Impact Of Organizational Culture On Organizational Performance

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MM2021 Management and Organisation
Individual Assignment
Name: Lai Pui Chung
Student ID: 14126029D

How does organisational culture affect the overall performance of a firm?

Introduction
Organisational culture, or corporate culture, is “a “set theory” of important values, beliefs, and understandings that members share in common, culture provides better (or the best) ways of thinking, feeling and reacting that could help managers to make decision and arrange activities of organisation” (Sun, 2009). Every organisation creates and develops their own organisation culture which provides rules and boundaries for the members in the organisation.
Many people may think that “a firm’s organisational culture can affect its overall performance”. In this …show more content…

These firms only care for one thing – survival. To survive in the market, a firm must have its own strong cultures. How does strong organisational cultures lead to success?
Theories and Models
O'Reilly, Chatman, and Caldwell (1990) stated the following seven characteristics of organisational culture using an instrument that they developed in the Organisational Culture Profile (OCP) which are innovative, stable, respecting of people, outcome oriented, detail oriented, team oriented and aggressive. These seven characteristics can be seen as an organisational cultural model.
• Innovative (Innovation and risk taking): Organisations with this cultures which have encourage their members to have more innovation and take risks in their tasks.
• Stable (Stability): Organisations with this cultures which provide a consistent and predictable outcome, and well operate in unchanged market conditions. The culture can be said as rule …show more content…

Chatman and Cha (2003) indicate that strong organisational cultures are based on two characteristics: levels of agreement among employees and the levels of intensity. A strong organisational culture exists if both two characteristics are in high levels; if both are in low levels, the organisational culture is weak. Building up a strong organisational culture is very important for a new firm. It is the major core of success. Every organisation’s culture is unique, like a DNA (Practical Management, 2008). Organisational culture should be developed base on the firm’s own believes and

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