The Impact of Corporate Culture on Company Performance

Topics: Organizational studies, Organizational culture, Organizational studies and human resource management Pages: 18 (4850 words) Published: November 24, 2010

Business Intelligence Journal


Impact Assessment Of Corporate Culture On Employee Job Performance

Olu Ojo

This research study assesses empirically the impact of corporate culture on employee job performance as well as organisational productivity using Nigerian banking industry as the case study. We try to ascertain if organizational culture affects employee job performance, and to formulate recommendations regarding corporate culture and employee job performance. In order to achieve the above objectives, the following research questions were asked: Does corporate culture have any effect on employee job performance? And in what way does corporate culture impacts employee job performance? Two hypotheses were advanced: (i) There is no positive relationship between organizational culture and employee job performance, and (ii) There is no positive relationship between corporate culture and organizational productivity in Nigerian banking industry. The study uses survey research method. The case study companies were selected using stratified and simple random sampling techniques; while our respondents were selected using simple random sampling technique. The findings of this study are that a large number of respondents (57.7%) strongly agree that corporate culture has effect on employee job performance, and that 48.7% of the employees also agree that corporate culture determines the productivity level of the organization. These findings made us to accept our two alternative hypotheses and reject the null hypotheses because in both cases the calculated values of chi-square are greater than the tabulated values. KEY WORDS: Employee, Job Performance, Productivity, Corporate Culture,

Business Intelligence Journal - August, 2009 Vol. 2 No. 2


Olu Ojo


Organization development is concerned with the analysis and diagnosis of the factor that determine organizational effectiveness, and the planning and delivery of programmes to increase that effectiveness. Organizations want to obtain the commitment of their employees. Management would like its employees to identify with the values, norms and artefacts of the organization, hence the need for organizational culture. Management needs to explain and imbibe its culture in its employees; this will enable the employee to get familiar with the organizational system. During this process of explanation, the employee learns about the organizational culture and decides whether he can cope with it or not. This means that each organization is a learning environment. It is the proper understanding of the organizational culture that the performance of the employee in the organization. Performance is the extent to which an individual is carrying out assignment or task. It refers to the degree of accomplishment of the task that makes up an employee’s job (Cascio, 2006). Job performance is the net effect of an employee’s effort as modified by abilities and roles or task perceptions (Jones, 2003). The culture of the organization should be developed to support continuous improvement, improve employees’ style of performing their job and thus develop quality awareness. To operate successfully across cultures, it is important to be able to recognize cultural differences and be adaptable (Deter, Schroeder, and Mauriel, 2000). Organisational culture finds expression through the thoughts, intentions, actions and interpretations of members of the organization (Hallett, 2003). Academic interest in corporate culture is evidenced by the level of attention it has received over the last few decades. The relationship between corporate culture and performance has been the subject of abundant research in several fields, including strategic management, organisational behaviour, and industrial organizations. While this topic is rich in studies, many researchers concur on

the fact that there is no agreement on the precise nature of the relationship...

References: Cascio, W. F. (2006) Managing Human Resources: Productivity, Quality of Life, Profits. McGrawHill Irwin. Denison, D.R. and A.K. Mishra (1995) Toward a Theory of Organizational Culture and Effectiveness, Organization Science, 6 (2), pp. 204-223 Devis, L. (2007) Organizational Culture and its Importance, http://www. Accessed on 3rd January, 2009. Forehand, G. A. & B. von Gilmer, (1964) Environmental Variations in Studies of Organizational Behaviour, Psychological Bulletin, 62, pp. 361-382. Hallett, T. (2003) Symbolic Power and Organizational Culture, Sociological Theory, Vol. 21, No. 2. pp. 128-149.
The following recommendations are made to the management of case study banks and other organizations that are interested in modifying their
Business Intelligence Journal - August, 2009 Vol. 2 No. 2
Olu Ojo
Jones, G. R. (2003) Organisational Theory, Design, and Change, Upper Saddle River: Prentice Hall Kotter, J. P. and J. L. Heskett (1992) Corporate Culture and Performance, New York: Free Press Marcoulides, G.A. and R. H. Heck (1993) Organizational Culture and Performance: Proposing and Testing a Model, Organization Science, Vol. 4, No. 2. pp. 209-225. Morgan, G. (1997) Images of Organization, Thousand Oaks: Sage Publications. Ojo, Olu (2003) Fundamentals of Research Methods, Lagos: Standard Publications. Plakhotnik, M. S. and S. R. Tonette (2005) Organizational Culture: A Literature Review of the AHRD 1994-2005 Proceedings, Florida International University, USA.
Schein, E. H. (1990) Organizational Culture, American Psychologist, 43 (2), 109-119. Sorensen J.B. (2002) “The Strength of Corporate Culture and the Reliability of Firm Performance”. Administrative Science Quarterly, Vol. 47, No. 1. pp. 70- 91. Tichy, N. M. (1982) Managing Change Strategically: The Technical, Political, and Cultural Keys, Organizational Dynamics (Autumn), pp. 59-80. Titiev, M. (1959) Introduction to Cultural Anthropology, New York: Henry Holt & Company. Umikeer, W. (1999) Organisational Culture: The Role of Management and Supervisors, The Health care Supervisor, 17(4): pp. 22—27.
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