Organizational and business culture - what is it and how important is it for your company?

Business culture is one of the elements that most strongly affect the quality of business, and ultimately its success. Therefore, it is obvious that the higher it is, the more satisfactory the results. But what is business culture? What elements are included in it and what distinguishes it from marketing strategy? We will try to answer these questions in this article.

Expanding on the above thought, we can state that business culture is both a set of behaviors of people employed in a company and a set of rules, principles and customs that influence these behaviors. Both of these factors influence each other, and the role of the company is to level them in such a way that they don't sabotage each other. Simple, right? Well, often things that seem easy in writing actually become a real hardship.

By force or by persuasion

Serious companies (or those that aspire to such status) start with the organizational culture. A new employee, before he or she even takes a seat at his or her desk, receives a set of rules and principles which are followed by a particular company. Only after accepting them and accepting the organizational culture of the company, he or she can consider himself or herself a full-fledged member of the crew. But what are we talking about when we consider "organizational culture"? How is it implemented? Why does it matter so much?

There are three ways to conduct organizational culture: coercive, utilitarian, and normative culture. Each has an impact on an employee's willingness to identify with the organization and their willingness to act for what we might call the common good.  

With the coercive culture, which in itself does not sound interesting, we deal with when the only motivating factor to work in a particular company is the need to earn money. Employees follow all the rules, stick to the principles, but do not identify with their employer. This is usually just another stop on their professional path, from which at the earliest opportunity they will jump on the train leading to further careers. More and more companies are rejecting this type of model, trying to create a business culture that gives the employee the motivation to stay longer and confidently say that he or she is part of the organization.

A normative culture is the exact opposite of a coercive culture. In this case, the goals of the employees are fully aligned with the goals of the company. The team gives themselves entirely to the work they do, and the company over time becomes something of a second home to them. For many employers, but also employees, this is the ideal of organizational culture. It is hard to deny that a person engaged in performing tasks not only with the strength of his muscles and mind, but also emotions, is able to give much more than a robot who is on the mental outlet.

And finally, utilitarian culture, which is an intermediate state between coercive culture and normative culture. Although in this case employees engage in tasks for financial reasons, money is not the primary motivator of their actions. This allows for a healthy and/or beneficial bond between the workforce and the organization itself.

Establishing clear rules of coexistence within one company allows for the development of a healthy model of work, which translates into the culture of the conducted business, and thus the quality of services offered, and further customer satisfaction and loyalty.

The culture of an organization - what for?

If the positive values professed and implemented by the organization bring visible results, the company operates like a healthy organism. Enthusiasm and commitment of employees affect their approach to customers, which - as we have already mentioned - results in recognition from the latter.

Business culture thus guarantees a competitive advantage. Companies with a particular model of operation often become a starting point and positive role models for newcomers and even their rivals.

We must not forget about profits. According to the Harvard Business Review, companies that demonstrate a high organizational culture outperform their competitors by 20-30%. Even the best marketing strategy, which is inevitably mainly about the product and not the people, will not give us 100% success without an implemented organizational culture.

Artifacts, standards and assumptions

Edgar H. Schein, an American social psychologist, distinguished three components of organizational culture (also called levels): artifacts, norms and assumptions. Although they sound very professional, their elaboration is exceedingly simple.

• The first of the elements, or artifacts, breaks down into. the next three elements. Thus, there are linguistic, physical, and behavioral artifacts. Each of them contains what is most visible, tangible and recognizable in the company - both for people associated with the company and those who know it only from the outside.

Language artifacts are the jargon that characterizes a particular company, the legends or stories associated with it, and anything in the realm of language. A good and probably the most spectacular example is Apple, which has created a specific environment related to its founder, Steve Jobs - his appearance, the way he works and his business philosophy. Thanks to this, when we see the logo of the organization itself, we automatically filter it through the style of this pragmatic, although slightly eccentric "guy in a black turtleneck". This makes us trust the company because we recognize it and think we know a little more about it. What's more, we often want to become a part of it - not only as an employee, but also as a customer.

The second type of artifacts is related to the physical sphere, which is everything that can be touched and seen. It can be a dress code characteristic only for this organization, the architecture of buildings, interior design or gadgets associated with it.

The third type is behavioral artifacts, or the customs and rituals that characterize a particular company.

• The second element of organizational culture, or company norms, determines everything that works for and against the company. These are both the norms declared in the codes, and those that are observed (or not observed) in practice. Let's remember that we can speak about proper functioning of an organization when what is in writing is also realized in "reality".
• The third level of Schein's company culture are the assumptions, i.e. the absolutely basic set of beliefs that the organization follows. It is in the company's interest that they are followed by both the employees and the management division.

Cultures and subcultures in your company

In their book "Corporate Cultures: The Rites and Rituals of Corporate Life. "In their book Corporate Cultures: The Rites and Rituals of Corporate Life, Allan A. Kennedy and Terrence E. Deal write that company culture can be described in one sentence. It reads: "the way we work here."

Deal and Kennedy developed a model based on four types of organizations. They differ in elements such as speed of feedback, how employees are compensated, stress, and level of risk-taking. Let's look at each type separately.

• A culture of hard work and fun

This business culture model ensures quick feedback (or reward). There is a principle of quick action leading to quick recreation. Stress and tension arise in this model more from the workload than from its uncertainty. Examples of such businesses are restaurants or IT companies.

• Hardcore culture (macho culture)

There is a quick response (reward) that accompanies high risk. This type of organizational culture results in stress due to potential loss or profit. People who work this way focus more on the "here and now" than on the long-term outcome. This is how both a police surgeon and a professional athlete operate.

• Process culture

In a process culture there is a fairly long wait for feedback (rewards) and at the same time low risk. This is usually associated with hard work, but also comfort and relative safety. The employee, and the company as a whole, is usually dependent on internal policies and over company systems. Examples of this type of culture are offices, education, banks or insurance companies.

• Bet-the-company culture

The feedback (reward) in this case does not come quickly and the risk is usually high. The stress here comes from waiting a long time for work results. The bet-the-company culture assumes a long-term perspective and a lot of effort is put into making sure that everything has gone according to plan. This is how oil companies and aircraft manufacturers, among others, operate.

How does it work for us?

After this solid dose of knowledge about organizational and business culture (after all, one stems from the other, and the two are intertwined), it's easier for us to think about "how it works at our company," and then think about implementing the model that works best for our organization.