How does Organisational Culture Impact an Organisation’s Performance

Organizational Culture and Performance
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Organizational Culture and Performance
There are numerous definitions that have been coined to help enhance the understanding of the term organizational culture. The simplest way to grasp the idea of organizational culture is to think of an organization’s norms, shared values, beliefs, accepted behaviors, and the processes or ways of doing business. Every organization follows a set of beliefs and norms that greatly influence how employees perform or conduct themselves within the confines of the organization. Further, these greatly influence employees’ perceptions regarding their organization and, to a great extent, their commitment to their organization. Therefore, there is a need to develop an organizational culture that creates an environment that promotes the right attitude among employees. Also, the organizational culture should promote beliefs that induce as well as inculcate the values the management considers crucial for its organization’s success. The culture of an organization dictates performance. If the culture is well-constructed and helps promote the right attitude among the employees, the chances are high performance will reflect the same. However, failure by management to create and promote their desired culture leads to an organization that is founded on individualism, and therefore, failure becomes imminent. Provided herein is an explanation of how organizational culture through elements like leadership, motivation, shared values and norms, organizational environment, and employees’ skills and growth influence performance.
Leadership
Organizational culture greatly influences the leadership of an organization, and in turn, this influences the performance of an organization. The culture of an organization greatly influences the leadership organization. Like performance, culture dictates the type of leadership an organization adopts. The vision, values, and beliefs an organization adopts are within the culture of an organization. These are considered the key values of an organization that dictates how leaders behave, and with time a leadership style takes effect (Tsai, 2011). The employees of any organization take after the leadership. Therefore, whichever values, beliefs, and norms are adopted and practiced by the leadership will trickle down to the rest of the employees. As Tsai (2011) indicates, the behavior of the leadership and that of the employees should grow "increasingly inline" to help ensure that there is a unified behavior that the organization identifies within the eyes of the customers. The above effect is an environment marred by reduced conflicts and consistent behavior from the employees. Such a healthy environment is indeed prime for performance to grow since collaboration becomes easier when shared values persist.
The organizational culture of an organization also influences performance by introducing managerial practices that aim to leverage employees’ needs. Managerial practices are simply the elements used to gauge an organization’s management. Examples are job security, fair remuneration, and safety measures within the organization. According to Cera and Kusaku (2020), these aspects are crucial and can help drive performance within an organization. For example, regarding job security, the COVID-19 pandemic pushed the world to the edge economically, and companies reacted to these pressures through layoffs. However, several companies like PayPal, Bank of America, Starbucks, and Morgan Stanley decided not to lay off any employees regardless of the economic conditions pervading the world (Stankiewicz, 2020). Such a bold move and announcement to the entire world gave the employees of these companies a sense of job security. Their commitment and performance are incomparable to those whose companies announced they would consider laying off some of their employees. Therefore, the influence organizational culture has on managerial practices can help promote increased commitment from employees whose performance will thus be improved as well.
Motivation
Employee motivation is a crucial factor that significantly influences the performance of an organization. The higher the motivation of employees, the higher the likelihood their performance will also improve. However, motivation is a reflection of the organizational culture adopted within an organization. Southwest Airlines is one organization that greatly focuses on motivation and continually endeavors to create a fully motivated workforce. Southwest Airlines is among the most profitable companies in the world, and as an airline, the company boasts of more than 40 years of profitability, mainly because of employee motivation. According to Galer (2019), Southwest Airlines has maintained the vision of its former and late CEO Herb Kelleher. Kelleher’s vision was grounded in making the company treat its employees better than its competition. Galer (2019) notes that Kelleher believed in taking care of his employees, who will then care for the organization’s customers. He wanted to make the working environment as conducive as possible for his employees, and he endeavored to attain this goal through policies he adopted within the company. His transformational leadership style further helped cement his vision of inspiring his employees to give their best. He lived true to Conger & Kanungo’s (1994) words that transformational leadership aims to create an environment that is founded on inspiration and actions that drive the impression that employees are working for something greater. Kelleher managed to create a culture that motivates the employees to work for something more significant and, in the end, built one of the most successful airlines in the world. As McGregor and Doshi (2015) indicate, Kelleher managed to maximize the element of play which mainly entails a scenario when employees are motivated by the work itself. Kelleher’s transformational leadership style and the decision to lead from the front made it incredibly easy for the company to withstand stiff competition and to become a giant in the airline industry. Customer satisfaction for the airline continues to be among the best, with Mazareanu (2021) reporting that it posted a customer satisfaction index of 79, which was above the industry average of 76. With regards to profitability, Salas (2021) notes that the company posted revenue of $9 billion in 2020, which was a sharp decline since its incremental increases that have been happening since 2010. Considering that the COVID-19 pandemic greatly influenced organizational performance in 2020, the company is doing relatively well, and all the above is credited to the culture of treating employees better.
Shared Values and Norms
An organizational culture promotes a set of shared or unified values and norms. Organizational culture gifts an organization a unified outlook and gives it an identity. To the outside world, especial...