The Effect of Organizational Culture on Customer Satisfaction

The Case of Yeka Sub City Small Tax Payers’ Office, Ethiopia


Master's Thesis, 2019

100 Pages, Grade: A


Excerpt

Table of Contents

Acknowledgement

Acronym

Abstract

Table of Contents

List of Tables

List of Figures

CHAPTER ONE
1. Introduction
1.1. Background of the Study
1.2. Statement of the Problem
1.3. Objective of the Study
1.3.1. General Objective
1.3.2. Specific Objectives
1.4. Basic Research Questions
1.5. Hypothesis
1.6. Significance of the study
1.7. Scope of theStudy
1.8. Limitation of the study
1.9. Description of the study area

CHAPTER TWO
2. Review of Related Literature
2.1. Concepts and Definitions of Organizational Culture
2.1.1. Organizational Culture Development
2.1.2. Dimensions of Organizational Culture
2.1.3. Levels of Organizational Culture
2.1.4. Functions of Organizational Culture
2.2. The Concept of Service and Service Delivery
2.2.1. Public Service Delivery
2.2.2. Measuring Public Service Delivery
2.3. The Conceptof Customer Satisfaction
2.3.1. Determinants of Customer Satisfactions
2.3.2. The Concept of Service Quality
2.4. Organizational Culture and Customer Satisfaction
2.5. Review of EmpiricalLiterature

CHAPTER THREE
3. Research Design and Methodology
3.1. Introductions
3.2. Operational definition of key terms
3.3. Research Design
3.4. Data types and sources
3.5. Population, sampling procedure and sample size
3.5.1. Population
3.5.2. Sampling procedure and sample size
3.6. Method data collection
3.7. Data analysis and interpretation
3.8. Structure of the research

CHAPTER FOUR
4. DATA PRESENTATION, DISCUSSION AND ANALYSIS
4.1. Introduction
4.2. Response rate
4.3. Demographic data
4.4. Result interpretation and discussion
4.4.1. Result interpretation and discussion of Customers’ Responses
4.4.1.1. Reliability Tests
4.4.1.2. Effects of Organizational culture
4.4.2. Considered priorities of customer needs in the processes of service provisions
4.4.3. Over- all Customers’ Satisfaction
4.4.4. Grand mean
4.4.5. Correlation analysis
4.4.6. Regression Analysis
4.4.7. Result interpretation and discussion of Employee Responses
4.4.1.2. Demography of Employees
4.4.7.2. Reliability Testing for Major Dimensions
4.4.7.3. Correlation analysis
4.4.7.4. Regressions analysis

CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATION
5.1. Introduction
5.2. Summary of Findings
5.3 Conclusion
5.4 Recommendation

References

Acknowledgement

First and for most I would like to thank God for being with me in every step of my activities with this work. I am very glad to express my sincere gratitude and appreciation to Mr. HundeKebede for his invaluable, constructive and enduring comments and professional advice from the inception to the completion of this thesis.

I would also like to acknowledge the contribution of all employees, officials and customers of the Yeka Sub City Small Tax Payers’ Office for their cooperation by filling up the questionnaires and providing valuable information for completing my work.

My specials thank also goes to my wife YeshiAlelgnand my children for their priceless role of continuous blessing and moral support in all my deeds, for their encouragement and motivation throughout my life.

I would like to acknowledge the contribution of my friend GizachewTilahun for his holistic support and priceless contribution, co-operation and assistance throughout my work.

I also owed special debt to my friends and relatives who have been with me throughout my work by providing both material and moral support. Specifically, I would like to deeply thank;DagnachewHulumyfer, for his support.

Last, but not least my heartfelt appreciation goes to W/t SosnaAbaba for her beautifying the layout of the paper and neat print.

AbebeAnimut

Acronym

FDRE- Federal Democratic Republic of Ethiopia

SPSS – Statistical Package for Social Science

BPR Business Process Engineering

BSC Balanced Sort cord

Abstract

Organizational culture plays significant role in the overall performance of a particular organization. It becomes an increasingly important factor for organizational survival in the current dynamic environment. Customer satisfaction is one measurement of organizations performance based on the quality of services provided. This study tries to examine the effect of organizational culture on customer satisfaction in Yeka Sub City Small Tax Payers’ Office. The employed semi-structured questionnaire as data gathering tools for the sample population and non-participant observation was also employed as data gathering tool to supplement questionnaire. The total sample size was 249 out of which 232 questionnaires were completed and included in the analysis part. The responses of respondents were analyzed using descriptive statistics and narration. SPSS software was used in analyzing the collected data. The results of analysis showed mixed responses. The correlation coefficients show that all independent variable were found to be positively correlated with customer satisfaction though there is a discrepancy in their strength. Moreover, multiple regression analysis was used to determine the effect of all independent variables on dependent variable, customer satisfaction. And accordingly, customer satisfaction is found to be primarily predicted by higher level of reliability, tangibility, team orientation, responsiveness, customer orientation and stability of organization. Mean while, the employee satisfaction is mostly predicted by higher level of stability, out come orientation and innovation and risk taking. Generally, it was found that when 65 % of observed variability in customer satisfaction can be explained by independent variables included in the study, 54 % of observed variability in employee satisfaction is found to be explained by change in independent variables included in the study organization.

Key terms: organizational culture, service quality, customer satisfaction

List of Tables

Table 1: Number of Distributed and Returned Questionnaires

Table 2; Demographic distribution of customer

Table 3: Reliability tests for major dimensions of the study

Table 4: Impression of customers about customer orientation dimension

Table 5: Outlook of customers about team orientations of organizational activities

Table 6: Impression of customer respondents about outcome orientation of organization

Table 7: impression of customers on responsiveness of employs of the organization

Table 8; Customers’ impression on the empathy of members of the organization

Table 10 the impression about Reliability Dimension of Service Quality

Table 10: Impression about assurance dimension of Service quality

Table 11: Impression about tangibility dimension of services quality

Table 12: Grand mean computation

Table 13; correlation analysis of major dimensions

Table 14: Multiple Regression Models Coefficientsa

Table 15: Model Summary

Table 16: Back Grounds of Employee Respondents

Table 17; Reliability Tests for Major Study Dimensions

Table 18: Employees’ impression of people orientation dimension

Table 19: employees’ perception of team orientation dimension

Table 20: Impression of employees on outcome orientation dimension

Table 21: Pearson’s correlation coefficient of major dimensions

Table 22: Regression analysis of major study dimensions

Table 23: Model Summary

List of Figures

Chart 1: outlooks of customers on stability dimension of organizational culture

Chart 2 : Impression of customers about their overall level of satisfaction

Chart 3: Impression of employees on stability dimension of organizational culture

Chart 4: Outlook of employees in change orientation of the organization

Chart 5: Employees expression of their satisfaction

CHAPTER ONE

1. Introduction

The basic aspects that can give essential information on the general nature of the study are presented in this part. To this end, background of the study, statement of the problem, objectives of the study, research questions, significance of the study, scope of the study, limitation of the study, and organization of the study are covered.

1.1. Background of the Study

Organization is a collectivity with a relatively identifiable boundary, a normative order, and ranks of authority, communications system, and membership coordinating systems. This collectivity exists on a relatively continuous basis in an environment and engages in activities that are usually related to set of goals (Hall, 1999). These activities have outcomes for organizational members, the organization itself, and for the society. The essence of organizations revolves around the development of shared meanings, beliefs, values and assumptions that guide and are reinforced by organizational behavior. These shared meanings, values and assumptions represent organizational culture.

Different definitions have been given for the term organizational culture so far. Schein (1990) defined organizational culture as “a pattern of basic assumptions invented, discovered and developed by a given group as it learns to cope with its problems of external adaptation and internal integration that has worked well enough to be considered valid and is therefore taught to new members as the correct way to perceive, think about, and feel in relation to those problems. Organizational culture is viewed as the unique pattern of shared values, norms, attitudes, beliefs, rituals, socialization, expectations, collective programming of the mind and assumptions of the employees in the organization that shape the socialization activities, language, symbols, rites and ceremonies of a group of people and which distinguish the members of one organization from another (Hellriegel et al. cited in Nakamya , 2011 and Davis and Newstrom, 1989). The authors also indicated as “culture may exist across an entire organization, or it may refer to the environment within a single division, branch, plant or department”.

The above definitions clearly show as organizational culture is a commonly shared practice in a particular organization in its daily operations which may affect organizational activities either positively or negatively since it is shared both by employees and the public at large. Hence, the complete knowledge and awareness of organizational culture will help to improve the ability to examine the behavior of organization which assists to manage and lead the organizational activities. In connection with this, O’Reilly (1991) as cited in Nakamya (2011) stated the importance of having clarity on what is meant by the term organizational culture, if it is to be analyzed and managed, even though the concept is difficult to define.

Different literatures have identified different dimensions and types of organizational cultures those are inherent to both public and private. The absence and presences of all these have different effects on organizational efficiency and effectiveness in the processes of delivering the intended goods and services based on their degree of intensity. According to the study of Greenberg and Brown (2003), organizational culture influences an individual and organizational process by generating strong pressures on employees to go along with and to think and act in a way that is consistent with the existing organizational culture. The influences can either lead to enhance employee commitment and promote organizational success or hinder its effectiveness (Schein, 1990). This is the clear indications of strong relationships between organizational culture and organizational performances in the processes of providing the intended goods and services for the targeted customers. Whenever the performances of organizations are affected, it is true that the fillings of customers will be affected since the final resting points of organizational activities are on the shoulders of the customers. This influence is mostly significant in service rendering organizations because of the underlying characteristics of service.

Service can be defined as any intangible act or performance that one party offers to another that does not result in the ownership of anything (Kotler& Keller, 2009). Service as overall activities that is undertaken to meet social needs is highly sensitive to the prevailing organizational culture. This influence is mostly high in the case of public sector because of its behavior.

Services have different characteristics which determine the effectiveness and efficiency of the concerned organizations which finally determines the customer satisfactions. Understanding these characteristics is a determinant factor for the successfulness of any service providing organization in handling their customer interest. In response to this, all service providing agents are expected to investigate the status of their services in order to meet the pre-determined objectives since organizational activities are highly influenced by environmental factors either from the internal or external.

Considering the significance of service sectors, Ethiopian government introduced civil services reform which contains five basic pillars under the coordination of the then Ministry of Capacity Building in the year 2001 (Tesfaye, 2010). Accordingly, the government recognized the importance of improving the performance of public service delivery and the creation of accountable and responsible civil service institutions that would support the development endeavors in the country few years after the downfall of the military government (ibid).

Service delivery is one among these five pillars of the reform with the overall intensions of improving public sectors performance in the processes of delivering service for the intended customers. Six projects were there under the umbrella of Service delivery Sub- Program [which includes] development of service delivery policy, grievance handling directives, award system in the civil service, methods integration of related public service (center links), and preparation of technical directives for improving civil service delivery and service delivery standard directives (Fekadu, 2013).However, the implementation status of the aforementioned sub-programs is below the expectation. This attributes to many factors like too much focus on technical aspects, rather than changing attitude of the workforce, impulsive start of implementation, and lack of committed political leadership (ibid).

As it is clearly stated in article 50/1&4 and article 78/1 of the FDRE constitution of 1995, the country has the three tier system that involves the federal, regional and local levels of government, and each sphere is separated with its own powers and functions. It also made clear references and justifications in favor of the decentralization process, pledging to grant adequate power to the lowest units of government. In this manner Sub City took the positions of local governance from which basic goods and services are provided for the concerned portion of society in collaboration with other stakeholders through the decentralized manners which is expected to facilitate better service provisions for society. Accordingly, each and every Sub City has its own administrative wings and sectors to accomplish the intended objectives as per its necessities.

Despite the government efforts to improve service delivery through decentralized approach, there are still different challenges standing as inhibiting factors to the performance of sub city administrations. In doing so, sub cities, activities will not escape from the influencing factors like service related organizational culture in the processes of service provisions considering culture as how things are done around here as the definition given by Williams, Dobson and Walters(1994). These influences will finally affect the organizational performances and feelings of the customers towards the ongoing services. So this paper has tried to assess the effect of organizational culture on customer satisfaction in Yeka Sub City Small Tax Payers Office.

1.2. Statement of the Problem

Organizational culture remains a major determinant factor for organizational efficiency and effectiveness in carrying out their activities. According to empirical findings in various literatures, organizational culture plays a great role on organizational effectiveness, employee commitment and performance, provisions of qualified service, organizational productivity, job satisfactions, etc. For instance, Sokro (2012) undertook the analysis of the existing relationship between organizational culture, motivation and performance and believes that organizational culture can either encourage an employee to give out his best for the sake of organizational goals or it can discourage or demoralize people which can be dangerous for the performance of the organization. In his study, it is indicated that the effects of organizational culture is a common practice in every organization since each and every organization has unique organizational culture though there can be differences by the degree of its influences.

Likewise Yamsul et al. (2013) studied the influence of motivation and organization culture on work satisfaction and organizational commitment. The results of this study stated that there is a positive and strong relationship between organizational culture values and employees’ responses. The study further indicated that organizational culture as values perceived by organization members significantly determines organizations function and identity in holding organizational culture congruence with other variable like motivation, work satisfaction and organizational commitment.

On their studies Helou and Viitala (2007) affirmed that organizational culture can be seen as the total sum of all needed organizational activities that aim at fulfilling organizational purposes and concluded that culture followed by organization highly influences motivational practices and finally the overall performances of organization. From this one can deduce that organizational performance is influenced either positively or negatively by the prevailing organizational culture and the same is true for customer satisfaction. This is supported by the study of Syauta et al. (2012) in Indonesia which clearly shows the negative consequences of non-conductive organizational culture on employee performance, job satisfaction and organizational commitment. These studies show the significant role of organizational culture in influencing the organizational activities either positively or negatively both in service rendering and productions organizations.

When we come to Ethiopian, attempts have been made to provide efficient and effective public services under different circumstances to achieve customers’ satisfaction while the issue of service delivery is becoming a global concern that demands continuous reform to cope up with unstable environment and the ever changing of customer needs. That is the reason behind different endeavors to provide efficient and effective public services in different circumstances to bring customers delight in the country. The Study made by Kumera (2006) shows the direct reflection of these concepts. It indicated as a series of reform measures were introduced into the country’s public services to effectively institute multi-faceted decentralized system first at regional and subsequently at Woreda level since 1991. According to this study, provision of public services through decentralized institutions and participation of the population are expected to match local needs and priorities with required resources even though delivering basic services like taxpaying is at a very low stage of development (ibid). Despite the existence of different studies in connection with factors affecting customer satisfaction, very little attention has been given to organizational culture. This means that the effect of organizational culture on customer satisfaction has not yet received adequate research attention in Ethiopia. Thus, there is a major gap in the relevant literatures on Ethiopia, which has to be covered by this research.

Believing the significant role of organizational culture in the processes of service delivery, the intension of this paper is to investigate the effect of organizational culture on customer satisfactions in public sector particularly in the tax collection of Yeka Sub City. In this sector practical problems are highly reflected in connection with respecting customers interest and job ethics, transparency, team work and readiness for change, accountability and provisions of qualified services even though these are cited as values of the sector.

Delay in service delivery is also a great problem in this sector though the sector is mandated to give timely services for the customers. There is also a critical lack of empathy in the processes of service provision which deteriorate customer satisfaction. In this study, the researcher tried to investigate the level of both internal and external customer satisfaction towards the prevailing organizational culture of the Yeka Sub City Small Tax Payers Office.

1.3. Objective of the Study

1.3.1. General Objective

This study will carry out with the general objective of investigating the effect of organizational culture on customer satisfaction in the processes of service provision in Yeka Sub City Small Tax Payers Office

1.3.2. Specific Objectives

The specific objectives of the study are to:

i. Identify whether organizational culture has an effect on customer satisfaction in the study organization.
ii. Disclose the ways by which organizational culture can affect customers’ satisfaction in Yeka Sub City Small Tax Payers Office.
iii. Indicate the extent to which the sector considers the priorities of customer needs in the processes of service provisions
iv. Pinpoint the presence of complaint handling mechanism in the study organization and finally to recommend the concerned organs about the effect of organizational culture on customer satisfaction.

1.4. Basic Research Questions

The study will try to answer the following basic research questions.

I. What are the effects of organizational culture on customer satisfaction in Yeka Sub City Small Tax Payers Office?
II. How organizational cultures can affect customer satisfaction in the study organization?
III. To what extent the organization is taking into account the priorities of customer needs in the processes of service provisions?
IV. Is there customer complaint handling mechanism in the study organization?

1.5. Hypothesis

The general hypotheses of this research are:

H1. Organizational culture affects the customer satisfaction of Yeka Sub City Small Tax Payers’ Office.

H 2. Organizational culture affects customer satisfaction in different ways in Yeka Sub City Small Tax Payers’ Office.

1.6. Significance of the study

Organizational culture plays significant roles in provisions of goods and services. Therefore, studying its effects on decision making has meaningful importance as it helps in realizing the extent to which organizational culture influence the efficiency and effectiveness of an organization. Every research should have something to contribute since a lot of time, money and above all human energy is exerted to do it. Therefore, this research is expected to have the following significances.

The Sub City officials through the research’s output can get important information concerning the effects of organizational culture on customer satisfaction. This will inspire them to deal with their weaknesses and strengths in the provisions of services in the tax collection of the sub city.

Findings from this research can also assist to the interest of researchers for further investigation of the various aspects of problems which are not fully addressed by this particular study. Accordingly, the study is expected to be a bench mark for the upcoming research investigations. Concerned bodies having interest in the sector can also use the research findings as input in their decision making processes.

1.7. Scope of theStudy

The theoretical aspect of organizational culture goes across several disciplines since it is, a multidisciplinary study. The concept of organizational culture includes broad elements like artifacts, values and assumptions of the concerned organizations. For the purpose of this study, organizational culture is defined as how things are done around the concerned organization in relation to service provisions. As a result, this paper is delimited to investigate the effect of the prevailing organizational culture on customer satisfaction on provisions of services in the tax payers office of Yeka Sub City. Even though different categories of organizational cultures are developed by different researchers and authors, this study will try to depend on the dimensions of organizational culture indicated by Delobbe, Haccoun and Vandenberg (2020) and Sokro (2012). These authors have identified seven dimensions which can be used to analyze the culture of one particular organization. Among the seven dimensions, only five of them have been used in this study since these dimensions are more compatible to study Ethiopian public services. Five dimensions of service quality like tangibility, reliability, responsiveness, assurance and empathy are used in analyzing the impact of organizational culture on each dimension which finally affects the levels of customer satisfaction.

The study is also delimited only to tax collecting sector even though the sub city has 24 sectors since it is difficult to see every sector’s organizational culture and its effect on customer satisfactions due to the presence of different constraints.

1.8. Limitation of the study

Multidimensionality and the absence of single definition for organizational culture has become the primary limitation to conduct this study. Lack of published data (study) conducted on the effects of organizational culture on customer satisfaction in our country Ethiopia was also the other limitation. This created difficulty in developing the research model for the study.

While caring out this research, the researcher has faced constraints of budget, Problem of cooperative from informants and also respondents had lack of understanding the overall organizational culture of the study organization. Taking these problems into account the researcher has tried to handle the problems in different mechanisms.

1.9. Description of the study area

Addis Ababa City Administration has 10 sub cities; Yeka sub city is one of them which locate north eastern Addis Ababa. The sub city borders with Oromiya regional state on the north and north east, Arada sub city on north east, Gulele and Kirkose sub cities in the west, Bole sub city in the south east. The area of sub city is 85.46 kilometer square with total population of about 500,000 and density of 3950.1(i.e. total population per square kilometer of land). The sub city comprises 14 distinct woreda administrations and 24 sub city sector offices. Small tax payers’ office is one of the 23 sector offices of Yeka Sub City which holds the responsibility of collecting taxes from small tax payers (grade B and grade A excluding higher tax payers). The sub city Small tax payers office has around 28,000 customers and collects around 1,000,000,000 (one billion birr) per year and we can say this organization is the blood vessel of the sub city so studding this organization is very important

CHAPTER TWO

2. Review of Related Literature

This section assesses the related concepts and theories which are relevant to the main subject of the study. The general concepts of organizational culture, leadership, decision making and the relation of organizational culture to the decision making particularly in public services is presented.

2.1. Concepts and Definitions of Organizational Culture

Historically, there are numerous definitions about organizational culture, which is defined by various scholars in different ways in the literature. Authors like Hellriegel, Slocum and Woodman (2001); Hofstede (1980); Martin, 2001 and Schein (1992 cited in Nakamya, 2011) asserted as it is difficult to define organizational culture and its concept. The authors clearly agreed on importance of having clarity on what is meant by the term organizational culture, if it is to be analyzed and managed.

Among the several definitions given for this concept perhaps the most commonly known is “the way we do things around here” (Lundy & Cowling, 1996 in Sun, 2012).Accordingly, organizational culture is manifested in the typical characteristics of the organization, which means it should be regarded as the right way in which things are done or problems should be understood in the organization. It is widely accepted that organizational culture is defined as the deeply rooted values and beliefs that are shared by personnel in an organization (ibid).

According to Divan, (2012) culture is embedded across entire organizations over time as members develop common beliefs, values and practices that are then transferred to new recruits. This idea is also advocated by Sun (2012) in which organization culture is generalized as the “set theory” of important values, beliefs, and understandings that members share in common and it provides better (or the best) ways of thinking, feeling and reacting that could help managers to make decision and arrange activities of organization. The author pronounced that a successful organization should have strong cultures that can attract, hold and reward people for performing roles and achieving goals. In this form, strong cultures are usually characterized by dedication and cooperation in the service of common values. So how much does an employee involve for an organization at their best should be recognized clearly in order to be a successful organization in the processes of undertaking the predetermined activities (ibid).

When indicating the sound roles of organizational culture in organizational progress, Sun (2012) said culture may be considered as ‘software’ within an organization and because of this managers are supposed to study carefully and try to find how does each element of this ‘software’ works on the basis of ‘hardware’ (simply regarding an organization as an operating hardware). This shows as each and every activities of organization could not escape from the influences of organizational culture.

Culture includes the organizational values, visions, norms, working language, systems, symbols, beliefs and habits. It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving, and even thinking and feeling. It affects the way people and groups interact with each other, with clients and with stakeholder (Davis and Newstrom, 1989).

This clearly shows the significant effects and roles of organizational culture on over all organizational activities and the interactions among organizational stakeholders since it is a commonly shared practice.

In addition to this, Brown (1995) stated that organizational culture refers to the pattern of beliefs, values and learned ways of coping with experience that have developed during the course of an organization’s history, and which tend to be manifested in its material arrangements and in the behaviors of its members.

Those definitions discussed above emphasized on different aspects of organizational culture like shared assumption, shared values, shared socialization and norms, and shared symbols, language, narratives and practices; and how organizational culture assists employees in being introduced and socialized into the new organization, while concurrently ensuring internal integration. It also asserted as organizational culture can be reflected in the web of both formal and informal practices which finally determine the overall images of an organizations. Accordingly, every activities of organization are under the umbrella of the prevailing organizational culture. In doing so, organizational culture lets the employees know how to perceive, think and feel when faced with new problems within their new organizational environment and it affects organizational interactions with both internal and external customers.

For the purpose of this study, organizational culture is defined as” the way we do things around here” or way we think about things around here” as it has used by (Williams, Dobson and Walters, 1994).Being the determinant factor for the overall status of one particular organization, different factors can be a base for the developments of organizational culture. Its development is not the result of overnight and single events. Rather it is resulted from different events which prevail for a long period of time.

2.1.1. Organizational Culture Development

For organizational culture to be developed, different agents play a great role. Among the other Finnegan (2000 as cited in Ojo, 2012) indicated that the values and norms which are the basis of organizational culture are formed through the following four ways. These are:

- By Leaders in the organization, especially those who have shaped them in the past.Peopleidentifywithvisionaryleaders–howtheybehaveandwhattheyexpect. They note what such leaders pay attention to and treat them as role models.
- Through Critical Incidents or Important events from which lessons are learned about desirable or undesirable behavior.
- Through effective working relationship among organizations members. This establishes values and expectations.
- Through the Organization’s Environment: Culture is learned over a period of time. Where a culture has developed over long periods of time and has become firmly embedded, it may be difficult to change quickly.

As it is indicated above, leaders of an organization, events those have the ability to leave lessons from which desirable and undesirable behavior will be learned. The relationship among the organizational actors and the general working environments has also the ability to develop organizational culture in particular organization. In this form organizational culture can be developed.

2.1.2. Dimensions of Organizational Culture

Organizational culture can be examined by its different dimensions. Accordingly different researchers and authors have identified different types / dimensions of organizational culture based on their studies. For example Shahzad et al., (2012) indicated that organizational culture can be weak and strong. Accordingly, strong culture is believed to be available where the greater part of employees embraced the same sort of beliefs and values as concern to the organization and weak organizational culture could be one that is loosely joined. In this case rules are imposed strictly on the employees that may create diversity between the person’s, personal objectives and organizational goals.

In the other ways Delobbe, Haccoun& Vandenberg (2002 ); Kumar (2001) ; Robbins (2006) and Collins and Porras (2000) in Nicker (2008) have identified seven dimensions which in aggregate capture the essence of organizational culture that could be used to compare culture across organizations. These seven dimensions are:

- Innovation and Risk taking: characterizes the degree to which employees are encouraged to be innovative and take risks while performing their duties.
- Attention to detail: the degree to which employees are expected to exhibit precision, analysis, and attention to detail or task. It means that paying attention to being careful.
- Outcome Orientation: the degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve these outcomes.
- People Orientation: the degree to which management decisions take into consideration the effect of outcomes on people within the organization. It is degree of value and respect for people.
- Team Orientation: the degree to which work activities are organized around teams rather than individuals based.
- Aggressiveness: the degree to which the people are aggressive and competitive regarding their work rather than easy going.
- Stability: the degree to which organizational activities emphasize maintaining the status quo in contrast to growth. Or the organizational openness to change. In terms of figure it is shown as follows:

Any organization’s culture can be evaluated by using the indicated dimensions of organizational culture. Each of these characteristics exists on a continuum from low to high. Appraising the organization on these seven characteristics gives a composite picture of the organization’s culture (Nicker, 2008). Their influences are based on their degree of intensities.

In other ways Cameron & Quinn (2011) categorized organizational culture into four: Clan culture, hierarchy culture, adhocracy culture and market culture. Accordingly the four categories describe the extent to which an organization is either internally focused or externally focused on customer satisfaction (ibid). These are elaborated as follows:

The Clan culture/collaborate: Is with the motto of” do things together”. Exists in an organization where there is a very pleasant place to work in which people share a lot of personal information, much like an extended family. The leaders or heads of the organization are seen as mentors and perhaps even parent figures. The organization is held together by loyalty or tradition. In this case, commitment is high. The organization emphasizes the long-term benefit of human resources development and attaches great importance to cohesion and morale. Success is defined in terms of sensitivity to customers and concern for people. The organization places a premium on teamwork, participation, and consensus. In an organization with this type of organization culture, leaders are facilitator, mentor and team builder. And the value drivers in such kind of culture are commitment, communication and development. In organization with this king of culture quality strategy is empowerment, team building, employee involvement, human resource development, open communication.

The Adhocracy/create Culture: is organizational culture where a work place is dynamic, entrepreneurial, and creative i.e.do things first. In such organizational culture, leaders are considered innovators and risk takers. The glue that holds the organization together is commitment to experimentation and innovation. The organization’s long term emphasis is on growth and acquiring new resources. Success means gaining unique and new products or services. Being a product or service leader is important. The organization encourages individual initiative and freedom. The quality strategy is, creating new standards, anticipating needs, continuous improvement, finding creative solutions.

The Market Culture/ compete: Organization with this culture is result-oriented whose major concern is getting the job done. It is with the intensions of doing things fast. In such organization people are competitive and goal-oriented. Quality Strategies of organization is measuring customer preferences, improving productivity, creating external partnerships, enhancing competitiveness, involving customers and suppliers.

The leaders are hard drivers, producers, and competitors. They are tough and demanding. The glue that holds the organization together is an emphasis on winning. Reputation and success are common concerns. The long-term focus is on competitive actions and achievement of measurable goals and targets. Success is defined in terms of market share and penetration.

The Hierarchy/ Control Culture: A very formalized and structured place to work. Procedures govern what people do. Organization with this kind of culture deals with doing things right which implies efficient utilizations of resources and achieving the right outputs. The leaders pride themselves on being good coordinators and organizers who are efficiency minded. Maintaining a smooth-running organization is most critical.

Formal rules and policies hold the organization together. The long-term concern is stability and performance with efficient and smooth operations. Success is defined in terms of dependable delivery, smooth scheduling and low cost. The management of employees is concerned with secure employment and predictability. Efficiency, punctuality, consistency and uniformity are the value driven in organization with such kinds of culture. Error detection, measurement, process control, systematic problem solving and quality tools are quality strategies in such kinds of organizations.

The identification of organizational cultures into different categories and dimension is not sufficient to attempt to understand and measure the culture of the organization. However, it is also very important to measure the impact that the culture has on the everyday operations and workings of the organization, that is, how the organization organizes itself, its relations with customers (internal and external) and how the organization treats staff, those should be key aspects when building a successful culture( Sun ,2012).

As it is indicated in the above paragraphs the studies made on organizational culture have identified different dimensions and types of organizational culture. These types and dimensions have the ability to explain the prevailing culture of one organization and influence the other aspects of organizational elements.

2.1.3. Levels of Organizational Culture

Organizational culture exists on several levels, which differ in terms of visibility and resistance to change. When it comes to changing the culture of the organization, it becomes difficult to determine which the more, and which are the less important elements that help shape an organization’s culture (Nicker, 2008).

Schein (2004) argues that there are three major levels to be considered when analyzing organizational culture. They are:

- Basic assumptions, namely the fundamental dynamics of how the organization and its members relate to the environment, time, space, reality ,and to each other which often fall below the level of consciousness and tend to dictate and motivate the behavior.
- Values and beliefs which reflect what members believe "ought to be" the work of the organization in the form of easily articulated ideologies, attitudes, and philosophies. It represents collective beliefs, assumptions, and feelings about what things are good, normal, rational, and valuable.
- Cultural artifacts which are the most visible layer of culture within the organization and include the languages used, stories told, ceremonies performed, rewards given, symbols displayed, heroes remembered, and history recalled. It also includes the organizational processes by which behavior is made routine and structural elements such as charters, formal descriptions of how the organization works, and organization charts. Any challenge of these assumptions will result in anxiety and defensiveness (ibid).

The above indicated levels of organizational culture encompass the overall images of one organization. Organization can also produce multiple cultures or subcultures that overlap to create intergroup harmony, conflict, or indifference (Martin, 2004). In connection withthis Schein (2004) argues that each organization, at minimum, contains three subcultures among front-line personnel executing tasks; the subset focused on process design, innovation, and improvement; and executive personnel responsible for organizational survival and long-term effectiveness. This clearly indicated as one can describe a particular organization in terms of its culture and subcultures.

2.1.4. Functions of Organizational Culture

Organizational culture has different functions in the life of any organizations. It plays several important roles within an organization. As such it provides a sense of identity and generates organizational commitment as well as commitment to the organization’s mission and clarifies and reinforces standards of behavior (Greenberg and Baron, 2003). It influences everybody and influenced by every body’s action and thinking and hence the successes of any organization depends on its culture. It is clear that culture is an important force that influences employee attitudes and behaviors within organizations which will result in the employee commitment to their organization, and therefore they will deliver higher standards of service(ibid).

According to Martin (2004), the functions of organizational culture can manifest itself through creating the feeling of identity among personnel and commitment to the organization and competitive edge to enable the members (especially new members) in the organization to well understand acceptable behavior and social system stability.

It is the fact that organizational culture can offer a shared system of meanings which forms the basis of communication and mutual understanding. If the organizational culture does not fulfill these functions in a satisfactory way, the culture may significantly reduce the efficiency of an organization (Sun, 2012). When indicating the indirect role of organizational culture, Martins &Terblanche (2003) said organizations use different resources and processes to guide behavior and change in which organizational culture play an indirect role in influencing behavior by using reasonable managerial tools such as strategic direction, goals, tasks, technology, structure, communication, decision making, cooperation and interpersonal relationships, and so forth, which are all designed to do things. Organizational culture has the ability to promote code of conduct, facilitates recognition, provides self-satisfaction and opportunity to set the standards of performance, guides and controls the employees, directs employee behavior towards goal achievement, makes people development-oriented and develops positive attitude (Hofsted, 1980 and Amman,2003).These are elaborated as follows:

1. Culture Promotes Code of Conduct: a strong culture in an organization explicitly communicates accepted modes of behavior which make the people to be conscious. In this form, promotion of the culture of quality can help to achieve good organizational results.
2. Culture Facilitates Recognition: Every organization is recognized by its culture. It is a known fact whenever we name an organization we immediately remember the culture attached to the organization. Organizational culture sets the boundary beyond which employees are not permitted to go. Employees of an organization automatically adopt the cultural limit of their organization. A number of organizations are well recognized by the culture.
3. Culture Provides Self Satisfaction: Organizational culture enables employee to be satisfied internally. They get internal satisfaction with an esteemed culture.
4. Culture Provides Opportunity to Set the Standards of Performance: Organizational culture provides employees to get an opportunity to set the standards of performance. They try to achieve the standards. It becomes a self-control mechanism which helps the organization to grow and flourish.
5. Culture Guides and Controls the Employees: Organizational culture acts as a motivator that guides and controls the employees.
6. Culture Directs Employee Behavior towards Goal Achievement: a sound culture directs the attitude and behavior of the employees towards the achievement of goals.
7. Culture Develops Positive Attitude: Culture develops a positive attitude and behavior of employees. It leads to development of a good behavior and good behavior makes a good culture which promotes organizational performances.
8. Culture facilitates induction and socialization: induction is a process through which new entrants to an organization are socialized and indoctrinated in the expectations of the organization; its cultural norms, and undefined conduct. The newcomer imbibes the culture of the organization, which may involve changing his / her attitudes and beliefs to achieving an internalized commitment to the organization.
9. Culture supplements rational management: creation of work culture is a time- consuming process. Therefore, organization culture cannot suddenly change the behavior of people in an organization. Culture communicates to people through symbols, values, physical settings, and language, and, thereby supplements the rational management tools such as technology and structure

Generally the importance of organizational culture should not be neglected to become an efficient and effective organization because it has a significant impact on the daily activities of organization and acts as an agent in determining the organizational images for both internal and external customers. Moreover, the prevailing organizational culture can highly influences the performances of each organization. This has been in turn result in affecting customers’ satisfaction either positively or negatively.

In indicating the functions of organizational culture, Martins (2000) as cited in Sun ( 2012) said culture manifest itself in two aims: first, creating the feeling of identity among personnel and commitment to the organization; second, creating a competitive edge to enable the members (especially new members) in the organization to well understand acceptable behavior and social system stability. As such organizational culture has the ability to offer a shared system of meanings which forms the basis of communication and mutual understanding and if the organizational culture does not fulfill these functions in a satisfactory way, the culture may significantly reduce the efficiency of an organization. This will in turn determine the level of customer satisfactions towards the ongoing services of service providers.

2.2. The Concept of Service and Service Delivery

Because of its broad concept and multidimensional nature, it is difficult to define service. However, different scholars have defined it from different perspectives. Service means something which is done by individual or group to help or benefit others, either freely or with payment, through systematically arranged way, or in informal way to meet individual or public needs (Kotler, 1989). He added that service is a work carried out for others by an organization where no transfer of goods is involved. It consists of social processes that involve a physical or informational interaction between a service provider and a client (user), the interaction of client and employees that lie at the heart of most service system.

Services possess several unique features that often have a significant impact on marketing Program development. Manufacturing organizations produce tangible goods that can be numbered, stored and consumed at a later time whereas, services are intangible performance. These special features of services may cause problems and often result in making decisions that are substantially different from those found in connection with the marketing of goods (ibid).

According to Kotler (1989), services have the following major characteristics that greatly affect the design of service management programs. These are:

Intangibility: Services are intangible, unlike physical products, they cannot be felt, smelled, heard, or tasted before they are bought or rendered.

Heterogeneity: This refers to the difficult nature of services to standardize them; as a result, output can vary widely in quality. Services are usually designed around the specific requirements of the individual customer.

Inseparability: Services possess a potential for high variability in the quality of output. Because they depend on people who provide them and when and where they are provided. It cannot be guaranteed to be identical in all aspects to those that have gone before and to those that will follow.

Variability: Services possess a potential for high variability in the quality of output since they depend on people who provide them and when and where they are provided. It cannot be guaranteed to be identical in all aspects to those that have gone before and to those that will follow.

Perish ability: It is to mean that services cannot be stored because it is not tangible goods. Being in the right spot at the right time is important to service users while having the right service, in sufficient quantity, in the right place at the right time is important to the service providers(Kotler, 2001)). Accordingly, the presence of random nature of customer request for service which generally prevails in service system is almost impossible to provide service capacity that match demand. However, it is possible to address and achieve goals of satisfying customers to certain and better degree by efficient utilization of the fixed capacity. This requires the organization to use several strategies for providing a better match between demand and supply in a service organization (ibid).

Members of societies, individuals or groups who are direct recipients or users of these services are customers for those who supply the services (Kotler, 1999). Customer is a person who buys (external customer) and a person with whom one deals, i.e. internal customer or employees. This implies that the definition of customer is not limited only to someone who is a direct user of services or products and outside of the organization but it also includes the organization's employees who render the service to direct users. The relationship between the two creates the customer chain and if the relationship is smoother the chain is stronger (ibid).

2.2.1. Public Service Delivery

Service will be provided for the service users either by government or private sector in the economy. It is called public services when public bodies (such as central or local government) either provide themselves or commission others to provide the demanded services for the target groups. Public services are delivered by a nexus of relationships between beneficiaries, politicians and service providers (Besley and Ghatak, 2007). Public services generally refer to any activities undertaken to meet social needs. It particularly refers to those activities of government institutions aimed at satisfying the needs and ensure the well-being of society as well as enforcing laws, regulations and directives of government (Gaster and Squires, 2003). It is often used to mean services provided by the government to the citizens, either directly (through the public sector) or indirectly by financing the private provision of the service (ibid).

To be a citizens centered public service, it should incorporates citizens concerns at every stage of the service designing and delivering process that the citizens needs become the organizing principle around which the public interest is determined and service delivery is planned ( the Canadian Center for Management Development, 1998). Accordingly, priorities as well as improvements in public service should be seen from the service users and not from service provider's perspective. This indicates that the actual performance of the provided service is known by the service users rather than service providers. Because of this, service providers should always engage in the processes of knowing the reactions of their customers to be successful in the life of their organizations. That means organizations should have a mechanisms to know the feedback of their services to take the corrective measurement if needed in the processes of service delivery.

In the processes of customer service delivery, understanding of both internal and external service environment is a necessary condition for the service providers. This is conditioned by different components of customer service delivery frameworks. Citizen centered service delivery is decided as service that incorporates citizens concerns at every stage of the service designing and delivering process that the citizens needs become the organizing principle around which the public interest is determined and service delivery is planned(ibid). Accordingly, the conceptual framework of customer service delivery has the following four components. These are:

- Citizens’ expectation of government service delivery which shows knowing citizens expectation, perception as well as priorities and involving them in service improvements.
- Measuring and reporting on performance and accountability: with the aid of information in closing the service gap measures progress to guide the selection of service improvement tools.
- Government delivery of service: in order to give service for citizens as they expect, capacity of public organization should be improved continuously.
- Government service improvement tools box: closing the appropriate mix of tools to close the service gap is guided by citizens with the priorities for improvement.

2.2.2. Measuring Public Service Delivery

Governments around the world are putting pressure on their public managers to improve service quality and deliver efficiency at the same time: to do more, for less. After all, managers in the private sector face similar pressures and they are expected to deal with them as a matter of routine (Ng Wee Wei, 2008). Public service is a term often used to mean services provided by the government to the citizens, either directly (through the public sector) or indirectly by financing the private provision of the service.

Measuring service quality and customer satisfaction is a central issue to evaluate public sector reform implementation even though there is a challenge that arises from the absence of universal definition of quality services and measurement indicators (Kotler et al. 2002). But there is a general agreement among scholars in the area that quality of service should be measured or judged by the customers. However, they differ on the techniques or methods of how customer satisfaction is measured (ibid).

Even though, it is difficult to measure service quality and customer satisfactions there are two prominent measures of service quality and customer satisfaction. They are SERVQUAL with 10 aspects of service quality (Suresuchander, et.al, 2002). These are: reliability, responsiveness, competence, access, courtesy, communication, and credibility, security, understanding the customer and tangibles and The Batho Pele (putting people first) principles. These principles have established eight principles of public service delivery. These are consultation, service standards, access, courtesy, information, openness and transparency, readiness and value for money. Both of them have more or less the same indicators (ibid). These are the reason behind for the development of organizational values, norms, mission, objectives and, etc on the eve of the establishment of every organizations and the introductions of public sector reform in different countries. These reforms are with the objectives of delivering the customer centered service with the expected outcomes of getting the satisfied customers.

2.3. The Conceptof Customer Satisfaction

Customers are the portion of society those are using the goods and services of one particular organization. In the processes of using these goods and services customers may either satisfied or dissatisfied with the ongoing activities of organizations. Despite the widespread recognition attached to customer satisfaction, researchers have not yet agreed on one global definition for it. Although the constructs have been thoroughly explored, one theoretical model has not and likely will not be accepted due to the complex process involved in arriving at a customer’s judgment of satisfaction or dissatisfaction (Ampomah, 2012).

Customer satisfaction is the condition at which prevailing performance of organizations or service meet users expectation. It is the evaluation of the perceived discrepancy between prior expectations and the actual performance of the products of particular organization. The most general interpretation of satisfaction is the sense and feeling which is produced by comparing what is received and what is expected by needs and wants (Fecikova, 2004). It refers to the extent to which customers are happy with the products and services provided by organization. According to Westbrook and Oliver (1991) the notion of customer satisfaction involves cognitive and affective aspects in pre- purchase, purchase, and post-purchase phases of buying goods and/or receiving services.

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Title
The Effect of Organizational Culture on Customer Satisfaction
Subtitle
The Case of Yeka Sub City Small Tax Payers’ Office, Ethiopia
Course
Business Adminstration
Grade
A
Author
Year
2019
Pages
100
Catalog Number
V918528
ISBN (eBook)
9783346304698
Language
English
Tags
effect, organizational, culture, customer, satisfaction, case, yeka, city, small, payers’, office, ethiopia
Quote paper
Abebe Animut (Author), 2019, The Effect of Organizational Culture on Customer Satisfaction, Munich, GRIN Verlag, https://www.grin.com/document/918528

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