R O L E O F C U L T U R E I N O R G A N I Z A T I O N A L

E F F E C T I V E N E S S

DETERMINANTS OF ORGANIZATIONAL EFFECTIVENESS

What factors most influence company performance and what can managers do to ensure

the effectiveness of their companies? The answers to these questions are, in reality,

complex because of the vast number of factors that may influence company performance.

These include external factors such as market share and market environment, as well as

internal company factors including organizational culture, management styles and human

resource management practices. Recently, the increasing level of competition worldwide

has led managers and researchers to focus even more sharply on these questions.

Reducing labor costs in some countries, particularly in countries in the process of

industrialization, has raised the level of competitive threat for countries which have been

industrialized for some time.The pressures on managers to manage the complex and

varied influences on company performance are greater than ever before.

CULTURE-STRUCTURE EFFECTIVENESS

Culture, in organizational context, may be broadly defined as a group’s or nation’s way of

thinking, believing, feeling, and responding. Culture is the way of life of a group of

people. More formally culture is defined as the complex whole which includes

knowledge, belief, art, morals, customs and any other capabilities and habits adopted by

members of a society. A society may be represented by the members of a nation or by

members of an organization. “The individualism-collectivism dimension illustrates this

shift from cultural dimensions to cultural syndromes.” (Gregory, 1983) Often, it is

observed that the ‘Actual Culture’ is quite different from ‘Official Culture’ with respect

to participation in decision making and social orientation in a company.

If we assume that organizational structure is measured by four dimensions (specialization,

standardization, formalization, and centralization) and culture is also defined also by four

dimensions (individualism/collectivism, power distance, uncertainty avoidance, and

masculinity/femininity), relationships between these dimensions will describe the

relationship between organizational structure and culture. Based on such assumptions we

can deduce that culture can relatively influence organizational structure in different

variations; consequently, enhancing organizational effectiveness.

EMPLOYEE ATTITUDES AND PERFORMANCE

Even if a small percentage of the variation in organizational performance can be

explained by employee attitudes, then managers are likely to take considerable interest in

the factors that influence employee attitudes. On the other hand, if there is no link

between employee attitudes and organizational performance, then those charged with

running organizations may well argue that concerns about job satisfaction, for example,

are moral and ideological rather than economic issues. “Organizations do not decide to

become bureaucratic. Bureaucracy, or any other organizational form, is the function of

the actions of people in the organization, perhaps in response to conditions outside the

organization.” (Frank & Fahrbach, 1999) Rather than concentrating upon the culture of

the organization, the performance of the management depends on the mind-set of the

employees. Here the argument arises that any organizational form must comprise of such

an environment that contributes to the optimum performance of the organization. Here the

attitudes of the employees play an important role; they are responsive to the factors that

exist internally as well as externally in the organization. Managers are required to make

an effort through which organizational form integrates with the attitude of the sub-

ordinates. Being contradictory to the proposition above still it can prove to increase

organizational effectiveness.

CULTURAL STRENGTH ANDORGANIZATIONAL PERFORMANCE

Organizational culture is interpreted here as the aggregate of employees’ perceptions of

aspects of the organization, for example, quality of communication, support for

innovation, level of supervisory support and so on. However, the evidence for the

influence of culture upon organizational productivity is limited. “The voluntarism,

commitment, and identification with the humanistic mission were seen by the

organization's members (and the researchers) as having a positive effect on the

organization's functioning, particularly in the early stages.” (Denison & Mishra, 1995)

Organizational culture is the set of values, norms and beliefs shared by member of

organization. Organization develop a unique culture and employees share common values

and beliefs about work-related issues. Organizational culture also can support company

mission and strategy. Even companies in the same industry tend to have entirely different

cultures based to their own mission and goals. This helps in providing the organization a

clear direction to work towards. Ultimately when the organizational culture starts to

support company strategy, mission, and policies; indirectly the employees will be redirect

towards a collective motive. The strength of the culture depends on how strongly member

share its values and basic assumption.

The pervasiveness of an organization’s culture requires that management recognize the

underlying dimensions of their corporate culture and its impact on employee-related

variables such as satisfaction, commitment, cohesion, strategy implementation,

performance, among others. One consistent theme in the culture literature concerns the

impact of a strong culture on organizational performance. The hypothesis is that an

organization with a high level of shared meaning, a common vision, a “clan-like” attitude

toward members, and a high level of normative integration will perform well.

Some authors have argued that this theory has universal application, while others have

argued that the culture of an organization, in addition to having these characteristics, must

also fit the business environment. “The multicultural organization is characterized by

pluralism, full integration of minority-culture members both formally and informally, an

absence of prejudice and discrimination, and low levels of inter-group conflict; all of

which should reduce alienation and build organizational identity among minority group

members.” (Cox, 1991) Aligning organizational culture with strategy is a powerful means

for gaining competitive advantage and industry or sector leadership. Organizations that

seek leadership and sustainability make the choice for culture by design, not default.

BUILDING AND SUSTAINING A CULTURE OF

EMPLOYEE ENGAGEMENT

Building and sustaining a culture of engagement requires a full commitment from

leadership and a climate that regularly considers how the organizational environment

influences employee attitude, productivity, well-being and loyalty. In any organizational

structure there are some regular official activities in which participation is required by

every employee. But the extent to which the participation is mandatory is the question to

ask. The engagement of the employees in the organizational structure is the primary cause

of their involvement in these activities. “The seemingly common structure of rituals, i.e.,

meetings, training programs, and formal sessions for information exchange, they serve

contrasting functions in high and low innovation-supportive cultures.” (Jassawalla &

Sashittal, 2002) Here it can be proposed that cultures of different variation of notions can

have a major impact on the employees’ attitudes concerning their required performance.

We see organizational culture as the critical foundation which shapes the way that the

work of the organization gets done (established through goals, plans, measures, and

rewards) and the infrastructure (systems, process, and structures) gets utilized.

Engagement reflects alignment of each employee’s very personal goals and drivers of job

satisfaction with the organization’s strategy and contribution requirements. And,

realistically, if employees themselves aren’t clear on what they do well and what matters

most to them, it’s unlikely that any work situation will engage them.

Cultural diversity is a part of organizational life. In the present business environment it

cannot be ignored. The question arises ‘how to manage it?’ When a manager focuses

attention on cultural differences, it causes problems as it is often confused with evaluation

of a culture. According to Sadri and Lees (2001), a positive corporate culture could

provide immense benefits to the organization, and thereby a leading competitive edge

over other firms in the industry. However, a negative culture could have a negative

impact on the organizational performance as it could deter firms from adopting the

required strategic or tactical changes. Such type of culture could inhibit future changes in

an organization. The changes cultivated by organizational culture have a positive

relationship with the financial performance of the firms.

CONCLUSION

This term paper has enhanced the understanding of the role of culture in Organizational

Effectiveness. Culture was found to impact a variety of organizational processes and

performance. While more research remains to be done in this area, this term paper has

demonstrated the power of culture in influencing organizational performance. Strong

culture which all members in organization such as employees, executives and managers

in organization’s operation and management decision. In the same time, organizational

culture also supports organization’s strategy, mission and policies to achieve their goal.

This term paper also showed that organizational culture is associated with attitudes

toward organizational change. Different types of organizational culture have different

levels of acceptance on attitudes toward organizational change. Finally organization

culture play important role and is effective in many ways to achieve successful.

WORKS PCITED

Cox, T. J . (1991). The Mult icul tural Organizat ion. The Execut ive , 5 (2) , 34-47.

Denison, D. R. , & Mishra, A. K. (1995). Toward a Theory of Organizat ional Cul ture and Effect iveness . Organizat ion Science , 6 (2) , 204-223.

Frank, K. A. , & Fahrbach, K. (1999). Organizat ion Culture as a Complex System: Balance and Information in Models of Inf luence and Select ion. Organizat ion Science , 10 (3) , 253-277.

Gregory, K. L. (1983). Nat ive-View Paradigms: Mult iple Cul tures and Culture Confl ic ts in Organizat ions. Administrat ive Science Quarterly , 28 (3) , 359-376.

Jassawalla , A. R. , & Sashi t ta l , H. C. (2002). Cul tures That Support Product-Innovat ion Processes . The Academy of Management Execut ive (1993) , 16 (3) , 42-54.

Sadri , G. , & Lees, B. (2001). Developing corporate cul ture as a compet i t ive advantage. Journal of Management Development , 20 (10) , 853-9.