The Role and Importance of Organization Culture in a Business or Company

Organizational culture is an important aspect of any business or company (Smith, 2003). Although there is no universally acceptable definition of organizational culture, it is a collective term referring to the mind and action programming of employees of an organization that differentiates employees of one organization from another. It is the way or mode of doing things in the organization. It includes all the beliefs and rules governing how activities are carried out in an organization (Smith, 2003).

Organizational culture is a combination of principles and guidelines that govern how different levels of employees relate to one another while on duty and how they relate to the outside world.

Organizational culture can also be thought of as a collection of behavior observed among employees of an organization that is usually because of previous experiences. This culture, usually gained through experience helps employees to know how to handle different situations and how to tackle different problems in the company.

Organizational culture also involves beliefs, assumptions, behavior, communication, values, rules, principles, and actions performed by employees of an organization when faced with different situations.

All these aspects are important to every member of the organization and are usually taught to new members upon recruiting.

Strong organizational culture is important in ensuring that an organization’s activities and objectives are carried out efficiently and swiftly (Huhman, 2012). It promotes understanding among members of an organization and improves correlation in business activities. Organizational culture is important in any organization because it helps hold an organization together and gives a company an image in the market and community.

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Leadership plays an important role in shaping the organizational culture of an organization. It is the backbone of all the activities and decisions made is an organization on how to deal with different situations and happenings. Leaders are people who are usually born with leadership qualities and traits (Smith, 2003). These qualities and traits differentiate one leader from another and make it easy to classify leaders on a scale from good to bad.

Leadership is the main thing that differentiates organizations behavior even though they are dealing in the same chain of goods. Since organizational culture determines the success or failure of a business, it is important that an organization’s culture be good for any business to succeed. From this perspective, it then follows that good leadership is the key to any business success because it determines the organizational culture of any business. Although leadership is a key determinant of an organization’s culture, the surrounding community’s culture is the biggest determinant of a company’s organizational culture (Smith, 2003).

Such things as religious beliefs, market culture, and quality of service required by customers constitute the fundamental attributes that constitute a community’s culture. This is mainly because if a company does not conform to the already set culture in the surrounding community it will fail in business. A business needs to integrate itself within the culture of a community and support such cultures for it to succeed. Some of the common community cultures are described below.

According to Hofstede and Trompenaar, organization’s behavior and activities are shaped by regional culture, which is grouped according to certain behavior observable among community members (Cameron and Quinn, 2011). Hofstede presents five divisions into which communities can be grouped into according to the behavior observed among its citizens. The first division into which a community can be categorized is according to the power distance index (PDI).

This categorization determines the extent to which employees and citizens in a country accept and conform to the rules put in place by the leaders in the society (Flamholtz and Randle, 2011). It is the extent to which they accept that power can never be equally distributed in any group of people. Low PDI indicates a democratic society and requires that leaders make consultations before major decisions in the organization. This categorization shows that companies in areas with high PDI have easy time in making decisions and delegating duties as compared to those in areas with low PDI. Those in areas with low PDI have to make consultations and references before decision-making and delegation of duties (Huhman, 2012).

The second category is individualism versus collectivism. This division determines the level at which members of a community are free and willing to work in groups (Cameron and Quinn, 2011). It determines the extent to which members of a community can form strong groups. In individualistic societies, emphasis is put on individual achievements and not in groups’ achievements. This makes citizens in such a society to work better when alone rather than when in groups.

Such societies are free and allow individuals to be free and choose their own affiliations and do their own activities. On the other hand, collectivist societies prefer to do their activities together rather than individually. They make decisions together and act together as a group. From this categorization, it is evident that companies in collectivist communities perform better as compared to those in individualistic communities (Flamholtz and Randle, 2011).

Hofstede also categorized societies in terms of masculinity and femininity. In this categorization, Hofstede stated that different communities have different distributions of labor roles according to gender (Cameron and Quinn, 2011). This categorization also stipulates how emotional values are distributed in a community. According to Hofstede, masculine cultures have bias towards materialism, assertiveness, power, ambition, and competitiveness. On the other side, feminine cultures put value in quality of life and relationships (Flamholtz and Randle, 2011).

This categorization is sometimes termed as quality of life versus quantity of life. From this description, it is evident that companies in feminine cultures perform better as compared to those in masculine communities. This is basically because masculine cultures will promote the quality of products in a company and the relationships between the company and the outside world.

In another context, Hofstede groups societies as either long-term oriented or short term oriented. In this categorization, Hofstede states that long term oriented societies put more emphasis and importance in the future while short term oriented societies put more emphasis in the past and the present. According to Hofstede, long-term oriented communities are rewards oriented and value saving, persistence and adaptation to new situations while short-term oriented communities value rules, tradition, steadiness, and health (Flamholtz and Randle, 2011).

This categorization shows that companies based in long term oriented communities will definitely perform better as compared to those based in short term oriented communities. This is because the employees in the long-term oriented community will look forward to having a better company in the future and thus work hard to achieve their goals.

Communities can also be assessed according to uncertainty avoidance index. This categorization puts communities into groups according to their readiness to deal with uncertainty. It gives the extent to which a group can deal with anxiety in case there are uncertainties. Individuals from communities with a higher index are very emotional and try to prevent occurrence of unusual happenings (Cameron and Quinn, 2011). They strictly follow rules and regulations.

On the other hand, communities with low index tend few rules and regulations as possible. They also accept change and look for comfort even if there are changes in the environment. Such individuals are tolerant of change. From this grouping, it is clear that a company in a community with a high index will perform better as compared to one in a low index community. This is because employees in the high index region will work hard to avoid uncertainties and will conform to the set rules and regulations.

Indulgence versus restraint is also another category into which communities can be grouped. This grouping classifies communities according to their control for impulses and desires. Indulgent societies allow free enjoyment of life to the fullest according to an individual’s desires. They value having fun and enjoying life. On the other side, restraint communities do not allow free enjoyment of life and having fun. They curb such enjoyment and fun with strict laws and regulations (Flamholtz and Randle, 2011).

From this explanation, it is clear that companies in areas with restraint character will perform better as compared to those in the indulgent communities. This is basically because those in restraint communities will easily conform to set rules and regulations as compared to those in the indulgent communities.

All the above categories affect a company’s culture and determine how a company is seen from the outside world. They shape employees’ behavior, relations, actions, and communication in any organization. An organizations culture can also be manifested through a company’s core values, mission, and vision (Cameron and Quinn, 2011). These ones shape an organization’s course of action and determine the prioritized activities.

In addition to these, a company’s culture can be seen from employees’ attitudes towards different things, employees’ beliefs, employee experiences, and employee expectations during different situations. All these attributes determine how an employee will react when faced with an unexpected situation. They also determine how employees relate with one another and how they relate with their employer.

Apart from the above, a company’s culture can also be seen from the psychological environment set at a company’s premises (Raice, 2012). This environment affects employees output and how they relate with different people within the community. The physical environment in a business can also constitute to the organization’s culture. This is because a clean environment will present a better culture as compared to a dirty environment and affects how business activities are carried out. Rules, regulations, and norms formed in an organization are also a determinant of organizational culture. This includes all the written and unwritten cues that regulate behavior and actions in an organization.

Another important determinant of a company’s culture is the leadership structure and how power is distributed down the leadership chain (Dilts, 2012). The leadership structure in any organization determines how different decisions are made in the organization, which is a huge cultural reflector. It also affects delegation of duties and accountability of the leaders at the different levels of the chain. Apart from these, leadership structure determines how information and power is distributed across the different departments and leaders (Dilts, 2012).

An organization’s culture can also be assessed in terms of how free employees are to make decisions, come up with new ideas, speak their mind, and conduct business. Culture can also be determined by observing how employees are committed to their work and how performance is measured over a period (Raice, 2012).

In addition to this, culture can be shown through customer care services, service quality, product quality, safety of employees while on duty, care for the environment. employee attendance and punctuality. These are key as they involve employees who are the representatives of the business while in the market. They carry with them the business image and secrets and thus form the major concern for every observer in the community. Apart from these, a company’s mode of advertising, ways of production, marketing skills, and creation of new products all constitute to a company’s culture. They affect how business activities are carried out and how they follow one another chronologically (Dilts, 2012).

Every organization has its own set of culture, which is usually set at the start of a company and is usually difficult to change. The culture set in place by a leader needs to be continued by succeeding leaders for the business to succeed. Change in any feature of an organization’s culture affects other activities in a business and can easily lead to loses and failure of a business (Dilts, 2012).

A change in such a culture also causes confusions and distracts employees from their activities. For continued growth of a company’s culture, leaders need to emphasize the culture by ensuring that they only emphasize on the important activities and rules. This will involve such things as pinning them on posters, having a mission statement, complimenting good employees, and establishing a friendly working environment.

In addition to this, leaders are supposed to reward performing employees to emphasize on the important activities in the business. They are also supposed to discourage behavior and activity that does not reflect what is important in the organization (Smith, 2003). This will help to remind all employees of what is required of them while on duty. Such things as verbal warning, feedback after work and written warnings will be helpful in reminding employees of what is important in a business. Leaders are also supposed to mold the behavior they want at the workplace. This can be achieved through giving activities that model the required behavior such as grouping employees into units or groups (Huhman, 2012).

In conclusion, it is clear that organizational culture is a key determinant of a company’s success or failure (Dilts, 2012). Such culture is seen to be shaped by the culture presenting itself in the community and can vary from religious beliefs and activities to market structure and market culture. All these affect an organization and affect its performance and mode of doing its activities. In addition to this, organizational culture can be shaped by Hofstede’s cultural categorizations. Organizations based in the different cultural subdivisions will be affected by the culture and will thus act according to the culture in the region. Leadership is also another determinant of organizational culture.

Leadership and the leadership structure in an organization determine how activities are carried out in the organization (Huhman, 2012). Leadership structure also determines how employees relate to one another and how they relate with their leaders. Organizational culture is the determinant of a company’s success or failure and determines how different organizational activities are carried out. It also gives an image to the outside world and helps customers to decide where to buy their goods. In general, organizational culture is an important aspect in any business set up and needs to be maintained in every situation (Smith, 2003).

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The Role and Importance of Organization Culture in a Business or Company. (2023, Jan 07). Retrieved from

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