Business Insights and Ideas
In the sections below, you’ll learn what organisational culture means, why it’s important, and what benefits it provides.
Ask anyone, ‘What is organisational culture?’, and you’re likely to get a variety of answers. This is why an organisational culture definition is critical to understanding the role culture plays in key areas like employee experience and engagement.
Although there may be many potential definitions for organisational culture, it’s broadly defined as the shared vision, beliefs, and values that characterize the people within an organisation. Which means, the culture of an organisation is defined by more than its mission statement. Put simply, it’s how the people in the organisation behave daily.
An organisation’s culture takes time to develop, and it is most often shaped by the leaders throughout the organisation, but particularly at the top. Many of the most recognizable companies have identifiable organisational cultures.
Some of the key factors that influence organisational culture include:
There are typically three specific cultural traits to an organisation, including:
All three combined make up the qualities of an organisational culture.
Organisational culture is important for several reasons. For one, organisational culture is a crucial differentiator for any organisation because the culture can have a significant impact on its success and effectiveness. For instance, organisational culture plays a key role in attracting and retaining talent in today’s competitive market.
Leaders often stress the importance of organisational culture and how it impacts employee experience. Sometimes, though, there’s a disconnect between the culture that is presented and the actual culture employees experience. For instance, an organisation might say they support diversity and inclusion, but lack tangible evidence to back up their claim. This type of disconnect can impact employee experience and satisfaction.
Additionally, assessing organisational culture is typically an on-going process. It requires getting consistent feedback from employees across the organisation.
If there are myriad ways to define organisational culture, then there are nearly as many ways a culture is structured or created. A strong or definitive culture makes it easier to communicate how and what differentiates one company over another.
It’s important to know that an organisational culture isn’t built overnight. Partly because culture develops organically, it can take years to establish a culture. But no matter what size or structure, every organisation has some kind of culture.
Developing a culture is essential for any organisation since it serves as an identifying structure for current or new employees. Founders often have the most influence over a workplace culture, especially in the early days of a start-up. Once an organisation is established, senior leadership carries the responsibility of growing and evolving the norms of workplace culture.
There are several benefits to building or establishing an organisational culture. Recruitment is one of the top benefits of an organisational culture. Having a clear organisational culture will help you:
Leadership plays a key role in influencing organisational culture. In fact, in many cases, the president or chief executive officer sets the tone for how the entire organisation will function. Strong workplace cultures with open and effective communication come from leaders who are active in shaping culture. Once a culture is established, employees are also responsible for adopting the culture and maintaining the way things are done at the organisation.
Organisational culture will emerge without input from leaders or founders, but the culture that’s created might not be healthy or positive. Even with leader involvement, a culture may not positively impact employee experience if it isn’t supportive in the ways that employees want it to be.
Naturally, an organisational culture can positively or negatively impact employee experience. If a culture is supportive of the ways employees want to work, employee experience is likely to be more positive. Conversely, if a culture is rigid toward how employees want to work, employee experience suffers. A more positive employee experience typically helps with retention, increases engagement, increases productivity and profits, and determines the overall health of your culture.
Since recognition is possibly the biggest driver of employee engagement, it’s beneficial to foster a culture that recognizes employees and their contribution. This can be achieved in many ways, but it is most important and meaningful when leaders play a role in recognition.
Leaders and employees both can actively shape the culture of their organisation, creating a positive and more productive environment.
Depending on the organisation’s size and the longevity of the company, transforming culture can be notoriously difficult. Sometimes the shared beliefs and assumptions of a workplace culture can become outdated, or they may hinder future growth. However, changing culture in an organisation can have a bottom-line impact that makes the transformation worthwhile.
Culture shifts take time to gain traction, particularly in large organisations where a culture is entrenched. However, changing culture in an organisation is possible if leaders commit to the change, no matter how long it might take. On average, it takes anywhere from several months to several years to change a workplace culture.
The following are four steps toward culture transformation:
Sometimes, a change in leadership will have a ripple effect on an organisation’s culture, particularly if the change at the top is part of the cultural change. Mergers and acquisitions can also present many culture-related issues. In some cases, an acquisition can have a negative impact on company culture. For instance, how easily does the company adjust to a new culture?
Ultimately, it’s important to remember that organisational culture plays a crucial role in every organisation’s success and effectiveness.
Find out more by reading the e-book, Create a Holistic Employee Experience, to explore how customers are using EXP platforms to improve employee experience, or by exploring Microsoft Viva, an employee experience platform that supports connection, insight, purpose, and growth, empowering people and teams to be their best
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Business Insights and Ideas does not constitute professional tax or financial advice. You should contact your own tax or financial professional to discuss your situation.
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