8 Reasons Why Organizational Culture is Important

Updated February 16, 2023

Companies with a strong work culture appeal to job candidates looking for a permanent position and the opportunity for growth. Organizational culture promotes a positive, structured work environment that helps companies achieve success.

In this article, we discuss why organizational culture is important and how to improve culture in the workplace.

What is organizational culture?

Organizational culture refers to a company's mission, objectives, expectations and values that guide its employees. Businesses with an organizational culture tend to be more successful than less structured companies because they have systems in place that promote employee performance, productivity and engagement. Having a strong company culture motivates everyone to do their best work.

Related: What is Organizational Culture?

8 reasons why organizational culture is important

Here are eight reasons why organizational culture is important:

1. Increased employee engagement

A work environment that possesses organizational culture is driven by purpose and clear expectations. This motivates and inspires employees to be more engaged in their work duties and interactions with others. It also leads to high levels of workforce engagement, which drives productivity. Having a strong connection to an organization and its people creates an atmosphere of positivity that is hard to ignore.

2. Decreased turnover

People who feel valued and respected at a company are less likely to leave it. That's why it's essential for brands to foster a winning organizational culture that supports their core values and mission statement. Happy employees mean less turnover, which saves companies time and money in the hiring process. Companies that achieve a strong culture must take steps to maintain and improve it.

3. Elevated productivity

When employees have the resources and tools they need to succeed, it helps increase productivity and performance levels overall. Organizational culture impacts the structure of a workplace in ways that bring people of the same skill set together. Those who share similar backgrounds and skills may work more quickly together when tackling company projects.

Related: 15 Examples of How to Increase Productivity in the Workplace

4. Strong brand identity

A company's organizational culture represents its public image and reputation. People make assumptions about businesses based on their interactions within and outside of the company. If it lacks organizational culture or has a weak image, customers may hesitate to do business with anyone who is associated with the brand. Businesses with a strong brand identity tend to attract more business and job candidates with similar values who support their mission.

5. Transformational power

Not all businesses have the power to transform ordinary employees into total brand advocates, but those with a strong organizational culture do. Companies that recognize their employees' efforts and celebrate team successes are more likely to notice a change in employees as they experience a sense of accomplishment.

6. Top performers

Companies that promote community in the workplace are more likely to retain their best employees. People who are great at their jobs and know the value of their skills commonly leave negative work environments where they feel undermined and unappreciated. Organizational culture builds a high-performance culture that strengthens the work of people within the company, resulting in a positive employee experience overall.

Related: 7 Ways Organizational Culture and Leadership are Connected

7. Effective onboarding

More and more, businesses with an organizational culture are relying on effective onboarding practices to train new hires. Onboarding practices that include orientation, training and performance management programs help new employees access the right resources and better transition into their roles. This promotes employee longevity and loyalty and reduces the amount of frustration some employees experience when they don't have the information needed to do their job well. Onboarding is a great way for companies to ensure new hires understand the core values of their business.

8. Healthy team environment

Organizational culture helps improve workflows and guides the decision-making process. It also helps teams overcome barriers of ambiguity. Team members who are informed and knowledgeable about certain processes are often more motivated to finish projects. Having a clear culture that unifies employees and promotes organized work structures helps people work together with purpose.

How to improve organizational culture

If you're in a leadership position at work, follow these steps to ensure your team achieves success in the workplace:

1. Communicate well

Knowing how to communicate well is the best way to improve organizational culture. Miscommunication is the main reason people become unsatisfied with their jobs and start looking for other opportunities. Help your team have a better experience by doing your part to communicate well. When sending emails and contributing to meetings, try to share your ideas in the clearest possible way. Sometimes it helps to provide people with the background information of an issue or give specific examples. When people seem confused, look for ways to simplify your message. Encourage people to ask questions.

Related: 4 Different Ways to Communicate Effectively in the Workplace

2. Listen to concerns and ideas

If you're in a leadership position, provide your employees with a public (or anonymous) platform that makes it easy for them to share their opinions. Encourage one-on-one meetings with team members to allow them to speak openly, yet privately about sensitive concerns. Letting employees know they can come to you when they have questions helps them feel valued.

3. Encourage feedback

If you notice that a certain aspect of the company needs improvement, take time to provide feedback regarding the issue and encourage others to do the same. Some companies have policies in place that dictate the process of giving feedback, while others are more relaxed. When leaving feedback, keep your communication professional and honest. Provide details and offer possible solutions to any problems the company is facing.

4. Be consistent

Being consistent in your leadership efforts helps people experience a sense of stability. Once a company's organizational structure is in place, do your best to maintain processes and procedures. Treat everyone in the same professional manner and avoid giving preferential treatment.

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