1.INTRODUCTION TO THE ORGANIZATIONAL CULTURE

      

Having a good organisational culture is key to business success. The effects of this can be seen in the company’s bottom line: according to research, with a healthy culture, the company is one and a half times more likely to have its revenue grow above 15% over 36 months and is two and a half times more likely to see its stock grow too.

According to the Achievers 2022 Engagement and Retention Report, the Great Resignation continues with employees seeking balance, growth and support. The research showed that 66% of employees are likely to look for a new job in 2022 and a staggering 41% do not feel valued at work. The research highlighted that those who weren’t planning to look for a new job were those who felt supported and valued by employers.

So, what is causing the continuation of the Great Resignation? Again, the Achievers report has shown 

that this is down to the organisational culture that is suffering due to a lack of communication and connection.

What is Organizational Culture?

Organizational culture includes an organization’s expectations, experiences, philosophy, as well as the values that guide member behavior, and is expressed in member self-image, inner workings, interactions with the outside world, and future expectations. Culture is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid (The Business Dictionary).

Culture also includes the organization’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits (Needle, 2004).

Simply stated, organizational culture is “the way things are done around here” (Deal & Kennedy, 2000).

While the above definitions of culture express how the construct plays out in the workplace, other definitions stress employee behavioral components, and how organizational culture directly influences the behaviors of employees within an organization.

Under this set of definitions, organizational culture is a set of shared assumptions that guide what happens in organizations by defining appropriate behavior for various situations (Ravasi & Schultz, 2006). Organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders. Also, organizational culture may influence how much employees identify with their organization (Schrodt, 2002).

In business terms, other phrases are often used interchangeably, including “corporate culture,” “workplace culture,” and “business culture.”

Why Organizational Culture is important?

Organisational culture, or workplace culture, matters because it means employees understand the organisation, can be heard and can develop common purpose and connections.

The culture of a company affects everything: from tone and punctuality to employee benefits and contract terms. When the company culture aligns with the employees, they will likely feel valued, supported and comfortable in the workplace. When a company priorities culture, it means they’re more prepared for difficult times like changes and will come out stronger.

Another reason why a positive organisational culture is an advantage is for recruitment. If companies want to attract talent (like T-shaped employees), they need to outperform their competition in terms of what they offer their employees. According to Glassdoor’s Mission & Culture Survey 2019, 77% of people will look into the organisational culture of a company before submitting an application.

Real-life examples

When Steve Balmer was CEO of Microsoft, a cartoonist drew an image to illustrate the company culture at the time. It showed three gangs of different colors that were assembled in a hierarchical pyramid with guns pointing at each other. It clearly defined what was going on in Microsoft in terms of organisational culture. It was this 2011 cartoon that spurred the new CEO, Satya Nadella, to prioritise changing the company culture when he took over in 2014.

Nadella made it a priority for employees to improve themselves rather than prove themselves – and it worked. Today, the company is once again up there among the world’s most valuable companies with Amazon and Apple.

Another example of how culture works well is with Salesforce. This company puts its organisational culture at the helm of the company and, as a result, has experienced substantial growth.

Salesforce’s CEO and founder, Marc Benioff, has established cultural norms over the last twenty years and, according to Fortune, has made the company one of the best workplaces in the United States. You can see this if you look at the statistics: a huge 52% of new recruits come from current employee referrals.

The influences of organisational culture

As we’ve seen, company culture is vital in retaining and attracting talent. It’s a huge part of employee experience, and the ‘vibe’ that employees get when they’re part of the company determines how they approach their work and how they feel about the company. Essentially, a company’s organisational culture directly determines whether employees feel drained or energized, and demotivated or motivated. It affects absenteeism/presentiment, performance and productivity

Here are some other areas where organisational culture has an impact (either directly or indirectly):

• Morale.
• Achievement of goals.
• Cohesiveness in the team.
• Turnover.
• Performance (individual and team).
• Innovation and creativity.
• Competitive edge.
• Economic performance over the long term.
• Customer experience.
• Succession planning.
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  Source: http://www.denisonconsulting.com

  How is organisational culture measured?

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• There are different ways of measuring organisational culture. One way is to survey employees. This can be very precise and informative, especially if done anonymously. Another precise way is to use a Business Needs Scorecard (BNS).

  Surveying employees

  No one knows the company better than those who work there. Surveying the employees is an excellent way of measuring the organisational culture. It also helps engage employees in being a part of a cultural shift.

  A typical employee survey is a satisfaction survey. It would usually cover where employees see themselves in the organisational culture, the employee position in defining the culture, employee motivation, and employee insights.

  Business Needs Scorecard

  This is a precise method to measure the values in an organisation. It can be used to identify positives as well as finding the potential pitfalls. There are six sections that categorise the positive values and potentially limiting ones.

  These are:

  • Finance – Things that impact the company’s growth and performance financially
  • Fitness – Things that impact employee performance and productivity
  • External relationships – Things that affect the relationship with customers and partners
  • Evolution – Things that impact innovation and creativity
  • Culture – Things that influence trust and communication between employees and leaders
  • Societal contribution – How the corporate values align with societal values.
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Source: http:// www.stevejob.organizationalimportance.com

Final thoughts on organisational culture

Overall, organisational culture is an important part of an organisation’s social and psychological environment. The environment itself impacts employees’ experience and thus their engagement levels. A company’s culture is expressed in its branding and reputation, which has an impact on staffing and recruitment. It also determines the process of developing new ideas for business development.

All companies have unique cultures that develop and change over time. Though a great organisational culture is a solid foundation, it is fluid rather than permanent and needs to change and adapt.

It isn’t easy to go about organisational change and employees might be resistant. However, if it is implemented correctly, employees can be encouraged to support (and perhaps be excited about) cultural change. If allowed to develop, an organisation can stay relevant and compete in times of challenge.

Though organisational culture change is often necessary, it is probably the hardest thing to change in a company. According to the Institute for Corporate Productivity (i4cp), only 15% of organisations succeed in transforming their cultures, which is a rather stark reality! It can be done, though, just look at Microsoft as an example.

List of References:

Alvesson, M. (2002). Understanding organizational culture. Thousand Oaks, CA: Sage.

Armenakis, A., Harris, S., & Mossholder, K. (1993). Creating readiness for organizational change. Human Relations, 46(6), 681–703.

Barney, J. (1986). Organizational culture: Can it be a source of sustained competitive advantage? Academy of Management Review, 11(3), 656–666.

Cameron, K., & Quinn, R. (1999). Diagnosing and changing organizational culture. Reading, MA: Addison-Wesley.

Chandler, G., Keller, C., & Lyon, D. (2000). Unraveling the determinants and consequences of innovation-supportive organizational culture. Entrepreneurship Theory and Practice, 25(1), 59–77.