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Importance of Organizational Culture in Modern Organizations

Organizational Cultures that motivate people to work for common goals and also help them to build a very good common identity are extremely important. Apart from loudly declaring to the world that "this is our way of doing business", the Organizational Culture builds continuity, helps massive learning and so on. Some of these aspects are discussed in some detail in this article.


Organizational Cultures in modern organizations, if carefully nurtured as a way of life and perpetuated at all times, can and will help the organization to move from one stage of achievement to another and achieve world-class levels of business excellence. Organizational Cultures are instrumental in a)building organizational credibility b) strongly establish societal status c)help in building huge continuity d) facilitating world-class learning and e)making strong statements of intent.

Building Organizational Credibility

Larsen and Toubro is known all over the world for its Engineering excellence in project management. It is a world class leader in manufacture of customized unit equipment, that is, equipment that is specifically used by different manufacturers of cement, steel and so on. Their Engineering skills are so great that they always work on what are called "Concept to Execution" projects.

Similarly, ICICI Bank is very well known for its innovation in cutting-edge information technology. It is a huge financial supermarket. BHEL is a world-class organization superb Engineering skills in a huge variety of areas. Sundram Finance of the TVS group is too good in customer service. These are all examples of superb Organizational Cultures where "this is our way of life" is understood by every single employee and consistency of behavior of all employees is a given.

In other words, the employees share the Common Vision and are so keen to preserve the identify in no small way. The Organization gains huge reputation and credibility.

Strongly Establish Societal Status

What is the status of organizations with superb Organizational Cultures? Each of the aforesaid organizations are simply superb in terms of societal recognition. Different target groups that each of the organizations serves in terms of customers have great faith and trust in such organizations. For instance, in the case of Sundram Finance, the organization itself is a jewel in terms of satisfying the trust of senior citizens who have always trusted this organization for its reputation as a highly ethical organization. The customer is always treated like a king. If there is any employee who misbehaves with a single depositor or does things that do not reflect the true character of the organizational culture, the employee(s) is/are reprimanded with a severe warning.

Larsen and Toubro is too good as a highly ethical company. The culture is known to all in the society. In fact, I have seen the ease with which the employees get houses on rent from landlords. For, the latter do know that in any case of any problem, the company will be there to support them in a big way. The employees themselves know this kind of a reputation in the city of Mumbai. And as a employee, I too found it so easy to get an accommodation for rent.

Help In Building Huge Continuity

When the strong Organizational Cultures start promoting certain norms of behavior, they directly and indirectly help in building huge continuity. For example, the organizations mentioned above have superb succession planning exercises and the talent that is identified is systematically nurtured in a very big way. There are other examples of such Organizational Cultures, apart from those mentioned above.

For example, in HDFC Bank, the employees are always encouraged to enhance their learning with specific reference to business outcomes. They have a huge emphasis on innovation in their organizational cultures and this helps in nurturing talent in a very big way. The same is now true of even smaller, but very fast growing banks such as the Karur Vysya Bank where the employees are always pushed to prove themselves in providing world-class customer service. Its Information Technology is now equal to that of even the State Bank of India, and is now able to virtually capture new customers by selling its agility and ease of customer service. All this results in a huge talent pipeline that further builds the organization and literally captures the collective consciousness of a huge number of employees.

At Asian Paints, the Organizational Culture is always supportive of innovation. Its high performance managers learn how to built excellent talent pipelines. At Unilever, a huge talent pipeline is always built through huge practical experience. In fact, even the IIM graduates have to work in rural areas. There is always the hard grind that no employee can escape from.

In the Aditya Birla group, the elders have acted as mentors. A whole new Management Team is in place and is now building a very viable Organizational Culture where the talent pipeline gets reflected in performance that is simply world-class. For example, after they have acquired the cement business from Larsen and Toubro, the Aditya Birla group has been able to build a huge continuity in terms of business excellence through its Ultra tech brand of cement. Mr Kumaramangalam Birla is well known to be the brain behind each of the superb initiatives.

At the Tata Consultancy Services, Mr N Chandrasekharan, the present Chairman of the Tata Group, has been able to build a huge talent pipeline. Yes, the demands of the Organizational Culture are known to be very tough. But the entire organization works towards such common goals and does believe in building such a huge talent base.

At WIPRO,Mr Azim Premji is always one who nurtures talent. The list is endless. There are such superb examples of Organizational Cultures helping in building continuity of Management, in a very big way. When there is so much of home grown talent, raring to go, the organization grows from strength to strength.

Facilitating World Class Learning

When the Retail Don of India, whose name is Kishore Biyani wanted to build a big empire in organized retail, he sent several of his managers to study the working of the superb Saravana Stores at Renganathan Street, T.Nagar in Chennai. He understood that huge discount models do work in India and if one works on sheer volumes, such volumes can sustain the business itself.

Today, that learning is built into the entire operations of Kishore Biyani's Big Bazaar. In fact it is learnt that the competitor Reliance Fresh that is present in different Retail Formats, always poaches trained manpower from this group. The learning on the job is superb. Organizational Cultures that promote world-class learning have this great ability to make a huge difference in terms of getting this learning spread throughout the organization. The various training programs are also built to support this learning.

Such learning is a way of life in BHEL. In fact, the plant at Tiruchirapalli, has gone one step further. It has a tie-up with a very good Institute of Management called the Bharathidasan Institute of Management, which functions as a great learning center. The MBA students get to do their internship under experienced Senior managers. One is given to understand that the mutual learning is tremendous. Only strong Organizational Cultures can support such learning.

Making Strong Statements of Intent

Having very good fashionable Vision and Mission Statements is one thing. But living such statements in their true letter and spirit is a totally different cup of tea. This is exactly where many organizations fail. However there are superb examples of organizations that can make and do make, strong statements of intent through their Organizational Cultures.

The TVS group means Quality. For this group, Quality is the nerve center of its own existence. It is the very purpose of its existence. Such strong Statements of Intent are embedded in the minds of even MBA students. This oftentimes happens even before the students start reading a single line of their case studies about these organizations. This is the true meaning of what is called intent. Only strong Organizational Cultures that support such larger purposes of the business can get the organizations make such strong statements of intent.

Similarly, WIPRO and Infosys Technologies have already made very strong Statements of Intent. They really mean business when they say that they want to make a meaningful contribution to society.


Hence, every single aspect of Organizational Cultures, as explained above, are very important in ultimately making a huge difference to the business excellence itself. These Organizational Cultures are not too common. It is not that every Indian organization can achieve these kinds of excellence. However, it needs to be noted that every single Indian organization, which wants to grow into a globally competitive organization, needs to be ready to build such strong Organizational Cultures. This is one imperative that they cannot do without Forever.


Author: Umesh01 Aug 2018 Member Level: Diamond   Points : 4

It is very true that a common goal, encouragement for innovation, awarding the motivated persons and a combined vision for company's success are the key elements for a progressive organisation and that is essentially what constitutes the organisational culture.

At the same time, we must keep in our mind the environment and society where the organisation is working. Sometimes these local factors influence the working of the organisation and there are subtle deviations from the desired path of development.

So it is necessary that the management should be aware of these local social and political factors and count them in their developmental plans. Then only the real progress will be achieved.

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