The business and organizational environment is constantly evolving. Social and organizational psychology, among other things, is responsible for studying all these changes. An important phenomenon within this field is the business culture, which consists of the set of values and behaviours that define a company.
In this article we will know what exactly is the company culture , what components form it, what types exist, how it is transmitted among the workers and what elements are needed to produce a cultural change in the organizations, a process that is often necessary to continue growing.
Business culture: what is it?
Business culture can be defined as the personality of a company. It includes all those values, processes, knowledge, techniques, attitudes and policies that the company considers as defining and identifying the organization itself . It is, in a certain way, the “philosophy” of the company.
All these elements allow the achievement of the company’s objectives, and many experts consider the business culture as “the DNA of the company”, since it is in it, as we said, the identity of the company.
Nowadays, more and more companies, managers and professionals consider business culture as the most important part for a company to function , even beyond its strategy or operating model.
That is why more companies are now choosing to define a good business culture, one that is known, accepted and shared by all its workers and positions. The aim of a good business culture is that all members of the company feel it is their own and share its values.
We can talk about two great types of business culture, although there are more: the strong culture and the weak culture .
In the strong one, the business culture is accepted and followed with determination by the workers; in the weak one, on the other hand, the workers do not assume the business culture proposed by the organization (its values, norms, behaviors…). In fact, they perceive these elements as taxes.
Sometimes, many companies are forced to make a change in business culture. But when does that happen? When the organization’s behavior and values no longer serve to achieve its objectives.
Thus, the business culture has to be always updated, in constant evolution . Later on we will see what elements are needed to produce a change in business culture.
How is it transmitted?
The business culture is mainly transmitted through organizational communication . There are different types of organizational communication (formal, informal, ascending, descending…) that enable multiple forms of social interaction and information transmission. These interactions will allow the business culture to be known and reproduced.
In this way, when a new person enters a company, the most normal thing is that he or she learns the language and appropriate behavior within the group of co-workers, listening to the stories and “legends” of the company and observing the rites and rituals of the organization.
All this (language, behaviour, rituals…) is also part of the business culture, and it is what the person will get to know and take on throughout his or her time in the company and the development of his or her work there. That is why the ideal is to promote this knowledge so that the worker ends up forming a real part of the company .
There are several elements that make up the business culture, and several experts have made different proposals in relation to them. We are going to know two proposals:
1. Proposal by Edgar Shein
Edgar Shein, social psychologist and author of Organizational Culture and Leadership , proposes three elements that shape every business culture:
1.1. Unconscious assumptions
These include how people and workers see the company from outside (and from inside), what they think of it, what beliefs they have, etc.
They are formed by the rules that must guide the behaviour of the workers , as well as their principles and models to follow.
The third component of any business culture, according to Shein, would be the artifacts, that is, the results that the company obtains through its actions .
2. Proposal by Stephen Robbins
Stephen Robbins, writer and author of works such as Organizational Behavior , proposes another 7 elements as part of any business culture:
2.1. Individual autonomy
It consists of the level of independence and participation that the company itself has .
The structure contains the rules that govern the behaviour of the workers and the rules that define how the company works. It also includes the degree of control exercised to ensure that the rules are complied with .
It is about the support and help provided to each other by the workers and their superiors, and includes the type of relationship they have.
Identity as part of the business culture refers to the fact of feeling part of the company (it is a sense of belonging to the company). It is the way in which the workers perceive the company as a whole and not in a fragmented way.
Recognition is related to the rewards or positive reinforcement that employees receive for work well done and for their contributions to the company, by the organisation.
2.6. Conflict tolerance
It refers to the capacity of the company to deal with the obstacles and difficulties that arise in the achievement of its objectives.
2.7. Risk Tolerance
The last component of the business culture proposed by S. Robbins is risk tolerance, a concept that refers to creativity and innovation , which are very positive aspects to implement in the company.
Change in business culture
As we mentioned at the beginning of the article, sometimes companies need to make a cultural change, because their current system does not work . There are 4 features that facilitate and enable such a process of change in business or organisational culture. These features or conditions are the following:
1. Strong leader
A strong leader who can initiate and sustain business change is essential. Leaders are key figures in any change process , who contribute ideas and lead a team through motivation, enthusiasm and experience.
2. Vision of what to do
Another condition needed to produce a cultural change in the company is a vision of what needs to be done to achieve such change. This vision implies a belief in what the new culture will be like, and it must be well defined.
3. New working procedures
It is also necessary to develop new working procedures that help to break the fidelity with the old values, and to establish the new ones .
4. Open organization
Finally, an organization that is open to learning, adaptable to change and constantly growing, will allow the change in business culture that the organization needed to continue growing to be successfully carried out.
- Beascoechea, J.M. (1996). Determining factors of the company’s culture. Senior Management, 188: 289-306.
- Hogg, M. (2010). Social Psychology. Vaughan Graham M. Panamericana. Editorial: Panamericana.
- Oliveras, E.F. (2018) Business culture: concept, types and components. P&A Group.