The paper "Effect of Corporate Culture on Organizational Performance" is a perfect example of a Management Case Study. Culture has been defined as a set of ideas, skills, customs, and arts that a given population practices over a given period. Different organizations have different corporate cultures. These corporate cultures have been thought to have an impact on an organization's performance. Social anthropologists have in the past been fascinated by the entire issue of corporate culture and its impact on organizations' performance. The interest that people and in this case researchers pay on the issue of corporate culture, shows the very fundamental role that it plays.
Most people who have ventured into this research have indicated that there exists a positive correlation between corporate culture and organization performance. Shields (1997) reported that profitability and effectiveness sand as strong organizational goals. As said by him, the most essential aspect of organizational culture is the various values and attitudes of its employees. Corporate cultures have a strong impact on those that work or are involved in running an organization (Venkatraman & Prescott, 1990).
They are in most cases invisible, but, yet form an important component in as far as organization performance and profitability are concerned. Despite the fact that a number of organizations don’ t lay enough emphasis on the issue of corporate culture, it has been shown that it has some positive on organizational performance. This paper gives a concise look at the literature that surrounds this topic. In this section, the focus will be put on different arguments and evidence that authors bring forth in relation to this topic. Arguments from authors that do not agree with the topic will also be looked at.
Similarly, areas that require further studies and research will be indicated. Literature review. In business, there has always arisen the question as to why a few organizations succeeded while a number fail desperately. Similarly, the question of whether corporate culture affects organizational performance has been predominant (Burns & McKinnon, 1993; Gordon & DiTomaso, 1992; Carroll, 1982). Organizational performance is a fundamental aspect in any organization be it for profit-making or non-profit one. It is thus of utmost good that business managers get an understanding of the various aspects that have some bearing on an organization’ s performance.
This will assist in taking appropriate steps. Corporate culture is such a factor. According to Steensman and Corley (2000) aspects such as innovation and the cohesive nature of an organization are major determinants of an organization's performance. It should be noted from the outset that organization that is cohesive and has a culture of collective success, can be very successful. According to these two researchers, corporate culture is far much than just an imperative element of an organization.
It instead is the most vital driver of the highly celebrated organization. In their journal which is called “ Strategic Management Journal” , Venkatraman and Prescott (1990) highlighted that an organization corporate culture affects almost every activity that such an organization does. Corporate culture is simply the hub of what an organization is, how it carries out its operation, what its focus is on, and the treatment it accords its employees, customers, and other stakeholders. In this journal, it is clearly stated that professional research covering well over seven thousand organizations indicated that there is a notable relationship between organizational culture and organization performance.
The research took its sample from a population of all senior management teams in all the organizations. About 35 measurement criteria produced positive correlation between corporate culture and performance. These included a measure of return on capital invested, growth of revenue over time, customer rate of retention, and employee performance among others.