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International Journal of Management Science and Business Administration

Volume 11, Issue 1, March 2025, Pages 7-15

DOI: 10.18775/ijmsba.1849-5664-5419.2014.111.1001

Impact of Corporate Culture on Strategic Management: A Systematic Literature Review

URL:https://doi.org/10.18775/ijmsba.1849-5664-5419.2014.111.1001

¹ Nikodemus Angula, ² Petrina Louw, ³ Amanda Schroeder, ⁴ Ester Vaino, ⁵ Lindie Tripodi

 Department of Governance and Management Sciences, Namibia University of Science and Technology, Windhoek, Namibia

Abstract: The purpose of the study was to investigate the relationship between the impact of corporate culture on strategic management using existing literature. The study used literature between 2015-2024 extracted from different search engines such as Google Search, Bing and Yahoo.

The strategic environment of an organization is designed in large part by its corporate culture. An organization’s corporate culture is the foundation that determines whether it succeeds or fails. A shared set of standards and values that influence how community members behave is referred to as a culture. “What is corporate culture?” can be addressed by redesigning this definition. The collection of all accepted standards and values at work is referred to as corporate culture. A significant influence on organizational productivity is the interaction between corporate culture and strategic management. Strategic management is positively impacted by certain corporate culture elements, whereas organizational issues and disasters are caused by other components.

 Keywords: Corporate culture, Strategic Management, Impact of corporate culture

 1. Introduction

There is a strong link between corporate culture and strategic management. A company is managed and strategic decisions are made using the same values, beliefs and principles set through the organisational culture (Alina et al., 2018). Strategy sets the direction and focus, and elaborates plans and formal environment for employees to understand the organisation’s goals, while culture helps accomplish goals by encompassing them in the organisation’s shared values and beliefs. The vision of the organisation needs to be first assimilated into the culture. A strategy can only be implemented if it is backed by the corporate culture. The company sets the headline of its story through strategy and the language through culture. The intention is given by strategy and culture sets and measures the aspiration, the commitment, and the performance. Corporate culture will impact the way a leader expresses his vision to other members of the organisation as well as gaining support for implementing new strategies. The strategy gives the direction and culture that sets the way you make your trip until the destination is positive, negative, challenging, funny, and painful.

According to Hofstede’s Cultural Model, if we examine Pakistan’s culture. We came to know that Pakistan is a collectivist society which has a higher degree of power distance and high uncertainty avoidance(Nisa et al., 2019). The culture of different Multinationals operating is Pakistan is a bit different from other countries. A professional editor expressed his working experience in two renowned Multinationals of Pakistan in Dawn. One organisation’s priority was the best employee relations, they tried to resolve the employee conflicts effectively and the salaries were also optimum. While, on the other hand, the second organisation’s top management was occupied by the elite group of the society, and the promotional criteria were not merit but their references. The writer was shocked to gasp at the result that the majority of employees in the organisation tend to work beyond their best to remain in those organisations. He concluded the article by saying that the working output for both shareholders was beyond expectation while the work-life balance of the employee was not considered well in those organisations. The purpose of the study was to investigate the relationship between the impact of corporate culture on strategic management using existing literature.

Main research objective and sub-objectives

• &nbspThe main objective of the study was to investigate the relationship between the impact of corporate culture on strategic management using existing literature.

The study’s specific objectives were as follows:

• &nbspTo determine the effects of corporate culture on strategic management using existing literature.

 Research questions/hypotheses

In line with the above objectives, the one hypotheses of this study were:

• &nbspH0: There is no relationship between corporate culture on strategic management.
• &nbspHA1: There is a relationship between corporate culture on strategic management.

The study research model

The research model for this study was represented by the simple linear regression model:

Y = β0 + β1 X1 +β2 X2 + β3 X3; where Y = corporate culture, X1 = Strategic management; X2= corporate culture; β = gradient of the slope; β0 = intercept of the graph on the y-axis; Y is the outcome variable and from X1 represents the independent variables.

2. Literature Review

Corporate culture plays an important role in designing the strategic environment of the organisation. Corporate culture is the basic ground of an organisation that can result in its success and failure (Aslam & Ajmal, 2019). A culture is defined as a set of shared norms and values that shape the behaviour of the people living together. This definition can be redesigned to address the question, “What is corporate culture?”. It can be said that corporate culture is the set of all the shared values and norms at the workplace. The relationship between corporate culture and strategic management has a major impact on organisational productivity and profit. Some of the factors of corporate culture positively impact strategic management while others contribute towards organisational problems and disasters. The values, habits, beliefs, traditions and historical elements shape the corporate culture of an organisation (Alina et al., 2018). Corporate governance of an organisation influences the relations between the members of the organisation, the board of directors, shareholders and stakeholders, but also elements of the corporate culture. Stakeholders’ commitment becomes the main factor in the organization’s activity in terms of total involvement to understand their vision and interests and to accomplish sustainable development objectives and future development challenges. Corporate culture sums up the invisible platform that runs the organisation, meaning the values, principles, behaviours, and emotional commitment. At the same time, organisational culture grants unity and continuity. The purpose of the study was to investigate the relationship between the impact of corporate culture on strategic management using existing literature.

Theoretical literature.

Corporate culture

Corporate culture is defined as a set of shared values, norms, beliefs and behaviours that determine how the employees and management of the organization interact with each other. It is said that corporate cultures represent the uniqueness of the organisation. Simply said: “The way things are done here.” (Deal & Kennedy, 2000). The people in the organisation play a key role in the development of that culture.

Strategic management

Scholars have long recognised that an organization’s strategy decisions and implementation can substantially influence the values, beliefs, and behavioural norms that form its cultural landscape (Isensee et al., 2021). According to Hitt, Ireland, and Hoskisson (2019), strategic management is critical for gaining a competitive edge and attaining long-term success.  Furthermore, strategic management is critical for ensuring that organisational operations are consistent with the company’s goal and vision, allowing for better resource allocation, operational efficiency, and market positioning (Wheelen et al., 2018). Companies that adopt a strategic management strategy can better foresee market trends, adapt to competitive pressures, and capitalise on new opportunities, resulting in sustainable competitive advantage and long-term success (Barney & Hesterly, 2021).

The Effects of Corporate Culture

A positive business culture is typically linked to improved employee happiness and performance. According to Schein (2021), a strong organisational culture can have a significant impact on staff behaviours and attitudes, as well as foster a sense of belonging and loyalty. This sense of belonging is important since it increases employee engagement and productivity (Groysberg et al., 2020).  Corporate culture is a crucial determinant of numerous organisational outcomes, such as employee satisfaction, organisational performance, innovation, and adaptability. A positive culture promotes success and innovation, but a negative culture can cause significant problems. As a result, developing and sustaining a positive corporate culture should be a top strategic priority for organisations seeking long-term success.

The Impact of Corporate Culture

According to Deal and Kennedy (2000), corporate culture has an impact on organisational climate, employee motivation, performance, and overall firm success.  A strong, positive organisational culture can improve employee satisfaction, productivity, and retention while also fostering innovation and ethical behaviour (Schein, 2017).  Additionally, a well-articulated corporate culture that aligns with organizational objectives can propel business success by fostering a cohesive environment where employees grasp and are dedicated to the company’s mission and values (Groysberg et al., 2022).

Values, attitudes, and beliefs

Corporate culture is generally understood to consist of three levels: artefacts, stated values, and underlying assumptions (Schein, 2021). These cultural elements have an impact on how strategies are developed and implemented within businesses. As stated by Johnson et al. (2020), navigating and aligning these cultural layers through effective strategic management is necessary to ensure coherence between internal dynamics and organisational goals.  Values, attitudes and beliefs play a central role in the literature on sustainability-oriented corporate culture (Isensee et al., 2020). Beliefs, which are usually founded on organisational narratives and leadership visions, are the underlying assumptions and convictions that shape these attitudes (Bansal & Song, 2021). Values, on the other hand, refer to the underlying beliefs and moral principles that influence company action and decision-making (Eccles et al., 2023).

Empirical literature

The study conducted by Obaji, Cross, Olaolu (2017)  was about the impact of Organisational Culture and Strategic Management on Organisational Performance. The study used Schein’s theory of organisational culture. The study employed Statistical Product and Service Solutions (SPSS). Multiple Regression Analysis was employed for the data analysis. The study sample size was 139 respondents.

Longitudinal design should be considered in the future to determine the theoretical constructs at various intervals in time. Determining whether there is a relationship between the culture of an organisation and the performance of an organization.

The study found that OC for Diamond PLC has a significant mean effect on the performance of the company. There is a positive relationship between SM and organisational performance.

The study done by Samad, Alghafis & Al-Zuman (2018) was about examining the effects of strategic management and organizational culture on organizational performance. The study used SEM (Structural Equation Modelling). The study used a 7-point Likert scale. The study sample size was 291 respondents who took part in this study through self-administered questionnaires. The study found that   Organisations that would like to enhance organisational performance could start to study their strategic management process. The study was only conducted in the public sector. The qualitative approach should consider variables such as organisational capabilities and economic perspective. Shared culture amongst workers results in better organisation performance.

The study conducted by Ghumiem,  Alawi,  Abd & Masaud (2023) was about Corporate culture and its effects on organizational performance: multi-group. The study used Structural Equation Modelling (SEM). Confirmatory Factor Analysis (CFA) was used. The sample size was 408 employees of General Electric Company of Libya who took part in the study Random sampling was used. The study found that culture has a great positive impact on corporate performance. Larger samples from different cities should be used for future studies. Organisational culture improves the overall performance of organisations. The study done by Nurwitono, & Silvianita (2023) was about the influence of strategic leadership, corporate culture, commitment management, innovation and competitive advantage in change management moderation on corporate performance. The study used the Structural Equation Model (SEM. 140 respondents Probability sampling was used. Found that corporate culture does not have a great effect on the competitive advantage at PT Putraduta Buanasentosa.

Theoretical framework

Self-Determination Theory (SDT): The Self-Determination Theory posits that individuals have innate psychological needs for autonomy, competence, and relatedness. In the context of higher education employees in Namibia, understanding how these needs are met or hindered can influence their motivation levels and subsequent performance outcomes. The Prisma model will help identify how the fulfilment of these basic psychological needs aligns with specific motivational factors and impacts employee performance.

Expectancy Theory: Expectancy Theory suggests that individuals are motivated by the expectation that their efforts will lead to desired outcomes and rewards. In the higher education sector, this theory can be applied to investigate how employees perceive the link between their performance efforts, the outcomes they desire (e.g., recognition, career growth), and the Prisma model’s role in shaping these perceptions.

Goal-Setting Theory: The Goal-Setting Theory emphasizes the importance of specific and challenging goals in enhancing motivation and performance. In the context of Namibian higher education, exploring how the Prisma model can be utilized to set clear and meaningful goals for employees and align these goals with institutional objectives can shed light on the impact of motivation on their performance.

Social Exchange Theory: Social Exchange Theory proposes that individuals engage in a reciprocal relationship with their organizations, where they invest effort and dedication in exchange for rewards and benefits. Applying this theory alongside the Prisma model can help understand how motivational factors contribute to the quality of the social exchange, affecting employee commitment, loyalty, and performance.

Job Characteristics Model: The Job Characteristics Model highlights the importance of certain job characteristics (such as skill variety, task identity, autonomy, feedback, and significance) in influencing employee motivation and satisfaction. By integrating the Prisma model, researchers can identify how these job characteristics interact with other motivational factors and ultimately impact employee performance in Namibian higher education.

Equity Theory: The Equity Theory proposes that individuals compare their inputs and outcomes with those of their colleagues and expect a fair distribution of rewards relative to their efforts. In the context of Namibian higher education, applying the Prisma model can help identify factors influencing employees’ perceptions of fairness and equity, impacting their motivation and performance.

Organizational Culture and Climate: Exploring the influence of organizational culture and climate on motivation and performance is crucial in the higher education context. Integrating the Prisma model can help analyse how certain cultural aspects, such as support for innovation, teamwork, and learning, impact employee motivation and their subsequent performance outcomes.

By adopting this theoretical framework, researchers gained a holistic understanding of the complex relationship between motivation and employee performance in Namibian higher education institutions. The Prisma model serves as an integrated system that can help identify and analyse the interplay of various motivational factors and their direct and indirect effects on employee performance, contributing to informed decision-making and the development of effective strategies for enhancing employee motivation and overall institutional success.

Relationship Between Corporate Culture and Strategic Management

A wide range of organisational theories and models serve as the theoretical foundation for understanding the relationship between corporate culture and strategic management. Corporate culture, described as an organization’s shared values, beliefs, and practices, has a significant impact on strategic management, including the development and implementation of major organisational initiatives (Schein, 2021).

The Interrelationship

The relationship between corporate culture and strategic management can be explained through numerous theoretical lenses:

Resource-Based View (RBV)

According to the Resource-Based View (RBV) paradigm, an organization’s distinct resources, capabilities, and culture are crucial for achieving a competitive edge (Barney, 1991). A strong corporate culture is seen as a valuable, scarce, and unique resource that bolsters strategic efforts and improves organisational success (Barney & Hesterly, 2021).

Contingency Theory

According to this theory, the effectiveness of strategic management methods is determined by the alignment of organisational culture with external environmental variables (Fiedler, 1964). A flexible and adaptive culture enables businesses to efficiently respond to changing market dynamics and competitive challenges (Cameron & Green, 2019).

Stakeholder Theory

This idea emphasises the need to balance the interests of multiple stakeholders in strategic management (Freeman, 1984). A culture that emphasises transparency, ethical behaviour, and stakeholder participation encourages trust and collaboration, which are required for successful plan execution (Freeman & Dmytriyev, 2021).

Enhancing Organizational Agility

Organisational agility refers to the ability of a company to rapidly adapt to market changes and environmental shifts. A robust corporate culture that promotes flexibility and continuous learning equips organizations to respond swiftly to unforeseen challenges and opportunities (Renzl et al, 2021).

Leadership’s Role in Shaping Culture

Corporate culture is shaped and sustained by leaders, who set the tone for organisational values and behaviours through their actions and decisions (Schein, 2021).  Effective leaders understand the significance of integrating culture with strategic objectives and actively try to implant desired cultural characteristics into the organisation.

Long-Term Success

The synchronisation of company culture with strategic management is critical for long-term success. When an organization’s culture and strategy align, a tremendous synergy emerges, driving long-term growth and profitability (Barney & Hesterly, 2021). Organisations that prioritise cultural balance are better positioned to effectively execute their plans, overcome business changes, and maintain a competitive edge over time (Grant, 2021).

Conceptual framework

This section describes the analytical tool with several variations and contexts. Besides, the conceptual framework enabled this study to make conceptual distinctions and to organise ideas. The conceptual framework in Figure 2 below articulates the relationship between the independent and the dependent variables. These are the effects of the impact of corporate culture on strategic management respectively as illustrated below:

Figure 1:  Conceptual framework for the impact of corporate culture on strategic management

Source: Researcher’s own conceptualisation

3. Research Methodology – Materials and Methods

The Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) standards were followed for conducting this systematic review by conducting a systematic review of the existing literature on the impact of corporate culture on strategic management.  The purpose of this systematic review was to examine the impact of corporate culture on strategic management employing the Prisma model as the guiding framework. By systematically analysing existing literature, this study aims to provide a comprehensive overview of the relationship between the impact of corporate culture on strategic management, and how the Prisma model can be employed to better understand these relationships.  The paper was guided by the following research questions: a. What are the key motivational factors affecting employee performance in Namibian higher education institutions? b. How does motivation influence employee performance in the higher education sector in Namibia? c. To what extent can the Prisma model enhance our understanding of the relationship between motivation and employee performance in this context?

Summary of findings

The study sought to test the following hypotheses:

The table below provides a summary of the findings of the literature review.

No	Author / Date	Hypothesis	Finding	Decision Accept / Reject
1		H1	The present study found that that there is no relationship between the impact of corporate culture on strategic management.	Accept
2		H2	The present study found that the impacts of corporate culture affect strategic management.	Accept
3		H3	The present study found that corporate culture and strategic management influence organisation’s performance.	Reject

 

Table 1 Summary of findings

Summary, Conclusions and Recommendations

Introduction

This section revisits the stages taken in carrying out this research. The purpose of the study was to investigate the relationship between the impact of corporate culture on strategic management.

Summary of major findings

From the presented meta-analysis secondary data, it was revealed that there is no relationship between corporate culture and strategic management according to the null hypothesis and the Alternative hypothesis indicated that there is a relationship between corporate culture and strategic management. The study conducted by Obaji, Cross, Olaolu(2017)  was about the impact of Organisational Culture and Strategic Management on Organisational Performance. The study used Schein’s theory of organisational culture. The study employed Statistical Product and Service Solutions (SPSS). Multiple Regression Analysis was employed for the data analysis. The study sample size was 139 respondents.

Longitudinal design should be considered in the future to determine the theoretical constructs at various intervals in time. Determining whether there is a relationship between the culture of an organisation and the performance of an organisation The study found that OC for Diamond PLC has a significant mean effect on the performance of the company. There is a positive relationship between SM and organisational performance.

The study done by Samad, Alghafis & Al-Zuman (2018) was about Examining the effects of strategic management and organizational culture on organizational performance. The study used SEM (Structural Equation Modelling). The study used 7 point Likert scale. The study sample size was 291 respondents who took part in this study through self-administered questionnaires. The study found that   Organisations that would like to enhance organisational performance could start to study their strategic management process. The study was only conducted in the public sector. The qualitative approach should consider variables such as organisational capabilities and economic perspective. Shared culture amongst workers results in better organisation performance.

The study conducted by Ghumiem,  Alawi,  Abd & Masaud (2023) was about Corporate culture and its effects on organizational performance: multi-group. The study used Structural Equation Modelling (SEM). Confirmatory Factor Analysis (CFA) was used the sample size was 408 employees of General Electric Company of Libya who took part in the study Random sampling was used

5. Conclusion and Policy Implications

The researcher’s recommendations, which are addressed here, are aimed at Namibia’s public enterprise management.

• &nbspIncorporate case studies of Namibian companies to illustrate how corporate culture impacts strategic management within the local context. This could involve studying both successful and unsuccessful companies to identify key factors that contribute to or hinder effective strategy implementation.
• &nbspConsider how Namibian companies adapt global strategic management practices to fit local cultural contexts. Assess whether strategies are modified or implemented differently due to cultural influences.
• &nbspRecommend tailored training programs that align corporate culture with strategic goals. This could involve leadership development programs that emphasize the importance of aligning culture with strategy.
• &nbspOffer strategies for managing cultural change within organisations. If a company needs to shift its culture to better support its strategic goals, recommend approaches for effectively managing this transition in the Namibian context.

Limitations of the present study

The principal source of limitation for this research was obtaining original data on the use of corporate culture and strategic management from the relevant stakeholders.

Areas for further research

The study recommends that future researchers take into account all elements that were not covered in this study. Moreover, all the information omitted from this study should be taken into account in future research. Using previously published material, examine the relationship between corporate culture and strategic management.

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