Just what exactly is Corporate Culture?


Corporate Culture – what is it?

Investopedia defines it as: “Corporate culture refers to the beliefs and behaviours that determine how a company’s employees and management interact and handle outside business transactions. Often, corporate culture is implied, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires. A company’s culture will be reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, client satisfaction and every other aspect of operations.

Hence, an organisation’s culture is primarily driven by its internal belief system, its values and methods.

What, then, does this mean for an organisation and its employees?

Basically, it will affect all aspects of an operation and especially productivity and performance. It will provide guidelines on customer service and product quality, and impact on safety, attendance, punctuality and concern for the business and the environment. Every organisation’s culture is unique and can be one of the hardest things to change.

Given the importance of the organisation’s culture, it is often written into the Mission Statement and savvy job seekers will try to find an organisation that matches their ideas of corporate culture.

However, how well do your employees understand your culture and are they integral to its beliefs?

In their book, Corporate Culture and Performance, John Kotter and James Heskett published the results below, taken from an 11-year period, highlighting the performance differences between 12 companies that had a strong and adaptable corporate culture and 20 that did not.


The authors admit that the results are staggering, but also that they took great care to ensure that the study was robust. Even allowing for a range of variables, there is a clear indication that corporate culture is important in a company’s performance.

If your company’s culture turns sour, you could be headed for trouble.  There are a number of warning signals to watch for, including:

  • Increased turnover – this is easily monitored and the reasons, garnered by good exit interviews, can often point to the problems.
  • Difficulty in finding new employees – if candidates find that the company doesn’t seem to match their ideals, this could indicate issues.
  • An office that empties promptly at 5PM – it could be because job satisfaction is low and staff is only there for the money.
  • Do your people understand and live by the Mission Statement? If they don’t understand it or believe in it, again, another sign to watch for.
  • Is there harmony between levels of management and workers?
  • Increases in customer complaints.
  • Poor attendance and reluctance to attend company events.
  • Lack of feedback and honest communication.

Any one of these can on its own be an indicator. However, if more than one manifests itself, there are some really serious issues present.  Either way, the faster they are addressed, the better.

So how do we address the cultural issues?

  1. The best way is very obvious – avoid them in the first place. This can be done by ensuring that your people are all on board, in the most appropriate roles for their skill-sets and a contributing part of the culture. Being assessed as job-fit and benchmarked for their roles is a huge step in the right direction, as this ensures maximum job satisfaction and performance.
  2. Invest time in your employees, know who they are and understand their strengths and weaknesses. This allows for selective and targeted training and development, building rapport and enhancing their sense of worth. Always remember the old maxim: “If you think training is expensive, Consider the cost of ignorance!”
  3. Having an excellent communication strategy and being open with employees is also vital. This can be done by informal or formal gatherings where management listens to and acts on concerns that are expressed. Good employees want their company to be successful and they want to enjoy their time on the job. It is management’s role to work with them to achieve this and in the process, improve the productivity and performance of the company.
  4. While fixing the problems won’t necessarily be done in one, two or even three meetings, opening up direct channels of communication is a big step towards healing whatever ails your organisation.


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