Cultural Behavior And Its Effect On A Business 's Performance

Decent Essays
Culture is described by Smircich (1983 p.339) as a concept with “no consensus on its meaning”, which makes it challenging to establish a direct link between failing operations of an organization and the cultural cause in need of rectifying. Nevertheless, there is supportive evidence to suggest certain aspects of cultural behaviour can negatively influence a business’s performance (e.g. Kottler, 1992, p.11)(Riley 2005), which can help to identify the aspects of culture that trigger potential failures. This paper will look at the key causes of failure initiated by cultural behaviour and how operations can develop cultural values in a positive and sustainable way.
Smircich makes the point that culture can be brought into the organization rather than created internally (1983 p.343). This suggests that individuals contribute to the organization’s culture through their own background and behaviour, making various financial sectors’ imported cultures conflict with performance. Despite this, DNB (2015) supports the supervision of cultural behaviour and believes there is a link between management and overall organizational culture change. One could argue there is a shared contribution to organizational culture between individual employees and management, although if there is poor individual behaviour contributing to the company’s culture, it is the manager’s job to implement plans of action. An example of a major cultural failure in the finance sector is the 2008 credit crunch,
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