Every company, regardless of size, has its own company culture—its own way of working, company system, or way of thinking that is unique to the company. The company’s culture is said to affect the employees’ behaviours, decisions, approaches, tactics and reasoning.

Company culture has become one of the bigger topics for discussion in the last two decades and its effect and impact are greater than before, especially in today’s modern and fast-paced workplace.

So, what is company culture?

Company culture generally refers to the values and attitudes of employees in a company. It is a collection of common values and beliefs that shape  how the company works and how the team communicates and works together. Though intangible, company culture typically transcends and controls the working environment, ensuring a unity of purpose among the staff for the benefit of the company.

In a company with a healthy company culture, each employee should feel valued and have their goals and objectives aligned with the company’s. Employees will be more willing to work as a team to meet both the company’s and their personal needs.

On the other hand, if the company has a poor working culture, employees will not be concerned about the company’s goals and will only be interested in their own personal benefits. They may not be able to work well together as a team due to different goals and poor communication. They might not be able to perform at their best.

In certain scenarios, a skilled employee may choose to leave a high-paying job because of poor company culture. Likewise, an experienced employee may choose to remain at a company because of the good company culture, even if it means taking home a lower salary.

It is known that a healthy corporate culture helps improve business in many areas. This is why organisations like Google, Adobe and Netflix greatly emphasise their firms’ missions, visions, core values and ethics.

Why is company culture important and what are the benefits of having a positive culture?

Helps to identify the best people for the job:

Academic qualifications are very important when looking for a new job. But why is it that some job applicants with top scores still get their applications rejected? Why would a top scorer fail to get into established companies like Google, Accenture or GlaxoSmithKline?

Results aside, human resource recruiters and interviewers will always look at the potential employee’s attitude, body language, communication skills as well as their values and beliefs. Companies are typically only interested in hiring applicants with similar work styles or objectives to theirs.

Such individuals stand a higher chance of being good workers and this is important as each employee they choose to hire will require an investment of time and money to train. Hiring those who fit into the company culture also ensures that the current company culture does not get affected. Both the company and the employee will be able to work at their best and reach their maximum potential.

Increased productivity and happier workers:

Having a strong, positive company culture is helpful in creating a cohesive and highly motivated workforce. This is important for managers, who will have to keep their teams motivated even during tough times.

Motivation is one of the greatest factors that affect a person’s productivity. When an employee is motivated to work, their productivity will increase, which will contribute to the company’s goals and profits. This is a win-win situation for both the company and the employee as the former benefits from the productivity while the latter simply feels happier working.

Sense of identity:

Company culture contributes to the identity of employees, which affects how they feel and think about their work and the organization. A good company culture helps to ensure that employees feel like they belong because they are part of a bigger picture. The fact that everyone is working towards the same goal minimises collisions that would otherwise occur when employees lack a common reference point.

Reputation of the company:

Having a good company culture enables institutions to cultivate a positive brand name and gain industry-wide recognition. If the company’s brand name is well-known and widespread enough, it may attract potential employees, helping the business grow with top talents.

With good skills, qualifications and high levels of productivity, the company will be able to progress faster and gain more clients. A good reputation may also make it easier for companies to secure deals from large stakeholders such as labor unions and government agencies.

Employee retention:

Having a good corporate culture helps to retain employees. When employees feel comfortable and happy working, they will be less inclined to switch jobs, even if the other opportunity comes with a better pay or more benefits.

If they have a stronger sense of belonging to the company, they are more likely to stay for the long term. A strong company culture allows companies to retain good talent which may be tough to find. This will lead to a lower turnover rate and better teamwork among employees.


moneykinetics-logo-1This is part one of a two part article on company culture.

It first appeared as Letting Bad Employees Go – The Importance of Company Culture, Communication and Building Morale in an Organization (2018 Update) on Money Kinetics: Singapore’s definitive guide to financial literacy. Money Kinetics helps Singaporeans compare and evaluate loans, deals, cards and guide them to make their money work for them.

The article has been edited for concision and style with the permission of Money Kinetics.