THE IMPACT OF ORGANIZATIONAL CULTURE ON EFFECTIVE EMPLOYEES’ PERFORMANCE TOWARDS THE ATTAINMENT OF ORGANIZATIONAL GOALS
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THE IMPACT
OF ORGANIZATIONAL CULTURE ON EFFECTIVE EMPLOYEES’ PERFORMANCE TOWARDS THE
ATTAINMENT OF ORGANIZATIONAL GOALS
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Organizational
culture refers to a system of shared assumptions, values, and beliefs that show
people what is appropriate and inappropriate behavior. These values have a
strong influence on employee behavior as well as organizational performance. In
fact, the term organizational culture was made popular in the 1980s when Peters
and Waterman’s best-selling book In Search of Excellence made the argument that
company success could be attributed to an organizational culture that was
decisive, customer-oriented, empowering, and people-oriented. Since then,
organizational culture has become the subject of numerous research studies,
books, and articles. Organizational culture is still a relatively new concept
(Daft, 2003). In contrast to a topic such as leadership, which has a history
spanning several centuries, organizational culture is a young but fast-growing
area within management.
Culture is
largely invisible to individuals just as the sea is invisible to the fish
swimming in it. Even though it affects all employee behaviors, thinking, and
behavioral patterns, individuals tend to become more aware of their
organization’s culture when they have the opportunity to compare it to other
organizations (Amah, 2009). The organizing function involves creating and
implementing organizational design decisions. The culture of the organization
is closely linked to organizational design. For instance, a culture that
empowers employees to make decisions could prove extremely resistant to a
centralized organizational design, hampering the manager’s ability to enact
such a design. However, a culture that supports the organizational structure
(and vice versa) can be very powerful (Daft, 2003).
An
organization’s culture may be one of its strongest assets or its biggest liability.
In fact, it has been argued that organizations that have a rare and
hard-to-imitate culture enjoy a competitive advantage. In a survey conducted by
the management consulting firm Bain & Company in 2007, worldwide business
leaders identified corporate culture to be as important as corporate strategy
for business success. This comes as no surprise to leaders of successful
businesses, who are quick to attribute their company’s success to their
organization’s culture (Garvin, 1998).
Culture, or
shared values within the organization, may be related to increased employee
performance. Researchers found a relationship between organizational cultures
and employee performance, with respect to success indicators such as revenues,
sales volume, market share, and stock prices leading to realization of the
organizations goal. At the same time, it is important to have a culture that
fits with the demands of the company’s environment. To the extent that shared
values are proper for the company in question, employee performance may benefit
from culture. For example, if a company is in the high-tech industry, having a
culture that encourages innovativeness and adaptability will support its
performance (Amah, 2009). However, if a company in the same industry has a culture
characterized by stability, a high respect for tradition, and a strong
preference for upholding rules and procedures, the company may suffer because
of its culture. In other words, just as having the right culture may be a
competitive advantage for an organization, having the wrong culture may lead to
performance difficulties, may be responsible for organizational failure, and
may act as a barrier preventing the company from changing and taking risks
(Caves and Porter, 1977).
In addition
to having implications for employee performance, organizational culture is an
effective control mechanism dictating employee behavior. Culture is a more
powerful way of controlling and managing employee behaviors than organizational
rules and regulations. For example, when a company is trying to improve the
quality of its customer service, rules may not be helpful, particularly when
the problems customers present are unique. Instead, creating a culture of
customer service may achieve better results by encouraging employees to think
like customers, knowing that the company priorities in this case are clear.
Therefore, the ability to understand and influence organizational culture is an
important item for managers to have in their tool kit when they are carrying
out their controlling function as well as their organizing function to enhance
employee performance and promote the realization of the organizational goals.
1.2 STATEMENT OF THE PROBLEM
Several
researches on how to optimize employee performance with a view to realize
organizational goal have taken place in the past two decades. It has been
argued that strategic group membership and associated collective behaviours are
the primary sources of durable differences in firm profitability and effective
employee performance (Caves and Porter, 1977). This implies that the collective
behaviour of organization members which culture helps to control is important
to its effectiveness. In relation to this argument, Glasister and Buckley
(1998) identified organizational culture as one of the factors responsible for
organizational effectiveness and employee performance. A strong organizational
culture (that is, one in which everyone understands and believe in the firm’s
goal, priorities and practices) that encourages the participation and
improvement of all organization’ members has been identified to be one of its
most important assets (Denison, 1985). However, the researcher seeks to analyze
the impact of organizational culture on employee performance.
1.3 OBJECTIVES OF THE STUDY
The general
objective of this study is to analyze the effect of organizational culture on
employee performance and the following are the specific objectives:
To examine
the effect of organizational culture on the employee performance.
To identify
the type of organizational culture capable of enhancing employee performance in
an organization.
To identify
factors hindering the employee performance in an organization.
1.4 RESEARCH QUESTIONS
What are the
effects of organizational culture on the employee performance?
What are the
types of organizational culture capable of enhancing employee performance in an
organization?
What are the
factors hindering the employee performance in an organization?
1.5 HYPOTHESIS
HO: There is
no significant relationship between the organizational culture and employee
performance in an organization
HA: There is
significant relationship between the organizational culture and employee
performance in an organization
1.6 SIGNIFICANCE OF THE STUDY
This study
on the effect of organizational culture on employee performance towards the
attainment of organizational goals is significant in the following ways:
It will
enlighten managers and other stakeholders in Nigeria on the need for better
organizational culture as the result from this study will guide them in
selecting and adopting better organizational culture in the organization for
better employee performance.
This
research will be a contribution to the body of literature in the area of the
effect of organizational culture on the performance of quantity surveying firms
in Nigeria, thereby constituting the empirical literature for future research
in the subject area.
1.7 SCOPE/LIMITATIONS OF THE STUDY
This study
on the effect of organizational culture on the employee performance in
organizations in Nigeria will cover all the corporate organization in Nigeria
by carefully examining their organizational culture and its effect on employee
performance with a view to attain the organizational goal. The study will also
cover an overview of factors militating against employee performance.
LIMITATION
OF STUDY
Financial
constraint– Insufficient fund tends to impede the efficiency of the researcher
in sourcing for the relevant materials, literature or information and in the
process of data collection (internet, questionnaire and interview).
Time
constraint– The researcher will simultaneously engage in this study with other
academic work. This consequently will cut down on the time devoted for the
research work.
1.8 DEFINITION OF TERMS
Culture: the
arts and other manifestations of human intellectual achievement regarded
collectively.
Performance:
The accomplishment of a given task measured against preset known standards of
accuracy, completeness, cost, and speed. In a contract, performance is deemed
to be the fulfillment of an obligation, in a manner that releases the performer
from all liabilities under the contract.
Organization:
A social unit of people that is structured and managed to meet a need or to
pursue collective goals. All organizations have a management structure that
determines relationships between the different activities and the members, and
subdivides and assigns roles, responsibilities, and authority to carry out
different tasks. Organizations are open systems–they affect and are affected by
their environment.
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