corporate culture effect on performance enhancement academic essay assignment -

Does a strong corporate culture enhance organisational performance? Discuss, with reference to the key academic studies in this area.

Literature Review:

“A fish discovers its needs for water only when it is no longer in it. Our own Culture is like

water to a fish. It sustains us. We live and breathe through it.”

Trompenaars and Hampden-Turner (1998)

An organizational or corporate culture has diverse perspective according to the discipline or

field in which that is working. For example there are different and unique cultures for

marketing, finance management or sociology disciplines. Culture is basically considered as

the pre-observed rules and regulations that the employees and the users have to follow.

According to the schein (1985) corporate culture is, “a set of basic assumptions – invented,

discovered, or developed by a given group as it learns to cope with its problems of external

adaption and internal integration, that has worked well enough to be considered valid and

therefore, to be taught to new members as the correct way to perceive, think and feel in

relation to those problems.” So this culture is a basic tool to manage the organizational

functions with its best ways. Management and the organizational performance correlate with

the functions it has. That according to sachein is come into the action plan through culture

and basic assumptions by group of people (organization). Corporate culture is something that

is defined differently by many researchers and authors. But most of them believe in this

concept of corporate culture that is defined as the set of believes, values and behaviour

patterns that form the unique and identical recognition for the organizations and at the same

level it shapes the behaviours of the employees in such way that is in best way to the

corporation. (Schein 1998, Van de post 1998). Some researches takes this concept and

practice in such a way like Grant (2005, Pg. 216) says that corporate culture is an effective

mechanism to have better control and coordination among the stockholders of the

organization. So getting control and cooperation is also another characteristic of corporate

culture along with core values, assumptions and behaviours.

The corporate culture works like the same way for the organization as the personality shows

the characteristics of an individual. This is considered as the behind the scene force that do

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not work formally but it is the force that gives a direction and meaningful purposes of the

existence of the organization. By utilizing this unifying force organizations develop the

behaviours of the individuals and the employees for the best interests of the organizations

(Van de Post et al, 1998).

During last few decades the corporate culture has attain a significant for the organization due

to its potential impacts and effects for their success and the performance. The Van der Post et

al. (1998) states that organizational culture and performance have a strong relationship in

between. It is also said that the developed norms, values and behaviours of the employees

under a certain culture lead them to have right direction towards the core organizational goals

and missions. In short we can say that the corporate culture is basically something that is

aligned with the corporate strategy. It need to go with it roots to get the potential results and

achievements. Many of the researchers conclude this fact that corporate culture is related to

organisational strategy, especially when a particular strategy is needed to be implemented in

an organization (Schwartz and Davis 1981, Rashid and Anantharaman 1997). Some

researchers examined the relationship between corporate culture and its performance. For

example, Van der Post et al. (1998) examined the organizations in South Africa on these two

constraints. He widely held a research over the relationship between financial performance

and corporate culture in the specific area. As a result he attained a result that the corporate

culture has a positive relationship with the financial performance of the firms. On the other

side of coin, he also drawn some results that the corporation with weak culture differs in the

financial performance with relative to the companies who have a strong organizational

culture. To make the results more authentic and accurate Van der Post (1998) used fifteen

different dimensions for the measurement of the corporate culture rather than sticking on a

single perspective.

To implement a strategy in an organization is a critical process as most of the higher level of

management does face it. At the passage of time it will be getting more complex for the

organizations. And Grant M. (2005) urges that a strong and fool proof strategic plan leads an

organization to the high level of performance and Rashid and Anantharaman (1997) interpret

that strategic planning is something that needs a strong link with the culture of the

organization for the successful implementation. Trough this cause and effect argument we

can have a conclusion that strategic planning that is the backbone for the organizational

performance is dependent upon the strong alienation with the corporate culture. According to



the Kotter and Heskett 1992, the firm’s long term performances are correlated with the

impact of the corporate culture. They also argued that the firms with the strong cultural

values implemented on their stakeholders like employees, customers and the stockholders

performs in such a significant way that they make other companies suffering from the lose

through the competitive edge of the strong organizational culture. And those companies have

huge margins to compete them in the organizational performances. The companies with

strong and positive culture have a significant efficiency and performance heights. The

competitors has to face real trouble to compete them in the traits, the cultural organizations

are adopting. In the futuristic point of view, they also believe that the age is not so far when

organizational success or failure will be determine by the cultural values of that specific

organization. In the support of these arguments the Sadri and Lees (2001) states that whenever an

organization has a positive culture, it provides a range of benefits to it. And these benefits provide the

organization a leading competitive edge over the other organizations. On the parallel scenario, they

also warned us about the negative culture. As the positive culture has the positive impact, similarly

the negative culture has a negative impact on the organizational performance. This negative culture

can harm in various different ways. For example, it can take away the firm from the current trends,

needs and the strategic requirements. So the flexibility in the organizational culture can be harmed

badly and in a result you have to face drastic consequences in the future industry. Similarly corporate

culture also reduces many factors that can be leading role for the organizational performance.

According to a research the findings clearly shows that a constructive organizational culture reduces

the job stress and other psychological issues in a working environment. Similarly the organizations

with constructive cultures do not face the problems like the role conflict, ambiguity and job stressors.

Through the elimination of these factors, the job performance, job satisfaction and the employee

commitment get strengthened and ultimately it provides a path towards organization success (Pool,

2000)

Through this literature review, it comes to our consideration that organizational culture plays a vital

role in the promotion and success of an organization. Similarly this is the organizational culture

develop the employees values, behaviours and attitudes in such a way that it increases job satisfaction,

organizational performance and strong commitment.



References

Trompenaars Alfons and Hampden – Turner, (1998), Riding the waves of the culture:

Understanding diversity in global business 2nd

edition, McGraw Hill, USA

Schein, E.H, (1985), Organizational Culture and Leadership, Jossey-Bass, CA.

Grant M, (2005), contemporary strategy analysis 5th

edition, Blackwell publishing,

UK

Kotter and Heskett, (1992), Corporate Culture and Performance, Free Press, New

York, USA.

Pool, S.W. (2000), “Organisational culture and its relationship between job tension in

measuring outcomes among business executives”, Journal of Management

Development, Vol. 19 No. 1, pp. 32-49.

Sadri, G. and Lees, B. (2001), “Developing corporate culture as a competitive

advantage”, Vol. 20, pg. 853-859

Van der Post, de Coning, and Smit, (1998), “The relationship between organisational

culture and financial performance: some South African evidence”, South African

Journal of Business Management, Vol. 29 No. 1, pp. 30-41.

Schwartz and Davis, (1981), “Matching corporate culture and business strategy”,

Organisational Dynamics, winter, pp. 30-48.

Rashid and Anantharaman, (1997), “A study of corporate culture strategy and

culture”, Malaysian Management Review, Vol. 32 September, pp. 25-29.

