Interrelations between Organizational Culture, Innovation and Employee Performance: Evidence from Banking Sector of Pakistan

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Date: Dec. 31, 2012
From: Pakistan Journal of Social Sciences(Vol. 32, Issue 2)
Publisher: Knowledge Bylanes
Document Type: Report
Length: 5,777 words
Lexile Measure: 1390L

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Byline: Masood ul Hassan, Sadia Shaukat, Muhammad Shakeel and Muhammad Imran

Abstract

The core purpose of this research study is to reveal the effects of organizational culture on the employee performance via organizational innovation in banks operating in Pakistan. A quantitative survey technique was adopted to serve the purpose. Data of 167 respondents including mostly managers, sales officers and front desk employees were collected through an adapted survey questionnaire. The results expressed that components of organizational culture i.e. organization mission and concern for employees and trust have direct and strong influence on productivity at work while core values and organizational learning and empowerment influence productivity at work indirectly via organizational innovation.

Hence, the results have affirmed most of hypotheses presumed in the study that culture has an impact on productivity at work whether directly or through organizational innovation. Managerial implications along with limitations and future research directions have also been discussed.

Keywords: Banking; Employment; Organizational Culture; Pakistan; Productivity

I. Introduction

Banking sector of Pakistan is playing a key role in the growth of Pakistani economy. As on 31st December 2010, number of branch network of 44 public sector commercial, specialized, domestic private, and Islamic Pakistani and foreign banks has also been increased to 9,772 branches all over the Pakistan (http://www.sbp.org.pk).

This high number of branch network of bank branches shows high competition among Pakistani and Foreign Banks. To remain in this competition, banks have to show high organizational performance which is unimaginable to attain without enhanced employee performance. To attain high organizational performance through improved employee performance, innovation plays a cardinal role (Cooper and Kleinschmidt, 1987; Damanpour and Evan, 1984; Damanpour and Goplakrishnan, 2001).

Likewise, modern organizations are knowledge based confronting scarce resources, dynamic business environment, intense competition and changing customer demands for better quality; hence, their success depends upon creativity, innovation and discovery (Jansen, Van Den Bosch, and Volberda, 2006; Roberts and Amit, 2003). These demands can be met not only by responding the changes but also by bringing innovative changes in organizations (Read, 1996).

This is because innovative firms are more flexible in terms of adopting changes, creating new opportunities and responding faster to changes (Drucker, 1985; Miles and Snow, 1978). The core of the innovation is newness of an idea that in turn improves organizational performance (CamisA3n-Zornoza, Lapiedra-AlcamA, Segarra-Cipres, and Boronat-Navarro, 2004). It can help to generate such kind of rare, inimitable and valuable resources that are costly to copy (Barney, 1991; Wernerfelt, 1984).

This scenario of significance of innovation in today's changing environment has led to increased interest among researchers to gain a better understanding of how to improve the capacity to innovate (Damanpour, 1987, 1996; Koc and Ceylan, 2007; Mayondo and Farrell, 2003). Many determinants of innovation have been identified by number of studies. Among these many determinants of innovation, the role of information technology, firm strategy, organizational design, organizational learning, organizational knowledge and organizational culture are leading ones (Baker and Sinkula, 1999; Cohen and Levinthal, 1990; Coombs and Hull, 1998; Darroch and McNaugton, 2002;...

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Gale Document Number: GALE|A364069382