Impact of Organisational Culture on the Financial and Non-Financial Performance and the Moderating role of the Environment

Malik, Sabir

Abstract

The academic literature signifies a relationship between corporate culture and performance, particularly for those firms that strive in gaining competitive advantage and long-term effectiveness. Employees with various cultural backgrounds, nationalities, and ideologies require organisations to establish a corporate culture and provide working environment that supports and facilitates employees to achieve the required performance set by their organisations. The current study has applied cultural dimensions of the Hofstede organisational Culture (1983), the Power Distance (PDI), the Uncertainty Avoidance (UAI) and Collectivism (IDV) as independent variables. Denison’s (2000), Denison and Mishra (1995) environmental traits (Adaptability), (Consistency) and (Involvement) as moderating variables.

The dependent financial performance variables, Return on Assets (ROA), Return on Equity (ROE), Tobin's Q, and non-financial performance variable “Learning and Growth” and “Reward and Compensation” of listed organisations are selected. The data is evaluated by using multiple statistical techniques, OLS, WLS, and Moderation Analysis. Our regression results show dependent variables ROA and ROE are significantly affected by the overall culture variables. Tobin's Q, is verified when the verification test is performed using the WLS model; the current research implies that individuals perceive and accept these values and beliefs essential to perform. These values are upheld within the groups and individuals to influence employees' performance, affecting the organisational performance as a whole. The results strengthen the necessity to explore combinations of contextual and personal characteristics from an interactive viewpoint to understand both management and employees to evaluate the correct environmental and cultural settings that support sustainable growth.

• Thesis Type: Thesis
• Deposit Date: Aug 21, 2023
• Publicly Available Date: Aug 21, 2023
• DOI: https://doi.org/10.17869/enu.2023.3175315
• Keywords: Corporate Culture, Financial and Non-Financial Performance, Environment, Listed Organisations and employees
• Award Date: Jul 6, 2023