Corporate culture: you cannot see it, touch it, smell it, taste it, or hear it, but it is there. It pervades all aspects of organisational life, and it has a pro-found impact on organisational success and failure. If managed effectively, it is a real economic asset. If managed ineffectively or allowed to deteriorate, it can become a true economic liability and even lead to organisational failure.
The concept of corporate culture has become embedded in management vocabulary and thought. Although there are many definitions of the concept, the central notion is that culture relates to core organisational values. In a very real sense, corporate culture can be thought of as a company’s “personality.” Every organisation—regardless of size—has a culture that influences how people behave, in a variety of areas, such as treatment of customers, standards of performance, innovation, etc.
Culture is manifested almost everywhere in an organisation, if we know where to look for it. It is reflected in the words and language people use in communicating with one another.
Culture is also manifested in the artefacts that are in (and on display in) the company’s facilities. Everything in an organisation—from coffee cups to artwork—contains a cultural message, whether explicitly intended or not.
Although culture is everywhere and in everything, in some companies there are few clues about what the culture is: no culture statement, no pictures pertaining to the history of the business, no hint of what line of business the company is in. This is characteristic of a company whose culture is ill-defined (almost a “non-culture culture”), one devoid of obvious cultural symbols. This usually occurs by happenstance, rather than design. It is a marker of a company that does not recognize the importance of culture to people, whether to members of the organization or to those with whom they do business.
Companies differ in the extent to which they are effective in defining, communicating, and managing their culture. Companies where there is a clearly defined culture, where time is invested in communicating and reinforcing this culture, and where all employees are behaving in ways consistent with this culture, are defined as having a strong culture. Simply having a values statement is not enough to have a strong culture; the values need to be communicated in both words and actions, and they need to be reinforced.
A strong culture is one that people clearly understand and can articulate. A weak culture is one that employees have difficulty defining, understanding, or explaining. The culture may not have been defined, or it is not being actively managed. As a result, employees are left to interpret the company’s values for themselves, which sometimes results in the company having not one but many cultures.
Culture proves to be strategic asset – it is a source of competitive advantage. A company’s culture—if well managed—is transmitted to generations of employees through the company’s “DNA,” thus perpetuating this source of competitive advantage.
With the cultural DNA, the personal and professional values of the founder(s) are the DNA of the culture of the company during its initial stages. If the founder is a perfectionist, then the performance standards for the company will be all about perfection. If the founder is hypercritical, then the culture will take on a critical character. If the founder is all about customer service or frugality, then the culture will be all about those same things. If the founder has a sense of humour and wants to have fun, then the culture will reflect this.
Culture functions as “organisational glue” -it helps people come together with common purpose and values. This is particularly important in siloed organizations, where people tend to work in their own functional or divisional areas without significant interaction with others. It is also especially important in large and geographically dispersed organizations. A strong, well-managed culture helps create a sense of team throughout a company—a feeling that “we are all in this together, that we are all a part of something special, and that each of us is a contributor to the company’s success.
Healthy culture really helps gain a positive reputation- Companies with a healthy corporate culture gain a positive reputation among potential workers, which may attract talented and skilled workers to the organization. In addition to attracting high-quality workers, a well-regarded business reputation allows the company to charge a higher price for products and services and increases the value of the company in the financial market. Customers may prefer to conduct business with a business that has a solid corporate reputation as well.