The main importance of organizational culture is the fact that such a culture, or lack of it, can help determine or shape the success or failure of an organization. Organizational culture refers to the types of activities that go on behind the corporate front of an organization. It is the human elements that drive the services and products that define an organization. The organizational culture is the type of structure or framework that has been put into place in the organization.
An example of organizational culture is the approach to formality in an organization. Some organizations may be less rigid than others in their approach to issues like contact with the top management, dress code, and mode of operation. For instance, an information technology firm known as ABC might be more informal in its general operations than a law firm known as XYZ. While ABC might allow its employees to wear casual clothes like jeans and sneakers to work, XYZ might insist on a rigid form of formal attire like dark suits. The employees at ABC may all have relatively easy access to their CEO and call him or her by first name. On the contrary, those who are lower than lawyers and partners in the hierarchy of XYZ's law firm may not have easy access to the managing partners and may only address them formally.
Another example that illustrates the importance of organizational culture is the mode of operation. Some organizations may encourage their employees to be individually driven and oriented, while others will encourage their employees to always be part of a team. For instance, insurance companies, banks or other financial institutions may encourage their marketers to be individually driven in their quest to meet financial targets. Each marketer or sales agent may be given a particular territory and a target to fulfill to the exclusion of other sales agents who will also be assigned their own targets and territories.
Such practices emphasize the importance of organizational culture in organizations because such cultures can help set the tone for employee performance and productivity. Organizational culture does not have one generally applicable concept, since what works for one organization may not work for another. It is up to each organization to figure out what type of culture will suit its goals and encourage the employees to perform optimally.
For instance, XYZ may feel the need to project a strictly formal look because that is the sort of image and culture that suits the serious business of law. They meet with clients who are reassured by the dignified demeanor of the people to whom they entrust their cases. On the other hand, ABC may not be as formal as XYZ because most of their jobs are done behind the scene. Even so, the executives, marketers and workers who conduct deals on behalf of the company might dress more formally than the employees who mainly work behind computers.