Culture and its Impact on Organizational

Performance
Organizational Behaviour II
Presentation Report

Submitted By:
Anshul Sehgal 14PGP001
Anshul Sharma 14PGP002
Ansuman Chattopadhyay 14PGP003
Arghya Das 14PGP005
Arijit Hawlader 14PGP007

Introduction:
This report is based on the reading of the research paper Impact of Organizational Culture on
Organizational Performance: An Overview published in the journal Interdisciplinary Journal of
Contemporary Research in Business. It is written by Fakhar Shahzad, Rana Adeel, Ayesha
Rashid and Lalarukh Shabbir.

What is Organizational Culture?

There is no one definition of Organizational Culture. It can be explained as an arrangement of
different attributes that expresses an organization and differentiates the firm from one another.
There are other definitions of organizational culture which says that it is the explanation,
acquired knowledge, skills, explanations, values possessed, beliefs and communication of large
group of people at the same time and same place. Different definitions of organization culture
have been given by different researchers. According to Hofsted in 1980, Organizational culture is
the collective thinking of minds which create differences between members of one group from
another. As per Trichy in 1982, organizational culture acts as formative glue which keeps the
overall organization together. According to Edgar Schein of MITs Sloan School of Management
organizational culture is a pattern of basic assumptions that the team learned as it solved its
issues of internal integration and external adaptation, that actually worked efficiently to be
considered as effective and, hence, to be explained to new members as the right way to think,
relate, and feel in accordance with the aforementioned issues. The organizational culture is
socially constructed and is affected by history and environment. It has many layers, both
cognitive and symbolic, hence it can be considered as residing at all levels.

Types of culture:
There are different types of culture based on how many employees in the organizational find
themselves aligned with the goals of the company. Some of the major types are explained below:

Counter Culture
In this type of culture, beliefs and values possessed by employees of the organization are
opposite to the organizational culture, hence the term counter culture.

Sub Culture
This type of culture cocoons in an organization where projects are run in different geographies.
Collaborating with teams across geographies on a daily basis grows this sub culture.

Strong Culture
This type of culture is most appropriate and is what most of the organizations aspires to have. In
this, all or most of the employees connect with the organization, its goals and values and hence
contribute to their maximum potential, which in turn help the organization grow.

Weak Culture
This culture is mostly found in the startup companies where not much emphasis is laid on the
hierarchy or the culture as such. More individualism is emphasized and focus is on creativity,
hence binding the thoughts or imaginations of employees using an organizational culture is not
preferred here. It can be considered as a loosely knit employer-employee culture.

Characteristics of Organizational culture

Innovation
& Risk
Taking
Attention
to Detail

Stability

Aggressiven
ess

CULTURE

Team
Orientation

Outcome
Orientation

People
Orientation

According to Dasanayaka and Mahakalanda (2008), if we have to increase employees value then
we need to consider them as important assets that require a culture to support their logical
participation both for the employee and organizational learning, new knowledge can be formed
and readiness to share with others. Schein (1992), tells us that organizational culture is very
crucial today as compared with past. Hodgetts and Luthans (2003), define some of the
characteristics of the organizational culture as follows:
Different type of norms are measured by things like amount of work we do and also the level of
assistance between the management & employees of the organization
Without doubt the rules are defined for employees reaction which is associated with the
productivity, intergroup cooperation & customer relationship.
We need to observe behavioral consistency, illustrate them as common language and precise
procedure.
Allocation & combination between the organizational units for the purpose of improving the
efficiency to works, quality and speed of designing, constructing the products and services
Organizational culture refers to a system of common meaning held by members of an
organization that differentiates the organization from other organizations. The main seven
characteristics of an organizations culture are as follows:
Innovation & Risk Taking: It is the degree to which in an organization with strong culture
employees are encouraged to take more risk and more innovative and take ownership of their
work.

 Attention to detail: It is mainly the degree to which in an organization employees are expected
to attain correctness, analysis and attention to minute details.
Outcome Orientation: It is mainly the degree to which in an organization the top management
mainly focuses on result or outcomes of the work rather than on the techniques and process used
to achieve them.
People Orientation: It is degree to which in an organization the managements decision is taken
into account considering the effect of outcomes it will have on people within the organization.
Team Orientation: It is the degree to which in an organization the work related activities are
organized mainly around teams rather than individuals.
Aggressiveness: It is the degree to which in an organization employees are aggressive and
competitive rather than easygoing.
Stability: It is the degree to which organizational activities mainly emphasize in maintaining the
status quo in contrast to growth.

Dimensions of Organizational Culture

Hofstede conducted a survey of IBM employees of around 40 countries and classified
organizational culture into four dimensions initially and then collaborated with Bond to add a
fifth dimension.

Power Distance

This alludes to the level of disparity that exists and is acknowledged among individuals with
and without power. A society that acknowledges an unequal distribution of power, and where
individuals know their position in the organizational framework is high on Power Distance. Low
Power Distance implies that power is shared and decently scattered. It likewise implies that
society parts view themselves as equivalent.

High Power Distance is usually prevalent in centralised companies with hierarchical structures
while Low Power Distance gives equal power to employees in flatter organizations.
Individualism
This refers to the quality of the relationships between individuals in a group. A high IDV score
demonstrates detached associations. In nations with a high IDV score there is an absence of
interpersonal association, and small offering of obligation past family and maybe a couple of
close companions. A general public with a low IDV score would have solid gathering
attachment, and there would be a lot of faithfulness and appreciation for parts of the gathering. A
high IDV score indicates that individuals value their self interests more than those of the
organization.
Uncertainty Avoidance Index
This identifies with the level of anxiety that society members feel when in indeterminate or
obscure circumstances. High uncertainty avoiders attempt to dodge uncertain circumstances at
whatever point conceivable. They are administered by guidelines and they seek reliable
information. Low scores of UAI show that the general public appreciates novel occasions and
values different opinions. There is low formality and individuals are swayed to find their own
truth. High UAI organizations are highly structured and formal and avoid differences.
Masculinity
This refers to the impact of contrasts in male and female values on the society of the association.
Associations where male representatives rule their female partners will take after distinctive
arrangements as compared with associations where females have a significant say in the choice
making methodology of the association. Male representatives would be more forceful in
comparison with the females who would be caring and considerate. The obligations likewise
shift according to the sex of the representatives. The female workers are never allotted something
which requires late sittings or regular travels .Masculine organizations measures success in terms
of ambition and challenges as compared to caring and helping.
A high Masculine organization thinks that some tasks are sex-oriented while low masculinity
organizations feel both males and females are equivalent in all aspects.

Long term Orientation

There are a few associations which concentrate on long haul association with the workers. In
such associations individuals have a relentless approach and strive hard to satisfy the desires of
the administration. Representatives get appended to the association and don't aim at transient

goals. Actually, a few associations have representatives who are more concerned with their
position and picture. They take after a society where individuals proceed onward in a short
compass of time and nothing is carried out to hold them. The workers are concerned just with
their benefits and targets and leave as and when they improve opportunity.

What is SPMS and Balanced Scorecard?

Human Resources as a discipline is moving away from being a discipline to stock manpower to
being a strategic partner. To this end according to the researchers in this paper we have a
framework called as Strategic Performance management system (SPMS).
SPMS is a framework which supports a performance-driven management system.The 4 pillars of
SPMS are mentioned below:
Direction: According to this the PM must provide guidance
Dialogue: The communication channels must be clear.
Inclusiveness: The manager must include all the employees under him in all the decision making
activities
Relevancy: The communication must be relevant to the objectives of the firm
Mission: This part basically states the implementation of the pillars.
To evaluate this framework we have a tool called as Balanced Scorecard.A balanced scorecard
essentially tells us how to evaluate the vision and strategy of an organization through 4 verticals
and by applying the 4 metrics which are stated below:
The 4 verticals are
Financial
Customer
Internal Business and
Learning and Growth
The 4 evaluating metrics are:

Objectives

Measures

Targets

Initiatives

Let us evaluate how we can use the balanced scorecard to measure metrics.
We take into account a vertical say Learning and Growth:
We define the objectives like how many training sessions are needed for a trainee.
Then we address the measures it takes to meet those objectives.
The targets are realistic targets which may be achieved.
Finally the initiatives are enlisted.