What are the performance implications of your organization’s culture?

Topic: Culture, Human Resources, Organizational Performance
Publication: Journal of Applied Psychology (JULY 2011)
Article: Organizational Culture and Organizational Effectiveness: A Meta-Analytic Investigation of the Competing Values Framework’s Theoretical Suppositions
Authors: Hartnell, C.A., Ou, A.Y., & Kinicki, A.
Reviewer: Neil Morelli

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.

Hartnell, C.A., Ou, A.Y., & Kinicki, A. (2011). Organizational culture and organizational
effectiveness: A meta-analytic investigation of the competing values framework’s
theoretical suppositions. Journal of Applied Psychology, 96(4), 677-694.

human resource management,organizational industrial psychology, organizational management