12) Culture – Organization Culture and Performance

12) Culture – Organization Culture and Performance

The relationship between culture, engagement, and performance at the business/work unit level is significant, but the critical key piece of information to understand is that it is an engaged culture that positively affects performance.

All executives want to drive results, but the secret to long term performance is in how you create a culture of engagement. Organizations should make efforts to increase the level of collaboration. The higher the level of collaboration, the higher the level of service the coworkers provide to each other. Collaboration has a significant positive impact on perceived organizational performance.

Below is a study that shows the validity of the above statements.




A poor organizational culture and climate will significantly deteriorate service quality and customer satisfaction and hence the organizational performance.

Culture constitutes a central part of how a business conducts its routine operations. Organizational culture refers to the overall ethos of a business: characteristics that include both psychological and structural elements, which impact the perceptions and behavior of the employees.

To provide excellent sustainable service to clients, organizations must realize the connection between internal service quality, organizational culture, and organizational performance.

This study provides us with evidence that collaborative culture and internal service quality have a direct positive impact on organizational performance.

Research Study


In 2016, a group of researchers published in a peer-reviewed psychology journal a study showing the connections between culture, performance, and service as found in 80 banks.


The aim of this study was to ascertain the mediating role of internal service quality on the relationship between collaborative culture and organizational performance.

The hypothesis was simple: A collaborative internal culture will show a significant positive impact on internal service quality, and that these two influences positively impact organizational performance.


The researchers distributed scientific questionnaires to 80 bank branches. A total of 341 questionnaires were then used in data collection.


The results were profound.  There is a significant relationship between a collaborative culture and a positive organizational performance.

Internal service quality partially mediates the relationship between collaborative culture and organizational performance, and contributes significantly to the subjective organizational performance.

These findings strengthen claims that if an organization focuses on the service received by coworkers, it will reflect on adequate level of profitability and external service quality.

On the other hand, lack of focus on employees would harm business performance.

Management which expects benefits of external service quality must understand the need of better internal service quality. Although these findings are related to the banking sector, scientific literature indicates that similar relation could be expected in other sectors.

Reference: Latif, K. F., Ullah, M. (2016). An empirical investigation into the relationship between organizational culture, internal service quality and organizational performance. Abasyn Journal of Social Sciences, 9(1), 31-53.