The influence of the corporate culture on organization’s
performance
The
question of the
corporate culture influence
on the organization’s performance
is quite important.
This question began
to trouble experts
in 1970s when
the competition between
companies had grown
very fast due
to the emergence
of new strong
players on the
market. To reveal the
reasons of the
success of one
companies, and the failure
of the other, many researches
were conducted. Despite the
differences in the
research goals and
methodology, their
conclusions were quite
similar: all companies have
corporate cultures, although some
of them have
more strong culture
than the others; these
cultures can influence
greatly on individuals
and on performance, especially in
a competitive environment;
this effect may
be even greater
than all those
factors that traditionally
considered to be
important for the
organization to achieve
success (strategy, corporate
structure, management systems,
financial analysis tools, leadership, etc.); the best
American and Japanese
executives often spare
much time to
creating, shaping, or
maintaining strong corporate
culture (Kotter and Heskett 9).
Considering
the results of
these researches, such conclusion
can be made: strong
corporate culture determines the
effectiveness and success
of the organization. One of the most
important advantages of
having a corporate culture
is the presence
in the organization
common and consistent values
and methods of
doing business that
are shared by
almost all managers. New
employees adopt these
values very quickly. Corporate culture
helps to correct
new executives, if they
violate the organization’s norms.
The other important
thing about strong
corporate culture is
goal alignment. In a company
with a strong culture,
employees tend to work
for achieving one goal,
that means that they move
in one direction. Corporate culture
create an unusual
level of motivation. Commitment and
loyalty that appear
due to the
culture make people
strive harder, whereas, shared
values and behaviors make
people feel good
about the company
they work in. Also, corporate culture
can create the
system of control
that do not
rely on formal
bureaucracy (Kotter and Heskett 16).
But one research
among those that
were conducted in
1970s showed that
the strength of
the corporate culture
not always leads
to strong performance. There was
found out the
range of companies
that had relatively
strong corporate culture
and relatively weak
performance: General Motors,
Sears, Citicorp, Godyear, etc.
Actually,
strong corporate culture
can be named
good only if
it is strategically appropriate. It
should fit its
context. For example, culture characterized by rapid
decision making and no bureaucratic behavior will enhance
performance in the highly competitive
deal-making environment of a mergers and acquisitions
advisory firm but
might hurt performance in a traditional life insurance
company. A culture in which people value stable and tall hierarchical structures might not work
well in a slow-moving environment but be totally inappropriate in a very
fast-moving and competitive industry.
To sum up, corporate
culture has a
great influence on
the organizational performance. But it
is important to
choose appropriate corporate
culture according to
the organization’s strategy.
Kotter, J. and Heskett J. Corporate
Culture and Performance. New York: Simon and Schuster, 2008. Print.
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Argument
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Counterargument
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Rebuttal
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Strong corporate culture leads to success
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Companies that have relatively strong cultures and relatively weak
performance
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Corporate culture should fit the organizational strategy
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