The Influence of Corporate Culture on Organizational Performance

This essay delves into the significance of corporate culture within an organization, emphasizing its role in shaping employee behavior, ethical practices, and overall success. It defines corporate culture as the sum of behaviors and practices, influenced by founders and evolving over time, highlighting the importance of shared accountability, values, and a clear vision. The essay discusses how a strong corporate culture fosters ethical conduct and is closely linked to corporate governance, referencing the Australian Prudential Regulatory Authority's (APRA) oversight to ensure ethical compliance. By examining instances like the ANZ bank inquiry, the essay underscores the necessity of good governance principles and regulatory bodies in maintaining positive corporate culture, ultimately concluding that a robust corporate culture enhances an organization's reputation and ensures legal and ethical operations.

Running Head: CORPORATE CULTURE
Corporate culture
Name of the Student:
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Author Note

1CORPORATE CULTURE
According to Guiso, Sapienza and Zingales (2015) culture can be defined as a phenomenon
which surrounds every human being all the time and is created by a constant interaction with
others. The most general definition of corporate culture would be that it is the sum of behaviour
and practices of an organisation. Corporate culture at a basic level is found in small and big
decision making along with daily practices which have a tendency of perpetuating themselves.
Although corporate culture may go unnoticed by the employees the presence of a strong
corporate culture is essential for the proper growth of an organisation. The founders of an
organisation naturally influence the corporate culture by indulging into proper Hiring and policy
making decisions as well as their own communication and behavioural values.One of the most
distinct feature of corporate culture is that as the organisation grows old the culture within it is
allowed to change and evolve.
However corporate culture and employee engagement are too critical components to be left alone
to evolutionary forces. Employee engagement can only be driven when the managers of an
organisation intentionally shape and cultivate high-performance corporate culture. There are
three components which need to be taken into consideration while enforcing corporate culture
within an organisation. These components include shared accountability, shared organisational
values and a compelling and clear corporate vision (Hickman and Silva 2018).
The corporate culture within an organisation is responsible for the way in which the employees
of the organisation interact within themselves and the society. As a corporate culture of an
organisation encompasses behaviours and values which have an impact on psychological and
social environment of a company way to represent collective belief, values and principles of
those who are associated with organisation. There for the implementation or enforcement of
Corporate culture within an organisation can be triggered by creating our environment where

2CORPORATE CULTURE
values and good behaviour is respected. Creating an obligation for those associated with an
organisation to act ethically while dealing with each other or any third party will ensure that a
strong corporate culture is created within the company. Ethics and values can we incorporated
into the system in various ways. They can either be enforced forcefully by the implementations
of rules and regulations which expressly prohibited any conduct which may be regarded as
unethical or valueless conduct on behaviour or high moral values and ethical behaviour can be
depicted by the managers of an organisation who can lead as an example before the other
employees. When the employees get to know that their supervisors are very strict and cautious
about ethical compliance and good behaviour they would also follow the footsteps which would
lead to enhancement of the corporate culture. The term corporate culture is closely associated
with corporate governance. Positive corporate governance within the organisation evidently
results in a positive corporate culture. Corporate governance guidelines are those rules which
helps the managers of organisations to discharge their obligations with dignity and integrity and
giving respect to ethical principles. Where good corporate governance can be seen within an
organisation it evidently leads to enhanced positive corporate culture (Zingales and Poterba
2015).
The Australian Prudential Regulatory Authority has the role of overseeing the functioning of
organisations like credit unions, Overseas Banks, insurance companies and business societies. It
conducts frequent enquiry into any reported misconduct on the part of the organisations
operating in Australia. One of the major enquiries which had been conducted by this authority
has been in relation to ANZ bank in Australia. In this situation the regulatory body along with
Australian securities and investment Commission at identified that the bank was indulging in
unconscionable behaviour by rigging the bank bill swap reference rate. The authorities insurance

3CORPORATE CULTURE
that good governance principles followed by organisations across Australia and their activities
are not contrary to public interest.
Therefore from the above discussion it can be concluded that corporate culture is a major part of
organisational success. A strong corporate culture being present within an organisation ensures
that its functions legally and ethically which enhances its reputation in the society. Corporate
culture can be implemented by following good governance practices for example those which
have been provided by Australian securities exchange. The APRA constantly regulate the
behaviours of organisations in Australia to ensure that positive corporate culture is implemented
within them.

4CORPORATE CULTURE
References
"Pages - Australian Prudential Regulation Authority". Apra.Gov.Au, 2018,
http://www.apra.gov.au/Pages/default.aspx.Accessed 21 May 2018.
1(11), 4690-4698.
Guiso, L., Sapienza, P. and Zingales, L., 2015. The value of corporate culture. Journal of
Financial Economics, 117(1), pp.60-76.
Hickman, C.R. and Silva, M.A., 2018. Creating excellence: Managing corporate culture,
strategy, and change in the new age. Routledge.
Zingales, L. and Poterba, J., 2015. Causes and Consequences of Corporate Culture. NBER Books.