Organizational culture and organizational performance: does job satisfaction mediate the relationship?

Abstract

AbstractIn today’s fast-paced business environment, several factors, including organizational culture, play a crucial role in determining organizational performance. However, the effect of these factors varies depending on the introduction of intervening variables in the model. The objective of the study, therefore, is to examine the effect of organizational culture on organizational performance when the two variables are mediated by job satisfaction. Researchers used a simple random sampling technique to collect data from 204 respondents found at the head office of the Cooperative Bank of Oromia in Ethiopia. The researchers used Structural Equation Modeling (SEM) to analyze the data and discovered a significant indirect effect of organizational culture on organizational performance. For the direct unaggregated effect analysis, the results also revealed that involvement and adaptability (from the cultural dimension) and relationships with supervisors, physical working conditions, and pay rate (from the job-related dimensions) have significant effects on the performance of the organization. Based on the findings, managers are suggested to consider the indirect effect of culture via job satisfaction while they make decisions.

Keywords

• Organizational culture
• job satisfaction
• performance
• mediation effect
• balanced score card
• Denison’s model