What is the impact of the organizational culture on the company?

Management scholars and experts have been interested in studies and unique experiences related to the organizational culture of institutions in order to increase the pace of competition between companies, the encroachment of globalization with its diverse cultures, the acceleration of digital transformation, the exacerbation of ethical scandals and the increase in disasters related to information security.

The term organizational culture refers to the set of moral values, traditions, collective principles, and norms that prevail in an organization.

This culture has a major role in shaping the identity of the institution, directing the behavior of its children, forming channels of communication, refining the decisions of its leaders, coloring its organizational structures and charting career growth paths in it, in addition to defining methods for conflict resolution and developing the incentive system, according to what management scientist Edgar Shane emphasized in his famous book “Organizational Culture.” and leadership“.

The organizational culture of companies is also present during the distribution of power and influence, the division of work teams within the company, agreement on ways to complete transactions, and drawing up policies for dealing with employees and customers, as well as how the company deals with community problems and environmental challenges.

This culture is generated first from the convictions of the participants in the establishment of the institution, and then it matures thanks to the accumulated experiences and expertise, and its vocabulary crosses with the culture of new employees and is mixed with the philosophy and principles of its leaders, symbols and inspiring personalities.

Leaders are the inspirers, custodians of values ​​and principles, and agents of change, says Edgar Shane. It is therefore advisable to assign a Culture Champion within each company.

This culture is coupled with the institution’s mission, values, strategic objectives, standards, systems, legislation, environment, location, and the Code of Ethics if it has a charter.

The culture itself is affected by the quality of the product, the characteristics of the industry and the market, the role of technology, the national culture of the country, and the directives of the regulatory bodies.

Like strategic plans and codes of ethics, key stakeholders must be considered when formulating organizational culture.

As for employees, they are attracted by carefully designed values, principles and policies to motivate them, enable them to compete, urge them to take risks, involve them in the decision-making process, and provide them with means of happiness and safety.

This unique cultural mixture is present in the cultural mix of the Internet giant Google.

Similarly, Warby Parker adopts an organizational culture centered on growth, learning and repetition, which was the reason for its leadership in the top innovative companies in 2017.

While the owners of capital and stakeholders are keen to formulate an organizational culture that aims to achieve competitive advantages, encourage innovation and reduce waste of money and resources In kind, saving energy, time and effort.

As for clients, they are often drawn to organizations that embrace a long tradition of social responsibility and a tradition of meeting their needs and improving their expertise.

Read Also

Does Your Organization Have Healthy or Toxic Organizational Culture?

Management scholars divide organizational culture into healthy organizational culture and toxic organizational culture.

Elements of a healthy culture that experts recommend adopting include: spreading acceptance, appreciation, diversity and fairness among employees, and respecting each other’s contributions, achievements, and ideas.

The healthy culture also considers each employee as an original element in the organization that is proud of and supports and supports him through thick and thin.

Institutions that have a healthy culture are keen to provide the necessary resources for the employee to continue his career and enable him to compete even after leaving the company in order to be a messenger and ambassador for it after his departure.

In addition, they do not consider the employee a tool for production, but rather a person with moral, security, psychological, social and spiritual needs as well.

The value of “equal opportunity” is also an adornment of the organizational culture of successful institutions.

Promote Your Healthy Organizational Culture

Investing in training and development, professional ethics and social responsibility has become essential fertilizers for organizational culture within innovative organizations.

Effective communication between the members of the organization has become one of the tools of cultural cross-fertilization and channels for integrating employees into the company’s culture and involving them in shaping its values, customs, traditions and collective principles.

We conclude from this cursory tour that the healthy organizational culture is the backbone of the institution and its pinnacle, the carnivore that connects its sprawling parties, and the belief that unites its sons.

It is also a powerful tool that may turn the employee’s job dreams into reality or turn them into nightmares that deprive him of the pleasure of sleep and rest.

Management expert Michael Watkins has described it as the immune system that protects an organization’s existence and maintains its cohesion.

Toxic Organizational Culture is Really Harmful to Your Company

On the other hand, according to Liz Ryan, a management expert, we find that one of the manifestations of a toxic organizational culture is: individuals holding their tongues when making decisions, their reluctance to take the initiative, and their fear of venturing by introducing new ideas or adopting unconventional ways of working, as this negativity arises because of their keenness to avoid controversy and conflict with Companions or fear of the look of contempt from their superiors.

And when culture is disturbed, cooperation is absent, hatred and envy invade the hearts of co-workers, and division, division and conflict prevail among them, according to Joanna Zambas. Dr. Lavon says, “It took place in such an environment, people do not listen to each other, abuse one another because of experience, and do not sympathize with the weak among them or the afflicted among them.”

Rumors spread, secret agreements are complicated, backbiting and gossip pollute every tongue, in addition to wasting a great deal of time in settling disputes.

In addition, backstabs become more than handshakes between colleagues.

In such a climate, dissatisfaction looms on the faces of the employees, the smile disappears, their faces are covered with signs of insomnia and fatigue, and they think, in addition to the exacerbation of health problems such as headaches, high pressure and other diseases related to the toxins in the work environment, which wastes resources and negatively affects productivity and distorts the relationship with customers. The Arab sages concluded that “the one who loses something does not give it.”

In addition, the toxic culture causes a rift in the manager’s relationship with his subordinates, as personal interests prevail over the interests and objectives of the company, selfishness and greed spread, and the work environment becomes repulsive to clients and competencies, as well as partners. Ambitious competencies migrate when the windows of career growth are closed to them and losing battles are imposed on them, in which they have neither elegance nor sentences.

Worse, according to a report by Switch and Shift: Companies not embracing healthy cultures may lead to bankruptcy, as in the case of American Apparel, or recession, as in the case of McDonald’s, or billions of losses, as in the case of Toshiba.

Company culture is powerful: it can impact sales, profits, recruiting efforts and employee morale, whether positively or negatively. A great company culture attracts people who want to work or do business with a company. It can inspire employees to be more productive and positive at work while reducing turnover.

It can even act as your best recruiter, attracting qualified candidates who want to work for your company. It’s easy to see just how important company culture can be.

There are brands doing it famously well, and if you’re wondering how you can too, often a good place to start is understanding how your company culture impacts your employees.

Company Culture’s Impact on Employee Performance

To provide the biggest competitive advantage, an organization’s culture must be strong, widely communicated and reinforced. Everyone must share their values and beliefs.

In a strong culture, employees feel valued. They enjoy at least some control over their jobs, instead of feeling powerless. Whether it’s by working from home, choosing their projects or trying out a new role, employees that feel valued and can make decisions achieve a higher level of performance.

Strong company cultures also give employees opportunities to grow. Offering promotions, career development programs or extra training can keep employees motivated – which in turn, improves performance. When everyone is in it together, they will all put forth the extra effort to achieve organizational goals.

Company Culture’s Impact on Employee Happiness

Positive company culture has the ability to ensure that employees remain satisfied with their jobs and loyal to the organization. This can be extremely beneficial in a competitive hiring environment. People are much more interested in signing on (and staying) with a company culture that promotes flexibility, supports employee development and offers work-life balance.

Improving employee satisfaction through a strong and supportive company culture can reduce recruiting, hiring and training expenses while improving morale and increasing profits.

Company Culture’s Impact on Employee Engagement

By now, we’ve made it clear that strong company culture has quite the impact on an organization, as well as employee performance and satisfaction. Now let’s explore the many ways that company culture can impact employee engagement:

Communication: In companies with good communication practices, employees know their opinions and ideas are welcomed. When employees feel heard, they don’t carry the resentment that can lead to absenteeism, negative morale and termination. Communicative company culture also leads to greater participation, creativity, and innovation.

Safety: Organizations that value employees emphasize safety. A culture of safety becomes ingrained, and employees are more mindful and engaged when performing their duties.

Collaboration: Rather than an “us vs. them” approach, collaborative companies promote autonomy, decision-making, and teamwork. Employees are given opportunities to contribute, placed in roles in which they can succeed, and offered opportunities to build meaningful relationships with managers and co-workers.

Growth: Cultures that foster employee development and growth give workers something to work toward and look forward to. Such cultures prevent boredom and job stagnation while keeping things exciting and interesting.

Once employees are hired, trained and oriented to the workplace, they either feel supported and energized or undervalued and frustrated. When employees feel valued, they are more involved, enthusiastic, and engaged.

Company Culture is More Important Than Ever

In today’s highly competitive business environment, everything from sales to recruiting becomes more challenging. One way to make it all easier is by being a company that people want to do business with and work for. Smart organizations know that strong, positive company culture is one of their most important assets.

Unsure Where to Begin?

That’s where we come in. Great Place to Work® makes it easy to survey your employees, uncover actionable insights and get recognized for your great company culture. Contact us today to get started.