Active Business Support Services
A client made the comment recently that the culture of a business is simply an addition to the purpose of the business and shouldn’t be classed as a critical component of the business make-up.
The client went on to state that the most important components of a business are to produce the goods the market will want, at a price the market can stand, so as to maximize the profitability of the business.
The other components of a business like culture are additional to the purpose of the business and are an unwanted cost, often causing a reduction in profits.
I inquired regarding staff turn-over and employee satisfaction to which the client replied “discipline is the key to a controlled workplace, and if they don’t like the rules or the conditions they can leave and get another job”.
I guess every business owner has their own style of operating, yet if the business is located in a community or region where there is a limited resource of people to employ, or who would be willing to work in a particular industry, the culture of a business would become much more important to the business being able to provide its goods to the market.
Business culture can impact on much more that being able to employ the right people for the business to operate as culture can have a greater impact such as:
Staff retention: Individuals spend approximately one third or more of their employable life at work and mostly want to be in a work environment where their self-worth is valued. When the employment market is buoyant as is currently experienced, and employees find themselves working in business culture that is not good, they will search elsewhere with an emphasis of alternative employment being placed on working in a good and inclusive business culture.
Recruitment: Word of mouth can be a bit like the smoke signal theory of past. The alert of a company having a bad business culture and/or high staff turnover can travel pretty fast around the community of prospective employees for the business. Employees have choices when selecting their next place of employment and business culture is high on the priority list of their employment requirements.
Function ability: As more prospective employees turn away from the offer of employment due to a bad business culture, the business may then be forced to employ less qualified staff, or staff that are unable to gain employment elsewhere. Employing a lower quality of staff may affect the quality of the goods provided, and in some cases even the ability to operate continuously.
Brand: The staff of a business can be one of the best marketing tools especially if the business is located in a low population area. The employees will praise the business for its good points and equally express their dissatisfaction when treated badly. Such feedback into the local market can be damaging to the brand of the business causing a downturn in goods demand. Prospective customers may want to purchase goods from a business that cares for its staff and if it’s known that the business treats its staff with low value, many customers may redirect their purchasing to a competitor business.
Profit: As the business enters further into the spiral of having a bad business culture, the above elements start to accumulate into a much bigger issue than what may have at the start been a minor issue. With low quality staff, low function ability, low morale and a tainted brand, the business may start to struggle to make its desired profits and in acute cases may even struggle to survive.
A bad business culture can be caused by the business owner being somewhat disconnected from the needs of the employees, maybe the senior management team acting with overstated authority, the line managers possibly controlling the employees using methods more likely in a policed environment rather than being attentive to employee needs, or a group of employees simply choosing to be disruptive within the business.
Unfortunately a bad business culture can slip into the business at any time and often without the business owner noticing until the bad culture has been firmly cemented into the organization.
For further information on how to change the culture of your business, contact Active Business Support Services Ltd.