Effect of organizational culture on performance of selected five-star chain-affiliated hotels in Nairobi Central Business District, Kenya.

Abstract

Investors in the hotel industry continue to face challenges of aligning people with different cultures towards a common set of goals due to the dynamic nature of the industry. It is widely recognized, particularly in the contemporary discussions of performance that managers and other hotel practitioners have to develop a healthy and a common organizational culture if they are to perform effectively. However, few studies focusing exclusively on the effect of organizational culture on performance in hotels in Kenya have been done. Hence, the purpose of this study was to investigate the effect of organizational culture on the performance of selected 5-star chain-affiliated hotels in Nairobi Central Business District (CBD). The specific objectives were to establish the effect of involvement culture, consistency culture, adaptability culture and mission culture on performance. The study was based on Denison theory of organizational culture and employed both descriptive and explanatory research designs. The target population comprised of 450 employees. Purposive sampling was used to select CBD hotels, Census sampling was used to select four 5-star chain-affiliated hotels. In all the hotels selected, simple random sampling techniques were used to select the respondents. The sample size was determined using Yamane formula which gave a sample size of 211 respondents (employees). Questionnaires were used to collect primary data. The data collected was analyzed using both descriptive (frequencies and percentages) and inferential statistics. To test the effect of organizational culture on performance, correlation and regression analysis were performed. The results of correlation analysis revealed that involvement culture had a positive but weak relationship with performance (r = 0.291). Additionally, consistency culture, mission culture and adaptability culture were found to have a positive and strong to moderate relationship with performance (r = 0.797, r = 0.532 and r = 0.496 respectively). The results of regression analysis revealed that involvement culture, consistency culture, adaptability culture, and mission culture predicted 69.7% (R2= 0.697) of performance in hotels. This indicates that the variables considered in this study significantly predict performance. However, the remaining percentage (approximately 30%) is predicted by other factors that were not considered in this study. The findings of this study imply that as customers visit a particular hotel, they develop some level of expectation build through the available information channel and if the organization is not consistent in their service, they run a risk of not satisfying the customers. Additionally, the management sense of direction and their ability to marshal the resources towards the attainment of the set targets. In conclusion, consistency culture was found to have the highest effect on performance followed by mission culture then adaptability culture respectively, but involvement culture had the least effect on performance. Therefore, the study recommends that to improve hotels’ performance; hotel practitioners should endeavor to implement the organizational culture in the following order of priority; consistency culture, mission culture, adaptability culture and involvement culture.