Monday, November 21st, 2016
A company’s culture is the set of “unwritten rules” that develop as a result of the way that company do business. It affects how employees interact with each other.
A business model is, in its simplest terms, the process by which a company generates revenue. Within that process are policies dictating how the company interacts with vendors, how the company treats customers, and how the company utilizes employees.
The relationship between the business model and company culture can best be compared to the relationship between a map and a road trip. The map shows you where to go, but the road trip dictates how you get there. The business model outlines to the company the various goals of the company and the policies which the company will use to conduct business. The company culture develops as a result of the way the business model is written and interpreted by management.
The important thing to remember is that the company culture and business model are extremely dynamic. When a manager indicates that something is “not the way we do things around here,” that manager is referring to the culture. But the genesis of that part of the culture can be found in the business model. When you change the company business model, you change the culture. The company culture then becomes a result of the business model, which would make it a part of the way the company does business.
Summing-up: Without a business model, there can be no company culture. The business model directs the company on what it is supposed to do and the culture arises around the actions taken to execute that business model.