Why is the Company Culture Important?

“Culture” is a big word in the Australian workforce. Whether you’re a business owner with several staff that work for you or a manager looking after a small team, or even a CEO of a company managing a large number of staff, you’ve probably all heard countless times that the company culture is one of the most important aspects of a company.

So why and how is the company culture important? The culture of an organisation can affect team members’ job satisfaction, motivation, and general well-being, which can have a tremendous effect on the company’s production speed, revenue and staff turnover rates.

What is culture?

Culture is a difficult term to define, and the concept of it has been studied, debated and theorised for over a century by sociologists, philosophers and scholars alike (source PDF). To prevent complicating the concept of culture by adding in a mix of different perspectives, we’ll go with the definition provided by the Merriam-Webster Dictionary:

1. the integrated pattern of human knowledge, belief, and behaviour that depends upon the capacity for learning and transmitting knowledge to succeeding generations
2. the customary beliefs, social forms, and material traits of a racial, religious, or social group; also :  the characteristic features of everyday existence (such as diversions or a way of life) shared by people in a place or time popular culture Southern culture
3. the set of shared attitudes, values, goals, and practices that characterises an institution or organisation a corporate culture focused on the bottom line
4. the set of values, conventions, or social practices associated with a particular field, activity, or societal characteristic studying the effect of computers on print culture

There’s no question that culture forms a big part of the human life whether or not we know what it is or agree on its meaning. Every individual is immersed in cultures at each level of their life (e.g. relationship, family, school, work, city, country…) and every individual contributes to shaping and confirming the cultures they’re a part of.

What is organisational culture?

Well, it’s not just some buzzword that the management and consultants like to use, that just results in eye rolls in already disgruntled employees. Organisational culture is defined as “the shared values, beliefs, or perceptions held by employees within an organisation” and “can influence the attitudes and behaviour of the staff”. And by understanding and nurturing an organisation’s culture, you can avoid possible conflict and influence employees’ job satisfaction, organisational commitment and performance.

Strong company cultures have qualities such as similar ethical values between workers, values that align with business objectives, teams built on mutual trust, transparent communication of expectations, and the available rewards.

How does culture affect the company?

Motivation and performance

Employees that feel included in the bigger goal of the company and part of the company culture tend to work harder to achieve their targets and the big picture objectives of the business.

Communication

“When the interaction between the leadership and employees is good, the latter will make a greater contribution to team communication and collaboration…”

Ethical behaviour

Negative company cultures such as lack of moral leadership (e.g. taking credit for someone else’s work or lying) can result in even the most honest employees to start acting in unethical ways to protect themselves.

Job satisfaction

The underlying factor in all the above points is the level of employee job satisfaction. Lack of a great culture and leadership in an organisation can result in poor job satisfaction, which in turn impacts employees’ performance, communication and collaboration, teamwork, and ethical behaviour.

Examples of great company culture

Take a look at Twitter, which received the highest score from its employees with a score of 4.5 out of 5 back in 2014 (It seems to have reduced to 3.8 as at 31^st of March, 2017, and probably different again depending on when you look at it). So, what did Twitter do that other companies aren’t doing, to excel in their company culture and employee reviews? Here are just a few things it did and the employees mentioned:

• Roof top meetings
• Free meals at the headquarters
• Office yoga classes
• Friendliness of staff
• Great teamwork
• “Supportive and motivational team-oriented environment”

The common theme in the employee comments were said to be that the environment was supportive and they felt valued and important. The transparency and integrity of the management was also mentioned as contributing to employee satisfaction.

Other companies that are said to have great working environment and organisational culture include Zappos, Chevron, Southwest Airlines, Google, and so on.

The company culture and following employee job satisfaction are shaped by leadership behaviour. With an understanding of how and why strong organisational culture is essential in creating a happy and satisfied work environment, you will be able to evaluate whether or not you’re shaping a great organisational infrastructure as a leader. And as a team member, you can ask yourself if you feel a part of a strong, transparent and warm culture and how you’re contributing to improve or maintain it.