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What Is the Impact of Organizational Culture?

Kenneth W. Michael Wills
Kenneth W. Michael Wills

When observing the impact of organizational culture, researchers have proposed that culture seems to reverberate down to the micro-level of organizations. If a company is pervaded with an adverse culture and employees are not matched to the organizational culture, this seems to result in dissatisfaction on the job and inefficient performance. A positive organizational culture engenders both direct and indirect advantages related to organizational performance. Business leaders can make use of these correlations to understand and address the impact of organizational culture.

A negative organizational culture also appears to be destructive to the recruiting process and is reflected in high turnover rates. Other areas that are affected might include the under-reporting of unethical behaviors, high stress levels and stifled creativity. Organizations with positive culture might emphasize innovation and treating customers well. They tend to encourage cohesiveness at all levels of organizational structure and purposely seek to promote high morale among employees. Such characteristics instilled in the culture correlates with a competitive advantage, reliable and effective performance among employees and an alignment of company resources with the organization's goals.

A negative organizational culture can be destructive to the recruiting process.
A negative organizational culture can be destructive to the recruiting process.

Company managers can make decisions based on the impact of culture within an organization, especially when there are problems manifested in the organization as a result of culture tendencies. If a company is experiencing a problem with customer turnover and research yields that this problem is because of bad customer service, the company's leaders will need to find out why employees lack concern for customers. By implementing an anonymous feedback mechanism, for example, leaders can find answer to such questions. After the leaders identify the answers, they can move forward to change the organizational culture to better reflect its customer base.

Employee engagement is an important aspect of an organization's culture.
Employee engagement is an important aspect of an organization's culture.

Defining organizational culture proves challenging because of the inherent tendency to define it from diverging perspectives. Determining the impact of organizational culture sometimes succumbs to the same conundrums. The main challenge is the lack of definitive research that conclusively demonstrates positive and negative attribution to organizational culture. Despite this, research does highlight some important correlations between culture and performance. Understanding these correlations and their impacts can aid an organization in assessing and shaping its culture.

Experts often do not agree on the best way to define organizational culture. Thus, two types of definitions commonly emerge in most literature on the subject: outcome-oriented descriptions and process-oriented expositions. Outcome-oriented terminology describes organizational culture as manifested behaviors, and process-oriented descriptions detail the mechanisms that produce those behaviors. Regardless of the position or focus on the subject, most experts agree that organizational culture is an agency of social function that cultivates disparate consequences.

The source of contention among experts commonly evidences the lack of required research. It’s not so much that organizational culture is overlooked, but to the contrary. The challenge is implementing required longitudinal studies to produce conclusive evidence. Such research would require studying multiple organizations simultaneously under the exact some conditions over a long period of time. Attempting to subject business organizations to such constraints is not feasible and presents ethical problems for researchers.

Rather than relying on empirical research, scientists usually study the impact of organizational culture with observational methods that leave room for varying interpretations on findings. Such observational studies do, however, shed light on the impact of organizational culture. The evidence most often used is correlations of repeated observations of cultural behaviors and resulting organizational performances.

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Discussion Comments


Steve, thank you for taking the time to read the article and for the comments. Social sciences, unlike the hard sciences is a challenge to get a firm handle on. Just when you think you have it figured out, humans go off and act in totally unexpected situations.

However, Bruce Bueno de Mesquita uses mathematical analysis to predict human reactions and usually applies it to international events related to politics. As well, we could likely use his equations to study a variety of social phenomenon.

John Smith

I appreciate the post - especially the reference to the need for more research. There is much to be studied to gain insight into something that is difficult to describe, explain - like describing and explaining air to a child.

Of note in your post: It's the common use of negative and positive as ways to describe/explain organizational culture. There is an 'absolute' connotation associated with those words and takes 'us' down the path of similar nomenclature for hard and soft skills. Yikes!

With the research you suggest and doing my best to contribute, let's find better words to freeze/learn/unfreeze our perspective of organizational culture.

Thank you Kenneth. Cheers, Steve

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    • A negative organizational culture can be destructive to the recruiting process.
      By: Rido
      A negative organizational culture can be destructive to the recruiting process.
    • Employee engagement is an important aspect of an organization's culture.
      By: apops
      Employee engagement is an important aspect of an organization's culture.