Organizational Culture and Its Impact on Business Success

Running Head: Business and Culture
Literature review: Business and Culture

Business and Culture 1
Business culture is related to behaviour, ethics, etiquette and more. A business culture will
encompass as organisation’s values, visions, working style, beliefs and habits. Organizational
behaviour plays crucial role in terms of developing an effective social and psychological
business environment. This forms an effective business culture and some of the factors which are
included in an effective business culture are product, market, history, type of employees,
language used in the workplace, workplace environment, etc. Culture of a country includes time,
beliefs of local people, morals and behaviour of people. This could be noticed with the help of
analysing the way of performing activities. Business is a set of activities of buying, selling, and
manufacturing of goods and services with the motive of earning certain amount of profit. As per
Khakhar & Rammal (2013), in performing these activities, organization is required to set certain
effective rules and regulations along with describing an effective way in order to accomplish
organizational desired goals and objectives. In this manner, culture plays vital role in
organizational success and it has a great impact over strategic direction of the business.
An effective cultural environment in business helps the organization to accomplish the tasks in
the most appropriate manner along with enhancing the chances of uplifting organizational
performance through attainment of desired goals and objectives. Culture in business is said to be
an effective aspect though which every function of the organization get influenced. From
managerial decisions to the every function of an organization is influenced through culture.
Bird & Mendenhall (2016) have conducted research on international business management and
they have found that over last 50 years, awareness and understanding level in relevance with
cross-cultural management has been increased. In today’s business environment, it has been
analysed that most of the companies are operating at international level and rest are planning to
expand their businesses at global level. Thus, in order to execute organizational functionalities in
an effective manner at global level, it is must to understand and evaluate the cultural difference
amongst the locations in which organization is operating or planning to operate. Schmiedel, vom
Brocke & Recker (2015) have described that it is necessary to understand the concept of
international management to understand the clear meaning of cross cultural difference. Cross-
cultural management is a significant aspect of international management. Global leadership is
another crucial aspect which described the importance of the cross-cultural difference and
management. Global leadership has four stages and each stage describes its importance that how

Business and Culture 2
the cross-cultural management play vital role in executing organizational functionalities in an
effective and appropriate manner.
Various young scholars such as Silvius, Smit & Driessen (2010) think that cross-cultural
management and organizational behaviour are followed by well-established enterprises but the
fact is that cross-cultural management and organizational behaviour have become the
requirement of every business enterprises that are operating its activities at international level. It
has been reviewed that analysed by some experienced business experts that adaptation of these
two concepts is become a crucial need for every organization in term of accomplishing the tasks
in an effective manner. Along with this, it has also been analysed that the Schmiedel, vom
Brocke & Recker (2015) and business experts have failed to determine the difference in
organizational behaviour theories as well as in the cross-cultural management. In relation with
this, it was observed that at the time of industrialisation, common form of technological
developments were manufacturing and management. Initially in 1960s to 1980s, primary focus in
relation with cross-cultural management was on management systems and over the
organizational behaviour. After this, following the period of Second World War, American firms
began to expand their businesses in international market with the objective of enhancing the
revenues and at that time, much attention was derived over uncovering how local cultural, legal,
business, and political systems operated. During this exercise, it was analysed that dominant
organizational structure reflects the international division. According to authors, this was due to
primary focus imposed by the American businesses over control function in order to expatriate
the managers sent from headquarters so as to train the local managers in the same manner
(Alvesson, 2012).
According to Hofstede (2006), During 1980 to 2000, it was observed by scholars that regional,
multi-domestic and MNCs were shifting towards adaptation of organizational structures so as to
perform the tasks in the structured manner. Main focus was imposed over the requirement of
training to expatriate managers in order to uplift their skills and development in order to build
social relationships and effective working behaviour. Further, Bird & Mendenhall (2016)
discussed about the impact of cross-cultural management over leadership-related issues on the
above discussed time periods. Adler (1983) researched and found three categories of cross-
cultural management research i.e. unicultural, intercultural and comparative. Amongst these