Corporate culture

What is corporate culture?

Corporate culture serves as a guiding framework for interactions among employees, management, and customers. The concept of "culture" refers to the customs and practices characteristic of a particular place, community, or, in this case, organisation. Essentially, corporate culture encapsulates the behavioural patterns that influence both formal and informal communication within the organisation.

Regardless of the company's size, team, industry, or objectives, every organisation inevitably cultivates its own distinct culture and the rules that govern it. A company without corporate culture is unimaginable, and a culture will emerge either deliberately and managed or spontaneously. In the former scenario, it is intentionally shaped by leaders, such as managers, top executives, or the HR department. In the latter, it develops organically through the collective influence of employees and their managers.

The role of corporate culture

Many employees and managers may question the importance of corporate culture since businesses can theoretically function without it. However, corporate culture acts as a crucial tool for streamlining business procedures and serving several key functions:

• Guiding the company's values ​​and mission in business development

Corporate culture serves as a "moral compass" in navigating challenges like differentiating from competitors, attracting partners, customers, and employees, reshaping the company's image, and defining the foundation for a marketing strategy. It provides clarity about the company's role within its niche and plays a crucial role in its efforts to position itself.

• Staff involvement

Actively engaging employees in the company's growth is vital for achieving long-term success. Corporate culture plays a crucial role in this activity, as it enhances both material and non-material incentives. Supporting intrinsic motivation by encouraging practices such as feedback systems, management communication, and special team member perks. For instance, initiatives like shared breakfasts with top managers serve dual purposes: they act as motivational tools and are fundamental components of corporate culture.

• Ensuring clear and precise expectations for employee tasks

Establishing KPIs (key performance indicators) and setting well-defined work goals are fundamental aspects of corporate culture. This practice enhances transparency in work activities, thereby boosting overall efficiency. Employees gain a clear understanding of their objectives, recognise the significance of their contributions, and see concrete examples of how tasks should be performed. The more accurately tasks are defined, the better the outcomes. Ultimately, this clarity significantly contributes to the business's profitability.

• Team management

As a company grows larger and more complex, the need for a strong corporate culture becomes increasingly important. This is especially vital for multicultural and cross-functional teams, where challenges such as communication barriers and misunderstandings are more likely to arise in their absence. Corporate culture serves as a bridge, allowing employees to connect with one another. It plays a crucial role in resolving conflicts, defining interaction dynamics, and directing answers to different situations. Without it, creating a healthy and psychologically safe workplace becomes significantly more difficult.

• Support during the adjustment phase

Corporate culture serves as a guideline for behaviour, making it easier for new team members to assimilate into the group and organisation since they essentially have a visual "manual." Employees understand the expectations they need to meet and the behavioural standards they should adopt, allowing them to engage in the workflow quickly. Essential to this process is the inclusion of a new employee adaptation system or mentoring within the corporate culture, as this is a crucial component; without it, it may create challenges to their adjustment instead.

All the functions mentioned also serve as benefits of corporate culture. Therefore, we will now outline its advantages and disadvantages:

• Some employees may find it more difficult to adapt, including introverts or individuals with certain personality types or professions.

• Overseeing adherence to rules and regulations, therefore necessitating the assignment of these responsibilities to an employee, typically the HR manager.

• The necessity of modifying the culture according to the circumstances, establishing motivational initiatives, and maintaining equilibrium to prevent this culture's misuse.

• There is a potential for confusion among employees if the corporate culture is poorly developed or inadequately communicated.

• Complexity of personal relationships, bureaucratic hurdles, and the rise of unnecessary communication barriers.

• A decrease in team comfort and the quality of working conditions.

Corporate culture is generally harmless. However, if the abuse described occurs, it can negatively affect business operations and workplace relationships. When balance is maintained, the team's comfort persists. Yet, issues can arise from overly strict rules or extreme control measures, such as mandating a particular clothing colour like blue and imposing fines for noncompliance with this rule.

Key components of corporate culture

The corporate culture of a company includes the following correlated elements:

• A mission. Representing the core concept of a brand, serving as the foundation of its existence and defining its purpose and objectives.

• Declared values. The principles and ideological traits that guide the company's activities and compliance efforts.

• Behavioural stereotypes. Simply put, this encompasses the norms and practices within a company, like whether employees use first names, the language they employ, or rituals such as sharing lunch breaks or knocking before entering a room. These factors significantly influence the company's culture.

• Group norms. Refer to documented examples and standards that act as guidelines for activities and interactions within a group.

• A philosophy. That encompasses the cultural, social, ethical, and other fundamental principles shaping relationships within the company and with consumers, partners, and the broader external environment.

• Symbolism. Includes the visual elements of corporate cultures, such as slogans, mottos, myths, branding, logos, and colour schemes, etc.

• Communication system refers to the established channels for interaction, including specific messaging platforms, as well as the degree of transparency and accessibility of information-or its confidentiality.

• Practical experience. Strategies, techniques, and methods applied in daily activities, behavioural patterns in particular situations, and established routines.

• Accessible motivation. Involves rewards, both tangible and intangible, recognised by the team for completing tasks or surpassing performance metrics. Examples include a dinner with leadership or an extra day off.

• Prohibited actions. Including behaviours, tools, language, colours, and solutions deemed unacceptable within the organisation's corporate culture. Though these prohibitions are optional, they frequently coincide with fines and penalties when enforced.

Each aspect of corporate culture listed above can be developed either sequentially or in any preferred order.

Categories of corporate culture

There are several types of corporate culture:

Type 1. Market culture

Often referred to as competitive culture, it is the most prevalent corporate environment. Emphasising measurable, statistical outcomes and promoting internal competition among team members. Managers in these organisations are typically strict and demanding. While this may create a tense work atmosphere, it also nurtures dedication and high performance through various incentives, including rewards provided by the company and social benefits. These elements play a significant role in fostering a market culture within the organisation.

It provides the following benefits:

• Exceptional work productivity, and employees committed to achieving goals often emerge as market leaders.

• Clarity in all business developments and swift decision-making at every moment.

• Strong resilience during crises and effective onboarding of new employees, supported by clear and precise guidelines.

However, this type of culture has its drawbacks:

• High employee turnover results from increased emotional burnout risks due to the relentless pursuit of results.

• The office has a toxic atmosphere, marked by a lack of cohesion and tense relationships among team members due to high competition.

Amazon is a great example of this corporate culture. In interviews, employees often describe their careers as extremely demanding, frequently using the phrase "cost them everything." Failure to meet deadlines usually results in swift termination. Troubling reports suggest that ambulances are frequently on standby at warehouse facilities due to employee fainting spells. Despite these challenges, Amazon provides substantial benefits, including competitive salaries, health insurance, paid time off, and various other advantages.

Type 2. Hierarchical culture

This culture emphasises control and operates within a rigid hierarchical system that prioritises consistency, logic, and transparency in its activities. Firm guidelines govern every action, and tasks follow a defined set of procedures, providing little room for innovation or independence.

Its advantages are as follows:

• Consistent stability and clarity in work guarantee that each day is predictable and follows a defined schedule.

• A high level of social and psychological safety for employees results from this predictability.

• Well-defined roles and responsibilities lead to optimal performance.

The disadvantages are:

• Interpersonal relationships are viewed as less important, resulting in reduced engagement and an increased risk of conflicts and emotional burnout at the operational level.

• Limited market competitiveness due to strong resistance to innovation and suppression of employee creativity by the organisation culture.

• Hindered career advancement, prolonged decision-making due to cumbersome bureaucracy, and a divide between management and staff.

Government agencies and administrative bodies are examples of organisations that perfectly represent this cultural type. They are characterised by numerous regulations, restrictions, and strict accountability. Each decision requires justification supported by appropriate actions, as employees operate under constant observation. Career advancement is typically based on tenure rather than accomplishments or project outcomes.

Type 3. Clan culture

This type of culture, often referred to as a culture of cooperation, views the team as an extended family. It places significant emphasis on fostering unity and creating a supportive work environment, where morale, well-being, active involvement in the company's activities, and consensus-building are top priorities. Managers act as mentors and role models, inspiring their teams. Punitive measures are rarely employed, as the culture focuses on nurturing the ideal professional through a system of incentives.

Benefits of this type of culture are:

• Organisations with a clan-style culture prioritise team well-being and foster a collaborative, accommodating environment, resulting in minimal employee turnover.

• The organisation has a strong reputation in the labour market because of its focus on promoting engagement and unity within its culture.

• Casual and quick communication among employees.

Typically, the drawbacks include:

• Inefficiency in business procedures and the mismanagement of valuable resources, such as time-often exemplified by overly lengthy meetings and excessive communication-ultimately hampering productivity.

• Challenges in decision-making for complex and critical matters arise from unclear boundaries of responsibility and the lengthy time needed to reach a consensus.

• Excessive focus on team-building and mandatory social events can annoy employees who prefer to concentrate on their tasks rather than participate in enforced bonding activities.

A prime example of this cultural approach is Zoom, the virtual conferencing platform. It has a dedicated "happiness team" devoted to improving employee well-being, assisting new employees in their adjustment, and organising company events, holidays, and enjoyable activities.

Type 4. Adhocracy

This type of company is highly adaptable and laid-back, rooted in freethinking principles. It operates without a rigid structure or identified departmental boundaries, promoting interdisciplinary and cross-functional collaboration. These companies bring together skilled professionals, each responsible for enhancing the business in a particular area, while granting them considerable freedom elsewhere. Interactions take place without strict rules, methods, or directives. As a result, this culture encourages innovation and creative solutions, allowing individuals to explore their projects and ideas.

An important point is that this type of corporate culture evolves naturally, as no other strategy aligns with the company's character. The organisation is highly dynamic and "technically aggressive," which means that alternative corporate cultures often prove ineffective or counterproductive by potentially disrupting or impeding business operations. Given this context, adhocracy offers several advantages:

• High flexibility and significant growth frequently allow these companies to become market leaders.

• High levels of psychological safety within the team foster creativity and encourage the generation of original ideas.

• A wealth of innovations and their seamless implementation align with market trends and cutting-edge technologies in the work toolkit.

Yet, as you might imagine, this also has its limitations:

• If employees struggle with self-discipline and initiative, the risk of procrastination, inefficiency, and instability increases, which is why adhocracy is appropriate for only a small number of companies.

• This type of corporate culture is suitable only for experienced professionals. The reasoning relates to the earlier point, as it can be highly intimidating for newcomers who are unfamiliar with it.

• Realising this culture's full potential necessitates complete transparency throughout all business procedures to effectively oversee and manage projects.

An example of a company that embodies this culture is Google, whose success in the technology industry stems from its commitment to innovation and rapid implementation. Google's office is famous for its diverse workspaces, ranging from hammocks to beds that facilitate working, a buffet offering global cuisines, a free gym, and the flexibility to bring pets or wear pyjamas to work. Despite these comforts, the company upholds rigorous KPI standards and strict deadlines, yet it is widely recognised as one of the most comfortable workplaces regarding conditions and creative freedom.

Building a Corporate Culture

To establish and nurture a corporate culture within a company, it is essential to develop a detailed plan and implement it systematically. The following guide can serve as a foundation:

Step 1: Evaluate your company's features and needs

After examining the different types of corporate culture above, it is clear that creating a hierarchical or adhocratic culture does not suit every company. It is crucial to identify the culture that strengthens your organisation, addresses progression gaps, and reduces weaknesses. For instance, in fields like creative or entertainment, a hierarchical culture can stifle originality and threaten competitiveness.

When analysing your company, clearly define the following points:

• Competitive advantage: Where should you direct your attention? What characterises your company's strength-innovation or stability?

• Mission and ideological values: What are your company's core values and focus areas? For example, if you're running a medical centre dedicated to elderly care, adhocracy might not be the best fit. Conversely, if you're a young FinTech startup focused on enhancing global well-being and promoting humanism, adhocracy could be an appropriate choice.

• What is your company's current tone of voice, history, and narrative? How can you integrate these elements into your corporate culture? For instance, if a close-knit family founded the company, embracing a clan-oriented culture would naturally foster a warm, friendly, and familial image.

Step 2: Create policies and standards tailored to the specifics you've identified

Transform the values and attributes of your legend that you've identified into 2-3 bullet points that define your company. For example, "Our company aims to create new financial opportunities for those in need, empowering individuals to attain freedom." As your employees are expected to reflect these aspirations and ideals, they should also have a reasonable degree of autonomy in their actions.

Compile all desired principles of corporate culture and key elements of your cultural concept into a comprehensive document. Clearly outline the company's values, goals, and core ideas you want to communicate to your employees. This document can also include guidelines, codes of conduct, and any necessary regulations or procedures vital for effective collaboration and operations within the team.

Creating a separate role for a "corporate culture manager" is unnecessary. Culture development responsibilities can be assigned to an HR specialist or handled directly. Furthermore, actively engaging the team in cultivating corporate culture greatly improves its effectiveness and adaptability from the outset.

Note: Corporate culture exists at different levels, influencing the degree to which it affects employees and the extent to which it is adhered to. These levels can be categorised as superficial (informal), declared (formally established), and deep (the most rigid). Please select one of these three levels in advance.

Step 3: Begin implementing and cultivating a corporate culture

Remember that this process is both lengthy and methodical. It will require the integration of multiple communication channels, along with platforms for disseminating your values and materials. These channels will also act as ongoing tools for nurturing and evolving your corporate culture, as it is a continuous effort that lasts throughout the company's existence. To implement and develop this culture, you can utilise the following channels and tools:

• Provide educational courses and develop a corporate training program to enhance your employees' soft skills, aligning with company values such as emotional intelligence and conflict resolution. Additionally, consider creating a tailored course focused on instilling your unique corporate culture in your employees.

• Schedule regular team events that range from informal daily lunches to off-site sports activities. Options may include Friday football games, participating in charitable efforts, attending scientific conferences, or engaging in other enjoyable pursuits.

• Motivation and reward system whilst avoiding imposing fines for deviations from corporate culture, especially during the initial adaptation period. Instead, emphasise positive reinforcement through both material and non-material incentives.

• Put in place a mentoring system and choose two to three team members who closely align with the corporate culture or have contributed to its development. Assign them the responsibility of ensuring proper implementation and compliance. Foster a culture in which employees mentor and support one another in adapting to the new guidelines.

• Utilise cloud platforms and services to ensure that all resources that support the corporate culture are easily accessible and publicly available. Promote convenient and transparent communication with management and relevant teams, such as HR, by integrating various messaging platforms.

Note: It's essential to prioritise collecting feedback and refining corporate culture as needed. Implement anonymous surveys to allow employees to assess the corporate culture and share their adaptation experiences one to two months after implementation. Additionally, regular surveys can be conducted to gather suggestions for improving or diversifying the corporate culture.

Conclusion

Corporate culture embodies a brand mentality and is essential for establishing and enhancing a distinct image. It also creates a stable and comfortable work environment for all employees, streamlining procedures and reducing the risk of misunderstandings, conflicts, and operational failures. Monitoring the evolution of corporate culture and maintaining a balanced approach to its implementation is crucial. The more straightforward and accessible the corporate culture is, the quicker employees can adapt to it.