What purpose does organization culture play in an organization? In general terms, organization culture influences the behavior of everyone within an organization and, if carefully crafted, can have a significant, positive impact on organizational success.10 Organization culture influences the way people carry out organizational processes and can create immense pressure on organization members to act in ways consistent with the culture. As a result, organization culture should reflect the values that are conducive to organizational goal attainment.

In more specific terms, organization culture has a variety of functions within an organization. First, organization culture can enhance organizational productivity. Organization members often become more productive as organization culture increases the emphasis on such factors as rewarding performance and setting goals.11 Second, organization culture can serve as a component of organizational strategy.12 Following this line of reasoning, competitive advantage arises from complex combinations of tangible as well as intangible resources. One such intangible resource is a culture that enhances organizational success. Third, organization culture provides a rationale for staffing.13 That is, management must make sure that new hires are appropriate for the organization’s culture. The employment interview is an ideal opportunity for managers to assess whether applicants might fit in the organization culture and for applicants to assess whether the organization culture is a good fit for their personal needs and aspirations. During the interview, employers look for clues to issues such as an applicant’s work ethic and personality, while job seekers want to learn more about company culture issues, including the allocation of rewards and promotions. Last, organization culture can act as a guideline for making operational decisions. Given an explicit organization culture, organization members tend to make decisions that are consistent with the values embedded in that culture.

Overall, organization culture functions to influence organization members to act in ways that are consistent with the accepted values of the organization. To assist organization members in identifying these beliefs and values, many organizations establish a code of conduct. A code of conduct is a document that reflects the core values of an organization and suggests how organization members should act in relation to those values.

Once established, a code of conduct may at times need to be changed. For example, although a code of conduct was already in place at Austin, Texas–based Tocquigny, the interactive ad agency suffered an embarrassing lapse involving Twitter. An unhappy prospective client confronted the chief executive: He had read that her agency was also courting one of his competitors. Hurriedly, Tocquigny amended the social media guidelines in its code of conduct to include an admonition about respecting the firm’s confidential and proprietary information. The agency also established a measure of control by assigning to one person the responsibility for posting.14

Managers must remember, however, that simply possessing a code of conduct does not guarantee that the organization’s members will follow that code. Overall, management must not only work to establish a code of conduct within the organization but also take steps to ensure that behavior that follows the code is rewarded.