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What is company culture? importance, types, how to build your own?
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What is company culture? importance, types, how to build your own?

Velents Team
Updated on:
July 20, 2022
Reading time:
8 Min

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If you asked an employee of yours and another of a different company "What is company culture? How do you see it?" you will get not two different answers, but more than four, some wishes, suggestions and more.

Employees' experience must be at the top of your concerns, they are the hands and minds of your business and the reason you reach your shared goals.

The psychology behind building culture in any workspace is similar to a nudge. It may seem like a small action but it affects much more aspects of the organization than you can see at first.

Let's dig deeper into the definition and benefits of company culture.

What is company culture?

Simply put, company culture is where you want to live, a convenient environment where you can achieve your goals, meet your success, talk with your colleagues and what decisions are best to make. Company culture affects all aspects of a company like mission, vision, goals, attributes, hiring decisions, etc.

A company's culture is often described as its "personality." Just like individuals, every organization has a unique set of values, beliefs, and behaviours that make up its culture. These elements influence how employees interact with each other and with customers, what kind of work environment they enjoy (or don't), and what kind of products or services they produce.

In order to create and maintain strong company culture, it's important to be intentional about what you want your culture to be. That means clearly articulating your values and then living them out in everything you do, from the way you treat your employees to the way you design your office space. It also means being open to feedback and always looking for ways to improve.

It's what gives your business a competitive edge, attracts and retains top talent, and drives employee engagement and satisfaction. If you're not already focusing on culture, now is the time to start.

Importance of company culture

Company culture is important because it affects the organization, the employees, the success ratio, and why you need to have one. It is the way that a business conducts itself. The culture of a company can be good or bad, but either way it will have an impact on how well the company does.

There are countless articles, books and studies that discuss the importance of company culture, but what does that mean for you and your business?

Strong corporate culture:

  • Attracts top talent
    In today's job market, employees are looking for more than just a paycheck. They want to work for a company that shares their values and where they feel like they can be themselves. A strong company culture is a major selling point for job candidates, and it can help you attract the best and the brightest to your team.

  • Boosts employee engagement
    When employees are engaged, they're more productive, more innovative, and more likely to stick around. A positive company culture is a major driver of employee engagement, so if you want to keep your team happy and engaged, focus on building a strong culture.

  • Improves retention
    In addition to attracting top talent, a strong company culture can also help you keep the employees you already have. When employees feel like they're part of a positive, supportive culture, they're less likely to look for a new job.

  • Drives business success
    A strong company culture doesn't just make employees happy—it also has a major impact on the bottom line. Studies have shown that businesses with strong cultures are more profitable, more productive, and more successful overall.

Bad company culture, on the other hand, can have disastrous consequences. A negative or toxic culture can lead to high turnover, low productivity, and a whole host of other problems.

It is important to identify your company culture and make sure that it is what you want it to be. You can do this by looking at the values that you promote, the way that you treat your employees, and the overall atmosphere of your workplace. If you are not happy with what you see, then it is time to make some changes.

Types of company culture

Different types of company culture can be found in different organizations. The type of culture that is present in an organization can have a significant impact on the way employees behave and perform their duties.

Defining company culture is one of the best ways to figure out what it would be like to work at a particular organization.  It can be difficult to properly identify the culture of an organization, but doing so can give you a good idea of what to expect from the workplace.

This is your way of showing off what your organization is offering and what distinguishes it from other companies.

Let's talk about the types known to be the best to exist.

  • Clan or Collaborative Culture
    Clan cultures are typically found in smaller organizations where everyone knows each other and works closely together to achieve common goals. In clan cultures, employees are often very close-knit and supportive of one another. The culture is typically very team-oriented, and people are willing to put the needs of the team above their own.

  • Adhocracy or Creative Culture
    Adhocracy cultures are typically found in organizations that value creativity and innovation. In these cultures, employees are encouraged to be creative and to take risks. The focus is on generating new ideas and solving problems in innovative ways.

  • Market or Competitive Culture
    Market cultures are typically found in organizations that operate in highly competitive industries. In these cultures, employees are driven by a need to win and to be the best. The focus is on achieving results and beating the competition.

  • Hierarchy or Control Culture
    Hierarchy cultures are typically found in large organizations with a lot of bureaucracy. In these cultures, employees are expected to follow rules and procedures. The focus is on maintaining order and control.

  • Network or Community Culture
    Network cultures are typically found in organizations that are part of a larger community or network. In these cultures, employees are expected to build relationships and to cooperate with others. The focus is on networking and building relationships.

  • Purpose cultures
    They are cultures that are based on a shared sense of purpose. In these cultures, employees are united by a common goal or mission. The focus is on achieving results that are in line with the organization's values and goals.

  • Task-oriented cultures
    Typically found in organizations that are focused on getting things done. In these cultures, employees are expected to be productive and to meet deadlines. The focus is on completing tasks and achieving results.  Startups, in particular, are prone to this sort of company culture. A few workers in a small company must handle a number of responsibilities. To get employed by such an organization, you must show understanding of the industry as a whole and the ability to complete a variety of tasks.

Now that you know the types of company culture, what's the best way to identify which one is present in your organization? The answer is by looking at the values that are important to the organization. Different types of company culture will emphasise different values. For example, a clan culture will typically emphasise teamwork and cooperation, while a market culture will emphasise competition and results. Once you have identified the values that are important to your organization, you can start to look for signs of those values in the workplace.

How does Best Company Culture Function?

The best company culture is the one that suits the organization and its employees. There is no one-size-fits-all solution when it comes to company culture. what works for one organization may not work for another. The key is to find the culture that suits your organization and its employees.

When choosing a company culture, there are a few things to keep in mind. First, you need to make sure that the culture is aligned with the organization's goals and values. Second, you need to make sure that the culture is attractive to potential employees. Finally, you need to make sure that the culture is sustainable over time.

A company can clearly state and express its culture in guidebooks, welcome toolkits, and employee handbooks. This will help new employees understand the company culture and what is expected of them. It plays a role in its performance success if team members are passionate about the company's mission and feel like they are part of something larger than themselves.

Some companies also have what is known as a "cultural touchstone." This is a physical object or activity that helps team members know what to expect and how to behave. For example, at Google, employees are encouraged to work on projects they're passionate about in their spare time. This passion is often displayed on their office walls through personal photos, memorabilia, and other items that reflect their interests.

Different cultures can also arise when a company expands into new markets. When a company goes global, it might need to adapt its culture to fit the new markets it's operating in.

So, company culture is something that can evolve over time, and it's important for businesses to be aware of how their culture is changing and what impact that could have on their performance.

Benefits of strong corporate culture

A strong corporate culture has many benefits for both employees and employers.

For employees, a strong corporate culture can provide a sense of belonging and identity. It can also motivate employees to do their best work and be more productive. Finally, it can provide a way for employees to connect with each other and build relationships.

For employers, a strong corporate culture can help to attract and retain employees. It can also improve employee productivity and engagement. Finally, it can help to create a positive work environment.

A study by the University of Pennsylvania found that firms with strong cultures had 1.5 times more sales growth and 2.5 times more profit growth than firms with weak cultures.

It's also worth noting that a strong corporate culture can help to build brand loyalty. Customers who feel a connection to a company's culture are more likely to be loyal to the brand.

How to identify your company culture

There are a few different ways to identify your company culture.

One way is to ask employees what they think the company's values and beliefs are. Another way is to look at how employees behave and what they say about the company. Finally, you can also look at the physical environment of the workplace and see what it says about the company culture.

If you want to create a strong company culture, it is important to have a clear understanding of what it is and what it isn't. Company culture is not just about having fun or being relaxed. It's also about having a clear purpose and mission, as well as defined values that everyone in the company agrees on.

Here are a few tips on how to build a strong company culture:

1. Define your company's purpose and values
The first step to creating a strong company culture is to define what your company stands for. What is its mission? What are its core values? Once you have a clear understanding of these things, you can start communicating them to your employees.

2. Hire people who align with your company culture
When you're hiring new employees, it's important to make sure that they share your company's values and beliefs. This way, they'll be more likely to buy into the culture and help to strengthen it.

3. Train your employees on your company culture
Once you have your employees on board, it's important to train them on what your company culture is and what it means. This way, they'll be able to live and breathe your culture every day.

4. Lead by example
As the leader of your company, it's important that you live and breathe your culture every day. Your employees will look to you for guidance, so it's important that you lead by example.

5. Reward and recognize employees who live your company culture
It's important to reward and recognize employees who embody your company culture. This can help to motivate other employees to do the same.

These are just a few tips on how to build a strong company culture. If you follow these tips, you'll be well on your way to creating a culture that everyone can be proud of.

Elements of organizational culture

There's nothing magical about great cultures. They're built one step at a time by firms that understand what makes an organization's culture outstanding, and they don't just appear out of nowhere. Great cultures are created when an organization's leaders consciously take charge of the culture-building process.

There are a number of elements that must be present within a company culture in order for it to be successful. These elements include:

1. A clear and inspiring vision
Without a clear and inspiring vision, a company culture will lack direction and purpose.

2. A set of core values
Core values provide the foundation for a company culture and guide the behaviour of its employees.

3. A focus on customer service
A culture that focuses on customer service will always be one step ahead of the competition.

4. A focus on teamwork
A team-oriented culture is one that values collaboration and respect for others.

5. A sense of community
A strong sense of community is what ties a company culture together and makes it unique.

6. A positive work environment
A positive work environment is one that is enjoyable to work in and where employees feel valued.

7. A sense of ownership
A company culture that fosters a sense of ownership among its employees will be more successful in the long run.

8. A focus on results
A culture that focuses on results is one that is focused on achieving its goals.

Building a great company culture doesn't happen overnight. It takes time, dedication, and a commitment to the process. But when done right, the benefits of a great company culture are immeasurable.

How to Improve Company Culture

  • Encourage transparency.
    Encouraging transparency within your company will help to build trust and improve communication. When everyone is on the same page, it’s easier to work towards common goals.
  • Promote a healthy lifestyle.
    A healthy workforce is a productive workforce. Encourage your employees to lead a healthy lifestyle by offering perks like gym memberships or healthy snacks in the office.
  • Encourage creativity.
    A creative environment is a happy environment. Encourage your team to think outside the box and come up with new and innovative ideas.
  • Express your desired outcome.
    An aspirational culture is one that sets the tone for how employees should behave. It lays out the company's ideals and goals, and encourages employees to be agile and flexible in order to compete with other businesses.
  • Developing leaders.
    Those who align with the target culture are a key factor in improving company culture. Promote employees who embody the company’s desired values and behaviors, and give them the resources they need to succeed. This will help to create a positive feedback loop where good company culture leads to better leaders, which then leads to an even better company culture.
  • Finally, always remember that company culture is constantly evolving.
    What works today may not work tomorrow, so it’s important to be flexible and adaptable. Keep your finger on the pulse of what’s happening in your industry and be ready to make changes when necessary.

If you want to be a successful leader, you must first understand your company's culture. When leaders are frustrated with their culture, they treat it as an annoyance instead of an opportunity for growth. Instead of viewing culture as a frustration, successful executives will make use of it as a core management tool.

Now that you have established your culture, understand that Pre-hiring tests and assessments help you uncover high-potential candidates.

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