Definition and importance of organizational culture

Mindletic

3 min read

People holding hands in center. Organizational culture.

A great corporate culture is essential for establishing the qualities required for business success. Employees of all ages and countries today place high importance on values, which aligns with the rise of passion-driven issues. An employer must be able to define and express corporate values and constantly demonstrate that they are living up to them.

What is organizational culture?

The set of values, expectations, beliefs and practices that guide and inform the activities of all team members is known as organizational culture. Culture is also consistent, observable patterns of behavior in organizations. Consider it a collection of characteristics that define your organization. A great corporate culture displays positive aspects that lead to enhanced performance, whereas a dysfunctional company culture brings out maladaptive dynamics and outcomes.

The importance of organizational culture

1. Organizational culture affects all aspects of the corporate. First, culture is the distinct manner by which your organization lives out its corporate purpose and fulfills its brand promise to customers. It is a unique way to attract, retain, and convert customers into brand supporters.

2. It's also how you attract and retain employees who become brand advocates. Individuals and teams most aligned with organizational culture outperform those less aligned on internal performance indicators. Nothing new that a corporation's reputation is one of the key reasons why talented individuals desire to work in it, and the company's mission and purpose are significant elements. According to Glassdoor’s Mission & Culture Survey (2019), millennials (18 - 34 year-olds) are more likely to place culture above salary, and 79 % of adults would consider a company’s mission and purpose before applying for a job there, 77 % would consider its culture.

3. When an organization's employees are aligned, they are heading in the same direction and focusing on the same goal. When your workplace culture aligns with your employees' needs and values, they are more likely to feel supported and valued. Company culture is one of the main reasons that almost two-thirds (65%) of employees stay in their job, reveals findings of Glassdoor’s Mission & Culture Survey (2019).

4. Culture is an all-encompassing force that determines how individuals collaborate, how choices and decisions are made, or which behaviors are celebrated. In a way, culture sets a foundation for the workforce and can significantly impact whether or not a prospective employee is attracted to a company. Engaged people are the fuel that keeps the company running.

According to Gallup, culture can improve the following essential performance goals of an organization:

• strengths

• diversity and inclusion

• safety

• innovation

• compliance

• high performance

Organizational culture and transformation

According to Hunt and colleagues (2021), organizational culture is critical to the engagement and well-being of its workforce. More specifically, it is the collective manifestation of shared beliefs, behaviors, thoughts, attitudes, and norms that flow through the workplace. Organizational culture potentially boosts broader corporate innovation and change.

EY and Oxford University formed a research collaboration to probe what it takes to lead a successful transformation. They surveyed 935 CXOs, and 1,127 members of the workforce from 23 countries, seven industries, and 16 sub-industry sectors - 50% of them represented a successful transformation project and 50% an unsuccessful one. They also conducted 25 in-depth interviews with CXOs from multiple global companies. Before interviews, each leader identified three critical turning points in their transformation. Research respondents recognized that intense and complex emotions were part of the transformation. Rather than avoiding emotions, proactively creating psychological safety, encouraging people to speak up, and directly soliciting their opinion may act as soil for change at the organizational level.

Every organization's culture is unique, and it is essential to preserve what makes your company authentic.Want to learn more about qualities that you and your company should seek to cultivate positive and psychologically safe organizational culture? Reach out to our team and get a free consultation now.

Want to learn more about qualities that you and your company should seek to cultivate positive and psychologically safe organizational culture? Reach out to our team and get a free consultation now.