What Is Organizational Culture and Why Is It Important?

What Is Organizational Culture and Why Is It Important?

'Organizational culture' is a phrase that you may have heard applied to several different elements of a business. It is often used incorrectly, and this article aims to set the record straight.

We'll take a look at exactly what organizational culture is, its benefits and challenges and why it is important to a successful business.

What Is Organizational Culture?

A company's organizational culture is the collection of characteristics that make up the business, including its:

  • Values
  • Expectations
  • Beliefs
  • Practices

All team members should know what the company's organizational culture is and adhere to it in everything they do at work.

The goals and mission statement of an organization are often referred to as its culture, but this is incorrect.

The culture is defined by the behavior of the employees. The goals and mission statement are what the company wants to achieve through the business's culture, objectives and results.

What Creates Organizational Culture?

An organizational culture is not created instantly – it manifests over time.

A company will decide what traits and factors work well for its business, and the culture is built from there.

Employees need to be able to see the company's culture through its customs, behavior, traditions, symbols and practices.

The culture of the organization can be broken down into three different concepts that are installed through the management and behavior of employees:

  • Ideological culture
  • Social culture
  • Material culture

Ideological Culture

This refers to the company's values and ethics. It looks at how the people who make up the business view everyday interactions and activities.

For example, the way a manager approaches an employee appraisal will reflect the business's ideological culture.

Social Culture

This refers to the roles and responsibilities of everyone within the organization.

The way team roles are given, and the business hierarchy should be based on the social culture.

Material Culture

The material culture includes the way a manager encourages their team to work together and the way the company works with external partners and associates.

The best way for a company's culture to develop and be sustained is for the management to consistently display these traits and concepts.

How to Instill Business Culture

The leaders at different levels of the business can instill the culture in several ways as an example to employees.

Teaching All Staff

An induction program can be given to new starters to teach them the desired traits and behaviors that make up the company culture.

Encouraging new starters to become part of social and ideological networks will ensure that they are aware of the culture from the start and that they can help to reinforce it.

Include Assessments Into the Hiring Process

In addition to assessing an applicant's skills and work experience, there are tests that can measure personality traits.

These tests will help to see if the potential recruit's character fits the culture of the business. A follow-up interview will also give a good indication of some of those traits.

It is great to have someone join a business who has all the necessary skills, but if their ideology doesn't fit the organizational culture, it will cause issues.

Communication

Regular team days, emails and informal chats with management help to reinforce the culture.

The leaders could give examples of the ideal culture they would like to implement or focus on different beliefs and traits that they would like employees to display.

What Is Organizational Culture and Why Is It Important?
What Is Organizational Culture and Why Is It Important?

Why Is a Strong Organizational Culture Important?

The importance of an organizational culture may not be obvious if a business has a good reputation and clear objectives.

However, there are many benefits to having a culture within a business, and it can help avoid certain issues.

Three things commonly occur when an organization develops a powerful culture:

  • Employees are aware of how they are expected to act and react in the work environment
  • Employees believe in the way they act
  • Employees know they will be rewarded for reinforcing the organization's values and behaviors

Let's look at some of the key benefits in having a strong organizational culture.

Executes Company Values and Reinforces Brand Identity

Developing a culture will mean that the business's values will flourish. Employees within a team can use the culture to showcase the company and reinforce its identity.

The identity of a business is vital to show customers why they should use your service or buy your product.

The culture of the business will set it apart from its competitors.

Helps With Employee Environment and Engagement

Having a strong, positive culture will help employees engage as they are aware of what traits the business leaders want to focus on.

If a worker knows how their manager wants them to react to a certain situation, it will make decisions at work much easier and, more importantly, transparent.

The Right People Get Hired

If an employee knows how they are expected to react to something at work, that's great.

However, if a business can hire people who will automatically display its ideal values in the first place, it can only be a positive thing and help sustain the culture.

Helps New Employees Onboarding

When someone starts a new job, there is always a lot to learn and understand.

Having a structured, set culture can help a new starter settle into their role and feel at home in the organization.

Improves Productivity and Morale

A positive culture will reflect a positive atmosphere within the business.

This will boost morale and productivity and ultimately produce happy employees.

4 Tips for Improving Your Organizational Culture

If your employees needs some development in displaying and manifesting the organization's culture, here are some tips to follow.

1. Be Transparent

Company transparency is needed to ensure everyone is clear about the values and ideologies that make up the organizational culture.

This can be done through regular communication, workshops and informal discussions.

2. Engage With Employees

Engaging with employees will allow management to assess what employees understand about the culture.

Listening to their feedback will help to improve areas where the culture may not be working or is not reinforced successfully.

3. Communicate

Communication and feedback to the employees is also important, and they can only learn more about the culture from the people that created it.

Reward systems can be put in place for those who are embracing the company culture.

Equally, feedback on how people can improve their execution of the culture is also vital.

4. Run Social and Team-Building Activities

Social and team-building activities are great for building morale and improving relationships. They are also ideal for helping to reinforce the organizational culture and discussing challenges and successes.

Final Thoughts

It is important for a business to define, identify and implement an organizational culture to reinforce brand identity and employee engagement, and reflect company ethos.

There are a number of ways in which management can roll out the culture to ensure all members of the business know what their role is. Sustaining the organizational culture is key to ensuring its success.


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