What is Organizational Culture, and Why Does it Matter?
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| (Photo by Antoni Shkraba from Pexels) |
Introduction:
Organizational culture is a crucial component of any organisation. The shared values, beliefs, attitudes, and practices that define an organisation are referred to as its organisational culture. It is the "way things are done" (Drennan, 1992:3 after Bower) in an organization, and it affects how its people act and think. What organisational culture is and why it matters will be covered in this blog.
What is Organizational Culture?
Organizational culture is commonly defined as a company's values, beliefs, attitudes, and how these influence employee behavior. Several great researchers and scholars have defined Organizational culture in various ways:
"Culture is a pattern of beliefs and expectations shared by the organization’s members. These beliefs and expectations produce norms and powerfully shape the behaviour of individuals and groups in the organization." (Schwartz and Davis, 1981:33)
Why Does Culture Matter?
The culture within an organisation can impact employee behaviour and performance. A robust clan culture, for instance, can foster a sense of community and shared purpose among employees, leading to greater job satisfaction and employee engagement. (Schein, 1990). A hierarchical culture, on the other hand, can foster rigidity and bureaucracy, which can impede creativity and innovation. (Trice & Beyer, 1993). Research demonstrates that organisations with strong and positive cultures have better financial performance than those with inferior cultures. (Sorensen, 2002).
Core Beliefs and Culture
Deloitte chairman’s survey findings
According to research done by Deloitte (2013) in figures 1 and 2, 88% of employees and 94% of executives believe a distinct corporate culture is essential to a company's success. 76% of the employees surveyed by Deloitte believed that a "clearly defined business strategy" contributed to establishing a positive culture.
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| Figure 1: Strategy and culture are on the opposing sides of a two-sided ledger. (Source: Deloitte) |
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The Benefits of Organizational Culture
According to Indeed (2021), A robust organisational culture has many advantages. Now, let us look at some of the benefits of a healthy organisational culture:
- Increased employee engagement
Purpose and expectations shape organisational culture. This drives employees to work harder and interact more. It boosts employee engagement and productivity. A deep connection to an organisation and its people fosters positivity. - Decreased turnover
Respected employees are less likely to leave their jobs. That's why brands must create a winning culture that supports their mission and values. Happy workers reduce turnover, saving companies time and money in hiring. - Elevated productivity
Great culture gives employees the tools to boost productivity and performance. Workplace culture brings people with similar skills together. Company tasks may go faster with people with similar backgrounds and talents. - Transformational power
Solid organizational cultures can turn average employees into fully committed brand ambassadors. Companies are more likely to notice a change in employees as they feel accomplished if they acknowledge their employees' efforts and celebrate team victories. - Top performers
Businesses that foster a sense of community at work are likelier to keep their top talent. A pleasant overall employee experience produced by organisational culture creates a high-performance culture that strengthens the work of individuals in the organisation. - Effective on-boarding
Great culture increasingly depends on efficient onboarding procedures to train new employees. New hires assisted in accessing the appropriate resources and making a smoother transition into their roles via onboarding procedures, including orientation, training, and performance management programmes. - Healthy team environment
Culture in an organisation helps improve how work gets done and guides decisions made. When team members know more about how things work, they are often more motivated to finish jobs. A transparent culture that brings workers together and encourages organised work structures helps people work together with a purpose.
Figure 3: Organisational culture (Source: youtube)
Challenges in Organisational Culture
There are challenges and criticisms with organisational culture. It is fragile and can't be put into place quickly. It may resist change and only look inward (Mintzberg et al, 2005). Even with all of these problems, handling organisational culture is still an essential part of human resource management (HRM).
Conclusion
In conclusion, organisational culture matters as it impacts various aspects of the organization. A strong and positive culture can foster an awareness of community and common goals among employees, encourage innovation and creativity, and contribute to the organisation's overall success.
Why does organizational culture matter? Please share your ideas in the comments section.
Bower, M. (2003). Employee engagement: A road map for building a competitive workforce. John Wiley & Sons.
Deal, T. E., & Kennedy, A. A. (1982). Corporate cultures: The rites and rituals of corporate life. Addison-Wesley Publishing Company.
Deloitte (2013). Core beliefs and culture Chairman’s survey findings. [online] Available from: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-core-beliefs-and-culture.pdf [Accessed on 28 March 2023].
Indeed (2021). 8 Reasons Why Organizational Culture is Important. [online] Indeed Career Guide. Available at: https://www.indeed.com/career-advice/career-development/why-organizational-culture-is-important [Accessed on 28 March 2023].
Kotter, J. P., & Heskett, J. L. (1992). Corporate culture and performance. Simon and Schuster.
Mintzberg, H., Ahlstrand, B., & Lampel, J. (2005). Strategy safari: A guided tour through the wilds of strategic management. Free Press
Peters, T. J., & Waterman, R. H. (1985). In search of excellence: Lessons from America's best-run companies. Harper & Row.
Schein, E. H. (1990). Organizational culture. American Psychologist, 45(2), 109-119.
Schwartz, H. S., & Davis, S. M. (1981). Matching corporate culture and business strategy. Organizational Dynamics, 10(1), 30-48.
Sorensen, J. B. (2002). The strength of corporate culture and the reliability of firm performance. Administrative Science Quarterly, 47(1), 70-91.
Trice, H. M., & Beyer, J. M. (1993). The cultures of work organizations. Englewood Cliffs, NJ: Prentice-Hall.
The introduction provides a clear definition of organizational culture and its importance. The author then goes on to provide a detailed explanation of what organizational culture is and how it can impact employee behavior and performance. The inclusion of figures and statistics from research conducted by Deloitte and Indeed adds credibility to the blog post. The author also highlights the benefits of a healthy organizational culture, including increased employee engagement, decreased turnover, elevated productivity, and effective onboarding. The challenges and criticisms of organizational culture are also mentioned. I think this blog provides valuable insights into the importance of organizational culture and its impact on an organization's success.
ReplyDeleteThanks a lot 🙏 Hansika for your valuable comment.
DeleteThe blog post gives a very clear understanding of what is organisational culture and why it is important. The blog post has a remarkable flow from the introduction to the conclusion. The post is very well cited and referenced throughout the flow. Its a commendable post Niluka.
ReplyDeleteThanks a lot 🙏 George for your valuable comment.
DeleteThis article has defined organizational culture and it's benefits clearly .Healthy cultures enable organizations to adapt. In a world where the one constant is change, culture becomes even more important because organizations with high-performing cultures thrive on change. The converse also holds true: Unhealthy cultures do not respond well to change. Culture is the lifeblood of a vibrant society, expressed in the many ways we tell our stories, celebrate, remember the past, entertain ourselves, and imagine the future. Our creative expression helps define who we are, and helps us see the world through the eyes of others. The culture at your organization sets expectations for how people behave and work together, and how well they function as a team. In this way, culture can break down the boundaries between siloed teams, guide decision-making, and improve workflow overall.
ReplyDeleteI appreciate your thoughtful feedback. The significance of organizational culture and how it affects an organization's capacity for change have been briefly explained by you. While an unhealthy culture might stifle advancement, a healthy culture can aid organisations in thriving in a world that is constantly changing.
DeleteWell written article Niluka!
ReplyDeleteWhile I agree challenges and criticisms with organizational culture and cannot be can't be put into place quickly, there are certain strategies that organizations can use. As organizations grow and change, maintaining a consistent culture across different locations and departments can be a challenge. (Schein, 2010) However, effective and frequent communication can help create a shared understanding of the organization's culture and values, and ensure that all employees are aware of how their actions align with those values. (Cameron & Quinn, 2011) Leaders also play a key role in shaping and reinforcing the organization's culture, by modeling the desired behaviors and values and providing clear direction to employees. What is your view on this?
Thank you Thahani for sharing your opinion on how organisations may retain a uniform culture across multiple locations and departments. Effective and frequent communication is essential for developing a shared understanding of the organization's culture and values. This can help ensure that all employees know how their activities correspond with those principles and promote the organization's desired behaviours and ideals.
DeleteLeaders play an essential role in shaping and reinforcing the culture of their organisations. Leaders must serve as role models for desired behaviours and values and provide clear instructions to personnel. They can accomplish this by creating specific goals and holding themselves accountable to those goals. They can also promote an environment that supports and respects diversity and inclusion by encouraging open and honest dialogue inside the organisation.
Finally, keeping a uniform culture across several locations and divisions necessitates a collaborative effort from all employees of the organisation. Organisations may establish a culture that supports their aims and objectives and allows them to survive in an ever-changing business landscape by working together and focusing on good communication and strong leadership.
It is interesting to discuss organizational culture, I think, organizational culture has become a well popular topic among HRM professionals, business owners, and employees.
ReplyDeleteAs highlighted by the author culture became a critical success factor for business performance and long-term sustainability, on the other hand, organizational culture leads to gaining competitive advantages.
Here we can identify different kinds of cultures, such as innovative culture, high performing work culture, those are lead to enhance productivity and profitability, however, some organizations have traditional cultures which negatively impacted business performance.
Thank you Nelusha for sharing your views on organizational culture. I totally agree with your statement that organizational culture has become an essential topic among HRM professionals, company owners, and employees. A positive organizational culture can indeed help to improve business performance and create competitive advantages. On the other hand, a negative culture can have a detrimental effect on company performance.
DeleteI admire that you mentioned the different types of organizational cultures, including innovative and high-performing work cultures, which can lead to enhanced productivity and profitability. It is important to note that each organization may have its own unique culture, and what works for one company may not work for another.
Great article! Understanding and cultivating a strong organizational culture is crucial for any company's success (Schein, 2010). It's amazing how much impact culture can have on employee morale and productivity. I particularly appreciate the section on how to build a positive culture. It's important to emphasize that culture is something that needs to be intentionally created and nurtured over time. Thanks for sharing your insights!
ReplyDeleteThank you for your feedback! A strong organizational culture is vital for a company's success and can significantly impact employee morale and productivity. Building a positive culture is a deliberate and ongoing process requiring effort and commitment. I am glad that you found the section on building a positive culture helpful. Thank you for taking the time to read and comment on the article.
DeleteThis article has good points for the reader regarding organizational culture. In my understanding from other readings values of the organization's culture are built on fundamental presumptions regarding the following.
ReplyDelete1.Human nature
2.The organization's relationship to its environment
3.Appropriate emotions
4.Effectiveness
What is your idea about this? :)
Thank you for sharing your thoughts on the article. I agree that an organization's cultural values are built on fundamental presumptions about human nature, its relationship to its environment, appropriate emotions, and effectiveness. These presumptions can influence how employees perceive and react to their work environment and ultimately impact organizational performance. Organizations must understand and actively shape their culture to align with their values and goals.
DeleteI completely agree with your article. Because it affects many facets of an organisation, organisational culture is important. A solid and encouraging culture can promote employee community, support creativity, and contribute to overall success.
ReplyDeleteThank you for your comment Udesh! I am glad you found the article informative and agree with the importance of corporate culture in enabling employee engagement, creativity, and overall success.
DeleteOrganizational culture plays a vital role in organization performance, productivity, employee satisfaction, employee engagement etc. Employer should maintain a healthy culture within the organization by maintaining positive attitudes, beliefs, values, relationships among the employer and employees. Through a healthy culture employer can motivate employees to increase the employee engagement, reducing the employee turn over, identifying best performers and etc. In todays context employers should give priority to make a better organizational culture to get the productivity from employees.
ReplyDeleteThank you for your comment Kavindi. I agree with your opinion of the importance of organisational culture in influencing organisational performance, employee satisfaction, and engagement. A positive organisational culture can influence employees' attitudes, beliefs, and values towards their work and the organisation as a whole. Thank you for providing your thoughts on this topic.
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