Pursuant to our mutual interest regarding research on the relationship
between corporate culture and performance, I have started a preliminary
review of literature. From that effort, two recent studies in particular may
prove relevant in further developing our proposal. The first study
examined the relationship between the cultural impact on overall firm
performance (Widodo & Silitonga, 2017), while the second test
complements by exploring culture and individual worker performance
(Farhani, 2019) .+
Widodo & Silitonga (2017) hypothesized that culture influences corporate
performance, along with leadership style and people development. A
combined population across six firms studied was 2,844 and a sample of
that population was selected numbering 351. A survey instrument was
developed to generate the variables of interest to gauge perception levels
of cultural influence, leadership style, people development, and firm
performance (Widodo & Silitonga, 2017). Researchers tested null
hypotheses for each of the three variables of interest (e.g. cultural
influence; H0 = there is no effect on corporate performance from culture)
and for all three variables combined (Widodo & Silitonga, 2017). Linear
regression analysis was conducted to evaluate the prediction for
corporate performance given the level of cultural influence and was found
to be significant F(1,350) = 4.992,+p+<.001. The regression equation for
predicting the firm’s performance is 𝑌′ = .240X + .816. The correlation
between culture and performance is 0.685. Approximately 46.9% of the
variance in corporate performance was accounted for by its linear
relationship with level of cultural influence (Widodo & Silitonga, 2017).
In Farhani (2019), the hypothesis was that performance of workers was
influenced by the culture of the company. The population considered for
the test spanned the entire employee base of a single firm totaling 346
workers and from that population a sample of 78 workers was drawn
(Farhani, 2019). Through a survey instrument developed to obtain data
from the workforce, aggregate measures were generated for strength of
culture, magnitude of performance, motivation and leadership style
(Farhani, 2019). A linear regression analysis was performed to assess the
prediction for individual performance given the level of cultural influence,
but the article did not disclose significance, correlation or variance
measures. The regression equation for predicting the worker performance
is 𝑌′ = 0.509X + 28.649 (Farhani, 2019).+
In both of these examples, the research indicated positive relationships
between gauges of cultural strength and some resulting measure of
performance. Our proposed research has the potential to further elaborate
on this foundational research through probing on two dimensions. For one,
a broader evaluation across different industries would not only bolster the
sample size, but may also identify any particular nuances across those
industries. The second potential dimension would be in a more robust
examination of common dimensions of corporate culture, such as quality,
innovation and integrity (Li, Mai, Shen, & Yan, 2021).
References:
Farhani, F. (2019). Building employee performance.+International Review
of Management and Marketing, 9(5), 52-56.
https://doi.org/10.32479/irmm.8533
Li, K., Mai, F., Shen, R., & Yan, X. (2021). Measuring corporate culture
using machine learning.+The Review of Financial Studies, 34(7), 3265-
3315. https://doi.org/10.1093/rfs/hhaa079
Widodo, D. S., & P. Eddy Sanusi Silitonga. (2017). Company performance
analysis: Leadership style, corporate culture and human resource
development.+International Review of Management and Marketing, 7(4),
34-41.
