Corporate culture is a company’s perceived environment that is not necessarily tangible to employees and other stakeholders. A common definition for this concept is the values or beliefs a company develops over time. The role of corporate culture is to enhance a company’s mission and strategies, with long-term hopes of improvements in a company’s profit. Though corporate culture often comes from a company’s top management, older companies can develop a culture that is different from the classically defined business concept. A strong culture can get all employees on the same page and make the company stronger than before the culture existed.
One role of corporate culture is to influence employee behavior, integrity, ethics, and compliance. A company does not have to necessarily create a direct influence for these actions. A direct influence may be a written code of conduct or other policies, and while these may be in place, the corporate culture is usually more of an indirect influence. For example, starting a business with strong corporate culture allows the natural environment to create a positive vibe in a company.
While many companies try to create corporate culture through the use of written policies, its role is harder to define. The human factor has an influence on how corporate culture is expressed. The way upper management acts and reacts to various situations defines how lower-level employees will act, and this aspect may be more important than any written policy. For example, a company may have many policies on corporate culture, but seeing them in action is how employees learn about them.
A company’s corporate culture can also extend beyond the walls of the business. Consumers who believe a company to be ethical and forthright may be more loyal in their buying behavior. Employees in a company’s customer service department can also exhibit positive corporate culture to outside individuals. In this case, the culture creates a link between the company’s employees and its customers. How customers react may be a direct result from the company’s corporate culture.
Product quality can also be influenced by a company’s corporate culture. Companies that focus solely on profits may decide to avoid high-quality materials in products, but try to suggest that the products are of higher quality than they really are. This negative culture can then result in lower brand loyalty with consumers.