Effects of Corporate Culture on Organization Performance

Abstract

This paper focuses on the definition of organizational/corporate culture and sheds the light on the important studies on the topic. Various definitions of corporate culture as discussed by various authors have been analyzed. The different types of cultures and what researchers have found out about their effects on organization performance has been reviewed in this paper. A number of studies that linked the relationship between organizational culture and the organizational performance have been discussed. The researcher realized that as cited by Jennifer et al., (2011) the relationship between culture and organizational performance is still not well understood by many researchers. They bring out the criticism of strong and weak cultures citing that what matters is not the strength or weakness of a culture but how forcefully the norms are held by organizational members (its intensity), and how widely members agree about the norms within the organization (consensus) (O'Reilly, 1989; Jackson, 1960). The researcher agrees with this finding as supported by Sorensen (2002) who theorized that an organization cultures lead to consistency in performance by increasing employee consensus and willingness to endorse organizational goals, reducing uncertainty through goal clarity, and increasing motivation. Although Wilderom and Berg (1998) argued that instead of striving for strong culture, researchers should attempt to reduce the gap between employees' preferred organizational culture practices and their perception of the organizational practices. This prompts a further study to explore the reasoning by Wilderom and Berg.