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THE EFFECTS OF ORGANIZATIONAL CULTURE ON EMPLOYEE PERFORMANCE AND PRODUCTIVITY

ABSTRACT

This study examines the effect of organizational culture on employee performance and organizational productivity. Five hypotheses were formulated and tested. The literature review examines the meaning of organizational culture, theoretical concepts in organizational culture, the functions of organizational culture, components of organizational culture, assessing the culture of an organization and the methods for changing the culture of an organization. Four banks were taken as the sample for this study. The method of data collection used in this study is mainly through the questionnaire method. Findings indicate (i) a high percentage of employees who comply to the culture of the organizations, (ii) that rigid operational procedures and policies can inhabit employee performance and productivity, (iii) lack of good communication is a factor that can prevent employee performance and productivity, (iv) a strong relationship between “entrepreneurial risk-taking initiative and organizational performance, and (v) a strong relationship between   shared values among the employees of the banks and the performance of the banks.  The study recommends that banks should have a clear vision and mission statements and communicate these to their employees; good leadership skills are essential to manage the organization’s culture; there must be shared values and trust; and opportunities for employees to progress and develop. Finally, it is recommended that organizations should encourage initiative, creativity and entrepreneurial culture by doing away with bureaucratic practices.

CHAPTER ONE 

INTRODUCTION

1.1      BACKGROUND TO THE STUDY 

Every organization is affected by its culture and every organization has a culture. It has been shown by several researchers such as Ogbor (2003), Schein (2004) and Alvesson (2003) that the performance of an organization should be explained against the backdrop of its culture. Someone walking into the lobby of Grand Hotel, Favorites Fast-Food Restaurant, Zenith Bank, all in Asaba will experience a certain atmosphere, feeling, and style that are unique. These companies, be it a bank, a hotel or a restaurant, have a personality, a charm, a feel that is unique to it. They have a cultural anchor that influence the way customers respond and the way employees interact with customers.

At Zenith Bank, for example, with its over two hundred and fifty (250) branches and business offices nationwide, a visitor experiences a kind of business focus in the ways tellers attend to the customer; there is an attitude among the tellers which exudes passion, energy and enthusiasm, and creativity in its environment. At Grand Hotel, the ambience is not only seductive but customers feel a sense of been in an oasis. The founders or the management of these successful organizations have instilled these cultural values in the companies and have been embedded in the ways business is conducted.
Whether the discussion focuses on a bank or a hotel that exudes a culture of passion or friendly customer service, culture is a part of organizational life that influences the behavior, attitudes, and overall effectiveness of employees. The culture of an organization deserves special consideration because, as Denison (1990) rightly points out, “decisions made without awareness of the operative cultural forces may have unanticipated and undesirable consequences.” 
In this project, the aim is to explore how the organizational culture of four banks in Asaba affects their productivity. In this project, I will use the terms “organizational culture” and “corporate culture” interchangeably because the two concepts refer to the same phenomenon. According to Alvesson (1990), “Organizational culture” is a term that is mostly use in scholarly research and organizational discourses while “corporate culture” is practitioner-oriented.
Ogbor (2012) has argued that many organizations in Nigeria, especially in the public sector, are plagued with problems of productivity. According to the researcher, there are several reasons for this, including:

As pointed out above, the purpose of this study is to examine the effect of organizational culture on the performance of selected banks in Asaba.

1.2       STATEMENT OF THE PROBLEM
Organizational culture affects the performance and productivity of organizations in a tremendous way. The Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi (2010) argued that poor corporate governance and poor corporate culture were responsible for the problems faced by Nigerian banks in the post-consolidation era. In several instances, it has been shown that most employees in the organizations (banks) do not have the knowledge of its vision, mission and strategic goals. 
Studies have indicated that the leaders of most banks in Nigeria lack the necessary skills for their banks to compete effectively and employees do not share values expressed in the organization’s mission statement. Secondly, many of the banks have bureaucratic culture and do not promote entrepreneurial and risk-taking initiatives. Thirdly, there is no appropriate communication between management and employees Fourth, cross-functional collaboration and team work in the banks is poor.

1.3       OBJECTIVES OF THE STUDY
The general objective of this study is to achieve an understanding of how the culture of an organization affects the performance of the organization. This is done by examining the organizational culture of some selected banks in Asaba. Specifically, the study aims at achieving the following five objectives:

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