The Effect of Organizational Culture on

Employee Performance: the Case of

BerhanInternational Bank s.c.

By Hana Atfraw

Advisor: Wubshet Bekalu (PHD)

A Thesis Submitted to School of Commerce in

Partial Fulfillment of the Requirement for the
Degree of Masters in Human Resource Management

Addis Ababa University School of Commerce

JUNE 2019

Addis Ababa, Ethiopia

1
 DECLARATION

I, Hana Atfraw, declare that the thesis entitled “The Effect of Organizational Culture on

Employee Performance; The Case Of Berhan International Bank s.c” is my original work. I

have carried out the present study independently with the guidance and support of the research

advisor, Dr. WubshetBekalu. Any other contributors or sources used for the study have been

duly acknowledged. Moreover, this study has not been submitted for the award of any Degree or

Diploma Program in this or any other Institution.

Hana Atfraw _______________ _______________

Signature Date

Conformation by advisor _______________ _______________

WubshetBekalu (PHD) Signature Date

I
 STATEMENT OF CERTIFICATION

This is to certify that Hana Atfraw’s research work on the topic entitled “The effect of

Organizational Culture on Employee Performance: The Case of Berhan International Bank s.c.”

is her original work and suitable for submission for the award of Masters Degree in Human

Resource Management.

This project paper has been submitted for examination with my approval as a university advisor.

_______________________________________
WubshetBekalu (Ph.D)
(Advisor)
June, 2019

II
 ADDIS ABABA UNIVERSITY SCHOOL OF COMMERCE
DEPARTMENT OF HUMAN RESOURCE MANAGEMENT
GRADUATE PROGRAM UNIT

THE EFFECT OF ORGANIZATIONAL CULTURE ON EMPLOYEE PERFORMANCE

THE CASE OF BERHAN INTERNATIONAL BANK s.c.

BY

HANA ATFRAW

GSE\4193\09

Approval Board Committee

Research Advisor Signature Date

_________________________ ________________ _____________

Internal Examiner Signature Date

_________________________ ________________ _____________

External Examiner Signature Date

_________________________ ________________ _____________

III
 Acknowledgements

First and foremost, I would like to thank Almighty GOD for giving me the strength, knowledge,

ability and opportunity to undertake this research study successfully. Without his blessings, this

achievement would not have been possible.

Next, I would like to express my deepest gratitude and appreciation to my advisor,

DrWubshetBekalu for his devotion in rendering me professional advice, constant

encouragement, effective guidance and constructive comments during my research. Without his

help, this work could have been difficult.

I am also very much obliged to express my special thanks and indebtedness to all those who

participated in this research as respondents of the questionnaire who are found in Berhan

International Bank s.c.

Finally, my acknowledgement would be incomplete without thanking the biggest source of my

strength, my family especially my mom, and friends for the constant encouragement and support

given to me all the times.

IV
Contents
DECLARATION ............................................................................................................................................ I
STATEMENT OF CERTIFICATION .................................................................................................................... II
Acknowledgements...................................................................................................................................... IV
ABSTRACT................................................................................................................................................... VIII
CHAPTER ONE ............................................................................................................................................... 1
INTRODUCTION ............................................................................................................................................. 1
1.1 Background of the Study............................................................................................................... 1
1.2 Organizational profile ................................................................................................................... 2
1.3 Statement of the Problem ............................................................................................................ 3
1.4 Research Question ........................................................................................................................ 4
1.5 Research Objective ....................................................................................................................... 5
1.5.1 General Objective ................................................................................................................. 5
1.5.2 Specific objective .................................................................................................................. 5
1.6 Assumption ................................................................................................................................... 5
1.7 Significance of the study ............................................................................................................... 5
1.8 Definition of Terms ....................................................................................................................... 6
1.9 Organization of the Paper ............................................................................................................. 6
CHAPTER TWO .............................................................................................................................................. 8
REVIEW OF RELATED LITRATURE .................................................................................................................. 8
2.1 Organizational Culture ........................................................................................................................ 8
2.2 Significance of Organizational Culture ................................................................................................ 9
2.3The Components of Culture ............................................................................................................... 10
2.4 Levels of Organizational Culture ....................................................................................................... 12
2.5 Models of Organizational Culture ..................................................................................................... 13
2.6 Employee Performance..................................................................................................................... 18
2.6.1 Factors Affecting Employee Performance ................................................................................. 19
2.7 The Impact of Organizational Culture on Employee Performance ................................................... 21
2.8 Empirical Studies ............................................................................................................................... 23
2.9 Conceptual Framework ..................................................................................................................... 24
CHAPTER THREE .......................................................................................................................................... 27
RESEARCH DESIGN AND METHODOLOGY ................................................................................................... 27

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 3.1 Description of the Study Area ........................................................................................................... 27
3.2 Research Design ................................................................................................................................ 27
3.3 Types and Source of Data ................................................................................................................. 28
3.4 Study Population and Sample Design ............................................................................................... 28
3.5 Data Collection Method .................................................................................................................... 29
3.6 Data Analysis Tool and Interpretation .............................................................................................. 29
3.7Ethical Considerations........................................................................................................................ 30
3.8 Validity Assurance and Reliability Test ............................................................................................. 30
CHAPTER FOUR ........................................................................................................................................... 32
DATA RESULTS AND INTERPRETATIONS ..................................................................................................... 32
4.1 Response Rate................................................................................................................................... 32
4.2 Demographic Characteristics of Respondents ............................................................................ 33
4.3 Descriptive Analysis on Selected Organizational Culture Measures................................................. 34
4.4 Descriptive Analysis on Employee Performance ........................................................................ 39
4.5 Correlation Analysis .......................................................................................................................... 40
4.6 Regression Analysis ..................................................................................................................... 42
CHAPTER FIVE ............................................................................................................................................. 46
SUMMARY OF FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS ...................................................... 46
5.1 Summary of Findings......................................................................................................................... 46
5.2 Conclusion ......................................................................................................................................... 48
5.3 Recommendation.............................................................................................................................. 49
5.4 Recommendation for further studies ............................................................................................... 51

Reference

Appendices

VI
 List of Tables

Table 4.1 Response Rate

Table 4.2 Demographic Characteristics of Respondents

Table 4.3Involvement Cultural Dimension

Table 4.4 Consistency Cultural Dimension

Table 4.5 Adaptability Cultural Dimension

Table 4.6 Mission Cultural Dimension

Table 4.7 Employee Performance

Table 4.8 Correlation Analysis

Table 4.9 Multiple Regression

VII
 ABSTRACT

The objective of this study was to investigate the effect of four organizational culture traits namely,

involvement, consistency, adaptability and mission on employee performance in Berhan

International Bank s.c. Based on the work of Denison on organization culture traits, a structured

questionnaire was developed and self-administered to employees of Berhan International Bank s.c to

collect explanatory data. Since the research is descriptive in nature quantitative method was used. A

total of 161 employees participated in the study and the data’s were analyzed using descriptive and

inferential statistics. The results show that the four traits measuring organizational culture were all

positively related with employee’s performance within the range of r=0.634 to r=0.738. Moreover,

adaptability is the most contributing organizational culture traits in the prediction of employee

performance with beta value .376. The other three organizational culture traits, in their descending

order of standardized coefficients are involvement, mission and consistency. Furthermore,

statistically significant of the four organizational culture traits: adaptability and involvement

indicate that there is significant relationship with employees’ performance. However, consistency

and mission doesn’t have significant effect on employee performance as it is explained by

significance level p>0.05. The implications of the findings were discussed and recommendations

made. From the study organizational culture has positive relation with employee performance.

Having this the organization should do a frequent cultural audit so that to perform better and be

competitive.

Keywords: Organizational culture, involvement, consistency, adaptability, mission, and employee

performance

VIII
 CHAPTER ONE
INTRODUCTION

This chapter of the paper consists of background of the study, organizational profile, statement of

the problem, research question, the research objective, scope, significance,definition of terms and

organization of the study.

1.1 Background of the Study

Organizational culture comprises the unwritten customs, behaviors and beliefs that determine the

"rules of the game" for decision-making, structure and power. It's based on the shared history

and traditions of the organization combined with current leadership values. In effect, culture

dictates the way we do business andthe organizational survival tactics that facilitate assimilation

and personal success (Dave H. and Jeanne Urich, 2011). With a strong organizational culture,

employees do things because they believe it's the right thing to do and feel they'll be rewarded

for their actions. Organizational culture can be treated as a series of distinctive characteristics of

a specific organization. Some modern definitions of organizational culture are dynamic, directed

at creativity, innovations and entrepreneurship. Organizational culture includes; a system of

ideas and concepts, customs, traditions, procedures and habits for functioning in a specific macro

culture (Harris P. R, R.T Moran, 1981). Organizational culture is a series of values, standards

and beliefs (Handy C.B, 1986). Organizational culture is implicit, invisible, intrinsic and

informal awareness of the organization which directs behavior of individuals and which results

from their behavior (Scholz Z 1987).

In understanding organizational culture it is very important to know all its elements. Authors are

not unanimous about what are the elements of the organizational culture. According to
1
(Armstrong, Žugaj, Cingula, 1992) there are four important elements of organizational culture.

These are; organization value, organization climate, Leadership style, work processes and

system. The culture of an organization refers to the behavior patterns and standards that bind it

together Schein (2004).

Generally, behavior patterns are most strongly influenced by the leaders of the organization. The

words and actions of the quality control and production managers reflect the values and beliefs

of senior management. Performance management is the process of creating a work environment

or settingin which people are enabled to perform to the best of their abilities. Performance

management is a whole work system that begins when a job is defined as needed. It ends when

an employee leaves your organization M.Heathfield, (2009). According to Cascio (2006)

performance is the degree of an achievement to which an employee's fulfill the organizational

mission at workplace.

Organizational culture is pervasive and powerful. For the organizations, companies and business

it is either a force for change or a definite barrier to it. For theemployees, it is either the glue that

bonds people to tan organization or what drives them away. Organizations, today, are

increasingly challenged with changing their organization’s culture to support ways of

accomplishing work. Organizational culture plays a very significant role in an organization. It is

a well recognized measure which helps in understanding the organization’s professed stability

for the employee’s incentive, encouragement and contentment with their job.

1.2 Organizational profile

Berhan International Bank s.c. was formed in accordance with article 304 of the commercial

code of Ethiopia with the objective of operating in the banking industry. This objective has been

insured in article 3 of the memorandum of association of the company. The bank was registered

2
and licensed by the national bank of Ethiopia on 27 June 2009 with an authorized capital of 300

million birr. Having been registered and licensed by the national bank of Ethiopia on 27thJune,

2009, Berhan International Bank s.c got its start in 2009. With the branch network of 185 as at

31st October 2018, headquartered in bole, Addis Ababa. Its vision is to be a radiant and

trustworthy bank in excellence. It also has a value of quality service for customers with high

ethical standard and confidentiality. Corporate social responsibility is also one of the values of

Berhan bank along with innovative and learning organization. The bank operates in virtually all

regional cities and in their respective major towns. Berhan bank has 3,378 employees and serves

more than 582,122 customers across the nation.

With the bank goal to make banking stress free and efficient, it invests in technology and

innovations that enable our customers to reach their goals as in saving, investment, business or

managing money. In addition the bank offer electronic banking services such as debit cards

allowing customers to access their accounts at any ATM machine nationwide, introduce mobile

banking with a plan to introduce internet banking and agent banking in the near future.

Beyond local banking service, the bank also partnered with international money transfer

companies such as western union, money gram, Ria, Dahabshiil, Transfast, Xpress money, Taran

express and world remit.

1.3 Statement of the Problem

It is widely acknowledged in current discussion of organizational performance that managers

have to widen an understanding of their cultural settings if their organizations are to perform

effectively (Hodgetts&Luthans, 2013; Agwu, 2014). Increased competition, globalization, and

alliances have led to a greater need for a performance-based organizational culture. This has

3
become necessary because organizations are saddled with a lot of management crises that stem

from their organizational culture (Agwu, 2014). These problems tend to impede progress toward

achieving high employees’ performance. A lot of attention has been given to organizational

culture and related studies (Ojo, 2010; Omoniyi, Salau, &Fadugba, 2014). Theoretical arguments

as well as empirical evidence lend credence to the view that organizational culture is related to

employees’ performance. However, Ojo (2010) argues that there is no clear conclusion on the

exact relationship between organizational culture and employees’ performance. Similarly,

Ogbonna and Harris (2000) aver that despite many research works done in this area and

contributions from various fields, there is no generally acceptable causal relationship between

organizational culture and employees’ performance. Therefore, more research is needed in

understanding and establishing relationship between organizational culture and employees’

performance.

Since human resource is a unique resource that an organization have its important to assess how

their interaction with the organization affects on their performance. Also in our country, there are

only few studies conducted regarding the area of study. Though there are many researches done

in the other countries, the fitness of those studies in our country is questionable. Therefore the

researcher wants to study what impact organizational culture has on employee performance

based on the country culture, norm and other issues especially in the banking industry.

1.4 Research Question

Many factors influence people in organizations, but not all are considered when trying to understand

the behavior of people at work, the most frequently overlooked factor is the effect of organizational

culture on employees’ performance; hence on the basis of the problem discussed above, the research

focused on the following research questions:

4
 1. How is organizational culture practiced in Berhan International Bank s.c?

2. What is the level of employee performance in Berhan International Bank s.c?

3. What is the relationship between organizational culture and employee performance?

4. How is culture affecting employee performance in Berhan International Bank s.c?

1.5 Research Objective

1.5.1 General Objective

The general objective of the research is to assess the impact of organizational culture on

employee’s performance in the case of BerhanInternational Bank s.c.

1.5.2 Specific objective

 To assess organizational culture practice in Berhan International Bank s.c.

 To assess the level of performance in Berhan International Bank s.c.

 To explore the relationship between performance and organizational culture.

 To evalute how employee performance is affected by organizational culture.

1.6 Assumption

In this research work organizational performance is considered as the aggregator of individual

performance.

1.7 Significance of the study

In addition to achieving its general and specific objectives, the study is significant in that, it

might give highlight for those who may develop interests to make further study on similar topics.

And also it might inform the management of the bank about the existing cultural setting in their

5
bank and alarms them to take appropriate actions if they need to. And since most of our country

banks share some common characteristics, it also helps other bank to take a look in to their

corporate culture and act up on it.

1.8 Definition of Terms

Organization: It is defined as a social entity where two or more people are working together

cooperatively within identifiable boundaries to accomplish a common goal or objective (Mullins,

2004).

Employee performance: signifies individuals work achievement after exerting required

effort on the job which is associated through getting a meaningful work, engaged profile,

and compassionate colleagues or employers around (Hellriegel, Jackson, & Slocum,

2009)

Organizational culture: comprises the shared set of beliefs, expectations, values, norms and

work routines that influence how members of an organization relate to one another and work

together to achieve organizational goal (Jones and George, 2006).

1.9 Organization of the Paper

The study is organized in five chapters. The first chapter dealt with introduction, background of

the study, organizational profile, statement of the problem, research question, objectives, scope,

and significance of the study and definition of terms.

The second chapter covers review of related literature. In this chapter the theoretical framework,

empirical review and conceptual framework are included. Chapter three is about the

6
methodology of the study. Mainly the research design, target and sample size are discussed.

Whereas chapter four covers the descriptive analysis and interpretation part. The summary of

findings, conclusion and recommendation are discussed in the last chapter, chapter five.

7
 CHAPTER TWO
REVIEW OF RELATED LITRATURE

Theoretical Framework

This chapter of the paper covers the concepts and definition of organizational culture. The

theoretical, empirical and conceptual frameworks are also covered.

2.1 Organizational Culture

Many organizations focus on their performance using different physical measurements. For

example employee performance, output level of machines, office layout and some others. But

organizations also rely heavily on their organizational culture as an important tool in controlling

and coordinating the activities of their members. This organizational culture is not seen or

measured or expressed in numbers. Rather it is a shared norm and value that grows in the

organization by its members having different backgrounds. In most organizations the term

organizational culture is simply “how we do things around here”. There are many different

organizational culture definitions given by many scholars, researchers and authors.

According to Dave H. and Jeanne Urich, 2011Organizational culture comprises the unwritten

customs, behaviors and beliefs that determine the "rules of the game" for decision-making,

structure and power. It's based on the shared history and traditions of the organization combined

with current leadership values. In effect, culture dictates the way we do business here and the

organizational survival tactics that facilitate assimilation and personal success.

From this definition, if there is a strong organizational culture, employees do things because they

believe it's the right thing to do and feel they'll be rewarded for their actions.

8
Scholz Z (1987) defines organizational culture as implicit, invisible, intrinsic and informal

awareness of the organization which directs behavior of individuals and which results from their

behavior.

Organizational culture is the way that things are done in an organization; it is the unwritten rules

that influenceindividual and group behavior and attitudes. Factors which can influence

organizational culture include: theorganization's structure, the system and processes by which

work is carried out, the behavior and attitudes of employees, the organization’s values and

traditions, and the management and leadership styles adopted.

These factors keep the employees stick to the organization or drive away from it which affects

the organization performance as a whole.

2.2 Significance of Organizational Culture

An organizations culture may one of its stronger 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. Culture or shared values within the organization may be related to increase

performance. It is important to have a culture that fits with the demands of the companys

environment. To the extent that shared values are proper for the company question, company

performance may be benefited from culture. For example, if a company is in the high tech

industry, having a culture that encourages innovation and adaptability will support its

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.

9
Culture represents the “social glue” and generates a “we feeling”, thus counter acting processes

of differentiations that are an unavoidable part of organizational life. Organizational culture

offers a shared system of meaning which is the basis for communications and mutual

understanding. If these functions are not fulfilled in a satisfactory way, culture may significantly

reduce the efficiency of an organization Furnham and Gunter (1993).

2.3The Components of Culture

Organizational culture can be described in terms of values, norms, artifacts and management

style.

Values

Values are beliefs in what is best or good for the organization and what should or ought to

happen. The value set of an organization may only be recognized at top level, or it may be shared

throughout the business, in which case it could be described as value driven.

The stronger the value the more they will influence behavior. This does not depend upon their

having been articulated. Implicit values that are deeply embedded in the culture of an

organization and are reinforced by the behavior of management can be highly

Influential, while espoused values that are idealistic and are not reflected in managerial behavior

may have little or no effect. When values are acted on they are called ‘values in use’.

Areas in which values may be expressed – explicitly or implicitly

 Care and consideration for people

 Competence

 Competitiveness

 Innovation

10
  Performance

 Quality and

 Teamwork

Values are translated into reality through norms and artifacts. They may also be expressed

through the media of language (organizational jargon), rituals, stories and myths.

Norms

Norms are the unwritten rules of behavior, the ‘rules of game’ that provide informal guidelines

on how to behave. Norms tell people what they are supposed to be doing, saying, believing, and

even wearing. They are never expressed in writing – if they were, they would be policies or

procedures. They are passed on by word of mouth or behavior and can be enforced by the

reactions of people if they are violated. They can exert very powerful pressure on behavior

because of these reactions we control others by the way we react to them.

Typical norm examples

 How managers treat the members of their teams (management style) and how the latter

relate to their managers.

 Status – how much importance is attached to it; the existence or lack of obvious status

symbols.

 Ambition – naked ambition is expected and approved of, or a more subtle approach is the

norm.

 Performance – exacting performance standards are general, the highest praise that can be

given in the organization is to be referred to as ‘very professional’.

11
Artifacts

Artifacts are the visible and the tangible aspects of an organization that people hear, see or feel

and which contributes to their understanding of the organizations culture. Artifacts can include

such things as the working environment, the tone and language used in e-mails, letters or

memoranda, the manner in which people address each other at meetings, in e-mails or over the

telephone, the welcome (or lack of welcome) given to visitors and the way in which telephonists

deal with outside calls. Artifacts can be very revealing.

Management style

Management style is the approach managers use to deal with people. It is also called as

‘leadership style’. Most managers adopt an approach somewhere between the extremes. Some

will vary it according to the situation or their feelings at the time; other will stick to the same

style whatever happens. Every manager has his or her own style but this will be influenced by

the organizational culture, which may produce a prevailing management style that represents the

behavioral norm for managers that is generally expected and adopted.

2.4 Levels of Organizational Culture

Organizational culture consists of some aspects that are relatively more visible, as well as aspects

that may lie below ones conscious awareness. Organizational culture can be thought of as

consisting three interrelated levels.

At the deepest level lie basic assumptions. These assumptions are taken for granted and reflect

beliefs about human nature and reality. At second level, values exist. Values are shared

principles, standards and goals. Finally at the surface we have artifacts or visible, tangible

aspects of organizational culture.

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2.5 Models of Organizational Culture

Different researchers develop models on organizational culture which incorporate different traits

or behaviors driven by beliefs and assumptions that create an organizational culture. Dolan and

Lingham (2012) have summarized some of the principal organizational culture models as Deal

and Kennedy Model, Charles Handy Concept and Edgar Schein Model. In addition to the three

models, a detail on Denison model of organization culture is also part of this section. Common to

all model of culture and the linkages to organizational success assert that values of employees

need to be aligned with vision and mission of the company.

Deal and Kennedy Model

Dolan and Lingham (2012) tried to summarize the model as follows. The model measured

organization in respect of feedback or instant response accordingly four classification of

organizational culture were developed. These are Tough-Guy Macho Culture, Work Hard / Play

Hard Culture, Bet your Company Culture & Process Culture.

The first Tough-Guy Macho Culture where by feedback is quick and the rewards are high. This

often applies to fast moving financial activities such as brokerage and it is very stressful culture

in which to operate. Secondly, The Work Hard / Play Hard Culture is characterized by few risks

being taken, all with rapid feedback. This is typical in large organizations, which strive for high

quality customer service. Thirdly, Bet your Company Culture in which big stakes decisions are

taken, but it may be years before the results are known. Typically, these might involve

development or exploration projects, which take years to come to completion, such as oil

prospecting or military aviation. Fourthly, Process Culture which occurs in organizations where

13
there is little or no feedback. People become suspicious with how things are done not with what

is to be achieved. This is often associated with bureaucracies.

Charles Handy Concept

The second model that Dolan and Lingham (2012) discussed in detail is Charles Handy Model.

Organizational structure is the base for this model to classify organizational culture in to four:

Power Culture, Role Culture, Task Culture and Person Culture.

 A Power Culture in which power concentrates among a few and control radiate from the

center like a web. Power Cultures have few rules and little bureaucracy

 A Role Culture characterized by people has clearly delegated authorities within a highly

defined structure. Typically, these organizations form hierarchical bureaucracies thus,

power derives from a person's position and little scope exists for expert power.

 A Task Culture in which teams are formed to solve particular problems. Power derives

from expertise as long as a team requires expertise. These cultures often feature the

multiple reporting lines of a matrix structure.

 A Person Culture exists where all individuals believe themselves superior to the

organization. Survival can become difficult for such organizations, since the concept of

an organization suggests that a group of like-minded individuals pursue the

organizational goals.

Edgar Schein Model

The organizational culture model that Dolan and Lingham (2012) tried to summarize is Edgar

Schein Model. This organizational culture model is described by three cognitive levels of

14
organizational culture. At the first and most cursory level of Schein's model is organizational

attributes that can be seen, felt and heard by the uninitiated observer. These includes facilities,

offices, furnishings, visible awards and recognition, the way that its members dress, and how

each person visibly interacts with each other and with organizational outsiders.

The next level deals with the perceived culture of an organization's members. At this level,

company slogans, mission statements and other operational belief are often expressed, and local

and personal values are widely expressed within the organization. Finally, the third and deepest

level depicts the organization's tacit assumptions. These are the elements of culture that are

unseen and not cognitively identified in everyday interactions between organizational members.

Many of these „unspoken rules' exist without the conscious knowledge of the membership. The

above three models encompasses organizational culture traits from psychological or personality

perspective and mainly the third is designed and created within the academic environment which

uses non-business language. To the contrary, Denison organizational culture model, which is

discussed in the subsequent paragraphs, is behaviorally based that are designed and created

within the business environment. And it is applicable to all levels of the organization in which

business language is used to examine business results.

Denison Model

Denison and Neale (2011) identifies four cultural traits Involvement, Consistency, Adaptability

and Mission. These underlying traits are expressed in terms of a set of managerial practices and

measured using the twelve indices that make up the model. (Denison & Neale, 2011). The below

succeeding paragraphs briefly discuss each of the four organizational culture traits and their

respective indices.

15
Involvement

Involvement is the first organizational trait which ensures the participation of employees in

decision making; it also relies on team effort to get work done and continual investment in the

development of employee’s skills.

In other words, involvement is building human capability, ownership, and responsibility. Thus,

organizational cultures characterized as "highly involved" strongly encourage employee

involvement, and create a sense of ownership and responsibility. They rely on informal,

voluntary, and implied control systems, rather than formal, explicit, bureaucratic control systems.

Consistency

Consistency is the second trait which emphasizes on maintenance of the status quo by being well

coordinated and well integrated also the organization devises clear agreement about the right

way and the wrong way to do things.

Furthermore, consistency deals with defining the values and systems that are the basis of a strong

culture. It also provides a central source of integration, coordination and control. Consistent

organizations develop a mindset and a set of organizational systems that create an internal

system of governance based on consensual support also has clear set of do's and don'ts.

Coordination and integration, agreement and core values are indices of the consistency trait.

Accordingly, coordination and integration clarify ability of different functions and units of the

organization to work together well to achieve common goals. Organizational boundaries do not

interfere with getting work done. The second indices is agreement in which is underlying level of

agreement and the ability to reconcile differences when they occur. The last one core values

16
stress in which members of the organization share a set of values that create a sense of identity

and a clear set of expectations.

Adaptability

The third trait, adaptability, depicts the ability of the organization in translating the demands of

the business environment into action through creating change, customer focus and organizational

learning environment.

Adaptability deals with translating the demands of the business environment into action.

Organizations hold a system of norms and beliefs that support the organization's capacity to

receive, interpret, and translate signals from its environment into internal behavioral changes that

increase its chances for survival, growth and development.

The indices of the adaptability trait are: creating change, customer focus and organizational

learning. Creating change deals with the ability of organization to create adaptive ways to meet

changing needs. So organization will be able to read the business environment, quickly react to

current trends, and anticipate future changes. Customer focus is the second indices which focus

on the organization understanding and reaction to its customer and anticipation to future needs.

Lastly, organizational learning reflected when on organization receives, translates, and interprets

signals from the environment into opportunities for encouraging innovation, gaining knowledge

and developing capabilities.

Mission

The last trait is mission whereby organizations devise meaningful long-term direction and

organization with this trait clearly defines Strategic direction, Vision, Goals and Objectives of

17
the company. Mission involves defining a meaningful long-term direction for the organization. A

mission provides purpose and meaning by defining a social role and external goals for the

organization. It provides a clear direction and goals that serve to define an appropriate course of

action for the organization and its members. A sense of mission allows an organization to shape

current behavior by envisioning a desired future state.

Strategic direction, vision and intent, goals and objectives are the indices of the mission trait.

Thus, strategic direction and intent deals with clear strategic intentions convey the organization's

purpose and make it clear how everyone can contribute. The second indices, goals and

objectives, stress on a clear set of goals and objectives can be linked to the mission, vision, and

strategy, and provide everyone with a clear direction in their work. Finally, vision ensures that

organization has a shared view of a desired future state. It embodies core values and captures the

hearts and minds of the organization's people, while providing guidance and direction.

2.6 Employee Performance

Every organization has been established with certain objective to achieve. These objectives can

be achieved by utilizing the resource like men, machine, materials and money. All these

resources are important but out of these the manpower is the most important. It plays an

important role in performing tasks for accomplishing the goals.

Employees are performing different jobs in an organization depending upon the nature of the

organization. They mainly perform tasks like production, storage, manufacturing, transportation,

marketing, accounting, human resource, research and public relations. All these activities are

interrelated to achieve the targets. Various factors like skill, training, motivation, dedication,

welfare, management policies, salary and packages, promotion, communication, organizational

culture are responsible to encourage the people to work sincerely and give their best output. The

18
importance of employee’s performance must be understood by the management and sincere

efforts must be put in that direction.

2.6.1 Factors Affecting Employee Performance

According to some researchers and practitioners, there are certain factors individually and

collectively effect on the performance of employees in a positive ornegative way.

Leadership

Leadership is a process whereby an individual influences a group of individuals to achieve

common goals (Northouse, 2007). Leadership style is the combination of attitude and behavior

of a leader, which leads to certain patterns in dealing with the followers (Dubrin, 2004). The

leadership style within an organization has a bearing on encouraging or inhibiting employee’s

performance (Armstrong &Murlis 2004; Cronje et al 2001).

Coaching

Coaching has become an important technique to improve performance (Champathes, 2006). It is

not a one way communication and proves to be a two way communications where coaches

identify what can be improved and how it can be improved. Further coaching addresses the belief

and behaviors that hinderperformance (Toit, 2007). It can be further seen that coaching is all

about helping someone else to improve performance (Starr, 2004).

Empowerment

Duvall (1999) defines success as achievement, accomplishment and attainment which is

consequence of empowerment as follows: (1) Individual success in form of employee’s role

performance, (2) Organizational success which is achieved as members of the organization

accomplish collective organizational goals and objectives, and (3) As organizational members

share a mutually beneficial and satisfying work experience meeting both social and personal

19
growth needs. Further, empowerment had significant positive correlations with both performance

and satisfaction (Bartram and Casimir, 2007). And specifically empowerment was more strongly

correlated with the in-role performance of followers than with satisfaction with the leader.

Participation

In Chen and Tjosvold research 2006, they revealed that participation management is about

involving employees in the decision making process where the employees feel that they have the

opportunity to discuss problems and can influence organizational decisions. Employee will be

motivated becausemanagement considers them as partners in contributing to organizational

success instead of being seen as mere subordinates and therefore will avoid engaging into

counterproductive behaviors hence improved performance through timely achievement of

organizational goals and objectives (Carrel, Kuzmits& Elbert,1989).

Organizational Culture

Organizational Culture is common values and behaviors of the people that considered as a tool

leads to the successful achievement of organization goals (Schein, 1990). Strong culture in the

organization is very helpful to enhance the performance of the employees that leads to the goal

achievement and increase the overall performance of the organization (Deal and Kennedy, 1982).

According to the Stewart (2010), norms and values of organizational culture highly effect on

those who are directly or indirectly involved with the organization. These norms are invisible but

have a great impact on the performance of employees and profitability. The most important

characteristic is shared value. A strong organizational culture supports adaptation and develops

organization’s employee performance by motivating employees toward a shared goal and

objective and finally shaping and channeling employees’ behavior to that specific direction

should be atthe top of operational and functional strategies (Daft, 1984). Shared value of

20
employees is one of the basic components of organizational culture (Smit and Cronje, 1992;

Hellriegel, 1998). Schein (1994) clarifies that value which is a set of social norms that define the

rules or framework for social interaction and communication behaviors of society’s members, is

a reflection of causal culture assumptions. Academics and practitioners argue that the

performance of an organization is dependent on the degree to which the values of the culture are

widely shared (Peters and Waterman, 1982). Similarly, it is widely argued that shared

andstrongly held values enable management to predict employee reactions to certain strategic

options and by reducing these values, the consequences maybe undesirable (Ogbonna, 1993).

2.7 The Impact of Organizational Culture on Employee Performance

Early studies have indicated that there exists a relationship between organizational culture and

employee performance. Organizational culture is inherently connected to organizational practice;

therefore employee performance is conditional on organizational culture. According Hellriegel

and Slocum (2009), organizational culture can enhance performance in a large scale. According

to them, the culture of an organization allows the employees to be acquainted with both the

firm’s history as well as currentmethods of operation and this specific direction endows the

employees with guidance about expected and accepted future organizational behaviours and

norms. Furnham and Gunter (1993), states that organizational culture functions as the internal

integration and coordination between firm’s operations and its employees. Internal integration

has to do with the societal interaction of new members with the existing ones, creating

boundaries of the organization feelings of identity among personal and commitment to the

organization. A strong organizational culture supports adaptation and develops employee

performance by motivating employees towards a shared goal and objective, and finally shaping

21
and channeling employees’ behavior to that specific direction. Although, there are certain

parameters that are taken intoconsideration to understand the impact of organizational culture on

employee performance, which includes: employee participation, innovation and risk-taking,

reward systems, openness to communication, customer service orientation. An organizational

culture that supports these factors motivates the employees to put more effort in their jobs, which

helps increases their performance level.Some theoretical model asserts that the effective human

resource system of an organization based on supporting values creates a positive impact on

employee attitude and behavior, which facilitates their performance.

Furthermore, the type of organizational culture created in an organization determines the impact

it can have on employee performance. It can have either a negative or a positive impact. For

instance, an organizational culture was employees are considered an integral part of the growth

process of the organization fosters employee performance. This is so because the employees

align their goals and objectives with those of the organization and feel responsible for the overall

well being of theorganization. As their efforts are in turn appreciated by the management and

suitable rewards are given, they perform effectively and efficiently. In such organizational

culture, the employees are committed to achieving their goals and thus it has a positive effect on

the overall performance of the organization. Organizational culture to a large extent determines

the performance of employees. Therefore, itis in the interest of organizations to eliminate

negative factors that slow down employee performance in order to foster a positive work place

environment or a positive organizational culture.

22
2.8 Empirical Studies

Various related studies are conducted by different researchers in different parts of the world.

However, there are limited numbers of studies conducted in Ethiopia on the Impact of

organizational culture on employee performance.

Evelyn Umemezia (2017) conducted a research on organization culture and employee

performance in Nigerian banking sector. The research made use of leadership styles,

employeetraining, work process, and employee commitment as the dimensions of organizational

culture. The study analyzed primary data from fieldsurvey using the questionnaire instrument.

Collected data were analyzed using SPSS 22.0 by running both descriptive and inferential

statistics.

Findings from the study revealed that there is a high level of organizational culture practices in

the Nigerian banking sector. Organizational culture dimensions all had positive effects on

employee’s performance. Thus, the study recommended that firms should adopt organizational

culture that best enhances employeeperformance.

EkpenyongNkereuwem Stephen (2016) has also conducted a research on organizational culture

and its impact on employee performance. The data was analyzed using simple percentage, tables

and chi square was used in testing the hypotheses formulated to guide the research. From the

findings, it was observed that majority of the respondents’ agree that organizational culture does

have an impact on performance of employees. It was also discovered that the type of

organizational culture practiced in an organization can also determine the level of employee

performance. An organization that practices either a clan or support culture tends to experience

23
high performance and satisfaction levels; this type of culture encourages employees to be

innovative and also supports socialization and teamwork.

Another research conducted on organizational culture on employee performance is by Bethelhem

H/Gebriel (2017). She conducted the research on JSI Research and Training Institute, Inc., one of

the international non-government organizations, Ethiopia.Both inferential and descriptive

analyses are used to see the relationship and effect of independent variables on dependent

variable. Based on the analysis, there is a positive and significant relationship between the three

variables of organizational culture and employee performance.

2.9 Conceptual Framework

Though there are different models and frameworks for organizational culture, I preferred to take

the Denison’s organizational culture model. The reasons for adoption of this model as a

conceptual framework are as follows: The basis of the model is that it tests the behavior of

group, it is applicable to all of the hierarchy levels from viewpoint of the measuring indices and

measurement of organizational culture dimensions, it is a detailed model. This model has a direct

impact on organizational culture and provides a novel framework over the other organizational

culture models and lastly the Denison’s model has been extensively employed by various

organizations in other countries in order to diagnosis organizational culture.

24
 Mission

Involvement

Employee
performance

Adaptability

Consistency

Independent variable Dependent variable

(Organizational Culture)

Source: Developed by Denison and Neale and modified by the researcher.

Research Hypothesis

Based on the literature review and the hypothesized connections presented in the conceptual

framework the following hypotheses were tested:

 H1: There is significant relationship between employees’ involvement in decision

making and employees’ performance.

H0: There is no significant relationship between employees’ involvement in decision

making and employees’ performance.

 H1: There is significant relationship between Consistency and employees’ performance.

25
 H0: There is no significant relationship between Consistency and employees’

performance.

 H1: There is significant relationship between adaptability and employees’ performance.

H0: There is no significant relationship between adaptability and employees’

performance.

 H1: There is significant relationship between employees’ identification with

organizational mission and employees’ performance.

H0: There is no significant relationship between employees’ identification with

organizational mission and employees’ performance.

26
 CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY

This chapter deals with description of the study area, research design, types and sources of data,

study population and sample design, data collection methods, data analysis & presentation,

validity and reliability test and ethical consideration. The detail of each issue is presented

hereunder.

3.1 Description of the Study Area

This research paper covers the branches of Berhan International Bank s.c located in Addis

Ababa, specifically the west district. The researcher selects this district due to the proximity to

the researcher; since there is a limited time and resource are available.

3.2 Research Design

According to Zukmund (ND) the purpose of research is interpreting, understanding, criticizing,

describing or analyzing information in a knowledge increasing manner. According to Singh

(2006), research design is essentially a statement of the object of the inquiry and the strategies

for collecting the evidence, analyzing the evidences and reporting the findings. With the view to

address its objectives, the study used quantitative method.This research paper is descriptive in

nature since its purpose is to identify how organizational culture impact employee performance.

Structured questionnaire was used to collect explanatory data and analyze the impact of

organizational culture on employee performance.

And concerning time horizon, the study used a cross-sectional study. Data was collected from

employees of Berhan International Bank in a particular time and not for different periods of time.

27
3.3 Types and Source of Data

The researcher uses both primary and secondary data collection method. Primary data through

questionnaire was collected to obtain firsthand information on the specific research questions.

And secondary data like policy, procedure, annual reports, and magazineare used to support the

facts acquired through primary data.

3.4 Study Population and Sample Design

The bank is organized in to five districts. The East and West districts are located in Addis Ababa

while the remaining three i.e. Central and western, Northeast and Southwest are located in the

countryside. The total workforce in Berhan International Bank s.c is 1,900 in Addis Ababa based

on 2017/2018 annual report of the bank. The total sample population for this research purpose

was the west district in Addis Ababa with total employees of 400.

Sample Size

The sample size is calculated based on the formula developed by Israel (2009), at +/- 5% level of

precision.

n = N

(1+N (e2))

Where N = total population

E = level of precision or acceptable sampling error (0.05)

n = sample size

28
n= 400

(1+400(0.05)2

n = 200

3.5 Data Collection Method

Questionnaire

Structured Questionnaire was used in order to reach wide range of respondents so that, to acquire

information that examine and explain the relationships between variables. Different

organizational theories that have been presented on the literature review were used to develop the

questionnaire. The questions were framed using Likert’s scale of measurement ranging from

strongly agree to strongly disagree (Strongly agree 5, Agree 4, Neutral 3, Disagree 2 and

Strongly Disagree 1).

3.6 Data Analysis Tool and Interpretation

The data analysis was made by using both descriptive and statistical regression. Descriptive

statistics such as frequencies, percentages, means and standard deviations were used to

summarize and present the data. Also, tables were used to increase understanding and facilitate

easy comparison of the data collected from the survey. With regard to statistical regression

(particularly multiple regression) was used to examine the significance contribution of each

independent variable to the dependent variable; organizational performance. Lastly major

findings were interpreted based on the result.

29
3.7Ethical Considerations

The researcher observes the principles of ethical issues like confidentially and dignity of the

participants, integrity, on no account plagiarism, and never fabricating and destroying data. The

research took at most precaution before undertaking the research and informs the participants in

the study about the objectives of the study, and is consciously consider ethical issues in seeking

consent, avoiding deception, maintaining confidentiality, respecting the privacy, and protecting

the anonymity of all respondents. A researcher must consider these points because the law of

ethics on research condemns conducting a research without the consensus of the respondents for

the above listed reasons.

3.8 Validity Assurance and Reliability Test

Validity and reliability of the measures need to be assessed before using the instrument of data

collection (Hair 2003). Validity concerns whether an instrument can accurately measure, while

reliability pertains to the consistency in measurement.

Due to the nature of the questionnaire construct, as varying ways were applied for measuring the

different variables considered. In this research, the researcher is used questionnaire that their

validity and reliability are checked according to the specific topic. The researcher has tested the

reliability using Cronbach’s Alpha (α) which is an internal consistency test that measures the

degree to which the items or measurements consistently measures the underlying construct, the

result of the Cronbach’s coefficient of reliability test is indicated in the table below.

30
 Organizational Culture Cronbach's N of
Dimension alpha items
Adaptability 0.88 8
Consistency 0.9 10
Involvment 0.92 13
Mission 0.92 9
Employee Performance 0.9 10
Source: own survey 2019

31
 CHAPTER FOUR

DATA RESULTS AND INTERPRETATIONS

This chapter presents the data analysis and discussion of the research findings obtained from data

collected from the survey questionnaire. Responses for the measures on the questionnaire are

summarized and presented using tables to facilitate easy understanding.

4.1 Response Rate

Response rate is the total number of respondents who participated in this study. The study has

target population of 200 from this only 161 respondents were participated. Having this the

researcher believes that the response rate that is 80% represents the population.

Description Respondents

Target population 200

Questionnaire Distributed 200

Questionnaire Returned 161

Response Rate (%) 80%

Usable Response 161

Table 4.1 Response Rate

32
 4.2 Demographic Characteristics of Respondents

For the purposes of this study, the variables on demographic information are age, sex, level of

education, and total years of experience. The result of this demographic presentation is stated

below using descriptive statistics analysis.

No Respondents Characteristics Frequency Percentage

1 Age 18-25 years 29 18.0
26-35 years 104 64.6
36-45 years 23 14.3
above 45 years 5 3.1
Total 161 100
2 Sex Male 80 49.7
Female 81 50.3
Total 161 100
3 Educational Level Diploma 6 3.7
BA/BSc 120 74.5
MA/MSc 34 21.1
Phd 1 0.6
Total 161 100
4 Experience 1-2 years 21 13.0
3-5 years 80 49.7
6-8 years 47 29.2
9-10 years 13 8.1
Total 161 100

Table 4.2 Demographic Characteristics of Respondents

Out of 161 respondents of Berhan International Bank s.cemployees most of them are in the age

of 26-35 years which is 64.6 percent. This indicates that most of Berhan Bank employees are

youth. Whereas age that covers from 18-25 years and 36-45 years are 29 and 23 respectively

with a mean of 18.0 and 14.3. Only 5 employees are above 45 which have a mean of 3.1.

33
While the sex construction taken from the sample employees of Berhan International Bank s.c

shows that the male and female distribution is almost equivalent with a percentage of 49.7 and

50.3 respectively.

As indicated in the above table most of Berhan International Bank employees are degree holders

with a percentage of 74.5.

Since the bank has served only ten years from its establishment, most of the employees have a

work experience of 3-5 years which sum up to 49.7 percent.

In general, the respondents characteristics is presented in percentage to show the demographic

construction of the bank and to show the sample population will represent the bank and the data

found is valid.

4.3 Descriptive Analysis on Selected Organizational Culture Measures

In order to see the general perception of the respondents regarding the selected organizational

culture in the subject organization, the researcher has summarized the measures with the

respective means and standard deviations. Thus, the mean indicates to what extent the sample

group averagely agrees or does not agree with the different statements. The lower the mean, the

more the respondents disagree with the statements. The higher the mean, the more the

respondents agree with the statement. On the other hand, standard deviation shows the variability

of an observed response from a single sample Marczyk, Dematteo and Festinger (2005).

According to Zaidation and Bagheri (2009), the mean score below 3.39 is considered as low, the

mean score from 3.40 up to 3.79 is considered as moderate and mean score above 3.8 is

considered as high.

34
No Variables Mean Standard
Deviation
1. Employees believes that they can have a positive impact 3.74 .99
2. Most employees are engaged in their work 3.7 .96
3. Information is widely shared so that employees can get 3.78 .97
the information they need
4. Everyone believes that s/he can have a positive impact 3.66 .97
5. Business planning is ongoing and involves everyone in 3.77 1.01
the process to some degree.
Involvement-Empowerment 3.73 .98
6. Cooperation across different parts of the organization is 3.73 .99
encouraged
7. Work is organized so that each person can see the relationship 3.75 .99
between his or her job and the goals of the organization.
8. People work like they are part of the team. 3.75 1.04
9. Teamwork is used to get work done, rather than hierarchy. 3.9 1.09
Involvement-Team Orientation 3.78 1.02
10. The capabilities of people are viewed as an important source 3.83 .999
of capability development
11. There is continuous investment in improving the skills of 3.88 1.06
employees.
12. Authority is delegated so that people can act on their own. 3.73 1.07
The capabilities of employees are viewed as an important
13. source of competitive advantage
3.86 1.02

Involvement-Capability Development 3.82 1.03

Involvement 3.77 1.01
Table 4.3 the Involvement Cultural Dimension

From the organizational culture measurements involvement is one of them. Respondents agree

that involvement has impact on organizational culture with a mean of 3.77.

35
From the involvement measurements respondents agree on capability development (3.82)

especially on “continuous investment in improving the skills of employees”. Regarding team

orientation respondents agree on “Teamwork is used to get work done, rather than hierarchy”

(3.9). But on empowerment dimension of involvement culture that is “Everyone believes that

s/he can have a positive impact” (3.66) respondents agree less in relation with that of the other

involvement culture dimension.

Description
No Mean Standard Deviation
3.8 .92
There is a clear and consistent set of values that governs
1. the way business is done.
2. Managers "practice what they preach" 3.8 .93
3. There is an ethical code that guides behavior and that 3.91 1.0
tells right from wrong.
Consistency-Core Value 3.83 .95
4. There is a ‘’strong culture’’ of doing things. 3.77 .91
5. When disagreements occur, employee work hard to 3.84 .92
achieve a "win-win" solutions
6. There is a clear agreement regarding the right way and 3.82 .89
the wrong way to do things
7. It is easy to reach consensus, even on conflicting issues 3.88 .97
Consistency-Agreement 3.82 .92
8. There is a good alignment of goals across levels. 3.8 .98
9. People from different parts of the organization share a 3.84 1.0
common perspective.
10. Our approach to do business is very consistent & 3.85 .98
predictable.
Consistency-Coordination and Integration 3.83 .98
Consistency 3.82 .95

36
Table 4.4 Consistency cultural Dimension

The other organizational culture dimension is consistency. Based on the findings obtained

consistency scores a mean of 3.82. This indicates that respondents agree on consistency aspect of

organizational culture. Especially on the “There is an ethical code that guides behavior and that

tells right from wrong” respondents agree with a mean of 3.91. Also on “There is an ethical code

that guides behavior and that tells right from wrong” respondents agree with a mean of 3.88.

In general the consistency dimension has approximately equal value among its three measures which are

agreement, core value and coordination and integration.

No Description Mean Sd. Deviation

1. Improved ways to do work are continually adapted 3.87 .9
2. Different parts of the organization cooperate to create 3.74 .95
change
3. Berhan bank respond to competitors actions and other 3.82 .92
changes in the business Environment
Adaptability-Creating Change 3.81 .92
4. Customers comment leads to changes and influences decision 3.9 .91
making
5. Customers inputs directly influences company’s decisions 3.88 .92
Adaptability-Customer Focus 3.89 .91
6. Innovations are encouraged 3.81 .98
7. Learning is an important objective in a day-to-day work of the 3.83 .99
company
8. Berhan bank view failures as an opportunity for learning and 3.71 .89
improvement
Adaptability-Organizational Learning 3.78 .95
Adaptability 3.82 .92
Table 4.5 Adaptability Dimension of Culture

37
The third cultural dimension is adaptability with a mean of 3.82. Furthermore, all of the eight

items that measures adaptability contributes almost equally to the overall mean.This result

indicates the majority of the respondents perceived that the company is translating the demand of

business environment and also the demand of internal customer in effect there will be positive

effect on level of employee performance to the organization.

No Description Mean Sd. Deviation

1. Our strategic direction is clear to me. 3.75 1.05

2. There is clear mission that gives meaning and direction to our 3.74 .98

work.

3. There is a long-term purpose and direction of the company 3.74 1.04

Mission-Strategic Direction & Intent 3.74 1.02

4. There is wide spread agreement about goals. 3.5 .85

5. Leaders set goals that are ambitious, but realistic. 3.53 .94

6. We continuously track our progress against our stated goals. 3.65 1.01

Mission-Goals & Objectives 3.56 0.93

7. Leaders have a long term view point. 3.62 .97

8. Our vision creates excitement and motivation for our 3.75 1.0

employees.

9. Employees have a shared vision of what the organization will 3.73 1.06

look like in the future

Mission-vision 3.7 1.01

Mission 3.66 0.98

38
Table 4.6 Mission Dimension of Culture

The mean score for mission was relatively low (3.66). This indicates that employees give less

value and agree with the measure of mission statements.

In general from the four of cultural dimensions respondents agree more on consistency (3.82)

and adaptability (3.82) items in equal mean score. Whereas for mission culture (3.66)

respondents agree less relatively from the remaining dimensions.

4.4 Descriptive Analysis on Employee Performance

To measure employee performance ten items were included on the survey questionnaire. As

depicted on the below table, mean score of 3.84 implies that the responses are mostly incline to

agree on performance measures.Specifically, mean score of 4.02 was obtained from statement

which inquires the required skill to perform their task and also from the statement “I could manage

more responsibilities in my job than typically assigned to me” is obtained a mean score of 4.03.

No Description Mean Sd. Deviation

1. I rated the quality of my work in the last performance excellent. 3.73 .98

2. I managed to plan my work so that it was done on time. 3.8 .99

3. I often expand extra effort in carrying my job. 3.86 1

4. I have a complete knowledge and understanding of my tasks. 3.8 .98

5. I always reach my objective set (performance target). 3.79 .96

6. I review my performance continuously for improvement. 3.77 .96

7. I have the required skills to perform my task. 4.02 .93

8. I have the required level of motivation to perform the tasks. 3.83 1.06

39
9. I do my job independently. 3.81 1.09

10. I could manage more responsibilities in my job than typically 4.03 .98

assigned to me.

Employee Performance 3.84 0.99

Table 4.7 Employee Performance

4.5 Correlation Analysis

Pearson correlation coefficients reveal magnitude and direction of relationships (either positive

or negative) and the intensity of the relationship (–1.0 to +1.0). Correlations are perhaps the most

basic and most useful measure of association between two or more variables (Marczyk,

Dematteo&Festinger, 2005).

As per Marczyk, Dematteo and Festinger, (2005) correlations of .01 to .30 are considered small,

correlations of .30 to .70 are considered moderate, correlations of .70 to .90 are considered large,

and correlations of .90 to 1.00 are considered very large. Accordingly, the below Pearson

correlation coefficients shows that the four factors measuring organizational culture were all

positively related with employees performance within the range of 0.63 to 0.76, all were

significant at p<0.01 level. All the independent variables i.e. adaptability, mission, involvement

and consistency show a large level of positive relation with the dependent variable (employees

performance)

40
Table 4.8 Correlation Analysis

Pearson Correlation involvment consistency adaptability mission employee_perfor

mance

involvment

161
**
.856 1
consistency .000
161 161
** **
.841 .878 1
adaptability .000 .000
161 161 161
** ** **
.749 .716 .682 1
Mission .000 .000 .000
161 161 161 161
** ** ** **
.738 .739 .760 .634 1

employee_performance .000 .000 .000 .000

161 161 161 161 161

**. Correlation is significant at the 0.01 level (2-tailed).

Regarding the relationship among the independent variables, table 4.8 clearly shows that the

variables are significantly correlated with each other (sig. level p<0.01). Also as shown in the

table all variables have a significant relationship among each other.

Multicollinearity Test

Here under Multicollinearity test is presented. The test presents the relationship between the

independent variables. The value generates must not exceed three. If it’s above three, it is to be

said that the relation between the independent variable is questionable.

41
 Variables VIF

Involvement Consistency 2.929

Adaptability 2.49

Mission 2.106

Consistency Involvement 2.24

Adaptability 3.484

Mission 2.326

Adaptability Involvement 2.35

Consistency 3.923

Mission 2.392

Mission Involvement 3.289

Adaptability 2.507

Mission 2.028

4.6 Regression Analysis

In order to see contribution each organizational culture traits on employee performance, standard

multiple regression analysis was employed. The regression model presents how much of the

variance in employee performance is explained by the selected organizational traits:

involvement, consistency, adaptability and mission. As shown on the table below, 62% variation

in employee performance is explained by organizational culture (where by R square is .622 and

adjusted R square is .613).

42
 Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate F Change Sig. F Change
a
1 .789 .622 .613 .45818 64.301 .000

a. Predictors: (Constant), mission, adaptability, involvement, consistency

Table 4.9 Multiple Regression result of selected organizational cultures traits and employee
performance

The ANOVA table shows the overall significance / acceptability of the model from a statistical

perspective. As the significance value of F statistics shows a value .000, which is less than

p<0.05, implies the model is significant. This indicates that the variation explained by the model

is not due to chance.

a
ANOVA

Model Sum of Squares df Mean Square F Sig.

b
Regression 53.994 4 13.498 64.301 .000

1 Residual 32.749 156 .210

Total 86.742 160

a. Dependent Variable: employee_performance

b. Predictors: (Constant), mission, adaptability, involvment, consistency

To further assess the effect of organization culture on employees’ performance, the following

model is used, where X1, X2, X3 and X4 are the four predictor variables.

Y = a + β1X1 + β2X2 + β3X3 + β4X4 e

Where: a = the constant (point at which line crosses Y axis)

β 1 = slope (regression coefficient) for variable X1

β 2 = slope for variable X2

β 3 = slope for variable X3

β 4 = slope for variable X4

43
e = error (or residual) value

Where Y is the employee performance, a is the regression constant, β1 to β4 are regression

coefficient, X1 is the involvement culture, X2 is the consistency culture,X3 is the adaptability

culture and X4 is the mission culture, e is the error term.

Y= 0.545 + (0.211) involvement + (0.146) consistency + (0.376) adaptability + (0.116) mission

a
Coefficients

Model Unstandardized Coefficients Standardized t Sig.

Coefficients

B Std. Error Beta

.545
(Constant) .212 2.575 .011

involvment .209 .108 .211 1.942 .044

1 consistency .155 .125 .146 1.246 .215

adaptability .396 .116 .376 3.405 .001

mission .109 .072 .116 1.519 .131

a. Dependent Variable: employee_performance

The regression coefficient explain the average amount of change in dependent variable that

caused by a unit of change in the independent variable. Therefore, adaptability is the most

contributing organizational culture traits in the prediction of employee performance with beta

value 0.376. The other three organizational culture traits, in their descending order of

standardized coefficients, are involvement (B=.211), consistency (B=.146) and mission (B=.116)

that the variables are making significant to the prediction of employee performance. In addition,

significance levels of adaptability and involvement is .001, and .044 respectively, which are less

than 0.05. This indicates that there is statistically significant relationship between them and the

dependent variable (employee performance). In the contrast consistency and mission have a

44
significant value of .215 and .131 respectively. This implies that the variables don’t have

significance relationship since their significance value is more than 0.05.

45
 CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

This chapter aims at presenting the summary of findings and also to aligne the research findings

with regard to the objectives of the study and illustrates the conclusions that have been reached.

Recommendation that focuses on how the problem identified could be addressed is included.

5.1 Summary of Findings

This section summarized the core points and major findings which were obtained from data

analysis of survey questionnaire.

 One hundred sixty one responses were valid for analysis, which represented 80%

response rate.

 The numbers of male respondents in the sample population are 49.7% and the female

number is 50.3 % which have an approximate value with each other. And it is largely

dominated by the age group of 26-35 (64.6%).

 The largest group of the population comprises first-degree holders, which is 74.5% of the

total respondents. Furthermore, 49.7% of the respondents have 3-5 years of experience in

the company and these take the majority.

 The mean score for the measures of consistency and adaptability was equal (3.82),

followed by involvement (3.77) and mission (3.66). However, mission scores a mean of

3.66. This indicates that, the majority of respondents have slight agreement on the

measures of mission.

46
  The employees’ performance is assessed with ten performance indicator statements. The

average agreement to these statements range from the smallest 3.73 to the largest 4.03.

For all these statements, the performance level of employees at Berhan International bank

is computed to the level M=3.84, which is a high level of performance.

 From the correlation analysis, it is found that all four variables have a positive

relationship from 0.63 to 0.76 score. And among these variables adaptability has more

positive relation (0.76) from others.

 To further assess the effect of organization culture on employees’ performance regression

analysis was conducted, from the regression result, the coefficient of determination, i.e R

Square, is computed to be 0.622=62.2%.

 In the regression coefficient findings, it is found that adaptability is the most contributing

organizational culture traits in the prediction of employee performance with beta value

0.376.

Alignment of Findings of this Research with Previous Studies

This study find out that the four factors measuring organizational culture score within the range

of 0.634 to 0.76 correlation coefficients with employee performance. Thus, all the independent

variables adaptability, mission, involvement and consistency show a moderate level of positive

relation with the dependent variable. This finding is consistent with the findings of other

researchers.

A research done by Senait Laike(2017) on Economic Commission for Africa indicates that the

four cultural traits have strong correlation with a value of 0.641 up to 0.84. However, out of the

four traits, consistency and mission have higher positive values in correlation with performance.

47
While in this research, though all the traits have positive impact, adaptability has more positive

value (0.76).

M. Shakil Ahmad research also reveal that all variables have positive relationship, especially

adaptability and mission with a person correlation of 0.837 and 0.815 respectively. The result of

the study indicates that organizational culture and employee performance are strongly associated

with each other and should be complimentary.

Overall the finding of this study along with other studies indicates that organizational culture has

strong relation with employee performance. The traits significance may vary from organization

to organization. For example in this study consistency and mission don’t have significance in

employee performance.

5.2 Conclusion

This study was initiated to investigate the impact of the selected organizational culture traits on

employee performance in Berhan International Bank sc. The study found that the level of

employee performance in Berhan International Bank has a mean score of 3.84. This indicates that

the value is to be high which indicates a high performance. The study also found that adaptability

is the most contributing organizational culture traits in the prediction of employee performance.

The other three organizational culture traits; involvement, mission and consistency are ranked

depending on their contribution from most to the least. Therefore, it can be concluded that the

more the organization adapt to changing circumstances the more employees are to perform.

Thus, employees believe that the organization ability to respond to internal customers

regardless of department/ section has effect on their performance.

48
 Involvement, one of the other organizational culture traits, is found to be more practiced in the

organization. This is asserted by the standardized coefficient of involvement which is less than

0.05.

The remaining organizational culture dimensions are consistency and mission. Though both

dimensions have a positive relationship with employee performance as shown in the person

correlation analysis, the significance of the variables tends to be more than 0.05. This implies

these two variables have no effect on employee’s performance.

Generally the study reveals that organizational culture has a positive impact on employee

performance at Berhan International Bank s.c.

5.3 Recommendation

As it can be shown from the different parts of this study, Berhan International Bank s.c is having

a good organizational culture and its relationship with employee performance is manifested

through the four types of organizational culture. Depending on the findings of the study and

conclusions made, the researcher came up with some important recommendations which would

help the organization to focus on organizational culture that can largely contribute to the

improvement on level of employee performance.

Though organizational culture has a positive impact on employee performance, the following

recommendations are made so that the organization know on which organizational traits to work

on and to improve its existing organizational culture to a better level.

 The first recommendation will be, in order to keep the existence of high impact

organizational culture on employee performance, the organization should do frequent

cultural audit with actionable outcomes and review its work environment so that to fill

the gaps from the review process and the employee performance will be kept increasing.

49
 One of the factors for high employee performance came from the existence of good

organization culture and if this doesn’t persist, employee performance will be lower and

the organization existence will be at risk position.

 Although all organizational culture measurements are important, the adaptability culture

has more impact on employee performance in the case company. But working on other

dimension of organizational culture is also important. Maintaining a strong culture by

being highly consistent, well coordinated and well integrated does not have significant

effect on the level of employee performance. This indicates employees prefer to be given

the freedom to do the job rather than being compelled to do it in a rigid manner.

 From the findings, mission has a mean score of 3.66 which is small from other variables.

It is also mentioned in the correlation analysis that it has a low relationship with

employee performance (.63). Based on this findings the company should work on

familiarize the goals, mission and vision of the company so that employees work

knowing what they do and seeing their company in the future.

 On the measure of employee performance, majority of respondents agree that they are

willing to put in a great deal of effort beyond the normal expected, in order to help this

organization to be successful. On the other hand, employees response on one of the

measure of organizational commitment shows respondents don’t perceive that the

company is the best of all possible organizations for which to work. Therefore, the

organization should receive feedback from employees and also conduct market survey so

as to know the level of competition.

50
  As it is seen the contribution of the four kinds of organizational culture is 61.3% on

employee performance. This implies that there are also other contributing factors which

are related to employee performance. So the organization should look for those

contributing factors (might be job satisfaction, leadership style, motivation, salary and

benefits issues…) and explore its relationships with employee performance. This in

return will boost both employee and organizational performance together.

5.4 Recommendation for further studies

The following are some of the recommendations for future studies:

 As it is mentioned in the first chapter of this study, the research on the effect of

organizational culture on employee performance are limited specially in our context and

the result of the study will be limited only to one organization; recommendations are

therefore made for further research in a different organization in the banking sector in

order to broaden research in this industry.

 There are different models and framework that will help to study on the effect of

organizational culture on employee performance like Hofstede’s cultural dimensions

theory, Edger Schein Model, O’Reilly, Chatman’s and Caldwell model and others. This

research study used Denison‘s Model, further research on the same organization can be

done using a different framework of organizational culture as suggested above to bring

depth understanding and outcome.

51
52
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APPENDICES

56
 Addis AbabaUniversity
School of Commerce
Human Resource Management
Questionnaire to be filled by employees of Berhan bank s.c

Dear Respondent:

This questionnaire is designed to get the relevant information for the current study. The
objective of the study is to assess the impact of organizational culture on employees performance
of Berhan bank s.c. This study is only for academic purpose i.e. for the requirement of second
degree in Human Resource Management. Hence, your responses will be kept confidential. The
soundness and the validity of the findings highly depend on your genuine responses. Therefore, I
kindly request you to fill the questionnaire carefully as much as possible.
Thank you in advance!
General Directions
1. No need of writing your name
2. Please put a tick (√) mark in the box for your answer and for the number of your choice for the
alternatives given.

Part IGeneral Background of Respondents (Demographic Information)

1. Age
18-25 years 26-35 years 36-45 years above 45years
2. Sex
Male Female
3. Educational level
Certificate Diploma BA/BSc MA/MSc PhD if any other
4. Work Experience at Berhan bank s.c
1-2 years 3-5 years 6-8 years 9-10 years

57
 Part II Organizational Culture of Berhan bank s.c

Please indicate the degree of your agreement/disagreement with the following statements
associated with the four traits of organizational culture; Involvement, Consistency, Adaptability and
Mission in Berhan Bank s.c (put “√” the Alternative Number That Best Describes Your View)

Organizational culture traits Strongly Disagree Neutral Agree Strongly

disagree agree
I . Involvement
Empowerment
1.Employees believes that they can have a
positive impact
2.Most employees are engaged in their
work
3.Information is widely shared so that
employees can get the information they
need
4.Everyone believes that’s/he can have a
positive impact.
5.Business planning is ongoing and
involves everyone in the process to some
degree.
Team Orientation
6.Cooperation across different parts of the
organization is encouraged
7.Work is organized so that each person
can see the relationship between his or her
job and the goals of the organization.
8.People work like they are part of the
team.
9.Teamwork is used to get work done,
rather than hierarchy.
Capability Development
10.The capabilities of people are viewed
as an important source of capability
development.
11.There is continuous investment in
improving the skills of employees.
12.Authority is delegated so that people
can act on their own.
13.The capabilities of employees are
viewed as an important source of
competitive advantage

58
II. Consistency Strongle Disagree Neutral Agree Strongly
disagree agree
Core value
14.There is a clear and consistent set of
values that governs the way business is
done.
15.Managers "practice what they
preach"
16.There is an ethical code that guides
behavior and that tells right from wrong.
Agreement
17.There is a ‘’strong culture’’ of doing
things.
18.When disagreements occur,
employee work hard to achieve a "win-
win" solutions
19.There is a clear agreement regarding
the right way and the wrong way to do
things
20.It is easy to reach consensus, even on
conflicting issues
Coordination and integration
21. There is a good alignment of goals
across levels.
22. People from different parts of the
organization share a common
perspective.
23. Our approach to do business is very
consistent and predictable.
III. Adaptability
Creating Changes
24. Improved ways to do work are
continually adapted
25. Different parts of the organization
cooperate to create change
26. Berhan bank respond to competitors
actions and other changes in the
business Environment

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Customer focus
27. Customers comment leads to
changes and influences decision making
Employees understand customers wants
and needs
28.Customers inputs directly influences
company’s decisions
Organizational learning
29. Innovations are encouraged
30. Learning is an important objective in
a day-to-day work of the company
31. Berhan bank view failures as an
opportunity for learning and
improvement
IV. Mission
Strategic direction and intent
32. Our strategic direction is clear to me.
33. There is clear mission that gives
meaning and direction to our work.
34. There is a long-term purpose and
direction of the company
Goals and objective
35. There is wide spread agreement
about goals.
36. Leaders set goals that are ambitious,
but realistic.
37. We continuously track our progress
against our stated goals.
Vision
38. Leaders have a long term view point.
39. Our vision creates excitement and
motivation for our employees.
40. Employees have a shared vision of
what the organization will look like in
the future

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Part III. Employee Performance

Employee performance Strongly Disagree Neutral Agree Strongly

disagree agree
41. I rated the quality of my work in the
last performance excellent.
42. I managed to plan my work so that it
was done on time.
43. I often expand extra effort in
carrying my job.
44. I have a complete knowledge and
understanding of my tasks.
45. I always reach my objective set
(performance target).
46. I review my performance
continuously for improvement.
47. I have the required skills to perform
my task.
48. I have the required level of
motivation to perform the tasks.
49. I do my job independently.
50. I could manage more responsibilities
in my job than typically assigned to me.

61