Investigating the Impact of Organizational Culture on the Performance

Investigating the Impact of Organizational Culture on the Performance

American Journal of Scientific Research ISSN 2301-2005 Issue 89 July, 2013, pp.94-107 http://www.americanjournalofscientificresearch.com Investigatin...

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American Journal of Scientific Research ISSN 2301-2005 Issue 89 July, 2013, pp.94-107 http://www.americanjournalofscientificresearch.com

Investigating the Impact of Organizational Culture on the Performance of Insurance Companies in Iran Parastoo Moradi Corresponding Author, M.A in Executive Management Department of Management, Science and Research Branch Islamic Azad University, Isfahan, Iran E-mail: [email protected] Tel: +98-937-9259368 Ali Safari Assistant Professor, Department of Management Faculty of Administrative Sciences and Economics University of Isfahan, Isfahan, Iran E-mail: [email protected] Mohammad Saleh Torkestani Assistant Professor, Department of Management Allameh Tabatabai University, Tehran, Iran E-mail: [email protected] Abstract Identifying culture of Iranian insurance companies, as one of the aspects of the organization, can assist them in selecting the right strategy. The analyzed statistical society was the managers and vice presidents of 15 Iranian private insurance companies. The effect of organizational culture test was conducted through patterning structural equations. The results indicate that organizational culture impacts competitive strategy directly and organizational performance indirectly. This study confirmed that a firm’s competitive advantage can be enhanced by culture and strategy fit. Strategy fit could also moderate the relationship between organizational culture and organizational performance.

Keywords: Organizational Culture, Organizational Performance, Competitive Strategy, Insurance Companies JEL Classification Codes: C12 – G22 - L10 - L22

1. Introduction Today’s world is a world dependent on organizations -places to meet the needs of modern humans- in different aspects. Human’s life is indispensably intertwined with the organizations’ functions so that any society, in which the organizations do their duties more appropriately, provides better levels of welfare for its people. So, finding detailed understanding of organizations’ functions will be a major instrument to ensure the welfare of the communities. One of the important issues in organizational theory and management body of knowledge is the concept of strategy. Most researchers emphasize the impact of the strategies implemented in the organizations on their functions (Dess and Davis,1984

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Hunger and Wheelen,1995). Thus, research and thought on the concept of strategy is one of the noticeable fields to improve the organizations, insurance companies and finally the community. A competitive strategy focuses on understanding sources of sustained competitive advantage like the organizational culture (Barney, 2001 Priem, 2001). Towards recognizing the elements that influence the performance of the insurance industry can grow and develop domestic companies and insurance industry. In the present research, organizational cultural is considered as the independent variable and competitive strategy as the meditating variable. Since the effectiveness of organizational culture on Iranian insurance companies’ performance is investigated in this study, review of related literature, the designed conceptual framework, methodology, assumption analyses, and finally the final model would be discussed and presented in the following sections.

1. Literature Review 1.1. Organizational Culture There are many scientific definitions of culture by humanities scholars, some are as follow: Analyzing hundreds of different definitions, Kroeber and Kluckhohn defines culture as: Culture consists of patterns, explicit and implicit, of and for behavior acquired and transmitted by symbols, constituting the distinctive achievement of human groups, including their embodiment in artifacts; culture consists of traditional ideas and especially their attached values; culture systems may, on the one hand, be considered as products of action, on the other hand as conditioning elements of further action. (Mohammadi, 1991, p.159). Deal and Kennedy (1982) describe culture as an organization of individual personalities. Schein (1992) defines culture as “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems” (p. 12). Kotter and Heskett (1992) defined organization culture as below: When three elements 1) strong culture, 2) adjustment with firm strategies and 3) adaption; work together, organization culture has the possibility to fulfill a firm ‘s profitability. Culture is mass of psychological operation for saved learning of a group, Covering, attitude, Feeling and cognitive bases. There are three bases for culture: 1) artifact, 2) value and beliefs, 3) fundamental hypotheses (Schein, 1992, p. 17). Tseng Hua-cheng (2006) reminded that the forms showed by usual belief and organization outlook is called organization culture. Daft (2006) pointed out that essential judgment of values, believes, attitude and behavioral norms shared by all limbs is called culture of and organization. Many researchers have defined organizational culture as values, ideology, philosophy, reputation, customs, symbols, and the norms affecting organizational performance (Bourantas et al., 1999; Bourantas and Papakadis, 1996 ; Hatch, 1993; Helriegel and Slocum, 2004; Kreitner and Kinicki, 2007;Muafi, 2008). The essential factor for organizational culture is estimating its competitiveness and shows particular specification of that. It is also in near relation with central contest of the organization (Huanng Li-hui, 2009). Li Ying-chung (2002) believed that the organization culture is the product of reaction between long-term operation of inside systems of an organization and outside surrounding. That is union among the values belief, sharpness, thinking and act. Organization’s action and performance of members and the organization itself can be restricted by its shapeless entity. Organizational culture is not a tangible phenomenon and is not recognized easily. Moreover, familiarity with each and every one of staff in different career levels and recognizing their needs and motivation is a very difficult task. For this reason, their general trend of thinking should be sought and their group culture should be recognized in the organization they are working as groups. Based on their

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Parastoo Moradi, Ali Safari and Mohammad Saleh Torkestani

own definition of organizational culture, management scholars and researchers prepared some patterns and presented a general framework to describe the values of organizational culture. Charles Handy introduces the four ancient Greek gods, Zeus, Apollo, Athena and Dionysus. He attributed each god to a school of management philosophy or an organizational culture. In this research, to investigate the culture of organizations, Charles Handy’s model is used. The management culture in Greek organizations has been researched by the first author and his colleagues (Bourantas et al., 1990). The conceptual framework for this research has been provided by Harrison (1972) and Handy (1978, 1980). Handy has used the ancient Greek gods, i.e., Zeus, Apollo, Athena and Dionysus as the symbols to introduce four types of management and organization cultures. The name of each of the four gods is used to describe the cult or philosophy of management and an organizational culture. The following four types of organizational culture were measured: Zeus (the king of the gods) is the symbol of club culture. The organization using this type of culture, like other organizations, has divisions of work based on functions or products. Spider web is used to represent Zeus. This type of culture demonstrates a patriarchal management and relies on the mutual trust between management and the employees. Club culture is very effective when speed of decisions matters. Historically, club culture is seen mostly in small entrepreneurial organizations (Muafi, 2009). Apollo is the symbol of role culture. In this type of culture, it is assumed that the man is a rational creature so that anything can be analyzed logically. The symbol to represent role culture is a Greek temple because its power and beauty lies in its pillars. The pillars represent the functions and divisions. In this type of culture, the employees’ duties are precisely defined in terms of roles. There is a set of prescribed rules for any tasks and the organizational stability is provided by manuals, budgets, information systems, etc. It is a picture of a bureaucratic organization. Role culture is effective when the basis is on the assumption that tomorrow will be like yesterday (predictability). Athena is the symbol of task culture or better to say task groups. In this type of culture management is viewed as being basically concerned with the continuous and successful solution of problems in a logical fashion. When locating a problem, people and appropriate resource are used to solve the problem. In the Athena culture, expertise in a specific field is the source for the power. Net is used to represent task culture because it draws resources from various parts of the organization and focuses them on a particular knot or problem. Dionysus is the symbol of existential culture. In the first three cultures, the individual is subordinate to the organization, but in this type of culture, the organization tries to satisfy the individual. In the organizations with this type of culture, the individual preserves his identity and is not owned by another. Existential culture is excellent for the professionals and experts and to Handy is perfect for working. The reasons to choose this model are as follow: Organization management is not a precise science but a strategic and creative process which in scale is affected by the dominant culture and traditions in a particular time and place. Organizations have their own strategies to fulfill their functions, the functions which are useful and the functions which are useless to them. The effective use of cultures needs a correct perception and interpretation of them. Using metaphors enhances the individuals’ ability to analyze and understand the complexities of organizational issues. Kotter and Heskett (1992) have provided research that suggests culture is a source of competitive advantage. The most important source of a firm are the people. A powerful category for conducting manner is a strong culture so that the staff works better. They also pointed out an essential factor of culture is adaptation which helps for a firm’s victory (Deal and Kennedy, 1982, p.15). According to Kotter and Heskett (1992) research, culture is a resource of contesting benefit. Culture has root in characters, values and believes and also attitude of a firm’s organizer. From 1977 to 1988 a research was done by Kotter and Heskett and more than 200 different firms went under estimation as to being, the nature and the strength of their culture according to the economical acting of

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the firm. Despite the fact that others imply on long-term economic acting, Kotter and Heskett revealed specific kinds of corporate cultures aid. Perhaps one more important factor in specifying the win or loss of firms will be corporate culture in the next decade there are enough corporate cultures that forbid powerful long-term financial functioning, and they expand quickly, difficult to change, they can make more execution functioning. There is a close relationship between organizational culture and strategy. It means is a strategy of a organization changes it must put the organizational culture in row with strategy or confront with strategic defeat. culture may support or block behaviors aiming to get strategic goals. (Semler, 1997; Tosti and Jackson, 1994). Relation of organizational culture and strategy was described and supported by Vestal et al (1997) and also other researchers. Schwertz and Davis (1981) declared: corporate culture has a main effect on capability of a company to do its goals and plans to get better or worse, chiefly at the time of changing strategic orientation. Importance or organizational culture in strategy execution has been revealed in studies rather than other factors. The previous studies have gone through the competitive strategy alignment, which affects the organizational performance through the contingency variables like culture. Some experts such as Hickman and Silva (1984), Tidball(1988), Kotter and Heskett(1992), Gordon and Tomasso (1992), Kramer (1993), Schuler and Jackson (1995), Besanko et al. (2000), and Muafi (2008,2009) have done some studies which show there is a relationship between competitive strategy and contingency variables like culture. Generally the findings indicate that alignment between competitive strategy and contingency variables affects the performance. Increasing this alignment improves the performance and vice versa (Muafi, 2009). Yung-fu (2004) implied that best organization culture is possible to amend the output of organization and increase the fertility. There was a research done by Lopez et al. (2004).its purpose was in three assumptions involving the effect of organizational culture and corporate strategy. According to a research observed by Sorenson, for sure a firm’s performance could get progressed by strong cultures, and it is correct in relation with those companies showing consistency in there presence conditions and there is less progress of a strong culture for companies with large amounts of change (Sorenson, 2002). Many researchers declares organizational culture can develop productivity, it also has a prominent result on the organization’s long-term tolerability, economic performance and result like effectiveness, function and obligation (Kotte and Heskett, 1992; Tidball, 1988; Cremer, 1993; Gupta, 2011) and in communication with the staff culture, gets applied to cheer them in order to confirm the organizational aims (Deal and Kennedy 1982, Wilkins and Ouch 1983). It is essential to figure out the organizational culture to test what happens in organizations, their way of running and improvement (Schein, 1992). Some other experts like Tidball (1988), Kotter and Heskett(1992), Kramer (1993), Besanko et al. (2000), and Muafi (2008,2009) have found that organizational culture has a meaningful effect on the long term stability of the organization, economical performance, different outcomes such as profitability, turnover, and commitment. They show that the congruence of beliefs creates a unifying force that enhances organizational performance. Thus, hypothesis 1a-b is presented. H1a: Organizational culture has a meaningful impact on cost leadership competitive strategy. H1b: Organizational culture has a meaningful impact on differentiation competitive strategy.

1.2. Strategy Strategy determines the functions in a complicated and dynamic environment and is an instrument giving life to the human elements in an organization and moves them. In table 1, other definitions of strategy are presented.

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Table 1:

Definitions of strategy

No.

Presenter

Year

1

Chandler

1962

2

Tilles

1963

3

Andrewz

1971

4

Mintzberg

1978

5

Hofer&Schendel

1979

6

Enz

2010

Strategy definition A unified, comprehensive and integrated plan designed to link the strengths and weaknesses to the environmental opportunities and threat in order to achieve the main organizational goals a set of major goals and policies that outline what an organization is trying to achieve the pattern of major objectives, purposes or goals and essential policies and plans for achieving those goals a pattern in a stream of decisions the match an organization makes between its internal resources and skills and the opportunities and risks created by its external environment 1. a pattern that emerges in a sequence of decisions over time 2. an organizational plan of action that is intended to move a company toward the achievement of its shorter term goals and, ultimately, its fundamental purposes

There are different categories and typologies of generic strategies in management literature, four of the generic strategy typologies which are of more attention to the researchers are introduced in table 2. Table 2: No. 1 2 3 4

Strategic classification Presenter Miles and Snow Porter

Year 1976 1980

Mintzberg

1988

Parnelland

Karaher

2002

Strategic Classification Prospectors, Defenders, Analysers, Reactors Cost Leadership, Diffrentiation, Focus Price Differentiation Strategy, Image Differentiation Strategy, Support Differentiation Strategy, Quality Differentiation Strategy, Design Differentiation Strategy, Undifferentiation First Mover, Second Mover, Segment Control, Product/Service Breadth, Percieved Uniqueness, Production/Distribution Efficiency

In this article, Porter’s generic strategies are used as the theoretical basis for recognizing the implemented strategies in the insurance industry. Of the reasons to choose them is the simplicity, the vastness of literature and many theoretical sources about Porter’s generic strategies. Cost leadership strategy was increasingly common in the 1970s because of popularization of experience curve. This strategy requires construction of efficient facilities, vigorous pursuit of cost reduction from experience, tight control and overhead control, cost minimization in areas like R&D, service, sales force, advertising, and so on. Having a low- cost position yields the firm above average returns despite the presence of strong competitive forces (Porter, 2006, p. 73). The second strategy is differentiation which brings the competitive advantage for the firms, i.e., different or unique products or service offerings. Approaches to differentiating can take many forms, for example through design, brand image, technology, features, production customer service, and dealer network. Ideally, the firms differentiate themselves along several dimensions (Porter, 2006, p.83). The final generic strategy is focusing on a particular buyer group, a segment of product line, or geographic market. The findings of the study done by Khosravi (2010) show that there is not much stress on using Porter’s focus strategy in the insurance companies. Thus, focus strategy is not discussed in this article. The difference of the three generic strategies is shown in figure 1.

Investigating the Impact of Organizational Culture on the Performance of Insurance Companies in Iran

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Figure 1: Porter’s Generic Strategies

Tarigan (2005) showed that alignment of the strategies has a positive impact on the performance of organizations. Campbell-Hunt (2000) investigated the impact of cost leader ship, differentiation, or a combination of both on the financial performance and progress of the companies. Many researchers showed the positive impact of Porter’s generic strategies on the better performance of companies (Dess and Davis,1984 Hambrick, 1982 Hawes and Crittenden, 1984 Nayyar, 1993 Parker and Helms, 1992 Powers and Hahn, 2004 Torgovicky et al., 2005). However, the findings are different in different industries. Regarding this, the following hypotheses are presented: H2a: Cost leadership strategy has a meaningful impact on behavioral performance. H2b: Cost leadership strategy has no meaningful impacts on behavioral performance. H3a: Differentiation strategy has a meaningful impact on behavioral performance. H4b: Differentiation strategy has no meaningful impacts on behavioral performance.

1.3. Organizational Performance The only question regarding corporate performance is the problem of different selections. It means which different factor can determine the correct corporate performance or value. Till now the literature is vogue regarding the about the determination of corporate performance. In most technical terms, organizational performance is defined as the output of the strategy used as a tool in organization. Strategic management is a tool for managers; they should measure the effectiveness of the organization by collecting and using performance data (Crook et al., 2003). Galbraith and Schendel (1983) suggested that the performance is a complex (combined) and multidimensional phenomenon consisting of several objects. Depending on the implemented strategies, the selected structure, and competitive power of organization in implementing the strategies, the important coordination of performance indicators can be met (Tse, 1991). In what comes next, two important types of performance are discussed: Behavioral performance refers to performing work-related functions (Lawler and Porter, 1967; Petty,Mcgee and Cavender,1984).Behavioral performance is measured when evaluating performance results is difficult and an effective relation exists between the functions and results (Botten and McManus, 1999). Donavan et al. (2004) stated that welfare is important in the motivation of service workers (satisfaction and commitment). The reports of some researchers showed the increase of implementing non-financial performance measures in the recent years (Tavitiyaman et al., 2011; Pertusa-Ortega et al., 2010; Alen and Helms, 2002). Bridoux (1997) defines financial performance as “profit in excess of the cost of capital, depends upon the attractiveness of the industry in which the firm operates (industry-effect on

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Parastoo Moradi, Ali Safari and Mohammad Saleh Torkestani

performance) and the firm’s competitive advantage”. Financial ratios are used to determine: 1. the firm’s position in its industry, 2. The degree to which strategic objective are accomplished, 3. Firm’s vulnerability to revenue decrease, 4. The growth potential of the firm, 5. The firm’s ability to react to unpredicted changes in the environment (Botten and McManus, 1999; Graham and Strombom, 1998; Reimann, 1982).

2. Research Hypotheses and the Conceptual Model Considering organizational culture and Porter’s generic strategies as the recognition basis of Iranian insurance companies, and also the impact of strategy on the performance and research hypotheses, the theoretical framework is presented as shown in figure 2. Figure 2: Conceptual Model

3. Methodology 3.1. Research Population snd Sample Regarding the purpose, the present research is an applied one, and taking data collection into account, it is a descriptive and survey type. The unit of analysis is the organization. To collect the data, the library studies and also a field study in the insurance companies were done. The senior vice presidents and managers of these companies comprised the statistical population of this research. It used census sampling method and the insurance companies to be analyzed were Alborz, Asia, Dana, Moalem, Parsian, Karafarin, Sina, Toseeh, Razi, Saman, Dey, Novin, Mellat, Pasargad, and Mihan. Due to the low number of mangers and vice presidents, the insurance companies of Kousar, MA and Iranian were omitted from the statistical population. Another reason for omission was observing the homogeneity of the analyzed companies. Financial and behavioral performances were the dependent variables, organizational culture was the independent variable, and cost and differentiation strategies were the mediating variables. Time period to collect the data was from February to September 2012. To collect the required data in this industry, questionnaires were used. 190 questionnaires were distributed among the senior managers and vice presidents of these companies of which 169 questionnaires were retrieved. The questionnaires were comprised of two sections. The first section embraced the demographic variables of gender, education, age, date of foundation, and the number of staff. The information related to demographic variables is shown in table 3. The second section evaluated the intended variables of this research. The rating scale for each question ranged from strongly agree to strongly disagree based on the points of 1 to 5.

Investigating the Impact of Organizational Culture on the Performance of Insurance Companies in Iran Table 3:

101

Information demographic variables

Characteristic Gender Male Female Work Experience 1 and lower 1-5 6-10 11-15 16-20 More than 20 Age 30 and lower 31-40 41-50 More than 50 Education Bachelor Master PhD

Frequency

Percentage

102 67

60 40

4 36 42 33 35 19

2 21 25 20 21 11

7 40 97 25

4 24 57 15

95 66 8

56 39 5

3.2. Testing the Research Variables Before finding any cause and effect relationship among the organizations, the mean of the four cultures of Zeus, Apollo, Athena, and Dionysus were calculated to recognize the dominant organizational culture in the statistical population; in the end, Zeus culture with the mean of 3.65 was selected. Content validity of the questionnaire was confirmed by scholars and professors. Cronbach’s alpha was used to determine the reliability of the test. To do so, at first, 30 questionnaires were distributed in the companies. Using the obtained data, Cronbach’s alpha was calculated, the results showed the adequate reliability of the questionnaires. For the all the questions related to the variables of the analytic model, Cronbach’s alpha was calculated 84% which is an acceptable percent. The alpha of each variable is separately shown in table 4. Table 4:

Cronbach’s alpha

Construct Zeus culture Cost leadership strategy Differentiation strategy Behavioral performance Financial performance

Items 1-2-3-4-5-6-7-8-9 37-38-39-40 41-42-43-44-45 46-47-48 49-50-51

Cronbach’s Į 0.88 0.81 0.78 0.85 0.79

3.3. Conformity Factor Analysis The results of factor analysis, done to determine the accuracy of proposed models, show several indicators. The used indicators in this research indicate the suitability of measurement models since the level of significance is more than 0.05; RMSEA of models ranges from 0.00 and 0.08 and close to zero; GFI is more than 0.9 and so is CFI indicator. All the values are acceptable. The results of conformity factor analysis are seen in table 5.

102 Table 5:

Parastoo Moradi, Ali Safari and Mohammad Saleh Torkestani The results of factor analysis

Construct Zeus culture Cost leadership strategy Differentiation strategy

RMR 0/006 0/008 0/000

CFI 1/00 0/99 1/00

P 0/65 0/28 0/48

GFI 0/97 0/99 0/99

RMSEA 0/00 0/03 0/00

CMIN 18/90 2/49 1/45

3.4. Findings of the Conceptual Model Analysis After confirming the measurement models of research variables, the conceptual model was analyzed by structural equation modeling. To determine the suitability of model, CMIN path analysis and other suitability criteria of model fitting were investigated. The results are presented in table 6. The final model was created as seen figure 3. Figure 3: Final model

Table 6: CMIN 280/46

Model fit statistics Df 113

CMIN/df 2/48

RMSEA 0/09

GFI 0/86

IFI 0/92

CFI 0/92

RMR 0/03

Amos outputs, in model standard estimation section, show that structural equation model is an appropriate model. RMSEA of the model equals 0.09 which is almost appropriate; GFI also is close to 90%. The two indicators of IFI and CFI are more than 90%, and RMR is close to zero. To compare the latent variables in the structural equation model, model estimation was analyzed in standard scales. Calculation of significance values shows that the cause and effect relationship of Zeus culture and cost and differentiation strategies, cost and differentiation strategies and financial and behavioral performance is meaningful in this industry (to determine the significance value of the model, its significance value should be more than 2 and less than -2). The results of hypotheses testing can be observed in table 7.

Investigating the Impact of Organizational Culture on the Performance of Insurance Companies in Iran Table 7:

The results of hypotheses testing

Hypothesis H1a H1b H2a H2b H3a H3b

103

Number 169 169 169 169 169 169

P-Value 0/014 0/004 0/000 0/000 0/016 0/000

Regression coefficients 0/21 0/22 -0/37 -0/23 0/18 0/27

Result Yes Yes Yes Yes Yes Yes

4. Conclusion and Discussion Insurance industry is undergoing structural changes and clearing tariff rates. These changes have caused competitiveness in the industry. The other issue to be considered in the insurance industry is the number of different insurance majors which each one is performing as strategic business unit in these companies. Thus, in each insurance company, several strategies are used simultaneously so that based on the available majors and sources of each unit, a different strategy is implemented. Hypothesis 1: Organizational culture has a meaningful impact on the competitive strategy of Iranian insurance companies. The findings of the present research are the same as the findings in Gunnigle and Moore (1994) and Muafi (2009). Working in Zeus culture is good provided that individual belongs to the club, because it values individual, gives him a free rein, and reward their efforts (Handy, 2001). Money is highly valued in Zeus cultures, but it is usually used as an enabling factor or as a symbol of purposes achieved (Handy, 2001). Thus, leadership strategy is used in Zeus culture. To succeed in differentiation strategy, individual should be given enough power to reach creativity. As the above mentioned matches Zeus culture, the relationship is confirmed. Hypothesis 2: cost leadership strategy has a meaningful impact on the performance of insurance companies in Iran. Strategy is an essential management instrument and affects the performance of the companies. In addition, achieving competitive advantage by strategic plans is increasing (Powers, 2004). The differentiation strategy’s impact on behavioral performance was shown in a study by Tavitiyaman et al. (2011). It can be said when an organization uses differentiation strategy correctly, employees’ creativity and satisfaction, different products and service and along with customers’ needs, and in turn, customer satisfaction will increase. On the other hand, when cost leadership strategy is used, the employees’ creativity and satisfaction, as a result of working based on some rules and regulations, will decrease. So, there is a reversed relationship between cost leadership strategy and behavioral performance. Hypothesis 3: differentiation strategy has a meaningful impact on the performance of insurance companies in Iran. The findings of competitive strategy’s impact on financial performance are the same as the studies done by Tavitiyaman et al. (2011), Pertusa-Ortega et al. (2010), Muafi (2008, 2009), Chathoth (2007), Allen et al. (2007). The more different products/ services a company offers, the more prices and profit it can make which improves the performance of the company. It should be noticed that reliance on cost competitiveness alone without considering technical and insurance based principles may cause problems in the solvency of insurance companies. Amateur price competitiveness effects also cause problems to the durability of insurance companies in the medium term and long term. Deprecations without observing technical and insurance principles cause the performance to decrease. So, there is a reversed relationship between cost leadership strategy and financial performance. One of the important ways that leaders change an organizational culture and accommodate their hypotheses is by means of selection, maintenance, and encouraging people in the organization in most organizations mechanism of preparation is accurate because it operates in an unawareness way Schein

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Parastoo Moradi, Ali Safari and Mohammad Saleh Torkestani

(2004). Establishers and leaders build this culture base in the organization by applying developing the same as the realize to have their required values, and also by deleting those keep in mind as containing pleasant worth basis. (Pfau and Kay 2002) discuss that companies consisting formal employment strategy utilize a fiscal benefit. Avoiding of getting connected with employment efforts to a strong business behavior and moral values can cause catastrophe for and organization. The factor of employing and cultivating colleagues consider the best people are involved by allocating specifications that harmonized their being employed. Any applied factor should focus the character, perfection, method and efficiency of the employed person the mentioned process will cover the cultural features of the organization in the chosen and removal process. Organizational culture resist as a part that is important to maintain the execution, competitive advantage, and good reason for being an excellent organization. organizational learning firm culture can progress moral environment which specifically can improve people in the organizational with shared belief, trust and theme harmony for vital success.(Fau and Kay , 2002) defends, applying the right people will launch a company in to the types of fiscal success that leads in to a business which draws more excellent performance. A leader can create a culture that makes difference with his organization in to a best place of work in order to put through the devotion of organizational sources, awards and progresses that promotes contesting ethics. Promoting staff to create new advantages is the best way to encourage competitive advantage the difference of win or lost belong to the degree and aim, the value made by the organization culture.

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