Article

January 15, 2025

Importance of Organizational Culture: 15 Benefits for Companies

Jade Burens

SEO & Growth marketer

10 minute read

Organizational culture is a term you’ve probably heard recently, reflecting the shared values, behaviors, and leadership styles within an organization. It’s an important concept that has a definite bearing on any business, influencing management practices, employee performance, and overall success. This article explores several benefits of a successful organizational culture, along with examples from various organizations, and more.

Before we start discussing the importance of organizational culture in an organization, let’s define, “What is organizational culture?” Organizational culture encompasses the shared values, leadership styles, and behaviors that characterize an organization. Firstly, an organization’s or company's culture is not the same as the company mission statement. Workplace culture is broader, influencing the company’s management practices, innovation, and overall performance beyond the mission statement or its stated organizational goals. The mission statement and its organizational goals can be used to define its culture, though.

The company’s culture is based on how the people working for the company behave consistently. It evolves as the company executives, managers, and employees are called on to face challenging situations as the business grows. The culture is not based on a single event or one poorly managed interaction with a customer or a supplier. It develops over time and impacts all aspects of the business. An effective organizational culture can significantly enhance the alignment between employee motivations and company objectives, fostering a cohesive environment aimed at achieving shared goals.

Examples of Organizational Culture

There are many types of organizational cultures that can be present in a workplace. Some examples include the following:

— Task Culture

Employees working in a task culture value task completion and accomplishments. In this environment, high-performing teams value getting things done and meeting deadlines.

— Power Culture

An organization with a power culture is invested in following a strong leader. This person influences the employees’ values and behaviors. The leader has a strong influence on employees’ ideas and beliefs. A power culture is quite common in small businesses, where the owner has already invested a significant amount of time and money bringing their vision to life.

— Role Culture

A role culture generally works within highly structured systems. The formal systems determine the beliefs and values of the working environment. You would likely find this culture in government departments, law firms, insurance companies, and financial institutions that emphasize predictability and control.

— Personal Culture

Personal culture is driven by the personal beliefs and interests of employees. A service provider that encourages employees to get to know clients by sharing something about their personalities (while avoiding topics considered too controversial) is more likely to develop repeat business.

Attract, Engage and Retain: The Employee Experience Advantage

In addition to ROI, employee experience measures help companies succeed at retention and recruiting.

15 Organizational Culture Benefits

Are you still wondering about the importance of organizational culture? It provides several benefits to a business. We have gathered the following examples for your consideration.

1. The company culture identifies its values

This idea is one of the most important benefits of company culture. At the company’s core, what does the business do? What kinds of customers does it serve? How does it go about reaching its goals? The answers to those questions help to define the company culture. It's crucial to integrate these values in daily business operations, which enhances consistency and authenticity within the corporate environment.

Every company culture is like a distinct personality. No two are exactly alike. The company culture also has to fit the products or services the company is selling. A car repair business might want to emphasize its culture around skilled technicians who can diagnose problems quickly. Car repair businesses focusing on accident repairs tell customers about their loaner car service and offer to deal with the insurance company for the customer.

2. Corporate culture heightens your brand identity

You want to have a strong corporate culture to set your company apart from your competition. The corporate brand describes the company, as opposed to one product. For example, if you think of “Apple,” “Nike,” or “Tesla,” the company name or brand comes to mind before any one of their products. This example speaks to the importance of a good brand identity.

The organizational culture for an insurance provider will be very different from one for a soft drink manufacturer. The insurance company will market itself as a trustworthy brand that its customers can rely on for their insurance needs. The soft drink company’s brand will be about having fun and enjoying good times.

3. A strong company culture allows businesses to attract higher-caliber job candidates

All businesses want to attract the most qualified, highest-caliber job candidates for available positions. One of the purposes of organizational culture is to create a sense of belonging among employees. People who feel they fit in at work are much more likely to stay with a company. The turnover rates drop. The leadership team can spend more time developing existing talent.

Businesses with poor company cultures will have more difficulty attracting strong performers. This problem will show itself in the company’s sales and customer service results.

4. A successful organizational culture is more likely to meet employee expectations

We know that employers have certain expectations when they hire employees for a role. Employees also have specific expectations when they accept a position with a company. When there is a gap between the employer and employee’s expectations, conflict often ensues. No one wants the workplace to devolve into a place where managers and employees can’t get along. A well-cultivated culture ensures an environment where employee feedback is not only encouraged but systematically integrated into business practices for mutual growth.

This situation outlines the importance of organizational culture in employee performance. Employees need to feel safe, supported, and valued to do their best work. If the company can’t (or won’t) provide that kind of culture, then it will have difficulty attracting the best candidates.

5. Companies are in control of their organizational culture. They can evaluate it and make changes as necessary

Making changes is one of the corporate culture benefits companies have at their disposal. They can perform a cultural audit to assess the current state of the company culture. This process provides a means to evaluate the current state of the corporate culture, determine whether anything is missing, and make a plan addressing any shortcomings. The cultural audit may include the following elements:

Definition: Define your company culture. Are all your employees aware of the company culture? How are new team members introduced to the corporate culture?

Comprehension: Take the time to discover how well employees understand the company culture. Ask them to complete an employee experience survey. Include specific questions about your brand’s values to evaluate their level of perception.

Constancy: Even the strongest organizational culture can get lost if managers and employees are not demonstrating positive values consistently. What can you do to remind everyone on your team about the importance of a strong organizational culture when they forget to model these values daily?

6. The culture can encourage employees to become enthusiastic advocates

A company with a positive organizational culture has the advantage of being able to encourage employees to become advocates for the company. Employees are interested in being paid well for their work and receiving good benefits. They also want to feel that they make a difference when they come to work. They can feel that they matter by promoting the company culture at work and on their time.

The first step in creating employee advocates is to recognize employees who do their work well. Praise them publicly and often. Always give credit where it is due. Feature your employees on the company blog and in promotional materials. Ask them for a quote about what they like about working for the company.

7. A positive organizational culture helps your company retain the best talent

Employees who feel they are part of a thriving community at work are more likely to stay put. Research conducted by OC Tanner discovered that 79% of people who quit their jobs said that lack of appreciation was “a main reason” for their decision. The majority of those surveyed (60%) said they are “more motivated by recognition than money.” The top-performing employees at a company will be encouraged to stay when they feel appreciated for their contributions. Healthy cultures put policies in place that make people feel connected to the company and each other.

8. The organizational culture welcomes new employees with a positive onboarding process

A new employee can see the importance of organizational culture and communication starting in the first days and weeks after joining the company. Job candidates have often given considerable thought to the type of company where they would like to work. They want to find somewhere to work where employee engagement is a priority.

During onboarding, new hires get a feel for whether the company and its high-level managers and executives “walk the walk” regarding the organizational culture. During onboarding, the new employee should be able to adjust to company procedures. The new hire should find their place in the organization and start producing work within a reasonable time.

9. A company culture turns a group of individuals into a team

Most people have seen a movie where a group of people with nothing more in common than a set of athletic skills are thrown together and forced to become a team. Part of the storyline usually focuses on the group having difficulty coming together until they stop thinking of themselves as individuals. To succeed, team members have to start thinking of each other and working together to reach their common goal. Within a well-balanced company culture, individual prowess is celebrated while still fostering a sense of unity among employees, ultimately driving organizational success.

A workplace culture behaves in the same way. Employees with different backgrounds and experiences can come together to achieve shared goals. With a successful organizational structure, employees can focus on the tasks required to reach the company’s goals.

10. Company culture influences employee physical and mental health

Organizational culture has a direct bearing on employee health. Overall health includes the physical and mental aspects of wellbeing. Employees who are encouraged to have a healthy work-life balance are more likely to perform well. It may be possible to burn the midnight oil occasionally and still do well at work. Most people would agree that tired employees, overwhelmed by their workload, or stressed will not perform well.

They are more likely to become physically ill or become injured on the job. These employees are at higher risk for anxiety, depression, or other forms of mental illness. In a supportive company culture, employees feel comfortable seeking appropriate care for their health issues. They know their employer wants them to be well.

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11. A supportive workplace culture boosts productivity

As an employer, you may be reading about the importance of a strong organizational culture and still wondering WIIFM (What’s In It For Me). When employees feel comfortable, supported, and appreciated, they can give their best effort in the workplace. Give employees the tools they need to do their work well. You will get the best from your team members. They will be at their most creative, diligent, and productive in return.

12. Healthy cultures support a healthy work environment

Supportive workplace culture is a crucial part of running a successful business. Organizational culture provides guidelines in managing the workflow for employees. Team members will find it easier to keep each other informed of the progress of their tasks. Entire projects are more likely to be completed as a result.

Healthy cultures also provide guidelines for the way employees are to treat each other. These guidelines also apply to customers and suppliers. When expectations are clearly communicated, employees can focus on their work with fewer distractions.

Attract, Engage and Retain: The Employee Experience Advantage

In addition to ROI, employee experience measures help companies succeed at retention and recruiting.

13. Workplace culture can foster a healthy sense of competition on the job

Some employees work in jobs where their progress is measured in tangible ways. They may be working in sales, where one measurement is the number of units sold or dollar amounts of sales. Customer service representatives tasked with signing up customers for a program can be tracked for the number of successful sign-ups.

The idea is to create a spirit of healthy competition where all participants can be treated respectfully. Anyone who needs extra coaching or support to reach their goals can get the help they need to be successful on the job.

14. Organizational culture creates a level playing field for all employees

When an organization's culture is working well, all employees are treated fairly. No one is bullied or given preferential treatment. Employees do their work and help out other employees when asked. Everyone knows there will be times when other employees will fill in for them.

This spirit of cooperation is part of working as a team. No one abuses the system since everyone appreciates their fellow employee's willingness to help out in a pinch. When everyone helps to get work done, no one feels that they are overburdened.

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15. A healthy work culture brings out the best in employees

Employees want to challenge themselves to do their best and advance in their chosen careers. A healthy culture is a perfect environment for them to feel comfortable enough to take professional chances by sharing their ideas with peers and management.

They may even suggest that they take the lead on a project to get some practical leadership experience (with their manager close by to offer advice).

Everyone wants to be successful and make the company successful as a result.

Discover our latest content on employee experience :

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FAQ - Benefits of organisational culture

The tapestry of organizational culture is intricately crafted from the shared values, beliefs, and practices that shape a company's internal operations and external interactions. It is a critical element that shapes the employee experience, influences behavior, and impacts the overall success of the organization. LumApps, renowned as a premier collaboration tool, significantly enhances organizational culture by seamlessly integrating employees, global teams, and management, fostering a cohesive and efficient work environment.

See main questions

Why is Organizational Culture so Important?

Organizational culture is paramount because it is the backbone of a company's identity and serves as a guiding beacon for behavior, decision-making, and the overall operational mindset. A strong organizational culture enhances employee engagement, drives motivation, and aligns the workforce towards common company goals, resulting in increased productivity and decreased turnover.

LumApps plays a crucial role in nurturing this culture by providing a platform that promotes communication, collaboration, and community, which are all integral components of a vibrant organizational culture.

How to Change Organizational Culture?

Changing organizational culture is a strategic process that involves assessment, planning, implementation, and continuous evaluation. It starts with leadership setting the vision and direction for the desired culture change. Engaging employees through transparent communication, soliciting their input, and involving them in the change process are essential steps.

LumApps facilitates this transformation with tools for sharing knowledge, gathering feedback through employee surveys, and enabling leaders to communicate change initiatives effectively. This ensures everyone is on board and aligned with the new cultural direction.

What is an Adhocracy Organizational Culture?

Adhocracy organizational culture is characterized by dynamism, innovation, and a willingness to take risks. It thrives on creativity and an entrepreneurial spirit, where the emphasis is on breaking new ground, developing new products, and discovering new markets. In an adhocracy, the hierarchy is fluid, and authority is often decentralized, allowing for quick decision-making and adaptation to change.

LumApps supports adhocracy cultures by enabling flexible collaboration, fostering an environment of innovation through collaborative networks, and allowing teams to share and develop ideas in real-time.

How Does Organizational Culture Impact the Change Process?

Organizational culture significantly impacts the change process by either facilitating or hindering the adoption of new ideas, practices, and technologies. A culture that values agility, learning, and open communication will more likely embrace change and view it as an opportunity for growth.

Conversely, a culture resistant to change may find it hard to adapt, implement new ideas and encounter employee resistance. LumApps’ tools help with these challenges by educating employees about the benefits of change, encouraging discussions, and sharing success stories. This makes the transition smoother and embeds the change within the organizational culture.

How to Encourage Workplace Collaboration?

Encouraging collaboration in the workplace involves creating an environment that supports open communication, mutual respect, and shared goals. Implementing the right collaborative technology, like LumApps, that offers diverse communication tools, project management features, and social networking capabilities is crucial. Recognizing and rewarding teamwork, promoting team-building activities, and supporting a culture that values diversity and inclusion are key strategies to enhance workplace collaboration.Here's a full article on the matter of workplace collaboration.

How to Develop Teamwork and Collaboration?

Developing teamwork and collaboration starts with defining clear team goals, establishing roles and responsibilities, and ensuring that team members have the skills and resources needed to collaborate effectively. Utilizing LumApps to create dedicated spaces for team projects, facilitate easy information sharing, and enable real-time communication helps teams to work together seamlessly. Regular feedback, continuous learning opportunities, and celebrating team successes further reinforce the value of teamwork and collaboration within the organization.

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