The Impact of Organizational Culture on Company Performance

1 Introduction:
As the business environment all over the world became very
competitive and the organizations are struggling to survive within this
rivalry world. Organizations start to find and looking for other ways to
be more innovative, creative and competitive searching for the most
important factors that could affect their performance, thus among
many of the different factors that could influence the organizations
performance; the organizational culture has been suggested in
different studies by many researchers (Yesil & Kaya, 2013).

The aim for the study of this research is to determine the

relationship between the organizational culture and its influence on the
company performance, and in order to know how organizational culture
can help in enhancing the organizational performance, given the fact
that many organizations need a real different change in their external
environment dynamism, where it was found that many and different
organizations have fallen, despite the fact that they followed the most
widely recognized techniques and common strategies, but they have
failed to implement them because of idleness, and even opposition,
showed in their organizational culture (Neagu & Nicula, 2012).

In these circumstances, organizational culture must be broad and

accepted through all the organization if the goal is to positively affect
the organization effectiveness and evolution, where managers and
directors must distinguish each element and component in the
organization culture that slow down the organization development and
change them into attitude, values and behaviors that support the

The Impact of Organizational Culture on Company Performance

accomplishment of the new business objectives (Neagu & Nicula,
2012).

a literature review was made, where the most important factors

and

dimensions

of

culture

were

identified,

the

performance

management and organizational performance were illustrated with

identification of the four perspective of the balanced scorecard as one
of

the

most

important

measurements

of

the

organizational

performance, then finally we concentrated on reviewing the literature

on

the

link

between

organizational

culture

and

organizational

performance.

2 Organizational Culture
Schneider, B., Ehrhart, M. G., & Macey, W. H. (2013) stated that
there is not agreement on what culture is nor how it should be
studied, but the issues have been somewhat clarified.
Raymond Williams argued about the culture complexity and did
consider it as a trickier to define and to analyze, culture is one of the
two or three most complicated words in the English language.
(Williams, 1983, p. 87)
(Martinez,

Beaulieu,

Gibbons,

Pronovost,

&

Wang,

2015)

indicated that organizations are not just firms, government agencies,

hospitals and schools but it is everything around us as, unions, social
movements, communities and more.

The Impact of Organizational Culture on Company Performance

Waterman (1982) point out that the organizational culture as a
predominant and cohesive set of shared values transferred by different
typical means for example via stories, myths, legends.
As indicated by Schein, the organizational culture is the values,
beliefs and norms combined together created by a certain group of
people or community that may affect the employees behavior or the
way of thinking and feel during facing or solving different problems and
issues that may arises (Schein, 2010). This model has worked
effectively for an adequate timeframe keeping in mind the end goal to
be affirmed and will be transmitted to new employees as a fitting
model of perception and analysis of problems (Girneata & Potcovaru,
2015).
Moldoveanu and Dobrin stated that the organizational culture are
a set of knowledge, ideas, standards, rules and basic assumptions that
shape the method by which work is processed and rotated by the
employees (Moldoveanu & Dobrin, 2007). While Shahzad in a short
definition considered the organizational culture as a set consists of
knowledge,

values,

beliefs,

explanations,

communications

and

behaviors for a different group of people, gathered together at the

same time and at the same place (Shahzad, 2012).
(Neagu & Nicula, 2012) stated that the organizational culture
considered to be one of the most critical important subjects that drawn
the attentions of many literatures lately, because of the extraordinary
performance accomplished by the Japanese organizations, as result of
their impressive degree of their specific cultures.
Organizational cultures in an organization helps in understanding
on how to differentiate between what is actually done inside the
organization and what is officially announced by managers. Knowing
that there are different principles, techniques, articulations, decisions

The Impact of Organizational Culture on Company Performance

are translated and applied through organizational culture (Neagu &
Nicula, 2012).
Ovidiu Nicolescu and Ion Verboncu provided a comprehensive
definition for the organization cultures and indicated that it is a set of
values, beliefs, ambitions, expectations and behaviors combined
together overtime in each organization, which dominates inside the
organization and accommodate directly and indirectly the organization
functionality and performance (Nicolescu & Verboncu, 2001).
Schein defined cultures in term of basic assumptions, values and
the shared belief (Schein, 1985).

Ovidiu-Iliuta indicated that Schein

point of view is that the organizational culture do exists at three levels:

basic assumptions, values and the artifacts: where organizational
culture consists of the principles and norms that shows the appropriate
behaviors inside the organization from those who are not, and that
cultures should not be identical or similar across the different
departments within the same organizations, as may overtime different
groups inside the same organization develop their own sub cultures
(Ovidiu-Iliuta, 2014).
According to Stewart, the organization norms and values can
directly affect the employees to be fully devoted to their organization
and those norms cannot be seen but if the companies interested on
maximizing their profit and in increasing their employee productivity,
norms are to be considered on the first place (Strewart, 2010).

(Hofstede, 1984, p.21) defines culture as "the collective

programming of the mind, which distinguishes one human group from
another ... Culture in this sense, includes systems of values, and values
are among the building blocks of culture." Few years later Hofstede

The Impact of Organizational Culture on Company Performance

then

broadened culture as

"mental

programming

...

patterns

of

thinking and feeling, and potential acting" (Hofstede, 1991, p.4)

2.1 Dimensions of Organizational Culture

Hofstede searches the different elements of culture that can
influence and affect the organizational behavior. Using the IBM
employees in 50 different countries in three regions in the world, he
provides reasons why culture differences may exist in these different
regions. And he did perfectly analyze the organization culture of IBM on
the basis of four dimensions (power distance (PDI), individualism (IDV),
uncertainty avoidance (UAI) and masculinity (MAS)) (Hofstede, 1980).
Hofstede and Bond determined the 5th dimension (Long-term
Versus Short-term Orientation) based on eastern Chinese values using
23 countries (Hofstede & Bond, 1988).
(Hofstede & Peterson, 2000) inspected the issues of the
cooperation between national cultures and organizational culture. The
studies demonstrated that there are highly resistant national and
regional cultural groups over time, influencing the behavior of both
society and organizations, and that define and show why some
subsidiaries of the same organization can be more productive than
others although they have the same organizational culture.

2.2 Hofstede Dimensions of Organization Culture:

Power Distance: It measures the degree of acceptance of
inequality among people of the same society, or employees on the
same organization (Hofstede, 1980).
A highly PDI classification is the larger the acceptance of inequality;
peoples are tending to be highly accepting the hierarchical order,

The Impact of Organizational Culture on Company Performance

where everyone in the society has a place without any explanation or
further justification (Perera & Mathews, 1990).
A lower PDI means explanation and justification is required to
understand why these inequalities do exist; where peoples with low PDI
claim for their right to eliminate and minimize that inequality in that
relationship

who

do

exist

between

the

subordinates

and

the

supervisors, whereas low PDI values states that all peoples are equals
whether they are supervisors or subordinates and they all should have
equal rights (Hofstede, 1980, 2001).
Individualism versus Collectivism: Whether people are looking
after themselves and their immediate family only or they are belonging
to groups and looking after each other in exchange for loyalty
(Hofstede, 1980).
The more IDV scores the more the people focus on their own self
interest rather than on the groups they may belong, where people in
that case are more independent (Hofstede, 1980,2001).
Masculinity/Femininity: Cultures in which the prevailing social
values are success, money and things or the overwhelming social
values are caring for others and the quality of life (Hofstede, 1980).
Uncertainty Avoidance: are people are risk takers or risk averts
(Hofstede, 1980).
Perera and Mathews pointed for the main issue involved in that
dimension; which is the fact of the unknown future and how people
interact toward that, the more uncertainty avoidance peoples are likely
to react for the elimination of the unpredictable future that creates a
higher level on anxiety (Perera et al., 1990).

The Impact of Organizational Culture on Company Performance

Long-term Versus Short-term Orientation: the length of time
where people make plans and expect results and their tendency of
scarifying today for future results (Hofstede et al., 1988).

2.3 Factor Affecting Organizational culture:

(Girneata & Potcovaru, 2015) indicated in their study that there
are several factors that significantly play and contribute in changing
the organizational culture, these factors are as follow:
Clarity: in order to adapt to the market environment, leaders must
understand well the organization vision, mission, goals and values and
make sure that they are delivered clearly to their subordinates;
Communication: as highly skilled employees is now needed in all
different industries, employees also must understand clearly what their
role and how their work affect the organization objectives thus
communication skills are needed to be widely shared through the
company all different departments.
Collaboration: is the environment where employees working and
collaborate together, competition between employees can just produce
short

term

results

while

collaboration

can

achieve

long

term

sustainable growth for the organizations;

Connections:

To

seize

the

opportunities

employees

must

be

connected together especially in the dynamic environment;

Compassion: to build other success factors, employees must be
emotionally involved together where they will be able to understand
each others opinions, ideas and beliefs;
Credibility: to strong the link between the intention and results,
leaders must take systematic actions to build the trust, maintain
stability that result at the end to organizational success;

The Impact of Organizational Culture on Company Performance

Creativity: organizational culture that support the linear thinking and
creativity through applying automated straight procedures will results
in creating new competitive advantages.

2.4 The Denison Theory of Organizational Culture

Starting from Schein (1985) approach of organizational culture,
Denison developed the model of organizational culture based on four
cultural traits adaptability, mission, involvement and consistency
(Denison & Mishra, 1995).
Denison designed a framework using the four cultural traits to
show the differences between two important issues, the difference
between the internal integration and external adaptation and between
the change and stability, thus involvement and consistency focus on
the dynamics of internal integration while mission and adaptability
focus on the dynamic of external adaptation, on the other hand
involvement and adaptability stands for the organization ability to
change, while consistency and mission shows the organization ability
remain stable and predictability overtime (Denison & Mishra, 1995).

3 Company Performance
3.1 Performance Management
Ovidiu-Iliuta defined the performance management as a strategic
and

integrated

approach

to

achieve a

sustainable

competitive

advantage for an organization through improving the employees

performance and investing in their capabilities, by doing that the
organization goals will be met effectively and efficiently, the study
stated that people are the most important assets who create the
competitive advantage and not the capital (Ovidiu-Iliuta, 2014).

The Impact of Organizational Culture on Company Performance

Campbell, McCloy, Oppler, and Sager (1993) stated that job
performance is a controllable individual action that support and lead at
the end in reaching the organizational goals.
Performance management is a system that makes use of the
human resources full potential by removing the barriers and motivating
the employees of the organization (Armstrong & Baron, 1998). Kandula
states that performance management is to create competitive
advantage through development and employees motivation (Kandula,
2006). Ovidiu-Iliuta assumes that training strong employees through
developing their capabilities will positively affect the organization as its
competitive advantage will be improved (Ovidiu-Iliuta, 2014).

3.2 Organizational Performance

Organizational performance is a method for organizing the
behaviors

and

implications

that

serves

the

employees

of

the

organization as a guide for adaptation and survival, where solid leaders

can effectively spread the core values among the organization
employees through clear vision and mission statements; they also
acknowledge their employees about the expected performance, how
they will be evaluated? And at the same time they link motivation to
the achievement of these performances, thus they creates an internal
competition inside the organization, that is lead at the end to the
creation of strong organizational culture results to a long-term positive
business performance (Girneata & Potcovaru, 2015).
The

estimation

of

the

organization

performance

in

manufacturing and services organizations is critical (Brynjolfsson,

1993). Kaplan and Norton indicated that clear performance cannot be

The Impact of Organizational Culture on Company Performance

provided by a single measure, where managers have to choose
between operational and financial measures (Kaplan & Norton, 1992).
The balanced scorecard was proposed by Kaplan and Norton
(1992) to measure the organization performance, where it consists of
four dimensions (Financial Perspective, Customer Perspective, Internal
Business

Perspective

and

Learning

Perspective),

the

balance

scorecards considered to be one of the most critical tool that works in

supporting and ensuring that the organization strategy is translated
into rational set of performance measurements. It is simply contains a
set of financial and non financial measures that allow managers to
have a quick comprehensive view on businesses that assists them at
the end in achieving the organizations goals and objectives in a
successful manner (Kaplan & Norton, 1992).

Yesil and Kaya carried a study on the effect of organizational

culture on firm financial performance, and stated that it is too difficult
to indicate that the culture dimensions do not affect the company
performance directly without mediator and advised for further studies
using different context and different measurements as Balanced Score
Cards (Yesil & Kaya, 2013).

(Chavan, 2009) indicated that the most important part of the

balanced scorecard is the feedback and learning, where leaders will be
able to analyze the drawn data from the balanced scorecard and
determine whether they are on the right way or where the modification
and adjustments should take place and how it should be, in another
words changes will be the objectives that should be defined correctly
to rebuild the initiatives to improve the capabilities.

The Impact of Organizational Culture on Company Performance

3.3 The Balanced Scorecard Perspective (Chavan, 2009)

3.3.1 Financial Perspective
How the organization should appear to their shareholder to
succeed financially? Where the measures are return on capital;
improved shareholder value and asset utilization.
3.3.2 Customer Perspective
How the organization should appear to their customer to achieve
vision? The measures are: products and/or service qualities; customer
relations; image and reputation.
3.3.3 Internal Business Processes
At what business processes the organization must surpass to
attain the shareholders and the customer satisfaction, the measures
are product and service production; product and service delivery and
the after sales services.
3.3.4 Learning and Growth Perspective
How the organization will maintain and keep their ability to
change and improvement to achieve the organization vision? The
measures are; the capabilities of the employees; the capabilities of the
organization

information

empowerment.

system,

motivations

and

employees

The Impact of Organizational Culture on Company Performance

Source; Kaplan, R. S., & Norton, D. P. (2007). Using the Balanced Scorecard as
a Strategic Management System. Harvard Business Review, 85(7/8), 150-161.

According to Kaplan and Norton (2007) many organizations found

that there is a cause and effect relationship between the four
perspective measurements of the balanced scorecard, thus there is a
significant correlation between employees morale which is one of the
measures in the learning and growth perspective, and customer
satisfaction which is the most important part on customer perspective
measure. Also customer satisfaction, in turn was correlated with quick

The Impact of Organizational Culture on Company Performance

invoice payment that is lead to an essential decrease in account
receivable

and

organizations

so

found

higher

also

that

return
there

on
is

capital
a

employed.

correlation

The

between

employees morale and the number of suggestions made by the

employees - the two measures in the learning and growth measure and
between an increased number of suggestions and lower rework which
is an internal business process measure.
4

The Relationship between Organizational Culture

and the Company Performance:

4.1 The Link between Organizational Culture and

Performance
Many literatures on this topic assumed that culture is directly
related to performance since culture affects the behavior of the
employees of the organization through two main functions internal
integration and coordination (Galves & Garca, 2011; Hofstede, 1988;
Martins & Terblanche, 2003)
Kandula (2006) stated that the main key to good performance is
reaching a strong culture. The study asserts that because of the
differences in organizational culture, implementing the same strategies
in two similar industrial organizations even at the same location may
not lead to the same results at the end.
According to Ovidiu-Iliuta (2014) many scholars indicated that
the main element that support in achieving a perfect performance is to
develop a strong organizational culture. A strong culture is the one in
which the employees of an organization work effectively together,
share the same core values, and take their own decisions that is meets
at the end the organization main goals and objectives. Also sometimes
culture became a barrier when trying to apply new strategies, and that
is clarify why strategies may succeeded in one company and fail in

The Impact of Organizational Culture on Company Performance

another, although the two companies are in the same industry or even
at the same geographical area (Ovidiu-Iliuta, 2014).
Organizational

culture

and

performance

management

are

interdependent thus the change in one affects directly the other, that
is why mangers have to understand the effect of organizational culture
to get benefit from practicing the performance management (Magee,
2002).
Other studies addressed the relationship between the type of
culture and the organizational performance, indicating that the
organizational culture has an active and effective direct role in
performance management, cultivated by the belief that cultures are
different and that certain cultures may acts and perform better than
others, also the studies showed that strong and positive cultures
empower the employees operating effectively in a great attitude
attaining the organizational success, whereas a weak and negative
cultures may demotivate the organizations employees and decrease
their performance and end up with no achievement (Kandula, 2006;
Ovidiu-Iliuta, 2014).
Ogbonna (1993) argued that management can predict the
employees behaviors and their responses to a certain strategic
options and minimizing the degree of undesired outcomes if the
strongly held values are widely shared.
To manage and control the organizational cultures managers and
leaders must be characterized of having a high degree of ethics and
morality, thus the actions and values they takes must be in context to
what expected by their employees, mutual respects affects the
relations between employees and their managers, leaders is the
employees model where lack of involvement in any raised problem will
influence the employees negatively to act the similarly which will result

The Impact of Organizational Culture on Company Performance

at the end to

low performance and

failing

in

achieving

the

organizational goals. Also companys leaders must encourage their

employees by giving them the opportunity of growth and development,
support them with the needed training programs where employees in
turn will feel that their tasks are being appreciated acting directly to
the success of their leaders ending to achieve the organizational
objectives, if the employees feels the opposite, the stress and tensions
will affect them negatively leading to a reduce in their performance
and the organizational performance as well (Girneata & Potcovaru,
2015).
Many

studies

indicated

that

the

company

performance

depending on the degree of shared values of the strong culture, and

that the reason of linking the performance to the organizational culture
is that culture can play a significant role in creating competitive
advantage (Ogbonna & Harris, 2000).
According to the resource-based view of the firm, culture
considered to be one of the organization source of sustainable
competitive advantage because of its valuable, rareness, complexity
and its difficultly of being imitated by other competitors as its most
important characteristics is being tacit (Coyne, 1986).
Although that many theorists and researchers indicated that
organizational culture is linked to the organizational performance, it
was also found that other researchers and studies suggested that the
relationship

between

the

organizational

performance

and

organizational culture are weak, due to in fact of the appearance of

what is called the recourse based view of competitive advantages, that
claims that the success of culture to create a sustainable competitive
advantage depend on the degree of its rareness, complexity and
imitability (Ogbonna & Harris, 2000).

The Impact of Organizational Culture on Company Performance

Krefting and Frost (1985) proposed that if the organization
boundaries analyzed and defined in a way that facilitate the employees
interaction together by limiting the scope of processed information to a
proper levels, the organizational culture can succeed in creating a
competitive advantages.
Early researchers also claim that the raise of the organizational
sustainable competitive advantages comes from the generation of the
organizational competencies and that both are unique, unrivaled and
difficult to be imitated by other competitors. Thus the organizational
culture uniqueness quality can succeed in making it a powerful source
that generates superior advantages over the competitors. Also many
studies advised researchers and organizations to discover the multiple
drained benefits that can be obtained from the culture more than just
concentrating on the perceptible side of the organization (Ogbonna &
Harris, 2000).
Ogbonna and Harris (2000) indicated that many studies are
perfect in their claims in linking the organizational performance to the
organizational culture, and that is shown in what is called the
excellence writers works who contend that the successful companies
and organizations are differentiate from others by their ability in
developing and creating cultural values that are consistent with the
organization strategies, although this work was widely accepted by
many researchers, but it also faced many criticism and arguments by
others.
Denison (1990), Gordon and DiTomaso (1992) both assumed that
there is a link between a specific organizational culture attributes and
the organizational performance, and that the organizational culture will
keep linked to the organizational performance if its succeeded in being
adapted to the environmental changes, with preserving that the

The Impact of Organizational Culture on Company Performance

culture must remains on its unique qualities of being difficult to be
imitated by others and do not depend only of being strongly widely
shared.
Kotter and Heskett (1992) provided significant evidence that the
organizational culture is an impressive element that affects the
organization sustainable success, they conducted a study along eleven
year period for 207 large American companies where they discovered
that those companies who focused in developing their culture in all the
managerial

elements

including

employees,

customers

and

shareholders with a strong management system at all levels, perform

better than those who did not manage their cultures well, where those
who performed better and managed their culture well succeeded in
increasing their revenue by 682% and net income by 756% comparing
to increase in revenue for only 166% and only 1% net income for other
companies who did not.
(Girneata & Potcovaru, 2015) argued that the main symptoms
that indicate that there is a weakness of organizational culture include
the following:

No mutual information sharing between the employees.

The employees do not have the feeling of being a part of

the organization.
Employees do not understand that their tasks affects the
organization objectives, they just concern of doing what is
required, without having the chance to express their

knowledge.
No mutual trust between the employees at all levels.
Existing values and employees received rewards are

conflicting.
Different leadership style within the same organizational
culture.

The Impact of Organizational Culture on Company Performance

(Girneata & Potcovaru, 2015) indicated that strong managers
have to search for these negative elements and provide suitable
solutions to fast cure the negativity that opposes the company
strategies and turn it to positive elements where the positive
organizational culture will enable the organization to drain a great
benefits, and that can be achieved by training strong employees
through developing their capabilities that will positively affect the
organization as its competitive advantage will be improved over other
competitors.
(Girneata, 2014) states that adaptability has a direct effect on
organization

success

as the organizational

culture

support

the

companies social and economic efficiency as well as the companies

adaptability in the competitive context, and that the relation between
adaptability and performance in most industries identified when there
is a strong changes in the business environments.
(Ganescu, 2011) pointed for the importance for being an
organization

with

strong

effective

culture,

as

the

negative

consequences of the economic and social environment changes can be

mitigated, the study also states that the organizational culture is very
important in achieving the organization sustainable growth objectives,
which can be obtained by achieving the business excellence,
employees engagements, product quality and customer satisfaction
that leads at the end to the growth in the organizational culture as
well.

4.2 Denisons Framework of Organizational Culture

Denisons developed his model of organizational culture based
on Schein (1985) approach of organizational culture by underling the

The Impact of Organizational Culture on Company Performance

beliefs and assumptions that reflect the deepest level of organizational
culture, where the comparisons of organizations is made based on the
surface level values and between their manifest practices. Where the
values considered being more attainable than the assumptions and
more credible than the artifacts. (Denison, 2000 in Yilmaz, 2008)
Denisons framework main purpose is to distinguish between two
important issues, the difference between the internal integration and
external adaptation and between the change and stability, the model
was

developed

using

four

cultural

traits

adaptability,

mission,

involvement and consistency all this traits have been shown in the
literatures and many studies to have an influence on the organizational
performance (Denison & Mishra, 1995)

Source; Denison, D. R., & Mishra, A. K. (1995). Toward a theory of

organizational culture and effectiveness. Organization science, 6(2),
204-223.
Denisons theory proposes that organizations are most effective
if they have high level of employee involvement, staple internal
consistency, adaptability and have a strong clear mission (Denison &
Mishra,1995).

The Impact of Organizational Culture on Company Performance

4.2.1 Adaptability
(Kanter, 1983) criticized the well integrated organization of being
difficult to react and change to the market. (Nadler 1998, Senge 1990,
Stalk 1988) indicated that most adaptable organization are derived by
their customers, and characterized of being risk takers, have the ability
to change and always learn from their previous experiences and their
mistakes.
Organizations with high performance differentiated from those of
low performance by their strong ability in restructuring behavior and
procedures that help them to adapt and react directly to the
competitive environment and customers. Also successful organization
encouraging the new ideas and seeking different solutions for solving
any problems may arise, they always keep changing the systems for
better organization improvement. Moreover the employees of high
performing organizations work in upgrading themselves they keep
searching for new ideas, different values and better process to meet
their customer expectations in addition to their ability to learn from
their mistakes before learning from their success (Ovidiu-Iliuta, 2014).
(Boyce, Nieminen, Gillespie, Ryan, & Denison, 2015) identified
the adaptability as the degree in which the organizations concentrated
on learning from other competitors as well as from their customers,
and also on having a flexible response and adaptive reaction at both
organizational and employees levels.
4.2.2 Mission
Organizations are considered to be effective and successful if
they have a sense of purpose and clear directions that help in defining
the organizational strategic objectives and main goals and expressing
the organization vision of how the company will be in the future
(Mintzberg, 1987; 1994; Ohmae, 1982; Hamel & Prahalad, 1994). When

The Impact of Organizational Culture on Company Performance

an organizations basic mission changes, consequently changes in
different part of the organizational culture will occur (Denison, 1990).
(Ovidiu-Iliuta, 2014) indicated that effective organizations are
those who have a very clear mission and succeed in acknowledging
their employees how their works and tasks support and assist in the
organizational performance, and how their daily works related to the
organization vision. Also successful organization characterized by
having multiyear strategies, their objectives and goals are short term
and high priorities are established.
Mission is the degree in which the companies have designed
clearly their strategic direction that allows setting the organization
goals and objectives and which progress can be traced (Boyce et al.,
2015).
4.2.3 Consistency
(Saffold,

1988;

Davenport,

1993)

stated

that

successful

organizations are those who have strong cultures that are highly
consistent, well integrated and well coordinated. The behavioral and
norms are rooted in a set of core values, the employees of the
organizations interact positively together where the leaders and the
subordinates can reach easily to an agreement even there is a diverse
point of view (Block, 1991). Consistency considered being a powerful
source of the organization stability and internal integration that results
from high level of conformity and from a common mentality (Senge,
1990).
Consistency

is

the

organization

main

source

of

control,

coordination and integration. It supports organizations in developing

their internal governance system based on consensual support. Where
effective organizations support managers and employees in taking
consistent decision, any problems arises are discussed openly between

The Impact of Organizational Culture on Company Performance

all the involved parties as all employees understand well that their
tasks and work affect others and affected by others, that is why
employees in those successful organization keen to keep their tasks
aligned to the organizational goals and objectives (Ovidiu-Iliuta, 2014).
Internal consistency is the degree of existence of a clear set of
values and acceptance of these values inside the organization, where
effective organization have a smooth coordination and integration
between all departments and employees on the same organizations
(Boyce et al., 2015).
4.2.4 Involvement
In successful organizations executives, managers and employees
at all level are empowered to have their own decision; they understand
well that their decision will affect their work which is directly linked to
the organization goals and objectives (Katzenbach, 1993; Spreitzer,
1995).
High involved organizations differ from others by their ability in
making their employees feel self appreciated in return employees
become more attached and self committed toward their organization,
they invest in their employees capabilities through several training and
coaching, organizations are empowering their employees in an
informed framework where each employee knows well his main
responsibility and his limit which decisions they are allowed for and
which is beyond their responsibility, also high involved organizations
are team oriented where all employees works in a team and support
each other to achieve at the end the organizational goals and
objectives (Ovidiu-Iliuta, 2014).
(Kotrba, Gillespie, Schmidt, Smerek, Ritchie, & Denison, 2012)
indicated that there is a kind of interaction between the cultural
consistency and the other cultural traits mission, adaptability, and

The Impact of Organizational Culture on Company Performance

involvement on the organizational performance, where they carried a
study to discover whether these interactions affect the relationship
between the cultural consistency and market to book ratio, sales
growth, and return on assets. The study derived a data from 88879
employees

in

137

public

organizations

using

the

Denison

Organizational Culture Survey. The study shows that there is a

significant positive interaction between the consistency and the other
culture traits, thus high performer organizations can predict the market
to book ratios and the company sales growth, as they are found to be
both consistent and adaptable. Also the study shows that there is a
negative interaction when predicting return on assets.
Although Denison and Mishra (1995) stated that the four culture
traits have a significant positive effect on the company performance,
other researchers indicated that there are negative results observed
during their study (Deshpande, Farley, & Webster, 1993).

Deshpande et al. (1993) conducted a study in Tokyo for a sample

of Japanese organizations and discovered that the market culture is
correlated with better performance, followed by the adaptability
(adhocracy culture), while the involvement (clan culture) and the
hierarchy culture are more correlated with a bad performance. Also
Xenikou and Simosi (2006) concluded from their study for a sample of
Greek companies that the market culture was associated to the
organization performance while the clan culture (involvement) or
humanistic orientation did not show any relation with the company
performance, and that the organization high performance are derived
from the organizational norms that create the productivity and
effectiveness.

The Impact of Organizational Culture on Company Performance

Other studies finding support the theoretical argument that a
mediator variable affect the relationship between the organizational
culture and the organizational performance where Tseng (2010) stated
that knowledge conversion mediates such relation, Zheng, W., Yang,
B.,. & McLean, G. N. (2010) went for knowledge management as a
mediator, and Han, J.K., Kim, N., & Srivasta, R.K. (1998) went for the
innovativeness as a mediator variable. Thus other empirical studies
indicated that there is no direct relation between organizational culture
and performance (Han et al., 1998; Tseng, 2010; Zheng et al., 2010).

5 Conclusion
Despite the fact that there are several studies and authors stated
that there are no direct link between the organizational culture and
performance, and indicated that mediator variables can link between
the two variables (Han et al., 1998; Tseng, 2010; Zheng et al., 2010).
There are many other studies provide with an evidence that there is a
direct relation between organizational culture and organizational
performance (Denison, 1990; Denison & Mishra, 1995; Fey and
Denison, 2003; Denison et al., 2004). Also other type of studies
extended their research from previous studies on the link between
organizational culture and performance, and empirical demonstrated
the importance of the culture traits interaction on performance (Kotrba
et al., 2012). For instance (Brown, 1998; Kim, S., Lee J., & Yu K., 2004)
concluded that strong organizational culture has significant important
consequences for its impact on the organizational performance. On the
other hand Yesil and Kaya study findings support the argument which
indicated that each culture has its own specific unique characteristics
that can flourish in its particular context of time, conditions and
environment (Yesil & Kaya, 2013).

The Impact of Organizational Culture on Company Performance

Other authors called for further research areas using different

context and different measurements as Balanced Score Cards as
advised by (Maltz, A.C., Shenhar, A.J., & Reilly, R.R., 2003; Fekete, H., &
Bcskei, E., 2011; Yesil & Kaya, 2013). While (Patterson ,F., Kerrin, M.,
Gatto-Roissard, G., & Coan, P., 2009; Yesil & Kaya, 2013) advised to use
measures related to the employee behavior as proactivity and voice
behavior that may lead to different results.
(Yesil & Kaya, 2013) refused to jump to a fast conclusion that
there is no direct link between organizational culture and performance
outcomes and advised for further research area by linking specific
organizational culture dimensions and related characteristics to
specific performance outcomes. As any conclusion will be consider
misled without thorough understanding and further investigations.
Therefore, other researches and investigation with different context
and different measurements is needed to reach to the right conclusion.