Question

ubmission Details scussion 1.2: Culture and the Bottom Line Culture and the Bottom Line 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.

Answer 1

Culture is an important part of any business. It really is the foundation upon which the business fails or succeeds. Rich company cultures and commitments to employee happiness both have a direct relationship with shareholder returns. Culture conscious companies rise above industry benchmarks and they out earn and outperform their competition. Company's culture helps through: lower employee absenteeism, less costly turnover, high morale of workers, less requirement of management and improvement to commitments and health.

An increasing number of successful companies have, in part, attributed their success to effective culture management. For example, Starbucks Coffee Company, which has grown from just two retail stores in Seattle (USA) to more than 2500 stores worldwide within the first decade of its existence, views culture as a critical factor in the organization's success. Specifically, the company's paradigm is that : 'the way we treat our people affects the way our people treat our customers, and, in turn, our success, which includes financial performance'. This belief has led the company to a number of human resource practices that are designed to enhance people's feeling of being valued by the company. These include the widespread use of stock options and the practice of providing full benefits to all employees who work more than 20 hours per week.