ORGANIZATIONAL CULTURE AND EMPLOYEE PERFORMANCE IN BREWERIES MANUFACTURING FIRMS IN ANAMBRA STATE

ABSTRACT

Many organizations place more resources and effort just on integral and external reward systems but give less concern to traditional cultural activities. Organizational culture has received relatively low levels of empirical investigation among the possible antecedents of employee performance. The objective of the study is to strengthen the organization’s culture to enhance the organizational commitment to performance. This study was centered in Anambra state, South Eastern Nigeria, selected through stratified sampling. The product of the study showed that there is existence of a significant culture-performance relationship in enhancing organizational performance through employee’s commitment with right attitude to the objective(s) of the organization. Also the result proved that organizational culture reduces levels of ambiguity in the organization for effective performance. The summary of this study is that organizational culture promotes the consistency to employee attitude towards performance through job satisfaction which is positively associated with the degree to which employees fit into both the overall culture and subculture in which they work. The recommendation of the study is that transactional, transformational and effective leaders should foster, support and sustain organizational cultures that facilitate the type of managerial reforms envisioned to developed skills that enable them improve their performance in organizations efficiently. The methodology of the study was descriptive survey research design, and the instruments used for data collection were the combination of oral interview and questionnaires, interview schedule and research findings from available related literature.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study 

Although the concept of organizational culture was popularized in the early 1980s, its roots can be traced back to the early human relations view of organizations that originated in the 1940s. Human relations theories viewed the informal, nonmaterial, interpersonal, and moral bases of cooperation and commitment as perhaps more important than the formal, material and instrumental controls stressed by the rational system theorists. The human relations perspective drew its inspiration from even earlier anthropological and sociological work on culture associated with groups and societies (Geerts, 2000; Mead, 1998; Durkheim, 2000; Weber, 2007, 2008).

Attention to organizational culture lost ground as organizational science, and social science in general became increasingly quantitative. To the extent that research on organizational culture survived, its focus shifted to its more measurable aspects, particularly employee attitudes and perceptions and/or observable organizational conditions thought to correspond to employee perceptions (i.e. the level of individual involvement, the degree of delegation, the extent of social distance as implied by status differences, and the amount of coordination across units). This research, referred to as organizational climate studies, was prominent during the 1960s and 1970s (Denison, 2000).

This renewed interest in organizational culture represented a return to the early organizational literature but it went far beyond this literature in contributing important new insights and ways of thinking about the role, importance and characteristics of organizational culture. Also, research on the effect of culture on organizational performance and investigations into how organizational culture are created, maintained, and changed received greater attention. The main difference was that organizational culture was now viewed less as a natural, organically emergent phenomenon and more as a manipulable and manageable competitive asset.

Manufacturing started in Nigeria in 1946. Consequent to the aforesaid, Nigerian Breweries Plc, the Pioneer and largest brewing company in Nigeria, was incorporated in 1946 and recorded a landmark when the first bottle of Star Larger Beer rolled off the bottling lines in its Lagos brewery in June 1949. This was followed by Aba brewery which was commissioned in 1957, Kaduna brewery in 1963 and Ibadan brewery in 1982. In September 1993, the company acquired its fifth brewery in Enugu while in October 2003, a sixth brewery, sited at Ama Green field in Enugu State was commissioned. Ama brewery is the biggest brewery in Nigeria and the most modern in the world. Thus, from its humble beginning in 1946, the company now has five operational breweries from which its high quality products are distributed to all parts of this country.

Kilmann (2000) opines that culture in the organizational context can be described as the collective behaviour or styles of people, their attitude towards various constituents of business such as customers, co-workers, share-holders and so on and so forth and the common values that they share among themselves, which in fact acts like a binding force between them. One is actually observing the culture of an organization, when he or she is using words such as handworking, friendly, professional, ethical etc to describe the general behaviour of the people. The culture decisively influences the priorities set by the organization, as it is the underlying value system in the organization that emphasizes things like customer focus, innovation, cost reduction, strong alliances, empowerment and control in response to the various business stimuli.

Armstrong (2000) opines that culture enables people to see the goal alignment and motivates them to higher levels of performance, as shared values make people feel good about the organization and commit their capability and potential sincerely for the company. Such strong culture acts like intrinsic motivator. Empowerment, decisiveness, learning attitude, and team working are some of the attributes of strong organizational culture. Culture at this level is the real driver for superior performance and a definite source of competitive advantage that is very difficult for competitors to emulate. Toyota Lean production system is as much of tools, systems and processes as it is of the culture of the people there. Many companies have tried to copy the famed production system but none could do it with the same effectiveness. The reason – companies could copy the management system in place but not the underlying cultural strength rooted deep in the business philosophy of the company – understanding customer value, identifying value stream, one piece flow, pull system and striving for excellence.

Organizational culture comprises the shared set of beliefs, expectations, values, norms and work routine that influence how members of an organization relate to one another and work together to achieve organizational goals. In essence, organizational culture reflects the distinctive ways organizational members go about performing their jobs and relating to others inside and outside the organization. It may, for example, be a distinctive way in which customers in a particular hotel are treated from the time they are greeted at check-in until their stay is completed; or it may be the shared work routines that research teams use to guide new product development. When organizational members share an intense commitment to cultural values, beliefs, and routines and use them to achieve their goals, a strong organizational culture exists. When organizational members are not strongly committed to a shared system of values, beliefs, and routines, organizational culture is weak.

The stronger the culture of an organization, the more one can think about it as being the “personality” of an organization because it influences the way its members behave. Organizations that possess strong culture may differ on a wide variety of dimensions that determine how their members behave toward one another and perform their jobs. For example, organizations differ in terms of how members relate to each other (e.g; formally or informally), how important decisions are made (e.g. top-down or bottom-up), willingness to change (e.g; flexible or unyielding), innovation (e.g; creative or predictable), and playfulness (e.g; serious or serendipitous).

Organizational culture develops in different ways, such as: Over a period of time, through visionary leaders, around critical incidents, from the need to maintain effective working relationship among organization members, and by the influence of the organizations environment. The indices with which to measure culture includes customer satisfaction, sales growth, and market share competitive advantage and sales volume. Also to measure culture the following should be considered, competitive culture, innovative culture, bureaucratic culture and community culture. These are based on the fact that organizational culture facilitates the acceptable solution to know the problems, which members learn, feel and set the principles, expectations, behaviours, patterns and norms that promote high level of achievement. An integrated organizational culture reduces the uncertainty and ambiguity experienced in an environment and maintains an organizations operating capacity. That is why cultures are historically developed, socially maintained and individually interpreted. Based on the above, the attributes to organizational culture and performance relationship will be on the attributes of individual’s capability development, team orientation and empowerment.

 1.2 Statement of the Problem

The intensification of research on organizational effectiveness has led to the identification of several organizational factors that have an influential role in the determination of organizational performance. Organizational culture is one such factor that has received much attention in organizational behavior. In the effort to understand the forms and consequences of organizational culture, the researcher has explored how various internal processes such as individual and organizational selection and socialization, characteristics of powerful members such as the organization’s founder or group of members influence the content and intensity of the consensus that exists about organizational values. Although several studies have focused on identifying the value dimensions that characterize an organization’s culture, only a few have investigated the extent to which an organization’s values affect performance.

It is believed that organizational performance can be measured using capital market and financial indicators vis-à-vis several latent variables such as organizational structure, organizational values, task organization, climate, individual’s values, beliefs and leadership styles as seen in manufacturing industry like Hyundai, Ingvar Kampard and so on. This study is embarked upon to look into the exogenous and endogenous cultural and human impediments that affect culture-performance relationships in the manufacturing industry such as Intafact Beverages Limited, Premier brewery limited, Anchorage company Limited.

This study is to investigate therefore the remote and immediate factors responsible for lack of commitment, bad leadership, inconsistency in employee’s attitude, decrease in employee’s morale and negative alignment to organizational goals that the organization receives unfavourable impact on output/performance as seen in Premiere brewery Ltd, and Interfact brewery firm, and proffering the right panacea/antidote which will serve as a platform for restoring a positive attitude for effective performance of organizations. Based on these problems, the objectives of this study are formulated.

1.3 Objectives of the Study

This study is essentially a critical evaluation of the relationship between organizational culture and performance in manufacturing industry. Manufacturing creates the real wealth in an economy. Therefore, the objectives of this study are as follows:

1. To ascertain the extent to which organizational culture enhances organizational commitment to performance.
2. To determine whether organizational culture promotes the consistency of employee attitude towards organizational performance.
3. To examine to what extent core organizational culture enhances leadership performance of the organization.

1.4     Research Questions

1. To what extent does organizational culture enhance organizational commitment to performance?
2. How does organizational culture promote the consistency of employee attitude towards organizational performance?
3. In what measures does core organizational cultures enhance leadership performance of the organization?

1.5     Research Hypotheses

The following research hypotheses are formulated to guide this study:

H₁ Organizational culture promotes the consistency of employee attitude towards organizational performance.

H₂ Organizational culture could significantly be used to achieve organizational diversity for effective performance.

1.6     Significance of the Study

With research such as this, many people and organizations will benefit because of the relationship between culture and performance which it explores, as well as how it can be fostered. Culture represents the social glue and generates a ‘we’ feeling; thus counteracting processes of differentiations which are an unavoidable part of organizational life. Organizational culture offers a shared system of meanings which is basis for communications and mutual understanding. Note should be taken that if these functions are not fulfilled in a satisfactory way, culture may significantly reduce the efficiency of an organization.

Specifically, those that will benefit from this work includes: the government, business managers, Directors/Employers, Employees, Researchers Statistical Bodies and Agencies, and industrialists in manufacturing companies, non-profit making organizations and the researcher himself as it will lead to the award of Ph.D in Management to him.

Other sections to which this work is significant include the following:

1. Organizational culture has a boundary-defining role, that is, it creates distinctions between one organization and others.
2. Organizational culture conveys a sense of identity for organization members.
3. Organizational culture facilitates the generation of commitment to something larger than one’s individual self-interest.
4. Organizational culture enhances social system stability.
5. Organizational culture is a social glue that helps hold the organization together by providing appropriate standards of what employees should say or do.
6. Organizational culture serves as a sense-making and control mechanism that guides and shapes the attitude and behaviour of employees.
7. A strong organizational culture increases behavioural consistency that leads to effective performance.

1.7     Scope of the Study

This work organizational culture and performance will be limited to manufacturing companies in Anambra State, South Eastern Nigeria. Therefore the researcher has decided to restrict the scope of this study to the identification of the extent to which organizational culture will improve organizational performance. The companies in view are as follows: Intafact Beverages Limited, Premier brewery limited, Anchorage Company Limited. The period covered by this study ranges from 1972 to 2013.

1.8     Limitations of Study

The limitations of this study includes:

• Time: It was not unusual that the researcher was constrained with time limit as it posed a serious threat to the successful coverage intended in the course of this study. It is the intention of the researcher to interview all the employees of the selected manufacturing companies but because of various activities of the researcher which borders on both academics, work schedules and other social activities it became relatively impossible to justify that intention.
• Finance: Due to the economic hardship that is faced by the people including the researcher, the possibility of a larger sample size which may have helped the work to cover much areas becomes impossible hence this work will be limited to only brewery manufacturing firms in Anambra State.
• Attitude of respondents: Most of the employees refuse to collect the questionnaires and those that collected did not give it the urgent attention it required in filling and returning it while some did not even return theirs at all. Some others were not very cooperative and could have given non-reliable information as they feared publicity despite the assurance by the researcher to treat every information with utmost secrecy and purely for academic purpose. This lack of co-operation from both the staff and most importantly, lack of encouragement by the management of these organization and also administrative bottlenecks acted as impediments to this study.

The researcher overcame the above constraints by voting more money and time to the research work and also tried to convince the respondents by giving them incentives to make them ensure a prompt co-operation and give out reliable and relevant information as may be required to achieve the objective of this work which is knowing the extent the culture of an organization can influence or improve organization performance.

1.10   Operational Definition of Terms

Adaptability: This refers to the ability of the company to scan the external environment and respond to the ever-changing needs of its customers and other stakeholders. (Attributes: Creating change, customer focus and organizational learning).

Consistency: This refers to the organization’s core values and the internal systems that support problem solving, efficiency, and effectiveness at every level and across organizational boundaries. (Attributes: Core values, agreement, and coordination and integration).

Culture: This can be defined as the commonly held beliefs, attitudes and values that exist in an organization. Or more simply, it is the way we do things around here – Furnham and Gunter (1998:25).

Culture can also be referred to as the unique configuration of norms, values, beliefs and ways of behaving that characterize the manner in which groups and individuals combine to get done – Eldridge and Crombie (1999:13).

Leadership: This consists of interpersonal influence, exercised in a situation and directed, by means of the communication process, towards the attainment of a specified goal or goals.

Involvement/Commitment: This is the degree to which individuals at all levels of the organization are engaged in pursuit of the mission and work in a collaborative manner to fulfill organizational objectives. (Attribute: Capability development, team orientation, and empowerment).

Organization: This can be defined as a conscious, coordinated social unit, composed of two or more people that functions on a relatively continuous basis to achieve a common goal –Robbins (2008:434).

Organizational Culture: This refers to a system of shared meaning held by members that distinguishes the organization from other organizations. (Robbins, 2008:435).

Manufacturing: Manufacturing is the transformation of material into other goods through the use of labour and factory facilities.

Manufacturing Industry: Manufacturing industry is the term used for a firm or firms that produces and sells a product. Therefore, it is one that acquires raw materials and intermediate goods and transforms them to finished goods through an industry process.

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