Organizational Culture and Its Impact on Employee Performance

This literature review discusses the concept of organizational culture, its importance in managing a company, its impact on employee performance, and the challenges faced in managing a good culture. Various studies and journals are cited to support the arguments presented.

Short Literature Review

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................3
Concept of organisational culture...............................................................................................3
Importance of managing culture of company.............................................................................3
Impact of managing the organizational culture over the performance of employees.................4
Challenges faced at time of managing good culture...................................................................6
REFERENCES................................................................................................................................7

MAIN BODY
Concept of organisational culture
According to Lubis and Hanum (2020) Organizational Culture (OC) is associated with
collection of values, expectation, practices, etc that helps in guiding & instructing members to
take crucial and relevant actions. There are several kinds of the benefits which can be attained by
having organizational culture in the process that involves increased retention and higher
productivity. With the help of the increased retention the firm can get the proper ability to
enhance engagement of employees so that better decision-making process can be achieved. On
the other side, Azeem and et.al., (202)1. OC is basically related with structure which indicates
the policies and practices which are required to be followed by workforce. There are few
limitations which are needed to be understood by firm so that depth study can be obtained. It has
poor communication which does not allow offering clear understanding that hamper the
motivational level of firm.
In the opinion of Salama (2018) organization culture is the process which defines the
way of behaving which is followed by the people working in company. There are few pros which
can be obtained by firm from having OC that involves enhanced company brand, increased
moral, clarity of goals, etc. These all permits the organization to gain better performance so that
desirable objective accomplishment can become possible. In contrast to this, Everett (2020) there
are few lacking areas which are obtained due to the organizational culture that comprises low
engagement, inconsistency, ineffective management of conflicts, etc.
Importance of managing culture of company
As per the views of Syakur and et.al., (2020) there are different kinds of roles which are
organizational culture that benefits the firm in the server distinct pattern. The one of the
significant reason behind considering the organizational culture important is having enhanced
brand engagement. This is helpful in covering greater knowledge and optimizing resources of the
company. It aids in declining the employee turnover which provides assistance in retaining
experienced people in firm to boost productivity. In contrast to this, Suryaningtyas and et.al.,
(2019) articulated that the major part of OC which assist enterprise to healthy working
environment that promotes full potential sharing among employees. It helps in meeting the

deadline in higher effective manner so that proper ability to meet market forces can become
possible.
According to Al-Musadieq and et.al., (2018) there are various crucial parts which is
positively affected due to having proper organizational culture. This involves having proper
consistency among the employees to derive quality performance by understanding core values of
the firm. It provides assistance in having higher motivation by ensuring personal development
along with the organizational growth. The better decision-making as well becomes possible
through building god working environment. On Contrast to this, Arif and Akram, (2018) the
crucial aspects which provides assistance to get stronger position by ensuring that proper team
collaboration can be received. Good working culture in the organization helps in increasing
satisfaction of employees so that better performance can be achieved.
Impact of managing the organizational culture over the performance of employees
In accordance to the views of Widiatmika and Darma (2018) the organization culture is
important for the proper management of business activities. This is pertaining to the fact that
organizational culture is very important to be managed because it involves collection of values
and expectation for working in team. The culture is being necessary for every company to
manage and maintain as it provides a base for better creation of environment. In case the
environment is good then this will be resulting in the proper management of each and every task
and this will improve the efficiency of business.
In support of this Yu and Wang (2018) comments that management of good culture
creates a positive impact over the working of employees. The reason behind this fact is that when
the working environment is good then this promotes positive working spirit and environment.
Hence, this positive working develops a good working capability among the employees and this
improves their working efficiency. This, in turn promotes good working environment where
every employees works in coordinated manner and promotes team work.
Along with this Aziz, Sumantoro and Maria (2019) states that another impact which is
being created by maintaining good culture is increase in productivity of company. the reason
behind this fact is that when the culture is coordinated and better than this will improve the
working efficiency. The reason behind this fact is that when there is proper guidance and culture
is maintained then this improves the working efficiency of employees. Resultantly when
employees work in better manner then it will increase the working of overall company. This in

turn promotes good working environment and it also motivates other people and they work in
better and effective manner.
In against of this Amina and et.al., (2021) argues that impact of organizational culture
over performance is that it increases the sense of belongingness among the employees. The
reason behind this fact is that when the culture of company is supporting then this develops a
feeling of belongingness and connectivity within the employees. Hence, employees feel that they
are valuable to the company and this motivates the employee and they perform their role and
responsibilities in better and effective manner.
On the contradictory note, Impact of Organizational Culture on Employee Performance,
(2019) criticizes the fact that good organizational culture promotes sharing of shared values and
beliefs which promotes positive working environment. Hence, for this it is essential that
company manages a good culture within the company so that working can be managed in proper
and effective manner. The reason underlying this fact is that when the working environment of
company will be improved then at that time employees will be feeling good and they will work
in better and effective manner.
In addition to this, Paais and Pattiruhu (2020) states that the effective management of
organizational culture positively affects the performance of company and employees as well. The
reason underlying this fact is that effective management of culture provides a synchronized way
of working and has clearly defined goals and responsibilities. Hence, as a result of this, the
working efficiency of the employees will be improved and this will result in attainment of
objectives of business.
Further Meng and Berger (2019) states that for the management of culture there are
different aspects to be followed. These dimensions involve the variables like power distance,
individualism, masculinity and uncertainty avoidance. In case all these aspects are being
managed in proper condition then this affects the working efficiency of the company. The reason
underlying this fact is that when the power is decentralised then this affects the working in
positive way. This is pertaining to the fact that when the power will be given to all then this will
create a good and cordial environment. Hence, as a result of this, the working efficiency of the
company will be improved.
Fitria (2018) also stated that when the culture is maintained in proper manner then this
results in effective attainment of the business objectives and goals. The reason underlying this

reason is that when the working of the company is well coordinated and managed in proper
manner then this will be working in better and effective manner. Hence, the use of good culture
creates a good rapport between employees and management and company. This in turn result in
effective attainment of goals and objectives of the business.
Challenges faced at time of managing good culture
As per the views of Nuryanto and et.al., (2020) there are certain challenges which affect
the working of the company to a great extent. This is because of the reason that when the
company will not be capable of managing a good culture then this will be affecting the working
efficiency to a great extent. The most common challenge faced by company in managing the
culture is the diverse need of every employee. The reason underlying this fact is that there are
different types of employees working and it is not necessary that they like the same type of
culture. This in turn will affect the working efficiency of the company and capabilities of
company as well.
In against of this Al Khajeh (2018) argues that another challenge faced by the company is
poor communication. This is pertaining to the fact that when the culture is being created then
employees come from diverse culture. Hence, after this, there might be changes taking place in
the communication level and this can affect the working efficiency of employees. In addition to
this, it might be possible that the working of company can create miscommunication within the
company and its operations. Hence, this will create a negative image over the working efficiency
of employees. This is because of the reason that when communication will not be clear then this
will be affecting the interest of employees in company.

REFERENCES
Books and Journals
Al Khajeh, E. H., 2018. Impact of leadership styles on organizational performance. Journal of
Human Resources Management Research. 2018. pp.1-10.
Al-Musadieq, M and et.al., 2018. The mediating effect of work motivation on the influence of
job design and organizational culture against HR performance. Journal of Management
Development.
Amina, A., and et.al., 2021. The Effect of Leader Mindfulness on Employee Job Performance:
Investigating the Mediating and Moderating Role of Leader-Member Exchange and
Organization Culture. Journal of behavioral Sciences. 31(2). pp.138-165.
Arif, S. and Akram, A., 2018. Transformational leadership and organizational performance: the
mediating role of organizational innovation. SEISENSE Journal of Management. 1(3).
pp.59-75.
Azeem, M. and et.al., 2021. Expanding competitive advantage through organizational culture,
knowledge sharing and organizational innovation. Technology in Society. 66 p.101635.
Aziz, A. R., Sumantoro, I. B. and Maria, D., 2019. Total Quality Management of micro, small
and medium enterprises (MSMES), and the impact to organizational culture and
performance: emerging country case. Polish Journal of Management Studies. 19.
Everett, J.L., 2020. Organizational culture and ethnoecology in public relations theory and
practice. In Public relations research annual (pp. 235-252). Routledge.
Fitria, H., 2018. The influence of organizational culture and trust through the teacher
performance in the private secondary school in Palembang. International Journal of
Scientific & Technology Research. 7(7). pp.82-86.
Lubis, F.R. and Hanum, F., 2020, December. Organizational culture. In 2nd Yogyakarta
international conference on educational management/administration and pedagogy
(YICEMAP 2019). Atlantis Press (pp. 88-91).
Meng, J. and Berger, B. K., 2019. The impact of organizational culture and leadership
performance on PR professionals’ job satisfaction: Testing the joint mediating effects of
engagement and trust. Public Relations Review. 45(1). pp.64-75.
Nuryanto, U. W., and et.al., 2020. The Impact of Social Capital and Organizational Culture on
Improving Organizational Performance. International Review of Management and
Marketing. 10(3). p.93.
Paais, M. and Pattiruhu, J. R., 2020. Effect of motivation, leadership, and organizational culture
on satisfaction and employee performance. The Journal of Asian Finance, Economics, and
Business. 7(8). pp.577-588.
Salama, I.K.Y., 2018. The Relationship Between Organizational Culture and Administrative
Creativity in Universities. European Scientific Journal. 14(4). p.146.
Suryaningtyas, D. and et.al., 2019. Organizational resilience and organizational performance:
examining the mediating roles of resilient leadership and organizational culture. Academy
of Strategic Management Journal. 18(2). pp.1-7.
Syakur, A. and et.al., 2020. Sustainability of Communication, Organizational Culture,
Cooperation, Trust and Leadership Style for Lecturer Commitments in Higher

Education. Budapest International Research and Critics Institute-Journal (BIRCI-
Journal). 3(2). pp.1325-1335.
Widiatmika, P. H. and Darma, G. S., 2018. Good Corporate Governance, Job Motivation,
Organization Culture Which Impact Company Financial Performance. Jurnal Manajemen
Bisnis. 15(3). pp.82-99.
Yu, V. S. O. and Wang, Y., 2018. THE INFLUENCE OF ORGANIZATION CULTURE ON
MIDDLE-LEVEL MANAGERS'CONTEXTUAL PERFORMANCE WITH
COMMITMENT AS A MEDIATING VARIABLE. Perspectives of Innovations,
Economics and Business. 18(2). pp.58-71.
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