In the first of a two-part series, the Institute of Personnel and Development's Angela Baron tells Nancy Cavill about the effects of company cultures.
Why is company culture important?

For individuals, culture will influence how they are managed, the nature of their working relationships, the information they have access to and even how they dress and speak. It might determine how they are rewarded and their career prospects, as well as the hours they work.

What is company culture?

It's the glue that holds companies together. It is "the way we do things around here" – which sometimes means the invisible barriers that stop things getting done. The values, customs and objectives shared by the members of the organisation, particularly those at the top, will largely determine the culture.

Do company cultures really vary that much?

Take two companies. In one company, people leave their coats behind and their computers switched on if they leave the office before 7pm because they are scared to be seen going home "early". There are late-night drinking sessions in the managing director's office – the boss has a "work hard, play hard" approach to business – but those who can't attend worry about their career prospects.

In other words, the culture is driven by being seen to be participating. Managers believe good employees put in the hours and join in the "fun", regardless of family or social commitments.

In a second company, top managers believe that people should be valued as individuals with different needs, and that work should be a flexible structure that takes these needs into account. People attend staff parties because they want to and because they really are fun. Staff are willing to work long hours when it is necessary and are judged and rewarded according to their achievements.

Organisational culture is the glue that holds companies together – “the way we do things around here” – which sometimes means the invisible barriers that stop things getting done

Can a firm's culture change?

A culture will change only if the dominant attitudes are challenged. Bosses have to decide what kind of culture they want, looking at it in terms of their business needs, and then devise a strategy that will constantly reinforce the message.

Lofty phrases such as "people are our most important asset" or "we are an equal opportunities company" are worthless unless people believe them. It will take time and commitment to change a culture. The top team must also be open to people challenging their thinking.

Does the culture of a company affect the performance of staff?

Yes. In companies where being seen to be there is the norm, staff will tend to feel threatened and vulnerable. They may try to hide mistakes or promote themselves at the expense of the team. They will exhibit the behaviour they think is required rather than that which is best for the business.

This could explain recent research by Sheffield University that suggests cultural factors, and particularly the value placed on employee welfare, can have a significant effect on profitability and productivity.