The Link Between Values, Culture and Profits

Culture is a widely used and misunderstood term. By the strictest definition, culture is the sum of attitudes, customs and beliefs that distinguish one group of people from another. An organization’s culture can be defined by a company’s prevailing ideas, values, attitudes and beliefs that guide the way in which its employees think, feel and act. Therefore, a company’s culture directly impacts the decisions and actions of the organization.

A positive culture, however, can obviously have the opposite effect. The Disney organization, for example, prides itself on closely following its six core values: Integrity, trust, teamwork, honesty, play by the rules and respect. These values drive the Disney culture of excellence, and have resulted in a 54% increase in net profits over the last four fiscal quarters. Disney is not an anomaly. A 2014 study, “Parsing Organizational Culture: How the Norm for Adaptability Influences the Relationship Between Culture Consensus and Financial Performance in High-Technology Firms” by Jennifer A. Chatman, David F. Caldwell, Charles A. O’Reilly and Bernadette Doerr, concluded that corporations with strong positive cultures performed better financially over a volatile three-year period than companies with weaker cultures did.