What does Organisational Culture mean and why is it important?

  • Updated on: 10 Apr 2023
  • Published on: 23 Jul 2019
What does Organisational Culture mean and why is it important?

“A company’s culture is the foundation for future innovation. An entrepreneur’s job is to build the foundation.”

Brian Chesky, Co-founder and CEO of Airbnb, accurately sums up the essential role organisational culture plays in today’s time. In this era of rapid economic acceleration and business expansion, understanding what we commonly refer to as “Organisational Culture” is more vital than ever. People seem to agree – in a survey conducted by Deloitte, 82% of the people who undertook the survey quoted that a good organisational culture is a potential competitive advantage. Organisational culture pertains to the behaviours and actions of the employees within the organisation, and is the summation of their actions and relations amongst themselves, with their personal goals and the organisation as a whole. It refers to the amalgamation of all external factors affecting the employee’s performance and association in a given work setup. 

Culture is important for all the stakeholders in question, not only for their own development but for the development of the organisation as a whole. A healthy organisation culture contributes positively towards building the goodwill of the organisation. Consequently, it sees a reduction in labour turnover and absenteeism, in addition to the personal growth of the employees.

The right culture (whatever that is depending on the organisation), also improves the efficiency, promotes teamwork, and helps in the inculcation of leadership skills in all. Not only that, it contributes immensely in the achievement of personal growth of the employees which, in turn, leads to more prosperity of the employer at micro-level and the economy as a whole on the macro-level.     

5 Tips to Improve Organisational Culture

Having impressed enough on the pivotal role organisational culture plays, it is imperative that organisations strive to achieve a healthy culture as much as possible in this overtly competitive age. Some tips you may want to look at:

  1. Improving communication and relaxing chains of command: A robust system of communication across levels is one of the pre-requisites for a healthy work environment. Exhibit that you value opinions, and you’ll strengthen bonds and incentivise contribution. 
  2. Gamification and employee reward system: Recognition and appreciation for performance works as the ideal impetus for faster turn-around times and improved efficiency. Having a comprehensive reward system in place for employees can go a long way in ensuring job satisfaction – which is often an indicator of happy organisational culture. It can be executed by having a wellness programme or even a free snack policy in place. In addition, inculcating a little sense of competition in the workplace may impact individual efficiency as well as team bonding. In fact, in a study by the Aberdeen Group, it was concluded that the organisations which implement some sort of gamification of the monotonous day-to-day work-life improve the engagement of the employee with the organisation and its goals by 48%. 
  1. Group building exercises: Co-workers are one of the most vital variables in shaping a healthy work environment. Therefore, all possible endeavours should be embarked on, to develop a sense of bonding. This is often done by organising team building exercises, some of the common ones being excursions, community service, organising various celebrations at the workplace, group fitness classes among other things. In fact, Apple organises an annual Beer Bash for all its employees at its HQ. It is one of the most looked forward events of the year. This improves the overall culture and makes the experience of a job an enjoyable one. 
  1. Adequate personal development opportunities: An essential component for job satisfaction for any person is personal growth in the form of skill development, educational opportunities etc. Even in Maslow’s hierarchy, self-actualisation needs are on the top of the pyramid, making it the most critical need of an employee. Organisations can provide on-the-job training, opportunities for further studies, training and skill development workshops etc to its employees. Not only does it directly assist in improving one’s performance at their job, but it also increases their sense of belonging, with the organisation leading not only to a healthier work environment for the current employees but also acts as an inducement for future employees. 
  1. Transparency and involvement in key decision making: Simply put, a sense of belongingness and safety in a job can go a long way in order to inculcate a healthier work environment. Again, according to Maslow, after the fulfilment of the basic physiological needs, these are the items an employee yearns for. By involving the employees in decisions which impact the organisation as a whole, they may feel a sense of influence and belongingness in the organisation.The results? More Inclusiveness, lowered employee turnover, and longevity of a continued healthy work environment. 

In the words of Louis V. Gerstner, Jr., CEO of IBM,

“Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success — along with vision, strategy, marketing, financials, and the like… I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”


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