A strong organizational culture aligns employees with company values, ensuring consistent behavior and recognition. Effective hiring, training, and reward programs reinforce this culture, driving company success.
By Brad Nakase, Attorney
Email | Call (888) 600-8654
Have a quick question? I answered nearly 1500 FAQs.
A well-defined and broadly accepted set of values underpinned by a framework and strategy constitutes the foundation of a profitable firm. Three things take place in an organization with a robust culture: Workers are aware of how the top leadership expects them to react in any given circumstance, they think that the anticipated course of action is the right course of action, and they are aware that they can expect recognition for upholding the company goals.
Employers play a critical role in maintaining a strong culture. This begins with finding and hiring candidates who will align with the company’s beliefs and flourish there. It also involves creating training, performance management, and orientation programs that spell out and emphasize the company’s key principles and making sure that workers who genuinely exemplify the values receive the proper recognition and rewards.
The following topics are included in this toolkit:
The appropriate behavior inside a company is determined by its culture. Shared values and beliefs that have been developed by leadership and then disseminated and reinforced via a variety of channels make up this culture, which in turn shapes employee attitudes, actions, and comprehension. Every action taken by an organization is framed by its organizational culture. There isn’t a single culture template that works for every firm because circumstances and industries differ greatly from one another.
The most prosperous businesses all share a strong corporate culture. At the highest levels, there is agreement on cultural principles that prioritize the company and its objectives over the interests of individual members. Effective leaders actively embrace their cultures on a daily basis and make a point of sharing them with both current staff and potential new hires. They have no trouble articulating their beliefs and how they establish and govern their organizations.
On the other hand, a weak culture has the power to destroy a company and its executives. The improper culture can have a detrimental effect on the bottom line as seen by disgruntled workers, high staff turnover, bad customer relations, and decreased profitability.
Culture-related problems are common in acquisitions and mergers. After a merger, even efficiently functioning organizational cultures might turn dysfunctional. According to research, cultural issues account for two out of every three merger failures. To create a shared foundation for the future, cultures must be redefined, and blended, and their disparities must be addressed.
Business integration has evolved in recent years due to the rapid pace of acquisitions and mergers. Fulfilling certain corporate objectives has become the primary focus of mergers, rather than integrating cultures. A strong company culture will automatically emerge during a merger, according to some experts, if the proper business strategy and objectives are in place.
A company’s principles and ideals need to be strongly held and broadly accepted in order for the culture of the organization to enhance overall performance. It also has to give the company a tactical competitive edge. Increased collaboration and confidence, fewer conflicts, and more effective decision-making are all advantages of having a strong culture.
Together with an overwhelming feeling of connection with the company, culture fosters an informal control system and a common sense of importance among staff members. Workers in companies with clearly defined cultures may also utilize these businesses’ cultures as justification for their own workplace conduct.
The development and maintenance of organizational culture is mostly the responsibility of company leaders. Executives frequently struggle in their careers or leave because they struggle to integrate into the social environment of the company. C-suite managers should therefore be able to blend in with the corporate culture in addition to possessing the necessary talents when they are hired by organizations.
First and foremost, an employer has to have a solid grasp of both the general definition of culture and the unique culture of their company. An organization’s core values are derived from fundamental presumptions regarding the following:
Culture is a vague term that frequently refers to an unclear element within an institution. There is no widely agreed definition of culture, despite the fact that organizational culture has been the subject of a great deal of scholarly writing. Rather, the literature presents a wide range of opinions about what organizational culture actually is.
Numerous factors, such as corporate festivities, internal messaging, leadership practices, and communication methods, might indicate an organization’s culture. It is not unexpected that there are many different names used to describe different cultures given the multitude of components that make up culture. The terms aggressive, customer-oriented, inventive, playful, moral, process-oriented, research-driven, technology-driven, hierarchical, welcoming to families, and risk-taking are frequently used to characterize cultures.
Organizations may find it difficult to be consistent in their messaging regarding culture since culture is hard to define. Workers could also find it challenging to recognize and discuss perceived cultural differences with one another.
Speaking of their areas as unique work environments, organizational executives frequently discuss the peculiar aspects of their corporate cultures. Nevertheless, companies with distinctive cultures like Disney and Nordstrom are uncommon.
The cultures of the majority of companies are not that dissimilar. A shared set of cultural values is typically shared by enterprises, even those in very different industries, like manufacturing and healthcare. In the private sector, for instance, most businesses aim to expand and boost sales. The majority try to show compassion for others and work well in teams. The majority are competitive for money and share of the market, therefore they are motivated rather than laid back. The following are a few of the cultural traits that set the majority of companies apart.
Commonly held values form the foundation of organizational cultures. Organizations must choose which values to prioritize; none are right or wrong. Among these shared ideals are:
How much the organization regards established lines of authority determines how hierarchical it is. The three different levels of structure are “low”—having vague job descriptions and acknowledging that people question authority—and “moderate,” which has an established framework but accepts that people frequently work beyond formal channels. “High” is characterized by an established organizational framework and a belief that individuals will operate through official avenues.
A high-hierarchical organization is typically slower to respond to changes and more rigid than a low-hierarchical organization.
The speed of decision-making and creativity inside a company is determined by its level of urgency. While the market forces some firms to pick their level of urgency, others are forced to adopt it.
Project completion speed and responsiveness to a shifting market are critical components of a high-urgency culture. Projects go at a decent speed when there is a modest amount of urgency. Individuals who work with a low sense of urgency prioritize quality over speed and work carefully and consistently. Strong urgency is associated with a fast-paced, aggressive management style within the organization. An organization that embraces a more deliberate management style is typically more systematic in nature.
Tasks and people are typically valued in ways that are dominant in organizations. Strong people orientations lead to decision-making where people are prioritized and the company’s efficiency and output are seen as being driven by their people. A company that prioritizes tasks and procedures over other considerations and feels that productivity and performance are primarily determined by effectiveness and quality is known as a task-oriented organization.
Certain businesses can be able to select the individuals and job orientations they want. However, some may need to adjust their orientation to suit the demands of their sector, past problems, or current operational procedures.
Every company prioritizes particular functional areas. Marketing, business processes, development and research, engineering, and services are a few domains where functional orientations can be found. For instance, a cutting-edge company renowned for its R&D can be fundamentally driven by a functional perspective on the field. Depending on its past decisions and how it is perceived in the industry, a hotel corporation may prioritize operations or services.
Workers in the business from various functions may believe that the people who work in the areas they specialize in are the individuals who run the company. Leaders in organizations need to be aware of what the majority of workers consider to be the functional direction of the company.
A variety of subcultures can coexist with the prevailing culture in any organization. Individuals or groups that may follow customs and rituals distinct from the remainder of the company might form subcultures that serve to emphasize and reinforce the organization’s basic principles. Subcultures may also be quite problematic.
Regional cultures, for instance, frequently diverge from the corporate culture that the upper management strives to impose. A culture that prioritizes team building may not be compatible with an aggressiveness that is widespread in that field. Alternatively, if the country’s culture prioritizes hierarchy and demands subservience to authority, a company that is based on egalitarianism may have difficulties. Companies have to acknowledge these variations and deal with them head-on.
An organization’s leadership, as well as the behaviors and principles that are attributed to previous accomplishments, often mold the culture of the business over time. Executives and management can effectively manage a company’s culture by demonstrating cultural knowledge. It takes deliberate work to maintain aspects of a culture that enhance organizational efficiency.
Upon entering an organization, one is greeted with its visible culture—its traditions, customs, rituals, ethical standards, symbols, and overall way of doing things. Most often, the elements that have contributed to the organization’s past success have shaped its contemporary culture.
An organization’s initial culture is often greatly influenced by its founders. As time passes, standards of behavior emerge that align with the ideals of the organization. For instance, in some businesses, disagreements are resolved hierarchically and discreetly behind the scenes, whereas in others, problems are hashed out loudly and publicly to build broad consensus.
Even though most firms have a natural culture, powerful cultures frequently start with a process known as “values blueprinting,” which includes an open discussion with officials from all areas of the company. An organization may form a values committee with direct access to the leadership once the culture has been framed. This group maintains the ideal culture in its entirety. Employing individuals who possess the necessary skills while upholding the values is the first step toward making values blueprinting successful for firms.
The first step in managing an organization’s culture is figuring out its “artifacts,” or organizational cultural characteristics. The main operational procedures, business practices, and beliefs that define an organization’s daily operations are called artifacts.
One strategy to begin managing culture is to recognize these characteristics and evaluate their significance in relation to current company goals. A culture’s distinctive characteristics can be found using three general concepts:
Prior to addressing culture management, managers and leaders in a company should educate themselves on the characteristics that are shared by all companies. To control the culture of their company, they should then do the following actions:
An organization’s leaders and founders are usually the source of common assumptions and opinions. Frequently, assumptions and ideas are accepted without question because they have been effective; otherwise, the organization and its leaders wouldn’t be functioning in their current roles. Nevertheless, these viewpoints may now be out of date and could impede future opportunities for growth.
An organization that conducts a thorough assessment of its culture can then develop strategies, policies, and programs that uphold and reinforce its basic goals and values. All members in synchronized organizations are motivated and united by the same basic qualities or beliefs, which extend from the top management to individual participants.
A high-performance corporate culture can be created and maintained using a variety of strategies, such as performance management plans, hiring procedures, onboarding initiatives, and recognition programs. Making optimal use of these technologies and resource allocation decisions is the largest issue.
A company can leverage its culture by using effective hiring methods. Although abilities are still the main consideration in hiring, employees are inclined to perform better when their personality meshes well with the company culture.
However, the cost of hiring people who don’t fit well and leaving them quickly might range from 50% to 150% of the annual compensation of the post. Regretfully, one in three recently employed workers depart either freely or unwillingly within one year of employment, and this percentage has been rising noticeably in recent times.
Among the hiring procedures used to guarantee cultural fit are:
There are disadvantages to looking for workers who will blend in perfectly. The most common error an organization may make when trying to draw in candidates is to present a false impression of itself. Upon realizing they have been duped, newly hired employees will likely leave and morale will drop while they are still there.
People may be less inclined to act negatively toward others who resemble them, which is another potential disadvantage. Therefore, if they embrace the cultural values, average workers have a higher chance of keeping their jobs. Similarly, analysts assert that while comfort levels inside a business are perceptible when the environment is in sync, excessive comfort can lead to complacency and groupthink.
The greatest employee onboarding procedure instructs new hires about the standards, values, and ideal behaviors of the company. Companies need to ensure that new hires have initial job experiences that support the culture and assist them in integrating into the social networks within the company.
Key tools that companies can utilize to encourage staff members to operate in a way that aligns with the values and culture of the company are these programs. Bonuses, for instance, ought to emphasize teamwork rather than individual achievement if cooperation is a basic value. Those who best represent the company’s principles should also be highlighted by employers.
Colleagues with similar goals and values typically perform better than those in less cohesive workplaces. By offering an evaluation instrument that educates staff members about appropriate behavior and by clearly defining expectations, performance management initiatives have a significant impact on corporate culture.
Employees may be prompted to engage in harmful behaviors like embezzlement or may find it easier to justify them if they receive contradictory signals about the company culture. Scholars have observed that cultural disparities can also lead to employees becoming disheartened, thinking that management is lying, questioning assertions made by superiors, and being less motivated to work hard.
Companies may be spending a lot of effort and money developing a culture, but they might not be seeing the same returns. This is particularly likely if rank-and-file workers, managers, and leaders all have different opinions about the company’s culture. Thus, employers have a need to make certain that the company conveys its beliefs to all workers in an understandable and consistent manner.
Developing solid strategies to advance corporate objectives and goals requires evaluating organizational culture. However, how can one quantify something that could be as difficult to define as culture? Organizations can evaluate culture by carrying out the following actions after determining its essential components, which include values, the level of hierarchy, and people- and task-oriented behaviors:
2. Carry out the evaluation. Respondents to the survey ought to represent all organizational levels, departments, divisions, and geographic locations.
3. Examine and discuss the assessment results. Discussing points of disagreement and agreement on the organizational culture is a good idea for managers and leaders.
Additionally useful in identifying cultural inconsistencies are cultural audits, 360-degree feedback, and assessments. The inconsistency can then be eliminated by leaders. Examine the amount of time staff members spend at customer locations, the amount of time they spend interacting with consumers, the type of training they get in customer service, and other signs that the business’s culture places a strong emphasis on customer service.
If employers prioritize cultural fit throughout the process of hiring and selecting employees, they may be open to discrimination lawsuits if they do not exercise caution. Employers must take care to prevent discrimination against applicants who aren’t “just like” their hiring managers through recruiting procedures and hiring choices based on cultural fit.
Employers also need to be mindful that some organizational cultures—such as those that are strongly patriarchal or dominated by men—may have a tendency to maintain differences in pay, promotions, and other employment-related aspects. Anti-discrimination regulations may be broken by those differences.
Employees may be more impacted by their country’s culture than by their company’s, according to research. In order to guarantee that management and corporate procedures are suitable and will work well in those nations, organizational executives should be aware of the cultural values of the nations in which their organizations operate. In multinational businesses, organizational governance initiatives should take into account cultural differences across nations.
Within national cultures, workers have varying expectations of their administrators, and managers need to be able to adapt to these differences in expectations and respond to them accordingly. In some nations, the global organization’s prospects of success could be fatally compromised if those expectations are not fulfilled.
Global corporate mergers make these problems much more complicated. The ability of the combined organization to facilitate meaningful and insightful conversations about the newly formed company amongst individuals with diverse cultural backgrounds is critical to the success of multinational mergers.
Have a quick question? We answered nearly 2000 FAQs.
See all blogs: Business | Corporate | Employment Law
Most recent blogs:
Contact our attorney.