Effect of corporate culture on organisational performance of star-rated hotels in Ghana

Abstract

Although studies on the relationship between corporate culture and organisational performance abound in other jurisdictions, the focus has been on the composite effect of corporate culture on performance, with little attention given to the predictive value of the corporate culture types on organisational performance. Using the four major corporate culture types (clan, hierarchy, market, and adhocracy) on both financial and non-financial performance of star-rated hotels in Ghana, the study hypothesized that each corporate culture type will exert a positive effect on both financial and non-financial performance. Out of a population of 640 star-rated hotels, 248 hotels were involved in the study, using the multi-stage sampling technique. Questionnaires were administered to managers of the selected hotels. In all, a total of 178 responses were retrieved and analyzed using descriptive statistics (such as mean and standard deviation) and partial least squares in structural equation modeling. Findings of the study indicate that market culture was the most prominent predictor of profitability, return on investment, growth in profit, and sales volume, although it recorded a weak effect size. Adhocracy and hierarchy cultures were also the most prominent in predicting trust, improving supplier relations, improving service quality delivery, and customer retention. The study recommends, for the promotion of market, hierarchy and adhocracy corporate cultures in order to improve both financial and non-financial organisational performance of star-rated hotels in Ghana.