Insight Articles
| What are the performance implications of your organization's culture?
| Journal of Applied Psychology (JULY 2011) | By Hartnell, C.A., Ou, A.Y., & Kinicki, A. | Try to define your organization's culture in one word… The word you came up with may be a predictor of how your organization is performing. Although organizational culture is assumed to be a key component of organizational effectiveness, the theoretical
connection between these two important concepts remains fuzzy. Hartnell, Ou, and Kinicki conducted a meta-analysis to explore how a prolific taxonomy of organizational cultures, called the competing values framework (CVF), may help connect our understanding of organizational culture to organizational effectiveness.
Briefly, the CVF arranges organizational cultures into four categories: clan (internal
focus on human capital and membership), adhocracy (external focus on adapting
through creativity, innovation, and gathering of resources), market (external focus
on competitiveness and aggressiveness to meet customer demands), and hierarchy
(internal focus on maintain predictability and performance through precise control and
clearly defined roles).
After examining 84 studies across three dimensions of organizational effectiveness
(employee attitudes, operational effectiveness, and financial effectiveness), the authors
found that clan cultures were more positively associated with job satisfaction than were
adhocracy cultures, subjective innovation was more strongly related to market cultures
than adhocracy cultures, and market cultures had stronger positive relationships with
financial effectiveness criteria than were clan or adhocracy cultures.
All that to say, each of the CVF culture types were related to organizational
effectiveness criteria in varying ways; this highlights the importance of organizational
culture's role in predicting firm performance. However, the authors concluded that
more work is needed regarding the CVF's nomological validity—as researchers and
practitioners look to "tried and true" methods of defining organizational culture, they
must also be careful to not ignore both the role of culture in organizational functioning or the theoretical foundations of their taxonomies.
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| | With an increasing amount of employees working in global and multinational environments, it is critical for organizations to understand and develop the competencies deemed most important for success. A recent study, spanning 40 countries and 1,550 companies, investigated if four leadership competencies (Resourcefulness, Change Management, Building and Mending Relationships, and Balancing Personal Life and Work) are valued as important for managerial success across cultures or just in some countries.
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