An Organisational Culture is the beliefs and values behind the way a company
does its business.
A strong positive
culture can impact business strategies and performance in an extremely positive
way.
Having a strong
positive culture wherein all employees are brand loyal and believe in the same
core values; always putting the customers first, and their mission to deliver
happiness, can aid in the happiness and motivation of the employees. If the
employees are happy at work, they are likely to pass this onto the customer and
good customer services encourages brand loyalty, and it is this that has lead
Zappos to becoming the world’s largest online shoe retailer. By
continuing to recognise the importance of their culture they are not only
satisfying their customers but also enabling their employees to provide a good
service and feel valued as part of a team. This will have an impact on sales
and profits and will enable Zappos to keep their lead in the online shoe market.
Another example of
a strong positive organisational culture can be seen at Southwest Airlines -
where every employee is 'celebrated'. This rewarding empowered culture has
given Southwest Airlines a unique selling point that their CEO has labelled
intangible. This USP attracts custom, satisfying the need of profitability when
running such a low cost service. Employees are more likely to take pride and
interest in their work if they're enthusiastic and committed. This affects
profitability but more importantly their productivity. High levels of
productivity result in high profits for Southwest Airlines, enabling them to
remain competitive, all because of their culture.
On the other hand,
having a strong negative culture can badly affect the performance and
strategies of a business.
This was predominantly seen at Enron, where a culture of lies, deception and
profit focus lead to the eventual shut down of the business. They illegally hid
profits and mislead both customers and staff, to try and get the biggest
profits. It was this that led to the close of Enron and their leader to face a
24 year prison sentence.
This culture was a severe take on a profit centred culture; Barclays have tried
to change before their culture, similar to Enron, got to that point.
Barclay's
power and profit hungry culture led to staff at the firm to view their illegal
activities as a prime way of growing profits. Although it was good while it
lasted, Barclay's were caught, and faced a fine of £2,362,000,000 as well as
facing a public outrage. A flattened reputation and millions of customers that
feel betrayed, is one result of the strong negative culture. It has lead
performance to fall and customers to bank elsewhere.
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