Speaker 1: Hello, everyone. Welcome to Business School 101. As you might know, monkeys love bananas. But did you know that we can make monkeys voluntarily give up eating bananas with peer-influenced training? In 1966, the University of Wisconsin-Madison hatched an experiment involving five monkeys in one large cage. In the middle of the cage was a ladder leading up to some hanging bananas. As the experiment began, one monkey spotted the fruit and began to climb the ladder. The researcher then sprayed that monkey and all the other monkeys with a stream of cold water as they climbed. The monkey on the ladder scrambled away without a banana, and the other monkeys were cold and wet. Nevertheless, the temptation of the banana soon took over, and another monkey attempted to climb the ladder. Once again, the researcher sprayed the adventurous monkey on the ladder as well as each of its cage mates. Afterward, when a third monkey attempted to ascend the ladder, the other monkeys pulled him off and beat him because they wanted to avoid the cold spray. Then, the researcher replaced one monkey in the cage with a new monkey. As would be expected of the newcomer, he naively began to climb the ladder upon noticing the bananas. Just like last time, the other monkeys pulled him off and beat him. Here's where the experiment got interesting. The researcher removed a second one of the original monkeys from the cage and replaced him with a new monkey. Once again, the new monkey went for the banana, and the other monkeys pulled him off and beat him, including the monkey who had never been sprayed. By the end of the experiment, none of the original monkeys were left, and yet, despite none of the new monkeys ever experiencing the cold wet spray, they had all learned to never go for the bananas. This example shows how peers can influence and even change an individual's beliefs and behaviors. Indeed, the way the experiment worked is pretty close to how organizational culture influences employees. Numerous studies have shown that organizational culture can affect almost all aspects of a firm's operations, from punctuality and tone to contract terms and employee benefits. So what is organizational culture? What are the benefits of a positive organizational culture? Where do organizational cultures come from, and how does a company build a high-performing organizational culture? In this video, I will answer all these questions for you. By definition, organizational culture is the shared values and norms of an organization's members. Values define what is considered important, and norms define appropriate employee attitudes and behaviors. Employees learn about an organization's culture through socialization, a process whereby employees internalize an organization's values and norms through immersion in its day-to-day operations. For example, Twitter's employees are always excited about their great company culture. From rooftop meetings to yoga classes to free meals and more, the employees just can't stop raving about it. Additionally, the employees love working with smart and friendly co-workers in a team-oriented environment. These aspects motivate Twitter employees to go above and beyond to meet the company's goals. Generally, a positive company culture has six major benefits. First, recruitment. Many HR professionals agree that a strong company culture is one of the best ways to attract potential employees. A positive culture gives an organization a competitive advantage because people want to work for companies with a good reputation from both previous and current employees. A company with a positive culture will attract the type of talent that is willing to make their next workplace a permanent home, rather than just a stepping stone. Second, employee loyalty. Not only will a positive culture help recruitment efforts, but it will also help retain top talent. A positive culture fosters a sense of employee loyalty. Employees are much more likely to stay with their current employer when they feel like they are treated well and enjoy going to work every day. Third, job satisfaction. It's no surprise that job satisfaction is higher at companies with a positive corporate culture. Employers who invest in the well-being of their employees will be rewarded with happy, dedicated workers. Fourth, collaboration. Employees are much more likely to come together as a team at companies with a strong culture. A positive culture facilitates social interaction, teamwork, and open communication. This type of collaboration can lead to some amazing results. Fifth, work performance. Many studies show that strong company cultures have been linked to higher rates of productivity. This is because employees tend to be more motivated and dedicated to employers who invest in their well-being and happiness. Sixth, less stress. A positive company culture will help reduce workplace stress significantly. Companies with a strong corporate culture tend to see less stressed employees, which helps boost both employee health and work performance. It's clear that organizational culture can provide a lot of benefits. But where do these cultures come from? Normally, there are two major sources of culture in an organization – founders and industries. Let's discuss these separately. First, founders. When a company is founded, there is either a single individual or a group of individuals involved. The founder or founders have a vision for their new company, and that vision helps form the corporate culture. In some cases, the founder is very intentional about creating a particular culture. For example, they may want to create a business in which innovation or teamwork is valued. In other cases, the founder's personality unintentionally forms a culture. Some individual founders have such strong personalities and values that the company continues to reflect their goals as it grows and even after the founder dies. For example, Walt Disney modeled leadership, teamwork, and innovation so much that the Disney Corporation is still built around the values and beliefs of its founder. Another good example of the way that founders' values create corporate culture is Ben and Jerry's Ice Cream. Founders Ben Cohen and Jerry Greenfield started out to create a company with strong social values, and they succeeded. The company was established in 1978, and it continues to focus on sustainability, environmental activism, social activism, and charity even today. Second, industries. Different industries tend to have different organizational cultures. It's one thing to be creative, innovative, and fun in the technology and entertainment industries, but that type of culture won't work well in an industry that's built around regulations and policies that cannot be altered. For example, industries such as pharmaceuticals and nuclear power require attention to detail and therefore cannot tolerate a creative approach to following rules. While it's true that a pharmaceutical company can be people-oriented to a degree, its willingness to support the individual needs of employees must be secondary to its absolute compliance with regulations and the law. Now that we understand where organizational cultures come from, let's discuss how to build a high-performing organizational culture. Here are six tips for business practitioners. 1. Emphasize Employee Wellness No organization can expect to foster a positive culture without healthy employees. In many ways, employee wellness is a foundation for a positive corporate culture. Leaders should ensure that employees have the resources, tools, and on-site healthcare opportunities they need to live their healthiest life, both inside and outside of the office. 2. Grow From Your Current Culture Building a positive corporate culture doesn't mean that employers should completely scrap everything their company currently stands for. Instead, employers should ask employees what they like and don't like about their current culture and work environment. Leaders should use these suggestions to help create a positive corporate culture that is appropriate for their workforce. 3. Hire The Right People The people you hire directly impact your business and company culture. So make sure that you aren't just hiring based on skill or need. You must also consider how an individual will fit into the overall picture. For example, if your company culture focuses on teamwork but your new hire hates working with others, then they can seriously interrupt or even damage the flow that you've established. 4. Encourage Positivity In order to build a positive culture, employers need to start by encouraging positivity in the workplace. It's essential to promote positivity on a daily basis. Employers should lead by example by expressing gratitude, smiling often, and remaining optimistic during difficult situations. Many business researchers suggest that employees are much more likely to engage in positive behavior when they see their employers doing so. 5. Foster Workplace Relationships Workplace relationships are an essential element to a positive company culture. When employees barely know their colleagues and rarely interact, it is almost impossible to build a strong organizational culture. Leaders need to provide employees with opportunities for social interactions in the workplace. Consider weekly team meals, happy hour excursions, or even a book club to get things started. 6. Listen More For managers, an easy way to build a great company culture is to be a good listener. According to a recent business study, 86% of employees in a strong culture environment felt that senior management listened to them, while 70% of employees without a positive company culture reported the opposite. Therefore, listen to your employees and ensure that their voices are heard. Now let's do a quick review of today's topic. Organizational culture is the shared values and norms of an organization's members. A positive company culture can help firms attract qualified candidates, encourage internal collaborations, improve employees' job satisfaction, loyalty and work performance. Usually, founders and the industry are the two major sources of culture in an organization. To build a positive organizational culture, managers should put emphasis on employee wellness, growing from their current culture, hiring the right people, encouraging positivity, fostering workplace relationships, and listening to their employees more to ensure that their voices are heard. So what do you think about organizational culture? Please leave your thoughts in a comment below. If you enjoyed this video, then please be sure to give it a thumbs up and to subscribe to the channel. Thanks for watching and I will see you next time.