12/05/2021
Company culture.
• Company culture refers to the beliefs and behaviours that determine how a company's employees and management interact, how it's treats it's customers, how it rewards it's employees and how it deals with environmental issues.
• Studies have shown that companies with good culture greatly outperform the market.
• Company culture is also influenced by national cultures and traditions, economic trends, international trade, company size and products.
Company cultures, whether shaped internationally or grown organically, reach to the core of a company's ideology and practice and affect every aspect of a business.
The term company culture developed in the early 1980s and become widely known by the 1990s. Company culture was used during those periods by managers, sociologist and academics to describe the character of a company. This included generalized beliefs and behaviours, company wide-value systems, management strategies, employee communication and attitude.
Company culture would go on to include company origin myths via charismatic chief executive officers (CEO's), as well as visual symbols as logos and trademarks. Company culture was not only created by founders, management, but was also influenced by national cultures, traditions, economic trends, international trade company size and products. Just as national cultures can influence and shape a company's culture, so can a company's management strategy.
Of course, financial analysis is also important in choosing the right companies to invest in, but something that is is very often overlooked is company culture. Studies shows that company culture is incredibly important when it comes to returns for investors.