How can a company’s culture affect the bottom line [net income]? Support your answer by identifying and discussing an example of a company where, in your opinion, it was evident that the culture of the company has either positively or negatively affected the bottom line.
Corporate culture is the relationship between the management team and employees and the way they all communicate with their customers. According to Sarah S. and Chris S. "Bad managers create bad cultures" (2011), which results in high rate of employee turnover. The bottom line of any company will be affected by the culture and their employee satisfaction which is essentially related to their sales. Positive work environment and proper employee training, appreciation and compensation will create a desirable workplace and culture. Great example of a company where the culture has had a positive effect on their net income is Zappos . The reason why they are one of the most successful online shoe retailer is because they put their employees first which makes them happy and appreciated. Happy employees are more likely to provide exceptional customer service which will result in repeated customers and increased sales. In the article of Sarah L. Simoneaux and Chris L. Stroud, "Zappos, an online retail firm known for its extraordinary customer service, puts all employees through a four-week orientation class, with an intense focus on company values. At the end of the first week, they offer employees $2,000 to leave if they do not feel they fit the culture. Although the offer stands through all four weeks, less than 1 percent leave. Zappos’s process underscores how important culture is in attracting and retaining employees and living out corporate values." There is another great article in Forbes magazine that shows how important the corporate culture is for Zappos' success. "Zappos takes its corporate culture seriously. They have weekly office parades and institutionalized random acts of kindness to...
References: Simoneaux, S. L., & Stroud, C. L. (2014). A Strong Corporate Culture Is Key to Success. Journal Of Pension Benefits: Issues In Administration, 22(1), 51-53.
Does corporate culture drive financial performance?(2011, February 10). Retrieved from: http://www.forbes.com/sites/johnkotter/2011/02/10/does-corporate-culture-drive-financial-performance/ February 18th, 2015.
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