Walden University ScholarWorks Walden Dissertations and Doctoral Studies Walden Dissertations and Doctoral Studies Collection 2016 The Impact of Organizational Culture on Corporate Performance Tewodros Bayeh Tedla Walden University Follow this and additional works at: https://scholarworks.edu/dissertations Part of the Business Administration, Management, and Operations Commons, Management Sciences and Quantitative Methods Commons, and the Organizational Behavior and Theory Commons This Dissertation is brought to you for free and open access by the Walden Dissertations and Doctoral Studies Collection at ScholarWorks. It has been accepted for inclusion in Walden Dissertations and Doctoral Studies by an authorized administrator of ScholarWorks. For more information, please contact ScholarWorks@waldenu. Walden University College of Management and Technology This is to certify that the doctoral study by Tewodros Bayeh Tedla has been found to be complete and satisfactory in all respects, and that any and all revisions required by the review committee have been made.
Review Committee Dr. Charles Needham, Committee Chairperson, Doctor of Business Administration Faculty Dr. Tim Truitt, Committee Member, Doctor of Business Administration Faculty Dr. Roger Mayer, University Reviewer, Doctor of Business Administration Faculty Chief Academic Officer Eric Riedel, Ph.
Walden University 2016 Abstract The Impact of Organizational Culture on Corporate Performance by Tewodros Bayeh Tedla MS, California State University, 2013 MBA, Unity University, 2009 BS, Unity University, 2006 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University June 2016 Abstract Lack of effective organizational culture and poor cultural integration in the corporate group affect organizational performance and decrease shareholders return. The purpose of this exploratory case study was to explore successful strategies that one corporate group used to establish an effective organizational culture to improve performance. The Denison organizational culture model served as the conceptual framework for the study. A purposive sample of 20 senior managers from a corporate group in Ethiopia participated in semistructured face-to-face interviews.
The selected participant met the criteria of a minimum 5 years of experience with successful strategies in establishing an effective organizational culture in the corporate group. The interview data were transcribed, categorized, and coded; they were subsequently member checked and triangulated to increase the trustworthiness of interpretations. The findings included a well-defined mission that attributed to developing shared understanding between employees and managers, and employee-focused leadership that contributed to motivating employees. Core corporate value findings included the well-being of the society through self-regulated corporate social responsibility.
The findings identified in this study could have potential for economic growth in the local economy and may contribute to social change with strategies business managers may use to sustain their business and improve the life standards of employees and the local community. The Impact of Organizational Culture on Corporate Performance by Tewodros Bayeh Tedla MS, California State University, 2013 MBA, Unity University, 2009 BS, Unity University, 2006 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University June 2016 Dedication This study is dedicated to Dr. Arega Yirdaw, for his generous support, encouragement, and making my educational dream a reality. I also dedicate this study to my loving wife, Berhanayehu Arega, and my son, Thomas Tewodros Tedla, for their unconditional love and support.
Acknowledgments The completion of this doctoral study would not have been possible without the support of Dr. Arega Yirdaw; thank you so much for your generous help and inspiration. I acknowledge and appreciate Dr. Sheikh Mohamed Hussein Ali Al-Amoudi for my doctoral degree financial support.
I would like to thank my loving wife, Berhanayehu Arega, and my son, Thomas Tewodros Tedla, for their help, understanding, and encouragement. I would also like to thank Ms. Rekik Aemero and Ms. Yodit Bekele for their support and help during my data collection.
I extend my deepest gratitude to the study participants for sharing their outstanding work experience and knowledge for this study. I would also like to thank all family members and friends for their encouragement, and moral support during my doctoral study. I would like to thank my mentor and doctoral committee chair, Dr. Charless Needham, for his outstanding direction, help, and scholastic guidance throughout my doctoral study journey.
The time and effort he gave me were essential; he was always willing, available, and ready to help me. I would also like to thank my doctoral committee members, Dr. Tim Truitt, and Dr. Roger Mayer, for their valuable and timely feedback and direction on my doctoral study.
I acknowledge and appreciate the Walden University leadership, particularly the DBA program director Dr. Freda Turner, and her faculty staff Fred Walker, Dr. James Savard, and Dr. Gene Fusch for their outstanding support, encouragement, and quick responses when I needed their help.
Table of Contents List of Tables .v Section 1: Foundation of the Study.1 Background of the Problem .3 Nature of the Study .6 Definition of Terms.8 Assumptions, Limitations, and Delimitations. 9 Significance of the Study .10 Contribution to Business Practice. 10 Implications for Social Change. 12 A Review of the Professional and Academic Literature.
14 Sources of an Organizational Culture. 16 History of Organizational Culture. 19 Strong and Weak Organizational Culture. 20 Positive Organizational Culture.
24 Organizational Culture Effectiveness. 26 Denison Organizational Culture Model. 30 Types of Organizational Culture. 34 Measuring Organizational Culture Effectiveness.
38 The Role of Organizational Culture on Corporate Performance. 42 The Role of Organizational Culture in the Corporate Group. 43 Transition and Summary .50 Section 2: The Project .52 Role of the Researcher .56 Research Method and Design. 60 Population and Sampling.
68 Data Collection Technique. 70 ii Data Organization Techniques. 71 Data Analysis Technique .72 Reliability and Validity. 76 Transition and Summary .78 Section 3: Application to Professional Practice and Implications for Change .80 Overview of Study .80 Presentation of the Findings.82 Theme 1: Well-Defined Mission and Vision.
82 Theme 2: Core Corporate Values. 87 Theme 3: Employee-Focused Leadership. 98 Applications to Professional Practice .103 Implications for Social Change .105 Recommendations for Action .107 Recommendations for Further Study .110 Summary and Study Conclusions .116 Appendix A: An Invitation Letter .136 Appendix B: Consent Form .138 iii Appendix C: Interview Questions .142 Appendix D: Letter of Cooperation .143 Appendix E: Protecting Human Research Participant Training Certificate .144 Appendix F: Summary of References .145 iv List of Tables Table 1. Reference Table for the Literature Review.
Frequency of Themes for Well-defined Mission and Vision. Frequency of Themes for Core Corporate Values. Frequency of Themes for Employee-Focused Leadership. Frequency of Themes for Consistency.
102 v 1 Section 1: Foundation of the Study Since the 1960s, a corporate group or holding company business structure has been as an important strategy for corporate growth in the world (Eukeria & Favourate, 2014). A corporate group is a collection of legally independent companies operating as a single economic entity (Gajewski, 2013). In a corporate group or holding company business structure, the group includes two or more diversified companies under a single power of control, governance, and leadership (Kenny, 2012). Managing diversified companies under the same leadership has an economic advantage, but the lack of strong leadership and effective organizational culture causes diversified companies to fail (Kenny, 2013; Lien & Li, 2013).
Managers in the corporate group may suffer the loss of control when diversification increases within the group (Gajewski, 2013). Kenny (2013) noted that when an organization becomes more diverse, managers have more challenges to manage and control resources. Organizational culture is an essential ingredient of organizational performance and a source of sustainable competitive advantage. Organizational culture is an important element to unify various company cultures in the corporate group structure (Kenny, 2012).
Corporate managers may establish an effective organizational culture to integrate the organizational culture and to improve performance. Successful cultural integration within the corporate group is an important element to maintaining successful communication and improving performance (Idris, Wahab, & Jaapar, 2015). Establishing an effective organizational culture in the corporate group is necessary to improve performance and productivity (Lee & Gaur, 2013). 2 Background of the Problem Many business managers struggle to survive in a competitive global market because of challenging characteristics in business (Bolboli & Reiche, 2014).
The challenges include increasing global price competition and satisfying demands of different stakeholders (Bolboli & Reiche, 2013). In the corporate group, managers have more challenges in establishing an effective organizational culture, which is an essential element to improve performance and productivity (Kenny, 2012). Profitability is a critical factor for the existence of any business, and expanding the business scope is also essential for business growth (Erdorf, Hartmann-Wendels, Heinrichs, & Matz, 2013). Establishing an effective culture within diversified companies includes additional challenges for business managers in a corporate group than for managers in a single company (Lee & Gaur, 2013).
Idris et al. (2015) indicated that poor cultural integration within diversified business companies affects the economic performance of the corporate group and the shareholders’ value. Bolboli and Reiche (2014) indicated that more than 90% of business excellence initiatives fail to succeed because of poor cultural integration among company managers in the corporate group. The cultural difference that exists within the group is a major barrier to corporate performance (Weber & Tarba, 2012).
The lack of effective organizational culture is a primary cause of poor performance and productivity in the corporate group (Eaton & Kilby, 2015). Business managers must understand the importance of effective organizational culture to improve performance and productivity in the corporate group (Viegas-Pires, 2013). 3 Problem Statement In a corporate group, lack of effective organizational culture and poor cultural integration affect organizational performance and decrease shareholders return (Idris et al. Eaton and Kilby (2015) indicated that 72% of corporate leaders acknowledged the importance of organizational culture to organizational performance but only 25% identified an effective organizational culture for their organization.
The general business problem was some company managers lack an effective organizational culture, which often results in poor performance and loss of productivity within the corporate group (Eaton & Kilby, 2015; Viegas-Pires, 2013). The specific business problem was that some senior company managers lack strategies to establish an effective organizational culture to improve performance (Hirsch, 2015). Purpose Statement The purpose of this qualitative exploratory single-case study was to explore successful strategies that senior company managers use to establish an effective organizational culture to improve performance. The study results may provide relevant information for company managers in understanding the role of organizational culture.
The target population of the study was senior company managers with successful strategies in establishing an effective organizational culture in the corporate group from Ethiopia. The target population of the study was company managers because participants had the relevant experience and knowledge on the topic, and they were the primary source of firsthand evidence for the study. Creating and maintaining an effective 4 organizational culture is important to improve performance and productivity (Eaton & Kilby, 2015). The findings of the study may positively affect business managers by providing strategies to improve their company performance.
The public may benefit from the existence of a productive company because the profitable company may provide employment opportunities for the public. Nature of the Study Researchers can use quantitative, qualitative, or mixed-methods approaches (Kumar, 2012). The purpose of the study is important to determine the appropriateness of the research method (McNulty & Zattoni, 2013). The qualitative research method was suitable for the study because quantitative and mixed-methods are relevant in quantifying causal relationships and analyzing numbers.
Allowed (2012) indicated that qualitative methods are suitable to explore experiences, processes, and problems in addressing individual and group problems. The qualitative method was suitable for the study because studying the role of organizational culture requires a qualitative approach (Yin, 2014). The research design may include a case study, phenomenology, grounded theory, ethnography, and narrative (McNulty & Zattoni, 2013).