The interaction of organizational culture with corporate governance practices and isomorphism: A case study

Organizational structures are shaped by two foremost theories in the context of efficiency and external adaptation according to the organizational environment they are involved in. These are efficiency-oriented contingency approach and legitimacy-oriented institutional theory. Institutional theory suggests that organizations will institutionalize via becoming "isomorphic" by resembling the organizational structure that is approved and considered legitimate in the organizational environment, and thus will provide external support with the legitimacy they have acquired structurally. On the other hand, contingency approach points out that the organization should adapt to expected or unexpected conditions and adopt the structure that best suits these conditions. Organizational culture, which emerged as a concept within this phenomenon in the early 1980s, tried to explain how some organizations were successful by managing the conditions better, although all organizations operating in a certain sector were exposed to the same conditions. However, the managerial inadequacies of organizations, whether focused on efficiency or legitimacy, which emerged as a result of principal-agent conflict, appeared with scandals such as Enron and Worldcom in the late 1990s, creating the need for organizations to reconsider their managerial structures. The phenomenon of corporate governance has come to the fore in order to prevent such abuses and to introduce "best" practices in structural/managerial practices. In this study, the role of isomorphism to the impact of organizational culture on corporate governance practices was investigated. To examine this, a case study was conducted at a foundation university in Ankara. For examining isomorphism and corporate governance qualitative methods were used, while in examining the organizational culture quantitative and qualitative methods were used together. In the quantitative phase of the study, data were collected from 117 faculty members of the case; in the qualitative phase, data were collected from 11 senior managers of the case. When the results were examined, it was seen that although the case had a very strong hierarchical organizational culture, after a certain point it became isomorphic in order to continue its existence. It was seen that the efforts of the organization's environment to isomorphize the case indirectly affected the case's efforts towards corporate governance. Even though there was no legal regulation regarding corporate governance in the organization's environment, the fact that the case adopted corporate governance practices revealed its tendency towards corporate governance in terms of its organizational culture. Keywords: Organizational culture, corp. governance, institutional theory, isomorphism.