An Investigation of the Relationship Between Organizational Culture and the Performance of Construction Organizations

Abstract

The operation of organizations is very much influenced by their culture. Organizational culture (OC) has been defined as a pattern of basic assumptions that are manifested by the behavior of an organization. Positive OC is considered to be catalytic to performance enhancement. As construction aspires to be an efficient industry, this study aims to contribute in this regard by examining the relationship between organizational culture and the performance of construction organizations. Artifacts corresponding to OC identifiers and Performance indicators are short-listed from a literature review. These artifacts are arranged into constructs. The eight OC constructs are: Goal Clarity, Coordination and Integration, Conflict Resolution, Employee Participation, Innovation Orientation, Performance Emphasis, Reward Orientation and Team orientation. The performance indicator constructs are; Financial, Internal Business Process, Custom and Innovation & Learning. The artifacts were elaborated and operationalized for data collection. The constructs, as well as the OC-Performance relationship framework, were then analyzed and tested using Structural Equation Modeling. Innovation was found to be the most critical OC as far as performance of construction organizations is concerned. In today's knowledge based society, innovative organizations have proved to be the performers. This timely finding highlights the need for a culture that fosters creativity and supports innovation.

The Impact of Project Organizational Culture on the Performance of Construction Projects

“…Dimensions are widely used in describing organizational culture because of their flexibility to reflect the value being assessed [31]. To identify each project's organizational culture, it was therefore necessary to examine the sources of those dimensions.…”

“…Culture is viewed as an essential determinant of management practice; thus, culture has recently been examined in the literature as a CSF of construction project [29][30][31]. In addition, construction project organization is operated by multiple individuals with diversity of backgrounds, causing different human behavior and different expectations for a project.…”

Organizational Culture: Case of the Finnish Construction Industry

“…To make a cultural change in the industry, it must abandon some of the current culture features. The cultural movement toward an adhocracy-like culture would most likely increase the efficiency level of the Finnish construction industry (Cheung, Wong and Lam, 2012;Yepes, et al 2016;Monahan, Coates and Clarke-Hagan, 2014;Castro et al, 2012). Table 3 The The scores tend to increase from the perceived scores to the preferred ones.…”

“…Nonetheless, these results can be guiding ones with caution of the afore-mentioned limitations, due to the results in Column 1 and 2 where the pattern for the above-described change is supported. In particular, the lack of aspiration of contractors to change their culture toward adhocracy is alarming, as innovation was found to be the most critical cultural factor for a construction organization's performance (Cheung, Wong and Lam, 2012). Infrastructure projects tend to cover large areas and are remote projects by nature.…”

“…Liu and Zhang 2003;Zhang and Liu 2006). The most forward-looking companies have already achieved success by departing from entrenched construction business models and practices (Cheung, Wong and Lam, 2012) as a continuously changing business environment requires fresh perspectives and innovativeness from today's construction (Nummelin, 2007;Yepes et al 2016;Monahan, Coates and Clarke-Hagan;Castro et al, 2012). This paper is a part of an on-going large research project in the Finnish construction industry, which aims to portray the mechanism of the interaction between OC and effectiveness.…”