Is Company Culture Part of Your Business Model?
What exactly is a company’s culture? In order to understand the relationship between company culture and a corporate business model, it is necessary to examine the component parts and break each down completely. The quick answer to the question of whether company culture is part of your business model is yes. But it is an indirect relationship that relies more on synergy than policy. It is critically important that a business owner understand how the parts of their business model affect the way their company is run.
What Is Company Culture?
Your company’s culture is the set of “unwritten rules” that develop as a result of the way you do business. For example, your company may have a mandate which makes it against company policy to re-negotiate signed contracts just to set two vendors against each other to get a lower price. In your company culture, it is important to honor agreements and act with integrity.
Your company culture also affects how employees interact with each other. If your company culture has a zero-tolerance for harassment of any kind, then employees should feel comfortable reporting incidents of harassment to management. In this way, company culture helps to foster a work environment based on trust and cooperation.
What Is A Business Model?
A business model is, in its simplest terms, the process by which a company generates revenue. Within that process are policies dictating how the company interacts with vendors, how the company treats customers, and how the company utilizes employees. The business model includes important company mantras such as the mission statement and the vision for the future.
How Does The Business Model Affect Company Culture?
The relationship between the business model and company culture can best be compared to the relationship between a map and a road trip. The map shows you where to go, but the road trip dictates how you get there. The business model outlines to the company the various goals of the company and the policies which the company will use to conduct business. The company culture develops as a result of the way the business model is written and interpreted by management.
Is Company Culture A Part Of Your Business Model?
At this point we can give the long answer to the question that we have been exploring. Without a business model, there can be no company culture. The business model directs the company on what it is supposed to do and the culture arises around the actions taken to execute that business model.
The important thing to remember is that the company culture and business model are extremely dynamic. When a manager indicates that something is “not the way we do things around here,” that manager is referring to the culture. But the genesis of that part of the culture can be found in the business model. When you change the company business model, you change the culture. The company culture then becomes a result of the business model, which would make it a part of the way the company does business.
A company is a very fluid organization that can change on a moment’s notice. Once a company culture is in place, it is handed down from one employee to the next. Any kind of action taken that is counter to what the culture stands for will normally result in discipline. Since that culture is firmly established by the mandates in the company business model, then it makes sense to conclude that the culture and the company business model are forever tied together.
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