Corporate Culture Simply Explained: Definition, Design, and Positive Examples

Marcus Merheim 11/8/2023

As experts in HR and employer branding, we delve deeply into the significance of corporate culture in this article.

Table of contents
  1. Definition: This is corporate culture simply explained
  2. Why is corporate culture important to you?
  3. What does corporate culture look like in everyday life?
  4. What models of corporate cultures are there?
  5. How can the corporate culture be analyzed and measured?
  6. How can corporate culture be actively shaped and is a culture change possible?
  7. What tools can assist in shaping corporate culture?
  8. Corporate Culture: Best Practice and Success Factors
  9. Conclusion

In today's business world, corporate culture is a term that is on everyone's lips. But what exactly lies behind this term, which is often considered the key to business success? As experts in HR and employer branding, we will deal intensively with corporate culture in this article. From the definition through to concrete examples, we will guide you through this fascinating area of organizational development. In many organizations - but by no means in all - the responsibility for corporate culture is anchored in HR.

Definition: This is corporate culture simply explained 

Corporate culture, also known as organizational culture or company culture, is the heartbeat of a company. It forms the basis for the way employees interact, which values and beliefs they share and how they perceive your work. Corporate culture thus describes the values, norms and behaviors within a company - something like the corporate philosophy.
 

Why is corporate culture important to you?

Corporate culture is vital to the success of a company. Why this is so is shown in the following points:

  • Employee retention & satisfaction: A positive corporate culture contributes to winning and retaining employees in the long term. Studies show that employees are more motivated and satisfied when they identify with the norms, values, and behaviors of their employer.
  • Customer satisfaction: Satisfied and motivated employees promote two other factors important to companies that increase customer satisfaction. On the one hand, the quality of their work improves. And the better the quality of work, the more customers like to buy the company's products. On the other hand, these employees are more balanced and friendly in customer contact. This factor also increases customer satisfaction. 
  • Work productivity: A well-designed corporate culture promotes productivity by setting clear expectations and norms. Employees know what is expected of them and can work more efficiently.
  • Attractiveness for talent: Companies with a positive culture are more attractive to talent. People want to work in an environment that matches their own values and where professionalism and appreciation are a matter of course.

What does corporate culture look like in everyday life?

Corporate culture manifests itself in various areas of daily work life. The main elements are addressed below:

  • Communication: How is communication handled? Are there open discussions and transparent flows of information? How do colleagues interact with each other?
    How do leaders talk, speak or write to employees and vice versa?
  • Decision-making: How are decisions made? Is this based on hierarchy or participative processes? Does everyone in the company have a say? Or are certain groups of people, roles or functions generally excluded?
  • Working atmosphere: What does the work environment feel like? Is it characterized by trust and teamwork or by jealousy, distrust, and rivalry? Do all have the opportunity to express their opinion? And is this taken seriously? For instance, by implementing suggestions?
  • Conflict resolution: How are conflicts handled? Is there room for constructive discussions and solutions? Are all at the company involved? 
  • Recognition and reward: (How) are successes and achievements rewarded and appreciated? This shows which values are particularly appreciated. 

What models of corporate cultures are there?

Whether intentional or not, culture inevitably arises in every company. By using models, it is better understandable and designable. Numerous models and approaches exist that serve as tools and guides.

One of the best-known models is the three-level model by Edgar Schein. This model divides culture into three levels:

  • Artifacts: Visible elements such as rituals, clothing and office design.
  • Deep structure: The basic assumptions and values that shape employee behavior.
  • Basic assumptions: The deepest, often unconscious beliefs, that define the culture.

The three-level model helps companies understand the various aspects of corporate culture and influence them specifically to foster a positive and effective culture.

Some other examples of corporate culture models are:

  • The 7-S Model according to PETERS and WATERMAN / McKinsey 7-S 
  • Corporate Culture according to Mary Joe Hatch
  • The Organizational Culture Iceberg Model according to Hall
  • Corporate Culture according to Geert Hofstede
  • Two-Step Model according to Kotter and Heskett

Furthermore, corporate culture can be categorized, which in turn requires more precise definitions. For example, we talk about:

  • Agile corporate culture
  • Dialogical corporate culture 
  • Family corporate culture
  • Innovative corporate culture
  • Modern corporate culture 
  • Sustainable corporate culture
  • Negative corporate culture
  • Positive corporate culture
  • Strong corporate culture
  • Toxic corporate culture 
  • etc.

How can the corporate culture be analyzed and measured?

Recording and measuring corporate culture are important tasks. Organizations that show enough patience here benefit from a profound understanding of their culture. Collecting and measuring corporate culture is a continuous process, similar to overall in KPIs in recruiting and Employer branding. Regular implementation allows a holistic view of the corporate culture. With its help, companies can make necessary adjustments over time. This way, organizations can harness the power of values in a sustainable way. 

We will introduce the most important approaches to collection and measurement below. The list includes both quantitative and qualitative measures.

  • Quantitative performance and output metrics: Some aspects of corporate culture are captured through quantitative metrics. These include factors such as staff turnover, absences due to illness, or customer satisfaction. These metrics provide indications about the culture and work environment. While these figures provide important information, they also have their downsides. So, they reduce the high complexity of a corporate culture to just a few aspects. Numerous other facets for a complete representation of the culture remain on the outside. We, therefore, recommend using them only in combination with other approaches.
  • Employee surveys: Through employee surveys, companies gain valuable insights into the perception and opinions of employees. By asking about values, communication, collaboration, etc., companies find out whether these align with the desired culture. Other possible methods in the quantitative area are pulse checks (mood barometers) or the Employee Net Promoter Score.
  • Focus groups: These interviews are conducted with several groups of employees. These should represent a cross-section of roles and functions in the company. Ideally, the direction should be in the hands of an experienced moderator. This qualitative method provides particularly authentic insights into the corporate culture. The focus of the interviews is on questions such as:
    • Why did you choose this employer?
    • What is special about this employer?
    • How would you describe the collaboration? Can you give an example?
    • What is typical for this employer? Are there any rituals?
    • What can you improve on?
       
  • Individual interviews: Targeted conversations with employees provide deep insights. They give employees the opportunity to openly talk about their subjective perception of the corporate culture. In a protected space, they report on relevant experiences, perceptions, and attitudes. Individual interviews exclude distractions or influence by colleagues in this way. Individual interviews and focus groups count as qualitative procedures.

How can corporate culture be actively shaped and is a culture change possible?

Corporate culture develops naturally. Whether employers actively work on it or not. It is not a good idea to leave the culture to itself - to remain passive in this respect. Designing a positive corporate culture requires conscious efforts and measures. We will introduce the most important ones below. In most companies, these measures also fall under the responsibility of the HR department. 

  1. Analysis: First, the measurement results should be analyzed thoroughly. If everything went according to plan, the results should show which aspects of the culture work reliably and which ones need to be improved.
  2. Setting goals & action plan: Based on the measurement results, the organization sets clear goals for optimizing corporate culture. Specific areas can be identified where changes are necessary. Aspects like communication, leadership style, cooperation, or work environment may require targeted optimizations. Identifying these aspects allows companies to focus their resources and efforts. With targeted actions, it is possible to improve these areas and ultimately influence the entire company positively.
  3. Participation & continuous communication: It makes no sense if companies do not involve their employees in optimizing corporate culture. After all, without them, there would be no culture. This is achieved through the use of various informative and communicative measures. These should be as open and transparent as possible and tailored to the different target groups within the organization. Town Hall meetings, newsletters, or training sessions are excellent for ensuring that all people in the company are involved in the action plan. Managers have a special role to play because they naturally act as role models.
  4. Cultural Fit: This is not about physical fitness, but about cultural fit. When hiring new employees, companies can pay attention to this fit because they have defined values, norms, and behaviors. From the job advertisement through interview questions and references to trial workdays: Companies can check the fit at various points in the application process. But beware: There should be no recruiting of clones, so diversity does not suffer. It should only serve to check if applicants fit the culture of the company. This is a fine line.
     

What tools can assist in shaping corporate culture?

There are various tools that can support organizations in measuring, capturing, designing, and maintaining corporate culture.
OMR Reviews HR Software & Tools introduces a variety of tools that offer corresponding possibilities.

for example, allows carrying out employee surveys in which feedback on corporate culture can be collected. The results can be analyzed to identify strengths and areas for improvement and derive targeted plans for cultural optimization.

is a comprehensive HR software system that offers various functions that can indirectly influence corporate culture. It supports the management of employee data, Employee Self-Service, Recruiting, Onboarding, Talent Management, Feedback and Performance Management. By efficiently managing these HR processes, a positive culture can be supported and promoted.

offers a variety of HR solutions. Among them, personnel management, employee development, and talent management. By supporting the development and implementation of strategic HR measures, Haufe HR promotes a positive corporate culture.

supports the applicant management, in which it helps to select the right candidates with a suitable culture fit.
 

is a personnel administration software that supports companies in optimizing their personnel processes and tasks. These include for example time recording, shift planning, and the creation and management of work plans. 

are equipped with similar functions. 

is typically used as a project management tool when it comes to a concrete action plan for improving corporate culture. 

The employer review platform helps companies to get external reviews of their culture. Furthermore, employers can use the platform to engage in dialogue with fans or critics. 

Corporate Culture: Best Practice and Success Factors

A multitude of factors shapes the culture of a company. These factors are unique in each company. They develop over time, which is why shaping corporate culture is an ongoing process. Whether corporate culture is good or bad is judged by the people who are part of this organization. Be it as leaders, employees, or customers.

General judgments about a corporate culture are not possible. Unless you are yourself part of the whole. Nor can a good corporate culture be transferred one to one to another company. However, there are success factors with which companies can work on optimizing their culture. The above-described methods of measurement and analysis illustrate with which of the following points companies can positively influence their culture: 

  • Error and Feedback Culture
  • Flexibility and Creativity
  • Good personnel leadership
  • Clear values and norms
  • Transparent communication and goal-oriented collaboration
  • Further education and knowledge transfer
  • Appreciation and balanced reward systems 

Conclusion

Corporate culture is a key factor for success for organizations. It influences employee retention, productivity, satisfaction, and the ability to attract talent. Shaping and maintaining a positive corporate culture requires persistence and patience at all levels of the organization. Starting from the management level to the employees. Culture is not static and can change over time, so continuous analysis and adaptation are essential. HR plays a crucial role in creating and maintaining a strong corporate culture. The use of supportive tools is advisable. The same applies to external consultants or moderators, for example in the use of focus groups or individual interviews. In a world where corporate culture is increasingly coming into focus, it is crucial to know your own values and goals and to actively shape them.

Marcus Merheim
Author
Marcus Merheim

Marcus Merheim ist seit mehr als 10 Jahren in der HR-Welt unterwegs und setzt sich dabei aus einer Marketingperspektive mit unterschiedlichsten Personalthemen auseinander. Inhaltlich liegt sein Fokus auf Recruiting und Employer Branding sowie New Work und Digitalisierung. Als Gründer von hooman EMPLOYER MARKETING setzt er an der Schnittstelle von HR und Marketing an. Dabei ist er davon überzeugt, dass Employer Branding seine volle Wirkung als kraftvolles Werkzeug der strategischen Unternehmensführung nur dann entfalten kann, wenn Recruiting & Retention basierend auf einer starken Arbeitgebermarke professionell und vor allem glaubwürdig betrieben werden. Zusätzlich ist Marcus Vorsitzender des Ressorts „Arbeitswelt der Zukunft“ beim Bundesverband Digitale Wirtschaft.

All Articles of Marcus Merheim

Product categories mentioned in the article

Join the OMR Reviews community to not miss any news and specials around the software seeking landscape.