THE NEXUS BETWEEN ORGANIZATIONAL CULTURE AND ORGANIZATIONAL PERFORMANCE

Abstract

Organizational culture plays a crucial role in shaping how organizations function, influencing employee behavior, decision-making, and overall organizational performance. As businesses operate in increasingly dynamic environments, understanding how different cultural frameworks impact performance has become a key area of interest. This study examines the impact of organizational culture on performance within the Malaysian automotive industry, focusing on hierarchy, clan, adhocracy, and market cultures. Despite significant research, there are still gaps in understanding how these specific cultural types influence performance in fast-paced industries. Targeting 112 middle-level managers from Perodua, Proton, Toyota, and Honda Malaysia, the study utilized Cameron and Quinn's Competing Values Framework to assess non-financial performance indicators such as customer satisfaction, service quality, and employee satisfaction. The findings reveal that hierarchy culture negatively impacts organizational performance by stifling innovation, while adhocracy culture enhances performance through flexibility and creativity. Market culture also positively influences performance by promoting competition and goal achievement. However, clan culture did not show a significant link to performance, indicating that internal cohesion may not always lead to improved results in competitive environments. The study highlights the need for organizations to align their culture with external challenges, encouraging more adaptive and innovative cultures, and suggests further research across various industries to deepen understanding.