What is Organizational Culture and Why Does it Matter?

Organizational culture serves the purpose of providing individuals with a framework for perceiving the world around them. This is achieved through the powerful See-Do-Get Process, which involves instructing members, leaders, managers, and associated individuals on how to perceive themselves, others, and their surroundings.

Through the See-Do-Get cycle, individuals are able to transform their perceptions, leading to changes in behavior and ultimately, the achievement of desired outcomes.

Organizational culture plays a crucial role in determining the fate of any organization. It is a foundational element that ensures the maintenance of high morale within the organization.

In this article, we will define organizational culture, highlight its significance, and provide valuable insights on how to cultivate a healthy one. Let's dive into the fascinating world of organizational culture.

What is Organizational Culture?

Organizational culture can be summarized as a plan in the field of Organization Management studies and exploration.

The organization's culture is a complex combination of various approaches, attitudes, mentalities, convictions, policies, strategies, values, and psychological considerations that shape and refine the way the organization operates. It is essentially a set of standards that all individuals within the organization adhere to.

The foundation of organizational culture lies in the integration of standards, morals, and ethics. To fully comprehend the evolution of this culture, we must delve deeper into its origins.

The Inception of the Concepts of Organizational Culture

Man is a social animal. He needs to be with many people and live in a society.

A person's social life extends beyond the workplace, but having a social sphere within it is just as important. This is where organizational culture comes into play; it encompasses the values, practices, and expectations of the workplace.

A strong and positive organizational culture is vital for maximizing employee potential and boosting company profits. While often confused with organizational goals, culture is a separate concept that plays a crucial role in creating a healthy work environment and motivating staff to perform at their best.

Creating a company culture is not an easy task. It is the fruit of years of dedicated efforts, authentic and sincere behavior, and complete honesty.

Importance of Having an Organizational Culture

A company's organizational culture plays a crucial role in its success. When the culture is conducive to employees exploring and utilizing their skills, both the company and its workers can reap significant benefits.

Several companies prioritize organizational culture because it not only makes their employees feel comfortable, valued, and supported but also helps them stand firm even during the most challenging times. In fact, there are numerous examples of companies that have successfully dealt with tough situations, thanks to their strong emphasis on culture.

Key Statistics about the Significance of Organization Culture

In a survey, it has been proved statistically that 77% of the employees consider a company’s working culture before applying for a job.

Approximately 65% of employees in a company remain in their current job because they value the positive working culture and overall atmosphere, even if it means accepting lower pay than they may receive elsewhere.

Google is renowned for its exceptional organizational culture, often serving as a trailblazer in the implementation of attractive employee incentives. These incentives include but are not limited to, free meals, financial bonuses, employee trips and parties, gyms, open presentations by high-level executives, and an accommodating dog-friendly environment. Another company that has been recognized for its impressive organizational culture is L.L. Bean, which has been ranked in Fortune's 100 Best Companies to Work For. L.L. Bean's internal culture is highlighted by benefits such as lifetime warranties and free shipping.

The exceptional organizational culture of the 103-year-old retail company, which specializes in outdoor apparel, has resulted in a remarkably low turnover rate of only 3%. The company offers a plethora of benefits to its employees, such as discounts on gym memberships, paid time off for volunteering, employee discounts, and college tuition reimbursement, among others. The transformation in the organizational and working cultures of the company has contributed to this remarkable achievement.

Reasons why Business Owners and Managers should care about Organizational Culture

Organizational culture plays a crucial role in the success of any business. As a business owner, manager, or H.R., it is essential to recognize and appreciate the significance of a healthy and positive work environment. The culture of your organization can impact employee satisfaction, retention rates, and overall performance. Therefore, it is vital to pay attention to the culture of your organization and strive to create a positive and inclusive environment for your employees.

The reputation of a company plays a crucial role in an individual's decision to join or not. A significant aspect of this reputation is the organizational culture, which influences employee motivation, engagement, and retention. Having a distinctive and positive culture can make it easier and cost-effective to hire the right employees, as your reputation precedes you.

Moreover, an organization's culture also affects the level of job satisfaction among its staff. Companies with a poor culture tend to have higher turnover rates, leading to a negative reputation and increased costs.

The happiness and satisfaction of an organization's employees are greatly influenced by its culture. Research shows that content and motivated employees tend to be more productive and punctual, work harder and longer, and are generally more pleasant to be around. They are also more likely to collaborate and provide better service to customers, ultimately leading to better management of the workforce.

Organizational culture is a constant presence in all types of organizations. When it is consciously developed and supported, it can have a positive impact on an organization's success. However, when ignored or undermined, it can become a liability and even pose a threat to the organization's well-being.

The distinct culture of an organization cannot be replicated, bought, or stolen. This makes it a valuable asset that can set you apart from competitors in your industry.

Types of Organizational Cultures

There are some basic organizational cultures that one needs to know and understand to figure out which suits them best.

1. Club culture

Fitting into the organization is the most crucial requirement of any employee. They want to fit in the group and not feel left out.

This culture is all about continuous learning and development. Organizations with an academy culture invest in training and development programs for their staff. This helps to improve their skills and knowledge, making them more valuable to the organization. The focus is on long-term growth and development rather than just short-term goals.

The company's culture prioritizes the recruitment of highly skilled and diligent employees, who are given opportunities to enhance their skills and knowledge. The company places great value on their hard work and loyalty in return.

Fortress culture, while not the most dependable, can offer an enticing level of thrill. Companies with this culture tend to hold onto their top talent and most promising employees.

They have massive reorganizations going on at their end, and this gets the under-skilled employees in trouble. In such type of an organization, only timely skills matter.

4. Baseball team culture

The hiring process in this organizational culture is focused on recruiting team members with exceptional skills and expertise. The employees possess versatile skills that make them capable of adapting to various job requirements effortlessly. This culture is prevalent in fast-paced environments, particularly in high-risk industries such as advertising and investment banking.

Here is a video byon Organisation Culture.

Qualities of a Good Organisational Culture

There are some qualities that an organization should have to have a balanced and healthy culture. Here is a list of some of them.

1. Appreciation

Being appreciated for the work we do is something that is universally enjoyed. It's a great feeling when our efforts are recognized, and it can even become an integral part of our identity. That's why fostering a culture of appreciation is crucial for any organization.

A successful organization is one that knows how to properly value and reward its team members. This not only helps to motivate employees, but also benefits the company as a whole.

The alignment between a company's work culture and its goals is crucial. To ensure success, employees must understand and work towards achieving these goals while upholding the company's mission and vision. Therefore, the work culture should be designed to align with these objectives and support their attainment.

Building trust is a two-way street. The company must trust its employees to do their job well and provide a positive work environment. In turn, employees must trust that the company will treat them fairly and acknowledge their hard work. When trust is established, a strong foundation for a successful relationship is laid. It leads to increased productivity, better communication, and a sense of loyalty from both parties.

If they know that they are valued and trusted, they feel a homogenous part of the company. They work wholeheartedly and make sure they succeed.

4. Resilience

A team's ability to remain steadfast during difficult times is known as resilience. In today's cutthroat environment, there are numerous obstacles and uncertainties that must be navigated with care and vigilance. When faced with adversity, a dependable team that will not abandon ship is critical. The trait of resilience should be an integral part of every organization's culture.

5. Teamwork

Working in large companies is mostly about teamwork. People cannot work solo on massive projects and strict deadlines. Hence, they need to exercise teamwork very well.

To tackle even the most difficult projects and reach their objectives, it's crucial for team members to have a strong sense of harmony and understanding. This is where effective leadership comes into play. A good leader comprehends the unique strengths of each team member and allows them the space to fully utilize those capabilities.

In today's rapidly changing and highly competitive environment, innovation is crucial. The ability to innovate fuels the creation of new inventions, which in turn can bring about positive changes for society.

is also important in a good working culture. Employees should feel comfortable expressing their opinions and ideas without fear of judgment or retribution. This fosters a culture of open communication and collaboration, leading to better decision-making and problem-solving.

When employees feel psychologically safe, they are empowered to do their best work. This feeling of safety comes from being respected and valued as individuals. By prioritizing psychological safety, organizations can improve work quality and productivity by reducing stress and allowing employees to fully utilize their skills and talents. Ultimately, creating a culture of psychological safety is crucial for any successful organization.

Role of the H.R. Department in an Organizational Culture

The H.R. Department is very crucial when it comes to maintaining a good and healthy working culture.

2. Encouraging open communication and transparency among employees.

3. Providing opportunities for professional development and growth.

4. Recognizing and rewarding employees for their contributions.

5. Fostering a sense of community and teamwork.

6. Creating a supportive and inclusive work environment.

7. Addressing and resolving conflicts in a timely and effective manner.

8. Leading by example and modeling the desired behaviors.

9. Continuously evaluating and improving the organizational culture.

Since the employees look up to them, they need to show through their behaviors that they follow the company’s values.

2. Sustaining the reward and recognition system:

The H.R. team should prioritize the encouragement and empowerment of their teams. This involves providing them with the necessary resources and support to perform their roles effectively, while also promoting a culture of continuous learning and development.

The H.R. team serves as the link between all teams within the company. Their primary role is to motivate and inspire each team to showcase their best work. This enables team members to unlock their full potential and effectively utilize their skills.

Offering ongoing training and learning opportunities is crucial for employers in today's ever-evolving landscape. By keeping employees up-to-date and well-prepared to tackle new challenges, businesses can ensure they remain competitive and adaptable.

Also, apart from the training related to their jobs, there can be recreational training as well. It will focus on the all-around development and well-being of the employees.

Final Thoughts!

The significance of organizational culture cannot be overstated. It prioritizes the progress and advancement of employees while safeguarding their security and welfare. The aim is to uncover the untapped potential in these individuals.

An organization's culture is a crucial aspect that encompasses various elements such as its people, structure, processes, rituals, rewards, and punishments. The effective management of these aspects in a constructive and organized manner is essential to cultivate the right culture that empowers the organization to succeed. What are your views on the significance of organizational culture in shaping a business model? Share your insights in the comments section.