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Does a strong corporate culture enhance organisational performance?
Discuss, with reference to the key academic studies in this area.
Literature Review:
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“A fish discovers its needs for water only when it is no longer in it. Our own Culture is like
water to a fish. It sustains us. We live and breathe through it.”
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Trompenaars and Hampden-Turner (1998)
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An organizational or corporate culture has diverse perspective according to the discipline or
field in which that is working. For example there are different and unique cultures for
marketing, finance management or sociology disciplines. Culture is basically considered as
the pre-observed rules and regulations that the employees and the users have to follow.
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According to the schein (1985) corporate culture is, “a set of basic assumptions – invented,
discovered, or developed by a given group as it learns to cope with its problems of external
adaption and internal integration, that has worked well enough to be considered valid and
therefore, to be taught to new members as the correct way to perceive, think and feel in
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relation to those problems.” So this culture is a basic tool to manage the organizational
functions with its best ways. Management and the organizational performance correlate with
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the functions it has. That according to sachein is come into the action plan through culture
and basic assumptions by group of people (organization). Corporate culture is something that
is defined differently by many researchers and authors. But most of them believe in this
concept of corporate culture that is defined as the set of believes, values and behaviour
patterns that form the unique and identical recognition for the organizations and at the same
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level it shapes the behaviours of the employees in such way that is in best way to the
corporation. (Schein 1998, Van de post 1998). Some researches takes this concept and
practice in such a way like Grant (2005, Pg. 216) says that corporate culture is an effective
mechanism to have better control and coordination among the stockholders of the
organization. So getting control and cooperation is also another characteristic of corporate
culture along with core values, assumptions and behaviours.
The corporate culture works like the same way for the organization as the personality shows
the characteristics of an individual. This is considered as the behind the scene force that do
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not work formally but it is the force that gives a direction and meaningful purposes of the
existence of the organization. By utilizing this unifying force organizations develop the
behaviours of the individuals and the employees for the best interests of the organizations
(Van de Post et al, 1998).
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During last few decades the corporate culture has attain a significant for the organization due
to its potential impacts and effects for their success and the performance. The Van der Post et
al. (1998) states that organizational culture and performance have a strong relationship in
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between. It is also said that the developed norms, values and behaviours of the employees
under a certain culture lead them to have right direction towards the core organizational goals
and missions. In short we can say that the corporate culture is basically something that is
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aligned with the corporate strategy. It need to go with it roots to get the potential results and
achievements. Many of the researchers conclude this fact that corporate culture is related to
organisational strategy, especially when a particular strategy is needed to be implemented in
an organization (Schwartz and Davis 1981, Rashid and Anantharaman 1997). Some
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researchers examined the relationship between corporate culture and its performance. For
example, Van der Post et al. (1998) examined the organizations in South Africa on these two
constraints. He widely held a research over the relationship between financial performance
and corporate culture in the specific area. As a result he attained a result that the corporate
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culture has a positive relationship with the financial performance of the firms. On the other
side of coin, he also drawn some results that the corporation with weak culture differs in the
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financial performance with relative to the companies who have a strong organizational
culture. To make the results more authentic and accurate Van der Post (1998) used fifteen
different dimensions for the measurement of the corporate culture rather than sticking on a
single perspective.
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To implement a strategy in an organization is a critical process as most of the higher level of
management does face it. At the passage of time it will be getting more complex for the
organizations. And Grant M. (2005) urges that a strong and fool proof strategic plan leads an
organization to the high level of performance and Rashid and Anantharaman (1997) interpret
that strategic planning is something that needs a strong link with the culture of the
organization for the successful implementation. Trough this cause and effect argument we
can have a conclusion that strategic planning that is the backbone for the organizational
performance is dependent upon the strong alienation with the corporate culture. According to
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the Kotter and Heskett 1992, the firm’s long term performances are correlated with the
impact of the corporate culture. They also argued that the firms with the strong cultural
values implemented on their stakeholders like employees, customers and the stockholders
performs in such a significant way that they make other companies suffering from the lose
through the competitive edge of the strong organizational culture. And those companies have
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huge margins to compete them in the organizational performances. The companies with
strong and positive culture have a significant efficiency and performance heights. The
competitors has to face real trouble to compete them in the traits, the cultural organizations
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are adopting. In the futuristic point of view, they also believe that the age is not so far when
organizational success or failure will be determine by the cultural values of that specific
organization. In the support of these arguments the Sadri and Lees (2001) states that whenever an
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organization has a positive culture, it provides a range of benefits to it. And these benefits provide the
organization a leading competitive edge over the other organizations. On the parallel scenario, they
also warned us about the negative culture. As the positive culture has the positive impact, similarly
the negative culture has a negative impact on the organizational performance. This negative culture
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can harm in various different ways. For example, it can take away the firm from the current trends,
needs and the strategic requirements. So the flexibility in the organizational culture can be harmed
badly and in a result you have to face drastic consequences in the future industry. Similarly corporate
culture also reduces many factors that can be leading role for the organizational performance.
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According to a research the findings clearly shows that a constructive organizational culture reduces
the job stress and other psychological issues in a working environment. Similarly the organizations
with constructive cultures do not face the problems like the role conflict, ambiguity and job stressors.
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Through the elimination of these factors, the job performance, job satisfaction and the employee
commitment get strengthened and ultimately it provides a path towards organization success (Pool,
2000)
Through this literature review, it comes to our consideration that organizational culture plays a vital
role in the promotion and success of an organization. Similarly this is the organizational culture
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develop the employees values, behaviours and attitudes in such a way that it increases job satisfaction,
organizational performance and strong commitment.
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References
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 Trompenaars Alfons and Hampden – Turner, (1998), Riding the waves of the culture:
Understanding diversity in global business 2nd edition, McGraw Hill, USA
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 Schein, E.H, (1985), Organizational Culture and Leadership, Jossey-Bass, CA.
 Grant M, (2005), contemporary strategy analysis 5th edition, Blackwell publishing,

UK
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Kotter and Heskett, (1992), Corporate Culture and Performance, Free Press, New
York, USA.
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 Pool, S.W. (2000), “Organisational culture and its relationship between job tension in
measuring outcomes among business executives”, Journal of Management
Development, Vol. 19 No. 1, pp. 32-49.
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 Sadri, G. and Lees, B. (2001), “Developing corporate culture as a competitive
advantage”, Vol. 20, pg. 853-859
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 Van der Post, de Coning, and Smit, (1998), “The relationship between organisational
culture and financial performance: some South African evidence”, South African
Journal of Business Management, Vol. 29 No. 1, pp. 30-41.
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 Schwartz and Davis, (1981), “Matching corporate culture and business strategy”,
Organisational Dynamics, winter, pp. 30-48.
 Rashid and Anantharaman, (1997), “A study of corporate culture strategy and
culture”, Malaysian Management Review, Vol. 32 September, pp. 25-29.
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