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Significance of Work Culture for Organizations

Every organization, no matter how small, has its unique set of shared values and practices, referred to as its corporate culture. It reflects the unique personality of the organization and conveys its core values, ethics, behaviors, and beliefs.

What is Corporate Culture?

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It would not be wrong to state that the corporate culture decides the social and psychological environment within an organization.

It provides employees with appropriate guidelines about how they act, feel, and think within the workplace.

In a bad corporate culture, where employees act as individuals and work only for the sake of pay and benefits.

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A healthy corporate culture motivates employees to value their co-workers irrespective of their roles and responsibilities and promotes teamwork.

Such a culture is based on collaboration. It puts organizational growth and success above everything else.

This is why a healthy corporate culture proves effective in enhancing business performance and driving engagement.

Why is Work Culture so important for organizations?

Corporate culture has come to play an important role in ensuring the growth and success of an organization.

Modern work culture has become more employee-centric and is key to attracting and retaining the best employees.

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Today, employees prefer to work for organizations with a culture based on growth and transparency.

Hence, they avoid joining organizations that follow a traditional management system that offers little flexibility and growth opportunities.

Here are the reasons that make a corporate culture so important:

Significance of Corporate Culture

1. Helps to shape the identity of the organization


The organization’s culture makes it possible for employees and others to understand how the business operates internally and externally. 

It guides how employees interact and behave with one another as well as with customers, partners, suppliers, and others.

The culture reverberates across all aspects and defines how the organization is perceived by employees and customers.

2. Deeply impacts workforce engagement

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It is a well-known fact that engagement is directly correlated with business productivity.

highly engaged workforce is more committed to ensuring organizational success and hence puts in its best efforts for the same.

In this context, a healthy corporate culture can go a long way in boosting employee engagement levels.

For example, a culture that offers flexible working can ensure a better career-life balance for its employees.

It paves the way for creating a more productive and highly engaged workforce.

3. Boosts the professional development of employees

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As mentioned before, a healthy work culture is based on a deep sense of teamwork and coordination between coworkers.

This, in turn, helps in enhancing the professional development of individual employees through healthy competition.

Employees feel motivated to learn new skills and improve their performance to make a positive contribution to organizational growth.

In many cases, employees are willing to offer help and support to co-workers to learn new skills.

4. Helps in lowering turnover rates

Good corporate culture leads to happier employees, who in turn, feel reluctant to seek other job opportunities.

When organizations value their employees for their contributions and achievements, it boosts employee motivation, morale, and a sense of belongingness.

They are thus able to retain valuable employees and cut back the costs associated with hiring and training new ones.

For example, employees who enjoy good work-life balance and freedom of expression in their current organization may turn down lucrative job offers from organizations with poor corporate culture.

5. Can help transform employees into business advocates

Employer Branding

Another reason why corporate culture is so significant is that it ensures that employees promote their organization wherever possible. 

When employees feel happy with the corporate culture they are likely to boast about it in their social circles.

Employees often promote good aspects of their corporate culture on social media and contribute to a positive brand image of their organization.


For most professionals today, there is a growing significance of corporate culture as an important deciding factor for accepting job opportunities or staying on with an organization.

That is why organizations should work towards building an exceptional corporate culture that gives them a competitive edge and success.

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn

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HiFives is a global employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. It is used by 100+ large enterprises, small businesses and startups in manufacturing, retail, technology, financial services and media, across 25+ countries.