The notion of corporate culture and its impact on the business world have been discussed since the 1980s, but despite its popularity among businesspeople and academics, the concept remains hard to define given its abstract character.

Corporate culture could be defined as the set of behaviours, beliefs, corporate strategies, attitudes, practices, processes, and standards shared by members of an organisation. It could be said that corporate culture is “the way things are done” within an organisation, usually as a reflection of the company’s mission, vision, and values. Corporate culture may even be embodied in a logo, but often goes beyond that and encompasses staff and executives’ feelings, expectations, and thought processes.

However, some are sceptical about the role that corporate culture plays in organisations, claiming that it can be double-edged sword used as a control mechanism to stifle individuality. This begs the question “Is corporate culture still relevant today?”

The answer is yes, for two main reasons:

1- Corporate culture evolves over time as a result of the cumulative actions and characteristics of the individuals that make up a company, building on the company’s history and developing as a reflection of the company’s identity. This means it cannot simply fade in the background, as it will always remain a crucial part of a business raison d’etre. Moreover, a well-defined organisational culture can help build a stronger brand image and reinforce the idea that a company is committed to high quality standards that are coherent with its identity.

2- Corporate culture plays a key role in a company’s success. A 2015 survey showed that more than more than 50% of  top executives believed corporate culture had a direct effect on productivity, growth, value, and profitability. Improved staff morale and retention are typically higher in businesses with a healthy culture. In the UK, the 2016 Great Place To Work report highlighted how workplaces with a strong corporate culture score higher in terms of employee well-being, since in these companies there are clear strategies in place to ensure the working environment is conducive to satisfaction and productivity.

Similarly, the UK Employee Engagement Task Force report pointed at the cause-effect relationship between a well-defined corporate culture and trust. In turn, trust generates engagement and this materialises into improved productivity levels, higher profits, stronger advocacy and loyalty, and lower absenteeism.

To sum up, corporate culture is still important given its ability to become a company’s greatest asset: it offers organisations a competitive advantage by highlighting their unique values and setting them apart from others.

In the near future, the importance of corporate culture is set to grow as more millennials enter the job market in search of workplaces they can identify with, since this generation is known for allocating high value to finding a match between corporate culture and their own values. At the same time, this reinforces the idea mentioned above: corporate culture is enmeshed in a company’s ability to engage employees and to compel them to work together towards success.

Lastly, corporate culture remains important for businesses who wish to stay competitive in the international and global scene. As workplaces and business practices continue to evolve, it becomes more important than ever to ensure that organisations have a strong identity and well-defined objectives that are coherent with their history and values.

Sources:

(1) https://www.entrepreneur.com/encyclopedia/corporate-culture

(2) http://smallbusiness.chron.com/examples-cultural-controls-organizational-structure-13425.html

(3) https://hbr.org/2013/05/six-components-of-culture

(4) http://smallbusiness.chron.com/importance-healthy-corporate-culture-20899.html

(5) https://www.forbes.com/sites/susanadams/2015/11/12/corporate-culture-matters-says-new-study/#4535b7e422b4

(6) http://www.greatplacetowork.co.uk/storage/Publications/wellbeing_and_culture_final_011216.pdf

(7) http://www.greatplacetowork.co.uk/our-approach/what-are-the-benefits-great-workplaces

(8) https://www.forbes.com/sites/larryalton/2017/02/17/why-corporate-culture-is-becoming-even-more-important/2/#6076f1f73932

(9) https://www.td.org/Publications/Blogs/Human-Capital-Blog/2016/06/Why-Millennials-Value-Company-Culture-Above-All-Else