The Effect of Organizational Culture on Organizational Performance: The Case of Commercial Bank of Ethiopia
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Date
2022-06
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Addis Ababa University
Abstract
Organizational culture refers to shared assumption that define an organization’s characteristics like norms, belief, attitude and assumption that shape the way employees in an organization conduct and get things done. Organizational performance is multiple organizational activities to achieve the goal and objectives of an organization. It shows how effective the organization in achieving the outcome that has been planned. Non-financial performance is performances that cannot be measured using monetary value, like customer satisfaction, employee engagement, market share etc. And it has a critical impact in the improvement of financial performance. This study targets to investigate the effect of organizational culture in the organizational performance in the case of commercial bank of Ethiopia one of the largest and oldest government owned commercial bank in Ethiopia. The study uses Denison’s Model of organizational culture with four dimensions namely – Mission, Adaptability, Involvement and Consistency. Samples of 300 managerial employee of the organization have been selected from the total population of 1206 managers using Yamane’s statistical formula. To investigate the case this study used causal or explanatory research design. Structured five point questioners of Likert scale and regression method of data analysis is used to assess the effect of organizational culture and organizational performance. The study data was analyzed using IBM SPSS Statistics20. Empirical reviews showed that having strong, pervasive, integrated and unique organizational culture improves the performance of an organization. The study generates findings that organizational culture has statistically significant relationship with organizational cultures dimensions. It is recommended that the organizational culture of the bank that is mission have higher impact for the organization non-financial performance. And the bank must have higher priority and employees must have better awareness. And the bank must strive to make the existing organizational culture better specially the adaptability culture of the bank must be improved
Key Words: Organizational culture, Organizational financial Performance, non-financial performance