Organisational culture and organisational climate are two concepts that play an important role in organisations as far as performance is concerned.
Organisational culture represents the manner employees finish their tasks and collaborate with each other in an organisation. The cultural prototype is made up of the different values, symbols, beliefs and rituals that depict the operating style of the employees within an organisation. Corporate culture binds the workforce together and shows the order of the organisation. In times of organisational flux, the largest challenge for any organization is to modify its culture, as the people in it are already used to a certain way of accomplishing things.
Academics and HRM practitioners have spent the past two decades researching on the issue of corporate culture and finding the relationship between a company’s culture and its overall effectiveness and performance. The available literature and research on this topic has been largely experiential and it established a straightforward relationship between organisational culture and the effectiveness pf a company’s performance. These early studies can be traced back to 1983, in a study of organizational change by R.M. Kanter (The Change Masters, Innovation for Productivity in the American Corporation), whose research indicated how companies with progressive HR management practices outperformed those with less progressive practices. Furthermore in 1984, using survey-based measures, Daniel R. Denison (Corporate Culture and Organizational Effectiveness), exhibited that the full engagement, involvement and participation of the company’s employees can suggest strongly what the current and future financial performance of the company will be. Denison also pointed out that organisational culture can be seen as a necessary part of the process of change and that certain cultural traits can be used as predictors of an organization’s effectiveness and performance (Denison & Mishra, 1995).
To be able to exhibit the relationship between culture and effectiveness, four major cultural traits are going to be examined, namely, consistency, mission, adaptability and involvement. Consistency and involvement focus mainly on the organization’s internal composition and mission while adaptability and mission focus on the correlation between the organization and external environmental factors. However, despite the attention being given to organizational culture in both academic and business management literature over the past several decades, it continues to be an area that has not yet been fully researched and understood.
Organizational culture consists of shared beliefs and values established by the organization’s leaders and then communicated and reinforced through various methods, ultimately shaping employee perceptions, behaviours and understanding. Simply speaking, a company’s structure and design can be viewed as its body, and its culture as its soul. Because industries and situations vary significantly, it would be difficult and risky to propose that there is a “one size fits all” culture template that meets the needs of all organizations. Nonetheless, research does propose that if an organization’s culture is to improve its overall performance and effectiveness, its culture must be strong and provide a strategic competitive advantage and its beliefs and values must be widely shared and firmly upheld.
Organisations that maintain and develop a strong organizational culture can actually fulfill these benefits like shared understanding; a strong sense of identification; a shared understanding; improved mutual cooperation, enhanced trust and cooperation; lesser disagreements and more efficient decision-making processes; an informal control mechanism and helps assist employees in making sense of their behaviours by giving justification for behaviours.
Consequently, it is worth mentioning that regardless of whether or not significant research and supporting evidence exist to establish a definitive link between culture and effectiveness, valuing different viewpoints and styles as well as developing concrete ways to expedite organizational learning from differences can still turn out to be greatly beneficial in boosting organizational processes, procedures and structures (Society for Human Resource Management, 2012).
Organisational cultures have differing effects on employee performance and their levels of motivation. Usually, employees exert more effort to reach their organisational goals if they feel that they are a part of the corporate culture. However, if a company has varied cultures functioning in one setting, there is also an impact on the performance of the employees. For example, if the organisation imposes a “talk when necessary” culture which employees follow accordingly; if and when the organisation permits one of their departments to be socially active and outspoken, rivalries and resentment might fester in the organisation, thus, leading to the establishment of a rival culture within the same company – a presence that may affect the performance of the employees of the other departments within the organisation.
Organizations are therefore advised to structure their recruitment processes to attract and engage new employees with the same beliefs and values that serve as the foundation of an organisation’s culture. This cements the new employee’s assimilation with the company and further fortifies their corporate culture. Companies must also align their corporate culture with their performance management systems. If this is misaligned, management must redirect them so that employee behaviour results in the achievement of organizational goals (Davoren, J., 2016).
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