Organisational culture can be defined as “an amalgamation of the values and beliefs of the people in organisations” (Williams and Curtis, 2008, p.10). In simple words, organisational culture refers to ways things are done in an organisation. Hidden elements of organisational culture include power and politics, informal sub-cultures, leadership styles, values, attitudes and beliefs.
Organisational structure, on the other hand, relate to the nature of arrangement of activities in a company. Major types of organisational structure include flat, functional and divisional structures, whereas centralisation, span of control and chain of command can be mentioned as elements of organisational structure.
There is a mutual impact between organisational culture and structure. The nature of organisational structure may determine organisational culture, and at the same time cultural transformations within the organisation can undermine organisational structure.
Both, organisational culture, as well as, structure do impact individual and organisational performance in various ways. Impact of organisational culture in individual performance is obvious i.e. employees are expected to behave within the boundaries of organisational culture. Similarly, organisational culture can impact organisational performance through encouraging or discouraging employee creativity and in many other ways.
Organisational structure, on the other hand, may affect individual employee performance via integrating motivational or de-motivational elements. For example, management-employee communication boundaries as a trait of organisational structure may have negative impact on employee performance.
The impact of organisational structure on organisational performance can be explained by bureaucratic nature of decision-making process in some organisations with tall structure and this may have negatively effect flexibility of organisations to adapt to changes in marketplace.
William, J. & Curtis, T. (2008) “Marketing Management in Practice” Routledge