Role of Corporate Culture on the Performance of Commercial State Corporations in Kenya

Abstract

The concept of corporate culture has received increasing attention in recent years both from academics and practitioners. In the process of international economic integration, corporate culture is the sharp weapon for enterprises to obtain the competitive advantage and managerial effectiveness. On the other hand, the performance of State Corporations in Kenya is one of key areas that need urgent address. Most of them face stiff challenges, some of which have their background from government interference, lack of right personnel, conflicting interests between organizational objectives and individual needs and lack of proper statutes of total quality management. Performance of State Corporations in Kenya has been unsatisfactory. There has been concerted efforts and clear communication from the government that Commercial State Corporations need to do more to improve performance. Despite several efforts by the government to restructure the State Corporations to enhance performance, the corporations have over the years performed dismally. The purpose of this study was to assess the role of corporate culture on organisational performance of State Corporations in Kenya. Specifically the study set to assess the role of involvement culture in the performance of commercial state corporations, establish the role of consistency culture in the performance of commercial state corporations, find out whether adaptability culture plays a role in performance of commercial state corporations, identify how mission culture affects performance of commercial state corporations, and investigate the moderating effect of CEO values on the relationship between corporate culture and performance of commercial state corporations. The measures for this study were corporate culture and organizational performance. The study is basically a replication of the Denison’s Model of Culture but it also integrates other models. This was a descriptive census study where the population was drawn from all the 34 purely commercial state corporations in Kenya. Respondents were selected from various departments including finance, human resources, marketing operations and corporate affairs (public relations). Data was collected from 70 respondents giving a response rate of 68%. Structured questionnaires and performance reports were used in eliciting data. The research adopted Denison’s questionnaire as one of the data collection instrument complimented by other secondary sources. After the pilot testing and all necessary modifications, the questionnaires were subjected to reliability and validity tests and then administered directly to the respondents. Descriptive analysis, factor analysis, Pearson correlation, analysis of variance (ANOVA) and regression were carried out to analyse data using SPSS. The results show that the role of corporate culture appears significant in performance of commercial state corporations. The results also indicate that corporate culture could improve performance of state corporations. Implications of the findings for Kenyan commercial state corporations and limitation are also discussed in this study. The study contributes to the body of knowledge in that organizations will gain practical insights into the determinants of corporate culture thereby enriching their knowledge how to increase work engagement and future researchers may concentrate on the development of a common tool of measurement for corporate culture in public sector as well as in private sector.