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What Is Company Culture (and Why Does It Matter)?

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Considering that we spend approximately 40 hours out of every week on the job (that’s over 2,000 work hours a year!), working for a company with a healthy culture is essential. It helps you perform at your best and can improve your future career prospects.

But if you’ve never thought about a company having a culture, you may not understand how company culture can impact you or how to assess a company’s culture before you apply. 

So, before starting your job search, read up on what company culture is, why it matters, and how to learn about it before, during, and after your interview!

Company Culture Definition

The Merriam-Webster Dictionary definition of culture is “the customary beliefs, social forms, and material traits of a racial, religious, or social group.” Culture is the way a group of people agrees to do something, whether that’s belief in a god or how to share common resources. 

And while we often think of culture as something we’re born into (like a religion), it’s also something we can choose based on what we like or agree with (like nerd culture). The commonalities bind a culture together to help it function, and each culture has its unique norms, quirks, and expectations.

Companies also have cultures with their own norms, quirks, and expectations. Merriam-Webster also says, culture can be “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.” 

Put another way, “Company culture is the core of an organization. It is its values, beliefs, behaviors, customs, and attitudes that gives an organization its character and shape,” says Julie Schweber SHRM-SCP, senior HR knowledge advisor of SHRM. The culture “defines how everything is done, impacting how you behave and act on the job by reinforcing a set of norms and expectations. It covers all the things that are done within a company and it has a great impact on the behavior of its employees.”

Company Culture Examples

One way to describe company culture is a fundamental concept that defines the company. It could be the mission, profit, or how it treats customers.

For example, Nordstrom has a customer-oriented culture. The company goes out of its way to ensure that every customer feels special and valuable. 

A nonprofit is a mission-oriented culture. The organization is trying to solve a problem or fulfill a need where others can’t (or won’t). This is similar to a science-based organization that is also trying to solve a problem, but through different means, like inventing a medical device.

Tech companies usually have a culture of innovation and disruption. They are often on the bleeding edge of new products, services, and tools.

Why Is Company Culture Important?

As Schweber notes, you spend a lot of time at work, so you want to work somewhere where you’ll find “personal and professional joy.” 

That doesn’t mean every day will be perfect. But you should know what the company’s mission and purpose are and be on board with them. “You want to believe in the organization, or at least have an alignment of goals,” says Schweber. This can increase your satisfaction with the job, making it more likely you’re engaged and productive at work and less likely that you’ll be dissatisfied — and looking for a new job!

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And there’s research to back this up. A group of researchers at MIT wanted to learn more about the driving forces behind the Great Resignation. They analyzed the reasons why people left their jobs throughout 2021. 

Though compensation is often cited as a reason someone quit or was thinking about quitting, the survey found that toxic company culture is over 10 times more likely to contribute to a person’s reason for leaving a job than compensation.

What Is a Toxic Company Culture?

According to the survey, a toxic company culture came down to three main points:

  • Failure to promote diversity and inclusion
  • Feeling disrespected
  • Unethical behavior

As the survey dug deeper into these concepts, a few themes emerged.

First, companies with environments where it felt like jobs were insecure, or the company reorganized a lot, tended to have toxic cultures. When people were constantly on edge that they might lose their job or be moved to a new team, they felt disrespected and unable to fully care about their work.

Interestingly, companies described as “innovative” were also considered toxic. It can be difficult to continually iterate and create new products and concepts. People at innovative companies reported feeling that they had to give everything to work, lacked work-life balance, and were often burned out.

Finally, companies that don’t recognize good and bad performance are often considered toxic. If companies don’t reward their best and brightest, employees begin to feel underappreciated and start looking for a company culture that does. And when management doesn’t address bad performers or even tolerates poor performance, everyone who is doing their job feels unappreciated and unsupported.

What Is a Good Company Culture?

So, what is a good company culture, then?

Interestingly, it’s “not a one size fits all” proposition, says Schweber. As an example, a company culture that is very traditional and profit-oriented may not be a good fit for someone who prefers flexible work hours and community-based work. 

That said, some commonalities define a good company culture and as Schweber points out, “A strong company culture can create a positive workplace.”

As a rule, a “good” company culture is one where you know what is expected of you and what you can expect from the company. You have a clear idea of what your duties are and how the company measures your performance.

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Likewise, you know exactly what you can expect from the company. You understand the compensation and benefits schedule, how often you’ll receive feedback on your performance, and when you’ll be reviewed. There’s a clear career path, and you know what you have to do to get promoted. And you know exactly how the company handles mistakes and supports you when you err.

How to Learn More About a Company’s Culture

Clearly, a company’s culture matters to your on-the-job success. But how can you know what a company’s culture is before you work there?

There’s no way to know for sure, but there are several ways you can assess the company’s culture throughout the application process.

Before Applying

Before you apply for any role, learn as much as you can about the company culture. How a company presents itself, treats job seekers, and handles negative feedback can give you a lot of valuable information about its culture.

Start With the Company’s Website

Schweber says the first place to research company culture is on its website. Check for a diversity, equity, and inclusion initiative to gauge how inclusive the company is and how it measures its progress toward DEI goals. Also, look for a sustainability report to help you understand where a company’s profits go and what causes it supports. You can also check its press releases or corporate blogs for this information.

Then look for employee testimonials. While you know the company won’t put “bad” testimonials on its website, how do the ones that are there resonate with you? Do they feel forced or faked? Do you believe the employee believes what they are saying?

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Finally, check the company’s career page to see if you can get an idea of what your career path at that company would look like. Is there a program that develops your leadership skills? Do the job postings talk about promoting from within? Is there any mention of an education and professional development budget?

Compare With Outside Sources

Your next stop should be LinkedIn. Start by searching for profiles of long-term employees. That should give you an idea of how long people do or don’t stick around at the company. Then see if their job history at that company shows clear and consistent growth. Do they seem to move up every few years or take on new responsibilities? Barring that, do they move laterally within the company and learn more cross-functional skills?

Then check a third-party review site, like Glassdoor, to get an insider view of the company. Schweber says it’s important to take all the reviews into consideration. If a company has many positive reviews and a few negative ones, that information is just as important as noting that the company has many negative and few positive reviews.

Then look at how the company responds to negative reviews, if it even responds. Are the responses passive-aggressive or even rude? Does the company blame the employee for the problem or claim the review is fake? Also, see if there are multiple positive reviews posted after negative ones. Do you notice a pattern?

See what reviewers have to say about the interview process. Do applicants describe having multiple day-long interviews and several projects? Was the recruiter an excellent communicator who kept applicants in the loop even if the update was “working on it”? Does the company have a habit of ghosting applicants?

During the Interview

During the interview, you’ll have a few opportunities to assess the company culture for yourself.

Check the Employees Out

If the interview is in-person, start with the people. How does the person who greets you seem? Happy and excited or downbeat and somber? As you walk through the office, what’s the general vibe? It’s OK if everyone is quiet and working on their own. Some companies are like that. But does everyone seem like they’re enjoying their work?

Even if your interview is over Zoom, you can still assess how people come across. Does the interviewer seem positive and engaged or tired and overwhelmed? Are they even bored? While it’s possible they’ve had a long day, pay attention to the interviewer’s attitude and demeanor.

Ask About the Culture

You can, of course, ask, “How do you describe your company’s culture?” but you may not get an accurate assessment. And, in some cases, you may not get an answer at all. Some people think “company culture” isn’t a thing (which tells you a lot!).

But if you aren’t comfortable asking directly, here are other questions to ask that can help you determine a company’s culture:

  • What do you like about working here? If they struggle or talk about only things outside of the job (like saying the best thing is the holiday party), that could indicate a poor work culture.
  • What are the top three priorities for the company/department/team in the next six months? This can reveal information about the overall goals the company has and how it prioritizes them. It can also clue you in to how you’ll contribute to achieving these goals.
  • What are the key challenges the company is facing? The answer tells you how much they know about the market and competition as well as how they plan on handling it. 
  • What’s the growth potential of the position? Not every role has a defined career path. This is especially true at start-ups, where your role is often a little bit of everything. But the interviewer should be able to give you an idea of what you might be doing a year or two from now. At a more established company, there might be a more clear-cut path that indicates what you could be doing in three to five years.

After the Interview

You may have an immediate gut reaction after the interview, but you might not, and that’s OK. Sometimes you need a few days to process the interaction. Either way, when you think about what you discussed and the people you met, how did you feel? Did you feel at ease with the people interviewing you? They may have asked hard questions, but did they seem satisfied with your answers? How comfortable did you feel with the entire process? Did you feel welcome and valued, even as a candidate?

And pay attention to what happens after you send your thank you note. Did your recruiter follow up when they said they would? If things changed, did the recruiter keep you in the loop, or did you have to follow up (again and again and again) only to get a vague response?

The Bottom Line

A company’s culture can make or break your experience as an employee. Fortunately, using your job search to find a culture that matches your own goals and values can help you find a great long-term career fit.

Image credit: Canva

Frequently Asked Questions

What is company culture?

Company culture is the norms and values of the organization and defines how everything is done. It impacts how employees behave throughout their employment.

What is a good company culture?

A good company culture is one that treats employees with dignity and respect. It is clear to the worker what is expected of them, how their performance is measured, and what they have to do to move up the ladder.

Why does company culture matter?

Because we spend so much time at work, how we feel about our jobs has a significant impact on the rest of our lives. If you don’t feel valued and respected at work or feel you have to work all the time, you’re likely to feel stressed in other areas of your life and disengage from the work.

What is a toxic company culture?

A toxic company culture is one in which employees feel disrespected and devalued. It is often due to poor management or leadership.

How do you identify a company’s culture?

Look at the company’s website and see what its mission is. Then check out employee review sites to see what they have to say about working there. Finally, pay attention to how you’re treated throughout the entire application process. This can be an excellent indicator of how the company will treat you as a staff member.

Rachel Pelta is the Head Writer at Forage. Previously, she was a Content Specialist at FlexJobs, writing articles for job seekers and employers. Her work has been featured in Fast Company, The Ladders, MSN, and Money Talks News.