Company Culture: What it Is and Why it's Important

company culture

Company culture should be a huge consideration when you are looking for a job. Why? Because it is the very essence of a company and work environment that underpins it. It includes the way employees (you, in our case) are treated, what is expected of them and what is offered to them. It is immensely important to research the culture of any company you are interested in, as an unhealthy culture not only affects you at work but also has adverse effects on your personal life. A toxic workplace can affect you mentally, physically and emotionally.

healthy organisational culture, on the other hand, will keep you engaged, happy and productive. How productive, you ask? Quite a lot! Engaged employees are more productive than people who are disengaged due to a toxic corporate culture. Being engaged can also result in increased cognitive ability and faster problem solving.

A healthy company culture, on the other hand, will keep you engaged, happy and productive.

The appeal of a company’s culture is so profound that many jobseekers forgo a higher salary in lieu of a better work environment. Let's take a deeper look into what organisational culture is and why it is so important for you as a jobseeker.

Defining company culture

Corporate culture is a term that has been thrown around for quite some time now, but what does it really mean? A gross oversimplification is that it is everything: the way a company presents itself, how it conducts business internally and externally, common language used in the organisation and the vision the company has for the future. It is especially common for the term to be used to refer to the way employees are treated and the benefits that they receive.

Gerry Johnson, Professor of Strategic Management at Lancaster University, elaborates on the concept and defines it as:

  • The company’s values, goals and mission.
  • The systems in place regulating and monitoring what is going on within and outside the organisation.
  • Power infrastructure: How is power concentrated? Is it top-heavy or distributed throughout the corporate structure?
  • Symbolism: Google has its primary colour palette and now practically iconic set of employee perks. Symbols can be as simple as a corporate brand to company-specific jargon.
  • Special routines or rituals: Walmart has almost become a parody of itself with its storewide morning pep talks. Weekly or monthly meetings can also become rituals.
  • Storytelling: A prime example of an amazing storyteller is the late Steve Jobs. He established a mythos surrounding not only his person but also his company and products. This is an indivisible part of a company’s culture.
  • Leadership: Leadership is part and parcel of storytelling. Every great story needs an amazing protagonist. Superficially, a leader can be the embodiment or even mascot of an organisation’s values (see: Elon Musk). On a deeper level, strong leadership is important not only for establishing a culture but also for staying close to its core.

Some of the most unreal benefits that also inadvertently reveal a company's culture include:

Netflix – No set schedule and unlimited vacation days

Netflix’s culture was set up and formulated in its early days of existence by Patty McCord with a 124-page slideshow known as 'Netflix Culture: Freedom & Responsibility'. Although that sounds very hippie-dippy, in essence, it’s a corporate guide for cutting the fat and disposing of dead weight. The slideshow mentions the principle of having only the highest performers in each position and sending off any employees that only perform 'adequately'. The slideshow draws a comparison between Netflix and a professional sports team, explicitly saying that the company isn’t a family. This cutthroat high stakes/high gains approach was, ultimately, McCord’s demise, though: she was allegedly let go after backing a catastrophic policy change that cost Netflix hundreds of thousands of subscribers. Although they offer unlimited vacation days, seldom does anyone have time to take any.

Metis Communications – Four weeks of vacation plus summer Fridays off

Metis Communications, is a PR and marketing company based in Boston, Massachusetts, and offers massive incentives as rewards for loyalty, experience and years of service to the firm. Their baseline paid holiday is three weeks for all employees. These paid leave days become four weeks if you have been with the organisation for over three years. Employees are also allowed to take their birthdays and the last week of December off and, for employees that have worked with the company for more than five years, to work from home on Fridays.

Facebook – Family first culture

Due to the fact that most of Facebook's staff is comprised of young adults, the social media giant has many policies putting family first. One of the most generous benefits the organisation offers its employees is reimbursement for the cost of adoption as well as childcare expenses. Not only does Facebook offer maternity leave but it also extends the same benefits to new fathers: four months' worth of leave. In addition to both those monetary and holiday benefits, Facebook also gives new parents an amazingly generous $4,000 (about £3,250) stipend called ‘baby cash’ to help cover the extra expenses of a new child.

Beyond benefits

Company culture benefits

Although the number and types of benefits a company offers is a very good measure of an organisation’s attitude and obligation towards its employees, it does not singularly define its culture. Other elements include how management and administration work with the lower level employees and how employees work amongst themselves. There are many organisations that not only believe in collaboration but also greatly encourage it, reinforcing it with various policies they have in place. Although this atmosphere, or more appropriately, this culture of collaboration through all tiers of a company, might be expected on a small scale, there are some large-scale companies that believe collaboration is not only feasible but also the key to success.

Some large-scale companies believe collaboration is the key to success.

Target is an amazing example of this type of collaborative culture. With a workforce that enumerates at almost 400,000 and with almost 2,000 retail stores across the US, it would seem either impossible, absurd or both to expect collaboration. Target has various ways of facilitating collaboration, primarily and most innovative amongst them an internal social network called RedTalk which they have likened to TwitterThis platform allows team members to follow other team members, discuss various topics and even ‘like’ other members’ posts. Another internal tool that Target uses is the Target Wiki which uses a question and answer function similar to Q&A website Quora.

Target has various ways of facilitating collaboration, primarily and most innovative amongst them an internal social network called RedTalk which they have likened to Twitter.

Target further supports an internally looking culture by having strong mentoring and mentee systems which, of course, are bolstered by the ‘following’ mechanic of RedTalkAt the same time, though, everyone is expected to be both a mentor and a mentee. The reasoning behind this is that Target prefers to promote internally than to look outwards for talent. This not only rewards loyalty to the company but it also motivates employees to be engaged, innovative and, of course, hardworking. Beyond these policies, Target also has an amazing feedback system that allows its almost 400,000 employees to give feedback from the ground level up.

The effects on employee retention

The significance of corporate culture when job searching extends even further: no matter what the benefits, perks or collaborative nature of the culture, a much more significant aspect is cultural fit. A study conducted by John E. Sheridan at the University of Alabama followed 904 new graduates over a 6-year period as they were split up between two types of accounting firms. One group of accounting firms had an interpersonal respect for people and collaborative cultural values; the other group valued work tasks, stability and detail. By the end of the 6-year period, only 51.2 per cent of the candidates still remained in their positions. The group working for the firm that had an interpersonal/collaborative respect for people culture stayed an average 45 months compared to 31 months for those employed in firms that valued work tasks, stability and detail.


Firm values study graphic

Of course, the study also pointed out that lower performers were more likely to abandon their positions quicker than high performers, but that is self-evident, as they would either quit or be dismissed due to their lacklustre performance. At the same time, though, maybe the reason for lower performance was due to their ill-fit within the company culture: unhappy employees are 10 per cent less productive than their happy counterparts, according to Entrepreneur.


Job satisfaction and organisational culture

Job satisfaction graphic

As mentioned above, not fitting into a specific culture will not only affect your productivity but it will also affect your job satisfaction. There is an extremely strong correlation between organisational culture and job satisfaction. A Boston Consulting Group survey found these 10 factors to affect job satisfaction:

  1. Appreciation for work done
  2. Healthy interpersonal relationships with co-workers
  3. A healthy work-life balance
  4. A healthy and professional relationship with superiors
  5. A stable and financially viable company
  6. The ability to grow and develop one’s career
  7. Job stability
  8. A decent and stable salary
  9. Engaging work
  10. Company values

All of these items are related to company culture, how employees are treated by both co-workers and administration, how an employee’s work is perceived, and compensation. Of course, the first four items seem so specific that they are practically a how-to guide on creating a healthy corporate culture.  Even the other factors that play into job security and engaging work can be considered correlations or even extensions of a company’s culture.

Unseen benefits of company culture

The most significant unseen benefit of getting a job at a company that has a well-defined and healthy organisational culture is that their hiring policies reflect that. This means that most people that already work or will work there in the future will share common values, goals and mores. This will facilitate communication and, of course, workflow. Both these factors play a significant role in the workday and workload moving smoothly, thus minimising both mental and physical fatigue. Items instrumental to job satisfaction such as transparency, work-life balance, working conditions and a focus on employee happiness are all elements either ingrained or absent from a company’s culture.  If you are a cultural fit, then the company inversely will also fit you.

Most people that already work or will work there in the future will share common values, goals and mores.

If these benefits are broken down further, though, you can see how a company’s culture can actually influence your quality of life. If a job offers a good work-life balance, you are able to spend more time investing in social relationships which, according to the Harvard Medical School, are beneficial to longevity as well as mental and physical health. The observable results of this study says that when looking at a sample of 309,000 people, individuals that lacked strong social relationships actually had a 50 per cent increased chance of premature death. So, a healthy company culture might actually prolong your life if you use a beneficial work-life balance to build on social relationships. The same article mentions a large-scale Swedish study of individuals over 75 years of age which found that people with strong social relationships had much lower rates of dementia.

A healthy company culture might actually prolong your life.

Working conditions may also affect your health. A condition called sick building syndrome affects thousands of office workers every year. The causes are usually associated with working in a closed space for an extended period of time which lacks natural ventilation and the symptoms generally dissipate when employees leave their workplace. These symptoms can include respiratory problems, skin rashes or flaking, and lowered immune system response. Although not life-threatening, sick building syndrome can definitely have a negative effect on employees’ quality of life. If a company has an employee-centric set of values, then not only will the employees have access to their superiors to air their concerns but administration will also, inevitably, take steps towards fixing the situation to keep their workforce healthy and happy. If the values of a company lean towards overhead costs and profits more than towards their workers’ health and happiness, then cleaning ventilation, looking for the causes of the symptoms and trying to fix them will not be a priority.

How to discern culture when applying

Researching company culture graphic

Your next question will most likely be: how can I find out about an organisation’s culture that I am applying to? Of course, the bigger the company is, the better because there will be a plethora of material and content available to you. Searching ‘Working for Google’, for example, yields over half a million search results. Many of these revolve around the culture at Google and the truth about it. Yes, Google isn’t the amazing magical Neverland it once was, but it’s still better than most workplaces.

Google isn’t the amazing magical Neverland it once was.

If you are applying to a smaller corporation, Glassdoor offers employee written reviews including metrics regarding the CEO’s approval and if employees would recommend a friend to work for the company. Indeed also offers employee reviews of companies but gives different insights including ratings for work-life balance, salary, benefits, job security, advancement opportunities, management and the culmination of this entire article: culture. Beyond these, it also offers you some of the average salaries of certain jobs and some graphical depictions of them, too.

Another way to figure out a company’s culture before you actually accept a job with them is by following them on social media. Due to social media platforms’ ability to engage with customers quickly and in a friendly way, even small to medium-sized companies have and maintain a social media presence. Although it might be a slightly skewed image because, as I mentioned previously, it's what and how they present their company to their customers and not necessarily how they really are. It's best to use this just as an auxiliary source of information. Some companies, for example, share updates regarding promotions or new hires; this can help you figure out if the company you want to work for hires within or prefers to hire externally.

If you have the option available to you, a surefire way of gathering information about the way a company conducts business is by having someone that you know who has worked at the organisation you are interested in. Of course, depending on the relationship you have with the individual, the information you receive will vary; the closer the relationship, the more information you can glean from the person.

Using the lobby for information

The Lobby Test

The final way to understand an organisation’s culture is to try to source information when you visit their space for your interview. Here’s a small list of things to look out for:

  • How is the lobby set up? Is there natural light, plants, artwork, etc?
  • How did the receptionist greet you? What does their desk look like?
  • How long did you wait to be accepted into the interview?
  • Does the interview room have the same elements as the lobby or does it differ greatly?
  • How do the corridors look between the lobby and the interview space?
  • What is the ambient noise like?

These might seem like asinine items but each can reveal a different aspect of the company you are interviewing with. The lobby generally is treated like a shop window: most companies will attempt to portray their company through the design and architecture of space. Financial institutions will generally work with heavy, stable structures and materials to convey a feeling of authority and security. Companies that have a more youthful target or product will often use organic shapes and playful materials to convey their market. A space that is stark and devoid of artwork, plants and natural light should be a red flag. There are two reasons why a company’s lobby would be like this:

  1. Their human resources or the human element of their company is low on their priority list; or
  2. It’s a newly created space, thus it has not been designed/decorated adequately yet.

Another piece of evidence that will show you how high a priority people are for a company is how the receptionist greets you: if they’re pleasant, jovial and have offered you something to drink, that’s a great sign. This means that they are just as excited to interview you as you are to interview with them. If, however, you are greeted coldly and, to bring into consideration another list item, wait for an extended period of time for the interviewer, this shows a lack of respect and that the company doesn’t value talent to the appropriate level. 

No matter what the potential scenario, you will, hopefully, be taken to the interview room eventually. If the design and theme of the lobby seems consistent with the interview room, that is a good indication that the values the company believes in are applied consistently and it might even be an indication of transparency. On the other hand, if the design of the lobby is very different than the interview room, then this shows a company that wants to present itself one way but, in reality, acts and has policies that aren’t consistent with that image. Worst of all is if the interview room is completely stark, sans a table and looks more like the interrogation room in a police station than a room in a company. This conveys a hostile environment, one that is not made with people and their mental state in mind.

This conveys a hostile environment, one that is not made with people and their mental state in mind.

The corridors between the lobby and interview room can give you the same information: is it people-friendly? Does it have pleasant ambient light and artwork, or is it stark and under harsh fluorescent lighting? The same holds true as the above item: if it's consistent with the rest of the building, great; if it's different, then there might be something awry.

The final item on this list might seem like the most absurd but there is logic behind it. You should always look for some sort of ambient noise – what you would expect in an office like doors opening, people walking around, people speaking to each other, etc. If there is complete silence, it isn’t an indication that the building has amazing sound insulation. Another scenario is if there is a buzz in the building, a constant nervous drone for the people that work there; this could be due to the company having a sales floor or a call centre, but a nervous buzz means that this will be a competitive workplace. If that is what you applied for, great; if not, then you might want to ask a few more questions during the interview.

What do you look for in a company culture when you are applying for a job? Let us know in the comments section below.