Article

March 26, 2025

What is Company Culture? Importance and Best Practices

Milton Herman

10 minute read

How does a thriving company culture make businesses more successful? Why is company culture such a hot topic? Companies develop personalities over time. This statement is true whether you have a brick-and-mortar location or you are operating a digital workplace. It is what the term “company culture” refers to. It incorporates the company’s mission statement, as well as its values, ethics, and goals. This article will explain the importance of company culture as well as how to build one for your company and how to improve your existing one.

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What is Company Culture?

Company culture (also named "corporate culture" or "workplace culture") is the shared set of values, beliefs, behaviors, and experiences that characterize an organization. It's the "personality" of a company, influencing how people interact and work.

Here's a breakdown, keeping LumApps' voice in mind:

Shared Values and Beliefs: These are the core principles that guide a company's decisions and actions.
Behaviors: These are the observable actions and interactions of employees, reflecting the company's values.
Experiences: These encompass the collective feelings and perceptions of employees about their work environment.

Company culture shapes the work environment and significantly impacts employee satisfaction and overall business success.

Some types of companies have a very traditional and conservative culture. Banks and law firms tend to fall into this category, since these industries are governed by a number of regulations that must be followed precisely. They may operate from a top-down management style, where decisions about how the company is going to operate are made by a few people at the top management level. Information in this company culture definition flows down and workers generally don’t have a lot of influence on how the company is being run.

Companies focusing on creative pursuits, such as advertising or design, are less likely to be conservative. Along with their relaxed style, they may also use a more casual approach to their day-to-day operations.

Neither of these company culture types is better or worse than the other — on their own. Both of them can be effective and used to run a successful business.

In terms of current and prospective employees, company culture makes a significant difference in job satisfaction. When an employee feels that they fit well into the existing company culture, they can feel comfortable and focus on contributing to the best of their ability. If the company culture is not a good fit, however, an employee may not feel entirely comfortable. They may end up moving on from that employer relatively soon in search of a company that is a better fit.

What are the 4 C's of company culture?

The "4 C's" offer a helpful framework for understanding and shaping company culture. Let's explore each, keeping our voice clear and insightful:

Clarity:

This is the foundation. It's about ensuring everyone understands the company's values, mission, and clear expectations.
A clear culture means employees know what's important and how their work contributes to the bigger picture.
Think of it as providing a well-defined roadmap, so everyone moves in the same direction.
Example: "We clearly articulate our core values through regular team discussions and accessible resources."

Consistency:

Culture isn't just words; it's actions. Consistency means living those values every day, at all levels of the organization.
When leadership and employees consistently demonstrate the desired behaviors, it reinforces the culture.
It's about creating a reliable and predictable work environment.
Example: "Our commitment to open communication is reflected in our consistent feedback processes and transparent decision-making."

Connection:

A strong culture fosters meaningful connections between employees. It's about building a sense of community and belonging.
Connection encourages collaboration, teamwork, and mutual support.
It's about creating a workplace where people feel valued and connected to something larger than themselves.
Example: "We promote connection through team-building activities and shared spaces that encourage collaboration."

Contribution:

This is about empowering employees to make a meaningful impact. It's about recognizing and celebrating their contributions.
When employees feel their work matters, they're more engaged and motivated.
It's about creating a culture where everyone feels they can contribute their unique talents and ideas.
Example: "We recognize and celebrate employee achievements, reinforcing their contributions to our shared success."

These 4 C's work together to create a thriving company culture. Clarity sets the stage, consistency builds trust, connection fosters community, and contribution empowers growth.

Are workplace culture, corporate culture, business culture and company culture different ? What is their specificity ?

While often used interchangeably, "workplace culture," "corporate culture," "business culture," and "company culture" have subtle nuances. Let's clarify their specificities:

Company Culture:

This is the broadest term, encompassing the overall values, beliefs, and behaviors that define an organization.
It's the overarching "personality" of the company, influencing how employees interact and work.
Think of it as the foundation upon which the other cultures are built.
Example: "Our company culture values innovation and open communication, shaping every aspect of our work."

Workplace Culture:

This focuses on the day-to-day environment and interactions within the physical or virtual workspace.
It emphasizes employee experiences, relationships, and the overall atmosphere of the work setting.
It's about the tangible aspects of how people work together.
Example: "Our workplace culture promotes collaboration through flexible work arrangements and team-building activities."

Corporate Culture:

This often refers to the culture of larger, more established organizations.
It tends to emphasize formal structures, policies, and procedures.
It can also imply a focus on the company's image and reputation.
Example: "Our corporate culture ensures compliance and consistency through clear guidelines and ethical standards."

Business Culture:

This term can extend beyond the internal company environment to include interactions with external stakeholders, such as customers, partners, and competitors.
It can also refer to the cultural norms of a specific industry or market.
It involves how a business operates within its larger ecosystem.
Example: "Our business culture prioritizes customer satisfaction and builds strong relationships with our partners."

In essence, while all these terms relate to the shared values and behaviors within and around an organization, "company culture" is the most general, "workplace culture" focuses on the immediate work environment, "corporate culture" often implies a larger, more structured organization, and "business culture" extends to external interactions.

What are the 4 C's of company culture?

The "4 C's" offer a helpful framework for understanding and shaping company culture. Let's explore each, keeping our voice clear and insightful:

Clarity:

This is the foundation. It's about ensuring everyone understands the company's values, mission, and clear expectations.
A clear culture means employees know what's important and how their work contributes to the bigger picture.
Think of it as providing a well-defined roadmap, so everyone moves in the same direction.
Example: "We clearly articulate our core values through regular team discussions and accessible resources."

Consistency:

Culture isn't just words; it's actions. Consistency means living those values every day, at all levels of the organization.
When leadership and employees consistently demonstrate the desired behaviors, it reinforces the culture.
It's about creating a reliable and predictable work environment.
Example: "Our commitment to open communication is reflected in our consistent feedback processes and transparent decision-making."

Connection:

A strong culture fosters meaningful connections between employees. It's about building a sense of community and belonging.
Connection encourages collaboration, teamwork, and mutual support.
It's about creating a workplace where people feel valued and connected to something larger than themselves.
Example: "We promote connection through team-building activities and shared spaces that encourage collaboration."

Contribution:

This is about empowering employees to make a meaningful impact. It's about recognizing and celebrating their contributions.
When employees feel their work matters, they're more engaged and motivated.
It's about creating a culture where everyone feels they can contribute their unique talents and ideas.
Example: "We recognize and celebrate employee achievements, reinforcing their contributions to our shared success."

These 4 C's work together to create a thriving company culture. Clarity sets the stage, consistency builds trust, connection fosters community, and contribution empowers growth.

What are the 4 types of company culture?

Company cultures generally fall into four types:

Clan culture, which prioritizes collaboration and employee development;
Adhocracy culture, focused on innovation and risk-taking;
Hierarchy culture, emphasizing structure and efficiency;
Market culture, driving competition and results. These categories help understand a company's values and how it operates, though many organizations blend elements from each to suit their unique needs.

Read more : 4 types of company culture

‍Who is the owner of a company culture ?

Company culture isn't owned by a single individual; it's a shared responsibility.

Leadership as Cultural Architects:
- Leaders are responsible for defining and communicating the organization's core values and mission.
- They establish the framework for how the company operates, influencing everything from hiring practices to performance evaluations.
- Their consistent behavior and decisions serve as a powerful example, demonstrating the culture they wish to cultivate.
- They must be forward thinking and adaptable, to ensure the culture can evolve with the business.
Employees as Cultural Co-Creators:
- Employees are the daily custodians of the company culture.
- Their interactions, collaborations, and contributions shape the lived experience of the workplace.
- They provide valuable feedback, highlighting areas for improvement and reinforcing positive aspects of the culture.
- Their engagement and sense of ownership are vital for sustaining a positive and productive environment.
The Interplay of Influence:
- The relationship between leadership and employees is dynamic. Leaders set the direction, and employees bring it to life.
- Open communication and feedback loops are essential for ensuring alignment and fostering a sense of shared ownership.
- This collaborative approach creates a culture that is both intentional and organic, reflecting the collective values and aspirations of the organization.
- It is about the creation of a living ecosystem, that must be cared for, to allow it to grow.

While leadership provides the strategic vision, employees are the active participants in shaping the daily reality of the company culture. It's a partnership that requires ongoing communication, collaboration, and commitment from everyone involved.

... What about a culture committee ? What is it and what is their role ?

A culture committee is as a dedicated team, focused on nurturing and evolving your company's internal environment. It's a proactive approach to shaping a workplace where values are lived, and employees thrive.

Here’s a breakdown of its purpose and impact:

Cultivating a Positive Environment:
- The committee champions initiatives that reinforce desired behaviors and promote a sense of belonging.
- They actively work to ensure the workplace reflects the company’s core values.
- It is about creating an environment where employees feel valued and heard.
Driving Cultural Initiatives:
- They organize events, workshops, and programs that foster connection and collaboration.
- They act as a conduit for employee feedback, ensuring diverse perspectives are considered.
- It is about taking action, and creating tangible results.
Championing Employee Engagement:
- They work to build a culture of recognition and appreciation.
- They help to create pathways for employees to contribute their unique skills and ideas.
- It's about empowering employees, and providing them with the tools they need to succeed.
Ensuring Cultural Alignment:
- They help to align company policies and practices with the desired culture.
- They help to monitor and measure the impact of cultural initiatives.
- It's about ensuring consistency, and making sure that the culture remains on track.

A culture committee is a strategic investment in your company's most valuable asset: its people. It's a team dedicated to building a brighter, more connected workplace.

What are the benefits and effects of a clear company culture ?

A clear company culture acts as a powerful catalyst, driving positive outcomes for both your team and your business. Here are some key benefits:

Enhanced Employee Engagement and Retention:
- When values and expectations are clear, employees feel more connected and motivated.
- A shared sense of purpose fosters stronger teamwork and collaboration.
- This leads to increased productivity and a more positive work environment.
- LinkedIn's 2019 Global Talent Trends report highlighted that 70% of professionals said company culture is more important than salary when considering a job change. Clear values and positive work environments reduce turnover.

Improved Talent Acquisition and Retention:
- A strong, well-defined culture attracts top talent who align with your values.
- Employees are more likely to stay in an environment where they feel valued and respected.
- This reduces turnover and saves valuable resources.

Increased Innovation and Creativity:
- A culture that encourages open communication and collaboration sparks new ideas.
- Employees feel empowered to share their perspectives and take calculated risks.
- This drives innovation and helps your business stay ahead.
- A Deloitte study showed that companies with inclusive cultures are six times more likely to be innovative.
- A culture that values open communication and collaboration creates an environment where new ideas thrive.
- Source: Deloitte, "Diversity and Inclusion: The Reality"

Better Customer Experience :
Stronger Brand Reputation:
- A positive internal culture translates to a positive external image.
- Customers and partners are drawn to companies with a strong sense of purpose and integrity.
- This enhances your brand reputation and builds trust.
- Glassdoor research demonstrates that 84% of job seekers consider a company's reputation as an employer.
- A positive internal culture translates to positive external perceptions, attracting both talent and customers.
- Source: Glassdoor, "Employer Branding Statistics"

Greater Efficiency and Productivity:
- Clear expectations and streamlined processes lead to greater efficiency.
- A culture of collaboration and teamwork fosters a more productive work environment.
- This results in improved business outcomes and greater success.
- Research from Harvard Business Review indicates that a strong culture can improve net income by 76% over 10 years.
- Organizations with a strong culture experience less workplace and workforce stress, and have higher levels of productivity.
- Source: Harvard Business Review, "The Impact of Corporate Culture"

A clear company culture serves as a foundation for growth, enabling your team to thrive and your business to excel.

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The Core successes of Company Culture

Organizational culture differs in every business and there are many company culture types. But the core values remain the same. To be successful a company should put its employees first while respecting the needs of the business.

The 6 core successes of company culture are:

Listening to ideas and opinions
Encouraging people to ask questions
Trusting employees to make accurate decisions
Promoting team spirit
Integrating relationships
Providing efficient employee engagement and communication platform

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Why would an employer be concerned about its company culture definition?

When hiring workers, it is not uncommon for an employer to ask a candidate to describe themselves briefly. The employer also needs to be prepared to do the same for the candidate to help determine whether a person would be a good fit, as well as evaluating their skills and experience.

Since the company culture is the guide to the employer’s values and expectations, it also addresses how the work should be performed. For example, all internal communications are considered confidential, whether they are communicated through the company intranet platform, orally, or as part of written correspondence.

Why is Company Culture Important?

There are several reasons why company culture is important. Some of these benefits are discussed below:

Company culture defines the company’s identity

The company culture establishes exactly how the people in the organization are going to interact with each other. It also sets out how the business will conduct itself with suppliers and its customers. These core company values become part of the company brand because they are reflected in everything the company does.

Company culture is also important for the future of a business. The best kind of company culture constantly evolves and asks questions such as:

How are we doing?
What are we doing right for our employees?
What can we do better for our employees?
Do our employees have the right tools? (e.g. internal communication platforms)

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It can transform your employees into your most powerful advocates

One of the benefits of good company culture is that it becomes a calling card for your business. When your employees feel valued and appreciated, it is going to show in the way they perform their duties. It also becomes obvious in the way they interact with everyone they come into contact with.

It’s important to recognize employees who are doing their work well. The best company culture is one where people feel they are contributing and that what they are doing matters.

It helps you attract and retain the best employees

A company culture that is focused on looking after its people is going to keep its employees engaged in their work. They will want to stay with the company for the long term instead of moving on after a short time. These employees will turn into your company’s biggest advocates as you are building your brand.

It transforms individual workers into a team

You need your employees to move away from the WIIFM “What’s In It For Me” mentality. They need to work together for your business to be successful. Obviously, one of the rewards for an employee working for the company is financial. The feeling of belonging to a group is another benefit that comes from positive company culture.

A healthy company culture has a positive effect on employees’ wellbeing

When employees are healthy (physically and mentally), they are able to respond to the stresses and strains of modern life more easily. As a result, their job performance will be better than workers who are in an unsupportive environment.

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How to Build a Company Culture?

Since your company is going to develop its own culture whether you step in to guide it along or not, you may as well take steps toward building a positive workplace culture. This is a task that is not going to be accomplished overnight, so be prepared to devote some time and effort to it.

1. Decide on your company’s main values

What are the most important words you want to have associated with your business? If you could describe it in a few words, which ones do you want your customers (or the public in general) to think of when they picture your sign or logo? These are your company’s main values. They tell a story about the way you want the world to see your business and its employees.

2. Hoose goals for your company culture

These goals are not associated with selling a certain number of units or reaching a specific level of sales during a quarter. Instead, they have to do with the reasons you started your company initially. How did you want to make a difference when you decided to strike out on your own? These words or a phrase are the goals for your company culture.

3. Get everyone in your company involved

Employees are a key component in building company culture. If the employees generally feel good about the company culture, then their productivity will increase. As an employer, there are some things you can do to help this process along.

Be sure to let your employees know that you appreciate them and their work. Take time to say “Hello” to them when you see them. Let them know when the company is reaching its goals and thank them for their contributions.

Find out what kinds of things motivate your employees to continue doing their best. Not everyone is motivated by money (and you may not be in a position to offer your employees salary increases across the board). However, you may be able to offer other incentives that your employees might like, such as extra time off from work instead.

Great company culture also comes from the benefits a business offers its employees. Company culture is changing fast as employers offer perks such as :

Free drinks and snacks
Events (barbecues, parties, sports matches)
Weekends away
Competitions
Relaxed office environments with games and comfortable chairs for downtime
Gym/swimming pool membership

Offering these benefits as part of the working day promotes team spirit and builds a positive workplace culture. We spend so much of our lives working, so it should be enjoyable.

Part of being a good employer is providing help and support for employees when they need it. An employee who is going through a period of personal or professional challenges will appreciate an employer who is prepared to be flexible while the employee deals with the situation.

→ Also read: 5 Starting Points for a Resilient Organizational Culture

How to Improve Company Culture?

If you have decided that you want to improve company culture, you will need to be proactive. The following are some suggestions you can use to change the culture in your business for the better.

1. Set an example from the top down

Behaviors that are contrary to the company culture you want to see in place must be stopped. You can’t have an environment where rules and regulations exist for some employees but are ignored for others. If you have been guilty of being somewhat lax about following the rules yourself, now is the best time to start following them more closely as an example for all employees.

2. ”Catch” your employees modeling the behavior you want them to continue to do

When an employee is demonstrating the behavior you want them to continue doing regarding your company culture, reinforce it by thanking them for it or acknowledging it in another positive manner. The employee will continue to behave similarly and others will be inspired by his example.

3. Be prepared to provide feedback

Tell your employees how they are doing in their efforts to improve company culture. Start by letting them know the areas where they are succeeding in this regard. Then bring up anything that requires their attention as far as areas of improvement. Finally, you want to reiterate that everyone is working together to put the company culture best practices into effect and that you appreciate the employee’s efforts to help. It’s important to end the feedback session on a positive note.

How can you monitor your company culture to determine whether your efforts have been successful? There are a few KPI (Key Performance Indicators) that you can track to find out whether you are doing well or if you still need to fine-tune your efforts.

4. Employee Turnover Rate

After you have taken the time and made the effort to change your company culture, has your retention rate remained the same or has it dropped? There will be some employees who decide to change jobs that have nothing to do with the company. It’s still possible to make a bad hire, no matter how carefully you screen candidates in advance.

If, however, the employee turnover rate continues to remain consistent or rise over several months or a year, it can be a sign that there is something amiss.

5. Employee and Manager Satisfaction Survey

If you really want to know how your employees and managers feel about working for your company, ask them in a confidential survey. Let them share whether they are using their skills effectively, if they are being supported appropriately, and whether they have enough opportunities for training. The answers to those questions will help you fine-tune your company culture more effectively.

This is the type of employee engagement that can help you make improvements in your company policies. The key is getting honest responses. Your employees and managers need to have confidence that their responses will be kept confidential. An online survey would allow everyone to share their thoughts freely. It is an excellent option for a digital workplace, since all participants can complete the survey at their convenience.

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How can an intranet influence and improve company culture ? LumApps' example

An intranet, when designed with purpose, becomes a powerful catalyst for shaping and enhancing company culture. It's more than just a tool; it's a digital reflection of your organization's values and a space where those values come to life. Consider LumApps' approach: we view the intranet as a connected employee hub, a central point for fostering communication, collaboration, and a sense of belonging.

Imagine a workplace where information is not siloed, but flows freely, where teams connect seamlessly regardless of location, and where every employee feels heard. LumApps facilitates this by integrating communication, collaboration, and knowledge management into a unified platform. This creates an environment where employees can readily access resources, share ideas, and contribute to the collective success of the organization.

Moreover, a well-designed intranet empowers companies to reinforce their core values. Through features that highlight employee achievements, facilitate open feedback, and encourage cross-functional collaboration, the intranet becomes a vehicle for positive cultural change. LumApps’ example demonstrates that a future-ready intranet doesn’t just support your existing culture—it actively shapes it, fostering a more connected, engaged, and innovative workforce.

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What is Company Culture? Importance and Best Practices