Impact of Organizational Culture on Performance

 Impact of Organizational

Culture on Performance

Organization Culture


Organizational culture is the system that the organization believes in and values. Organizational culture can overcome environmental challenges by working together to solve them (Fitri Rahmadani Lubis, 2019). According to (Brian T. Gregory, 2009) Organizational culture is defined as a set of beliefs, values, and assumptions that are shared by members of an organization. (Torvald Øgaard, 2005) describe there are levels of organizational culture: (i) basic underlying assumptions; (ii) values; and (iii) artifacts and behavior.

Culture, coupled with business strategy, is a valuable resource as it contributes to both efficiency and effectiveness (Finnegan, 2010). As per  (ZHANG Mian, 2008) Organizational culture is built up gradually through organizational development. According to (ZHANG Mian, 2008) organizational culture functions in two ways: internal integration and external adaptation.

(Ovidiu-Iliuta) Defines organizational culture as “the set of shared, accepted, implicit assumptions that a group maintains that determine how it perceives, thinks about and interacts with its various environments.” It has been shown that differences between types of organizational culture at the same time lead to different results of the activity (Dr. A.Zafer Acar, 2014).

1: Adhocracy culture has direct and positive effects on business performance.

2: Clan culture has direct and positive effects on business performance.

3: Hierarchy culture has direct and positive effects on business performance.

 4: Market culture has direct and positive effects on business performance(Dr. A.Zafer Acar  (Dr. A.Zafer Acar, 2014).

organizational cultural types as mentioned by (Rowena Jacobs R. M., 2013), The Clan culture identifies doing things together, whereas the Rational culture of control focuses on doing things fast, the Developmental culture identifies values that do things first, and the Hierarchical culture focuses on doing things right.


(Lim, 1995) Explained, especially, "corporate culture" or "organizational culture" has been used to explain the economic successes of Japanese companies over American companies, by developing a highly motivated workforce, committed to a common set of core values, beliefs, and assumptions. (ALHARBI MOHAMMAD AWADH, 2013) stated that culture is defined as a mixture of values, attitudes, beliefs, communications, and explanations of behavior that guide people. Human cognitive systems that help improve thinking and decision-making have been based on organizational culture. Organizational culture has been described (Ahmad, 2012)as a pattern of shared values and beliefs over time that creates norms of behavior adopted in problem-solving.

 Organization Culture and Performance

Managers have also recognized the importance of culture because of the hypothesized relationship between certain types of organizational culture and effective organizational performance (Jennifer A. Chatman, 2016). Organizational culture helps in measuring constraints to overcome performance measurement  (ALHARBI MOHAMMAD AWADH, 2013).

 (Finnegan, 2010) stated that organizational culture is a source of competitive benefit when it enables a company to execute its strategy more efficiently or productively. Also, Stated that an organization's culture must possess traits not shared with those of its competitors and, being an intangible asset, must be difficult for competitors to imitate. According to (Lim, 1995) organizational culture for performance tends to differ in terms of performance indicators.(TAKÁCS, 2017)suggested that one of the important consequences of a strong organizational culture is its impact on the company's activities.


(Daniel I. Prajogo, 2010)reported a significant association between a particular type of strong culture and superior financial performance. Further examines the relationship between organizational culture and organizational performance at the operational level. Operating results are the primary precursor to financial results and organizations often have more control over them than financial results, which are often influenced by external factors such as macroeconomic conditions (Daniel I. Prajogo, 2010).

(ZHANG Mian, 2008) stated that it is reasonable to assume that a strong culture exerts positive influences on organizational performance only under conditions in which the organizational culture is appropriate to the external environment.(Harris, 2000) As explained many scholars and practitioners argue that the effectiveness of an organization depends on how widespread the values of a culture are. (Ahmad, 2012) States that because of the difference in organizational culture, the same strategies do not give the same results for two organizations in the same industry and in the same location.  (Torvald Øgaard, 2005) found that many perceptions of cultural values were consistently positively associated with manager performance. (Elizabeth A. Martinez, 2015) mentioned that culture can help or hinder organizational effectiveness and to leaders can change the organizational cultures toward well-performing organizations. Culture can influence the priority given to fairness considerations in organizational strategy (Rowena Jacobs, 2013).

 References

Ahmad, M. S. (2012). Business Intelligence Journal - January, 2012 Vol.5 No.1. IMPACT OF ORGANIZATIONAL CULTURE ON PERFORMANCE.

Ahmad, M. S. (2012). Business Intelligence Journal - Vol.5 No.1. IMPACT OF ORGANIZATIONAL CULTURE ON PERFORMANCE.

ALHARBI MOHAMMAD AWADH, A. M. (2013). Impact of Organizational Culture on Employee Performance.

Brian T. Gregory, S. G. (2009). Journal of Business Research 62 (2009) 673–679. Organizational culture and effectiveness: A study of values, attitudes, and,organizational outcomes.

Daniel I. Prajogo, C. M. (2010). International Journal of Operations & Production Management Vol. 31 No. 7,pp. 712-735. The relationship between multidimensional organizational culture and performance.

Dr. A.Zafer Acar, P. A. (2014). Emerging Markets Journal | P a g e |18. Organizational Culture Types and Their Effects on Organizational Performance in Turkish Hospitals.

Elizabeth A. Martinez, N. B. (2015). American Economic Review: Papers & Proceedings 2015, 105(5): 331–335. Organizational Culture and Performance.

Finnegan, S. F. (2010). Mark Lett (2011) 22:227–242. Business strategy, marketing organization culture and performance.

Fitri Rahmadani Lubis, F. H. (2019). Advances in Social Science, Education and Humanities Research, volume 511. Organizational Culture .

Harris, E. O. (2000). Int. J. of Human Resource Management 11:4 ,766–788. Leadership style, organizational culture and performance.

Jennifer A. Chatman, C. A. (2016). G Model RIOB 97 No. of Pages 26. Reinvigorating the study of organizational culture.

Lim, B. (1995). Leadership & Organization Development Journal, Vol. 16 No. 5, pp. 16-21. Examining the organizational culture and organizational performance link.

Ovidiu-Iliuta, D. (n.d.). THE LINK BETWEEN ORGANIZATIONAL CULTURE AND PERFORMANCE MANAGEMENT PRACTICES.

Rowena Jacobs, R. M. (2013). Social Science & Medicine 76 (2013) 115e125. The relationship between organizational culture and performance in acute hospital.

Rowena Jacobs, R. M. (2013). Social Science & Medicine 76 (2013) 115e125. The relationship between organizational culture and performance in acute hospitals.

TAKÁCS, A. M. (2017). Int. Rev. Appl. Sci. Eng. 8 (2017) 1, 99–105. EXAMINATION OF THE RELATIONSHIP BETWEEN ORGANIZATIONAL CULTURE AND PERFORMANCE.

Torvald Øgaard, S. L. (2005). Food Service Technology, 5, pp. 23–34. Organizational culture and performance – evidence from the fast food restaurant industry.

ZHANG Mian, L. H. (2008). Science of Science and Management of S. & T.), 2007, 28(8): 140–148. Examining the relationship between organizational culture and performance.

 

 

 

 



Comments

  1. Sachini NagahawattaDecember 6, 2022 at 10:30 PM

    Great content Upul. Organizational development is depends on analysis and identification of the factors that conclude the effectiveness of the organization. Organizations and managers are willing to get employees commitment, which leads to improve the productivity. Management would like to introduce employee with norm, values and objectives of the organization which is importance to understand the organizational culture. It is the responsibility of the management to introduce the organizational culture to its employees that will assist the employees to get familiar with the system of organization (Shahzad, 2012).

    ReplyDelete
    Replies
    1. Upul Samantha Kumarasiri December 7, 2022 at 2:56 PM

      Agreed Schini ,Management is having big role in organization culture ,Most managers do not deny the importance of organizational culture in managing their employees, but very few do not recognize the direct impact it has on shaping them. Management takes the lead in building and supporting it (KANE-URRABAZO, 2006).

      Delete
  2. Zameera ThahaDecember 9, 2022 at 11:30 PM

    Super content Upul. Agreed with your content. Management has a vital role in improving the organizational culture towards a high performing environment. while many factors such as T&D will pave ways to achieve that management also need to identify the following factors. Identify Client needs and Expectations, Detect threats and opportunities within the organization, locate world-class benchmarks of organizational performance, identify employee needs and expectations, Improve work flow to achieve high level of productivity, forecast future competency needs and finally future workforce needs. (William J. Rothwell, 2005)

    ReplyDelete
    Replies
    1. Upul Samantha Kumarasiri December 12, 2022 at 8:15 PM

      Also sameera,A strong culture is almost always a driving force for improving employee performance. It enhances the self-confidence and commitment of employees, reduces work stress, and improves the ethical behavior of employees (Fakhar Shahzad, 2012).

      Delete
  3. RahmanDecember 10, 2022 at 3:35 AM

    Well written and I agree with the great introduction for organizational culture. I believe organizational culture should fit with the employee to have an effective workforce.

    ReplyDelete
    Replies
    1. RahmanDecember 14, 2022 at 7:18 AM

      Well written and I agree with the great introduction for organizational culture. I believe organizational culture should fit with the employee to have an effective workforce. (Shahzad, F, et al., 2012)

      Delete

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