Effects of organizational culture on performance of subsidiaries of selected regional commercial banks headquartered in Kenya

Abstract

The culture of a group is a pattern of shared basic assumptions that the group has learned as it solves its problems of external adaptation and internal integration that has worked well enough to be considered valid and therefore to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. Firm performance is the outcomes achieved in meeting internal and external goals of a firm. The study objective was to determine the effects of organizational culture on performance of subsidiaries of selected regional commercial banks headquartered in Kenya. The research problem was studied through a descriptive cross-sectional survey because it cuts across several commercial banks with subsidiaries within East African Community market. The population of this study comprised ten of subsidiaries of selected regional commercial banks headquartered in Kenya. The study used primary data that was collected using semi structured questionnaires. The questionnaires were the only primary data collection instruments used in the study. The collected questionnaires were inspected for completeness and coded in Statistical Package for Social Sciences (Version 20) for analysis. The study established that firms engaged in various organizational cultures so as to boost performance. The cultures were particularly oriented towards the relationships between the employees and fellow employees, employees and their seniors and lastly with the banks they worked for. The research findings revealed that the provision of rules that provided clear instructions, processes and procedures for employees was the most prevalent culture. This would therefore be translated to imply that employees will subsequently diligently attend to their duties thus eliminate errors and hence better performance both on their part and also on the bank. This study concludes that for performance of firms to improve, present organization culture should be supportive and compatible with intended strategies and day to day running of activities of employees. For banks to remain competitive, they should advocate for a corporate culture that motivates employees and also gives them a sense of belonging to the firm. This will consequently lead to more effort by the labor force since they will feel a sense of ownership in the firm. The study recommends that companies including banks should emphasize on the adoption of good organizational culture. The rationale behind this adoption is that organizational culture positively influences policies and strategies implementation and hence creating a sustainable competitive advantage against the competitors. Additionally, organizations should ensure that they align their organization culture and their strategies if they are to benefit from good organizational customs.