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What is meant by “company culture,” and how is it important to my business?

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What is meant by “company culture,” and how is it important to my business?
posted Jun 12, 2017 by Ati Kumar

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Company culture is defined as the shared values, beliefs and practices of company employees including management. This is not the written policies, procedures or strategic plan; it’s the actions and attitudes of each individual who is a part of the organization. Knowing the culture in any business is important to ensure the long term health of the business. Company culture changes as the employees in the business change, as management makes strategic decisions and as the business environment shifts.

The most successful businesses have an adaptive culture. A study co-sponsored by Crawford International and in Palo Alto, California in 2006 found that “companies that create adaptive corporate cultures outperform companies with non-adaptive cultures by a factor of 900 to 1 as measured by long term net income and stock price growth.” An adaptive culture is defined as one that is aligned with the business mission and strategic goals.

How can a business owner assess their company culture? Look for common employee behaviors. How do employees act with customers and with each other? Listen with an open mind to employees, suppliers, customers, the media and members of the community. What is being said about the company in public, on social media and in the hallways of the business? What employee actions are rewarded or punished? Are sales growing or shrinking?

Once the assessment is completed, the next step is to determine what you want the company culture to look like in the future. Review corporate mission, vision, values and goals to make sure the company culture you are inventing is supportive of them. Develop an action plan considering what is working well and what needs to be improved. Brainstorm changes in formal policies and business practices that enhance the desired improvements. Make sure to include employees at all levels of the organization in the brainstorming sessions. Develop models anticipating the changes and communicate with all employees about the expected outcomes. Monitor the results of any changes that are initiated to see if they are impacting the company culture in a positive way.

Company culture cannot be dictated by management, it can only be modeled. Reward behaviors that align with strategic goals. Celebrate accomplishments and communicate regularly with all employees about the progress towards reaching the strategic goals of the company. The bottom line; to change the culture of a business the leaders must start acting differently and enlist enough support within the organization that others act differently as well.

answer Jun 17, 2017 by Prajwal C.m.
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