Impact of Organizational Culture on Team Performance

Let us look at different types of company cultures which will help us understand how Organizational culture impacts Team Performance. Here we will talk about four various types of Organizational Culture based on “Decision Making” and “Reward Structure” dimension. Every company culture has its strengths and weaknesses which the creators of this theory Jeanne Urich and David Hofferberth describe as “the culture’s unbalanced form”.

1. Creative company culture

Self-expression is key to this culture and here are few of its advantages: Here the leaders allow their employees to utilize their creativity, and encourage “out-of-the-box” thinking. Such companies focus on research and development and professional services. Innovation is used as a main tool to beat the competition. Such business owners are not viewed as “traditional” CEOs, but as entrepreneurs and even visionaries.

One disadvantage of this culture is that people tend to think too highly about themselves and their work. Which if not checked leads to arrogance, which does not auger well for the team.

This type of culture is perfect for smaller tech-industry businesses that rely heavily on agile frameworks and speed of execution. This “unconventional” culture tends to use self-managed and remote teams, which require a certain level of autonomy to function properly.

2. Collaborative company culture

This type relies primarily on teamwork, consensus and decision-making based on a shared view of desired results. The main differences between “collaborative” and “creative” companies are that the former value trustworthiness and teamwork above creativity and aggressiveness. The focus is on marketing and customer service as for these companies that is the measure of success.

The disadvantage of this culture is that it can prolong the decision-making process. It takes a lot of time to evaluate alternative and reaching consensus among some conservative groups.

A collaborative culture is mostly for scale-ups which strive towards becoming an enterprise. Such teams are considered to be “middle ground” between flexible and rigid teams, as both “extremes” would struggle with the different aspect of collaborative culture. Creative and flexible teams would be held back by consensus decision making, while rigid teams would lack clear leadership and straightforward set of rules to rely on.

3. Competitive company culture

Winning is everything in this type of Organizational culture. Here individual achievements are valued more than teamwork. So companies that cultivate “competitive culture” will rely on teams which are expected to achieve specific goals efficiently. Their leaders are focused on beating the competition and are driven by personal and team achievements. There is always a want to win at any cost.

The disadvantage with these companies is that it turns a blind eye to an occasional crossing of ethical boundaries and tolerates blurred lines between competing and cheating.

Competitive culture is for companies that are focused on individual results first, so encouraging “the team” to handle things may not be the best option. This is one of those cases when using a group instead of a team, might be a good idea. As team success takes a back seat to individual accomplishments, gelled teams would fail to achieve what leaders of competitive culture companies consider to be a positive result.

4. Controlled company culture

This type of culture requires order and alignment based on clear data-driven goals and objectives. Often focused on finance or manufacturing, companies that opted for this kind of culture relies heavily on annual business plans and key performance measurements. Additionally, they use quarterly improvement metrics and benchmarks to determine if the business is heading in the right direction. Finally, company leaders create top-down reporting structure based on the hierarchy.

A controlled culture leads to the putting everyone in one size fits all, in which individualism is not welcome so as to maintain order and status quo within the company.

This is meant for established enterprises that value highly structured and organized teams, which tend to follow the rules. Controlled culture is characterized by excessive bureaucracy and complex management mechanism which prevents creative and independent teams from reaching their full potential.

To sum it up, if the company chooses a particular culture and implements it throughout all departments, “natural selection” will soon take its course: employees who feel that organizational culture suits them will stay within the organization. If the company allows different cultures to operate in separate departments, it may impact employee performance severely. This “inequality” and “uneven treatment” will most likely cause rivalries among areas, and culminate in outright rebellion if not handled correctly. So, giving each department freedom to choose their own culture is usually NOT a good idea. All employees are equal in the eyes of the company and should be treated as such.