What is corporate culture?
1. Definition.
- Corporate culture refers to the shared values, beliefs, behaviors,
and practices that characterize an organization. It defines how
employees interact with each other, make decisions, and
approach their work. Corporate culture is often seen as the
personality of a company, influencing its operations, employee
morale, and even its public image.
- A company's culture will be reflected in elements such as its
dress code, business hours, office setup, employee benefits,
turnover, hiring decisions, treatment of employees and clients,
client satisfaction, and every other aspect of operations.
2. Importance of corporate culture.
- A carefully considered, even innovative, corporate culture can
elevate companies above their competitors, support long-term
growth, and underpin a company's longevity.
- Benefits of a positive corporate culture that contribute to
business success include:
+ Building a positive workplace environment
+ Creating an engaged, enthusiastic, and motivated workforce
+ Attracting high-value employees
+ Improving employee morale
+ Improving performance quality and productivity
+ Building favorable business results
- Employees who feel encouraged and motivated by a positive
company culture can provide a strategic competitive advantage
by reducing turnover and increasing productivity. A positive
corporate culture can clarify a company's goals at all levels and
offer a competitive advantage. A company with a corporate
culture that is attractive to a variety of employees can also
benefit from workforce diversification.
3. Types of corporate culture.
- clan culture: is about teamwork and collaboration. In such a
culture, those in management function as enthusiastic mentors
who provide guidance to subordinates.
+ Pros: Strong sense of belonging among employees;
encourages career growth through mentorship.
+ Cons: Can feel hostile or exclusionary to new employees or
those who aren't selected for mentoring.
- Adhocracy culture: creates an entrepreneurial workplace in
which executives and employees function as innovators and risk-
takers. Employees are encouraged to pursue their aspirational
ideas and take action to achieve results that can advance
company goals.
+ Pros: Creates a flexible environment that rewards agile
thinking; strong sense of innovation.
+ Cons: Risk of expensive projects that never become profitable;
may encourage innovation for the sake of innovation, rather than
tuning into actual customer needs.
- Market culture: Market culture is focused on meeting specific
targets and bottom-line goals. Employees are encouraged to
work hard and "get the job done" to enhance a company's
market presence, profits, and stock price.
+ Pros: Encourages goal-oriented teamwork; strong productivity
ethos.
+ Cons: Can create competition between employees, rather than
cooperation; risk of overwork or burnout.
- A hierarchy culture: is a traditional corporate culture that
functions according to a company's executive, management, and
staff organizational structure. There is a carefully followed chain
of command from the top down, where executives oversee
employees and their work efforts to meet specific goals.
+ Pros: Clear roles, responsibilities, and objectives at all levels;
stable paths of advancement.
+ Cons: More rigid than other work environments; difficulty
resolving conflict with managers.
4. Factors shaping corporate culture.
* Leadership style.
- The leadership style and behaviors of those in managerial
positions are fundamental in shaping the organizational culture.
The leaders act as role models, exhibiting behaviors that are
mimicked by employees.
* Values and beliefs.
- Values and beliefs act as the compass of an organization,
guiding actions and decisions while shaping daily operations and
strategies.
* Practices and rituals.
- Practices and rituals, from daily operations to special occasions,
fortify
* External influences.
- External elements, such as market trends, societal norms, and
global events, shape organizational culture by influencing
adaptations and strategic shifts.
