What is Company Culture and Why is Culture Important in Business?

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Company Culture

Company Culture‍Company culture is a popular topic at the moment with lots of different business cultures making headlines, for better or worse. But what does company culture actually mean?


‍What is Company Culture?

Culture is a group’s cumulative knowledge and achievements displayed via things like customs, art, religion, and language. A society’s values and beliefs are founded on its culture, and a company’s culture is no different. It’s a collection of views, values, attitudes, standards, goals, and actions that everyone shares.

Company culture is effectively how individuals in a corporation interact and collaborate with one another. An organisation’s culture is similar to a collection of small societies within a larger civilisation. Their cultures are expressions of the job they do, the values they hold, and the collective behaviours of its employees.

Using two hypothetical instances, we will explain how corporate culture develops. Corporate culture is critical for startup growth

Example #1

Firstly, we have a multinational software firm with thousands of employees all over the world.  Thousands of different views and behaviours could be whirling about in its enormous personnel base. Regardless of their physical distance, they’re all working in the same field and for the same objective. It’s likely that a firm of that size has articulated some set of values to all of its employees, even if they don’t feel personally bound by them.

Example #2 Positive Company Culture

Our second hypothetical instance is a small business with only a handful of employees, all operating from the same building. They have a clear industry and a relatively clear business purpose. They have a set of principles that the employees understand, even if no memo or video conference has been sent out to make them plain.

Employees at both organisations are aware of their mutual aim, and they are likely to act in any manner their employer deems appropriate in order to achieve it.

Company Culture: Weak vs. Strong

However, what makes company culture so intriguing is that it is not a single notion. Company culture is a combination of two concepts: the publicly broadcasted or declared culture of an organisation, and the actual culture of the organisation. This means how its employees really act and treat one another. In some circumstances, these two principles converge, resulting in what may be described as a strong culture. A strong culture is where executives and employees understand and embrace the company’s stated values as a result of purposeful training and decision-making.

However, in an organisation with a weak culture, there is a mismatch between the stated and actual cultures. This is either because there is no stated culture at all, or because the claimed culture isn’t understood or maintained by the employees or employers. Weak cultures are frequently an afterthought, with businesses realising the necessity for a stated culture after ignoring their employees’ experiences. Instead of putting up the work to support genuine cultural shifts, they hope that enough publicity will persuade their staff and the general public.

Strong company culture is where everyone understands and embraces their company’s values and goals.

Weak company culture is where there is a mismatch between how the company views itself and how it really is.

Communication is Key

Type of company culture isn’t always defined by company size, either. The first example above might have a wonderful company culture. This could include key principles established from the start, backed by company-wide communications efforts, and maintained by a vigilant HR.

Meanwhile, a vindictive, abusive owner could in fact preach peace, coexistence, and love for all humanity around the office.

‍Why is Company Culture Important in Business?

Company cultureTo understand why corporate culture is vital, consider the following questions. Would you prefer to work for a multinational corporation that values its people or a small business that mistreats its workers? And which company do you believe has the best long-term prospects?

Most of us would probably choose to work for the larger example business, owing to its positive corporate culture. Because of those feelings, employees are likely to be happier there and less anxious about keeping their jobs. They are also usually more enthusiastic about progressing for the right reasons and more interested in their work.

This implies there’s a better chance the bigger company will still exist in ten years. Company culture is vital because it is the bedrock of every organisation. A strong company culture acknowledges that people are the most valuable asset a company has. It also understands that safeguarding its people will help guarantee long-term success. For more information about Company, or Corporate, Culture, check out our other related blog post: Why Corporate Culture is so Important.


The Company Culture Problem – Stated vs. Actual Business Culture

Ensuring that the claimed and actual culture of a business may be one of the most difficult challenges. When the declared culture emerges after the actual culture has formed on its own, alignment can be particularly difficult. With or without official guidance, company culture will always evolve. Changing the direction of an established culture that has been created by years of tradition requires a lot of effort.

It is therefore wise for businesses to prioritise culture from the beginning rather than trying to fit it in later. It takes understanding the existing culture and reinforcing the positive aspects of it, one step at a time.

Another difficulty arises when measures to foster a positive culture aim to only improve the organisation’s image.

Realistic Approaches to Company Culture

Sometimes how a company appears from the outside is different to how it really is internally. But culture efforts like this can actually have a detrimental effect. As a result, it’s always better to approach culture realistically. You should openly acknowledge the genuine reasons and desired goals that employees are likely already aware of. Furthermore, it is best to suggest any planned modifications internally before announcing them publicly.

Employees are the bedrock upon which company culture is developed over time. Always determine whether you have the support of the people in your business before trying any cultural efforts.

Make sure your employees have opportunities to grow professionally and personally. This is regardless of how you define your vision of creating the ideal corporate culture for you. Ask the correct questions and listen to your employees’ unique viewpoints; they already have an idea of your current workplace culture and they can help shape it for the future.


Amit Khanna

Amit Khanna, 7startup Founder


Amit has 18 years of experience in the industry and an MBA. He supports entrepreneurs with every aspect of their business including concept and product development, investor presentations, and fundraising. Amit & 7startup assist startups in the pre due-diligence process and help connect them to our vast network of investors. Reach out to us today and see if we’re a fit!

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