The Impact of Organizational Culture on Organizational Performance A study on selected Public & Private Commercial Banks in Jimma City.

Abstract

Organizational culture is one of the most important factors for any organization success in such an increasingly competitive and technology-driven globalized environment. This indicates that, a strong and positive organizational culture is a key for successful growth & competitive advantage of an organization. This is especially true for service giving businesses like banking sector that greatly rely on the knowledge and skill of their employees. Moreover, organizations require sometime to establish a proper organizational culture of their shared ideas, common purposes to align with the practices of their employees. Considering this, the primary objective of the study is to investigate the impact of organizational culture on the (nonfinancial measures of) organizational performance of selected commercial banks operating at Jimma city. The student researcher assumed the significance of increasing organizational performance by employing the best suitable organizational culture for such business enterprises or banking sector focusing on selected case banks. Twelve banks were operational at Jimma city & the student researcher selected three of the bank’s main branch & district office as sample population of the case study categorizing CBE as “Public Bank”, and Dashen bank & Wegagen Bank as “Private Bank”. These target population banks have 240 total employees; of these 154 employees selected as sample population. Accordingly, the study employed explanatory research methods that used both quantitative & qualitative techniques. Data collection method used self-adopted questionnaire and semi-structured interview. Using correlation & regression analysis technique in Statistical Package for Social Sciences (SPSS) software, the collected data were analyzed. The result found from Hierarchical Multiple Regression analysis revealed that three of the organizational culture dimensions, i.e. Adaptability, Consistency & Mission, found to be statistically significant predictors on organizational performance of both group banks whereas Involvement found to be insignificant predictor. Moreover, the cross-cultural dynamic tensions, Adaptability+Involvement & Mission+Consistency, have strong correlation. On the other hand, the other four cross cultural dimensions found to have moderate correlation that needs attention to be improved to yield a balanced & well-rounded successful organization. Additionally, sales growths are best when anticipated by the flexibility traits, Involvement and Adaptability, that should seek leaders’ attention of both group banks should open their eyes on their internal & external environment to improve & scaleup organizational performance followed by improve their competitive advantage in the industry. Finally, the study found that organizational culture has a significant impact on organizational performance of both group banks.