Report on the Impact of Organizational Culture on Performance

This report delves into the significant impact of organizational culture on employee performance and overall organizational outcomes. It begins with an executive summary highlighting the importance of culture in driving organizational success. The report utilizes a literature review methodology to assess the dimensions of organizational culture, including power distance, individualism, and masculinity, and their relationship to organizational performance. It examines how strong organizational cultures foster employee commitment and align objectives, leading to improved performance levels. The report also explores the connection between organizational culture and performance, emphasizing the importance of positive workplace environments and the detrimental effects of weak or negative cultures. By analyzing various dimensions and their impact, the report provides insights into how organizations can leverage culture to enhance employee behavior, achieve strategic goals, and gain a competitive advantage.

Running head: IMPACT OF ORGANIZATIONAL CULTURE
IMPACT OF ORGANIZATIONAL CULTURE
Name of the Student
Name of the University
Authors Note

1IMPACT OF ORGANIZATIONAL CULTURE
Executive Summary
Culture has a great influence on the organizational performance all over the world. The
main aim of the report is to identify the impact of organizational culture and its relation with the
employee’s performance. Literature review methodology is adopted to assess organizational
culture and its impact on employees and process. The objectives and goal of the organization is
to increase the performance level through strategies designed. Strong organizational culture
helped in improving the performance level of the organization. Moreover, the report focused on
the interrelation between the organizational culture and performance. Positive corporate culture
provides competitive advantages to the firm.

2IMPACT OF ORGANIZATIONAL CULTURE
Table of Contents
Introduction:....................................................................................................................................3
Organizational Culture.....................................................................................................................3
Dimensions of Organizational Culture:...........................................................................................5
Organizational Performance:...........................................................................................................7
Impact of Organizational Culture:...................................................................................................7
Connection of Organizational Culture with Organizational Performance:.....................................9
Conclusion:....................................................................................................................................10
References:....................................................................................................................................12

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Introduction:
Organizational development is crucial for the improvement of firm’s productivity and
profitability. The development of organization is caused due to certain factors, which helps in the
improvement of organizational culture. Establishment of effective culture within the organization
leads to the improvement of employee’s behavior and performances.
The employee performance is considered to be the main backbone of the organization
that helps in effective development. Employee’s loyalty mostly relies on the awareness and
knowledge of the culture existing within the organization. According to Campbell and Göritz,
(2014) organizational culture was initially identified by Administrative science quarterly. The
norms and values of the employees are set in accord to management culture and practices. This
awareness about the quality leads to the improvement of employee and organizational
development.
Organizational Culture
Various attributes of culture is arranged according to the attitudes and norms that helps
the individuals to differentiate an organization from other. The success of an organization
depends upon its established values. This approach makes the firm effective and achieves its
desired goals in the long-run. The set of behavior, norms, beliefs and values makes the culture of
the organization more effective. The knowledge about the corporate culture is obtained through
beliefs and understanding through large groups.
According to Fu and Deshpande, (2014) culture is known as the mixture of beliefs,
values, behavior and communications that provides guidance to its people. Culture is generated

4IMPACT OF ORGANIZATIONAL CULTURE
from sharing in the process of learning, which is based upon allocation of resources in a
systematic manner. Multifaceted set of values and beliefs helps in presenting different level of
culture within the organization in an effective manner. Organizational culture helps in creating
the overall effectiveness of the management. As per Tong, Tak and Wong, (2015) business
decisions are made in a more improved and systematic manner due to effective organizational
culture. Culture within an organization depends upon the national and international culture
differentiation that arises in culture management.
In the recent times, organizational culture is interrelated to management. The most vital
factor that creates positive culture management includes integration of high standard of corporate
culture and structural stability (Ramdhani, Ramdhani & Ainissyifa, 2017). Organizational culture
is varied due to different ethics, backgrounds and racial differences that create positive or
negative impacts on the performance. The attraction of management norms, beliefs and values
has strong impact upon the sustainability and performance. According to Hameed et al., (2014)
employees’ behavior affects the management of organizational culture and sustainable
performance level in the management. This further leads to the attainment of firm’s profitability.
Various kind of culture can be ascertained in the following ways:
Counter culture
The beliefs and values of the organization culture that is shared among the various
departments of an organization leads to gaining counter culture. The organizational performance
of the firm is based on the contribution for strong culture that leads to creating strong association
between the management and performance (Hornstein, 2015).
Sub culture

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Subculture is defined as organizational segments with varied sets of belief and norms as
per the job requirements, geographical areas and job requirements (Jalal, 2017). Employee
commitment towards the firms is completely based on the perceptions of the employees that
affect their organizational culture.
Strong culture
The similar types of beliefs and values that employees hold within the organization is
known as strong culture. When the employee embraces higher quality of culture then the values
and beliefs of the firm is considered to be strong. Strong culture also reduces the existing gap
that would affect employee relationship. The organizational rules should be considered with
utmost importance by the employees. The policies, objectives and procedures designed by top-
level management should influence the employee’s behavior to gain competitive advantage.
Weak culture
According to Bortolotti, Boscari and Danese, (2015) such organization has loosely knit
cultures that requires pushing the attitudes, beliefs and thoughts of an individual to be highly
innovative. The diversity between organizational culture and personal objectives leads to
creation of such management of procedures and rules to create a perfect association between
them.
Dimensions of Organizational Culture:
In order to ascertain the culture present in an organization, it is relevant to analyze the
different organizational dimensions. As per Hofstede’s, the organizational cultural dimensions
can be identified by evaluating the factors.

6IMPACT OF ORGANIZATIONAL CULTURE
Power Distance: this is known as the degree of management and employee behavior,
which is completely set upon the relationship between informal and formal set of planning
action.
Individualism: this dimension differentiates the self-interest and organizational interest
existing within the organization.
Uncertainty avoidance: the ambiguity and uncertainty that is entirely based on tolerance
facilitates in mitigating the willingness of the people (Liden et al., 2015).
Masculinity: this dimension showcases the avoidance of promotion and caring instead of
demonstrating success based on ambition and challenges.
The organizational culture is affects the personality and performances of the employees
within the organization. In addition to this dimensions, there are two other factors that affects the
employee’s behavior. They are identified as affective and individual while the other one as self
transcendence and self enhancements. The standards help in displaying a contractual relationship
between both the professional and personal life (Firuzjaeyan, Firuzjaeyan & Sadeghi, 2015).
Such standards describe the perfect association between management and performance.
moreover, the various different dimensions of culture has also been known as universalism
versus particularize, emotional versus neutral, specific verses diffuse, achievement versus
ascription, communication versus individualism and attitude towards environment and attitude to
time. The model presented by Hofstede’s has seven dimensions that provides in presenting an
effective relationship between various set of values and norms.

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Organizational Performance:
Performance is achieved when the employees fulfils the desired mission set by the
organization (Lonial & Carter, 2015). Various researchers have perceived performance
differently but most of the organization has related performance as the measurement of
effectiveness of individual towards the organizational goals. As per Jalal (2017) the job of the
employees is to build degree of achievement for a particular mission and target that defines the
level of performances. According to certain researchers, different thoughts, beliefs and attitudes
has been identified as the measurement of output and input efficiency, which leads to
transactional association.
Organizational strategies should be designed in such a manner that the goals and
objectives of the organization should be achieved to create effective organizational performance.
As mentioned by Miraglia and Wei, (2017) equity based upon high level of returns leads to
effective management of resources so that the organizational performance improves.
Impact of Organizational Culture:
Organizational culture provides the framework required for the positive and better
working environment. As suggested by Liden et al., (2015), depending upon the culture’s type
created within the management leads to have a negative or positive impact on the employee’s
performance. in an organizational culture, where employees are regarded as the vital part of
organizational growth culture leads to fosters the commitment of employees towards the
organization.
Positive corporate culture leads to aligning the objectives and goals of the organization. It
is also responsible for the overall organizational well-being. The efforts of the employees are

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appreciated in an organization with effective corporate culture. Employees have immense
satisfaction towards their job. In such kind of organizational culture, the employees are
committed to achieve the desired goals. This further creates a positive impact on the overall
performance of the employees.
According to Abbas, Hayat and Nisar, (2017) an organization can never be complete
without the presence of organizational culture, which shows its significance. Organizational
includes flexible learning for environment through which environment changes can be easily
made. This also includes workforce that is highly responsible, hardworking, powerful, friendly
and well-inspired. Chatterjee, Pereira and Bates, (2018) defined culture as the important life
direction for a complete society. Moreover, organizational culture has been documented as a
vital aspect for bringing the success in the organization and desired performances outcomes.
Organizational culture is a vital factor for the success of an organization. The main
danger of weak organizational culture includes low employee motivation, frauds and bad
behavior of the employees within the workplace. As suggested by Chadwick and Raver (2015)
the companies should focus more on organizational culture existing in their workplace to
flourish. Organization culture generally varies from one firm to another that might be difficult to
improve. In large organizations, it is often seen that employees at lowest level is not properly
managed or controlled by the executive teams. Thus, they do not feel great sense of
organizational commitment and does not really connected with the organization and role in the
company.

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Connection of Organizational Culture with Organizational Performance:
The performance and culture is interrelated based on the perfect associations between the
business processes (Lonial & Carter, 2015). Various researches have been made to obtain the
impact of culture in the organization. In an organization where the top level managements are not
facilitators but taskmasters, then it create a negative work culture. The employees in such
organization always live in distrust and fear. The organization with negative culture creates an
adverse impact on the organizational performance. When the top-level managements are not
involved in achieving the organizational goals the organization is bound to perform poorly. The
lower level management is unable to understand the assigned tasks and hence is unable to
achieve the desired goal. When in an organization there is no cooperation between the
employees, entire organization performance is affected.
Organizational culture greatly affects the performances of the employees. Henceforth it is
important that organizations eliminate the entire negative or favorable factors that slowdown the
performances of employees. This fosters a positive organizational culture or positive workplace
environment. Organizational culture defines the process through which employees interact with
each and complete their assigned tasks The culture paradigm consists various values, rituals,
symbols and beliefs that govern the individuals operating style within an organization (Miraglia
& Wei, 2017). Moreover, the culture of the company provides a right direction to the company
and also binds the workforce together. In the time of changes, the main challenges of the
organization can arise due to change in the company’s culture. The employees become
accustomed to a specified way of doing things.
Organizational cultures have various impacts on motivation levels and employee
performance. More often it is viewed that employees work harder so that organizational goals

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can be achieved. Different cultures operating in an organization could also impact the
performance of the employees. As mentioned by Miraglia and Wei, (2017) the organization
maintains a reserved culture such as, talk when necessary and employees should work
accordingly. Moreover, if the organization culture is different in one area, like the sales team is
allowed to be outspoken and socially active then the organization can experience rivalries among
other areas. Therefore if the culture varies in different areas within the management, the
performance of the employees can be affected.
It is highly significant for the organization to structure its recruitment process
accordingly. Employees should be hired and engaged only if they share same values and beliefs
that constitutes the culture of the organization. Organization should also ensure that corporate
culture should be aligned with the performance management system (Lonial & Carter, 2015).
When in the organization, if management system and culture are not aligned, management
should redirect them. This measure would result in achieving the goals of the organization.
Conclusion:
Organizational culture facilitates in internalizing joint relationship, which leads to
effectively management of the organizational processes. The culture and productivity that exist
within the organization helps in performance improvement. The positive relation between the
performance and culture helps in improving the efficiency and productivity of the overall
organization. Job performances of the employees also generate strong impact on the firm’s
culture as it enhances productivity.
The values and norms of company that is based upon different culture strongly influence
the work force management. Organizational culture facilities in providing and improving the

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competitive edge. The group efficiency and employee commitment also affects culture based on
organizational sustainability. Therefore, the power and nature of organizational culture strongly
influences the effectiveness and sustainability of businesses.