Global Journal of Management and Business Research: A

Administration and Management

Volume 14 Issue 3 Version 1.0 Year 2014
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals Inc. (USA)
Online ISSN: 2249-4588 & Print ISSN: 0975-5853

The Impact of Organizational Culture on Organizational

Performance: A Case Study of Telecom Sector
By Mashal Ahmed & Saima Shafiq
Islamia University of Bahawalpur, Pakistan

Abstract- “The only thing of real importance that leaders do is to create and manage culture.” “If
you do not manage culture, it manages you, and you may not even be aware of the extent to
which this is happening.” (Edgar Schein).Organizational Culture is one of the most important
construct in management research. This exploratory study elaborates the impact of
organizational culture on organizational performance. This study is conducted in different
Bahawalpur based franchises of telecom companies. The purpose of this study is to determine
the impact of organizational culture on organizational performance in order to know that how
culture of an organization assist in enhancing the organizational performance. Balance score
card is used to measure the organizational performance. Quantitative approach is adopted in
which a questionnaire is used to collect the data. The questionnaire is adopted from a previous
study. 22 questionnaires have been distributed to the research participants out of which 15
questionnaire are returned to the researchers with complete information. The findings indicate
that all the dimension of the culture influence the different perspective of organizational
performance.
Keywords: organizational culture, organizational performance, telecom companies.
GJMBR-A Classification: JEL Code: M14, L25

TheImpactofOrganizationalCultureonOrganizationalPerformanceACaseStudyofTelecomSector
Strictly as per the compliance and regulations of:

© 2014. Mashal Ahmed & Saima Shafiq. This is a research/review paper, distributed under the terms of the Creative Commons
Attribution-Noncommercial 3.0 Unported License http://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial
use, distribution, and reproduction in any medium, provided the original work is properly cited.
 The Impact of Organizational Culture on
Organizational Performance:
A Case Study of Telecom Sector
Mashal Ahmed α & Saima Shafiq σ

2014
Abstract- “The only thing of real importance that leaders do is companies are already focusing and competing on innovation
to create and manage culture.” “If you do not manage culture, and technology that why this dimension is not included in

Year
it manages you, and you may not even be aware of the extent research.
to which this is happening.” (Edgar Schein).Organizational Keywords: organizational culture, organizational perform-
Culture is one of the most important construct in management ance, telecom companies.
research. This exploratory study elaborates the impact of 21
organizational culture on organizational performance. This I. Introduction

Global Journal of Management and Business Research ( A ) Volume XIV Issue III Version I
study is conducted in different Bahawalpur based franchises

O
of telecom companies. The purpose of this study is to rganizational development has some particular
determine the impact of organizational culture on features that can increase sustainability on basis
organizational performance in order to know that how culture of effectiveness. The enhancement in
of an organization assist in enhancing the organizational performance contributes to employee commitment while
performance. Balance score card is used to measure the norms, values and objectives contribute in enhancing
organizational performance. Quantitative approach is adopted the culture of an organization (Awadh & Saad, 2013).
in which a questionnaire is used to collect the data. The
Most of us contribute a great part of their time in
questionnaire is adopted from a previous study. 22
questionnaires have been distributed to the research
organizations. The study of Geert Hofstede indicates
participants out of which 15 questionnaire are returned to the that cultural differences among nations are found
researchers with complete information. The findings indicate specifically on the greatest level; that is on the level of
that all the dimension of the culture influence the different values. By comparing cultural differences between
perspective of organizational performance. Research also organizations are specifically identified on the basis of
indicates that if the norms and value of employees are practices. In comparison with values, practices are more
according to organization then it is beneficial for achieving the tangible. “Organizational Culture can be defined as "the
organizational objective. The findings also indicate that the collective programming of the mind that distinguishes
uncertainty avoidance is high in these companies and roles
the members of one organization from others".
and procedures are clearly defined .The findings revealed that
these companies are characteristised by high masculinity
(Hofstede, The Hofstede Center). Hofstede (1980)
which means the managers are effective, more assertive, searches for distinctions among 160
result oriented and value the final outcome. It is also revealed 000 IBM employees in 50 various countries moreover
that there is a power distance between the managers and the in three regions of the world, in order to search different
employees because only few employees are agreed with the elements of culture that can affect the organizational
statement that there manager is accessible and visible. The behavior. He provides reasons for cultural differences
findings indicate that these telecom companies are inclined that may exist in different regions, as well as the
towards collectivism due to which workers are more satisfied significance of international awareness and
with their work, supervisors and co-workers but there are also
multiculturalism for the individual cultural introspection.
some elements of competition which exist in individualism. The
result also shows the difference between the organizational
Cultural differences reveal distinctions in thinking and
performance measures. The result indicates that these social action, and even in "mental programs", some sort
companies have faith in their financial performance means of term Hofstede uses for expected behaviour. Hofstede
they believe that there financial performance is enhancing day correlates culture to ethnic as well as regional groups,
by day. In customer service perspective it is clear that these but additionally to organizations, profession, family, to
companies are trying to compete with each other due which community as well as subcultural groups, political
less customer are satisfied. In internal business perspective it systems and legal guidelines, This specific research
is revealed that most of the workers agreed that their company
acknowledged systematic variations in national culture
is productive. In learning perspective it is stated that these
with four dimensions: power distance (PDI), individu-
alism (IDV), uncertainty avoidance (UAI) and masculi-
Author α σ: Department of Management Science the Islamia University nity (MAS) (Hofstede, Wikipedia.org). In 1998 Hofstede
of Bahawalpur, Pakistan. e-mail: mashal_wattoo@yahoo.co.in, and Bond determined 5th dimension in which short and
saima_shafiq@ymail.com long term orientations of 23 countries are identified. The

© 2014 Global Journals Inc. (US)

 The Impact of Organizational Culture on Organizational Performance: A Case Study of Telecom Sector

organizational behaviour which is related to resources. (Titiev, 1959) The mental ability of human
practitioner’s values and beliefs is based on culture which helps in enhancing thinking and decision making
elements and norms that influence personality and depends on the organization culture (Pettigrew,
performance of organization. (Sondergaard, 1994) The 1979).According to (Schein, 1990) culture is a collection
cultural elements and personality effects behaviour and of various values and behaviors that may be considered
sustainability of organization (Schwartz, 1994) the strong as a guide to success. As per (Kotter & Heskett, 1992),
relationship of culture has been identified in the model culture is collection of beliefs, behaviors and values
produced by Hofstede in 1980 which represents the 38 which society contains normally. In simple we can say
countries research. Organizational performance is that culture is knowledge, explanations, values, beliefs,
comprised of the actual output or results of communication and behaviors of many people, at the
an organization as measured against its intended right time and right place. In present era the concept of
2014

outputs (or goals and objectives). One of the most culture is used as a concept of organization (Kotter &
important reasons that explain the interest in Heskett, 1992). Organizational culture may be consist of
organizational culture is the assumption that certain two important elements of social group; structural
Year

organizational cultures lead to an increase in stability of number of peoples and assimilation of an

organizational performance. (Ilies & Gavrea). individual item in good standard (Schein, Organizational
22
2 Organizational performance comprises the actual culture, 1995).According to (Strewart, 2010),
productions as well as outcomes or outcomes of organization’s norms and values have a great impact on
Global Journal of Management and Business Research ( A ) Volume XIV Issue III Version I

an organization which are measured against its those who are fully devoted to the organization.
expected outcomes. According to (Kaplan & Norton, According to him norms are unable to be seen but if the
1992) no single measure can provide a clear organizations want to increase the profits and
performance target….so managers have to choose productivity of the employees norms comes first to be
between financial and operational measures. In this considered.
study Items from (Kaplan & Norton, 1992)balance score b) Organizational Performance
card are used to measure the organizational The notion of organizational performance is
performance. These dimensions of the Balance Score affiliated to the endurance and success of an
card include organization. In service organization as well as in
1. financial perspective; manufacturing organizations the computation of the
2. customer perspective; organization performance is critical (Brynjolfson, 1993).
A balance score card proposed by (Kaplan & Norton,
3. internal business perspective
1992) is used to measure the organization performance.
4. Learning Perspective. The dimensions of the balance score used in this study
Organizational Culture is the most important are financial perspective; customer perspective; internal
variable that influences the organizational performance. business perspective and learning perspective.
The purpose of this study is to examine the impact of Performance is a comprehensive measure that can
organizational culture on organizational performance in include productivity, quality, consistency, and so on. On
different franchises of Bahawalpur based Telecom the other side, performance indicators may also involve
Companies. This finding can be useful to telecom (criterion-based) results, behaviors and (normative)
companies and their managers when attempting to relative measures, concepts of education and training
understand the influence of organizational culture on and instruments, involving management development
organizational performance and leadership training for developing attitudes of
performance management and essential skills. (Richard,
II. Research Objectives 2002) . Balance Scorecard is the one of most critical tool
1. To explore the culture of telecom companies which provides help or frame work to ensure that the
strategy is translated into rational set of performance
2. To analyze the impact of organizational culture on
measurement (Kaplan & Norton, 1992).The performance
organizational performance.
measurement system assist in enhancing organization
3. To understand the importance of organizational
association to achieve goals and objectives in a
culture and organizational performance.
successful manner. (Ittner & Larcker, 1998) The strategic
III. Literature Review planning that is based on development of objectives
assist organization to emphasize on non-financial or
a) What is Culture intangible assets. The quality, performance and services
Culture can be defined as a combination of associated with customers have financial features .The
values, sets, beliefs, communications and simplification financial and non financial reward management system
of behaviour which gives direction to peoples. The is possible through the measurement and evaluation of
basic idea of culture arrives through sharing of learning performance measurement system (Kaplan & Norton,
processes which is based on the proper allocation of 2001). According to (Chavan, 2009), (Johnsen, 2001)
© 2014
1 Global Journals Inc. (US)
 The Impact of Organizational Culture on Organizational Performance: A Case Study of Telecom Sector

said that an essential element of the Balance Scorecard performance management, relative (normative) measures
technique is the feedback and learning part, where an (Richard, 2002). The organization's performance is the
organization is able to measure ,where organization is function of the basic returns to the Instillation of strong
building its strategic capability, in the scenario of its culture in the organization's systems which enable it to
current performance, and possible dynamic business perform its routines undoubtedly. This concept is
situations. This data makes the leadership capable to important in permitting researchers and managers to
analyze that whether the organization is on right track, asses firms’ performance over time and matches their
and what, if there is need of any change. If there is need performance with the competitors. In simple word,
of change, these need to be in the definition of the organizational performance is the most essential
objectives, the path of the journey, or to rebuild the criterion in managing and assessing the actions and
initiatives developed to enhance the capability. environments of organizations
Perspectives of balance score card are discussed below

2014
d) Methods of Learning Organizational Culture
(Chavan, 2009) (Brown, 1998) Has identified the following

Year
i. Financial perspective methods of learning the organization’s culture:
How should we appear to our shareholders to i. Arte facts
succeed financially? Measures are: return on capital; It refers to the total social and physically
improved shareholder value; and asset utilization. 23
developed environment of an organization for example
office space, equipments, rules, systems and

Global Journal of Management and Business Research ( A ) Volume XIV Issue III Version I
ii. Customer perspective
How should we appear to our customers to achieve our procedures.
vision? Measures are: Product/service qualities; ii. Language
customer relations; Image and repute. It refers to basic ways in which the organization
understands its world for example jokes, stories, myths
iii. Internal business processes
and legends.
At what business processes must we excel to
satisfy our shareholders and customers measures are: iii. Behaviour patterns
produce products and services; deliver products and Behaviour patterns are repetitive patterns of
services; and “after-sales” services. behaviour which are characteristics of organizational life.
It includes rites, rituals, ceremonies and celebrations.
iv. Learning and growth perspective
How will we maintain our ability to change and iv. Norms of Behaviour
improve to achieve our vision? Measures are: employee It refers to rules of behaviour that determine
capabilities; information system capabilities; motivation, what are considered to be suitable and unsuitable
empowerment and alignment. responses from employees in different conditions.
These norms grow over time when several persons
c) Understand Organizational Culture and
make a discussion with each other in order to reach at a
Organizational Performance
decision on how they can handle the organizational
In the organizations Culture can be learned and
issues.
shared (Titiev, 1959). According to (Pettigrew,
1979)cultures of an organization is based on the v. Heroes
systems that may help to define how employees take Heroes help to attain success present role
decision and think. He also noted the different level of models and represent the organization to the people
culture based on the multifaceted set of beliefs, values outside of the organization. Heroes are the persons who
and assumptions may define ways to organizations to influence other employees.
do its business. Organizational culture is the
vi. Symbols and Symbolic action
combination of values, beliefs, and norms which may
These may be defines as words, objects,
impact the way employees behave, think and feel in the
conditions, acts or features of the organization that are
organization (Schein, 2011). There are 4 functions of
important to organizational members. It includes
organization culture: providing sense of identity to
corporate logos, policies and products.
members, enhancing the commitment, strengthening
organizational values, and shaping behavior through a vii. Believes, values and attitudes
control mechanism (Nelson & Quick, 2011). Performance Values are closely attached with moral
is a measure that involves productivity, quality, standards and ethical standards; they examine what
consistency, and so on. On the other side, performance people think should be done. Beliefs on the other side
indicators involve results and behaviors (criterion-based) are what is true and what is not. Attitudes relate belief
and education and training concepts and instruments and values to emotions and feelings; they may be
involving management development and leadership thought as a learned inclination of responding
training for developing essentials skills and attitudes of consistently in a suitable and unsuitable way.

© 2014 Global Journals Inc. (US)

 The Impact of Organizational Culture on Organizational Performance: A Case Study of Telecom Sector

viii. Basic Assumptions f) Effect of Organizational Culture on Organizational

They are considered as an expected solution of Performance
a recognized problem. In the organization basic Organizational culture has ability to increase job
assumptions direct organizational member’s feelings, satisfaction, and awareness about problem solving and
emotions and perception about things. organization performance (Kotter, 2012). If the
ix. History organizational culture becomes incompatible with the
Culture is considered as a result of the historical dynamic expectations of internal and/or external
process. stakeholders, the organization's success will decrease
as it has happened with some organizations (Ernst,
e) Dimensions of Organizational Culture 2001).
In order to describe results IBM employees of Organization performance and organization
2014

more than 50 countries were gathered in order to culture are clearly affiliated (Kopelman, Brief, & Guzzo,
perfectly analyze the organization culture on the basis of 1990), though the confirmation concerning the perfect
dimensions. (Hofstede, 1980) The four dimensions of
Year

nature of this relationship is miscellaneous. Research

organization culture are as followed: shows that the relation between many cultural qualities
i. Power Distance and high performance are not persistent over time
24
2 (Dension & Sorenson, 1990, 2002)
It refers to the extent to which people of a
society accept the unbalanced distribution of power We can say that the impact of organizational
Global Journal of Management and Business Research ( A ) Volume XIV Issue III Version I

frequently. Power distance refers to the extent in which a culture on employee behavior and performance is
nation accepts the factors that dissimilarity in its citizens’ based on 4 important ideas (Bulach, Lunenburg, &
mental and physical capabilities increase the Potter, 2012). Firstly, having knowledge of the
inequalities for their welfare. organization culture permits employees to understand
the history and functioning of the organization. This
ii. Individualism versus Collectivism knowledge provides information about projected future
Individualism: It is a national culture quality that behaviors. Secondly, organizational culture raises
defines a flexible social framework in which people devotion to the organization's philosophy and values.
stress on the protection of themselves and their family. This commitment creates shared feelings of achieving
Collectivism : A national culture quality which define a common goals. It means organizations can achieve
close knit social framework in which people require from greater success only when employees share values.
the others people of the group to take care of them and Thirdly, organizational culture, with its norms, deal as a
protect them. control mechanism to direct behaviors toward expected
iii. Masculinity/Femininity behaviors and away from unfavorable behaviors. This
The masculinity represents a preference for can also be achieved by recruiting, selecting, and
achievement, heroism, assertiveness and material retaining employees whose values match with the
reward for success. While femininity, stands for a values of the organization. This type of organizational
preference for coordination, emotions, caring for the culture may be linked directly to greater efficiency and
weak and quality of life; performance than others.

iv. Uncertainty Avoidance

A national culture quality that describes the
extent to which a society feels threatened by unknown
situations and try to avoid them;
v. Long-term Versus Short-term Orientation
Long-term Orientation: A national culture quality
which stresses the future, parsimony, and patience.
Short-term Orientation: A national culture quality which
stresses the present and past, fulfilling social
responsibilities and respect for customs. Hofstede and
Bond determined fifth dimension in which 23 countries
long and short term orientation have been analyzed in
1998. The organizational behaviour is associated to
professional values and beliefs based on culture factors
and norms which influence personality and productivity
of organization.

© 2014
1 Global Journals Inc. (US)
 The Impact of Organizational Culture on Organizational Performance: A Case Study of Telecom Sector

IV. Research Model

Organizational Culture Organizational

Performance
Power distance
Financial Perspective
Uncertainty Avoidance
Customer Perspective
Individualism/Collectivi
sm Internal Perspective

2014
Masculinity/Femininity Learning Perspective

Year
V. Research Methodology While other 34 are between 25-29 years old.80% 25
respondent have masters degree.47% respondent said
As the purpose of the current study is to

Global Journal of Management and Business Research ( A ) Volume XIV Issue III Version I
that they have 1st year in the organization. The items
determine the impact of organizational culture on
used in the questionnaire are discussed below
organizational performance .So exploratory research
technique is adopted for this purpose. Exploratory study VII. Organizational Culture
is an exploration technique which is mainly related with
the development of the theory. Many researches are a) Individualism and collectivism
usually exploratory. In social sciences exploratory My manager seeks other people’s input to evaluate my
research is connected to the notion of exploration and work
the researcher as explorer. (davies, 2006).Exploratory My manager encourages me to influence what goes on
research is an initial research that can be used to define in my department
and clarify the nature of the problem (Zikmund, 2003).
My manager encourages me to influence what goes on
Data for current study is gathered through the
outside my department
questionnaire adopted from a previous study
“Benchmarking culture and performance in Chinese My manager regularly recognizes and acknowledges
organizations by (Rajendar & Ma, 2005). There are two the quality of my work
parts of the questionnaire. The initial part is used to My manager takes into consideration the needs of the
collect information about the culture of the cellular customer (internal or external) when planning
companies. The second part is used to measure the
b) Power distance
performance of the organization on the basis of the 3
dimensions of the balance score card. A 5-point Likert My manager’s manager is accessible and visible
scale, which range from 1 (“strongly agree”) to 5 My manager communicates effectively upwards,
(“strongly disagree”) used to record the responses of downwards, and by the most effective media
the research participants from different telecom My manager openly and effectively discusses employee
companies. The quantitative approach is used to career development
determine the impact of organizational culture on
My manager helps us understand why things are
organizational performance. Quantitative data is
changing
analyzed in the form of percentages.
c) Uncertainty avoidance
VI. Data Collection and Analysis My manager encourages me to come forward with ideas
a) Data collection and suggestions
Data that is use in this research is obtained My manager’s manager creates an environment that
from franchises of telecom companies. supports empowerment and risk taking
b) Analysis d) Masculinity and femininity
25 questionnaires are distributed in Bahawalpur
My manager demonstrates a sense of urgency without
based franchises of different telecom companies out of
creating undue stress
which 15 are returned to researchers. Among
participants 33% are females and 66% male from whom My manager gives feedback honestly to me
data is collected.66% respondent are under 25years old. My manager’s manager is an effective leader

© 2014 Global Journals Inc. (US)

 The Impact of Organizational Culture on Organizational Performance: A Case Study of Telecom Sector

VIII. Organizational Performance In general, my co-workers are happy and proud to be

working for my company
a) Financial perspective
I believe that my service to the company and the
Overall, my company is performing well
contributions that I have made are appreciated
I understand the company’s financial picture
Compared with other companies in the industry, my
b) Customer perspective company has lower employee turnover
In general, our company has good relationships with our I am satisfied with my pay
customers Relative to our competitors, I am satisfied with the benefits program
My company’s customers are satisfied with our The people with whom I work have the appropriate skill
products/services set to contribute to the firm’s success.
2014

I understand the importance of system integration, multi- Relative to other companies, my company is an
vendor open systems, services and maintenance enjoyable place to work
Year

c) Internal business perspective Overall, I am satisfied with the financial and non-financial
Overall, my company is productive rewards given by my company
26
2
Results of some questions are discussed below:
Global Journal of Management and Business Research ( A ) Volume XIV Issue III Version I

d) Individualism and Collectivism

Question: My manager seeks other people’s input to evaluate our work
20% strongly disagree
60% agree My manager seeks other peoples input to evaluate
my work
9 neutral
10 disagree strongly agree
1 strongly disagree agree
nuetral
disagree
strongly disagree

e) Power Distance
Question: My manager’s manager is accessible and visible
5% strongly agree
7% agree My manager is accessible and visible
49% disagree
12% Neutral stronlgy agree
27% strongly disagree agree
neutral
disgree
stronlgy disagree

© 2014
1 Global Journals Inc. (US)
 The Impact of Organizational Culture on Organizational Performance: A Case Study of Telecom Sector

f) Uncertainty Avoidance
Question: My manager’s manager creates an environment
that supports empowerment and risk taking.
14 strongly agree My manager creates an environment that support
empowerment and risk taking
10 agree
7 neutral strongly agree
35 disagree
agree
44 strongly disagree
neutral
disagree

2014
Year
g) Masculinity and Femininity
Question: My manager’s manager is an effective leader
20 strongly agree
My manager is an effective leader 27
50 agree

Global Journal of Management and Business Research ( A ) Volume XIV Issue III Version I
12 neutral strongly agree
7 disagree
agree
11strongly disagree
neutral
disagree
stronglydisagree

h) Financial Perspective
Question: Overall, my company is performing well
22%.Strongly disagree Overall my company is performing well
60% Agree
13% Neutral strongly agree
9% Disagree agree
4% strongly disagree
nuetral
disagree
strongly disagree

i) Customer Perspective
Question: My Company’s customers are satisfied with our products/services.
12%.Strongly disagree My companys customers are satisfied with our
15% Agree product and services

4% Neutral
44% Disagree strongly agree
24% strongly disagree agree
nuetral
disagree
stronglydisagree

© 2014 Global Journals Inc. (US)

 The Impact of Organizational Culture on Organizational Performance: A Case Study of Telecom Sector

j) Internal Business Perspective

Question: overall, my company is productive.
Overall my company is productive
25%.Strongly disagree
60% Agree
strongly agree
2% Neutral
agree
10% Disagree
3% strongly disagree nuetral
disagree
strongly disagree
2014
Year

IX. Conclusion that affect the organizational performance like working

environment and job satisfaction. To get more accurate
Result shows that Hofstede culture dimensions results more respondents from franchises of other cities
28
2 affect the organizational performance in telecom should be included. Future research should enlarge the
companies. There several factors which influence the size of the population because more diverse participants
Global Journal of Management and Business Research ( A ) Volume XIV Issue III Version I

organizational performance but this research consider the will make significant contribution to the results.
Hofstede culture dimensions only. Organizational culture
plays an important role in achieving the organizational XI. Limitations of the Study
objective. Result show that there is high uncertainty
avoidance in the organization, higher the uncertainty The current study has some limitations. The
avoidance better will be organizational performance. outcome of the study is not precisely accurate as the
Results also indicate that is a difference between the sample size is too small. There is a lack of geographical
power of the manager and the employees. When there is coverage because this study has considered only the
a power distance employees seeks their problem solved Bahawalpur based franchises of telecom companies.
by the management. In this situation employees respect Limited time span is also another limitation of this study.
their supervisors by enhancing the performance in return. References Références Referencias
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