Why Organizational Culture Matters Even More Today

What does it mean for your organizational growth and success?
Manasa Prasad M

Jul 05, 2023

"For individuals, character is destiny, for organizations, culture is destiny!" -Tony Hsieh

Organizational culture is a set of shared underlying assumptions about an organization in terms of what is valued, how people should behave, and beliefs about what is normal within the organization (Schein, 1999). These shared assumptions can be formal rules (e.g., policies, processes) and informal rules, commonly understood expectations, standards and norms that direct workplace behavior and define what is accepted and what isn’t.

The success stories of organizations have time and again proved that sustained competitive advantage is largely attributed to internal innovation driven by a set of beliefs, values, and shared norms within the organization. These values, beliefs and norms symbolize an organization’s culture (Morgan 1997).

Why culture matters!

Organizational culture is what you see in the interaction of employees at work. Culture gives you a sense of collective identity as an employee of the organization. It binds you to values and beliefs that transcend beyond employees' personal aspirations.  An organization with a strong culture will have common values and codes of conduct for its employees. These values will help us in working towards organizational and personal missions and goals with minimal conflicts.

Your organization’s culture standardizes your company’s business process, it brings clarity that drives mental calmness, boosting morale which is vital in driving organizational efficiency.

The organizational culture boosts team spirit thus positively impacting the organizational climate. This sense of oneness neutralizes conflicts that might arise within the organization.

When you align your recruitment policies and procedures with the culture of the organization, recruitment becomes simpler. This helps you recruit, select, and retain employees whose values best fit the organization's values.

Studies have shown that strong cultural values promote innovation, internal flexibility, and better utilization of human capital (Robbins, Judge, & Sanghi, 1994) in an organization.

What does organizational culture look like?

Does your organization have a great culture? Here are the signs to look for:

  • Employee turnover: Employee turnover tells you about the culture of an organization. Happy, engaged employees with continued growth opportunities stay with an organization. If you see that your organization has employees who have been there for a long time, you can be certain that you have made the right choice!
  • Transparency: An open culture is a thriving culture. You feel safe and secure if you know where your company stands and what challenges you as a team should work towards. Lack of communication from your leaders breeds a lack of trust and connection and makes you feel insecure.
  • Diversity: If you have people from various demographics, you should know your organization is upholding an inclusive culture that is inclusive in its recruitment, policies, team structure, and approach. If you get to work with clients as diverse as your team, then that’s a diverse culture and you are in the right place.
  • Visible and accessible leaders: When your organization’s leaders are honest and available to everyone, it creates a sense of togetherness, and you feel strongly bound to your goal and the company’s mission. Successful leaders create a sense of “we are all in this together”.
  • Comfortable workplace: The physical environment in which you work each day can have a significant impact on how you feel about your job and your employer. A happy space with amenities that people care about is imperative for enhancing team morale. A positive workspace where each employee feels valued and heard nurtures psychological safety which is the hallmark of a good culture.
  • Opportunities for professional development: Job satisfaction is closely tied to the opportunities your team has for growth, learning and development. Resources and budgets for each employee’s professional development foster a culture of commitment towards team growth.

How can you foster a positive organizational culture in a hybrid workplace?

A positive organizational culture can boost productivity, morale, and employee well-being. Here are the tips leaders can follow to foster a healthy and harmonious workplace.

  • Communicate clearly and respectfully: Communicate your expectations, feedback, and appreciation to your team members. Take time to listen to your team members' concerns, ideas, and opinions. Communicate clearly and respectfully across different channels like email, phone, video calls and face-to-face meetings. Keep your communication regular and consistent.
  • Encourage collaboration and teamwork: Working together as a team builds a sense of belonging, trust, and mutual support. An environment that encourages teamwork by setting clear and shared goals, assigning roles and responsibilities, and providing resources and tools goes a long way to building healthy working relationships. This is essential for reducing stress and conflicts.
  • Promote well-being and balance: Stress and burnout can take a toll on your team's physical and mental health affecting performance and motivation. Take measures to promote well-being and balance in your work culture by providing a safe and comfortable work environment, offering flexible work arrangements, and respecting your team’s boundaries and preferences. Encourage your team members to take breaks, exercise, play and enjoy time away from work. Be emphatic and compassionate towards your team members when they struggle with challenges and are in distress.
  • Model positive and supportive behavior: As a leader, your words, actions, and thoughts influence your organization’s culture and climate. In every way possible, model good and supportive behavior. Show your commitment to your team’s well-being, growth, and success. Empower them to take ownership and initiative. Lead by example and set the tone for a positive and supportive culture.

Organizational Culture: Success stories

Costco is known for its unique culture. Its employees enjoy perks not easily found in other industries and higher work satisfaction. James Sinegal, the co-founder of Costco, its first CEO, and his successor Craig Jelinek believe that taking care of their people is the most valuable long-term investment and it’s a very low turnover rate of less than 10%.

Bob Chapman transformed HayssenSandiacre's trajectory by changing its culture. This powerful change in culture was done by communicating to its people that management trusts them. Breaktime bells, punching time clocks and cages that guarded spare parts of machinery were taken away. Continuous cues that the leaders trusted their people to do their job and be noble curated the organization’s culture. With this, they also doubled their revenue over time. 

When Allen Mullaly became Ford's CEO in 2006, he found a culture of fear when the company was inches away from bankruptcy. No one admitted what was not going well with the fear of losing their job. However, a senior manager saved the company by presenting the most red-flagged issue. Allen, instead of condemning him, rewarded him for putting it across and saving the company. Over time the team developed trust with their CEO and the leaders became more open about the issues that needed attention and offered necessary support.

The bottom line

Your organizational culture greatly contributes to the growth and development of your people and the organization. It is a measure of an organization’s health and identity. Gen Z evaluates the worth of an organization by examining its culture. Thus, the culture of an organization should be emphatically created, nurtured, changed, and splintered to guard the organization's success (Cancialosi, 2017).

Let’s all work towards building a robust organizational culture to live, work and thrive to be the most productive version of ourselves at work.

Manasa Prasad M is a Learning and OD Specialist who thrives on human interactions. She brings in her diverse expertise across education, education psychology, organizational psychology, behavioral skills and content development to create impactful learning solutions that are centered on the people behind the organization.        


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