Organizational Factors Influencing Project Success

Organizational Culture (OC)

Organizational culture (OC) can be defined as a set of assumptions that unite the norms and values, social ideals, or beliefs that are shared by the members of an organization. In this sense, OC can influence employee behavior and formal systems of control, guiding the way in which employees think, act, and respond to improvement and innovation actions.

Sørensen suggests that a strong culture, in which standards and values are widely shared and deeply retained throughout the organization, improves the organization's performance because employees are committed to common goals. According to Sørensen, the benefits of a strong organizational culture are the result of performance standards and strongly shared values, which may imply better alignment between business and member goals as well as bigger efforts of employees. In this sense, Triguero-Sánchez et al. noted that human resources practices have positive effects on organizational performance when striving for employee engagement.

Culture is also known to support innovation by generating a creative organizational climate and influences organizational performance. Büschgens et al. identified that the way in which a company directs its organizational culture can broaden its innovative posture, since innovative organizations may develop a culture of flexibility and external orientation. Additionally, Uzkurt et al. noted that it is important for firms to encourage an innovative organizational culture by instituting mechanisms that boost the absorption of new ideas. Situmeang et al. verified that organizational cultures capable of change tend to favor the performance of new product development projects. Thus, this line of thought resulted in the hypothesis:

Hypothesis 4: Innovative organizational cultures are positively related to project success.