THE EFFECT OF ORGANIZATIONAL CULTURE ON ORGANIZATIONAL PERFORMANCE: A CASE OF COMMERCIAL BANKS IN NAIROBI COUNTY, KENYA

Brigid W. King’ori¹, Prof. Dinah J. Kipkebut²

¹Masters student, Department of Business Administration, Egerton University,

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² Associate Professor, Department of Business Administration, Egerton University,

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CITATION: King’ori, B., W. & Kipkebut, D., J. (2022) The Effect Of Organizational Culture On Organizational Performance: A Case Of Commercial Banks In Nairobi County, Kenya. International Journal of Arts and Entrepreneurship. Vol. 11 (4) pp 70 - 86

ABSTRACT

Banking like any other industry has a basic structure or a set of principal economic and technical characteristics which contribute to competitive forces. In the current turbulent business environment, organizational culture is a key player in the provision of the glue that binds several parts of the organization together towards attainment of the desired goal. The study main objective was determining the effect of organizational culture on the performance of commercial banks in Nairobi County, Kenya. Specifically, the study sought to establish the effect of organization’s mission, consistency, adaptability and involvement on performance of commercial banks and the combined effect of the four variables on competitive advantage of commercial banks in Nairobi County, Kenya. This study employed a descriptive survey design and census was used on the target population of the 43 licensed banks and respondents were the operations managers. From the 43 distributed questionnaires, 33 were returned making a response rate of 76.7%. The results from the Pearson correlation showed that organizational mission and consistency had moderate and positive relationship to organizational performance. Further results indicated that involvement had strong and positive relations to performance and adaptability had a weak and insignificant relation to performance of the commercial banks. Finally, the study recommends the top managers and leaders of the bank to use Denison’ model of organizational culture elements of consistency, adaptability, strategic direction, core values, mission and involvement of all stakeholders as a way to enhance performance.

Keywords: Organizational performance, Organizational culture, Mission, Involvement, Consistency and Adaptability

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