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Organizational culture is the mix of traditions, attitudes, values and expeditions that shapes life for its staff. Does everyone work late or do they strive for work-life balance? Are acceptable work clothes traditional, casual or cutting-edge hip? In some cases, such as a company that tolerates bullying and abuse, there can be a big negative impact of organizational culture.
Creating Corporate Culture
Good leaders take an interest in the positive and negative effects of organizational culture. Effective leaders have a vision for the culture they want and work to develop it in the organization:
- They encourage staff to believe in their vision and empower them to help make it a reality.
- They encourage employees to respect and care about each other.
- They build trust between themselves and their team.
- When employees act in ways that exhibit the desired culture, leaders celebrate them. For instance, to develop a culture where employees act independently, management should acknowledge staffers who do great independent work.
- They eliminate negative behaviors. If the CEO wants a workplace culture that celebrates diversity, they have to discourage bigotry and discrimination.
- They walk the walk. No amount of vision statements and speeches will be as effective as staff seeing the leader lives by the values they talk about.
What Makes Culture Toxic?
Promoting the values you want in your organization doesn't guarantee they'll be adopted. In any organization, there are multiple influences on people's behavior. In some organizations, those influences push culture to the dark side.
- Poor communication. If managers don't talk openly to their staff, or if employees can't share their thoughts with management, that leads to a breakdown in trust.
- A toxic employee who backstabs or bullies colleagues can erode organizational culture. If management doesn't rein the employee in, other employees may assume the company will tolerate them behaving the same way.
- Prioritizing profit above everything else encourages employees to cut ethical corners to suit the bottom line.
- Setting employees competing against each other works against building a cooperative culture.
- Micromanagement. If employees feel they're under constant scrutiny, they stress out.
- Resistance to change makes it harder to fight the negative impact of organizational culture.
- If managers or other workers don't perform to the company's standards, employees will realize how much they can get away with.
- Lack of engagement. If the company shows no interest in employees, that makes it harder for them to care.
Effects on Management
The positive and negative effects of organizational culture influence managers as well as lower-ranked employees. For example, a small company may expect managers to help out employees when they need it. That's a positive culture, fostering a spirit of teamwork.
The effects of organizational culture on managers also shape how decisions get made. The culture can emphasize data-driven decisions dominated by analytics and statistics, or favor going with your gut. Does it prioritize results, even if managers have to compromise on their ethics? Culture shapes decisions as much as the facts in the case.
Negative Impact of Organizational Culture
In a healthy organization, the effects of organizational culture on employee performance will be positive. Employees know they're valued and enjoy the work environment, so they're ready to give their best.
A negative culture has the opposite effect:
- An organizational culture that doesn't value quality work gives the employees no reason to strive for quality.
- A culture that tolerates bad behavior gives other employees license to behave the same way.
- Unhealthy organizational culture leaves employees feeling miserable, with decreased motivation to commit to their job.
- An unpleasant culture can increase employee turnover because nobody wants to stick around where they're miserable. If the culture becomes known outside the company, it may become harder to attract new recruits too.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com