What Is Company Culture and How to Build It?

Company culture is the heartbeat of an organization. It’s more than just office perks, remote work policies, or casual Fridays—it’s the foundation upon which an organization is built. Culture shapes how employees interact, make decisions, and contribute to a shared vision. At its core, company culture is defined by leadership, values, and the overall employee experience.

In this article, we’ll explore what company culture truly means, why it matters, the different types of cultures organizations adopt, and actionable strategies to build and improve workplace culture.

What Is Company Culture?

Company culture refers to the shared values, behaviors, and practices that define how an organization operates. It influences decision-making, workplace environment, and employee satisfaction. A strong organizational culture aligns employees with business goals, fostering a sense of purpose and belonging. When employees feel connected to the company’s mission and values, they are more likely to be engaged, productive, and loyal.

A well-established company culture goes beyond policies and procedures—it includes the unwritten norms that guide everyday interactions. Whether it’s how teams communicate, how decisions are made, or how employees are recognized, organizational culture permeates every aspect of the workplace.

Why Is Company Culture Important?

Company culture is more than just a superficial feeling or a poster proclaiming values. It’s the underlying essence of what a company stands for, and a solid company culture benefits both employees and the organization in numerous ways:

1. Defines the Company’s Identity: Culture influences how employees, customers, and stakeholders perceive the business. A well-defined culture strengthens the company’s brand and makes it more attractive to prospective employees and customers.
2. Enhances Employee Engagement & Retention: A positive culture increases employee loyalty and reduces turnover. When employees feel valued and aligned with the company’s mission, they are more likely to stay and contribute meaningfully.
3. Fosters Collaboration & Innovation: Teams that share strong values work together more effectively and contribute fresh ideas. A culture that encourages knowledge sharing and open dialogue leads to better problem-solving and innovation.
4. Strengthens Brand Reputation: A well-defined culture attracts top talent and customers who align with the company’s values. Companies with strong cultures are often seen as industry leaders and preferred employers.
5. Boosts Productivity & Job Satisfaction: Employees thrive in environments that resonate with their personal values and professional goals. A positive culture leads to higher motivation, better morale, increased performance, and overall job satisfaction.

According to Gallup, companies that prioritize culture experience a significant 33% increase in revenue. And an impressive 88% of job seekers consider a healthy culture vital for business success, according to Forbes. All proof of just how important company culture truly is. 

Types of Company Culture

Different organizations cultivate different cultures, often shaped by their industry, leadership, and goals. And while there are many nuances and subtle differences, they can generally be broken down into four primary types:

1. Clan Culture (Collaborative & People-Focused)

A family-like, team-oriented culture where collaboration and mentorship thrive. Employees feel valued and supported, and leadership is focused on employee growth and well-being.

Characteristics of Clan Culture:

• Open communication and transparency.
• Emphasis on mentorship and professional development.
• Strong sense of community and belonging.

2. Adhocracy Culture (Innovation-Driven)

A risk-taking culture that encourages creativity and out-of-the-box thinking. This culture thrives in startups and technology companies that prioritize agility and innovation.

Characteristics of Adhocracy Culture:

• Encourages experimentation and fast decision-making.
• Values risk-taking and new ideas.
• Dynamic and adaptable work environment.

3. Market Culture (Results-Oriented)

A competitive and goal-driven culture focused on performance and achieving business success. Employees are motivated by incentives, performance metrics, and financial rewards.

Characteristics of Market Culture:

• High emphasis on achieving results and targets.
• Competitive work environment.
• Rewards performance and efficiency.

4. Hierarchy Culture (Structured & Process-Oriented)

A structured environment with clear roles, rules, and leadership. Stability and efficiency are prioritized, and decision-making follows strict protocols.

Characteristics of Hierarchy Culture:

• Well-defined roles and responsibilities.
• Strong leadership and clear authority lines.
• Emphasis on consistency and operational efficiency.

Examples of Strong Company Cultures

Many top companies have built exceptional cultures that contribute to their success, using methods described in this article. Here are a few examples of organizations that have reconfigured their strategy and taken the steps to build positive and enduring company cultures:

1. Google    

Google fosters a culture of innovation, autonomy, and open communication. Employees are encouraged to experiment and take risks, creating an environment that prioritizes creativity and collaboration. Hybrid scenarios and other flexible work options are promoted as a means of increasing wellness and employee satisfaction. 

2. Netflix 

Netflix’s culture is built on freedom and responsibility. Employees have the autonomy to make decisions, and high performance is expected. Transparency and direct feedback are key components of their work environment. “People over process” is a theme that’s built into their brand ethos, and is repeated time and time again. 

3. Patagonia

Patagonia integrates sustainability into its company culture, ensuring employees are aligned with its mission to protect the environment, with CSR not being just an offshoot, but a facet of the company’s DNA. Employees are offered outdoor activity incentives and flexible schedules to support work-life balance as part of a healthy culture.

4. Zappos

Zappos values customer-centricity, fun, and strong core values. The company emphasizes employee happiness, and its hiring process focuses heavily on cultural fit to maintain its strong organizational identity. The brand created a program called “Zappos Insights” specifically designed to communicate its vision both within and outside the company. 

5. UKG 

UKG (Ultimate Kronos Group) creates a workplace where belonging and transparency are prioritized. The company ensures new hires feel included from day one, promoting an open and inclusive workplace culture. “United, Kind, and Growing” is more than a slogan; it’s the driving force behind their culture. 

Read more about top company culture examples here.

What Is a Toxic Company Culture?

A toxic company culture is characterized by dysfunction, negativity, and a lack of trust. It manifests in various ways, including workplace bullying, lack of transparency, discrimination, favoritism, and poor communication. Employees in toxic environments often feel disengaged, stressed, and undervalued, leading to high turnover and low morale.

Signs of a toxic company culture include:

• High turnover rates – Employees frequently leave due to dissatisfaction.
• Poor communication – Lack of transparency, unclear expectations, and inconsistent messaging.
• Low morale – Employees feel unsupported and unmotivated.
• Lack of diversity and inclusion – Discrimination, favoritism, and exclusionary behaviors.
• Workplace burnout – Employees experience excessive stress due to unrealistic expectations or poor work-life balance.

Addressing a toxic culture requires proactive measures such as leadership accountability, open communication, and a commitment to fostering a positive work environment.

How to Build a Strong Company Culture

Creating a thriving workplace culture requires intentionality and commitment. It doesn’t happen overnight, but with the right strategy and proper attitude, a company can build a company culture that will improve the overall employee experience, resulting in better productivity, employee retention, and public perception. Here are key steps to build an effective company culture:

1. Define Your Mission, Vision & Core Values

Your company’s mission, vision, and values should serve as the foundation of your culture. Clearly articulate what the company stands for and how employees contribute to its goals. A strong set of values ensures that your employees feel aligned with the organization’s purpose.

2. Set Clear Culture Goals

When you align culture initiatives with long-term business objectives, it helps create a sense of direction. Whether it’s improving employee engagement, fostering inclusivity, or boosting innovation, setting measurable goals will provide structure and accountability.

3. Form a Culture Committee

Create a dedicated corporate culture committee to help maintain and evolve workplace culture. This team can plan events, address employee concerns, and ensure that cultural initiatives stay relevant and engaging.

4. Recognize & Appreciate Employees

Employees who feel valued and appreciated are more likely to be engaged and motivated. Regularly recognize accomplishments—whether through awards, bonuses, or shout-outs—and you’ll create a positive and uplifting workplace.

5. Provide Employee Motivation & Support

Your workforce thrives when employees feel valued, heard, and empowered. Recognition, meaningful rewards, and clear communication will keep your team engaged and aligned with company goals. Give them the chance to come to you with concerns, and act upon them when needed.

6. Ensure Leadership Leads by Example

Strong leadership fosters trust and alignment. When your executives communicate transparently and actively engage with employees, it reinforces company values and drives a positive culture. Give your leadership the tools and training they need to lead by example.

7. Reinforce Positive Behaviors

Recognize achievements and encourage collaboration among your employees; this will strengthen your workplace culture. Rewarding engagement through peer recognition and challenges helps sustain motivation and performance.

8. Offer Regular Feedback & Conduct Culture Assessments

By offering your employees continuous feedback, you help ensure a responsive and inclusive work environment. Regular surveys and data-driven insights help refine engagement strategies and address evolving employee needs.

How to Improve Company Culture

A great company culture requires continuous development. It’s a constant evolution, a journey, that can in many cases mirror the times. Here’s how organizations can refine and enhance their culture, while adapting when necessary: 

1. Lead by Example

Leadership must embody the culture they want to see. When leaders demonstrate company values, employees are more likely to follow suit and contribute positively.

2. Recognize & Reinforce Positive Behaviors

Reward employees who uphold cultural values. Recognition programs, incentives, and peer acknowledgment help reinforce desired behaviors.

3. Conduct Regular Employee Surveys

Gather feedback to identify areas for improvement. Surveys and one-on-one meetings can help assess employee sentiment and inform culture-enhancing initiatives.

4. Monitor Key Performance Indicators (KPIs)

Track engagement, employee retention, and employee satisfaction to ensure that company culture initiatives are effective and align with organizational goals.

5. Address Toxic Workplace Behaviors

Prevent negativity, favoritism, and lack of inclusivity by setting clear policies, providing conflict resolution training, and fostering an environment of respect.

How to Assess a Company’s Culture

Maybe you want to assess your own company’s culture, or maybe there’s another company that interests you as a potential future workplace. Either way, there are specific things to look at to help you make that assessment. For employees and job seekers evaluating an organization’s culture, consider the following:

1. Review the Company’s ‘About Us’ Page

Check whether the company clearly states its values and commitment to employee experience. Are they open about what they believe in and stand for? Does it feel like a positive company culture?

2. Analyze Social Media & Online Presence

Look for signs of employee engagement, company events, and positive workplace initiatives on social media platforms. These are authentic signs of how a company truly sees itself. 

3. Check Employee Reviews & Salary Reports

Websites like Glassdoor provide insights into company culture, leadership, and transparency in pay. Do the background research and see what people are saying in regards to their own corporate culture. 

4. Ask Culture-Specific Questions in Interviews

During job interviews, inquire about team dynamics, leadership style, and employee development programs to gain deeper insights into the culture. A company with a strong culture should also be aware of its culture.

Conclusion: A Positive Company Culture Can Be Achieved with the Right Steps and Tools

As we’ve seen in this article, company culture is a crucial component of business success, shaping the employee experience, brand identity, and overall productivity. We’ve explained what company culture is, why it’s important, how to assess it, and how to improve it. And whether you’re building a culture from scratch or improving an existing one, intentionality and leadership play vital roles.

Want to improve company culture in your organization? The Sociabble employee communication platform can empower your company to create positive and lasting cultural change. We’ve already partnered with global leaders like Coca-Cola CCEP, L’Occitane en Provence, and Primark to build a culture of strong communication, and we’d be happy to share our ideas on how we can help your business, too. 

Sign up for a free personalized demo, and discover what Sociabble can do for you.