Relationship between corporate culture and organisational performance - a survey of Kenyan state corporations

Abstract

This paper sought to examine why an organization's corporate culture should not be overlooked. The research had one objective: to determine the relationship between organizational culture and performance in state owned corporations. 52 corporations in the regulatory and service categories were used for the study. These sectors were chosen because they used similar performance indicators. The survey method was used because the research problem required comparative data from a cross section of organizations. Both primary and secondary data was used in the study. Primary data was collected through structured questionnaires and focus was on culture. The Pearson product-moment correlation analysis was also undertaken to determine the relationship between certain dimensions of culture and organization performance. The study findings revealed that company values and performance of corporations are strongly related with a value of +0.743 with key indicators being a clear set of values that underpin business performance and employees feeling confident and certain about the organization's future; that internal communication and performance of corporations are strongly related with a value of +0.866 with key indicators being management sharing business strategies and business results with all employees, and management being disciplined with employee performance feedback and appraisals; that work place behaviors and performance of corporations are strongly related with a value of +0.757 with key indicators being management rewarding employees for business success and management encouraging and rewarding specific behaviors; and that workplace harmony and performance of corporations are weakly related with a value of +0.265. The study findings thus show that corporate culture helps determine organization effectiveness from a business standpoint. It has a powerful influence through out an organization as it affects practically everything from what decisions are made, to who gets promoted to employee morale and to the basis of task assignment to name a few. Further, that employees may be alternately motivated or disillusioned depending on the prevailing corporate culture. It is recommended that state corporation bosses should seek to determine or identify a few core values or beliefs that shape the organization culture as organizations become more effective when they develop the right cultures. When cultures are strengthened, organization performance will be enhanced and greater commitment, involvement and flexibility from staff will follow