Research Project: Organizational Culture and Firm Performance

This research project investigates the correlation between organizational culture and firm performance, aiming to determine how a positive and healthy organizational culture can contribute to improved firm outcomes. The study employs a positivism philosophy, deductive approach, descriptive design, and survey research strategy, collecting primary data from 30 employees using probability sampling. The research explores the impact of leadership, employee engagement, and company policies on organizational culture and, consequently, on firm performance. The analysis of the survey data reveals that employees perceive a positive correlation between organizational culture and firm performance, with motivated, committed, and engaged employees contributing to the effective use of organizational resources and the achievement of goals. The project includes an introduction, literature review, methodology, data analysis, and conclusion with recommendations, providing a comprehensive overview of the topic and its implications.

Running head: RESEARCH PROJECT
The Correlation between Organizational Culture and Firm Performance
Name of the Student:
Name of the University:
Author’s Note:

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Acknowledgement
Thank you to all of those who have helped listened and encouraged me throughout this study. I
am indebted to my supervisor ……………………. whose guidance, advice and patience have
been immeasurable. My sincere thanks to all members of the…………… [Mention your
university/college name], both staff and students, whose continuous support have made this
thesis possible.
I would like to thank all of the participants in the study: students, teachers and Local Education
Authorities, for the time and help given throughout. Without their participation, this research
would not have been possible. In this context, I am also thankful to them, whose research work
helped me to execute this paper well.
Finally, I thank my family, without whom this thesis would not have been started or completed!
Your encouragement and support have never faltered; thank you.

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Abstract
The current research aims towards determining the correlation between organizational culture
and firm performance. The ultimate purpose of the organizations is to maximize profit, generate
revenues and gain competitive advantages. Challenges arise constantly when it comes to
establishing positive and healthy organizational culture that ensures improved firm performance.
Support and coordination from the ones within the organization followed by lack of transparency
are major challenges that arise when it comes to building appropriate organizational culture.
Positivism philosophy, deductive approach, descriptive design and survey research strategy has
been used. Hence, 30 employees has been selected using probability sampling technique for
surveying them in order to know how positive organizational culture impacts the performance of
the firm. As a result, primary data collection process and quantitative data analysis technique has
been used where the response of the employees is interpreted in percentages and the presented
using bar graphs and charts.
From the data analysis, it can be said that the employees agree that organizational culture is
correlated with firm performance. The employees believe that positive and healthy culture within
the organization has been effective for them. The employees have felt motivated, committed and
highly engaged towards their roles and responsibilities if the culture within the organization is
positive. The existing resources of the organizations are also used effectively and contribute in
achieving the organizational goals and objectives successfully.

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Table of Contents
Chapter 1: Introduction....................................................................................................................7
1.0 Overview...........................................................................................................................7
1.1 Problem statement.................................................................................................................7
1.2 Research aim..........................................................................................................................7
1.3 Research objectives...............................................................................................................7
1.4 Research questions.................................................................................................................8
1.5 Research hypotheses..............................................................................................................8
1.6 Research rationale..................................................................................................................8
1.7 Structure of the dissertation...................................................................................................9
1.8 Summary................................................................................................................................9
Chapter 2: Literature review..........................................................................................................10
2.0 Overview..............................................................................................................................10
2.1 Conceptual framework.........................................................................................................10
2.2 Organizational culture.........................................................................................................10
2.3 Factors affecting organizational culture..............................................................................11
2.4 Benefits and challenges of healthy organizational culture..................................................12
2.5 Firm performance................................................................................................................13
2.6 Factors affecting firm performance.....................................................................................13

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2.7 Impact of organizational culture on firm performance........................................................14
2.8 Summary..............................................................................................................................14
Chapter 3: Research methodology.................................................................................................15
3.0 Overview..............................................................................................................................15
3.1 Research outline...................................................................................................................15
3.2 Research philosophy............................................................................................................15
3.3 Research approach...............................................................................................................15
3.4 Research design...................................................................................................................16
3.5 Research strategy.................................................................................................................16
3.6 Sampling technique and sample size...................................................................................16
3.7 Data collection process........................................................................................................17
3.8 Data analysis technique.......................................................................................................17
3.9 Ethical considerations..........................................................................................................17
3.10 Accessibility issues............................................................................................................17
3.11 Summary............................................................................................................................17
Chapter 4: Data analysis and discussions......................................................................................18
4.0 Overview..............................................................................................................................18
4.1 Findings and interpretations................................................................................................19
4.1.1 Demographic questions................................................................................................19
4.1.2 Objective questions.......................................................................................................20

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4.2 Summary..............................................................................................................................29
Chapter 5: Conclusion and recommendations...........................................................................30
5.0 Conclusion...........................................................................................................................30
5.1 Linking with objectives.......................................................................................................30
5.2 Recommendations................................................................................................................32
5.3 Future scope of the study.....................................................................................................32
References......................................................................................................................................34
Appendix 1.....................................................................................................................................38
Survey questionnaire.................................................................................................................38

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List of Figures
Figure 1: Conceptual framework...................................................................................................10
Figure 2: Demographics................................................................................................................19
Figure 3: Organizational culture impact on employees.................................................................20
Figure 4: Leadership and organizational culture...........................................................................21
Figure 5: Policies and rules and organizational culture.................................................................22
Figure 6: Stress free environment and organizational culture.......................................................23
Figure 7: Employee commitment and engagement and organizational culture............................23
Figure 8: Benefits of positive organizational culture....................................................................24
Figure 9: Benefits of improved performance.................................................................................25
Figure 10: Motivation and improved firm performance................................................................26
Figure 11: Effective communication and firm performance.........................................................27
Figure 12: Organization culture and its affect on performance of firms.......................................27
Figure 13: Correlation between organizational culture and firm performance.............................28

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Chapter 1: Introduction
1.0 Overview
The ultimate purpose of the organizations is to maximize profit, generate revenues and gain
competitive advantages. However, for a firm to perform their best several factors contribute to
make it possible and organizational culture is one of them. Positive and healthy organizational
culture develops a stress free environment that influences and encourages individual to show
better engagement and participation. As a result, the firms are able to deliver best quality work
on time with minimal or no compromise at all (Alvesson and Sveninggsson 2015).
1.1 Problem statement
In spite of the significance of organizational culture, it is difficult to achieve. Challenges
arise constantly when it comes to establishing positive and healthy organizational culture that
ensures improved firm performance. Support and coordination from the ones within the
organization followed by lack of transparency are major challenges that arise when it comes to
building appropriate organizational culture that imposes negative impact and the performance of
the firm is compromised largely (Bortolotti, Boscari and Danese 2015).
1.2 Research aim
The current research aims towards determining the correlation between organizational
culture and firm performance.
1.3 Research objectives
The objectives of the research are:
 To understand the concept of organizational culture and firm performance

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 To critically analyse the factors affecting organizational culture those affect the
performance of the firm
 To assess the relationship between organizational culture and firm performance
 To provide suitable recommendations for improving the existing culture within the
organization
1.4 Research questions
The questions of the research are:
 What do you mean by organizational culture and firm performance?
 What are the factors affecting organizational culture those affect the performance of the
firm?
 What is the relationship between organizational culture and firm performance?
 What are the suitable recommendations for improving the existing culture within the
organization?
1.5 Research hypotheses
The hypotheses of the research are:
H0: There is no relationship between organizational culture and firm performance
H1: There is relationship between organizational culture and firm performance
1.6 Research rationale
Working on this research project is significant because the project helps in investigating
and assessing the relationship between organizational culture and firm performance. A firm
highlights improved performance when the existing culture within the organization is positive

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and healthy. This investigation will help to know whether organizational culture is one of the
factors that contribute and influences improved firm performance thereby, determining its
importance for any firm (Chang and Lin 2015).
1.7 Structure of the dissertation
The overall structure of the research project is divided into five major chapters. The five
chapters include introduction, literature review, research methodology, data analysis and
discussions and conclusion and recommendations. Each of the chapters need to be developed
chronologically, as this ensures the flow in maintained and the ultimate purpose of the research is
served.
1.8 Summary
Hence, in this chapter, it can be summarized that adequate background information has
been provided that helped in identifying the problem of the ongoing research that lead to the
formulation of research aim, objectives and hypotheses. This chapter is successful is laying the
overall foundation of the research project.

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Organizational culture
Leadership
Employees
Policies and practices
Size of the organization Firm performance
Chapter 2: Literature review
2.0 Overview
The chapter is developed with the purpose of reviewing past researches and studies about
organizational culture and firm performance and critically analyzes them accordingly for using
them in developing the current research project with quality and enriched data.
2.1 Conceptual framework
Figure 1: Conceptual framework
(Source: Created by the Author)
2.2 Organizational culture
Several past studies have been conducted on organizational culture because it is found to
have an impact on the performance of the organization. As mentioned by Chang and Lin (2015),
the behaviors and values of the firm that encompasses to the development of unique

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psychological and unique atmosphere of the business are termed as organizational culture.
However, as criticized by Korner et al. (2015), many consider organizational culture as the
values, beliefs, assumptions and methods of interacting with a particular organization. Though
the definitions of organizational culture vary, the ultimate purpose is to develop and establish a
healthy and positive culture within the organization so that the best can be given for own benefits
in the business sectors.
2.3 Factors affecting organizational culture
Leadership is one of the factors that influence organizational culture because appropriate
leadership style facilitates the development of healthy work atmosphere and influences positivity
and coherency among the employees. Additionally, leadership also mitigates conflicts and
develops a stress free culture that brings the best out of the employees (Walker and Aritz 2015).
However, on the contrary, one leadership style is not suitable of all organizations and hence,
identifying the most appropriate one is often challenging (Ashikali and Groenevold 2015).
Another factor that influences the organizational culture is the employees and the reward system
the organization have for the employees.
As mentioned by Hartnell et al. (2016), policies and rules within the organizations need
to be encouraging and motivating for the employees. This creates positivity because the
employees are appreciated and acknowledgement for the effort they put in towards achieving the
goals and objectives. Hence, if the organizational policies are more inclined and focused towards
penalization rather than appreciation, then a negative and harmful organizational culture is
created that affects the overall firm. However, as argued by Shim, Jo and Hoover (2015), even if
the policies and rules are encouraging, some employees fail to give their best no matter what that
compromises the culture of the organization.