Abstract
The objective of our study is to assess the influence of organizational culture and market orientation on performance. The population of the study comprise microfinance institutions that are members of the Association of Microfinance Institutions (AMFI) in Kenya. We used descriptive cross-sectional survey design. We collected primary data using structured questionnaire. We test our hypotheses through regression analysis. Our results demonstrate that organizational culture significantly and positively influence variations in performance. The partial mediation effect of market orientation on the relationship between organizational culture and performance was confirmed. The complimentary effect of organizational culture on market orientation implies that organizations need to spend more resources in nurturing market orientation to create sustainable competitive advantage through delivery of superior customer experience. We conclude that the influence of organizational culture and market orientation on performance is more plausible for mature industries regarded as diverse in terms of customer needs.
Highlights
Over the past few decades, researchers have focused on assessing the influence of organizational culture on performance
Our results indicate that organizational culture has a significant positive influence on performance with a coefficient of determination (R2) of 0.409, a standardized beta coefficient of 0.640 and F statistics of 35.31
Our results suggest that besides the indirect path postulated by the dynamic capability theory, organizational culture is directly linked to performance
Summary
Over the past few decades, researchers have focused on assessing the influence of organizational culture on performance. While several behavioural variables including market orientation may either hinder or reinforce the influence of organizational culture on performance outcome, empirical evidence on the mediating influence of market orientation on organizational culture-performance relationship is scant. Organizational culture is central to marketing management, its impact on marketing has not received satisfactory research attention (Deshpande & Webster, 1989). In spite of studies that have tested the relationship between organizational culture and performance, inconsistent findings have been found (Deal & Kennedy, 1982; Peters & Waterman, 1982; Ott, 1989; Denison & Mishra, 1995). Previous studies have focused more on direct relationship between organizational culture and performance (Kotter & Heskett, 1992; Daft, 2007)
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