EFFECT OF ORGANIZATIONAL CULTURE ON PERFORMANCE OF SELECTED FIVE-STAR CHAIN-AFFILIATED HOTELS IN

NAIROBI CENTRAL BUSINESS DISTRICT, KENYA.

BY

LUCY CHEPKOECH ROTICH

A THESIS SUBMITTED TO SCHOOL OF TOURISM, HOSPITALITY AND EVENTS MANAGEMENT, DEPARTMENT OF HOTEL AND HOSPITALITY IN PARTIAL FULFILLMENT FOR THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF HOSPITALITY MANAGEMENT,

MOI UNIVERSITY.

NOVEMBER, 2017.

DECLARATION

Declaration by the Candidate

This thesis is my original work and has not been presented for a degree in any other University. No part of this thesis may be reproduced without prior permission of the author and / or Moi University.

__________________________ _________________

LUCY CHEPKOECH ROTICH	Date

SBE/PGH/005/11

Declaration by the Supervisors

This thesis has been submitted for examination with our approval as University Supervisors.

__________________ _________________

Prof. Damiannah Kieti, Date

Department of Tourism Management

Moi University

________________________ ______________________

Dr. Rita Nthiga, Date

Department of Hotel and Hospitality Management

Moi University

DEDICATION

I dedicate this piece of work to my family;

My parents Mr and Mrs Jonathan Rotich, for their patience, humility and for being my living icon of genuine love.

My dear husband, for his commitment, constant encouragements and his undying love.

My dear son, my pearl, shining star and darling of my eye.

ACKNOWLEDGEMENTS

My ultimate acknowledgment is to Jehovah, the Creator and Giver of life for enabling me to live to see myself do this work each day of the rising sun, for the Good Health, Wisdom, the strength, and sustenance at each step along the way. Through His priceless strength of life and provision, the author of this work has seen it accomplished.

I pass my sincere appreciation to my supervisors Prof. Damiannah Kieti and Dr. Rita Nthiga for their valuable time and input as well as their support, guidance, advice and all the encouragements along the way that they have taken to get this thesis compiled. Their patience, generosity and dedicated assistance have all contributed significantly to this degree. I will always remember the facilitative approach towards learning and academic growth they have showed, and therefore I express my sincere and humble gratitude to them at this defining moment.

To my dearest husband, Hillary, most sincere appreciation is extended to you, my heartfelt gratitude for your love, endless support, and willingness to endure and stay with me and for boosting my spirit even when I was almost giving up. My darling son, Arnold, for been there for me and lifting my spirit up when I was down. My parents Mr. and Mrs. Jonathan Rotich and my brothers Justine and Fred my heartiest thanks and earnest appreciation, for inspiring me to pursue my education and whose everyday prayers made it possible for me to complete this thesis, also for their unyielding and unconditional love and support, they have always given me through this academic pursuit and for encouraging me at each step of the way at all times. Also to each member of my immediate family for their constant encouragement and patience, they have vindicated throughout this time.

My thanks are also extended to the hotels visited for the interviews and filling of the questionnaires, to the managers who were on duty, thanks for giving me the privilege to talk to you and the employees who agreed to fill the questionnaires and participated directly, without their cooperation this research would not have been possible. Thank you all for your warm welcome and the chance you gave me to be part of your organization.

Finally, I thank my classmates for their cooperation during the coursework and their input that helped me to improve the quality of research work in the academic field. Thank you all for the support, enthusiasm, patience and motivation I shall forever cherish all of you.

May God Bless You All!

ABSTRACT

Investors in the hotel industry continue to face challenges of aligning people with different cultures towards a common set of goals due to the dynamic nature of the industry. It is widely recognized, particularly in the contemporary discussions of performance that managers and other hotel practitioners have to develop a healthy and a common organizational culture if they are to perform effectively. However, few studies focusing exclusively on the effect of organizational culture on performance in hotels in Kenya have been done. Hence, the purpose of this study was to investigate the effect of organizational culture on the performance of selected 5-star chain-affiliated hotels in Nairobi Central Business District (CBD). The specific objectives were to establish the effect of involvement culture, consistency culture, adaptability culture and mission culture on performance. The study was based on Denison theory of organizational culture and employed both descriptive and explanatory research designs. The target population comprised of 450 employees. Purposive sampling was used to select CBD hotels, Census sampling was used to select four 5-star chain-affiliated hotels. In all the hotels selected, simple random sampling techniques were used to select the respondents. The sample size was determined using Yamane formula which gave a sample size of 211 respondents (employees). Questionnaires were used to collect primary data. The data collected was analyzed using both descriptive (frequencies and percentages) and inferential statistics. To test the effect of organizational culture on performance, correlation and regression analysis were performed. The results of correlation analysis revealed that involvement culture had a positive but weak relationship with performance (r = 0.291). Additionally, consistency culture, mission culture and adaptability culture were found to have a positive and strong to moderate relationship with performance (r = 0.797, r = 0.532 and r = 0.496 respectively). The results of regression analysis revealed that involvement culture, consistency culture, adaptability culture, and mission culture predicted 69.7% (R2= 0.697) of performance in hotels. This indicates that the variables considered in this study significantly predict performance. However, the remaining percentage (approximately 30%) is predicted by other factors that were not considered in this study. The findings of this study imply that as customers visit a particular hotel, they develop some level of expectation build through the available information channel and if the organization is not consistent in their service, they run a risk of not satisfying the customers. Additionally, the management sense of direction and their ability to marshal the resources towards the attainment of the set targets. In conclusion, consistency culture was found to have the highest effect on performance followed by mission culture then adaptability culture respectively, but involvement culture had the least effect on performance. Therefore, the study recommends that to improve hotels’ performance; hotel practitioners should endeavor to implement the organizational culture in the following order of priority; consistency culture, mission culture, adaptability culture and involvement culture.

TABLE OF CONTENTS

DEDICATION	ii

ACKNOWLEDGEMENTS	iii

ABSTRACT	v

TABLE OF CONTENTS	vi

LIST OF TABLES	ix

LIST OF FIGURES	x

OPERATIONAL DEFINITION OF KEY TERMS	xi

LIST OF ACCRONYMS AND ABREVIATION	xiii

CHAPTER ONE	1

INTRODUCTION	1

1.0. Overview	1

1.1. Background of the study	1

1.2 Problem Statement	5

1.3. Research Objectives	6

1.4 Significance of Study	7

1.5 Assumptions of the Study	8

1.6 Limitations of the Study	8

1.7. Scope of the Study	9

CHAPTER TWO	10

LITERATURE REVIEW	10

2.0 Overview	10

2.1 The Concept of Culture and Organizational Culture	10

2.2 Organizational culture Variables	12

2.3. Performance measurement	24

2.4. The organizational culture and Performance	35

2.5 Theoretical model and Conceptual Framework	36

CHAPTER THREE	40

RESEARCH METHODOLOGY	40

3.0 Overview	40

3.1 Research Design	40

3.2 Study Area	41

3.3 Target Population	43

3.4 Sampling Design	43

3.5 Data Collection Sources	46

3.6 Data Collection Instruments	46

3.7 Reliability and Validity of the Research Instruments	47

3.8 Data Analysis	48

3.9 Ethical Considerations	50

CHAPTER FOUR	51

RESULTS, PRESENTATIONS AND INTERPRETATION	51

4.1 Demographic information	51

4.2 Effect of involvement culture on performance	55

4.3 Effect of consistency culture on performance	57

4.4 Effect of adaptability culture on performance	59

4.5 Effect of mission culture on performance	61

4.6 Performance	63

4.7 Regression Analysis	65

CHAPTER FIVE	70

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATION	70

5.0 Overview	70

5.1 Summary of Findings	70

5.2 Conclusions	76

5.3 Recommendations	77

5.4	Areas for further research	78

REFERENCES	79

APPENDICES	88

APPENDIX 1: COVER LETTER	88

APPENDIX 2: RESEARCH QUESTIONNAIRE FOR EMPLOYEES	89

APPENDIX 3: NAIROBI CBD MAP	98

LIST OF TABLES

Table 3. 1: Target population	43

Table 3. 2: Sample Size Distribution	45

Table 4. 1: Involvement culture	56

Table 4. 2: Effect of involvement culture on performance	57

Table 4. 3: Consistency culture	58

Table 4. 4: Effect of consistency culture on performance	59

Table 4. 5: Adaptability culture	59

Table 4. 6: Effect of adaptability culture on performance	61

Table 4. 7: Mission culture	62

Table 4. 8: Effect of mission culture on performance	63

Table 4. 9: Hotel performance	64

Table 4. 10: Model Summary	65

Table 4. 11: ANOVAb	66

Table 4. 12: Coefficientsa	67

LIST OF FIGURES

Figure 2.1: Conceptual Framework for the study	38

Figure 4.1: Gender of the respondent	51

Figure 4.2: Age distributionof the respondent	52

Figure 4.3: Years of working in the organization	53

Figure 4.4: Level of education of the respondent	54

Figure 4.5: Departmental representation	55

OPERATIONAL DEFINITION OF KEY TERMS

Adaptability Culture is the ability of the company to scan the external environment and respond to the ever-changing needs of its customers and other stakeholders. It is the degree to which an organization has the ability to alter behaviour, structures; and systems in order to survive in the wake of the environmental change (Denison, 1990).

Consistency Culture refers to beliefs, values and expectations, which members of an organization hold consensually. This implies that organizations that have shared values develop a mindset and a set of organizational systems that create an internal system of governance based on consensual support (Saffold, 1988).

Involvement Culture refers to the level of participation by members in an organization’s decision-making process. Therefore, it refers to the degree to which employees share information, knowledge, rewards, and power throughout the organization (Lawler, 1996).

Mission Culture is the degree to which the organization and its members know where they are going, how they intend to get there, and how each individual can contribute to the organization's success (Hamel & Prahalad, 1994).

Organizational Culture is the set of values, beliefs, behaviors, customs, and attitudes that helps the members of an organization understand what it stands for, how it does things, and what it considers important (May et al., 2004).

Performance is the level of attainment normally measured by pre-determined indicators, for instance, growth, employee and customer satisfaction (Richard et al., 2009).

Customer satisfaction: This is the customer fulfillment response that is judgment that a product or service itself is providing a pleasurable level of fulfillment (Belilos, 1997). Customer satisfaction is often associated with revisit intent, and the high probability that satisfied customers will recommend the goods or services to other potential customers (Collier 1994).

Employee satisfaction: This is a measure of whether employees are happy, contented and fulfilling their desires and needs at work. This can be measured by factors in employee motivation, employee goal achievement and positive employee morale in the work-place (Spector, 1997).

Growth: it is a success of an organization that is gauged by how well a firm does relative to the goals it has set for itself. It is a parameter in organization which is measured in terms of sales, number of employees, physical expansion, success of a product line, or increased market share (McShane & Von Glinow, 2006).

LIST OF ACCRONYMS AND ABREVIATION

ANOVA	Analysis of Variance

BSC	Balance Score Card

CBD	Central Business District

SPSS	Statistical Package for Social Sciences

WTO	World Trade Organization

CHAPTER ONE

INTRODUCTION

1.0. Overview

This chapter consists of the background of the study, problem statement, the purpose of the study, research objectives and questions, significance, limitations, assumptions and finally the scope of the study.

1.1. Background of the study

Research on organizational culture contributes to the understanding of performance management (Murphy & Cleveland, 1995). Culture determines the way organizations and individual work (Wang & Abdul-Rahman, 2010). It is an important part of internal environment of an organization (Ricky, 2007). Also, culture of organizations is the collective programming of mind that distinguishes the members of one organization from another. Furthermore, culture at the workplace, is a very powerful force which is consciously and deliberately cultivated and is passed on to the incoming employees. Therefore, Culture is an important part of internal environment of an organization (Ricky, 2007).

Organizational culture is the set of values, beliefs, behaviors, customs, and attitudes that helps the members of an organization understand what the organization stands for, how it does things, and what it considers important (May, Gilson & Harter, 2004). In the last 20 years, the concept of organizational culture has gained wide acceptance as a way to understand human systems. Furthermore, the attraction of organization norms, values and beliefs have strong effect on performance and sustainability (Stewart, 2010). The complete knowledge and awareness of organizational culture should help to improve the ability to examine the behavior of organization which assists to manage and lead (Brooks, 2006). Hence, organizational culture is the very thread that holds the organization together (Desson & Clouthier, 2010). Moreover, without exception, the dominance and coherence of culture proved to be an essential quality of the excellent organizations. In these organizations, employees in line management understand what they are supposed to do in most situations because the handful of guiding values is crystal clear (Peters & Waterman, 1999).

In order to achieve set goals and objectives of an organization, strategies have been designed based upon performance which depends on organizational culture. The equity based upon high returns helps in effective management of organization resources so that performance improves (Tharp, 2009). In addition, the job performance of an organization has a strong impact on organizational culture as it leads to enhanced performance. Similarly, the norms and values of organizations based upon different cultures have an influence on work force management. Hence in an organization strong culture enables effective and efficient management of work force employees (Ricardo, 2001).

Denison theory of organizational culture implicitly explains the four organizational variables; involvement, consistency, adaptability, and mission as key determinants of performance. According to the theory, involvement culture is the degree to which individuals at all levels of the organization are engaged in pursuit of the mission and work in a collaborative manner to fulfill organizational objectives. This variable consists of building human capability, ownership and responsibility. Organizations empower their people, build their organizations around teams, and develop human capability at all levels (Lawler, 1996). Executives, managers, and employees are committed to their work and feel that they own a piece of the organization.

On the other hand, consistency is the organization's core values and the internal systems that support problem solving, efficiency, and effectiveness at every level and across organizational boundaries. Organizations also tend to be effective because they have strong cultures that are highly consistent, well-coordinated, and well integrated (Saffold, 1988).

Furthermore, adaptability is the ability of the company to scan the external environment and respond to the ever-changing needs of its customers and other stakeholders. Organizations hold a system of norms and beliefs that support the organizations capacity to receive, interpret and translate signals from its environment into internal behavior changes that increase its chances for survival and growth (Denison, 1990).

Finally, mission is the degree to which the organization and its members know where they are going, how they intend to get there, and how each individual can contribute to the organization's success. Successful organizations have a clear sense of purpose and direction that defines organizational goals and strategic objectives. They express the vision of how the organizations will look in the future (Hamel & Prahalad, 1994). When an organization underlying mission changes, changes also occur in other aspects of the organizations culture. The Denison’s model was deemed relevant in the current study since it connects the management of the organization with its performance.

A respectable amount of research has been conducted addressing the multidimensional phenomenon of performance. Despite the work done on performance measurement, the existing literature lacks a unified definition of what is included and excluded (Akyuz & Erkan, 2010). Gunasekaran (2004) included mainly cost-related metrics and measures of operational performance, among the proposed metrics were also sales, profit and Return on Investment (ROI). Lorentz (2012) measured performance in terms of cost performance, service performance and asset utilization. Hence, Hofmann and Locker (2009), conclude that performance measurement concept should include both financial and non-financial measures in order to be usable at all levels of the firm.

Denison model was developed based on a study conducted by Denison and Mishra (1995). The study investigated the correlation between the level of involvement culture and the performance of an organization. Based on the strong correlation between these two factors, (involvement culture and performance) the question arose as to which other organizational cultural variables could be correlated to the performance. Therefore, this study sought to identify other organizational culture variables and creating a better understanding of their effects on performance in selected 5-star chain-affiliated hotels in Nairobi CBD, Kenya.

1.2 Problem Statement

It is becoming more widely recognized in contemporary discussions of performance that managers and other organizational practitioners have to develop a strong and a common organizational culture if their organizations are to perform effectively. However, investors and hotel management in the industry continue to face challenges of aligning employees with different diverse cultures towards a common set of goals, including consistent decisions due to the dynamic nature of the industry. Hence, there is need to develop effective management structures that can optimize on the opportunities available in order to remain competitive (Brawn, 2004). Limited research has been conducted on hotels focusing exclusively on the effect of organizational culture on performance in Kenya. This study therefore focused on the four variables of culture in terms of involvement, consistency, adaptability and mission as key determinants of their effect on performance in selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

1.3. Research Objectives

The study was guided by a general objective and four specific objectives as indicated below.

1.3.1. General Objective

The general objective of this study was to investigate the effect of organizational culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

1.3.2. Specific Objectives

The specific objectives of this study included;

To establish the effect of involvement culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

To investigate the effect of consistency culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

To investigate the effect of adaptability culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

To establish the effect of mission culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

1.3.3 Research Hypotheses

The following four null hypotheses were derived;

HO1: There is no significant effect of involvement culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

HO2: Consistency culture does not significantly affect performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

HO3: There is no significant effect of adaptability culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

HO4: Mission culture does not significantly affect performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.

1.4 Significance of Study

The purpose of this study was to investigate the effect of organizational culture on performance of selected 5-star chain affiliated-hotels in Nairobi. The findings are of significance to the Ministry of Tourism in formulating policies for promoting tourism in Kenya. The findings are also useful to the hoteliers, managers and investors in hotel industry in decision making while implementing their strategies for improving the performance in hospitality sector. Research findings add to knowledge in management and organization theory as well as the body of existing literature. Furthermore, the findings solve challenges arising from work situations in all hospitality sectors in Kenya. Also, information provided through this research allows hotels to review their current organizational culture management system and inform their future reforms.

1.5 Assumptions of the Study

The assumptions for this study were;

All those employees and the management interviewed provided true and sincere responses which gave relevant information of the study.

All the respondents were available to fill the questionnaires during the period of the study.

The selected hotels practice organizational culture aspects under investigated in this study.

1.6 Limitations of the Study

The limitations for this study were;

The study considered some thematic areas in organizational culture as variables of performance in selected 5-star chain affiliated-hotels leaving others. However other factors may influence performance which would form a basis for further studies in hospitality management.

The study was conducted Nairobi CBD only, this might limit generalization of the findings; the researcher recommended future studies to cover all 5-star chain affiliated-hotels in entire Nairobi and in whole country.

Due to the employees tight and busy schedule there was limited time available to fill the questionnaires. To overcome this challenge, the hotel management was requested to administer the questionnaires to the employees during their convenient time.

Some hotel policies and regulations do not allow employees to give out information about the hotel voluntarily, to overcome this, the researcher had to seek permission first from the management and convince them that the research was purely intended for academic purposes and will be handled with utmost confidentiality.

1.7. Scope of the Study

The main aim of this study was to investigate the effect of organizational culture on performance of selected 5-star chain affiliated-hotels in Nairobi, Central Business District. This study was limited to the four organizational culture variables; consistency culture, involvement culture, mission culture and adaptability culture. The study was also limited to four-5-star chain affiliated-hotels, which were expected to represent responses from all employees in 5-star chain affiliated-hotels in hospitality sector. Four hotels were randomly selected. The study targeted 450 respondents who comprised the employees of selected four 5-star chain affiliated hotels in Nairobi. Questionnaires were used in collecting data. The data were collected in the months of April 2015 to June 2015.

CHAPTER TWO

LITERATURE REVIEW

2.0 Overview

This chapter discussed the concept of organizational culture in terms of organizational culture and concepts of culture, effects of culture, concept of performance measurements, measuring performance in the service industry, performance measures in hospitality industry, the use of balanced score-card in hotels, the organizational culture and performance, theoretical framework of the study and conceptual framework.

2.1 The Concept of Culture and Organizational Culture

The concept of culture originally derived from a metaphor of the organization as ‘something cultivated’ (Watson, 2006). For the past number of decades, most academics and practitioners studying organizations argue that the concept of culture entails the climate and practices that organizations develop around their handling of people, or promotion of values and statement of beliefs of an organization (Schein, 2004).

Since culture is ‘the way things are done within a group, it sets priorities and expectations, enabling people to learn and understand what is important, subsequently identifying those actions that lead to punishment and those that lead to reward (Daft, 2000). Besides that, there is a link between culture and motivational factors which are essential for the performance (Brown, 1998). The job of an employee is build up by degree of achievement of a particular target or mission that defines boundaries of performance (Cascio, 2006). The capability of an organization to establish perfect relationship with resources presents effective and efficient management of resources (Daft, 2000).

Organization’s culture establishes the rules within which people act in addition to the ways and methods in which people communicate (Schneider, 2004). Through an understanding of group culture, employees know exactly what is required of them in any given situation (Deal & Kennedy, 2000). Besides, rigid procedures and control mechanisms become unnecessary when group culture is understood because it functions as internal control mechanism that coordinates employees’ effort (Lee-Ross & Lashley, 2003).

Studies indicates that, different in organizational culture, same strategies do not yield same results for two organizations in the same industry and in the same location (Ogbonna & Harris, 2000). Strong organizational culture shapes the life of employees in such a way that they can mold themselves according to the culture as a result, performance will be enhanced (Saffold, 1988). A positive and a strong culture can make an average individual perform and achieve brilliantly whereas a negative and weak culture may de-motivate an outstanding employee to underperform and end up with no achievement. The key to good performance is a strong culture; therefore, organizational culture has an active and direct role in performance (Kandula, 2006).

Therefore, organizational culture is important for organizations of different classes and level to create the kind of environment or culture where the positive managerial patterns of listening, coaching, guiding, involving and problem-solving are actively encouraged and reinforced (Ogbonna & Harris, 2000). This is where the policy of the human resources department is critical as it reflects and reinforces organizational values and culture. Zalami (2005) noted that culture can either enhance or inhibit institutional transformation depending on whether or not the existing culture is aligned with the goals of the proposed change. This is also noted by O’Donnell (2006) in terms of culture facilitating innovative initiatives in the public sector and providing a supportive environment for developing ‘enterprising leaders’.

It is argued that, without considering the impact of organizational culture, organizational practices could be counterproductive (Magee, 2002). According to Hodgetts and Luthans (2003), different variables of organization culture; mission, adaptability, involvement and consistency cultures have impact on performance. The similar organization culture with different backgrounds has common set of values and beliefs to be affected by organization systems (Robbins & Sanghi, 2007).

2.2 Organizational culture Variables

Denison theory put forward four organizational culture variables that influence performance; involvement, consistency, adaptability and mission cultures.

2.2.1 Involvement Culture and its effect on Performance

Involvement refers to the level of participation by members in an organization’s decision-making process as well as to the sense of responsibility and commitment thereby engendered (Denison, 2007). It entails building human capacity, ownership and responsibility. Involvement is very crucial since it leads to united vision, values and purpose. Employee involvement commonly referred to as participative management is the degree to which employees share information, knowledge, rewards, and power throughout the organization (Randolph, 2000). Due to the fact of the feeling of ownership, the organizational members develop a greater commitment to the organization and a growing capacity to work independently. In addition, a greater amount of input from the employees is an increased decision-making and power of implementation (Mishra, 2005).

McShane and Von Glinow (2006) argue that when there is involvement, employees have some level of authority in making decisions that were not previously within their mandate. The two authors observed that, employee involvement extends beyond controlling resources for one’s own job; it includes the power to influence decisions in the work unit and organization. Hence, the higher the level of involvement, the more power people tend to have over the decision, process and outcomes. Employee participation has become an important part of organizational decision-making because it is an integral component of knowledge management (McShane & Von Glinow, 2006). This implies that organizational leaders are realizing that employee knowledge is a critical resource for competitive advantage and as such, they are encouraging employees to share this knowledge.

Different forms of employee involvement exist in organizations. For instance, formal participation which occurs in organizations that have established structures and formal expectations that support this form of participation and informal participation in which, casual or undocumented activities take place at management discretion. Employee involvement can also be voluntary or statutory. It is voluntary when employees participate without any force or law. It is statutory when government legislate its activities (e.g. Codetermination which varies from country to country). Likewise, employee participation can be direct or indirect. Direct participation occurs when employees personally influence the decision process while indirect or representative participation occurs when employees are represented by peers (e.g. work council in the European Codetermination system) (McShane & Von Glinow, 2006).

According to Ford and Fottler (1995), there are different levels of employee involvement which reflects both the degree of power over the decision and the number of decision steps over which employees can apply that power. The lowest level of involvement is selective consultation, in which employees are individually asked for specific information or opinions about one or two aspects of the decision. They do not necessarily recommend solutions and might not even know details of the problem for which their information will be used. A moderate level of employee involvement entails when employees are more fully consulted either individually or in group. They are told about the problem and offer their diagnosis and recommendations, but the final decision is still beyond their control. Employees reduce cost through recommendations to senior executives (McShane & Von Glinow, 2006). The highest level of involvement occurs when employees have complete power over the decision process. They discover and define problems, identify solutions, choose best option, and monitor the result of their decision (McShane & Von Glinow, 2006).

Organizational cultures that are characterized as “highly involved” rely on informal, voluntary and implied control systems, rather than formal, explicit, bureaucratic control systems. Denison (2007) identified three indices of the involvement culture as empowerment, team orientation, and capacity development. From the foregoing, the working definition of employee involvement is the extent of employee participation in decision making and implementation in the organizations studied. It refers to the employees’ level of sense of ownership and responsibility to the organizations they work in. It includes the level of empowerment, team orientation and capacity building found in the organizations studied.

2.2.2 Consistency culture and its effect on performance

Consistency refers to beliefs, values and expectations, which members of an organization hold consensually. The values and systems form the basis of a strong culture (Denison, 1990). It also provides the central source of integration, coordination and control. This implies that organizations that have shared values develop a mindset and a set of organizational systems that create an internal system of governance based on consensual support. Such organizations tend to have highly committed employees, key central values, a distinct method of doing business, a tendency to promote from within, and a clear set of dos and don’ts (Denison, 2007).

Implicit control systems based on internalized values can be a more effective means of achieving coordination and integration than external-control systems that rely on explicit rules and regulations. The power of implicit control systems tends to be particularly apparent when organizational members encounter unfamiliar situations. It enables individuals to better react in a predictable way to an unpredictable environment by emphasizing a few general, value-based principles on which actions can be grounded. Values represent stable, long lasting beliefs about what is important in a variety of situations (McShane & Von Glinow, 2006).

According to Robbins and Judge (2011), values influence our perception, cloud our objectivity and rationality. Values tend to generally influence attitudes and behaviours. Cultural values represent the dominant prescriptions of a society; usually influenced by religious, philosophical, and political ideologies (McShane & Von Glinow, 2006). Personal values include cultural values as well as other values socialized by parents, friends, and personal life events. Organizational values are values that are widely and deeply shared by people within the organization (Agle & Caldwell, 1999). They include a concern for employees, for customers, and for the quality of the company’s products (Nickels, McHugh, & McHugh, 2011). This means that organization’s goal also defines to a large extent the values of the organization. Organizational values are important because they represent a challenge to management.

Organizational values present a subtle, yet potentially effective alternative to the old expensive command-and-control system of direct supervision, which is incompatible with today’s more independently- minded workforce (McShane & Von Glinow, 2006). Employees whose values are consistent with the organization’s values are easier to manage. Shared values tend to represent the unseen magnet that pulls employees in the same direction also, foster a common bond and help ensure that organization members pull in the same direction, irrespective of their tasks and ranks (Begley, 2000).

Ethical values enable the organization leaders to determine the right thing to do. Ethical behaviour is driven by the moral principles which are essentially fundamental values. Generally, values and ethics represent an important part of organizational life as they guide decisions and actions and also influence emotions and attitudes. Values dictate priorities, preferences and actions, basic values are at the heart of what influences employee’s drives, motivation and behaviour (Kleiman, 2001). When the peoples’ values align with organizational values, they tend to be motivated and exhibit behaviours that enable the organization to succeed.

Stephen Tindall, the founder The Warehouse which was rated the second best performing small-cap Company in the Asia-pacific region by the Wall Street Journal in 2000, gave the main reason for his organization’s success as its “people first” values. He stated that the organization’s policies of putting employees first made them put the customers first and to provide exceptional service to them (McShane & Von Glinow, 2006). Doebele (2001), in the Forbes Magazine rated Stephen Tindall warehouse as one of the best in the world. This implies that when employees are valued and treated accordingly they tend to also care for the customers who have made it possible for them to have such regard and treatment. This leads to increased efficiency and effectiveness on the part of the employees.

2.2.3 Adaptability Culture and its effect on Performance

Adaptability is the degree to which an organization has the ability to alter behavior, structures; and systems in order to survive in the wake of the environmental change (Denison, 2007). Adaptability entails translating the demands of business environment into action. Organizations as open systems exist in environment that is complex and uncertain. Adaptability is one of the four organizational cultures that highly influence performance of an organization. It deals with the relationship between the organization and its environment. It acknowledges Schein’s idea that organizations have to balance internal processes with external adaption processes (Loisch, 2007). This means that a successful organization is able to perceive and respond to the constantly changing environment and at the same time develop internal processes that allow the organization to adapt to those changes.

The adaptability culture consists of three sub points; firstly, ‘creating change’, meaning that highly adaptive organizations are willing to try new approaches and welcome new ideas as an important part of the way they do business. Secondly, ‘organizational learning’, this sub point describes that risk taking is encouraged; it means that the organization gains knowledge from successes and failures. The third sub point, namely ‘customer focus’, states that the higher the adaptability of an organization, the higher is the level of trust (Denison, 2001). The employees help each other in the process of identifying problems and finding an appropriate solution together. They are open to innovation and change in order to achieve organizational success and satisfy customers.

According to Loisch (2007), in a highly adaptive organization the satisfaction and fulfillment of customer demands has utmost importance. In order to reach that goal, to stay in the market and be competitive, the organization is willing to adapt to any changes and to try out new ideas. If, for example, the behavior of the competitors in the market changes or a new trend is developing, a highly adaptive organization is able to rise to the new challenge. This behavior favors excellent financial performance in the long run (Loisch, 2007).

To survive and make profit, organizations need to adapt continuously to the different levels of environmental uncertainty. Environmental uncertainty represents an important contingency for organization structure and internal behaviors (Daft, 2003). Organizations need to have the right fit between internal structure and the external environment. Denison (2007) identified three aspects of adaptability that impact on performance.

These include; first the ability to perceive and respond to the external environment. Successful organizations are very focused on their customers and their competitors. Second is the ability to respond to internal customers, regardless of their department or function. Third is the capacity to restructure and re-institutionalize a set of behaviors and processes that allow the organization adapted to the changing business environment? Without the ability to implement adaptive response, an organization cannot be effective (Denison, 2007).

According to Lee (1999), organizations must learn to adapt to changing environment. Given the ever-accelerating rate of global scale change, the more critical learning and adaptation become the organization relevance, success and ultimate survival. Managers must encourage their employees to share and develop their knowledge bases with each other to improve performance. Personal relationships are very important for the meaningful internal transfer of information that will enable the organization to adapt to changes in the environment. To achieve adaptability, the organization needs to deliberately align its organizational dimensions: vision, strategy, leadership, culture, structure and processes to facilitate organizational learning (Redding, 1997).

2.2.4 Mission Culture and its effect on Performance

The mission of an organization company is essential, as it is the basis for the concept of survival. A consensus on the mission is the foundation for the organizational goals and strategic objectives and expresses a vision of how the organization will look into the future (Deshpandé & Farley, 2004).

Mission refers to the existence of a shared definition of an organization’s purpose. Bateman and Snell (1999) defined mission as an organization’s basic purpose and scope of operations. This means that the mission expresses the reason for the existence of the organization and the range of activities it intends to embark upon; what it hopes to achieve. Daft (2003) defined mission, as the overall goal for an organization. The mission describes the organization’s vision, its shared values and beliefs and its reasons for being. Goals are broad, long-term accomplishments an organization wishes to attain (Nickels et al., 2011). They are very important and need to be mutually agreed upon by workers and management and have a powerful impact on the organization.

Mission culture consists of three concepts; Strategic direction and intent’ is the first concept. This concerns the priorities in an organization and operationalizes the vision of the organization. Strategic direction is very important as it provides structure and clarity for the members of the organization. Nevertheless, this needs time. The formulation of milestones helps to keep on track and to regularly check if the strategy is correctly pursued. The formulation of a strategy within the framework of a mission includes the determination of goals and objectives (Loisch, 2007). This leads to the second concept; the goals and objectives that illustrate the connection between the vision and the strategy in an employee’s daily activities. The third concept is the ‘vision’. The vision is the purpose of the business, what it is ultimately trying to achieve. According to Cotter (1997), the vision of an organization represents its most important values and, moreover, emotional connection between the employees.

The ability to put these goals in place in organizations tends to determine the firms’ success. Goals provide a standard for assessment. The level of organization performance, whether in terms of profits, units produced, or number of complaints, needs a basis for evaluation. One can say that official goals and mission statements describe a value system for the organization while the operative goals represent the primary tasks of the organization. Being able to internalize and identify with an organization’s mission contributes to both short and long-term commitment to the organization (Denison, 1990). Company survival seems to be the most powerful super-ordinate goal that has improved relationships among groups in organizations.

Clear strategic direction and intent convey the organizations purpose; make it clear how everyone can contribute and “make their mark” in the industry. This is important because it makes employees know what to do to contribute their quota to the organization’s success. Organizations are created and designed to achieve some end, which is often decided by the chief executive officer and/ or the top management team (Denison, 1990).

Kotter (1982) stated that the primary responsibility of top management is to determine organizations goals, strategy and design, therein adapting the organization to a changing environment. There are two broad schools of thoughts on how top management can steer the organizations: the coalitionists and the top-down theorists. The coalitionists argued that a firm strategy is the end result of a series of struggles among competing interest groups or coalitions. By contrast, the top-down theories argue that strategy formulation follows a three-step process, generally referred to as SWOT (strength, weakness, opportunities, and threats) analysis. In this process, senior management examines the environment and assesses the financial, programmatic and other signals-both positive and negative, compares environmental signals with the firm’s strengths and weakness and incorporates the firm’s values into the analysis; and Selects a strategic direction (Young, 2000).

In line with the top-down theories Daft (2003) stated that the direction setting process typically begins with an assessment of the opportunities and threats in the external environment, including the amount of change, uncertainty and resource availability. Top management also assesses internal strength and weakness to define the company’s distinctive competence compared with other firms in the industry (Snow & Hrebiniak, 1980). The next step is to define overall mission and official goals based on the correct fit between external opportunities and internal strengths. Specific operational goals or strategies can then be formulated to define how the organization is to accomplish its overall mission. A clear set of goal and objectives can be linked to mission, vision and strategy and provide everyone with a clear direction in their work (Denison, 1990). The organization has a shared view of desired future state- the vision.

It embodies core values and captures the heart and minds of the organizations members while providing guidance and direction. From the foregoing the following hypotheses were derived. When strategic direction, intent and vision are higher than goals and objectives, this indicates that the organization may have a difficult time executing or operationalizing its mission. There may be brilliant visionaries who have a difficult time translating dreams into reality. When goals and objectives are higher than strategic direction, intent and vision, this often indicates that the organization is good at execution but lacks a real sense of direction, purpose or long-range planning. The focus is usually a short term, bottom-line focus with little forward planning.

2.3. Performance measurement

Even though literature on performance is very extensive, Johannessen, Olaisen and Olsen (1999) note that there is still lack in consensus about the meaning of the term hence the concise definition of performance has remained difficult. A wide variety of definitions of firm performance have been proposed in existing literature (Barny, 2002). Nonetheless, some clear definitions of firm performance in the market definition context could be put forward. In some cases, performance measures such as percentage of sales resulting from new products, profitability, capital employed and return on assets (Selvarajan & Hsu, 2007) are used. Besides, return on investment, earnings per share and net income after tax can also be used as the measure of performance (Grossman, 2000).

Performance is a broad concept and is difficult to measure in organizations (Daft, 2003). It takes into consideration a range of variables at both the organizational and departmental levels. It evaluates the extent to which the multiple goals of the organization are attained. It is difficult for managers to evaluate performance on goals that are not precise or measurable. However, performance measurement that is tied to strategy execution can help organizations reach their goals. Daft (2003) has identified two major approaches to measurement of organizational effectiveness –the traditional and contemporary approaches. The traditional approaches include the goal approach, the system resource approach and the internal process approach. The goal approach to performance which this study considers is concerned with the outputs, whether the organization achieves its goals in terms of its desired level of outputs. This means that this approach identifies the organization’s output goals and assesses how well they have been attained. It is based on the fact that organizations have goals they are expected to achieve. The goal approach is used in business organizations because output goals can be readily measured (Daft, 2003). Top managers can report on actual goals of the organization since such goals reflect their values. Once goals are identified, subjective perceptions of goal achievement can be obtained if quantitative indicators are not available.

The question of performance measurement remains crucial both in terms of the performance measurement system as well as the method of performance measurement used. The development and implementation process in the private sector is rather clear. Literature presents a lot of different kinds of process models for the implementation of a performance measurement system (Kaplan & Norton, 1996; Neely, 1998; Bourne, 2000 & Simons, 2000). These process models have mainly been developed from the perspective of large companies. In these companies the strategies and objectives are usually clearly defined. Moreover, the ultimate goal of business is unambiguous- it is profitability. In modern companies the stakeholders are important. Customers are also important and usually clearly defined and recognized. The measurement is often based on adding value for the customers and increasing the wealth of the owners. In view of this, several scholars proposed several tools that can be used in the measurement of performance.

According to Murphy, Trailer and Hill (1996), the use of the term “performance” includes 71 different measures of performance. However, in the recent past, a majority of studies have financial and non-financial indicators to measure performance (Johannessen et al., 1999 & Murphy et al., 1996). Examples of financial measures are return on investment, return on assets and earnings per share (Sapienza, Smith & Gannon, 1988). The use of financial measures is more common, even to some extent in certain organizations; financial reports have produced on a daily basis (Gummesson, 1998). The reason is that financial performance is usually found as the core of organizational effectiveness and it is also the most easily quantifiable parameters (Johannessen et al., 1999). However, after extensive reviews on financial measures, Johannessen et al. (1999) highlighted several limitations to financial measures. Firstly, accounts in general are difficult to interpret. Secondly, absolute scores on financial performance are affected by industry-related factors and directly comparing these data would be misleading. Furthermore, accounting measures may be susceptible to accounting method of variation; consequently, accounting measures are not always representative of actual performance as they can be manipulated.

Due to the limitations of financial measures, there is also a growing need to assess company’s performance through non-financial indicators, which includes customer satisfaction, (Pizam & Ellis, 1999), productivity and service quality (Gummesson, 1998). Kalafut and Low (2001) categorically asserts that financial measures only tell about a company’s past performance while non-financial measures reflect the health and wealth-creating potential of the company.

2.3.1 Measuring Performance in the Service Industry

Services industry has unique characteristics that distinguish them from products. Services are intangible and heterogeneous, particularly in work-intensive industries (Parasuraman, 1985 & Kotler, 1991). In service industries, customers generally participate in production process and therefore influence its flow and outcomes (Gronroos, 2000). Consequently, customer experience service performance and quality at the time of delivery. Hence, providing a consistently high-quality service is usually essential to creating satisfying delivery (Gronroos, 2000).

It is possible to measure service performance by evaluating the efficiency of service provision or the quality of service from customer or manager subjective perspectives (Otto & Richie, 1996). Customer satisfaction from service provides a leading indicator of financial health and complements the firm’s economic performance (Anderson & Fornell, 2000). Customer satisfaction is often associated with revisit intent, and there is high probability that satisfied customers will recommend the goods or services to other potential customers (Collier, 1994; Rust, Zahorik, & Keiningham, 1995; Haber & Lerner, 1999; Burnes, Dunne & Glynn, 2000), securing the firm’s future revenues (Rust & Zahorik, 1993), as well as to long-term positive reputation (Anderson & Fornell, 2000).

In a study on firms in a wide variety of service industries, Anderson et al. (1994), found customer satisfaction to be cumulative and primarily a function of both current service quality and past satisfaction. The function alludes to the significance of the role of ongoing customer satisfaction for enhancing long-term survival. Moreover, Anderson et al. (1994) found that firms that achieve high customer satisfaction enjoyed superior economic returns. Again, customer satisfaction can enhance organization performance and growth over time and serve as a necessary tool for future planning (Anderson & Fornell, 2000).

2.3.2 Performance Measures in Hospitality Industry

Goals as well as performance measures, of small hospitality organizations appear to have special features that differentiate them from measures in other sectors and industries (Getz & Carlsen, 2000). The measurement of performance is even more acute in-service organizations as compared to manufacturing (Brynjolfson, 1993). Gronross (1992) stressed that service firms must concentrate more on customer relationships rather than on short-term transactions. Furthermore, in service organizations such as hotels, this is even more critical because of the nature of business which is more focused on human skills and intangible assets (Bharadwaj, Varadarajan & Fahy, 1993).

The increasing importance and value of people (employees and customers) in the hotel industry makes the traditional accounting practice appropriate (Phillips, 1999; Atkinson & Brown, 2001). Evidently, the current accounting practice in hotels relies heavily on financial measures (Atkinson & Brown, 2001; Harris & Mongiello, 2001; Teare, Cook,

Adams, Burgess & Ingram, 2001) and ruled by intuition and experience. Examples of financial indicators used by hotels include operating profit/income, operating margin, return on investment (ROI), price, revenue per available room (RevPAR) and costs (Denton & White, 2000; Banker, Potter & Srinivasan, 2005).

Another study carried out by Atkinson and Brown (2001) found that profitability is the most monitored financial indicator by hotels besides revenue and cost control. However, there are several weaknesses of focusing on financial measurement alone. Specifically, the weakness of the financial measures used by hotels are that financial measures are lagging indicators rather than leading indicators and cannot be used to predict the future performance (Denton & White, 2000); financial measures partially reflect on the effect of past and current activities (Banker et al., 2005); financial measures do not capture the relevant performance issues necessary for today’s business environment (Phillips, 1999); and finally temptations exists for managers to focus only on dollar figures, which may not tell the whole story for the company. More importantly, financial measures are relatively stable over time and do not reflect on the new conditions and new goals (Hansen & Mowen, 2003); Lack of strategic focus and fail to provide data on quality, responsiveness and flexibility (Neely, 1999); Emphasis on short-term financial measures would create a gap between development of strategy and its implementation (Kaplan & Norton, 1996); The revenue per room alone cannot be used as the basis for performance comparison among hotels because hotels in high-price areas tend to have a much higher revenue per room than hotels in low price areas (Kimes, 2001).

Due to the limitations of financial performance mentioned above and the impact of global competition in the hotel industry, hotels should rethink their current performance measurement which is more focused on financial to a more balanced measurement which has both financial and non-financial dimensions (Atkinson & Brown, 2001). Furthermore, according to Atkinson and Brown (2001), because of high fixed costs associated with hotels, their performance management system should enable managers to make decisions not only based on financial but also other measures that reflect market orientation, revenue management and complex nature of the service delivery process within hotels. Arguably, non-financial measures are necessary for hotels because they contribute towards enhancing performance within service environment, as they deal with causes instead of effects (Arias-Aranda, 2003); they reflect the current managerial actions that are not in the financial performance for some time and may provide information on how certain hotels properties improve (Banker, 2005).

Furthermore, due to several weaknesses of financial measures and the need to have non-financial measures, Fitzgerald et al. (1991) introduced a framework in service known as “Result and Determinants Model” that incorporate both financial and non-financial measures. The ‘Results’ component model refers to performance outcomes that includes competitiveness, financial performance, and quality of service. Whereas, the ‘Determinants’ components include flexibility, resource utilization and innovation.

Elsewhere, Kaplan and Norton (1992) introduced a strategic model, the “Balanced Scorecard” (BSC) which creates a more balanced performance measurement for organizations. Kaplan and Norton (1992) argued that performance measurements based on financial measures alone is inadequate in evaluating company’s competitive position. Thus, BSC model does not only include financial measures but also three other non-financial measures including customers, internal business and learning and growth perspectives. Later on, Heskett et al. (1994) introduced the “Service Profit Chain” model which links the non-financial with the financial results. Herein, the non-financial measures, which include internal quality, employee satisfaction, employee loyalty, productivity, organizational value, customer satisfaction and customer loyalty to result in profitability and growth of an organization.

2.3.3 The use of Balanced Score-Card in Hotels

In an attempt to bridge the gap between theory and practice, Kaplan (1984) proposed that effective performance should be measured using a “balanced scorecard”. The author suggested that performance measurement requires measures that are not purely financial in nature, because many of the financial indicators are a result of critical operational measures. For example, accounting measures only report what has happened in the past, and not the investments in future opportunities. Therefore, they argue that a combination of financial and operational measures is necessary for measuring overall performance. Accordingly, the balanced scorecard is a multi-disciplinary view of performance.

Balanced scorecard measures include market share, changes in intangible assets such as patents or human resources skills and abilities, customer satisfaction, product innovation, productivity, quality, and stakeholder performance. Most of these measures require primary data from management in the form of their assessment of their own performance, which may lead to questions of the validity of the responses. The primary advantage to using operational measures in conjunction with financial performance measures is when they provide information about opportunities that have been created, but not yet financially realized.

Profit has been defined as the money a business earns above and beyond what it spends for salaries expenses, and other costs (Nickels et al., 2011). Profit is one of the major reasons for venturing into business. Profitability means a state of producing a profit or the degree to which a business is profitable. Profitability is the primary goal of all for-profit business ventures (Amah, 2006). Without profitability, the business will not survive in the long run. Conversely a business that is highly profitable has the ability to reward its owners with a large return on their investment. According to Thompson and Strickland (2001) measuring current and past profitability and projecting future profitability is a very important issue. Profitability has been identified as criteria for performance.

Productivity is defined by Amah (2006) as the measure of how efficiently and effectively resources (inputs) are brought together and utilized for the production of goods and services (out puts) of the quality needed by society in the long term. Productivity is combination of performance and economic use of resources; high productivity indicates that resources are efficiently and effectively utilized and waste is minimized in the organization. Productivity balances the efforts between different economic, social, technical and environmental objectives (Amah, 2006). High productivity provides more profit for investors and promotes the development of the enterprise. Productivity measurement indicates areas for possible improvements and shows how well improvement efforts are faring. It helps in the analysis of efficiency and effectiveness. It can stimulate improvement and motivate employees.

Productivity is expressed in terms of cost for a unit of production; “units produced per employee” or “resource cost per employee” (Daft, 2003). Productivity improves, when the quantity of output increases relative to the quantity of input. It includes measures such as time minimization, cost minimization and waste minimization. Speed and time are important resources, organizations seek to maximize speed and minimize time. The way they do these indicates how efficient and productive they are.

Market Share refers to the company’s sales as a percentage of the sales in its target market (Czinkota et al., 1997). This means that in strategic management and marketing, market share is the percentage or proportion of the total available market or market segment that is being serviced by a company. It can be expressed as a company’s sales revenue (from that market) divided by the total sales revenue available in that market. It can also be expressed as a company’s unit sales volume (in a market) divided by the volume of units sold in that market. According to Czinkota et al. (1997), the measure of share and concept of prospects are important because they describe the extra business that a producer can reasonably look for, and when to obtain it. Increasing market share is one of the most important objectives used in business. The main advantage of using market share is that it cuts across industry wide macro environmental variables such as the state of the economy or changes in tax policy. According to the national environment, the respective share of different companies changes and hence this causes change in the share market value; the reason can be political ups and downs, and disaster, or any happenings.

Market share has the potential to increase profits. Small market share increases, mean very large sales increases. Studies have shown that, on average, profitability rises with increasing market share (Kotler & Armstrong, 2009). Because of these findings, many companies have sought to expand market shares to improve profitability. Market share is important because it enables one to know the strength of the organization whether they are leaders or minor players and also if the organization is still holding, gaining or losing share of its target market (Kotler, 1999). A strong and adaptive culture is necessary for organizations to maintain and expand their market share (McShane & Von Glinow, 2006).

Employee`s and customer’s loyalty and satisfaction is always linked to the long-term growth and survival of the organization. Belilos (1997) states that looking at the organization from customer’s point of view will lay the course for a successful business and it also helps in the planning. Organizations have to differentiate from competitors by ensuring that they meet employees and customer demands and needs. Quality, reliability and customer service has to be good enough to maintain a good relationship with the customers. This will attract new customers and also retain the old ones. Furthermore, employees will be satisfied in that their satisfaction is often determined by how well outcome meet or exceed expectations. For instance, if organization participants feel that they are working much harder than others in the department but are receiving fewer rewards they will probably have a negative attitude towards the work, the boss and or coworkers. On the other hand, if they feel they are being treated very well and are being paid equitably, they are likely to have positive attitudes towards the job.

2.4. The organizational culture and Performance

The key to good performance is a strong culture, due to difference in organizational culture; same strategies do not yield same results for two organizations in the same industry and in the same location. A positive and strong culture can make an average individual perform and achieve brilliantly whereas a negative and weak culture may de-motivate an outstanding employee to underperform and end up with no achievement (Kandula, 2006). Therefore, organizational culture has an active and direct role in performance. Magee (2002) contends that without considering the impact of organizational culture, organizational practices such as performance could be counterproductive because the two are interdependent and change in one will impact the other.

Ogbonna and Harris (2000) analyzed the relationship between organizational culture and performance by including the leadership style as a third variable in the model. The authors used a sample of 1000 units from the Financial Analysis Made easy database of registered British companies. To measure performance; Customer satisfaction, sales growth, market share, competitive advantage and sales volume were used.

Performance level of any organization is increased when that organization has well-managed, well-defined and strong culture. Researchers have agreed that level of well managed and strong culture is related to level of performance of an organization (Emmanuel & Lloyd, 2000).

2.5 Theoretical model and Conceptual Framework

2.5.1 Denison’s organizational culture model

The study adopted Denison’s organizational culture model (Denison, 2000), which posited that organizational culture is based on four cultural variables; involvement, consistency, adaptability and mission. In terms of the concept of involvement culture: effective organizations empower their people, build their organizations around teams, and develop human capability at all levels; executives, managers, and employees are committed to their work and feel that they own a piece of the organization. For consistency culture: organizations tend to be effective because they have strong cultures that are highly consistent, well-coordinated, and well-integrated. Therefore, behavior is rooted in a set of core values, and leaders and followers are skilled at reaching an agreement even when there are diverse points of view. This type of consistency is a powerful source of stability and internal integration that results from a common mindset and a high degree of conformity. On the other hand, adaptability culture, adaptable organizations are driven by their customers, takes risks and learn from their mistakes, and have capability and experience at creating change. It concerns how the organization copes with external contingencies and changes.

Finally, we have mission culture whereby: successful organizations have a clear sense of purpose and direction that defines organizational goals and strategic objectives and expresses a vision of how the organization will look in the future. The four variables of Denison`s Model of Culture and Effectiveness have been expanded by (Denison & Neale, 1996; Denison & Young, 1999; Fey & Denison, 2003) to include three sub-dimensions for each variable for a total of 12 dimensions. The following are the four main cultural variables with their sub dimensions: Involvement culture variable attributes, which comprises of; employee commitment, loyalty, ownership and responsibility. Consistency culture variable attributes, which includes; shared beliefs, values and expectations. Adaptability culture variable attributes, which entails; learning from mistakes, growth, development and survival. And finally, Mission culture variable attributes, which constitutes; clear purpose, direction and strategic objectives. These four cultural variables, borrowed from the Denison Theory were used in the study as the concepts of organizational culture hence forming independent variables for the study.

2.5.2 Conceptual Framework

The aim of the study was to investigate the effect of organizational culture on performance in selected 5-star chain affiliated-hotels in Nairobi, Central Business District.

Independent Variable Dependent Variable

Mission culture Clear purpose Strategic objectives Direction Involvement culture Commitments Loyalty Responsibility Ownership Responsibility Ownership Direction Common decisions Adaptability culture Growth and development Learn from mistakes Survival Performance Employee satisfaction Customer satisfaction Growth (no. of branches) Consistency culture Beliefs Values Expectations Organizational Culture Performance

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Figure 2.1: Conceptual Framework for the study

Source: Modified from Denison and Mishra (1995).

The independent variables were; consistency culture, mission culture, involvement culture and adaptability culture while the dependent variable was performance. Consistency culture constituted beliefs, values and expectations. In addition, mission culture encompassed clear purpose, strategic objectives and direction. Furthermore, involvement culture considered commitments, loyalty, responsibility and ownership. Finally, adaptability culture looked into; growth and development, learning from mistakes and Survival, whereas for dependent variable; growth, customer and employees’ satisfaction were considered as performance measurements for the study.

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Overview

This chapter focused on the description of study area, research design, target population, sampling procedures, data types, data collection methods, research tools and instruments. It also focused on validity and reliability tests, data analysis and ethical issues in research.

3.1 Research Design

Research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure (Orodho, 2009). It is the conceptual structure within which research is conducted and constitutes the blueprint for the collection, measurement and analysis of data (Kothari, 2004). The study employed both descriptive and explanatory designs. Descriptive research design sought to collect data without manipulating the research variables or the respondents in an attempt to uncover the existing status of organizational culture in terms of consistency culture, involvement culture, adaptability culture and mission culture in selected hotels (Patton, 2000). Descriptive studies generally take raw data and summarize it in a useable form. Specifically, questionnaires were the tools used in data collection. Furthermore, the researcher chose explanatory research design, because it enabled establishment of the effect of organizational culture on performance. Also, explanatory research design is a description of ‘why’ and ‘how’ there is a relationship between two or more aspects of a situation. Explanatory research design is used mostly in studies with hypothesis testing. Also, according to Saunderset et al. (2011), studies that establish causal relationships between variables use explanatory research design. In that the study enabled the researcher to find out the effect of organizational culture in terms of consistency, adaptability, involvement and mission of culture on performance in terms of; employee turn-over, growth and employees and customers’ satisfaction of selected 5-star chain affiliated hotels in Nairobi, CBD. The explanatory design was also adopted in that it allows in-depth inquiry of the cause and effect of variables of organizational culture on performance from the study population of selected 5-star chain affiliated hotels in Nairobi, CBD.

3.2 Study Area

The study was undertaken in Nairobi, Central Business District (CBD). Nairobi city is an aviation hub for East and Central Africa apart from being an administrative capital of Kenya. The city and its surrounding areas form Nairobi County. It has a population of approximately 3,183,295 (National census, 2009). Larger part of Nairobi’s economy is driven by tourism activities. The city is endowed with luxurious hotels and top-rated tour companies. It enjoys a fairly moderate climate and the choice of accommodation is classified ranging from ‘one’ (1) to ‘five’ (5) star luxury hotels. Cheruiyot et al. (2012) noted that these classified hotels are trend settlers in tourism and hospitality industry.

Similar sentiments were echoed by Lo et al. (2010) posited that, the high classified hotels distinguish themselves by offering superior products and customized services to their customers. Tourism is Kenya’s second largest foreign exchange earner. Tours of the Nairobi city itself can be arranged for guests. These tours of central Nairobi usually include visits to the Parliament Building, the City Market, and the National Museum; Trips to Nairobi National Park, the Giraffe Centre, and the Karen Blixen Museum. Generally, the city offers a well-developed infrastructure, excellent hotels, and fine food. It also hosts numerous international conferences, conventions, exhibitions and meetings. It has a very wide range of accommodation to suit budgets of different clientele, their tastes and preferences.

Hotel classification is also said to be the ranking of hotels, usually by using categorization such as stars (or diamonds), with one star denoting basic facilities and standards of comfort and five-star denoting luxury in facilities and services. The purpose is to inform intending guests in advance on what can be expected in order to reduce the gap between expected and experienced facilities and service delivery (World Tourism Organization, WTO, 2015).

Additionally, these hotels are rated according to their geographical location, which are the sea, mountains and towns. Furthermore, these five-star categories are determined according to the regarding the building construction, furnishing and professional language qualification of the staff (WTO, 2015). The study was conducted in Nairobi since most 5-star chain affiliated-hotels are found in this area.

3.3 Target Population

A population is the entire group of individuals, events or objects having common observable characteristics (Mugenda & Mugenda, 2009). The target population of this study comprised of employees of four 5-star chain affiliated hotels in Nairobi CBD. From the available information, there are 4 hotels that met the above criteria in Nairobi CBD which comprised of; Inter-continental, Sarova Stanley, Hilton, Laico Regency (Hotel register, 2014) as indicated in table 3.1.

Table 3. 1: Target population of Employees

Hotel	Target population
Front office	Housekeeping	Food and Beverage	Production	Sales and marketing	Total
Intercontinental	12	30	30	30	14	116
Sarova Stanley	10	27	35	26	16	116
Hilton	12	30	30	20	16	108
Laico Regency	13	30	27	25	15	110
Total	450

Source: Hotel Records (2016)

3.4 Sampling Design

According to Mugenda (1999), the term sample design refers to the procedures or processes used to obtain the sample size for the study. The sample size on the other hand, is the number of cases involved in the study from which the researcher collects data.

3.4.1. Sample Size

Sampling is the process of selecting a number of individuals for a study in such a way that the individuals selected represent the large group from which they were selected. The individuals selected form the sample (Mugenda & Mugenda, 2009). The sample size for the study was derived using Yamane’s formula for calculation of the sample size (Yamane, 1973) at 95% confidence level, as shown below.

n = N

1+N (e) 2

Where:

n= sample size required

N = population

e = Allowable error in % (0.05),

n = 450

1+450 (0.05) 2

= 211

3.4.2 Sampling procedure

The researcher employed purposive, census and simple random sampling techniques. Central Business District (CBD) was purposely selected because it harbors’ the largest number of 5-star chain affiliated hotels. Census sampling was used to select four 5-star chain affiliated hotels within the CBD. Simple random sampling was used to select employees who were the respondents of the study. The sample size composed of 211 employees who were proportionately selected from the selected departments (see table 3.2).

Table 3.2: Sample Size Distribution of the Employees

Hotel	Sample size
Front office	House keeping	Food and Beverage Service	Production	Sales and marketing	Total
Intercontinental	8	12	13	13	9	55
Sarova Stanley	8	11	13	12	10	54
Hilton	8	12	11	10	9	50
Laico Regency	9	11	12	11	9	52
Total	211

Source: Research data (2016)

3.5 Data Collection Sources

Both primary and secondary data sources were employed in the study. Primary data refers to the actual information a researcher obtains from the field, that is, from the respondents in the sample collected, while secondary data is information obtained from previous research articles and other relevant written literature (Mugenda & Mugenda, 2009).

3.6 Data Collection Instruments

This study used questionnaires to get information from the respondents. According to Hair et al. (1995) the questionnaire tool is considered as the heart of a survey operation. Questionnaires were completed by hotel employees from the selected four- five star chain affiliated hotels in Nairobi, CBD. The data collected related to the research objectives.

3.6.1 The research questionnaire

The study employed the use of questionnaire as the tool for data collection because it allowed the researcher to cover a larger area within a short period of time, and also it allowed confidentiality of information; hence the respondents gave accurate information on the subject matter. The questionnaire was also convenient to the respondents as they can fill the questionnaire at their own free and convenient time. Structured questionnaires were in the following five sections; the first section (Section A) of the questionnaire entailed demographic information including, gender, age, education level, marital status, and the department of the employee. The second section (Section B) consisted of questions on the practices of involvement culture in an organization and the effect of involvement culture on performance. The third section (Section C) elicited information on the practices of consistency culture in an organization and the effect of consistency culture on performance. The fourth section (Section D) comprised of questions on practices of adaptability culture in an organization and the effect of adaptability culture on performance. Finally, the fifth section (Section E) sought for information on the practices of mission culture in an organization and the effect of mission culture on performance that was prevalent in the organizations (see Appendix 2). A drop off and pick technique was employed in order to boost the response rate. After dropping the questionnaire to the selected hotels, the researcher allowed two or three days for employees to fill in the questionnaire before the completed questionnaires were picked up. Items in the questionnaires comprised of statements weighed on a five (5) point Likert scale as follows; SA- strongly agree, A- agree, U- undecided, D-disagree, and SD- strongly disagree, rated 5 to 1 respectively.

3.7 Reliability and Validity of the Research Instruments

Van-Tonder and Ehlers (2011) asserts that validity is attained by aligning the content of the questionnaire with the research objectives. The validity test must produce information that is not only relevant but also free from systematic errors. On the other hand, reliability is used to measure accuracy and internal consistency of the research instrument.

3.7.1 Validity

There are two types of validity namely; internal and external (Van Tonder & Ehlers, 2011). External validity refers to the extent to which the findings and results of a study could be generalized to other particular research settings and other samples. Content validity refers to the extent to which a research instrument adequately covers the constructs under study. It was achieved by seeking opinions of research experts; the questionnaires were presented to supervisors for scrutiny and their opinion was used to make the necessary changes prior to the actual research.

3.7.2 Reliability

Reliability is a measure of the degree to which a research instrument yields consistent results or data after repeated trials. Reliability has to do with the accuracy and precision of a measurement procedure (Kothari, 2004). A pilot survey was conducted in one 5-star hotel which did not form part of the study in order to familiarize with respondents, test question sequence, eliminate biased questions, repetitive and ambiguous questions and also to estimate response rate as well as test analysis procedures. Five questionnaires were provided to employees in different departments. The hotel for the pilot study was Serena Hotel which was not be part of this study. Serena Hotel is located outside CBD but is a five-star chain affiliated hotel because it has similar characteristics to the hotels being studied. Cronbach’s alpha coefficient was calculated and was found to be 0.79, which indicated that the instruments met the required threshold for reliability which is a minimum of 0.7.

3.8 Data Analysis

After the data was collected, it was cleaned, coded and input into the computer; and analyzed with the aid of Microsoft Excel package and Statistical Package for Social Sciences (SPSS) version 21.0. Descriptive and inferential statistics were used in the analysis. Descriptive statistics was used to describe and summarize the data to enable meaningful description of the distribution of the scores or measurements. Correlation was used to assess the relationship between organization culture and performance. Multiple regression was computed to investigate how the independent variable predicted the dependent variable. Data was presented using frequency tables, bar graphs and pie charts. Inferential statistics were presented using regression analysis since the study attempted to establish the effect of organizational culture on performance. The regression model was given as:

Yi= β0 + β1X1+ β2X2 + β3X3 + β4X4 + ε

Where,

Yi = Performance

X1 = Involvement culture

X2 = Consistency culture

X3 = Adaptability culture

X4 = Mission culture

β0 = Constant term

β1, β2, β3, β4 = Coefficients of the Regression

μ = Error term

Whereby, Yi as the dependent variable was measured by customers and employees’ satisfaction, and growth. While the independent variable was measured by X1; involvement culture in terms of; commitments, loyalty, responsibility and ownership X2; consistency culture in terms of; beliefs, values and expectations, X3; adaptability culture in terms of; risk taking and learning from past mistakes. Then, X4; mission culture in terms of; clear purpose and direction.

3.9 Ethical Considerations

Ethics is the branch of philosophy which deals with an individual's conduct and serves as a guide to his/her behavior. The study was undertaken taking into account the ethical concerns. The major ethical issues that were addressed in the study included informed consent, privacy and confidentiality, anonymity and researcher`s responsibility (Oso & Onen, 2005). The researcher sought an informed consent where she asked the respondents to participate in the study to help in finding out the effect of organization culture on performance selected 5-star chain affiliated hotels in Nairobi, CBD. The Privacy and Confidentiality of the respondents in the study were respected and maintained through restricting the responses to the aim of the study. Data collected in the study was private and confidential that related to the operations of the hospitality organizations that helped employees to improve and boost performance. Thus, all data that was collected was used specifically for the purpose of the study and were not shared with unauthorized persons. To ensure privacy of the respondents, the researcher did not ask the identity of the respondents and thus, the real names of the respondents were not used. Also, informed consent was administered, whereby the respondents were informed of what the study entailed and were requested to voluntarily participate without coercion and that they could withdraw from the study if they wished to do so without any penalty. Finally, the researcher ensured unbiased release of research finding regardless of the outcomes.

CHAPTER FOUR

RESULTS, PRESENTATIONS AND INTERPRETATION

4.1 Demographic information

4.1.1 Gender of the respondents

The study results indicated that a majority of the employees in the hotel industry are females 115(58.1%) while the males were 83(41.9%), as indicated in figure 4.1

Figure 4.2: Gender of respondents

Source: Research data (2016)

4.1.2 Age of the respondents

Most of the respondents 64(32.3%) aged 36-45 years, 31(15.7%) aged between 18-25, 38(19.2%) aged 26- 35 years, 53(26.8%) aged 46-55 years while a smaller proportion 12(4.1%) aged above 55 years (see figure 4.2).

Figure 4.3: Age of the respondents

Source: Research data (2016)

4.1.3 Number of years in the organization

The researcher sought to know the number of years the respondents have worked with the organization. From the response, few respondents (4) have worked for less than 6 months, 27 (13.6%) have worked for between 1-2 years, and 59 (29.8) have worked for between 2- 4 years while majority 108 (54.5%) have worked for more than 4 years, as illustrated in figure 4.3

Figure 4.4: Years of working in the organization

Source: Research data (2016)

4.1.4 Level of Education

The researcher sought to establish the level of education of the respondents in order to gauge their level of understanding on the subject matter. As shown in Figure 4.4, the majority of the respondents 91(46.0%) had diploma, 49(24.7%) had certificate, 46(23.0%) had bachelors’ degree and 12(6.1%) had masters’ degree.

Figure 4.5: Level of education of the respondents

Source: Research data (2016)

4.1.5 Departmental representation of the respondents

It was important to get the views of the respondents across the hotel department, the distribution of respondents was; 36(18.2%) were from front office, 36(18.2%) were from production, majority 81(40.9%), were from drinks and beverage, 12(6.1%), were from sales and marketing and 33(22.1%) were from house-keeping department (see figure 4.5)

Figure 4.6: Departmental representation

Source: Research data (2016)

4.2 Effect of involvement culture on performance

The first objective of the study was to establish the effect of involvement culture on performance. The respondents were presented with Likert scale questions; SA- strongly agree, A- agree, U- undecided, D-disagree, and SD- strongly disagree, rated 5 to 1 respectively. They were requested to responds by selecting the option that best suits their opinion on the statements given. During analysis, the strongly agree and agree response were summed up as agree, while strongly disagree and disagree were presented as disagree. The findings indicated that the majority of the respondents 166 (83.9%) agreed that organization empower their employees to achieve its overall performance, while 19(9.6%) of the respondents disagreed. Most respondents, 158(79.8%) agreed that the organization build its employee`s around teams, while 17(8.5%) disagreed.

The study established that organizations develop human capabilities at all levels, as indicated by 163(82.3%) of the respondents that agreed and 17(8.5%) disagree. Majority of the respondents 157(79.3%) agreed that they are committed to their organizations, while 18(9.1%) disagreed. It was also found that employees agreed that they own piece of the organization in contributing to the decision-making to success (81.3%). Also, most respondents, 178 (89.9%) agreed that they work cooperatively towards a common goal (see more details on table 4.1)

Table 4. 1: Involvement culture

Statement	Agree	Undecided	Disagree
F	%	F	%	F	%
Our organization empower its employee`s to achieve its overall performance	166	83.9	13	6.6	19	9.6
Our organization build its employee`s around teams	158	79.8	23	11.6	17	8.5
Our organization develop human capabilities at all levels	163	82.3	23	11.6	12	6
We are committed to our organization	157	79.3	16	8.1	25	12.6
We own piece of our organization in contributing to the decision-making to our success.	158	81.3	19	9.6	18	9.1
We work cooperatively towards a common goal	178	89.9	6	3.0	14	7.2

Source: Research data (2016)

4.2.1 Relationship between involvement culture and performance

Correlation analysis was done to establish the relationship between involvement culture and performance. The results indicated a positive significant (r = 0.291, p = 000) relationship between involvement culture and performance (see table 4.2).

Table 4. 2: Relationship between involvement culture and performance

Performance
Performance	Pearson Correlation	1
Sig. (2-tailed)
Involvement culture	Pearson Correlation	.291**
Sig. (2-tailed)	.000
N	198

Source: Research data (2016)

4.3 Effect of consistency culture on performance

The second objective of the study was to determine the effects of consistency culture on performance. Majority 179(90.4%) of the respondents agreed that their behavior is rooted in fostering team work, while 10(5%) agreed. On statement that our leaders and us have common agreements, 173(87.3%) agreed and 5(2.5%) disagreed. Similarly, 178(89.9%) agreed that they share set of values hence creating sense of identity and a clear set of expectations. Similar proportion of the respondents agreed also that they reconcile differences and reach on agreements when critical issues occur (as indicated in table 4.3).

Table 4. 3: Consistency culture

Statement	SA	U	D
F	%	F	%	F	%
Our behavior is rooted in fostering team work	179	90.4	9	4.5	10	5
Our leaders and us we have common agreements	173	87.3	20	10.1	5	2.5
We share set of values hence creating sense of identity and a clear set of expectations.	178	89.9	8	4.0	12	6.1
We reconcile differences and reach on agreements when critical issues occur.	178	89.9	11	5.6	9	4.5

Source: Research data (2016)

4.3.1 Relationship between consistency culture and performance

The study findings revealed a strong positive relationship (r = 0.797, p = 0.000) between consistency culture and performance (as shown in table 4.4).

Table 4. 4: Relationship between consistency culture and performance

Performance
Performance	Pearson Correlation	1
Sig. (2-tailed)
Consistency culture	Pearson Correlation	.797**
Sig. (2-tailed)	.000
N	198

Source: Research data (2016)

4.4 Effect of adaptability culture on performance

The third objective of the study was to establish effects of adaptability culture on performance. As shown in table 4.5, the study established that the organizations are driven by customers, as indicated by 179(90.4%) of the respondents who agreed. Most respondents, 184(92.9%) agreed that they learn from the past mistakes and try hard to take the corrective measures. On statement that we continuously change our working system so as to improve our organization abilities, 184(92.9%) agreed and 2(1.0) disagreed. It was also found that the organizations have good relationship with external environment, as evident by 171(86.3%) of the respondents who agreed.

Table 4.5: Adaptability culture

Statement	Agree	Undecided	Disagree
F	%	F	%	F	%
Our organization is driven by customers because they are our assets.	179	90.4	12	6.1	7	3.5
We learn from our past mistakes and try hard to take the corrective measures	184	92.9	12	6.1	2	1.0
We continuously change our working system so as to improve our organization abilities.	171	86.3	12	6.1	15	7.6
Our organization have good relationship with external environment	182	91.9	8	4.0	8	4.0

Source: Research data (2016)

4.4.1 Relationship between adaptability culture and performance

Correlation analysis results (as shown in table 4.6) indicated a significant relationship (r = 0.496, p = 0.000) between adaptability culture and performance.

Table 4. 6: Relationship between adaptability culture and performance

Performance
Performance	Pearson Correlation	1
Sig. (2-tailed)
N	198
Adaptability culture	Pearson Correlation	.496**
Sig. (2-tailed)	.000
N	198

Source: Research data (2016)

4.5 Effect of mission culture on performance

The fourth objective of the study was to establish effects of mission culture on performance. Majority 183(92.4%) of the respondents agreed that their organizations have clear sense of direction and purpose (see table 4.7). Also, most respondents 169 (85.3%) agreed that they have strategic objectives on how our organization will look like in the future, while 8(4.0%) disagreed. On statement that our organization emphasizes on stability and direction, 189(95.4%) agreed and 4(2.0%) disagreed. The study also established that most organizations participates and contributes towards community welfare, as indicated by a majority of the respondents 189(95.4%) who agreed with the statement.

Table 4. 7: Mission culture

Statement	SA	U	D
F	%	F	%	F	%
We have clear sense of direction and purpose in our organization	183	92.4	10	5.1	5	2.5
We have also strategic objectives on how our organization will look like in the future	169	85.3	21	10.6	8	4.0
Our organization emphasizes on stability and direction	189	95.4	5	2.5	4	2.0
Our organization participates and contributes towards community welfare.	173	87.4	15	7.6	10	5.0

Source: Research data (2016)

4.5.1 Relationship between mission culture and performance

The study also sought to establish the relationship between mission culture and performance. Correlation analysis results indicated a significant relationship between mission culture and performance (r = 0.532, p = 0.000) (as shown in table 4.8).

Table 4. 8: Relationship between mission culture and performance

Performance
Performance	Pearson Correlation	1
Sig. (2-tailed)
N	198
Mission culture	Pearson Correlation	.532**
Sig. (2-tailed)	.000
N	198

Source: Research data (2016)

4.6 Performance

The dependent variable of the study was performance; the respondents were requested to responds to various statements for gauging the performance. Most respondents 192(97%) agreed that the customers are satisfied with their services. Also, 176(88.9%) of the respondents agreed that most of their new customers are referred by past clients, while 6(3.0%) disagreed. Most respondents 184(92.9%) agreed that they get repeat visits from past customers, and 2(1.0%) disagreed (see table 4.9).

The study established that the sales volumes for most organizations increases yearly, as indicated by 166(83.8%) of the respondents who agreed. It was also established that most organization venture into new markets, 188(95.0%) of respondents agreed. Most organizations 178(89.9%) agreed that their business has competitive advantage over the competitors. Most respondents 176(88.9%) agreed that their organization invest in building capacity of their employees, while 6(3.0%) disagreed. On statement that our organization role out, new products in the market regularly, 170(85.8%) agreed and 10(5.1%) disagreed. It was also found out that the organization ensure quality service, as indicated by majority 166(83.8%) of the respondents that agreed with the statement.

Table 4. 9: Performance

Statement	SA	U	D
F	%	F	%	F	%
The customers are satisfied with our services	192	97	6	3.0	0	0.0
Most of our new customers are referred by our past clients	176	88.9	16	8.1	6	3.0
We get repeat visit from our past customers	184	92.9	12	6.1	2	1.0
Our sales volumes increase yearly	166	83.8	22	11.1	10	5.0
Every year our organization venture into new markets	188	95	10	5.0	0	0.0
Our business has competitive advantage over the competitors	178	89.9	14	7.1	6	3.0
Our organization invest in building capacity of their employees	176	88.9	16	8.1	6	3.0
Our organization role out new products in the market regularly	170	85.8	18	9.1	10	5.1
The organization ensure quality service	166	83.8	24	12.1	8	4.0

Source: Research data (2016)

4.7 Regression Analysis

Regression analysis was performed to establish the prediction of independent variables on dependent variable.

4.7.1 Model summary

The model summary indicates the combined effects of the independent variables on the dependent variable. The R square (R2 = 0.697) indicates the independent variables; involvement culture, consistency culture, adaptability culture and mission culture predict 69.7% change on the dependent variable (performance). As shown in table 4.10, the variables considered in this study significantly predict performance. The remaining percentages are predicted by other factors that were not considered in this study.

Table 4. 10: Model Summary

Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.835a	.697	.691	.29545

a. Predictors: (Constant), Mission culture, Involvement culture, Consistency culture, Adaptability culture

Source: Research data (2016)

4.7.2 Analysis of Variance

The ANOVA results (shown in table 4.11) indicated the extent in which the results obtained fit into the model. The study established that the results from the study fit into the model (F = 111.137, p = 0.000).

Table 4. 11: ANOVA b

Model	Sum of Squares	df	Mean Square	F	Sig.
1	Regression	38.805	4	9.701	111.137	.000a
Residual	16.847	193	.087
Total	55.653	197

a. Predictors: (Constant), Mission culture, Involvement culture, Consistency culture, Adaptability culture

b. Dependent Variable: Performance

Source: Research data (2016)

4.7.3 Coefficients

Regression coefficients indicate the prediction of individual independent variable on dependent variable. The results (see table 4.12) indicated that involvement culture does not significantly predict performance (β = 0.041, p = 0.184), consistency culture significantly predict performance (β = 0.43, p = 0.000), adaptability culture significantly predict performance (β = 0.118, p = 0.042), mission culture also significantly predict performance (β = 0.298, p = 0.000). The t test results indicate the strength of prediction of variables. The t test results indicate that consistency culture (t = 15.219) strongly predict performance, followed by mission culture (t = 5.749), then adaptability culture (t = 2.043).

Table 4. 12: Coefficients a

Model	Unstandardized Coefficients	Standardized Coefficients	t	Sig.
B	Std. Error	Beta
1	(Constant)	1.505	.197	7.656	.000
Involvement culture	.041	.031	.056	1.334	.184
Consistency culture	.430	.028	.724	15.219	.000
Adaptability culture	.118	.058	.120	2.043	.042
Mission culture	.298	.052	.307	5.749	.000
a. Dependent Variable: Performance

Source: Research data (2016)

The study regression model was;

Y= β0 + β1X1+ β2X2 + β3X3 + β4X4 + ε

The study result of final model after regression was indicated below;

Y= 1.505 + 0.041 X1 + 0.430 X2 + 0.118 X3 + 0.298 X4 + ε

4.7.4. Test of Hypothesis

The first hypothesis of the study was that involvement culture does not significantly affect performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya. The regression results were β = 0.041; p = 0.184. Since p> 0.05, the null hypothesis was accepted. Hence, involvement culture does not have a statistical significant effect on performance.

The second hypothesis of the study was that consistency culture does not significantly affect performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya. The regression results were β = 0.43; p = 0.000. The null hypothesis was therefore rejected, which means that consistency culture had a statistical significant effect on performance.

The third hypothesis was that there is no significant effect of adaptability culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya. The regression results were β = 0.118; p = 0.042, implying that, adaptability culture significantly affect performance. The null hypothesis was rejected and it was concluded that adaptability culture had a statistical significant effect on performance.

The last hypothesis was that Mission culture does not significantly affect performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya. As revealed by the regression results (β = 0.298; p = 0.000), the null hypothesis was rejected. Implying that mission culture had a statistical significant effect on performance.

Table 4.13: Hypothesis testing summary

Null hypotheses	Level of significance (0.05)	Results of the study
H01: Involvement culture does not significantly affect performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.	p-value = 0.184	Accepted
H02: Consistency culture does not significantly affect performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.	p-value = 0.000	Rejected.
H03: Adaptability culture on performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya.	p-value = 0.042	Rejected.
Ho4: Mission culture does not significantly affect performance of selected 5-star chain affiliated-hotels in Nairobi CBD, Kenya	p-value =0.000	Rejected

Source: Research data (2016)

CHAPTER FIVE

DISCUSSION, CONCLUSIONS AND RECOMMENDATION

5.0 Overview

The discussion of the findings was based on; effect of involvement culture on performance, effect of consistency culture on performance, effect of adaptability culture on performance and effect of mission culture on performance.

5.1 Summary of Findings

The main purpose of this study was to establish the effect of organizational culture on performance in selected five-star chain affiliated hotels in Nairobi CBD, Kenya. The objectives for the study were to determine effect of organizational culture variables in terms of; involvement culture, consistency culture, adaptability culture and mission culture on performance. The results indicated that the customers were satisfied with the products and services of the hotels hence repeat visits by these customers to the same hotels. This is evident by their responses; majority of the customers agreed that; the hotel service is better than my expectation, if they came back they will stay at the hotel, they will also recommend the hotel to those who seek their advice. Also, most employees agreed that they are satisfied with the services offered in the hotels and are happy working for those hotels that is why their turn-over is very low. Additionally, most employees agreed that their market share was very high, and they make a lot of sales in the market, therefore, the growth of the hotels was very high in terms of their increase numbers of the branches

5.1.1 Effect of involvement culture on performance

From the foregoing, the working definition of employee involvement is the extent of employee participation in decision making and implementation in the organizations studied. It refers to the employees’ level of sense of ownership and responsibility to the organizations they work in. It includes the level of empowerment, team orientation and capacity building found in the organizations studied.

Therefore, the findings indicated that most respondents agreed that the organization build its employee’s around teams and also the teams will work towards collective achievements of the organizations’ goals. Moreover, organizations develop human capabilities at all levels, as indicated by most respondents that agreed. In addition, majority of the respondents agreed that they are committed to their organizations and it was also found that employees feel that they own piece of the organization in contributing to the decision-making and success as indicated by majority of the respondents. When the employees feel part of the organization, they become fully committed to the success of the organization. The findings by (McShane & Von Glinow, 2006) showed that employees reduce cost through recommendations to senior executives. Furthermore, most respondents agreed that they work cooperatively towards a common goal. Correlation results indicated a positive significant (r = 0.291, p = 000) relationship between involvement culture and performance, while regression results indicated that involvement culture does not significantly predict performance (β = 0.041, p = 0.184). Therefore, in the implementation of organizational culture strategies, involvement culture is given the least consideration.

5.1.2 Effect of consistency culture on performance

Consistency refers to beliefs, values and expectations, which members of an organization

hold consensually. It also provides the central source of integration, coordination and control. Such organizations tend to have highly committed employees, key central values,

a distinct method of doing business, a tendency to promote from within, and a clear set of dos and don’ts (Denison, 2007). Begley (2000) opined that employees whose values are consistent with the organization’s values are easier to manage. Shared values tend to represent the unseen magnet that pulls employees in the same direction, also foster a common bond and help ensure that organization members pull in the same direction irrespective of their tasks and ranks. Generally, values and ethics represent an important part of organizational life as they guide decisions and actions and also influence emotions and attitudes. Values dictate priorities, preferences and actions, basic values are at the heart of what influences employee’s drives, motivation and behavior (Kleiman, 2001). When the peoples’ values align with organizational values, they tend to be motivated and exhibit behaviors that enable the organization to succeed.

From the research done, majority of the respondents agreed that their behavior is rooted in fostering team work. On statement that we have common agreements with our leaders, most respondents agreed. Similarly, most respondents agreed that they share set of values hence creating sense of identity and a clear set of expectations. Similar proportion of the respondents agreed also that they reconcile differences and reach on agreements when critical issues occur. According to Kleiman (2001) ethical values enable the organization leaders to determine the right thing to do. Ethical behavior is therefore driven by the moral principles which are essentially fundamental values. Generally, values and ethics represent an important part of organizational life as they guide decisions and actions and also influence emotions and attitudes.

The study established a strong positive relationship (r = 0.797, p = 0.000) between consistency culture and organizational performance. Therefore, regression results established that consistency culture significantly predict performance (β = 0.043, p = 0.000).

5.1.3 Effect of adaptability culture on performance

Adaptability is the degree to which an organization has the ability to alter behavior, structures; and systems in order to survive in the wake of the environmental change (Denison, 2007). To survive and make profit, organizations need to adapt continuously to the different levels of environmental uncertainty. Environmental uncertainty represents an important contingency for organization structure and internal behaviors (Daft, 2003).

Organizations need to have the right fit between internal structure and the external environment. The study established that the organizations are driven by customers, as indicated by majority of the respondents who agreed. Most respondents agreed that they learn from the past mistakes and try hard to take the corrective measures. On statement that we continuously change our working system so as to improve our organization abilities. It was also found that the organizations have good relationship with external environment, as evident by most of the respondents who agreed.

Therefore, correlation analysis results indicated a significant relationship (r = 0.496, p = 0.000) between adaptability culture and performance. Similarly, it was established that adaptability culture significantly predict performance (β = 0.118, p = 0.042). According to Loisch (2007), in a highly adaptive organization the satisfaction and fulfillment of customer demands has utmost importance. In order to reach that goal, to stay in the market and be competitive, the organization is willing to adapt to any changes and to try out new ideas. If, for example, the behavior of the competitors in the market changes or a new trend is developing, a highly adaptive organization is able to rise to the new challenge. This behavior favors excellent financial performance in the long run.

5.1.4 Effect of mission culture on performance

Bateman and Snell (1999) defined mission as an organization’s basic purpose and scope of operations. This means that the mission expresses the reason for the existence of the organization and the range of activities it intends to embark upon; what it hopes to achieve. Majority of the respondents agreed that their organizations have clear sense of direction and purpose. Also, most respondents agreed that they have strategic objectives on how our organization will look like in the future. On statement that our organization emphasizes on stability and direction, majority of the respondents agreed. Nickels et al. (2010) describes the organization’s vision, its shared values and beliefs and its reasons for being are very important and need to be mutually agreed upon by workers and management, and they have a powerful impact on the organization.

The study also established that most organizations participates and contributes towards community welfare, as indicated by a majority of the respondents who agreed with the statement. Correlation analysis results indicate a significant relationship between mission culture and performance (r = 0.532, p = 0.000). The study established that mission culture also significantly predict performance (β = 0.298, p = 0.000). The organizations should therefore lay emphasis on strengthening mission culture in order to improve performance.

The study established that organizational culture affects performance, the results agree with Himmer (2013) who studied how organization culture influences performance of Ritz-Carlton hotel. The study established that organization culture significantly influence performance (r = 0.744, p = 0.00). Similar results were found by Ahmad (2012) who conducted a study on impact of organizational culture on performance management practices in Pakistan. The correlation results indicated that the four culture variables that were considered had a positive correlation with performance; consistency culture (r = 0.812, p = 0.000), adaptability culture (r = 0.910, p = 0.000), mission culture (r = 0.733, p = 0.000), and involvement culture (r = 0.736).

5.2 Conclusions

The study sought to establish effect of organizational culture on performance of selected five-star affiliated chain hotels in Nairobi. The independent variable was organizational culture and was defined by these variables; involvement culture, consistency culture, adaptability culture and mission culture, while the dependent variable was performance.

Involvement culture was found to have a positive but weak relationship with performance, in which the regression analysis established that involvement culture does not significantly predict performance. The study indicated that, the organization should ensure that the employees have shared beliefs, values and expectation to ensure realization of performance.

Consistency culture was found to strongly predict performance. Consistency culture can be achieved by employees adopting sense of ownership, responsibility, loyalty and commitment to the organization. This indicates that as the customers visit a particular hotel, they have developed some level of expectation build through the available information channel. When the organization is not consistent in their service, they run a risk of not satisfying the customers.

Hotel industry is a dynamic sector, due to globalization, changing nature of the customers’ taste and preference and culture diversity of the customers. The study established that adaptability culture strongly affects performance of selected five-star affiliated chain hotels in Nairobi. The hotels should therefore employ innovative strategies for penetrating into new markets, increase product varieties to gather for different market segments, conducting market research in order to take corrective measures on the mistakes and maximize on the strengths and opportunities.

Mission culture was also found to be strong predictor of performance. The management sense of direction and their ability to marshal the resources towards attainment of the set targets significantly affects performance. The management should ensure that the employees are aware of the short term and long-term goals of the organizations, and encourage teamwork among employees towards achievements of these goals.

In conclusion, the study established that organizational culture affect performance of selected five-star affiliated chain hotels in Nairobi. The independent variables involvement culture, consistency culture, adaptability culture, and mission culture predict 69.7% of performance.

5.3 Recommendations

The study established that there is a positive correlation between involvement culture and performance. The researcher therefore recommends that, for organizations to achieve the desired performance all the employees in the organization should be involved to drive the performance agenda.

Regression results indicated that consistency culture is a strong predictor of performance, the study recommend that in order of priority in implementation of the organizational culture practices in the hotel sector, they management should strive to achieve consistency in their level of services in order to satisfy customers expectations.

Adaptability culture was found to predict performance, the hotels therefore should strive to adapt to the changing customer tastes and preferences. They should also develop a culture that is responsive to innovations in order to maintain high levels of performance.

The study established that mission culture rank second in predicting performance in the hotel industry. The managers should therefore inculcate in the entire organization sense of direction so that all the employees strive towards common agenda.

Areas for further research

A similar study to be undertaken in the major towns in Kenya to allow for generalization of the findings. Also, future study to look into the effects of other forms of organizational culture; such as competitive culture, innovative culture, bureaucratic culture and community culture on performance that were not considered in this study.

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APPENDICES

APPENDIX 1: COVER LETTER

I am a student Pursuing Master of Philosophy degree in Hotel and Hospitality Management, Moi University. I am conducting a study entitled “Effect of Organizational Culture on Performance in Selected 5-Star Chain Affiliated Hotels in Nairobi CBD, Kenya”. You have been selected as a key respondent for the study.

The research was carried out using questionnaire with the sole objective of identifying the effect of organizational culture on performance. It also examined how hotel employees approach organizational culture in terms of involvement culture, consistency culture, adaptability culture and mission culture and how these variables of culture affect their performance at work. Also, the study proposed the most appropriate measure of culture which assisted in improving organizational culture in hotels in order to improve performance. The information provided through this research allowed hotels to review their current organizational culture management system and inform their future reforms.

Any information you give is purely intended for academic purposes and will be handled with utmost confidentiality. Your contribution, participation and co-operation will be highly appreciated.

Thank you for your assistance.

Yours Faithfully

Chepkoech Rotich Lucy

APPENDIX 2: RESEARCH QUESTIONNAIRE FOR EMPLOYEES

Section A: Demographic Information

Please tick where appropriate:

1. Kindly indicate your gender

(1) Male: (2) Female:

2. Age

(1) 18- 25 yrs (2) 26-35 yrs (3) 36-45 yrs (4) 46-55 yrs

(5) Above 55 yrs

3. How long have you worked in the organization? (Tick the appropriate box)

(1) Less than 6 months (2) 1 to 2 yrs (3) 2 to 4 yrs (4) More than 4 yrs

4. Highest Education level

(1) Primary school (2) High school (3) Diploma

(4) Bachelor`s Degree (5) Master`s Degree (6) PhD Degree

5. Marital status

(1) Single (2) Married (3) Separated (4) Divorced

(5) Widowed

6. Department

(1) Front office (2) Food production	(3) Food & Beverage service

(4) Sales & marketing (5) House keeping

Any other, (please specify) ...............................

Section B: Effects of involvement culture on performance

Kindly indicate your level of agreement with the following statements regarding involvement culture as practiced in your organization using the scale shown below. Key: SA-Strongly Agree (5); A-Agree (4) N-Neutral (3) D- Disagree (2) SD- Strongly Disagree (1).

Statement	5	4	3	2	1
Our organization empower its employee`s
Our organization build its employee`s around teams
Our organization develop human capabilities at all levels
We are committed to our organization
We own piece of our organization in contributing to the decision-making to our success.
We work cooperatively towards a common goal

Kindly indicate your level of agreement with the following statements regarding the effect of involvement culture on performance in this organization using the scale shown below. Key: SA-Strongly Agree (5); A-Agree (4) N-Neutral (3) D- Disagree (2) SD- Strongly Disagree (1).

Statement	5	4	3	2	1
The customers are satisfied with our services
Most of our new customers are referred by our past clients
We get repeat visit from our past customers
Our sales volumes increase yearly
Every year our organization venture into new markets
Our business has competitive advantage over the competitors
Our organization invest in building capacity of their employees
Our organization empower its employees by fostering teamwork among the employees
Our organization role out new products in the market regularly
The organization incur profits every year

Section C: Effect of consistency culture on performance

Kindly indicate your level of agreement with the following statements regarding consistency culture as practiced in your organization using the scale shown below. Key: SA-Strongly Agree (5); A-Agree (4) N-Neutral (3) D- Disagree (2) SD- Strongly Disagree (1).

Statement	5	4	3	2	1
Our behavior is rooted in fostering team work
Our leaders and us we have common agreements
We share set of values hence creating sense of identity and a clear set of expectations.
We reconcile differences and reach on agreements when critical issues occur.

Kindly indicate your level of agreement with the following statements regarding the effect of consistency culture on performance in this organization using the scale shown below. Key: SA-Strongly Agree (5); A-Agree (4) N-Neutral (3) D- Disagree (2) SD- Strongly Disagree (1).

Statement	5	4	3	2	1
The customers are satisfied with our services
Most of our new customers are referred by our past clients
We get repeat visit from our past customers
Our sales volumes increase yearly
Every year our organization venture into new markets
Our business has competitive advantage over the competitors
Our organization invest in building capacity of their employees
Our organization empower its employees by fostering teamwork among the employees
Our organization role out new products in the market regularly
The organization incur profits every year

Section D: Effect of adaptability culture on performance.

Kindly indicate your level of agreement with the following statements regarding adaptability culture as practiced in your organization using the scale shown below. Key: SA-Strongly Agree (5); A-Agree (4) N-Neutral (3) D- Disagree (2) SD- Strongly Disagree (1).

Statement	5	4	3	2	1
Our organization is driven by customers because they are our assets.
We learn from our past mistakes and try hard to take the corrective measures
We continuously change our working system so as to improve our organization abilities.
Our organization have good relationship with external environment

Kindly indicate your level of agreement with the following statements regarding the effect of adaptability culture on performance in this organization using the scale shown below. Key: SA-Strongly Agree (5); A-Agree (4) N-Neutral (3) D- Disagree (2) SD- Strongly Disagree (1).

Statement	5	4	3	2	1
The customers are satisfied with our services
Most of our new customers are referred by our past clients
We get repeat visit from our past customers
Our sales volumes increase yearly
Every year our organization venture into new markets
Our business has competitive advantage over the competitors
Our organization invest in building capacity of their employees
Our organization empower its employees by fostering teamwork among the employees
Our organization role out new products in the market regularly
The organization incur profits every year

Section E: Effect of mission culture on performance.

Kindly indicate your level of agreement with the following statements regarding mission culture as practiced in your organization using the scale shown below. Key: SA-Strongly Agree (5); A-Agree (4) N-Neutral (3) D- Disagree (2) SD- Strongly Disagree (1).

Statement	5	4	3	2	1
We have clear sense of direction and purpose in our organization
We have also strategic objectives on how our organization will look like in the future
Our organization emphasizes on stability and direction
Our organization participates and contributes towards community welfare.

Kindly indicate your level of agreement with the following statements regarding the effect of mission culture on performance in this organization using the scale shown below. Key: SA-Strongly Agree (5); A-Agree (4) N-Neutral (3) D- Disagree (2) SD- Strongly Disagree (1).

Statement	5	4	3	2	1
The customers are satisfied with our services
Most of our new customers are referred by our past clients
We get repeat visit from our past customers
Our sales volumes increase yearly
Every year our organization venture into new markets
Our business has competitive advantage over the competitors
Our organization invest in building capacity of their employees
Our organization empower its employees by fostering teamwork among the employees
Our organization role out new products in the market regularly
The organization incur profits every year

THANK YOU FOR YOUR PARTICIPATION

APPENDIX 3: NAIROBI CBD MAP