Influence of Sustaining Effective Organizational Culture on Organizational Performance of Pharmaceutical Companies in Kenya

Abstract

Organizational performance has been a challenge in the pharmaceutical industry in Kenya, with firms recording low returns over the past recent years. The study sought to establish to what extent organizational culture influenced the organizational performance of pharmaceutical companies in Kenya. Organizational culture was operationalized through 3 variables; Innovation, Risk-taking and proactiveness; while organization performance was operationalized through 3 variables; profitability, customer perspective and growth & learning. The study adopted a positivist philosophy approach and a descriptive correlational research design. Structured questionnaires were used to collect data from senior managers in Kenya’s pharmaceutical companies. Of 390 shared across the pharmaceutical companies in Kenya, 320 completed questionnaires were returned. The study hypothesis was tested using inferential tests: ordinal logistic regression and parameter estimates. The study findings established that organizational culture explained 6.3% variations in organizational performance (Nagerlkerke, Pseudo R2 = .063), while parameter estimates indicated that organizational culture significantly predicted organizational performance, β =.211, p ≤ .05), and consequently rejecting the null hypothesis that organizational culture does not significantly influence organizational performance. The study, therefore, recommends that a regular culture audit be undertaken to identify the measures that should be taken to ensure a culture of innovation, risk-taking and autonomy is sustained. Additionally, the study recommends that leadership embrace supportive team norms, organisational values, and behaviours that support the growth of organizational performance.