The relationship between organisational culture and organisational performance: a study conducted within a large South African retail organisation

Schlechter, Anton Francois (2000-03)

Thesis (MA) -- University of Stellenbosch, 2000.

Thesis

ENGLISH ABSTRACT: The underlying problem that prompted this study was to determine whether a relationship existed between organisational culture and organisational performance within a South African organisation. The research problem, furthermore, not only focused on establishing a relationship between aspects of organisational culture and performance, but also on whether variations in the perception of organisational culture are related to organisational performance, i.e. whether the degree to which the organisational culture is widespread or shared among members of the organisation, is related to organisational performance. To answer this question, six hypotheses were formulated with the intention of subjecting them to statistical analysis. The Competence Process of Jay Hall (1996) was used to provide a theoretical framework in terms of which the relationship between the constituent dimensions of organisational culture and organisational performance may be explained. Based on the competence theory it is hypothesised that the dimensions of organisational culture or competence - collaboration, commitment, creativity and the supporting conditions thereof, are directly proportional to the potential for performance. The 40-item Organisational Competence Index (OCI), which forms part of the Organisation Culture Analysis (OCA), is designed to assess the conditions for competence within an organisation. The sampling process finally produced a sample of 988 respondents that completed the organisational culture questionnaires (OCls). The organisation was divided into 60 areas or business units that were stratified throughout the organisation. A stratified sampling technique was therefore used, and the above mentioned geographical subdivisions were used as strata. Because of the all-pervasive nature of accounting as the language of business, financially based indicators are universally adopted to measure organisational performance. Taking the various arguments and proposed measures into consideration, it was decided to use the following three objective performance criteria: 1) financial profits; 2) stock losses; and 3) labour turnover - (indicative of the voluntary survival rate). Commercial organisations ultimately have one important "bottom line", to create wealth for all associated with the organisation and therefore to be financially successful. Thus, the indicators of organisational performance that were used are all directly relevant and based on the so-called financial "bottom line" of the organisation. To determine the relationship between the average organisational culture scores and the performance indicators, the product moment correlation coefficients were computed between each area's average organisational culture dimension scores and the three indicators of performance. Commuting the coefficient of variation arrived at the variation in average culture dimension scores per area. To establish the relationship between the variation in average culture dimension scores and the performance indicators, the correlation coefficients were computed between the coefficient of variation and the performance measures. All of these relationships were found to be significant, at least at the 0.05 level. The findings and conclusions arrived at, may be summarised as follows: The first conclusion that can be drawn is that the business units in which the members experience collaboration and the supporting conditions thereof to a greater degree are likely to be more profitable, to experience fewer stock losses and lower labour turnover, compared to those business units where members experience the collaboration dimension to a lesser degree. The second conclusion that can be drawn is that the business units in which the members experience commitment and the supporting conditions thereof to a greater degree are likely to be more profitable, to experience fewer stock losses and lower labour turnover compared to those business units where members experience the commitment dimension to a lesser degree. The third conclusion that can be drawn is that the business units in which the members experience creativity and the supporting conditions thereof to a greater degree are likely to be more profitable, to experience fewer stock losses and lower labour turnover compared to those business units where members experience the creativity dimension to a lesser degree. The fourth conclusion that can be drawn is that the business units in which the members experience the dimensions of competence and the supporting conditions thereof to a lesser degree of variance are likely to be more profitable, to experience fewer stock losses and lower labour turnover compared to those business units where members experience the culture dimensions to a greater degree of variance. In more practical terms, it would seem that the dimensions of competence might well explain why some business units (possibly organisations) are more successful than others.

AFRIKAANSE OPSOMMING: Die onderliggende vraag wat tot hierdie studie gelei het, was om te bepaal of daar 'n verband bestaan tussen die organisatoriese kultuur en die organisasie prestasie van 'n Suid Afrikaanse maatskappy. Die navorsingsprobleem het verder nie net gefokus op die vestiging van 'n verband tussen aspekte van organisasie kultuur en prestasie nie, maar ook probeer om te bepaal of die variansie in die persepsie van organisasie kultuur ook verwant is aan prestasie. Om hierdie vrae te beantwoord is ses hipoteses geformuleer met die intensie om hulle statisties te toets. Die Bevoegdheidsproses van Hall (1996) is gebruik as die teoretiese raamwerk wat die verband tussen die samestellende dele van organisasie kultuur en organisasie prestasie verduidelik. Hierdie teorie veronderstel dat die dimensies van organisasie bevoegdheid - samewerking, toevertrouing, kreatiwiteit en die onderskeie ondersteunende kondisies van elk, direk proporsioneel is aan die potensiaal vir prestasie. Die 40-item Organisasie Bevoegdheidsindeks (OCI), wat deel vorm van die Organisasie Kultuur Analise (OCA), is ontwerp om die kondisies VIr bevoegdheid in die organisasie te meet. Die steekproef het bestaan uit 988 respondente wat die organisasie kultuur vraelyste (OCI) voltooi het. Die organisasie is verdeel in 60 areas of besigheidseenhede wat regdeur die organisasie gestratifiseer is. 'n Gestratifiseerde steekproef trekkingstegniek is dus gebruik. Finansieel gebaseerde indikatore word universeel gebruik om orgamsasie prestasie te meet. In die keuse van prestasie indikatore, is verskeie argumente en voorgestelde indikatore in ag geneem, en is daar besluit om die volgende objektiewe kriteria te gebruik: 1) finansiële winste, 2) voorraad verlieste en 3) arbeidsomset. Kommersiële organisasies het uiteindelik een hoof doel, om rykdom te skep vir sy aandeelhouers en dus om finansieel suksesvol te wees. Die indikatore van prestasie is dus so gekies dat hulle relevant is en op hierdie doelwit gebaseer is. Om die verband te bepaal tussen die organisasie kultuur-tellings en die prestasie indikatore, is die produk moment korrelasie koëffisiënt bereken tussen die gemiddelde organisatoriese kultuur-tellings vir elke area en die area se tellings op die drie prestasie indikatore. Die variansie in die gemiddelde kultuurmeting per area was bereken deur middel van die koëffisiënt van variansie. Die korrelasie koëffisiënt is bereken tussen hierdie meting, en die prestasiemeting vir elke area. Al hierdie verhoudings was ten minste op die 0.05 vlak betekenisvol. Die bevindinge en gevolgtrekkings van hierdie studie sluit die volgende in: Die eerste gevolgtrekking wat gemaak is, was dat die besigheidseenhede waar die werknemers die samewerkingsdimensie, en die ondersteunende kondisies daarvan, tot 'n groter mate ervaar het, meer wins gemaak het, laer vooraadverliese gely het en 'n laer arbeidsomset gehad het in vergelyking met die besigheidseenhede wat die samewerkingsdimesie tot 'n mindere mate ervaar het. Die tweede gevolgtrekking wat gemaak is, was dat die besigheidseenhede waar die werknemers toevertrouing, en die ondersteunende kondisies daarvan tot 'n groter mate ervaar het, meer wins gemaak het, laer vooraad verlieste gely het en 'n laer arbeidsomset gehad het in vergelyking met die besigheidseenhede wat die toevertrouingsdimensie tot 'n mindere mate ervaar het. Die derde gevolgtrekking wat gemaak is, is dat die besigheidseenhede waar die werknemers die kreatiwiteitsdimensie, en die ondersteunende kondisies daarvan, tot 'n groter mate ervaar het, het meer wins gemaak, laer vooraad verlieste gelyen 'n laer arbeidsomset gehad in vergelyking met die besigheidseenhede wat die kreatiwiteitsdimensie tot 'n mindere mate ervaar het. Die vierde gevolgtrekking wat gemaak is, was dat die besigheidseenhede waarby 'n kleiner mate van variansie in die kultuurmetings gevind is, het daardie besigheidseenhede meer profyt gemaak, laer vooraadverliese gelyen 'n laer arbeidsomset gehad in vergelyking met die besigheidseenhede waar daar 'n groter mate van variansie in die kultuurrnetings was. In meer praktiese terme wil dit voorkom of die dimensies van bevoegdheid tot 'n mate kan verduidelik hoekom sekere besigheidseenhede (moontlik organisasies) meer suksesvol is as ander.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/52008
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