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Why Culture Matters
Culture, as described in the Webster dictionary, is the total pattern of behavior embodied in thought, speech, action, and products and is dependent upon the capacity for learning and transmitting knowledge to succeeding generations. In terms of corporate culture, it is the mode of behavior, communication, values, and interaction projected both internally and externally. Its basic tenets are often expressed in the mission statement. Companies may be seen as formal just by the way their managers dress and communicate with their client- as is the case with bankers and financial agents. On the other hand, you have the Silicon Valley casual dress code habits and behavior patterns that project less formality and more openness. Cultural distinctions are also evident in the organizational structure.
Problems With Older Companies
Older companies still lean towards strict hierarchical lines, while new technology companies opt for a more egalitarian approach. The functional lines of communication and reporting are still in effect in the latter but less pronounced. The result is a greater camaraderie and more friendly workplace. This is a matter of the cultural choices that are made by the founders or the management team as a whole. Corporate culture is not unlike national culture which promotes a strong allegiance to the flag, national identity, unique language, distinctive character traits, customs, and traditions. This is passed on from one generation to the next. But cultural distinctions can also lead to prejudice, xenophobia, and ethnic exclusions. This is also true in the corporate setting where, for example, over protection of intellectual assets can hamper technological progress. Finding the right balance is a cultural prerogative in both cases.
Small Business Culture
In a small business, it is the owners that set the cultural habits and expect their employees to follow suit. But culture goes deeper than just dress codes and organizational structures. Being a good corporate citizen in the larger community is an important cultural asset that many companies carefully nurture. Expressing concerns about the environment and reduction of the company's carbon footprint is a prime example of this. Support of local institutions, education, recreation, charity is another cultural element that can make a company stand out. But much of the cultural behavior starts with the employees and whether they are seen as valuable resources or just replaceable pawns. Companies that behave well outside the corporate walls but poorly on the inside will be called out at some time for their hypocrisy. The most critical and readily discernible cultural pattern is how we interact with customers. Nothing has a greater impact on the success of the business. Stressing value, quality, friendly service at every level of the organization projects a culture that recognizes the importance of every single customer.
Establishing a corporate culture is a process that takes both effort and time and must be championed at the highest levels of the organization. The benefits include greater employee loyalty and commitment, which translates into a low turnover and higher productivity.
There are some basic factors that contribute to successful implementation of a sound culture.
Factors That Contribute to a Successful Business Culture
- Set a personal example
- Let customers be your guide
- Clearly define your culture
- Incorporate changes into your culture
- Inform yourself about other cultures
1. Set a Personal Example
The owners/founders can set formidable corporate traditions, customs, and practices, but if they fail to take a leading role in setting an example then these will quickly decay. There are many different management styles ranging from the authoritarian to the collegial. Much depends on the character traits of the leading individuals in the company. This, in turn, leads to the kind of culture that is established in a particular company. Employees tend to follow the example provided by their leaders. If they sway from abiding by the established business principles and behavior patterns conducive to good business practices, then the employees will simply follow suit. This is a fundamental factor that relates to every aspect of business practice, but it is particularly significant in the successful establishment of a distinctive culture.
2. Let Customers Be Your Guide
Culture has its own inherent benefits, but business leaders must still prioritize the ability of the company to make a reasonable profit. Nothing is more essential to this goal than satisfied customers that recognize the company's commitment to their needs and express this fact consistently. A culture based on superior customer response is a winning one. In order to verify the effect that it has in the marketplace, it is useful to perform a customer satisfaction survey on a periodic basis. This can be done economically and efficiently by choosing a limited number of key customers to provide the necessary feedback. This type of survey is conducive to cementing relationships and shows the customer that there is a caring culture in place.
3. Clearly Define Your Culture
It is not enough to verbally promote certain behavior patterns towards employees, customers, and the outside world without actually stating them in a written form that will imprint this culture onto the minds of existing and new employees. The mission statement is one of the prime vehicles for such a statement. It should succinctly express the company's credo. The company policy manual should elaborate more on the cultural aspects of the mission statement. Everyone should be expected to know and implement these in their relationships within and outside the organization.
4. Incorporate Changes Into Your Culture
The passage of time produces cultural changes in society, and this should be noted and included in the cultural practices of the company. One example of this is the improved attitudes towards gender, racial, religious, and ethnic differences. Not recognizing these changes will relegate the company to a poorer choice of candidates for employment, and negatively influence customer perceptions.
5. Inform Yourself About Other Cultures
Most companies are exposed to the global nature of the existing marketplace. Many count on good relationships with countries that possess distinct cultures that may in some form be opposed to theirs. It is important not to be judgmental in this case, and learn more about the positive aspects of the different cultures that we do business with. If the company establishes local partnerships in their supply chains, it is very beneficial to recognize and show respect for their cultural differences. Policy should be guided by this recognition and allow for more flexibility where needed.