In a study of 230 Organizations from different industries around the world, and from regions including North America, Asia, Europe, The Middle East, and Africa, having a strong and positive organizational culture was associated with increased organizational effectiveness. The strong and positive aspect of organizational culture is most critical to success across regions generally included
* empowering employees
* having a team orientation
* having a clear strategic direction and intent
* possessing a strong and recognizable vision
Though there were similarities when comparing regions in terms of organizational culture and effectiveness, there were some differences when researchers compared individual countries. An organizational culture that stresses empowerment, for example, appears to be more important for performance in countries such as the United States and Brazil and less important in countries such as Japan because of the former two countries’ focus on the individual. Also, a focus on creating change within the organization appears to be a strong predictor of organizational effectiveness in South Africa but a relatively weak predictor in Jamaica, but it currently is unclear as to why this is the case. Overall, the study confirms that having a strong, productive organizational culture is associated with increased sales growth, profitably, employee satisfaction, and overall organizational performance regardless of where the organization is physically located.
Strong versus Weak Cultures:
It has become increasingly popular to differentiate between strong and weak cultures. The argument here is that strong cultures have a greater impact on employee behavior and are more directly related to reduced turnover.
In a strong culture, the organization’s core values are both intensely held and widely shared. The more members who accept the core values and the greater their commitment to those values is the stronger the culture is. Consistent with this definition, a strong culture will have a great influence on the behavior of its members because the high degree of sharedness and intensity creates an internal climate of high behavioral control. For example, Seattle-based Nordstrom has developed one of the strongest service cultures in the retailing industry. Nordstrom employees know in no uncertain terms what is expected of them and these expectations go a long way in shaping their behavior.
One specific result of a strong culture should be lower employee turnover. A strong culture demonstrates high agreement among members about what the organization stands for. Such unanimity of purpose builds cohesiveness, loyalty, and organizational commitment. These qualities, in turn, lessen employees’ propensity to leave the organization.
Culture versus Formalization:
A strong organizational culture increases behavioral consistency. In this sense, we should recognize that a strong culture can act as a substitute for formalization.
We have discussed how formalization’s rules and regulations act to regulate employee behavior. High formalization in an organization creates predictability, orderliness, and consistency. Our point here is that a strong culture achieves the same end without the need for written documentation. Therefore, we should view formalization and culture as two different roads to a common destination. The stronger an organization’s culture, the less management need be concerned with developing formal rules and regulations to guide employee behavior. Those guides will be internalized in employees when they accept the organization’s culture.
Organizational Culture versus National Culture:
National cultures must be taken into account if accurate predictions are to be made about organizational behavior in different countries. But does national culture override an organization’s culture? Is an IBM facility in Germany, for example, more likely to reflect German ethnic culture or IBM’s corporate culture?
The research indicates that national culture has a greater impact on employees than does their organization’s culture. German employees at an IBM facility in Munich, therefore, will be influenced more by German culture than by IBM’s culture. This means that national culture is as influential as organizational culture is in shaping employee behavior. National culture may be even more influential. The preceding conclusion has to be qualified to reflect the self-selection that goes on at the hiring stage. A British multinational corporation, for example, is likely to be less concerned with hiring the “typical Italian” for its Italian operations than in hiring an Italian who fits with the corporation’s way of doing things. We should expect therefore, that the employee selection process will be used by multinationals to find and hire job applicants who are a good fit with their organization’s dominant culture, even if such applicants are somewhat a typical for members of their country.