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Corporate culture and organizational performance: A case of Mayfair casino, Nairobi city county, Kenya

Global Journal of Commerce & Management Perspective
Open Access

ISSN: 2319-7285

Research - (2019) Volume 8, Issue 1

Corporate culture and organizational performance: A case of Mayfair casino, Nairobi city county, Kenya

Kamau PM* and Wanyoike RW
 
*Correspondence: Kamau PM, Department of Human Resource Management, School of Business, Kenyatta University, Kenya, Email:

Author info »

Abstract

The objective of the study was to access the effect of corporate culture on the organizational performance of Mayfair Casino in Nairobi City County in Kenya. The study objectives were to establish the existence of corporate culture in Mayfair Casino and to establish a relationship between corporate culture and organizational performance of Mayfair Casino. This was achieved by looking at the effects of values, teamwork, employee involvement and leadership on the organizational performance of Mayfair Casino. These four components formed the independent variables of the study and were used as indicators of corporate culture. The dependent variables were effectiveness, efficiency, productiveness and satisfaction which were used as indicators of organizational performance. The study adopted both descriptive and explanatory research designs which were used to explain the relationship between corporate culture and organizational performance. Descriptive statistics was used to analyze the data and draw conclusions. The population of the study was the 360 employees in Mayfair Casino. Stratified random sampling was used to come up with a sample of 108 employees that represented 30% of the population. Primary data was collected by the use of structured questionnaires and interviews. The results of the study revealed that satisfaction, productiveness and effectiveness are vital to the organizational performance of Mayfair Casino. The study concluded that there exists a strong positive correlation between corporate culture and organizational performance, (Correlation coefficient of 0.772). The study recommends that for organizational performance to improve, corporate culture should be supportive and compatible with intended strategies and day to day running of activities of employees. Validity and reliability was also employed in this study, in that a pilot test was carried out for clarity purposes. The reliability test was conducted by calculating the Cronbach’s alpha and analyzed using SPSS version 23.

Keywords

Corporate culture, Organizational performance, Employee involvement

Introduction

Background of the study

Managers face a tough struggle in a competitive global market in the world of business. The challenges include increasing global price competition and satisfying demands of different stakeholders [1]. In the corporate group, managers have more challenges in establishing an effective organizational culture, which is an essential element to improve performance and productivity [2].

Profitability is key for the existence of any business, and expanding the business scope is also essential for business growth [3]. Establishing an effective culture within diversified companies includes additional challenges for business managers in a corporate group than for managers in a single company [4].

Idris, argue that poor cultural integration within diversified business companies affects the economic performance of the corporate group and the shareholders’ value [5]. Bolboi et al. argue that more than 90% of business excellence initiatives fail to succeed because of poor cultural integration among company managers in the corporate group [1]. The cultural difference that exists within the group is a major barrier to corporate performance. The lack of effective organizational culture is a primary cause of poor performance and productivity in the corporate group [6]. Business managers must understand the importance of effective organizational culture to improve performance and productivity in the corporate group [7].

Organizational culture like an operating system leads an organization and its activities, shaping the way employees think, work as well as how they feel. An important feature of organizational culture is that at a certain point it can be effective, but it can be ineffective at some other point. Dysfunction of culture arises at a time of rapid changes when the consistency of behavior and deep-rooted values are no longer desirable. For example, companies in Serbia operated for decades in circumstances that involved safety (e.g. highly protected workers, job security etc.) and stability, which allowed them to work in a certain way, consistently, without changes. Thus, certain principles and values, which are applied in business and are difficult to deviate from, are deeply rooted in domestic companies [8].

In their work Smith et al, highlights that some studies reporting that after the creation and introduction of mission statement, company performance increases for about 50% [9,10]. Bart et al. found that mission statements could positively affect employee behavior which had a direct effect on firm financial performance [11].

Organizational performance

Organizational performance is considered to be the sum of accomplishments that has been achieved by all departments. The organizational goals that have been set in a given period of time, to outline its accomplishments that are involved in each stage [4]. The idea of organizational performance is affiliated to the survival and success of an organization [12]. Organizational performance is a multidimensional construct that consists of four elements [13].

Customer-focused performance, including customer satisfaction, and product or service performance; financial and market performance, including revenue, profits, market position, cash-to-cash cycle time, and earnings per share; human resource performance, including employee organizational effectiveness, including time to market, level of innovation, and production and supply chain flexibility.

In order to achieve the desired level of financial performance, many organizations have restructured, and implemented total quality management programs and introduced competitive staff benefits. Despite such attempts, many organizations have not achieved the anticipated results or have not experienced high performance. Analyses of the sustained superior financial performance of certain American organizations have attributed their success to the specific cultures of the respective organizations [14]. Organizational performance includes effectiveness, efficiency, productivity, quality, and innovation.

Organizational culture

Organizational Culture is deemed to be a set of basic values, perceptions, wants and behaviors learned by a member of society from family and other important institutions [15]. According to Zheng et al. culture is the sum total of learned beliefs, values and customs that serve to direct the consumer behavior of members of a particular society. Culture is formed by the leaders of an organization mostly those who have it’s a set of basic values [14].

Organizational culture forms in response to the need for external adaptation and survival as well as internal integration. External adaptation and survival involve finding a niche to enable the organization to cope with the changing environment. Internal integration entails development of language and concepts, group and team boundaries, power and status as well as rewards and punishment in order to establish and maintain effective working relationships among the members of an organization [16].

Employee involvement

According to Mwangi, behavior of individuals and groups largely depends on the specific socio-cultural factors [17]. Adoption of employee involvement practices must be viewed within the existing organizational culture. Bearing in mind that the national cultures differ in certain dimensions’ acceptance of employee participation in decision making and empowerment, as well as the use of self-managed teams will vary across cultures. More precisely, differences can be observed in the way employee involvement is interpreted, what is the purpose, who should be involved, and which organizational processes and activities are related to involvement. According to Sagie et al. two dimensions of organizational culture are strongly linked to employee involvement [18].

Statement of the problem

Organizational culture is important in enhancing organizational performance. Therefore, there is need to promote a culture of urgency, teamwork, trust and aligning organizational aspirations with the corporate objectives [19].

A study conducted by focused on critical factors affecting extended achievement amongst manufacturing companies in Malaysia. This study although conducted in the manufacturing industry, it only considered the performance of the organization not clearly highlighting from the cultural perspective.

A study by Marshal Ahmed et al. in various Bahawalpur based establishments of telecom organizations to decide the effect of the culture of the organization on the performance, demonstrated that all the aspects of culture impact on performance. It also uncovered that if the standards and estimation of representatives are as indicated by organizations then it is helpful for accomplishing the organizational target. This research considered only the dimensions that affect organizational performance, rather than what affects organizational culture [20].

In other studies Oduol, in her examination on the impact of culture on effectiveness of auxiliaries of chosen business Bank Headquarters in Kenya, found out that culture affects performance of Banks and observed that comparative studies on the impact of authoritative culture on company's execution in various areas of the economy should be done keeping in mind the end goal to analyze the discoveries. Furthermore, additional literature ought to be done to examine the influence of singular factors pertaining to organizational culture that have the highest impact on performance [21].

Owino, in their study on the impact of a firm culture and market orientations on performance of microfinance establishments in Kenya discovered that the impact of culture and market introductions on performance is more conceivable for developed ventures regarded as diverse in terms of customer needs. The research dealt more on market orientation and organizational performance rather than culture of the organization [22].

The studies highlighted above, support the key actuality that organizational performance has been one of the central issues for every organization and portrays corporate culture as an indispensable factor influencing organization’s performance. In spite of the way that numerous studies conducted show a positive relationship between organization culture and organization performance, Mayfair provides a clear study gap on the subject of organization culture on one hand, and organization performance on the other. Since these studies have been done on organizational culture relative to different variables, various contexts and time, none has focused on the relationship of corporate culture and organizational performance at Mayfair Casino. This study will therefore attempt to fill this knowledge gap.

Objective of the study

General objective

The general objective of the study was to investigate the effect of corporate culture on the organizational performance of Mayfair Casino.

Specific objectives

■ To establish the effect of culture of values and norms on organizational performance of Mayfair Casino.

■ To assess the effect of culture of teamwork on organizational performance of Mayfair Casino.

■ To determine the effect of culture of employee involvement on organizational performance of Mayfair Casino.

■ To examine the effect of culture of leadership on the relationship between corporate culture and organizational performance of Mayfair Casino.

Theoretical review

This study was guided by the Dynamic Capabilities Theory.

Dynamic capabilities theory

Trice and Beyer [23] argue that dynamic capabilities enable organizations to integrate, build, and reconfigure their resources and competencies and, therefore, maintain performance in the face of changing business environments. The notion of dynamic capabilities was subsequently refined and expanded by other scholars including: Eisenhardt et al. [23], Trice et al. [24]. In order for an organization to be competitive in its industry and in whatever it produces, it needs to have dynamic capabilities which constitute the firm's ability to utilize its resources effectively. Dynamic Capabilities enable the firm to quickly respond to change and deploy resources accordingly purposely integrated to achieve a desired end state [25]. Agha et al. argue that in a highly competitiveness market, core competence has emerged as a central concept for competitive strategy. They define core competence as the knowledge set that distinguishes a firm and provides a competitive advantage over others [26].

According to Johnson et al. [27], core competences are more robust and difficult to imitate because they relate to the management of linkages within the organizations value chain and to linkages into the supply and distribution chains [14]. Resources and capabilities are the building blocks upon which an organization create and execute value-adding strategy so that an organization can earn reasonable returns and achieve strategic competitiveness.

Resources are inputs to a firm in the production process [25]. These can be human, financial, technological, physical or organizational. The more unique, valuable and firm specialized the resources are, the more possibly the firm would have core competency. Resources should be used to build on the strengths and remove the firm’s weaknesses. Capabilities refer to organizational skills at integrating its team of resources so that they can be used more efficiently and effectively. In order for an organization to remain competitive, it is important it leverages on its dynamic capabilities. Therefore, dynamic capabilities are important in the development of firm competitiveness.

Literature Review

Organizational culture

Shakil, studied the impact of organizational culture on management practices in Pakistan with the aim of expanding understanding and testing the relationship between the components of organizational culture and performance. The study used the following variables namely, involvement culture, consistency culture, adaptability culture and mission culture. Using regression and correlation analysis, the study found out that consistency and adaptability were some of the cultural attributes which significantly influenced management practices [28].

Lorraine, investigated the influence of organizational culture on performance management in insurance industry. The study focused on five variables namely adaptive perspective, communal, network, mercenary and fragmented culture. The study established a link between organizational cultures and management practices. The findings showed that there was significant and positive correlation between organizational cultures and performance [29].

Employee involvement

Sokro, this study aimed at investigating the relationship that exists between organizational culture, employee motivation and performance. The variables of organizational culture (organizational values, individual beliefs, working environment, and employee relationships) and employee motivation and performance were investigated. In order to find the culture and motivation link, mixed method approach for data collection and analysis has been used. By using Pearson’s and Spearman’s correlation methods, a positive correlation has been found between the two variables. The study revealed that organizational culture has a direct impact on employee motivation and indirectly on organizational performance as well [30].

Raza et al. this research was conducted to test the hypothesis that suggested that there is a relationship between employee’s job performance behavior and the culture which is cultivating in the organization and its collaborative impact on organizational productivity. Using stratified and simple random sampling technique and survey questionnaire, results were derived that were tested against the two possible hypotheses; (a) organizational culture has no impact on employee’s job performance and organizational productivity, (b) organizational culture has strong impact on employee job performance. The findings suggested the contrary and thus alternative hypothesis were selected, and null hypothesis was rejected. 90% of the employees strongly agreed with the findings and accepted that there is impact of organizational culture on employee’s performance and organizational outcome [31].

Research Methodology

The study employed a combination of both descriptive and explanatory research designs to explain the relationship between corporate culture and organizational performance in Kenya. Descriptive research portrays an accurate profile of persons, events, or situations [32]. It allows the collection of a large amount of data from a sizable population in a highly economical way. It allows one to collect quantitative data, which can be analyzed quantitatively using descriptive and inferential statistics.

According to Mugenda, descriptive research design is preferable, as it tries to answ

stions concerning the current status of the subject of the study [34].

Therefore, the descriptive survey is deemed the best method to fulfill the objectives of this study. The design was preferred because it is concerned with answering questions such as who, how, what which, when and how much, Cooper and Schindler [35]. A descriptive study will be carefully designed to ensure complete description of the scenario, making sure that there is minimum bias in the collection of data. According to Saunders, explanatory research attempts to clarify “why” and “how”, and there is a relationship between two or more aspects of a situation or phenomenon. The explanatory research design explains best the characteristics of variables and how to establish the cause-and-effect relationship between variables [36].

Results and Discussion

This chapter presents the study findings, starting with descriptive statistics, followed by estimation of diagnostic tests and, finally, the empirical results are presented and discussed.

Response rate

The data collected was coded and then cleaned to ensure there was uniformity. Data were collected from 108 employees of May fair Casino that entailed, top management, middle management and level management and the response rate was 86.78%.

As indicated in Table 1, out of 108 questionnaires distributed, 92 were correctly filled and returned. This constitutes a response rate of 85.18%, which was satisfactory to make conclusions for the study. According to Saunders, a response rate of 50% is adequate; a rate of 60% is good and a response rate of 70% and over is very good. Based on this awareness, the response rate in this study was considered to be very good for the study [36].

Response Rate Questionnaires administered Questionnaires filed and presented Percentage
Respondents 108 92 85.18%

Table 1. Results for Response Rate

Bio-data of the respondents at Mayfair Casino

Profile of the organization sampled, number of years worked at May Fair Casino, organizations’ turnover and level of education are presented in Table 2.

Gender Frequency Percentage
Male 44 47.82%
Female 48 52%
Total 92 100%
Age Group    
20-30 years 30 32.6%
31-40 years 40 43.47%
41-50 years 12 13.04%
Above 50 years 10 10.87%
Total 92 100%
Level of Staff (position)    
Top Management 3 4.8%
Middle Level Management 22 23.91%
Operational Management Level 4 4.34%
Junior Employees 63 68.48%
Total 92 100%
Level of Education    
Primary Level 13 14.13%
Secondary Level 30 32.61%
Diploma level 20 21.74%
Undergraduate Level 26 28.27%
Post Graduate Level 3 3.26%
Total 92 100%

Table 2. Results for Bio Data of respondents

The study findings in this research showed that female employees were 52% of the total respondents in Mayfair casino, whereas male were represented by 47.8% of the total respondents in the total population. This showed that there was a slight difference in regards to gender equality in May fair casino. Employees of ages 31-40 years were 43.47% of the total population that showed that these employees are more energetic and are of essence to the organization in regards to productivity. 68.48% of the total population were junior employees in the casino, since, they contribute more to the productivity of May fair Casino. 32.61% of the respondents had secondary level education thus worked as subordinates in Mayfair casino. Whereas those with the highest level of education represented 3.26% of the total population, which entailed the top management.

Descriptive statistics

Organizational performance

Organization performance was measured using customer satisfaction, effectiveness and productiveness. The descriptive statistics for each of these indicators are presented and discussed in Table 3.

Statement (organizational Performance) N Mean SD
Satisfaction      
Customers complaints reduced to zero after
introduction of customer report feedback
plans at Mayfair Casino.
108 3.71 0.978
May Fair casino has fewer defects and less losses encountered. 108 3.62 0.972
Productiveness      
Productivity at May Fair increases performance. 108 3.92 0.786
There is improved lead time up to delivery. 108 3.66 0.900
The management ensures products meets customers’ expectations through feedback. 108 3.65 0.877
Effectiveness/Efficiency      
Effectiveness through timely plan and response of customers’ complaints help improve performance. 108 3.65 0.778
Effectiveness through support plans at Mayfair casino ensures performance of great order is achieved. 108 3.48 0.944
Aggregate   3.11 0.8907

Table 3. Results on respondents on organizational performance

The results in Table 3 indicated that majority of the respondents agreed that productivity at May fair Casino increases performance the mean was 3.92 and standard deviation was 0.788. There was another category of respondents who moderately agreed that Customers complaints reduced to zero after introduction of customer report feedback plan at Mayfair Casino the mean was 3.71 and standard deviation was 0.978. The aggregate mean was 3.11 and the standard deviation was 0.8907 which represents that respondents moderately agreed that, satisfaction, productivity and effectiveness are key to organization performance.

Employee involvement

Employee involvement was investigated using indicators comprising consultation, Budget Meetings, Open communication and decision making. The descriptive statistics for Employee involvement are presented in Table 4.

Statement (employee involvement) N mean Standard deviation
Consultation      
Employees are involved in consultation. 108 3.50 1.106
Employees are motivated to work more to attain the planned milestones by the company this is achieved through consultation. 108 3.42 1.044
Budget meetings.      
All employees are actively involved in budgeting processes. 108 3.65 1.044
Employees are involved in development of operational Schedules through budget implementation. 108 3.82 .811
Open communication      
Employees are given satisfactory and appropriate feedback on their job performance through open communication. 108 3.34 1.172
Employees are involved in review of reports as a way of improving performance in May Fair casino this is achieved through open communication. 108 3.60 .866
Decision Making      
Employees are involved in planned decision making at Mayfair Casino. 108 3.97 .8
Decision making plays a vital role at May Fair casino. 108 4.10 .725
Aggregate score   3.67 .8408

Table 4. Results on respondent on Employee involvement

As shown in Table 4, the overall mean score of 3.67 indicates that firms agreed that Employee involvement contributes to performance of May Fair Casino.

Inferential statistics

The table below shows the correlation coefficient matrix of the predictor variables. The Findings were presented in Table 5.

  Team work Employee involvement values leadership Organizational performance
Employee involvement 0.356 1 0.219 0.216 0.611

Table 5. Pearson correlation matrix of the predictor variable

Relationship between corporate culture and organizational performance

In order to establish the effects of corporate culture on organizational performance, the study conducted a correlation analysis. The findings are as shown in the Table 6.

Variables Corporate culture Organizational performance
Corporate culture Pearson correlation
Sig (2 tailed) 1
N 108
0.772**
0.000
182
Organizational performance Pearson Correlation .772**
Sig tailed (2 tailed) 0.000
N 108
0.00
0.182

Table 6. Correlation on corporate culture and organizational performance

Table 6 reveals that there is a strong positive correlation between corporate cultures And organizational performance (correlation coefficient of 0.772). These findings imply that Organization culture is related to organization performance at May fair casino.

Table 7 demonstrates a direct relationship between the dependent and independent components used in the study. This shows a strong coefficient of determination between organization culture and performance (R=0.793). Further, it is evident from the table that coefficient of determination was strong and significant (R2=0.628, P<0.05). This implies that 62.8% of variation in performance is by organizational culture.

Model R R square Adjusted R square Std Error Estimate
1 .793a .628 .620 .341

Table 7. Model Summary

The ANOVA measurements exhibited in Table 8 was utilized to show the model centrality. An F-importance estimation of p=0.000 was set up demonstrating that the model fit.

Model sum of
squares
df mean of squares f sig
Regression
Residual
Total
34.7
20.53
55.23
4
104
108
8.675
.116
74.7911 .000b

Table 8. ANOVAa

Model Unstandardized
Coefficients B
Standard error Standard coefficients
Beta
t Sig
(constant) Employee involvement Organizational performance .127
.099
.165
.213
.095
.075
.0911
.541
.176
.595
1.049
2.436
.552
.296
.005

Table 9. Regression Coefficientsa

Using the above finding findings, regression equation can be fitted as follows:

Y=0.127+0.099X2 (P=0.05)

From the model, when employee involvement is at zero, the organizational performance will be 0.127. Holding other factors constant, a unit increase in employee involvement would lead to a 0.099 (p=0.296) increase in organizational performance.

Summary of Findings

The purpose of this study was to build up the literature on the apparent of corporate culture on organizational performance at Mayfair Casino. A comprehensive conceptual framework was developed and tested empirically, guided by the following objectives: To determine the effect of culture of employee involvement on organizational performance of Mayfair Casino. The study employed descriptive and explanatory research design, which was cross sectional in nature. Primary data was collected using a structured questionnaire and validated by secondary data. The data were analysed using descriptive and inferential statistics. Descriptive statistics was used to describe and summarize data. There is a solid positive relationship between employee involvement and organizational performance (relationship coefficient of 0.611).

Limitations of the Study

The researcher relied heavily on personal views of the targeted employees of May fair Casino on the Corporate’s culture and performance. Therefore, it is difficult to entirely validate the legitimacy of the responses made by the respondents regarding the organizational corporate performance. The research project was limited to May fair Casino, whereas there are many other stakeholders such the customer, suppliers, government and other bodies in the hotel industry that might influences organization performance.

Conclusion

Based on the results of the study, it can be said that there exists strong correlation between corporate culture and performance and that organizational culture is a powerful tool for organizational effectiveness. At Mayfair Casino, the social characteristic of employee involvement is seen to have a solid and constructive outcome on performance. A good corporate culture will inculcate strong employee involvement that is in turn conducive for good policy and strategy implementation. This study concludes that for organizational performance to improve, corporate culture should be supportive and compatible with intended strategies and day to day running of activities of employees.

In addition, organizations should not only put more emphasizes on organizational cultures that improve organizational performance but also cultures that support the overall wellbeing of the employees. This is because employees are key assets to the organization and also have goals to achieve in terms of career growth besides working to ensure the organizations attains desired objectives.

Recommendations and Suggestions

The study recommends that all organizations should put more efforts on the adoption of good corporate culture since culture has today become a strategic tool in the market for attaining a competitive advantage. The study recommends that organization should facilitate trainings and learning for the employees to be able to adapt to new changes, strategies and policies that directly involve the employees in the organization. In addition, organizations should ensure that the corporate culture is well aligned with the organizational strategies and policies.

There is need for further research to establish the effect of group culture and professional culture on performance of the organization. There is also need for further research to establish the effect of organizational culture on performance in State owned organizations and also in the private sector for comparison purposes.

The study looked at the perceived effect of organizational culture on performance of organizations majorly focusing on the four cultural traits. However, there are other aspects of organizational culture such as leadership; organizational structure; innovation & development that can have impact on organizational performance and hence the need for studies to establish the extent of their effect on organizational performance.

References

Author Info

Kamau PM* and Wanyoike RW
 
Department of Human Resource Management, School of Business, Kenyatta University, Kenya
 

Citation: Kamau PM, Wanyoike RW (2018) Corporate culture and organizational performance: A case of mayfair casino, nairobi city county, Kenya, Global J Comm Manage Perspect 8:1.

Received Date: Dec 20, 2018 / Accepted Date: Feb 12, 2019 / Published Date: Feb 19, 2019

Copyright: © 2019 Kamau PM et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Sources of funding : No funding

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