ORGANIZATIONAL CULTURE AND CORPORATE SURVIVAL (A SURVEY OF SELECTED OIL SERVICE FIRM IN ONNE)

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Abstract

This study is examined the relationship between organizational culture and corporate survival. The aim of the study is to examine the relationship between cultural value and corporate survival in selected oil service firms in Onne, to examine the relationship between cultural norms and corporate survival in selected oil service firms in Onne and to examine the relationship between cultural practices and corporate   survival selected in oil service firms in Onne. In the course of carrying out the work, the primary and secondary source of data methods were adopted. The primary source has to do with structured and unstructured questionnaires, personal interviews, and observations; while the secondary data were sourced from text books, journals, interviews, internet materials, corporate magazines etc. The population of the is 108, the sample size of one eighty five (85) respondents was drawn from using the Yaro Yemen formula. The research question were analysed with the simple percentage while the research hypothese where analysed with chi-square. In our findings, it is revealed that there is a relationship between organizational culture and corporate survival. It is there recommended that organizations should adopt to culture that encourages a mechanistic structure should modify its structures to organic structure to foster innovation as this will improve product and develop new markets, in cases where organization culture must be changed, employees must first          of all be notified and made to learn the modification of the old culture as this          will affect their performance, organization culture must be binding on all members and staff of the    company as this will encourage uniformity among members of the organization and these will enhance commitment and group efficiency and Initiating cross functional teams and increasing employee responsibility and authority should be encouraged as it will be adaptive to improve employee job performance.

Table of Contents

Title Page    i

Declaration iii

Certification         iv

Dedication  v

Acknowledgements        v

Abstract      vii

Table of Contents viii

List of Tables       x

List of Figures      xi

CHAPTER 1        1

INTRODUCTION         1

1.1   Background of the Study 1

1.2   Statement of the Problem          4

1.3   Objectives of the Study   4

1.4   Research Questions         5

1.5   Research Hypotheses      5

1.6   Significance of the Study 5

1.7   Scope and Delimitations of the Study          6

1.8   Limitation of the study    6

1.9   Definition of Related Terms      7

CHAPTER 2        9

LITERATURE REVIEW        9

2.1     Conceptual Framework 9

2.1.1  Concept of Organization Culture      9

2.1.2  Dimensions of Organizational Culture       12

2.1.3  Concept of Corporate Survival        12

2.1.4  Measures of corporate survival        13

2.1.5  Organizational Culture and Employee Performance      15

2.2     Theoretical Framework 16

2.2.1  Consistency Theory      17

2.2.2  Involvement Theory      17

2.2.3  Adaptability Theory      17

2.2.4  Mission Theory   18

2.3     Empirical Framework   18

CHAPTER 3        21

RESEARCH METHODOLOGY      21

3.1   Research Design    21

3.2   Population of the Study  21

3.3   Sample Size Determination       22

3.4   Sampling Techniques      23

3.5   Source and Method of Data Collection        23

3.6   Methods of Data Collection      24

3.7   Questionnaire Design      24

3.8   Data Analytical Techniques      24

3.9   Reliability and Validity   25

CHAPTER 4        27

DATA PRESENTATION AND ANALYSIS       27

4.1 Data Collection and Presentation         27

4.2 Data Analysis 28

4.3 Hypotheses Testing 32

4.4 Discussion of Findings      35

CHAPTER 5        37

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS       37

5.1  Summary      37

5.2  Conclusions  38

5.3  Recommendations  38

REFERENCES    40

Appendix i 41

Appendix ii 42

List of Tables

Table 4.1: Questionnaire Administration and Retrieval 27

4.2 Data Analysis 28

Table 4.2: showing the age of respondents 28

Table 4.3: Showing the Sex of Respondents        28

Table 4.4: Showing the Educational Qualification of the Respondents      29

Table 4.5: Showing the Marital Status of Respondents 29

Table 4.6: Cultural value enhance corporate survival oil service firms in  30

Table 4.7: Cultural norm promote corporate survival oil service firms in Onne. 30

Table 4.8: cultural practices influence corporate survival oil service firms in Onne      31

List of Figures

Fig. 2.1: A Conceptual Framework on showing the relationship between Organizational Culture and corporate survival………………………………9

CHAPTER 1

INTRODUCTION

          1.1 Background of the Study

The existence, survival, growth and stability of any corporate body is highly dependent on the efficiency and effectiveness of its management. This is measured by the ability of the organization’s management to combine all the necessary material for optimal and efficient actualization of their set objectives within the stipulated time. In any organization, cash forms the life wire, which determines to a large-extent, its growth, existence and survival among other competing firms. As a result, it becomes imperative for the management of any organization to give a close attention to the management of working capital if they want to stand the test of time. The management decides the best proportion of its investment on both fixed and current assets and finally her liability level to enable improvement and correction of imbalances in the liquidity position of the firm. Most  organizations  believe  in  profitability,  but  it  is  generally  accepted  that  liquidity  is more  important  for  survival  and  growth.  The  reason  behind  this  premise  is  that  most organizations  make  profit  but  do  not  posses  enough  or  adequate,  liquid  asset  to  off-set current obligations. However, this inability to make payment at when due may definitely have serious consequences on the organization financial growth. Weak liquidity makes it unsafe  and  unsound  for  the  survival  of  the  company  but  all  it  takes  is  efficient  and effective management. Efficiency means doing something with little or no wastage especially in terms of time, energy and money. In other words, it is the achievement of great task with less than the proportionate factor input. According to Okafor and Udu (2002, p. 84), “Efficiency is the ability to work well without wasting time and resources.” Also, Horby (2000) stated that efficiency is doing something well and thoroughly with no waste of time, money or energy. This is to say that the achievement outcome is far greater than the resources put in to achieve the defined outcome. Efficient working capital  management  involves  the mix  of  the  current  assets,  current  liabilities  and  fixed  assets  of  the  business  in  order  to meet up with the day to day need of the business in question or in order words to keep the business  going  with  less  waste  especially  in  terms  of  time, energy  and  goodwill. Nwankwo (2005)  opined that efficient  working  capital  is  based  on the decision of the management  of  the  company  in  determining the volume  of  current  assets  over  current liabilities  that  the  company  is  prepared  to  have  in  the  company’s balance  sheet.  Ibenta (2005, p.  406)  further defined working capital management as “all  aspects  of  the administration of both current assets and current liabilities. It is the firms’ investment in short term assets cash, short term securities, account receivable and inventories.

Corporate survival has been the most interesting topics for organizations over the years. Organizations exist to survive in the midst of environmental factors that tend to encroach on business performance. Organizations attempt to maintain the existing state of affairs, but essentially the larger part of their efforts is tilted toward survival (Mindy, 1998).   The competition in the industry is getting stronger and firms are adopting different strategies to be competitive in the industry. Surviving is the global struggle to meet with increasing demand on firms in the market place has seen many researchers and academicians having a resort to pay attention to the individual employees in the organization since innovation in product and services are brought about by these individuals.

Organizational culture as defined by Uttal (1983) is a system of shared values (what is important) and beliefs (how things work) that interact with a company’s people, organization structures, and control systems to produce behavioral norms (the way we do things around here). Similarly, Sun (2008) defines organizational culture as the “set of theory” of important values, beliefs, and understandings that members share in common,  which help managers to make decision and arrange activities of the organization.

Organizational Culture Gordon and DiTomaso (1992) define the organizational culture as the shared and constant beliefs and values that are improved within a company across periods. Kim, Lee, and Yu (2004) define the corporate cultur as “the shared values and norms of the organization’s members” (p.341). Additionally, Ravasi and Schultz (2006) define the organizational culture as a group of shared mental suppositions that direct interpretation and business in companies by determining the proper behavior for different situations.  Specifically, it is “influencing the firm’s orientation towards the responsible treatment of stakeholders” (Galbreath, 2010 p.511).The organizational culture is briefly defined as the main suppositions about the world and the values that direct life in companies (Schneider, Ehrhart, & Macey, 2013). According to Kalyar, Rafi, and Kalyar (2013), the  organization’s  culture refers to  the  values,  beliefs  and  suppositions  that  the organization’s members perceive of the company. Although  there  is  no  standard  definition  for the organizational  culture,  many  scholars mention  that  the  organizational  culture  is  something  that  is  “holistic,  historically  determined by founders  or  leaders.  It  is related to things  that  anthropologists  study  like  rituals  and  symbols, socially  constructed  (created  and preserved  by  the  group  of  people  who  together  form  the organization),  which  is,  soft,  and  difficult  to  change” (Abu-Jarad, Yusof, & Nikbin, 2010  p.34).

1.2   Statement of the Problem

For an organization, employee is its basic constituent units, and culture is the common value and code of conduct shared by the employees. It could give can provide employees with a relaxed working environment with harmonious interpersonal relationships in order to give full play to their ability. A corporate culture allows employees to have a sense of mission and feel responsibility, and work towards the overall goal of the company. The competitiveness of enterprises is not only reflected in the technology, but also in their corporate culture. A positive organizational culture can promote healthy development of an enterprise, and actively mobilize the performance of employees, and make them work with more enthusiasm. Move over, it may improve production efficiency. In short, the benefits of a positive organizational culture are self evident. The priority of an enterprise is to increase the loyalty of its customer base. Therefore, a good corporate image must be established. In other words, a good corporate image brings good economic returns, and a good corporate image is dependent on good organizational culture.

1.3   Objectives of the Study

The main objectives of this study are to examine the relationship between organizational culture and corporate survival in oil servicing firms in Onne. The Specific objectives are as follows:

1.       To examine the relationship between cultural value and corporate survival in    selected oil service firms in Onne.

2.       To examine the relationship between cultural norms and corporate survival      in selected oil service firms in Onne.

3.       To examine the relationship between cultural practices and corporate      survival selected in oil service firms in Onne.

1.4  Research Questions

The following research questions are posed to guide this study as follows:

1.       To what extent does cultural value enhance corporate survival in selected oil     service firms in Onne?

2.       To what extent does cultural norm promote corporate survival in selected oil    service firms in Onne?

3.       To what extent does cultural practices influence corporate survival in `    selected oil service firms in Onne?

1.5  Research Hypotheses

The following hypotheses were formulated to guide the study:

Ho1:  There is no significant relationship between cultural value and corporate             survival in selected oil service firms in Onne.

Ho2:  There is no significant relationship between cultural norm and corporate                    

           Survival in selected oil service firms in Onne.

Ho3: There is no significant relationship between cultural practices and   corporate survival in selected oil service firms in Onne.

1.6     Significance of the Study

This study is important because, it will expose students, and other academicians to the concept and principles of organizational culture and its effect on organizational variables.

This study will aid business managers and other corporate bodies to come to terms with organizational cultural influences and the best possible way to align them to the best interest of the organization.

It will also be useful to other researchers, students and the general public.

1.7   Scope and Delimitations of the Study

The scope of this study is delimited into the followings:

1.       Content Scope: The specific areas of corporate survival the study investigated include; Increased Sales, Increased capital size and Innovation. Whereas the areas of organizational culture includes value, norm and practices.

2.       Geographical scope: This study covers an examination of strategic contributions of organizational culture on the corporate survival in selected oil servicing firms in Onne.

3.       Unit of Analysis: This is a macro study because it is interested in ascertaining the effectiveness of an organization in this direction.

1.8 Limitation of the study

In carrying out this research work, the researcher was constraint by lot of factors which include but not limited to the following:

Time Constraint: The time frame provision for this study was short.

Financial Constraint: Usually, a study of this nature involved some level of expenditure; therefore, finance was also a limiting factor.

1.9 Definition of Related Terms

INCREASED CAPITAL Size:  Capital size is the total amount of stock, both common and preferred, that a public company has the authorization to issue. Capital size is the number of shares that can ever be outstanding or held by shareholders. 

INCREASED SALES: The amount by which the average sales volume of a company’s products or services has grown, typically from year to year. Sales Growth is the parameter which is used to measure the performance of the sales team to increase the revenue over a pre-determined period of time.

INNOVATION: As the successful introduction of a better thing or method. It is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services.

Norms: Values and norms (sometimes moral values and norms) is a term used to describe the basic pillars of the organizational culture. These are unwritten rules and principles of behavior – some level of awareness of corporate culture. These are facts that are in the organization and considered relevant and important.

          Organization Culture: It is literally described by many researchers in diverse studies for various measures. Culture is critical to understanding any society or group. Through the process of socialization individuals bring into groups. Groups have the capacity to shape, influence, and determine group members’ outlooks, viewpoints, outputs, attitudes and indeed behaviors.

Practices: Organizational Practices are located immediately outside of the Core Culture. They are not the elements of Core Culture; they are the behaviors that convert ideals to actions which keep the culture alive.

          Values: Every organization has a set of values, whether or not they are written down. The values guide the perspective of the organization as well as its actions. Writing down a set of commonly-held values can help an organization define its culture and beliefs.

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