What is organizational culture? how it affects the performance of employees?

Organisation Culture is made up by, amongst others, the values, interpersonally acceptable behaviour, management stye  and collective beliefs of the members of the organisation.  It set the tone of the organisation, which in turn, effect the employees as this is the unwritten message (and through the management, the written message, such as in the policies, procedures, and management style) of the organisation.  If the culture is one that fosters and promote creativity, the culture will be reflected in the outlay and design of the office, management style (promoting  creativly and rewarding it), etc which will provide the support and environment for the employees to explore new ideas in an unthreatend environment - and they will pick up on this and act accordingly.  Those who do not step up to this will eel that they do not fit in and either leave, or will perform under expectation and will be terminated.  If the organisation is highly structured and controlled employees will follow the instructions and rules of the management because they will not feel safe to explore "out of the box" ideas, and they, in turn will act accordingly (or face the wrath of management if they don't).  The culture is therefore also self-perpetuating.