One of the defining characteristics of all successful organizations is the presence of a strong culture. This culture defines how individuals in it should behave. An organization's particular culture comprises of the shared values and beliefs that are established by its leaders ( Madueke & Emerole, 2017 ; Habib et al., 2014; Osibanjo & Adeniji, 2013 ; Dwirantwi, 2012 ). These values and beliefs are then reinforced and communicated using different methods and consequently shape the behaviors, perceptions, and understanding of the employees. When viewed from this perspective, organizational culture forms the basis for everything that an organization does. In all successful organizations, there is a consensus regarding the cultural priorities, with the chosen values focusing on the organization as well as its goals as opposed to the individuals ( Habib et al., 2014 ). Leaders in such organizations are also at the forefront of living the organizational cultures and communicating them to all the employees. The leaders make their values clear and communicate how these values fuel organizational success. Since culture is a crucial determinant of organizational success, it cannot be decoupled from human resources (HR). Specifically, an organization's HR department is charged with the responsibility of fostering a strong, high-performance organizational culture ( Osibanjo & Adeniji, 2013 ). The department can achieve this through the recruitment and selection of individuals that share the organization’s beliefs, and who are capable of thriving in the particular culture. The HR can also come up with training, performance and orientation programs that not only reinforce but also outline the core values of an organization. The programs can be coupled with recognition and award schemes for the employees who embody these values. A notable consequence of a strong organizational culture is increased employee retention. Consequently, this paper will focus on the impact of organizational culture on employee retention. Overall, a strong organizational culture leads to increased employee satisfaction and hence retention.
Literature Review
Understanding Organizational Culture
Organizational culture has gained considerable importance in the 21 st Century owing to its influence on such aspects as job satisfaction and employee performance ( Madueke & Emerole, 2017 ). It is therefore critical for all organizations to understand their dynamic cultures so that their leaders can take advantage of the insights that accrue from these cultural perspectives to gain control over these organizations. Organizational culture acts as a key determinant of an organization’s performance ( Al Shehri et al., 2017; Dwirantwi, 2012 ). With today's fast-paced business environment and the ever-evolving technology, organizations have been forced to develop innovative and cost-effective strategies for improving performance. One such strategy is a focus on the sociological aspect of their businesses. Organizational culture is an intangible sociological aspect whose role in fueling organizational success cannot be overstated.
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The transition from one organization to another comes with the realization that each of the organizations is unique in some way. Describing the difference might not be easy; however, it can be felt. Likewise, signs of the differences in each organization are subtle as one moves from one organization to another. Despite this subtleness, some key indicators include how employees in the organization speak, dress, and interact. The difficulty experienced in describing the ‘feel’ of different organizations is also experienced when describing organizational culture. Consequently, a universally accepted definition of organizational culture does not exist ( Madueke & Emerole, 2017 ; Dauber et al., 2012 ). The topic has been explored from numerous perspectives leading to its anchorage in such disciplines as the applied disciplines of organizational behavior, sociology, organizational commitment, anthropology, and management science. These perspectives have given rise to various definitions of organizational culture.
As a concept, culture was used in the past decade by organizational managers to denote the practices and climate that organizations develop with regard to the handling of people. The concept was also used to refer to an organization's credo or espoused values ( Habib et al., 2014; Dwirantwi, 2012 ). The concept is also viewed as the pattern of shared basic assumptions that a particular group has learned in the process of solving problems related to external adaptation or internal integration. This pattern is considered valid due to its functionality and is therefore passed to new members as the right way of thinking, perceiving and feeling in the context of the particular problems ( Zheng et al., 2010 ). On the other hand, culture has been perceived as a collection of beliefs, attitudes, traditions, values, and policies that make up the permeative context for what individuals in an organization do and think. Further, culture is conceptualized as a complex whole that is comprised of art, belief, custom, knowledge, law, morals as well as the habits and capabilities that have been acquired by individuals in a society. These elements are subsequently manifested in an organizational setting. Nevertheless, the generally accepted conceptualization of organizational culture is that it is a shared set of values and beliefs which are reinforced using an organization’s structure and symbols, and is manifested in how individuals within the organization think and act.
Organizational culture entails a system of shared meanings that are held by members of a given organization. It is this system that distinguishes a particular organization from others. The shared meanings comprise a set of vital characteristics that are of immense value to the organization in question. Ultimately, the spirit of an organization's culture is captured using seven key characteristics. These include outcome orientation, team orientation, people orientation, stability, innovation and risk-taking, aggressiveness, and attention to detail. Each of the above attributes occurs on a continuum that can be scored on a scale from low to high. Thus, using the seven characteristics to appraise an organization helps give a clear image of its culture ( Habib et al., 2014 ). Overall, the understanding of organizational culture can thus range from the broad to the specific definitions. Majority of these definitions allude to the beliefs, values, and attitudes that are held by not only the individuals within an organization but also by the organization itself. Therefore, irrespective of the adopted definition, there is a consensus amongst different scholars that attitudes, beliefs, and values are central to any robust organizational culture ( Osibanjo & Adeniji, 2013 ; Dauber et al., 2012; Dwirantwi, 2012 ) . These aspects help guide the actions of employees in an organization.
Levels and Importance of Organizational Culture
Organizational culture exists on different levels. These levels differ with respect to their visibility and the portrayed resistance to change. The most challenging task in the process of transforming an organization's culture is the differentiation between the most important and less important elements of the culture. To help solve this challenge, a four-layered hierarchical model of culture has been developed ( Dwirantwi, 2012 ). This model aids in identifying and categorizing the different elements that make up organizational culture. The model’s four core elements include cultural values, cultural symbols, shared assumptions, and shared behaviors.
Shared assumptions form the least visible, yet the deepest level of an organization's culture. This level comprises the beliefs about human nature and reliability that are often taken for granted. The second most important level of organizational culture includes cultural values. These values embody the collective beliefs, feelings, and assumptions about what is rational, good, normal, or valuable ( Dwirantwi, 2012 ). Cultural values, on the other hand, differ from one organization to another. For instance, employees in a given organization may be deeply concerned about money. However, in other organizations, employee well-being and technological innovation may take the center-stage. Shared behaviors comprise the third level of organizational culture. This level includes the norms which are not only visible but also easy to change compared to the values. This ease is owed to the fact that individuals are likely to be unaware of the values that are vital in binding them together. Cultural symbols form the last level of the hierarchical model. In this case, symbols comprise the gestures, words, pictures as well as other physical objects that have a specific meaning in a given organization’s culture. Despite the importance of hierarchical models in fostering an understanding of organizational culture, in actual sense, cultures lack the tidiness and neatness portrayed by the models. Instead, organizational cultures are characterized by sub-cultures, agreements, disagreements, and countercultures ( Dwirantwi, 2012 ). Also, significant differences exist between the culture in practice and the espoused culture.
The importance of organizational culture cannot be overstated. Culture aids in accounting for variations in organizations and their managers. It also aids in explaining differences in the perception of things between various groups of people as well as the differences in the execution of activities. Culture helps reduce uncertainty and complexity and offers consistency in an organization's values and outlook. Consequently, this helps in coordination, decision-making, and control. Ultimately, an organization's culture cannot be decoupled from its performance ( Dauber et al., 2012 ). Organizational culture performs four vital functions ( Dwirantwi, 2012 ) . Firstly, it supplements rational management in the workplace. By using such elements as values, language, symbols and physical settings to communicate, culture supplements an organization’s rational management tools such as structure and technology ( Zheng et al., 2010 ). Secondly, culture facilitates the socialization and induction processes. For instance, during their induction, new entrants are indoctrinated and socialized in an organization’s cultural norms and expectations. In this process, the candidate in question has to imbibe the organization’s culture in which case he or she may be forced to change the firmly held beliefs and attitudes so as to attain commitment to the organization in question.
The third role of culture is that it promotes a desirable code of conduct. In this case, a solid organizational culture helps to communicate the expected modes of behavior explicitly. As a result, the employees are conscious of the desirable behaviors and those that are not ( Zheng et al., 2010 ). The strength of an organization's culture is evident when its members share values, assumptions, and beliefs which ultimately influence their behavior in invisible ways. Thus, when members of an organization assimilate the culture entirely, they are bound to exhibit certain behaviors spontaneously. The last function of culture is that its sub-cultures lead to organizational diversity ( Dwirantwi, 2012 ). These subcultures offer meaning to the interests of specific localized groups of individuals within the larger organization. In the process, the sub-cultures influence an organization in numerous ways. While they may strengthen and perpetuate the present culture, sub-cultures are also likely to result in something different from what already exists. Further, sub-cultures may result in a counter-culture particularly when an organization is faced with a difficulty.
Organizational culture has become increasingly important today compared to the past. This need has been occasioned by such factors as increased competition, mergers, alliances, globalization, acquisitions and the numerous workforce developments ( Madueke & Emerole, 2017 ). With these issues, it has become increasingly vital for organizations to maximize their employees' value. As intellectual assets, employees require an organizational culture that enhances intellectual participation. The culture should also facilitate continuous organizational and individual learning, creation, and application of new knowledge as well as the willingness to share this knowledge with other individuals. For the success of any organization, coherence and dominance of culture are requisite. In organizations that boast strong organizational cultures, all employees are aware of what is expected of them in different situations due to the clarity of the organization's guiding values ( Zheng et al., 2010 ). Thus, the vital role of culture in an organization’s success cannot be overstated. It is therefore crucial for the management of various organizations to recognize that culture is an indispensable element of any successful business. Consequently, the top management should direct their efforts and resources in preserving and improving the existing organizational culture.
The Nexus of Organizational Culture and Human Resources Management
Human resource management is charged with the responsibility of attracting, developing, motivating, using and retaining human capital ( Kosiorek & Szczepańska, 2016; Osibanjo & Adeniji, 2013 ). On the other hand, organizational culture aids in mobilizing, allocating and leveraging resources in a bid to achieve an organization’ goals via behaviors, values, decision criteria, rituals, visionary planning, and management system among other factors ( Kosiorek & Szczepańska, 2016 ). Organizational culture and human resources management are linked to each other in numerous ways and cannot be decoupled for the success of any organization. For instance, HRM practices play a crucial role in managing an organization’s culture while culture has a tremendous impact on HRM. Organizational culture plays a crucial role in managing the workforce. In this regard, culture guides employees towards the organization’s desirable behaviors and helps in developing high performers. Likewise, culture helps in controlling behavior and instilling values and norms that result in adherence to how things are done in a given organizational setting ( Kosiorek & Szczepańska, 2016 ). This quality is achieved through such HR tasks as recruiting individuals that share an organization's values; employee socialization via training and guided interactions; and the development of strong organizational commitment using various HR policies. The latter include lifetime employment, housing, and recreation facilities, or expatriate rotation.
Human resource practices and policies are designed in a way that seeks to elicit the behaviors that comply with an organization's values and strategic direction. This link supports the existence of a close relationship between organizational culture and the HR system in place. The HR practices that underscore team development, extensive training and performance-based reward help in creating an organizational culture that fans innovation ( Kosiorek & Szczepańska, 2016 ). Organizational culture is also more associated with HR practices and employees’ behavior than to employees’ skills. Moreover, the presence of an adaptability culture has been found to impact HR-related performance and market-related performance directly and indirectly respectively. A good culture results in the appropriation of such effective management practices as strategic human resources management (SHRM) whose benefit to organizations cannot be overstated ( Osibanjo & Adeniji, 2013 ). Despite providing shared beliefs and values, organizational culture also espouses the loyalty of an organization’s employees. Also, culture helps in establishing a sense of trust in the process of adapting innovative administrative strategies and technologies. By adapting to an organization’s culture, the contribution of employees is enhanced due to the creation of a ‘team spirit' feeling. Amongst other spin-offs, this results in improved employee retention.
Organizational Culture and Employee Retention
Employee turnover is undeniably expensive for any organization. Thus, every organization should aim to hire based on its cultural beliefs and shared values ( Madueke & Emerole, 2017 ). Above everything else, the most effective way of retaining talented employees is ensuring that they fit into the organization's culture. This is particularly vital when the organization is experiencing changes. Nevertheless, employee retention starts with the ability of an organization's management to accurately articulate its culture ( Habib et al., 2014) . In this case, it is crucial for the management to communicate the aligned behaviors, values, experiences, and beliefs that define an organization's environment. Those involved in establishing the culture have to be aware of the cultural attributes that best fit the organization’s ultimate goal. This understanding is essential because an organization’s culture has to be aligned with the achievement of the organization’s vision as well as goals ( Zheng et al., 2010) . This alignment implies that, if need be, the existing culture can be changed to guarantee the achievement of the set goals.
On defining the organizational culture, any decision, strategy, action, and communication should be geared towards supporting the organization’s cultural beliefs. The same applies to all HR efforts such as recruitment, hiring, and performance review among others. Consequently, the importance of culture fit in recruiting as well as retaining talented employees cannot be overstated. Hiring individuals that do not gel with the desired or present organizational culture results in declined job satisfaction, declined quality of work, and increased likelihood of creating a toxic work environment ( Madueke & Emerole, 2017 ). Ultimately, this leads to increased turnover whose cost to an organization may be substantially high. Hiring individuals that fit well with an organization’s culture increases their chances of being contented ( Al Shehri et al., 2017) . Persons who fit well with their co-workers, organization, supervisors amongst other personnel are likely to experience greater job satisfaction. Consequently, they are also more likely to remain in the organization and achieve superior performance ( Madueke & Emerole, 2017 ). These factors are particularly crucial when an entity is faced with inevitable changes, ambiguity or volatility, which are inevitable elements in the course of any organization’s life-cycle. It is also undeniable that a strong team that is held together by shared values is not only more agile but is also more likely to adapt readily.
Discussion and Conclusion
The existence of a strong culture is a crucial attribute of any successful organization. This is particularly the case since organizational culture forms the basis for everything that an organization does. The generally accepted conceptualization of organizational culture is that it is a shared set of values and beliefs which are reinforced using an organization’s structure and symbols, and is manifested in how individuals within the organization think and act. There is a consensus amongst different scholars that attitudes, beliefs, and values are central to any solid organizational culture. Leaders in organizations are expected to be at the forefront of living the organizational cultures and communicating them to all their employees.
Organizational culture has become especially important in the 21 st Century due to its influence on such aspects as job satisfaction and employee performance. The current work environment is also characterized by increased competition, mergers, alliances, globalization, acquisitions and other major workforce developments. Organizational culture can be conceptualized in terms of levels. Subsequently, a four-layered hierarchical model of culture has been developed. This model aids in identifying and categorizing the different elements of organizational culture. The model’s four core elements include cultural values, cultural symbols, shared assumptions, and shared behaviors. Despite the importance of hierarchical models in fostering an understanding of organizational culture, in actual sense, cultures lack the tidiness and neatness portrayed by the models. Instead, organizational cultures are characterized by sub-cultures, agreements, disagreements, and countercultures.
The importance of culture in an organization cannot be overstated. Culture supplements rational management in the workplace. It also facilitates the socialization and induction processes within an organization. Further, culture aids in promoting a desirable code of conduct while its sub-cultures lead to organizational diversity. Organizational culture and human resources management are linked to each other in numerous ways and cannot be decoupled f rom the success of any organization. H uman resource management practices play a crucial role in managing an organization’s culture while culture has a tremendous impact on HRM.
A solid organizational culture has been proven to result in improved employee retention. Employees who fit well with their co-workers, supervisors and the organization, in general, are likely to experience greater job satisfaction. Consequently, they are also more likely to remain in the organization . It is therefore undeniable that organizational culture plays an indispensable role in determining the ability of an entity in the 21 st century to retain talent, achieve success, and remain competitive. A practicing manager may use this information to appraise the existing culture in his or her organization. This information may also be useful in freshly defining an organization's culture. While the existing literature comprehensively covers organizational culture, specificity lack with regard to particular demographics of employees. Thus, future research could be aimed at exploring organizational culture in the 21st century with an emphasis on millennial workers.
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