One of the most famous argument on organisational
culture-performance link belongs to Peters & Waterman (1982) that the
sustained superior performance of firms like IBM, Hewlett-Packard, Procter and Gamble,
and McDonald’s may be, at least partly, a reflection of their organisational
culture. Morley and Heraty (1995) give evidence from the literature that the
features of the high-performance organisations include developed autonomy and
control, flat lean structures and advance human resource practices, including
the use of realistic job preview techniques, group-based employee selection and
an espoused management philosophy of open communication and feedback. The
following arguments of other commentators on this issue can be helpful to
understand how organisational culture supports the sustained performance of
organisations.
Hagberg and Heifetz (2000) argue that if
the organisation wants to maximize its ability to attain its strategic
objectives, it must understand if the prevailing culture supports and drives
the actions necessary to achieve strategic goals. Culture assessment can enable
a company to analyse the gap between the current and desired culture.
Developing a picture of ideal and then taking a realistic look at the gaps and
bring specific elements of culture into line.
According to Brown (1995), most commentators on organisational
culture tend to emphasize that culture is an asset. The culture of an
organisation defines appropriate behaviour, bonds and motivates individuals and
asserts solutions where there is ambiguity. It governs the way a company
processes information, its internal relations and its values. Brown also states
that some authors have argued that an organisation’s culture can be a
liability. This is because shared beliefs, values and assumptions can interfere
with the needs of the business and lead people to think and act in
inappropriate ways.
Barney (1986) argues that in order for a firm’s culture to provide
sustained competitive advantages, and thus, by implication, be a source of
sustained superior performance, three conditions must be met.
§ The culture must be valuable; it must enable a firm to do things
and behave in ways that lead to high sales, low costs, high margins, or in
other ways add financial value to firm. Because superior financial performance
is an economic concept, culture, to generate such performance, must have
positive economic consequences.
§ The culture must be rare; it must have attributes and
characteristics that are not common to the cultures of a large number of other
firms.
§ The culture must be imperfectly imitable; firms without these
cultures cannot engage in activities that will change their cultures to include
the required characteristics, and if they try to imitate these cultures, they
will be at some disadvantage (reputational, experience, etc.) compared to the
firm they are trying to imitate.
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