What does it mean to have a strong organizational culture and why is it important to the organization?

Building a strong organizational culture will help recruiters entice elite candidates and retain top talent. Not only that, but a winning corporate culture has been shown to improve levels of employee engagement, productivity and performance. 

Organizational culture is defined as the values, ideals, attitudes and goals that characterize an organization. Your company’s culture consists of the important intangibles that dictate how your team operates and does business. In a lot of ways, your organizational culture becomes part of your organization’s identity. 

No two organizational cultures will be the same because every organization has unique goals and is made up of diverse individuals. A big part of creating a positive work culture is making sure every employee is represented and accounted for. Your organizational culture should unify your employees and propel them toward a shared goal.

Organizational culture consists of values, ideals, attitudes and goals that characterize an organization.

Company culture has often been linked to attractive benefits like lax dress codes, flexible vacation policies and beer on tap, but in reality, these perks are merely byproducts of a company’s organizational culture. The elements of a winning corporate culture will vary across companies, the fact remains: a strong organizational culture is invaluable. 

From establishing a brand identity to uniting coworkers and increasing employee engagement, a healthy organizational culture can have a huge positive impact on your organization. Let’s take a look at some of the ways a strong organizational culture elevates companies.

Dawn Kawamoto contributed reporting to this story.

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Why Organizational Culture Increases Employee Engagement

Companies with winning organizational cultures have 72 percent higher employee engagement ratings than organizations with weak cultures. Employee engagement is defined as the extent to which an employee is passionate about, motivated by and connected to their work and company. It’s no surprise that winning organizational cultures lead to high levels of workforce engagement. Bonus: engaged business units enjoy a 22 percent increase in profitability.

Nearly half of employees, 49 percent, said that organizational culture influences their employee experience more than their physical workspace or the technology they use. Strong corporate cultures give employees a cause to rally behind and purpose to do so passionately. That intrinsic motivation is what inspires employees to engage deeply with their work. A winning culture encourages employees to form a strong connection with their peers, organization and their role, enhancing their work experience and increasing their engagement.

How Organizational Culture Can Decrease Turnover

Meanwhile, 38 percent of employees report wanting to leave their current jobs due to a negative organizational culture or feeling like they don’t fit in. Your goal should be to create a corporate culture that promotes diversity and inclusivity, but not every employee will click perfectly with your culture. However, creating a winning organizational culture firmly aligned with your core values and mission will keep your employees engaged. 

A company’s culture is a key factor for 65 percent of employees when deciding to stay at their job. A weak or negative organizational culture will cause employees to look elsewhere for work, but a strong culture will keep them around. However, organizational culture is not something you can set and forget — 74 percent of U.S. employees said they would consider leaving their place of work if the organizational culture were to decline. Your corporate culture needs to be diligently maintained and improved upon when required.

Improve Recruitment Efforts With Organizational Culture 

In the U.S., 35 percent of employees claim they would pass on their ideal job opportunity if the organizational culture didn’t appeal to them. Your organizational culture isn’t something you can hide from job seekers — they’ll be able to get a sense of your organization almost immediately and use it to inform their decision. To avoid losing the interest of top candidates, prioritize creating an organizational culture that leaves a strong impression.

Companies that create a positive candidate experience enjoy a 70 percent increase in the quality of their hires. A strong candidate experience starts with your organizational culture. Winning organizational cultures prioritize employees and their relationship to the company and its goals, which creates a positive employee experience. These individuals are likely to be engaged with and passionate about their work, two positive attributes that job seekers can pick up on. A strong corporate culture will entice equally motivated candidates that will add to your company’s culture and improve business.

How to Increase Productivity With Organizational Culture 

Your organizational culture has a lot to do with your employees’ satisfaction and engagement. If your organizational culture prioritizes teamwork, but an individual prefers to work independently, they’re probably not going to be happy. However, you can work to build an organizational culture that provides a balance of your employees’ individual needs that still aligns with your organization’s goals. Your employees will reward you for it with increased productivity and performance.

Satisfied employees are 12 percent more productive, while dissatisfied employees are 10 percent less productive. Your organizational culture will directly impact how you structure your workspace, treat your employees and organize your benefits packages. Create a winning organizational culture and enticing employee perks will follow. These perks have an effect on your employees’ happiness and thus the engagement and productivity of your staff.

A whopping 77 percent of U.S. employees believe a strong organizational culture enables them to produce their best work. Furthermore, 76 percent of workers see the impact that organizational culture has on their productivity and 74 percent report a winning organizational culture improves their ability to serve their customers. 

While any given organizational culture will evolve and shift as the organization grows, there are steps leadership teams can take to guide their corporate culture in the same direction as the company’s goals. Before you get started, make sure you have the bandwidth to see your plan through. Winning cultures are not created overnight, and a bad organizational culture can do more harm than good. An organizational culture that does not align with the company’s core values or fulfill the C-suite’s promises will appear disingenuous, deter top candidates and drive away employees. 

It’s a big task, but dedicating the time and resources to create an organizational culture that’s true to who your team is and where you’re headed will attract the best people for the job and propel your organization in the right direction. Want more? Check out these 42 statistics on organizational culture.

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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.

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.

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.

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.

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.