Company Culture: Why It Matters

Key takeaways

Company culture shapes an organization in many ways, and the right company culture defines the workplace experience and company success.

• Company culture is an implicit, enduring, pervasive, and shared identity that a workplace takes on.

• Some words that describe common company culture types include caring, purpose, learning, enjoyment, results, authority, safety, and order. 

• You can build an enduring company culture to help you retain employees, encourage professional growth, and maximize productivity. 

Explore what defines company culture, the most common company culture archetypes found in our society, and why company culture matters. Then, discover the ways you can make your company more competitive with Coursera for Business. You can begin upskilling employees or find ways to make your team more agile. 

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What does company culture mean?

You can think of company culture as the set of beliefs, values, goals, and attitudes shared by an organization. This is sometimes called the “shared ethos” of a workplace or the “company personality.” Company culture guides the activity of an organization and the way goals are expressed through values and beliefs. This helps professionals take collective action within their businesses and align their goals with larger company objectives. 

Company culture often dictates the social interactions of a company, including what professionals consider appropriate, how employees interact, what behavior employees discourage, and how employees respond to change within the structure. 

Company culture is widely defined through four attributes:

1. Company culture is shared among employees.

Company culture cannot exist within one person alone. By definition, company culture shows itself through collective actions, values, and assumptions made within the company. It often encourages and shapes company goals and objectives, along with employees' expectations.

2. Company culture is pervasive.

Company culture is not only seen on an organization's top or bottom levels but is pervasive throughout the company structure. Company culture exists in multiple facets within the organization, including employees' behaviors, the company's environment, motivations behind actions, and unspoken assumptions. 

3. Company culture is enduring.

Company culture plays a significant role in shaping the hiring process, staff retention, and overall organizational structure. Employees are naturally inclined toward companies that align with their personal preferences and work styles, while employers actively seek individuals who will seamlessly integrate into their existing culture. As a result, company culture is not usually a temporary trend or passing phase; instead, it tends to be resistant to change. 

4. Company culture is implicit.

The nature of company culture is that it works in the background and is a type of silent motivating force. Therefore, it doesn't often have set boundaries or written rules. Employees can “feel” the cultural expectations and often respond instinctively. Company culture includes interactions, assumptions, and expectations.

Company culture examples: Netflix

Take this company culture memo from Netflix as an example. It clearly defines its cultural principles so that prospective candidates understand the expectations. Its tenets include [1]:

• The dream team: Netflix wants team members with selflessness, judgment, creativity, candor, courage, inclusion, curiosity, and resilience. This tenet helps retain the most valuable team members at their company. 

• People over process: The company wants its processes to work for everyone, not just managers, so employees get a lot of control over their work. This means Netflix is looking for candidates who are self-aware, responsible, and self-motivated.  

• Uncomfortably exciting: Netflix expects its employees to go out of their comfort zone to support shows and movies they may not always agree with. Artistic freedom is an important value that all employees should support. 

• Great and always better: Its culture is not about the present but is ever-changing. Netflix is always looking for long-term growth. 

This is just one example of a well-established company culture based on performance, innovation, and growth. 

Words to describe company culture

To organize and understand different company culture types, four subject matter experts at Harvard conducted a literature review to characterize different company cultures found across organizations [2]. They defined eight types. Within these eight types, you’ll find key differences in how people interact (independently or interdependently) and respond to change (prioritizing flexibility or stability). Each style has aspects that may be advantageous for certain individuals or organizations and disadvantageous for others. The eight culture types are as follows:

Caring

This work culture emphasizes employee trust and fosters a workplace that focuses on relationship building. A key component of this type of company culture is that employees support one another and act with integrity and sincerity. This type of environment is typically warm and welcoming. 

Purpose

A purpose-driven company culture focuses on a positive purpose, typically to better the world. These environments are generous and optimistic, and employees are motivated by a shared goal to make a positive impact and contribute to the greater good. Collective goals can unify and empower employees to work with one another.

Learning

A learning culture places the highest value on expanding knowledge, skills, and curiosity. This environment encourages employees to think creatively and thrive on continuous learning. Employees often have a love for innovation and adventure.

Enjoyment

This type of workplace culture focuses on creating an enjoyable space. Employees are typically light-hearted, spontaneous, and encouraged to have a sense of humor. These environments usually foster positive attitudes and high morale. 

Results

Results-oriented company cultures focus on their outcomes and driving productivity. Employee performance and results are carefully monitored, and top performance is a sought-after goal. Leaders in this environment reward employee productivity and push employees to maximize their performance capabilities.

Authority

This type of work environment is highly structured, and senior employees have high levels of control over the employees they manage. These workplaces are competitive and decisive. Employers desire boldness and confidence in this culture.

Safety

Safety culture is a top priority for companies with high-risk potential. These companies carefully plan each operation, prepare for all foreseeable events, and exercise caution in each step. Leaders in these organizations are averse to risk and tend to think logically. Employees move carefully and desire protection.

Order

This type of company culture includes traits of structure, respect, and shared norms. People in this type of workplace desire to fit in with their colleagues and share methods with their peers. Professionals in order cultures tend to follow the rules carefully and stick with the status quo. Employees often use traditional procedures and methods.

Why company culture matters

Company culture can enhance the workplace for employees and make a difference in whether they engage with their organization. Company culture may influence the following factors that affect your company:

Employee engagement

Employee engagement involves the connection and commitment an employee has to their workplace. This links to employee productivity, retention, and overall business outcomes. Employees who are part of a strong company culture often feel more engaged with their organization and colleagues. This helps employees feel their work is valuable and motivates them to go above and beyond to help the company succeed.

Read more: 15 Employee Engagement Ideas

Employee retention

Employees who enjoy their work and feel connected to their workplace are more likely to stay in their position. Several factors in a company culture contribute to employee retention. For example, employees with opportunities to learn and grow within their role may seek promotions or expand elsewhere less frequently. When looking for a company culture that fits them, savvy employees consider which opportunities will allow them to grow toward their goals. 

Workplace productivity

Company culture is directly related to workplace productivity. When employees can see the direct impacts of their work on achieving company goals and missions, they are more likely to continue pushing toward collective goals. This differentiates between an engaged employee and a satisfied employee. A satisfied employee is happy with their current position, but an engaged employee actively works to increase productivity and help the company meet milestones. 

How to create an enduring company culture

Creating an enduring company culture takes time, a willingness to listen, and strong leadership. To create or improve an existing culture, you need to assess the current culture and determine whether it aligns with your cultural and employment goals. To do so, you may use a series of employee satisfaction surveys, leadership meetings, and internal analyses. 

If your business is not meeting its goals and gaps begin to reveal themselves between what employees are saying and what leadership is saying, it might be time to create a new culture. Start with some of these steps to improve your company culture:

1. If you don’t have a set of business values, create them and see how they align with employee and customer perception. 

2. Create a culture committee, conduct one-on-one meetings with employees and leaders, and focus on work-life balance. 

3. Find ways to align employees, metrics, and brand identity with the cultural values that you’ve set to ensure buy-in from all stakeholders. 

4. Continually assess and take accountability to improve employee engagement and to develop an agile, lasting culture. 

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