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Organizational Culture and SMB

25 Nov 2013

By Videotron Business Solutions

The creation of a SME is rarely based on a business model. Generally, it will develop through an emergent strategy or a current strategy. The specific character of SME comes from a set of elements that are fundamentally determined by the founder’s personality. For that matter, during the company’s first years, the founder will mainly be the one in charge of communicating a set of values, rules of conduct, rites, codes, beliefs, and standards to employees, which will penetrate and become part of their mind and heart. These elements will be the components of the corporate culture.

Organizational culture is a learned product of group experience. Therefore, culture is found where there is a definable group with a significant history. An organization’s culture is initially formed as a result of early group experiences and the influence of early leaders. Myths are popular in corporate cultures, and in SMEs a myth about the founder is often present. His successor must be able to establish himself without actually destroying the aura surrounding the first leader. Pierre-Karl Péladeau, president and CEO of Quebecor, validates this idea while he refers to his dad and the business’ early years. He tells us about Pierre Péladeau and his entrepreneurship, his desire to develop and undertake, which he was able to instil in his employees. He also lists other elements that helped determined the culture of the Quebecor group: boldness, innovation, creativity, ability to reflect and the adoption of a “less linear” business model. Organizational culture is therefore a variable that is absolutely necessary to explain the day-to-day experiences and strategic choices achieved by an organization.

Organizational Culture as a Strategic Resource

Some researchers have suggested that organizational culture is a strategic resource that has value in ensuring the continuing existence and success of organizations. This assertion is supported by various studies that have linked organizational culture to broad strategic outcomes such as an organization’s ability to manage knowledge, innovation capability and strategic management of information technology.

From a strategic point of view, an organization’s culture can also represent a motivation lever for employees as well as a way to increase productivity and team cohesion. However, problems with the corporate culture can play a major role: it can inhibit a company’s growth or even contribute to hinder innovation in terms of products and services.

Developing a Culture That Works Within a SME

Following are several main principles that small business owners should consider in order to create a healthy corporate culture:

  • Prevailing corporate culture begins at the top. Entrepreneurs need to explain and share their vision of the company’s future and objectives with their workers, and set good examples;
  • Treat all employees equally and with respect, without showing favoritism for family members, since many small businesses are family-owned and operated;
  • Hiring decisions should reflect desired corporate culture, and promote workforce diversity;
  • Two-way communication is essential to stimulate employee engagement and commitment.
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