Impact of Organizational Culture on Organizational Performance

People and Organizations: Organizational Culture, Lecture 9

What is Culture?

Culture is arrangement of different attributes that express an organization and differentiate the firm from another one (Forehand and von Gilmer, 1964). According to Hofstede (1980), culture is the collective thinking of minds that create a difference between the members of one group from another. As per Schein (1990), defines culture is a set of different values and behaviors that may be considered to guide success. According to the Kotter and Heskett (1992), culture means a fairly established set of beliefs, behaviors, and values of society contain generally. In simple words, we can understand that culture is gained knowledge, explanations, values, beliefs, communication, and behaviors of a large group of people, at the same time and same place.

Characteristics of organizational culture:

 According to Dasanayaka and Mahakalanda (2008), maximizing employee’s values are considered as rational assets that required culture to support their logical participation both for individual and organizational learning, new knowledge formation and readiness to share with others. Schein (1995), tells that organizational culture is very important today as compared with the past.

Impact of organizational culture on performance:

According to Denison (1984), used data from 34 American firms on cultural performance over a period of five years and scrutinized the characteristics of organizational culture and tracked the performance over time in these firms. As per Reichers and Schneider (1990), stated that culture researchers have committed various studies to the definitions of culture, relatively few researchers have been contributed in culture and performance research. The only reason for doing this was the complexity in the operational concept of the culture construct.

According to Kotter and Heskett (1992), investigate the relationship between long-term organizational performance and economic performance across more than 200 organizations. More ever, being one of the most important and most conscientious research efforts on this subject, the study has arranged three vital contributions.

1. Relationship between culture and performance established in their research is forceful.

2. The writer gives an important combination of theoretical point of view regarding the  

    nature & scope of culture.

3.They sketch strong associations between culture, management practices and 

    performance.

References.

1.  Forehand, G. A. and Von Gilmer, (1964). Environmental Variations in Studies of Organizational Behavior. Psychological Bulletin, 62, 361-382.

2.    Hofstede, G. (1980). Culture’s Consequences, Sage London

3.    Schein, E. H. (1990). Organizational culture. American Psychologist, 43 (2), 109-119.

4.    Kotter, J. P. & Heskett, J. L. (1992). Corporate culture and performance. New York: Free Press.

5.    Dasanayake, S. W. S. B and Mahakalanda, I. (2008). A Literature Survey on Organizational Culture and Innovation. Global Business and Management Research, Boca Raton, Florida 539-550.

6.    Schein, E. H. (1995). Organizational culture. Campus Verlag, Frankfurt/New York.

7.    Denison, D.R. (1984). Bringing corporate culture to the bottom line. Organizational Dynamics, 13(2), 5-22.

8.    Reichers, A. and Schneider, B. (1990). Climate and culture: an evolution of constructs, in Schneider, B. (Ed.), Organizational Climate and Culture. Jossey-Bass, San Francisco, CA, 5- 39.