How Organizational Culture affects Business Performance

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Investigating how organizational culture affects business performance by defining both subjects, what they both mean to the business and their linkages which usually result in conflict.

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How Organizational Culture affects Business Performance

  1. 1. How organizational culture affects “Business Performance”Version 1 Tshidiso S. Moetapele Master of Technology: Business Information Systems (In-progress @TUT) Business Projects Management (WBS) Copyright © 2013 Tshidiso S. Moetapele
  2. 2. Copyright © 2013 Tshidiso S. Moetapele Contents o What is “OC” o What is “BP” o How to identify and capture “OC” o Benefits of managing an “OC” o Literature Review o Growth paths: Defined and undefined “OC” o Organizational Culture Quotes ABBREVIATIONS OC – Organizational Culture, BP – Business Performance, BMP – Business Performance Management Tshidiso S. Moetapele Master of Technology: Business Information Systems (In-progress @TUT) Business Projects Management (WBS)
  3. 3. Copyright © 2013 Tshidiso S. Moetapele Although there is no definite definition of what OC really is, many professionals from various fields e.g. Anthropology, sociology, etc have studied the subject and they all associate OC with the following (Cameron & Quinn, 2006); o organizational behavior, o Organizational values, o Organizational beliefs, o Organizational assumptions o Organizational norms. o And many other actions that enable business to achieve its brought organizational goals Consider the following example; OC is a set of shared values e.g. transparency and believes that assists an employee to understand the role they have to play in an organization. This provides an employee with a set of guides to the behavior expected from him/her e.g. going an extra mile to deliver a project / finding a solution to a problem. What is “Organizational Culture”
  4. 4. Copyright © 2013 Tshidiso S. Moetapele What is “Business Performance” Organizations are required by stakeholders e.g. BoD to run effectively and profitably in order to remain operational. Business performance usually has three sections; • Identification of goals, e.g. vision • Selection and consolidation of measurement frameworks relevant to identified goals e.g. Strategy. • Strategic drivers that will ensure that we achieve identified goals e.g. Business model BP just like BPM and OC lacks a cohesive body of knowledge but all management areas e.g. operational management, HR management, IS, marketing, and OC contribute to business’s positive performance and if business fail to identify and manage OC this might lead to confusion in form of a business conflict. Consider the following example; Business’s ability or criteria used to measure current goals against planned goals, along the processes identifying lacking areas , opportunities and applying remedial actions (when necessary), this process is often referred to as Business Performance Measurement.
  5. 5. Copyright © 2013 Tshidiso S. Moetapele How to ID & Capture Organization Culture Step 1 Identify what Organizational Culture is (definitions), specific to the industry an organization is operation on. Step 2 Identify and capture by interviews, observations, etc what organizational culture mean to organizational resources e.g. employees, systems, etc Step 3 From the results of step 2, compile a definition of what organizational culture is for the organization Step 4 Create an Organization Culture inline (and supporting) with broad organizational strategy, just like other management areas within any organization. Step 5 Resell and share OC strategy with stakeholders for “buy in” and “continuous improvement”.
  6. 6. Copyright © 2013 Tshidiso S. Moetapele Benefits of managing Organizational Culture According to Long & Fahey, OC is gradually growing as an obstacle to optimal usage of organizational resources if not identified and managed (Long & Fahey, 2000). It is by default divided into sub-cultures which all conform to the broad organizational culture. Below are some of the benefits associated with a managed organizational culture; o Increased organizational competitiveness o Sustained organizational performance o Operational excellence e.g. reduced operating costs, increased customer satisfaction, etc o Organizational attractiveness (internal and external) o Strengthen and unite an organization
  7. 7. Copyright © 2013 Tshidiso S. Moetapele Literature Review Failure for departments not conforming to the main organizational culture, usually lead to a department being perceived as working in silos, conflict with departments and sometimes customers. Organization culture plays a pivotal role in any organizational setting as it can choose, advise which and where the organization’s strategic efforts needs to be directed to achieve defined strategic goals / target and can also decide the strategic patterns of an organizations (Qun L. , 2006). Li Qun continues by saying that organizational culture plays an important role when an organization is concerned about long term sustainability, remaining profitable and being competitive. As per my theoretical framework illustrated in the next slide, if an organization is concerned with being profitable or being able to deliver on its services, it will focus efforts and organizational activities that will enable it to be in operation and ensure that it is on the right path of growth. Circle in red are our areas of concern, why we will be studying this phenomenon.
  8. 8. Copyright © 2013 Tshidiso S. Moetapele Organizational growth path for… An organization without defined and managed OC An organization with defined and managed OC
  9. 9. Copyright © 2013 Tshidiso S. Moetapele "...We believe that organizations will ultimately get only as far as their organizational cultures take them.“ by Dynamic Foundations LLC
  10. 10. Copyright © 2013 Tshidiso S. Moetapele Tshidiso S. Moetapele Business Projects Management (WBS) Master of Technology in Business Information Systems (In-progress @ TUT) moetapele@gmail.com +278 3 7501 609 END

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