Effect of Organizational Culture on Employee’s Performance

Effect of Organizational Culture on Employee’s Performance

Chapter One of Effect of Organizational Culture on Employee’s Performance

INTRODUCTION

Background of the Study:

The role of organizational culture in shaping the design, structures and destiny of an organization cannot be overemphasized. Culture of any organization is not inborn; it is what people learn over the time period which they spend within the organization. It helps them to solve internal organizational problems. Culture is said to be a set of assumption that is developed over a time period to cope with organizational problems that is why cultural knowledge should be delivered to the new employees. Every organization forms a bond between the employee and organizational culture. These forms of bond related to culture differentiate one organization from another and ultimately leads to a guaranteed success.

According to Black (2003) organizational culture is a specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. Organizational values are beliefs and ideas about what kind of goals members of an organization should pursue and ideas about the appropriate kind or standards of behaviour an organizational members should use to achieve these goals.

An organization’s culture embraces all the life experiences each employee brings to the organization. Culture is especially influenced by the organization’s founder, executives and other managerial staff because of their role in decision making and strategic direction. Organizational culture according to Donovan (2006) is represented in a group such as language, decision making, symbols, stories, legends, and daily work practices. A company’s bulletin board content, the company’s newsletter, the interaction of employees in meetings and the way in which people collaborate, speak volumes about an organization’s culture.

The type of organizational culture put in place will surely affect the performance of the organization. As stated by Schein (2005), culture is the most difficult organizational attributes to change, outlasting organizational products, services, founders, and leadership and all other physical attributes of the organization. This organization culture will definitely affect the performance of the firm.

Performance according to Davis & Olison (1985), it is usually the past that can realistically be expected rather than what is desired. Thus target performance is the desired , or in the other way the expected. There are however, situations where, in practice target may not have been expressly set but only a vogue notion is held as to what is expedient. Actual performance, on the other hand is the outcome of the firms won effort during a specified period Osaze & Annao (1990) or what is realized or against what actual accomplishment would enable one to adjudge performance as being either satisfactory or unsatisfactory. According to Osaze & Annao (1990), performance in business setting means the extent of which an objective has being or is being met.

In this highly competitive world many businesses are unable to survive due to rapid changes in the business environment (Tripathi, Kapoor, & Tripathi, 2000). In order to sustain in this competitive corporate world, organizations focus to change their culture, management style and relationship with their employees and try to change their internal environment in order to survive.  It is important therefore, to note that, it is organizational culture that makes an organization tops among its competitors (Gibson, Ivancevich, Donelly & Konopaske, 2005).

Organizational culture is the basic pattern of shared assumptions, values and beliefs considered to be the correct way of thinking about and acting on problems and opportunities facing the organization. It is what is important and unimportant in the organization. It is often thought of as organization’ DNA- i.e. invisible to the naked eye, yet a powerful template that shapes what happens in the workplace. Hence, Schneider & Smith (2004) argues that culture begins with leadership and passed on to the organizational members; it is seen as a set of forces that shape and determine human behavior. It is against this backdrop that this study intends to explore the link between Organizational Culture and Employee’s Performance with a special reference to Unilever Nigeria Plc.

Statement of the Problem:

The issue of maintaining an organizational culture could be challenging considering the diverse socio-cultural background of the workers that constitute an organization workforce in Nigeria. Their differences can interfere with the maintenance of corporate culture and values, when such values conflict with their personal values.

A lot of research in organizational management has focused on developed countries; 95 percent and whereas only 5 percent of the studies testing organizational theories are found to be done in developing countries (Farashahi, Hafso, & Molz, 2005) in spite of the highly dynamic environment. A number of scholars have questioned the applicability of western management practices in developing countries and since long time it has also been recognized that culture is a main source of difference in performance management practices. Thus, many researchers (Denison, Haaland, & Goelzer in Yilmaz, 2008) have called to investigate the phenomenon of organizational culture in different cultural context particularly in non-western nations like Nigeria.

The question then hinges on, what does organizational culture have on corporate performance? The answer to this question becomes the problem this study is set to investigate. Hence, the need to investigate the effect of organizational culture on the Nigerian business front is timely and should be considered as sacrosanct.

Objectives of the Study:

The major objective of this study is to determine the effect of Organizational Culture on Employee’s Performance. Other specific objectives are:

i.To examine the effect of organisational culture on organizational productivity.

ii.To investigate the effect of corporate identity on organizational efficiency.

iii.To assess the relationship between corporate culture and sales boom.

iv.Examine the contribution of corporate philosophy on employee job satisfaction.

v.To find out the effect of corporate norms and standard on employee job satisfaction.

Research Questions:

In other to achieve the objectives of this research study, the study was guided by the following research question.

1.What is the impact of organisational culture on organizational productivity?

2.To what extent does corporate identity affect organizational efficiency?

3.What are the impacts of corporate value on sales boom?

4.Does organisation philosophy have any impact on employee job satisfaction?

Research Hypotheses:

The following hypotheses will be tested at 0.05 level of significance. The alternative hypotheses are represented by “H1” while the null hypotheses by  “Ho”.

Hypotheses one:

H1:      There is a significant relationship between corporate value and    organizational productivity

Hypotheses two:

H1:      The existence of a strong distinct corporate identity has significant effect on     organizational efficiency.

Hypotheses three:

H1­:      There is a significant relationship between corporate cultures and sales boom

Hypotheses four:

H1­:      Business philosophy has a significant link with employee job satisfaction.