IMPACT OF ORGANIZATIONAL CULTURE IN THE EFFECTIVENESS OF THE TRANSFORMATION PROCESS OF MICROFINANCE ORGANIZATIONS IN KENYA INTO DEPOSIT TAKING INSTITUTIONS
DOI:
https://doi.org/10.47672/ijbs.169Keywords:
organizational culture, Microfinance institutions, Deposit Taking institutionsAbstract
Purpose: The purpose of this study was to assess the impact of organizational culture in the effectiveness of the transformation process of microfinance organizations in Kenya into deposit taking institutions.
Methodology: This study adopted descriptive research design. For purposes of collecting primary data, the use of a questionnaire developed by the researcher was used. Data was then analyzed using Excel and SPSS and presented in tables, graphs and charts. A total of 120 questionnaires were distributed to the above five organizations and 42 of them were returned. This represents a 35% response rate.
Results: Based on the findings, the study concluded that the dominant culture of MFIs that have transformed to DTMs is that of Control. The results further led to the conclusion that this type of culture is appropriate for MFIs since MFIs operate in heavily regulated and structured environment where standardized procedures and efficient processes enhance the stability of such MFIs. The study also showed that the most dominant organization leadership culture is that of Control. The leaders exemplify coordinating, organizing or smooth running efficiency. Results further revealed that leadership culture that is generally considered to exemplify entrepreneurship, innovation or risk taking is associated with the highest transformation success.
Unique contribution to theory, practice and policy: The study recommends that the leadership of organizations should have an understanding of the attributes of the dominant culture of their organizations, the level of opposing tension or balance between values, or the congruence between the organization and its leadership or initiatives.
Downloads
References
Abzari, M., & Teimouri, H. (2008). The effective factors on knowledge sharing in organizations. The International Journal of Knowledge, Culture and Change Management, Vol. 8, pp. 105-13.
Al-Alawi, A. I., Al-Marzooq, N. Y., & Mohammed, Y. F. (2007). Organizational culture and knowledge sharing: critical success factors. Journal of Knowledge Management, Vol. 11, pp. 22-42.
Ashforth, B. E., & Mael, F. A. (1998). The power of resistance: Sustaining valued identities. Thousand Oaks, CA: Sage Publications.
Association of Microfinance Institutions of Kenya (AMFI).(2010). Retrieved October 3, 2011, from Overview of AMFI: http://www.amfikenya.com
Barney, J. (1986). Organizational culture: can it be a source of sustained competitive advantage? Academy of Management Review, Vol. 11 No. 3, pp. 656-65.
Brooks, I. (2009). Organisational Behaviour: Individuals, Groups and Organisation;4th Edition. New Jersey: Prentice Hall.
Bryman, A., & Bell, E. (2007). Business Research Methods, 2nd ed. Oxford: Oxford University Press.
Cameron, K. S. (1997). Techniques for making organizations effective: Some popular approaches. Enhancing organizational performance , pp.39-64.
Cameron, K. S., & Ettingson, D. (1988). The conceptual foundations of organizational culture;Handbook of theory and research. Norwell, Massachusetts: Kluwer.
Cameron, K. S., & Quinn, R. E. (2006). Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework . San Francisco: Jossey-Bass.
Campion, A., & White, V. (2001). NGO Transformation. Maryland: Development Alternatives, Inc.
Central Bank of Kenya. (2011, January 11). Central Bank of Kenya. Retrieved October 12, 2011, from CBK Licenses Fifth Deposit Taking Microfinance: www.centralbank.go.ke
Chin-Loy, D. C., & Mujtaba, D. B. (2007). The influence of organizational culture on the success of knowledge management practices with North American companies. International Business & Economic Research Journal, Vol. 6, pp. 15-28.
Cooper, D. R., & Schindler, P. S. (2003). Business Research Methods, Eighth. New York: The McGraw−Hill.
Davenport, T. H., & Prusak, L. (1998). Working Knowledge: How Organizations Manage What They Know. Boston, MA: Harvard Business School Press.
Denison, D. R., & Mishra, A. K. (1995). Toward a theory of organizational culture and effectiveness. Organization Science, Vol 6(2), pp.204-223.
Denscombe, M. (2003). The Good Research Guide, Second edition . Buckingham: Open University Press.
Dillman, A., Smyth, J. D., & Christian, L. M. (2009). Internet, Mail, and Mixed-mode Surveys: The tailored Design Method, 3rd ed. Hoboken, NJ: Wiley.
Engel, R. J., & Schutt, R. K. (2005). The practice of research in social work. London: Sage Publications, Inc.
Fiedler, F. E. (2001). Validation and extension of the contingency model of leadership effectiveness: review of empirical findings. Psychological Bulletin, Vol. 76(2), pp.128-148
Giangreco, A., & Peccei, R. (2005). The nature and antecedents of middle managers’ resistance to change: evidence from an Italian context. The International Journal of Human Resources Management, Vol. 16, pp. 1812-29.
Gutmann, D. (2003). Psychoanalysis and Management: The Transformation. London, England: Karnac Books.
Hoque, M., Chishty, M., & Halloway, R. (2011). Commercialization and changes in capital structure in microfinance institutions An innovation or wrong turn? Managerial Finance, pp.414-425.
Jacobsen, J. (2008). Avoiding mistakes of the past: lessons learned on what makes or breaks quality initiatives. The Journal for Quality and Participation, Vol. 31, pp. 4-9.
Jarnagin, C., & Slocum, J. (2007). Creating corporate cultures through mythopoetic leadership. Organizational Dynamics, Vol. 36, pp. 288-302.
Kotter, J. P. (1995). Leading change: why transformational efforts fail. Harvard Business Review, Vol. 73 pp. 59-67.
Kotter, J. P. (1996). Leading Change. Boston, MA: Harvard Business Press.
Ledgerwood, J., & White, V. (2006). Transforming Microfinance Institutions: Providing Full Financial Services to the Poor. Washington D C: The International Bank for Reconstruction and Development / The World Bank.
Levinthal, D. A., & March, J. G. (2007). The myopia of learning. Strategic Management Journal, Vol. 14, pp. 95-112.
Maslow, A. (1987). Motivation and Personality, 3rd edition. Boston, MA: Addison-Wesley.
Mehrizi, M. H., & Bontis, N. (2009). A cluster analysis of the KM field. Management Decision, Vol. 47, pp.792 - 805.
MercyCorps. (2006, April 14). Global Envision:the confluence of global markets and poverty alleviation. Retrieved October 5, 2011, from The History of Microfinance: http://www.globalenvision.org.
MicrofinanceAct. (2006). Issue No.19 of 2006. Kenya.
Monette, D. R., Sullivan, T., & DeJong, C. (2002). Applied Social Research. Orlando,FLA: Harcourt Press.
Schein, E. (1985). Organizational culture and leadership. San Francisco: Jossey-Bass.
Schlesinger, L., & Kotter, J. P. (1979). Choosing strategies for change. Harvard Business Review, pp. 106-14.
Seel, R. (2002). Retrieved March 3, 2012, from The Nature of Organizational Change: www.new-paradigma.co.uk
Stenzel, P. L. (2009). Microfinance: The Journey from Non-Profits to Major Financial Institutions. Global Edge Business Review, Vol. 3, No. 8, pp.40-59.
Trice, H. M., & Beyer, J. M. (1993). The cultures of work organizations. . New Jersey: Prentice-Hall.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2017 Belinda Kendi, Prof. Kinyua Kamaria, Prof. Kinyua Kamaria
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
