9 Ways Organizational Culture Impacts Business Strategy

You are here:
9 Ways Organizational Culture Impacts Business Strategy

What is the one way in which your organizational culture impacts your business strategy?

To help you understand the ways your company’s culture might influence your business strategy, we asked business leaders and professionals this question for their insights. From making room for innovation and creativity to creating unique hiring criteria, there are multiple ways culture impacts strategy in business.

Let’s have a look at nine of them in more detail.

Want to know more about the steps you can take to transform your organizational culture? Check out our full guide on this topic here.

Treat employees with dignity, empathy, and respect

The national burger chain near me is offering a $20,000 signing bonus to new GMs. Another is paying the frontline $19.00 hourly. Why? Because they cannot find people. If people are not at the center of your strategy, then you don’t have one. 

A company’s culture is the easiest way to attract and retain talent, and it starts with a concept that doesn’t cost a dime. Be nice. Company culture isn’t branded pens, company gyms, and pizza parties. 

Related (free) resource ahead! Continue reading below ↓

HR Metrics for Organizational
Development Cheat Sheet

Organizational development is a critical process that should be monitored with the right HR metrics. These strategic metrics will help you manage your organization’s ability to change

Download the FREE metrics cheat sheet

It is treating those around you with dignity, empathy, and respect. Do those three things, and your company will quite literally win awards for how well you treat your people. COVID-19 has shifted the workforce’s priorities overnight. But the fundamentals are still the same. Be nice, or it will cost you.

Steven Brown

Steven Brown, DP Electric Inc

Make room for innovation and creativity

Having a positive work culture will enhance a can-do attitude with employees. When employees feel supported in a positive way, they are more creative and innovative, which usually leads to more profitability. Employees are willing to go the extra mile to make the company successful.

Paula Harvey

Paula Harvey, Schulte Building Systems, Inc.

Use company values in an explicit way

Your company values are a key cornerstone of your organizational culture. They should serve as a touchpoint into as many different aspects of operations as possible — when recruiting people, during performance reviews, and as dialogue when making business decisions. Your organizational values and culture come together to form the compass you use to guide your business strategy and keep the team united in working toward a common goal. 

For example, leaders should ask questions that align with the organizational culture and its values as early as the interview process. Candid questions like, “Who knows your work the best, how would they describe you, and what would they say would be your biggest area of improvement?” are particularly effective, serving as a barometer of a candidate’s honesty, transparency, and humility. All of these traits are vital and tend to pre-qualify candidates that will excel in their roles, enjoy the workplace experience, and complement the organizational culture.

Help Your Organization Thrive Organizational Development
Certificate Program
Learn to build a better, stronger, and more resilient organization.
100% online & self-paced.
Download Syllabus
Mike Grossman

Mike Grossman, GoodHire

Look at culture as a business strategy

Organizational culture not only impacts business strategy, but it is also a business strategy. Companies often lose sight of the fact that their employees are running their businesses. That said, a clearly stated mission, vision, values, essential attributes, and actions must be an integral part of the foundational structure of any successful organization.

Dawn Myers

Dawn Myers, Guided Leadership Solutions

Remember that culture prevails over strategy

If there is a mismatch or conflict between organizational culture and business strategy, the former will almost always prevail. Indeed, it is easier to change your business approach than to redefine what has been ingrained as values that your company believes in. In such a case, you are often left with little choice but to rethink your business strategy. 

Otherwise, the organization will greatly suffer from dissonance and lose its integrity. For example, a company or organization that advocates altruism but employs a greedy for-profit business model will easily lose support from stakeholders who genuinely believe in its values and culture.

Anton Giuroiu

Anton Giuroiu, Homesthetics

How Organizational Culture Impacts Business Strategy

Build a diverse team

We committed to building a diverse team from day one because we believe that is how to build the best company. I’ve managed HR and finance at six prior companies where this was not the focus, with varying results. We have found that by making this a stated objective, we have built a diverse team (60%POC, 40% female, 10%LGBTQ). 

This has paid off because by having a diverse team, we better reflect our customers and users, which means we can make many better-informed decisions about product direction, go-to-market, and overall growth. Having the right people on the team has made all the difference.

How T-Shaped are You?

The most successful HR professionals in today's digital business environment have a T-shaped competency profile. Take the free assessment now!

Start assessment
Amy Spurling

Amy Spurling, Compt

Welcome feedback and empower employees

When an organization prioritizes transparency with its stakeholders, it results in a host of positive benefits. Employees trust companies that are open and honest with them, leading to a more connected environment in which employee goals align with their organization’s culture. Transparency in business nurtures an environment that welcomes feedback and empowers employees in decision-making. A culture that puts trust in its employees in this way also positively impacts employee retention.

Denise Gredler

Denise Gredler, BestCompaniesAZ

Create unique hiring criteria

Our organizational culture is the driver behind innovation and creativity in our business strategy. Consequently, it has informed our unique employee hiring criteria and business mergers. We have strategized continuous learning and skill development within our employee ranks to compete with the best in the market and understand the organizational culture, thus equipping them for effective communication with our clients. The aim is to foster loyalty because we aim to be leaders in the industry.

Katherine Brown

Katherine Brown, Spyic

Recognize that culture and strategy go hand in hand

The strategy is what helps break down goals into attainable steps with the correct planning. When you encompass the organization’s culture, you also bring in the values and beliefs into the strategy. This helps with keeping the company mission at the forefront of every goal and strategy.

Olivia Young

Olivia Young, Conscious Items

These expert insights have been collected by Terkel. Terkel creates community-driven content featuring expert insights.

Are you ready for the future of HR?

Learn modern and relevant HR skills, online

Browse courses Enroll now