Organizational culture shapes an organization’s success or failure. It includes human elements that drive services and products, and can determine the approach to formality and individual/team orientation. Each organization must understand what culture will meet its goals.
The primary importance of organizational culture is the fact that that culture, or lack thereof, can help determine or shape an organization’s success or failure. Organizational culture refers to the types of activities that take place behind the business front of an organization. It is the human elements that drive the services and products that define an organization. Organizational culture is the type of structure or framework that has been put in place in the organization.
An example of organizational culture is the approach to formality in an organization. Some organizations may be less strict than others in their approach to issues such as contact with top management, dress code and how they operate. For example, an information technology firm known as ABC may 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, XYZ might insist on a strict form of formal wear like dark suits. All ABC employees can have relatively easy access to their CEO and call him by name. Conversely, those below lawyers and partners in XYZ’s law firm hierarchy may not have easy access to management partners and can only formally address them.
Another example that illustrates the importance of organizational culture is how you operate. Some organizations may encourage their employees to be individually guided and oriented, while others will encourage their employees to always be part of a team. For example, insurance companies, banks or other financial institutions can encourage their marketers to be individually guided in their quest to achieve financial goals. Each marketer or sales rep can be assigned a specific territory and goal to achieve, to the exclusion of other sales reps who will also be assigned their own goals 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 has no generally applicable concept, as what works for one organization may not work for another. It is up to each organization to understand what type of culture will meet its goals and to encourage employees to perform at their best.
For example, XYZ may feel the need to project a strictly formal aspect because that is the kind of image and culture that suits serious legal issues. They meet clients who are reassured by the dignified behavior 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 work is done behind the scenes. Even so, executives, marketers, and workers who conduct deals on behalf of the company might dress more formally than employees who primarily work behind computers.
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