Effect of corporate culture on organisational performance of star-rated hotels in Ghana

Dominic Owusu

doi:10.47963/ajthm.v1i2.139

Abstract

   Although studies on the relationship between corporate culture and organisational performance abound in other jurisdictions, the focus has been on the composite effect of corporate culture on performance, with little attention given to the predictive value of the corporate culture types on organisational performance. Using the four major corporate culture types (clan, hierarchy, market, and adhocracy) on both financial and non-financial performance of star-rated hotels in Ghana, the study hypothesized that each corporate culture type will exert a positive effect on both financial and non-financial performance. Out of a population of 640 star-rated hotels, 248 hotels were involved in the study, using the multi-stage sampling technique. Questionnaires were administered to managers of the selected hotels. In all, a total of 178 responses were retrieved and analyzed using descriptive statistics (such as mean and standard deviation) and partial least squares in structural equation modeling. Findings of the study indicate that market culture was the most prominent predictor of profitability, return on investment, growth in profit, and sales volume, although it recorded a weak effect size. Adhocracy and hierarchy cultures were also the most prominent in predicting trust, improving supplier relations, improving service quality delivery, and customer retention. The study recommends, for the promotion of market, hierarchy and adhocracy corporate cultures in order to improve both financial and non-financial organisational performance of star-rated hotels in Ghana.  

Highlights

A key issue that continues to attract the attention of managers today is how to understand the success or otherwise of their organisations in order to draw lessons that will enable them to succeed at their respective organisations
Most of the studies on the effect of corporate culture on organisational performance only concentrated on the composite effect of corporate culture. This makes it difficult for hotel managers in Ghana to determine which of the corporate culture types should be encouraged in order to enhance both financial and non-financial performance
This means the predictive relevance of the model is considered moderate. This suggests that the clan, adhocracy, market, and hierarchy cultures moderately predict nonfinancial performance of star-rated hotels

Summary

INTRODUCTION

A key issue that continues to attract the attention of managers today is how to understand the success or otherwise of their organisations in order to draw lessons that will enable them to succeed at their respective organisations. Most of the studies on the effect of corporate culture on organisational performance only concentrated on the composite effect of corporate culture This makes it difficult for hotel managers in Ghana to determine which of the corporate culture types should be encouraged in order to enhance both financial and non-financial performance. The outcome of the study would help managers of star-rated hotels to identify the corporate culture types that should be encouraged in the Ghanaian settings in order to enhance the attainment of both financial and non-financial performance.

LITERATURE REVIEW

RESULTS

DISCUSSION AND CONCLUSION