Effect Of Organizational Culture On Employees’ Performance

Background to the Study

It is very necessary for an organization to establish an organizational culture to maintain its position in market. The organizational culture has to be developed to provide support to an organization and bring continuous improvement. The culture of an organization is very important for the progress of an organization because it impacts on employee commitment, their retention and performance as well. If the culture of an organization is flexible it will provide such working environment to employees in which they may work easily and independently without feeling any burden. According to Ada and Cross (2021), organizational culture is a set of different value system which can help an organization to run itself and run a successful business. Organizational culture helps employees to understand the functioning of the organizations by sharing its norms, values and rules and regulation of organization. Agwu (2017) noted that organizational culture has remarkable effect on employee’s commitment and performance. If the employees of the organization have more understanding with the organizational culture, they will have more job satisfaction. Environment of organization and employee’s personal traits can influence its job satisfaction Auernhammer and Hall (2018). A committed employee is the person who stays with the organization in tough condition and tries to fulfill the organizational goals.

Hallett (2019) explains that organizational culture finds expression through the thoughts, intentions, actions and interpretations of members of the organization. Looking at the relationships between organizational culture and employee performance Kotter (2012) indicated that organizational culture has the ability to increase employee performance. If the organizational culture becomes incompatible with the dynamic expectations of internal and/or external stakeholders, the organization’s success will decrease as it has happened with some organizations (Ernst, 2001). Stewart (2007) opined that to ensure profitability is the goal of any organization, and one of the best places to start improvements is with an examination of the organization’s work culture. He states that the strongest component of the work culture is the beliefs and attitudes of the employees. An organization’s cultural norms are assumed to affect all who are involved with the organization. Those norms are almost invisible, but if performance and profitability are to be improved norms are one of the first places to consider (Stewart, 2010).

To have a better understanding, many cultural typologies have been developed, because a particular type of culture produces a different outcome and the overall performance of an organization is subject to the extent to which the values of the cultures are extensively shared (Ogbonna & Harris, 2000). For instance, the competing value framework (CVF) classifies organizational culture into four cultural categories such as clan, adhocracy, market, and hierarchy (Quinn & Robert 2011; Tseng, 2010). According to this school of thought, clan culture builds a warm and friendly work environment where employees can generously share their knowledge, while the adhocracy culture creates self-motivated, entrepreneurial, and innovative work settings, encouraging individual initiative and provides autonomy for those individuals who are prepared to take risks. Market culture creates a work environment through hard-driving competitiveness, and result-oriented organizations directed by tough and demanding leaders who are hard drivers, producers, as well as competitors (Tseng, 2010). The hierarchical culture has an unambiguous organizational structure, standardized policy and procedures, stringent control, and well-defined responsibilities. However, Ehrhart, and Macey (2013) claimed that no precise way on how organizational culture should be studied. They emphasized that no one type of organizational culture is better than the other, and different types of culture are better for different workplaces, different corporate philosophies and different types of companies (Schneider, 2013). Hence, an organization should focus on the type of culture that will create a better employee performance (Iliuta, 2014).