Explores the Relationship between Organizational Culture and Organizational Performance in the Bangladeshi Microfinance Sector: Organizational Innovation is a Mediating Factor
Keywords:
Microfinance organizations, organizational culture, innovation, performance, Bangladesh
Abstract
The purpose of this study is to explore the relationship between organizational culture and organizational performance, whereas organizational innovation focuses as a mediating variable in the microfinance organization in Bangladesh. The current study looks at the relationships between organizational culture, organizational performance, and organizational innovation plays mediating factor role. The study used a self-administered questionnaire using a five-point Likert scale. The data were collected from 300 middle and senior managers and considered top fifty microfinance organizations in Bangladesh. The hypotheses and connections between the constructs were empirically tested using structural equation modeling (SEM) along with the partial least squares (PLS) approach. The findings indicate that organizational culture is favorably and significantly related to organizational innovation and firm performance. Organizational innovation has a strong positive impact on organizational performance. Organizational innovation, on the other hand, mediates the indirect relationship between organizational culture and organizational performance. The study's findings indicate that executives and policy-developers should focus on business culture and organizational innovation in addition for increasing efficiency and maintaining a competitive advantage.
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References
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40. Panuwatwanich, K., & Nguyen, T. T. (2017). Influence of organisational culture on total quality management implementation and firm performance: evidence from the Vietnamese construction industry. Management and Production Engineering Review, 8.
41. Pawirosumarto, S., Setyadi, A., & Khumaedi, E. (2017). The influence of organizational culture on the performance of employees at University of Mercu Buana. International Journal of Law and Management, 59(6), 950–963.
42. Petrakis, P. and P. Kostis (2013). "Economic growth and cultural change." The Journal of Socio-Economics 47: 147-157.
43. Prajogo, D. I., & McDermott, C. M. (2011). The relationship between multidimensional organizational culture and performance. International Journal of Operations & Production Management, 31(7), 712-735.
44. Reinartz, W., Haenlein, M., & Henseler, J. (2009). An empirical comparison of the efficacy of covariance-based and variance-based SEM. International Journal of research in Marketing, 26(4), 332-344.
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47. Shanker, R., Bhanugopan, R., Van der Heijden, B. I., & Farrell, M. (2017). Organizational climate for innovation of organization and organizational performance: The mediating effect of innovative work behavior. Journal of Vocational Behavior, 100, 67–77.
48. Sinkula, J. M., Baker, W. E., & Noordewier, T. (1997). A framework for market-based organizational learning: Linking values, knowledge, and behavior. Journal of the academy of Marketing Science, 25(4), 305-318.
49. Strewart, D. (2010). Growing the Corporate Culture. Retrieved from https://www.wachov-ia.com/foundation/v/index.jsp?vgnextoid=ab411f07760aa110VgnV CM1 000004b0d1872.
50. Sung, S. Y., & Choi, J. N. (2014). Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation of organization in organizations. Journal of Organizational Behavior, 35(3), 393–412.
51. Valmohammadi, C. (2017). Customer relationship management: Innovation of organization and performance. International Journal of Innovation of organization Science, 9(4), 374–395.
52. Wang, Q., Zhao, X., & Voss, C. (2016). Customer orientation and innovation of organization: A comparative study of manufacturing and service firms. International Journal of Production Economics, 171, 221–230.
53. Warrick, D. D. (2017). What leaders need to know about organizational culture. Business Horizons, 60(3), 395–404.
54. Yilmaz, C., & Ergun, E. (2008). Organizational culture and firm effectiveness: An examination of relative effects of culture traits and the balanced
55. Zafar, H., Hafeez, M. H., & Mohd Shariff, M. N. (2016). Relationship between market orientation, organizational learning, organizational culture and organizational performance: mediating impact of innovation. South East Asia Journal of Contemporary Business, Economics and Law, 9(2), 40-56.
56. Zain, M., & Kassim, N. M. (2012). The influence of internal environment and continuous improvements on firms’ competitiveness and performance. Procedia-Social and Behavioral Sciences, 65, 26-32.
57. Zhang, S. B., & Liu, A. M. (2006). Organisational culture profiles of construction enterprises in China. Construction Management and Economics, 24(8), 817-828.
58. Zikmund (2003). Business Research Methods.7E.
59. Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2002). Business Research Methods. South.
2. Abuzarqa, R. (2019). The relationship between organizational culture, risk management and organizational performance. Journal Cross Cultural Management, 21(1), 13–20.
3. Acar, A. Z., & Acar, P. (2014). Organizational culture types and their effects on organizational performance in Turkish hospitals. Emerging Markets Journal, 3(3), 18–31.
4. Ahmed, M., & Shafiq, S. (2014). The impact of organizational culture on organizational performance: A case study of telecom sector. Global Journal of Management & Business Research, 14(3), 21–30.
5. Cardoso de Sousa, F., Pellissier, R., & Monteiro, I. P. (2012). Creativity, innovation of organization and collaborative organizations. The International Journal of Organizational Innovation of organization, 5(1), 26–64.
6. Carton, R. B. (2004). Measuring organizational study (Doctoral dissertation, University of Georgia).
7. Chan, L. L., Shaffer, M. A., & Snape, E. (2004). In search of sustained competitive advantage: the impact of organizational culture, competitive strategy and human resource management practices on firm performance. The International Journal of Human Resource Management, 15(1), 17-35.
8. Costello, T., & Prohaska, B. (2013). Trends and Strategies. IT Professional, 15 (1), 62–64.
9. culture hypothesis in an emerging economy. Journal of World Business, 43(3), 290–306.
10. Davies, P. (2006). SAGE Research Methods. Retrieved from Sage DIRECTORY of Social research methods.
11. Denison, D.R., Cho, H.J., & Young, J. (2000), Diagnosing organizational cultures: Validating a model and method, working paper, International Institute for Management Development, University of Michigan, Ann Arbor, MI.
12. Farhangmehr, M., Macaes, M., &Pinho, J. (2006). Market orientation and the synergistic effect of mediating and moderating factors on organizational performance. Paper presented at the 35th EMAC Conference, Athens.
13. Franco, C. E., & Suguna, G. (2017). Corporate social responsibility influences, employee commitment and organizational performance. International Journal of Research-GRANTHAALAYAH, 5(1), 23–27.
14. Gable, R. K., & Wolf, M. B. (2012). Instrument development in the affective domain: Measuring attitudes and values in corporate and school settings (Vol. 36). Springer Science & Business Media.
15. Garavan, T., McCarthy, A., Lai, Y., Murphy, K., Sheehan, M., & Carbery, R. (2021). Training and organizational performance: A meta-analysis of temporal, institutional and organizational context moderators. Human Resource Management Journal, 31(1), 93–119.
16. Glor, E. D. (2013). Do innovative organizations survive longer than noninnovative organizations? Initial evidence from an empirical study of normal organizations. The Innovation of organization Journal, 18(3), 2–35.
17. Han, H. (2012). The relationship among corporate culture, strategic orientation, and financial performance. Cornell Hospitality Quarterly, 53(3), 207-219.
18. Haris, N., Jamaluddin, J., & Usman, E. (2023). The effect of organizational culture, competence and motivation on the SMEs performance in the Covid-19 post pandemic and digital era. Journal of Industrial Engineering & Management Research, 4(1), 29-40.
19. Hofstede, G., Hofstede, G. J., & Minkov, M. (2005). Cultures and organizations: Software of the mind (Vol. 2). Mcgraw-hill.
20. Huang, C. H., & Hou, T. C. T. (2019). Innovation of organization, research and development, and firm profitability in Taiwan: Causality and determinants. International Review of Economics & Finance, 59, 385–394.
21. Huang, K. E., Wu, J. H., Lu, S. Y., & Lin, Y. C. (2016). Innovation of organization and technology creation effects on organizational performance. Journal of Business Research, 69(6), 2187–2192.
22. Imran, M., Ismail, F. B., Hussain, K., Singh, P. K., & Ansari, A. A. (2021). Achieving sustainable organisational performance through employee job satisfaction and organizational culture. Psychology and Education Journal, 58(1), 3089–3108.
23. Jensen, M. B., Johnson, B., Lorenz, E., & Lundvall, B. Å. (2007). Forms of knowledge and modes of innovation of organization. Research Policy, 5(36), 680–693.
24. Jiménez-Jiménez, D., & Sanz-Valle, R. (2011). Innovation of organization, organizational learning, and performance. Journal of Business Research, 64(4), 408–417
25. Johannessen, J.A., & Skaalsvik, H. (2015). The development of innovation of organizations in organizations: the role of creative energy fields. Kybernetes, 44(1), 89 – 106
26. Kadek Suryani, N., & Foeh, J. E. H. J. (2019). Impact of organizational justice on organizational performance in the hospitality industry. Journal of Engineering and Applied Sciences, 14(12), 4124–4131.
27. Kahn, K. B. (2018). Understanding innovation of organization. Business Horizons, 61(3), 453–460.
28. Latif, M. S., Ahmad, M., Qasim, M., Mushtaq, M., Ferdoos, A., & Naeem, H. (2013). Impact of employee's job satisfaction on organizational performance. European Journal of Business and Management, 5 (5), 166–171.
29. Leal-Rodríguez, A. L., Ariza-Montes, J. A., Roldán, J. L., & Leal-Millán, A. G. (2014). Absorptive capacity, innovation of organization and cultural barriers: A conditional mediation model. Journal of Business Research, 67(5), 763-768.
30. Leal-Rodríguez, A. L., Ariza-Montes, J. A., Roldán, J. L., & Leal-Millán, A. G. (2014). Absorptive capacity, innovation of organization and cultural barriers: A conditional mediation model. Journal of Business Research, 67(5), 763-768.
31. Lee, Y. J., & Huang, C. L. (2012). The relationships between balanced scorecard, intellectual capital, organizational commitment and organizational performance: Verifying a mediated moderation model. American Journal of Business & Management, 1(3), 140–153.
32. Lei, M., & Lomax, R. G. (2005). The effect of varying degrees of nonnormality in structural equation modeling. Structural equation modeling, 12(1), 1-27.
33. Liu, F.L. (2013). Study on China's Single-Star Hotel Business Situation and Development Strategy. Research Journal of Applied Sciences, Engineering and Technology, 5, 2908-2913.
34. manufacturing firms. The International Journal of Advanced Manufacturing Technology, 64(5–8), 1073–1085.
35. Microcredit Regulatory Authority (2022). Microfinance in Bangladesh, Annual Statistics
36. Naranjo-Valencia, J. C., Jiménez-Jiménez, D., & Sanz-Valle, R. (2016). Studying the links between organizational culture, innovation of organization, and performance in Spanish companies. Revista Latinoamericana de Psicología, 48(1), 30–41.
37. Nelson, D. L., & Quick, J. C. (2011). Understanding Organizational Behaviour. Belmont: Cengage southwestern.
38. Nguyen, V. T., Siengthai, S., Swierczek, F., & Bamel, U. K. (2019). The effects of organizational culture and commitment on employee innovation of organization: Evidence from Vietnam's I.T. industry. Journal of Asia Business Studies, 13(4), 719–742.
39. Noruzy, A., Dalfard, V. M., Azhdari, B., Nazari-Shirkouhi, S., & Rezazadeh, A. (2013). Relations between transformational leadership, organizational learning, knowledge management, organizational innovation of organization, and organizational performance: An empirical investigation of
40. Panuwatwanich, K., & Nguyen, T. T. (2017). Influence of organisational culture on total quality management implementation and firm performance: evidence from the Vietnamese construction industry. Management and Production Engineering Review, 8.
41. Pawirosumarto, S., Setyadi, A., & Khumaedi, E. (2017). The influence of organizational culture on the performance of employees at University of Mercu Buana. International Journal of Law and Management, 59(6), 950–963.
42. Petrakis, P. and P. Kostis (2013). "Economic growth and cultural change." The Journal of Socio-Economics 47: 147-157.
43. Prajogo, D. I., & McDermott, C. M. (2011). The relationship between multidimensional organizational culture and performance. International Journal of Operations & Production Management, 31(7), 712-735.
44. Reinartz, W., Haenlein, M., & Henseler, J. (2009). An empirical comparison of the efficacy of covariance-based and variance-based SEM. International Journal of research in Marketing, 26(4), 332-344.
45. Ruiz-Jiménez, J. M., & del Mar Fuentes-Fuentes, M. (2013). Knowledge combination, innovation of organization, organizational performance in technology firms. Industrial Management & Data Systems, 113(4), 523–540.
46. Shahzad, F., Luqman, R. A., Khan, A. R., & Shabbir, A. L. (2012). Impact of organizational culture on organizational performance: An overview. Interdisciplinary Journal of Contemporary Research in Business, 3(9), 975–985.
47. Shanker, R., Bhanugopan, R., Van der Heijden, B. I., & Farrell, M. (2017). Organizational climate for innovation of organization and organizational performance: The mediating effect of innovative work behavior. Journal of Vocational Behavior, 100, 67–77.
48. Sinkula, J. M., Baker, W. E., & Noordewier, T. (1997). A framework for market-based organizational learning: Linking values, knowledge, and behavior. Journal of the academy of Marketing Science, 25(4), 305-318.
49. Strewart, D. (2010). Growing the Corporate Culture. Retrieved from https://www.wachov-ia.com/foundation/v/index.jsp?vgnextoid=ab411f07760aa110VgnV CM1 000004b0d1872.
50. Sung, S. Y., & Choi, J. N. (2014). Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation of organization in organizations. Journal of Organizational Behavior, 35(3), 393–412.
51. Valmohammadi, C. (2017). Customer relationship management: Innovation of organization and performance. International Journal of Innovation of organization Science, 9(4), 374–395.
52. Wang, Q., Zhao, X., & Voss, C. (2016). Customer orientation and innovation of organization: A comparative study of manufacturing and service firms. International Journal of Production Economics, 171, 221–230.
53. Warrick, D. D. (2017). What leaders need to know about organizational culture. Business Horizons, 60(3), 395–404.
54. Yilmaz, C., & Ergun, E. (2008). Organizational culture and firm effectiveness: An examination of relative effects of culture traits and the balanced
55. Zafar, H., Hafeez, M. H., & Mohd Shariff, M. N. (2016). Relationship between market orientation, organizational learning, organizational culture and organizational performance: mediating impact of innovation. South East Asia Journal of Contemporary Business, Economics and Law, 9(2), 40-56.
56. Zain, M., & Kassim, N. M. (2012). The influence of internal environment and continuous improvements on firms’ competitiveness and performance. Procedia-Social and Behavioral Sciences, 65, 26-32.
57. Zhang, S. B., & Liu, A. M. (2006). Organisational culture profiles of construction enterprises in China. Construction Management and Economics, 24(8), 817-828.
58. Zikmund (2003). Business Research Methods.7E.
59. Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2002). Business Research Methods. South.
Published
2024-03-22
How to Cite
Akhter, P., & Chaity, N. S. (2024). Explores the Relationship between Organizational Culture and Organizational Performance in the Bangladeshi Microfinance Sector: Organizational Innovation is a Mediating Factor. European Scientific Journal, ESJ, 27, 434. Retrieved from https://eujournal.org/index.php/esj/article/view/17931
Section
ESI Preprints
Copyright (c) 2024 Parul Akhter, Naznin Sultana Chaity
This work is licensed under a Creative Commons Attribution 4.0 International License.
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