You might be aware that every day a lot of aspiring entrepreneurs start new businesses in the expectation of making it big and earning fortunes. However, only a small fraction of these entrepreneurs ultimately succeed. Have you ever wondered why?
The simple reason for this is that running a business requires a lot of effort from various stakeholders. The entrepreneur may give an organization a strong foundation and his/her expertise, but in the absence of supporting factors, the organization will not succeed.
Table of Content
- 1 Characterized of Successful Organizations Culture
- 2 Corporate Culture and Organisational Success
The supporting factors here refer to supportive culture, required infrastructure, strategic planning, etc. Among these, the most important factor is supportive culture.
How well an organization performs depends on the kind of culture it has. Let us now study the major characteristics of successful organizations and how the culture of an organization affects these characteristics.
Characterized of Successful Organizations Culture
Successful organizations are often characterized by the following attributes:
- Effective Communication
- Shared Goals
- High Morale
- Handling Poor Performance and Training
- High Adaptability
- Clearly Defined Structure and Policies
- Focus on Growth
- Social Responsibility
Most successful organizations have employees with great leadership skills. The organizations also groom future leaders by providing them with a suitable culture and environment.
Successful organizations have a well-defined policy for handling work as well as communication-related to it. The cultures of such organizations have formal communication networks and reporting structures in place to ensure smooth interaction at different levels so that projects are completed without any major delays.
Employees in successful organization work in tandem so that the goals and objectives can be achieved. An ideal culture is one that reinforces the role of employees in the achievement of goals.
Most successful organizations follow a task culture consisting of many teams. Each team is assigned a project along with the required resources and budget. Using teams has many advantages as what the teams achieve as a whole is mostly greater than the sum total of what all of the individuals would achieve if they work alone.
Organizations are usually successful if their employees are at the optimum level. This is only possible when they are happy and satisfied and have high morale. An ideal culture is important for creating an environment where employees have high morale and can work to their potential.
Handling Poor Performance and Training
Successful organizations recruit and select only talented people. However, there may be individuals who are not able to perform at par with the established standards of performance. Successful organizations know that some anomalies in performance can be corrected by providing individuals with the required training.
Successful organizations do whatever they can to retain talented individuals, and retrenchment is only seen as the last resort. Therefore, organizations should have a culture where the needs of the employees are addressed and they are given every opportunity to grow both professionally as well as personally.
Successful organizations are highly adaptive and continue to exist even in difficult situations. Only those cultures that inculcate a strong sense of perseverance and a never say die spirit among the employees will help the organization survive and thrive in such situations.
Clearly Defined Structure and Policies
Successful organizations have a well-defined structure. A formal culture lays down the foundation of establishing policies and procedures. Such organizations lay down policies with respect to communication and processes.
Successful organizations are those where employees are committed to their work and make constant efforts to achieve the goals of the organization.
Focus on Growth
Organizations that want to break the status quo and always keep growing or want to explore new horizons are more successful than organizations that develop and market only one product or service. Organizations that restrict themselves are likely to struggle and may even fail in the future.
Therefore, organizations should have a culture that encourages them to take calculated risks so that they can grow and expand.
Often the success of an organization is measured by its bottom line. However, an organization cannot be said to be truly successful if it does not fulfill its responsibility toward society at large.
This is also essential because as an entity the organization takes a lot of input from society; in fact, the organization exists primarily because of society and its people.
Therefore, organizations take out some part of their profits and use them for the welfare of society. For example, organizations like HCL have adopted entire villages to provide healthcare, food or education to its people.
Corporate Culture and Organisational Success
A strong workplace culture helps an organization stay focused, achieve its goals, and deliver results. Successful organizations retain their top positions in the market by keeping up their cultural promise and making quick adjustments to accommodate the changing needs of their stakeholders.
Organizations like Nike, Apple, Mcdonald’s, Facebook, etc. have successfully defined their cultural promise in a few words and have succeeded in practicing whatever they preach.
Here are some examples:
- Nike: Just do it
- Apple: Innovation
- McDonald’s: Diversity
- Facebook: Community-minded
A strong culture makes organizations more resilient and helps them take greater risks even in adverse conditions. Organizations with a culture that is focused on giving, sharing, and making all employees feel better undoubtedly succeed in the long run.
There are always many temptations to sway away from core values and beliefs but organizations that stay true to their cultural commitment surely succeed in the long run.
Kotter and Heskett’s Two Levels of Culture
John Kotter and James Heskett, researchers at Harvard Business School, undertook the most extensive study to determine the relationship between culture and organizational performance. They conducted research on 207 firms over a time period of five years.
They made the best of their efforts in determining how unwritten values, beliefs, and shared assumptions can result in economic success or conversely lead to a failure in adapting to a rapidly changing business environment.
The research was done using various measures of culture and long-term economic performance data. The objective with which this research started was to find the link between a strong culture and long-term performance. Initially, a modest correlation was established between the two indices.
However, after many more years of research, Kotter and Heskett were able to establish that organizations whose cultures suited the market environment performed better than organizations with strong cultures that did not fit with the environment.
Kotter and Heskett identified two levels of culture:
- Visible level: It involves the behavior patterns, attitudes, and styles of employees.
- Invisible level: It involves the shared values, beliefs, and assumptions held over a long period of time.
It is the most difficult to make changes at the invisible level. Kotter and Heskett asserted that changes in the visible level over a period of time can result in changes in the invisible level.
The two levels of culture have been depicted in Figure:
- Shared Value
- Group Behavior Norms
The results of their study showed that culture has a strong and increasing impact on the economic performance of organizations.
The three main conclusions of the study are as follows:
- Culture has a significant impact on the long-term economic performance of an organization.
- Culture determines the success or failure of an organization in the decades to come.
- A corporate culture depicting long-term financial performance can be developed by logical, skilled, and efficient individuals.
The two researchers also discovered that some corporate cultures are good at embracing and adapting to change thus preserving the performance of the organizations while others are not.
They helped to distinguish between adaptive and inadaptive cultures, which are summarised in Table:
|Point of Difference||Adaptive Corporate Culture||Inadaptive Corporate Culture|
|Core values||Managers value customers,|
stakeholders and employees
|Managers mainly value|
themselves, their immediate
work groups or processes
associated with their work.
|Managers initiate changes|
whenever they feel for an employee or customer satisfaction.
|Managers fail to change quickly and behave politically and bureaucratically.|