The focus on organizational culture in the twenty first century has increased due to its increased importance in terms of organizational productivity.
The organizational culture is at the root of everything inside an organization including employee behavior and performance.
The culture sets the tone for everything inside an organization including its governance, employee management, and business operations.
An organization’s culture is shaped by its values and beliefs.
However, there is not a single culture that suits all types of organizations.
Companies adopt the types of cultures that drive higher productivity, faster growth and superior performance.
It differs from one company to another, even if they are in the same industry sector.
There are several internal and external factors that affect the organizational culture and behavior.
While the external factors may be difficult to control and manage the internal factors are generally within the control of the company and mostly easier to manage.
The companies that are able to manage the internal factors right are able to improve their employees’ performance and organizational output.
Usually, the companies with stronger cultures are more stable in terms of market position and performance.
They also tend to be more successful than the companies that take a lousy approach to managing their culture.
Culture is something that business leaders and managers need take seriously in order to resolve a hundred problems that might plague the organization in the longer run.
In this post, we will discuss the internal factors that influence organizational culture and how companies must manage them.
Internal factors that affect organizational culture
Employees are the most important internal factor that can affect organizational culture.
In fact, their role is quite large in terms of organizational culture.
Individual employees differ in terms of personality traits and background.
While companies cannot completely control each employee, they use guidelines to inform and direct employee behavior and performance.
Several companies focus on creating cultures of diversity and inclusion and include employees from diverse backgrounds.
This helps make the team more diverse and have people with diverse skillsets and backgrounds on board.
Companies use mission and vision statements to guide employees in their daily operations.
Apart from it, an organization wide general code of ethics and other standards also used to direct employees.
Organizations also consider personality traits that fit into their organizational culture while hiring.
Focusing on hiring the right people for the organization, helps companies build a capable workforce and maintaining and promoting a strong organizational culture.
The role of leadership is also equally important in terms of the maintaining and promoting a strong organizational culture.
They also play a central role in the making of the organizational culture.
Let’s take Apple and Steve Jobs for example.
The culture he established has helped the company find global success and maintain its competitive position.
The leadership outlines and communicates the organizational culture.
It also ensures that the culture is supported and cultural rules followed throughout the entire organization.
Leadership has an important influence on people.
There is a popular saying – As the King, so are the followers.
A strong leadership maintains a solid focus on organizational culture and ensures that it is reinforced from time to time and people do not deviate from the norms.
On the other hand, a poor leader, who himself disregards also makes the other deviate from the rules.
This can have a poor impact on organizational culture and employee performance.
Leaders lead by examples and set the standards for expected behavior.
Apart from it, they also make sure to make changes as per changing industry environment, consumer preferences and to correct the course whenever required.
Some companies have highly flexible cultures and leaders play significant role in getting each component of the organizational culture right.
Capability & support:
Successful organizations maintain a strong focus on providing training and support to their employees.
Any company that is interested in helping their employees find career growth and professional development, offer them the training and support that enables superior performance.
Training and support are necessary to help employees complete their tasks satisfactorily.
It also helps maximize job satisfaction among employees.
Companies need to focus on hiring the right people but they also need to provide them continuous training and support.
It has a positive influence on organizational culture and employee productivity.
Setting an innovative culture that focuses on innovation and is committed to maximizing employee performance through training and support, facilitates faster growth for the company.
Nature of the business:
Different industries have different focus areas, which also has a profound impact on the organizational culture.
The same type of culture does not suit all the industry sectors and different industries also differ in terms of cultural focus.
For example, the ethical standards and cultural components may be different in the accounting industry compared to the technology or fast-food sector.
Ethics is also an important component of culture that companies need to maintain a heavy focus on in order to grow and maintain their social image.
So, the differences across the various industry sectors also have an important influence on the company culture.
For example, in the hospitality industry, the focus may remain higher on customer service and in the retail industry, companies need to focus on building a culture that maintains a higher focus on overall superior customer experience.
Resources and technology :
It is important for companies to provide their employees with all the necessary resources and technology that can help the companies perform.
If companies fail to provide them the necessary resources and technologies, it causes a lack of enthusiasm and frustration.
It has a negative impact on the company culture as well as employee satisfaction.
The industry has undergone a major transformation in the twenty first century.
It is the digital era, and throughout the industry, there is a higher focus on the use of digital technology to improve employee performance and to grow market share.
Digital technology has had a major impact on organizations and their cultures.
Organizations are also striving to create highly digital organizational cultures that promote risk taking in order to driver superior performance.
Technology and organizational resources have a positive impact on organizational culture and employee morale.
Digital technology has now become essential to successful completion of tasks across industries and for maintaining the growth momentum.
It has now taken centre stage and companies are making necessary changes to their cultures to foster higher innovation and inspire technological thinking organization wide.
However, technology is not just an internal factor, but also an external factor.
It is because how your competitors are doing and how technological changes across the globe influence your industry sector also affects your culture and its impact on performance.