IMPACT OF ORGANIZATIONAL CULTURE ON EMPLOYEES’ PERFORMANCE

Posted on January 18, 2022 by Cheapest Assignment

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Research Methods in Social Science

Introduction

The term organizational culture refers to a set of important, usually unexpressed assumptions in an organization that members of the organization share in common (Khalifa, Dahie, Mohamed, & Eid-Ga’amey, 2017). Khalifa et al., (2017) further claim that organizational culture is a “collection of values and norms that are shared by people and groups in an organization and that controls the way they interact with each other and with stakeholders outside the organization.”

There are several cultures that can be found in an organization. They include clan culture, which involves how workers within an organization relate to each other; the market culture that is fashioned to succeed no matter the odds and depends on performance to penetrate the market and gunner the most shares; adhocracy culture, which focuses on research and development and instils in employees an interest in innovation; and hierarchy culture which is usually formal, a structured working environment that is designed to bring about order and efficiency in performance. Many scholars have their own definition of organizational culture, which is but a way through which organizations ensure their members are in line and inspire them toward achieving the goals of the organization.

On the other hand, performance refers to the mental and physical capacity to carry out a particular task in a specific way, which can be measured as either high, medium, or low in scale (Nasuri, Falasi, Alrajawy, Khalifa, & Isaac, 2018; Khalifa et al., 2017). According to Stannack as cited in Awadh and Alyahya, (2013), performance is often related to transactional competence and efficacy toward the objectives of the organization. Many scholars concluded that organizational culture is vital in determining the performance of an organization. It dictates how an organization correlates with both its internal and external environment while searching to solve its concerns such as performance and survival (Polychroniou, & Trivellas, 2018).

The aim of this paper is to look at the different types of organizational culture and how they affect the performance of employees in the organization. It will also look at two approaches in evaluating the potency of organizational cultures. 

Methodology

When writing this paper secondary data will be used as the source of information on the topic of study. Research papers on different cultures in an organization and how these cultures determine how employees execute their duties are looked at. The paper will focus on one culture at a time and how it relates to employee performance. It will mention some of the advantages of each organizational culture and provide an example of an organization that employs clan, market, adhocracy, and hierarchy cultures. The data that will be used will be obtained from research papers, articles, and books from either google scholar or PubMed. Also, it will mention a method of measuring how effective the organizational culture is.

Organizational Cultures

As mentioned above, there are four types of organizational cultures. They include the clan culture, the market culture, the adhocracy culture, and the hierarchy culture. This section describes each culture, mentions some of its benefits, gives an example and shows how it impacts the performance of employees.

 To begin with, clan culture is concerned with how workers within an organization interact with one another. It involves building strong working relationships within the organization and between the organization and both customers and suppliers. This culture entails specific values such as trust, loyalty, support, togetherness, collaboration, and human affiliation (Fiordelisi & Ricci, 2014). Managers in the clan culture usually motivate their employees to work as a team (Yirdaw, 2014). In order to establish a success-oriented culture in an organization, the management must put in place measures that instil the above-mentioned values in the workers. According to Miguel (2015), it can be achieved when the management becomes more democratic in the manner in which they deal with employees. For instance, in the allocation of assignments, say in a media house, fairness instils a sense of equality among the employees. Research has had controversial findings on how clan culture impacts performance. Mans & Luvision (2014) concluded that the clan culture improves employee performance. However, Givens (2016) insisted that clan culture only focused on the relationships between employees instead of improving efficiency and effectiveness in the organization. All in all, when they feel equal, workers tend to work synergistically, ultimately improving their performance. A clan culture in an organization has the following advantages: productivity and company growth is consistent, there is clear communication and transparency because each person in the organization is free to voice their opinion and ideas (Al Shehri, McLaughlin, Al-Ashaab, & Hamad, 2017), and employees are recognized for doing well. Additionally, criticism in this organization is constructive and executed carefully to achieve a positive change in performance without hurting the employees. Tom’s of Maine epitomizes this culture as the founder, Tom Chappell focused on creating respectful relationships with employees, customers and suppliers which, eventually led to the creation of the brand. 

Secondly, market culture is a result-driven, market-oriented, and very competitive organizational culture. It is also referred to as a competitive culture. It concentrates on performance, productiveness, and achievement of objectives, and how they can be tailored toward gunning success in the market. It involves looking for information on both customers and competitors and setting suitable targets. According to Miguel (2015), it includes open communication, business rivalry, capability, and achievement. By knowing the market, an organization is able to get through in the competitive market. An example is in the clothing business. Production of clothes, however appealing they are, is on its own not enough.  The business needs to understand what consumers want. The trends of clothes and their decency, the age group of the potential market etcetera. It also needs to know what competitors are bringing to the market and how to better them. Having this knowledge eventually leads to an increase in employee performance. The advantages of market culture include the achievement of goals in one way or another, and employees are flexible and tend to find ways to remain in the market share. Plus, employees become more driven due to constant encouragement and inspiration from their leaders (Pasricha, Singh, & Verma, 2018). An example of an organization with this culture is the software giant, Oracle.

In an adhocracy culture, the focus is on creativity and agility in the market. This culture in an organization encourages employees to be risk-takers and inspires them to be agile and quick to adapt to market trends (Ilham, 2018). Research, for instance, by Engelen, Flatten, Thalmann & Brettel (2014), showed that adhocracy culture had a positive impact on innovative entrepreneurial culture. Such studies have shown that innovation and creativity are crucial factors when enhancing productivity. It is this culture that has seen the world transform and becomes more advanced in medicine, industrialization, education transportation, etc. Adhocracy culture in an organization imbues workers with the ability to turn a disadvantage into an advantage, therefore enabling the organization to fit into the prevailing market conditions. Furthermore, it encourages competition among the employees, stimulating them to “think outside the box.” As a result, employee performance in this culture is way above average and keeps on improving. Some of the merits of this type of culture are: one, every level of the organization depicts a shared commitment to innovation; the organization has a competitive advantage in the market due to the ability of employees to adapt to the market; and three, the working environment in this culture is inclusive hence, it is welcoming to ideas from anyone. Two, well-known example of an organization with an adhocracy culture is Google and Facebook.

Finally, hierarchy culture is where establishing effective control systems within an organization is prioritized with the end goal being efficiency and effectiveness (Tedla, 2016). The management comes up with a formal structure, complete with rules and policies, which ensure that the activities of the organization run smoothly. In this culture, employee performance determines their position in the organization (Sivakami, & Samitha, 2018). Their hard work and consistency, qualification, and expertise are what decide their salaries, the office they hold, and the rewards they get. It, therefore, motivates employees to put in more effort, subsequently resulting in a positive impact on the performance of employees. Some of the benefits of this culture include job security and timely payment for its members, advance in status that arises from promotion, and serves to motivate members to do better and is devoid of pressure since it is organized and predictable. Such a culture can be seen in the military and large bureaucratic organizations.

Organizational Culture Effectiveness

The efficacy of clan, market, adhocracy, or hierarchy cultures can be measured. According to O’Reilly, Caldwell, Chatman & Doerr (2014), it is possible only when an appropriate measurement method because some measurement factors that can be employed may fail to capture the complexity of an organization’s culture. O’Reilly et al., (2014) further suggest the use of the six factors method in measuring the effectiveness of organizational cultures. These are adaptability factors, integrity factors, collaborative factors, result-oriented factors, customer-oriented factors, and detail-oriented factors. As cited in Hacker (2015), O’Reilly insists that because these factors are detailed, they are successful in measuring the effectiveness of organizational cultures.

Flamholtz and Randle (as cited in Tedla, 2016) also came up with a method to evaluate the effectiveness of organizational culture. This particular method has five vital aspects of organizational culture. They claimed that to effectively evaluate the performance of organizational culture, the following had to be considered: customer orientation that involves identifying values that will enable employees to constructively interact with customers; employee orientation, which is concerned with motivating workers; performance standards that show when and how employees get rewards, are evaluated, and account for their performance; commitment to change, which is how the organization is prepared for and reacts to change; and company process orientation, which is concerned with the operating systems of an organization, and involves planning, making decisions, communication, and social responsibility. 

Conclusion

Different organizations have different organizational cultures. There are four organizational cultures, which include the clan culture, the market culture, the adhocracy culture, and the hierarchy culture. Whichever culture is in existence in an organization, How can your search end for Economic assignments help in the UK? affects the productivity of the employees. Also, for an organizational culture to be effective, it has to be inspiring to the employees, fulfilling to the customers, have successful performance standards, readiness to change or adapt, and have well-defined company process orientation. These factors determine the scope of the ability of employees to execute their duties effectively. At least one aspect is found in each organizational culture. It follows that a firm that encompasses more at least two organizational cultures stands to benefit more than a firm that is not flexible enough to employ more than one organizational culture. Finally, it is how the employees respond to the existing organizational culture that decides capabilities in carrying out their tasks at the organization.

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