Company culture is a shared set of values, beliefs and attitudes that influences employee behaviour and impacts the success of an organisation.
Company culture is a shared set of values, beliefs and attitudes that influences employee behaviour and impacts the success of an organisation. Company culture is based on the organisation’s vision, values, goals, attitudes, practices, language and systems, and reveals itself within various aspects of day-to-day operation, such business hours, employee benefits, hiring decisions, office set up, the treatment of staff and clients, and more. As company culture affects all aspects of a business – including hiring, retention, productivity, results and company longevity – it has become a vital component of every business leader’s tool kit.
History of company culture
Company culture comes from the concept of organisational culture, which was first introduced in the late 1970s. Based in sociology and anthropology, organisational culture determined that organisations could possess a set of shared values, beliefs and norms capable of influencing the attitudes and actions of organisation members. Researchers within the field believed that organisational culture could significantly impact organisational outcomes – not only in terms of guiding and motivating employees, but in distinguishing companies from each other and creating a competitive advantage. As a result, organisational culture became a valuable tool for business leaders looking to create and manage a culture that would improve their company’s performance. By the 1990s, ‘company culture’ had become a well-known term and tactic for managers, human resource departments and CEOs alike.
Recent trends in company culture
Covid-19 and the Great Resignation
The coronavirus pandemic has had a significant impact on the workplace in recent years. Perhaps most notably, the widespread adoption of hybrid and remote work models has caused many to reassess their priorities and reimagine the workplace. This has ultimately led many to quit their jobs, resulting in the Great Resignation. Since 2021, millions of people worldwide have taken part in the Great Resignation. In America, more than 50 million workers quit their jobs in 2022 alone. According to PwC’s 2022 Global Workforce Hopes and Fears Survey, there are many factors contributing to this phenomenon. While 71% of respondents listed pay as the primary reason for wanting to quit their job, job fulfilment and the ability to be one’s true self at work ranked second and third among employees considering a job change. Other factors, such as employee well-being, flexibility, training and creativity, also ranked highly. This shows that in addition to providing fair and competitive compensation, employers must create a positive work culture to attract and retain employees and accommodate their workers’ needs.
A new culture-building approach
For many years, company culture has been a top-down process that involves the CEO or senior management delegating the ‘culture-building duties’ to the human resources department, who then design and execute a strategy or campaign based on the mission statement and core values provided by senior management. This system, while seemingly functional, has a significant flaw: it treats company culture like a to-do list that can simply be ticked off and put away after all tasks have been completed. Company culture is not something that can simply be implemented. Instead, it must be actively developed by everyone in the organisation.
A new culture-building approach, centred on shared responsibility, has emerged in recent years. Within this system, the culture-building responsibilities are assigned to everyone in the organisation – including the board of directors, the CEO and senior management team, the human resources department, the compliance, risk and ethics department, middle managers and employees – rather than a select few. Each group has a clear set of expectations, which ensures that everyone is held accountable, and the desired culture is upheld. This approach allows a healthy, well-aligned and effective culture to develop which will positively impact company performance and employee satisfaction.
Advantages of company culture
- Company culture can create a positive workplace environment.
- Healthy company cultures will attract and retain high-value workers.
- Company culture can contribute to the diversification of the workforce.
- Positive workplace environments result in engaged, enthusiastic and motivated employees and increased performance and productivity.
- Company culture can provide organisations with a competitive advantage.
- Healthy cultures allow organisations to adapt.
Disadvantages of company culture
- Sometimes company culture is not explicitly defined but develops over time based on the people the company has hired in the past. This means that the bad habits or attitudes of a few can infect the entire organisation, leading to unhealthy cultures or toxic work environments.
Use case
In the wake of the pandemic and the Great Resignation, many companies have recognised the need to adapt their management styles and have started implementing policies and procedures likely to attract the most talent. For many companies, this has meant adopting flexible workplace models and ensuring that their employees are engaged with the company – whether that be through training and development opportunities or employee reward systems. Google, for example, has adopted a rewards programme that offers its employees experiences, such as dinner vouchers or trips to Hawaii, as well as new tech products, like tablets and smartphones. According to Google workers, this employee-centric approach has been 28% more fun, 28% more memorable and 15% more thoughtful than the company’s previous attempts at employee recognition – and is therefore more likely to positively impact the company’s success.