Understanding And Developing Organizational Culture
Organizational culture determines the average employee’s behavior in an organization. A great organizational culture is one of the most important traits of a successful organization as it is characterized by honesty, trust, and loyalty and enforces a positive attitude towards work.
Having a great organizational culture is the key to a successful organization. It reinforces the establishment’s core values, ensuring that all leaders and employees are working towards a common goal.
In this guide, we will examine the intricacies of organizational culture, its importance, and how to develop a strong organizational structure.
What Is Organizational Culture?
Also referred to as company culture or corporate culture, organizational culture consists of the shared beliefs and values upheld in an organization. It is the sum of an establishment’s beliefs, values, and attitudes and how these factors affect the behavior of all employees within that establishment.
Organizational culture affects how employees experience that organization. It determines workers’ expectations in the establishment and how they behave and eventually sets the context for every going-on within an organization.
Since organizational culture is evident in every area of an establishment, it shows up in all areas that concern the company. This ranges from how the establishment treats clients to mundane characteristics such as the employee’s dress sense or the establishment’s preferred choice of work clothes.
Essentially, as with the culture of a tribe, organizational culture is the foundation of everything an organization does.
In the past, organizational culture was not an important aspect of running a business. However, modern businesses today are creating distinct cultures that not only define their organization but also set them apart from competitors.
Organizational cultures ensure all employees within the company are on the same page. It is the personality of the company and says a lot about what a company stands for, who the employees are, and the goals of the establishment.
Ultimately, organizational culture dictates guidelines and boundaries for the conduct s of the employees and all members of an organization. It determines:
- How a business conducts its operations
- Emotions and decisions in the workplace
- How a business treats its employees
- How an establishment engages and treats its customers
- The extent of freedom that employees enjoy in decision-making, expressing themselves, and developing new ideas
- The process through which information flows through its hierarchy
- How dedicated employees are towards achieving a common goal
Characteristics Of Organizational Culture
Although every organizational culture is unique to the establishment, they share seven distinct characteristics.
When trying to tailor your unique organizational culture, it is important to outfit your plan or organizational culture creation strategy with all seven characteristics. You may choose to vary the degree to which every character is pronounced in your establishment, varying from high to low.
It is also important to remember these characteristics are not the same in all times and spheres. They may vary slightly when necessary in the organization, but they retain their emphasis on the company’s values and beliefs.
The seven characteristics of organizational culture include:
Also called risk orientation, innovation encourages members of an establishment to take risks and think outside the box. It empowers employees to be creative and brave enough to offer ideas and opinions, regardless of how unlikely these opinions may sound. When a company doesn’t value innovation, it creates a strict set of rules for employees to adhere to. It leaves no room for creativity, leaving employees in a monotonous environment that does not value psychological safety or the freedom to air opinions. Conversely, companies encouraging innovations enable employees to grow and harness employee creativity to spur company growth.
2. Attention To Detail
Attention to detail or precision orientation dictates the level at which staff members must be accurate in their work. It denotes the level of employee accuracy, limits to mistakes or errors, and a job that excuses accuracy and precision. A culture that emphasizes action to detail requires an employee to work with high precision, and a company that does not require much attention to detail convinces thief employees to perform otherwise.
3. Emphasis On Outcome
This characteristic is also known as achievement orientation. It focuses on how an outcome is achieved but not how the process is. Companies with this characteristic emphasize striving for results however necessary. For example, a company might urge its marketing team to reach a sales benchmark and do whatever it takes.
The people characteristic of organizational culture emphasizes fairness orientation. It reiterates that people are an asset, thereby ensuring members of the organization are treated with respect and dignity. An organization that emphasizes this characteristic places great weight on how decisions made within the company affect the people in the organization.
Teamwork is also called collaboration orientation. It prioritizes organizing activities around teams and not individuals to emphasize collaboration and cooperation. This characteristic encourages open and positive employee relationships, fostering a sense of community and friendship as part of the corporate culture.
This characteristic promotes competitiveness among employees. However, the form of competition that this characteristic encourages is healthy competition, one where employees aim to outperform others while remaining in a healthy environment. An organization that promotes aggressiveness encourages employees to know when they should be assertive, not easygoing, and vice versa. It also encourages employees to focus on doing better than the competition instead of being focused on their performance.
Stability refers to how rule-oriented the organization is. It determines how bureaucratic and predictable an establishment is. Companies like this focus on maintaining their output and processes and are mostly unbothered by growth as long as they are meeting the regular output necessary. They provide consistent and predictable output levels and function best in non-changing market conditions.
Types Of Organizational Cultures
Organizational cultures are usually tailored with varying characteristics to make one unique identity for an establishment. There are different types of organizational cultures depending on the values, beliefs, and norms an organization upholds. However, there are several well-known types of organizational cultures. Some include:
1. Clan Culture
As its name suggests, clan culture focuses more on emphasizing teamwork than any other characteristic. It creates a sense of community among the organization’s members, ensuring employees feel like one big family. This type of organizational culture also encourages all employees to speak up without fearing being judged, as every member of the workforce is valued.
Clan culture fosters collaboration and commitment as employees work together towards one common goal. This creates strong relationships, a more relaxed and welcoming work environment, and potential for growth as employees work towards one common goal. However, it also downplays power, making it difficult to determine who does what. Additionally, clan culture can limit productivity due to too much communication and cause workplaces to relax too much.
2. Hierarchy Culture
Hierarchy culture emphasizes the power of leadership. There is a definite leadership structure that defines the control of power.
Unlike the clan culture, which has a horizontal leadership structure where everyone is equal, the hierarchy culture has a more vertical structure with the highest leader of the centralized organization at the top.
Hierarchy culture offers an organized and efficient work environment, allocates responsibilities for performance efficiency, creates clear boundaries, offers a seamless communication channel, and creates workplace security. However, it is considered strict and oppressive, focusing less on poorer development than clan culture.
3. Adhocracy Culture
An adhocracy culture is usually adopted by organizations that need to continuously create cutting-edge products or services to remain relevant in their industry. Like clan culture, advocacy culture promotes innovation, employee creativity, and risk-taking.
This culture offers several benefits, including constant innovation, constant growth, a versatile work environment, and a high level of employee trust and support. However, it creates a chaotic environment, a lack of clarity about the company, employees who may feel pressured, and difficulty in employee ability to adapt due to the absence of set rules.
4. Market Culture
This is a culture of competition. It is highly result-oriented and encourages employees to be highly competitive, especially when meeting the company’s goals or bottom lines.
Market culture is usually adopted hand-in-hand with the concept of hierarchy culture. It offers great benefits such as gearing employees to reach set goals, creating constant innovation, and employees receive bonuses for their hard work. However, it creates a risk of a toxic environment and a highly demanding environment.
5. Strong leadership Culture:
This type of culture also deals with a hierarchy but has charismatic leaders at the apex of the hierarchy. The leader is in charge of defining a vision, mission, and purpose for the organization and helping the employees have the same purpose and vision.
Strong leadership culture also emphasizes employee development. It provides numerous training and mentorship programs for all employees at the lower pyramids of the hierarchy. This is great because this culture breeds top performers and helps employees develop good leadership skills. However, it also breeds competition.
6. Customer-first Culture
In many cases, establishments create their products and services before working to create demand in the market. However, a company with a customer-first culture works the opposite way. The company researched the market to find gaps and come up with how it could fill these gaps. They do this by striving to meet the market’s needs and maximizing customer satisfaction in every way possible.
A company with a customer-first culture enjoys a loyal customer base, promotes a happier workplace, and fosters market innovation. However, they do not have a set sales return and accept losses which is not a sustainable option for profit-oriented companies.
7. Role-based Culture
A business with a role-based culture focuses on placing employees in positions where they have the potential to succeed. As such, the roles and responsibilities of the employees are shared based on individual expertise and skill sets.
In this culture, employees have a clear role, enjoy a clear purpose, and take ownership of the work assigned to them. However, managerial positions don’t pull much weight.
8. Task-based Culture
Where employees in role-based cultures are assigned times based on their skill sets, employees in task-based cultures are assigned tasks. This is usually seen in small businesses, start-ups, or companies without many employees. In these establishments, employees are required to wear many hats so they can handle tasks their skills allow.
Task-based cultures boast of employees that can carry out different takes, members that fill more than one position, and little emphasis on hierarchy. However, employees may feel overworked, and performances might lack in some areas.
9. Purpose Culture
In this organizational culture, employees work towards one common goal or purpose. This is common in non-profit organizations and focuses on giving back to the community, working towards a greater good, and being united in sustainability. However, it may reduce profit margins.
Qualities of A Great Organizational Culture
Every organization has a unique culture. However, great organizational culture has unique qualities that reflect the establishment’s success.
Some of these qualities include:
- Alignment: Every employee shares the same objectives and beliefs and works together toward a common goal.
- Appreciation: Every employee is valued, appreciated, and is publicly recognized for reaching milestones or benchmarks.
- Trust: Members trust each other to a large extent and can rely on their colleagues to have their backs. It also means the presence of trust between employees and their managers.
- Great Performance: Employees are motivated to excel at whatever they do, thereby showing great results through performance.
- Teamwork: No matter how much employees are encouraged to trust their abilities, a great organizational culture promotes collaboration, communication, and mutual respect. It sets the basis for teamwork and creates a sense of community.
- Integrity: A good corporate culture promotes an organization with integrity and where employees are honest, transparent, and open with each other.
- Innovation: An establishment with a good corporate culture optimizes resources and adopts creativity to create innovative solutions.
- Psychological Safety: Psychological safety is the shared belief that an employee is protected from punishment or humiliation for speaking up with ideas, questions, and concerns or making mistakes. A great organizational culture promotes a safe environment for employees to thrive without the fear of being subjected to bias.
Importance Of Organizational Culture
Corporate culture is important for numerous reasons, all of which affect the success of an organization. Some reasons you need to tailor a great corporate culture for your establishment and employees include:
- Strong Brand Identity: An establishment’s organizational culture represents its personality, reputation, and image. The better its culture, the better its image in the eyes of customers and business partners.
- Effective Onboarding: When a company has a clear organizational culture, it is easier to integrate new hires into its operations. With clear rules, values, beliefs, and norms, new employees will have no problem transitioning into their role as a worker in that establishment. This not only reduces the cost and time an organization spends on an onboarding process but also provides less challenges for new hires.
- Healthy Team Environment: Organizational culture optimizes workflow. It unifies all members of an organization, promoting unity, and creating a healthy team environment.
- Top-Performing Employees: A great organizational culture fosters employees with great skills and values. It builds a network of high-performing employees by encouraging a positive environment where all workers can thrive.
- Transformational Power: A great work culture transforms employees to a better version of their professional self.
- Better Productivity: Employees in a positive environment tend to be more productive, especially if they are in an organization whose culture has employees working together towards a shared goal.
- Increased Employee Engagement: Organizational culture drives an establishment with a sense of clear purpose. As a result, employees are constantly motivated and inspired to be more engaged in their role at work.
- Reduced Turnover Rate: An employee in an establishment with great organizational culture is usually satisfied. They feel valued and respected and are less likely to leave. This reduces the turnover rate of the organization they work in.
How To Create An Organizational Culture
Creating or building your unique organizational culture can be challenging. However, seeing the benefits that it offers, it is undoubtedly one of the best things you can do for your organization.
Some easy steps to help you build a strong organizational culture include:
- Assess your company’s current culture and values
- Narrow down your cultural elements and do research on how to fine-tune them
- Collaborate with stakeholders
- Implement a plan, including rules and regulations to sustain your culture
- Effect your plan
- Monitor the plan’s effectiveness
- Make changes where necessary.
Tips To Build A Strong Organizational Culture
Are you finding it difficult to build or sustain your organization’s culture? Here are some tips to help you.
- Build shared values
- Invest in diversity and inclusion
- Encourage mutual trust
- Foster an habit of recognition and reward
- Create connections between members
- Live by the values you set
- Encourage employees to be vocal
- Focus on learning and development
- Personalize employee experience
Fostering A Strong Culture At Work
Understanding and developing organizational culture is crucial for any company that wants to be successful in today’s competitive business environment. By creating a positive and engaging workplace culture, businesses can attract and retain top talent, boost employee productivity and satisfaction, and ultimately improve their bottom line.
Although creating a lasting and effective work culture takes time and resources, the effects and benefits are worth it in the long run. Are you interested in building a work culture that prioritizes positivity and reinforces your organization’s beliefs? Our guide offers everything you need to know about the culture-building process!