GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY

The Organizational Culture

Learning Objectives:
At the end of this module, you should be able to, to wit:
1. Understand the meaning of organizational culture;
2. Have a gaze with the importance and qualities of a great organizational culture;
3. Know what a contributory factor why organizational culture emerges; and
4. Be familiarize with the effects of organizational culture.

Organizational Culture

Organizational culture is the collection of values, expectations, and practices that guide and inform
the actions of all team members. Think of it as the collection of traits that make your company
what it is. A great culture exemplifies positive traits that lead to improved performance, while a
dysfunctional company culture brings out qualities that can hinder even the most successful
organizations.

Don’t confuse culture with organizational goals or a mission statement, although both can help
define it. Culture is created through consistent and authentic behaviors, not press releases or policy
documents. You can watch company culture in action when you see how a CEO responds to a
crisis, how a team adapts to new customer demands, or how a manager corrects an employee who
makes a mistake.

The Importance of Organizational Culture

Organizational culture affects all aspects of your business, from punctuality and tone to contract
terms and employee benefits. When workplace culture aligns with your employees, they’re more
likely to feel more comfortable, supported, and valued. Companies that prioritize culture can
also weather difficult times and changes in the business environment and come out stronger.

Culture is a key advantage when it comes to attracting talent and outperforming the
competition. 77 percent of workers consider a company’s culture before applying, and almost half
of employees would leave their current job for a lower-paying opportunity at an organization with
a better culture. The culture of an organization is also one of the top indicators of employee
satisfaction and one of the main reasons that almost two-thirds (65%) of employees stay in their
job.

Qualities of a Great Organizational Culture

Every organization’s culture is different, and it’s important to retain what makes your company
unique. However, the cultures of high-performing organizations consistently reflect certain
qualities that you should seek to cultivate:
• Alignment comes when the company’s objectives and its employees’ motivations are all
pulling in the same direction. Exceptional organizations work to build continuous
alignment to their vision, purpose, and goals.

JHONNIÑO A. SERDENIA, MBA

GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY

• Appreciation can take many forms: a public kudos, a note of thanks, or a promotion.
A culture of appreciation is one in which all team members frequently provide recognition
and thanks for the contributions of others.
• Trust is vital to an organization. With a culture of trust, team members can express
themselves and rely on others to have their back when they try something new.
• Performance is key, as great companies create a culture that means business. In these
companies, talented employees motivate each other to excel, and, as shown above, greater
profitability and productivity are the results.
• Resilience is a key quality in highly dynamic environments where change is continuous.
A resilient culture will teach leaders to watch for and respond to change with ease.
• Teamwork encompasses collaboration, communication, and respect between team
members. When everyone on the team supports each other, employees will get more done
and feel happier while doing it.
• Integrity, like trust, is vital to all teams when they rely on each other to make decisions,
interpret results, and form partnerships. Honesty and transparency are critical components
of this aspect of culture.
• Innovation leads organizations to get the most out of available technologies, resources,
and markets. A culture of innovation means that you apply creative thinking to all aspects
of your business, even your own cultural initiatives.
• Psychological safety provides the support employees need to take risks and provide honest
feedback. Remember that psychological safety starts at the team level, not the individual
level, so managers need to take the lead in creating a safe environment where everyone
feels comfortable contributing .
(achievers.com/blog/organizational-culture-
definition/#:~:text=Organizational%20culture%20is%20the%20collection,your%20comp
any%20what%20it%20is.)

The Emergence of Organizational Culture

Organizational culture is a concept that is widely used but rarely clearly defined. It involves a
shared set of assumptions that unite stakeholders, enabling them to communicate effectively and
achieve common goals. Successful organizational cultures emerge organically, that is, without
heavy-handed intervention aimed at creating artificial connections and shared references.
However, there are circumstances in which a successful organizational culture is especially
likely to emerge, such as a work environment where employees are treated with respect and
openness.

1. Personnel
An organizational culture is especially likely to emerge when a business hires like-minded
individuals. A forward-thinking business employs people capable of building an open and
successful organizational culture; in turn, these employees contribute to maintaining a forward-
thinking orientation. Once an organizational culture has emerged, it may be possible to teach
this culture to individuals by immersing them in its daily activities and articulating its core
principles. Having the right people building this culture from the outset provides a firm
foundation and increases its odds for success.

JHONNIÑO A. SERDENIA, MBA

GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY

2. Reinforcement
Organizational cultures emerge through processes involving positive and negative
reinforcement: Employees who behave in manners consistent with the organization's culture are
rewarded in subtle and overt ways, receiving promotions and being treated warmly. Conversely,
employees whose behavior is not consistent with an emerging organizational culture experience
negative reinforcement by not receiving raises and promotions and by not being treated as full -
fledged members of the group. Positive and negative reinforcement with regard to organizational
culture may occur intentionally or unintentionally.

3. Leadership
Leadership is crucial to the emergence of organizational culture because leaders are capable of
setting a tone in policies and interpersonal exchanges and crafting and pursuing goals consistent
with the shared cultural assumptions. Leaders also take a primary role in the hiring process,
evaluating applicants to determine who is a good fit. A leader can help shape an organizational
culture by overtly articulating ideals and principles and also by subtly guiding employees to
behave in ways that are consistent with organizational values.

4. Artificial Implementation
Organizational culture cannot emerge through an artificial process based on defining and
creating a set of common goals and assumptions. Such a top-down approach may seem like an
effective strategy to a management team interested in introducing an organizational culture to a
business that lacks a cohesive vision. However, it is unlikely to work because organizational
culture is a phenomenon that gains traction when individuals are genuinely engaged rather than
because they are behaving as they are told.

How Does Culture Affect the Health of a Company?

Organizational culture can strongly affect the health of your company. Productive, high-
functioning workplaces can increase profits and reduce turnover, while dysfunctional, toxic
workplaces may dramatically reduce the success of a company. No single factor is the sole source
of a corporate culture. Instead, a combination of factors -- management style, daily routines,
corporate traditions and many others -- make up the culture of a company.

1. Productivity
Productivity is an important predictor of your company's success. Productive employees finish
their work in a timely fashion, maximizing the benefits you get for the expenditures of employee
salaries. A productive culture encourages useful, constructive meetings rather than disorganized
discussions. Competent, authoritative and non-bullying managers can also greatly increase
productivity by keeping employees motivated. A culture of frustration, bullying and time-
wasting, by contrast, can greatly reduce productivity.

2. Employee Satisfaction
Employee satisfaction is a major predictor of loyalty. Employees who feel they're treated unfairly
may quit or work less efficiently. In rare cases, they may deliberately undercut the productivity
of the company. A culture that values constructive criticism, positive feedback and fair

JHONNIÑO A. SERDENIA, MBA

GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY

compensation can greatly increase satisfaction. "Open door" policies that encourage employees
to vocalize concerns with their managers may also contribute to a healthy culture of satisfaction.

3. Company Reputation
A healthy corporate culture can establish your company as a leader in the field. Happy
employees, competent managers and friendly customer service staff convey a sense of corporate
pride, and outsiders pick up on this. Effective leadership, a collegial environment and productive
use of time can all help foster the kind of positive corporate culture that establishes a strong
reputation.

4. Profits
Profit is the goal of most companies, and your corporate culture directly and immediately affects
profits. When managers foster a climate of competence and effective time management, they
will hire, train and retain better employees. Better employees can increase sales and production,
boost your client base and spread the word that your company is an excellent place to do
business. A healthy corporate culture also makes for happy employees. When employees are
satisfied, they make fewer mistakes, miss fewer days and are more likely to come up with novel
and constructive ideas. (https://yourbusiness.azcentral.com/ethical-dimensions-leadership-
20940.html)

JHONNIÑO A. SERDENIA, MBA