Guide To Company Culture (What It Is and Why It's Important)
Updated April 17, 2023
Company culture refers to the beliefs and values that are strongly held by a company and expressed through its goals, behaviors, manner in which work is done, leadership, branding and other important decisions. A strong company culture can help a company establish a public persona that attracts job applicants who share the same values. Understanding what company culture is and the value it adds to a company can help you promote a positive work environment or find an organization with a healthy culture.
In this article, we define what company culture is, the main characteristics of company culture and the benefits of a healthy company culture.
What is company culture?
Company culture is a collection of beliefs, values, attitudes and behaviors that are sustained through a collective effort. Culture is what characterizes the organization. It may include the way employees handle relationships with customers, the values put forth by the company or the beliefs and attitudes held by members of the team. The leadership of the organization sets the tone for culture and when leadership changes the company culture may also change.
Company culture might suffer, for example, if defining and maintaining it is not a priority. Most businesses have at least a mission statement, which is a good starting point to identify the culture and make changes to further develop the culture as needed. A company's culture ultimately sets the tone for employee engagement and satisfaction. Here's an overview of the three levels of company culture:
Physical components: The physical elements of a company culture include things like the logo, branding, tone of voice, imagery, company swag, office design and job
Company values: Company values and core principles are other important aspects of company culture. Businesses typically integrate these words or behaviors into policies, job descriptions, internal communication, rewards and recognition.
Employee interactions: Employee interactions are the behaviors and words team members use when accomplishing their tasks, making important decisions and collaborating on important projects.
Attributes that impact culture
Each organization's workplace culture differs depending on its mission and core values. The main attributes companies may consider when defining their culture include passion, autonomy, performance, psychological safety and communication:
Passion: Passion is important to employee loyalty and satisfaction. When employees are consistently passionate about their work and workplace, they tend to feel more united in working toward shared goals.
Autonomy: Autonomy should be prioritized among managers because a successful organization understands that one of the key motivators for employees is feeling proud of their work. Empowering individuals to innovate and manage their own work is important to healthy, positive company cultures.
Performance: Performance is another attribute that impacts the culture of an organization. Businesses should recognize and celebrate high-performing employees for the quality of their work.
Psychological safety: Another critical component of culture is psychological safety. This is the ability for individuals to share and voice their concerns without fear of repercussions and a team with high psychological safety can openly discuss obstacles and failures and collaborate to find solutions productively.
Communication: The ability of employees to communicate with leadership and provide feedback is also critically important. It's essential for employees to be able to tell senior managers when the culture appears to be shifting and it's imperative that leaders take action on the significant feedback provided.
Core values and company culture
A company that has a strong set of core values can shape the overall culture. Core values are a set of practices, ideals or beliefs that outline how the company operates, including how it grows, allocates resources and makes decisions. Identifying and defining the core values of an organization can have a positive impact on structure and consistency. Examples of core values for a business include:
Commitment to customers and/or employees
Honest, direct and open communication
Quality and reliability of product/service
Opportunities for growth and self-improvement
Collaboration and teamwork
After establishing core values, business leaders can embody those values to implement a more defined company culture. To do so, the leaders of the company must live by those values and practice them every day. Setting goals and surveying employees can help leaders stay on track and maintain an atmosphere of accountability. Additionally, new employees should understand the importance of the company's core values. When an organization has a team of strong, hardworking individuals who adopt the company's values in their own work, the company culture becomes stronger.
Individual core values and company culture
Your core values can also impact the types of company cultures you look for when applying for jobs. If you're not sure what your personal core values are, think about the traits and qualities you most admire in mentors or leaders at work.
Identifying what motivates you can help you narrow down your values. Even your future career goals can shape the values you need to be prioritized in the workplace in order to achieve them. By prioritizing your values, it becomes easier to identify the right jobs as you search or make changes to the culture at your current job.
Additional benefits of a healthy culture
A positive company culture brings a number of benefits to employees and the organization as a whole. When a team can share their challenges and successes, the members often feel they are part of a collective effort inspired by a shared goal. A strong, healthy culture can increase productivity, job satisfaction, employee retention and morale. Following a shared set of values can develop a culture that is fulfilling and inspires innovation.
A significant benefit of a healthy culture is that it can help people feel engaged and willing to endure difficult situations and adversity out of commitment and love for their company. When a team feels more connected, the organization becomes more cohesive, making it less appealing for employees to consider leaving. If making changes to the culture of a business, seeking input from the employees is a valuable tool that can help the team feel like they're being heard and that their feedback is appreciated. It's well worth the effort to focus on company culture in any business or industry.
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