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HR Glossary  /  Company Culture
Company Culture4 min read
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What is Company Culture?

Company culture is the sum of the values, practices, and beliefs that make up an organization and influence the people in it. It is the heart of the workplace, how people interact, how management communicates, and what the company stands for. For businesses and employees alike, understanding company culture is key—it affects job satisfaction, retention, productivity, and overall business success. This article will explore company culture in more detail and give examples and practical tips to help you enhance it.

Company culture is the framework of norms, values and behaviors that shape the unique social and psychological environment of an organization. It includes the company’s mission, company values, ethics, expectations, goals and interpersonal interactions. This culture seeps into every part of a business, influencing everything from strategic decision-making to daily operational procedures.

A strong company culture means an aligned organization where the goals of the company and the actions of its team members are in sync, promoting unity and performance. A good company culture increases employee engagement, profitability, retention, innovation, customer service, talent attraction, competitive advantage, flexibility, and adaptability. It also increases employee engagement and satisfaction, which is key to attracting and improving employee retention. A well-defined company culture affects the external perception of the brand, customer relationships, and long-term reputation.

Google

  1. Famous for its culture of creativity and innovation Google has created spaces that encourage collaboration and open communication. This culture supports its mission to organize the world’s information in a universal and useful way. Google is also known for its great corporate culture which supports employee success, wellbeing and happiness.

Patagonia

  1. Patagonia’s culture is driven by environmental sustainability. This isn’t just a nice thing to have; it’s embedded in every part of the business, from product design to supply chain management. It’s a business model where environmental concerns are at the heart of the strategy.

Netflix

  1. Famous for its culture of freedom and responsibility Netflix expects high performance and offers big rewards. This culture supports its goal of delivering great entertainment in a way that’s liberating and innovative with company policies that promote independence and accountability. Netflix also has a strong company culture that promotes teamwork, collaboration and inclusivity.

Enhancing your company's culture is a strategic initiative:

  • Leadership role: Leaders must model the company's values and behaviors to reflect the desired culture. They need to be visible champions of these values and consistently demonstrate and communicate them to build company culture.
  • Employee engagement: Involve employees in shaping the culture. Use surveys, focus groups, and feedback mechanisms to gather input and create a sense of ownership and commitment across the organization.
  • Transparent communication: Create an environment where transparency is the norm. This means open conversations about challenges and successes, which can build trust and create a more cohesive workplace environment.
  • Recognition and rewards: Develop a system that recognizes and rewards behavior that aligns to the company’s cultural values. This will motivate employees and reinforce the cultural norms the company wants to establish.
  • Healthy culture: A healthy culture is key to aligning shared values, attitudes, and behaviors to the company’s vision and core values. This means setting clear expectations, employee engagement, and creating a sense of alignment between the company’s external brand and the day-to-day experience at work.

Measuring company culture is key to understanding how aligned it is to the strategy and how it impacts employee satisfaction:

  • Employee surveys: Conduct full surveys to measure satisfaction and alignment with cultural values. These should be anonymous to get honest and constructive feedback. Surveys can also identify the factors that make up a strong organizational culture and areas for improvement.
  • Turnover rates: Monitoring turnover rates will give insight into the health of the company culture. High turnover might mean cultural misalignment or other organizational issues. Analyze turnover rates to understand how effective the organizational culture is at retaining top talent.
  • Performance reviews: Include cultural alignment in performance evaluations. This will give structured feedback and reinforce the importance of cultural fit in the company’s success metrics. Performance reviews will also highlight how well employees live the organizational culture and contribute to the work environment.

Can remote work change company culture?

Yes, remote work can change company culture, especially around collaboration, communication, and team cohesion. Employers need to adapt their strategies to maintain a strong culture with remote teams and focus on virtual engagement and communication norms.

What’s the role of leadership in company culture?

Leaders are key to building and sustaining company culture. They set the tone and standard for behavior in the organization. Their actions and communication style model for all employees, so their role in company culture is essential.

What are the warning signs of a toxic company culture?

Employee complaints, high stress, conflicts, lack of enthusiasm, and disrespect will stifle professional development and harm the organization.

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