THE EFFECT OF ORGANIZATIONAL CULTURE ON EMPLOYEES PERFORMANCE: THE CASE OF ETHIOPIAN ROADS AUTHORITY

Abstract

The objective of this study was to examine the effect of organizational culture and employees’ performance. The researcher used explanatory research design with quantitative research approach in order to meet the objective of the study. The target population for this study was professional employees of Ethiopian Road Authority located in Head Office. Out of which 296 respondents were selected using Stratified Random Sampling Technique. A structured and self-administered questionnaire was developed based on Denison’s organizational culture dimensions (involvement, consistency, adaptability and mission) and employees’ performance, and distributed to the target respondents. A total of 272 questionnaires were used for this study and the data were analyzed using descriptive and inferential statistics. Pearson Correlation analysis shows that there was statistically significant positive relationship between all the four organizational dimensions (i.e. involvement, consistency, adaptability and mission) and employees’ performance. Moreover, involvement had stronger positive and statistically significant correlation with employees’ performance than the other dimensions. Relatively, adaptability had less positive correlation with employees’ performance. The result of regression Analysis revealed that 75.8% of the variation of employees’ performance can be predicted by the independent variables i.e. involvement, consistency, adaptability and mission. In addition, the two organization culture dimensions (i.e. involvement and mission) had significant contribution to employees’ performance at 95% confidence level. However, adaptability and consistency had a positive but statistically insignificant contribution towards employees’ performance. Accordingly maintaining the organizational culture with significant contribution towards performance, the organization should also strengthen its organizational learning culture because it is a prerequisite for adaptability strategy. Therefore, the organization should encourage and empower its employees so as to make them more innovative and to develop an appetite for taking risks and to proactively respond to the changing needs of their customers, is recommended by the researcher.