Back to Glossary

Definition of Organizational Culture:

If you consider your organization as a living entity, organizational culture defines the character of the person. It is values and traits that define the company. Just like how our views, our traits change and improve over time, organizational culture is a continuous process where the organization evolves to understand what is good for the company and their employees.

Organizational culture is reflected in the leadership style, the company’s reaction to tough situations, its interaction with employees and customers etc. Culture can be called competitive, innovative, employee-first, research driven, innovative, based on what you prioritize in your organization.

Why is organizational culture important?

Organizational culture is manifested in all the places and documents you deal with, for example; your employee contract, onboarding, rewards schemes, benefits, etc. Essentially, it is the way you treat your employees. If they feel comfortable and aligned with the company values, they perform better, eventually helping the company grow.  It plays a crucial role in hiring, as it is an indicator of employee satisfaction and employee retention. According to a Glassdoor survey, 77 percent of workers look into the company’s culture before applying.
Further, according to a study on organizational culture and its correlation to business, employees are willing to move to a lower-paying job than stay at a place with toxic culture. It says that companies with a healthy culture report an average revenue growth of more than 15 percent in three years and are 2.5 times more likely to report an increase in stock prices. 

Qualities that define organizational culture:

  • Trust: Fostering a culture of trust is important for employees to feel comfortable in your company. It gives them the space and opportunity to innovate, experiment, learn new things, fully knowing that they have the backing of their team.
  • Teamwork: Respect and openness are the spirit of teamwork. When your team members collaborate, everybody feels happy at work and would do more. This in turn leads to better performance for individual team members and the team on the whole.
  • Alignment on company goals: When the company goals align with your employee’s goals, it is a win-win situation that leads to growth. 
  • Breed Innovation: When the organizational culture promotes trust and teamwork, employees will be motivated. They would think outside the box, and try different and innovative things to help you reach new heights. 
  • Gratitude: Appreciate employees for their good work, in the form of promotions, rewards, or even a small thank you can go a long way. 
  • Transparency: Be honest with employees. Let them know about goals and setbacks. Communicate it in such a manner that you have your employees' best interest at heart. 
  • A space to speak up: Let your employees know that they can speak up when they have a problem at work, without worrying about the repercussions.