An assessment of cultural dimensions and their impact on organisational performance in the Zimbabwean banking sector

Abstract

Culture is a very diverse concept which has a significant impact on business performance. Hofstede developed one most popular variant of this concept. He came up with six cultural dimensions which he named Power Distance (PD), Uncertainty Avoidance (UA), Individualism (IND), Masculinity (MAS), Long Term Orientation (LTO) and Indulgence INDUL).These terms, together with Business Performance(BP) are largely defined. The main objective of the study was to ascertain the level of these dimensions in banks in Zimbabwe. Other objectives included a development of a regression model and checking if the cultural dimensions are statistically the same across bank types and different staff levels before finally to recommending the most appropriate cultural dimension that enhances bank performance. It was hypothesized that UA, MAS and LTO all had a positive impact on BP while PD, IND and INDUL had a negative impact on BP. The research methodology was quantitative, the research purpose being a descripto-deterministic type, following a positivist philosophy, using a deductive approach and informed by a survey strategy. A mono method research choice was employed. The research was a cross-sectional study and primary data was collected using the questionnaire. The population of the study was all the commercial banks’ employees operating in Harare. Stratified random sampling was used to select participating banks and employees. The six dimensions’ indices computed all high except for LTO and INDUL. The regression model developed showed that, out of the six dimensions, only PD, UA and INDUL were significant determinants of BP. All but one, (PD), dimensions were found to be statistically indifferent across bank types while across staff levels four dimensions were materially different. The hypothesis that PD, IND and INDUL had a negative impact on BP were rejected and so were the hypotheses that UA and LTO had a positive impact on BP. The hypothesis that MAS had a negative impact on BP was accepted. In the short-to-medium term only, it was recommended that high power distance be maintained while economy and corruption levels are being managed. Maintaining a high UA and INDUL culture was recommended while not much effort was recommended for IND, MAS and LTO because they were insignificant. A replication of this study at a future date when the economy is more stable, and across other sectors of the economy and together with independent tests across gender divide are further studies that are recommended by the researcher.