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The relationship between organisational culture and firm performance: an empirical study on Indonesian manufacturing firms

Author

Listed:
  • Didik Wahjudi
  • Moses L. Singgih
  • Patdono Suwignjo
  • Imam Baihaqi

Abstract

The impact of organisational culture on firm performance has been well documented. Previous studies on the impact of organisational culture derived from its national culture have been conducted in homogenous cultures. Little attention has been given to the impact of organisational culture derived from Indonesian culture on firm performance. Indonesia's subcultures may not be represented in the national culture. This study examines the impact of organisational culture on firm performance among Indonesia manufacturing firms. Results from 152 organisations confirm that organisational culture has significant effect on firm performance. Only individualism and uncertainty avoidance significantly impact firm performance. The implication is that, even in a country with many subcultures, firms' top management still need to pay attention to the impact of national culture at organisational level. Furthermore, since Indonesia has a very low score on individualism, managers need to create a conducive and rewarding environment for individuals to contribute.

Suggested Citation

  • Didik Wahjudi & Moses L. Singgih & Patdono Suwignjo & Imam Baihaqi, 2016. "The relationship between organisational culture and firm performance: an empirical study on Indonesian manufacturing firms," International Journal of Productivity and Quality Management, Inderscience Enterprises Ltd, vol. 18(1), pages 1-18.
    • Handle: RePEc:ids:ijpqma:v:18:y:2016:i:1:p:1-18
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    Cited by:

    1. Abdelkader Derbali & Lamia Jamel, 2018. "Determinants of performance of Tunisia insurance companies: case of life insurance," International Journal of Productivity and Quality Management, Inderscience Enterprises Ltd, vol. 24(4), pages 531-542.
    2. repec:grm:oikosp:201604 is not listed on IDEAS
    3. Hunjra, Ahmed Imran & Boubaker, Sabri & Arunachalam, Murugesh & Mehmood, Asad, 2021. "How does CSR mediate the relationship between culture, religiosity and firm performance?," Finance Research Letters, Elsevier, vol. 39(C).
    4. Phoebe Akoth Okwata & Susan Wasike & Kifleyesus Andemariam, 2022. "Effect of Organizational Culture Change on Organizational Performance of Kenya Wildlife Service Nairobi National Park," Administrative Sciences, MDPI, vol. 12(4), pages 1-13, October.

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