The Relationship Between Organizational Culture and Performance: A Review of Theory and Practice
Keywords:
organizational culture, organizational performance, competitive advantage, innovation, strategic managementAbstract
Organizational culture has become an important element to determine the success of organizations in various sectors. This research aims to analyze the relationship between organizational culture and organizational performance through a comprehensive literature review. With reference to key theories such as Schein's model, Denison, and Barney's competitive framework, this study explores the influence of culture on innovation, employee engagement, and adaptation to changes in the business environment. The analysis shows that a strong organizational culture that is relevant to operational needs can improve performance through various mechanisms, such as strengthening organizational identity, encouraging innovation, and building collaborative relationships across departments. However, challenges such as resistance to change, cultural gaps, and external pressures add complexity to managing organizational culture. Across sectors, culture performs different strategic functions, from driving efficiency in manufacturing to strengthening the culture of innovation in the technology sector. This research concludes that organizational culture becomes an internal element, and a strategic tool to achieve sustainable competitive advantage. Organizations that are able to leverage their culture adaptively and innovatively have a greater chance of surviving and thriving in the global market.
References
Al Hakim, Y. R. & M. Hariani. 2021. The Influence of Transformational Leadership Style on Organizational Commitment and Job Performance. Journal of Science, Technology and Society, 2(2), 19-24.
Amabile, T. M., R. Conti, H. Coon, J. Lazenby, & M. Herron. 1996. Assessing the Work Environment for Creativity. Academy of Management Journal, 39(5), 1154-1184.
Arifin, S. & R. Mardikaningsih. 2021. The Effect of Employability, and Organizational Climate on Employee Performance. Studi Ilmu Sosial Indonesia, 1(2), 33-42.
Barney, J. 1986. Organizational Culture: Can it be a Source of Sustained Competitive Advantage? Academy of Management Review, 11(3), 656-665.
Burt, S. & L. Sparks. 2003. Competitive Analysis of the Retail Sector. International Journal of Retail & Distribution Management, 31(3), 150-160.
Cable, D. M. & T. A. Judge. 1996. Person-Organization Fit, Job Choice Decisions, and Organizational Entry. Organizational Behavior and Human Decision Processes, 67(3), 294-311.
Cameron, K. S. & R. E. Quinn. 2006. Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. Jossey-Bass, San Fransisco.
Chatman, J. A. & K. A. Jehn. 1994. Assessing the Relationship between Industry Characteristics and Organizational Culture: How Different Can You be?. Academy of Management Journal, 37(3), 522-553.
Dahar, D. & R. Mardikaningsih. 2022. The Influence of Compensation and Work Environment on the Performance of Sub-District Employees. International Journal of Service Science, Management, Engineering, and Technology, 1(1), 28 – 32.
Darmawan, D. 2024. Distribution of Six Major Factors Enhancing Organizational Effectiveness. Journal of Distribution Science, 22(4), 47-58.
Darmawan, D., R. Mardikaningsih, E. A. Sinambela, S. Arifin, A. R. Putra, M. Hariani, M. Irfan, Y. R. Al Hakim, & F. Issalillah. 2020. The Quality of Human Resources, Job Performance and Employee Loyalty. International Journal of Psychosocial Rehabilitation, 24(3), 2580-2592.
Denison, D. R. & A. K. Mishra. 1995. Toward a Theory of Organizational Culture and Effectiveness. Organization Science, 6(2), 204-223.
Djaelani, M., E. A. Sinambela, D. Darmawan, & R. Mardikaningsih. 2021. Strengthening the Culture of Occupational Safety and Health as a Contributor to the Formation of Construction Project Performance. Journal of Marketing and Business Research, 1(2), 59-70.
Eddine, B. A. S. & D. Darmawan. 2023. Sales Performance Improvement Through Monitoring of Work Experience and Quality Work of Life. Journal of Marketing and Business Research, 3(1), 71-80.
Eddine, B. A. S., D. Darmawan, R. Mardikaningsih, E. A. Sinambela. 2023. The Effect of Knowledge Management and Quality of Work Life on Employee Commitment. Journal of Human Sciences, 10(1), 87-100.
Gambi, L. D. N., H. Boer, M. C. Gerolamo, F. Jørgensen, & L. C. R. Carpinetti. 2015. The Relationship between Organizational Culture and Quality Techniques, and its Impact on Operational Performance. International Journal of Operations & Production Management, 35(10), 1460-1484.
Handayani, S. & M. Khairi. 2022. Study on the Role of Quality of Work Life and Leadership on Employee Performance. International Journal of Service Science, Management, Engineering, and Technology, 1(1), 24 – 27.
Hariani, M. & M. Irfan. 2022. The Influence of Leadership and Work Culture on Employee Work Loyalty. Studi Ilmu Sosial Indonesia, 2(1), 39-48.
Hariani, M. 2021. Organizational Culture and Self-Efficiency that Form Employee Performance. Studi Ilmu Sosial Indonesia, 1(2), 23-32.
Hariani, M. 2023. Unleasing Organizational Commitment: Unravelling the Impact of Contract Worker Competence, Leadership, and Organizational Culture. International Journal of Service Science, Management, Engineering, and Technology, 3(1), 11–16.
Infante, A. & D. Darmawan. 2022. Women in Human Resource Management Practice. Journal of Social Science Studies, 2(1), 27-30.
Irfan, M. & Y. R. Al Hakim. 2022. The Effect of Perceived Organizational Support and Organizational Culture on Job Satisfaction. International Journal of Service Science, Management, Engineering, and Technology, 2(2), 25 – 30.
Irfan, M. 2022. The Influence of Work Discipline, Work Motivation and Leadership Style on Employee Performance. International Journal of Service Science, Management, Engineering, and Technology, 2(1), 31–36.
Jannah, S. M. & R. Mardikaningsih. 2023. Strategies for Improving Bureaucratic Efficiency and Employee Performance. International Journal of Service Science, Management, Engineering, and Technology, 4(2), 10–14.
Jung, T., T. Scott, H. T. Davies, P. Bower, D. Whalley, R. McNally, & R. Mannion. 2009. Instruments for Exploring Organizational Culture: A Review of the Literature. Public Administration Review, 69(6), 1087-1096.
Kotter, J. P. & J. L. Heskett. 1992. Corporate Culture and Performance. Free Press, New York.
Lee, S. K. J. & K. Yu. 2004. Corporate Culture and Organizational Performance. Journal of Managerial Psychology, 19(4), 340-359.
Lestari, U. P. & R. Mardikaningsih. 2020. Effect of Leadership Behavior and Work Climate on Employee Performance. Journal of Science, Technology and Society, 1(1), 5-12.
London, M. 2003. Job Feedback: Giving, Seeking, and Using Feedback for Performance Improvement. International Journal of Selection and Assessment, 11(2), 107-116.
Mardikaningsih, R. & D. Darmawan. 2022. The Influence of Working Conditions and Employee Motivation on Job Performance. Studi Ilmu Sosial Indonesia, 2(2), 1-10.
Mardikaningsih, R. & E. A. Sinambela. 2021. Performance Development of Agricultural Extenders Through Interpersonal Skills and Work Ethic. Journal of Science, Technology and Society, 2(1), 35-44.
Mardikaningsih, R. 2024. Organizational Effectiveness and Green Human Resources Management. Bulletin of Science, Technology and Society, 3(1), 6-13.
Meyer, C. B. & E. Altenborg. 2008. Incompatible Strategies in International Mergers: The Failed Merger between Telia and Telenor. Journal of International Business Studies, 39(3), 508-525.
Ouchi, W. G. & A. L. Wilkins. 1985. Organizational Culture. Annual Review of Sociology, 11(1), 457-483.
Pathiranage, J. 2019. Organizational Culture and Business Performance: An Empirical Study. International Journal of Economics and Management, 24(2), 264-278.
Peters, T. J. & R. H. Waterman. 1982. In Search of Excellence: Lessons from America’s Best-Run Companies. Harper & Row, New York.
Pulakos, E. D., S. Arad, M. A. Donovan, & K. Plamondon. 2000. Adaptability in the workplace: Development of a taxonomy of adaptive performance. Journal of Applied Psychology, 85(4), 612-624.
Putra, A. R. & R. Mardikaningsih. 2022. Study on Employee Performance Reviewing from Leadership, Innovative Behavior and Work Engagement. International Journal of Service Science, Management, Engineering, and Technology, 1(3), 4 – 10.
Rojak, J. A. & D. Darmawan. 2022. Strategies for Elevating Employee Performance: Focusing on Work Life Quality and Self-Efficacy Development. Journal of Science, Technology and Society, 3(2), 42-48.
Schein, E. H. 2010. Organizational Culture and Leadership. Jossey-Bass, San Fransisco.
Tandon, P., S. Mishra, & J. D. Mehta. 2018. A Theoretical Framework on Organisation Culture Dimension. Journal of Management Research and Analysis, 5(4), 263-269.
Wulandari, W. & D. Darmawan. (2024). The Influence of Emotional Intelligence on Salesperson Performance. Jurnal Manajemen Bisnis dan Terapan, 2(2), 124-132.
Zeithaml, V. A., L. L. Berry, & A. Parasuraman. 1990. Delivering Quality Service: Balancing Customer Perceptions and Expectations. The Free Press, New York.
Zohar, D. 2000. A Group-Level Model of Safety Climate: Testing the Effect of Group Climate on Microaccidents in Manufacturing Jobs. Journal of Applied Psychology, 85(4), 587-596.
