The Relationship among Corporate Culture,Strategic Orientation,and Financial Performance

Abstract

This study was conducted to suggest strategic orientations that can analyze which types of corporate culture and strategic orientation contribute to enhanced financial performance, based on the theory that, to acquire a competitive edge in the fierce competitive environment and maximize performance, the combination of corporate internal competitiveness and an appropriate action plan is crucial. The study shows that corporate culture does directly affect financial performance. However, for this group of Korean hotels, not all cultures performed equally. The transaction-oriented Market Culture did not promote financial performance, as compared to the family-oriented Clan culture or the innovative Adhocracy culture. The tradition-bound Hierarchical culture actually cost hotels in terms of financial performance. Certain strategic orientations moderated and improved financial results for some of the cultures, but not all. The opportunity-seeking approach of a leading orientation drove favorable financial results for the Clan and Adhocracy cultures but did not help the Market or Hierarchy cultures. Other strategic orientations also drove positive financial results, including future analytic and defensive. On the other hand, the discounting-oriented aggressive orientation returned negative financial results to all hotels in this sample.