Organizational Culture and Organizational Performance: The Role of Companies of a Developing Economy to the COVID-19 Pandemic

Abstract

The study sought to understand the relationship between organizational culture (OC) and organizational performance (OP) and included economic activity as a control variable in large and medium-sized companies in Ecuador. The authors collected data from 342 employees from different hierarchical levels and functional and operational areas of different economic activity through online surveys at two points in time. A descriptive analysis and structural equation modelling were applied. The results revealed that the culture of involvement, consistency and mission significantly explained OC. Of these, the mission was the most important. In addition, the research proposes another dimension called commitment. OP was significant for individual-level performance, group-level performance and job stability. In addition, individual-level performance and job stability were best related to business performance. When the type of economic activity is involved, the culture of involvement and consistency is more significant. The outcomes suggest that all the characteristics of OC and OP ensure the integration of strengthened principles into strategies, which, although unrelated to each other, are good predictors for improving corporate governance. Despite the popularity of studies on OC and OP, this research showed that it is still at an early stage of research in emerging economies. It provides managers with knowledge for effective management of the work environment.