What is Organizational Culture and Why Is It Important?- edited by Aishee Biswas

Organizational culture can be defined in various ways, but many people misunderstand its true meaning. Instead of focusing on the fundamental principles, a significant percentage of individuals tend to equate culture with the external appearance of a company. This could include factors such as the dress code, mission statement, office layout, and publicized employee benefits. Although these elements may contribute to company culture, they are not the defining aspects. Despite this confusion, culture plays a crucial role in business success. As noted by management consultant, educator, and author Peter Drucker, "culture eats strategy for breakfast," emphasizing the significance of human factors in any organization. To clarify the meaning of organizational culture and its importance, let's delve deeper into the subject.

 

Enhancing Recruitment Strategies:

Recruiting qualified talent can be challenging, especially with the increasing number of new businesses in the market. This has prompted job seekers to become more selective in their search and evaluation of potential employers. In fact, over one-third of employees have stated that they would turn down a job offer, even if it was their dream job, if the company culture did not align with their values. By fostering a robust organizational culture, you can improve your recruitment efforts and attract top candidates. However, it's important to note that what one person may perceive as an ideal company culture may not necessarily be the same for others. Therefore, it's crucial to create a culture that aligns with your company's values and attracts the type of individuals you want working for your business. For instance, some people may prefer a fast-paced, entrepreneurial culture, while others may prefer a more stable, traditional business and culture. It's important to acknowledge that there is no one-size-fits-all approach to organizational culture.

 

Streamlining Onboarding Processes: 

Companies with strong organizational cultures typically have more streamlined onboarding experiences. This is because they have established systems in place to ensure that new employees have access to the necessary resources to adjust and assimilate into the culture of your workplace during the transition period. Improved onboarding procedures often result in increased employee loyalty and longevity. During this process, effectively communicating the culture of your organization will help new employees understand the core values and daily operations.

 

Reducing Employee Turnover:

In today's highly competitive business landscape, retaining talented employees can be a daunting task. However, a robust organizational culture can help decrease employee turnover rates by fostering inclusivity and community while respecting diversity within your industry. Studies show that about 38% of employees consider leaving their jobs due to negative company culture, while 60% leave or are willing to leave their job due to poor leadership. Thus, investing time in building a positive cultural framework that aligns with your business objectives is critical. In the United States, a Glassdoor multi-country survey revealed that 74% of respondents would seek employment elsewhere if their company culture deteriorated. To maintain a low employee turnover rate, organizational culture must be a constantly evolving process that is nurtured over time.

Improved Employee Engagement:

Employee engagement refers to an individual's level of commitment, connection, and passion towards their work at a particular organization. It is the foundation for building a meaningful relationship between employees and the business, and it has long-lasting positive effects. By creating an immersive organizational culture, employee engagement can increase significantly. The level of engagement will depend on the type of culture that is fostered and promoted, but a strong organizational culture has the potential to generate a massive positive impact. For example, companies with a strong culture have up to 72% higher employee engagement rates than those with weak cultures.

Enhanced Productivity:

When employees are happy and satisfied with their job, they tend to work harder. Even though the organizational culture may slowly become less obvious to employees, it still impacts their daily work efforts. Creating a strong company culture aligned with organizational objectives can increase employee productivity and overall work output. In fact, a majority of workers in the U.S. consider organizational culture as one of the most significant influencers of their job performance. A 2019 survey found that 76% of employees believe culture helps positively influence their efficiency, motivation, and ability to do their best work.

Stronger Brand Identity:

Effective communication of your brand is crucial for marketing efforts and organizational culture. Your brand represents your business reputation in the public's eyes. While some external factors may impact your brand image, most of it comes from your company culture and interactions individuals have with employees and leaders. A strong company culture strengthens your brand identity. It is possible that your employees will become brand advocates without additional persuasion.

 

Improved Performance:

A culture that fosters individual development, community, and inclusivity stimulates employee performance and helps achieve organizational goals. Employee satisfaction, combined with higher performance, creates a strong talent pool of dedicated employees who value being a part of your company. Over time, this creates a positive cycle that can exponentially increase the success of your organization.