IMPACT OF ORGANISATIONAL CULTURE AND

STRATEGIC MANAGEMENT ON ORGANISATIONAL

PERFORMANCE
Nkem O. Obaji1, Daniel O Cross2, Dele Olaolu3
1
Department of Business Administration, Nile University of Nigeria, Abuja, Nigeria
2
Department of Business Administration, Nile University of Nigeria, Abuja, Nigeria
3
Department of Banking and Finance, Nasarawa State University, Keffi, Nigeria

ABSTRACT
The paper focuses on the Impact of organisational culture (OC) and strategic management (SM) on
organisational performance. The specific objectives of this paper are to examine the relationship between
organisational culture and organisational performance, the relationship between strategic management and
organisational performance. 155 sample sizes were drawn from a population of 259 employees of Diamond
bank. Using the Raosoft sample size calculator, out of this, 139 respondents returned their questionnaire. This
means a response rate of 89.7 %. Statistical Product and Service Solutions (SPSS) was used to analyse
questionnaires. Multiple Regression Analysis was employed for the data analysis. Results revealed that there
was a significant positive relationship between OC and organisational performance. Also, the relationship
between strategic management was positively and significantly related to organisational performance. It was
recommended that a longitudinal design in future needs to be considered to measure the theoretical constructs
at different points in time to confirm the findings of the present study.
Keywords: Organisational Culture, Organisational Performance and Strategic Management,

I. INTRODUCTION
Organisational culture is a system of shared assumptions, values, and beliefs, which governs how people behave
in organizations. These shared values have a solid impact on the people in the organization and order how they
dress, act, and accomplish their jobs. Kunda [1] described culture as a popular explanatory concept frequently
used to describe a company, a rationale for people’s behaviour, as a guideline for action, a cause for
condemnation or praise, or a quality that makes a company ‘what it is’. Organizational Culture can be defined as
‘the collective programming of the mind’ that distinguishes the members of one organization from another [2].
Culture leads the way entities and groups in an organisation relate to one another and with parties outside it. It is
the foremost competitive advantage of high-performance organisations.
Organisational culture is a vital element of organizational performance and a basis of sustainable competitive
advantage. Kenny [3] asserts that organizational culture is an important component to unite numerous company
cultures in the corporate group structure.

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Organizational culture comprises the attitudes, experiences, beliefs, and values of the organization, acquired
through social learning, that control the way individuals and groups in the organization interact with one another
and with parties outside it. The absence of effective organizational culture is a principal reason for poor
performance and productivity in the corporate group [4]. While studying organisational performance, strategic
management also comes up as an antecedent of firm performance. Dincer [5] described strategic management as
the whole set of decisions and activities for developing and implementing effective strategies and assessing and
controlling them. Typically, the key advantage of strategic management has been to assist organizations
articulate improved strategies using a more systematic, logical, and rational approach to strategic choice [6].
Strategy is the whole set of activities that emerges because of cogent planning [7]. Typically, strategies can be
construed as a set of hypotheses of causes and effects [8]. Strategic management consists of research, review,
assessment and selection efforts required for planning strategies, putting into action any kind of precautions
within the organization for these strategies to be realised and all activities related with controlling the works
performed [9].

II STATEMENT OF THE PROBLEM

Several research studies in Nigeria have attempted to address the issues of firm performance which have been
studied in piece meal manner. They have addressed the different components of constructs individually. For
instance, Adebayo et al. (2014) did an empirical analysis research on good Corporate Governance and
Organisational Performance; Mc Forson [10] researched on the impact of motivation on the productivity of
employees at GTBank Ghana; Latif, Ahmad [11] studied the Impact of employee’s job satisfaction on
organizational performance; Gagnon and Dragon [12] studied the impact of technology on organizational
performance.
As numerous factors have been identified as antecedents of organisational performance. One of the major
predictors of organisational performance is related to strategic management (SM). SM related factor has been an
important consideration in comprehending the factors that lead to successful organisational performance since
the strategies employed by management can shape the performance outcome of the firm.
Other studies mentioned above have been conducted on individual basis. While several research studies have
focused on individual factors such as corporate governance, employee motivation, employee job satisfaction,
technology, there is a shortage of scholarly work on organisational culture and strategic management constructs
combined together in one study.

III. OBJECTIVES OF THE STUDY

The objectives are as follows:
a. To examine the relationship between organisational culture and organisational performance.
b. To examine the relationship between strategic management and organisational performance.

IV RESEARCH QUESTIONS
For achieving the above-mentioned objectives, important research questions were identified. These include the
following:

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a. Is there a relationship between good organisational culture and organisational performance?
b. Does strategic management have a positive effect on organisational performance?

V.RESEARCH HYPOTHESES
a. Organisational culture will be positively and significantly related to organisational performance
b. Strategic management will be positively and significantly related to organisational performance

VI. LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT

1 Theoretical Framework
The appeal of Organizational Culture Theory has been far and wide, resulting in a heuristic theory. A heuristic is
a mental shortcut that allows people to solve problems and make judgments quickly and efficiently. For
instance, it has been used to frame research examining Muslim employees [13] law enforcement officers [14],
and pregnant employees [15]. Even more relevant to us in higher education, the theory has been used to study
the stories of undergraduate students and their perceptions of "fitting in" at a college or university [16]. The
approach is also useful because much of the information from the theory (e.g., symbols, stories, rituals) has
direct relevance to many different types of organizations and their employees. Because the theorists' work is
based on real organizations with real employees, the researchers have made the theory more useful and
practical.
2. Organisational Culture Theories
The theoretical review will cover the below theories related to performance and organisation culture. This study
is based on the Schein's theory of organisational culture. Schein's model of organizational culture is principally
comprising of three domains: artefacts, basic underlying assumptions and espoused values. In analysing
cultures, it is imperative to identify that artefacts are easy to observe but difficult to interpret and that espoused
beliefs and values may only reflect rationalizations or aspirations. To understand a group’s culture, one must
attempt to get at its shared basic assumptions and one must understand the learning process by which such basic
assumptions come to be.
3. Strategic Management Theories
Following David [17] and Hashim [18], among the common strategic management theories applicable are the
profit-maximizing and competition-based theory, the resource-based theory and contingency theory.
Firstly, the profit-maximizing and competition-based theory was based on the notion that business organization
key objective is to make the most of long term profit and developing sustainable competitive advantage over
competitive rivals in the external market place. This theory is rooted on the industrial-organization (I/O)
perspective which views the organization external market positioning as the critical factor for achieving and
sustaining competitive advantage. Porter [19] asserted that the traditional I/O perspective offered strategic
management a systematic model for assessing competition within an industry.
Secondly, the resource-based view, which stems from the principle that the source of firm’s competitive
advantage lies in their internal resources, as opposed to their positioning in the external environment. That is
rather than simply evaluating environmental opportunities and threats in conducting business, competitive
advantage depends on the unique resources and capabilities that a firm possesses Barney [20]. The resource-

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based view of the firm predicts that certain types of resources owned and controlled by firms have the potential
and promise to generate competitive advantage and eventually superior firm performance Barney [21].
The third and last theory that underpins this study is the contingency theory that draws the idea that there is no
one or single best way or approach to manage organizations. Organizations should then develop managerial
strategy based on the situation and condition they are experiencing. Therefore, in this study, besides the systems
perspective, contingency approach and the other main strategic management theories mentioned above, the
resource-based theory or view (RBV) of the firm’s competitive advantage will be the underlying theoretical
foundation applied and fundamental basis of the variables and their ensuring relationships that are being studied.
This is because of the nature of the Nigeria business environment that exposes all firms to high cost of doing
business. Because of this, this study will focus especially on the internal attributes (i.e. resources, capabilities
and systems) of the organization towards attaining competitive advantage. Hence, it justifies the adoption of
RBV as the main research theory.
4. Conceptual Framework
The framework of this study is a mix of concepts and phenomena. Shkedi [22] stated that conceptual framework
assists to offer a viewpoint or understanding of the phenomena under study. The framework is a critical
component for the development of research questions, selecting a data collection instrument, creating interview
questions, and determining the data analysis technique. In this study, the conceptual framework is based on two
important variables that are assumed to enhance the organisational performance in Nigeria. They include: good
organisational culture as well as strategic management factors. The conceptual framework represents a corporate
mindset to meet, examine, and develop concepts of relationships to help enhance employee and organizational
performance, strategic management, and building a corporate oriented culture.

Organisational Culture

Organisational Performance

Strategic Management

Figure 2.1: Conceptual Framework

In line with the theoretical explanations and earlier empirical studies, hypotheses for this study have been
advanced for empirical testing and validation. The current study has three constructs, namely, organisational
culture and strategic management as independent variables; and organisational performance as the dependent
variable. Consequently, in this study, two hypotheses have been advanced for testing and validation, which were
concerned with relationships among the study variables.

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5. Organisational Culture and Organisational Performance
Organizational culture is one of the dominant force and act as an influence in attainment of goals and objectives
of the organization. A reasonable organizational culture produces a motivation for high ideals of performance
and workers are always enthusiastic to contribute their best in the organization. To meet the organizational
objectives and achieve competitive advantages, all organizations are thriving to employ extremely achieving
individuals. On the other hand, individuals need supportive organizational culture to assist them reach individual
objectives.
Petty, Haugtvedt [23] conducted a study amongst 3977 employees across a United States company to assess
whether there was a relationship between organizational culture and organizational performance. The results of
this study indicated that organizational performance was linked to organizational culture. The authors affirm that
there was a strong link evident in the correlation between teamwork and performance. This correlation indicated
that teamwork, being the major aspect of culture, was significantly related to performance. The authors also
contend that such behaviours as helping others, sharing of information and resources, and working as a team
seemed to enhance performance in the organization studied.
The study revealed four factors that differentiated financially successful companies from less successful
companies. These four factors were: successful companies had greater horizontal coordination; they possessed
more affective internal communications; they encouraged their employees to air conflicts and criticisms openly;
and they showed greater concern for developing people.
Hence, the following hypothesis is formulated:
H1: Organisational culture will be significantly related to organisational performance
6. Strategic Management and Organisational Performance
Gichunge [24] examined the effect of formal strategic management on organizational performance of
microfinance institutions in Nairobi, Kenya. It examined the extent to which formal strategic management is
adopted by medium sized microfinance institutions in Kenya and investigated the effect of various
administrative/legal factors on the extent to which formal strategic management are adopted. It also determined
the relationship between level of competition and adoption of formal strategic management and investigated the
effect of administrative/legal factors on organizational performance.
In addition, Strategic management practices adopted by an organization affect performance as supported by
theoretical and empirical evidence. Lawal, Wang [25] found evidence that adoption of strategic management
techniques improved the performance and relative standing of organization that are with different societal and
political issues. Adoption of sound strategic management practices in terms of organisational structure, resource
allocation, corporate culture, leadership, managing conflict and resistance to change leads to high organization
performance.
Therefore, this study hypothesizes the following:
H2: Strategic Management will be positively and significantly related to organisational performance

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VII. RESEARCH METHODOLOGY
a. Research Population
The entire group that a researcher is interested in, the target population for this study is made up of workers of
Diamond Bank PLC in Abuja.
b. Sample Size
Sample size of 155 was drawn from a population of 259 employees of Diamond bank. using the Raosoft sample
size calculator. Out of this, 139 respondents returned their questionnaire. This means a response rate of 89.7 %
which is a very high response rate and good for the analysis.
c. Data Analysis
Statistical Product and Service Solutions (SPSS) was used to analyse closed and open-ended questions. First,
data collected from the questionnaires were edited, coded and keyed into the SPSS. Descriptive statistics in the
form of frequencies, percentages such as histogram as well as bar chart were used in the data analysis.
Multiple regression analysis was conducted to determine the relationship between variables. The relationship
between the independent and dependent variables was explained by;
P= β0+β1X1+β2X2 +α
Where;
P is Organization performance.
X1 is Organisational Culture.
X2 is Strategic Management.
Β0 = is the Constant
β1 = Coefficient of explanatory variable (OC)
β2 = Coefficient of explanatory variable (SM)
α is the error term
d. Data Analysis
Presented below are the outputs of the data analysis and their interpretations.
Reliability Statistics

Cronbach's Alpha N of Items

.786 3

Cronbach’s alpha coefficient and composite reliability coefficient are the most commonly used
estimators of the internal consistency reliability of an instrument in organisational research.
Cronbach’s alpha coefficient greater than 0.5 suggest that the data is reliable, hence with the value of
0.78, the data is thus reliable and fit for the analysis.

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 Correlations
ORGANISATIO
NAL
PERFORMANC STRATEGIC ORGANISATIO
E MANAGMENT NAL CULTURE
ORGANISATIONAL Pearson Correlation 1 .725** .508**
PERFORMANCE Sig. (2-tailed) .000 .000
N 139 139 139
**
STRATEGIC Pearson Correlation .725 1 .447**
MANAGMENT Sig. (2-tailed) .000 .000
N 139 139 139
** **
ORGANISATIONAL Pearson Correlation .508 .447 1
CULTURE Sig. (2-tailed) .000 .000
N 139 139 139

Model Summaryb
Std. Error of the
Model R R Square Adjusted R Square Estimate Durbin-Watson
a
1 .753 .567 .561 2.316 2.223
a. Predictors: (Constant), ORGANISATIONAL CULTURE, STRATEGIC MANAGMENT
b. Dependent Variable: ORGANISATIONAL PERFORMANCE

ANOVAa

Model Sum of Squares Df Mean Square F Sig.

1 Regression 957.446 2 478.723 89.225 .000b
Residual 729.691 136 5.365
Total 1687.137 138
a. Dependent Variable: ORGANISATIONAL PERFORMANCE
b. Predictors: (Constant), ORGANISATIONAL CULTURE, STRATEGIC MANAGMENT

Coefficientsa

Unstandardized Standardized Collinearity

Coefficients Coefficients T Sig. Correlations Statistics
Std.
Model B Error Beta Zero-order Partial Part Tolerance VIF
1 (Constant) 7.700 1.256 6.130 .000

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 STRATEGIC
.483 .049 .622 9.870 .000 .725 .646 .557 .801 1.249
MANAGMENT
ORGANISATIONA
.213 .058 .230 3.646 .000 .508 .298 .206 .801 1.249
L CULTURE
a. Dependent Variable: ORGANISATIONAL PERFORMANCE

Collinearity Diagnosticsa
Variance Proportions
STRATEGIC ORGANISATIONA
Model Dimension Eigenvalue Condition Index (Constant) MANAGMENT L CULTURE
1 1 2.965 1.000 .00 .00 .00
2 .019 12.492 .11 .36 .97
3 .016 13.599 .89 .64 .03
a. Dependent Variable: ORGANISATIONAL PERFORMANCE

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 14.76 28.59 23.81 2.634 139
Residual -6.316 7.033 .000 2.299 139
Std. Predicted Value -3.436 1.815 .000 1.000 139
Std. Residual -2.727 3.036 .000 .993 139
a. Dependent Variable: ORGANISATIONAL PERFORMANCE

VIII. INTERPRETATION
The results above indicate a correlation value of 0.44 between organisational culture and strategic management,
which shows a moderate relationship between the independent variables, and VIF of 1.2 and Tolerance 0.80 thus
fulfilling the assumption of no Multicollinearity [26]. All the four regression assumptions or conditions
including multicollinearity were satisfied; hence there is no violation of assumptions.
The Adjusted R-Squared shows a value of 0.561 indicating that 56.1% of the variability in the dependent
variable is explained by the independent variables (Organisational culture and Strategic management); the
adjusted R-squared was used due to the small sample size rather than the R-squared [27]. Durbin Watson (DW)
is used to test for multicollinearity between the independent variables. DW value lies between 1.5 and 2.5
suggests no multi-collinearity problem between the explanatory variables. With the DW value of study being
2.23, it indicates no multicollinearity issue, thus fulfilling the assumption of no multicollinearity.
To test for the effect of the two independent variables (OC, SM) on dependent variable (OP), the significance
value from the ANOVA table (Sig = 0.00, this means p < 0.05); thus, suggesting significant effect. With these, it
is seen that organisational culture and strategic management have serious effect on organisational performance,
hence very significant. Furthermore, it is discovered from the coefficient table that the individual contributions

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of the independent variables to the dependent are as follows (SM = 0.48, OC = 0.21), suggesting that
Strategic Management contributed 48% and Organisational Culture 21% to the dependent variable
(Organisational Performance) respectively. The model deduced from the result is here presented;
OP  7.7  0.48SM  0.21OC

IX. DISCUSSION

a. OC and Organisational Performance

Kohtamäki, Thorgren [28] assert that organizational culture was an essential component of organizational
performance and a source of sustainable competitive advantage. In addition, Childress [29] identified OC as a
dimension that can influence organisational performance. To buttress the position of the prior scholars, as
organizational culture is one of the overriding force and act as an influence in achievement of goals and
objectives of the organization. A realistic organisational culture produces a motivation for high ideals of
performance and workers are always keen to contribute their best in the organization.

As presented by Childress [29] as well as Kohtamäki, Thorgren [28], OC increases the likelihood of
organisational performance. Hence, this study hypothesised that OC is significantly related to incubator
performance. To attain this end, a research hypothesis was formulated and tested using the OLS path modelling.

Firstly, consistent with Hypothesis 1, result revealed a significant positive relationship between OC and
organisational performance. From the analysis in hypothesis 1, the finding is in support and it reveals that
organisational culture for Diamond PLC have significant mean effect on performance of the company. This
means that OC is significant in achieving enhanced productivity and performance of the company. With high R-
squared value (0.56) suggesting that 56 % of performance was accounted for OP.

Secondly, the current study also hypothesised that strategic management will be significantly related to
organisational performance (Hypothesis 2). As anticipated, the findings revealed a significant positive
relationship between SM and organisational performance. The result demonstrated that this construct is
significant and related to organisational performance. The significance of SM confirms that good strategy
employed by an organisation generally is the much-needed resources the corporate firms need to achieve high
performance.

X. LIMITATIONS AND RECOMMENDATIONS FOR FUTURE RESEARCH

Although this study has provided support for the hypothesised relationships between the independent and
dependent variables, the findings should be interpreted with consideration to the study’s limitations. First, the
current study adopts a cross-sectional design which does not allow causal inferences to be made from the

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population. Consequently, a longitudinal design in future needs to be considered to measure the theoretical
constructs at different points in time to confirm the findings of the present study.
Secondly, the current study offers quite limited generalisability as it engrossed mostly on banking sector
especially the Diamond Bank in Abuja. Consequently, additional work is needed to include majority of other
financial institutions in general and other commercial banks in particular, to generalise the findings.
Finally, the research model could only explain 56% of the total variance in organisational performance, which
means there are other latent variables that could significantly explain the variance in organisational
performance. In other words, the remaining 44% of the variance for organisational performance could be
explained by other factors. Consequently, future research is needed to consider other possible factors that could
increase organisational performance in Nigeria.

XI. CONCLUSION
In closing, it is on record that this research work intends to examine the essential factors that have an impact on
organisational performance in Nigeria. By so doing, a set of variables from the literature on organisational
performance has been studied using a quantitative study. The quantitative study discovered that some of the
essential factors have an impact on organisational performance. This analytical methodology allowed a new
depth of understanding of the variables and their impacts on organisational performance in Nigeria.
In sum, the current study has offered further evidence to the growing body of knowledge. Results from this
project work offer support to the key theoretical propositions. The current study has successfully answered all
the research questions and objectives despite some of its limitations. While there have been, many studies
examining the primary elements of organisational performance, however, the present study addressed the
theoretical gap by incorporating strategic management as a significant independent variable.
Robust corporate cultures show that employees are on the same wavelength and embrace similar beliefs and
ethical values. When these beliefs and ethical values align with business objectives, they can attest to be
effective in building teams since affinity and trust rapidly arises. Companies should also ensure that they align
corporate culture with performance management systems. When culture and management systems are not
aligned, management must redirect them so that employee behaviour results in the achievement of
organizational goals. Additionally, organisations must structure their recruitment processes to attract and
engage incumbents with the same beliefs and values that constitute the organization’s culture. This ensures the
new employee’s assimilation to the company and further strengthens corporate culture. The bonds that the
teams build help them evade conflicts and concentrate on task completion. Furthermore, strong corporate
cultures assuage communication of roles and responsibilities to all individuals. Employees know what is
expected of them, how management assesses their performance and what forms of rewards are obtainable.
On the practical implication of the study, as culture is considered as one and only different resource and is vital
for an organisation to sustain its competitive advantage. Defining the organisation's culture type will allow
managers to implement, among the numerous knowledge sharing events, the ones that would be more
appropriate and relevant to the organisational culture.

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In a real-world understanding, it has been observed that there is a lack of research that enables researchers to
understand the key elements vital to the organisational process, and specifically the impact of these factors on
organisational performance in Nigeria.
In addition, on limitations of the current study, several future research directions were drawn. In conclusion, the
present study has added valuable theoretical, practical, and methodological implications to the growing body of
knowledge in the field of organisational performance and strategic management.

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