Company Culture: Definition, Types, Benefits, and Strategies

23 Dec, 2022 | Read in 6 minutes

Company culture is an environment that reflects the values ​​and vision of the company. Read more about it here.


Company culture or by another name corporate culture is the personality of the company. Let's assume that if the company were to meet someone for the first time, what impression would it make? What is the main word it will talk about?

Describing company culture means influencing the decision-making process. Plus, it's a key differentiator for every company. Nonetheless, corporate culture is still a hazy concept and a secondary concern.

But if managed properly, this can help the organisation in any situation. As the company begins to grow, its culture grows. Let's learn more about company culture and everything we need to understand.

What is Company Culture?

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Daniel Coyle, the author of The Culture Playbook: 60 Highly Effective Actions to Help Your Group Succeed once said, “Culture is not about words or what you talk about. Culture is about behaviours and actions.”

If you Google the definition of company culture, you will find keywords such as vision, values, organisational standards, ethics, and others. Corporate culture refers to the values, vision, ethics and beliefs that determine daily business operations. This affects all aspects of the company, including business decisions and the pantry's atmosphere. Corporate culture may be born from leadership, but the role exists at every level.

Corporate culture includes formal and informal systems and behaviours. For example, have you ever walked into a company and felt a different positive energy when collaborating? This basic form of culture affects the office's entire atmosphere.

Culture becomes how people work, the values ​​they believe in, how they communicate, and how people hire and let go. It means the organisation's culture reflects team activities, celebrations, working hours and every other aspect of operations. Collectively, all of these traits illustrate the culture of the organisation.

Why is Company Culture important?

Company culture works like a magnet in many ways. Global Survey Trend 2022 said that 40% of job seekers view culture as a priority when picking a new job. Therefore, it's essential to maintain a corporate culture for long and short-term benefits. Here are some reasons why:

1. Company culture encourages employee engagement

Culture can make employees involved in every company's activity. Employee engagement drives positive outcomes for businesses. Gallup reported that 17% of employees engaged in the organisation become more productive.

2. Culture influences the work environment to be more positive and productive

As we mentioned above, a good culture fosters a positive experience at work. This also applies to remote and hybrid workers. Otherwise, companies that fail to build a good culture also affect employees. Here are some of the impacts:

  • Causes higher stress on employees.
    Toxic culture is one of the stress factors for employees. The result is bad time management and decreased productivity. reported that 31% of employees miss between 3 and 6 days due to stress at work.
  • Engagement decreases.
    Toxic culture makes employees lazy to engage with the organisation. As a result, decreased profits weakened productivity and other adverse effects. Harvard Business Review says that disengaged workers have 37% higher absenteeism.

Types of Company Culture

There are several ways to classify culture types. The following are the types of corporate culture according to OCAI:

1. Adhocracy Culture

A work culture that creates a dynamic and creative environment. Leaders act as innovators and risk-takers. Adhocracy has a long-term goal to grow and develop new resources. Organisations that adopt this culture will promote individual initiative and freedom. Some companies that implement this culture include Airbnb and Uber.

2. Clan Culture

Clan creates a friendly work environment. Everyone felt they had a lot in common and were like a big family. The leader is seen as a mentor or father figure. Companies that adopt this culture are united by loyalty and tradition. Clan promotes teamwork, participation and consensus. Sectors that frequently adopt Clan are health care, some government agencies, education and nonprofits.

3. Hierarchy Culture

A hierarchical culture offers a formal and structured workplace. Leaders adopt efficiency-based coordination and organisation. It has a long-term goal of maintaining stability and results. The level of cost efficiency determines success. Sectors that use hierarchies are medicine, government, insurance, banking, and transportation.

4. Market Culture

This culture emphasises targets, deadlines and completion of work. Everyone in the organisation must be focused on goals. The leader becomes a formidable producer and rival. The long-term goal is to dominate and lead the market. The market adopts a competitive style of organisation. Sectors that use market culture are consulting, accounting, sales, services, and manufacturing.

The benefits of Company Culture

A strong and healthy culture provides many benefits for the company. Here are some of the benefits of company culture:

1. Increased productivity

A healthy and non-toxic organisational culture will increase employee productivity. They will feel a sense of belonging and be empowered by the company. Employees are willing to go the extra mile if they invest in the company.

2. Health and welfare of employees improve

Some companies sometimes ignore the welfare of their employees. Employees are people who spend a lot of time at work. Employees need to feel that they are essential and impact the company. Through a solid organisational culture, employees will have a good work ethic. This can help companies improve employee welfare.

3. Customer satisfaction

Apart from employees, loyal consumers always pay attention to the company culture. They will be dedicated to a company with a healthy culture and employees who take pride in where they work.

4. Increased level of communication

The level of communication between employees, management and customers will increase if the company has a healthy culture. Ensuring that all people in the company understand its vision and mission. This enables collaboration and fosters a sense of unity.

5. Higher innovation

Increased productivity creates a faster innovation process. When everyone in the company feels productivity increases, innovation emerges more quickly. A smooth process of collaboration and brainstorming fosters creativity and innovation.

How to build Company Culture

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Creating a positive company culture takes work. It needs a deeper research and exploration process to make it. Here are some tips for building an excellent company culture:

1. Define the company's core values

The company's core values ​​are generally a few words with high meaning. But the word is worthless if it is not applied. The company's core values ​​can be important points that candidates must research before applying for a job. When practised, core values ​​form the foundation of a healthy corporate culture.

For example, one of the core values ​​of Meta is “Move Fast.” This word signifies that Meta likes to be on the edge of trends and is not afraid to tackle new ambitious projects. Even though this value sometimes does not occur, “Move Fast” can attract companies and retain like-minded people.

2. Set corporate culture goals

Every company has a fundamental purpose behind the company. A reason why the organisation exists. How a company communicates goals in a sentence significantly impacts the company. Sometimes goals sound moonshot, but they are all designed to speak on a deeper level. For example, the core value of Airbnb is to Create a world where anyone can belong anywhere.

3. Get the whole team involved

The entire team must be involved in shaping the corporate culture. The team is the person most affected by the company culture. So ask them what kind of culture they want. Companies can conduct employee surveys and then ask for feedback on the results.

Final Thought

You shouldn't be confused when someone asks: “what is your company culture?” In essence, company culture is an environment that reflects the values ​​and vision of the company. The culture empowers the best teamwork and embraces every individual in the company. So instead of thinking hard about defining your company culture, you better put a lot of effort into creating a work environment that supports good teamwork.

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