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THE IMPACT OF ORGANIZATIONAL CULTURE ON ORGANIZATION PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1     Background to the Study

There are different types of organizations which exist to serve different purposes and to satisfy the variety needs of stakeholders of the organization. The type of organization is dependent on its ownership, shapes and sizes. For example, firm of accountants, schools, retail shops, local authorities, airports, vehicle manufacturers, hospitals, hotels and many others. These organizations are categorized into two, that is, public and private organizations. Whatever type or category an organization is found, it exist to perform certain functions to achieve set objectives and to provide the desired satisfaction of its owners and customers. The set objectives are enabled and require the collective efforts of people to achieve the objectives that cannot be achieved by individuals on their own. Through collective efforts and actions, members and employees of an organization can provide a concerted and synergistic effect. Gibson, Ivancevich, Donelly, and Konopaske (2005) stated that organizations have distinct personalities and that these personalities are shaped largely by its top executives, for example, a tyrannical and autocratic executive team is able to create a culture that is filled with fear. Therefore, the way a leader or top executives manage his or her employees will determine how the employees will react to work to achieve the goal of the business of profit making.

Organizational performance is the ability for an organization to fulfill its mission through sound management, strong governance and a persistent dedication to achieving specific goals over a given period of time (Stafford & Miles, 2013). Performance is equally defined as the achievement of financial and non-financial goals that enables an organization to remain viable and sustainable both in the short term and in the long run (Denison, Haaland, Goelzer & Yilmaz, 2008. High organizational performance is achieved when all the parts of an organization work together to achieve desired results (Ansoff, 1987). The concept of organizational culture emerged in the United States in the mid 70‟s with the writings of scholar‟s like Ansoff (1987); Schein (2007); Rieley and Clarkson (2001) among others. These scholars argued that organizational culture defines the parameters that propelled fortune 500 companies in the US, UK, and other developed countries to enhance performance and remain competitive even in the face of intense globalization.

Management theorists, therefore, over the years have agreed among other variables that corporate culture and organizational performance have a very close relationship. Following Mullins (1999) “…there is a relationship between an organization‟s culture and its performance.” Flamholtz and Kannan-Narasimhan (2005) said “that the impact of organizational culture on the bottom line is of critical importance as a basis for influencing managerial practice and in turn financial performance.” McShane and Von Glinow (2005) in line with the above views of the relationship between organizational culture and organizational performance had a little different view, that “can companies with strong cultures have higher performance? Not necessarily! Studies have found only a modestly positive relationship between culture strength and success.” With the above views and statements of management theorists, one could easily conclude that organizational culture has a relationship with job performance of organization and in turn have positive impact on the overall performance of an organization. Researchers who have studied the impact of organizational culture on employees also indicate that it provides and encourages a form of stability. Gibson et al (2003) identified two major aspects of culture, which are strong culture and weak culture. Gibson stated that strong culture is characterized by employees sharing core values; the more employees share and accept the core values the stronger the culture is and the more influential it is on behavior and the more employees do not share and accept the core values the weaker the culture is and the less influential it is on behavior. Mc Shane et al (2005) also supports the argument of Gibson et al and went further so say that weak culture is when the dominant values are short lived and held mainly by a few people at the top of the organization.

1.2     Statement of the Problem

Organizations in Nigeria has adopted different changes ,over the years, these changes have necessitated a review of the management structure, addition of mandate and functions, and as a result, experienced significant changes in organizational culture. Stafford and Miles, (2013) had argued that an organization need to be in touch with its culture to be able to control its performance. Literally, this means that an organization has to assess its own structure, beliefs, values, and assumptions that informs the organizations way of doing things. As such, this will not only allow the organization to remain relevant, but to identify precipitous factors inherent within its culture that are good for performance, and those that are bad for performance.

1.3     Objective of the Study

The main objective of this study is to find out the impact of organizational culture on organizational performance, specifically the study intends to:

1.     Analyze the impact of organizational culture on performance of organizations in Nigeria

2.     Find out the extent to which organizational culture affects customer service

3.     Examine the extents to which organizational culture affect internal business procedures

1.4     Research Question

1.     Is there any impact of organizational culture on performance of organizations in Nigeria

2.     To what extent does organizational culture affects customer service

3.     What is the extents to which organizational culture affect internal business procedures

1.5     Research Hypothesis

Ho: there is no impact of organizational culture on performance of organizations in Nigeria

Hi: there is impact of organizational culture on performance of organizations in Nigeria

1.6     Significance of the Study

This research work will be significance to employees as well as management of different organizations in Nigeria, it will help the employees of gain knowledge and insight provides awareness of the extent to which they were willing to accept change and thus derive as much benefits as possible from the change initiatives that the organization is implementing. To management, an assessment of the organizational culture was important in determining the root cause of the problems that impeded better performance of employees. The top management of various organizations as well as the human resource management department would be better informed by the findings of the study in understanding the contribution of organizational culture (at overall and component level) on organizational performance. In this regard, the study findings would be useful in reviewing the change strategies that were in place to ensure that the changes bring meaningful gains to the organization.

1.7     Scope of the Study

This research work will vividly examine concept and literature related to organizational culture and performance and also analyze the impact of the former on the latter.

1.8     Delimitation of the Study

Finance for the general research work will be a challenge during the course of study. Correspondents also might not be able to complete or willing to submit the questionnaires given to them.

However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite these constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.

1.9     Definition of Terms

Organization culture: Organizational culture encompasses values and behaviors that "contribute to the unique social and psychological environment of an organization

Organization performance: Organizational performance comprises the actual output or results of an organization as measured against its intended outputs.

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