Six Components Of Corporate Culture

Apart from the income, a lot of people have different thoughts or expectations from their jobs or workplace. Some people want to work in a place where they feel like their work is contributing to a greater good and not just the success of the organization. Others want a fun environment where they can be free to express their creative skills without any form of restriction or where their good works and ideas are appreciated. Whatever expectation we have about our workplace, it is always linked to the corporate culture of the organization. Culture, in its simplest definition, is the way of life of a group of people. The way they talk, their beliefs, customs, art and everything that makes them who they are, is their culture. Culture affects almost every aspect of an organization.

According to a study by Duke University on corporate culture, it was ascertained that corporate culture is at the top of the list of value drivers of a company. In fact corporate culture ranked above strategic and operating plan, and even the CEO. This shows that the most driving force of any organization is its corporate culture. What is corporate culture? The structure of corporate institutions can be broken down into two; the formal and the informal. The formal aspect are mostly things that you can write down such as the governance and the management practices of the organization, salary and compensation policies, recruitment and dismissal policies, etc. The informal aspect on the other hand refers to the corporate culture of the institution. Corporate culture refers to the collection of self-sustaining patterns of behavior, beliefs and ideals that determines the way employees and management of an organization interact and run their business. It defines the way they think, feel and go about their jobs. Corporate culture is made of instinctive, repetitive habits and emotional responses.

The culture of an organization is what drives employees. It makes them feel good about their jobs and advance their strategic and operative priorities to push the company to its best. When the culture of a company is bad, it can cause a strain on productivity and emotional commitment, thereby restricting long term success. Corporate culture holds the company together and helps it reach its potential. Even when you hire the best professionals or the most creative people, without a good and stable corporate culture, the company will be unproductive because the employees are not working with the same goals or vision. So corporate culture helps employees work together to drive value and productivity of an organization. In fact, companies that focus on building a strong corporate culture tend to perform better than others.

According to Prof. James L. Heskett in his book The Culture Cycle, he ascertains that effective culture can account for 20 to 30 percent of the distinction in an organization’s performance when compared with “culturally unremarkable” competitors. He also described corporate culture as an unseen force that shapes or transforms the performance of an organization. This description is true considering the fact that some companies, even without the knowledge of ‘corporate culture’ as a term, have certain behaviors or values they uphold that helps drives productivity. As customers, we tend to feel the impact of a company’s culture when we do business with them. For instance, if you walk into a bank, you might notice that from the entrance, the security personnel has a warm smile and greets you. Even the bank tellers are welcoming and bids you a good day after your transaction. This is their corporate culture on how they attend to customers. Corporate culture comprises of various elements that makes the culture unique. There are six essential components of corporate culture and they include; vision, values, practice, people, narrative and place.

Components of corporate culture

1. Vision:

Every company needs a vision to define its purpose. An effective culture begins with a vision statement. Most organizations and business owners try to state a vision that will drive the course of the business and would stand the test of time. Vision statement a one-sentence statement that is often referred to as a picture of where the organization will stand in the future. It encapsulates the dream of the company and the direction of the company in future.

In other words, vision is the desired end state of the company. Vision statements are usually clear, memorable, concise and inspirational. When it is original, prominently displayed and truly emanates from the core of the organization, the vision will not only inspire employees, it can also help orient customers, suppliers and other stakeholders of the organization. For instance, the vision of the Human Rights Campaign is Equality for Everyone. This very short statement is not only clear, but strong and inspiring. It projects a future where every person is treated equally irrespective of their gender or any other prejudice. It will therefore drive employees and stakeholders of this organization to continue to push and fight to attain this goal. The vision statement of Save the Children which foresees a world in which every child attains the right to survival, protection, development, and participation, is another example of a motivational vision. However inspiring a vision statement is, it should be realistic. It should not look like a fantasy or something written out of wishful thinking. Vision statements should portray what the organization does, how they do it, why they do it and the value it brings. To this effect, a vision statement is a fundamental component of any organization’s culture.

2. Values:

Values make up the ethical foundation of every company. If you are a business owner and you have a certain expectation of how your employees should behave and interact with fellow colleagues or customers, you have to clearly state in in your company’s value statement. Values are the behaviors, mindsets and languages shared by an organization in order to achieve its vision. They represent a company’s top priorities and deeply held beliefs. While a company’s vision highlights its purpose, the values offer a set of principles that defines the behavior and mindset required to achieve that vision. Values can be seen in the actions people take and not their words.