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What Is the Role of Corporate Culture?

Corporate culture in companies can help set the tone for employee performance and productivity.
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  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 08 November 2014
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Corporate culture is a company’s perceived environment that is not necessarily tangible to employees and other stakeholders. A common definition for this concept is the values or beliefs a company develops over time. The role of corporate culture is to enhance a company’s mission and strategies, with long-term hopes of improvements in a company’s profit. Though corporate culture often comes from a company’s top management, older companies can develop a culture that is different from the classically defined business concept. A strong culture can get all employees on the same page and make the company stronger than before the culture existed.

One role of corporate culture is to influence employee behavior, integrity, ethics, and compliance. A company does not have to necessarily create a direct influence for these actions. A direct influence may be a written code of conduct or other policies, and while these may be in place, the corporate culture is usually more of an indirect influence. For example, starting a business with strong corporate culture allows the natural environment to create a positive vibe in a company.

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While many companies try to create corporate culture through the use of written policies, its role is harder to define. The human factor has an influence on how corporate culture is expressed. The way upper management acts and reacts to various situations defines how lower-level employees will act, and this aspect may be more important than any written policy. For example, a company may have many policies on corporate culture, but seeing them in action is how employees learn about them.

A company’s corporate culture can also extend beyond the walls of the business. Consumers who believe a company to be ethical and forthright may be more loyal in their buying behavior. Employees in a company’s customer service department can also exhibit positive corporate culture to outside individuals. In this case, the culture creates a link between the company’s employees and its customers. How customers react may be a direct result from the company’s corporate culture.

Product quality can also be influenced by a company’s corporate culture. Companies that focus solely on profits may decide to avoid high-quality materials in products, but try to suggest that the products are of higher quality than they really are. This negative culture can then result in lower brand loyalty with consumers.

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Discuss this Article

anon953788
Post 4

I need some information /website/link about the role of corporate leadership in national and international culture.

SkyWhisperer
Post 3

@NathanG - I worked at a company that had a very positive, caring culture. It was something that they stressed in their new employee orientation, and it was a commitment that they actively carried out.

Managers really cared about you. If you ask me, it’s from the top down. It starts with the executive. If it doesn’t start there, nobody else is going to carry the ball.

A company’s mission statement should give you a clue as to what they’re like. One famous example is Google and their motto, “Do no evil.” Of course that’s very abstract; if you dig deeper you’ll find out what they mean by that. You have to decide if you buy into the motto, or if…you’re an evil doer. If you’re the latter, then obviously you shouldn’t apply.

NathanG
Post 2

@Charred - You raise a good point. Sometimes it’s easy to figure out if an applicant will fit in, like if you have a software company with a laid back atmosphere where everyone likes to play as well as work hard. If you have a candidate that seems to be straight laced and a little tightly wound, you might determine that employee is not a good fit.

Having said that, it’s as much the employee’s responsibility to figure out if they are going to be a good fit too. During the interview process, the applicant must try to get a feel for the interviewers.

Do they seem compatible with his personality? What’s the atmosphere of the place? You could go on and on. But my point is that you are interviewing the employer as much as they are interviewing you.

Charred
Post 1

Corporate culture is certainly hard to define. But I believe it is very important. As a matter of fact, it’s so important that companies attempt to use corporate culture as one of the filters they use to screen potential applicants.

Companies say that they want employees who will “fit in” with their corporate culture. That is a challenge. How can you tell in an interview process whether or not an employee will fit in?

Is it how they talk? Is it their attire? Is it how they answer questions, or their body language? It’s really hard to accurately gauge, and it’s not uncommon for companies to make mistakes. When they do, they just have to take that employee “as is” and go on.

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