Post 4 out of 5: The Impact of Organizational Culture on Performance – When Does Organizational Culture Actually Harm?

In previous posts, we discussed how strong organizational culture can lead to success. However, there are cases where culture can actually hinder the organization and even damage it.

What does a “negative” organizational culture look like?

1. Poor Communication and Information Hiding

Communication is key to a healthy culture. But when there’s a lack of transparency, or when things go through organizational politics “filters” – that’s a bad sign. A McKinsey study showed that poor communication hurts the ability to handle changes and improve performance.

2. Culture of Blame and Fear of Failure

In places where failure is seen as “dangerous,” there’s less room for creativity and experimentation. A “blame-finding” culture stifles initiatives. An example of this is Kodak, which was a market leader but feared the transition to digital – something that led to its collapse.

3. Work Overload and Poor Balance

An “always working” culture leads to burnout. A WHO study showed that long working hours are harmful to employee health. Organizations that foster healthy balance gain more satisfied and productive employees.

4. Lack of Transparency and Absence of Engagement

When employees feel they have no idea what’s happening in the organization, alienation develops.

5. Inflexibility and Resistance to Change

A culture that’s not open to changes leads to a stagnant organization. When managers make change difficult, the organization might fall behind and fail to progress.

6. Over-involvement in Decision Making

Team involvement in decision-making sounds good on paper, but sometimes it leads to slowness and delays. When every team member needs to voice their opinion on every decision, processes can take too long and the organization loses its ability to respond quickly. The key is finding balance – knowing when to involve others, and when to make decisions and act fast.

Summary

Not every good intention creates a good outcome. In the next post, we’ll discuss how to build a healthy organizational culture that leads to real success.