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What is organizational culture?

The soul of companies

Organizational culture can drive business success and defining it properly is key to making a difference in today's corporate landscape.

Companies are alive. And not only because over time they diversify their operations or the activities they carry out acquire greater or lesser relevance. Their human capital, their values, and their purpose make them complex organizations whose success is closely related to their ability to define an appropriate corporate culture.

If we take into account that organizational culture marks the identity of the organization as a whole, its importance in driving a company's success is a factor to keep in mind.

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What is the organizational culture of a company?

The organizational culture of a company is the connective tissue that unites the values, beliefs, and behaviors of an organization, defining its identity. From influencing strategic decision-making to affecting the day-to-day work of the organization's team, there are many aspects in which, to a greater or lesser extent, corporate culture is revealed.

It is a complex concept that emphasizes the very essence of the company, shaped by its history, leadership, structure, processes, the environment in which it operates... At the core of this corporate culture is the way in which the organization perceives itself, how it interacts with its environment, and how it deals with internal and external challenges. The organization's own values, norms, and practices are three of the basic characteristics of any corporate culture. It is an intangible system that nevertheless influences every aspect of organizational life.

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Types of organizational culture

Each company defines its own corporate culture based on its mission, values, purpose... However, there are common features that allow distinguishing different types of organizational culture. Psychologist Roger Harrison, for example, establishes four categories:

  • Power-oriented organizational culture

Competitiveness is the main focus of this type of corporate culture that seeks business leadership. Decision-making tends to be centralized and hierarchical structures are very marked. In addition, personal success and competition are also present in the day-to-day running of the company which, in the long run, can lead to conflicts within the team.

  • Results-focused corporate culture

The main focus of this type of organizational culture is on the achievement of goals and objectives. Effectiveness, efficiency, and individual and business performance are valued. In addition, innovation and adaptability may be a priority in the pursuit of excellence and success in the market.

  • Standards-oriented

In a standards-oriented organizational culture, compliance with established rules and procedures is emphasized. Process standardization and consistency in the execution of tasks are valued. There is a strong orientation toward compliance and adherence to organizational policies.

Decision-making may be based on predefined criteria and communication tends to be formal and structured. Stability and predictability are important aspects of this type of corporate culture.

  • Person-oriented organizational culture

The well-being and personal development of the human team is at the heart of the organizational culture of a people-oriented company. Encouraging creativity, motivation, interpersonal relationships, teamwork, and collaboration are very present in this type of company where leaders are usually accessible and empathetic, promoting an inclusive and mutually supportive work environment. In short, there is a commitment to personal growth and development, and team satisfaction and commitment are valued.

Harrison's classification is one of the most popular, although the academic and business literature is full of examples identified by other experts in management, theory, and organizational development. In any case, each type of organizational culture has its own distinctive characteristics and may be more or less appropriate depending on the context and objectives of the organization.

4 tips for defining a successful corporate culture

A successful corporate culture involves creating a work environment that promotes performance, a sense of belonging through everyone's commitment, and the achievement of organizational goals. How to achieve this? Here are some ideas:

 

  1. Clarity in values and vision: clearly defining the organization's values and vision is the first step toward a successful organizational culture. And not only that. Effective communication of these values and vision at all levels of the company is critical so that everyone in the organization understands how their roles contribute to the company's purpose.
  2. Open and transparent communication: companies should foster an environment where people feel comfortable sharing ideas and concerns, allowing this feedback, which is key in an organizational culture, to result in an improved work environment. Transparency in communication promotes trust and collaboration among teams.
  3. Promoting personal and professional development: a successful corporate culture gives the team the necessary autonomy to make decisions and take responsibility. Empowerment fosters creativity, innovation, and commitment, as people feel valued. Along these lines, investing in the professional development of the human team, through training opportunities, professional growth, or the recognition of individual and team achievements, contributes to developing the full potential of the team within the organization.  
  4. Commitment to well-being: more and more companies are including in their organizational culture a special sensitivity to the physical, emotional, and mental well-being of their staff. Offering well-being programs, support in difficult times, and an adequate work-life balance through work-life balance policies or flexible work systems contributes to a healthier and more committed workforce.

 

Importance of organizational culture

The organizational culture is the soul of a company and a determining factor of its long-term success. In fact, clearly defining it can have benefits both internally and externally. To start, it is key from the point of view of reputation among customers, suppliers, and community in general. Organizations with a strong corporate culture are usually perceived as ethical, responsible, and reliable, three characteristics that, moreover, can generate a competitive advantage in the market.

But beyond outward projection, the company's organizational culture fosters a sense of belonging that provides internal stability. When people feel identified with the values and purpose of the organization, as well as valued and respected, they tend to be more committed and productive. Corporate culture thus becomes a key factor in attracting and retaining talent, but also in driving innovation and creativity.

Repsol and its culture

Efficiency, respect, anticipation, and value generation are four of the pillars that make up Repsol's organizational culture, a constantly evolving essence that also includes other values such as integrity, responsibility, flexibility, transparency, and innovation.

The starting point is clear, but it is the people and the organization itself that define a corporate culture where flexibility and commitment, entrepreneurship, and inspiration converge. Results orientation shares the spotlight with a collaborative environment in which the vision and common values of the entire team define the organization's DNA. In this line, the company's organizational culture leads the way by promoting, for example, participation in innovation, optimizing internal communication among employees to contribute ideas, the exchange of information, or synergies between departments.

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