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EFFECTS OF ORGANISATIONAL CULTURE ON THE PERFORMANCE OF QUANTITY SURVEYING FIRMS IN LAGOS STATE
BY
OLANIPEKUN, AYOKUNLE OLUBUNMI B.TECH. (HONS.) QS QS/05/5847
A THESIS IN THE DEPARTMENT OF QUANTITY SURVEYING SUBMITTED TO THE SCHOOL OF POSTGRADUATE STUDIES, IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER OF TECHNOLOGY (M.TECH) IN QUANTITY SURVEYING OF THE FEDERAL UNIVERSITY OF TECHNOLOGY, AKURE, ONDO STATE, NIGERIA
2012
EFFECTS OF ORGANISATIONAL CULTURE ON THE PERFORMANCE OF QUANTITY SURVEYING FIRMS IN LAGOS STATE
BY
OLANIPEKUN, AYOKUNLE OLUBUNMI B.TECH. (HONS.) QS QS/05/5847
2012
APPROVAL PAGE
ABSTRACT Quantity surveying service firms in contemporary times have evolved into structurally standard organisations where there’s the understanding of organisational culture as an essential management philosophy that drives performance. Using a survey design approach, this research examines the effect of organisational culture on the performance of quantity surveying firms. Ninety quantity surveyors from forty quantity surveying firms in Lagos completed the questionnaire used for this research. Psychometric test was also carried out on the questionnaires with average cronbach’s alpha (α) value of 0.87. The research instrument was also justified on face, content, construct and external validity. Mean score was used for ranking the types of organisational culture and the challenges to the formalisation of organisational culture while importance index was used to ascertain the level of importance attached to organisational culture. Spearman rank correlation was used to evaluate the intercorrelation among the types of organisational culture and the relationship between organisational culture and performance variables. Kruskal-Wallis H-test was used to test if there was any significant difference in the perceptions of the three hierarchies of quantity surveyors in quantity surveying firms on organisational culture while Stepwise regression was used to explain the effect of organisational culture on performance. The study revealed that quantity surveying firms are largely sole proprietorship and/or partnership business structure and operating multiple organisational cultures. The study also revealed positive significant correlation between the types of organisational culture and performance. Organisational culture was also found to influence the performance of quantity surveying firms with reward and stability cultures having the dominant influence.
Organisational
management structure, lack of resources and dearth of organisational culture study are the prevalent challenges to the formalisation of organisational culture while the challenges constituted by leadership and employees are least prevalent. The study concluded that causal relationships exist between organisational culture and performance in quantity surveying firms. The findings from this study implicate that there’s need for the management of quantity surveying firms to embrace organisational culture as strategy for driving performance and achieving corporate status.
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CERTIFICATION (a)(By the student): This work has not been presented elsewhere for the award of a degree, or any other purpose. Candidate’s Name: OLANIPEKUN, Ayokunle Olubunmi
Signature………………………………..
Date…………………………………….
(b)(By the supervisor): I certify that this work has been carried out by Olanipekun, Ayokunle Olubunmi in the Department of Quantity Surveying of the Federal University of Technology, Akure. Supervisor’s Name: Dr. I.O. Aje
Signature………………………………..
Date…………………………………….
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DEDICATION This thesis is dedicated to my parents, Mr. and Mrs. L.A. Olanipekun; for their love.
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ACKNOWLEDGEMENT My sincere gratitude goes to almighty God, for seeing me through this challenging but imparting period of my master degree. To Him is all the glory. I would like to appreciate my supervisors, Dr. I.O. Aje and Dr. J.O. Abiola-Falemu for their guidance and support. I cannot but appreciate my brothers, and workmates Mr. A.E. Oke, Mr. T.O. Oladinrin, Mr. S.A. Makanjuola, Mr. I.O. Famakin, Mr. O.A. Adedokun and Mr. O. Adeniyi for their assistance in different forms. I thank you for being there for me and I pray God will give me the grace to repay you. Also, I would like to thank Barr. Fakunle Adebayo and Miss Adebisoye Oluwase for their assistance during the process of data collection. My profound gratitude goes to Mr. O.T. Ibironke for the relevant journals he gave me during the course of this research work; and to Prof. D.R. Ogunsemi for his assistance in moulding this work. To all other members of staff of the Department of Quantity Surveying, FUTA, I say thank you. I cannot but reference the support of my wonderful siblings; Miss Olanipekun Yinka and Mr. Olanipekun Ajibola; to you I say thanks for your prayers and moral advices in respect of my academic pursuit. To my beloved parents, Mr. and Mrs. L.A. Olanipekun, words cannot express my sincere appreciation; God laid the foundation of every success I record through you.
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TABLE OF CONTENTS
PAGE
Abstract
i
Certification
ii
Dedication
iii
Acknowledgement
iv
Table of contents
v
List of figure
xi
List of tables
xii
CHAPTER ONE: INTRODUCTION 1.0
Background to the study
1
1.2
Research Problem
3
1.3
Research Questions
7
1.4
Aim and Objectives
7
1.5
Research Hypotheses
8
1.6
Justification of Study
8
1.7
Scope and limitation of Study
10
CHAPTER TWO: LITERATURE REVIEW 2.1
Organisational culture
12
2.2
Dimensions of organisational culture
14
2.3
Models for measuring organisational culture
15
2.3.1
The Barros and Prates Model (BPM)
16
2.3.2
The Denison Organizational Culture Model (DOCM)
16
2.3.3
The competing values framework (CVF)
16
v
2.3.4 Combined Organizational Culture Inventory [OCI] and Organizational Effectiveness Inventory [OEI] model (OCI &OEI) 2.3.5
Provincial Government Western Cape Organisational Culture Model (PGWC)
2.4
17
17
Organisational Culture Model for This Study: The validated organisational culture profile (OCP) model
17
2.4.1
Performance orientation
20
2.4.2
Innovation
21
2.4.3
Stability
22
2.4.4
Supportiveness
23
2.4.5
Social responsibility
23
2.4.6
Emphasis on reward
24
2.4.7
Competitiveness
25
2.5
Organisational culture and performance
26
2.6
Performance of Quantity surveying firms
27
2.6.1
Value creation
29
2.6.2
Financial measures/Profitability
29
2.6.3
Customer satisfaction
29
2.6.4
Competitiveness
30
2.6.5
Innovation
30
2.6.6
Business process re-engineering
31
2.6.7
Market orientation
31
2.6.8
Service flexibility
32 vi
2.6.9
Service quality
32
2.6.10 Employee satisfaction
33
2.7
Formalising organisational culture
33
2.8
Challenges to the formalisation of organisational culture in quantity surveying firms
35
2.9
Quantity surveying practice in Nigeria
39
2.10
Hierarchical perception of organisational culture in quantity surveying firms
40
2.10.1 Direct work
43
2.10.2 Operation
43
2.10.3 General
44
2.10.4 Strategic
44
2.10.5 Principal partner
44
2.10.5 Senior quantity surveyor
45
2.10.6 Junior quantity surveyor
45
Quantity surveying firm as an organisation
45
2.11
CHAPTER THREE: RESEARCH METHODOLOGY 3.1
Introduction
47
3.2
Research design
47
3.3
Research population
48
3.4
Sampling frame
48
3.5
Sample size
49
3.6
Sampling technique
49
3.7
Data collection instrument
50 vii
3.8
Procedure for data collection
51
3.8
Methods of presentation and analysis
51
3.9.1
Validity
51
3.9.2
Reliability
53
3.9.3
Profile of respondents and the firms
54
3.9.4
Types of organisational culture
54
3.9.5
Level of importance attached to organisational culture
55
3.9.6 Correlation between organisational culture and performance of quantity surveying firms
55
3.9.7
Effect of organisational culture on performance
56
3.9.8
Challenges to the formalisation of organisational culture
57
CHAPTER FOUR: RESULTS 4.1
Introduction
58
4.2
Response to questionnaire
58
4.3
The profile of respondents involved in this study
59
4.4
The profile of firms involved in this study
60
4.5
Types of organisational culture in quantity surveying firms
61
4.6
Level of importance attached to organisational culture
63
4.7
Inter-correlation among the types of organisational culture
64
4.8
Correlation between the types of organisational culture and the
4.9
performance of quantity surveying firms
66
Effect of organisational culture on performance
68
4.9.1
68
Effect of the types of organisational culture on financial performance viii
4.9.2
Effect of the types of organisational culture on business process re-engineering
69
4.9.3
Effect of the types of organisational culture on market orientation
69
4.9.4
Effect of the types of organisational culture on competitiveness
70
4.9.5
Effect of the types of organisational culture on service flexibility
70
4.9.6
Effect of the types of organisational culture on employee satisfaction
71
4.9.7
Effect of the types of organisational culture on customer satisfaction
71
4.9.8
Effect of the types of organisational culture on value creation
72
4.9.9
Effect of the types of organisational culture on service quality
72
4.9.10 Effect of the types of organisational culture on innovation 4.10
Challenges to the formalisation of organisational culture
73 76
CHAPTER FIVE: DISCUSSION OF FINDINGS 5.1
Introduction
78
5.2
Company and respondents’ profile
78
5.3
Types of organisational culture
78
5.4
Level of importance attached to organisational culture
79
5.5
Correlation between the types of organisational culture and performance measures
5.6
79
Effect of organisational culture on the performance of quantity surveying firms
5.7
80
Challenges to the formalisation of organisational culture
81
CHAPTER SIX: CONCLUSIONS AND RECOMMENDATIONS 6.1
Introduction
82 ix
6.2
Conclusions
82
6.3
Recommendations
83
6.4
Areas of further study
84
References
85
Appendices
97
x
LIST OF FIGURE Figure 2.1: Model of Organisational Culture Profile (OCP)
xi
20
LIST OF TABLES Table 2.1
Measures of organisational performance in firms
33
Table 3.1
Reliability coefficients for the measuring instrument
53
Table 4.1
Response rate of respondents and firms
58
Table 4.2
Profile of respondents
60
Table 4.3
Profile of firms
61
Table 4.4
Types of organisational culture based on Hierarchies
63
Table 4.5
Level of importance attached to organisational culture
64
Table 4.6
Inter-correlation among the types of organisational culture
65
Table 4.7
Correlation between the types of organisational culture and performance measures
67
Table 4.8
Effect of organisational culture on performance measures
Table 4.9
Challenges to the formalisation of organisational culture
xii
74-75 77
CHAPTER ONE INTRODUCTION 1.1
BACKGROUND TO THE STUDY
One of the eminent themes that is often discussed and debated in the management and business literature is the influence of organisational culture on organisational performance (Chow, Harrison, McKinnon and Wu, 2001). This debate has extended to construction business going by the increasing importance of organisational culture to construction business. Oney-Yazic, Arditi and Uwakweh (2005) buttress this assertion by stating that organisational culture has gained importance in the increasingly internationalised and globalised construction business. Consequently, firms need to understand their own and other firms’ organisational culture and so as to adjust their ways and traditions while conducting business (Oney-Yazic et al., 2005).
Provincial Government Western Cape (2009) described organisational culture as the vehicle through which the organisation fosters productive behaviours that is based on certain values, contributing to organisational performance. Organisational culture is also described as a mode, composed by some basic assumptions; and the assumptions are found and created gradually by a certain group in the process of exploring the method of adapting to external environment and solving internal interconnected system (Zhang, 2010). The definition by Zhang (2010) offered deeper basic assumption and faith that is shared by organisational members and explain the purpose and environment of organisation itself. The definition focused on internal integration and external adaptation of organisations which are the organisational culture attributes that defines the performance of organisations.
The performance of organisations has been attributed to the culture within such organisations. Denison's (1990) indicated that organisational culture influences organizational performance directly. Sarros, Gray, Densten and Cooper (2005) linked organisational culture to organisation’s effectiveness. Provincial Government Western Cape (2009) stated that organisational culture affects its performance. Cheung, Pang, Tam and Chan (2010) identified organisational culture as an essential organisational stabiliser and growth driver. Aluko
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(2003) indicated that organisational culture has significant impact on organisational performance in selected textile firms in Nigeria.
An organization is defined as basically a structure for carrying out a particular social activity on a regular basis (Aluko, 2003). In the light of the definition by Aluko (2003), quantity surveying firms are service based organisations within and outside the construction industry. An example is in UK where most of the leading quantity surveying firms is seen to have established consultancy services in other industries (Page, Pearson and Pryke, 2001). Thus the relevance of quantity surveying and its service firms (organisations) therefore extends beyond the construction industry. As an organisation, it is then sure that culture exists within every established quantity surveying firm going by Line (1999) that every organisation has its own culture whether it knows it or not. The assertion of Line (2009) also means that the awareness of culture within organisations may or may not be known to it. Questions however arose that ‘what culture exist within quantity surveying firm?’ and ‘what culture influences its performance?’ These questions need be answered going by the recent lacklustre performance in the quantity surveying practice and its service firms. Previous researches of Abdullah and Haron, (2005); Oladapo, (2006); Olanrewaju and Anavhe, (2009); Oke (2009); Frei and Mbachu (2009); Van der Forte and Le Jeune (2009) and Musa, Oyebisi and Babalola (2010) are all pointer to the dearth of performance in the quantity surveying service sector. Particular emphasis was made on the low performance of quantity surveying in Nigeria by (Aliyu, Oyediran, 2011). Worst still, with the low performance of quantity surveying firms, Yu (2007) stated that competition has become fiercer and unpredictable in the construction industry, no matter what type of the firm is. However, with this unfavourable situation and state, the contribution of quantity surveying practice to the construction industry and the society at large cannot be overemphasised. Babalola et al., (2011) cited Badu and Amoah (2000) that quantity surveying profession is crucial to achieving a better society because the role of the quantity surveyor is directly linked to the provision of basic human needs. Annunike (2011) also stated that the quantity surveyor as a professional is a major player in the building and construction sector as the cost expert. With the aforementioned importance of quantity surveying; and by extension its service firms, performance of the practice is therefore inexpendable. 2
This research therefore proposes that the performance of quantity surveying firms can be enhanced by organisational culture consciousness within. Baker (2002) stated that once organisational goals are defined, it is necessary to address the type of organisational culture that is necessary to advance these goals and objectives. Khan, Usoro and Majewski (2010) also buttressed that changing unfavourable culture can improve organisational performance and competitiveness. From the foregoing, the influence of organisational culture on the performance of quantity surveying firms needs be established first. Evaluating the effect of organisational culture on performance of quantity surveying firms in this study is with a view to establish the organisational culture that predicts the performance of quantity surveying firms. Furthermore, management theories on organisational effectiveness and performance in the Nigerian construction industry will also be enriched as the approach to this study will be a basis for similar research in other professional service firms in the construction industry.
1.2
RESEARCH PROBLEM
Zhang (2010) pointed out that management theory believes that organisational culture is the main part of development strategy of organization which means the quality of organizational culture will influence organizational performance directly or indirectly. In specific terms, Aluko (2003) reiterated the effect of organisational culture on performance. Baker (2002) also stated that once organisational goals are defined, it is necessary to address the type of organisational culture that is necessary to advance these goals and objectives. However, the performance of quantity surveying firms can be attributable to a number of factors and various researches in recent past had dwelt on the challenges to the performance of the quantity surveying practice and its professional service firms. Some of the researches include: Davis, Watson, and Man (2007), Smith (2010), Frei (2010), Hassan and Minden (2010) and Oyediran (2011). However, none of these researches nibbed on organisational culture in quantity surveying practice; neither in its service firms. This shows the extent of strangeness and obscurity of organisational culture and its application to quantity surveying practice. The implication of the strangeness of organisational culture in quantity surveying practice will be on the performance of quantity surveying practice and its service firms going by Zhang (2010) stating that organizational culture is combined with the internal requirements of organization and it is the need of organization's own development. Baker (2002) also stressed 3
that open system view of organizations recognized that culture is also important in mediating adaptation to the environment. There is therefore little wonder in the assertion of Cartilage (2006) that quantity surveying practice is on the brink in the UK considering the obscurity of organisational culture to quantity surveying practice. Oyediran (2011) expressed how the fortunes of some quantity surveying firms appeared tied to the fortunes of the architectural practice they have relationship with; when it comes to getting consultancy commission. The same applies to engineering service firms when it comes to quantity surveying firms getting consultancy commission. That is; other construction service firms are more or have been able to sell their services more to the clients which enable them the opportunity of making direct contact. They have also been able to make the construction industry clients identify with them. It also means that quantity surveying firms are not well entrenched into its local societies. This can be related to how ungrounded quantity surveying practice is; in the society. In the opinion of Frei (2010), the situation is related to the obscurity of the profession where it is relatively unknown to construction industry clients. This situation has led to Kawu (2011) positing that quantity surveyors face personality complex and act as strangers when commissioned on projects with other professionals. However, the awareness, adoption and application of organisational culture in quantity surveying firms would have mitigated this problem going by Bruno (2010) that an organization’s development is closely linked to its culture development. A company’s values, beliefs, rites, myths, laws, technology, morals, work and management (culture) should be molded on the society it is inserted in through its historic and anthropological makeup which enhances their acceptability. Contemporary discussions of organizational performance argued that managers and other organizational practitioners have to develop an understanding of their culture settings (by aligning its organisational culture with its environment) if their organizations are to perform effectively. Bruno (2010) proposed a methodology to draw the culture profile of organizations analyzing how it is used in the company's strategic analysis. The methodology made evident the contribution of organisational culture to strategic planning. The importance of strategic planning in terms of adapting organisations to the external environment and internal integration for organizational performance was also made evident. Strategic planning in quantity surveying firms is a potential for enhancing performance and to survive in the construction industry. Hassan and Minden (2010) buttressed this assertion by stating that 4
strategic planning process increases the way a firm manages the internal resources, scanning the external environment, position themselves in an industry which is important for small and medium firms like quantity surveying operating in the uncertain construction industry. In South Africa, Hoffman (2010) stated that research ten years ago and in recent times indicated restricted application of strategic management by quantity surveying firms. In the Nigerian quantity surveying firms, strategic planning is almost non-existent. This assertion cannot be argued since quantity surveying firms in Nigeria according to Oyediran (2011); have their consultancy commission fortunes tied to other service firms in the construction industry. There’s also the feel of inferior personality complex on part of quantity surveyors to other professionals when commissioned on projects (Kawu, 2011). These challenges occur when an organisation is not strategic enough which is however the case for quantity surveying firms. Strategic planning is the function of organisational culture (Bruno, 2010) and; is lacking in quantity surveying firms due to dearth of organisational culture therein. Quantity surveying firms are knowledge intensive organizations because its greatest service delivery means are staff expertise and skill (Davis et al., 2007). In the assertion of Yu (2007), organizational-level knowledge stock can lead to better business performance in quantity surveying organizations. In Singapore, Dulaimi and Ang (2009) identified organisational culture as one the building blocks that can help develop Singaporean quantity surveying firms into learning organisations. As learning organisations, quantity surveying firms will be able to render better services and perform effectively. In the Nigerian context, Babalola et al. (2011) made explicit the implication of knowledge based quantity surveying practice. It was stated that the ability of quantity surveying professionals to meet changing client needs and to grow the market for professional services depend on the knowledge base of the profession. This knowledge base must be fronted by appropriate organisational culture in quantity surveying firms. However, knowledge management practice seems to be lagging in the entirety of quantity surveying; no thanks to the dearth of organisational culture across all levels of the practice. Going through the syllabus of the Higher academic institution offering quantity surveying in Nigeria, culture study is lacking and worst still, the route to professional certification does not encompasses culture study. No wonder there is difficulty by quantity surveying practitioners to satisfy clients according to Page et al. (2004) and Oyediran (2011).
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Van der Forte and Le Jeune (2009) advised quantity surveying organisations in South Africa to implement horizontally integrated structures and culture; that do not penalise employees for introducing new ways of working and not succeeding; that endorse employees to consistently question organisational systems and processes; and that create a shared perception that all participants and employees are striving towards achieving sustainable goals. Suffice to say that the contents of the advice of Van der Forte and Le Jeune (2009) are the variables of organisational culture measures of OCP developed by Sarros et al. (2005) and used in this study. Also, this advice was made so as to enable and sustain both employee commitment and performance in such organisation. In Nigeria, Oyediran (2011) feared for the market position of quantity surveying firms because of the low performance of its employees. This shortcoming in the performance of employees in quantity surveying firms can be attributed to irrelevance attached to organisational culture in quantity surveying firms. How? Provincial Government Western Cape (2009) stated that organisational culture is closely related to the organisational climate that employees experience. The understanding of organisational strategies and directions in driving performance was also linked to the importance attached to organisational culture/climate. Thus, the non performance of employees’ in quantity surveying firms by Oyediran (2011) is attributable to lack of relevance to organisational culture.
However, it is believed that the lot of the quantity surveying firms can be progressed through the adoption and application of appropriate organisational culture. Ojo (2010) buttressed this by stating that organisational culture is frequently responsible for all manners of organisational ills and, on occasions, credited with creating positive qualities. This research therefore empirically evaluates the effect of organisational culture on performance so as to provide additional and improved means for the management of quantity surveying firms to drive and enhance performance.
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1.3
RESEARCH QUESTIONS
Considering the foregoing therefore, it is pertinent to ask the following questions which are germane to the objectives of this research work: 1. What are the types of organisational culture in quantity surveying firms? 2. What is the level of importance attached to organisational culture in quantity surveying firms? 3. What are the challenges to the formalisation of organisational culture in quantity surveying firms? 4. What is the effect of organisational culture on the performance of quantity surveying firms? 1.4
AIM AND OBJECTIVES
The aim of this research is to evaluate the effect of organisational culture on the performance of quantity surveying firms with a view to establish the culture that best predict(s) the performance of quantity surveying firms in Lagos State, Nigeria. The specific objectives are to: 1. assess the types of organisational culture in quantity surveying firms; 2. assess the level of importance attached to organisational culture in quantity surveying firms; 3. investigate the challenges to the formalisation of organisational culture in quantity surveying firms; and 4. evaluate the effect of organisational culture on the performance of quantity surveying firms.
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1.5
RESEARCH HYPOTHESES
In order to further examine the objectives of this research in quantitative terms, the following hypotheses are postulated: 1. There’s no significant difference among the perceptions of Principal Partners, senior quantity surveyors and junior quantity surveyors on organisational culture in quantity surveying firms; and 2. There’s no significant correlation between the types of organisational culture and the performance of quantity surveying firms; and 3. The types of organisational culture in quantity surveying firms have no effect on its performance variables. 1.6
JUSTIFICATION FOR STUDY
Quantity surveying profession is faced with the task of advancing the practice beyond the traditional scope. Quantity surveyors have been challenged to venture into vast areas and widen the scope of service; all in a bid to move the profession to the next level. The new areas proposed by Page et al. (2004) include: project/construction management, legal services, design, planning supervision, building surveying, tax capital allowance advice and value management. Others include: management consultancy, facility management, Private Finance Initiative (PFI) consultancy and service to non quantity surveying sectors. However, with the level of orientation and awareness for improved practice in the profession of quantity surveying, the practice exhibited in quantity surveying firms is seen as falling behind in attaining the global standard (Van der Fort and Le Jeune, 2009; Smith, 2010). The persistence of which may drown the profession with its benefits to the construction industry and the larger economy. Organisational culture is seen to advance professional service firms, including quantity surveying. Therefore, this study examines the effect of organisational culture on performance so as to provide specific and objective approach to advancing the performance of quantity surveying firms and by extension; quantity surveying practice. Yu (2007) corroborated this intention by stating that organisational culture can be a source of competitive advantage as cultures with tendency toward innovativeness encourage employees to think beyond existing knowledge, technologies, and parameters in efforts to find creative ways to add value. 8
Olanrewaju and Anavhe (2009) described the concern of quantity surveyors to include financial integrity, contractual matters, procurement in/and achieving value for the clients’ money in a project. For clients to fully benefit from these concerns of quantity surveyors, they have to be addressed and fronted by appropriate organisational culture so as to ensure sustainability; which is what this study is proposing. The advancement of quantity surveying practice through the adoption of appropriate organisational culture will benefit the quantity surveying firms in Nigeria, as they will be enriched with information on the appropriate type of organisational culture practice that better position and enhance the performance and competitiveness of quantity surveying firms. The Nigerian Institute of Quantity Surveyors (NIQS) will be informed on organisational culture relevant to the practice and advancement of quantity surveying profession and then included as part of codes of practice in quantity surveying firms; which is not presently included in the NIQS regulation and constitution. By extension, clients in the construction industry will benefit from the advancement of quantity surveying practice. The findings of this research will provide novelity and enrichment to management literatures construction in the construction industry as well as general management literatures.
Going through the literature, organisational culture is a popular area. Baker (2002); Ilies and Gavrea, (2005); Bititci et al. (2006); Provisional Government Western Cape (2009); Khan et al. (2010); Bruno (2010) and Naranjo-Valencia, Jimenez-Jimenez and Sanz-Valle (2011) have all carried out research on organisational culture. However, none had however made explicit the organisational culture in quantity surveying firms and its effect on performance and they were all carried out outside developing economic country like Nigeria. Oney-Yazic, Arditi and Uwakweh (2005)s’ study on construction firms in the US proposed the need for firms to understand their own and other firms’ organizational culture and need to adjust their ways and traditions while conducting business with other firms, organizations or individuals with different cultural values. The aim of the study was to encourage cultural synergy and cooperative relationships among construction firms in the US. The influence of organisational culture on performance of the firms was not addressed and the scope of the study was not specific to quantity surveying firms in Nigeria.
In advancing the practice of quantity surveying profession, Harun and Abdullah (2005) called on the profession of quantity surveying to evolve and reinvent itself in line with the new 9
emerging trends by changing their working patterns, acquiring new knowledge areas, skills and mindset. This is not enough as this proposition does not provide any linkage or causality to the new emerging trends proposed in advancing the practice of quantity surveying. This study of organisational culture in quantity surveying firms therefore provides information that explains the performance of quantity surveying firms using organisational culture. This therefore buttressed Baker (2002) that once organisation goals are defined, it is necessary to address the type of culture that is necessary to advance these goals and objectives and ensure the successful implementation of the necessary changes. Furthermore, the call by Harun and Abdullah (2005) is not specific to any of the divisions of quantity surveying practice (Academic, consulting/contracting practitioners, policy makers). This could make the effectiveness of the advice to be jettisoned. Also, the approach in which the recommendation was made is in sharp contrast to this study which specifically focuses on quantity surveying firms.
1.7
SCOPE AND LIMITATION OF THE STUDY
Liu, Shuibo and Meiyung (2006) stated that for construction enterprises (including quantity surveying), their organisational culture needs to be investigated in order to enrich the application of appropriate management theories in organisational effectiveness studies. This research therefore focuses on using organisational culture to explain the variability in the performance of quantity surveying firms. The validated Organisational Culture Profile (OCP) by Sarros et al. (2005) was used to assess the organisational culture of quantity surveying firms. The measure of performance of quantity surveying firm was gotten from the literature. This is with a view to establishing the relationship between organisational culture and performance of quantity surveying firms. The effect of organisational culture and performance of quantity surveying firms was also evaluated. The focus of this study was also delimited to an examination of organizational culture from organisational perspective. In achieving the organisational specific focus, quantity surveyors in quantity surveying firms respond to questions on the firms. The reason is in accordance to Sonia (2005) stating that quantity surveying firms predominantly rely on quantity surveyors expertise, knowledge and skill to satisfy clients needs. By this, other categories of employees like the administration staffers are considered not to be important to quantity surveying firms; especially on issues like organisational culture. Therefore, the identified three hierarchies of 10
Principal partners, senior quantity surveyors and junior quantity surveyors were the employees required to supply information required in each firm. This research also focuses on firms with five and above years of establishment. Firms with lower number of years of establishment were considered as insignificant to this study. The reason being that the culture within an organisation will not take less time to reach maturity; and by extension, studying. Data collection was confined to Lagos State since 75% of quantity surveying firms in Nigeria is located there and this was affirmed by Fagbemi (2008). The respondents for this research are the identified hierarchies (Principal partner, senior quantity surveyors and junior quantity surveyors) in quantity surveying firms. The design of this research was to purposively ensure that these three hierarchies provide response in each sampled firm. However, the responses of the three hierarchies were not gotten in all the firms as indicated in the response rate. This could hamper the generalisation of the findings but not to the extent of invalidating it.
11
CHAPTER TWO LITERATURE REVIEW 2.1
ORGANISATIONAL CULTURE
Baker (2002) stated that organizational culture became a business phenomenon in the early 1980s. Since then, the concept of organization culture has appealed to organizational scientists and practitioners who had grown disillusioned with the prevailing formalistic and quantitative organizational research. There are many research works which has the definition of organisation culture. Schein (2004) defined organisation culture to be pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. Wikipedia (2011) agreed with this definition of organisational culture describing it as the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. Khan et al. (2010) described organisational culture as the set of particular organisation tasks that are carried out by organisation members in a specific way that makes it different from other organisations or from other units within an organisation. Also organisational culture holds the organisation together and encourages employees not only to perform well but also to feel committed to the organisation. Provincial Western Government Cape (2009) described organisation culture as ‘the way things are done in a particular organisation’. Organisational culture is believed to be apparently unifying and this strongly appeals to management’s concern by projecting an image of the organization as a community of interests. Perhaps most importantly culture penetrates to the essence of an organization – it is almost analogous with the concept of personality in relation to the individual and this acute sense of what an organization is – its mission, core values – seems to have become a necessary asset of the modern company. Literatures have emerged around particular variants of organizational culture considered increasingly important for success in the modern business world. The variants include change oriented culture, learning culture, innovating culture, team- and project-oriented cultures. More recently, attention has turned to identifying and creating an organizational culture that facilitates agility, promotes alliances, partnerships 12
and networks, encourages knowledge management, fosters corporate responsibility and/or moral integrity and embraces diversity (Baker, 2002). Willcoxson and Millett (2000) stated that some writers argue that organisational cultures are unitary and integrated; others argue for the existence of pluralism or differentiated subcultures in the one organisation. Also, Web book (2012) argued that there multiple of cultures. It was stated that the variance in culture within an organisation can cut across units, departments and the divisions present in an organisation. It can thus be deduced that organisations can have multiple cultures in operation within. Web book (2012) named cultures that emerge within different departments, branches, or geographic locations as subcultures: a set of values unique to a limited cross section of the organization. Subcultures may arise from the personal characteristics of employees and managers, as well as the different conditions under which work is performed. In addition to understanding the broader organization’s values, managers will need to make an effort to understand subculture values to see their effect on workforce behavior and attitudes. Sometimes, a subculture may take the form of a counterculture: shared values and beliefs that are in direct opposition to the values of the broader organizational culture. For example, within a largely bureaucratic organization, an enclave of innovativeness and risk taking may emerge within a single department. A counterculture may be tolerated by the organization as long as it is bringing in results and contributing positively to the effectiveness of the organization (Web book, 2012). This all means that whether an organisation maintains single or multiple culture, the positive contribution of the culture is utmost. In this study, the focus is on the contribution of organisational culture to the performance of quantity surveying firms. However, the existence of a counter culture may be perceived as a threat to the broader organizational culture. In some cases, this may lead to actions that would take away the autonomy of the managers and eliminate the counterculture. As for Willcoxson and Millett (2000); observed was that; with the anthropological or scientific rationalist paradigm, there is no one demonstrably right perspective, but the perspective adopted will certainly influence the change strategies used and it may be that certain types of organisations are more likely to have a single, unitarist culture whereas others are more likely to be pluralistic or anarchistic in nature. This is a question waiting to be answered in this research as to whether quantity surveying firms maintain single or multiple organisational cultures. 13
From the unitarist perspective, the essential unity of the organisation makes it possible for the leader or leadership group to effectively control or alter organisational direction. The pluralistic perspective recognises the existence within organisations of diverse sub-cultures arising from factors such as professional affiliation, status, social or divisional interactions. It was thus argued that organisational success springs from the effective leadership and management of diversity, and that cultural change or maintenance efforts have to be undertaken through programs specifically designed for different segments of the organisation (Willcoxson and Millett, 2000). 2.2
DIMENSIONS OF ORGANISATIONAL CULTURE
Organisational phenomena (socialisation, culture, strategy, value, climate etc) exhibit dimensions in their parent organisations. The dimension of an organisational phenomenon refers to its focus and orientation. Socialisation as an organisational phenomenon was dimensioned into performance proficiency, politics, language, people, organisational goals/values and history by Chao, O’Leary-Kelly, Wolf, Klein, and Gardner (1994). These dimensions were said to reflect what is learned during socialisation process. Culture as a social construct and phenomenon in organisations has its dimensions. However, the dimensions of culture reflect the peculiarities of the environment where the construct of culture is assessed. These environments can be an individual perspective, an organisation or a nation. Wikipedia (2012) reported Geert Hofstede's theory of cultural dimensions which describe the effects of a society's culture on the values of its members, and how these values relate to behavior. The theory has six dimensions which include power distance, masculinity versus femininity, individualism versus collectivism and Uncertainty avoidance. Others are long term orientation versus short term and indulgence versus restraint. These dimensions gave a general overview and an approximate understanding of other cultures, what to expect from them and how to behave towards groups from other countries. Inference from this theory reveals that culture was assessed from national perspective. Liu et al. (2006) assessed the organisational culture of construction enterprises in China. The assessment was done with the framework developed by Cameron and Quinn (1999). The framework has two interestingly conflicting dimensions which are the hierarchy culture (which is internally-focused and concerning stability and control) and market culture (which is external focus but wanting stability). The framework implies that organisations have dual 14
dimensions of internal and external focus which ultimately explains their integration and adaptation. In Sarros et al. (2005), organizational culture was described as a multilayered construct that has an internal people-focused dimension and external business- and environment-specific dimensions. This assertion was based on in-depth empirical analysis carried out on the Organisational Culture Profile (OCP) model; which was also used for assessing organisational culture in this study. The model has seven factors of supportiveness, emphasis on reward, performance orientation, competitiveness, social responsibility, stability and innovation. After empirical analysis was done, the seven factors were re-categorised into three dimensions. The three dimensions reflect the focus of the factors in organisations. The factors of supportiveness and emphasis on rewards were put together and labelled people orientated dimension. These factors are congruent with two dimensions identified by Ashkanasy, Broadfoot and Falkus (2000). They are namely ‘humanistic workplace’ where ‘the organization respects and cares for individuals and ‘development of the individual’. Grouping supportiveness and emphasis on rewards together is consistent with the dimension labelled ‘concern for people’ in a Dutch study of organizational culture by Vianen (2000). The factors of competitiveness and performance orientation, competitiveness and innovation were grouped together having reflected dimension similar to goal accomplishment; according to Vianen (2000). The remaining two factors of stability and social responsibility formed a third group where the factors reflected a concern for aspects in the external environment beyond the organization. These aspects correspond to the dimension labelled ‘environment’ in the study by Ashkanasy, Broadfoot and Falkus (2000) and thus labelled so. Organisations that exhibit one, two or the three dimensions of organisational culture are single, dual or multidimensional respectively. 2.3
MODELS FOR MEASURING ORGANISATIONAL CULTURE
The model that consist the two basic approaches to studying organisational culture was adopted for this research which ensures robust and comprehensive study. Liu et al. (2006) stated that there are typological approach (cultural types) and the trait approach (cultural dimensions) to studying organisational culture. In choosing a model for measuring organisational culture, variants of model that have been applied to other studies were considered before the adopted model for this study was chosen. Furthermore, the models were checked for their robustness in including the typological and trait approaches. The variants considered are as follows: 15
2.3.1
The Barros and Prates Model (BPM)
This model was developed in 1996 to measure the culture traits present in business management organisations. The model is made up of four subsystems: the institutional (formal) one, the personal (informal) one, the one of the leaders and those who is led. Each one presents a common culture traits and also special traits that articulate the set as a whole. This model was however biased towards Brazilian environment and therefore it is not applicable in Nigeria because of differing environments. It can therefore not be used for this study. 2.3.2
The Denison Organizational Culture Model (DOCM)
This is a four trait model with three sub-dimensions for measuring organisational culture. Involvement trait (empowerment, team orientation and capacity development), consistency (core values, agreement and coordination and integration), adaptability (creating change, customer focus and organisational learning) and mission (vision, strategic direction and intent and goals and objectives). The unpopularity of the use of this model (especially in the construction industry) as indicated from its dearth in the literature makes it not to be considered for this study. 2.3.3
The competing values framework (CVF)
The Competing Values Framework was developed by Quinn (1988) to measure organisational culture. The Competing Values Framework combines two dimensions, creating a 2x2 matrix with four clusters. The first dimension places the values of flexibility, discretion, and dynamism at one end of the scale with stability, order, and control on the other. The second value dimension is marked by internal orientation, integration, and unity at one end of the scale with external orientation, differentiation, and rivalry on the other. Tharp (2009) gave an insight on the shortcomings of this model. It was stated that this model considers the culture of an organisation as a whole; in which case no organisation has homogenous culture. It was added that organisational culture contains potentially numerous subcultures which becomes a complexity for this model to measure; as such it becomes unsuitable for this study.
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2.3.4 Combined Organizational Culture Inventory (OCI) and Organizational Effectiveness Inventory (OEI) model The Organizational Culture Inventory (OCI) and Organizational Effectiveness Inventory (OEI) combined; is a measure of organisational culture developed by Human synergistic organisation (Cooke, 2012). The OCI and OEI provide a complete picture of the relationship between stated values (preferred culture) and the organization’s actual operating culture, identifying the key factors that influence that relationship and the outcomes associated with this. It has mission and philosophy, structures, systems, technology and skills/qualities as its variables. The outcome variables are individual, group and organisational levels. However, this model is not performance orientated and does not provide measure of external adaptation to organisations. Therefore it is not suitable for this study. 2.3.5 Provincial Government Western Cape Organisational Culture Model (PGWC) This model was developed by Provincial Government Western Cape (2009) to measure organisational culture. It was used to determine how employees view the ideal organisational culture which needs to be entrenched in the Western Cape. The model consists of five elements, namely leadership, strategy, responsiveness, co-ordination and relationships. Each of the elements of the model contains a number of sub-elements. This model was however biased towards Western Cape culture in South Africa. The model was also limited to public institutions. Therefore, it will not be used for this study. 2.4
ORGANISATIONAL CULTURE MODEL FOR THIS STUDY: The validated organisational culture profile (OCP) model
The importance of this research work has led to the adoption of the Organisation Culture Profile (OCP) model which represents one of the major measures of organisation culture (Agle and Caldwell 1999; Howard 1998; Cable and Judge, 1997). Ashkanasy, Broadfoot and Falkus (2000) cited in Sarros et al. (2000) reported that the OCP was one of only a few instruments to provide details concerning reliability and validity. The original version of the OCP consisting of 54 value statements was developed using exploratory factor analysis to establish eight dimensions of organizational culture, namely innovation, attention to detail, outcome orientation, aggressiveness, supportiveness, emphasis on rewards, team orientation, and decisiveness (Sarros et al., 2005). The aim of overcoming 17
the limitations associated with Q-methodology used in developing the original version of the OCP prompted the development of a revised version of the OCP using a Likert-type scale format by (Sarros et al., 2005). The revised version of the Organisation Culture Profile (OCP) model has 28–item, seven factor structure dimensions comprising the following factors: supportiveness, innovation, competitiveness, performance orientation, stability, emphasis on rewards, and social responsibility. Supportiveness and Emphasis on reward was highly correlated and grouped together and labelled ‘people oriented dimension’. The interpretation is that firms that place high emphasis on supportiveness and reward culture are said to be people orientated. Web book (2012) stated that people orientated cultures are characterised of value fairness, supportiveness, and respecting individual rights. In these organizations, there is a greater emphasis and expectation of treating people with respect and dignity. People orientation culture instils commitment in employees. The factors of competitiveness and performance orientation which correlated highly and competitiveness
and
innovation
were labelled
‘goal
accomplishment
dimension’.
Organisations that operate competitiveness, performance orientation and innovation cultures can thus be said to be goal accomplishment orientated. Web book (2012) described this type of culture as aggressive. It was also stated that organisations with this type of culture outperforms their competitors; however, such organisations are said to be short of corporate social responsibility culture. Factors of stability and social responsibility formed a third group where the factors reflected a concern for aspects in the external environment beyond the organization. These aspects correspond to the dimension labelled ‘environment oriented dimension’. Zhang (2005) stated that external adaptation is one of the functions of organisational culture. Therefore, any organisation that has stability and social responsibility cultures as dominant cultures can be said to be well grounded in its environment. That is, the organisation has not only been able to excel in performance but had carved a niche for itself in its environment. Furthermore, the identification of the higher-order factor structure dimensions clarifies the relationships among factors. In Sarros et al. (2005), this model was adjudged the best fitting model for measuring organisational culture. The choice of validated Organisational Culture Profile (OCP) for this study was based on its ability to inculcate the two approaches 18
(typological and trait) to studying organisational culture. Another reason is the shortcomings of the other models and their context of application. Barros and Prates Model (BPM) and Provincial Government Western Cape (PGWC) are locational biased towards Brazil and South Africa respectively; therefore lacking universal application which makes both unsuitable for this study. Competitive Values Framework (CVF) model is unable to measuring sub cultures within an organisation and such unsuitable for this study. The performance aspect of this research cannot be met by the combined Organizational Culture Inventory (OCI) and Organizational Effectiveness Inventory (OEI) and as such, they are not significant to this study. The Denison Organisational culture model (DOCM) is untested and unproven with the dearth of its usage as indicated in the literature. The importance of this research work cannot be put into jeopardy by using the unpopular Denison organisational culture model. The revised Organisation Culture Profile (OCP) is thus considered appropriate for this research. Its variables provide measure for the two important functions of organisational culture. They are internal integration and external adaptation (Martins and Terblanch, 2003). This means the model also presents organizational culture as a multilayered construct that has an internal people-focused dimension and external business- and environment-specific dimensions. This model is also sensitive to discriminate among industry groups suggesting its robustness, and the ability to reflect true differences among aspects being measured. Also, the ability of this model to multidimensionally measure organizational culture contributes to the understanding of various aspects of organizational behaviour, and provides a valuable and user-friendly instrument for researchers and practitioners. The gradual development of the models is presented in Figure 1.1
19
Figure 2.1: Model of Organisational Culture Profile (OCP) Source: adapted from Sarros et al. (2005)
The cultural elements considered under the Organisational Culture Profile (OCP) include the following: 2.4.1
Performance orientation
Bashayreh (2009) expressed performance orientation culture in organisations. It was stated that performance orientation culture in organisations emphasises on tasks and goal 20
accomplishment which thus glues the organisation together. The organisations have common shared production orientation. There’s general consciousness towards performance in organisations that are performance orientated. A well defined criterion for evaluation performance is also an attribute of organisations that has performance orientation culture (Bashayreh, 2009). In terms of commonly shared production orientation, each of the Nigerian quantity surveying firms ensures uniqueness in output. Contract documents used for project execution are unique to each of the firms and common to the employees within the firms only. As for the evaluation aspect of performance orientation culture, the mission and vision statements of each of the quantity surveying firms in Nigeria provides basis for evaluation on regular and periodic intervals. The mission and vision statements contain set targets and goals which when visited indicates the level of performance both at individual and organisational levels.
Sarros et al. (2005) looked at organisations’ performance orientation from the employee point of view. Organisations that entrench enthusiasm and result orientation in employees are said to be culturally performance oriented. Ensuring that employees are enthusiastic and result oriented is a function of the quality human resource management put in place in organisations. The quantity surveying firms in Nigeria hardly maintain human resource department. This means employees’ engagement and recruitment in quantity surveying firms are based on technical ability as against robust and an encompassing scrutiny that ensures acme performance. Sarros et al. (2005) also describe such organisations as well organised, structured and coordinated. The position of Sarros et al. (2005) on the performance outcome aspect of performance orientation culture is similar with Bashayreh (2009) emphasising performance evaluation as an aspect of the culture of performance orientation in organisations.
2.4.2
Innovation
Web book (2012) stated that organisations that are flexible, adaptable, experiment with new ideas and encourages risk taking have innovation culture. Such organisations are characterized by a flat hierarchy and titles and other status distinctions tend to be downplayed so as to limit barriers to risk taking. Hierarchical setup is never down played in Nigerian quantity surveying firms. Every quantity surveyor engaged in the firms occupies a rank and 21
ensures strict compliance with the duties thereof. Philip and Marketing (2007) also emphasise risk taking as germane component of innovation culture in organisations. The description of innovation culture by Bashayreh (2009) is similar to Web book (2012). Bashayreh (2009) stated that organisations that encourage and support innovation, cooperatively create change, develop new and improved ways constantly and respond well to competitors. In addition, Sarros et al. (2005) stressed the opportunities giving within organisations to employees to take individual responsibility. In Nigeria, most quantity surveying firms decentralise the management of on-going projects by assigning individual quantity surveyor employee to each project. The assigned quantity surveyor is given full responsibility of the project from inception to completion. This way, the quantity surveyor so assigned can bring in discretion and individual innovation on such project. It is noteworthy that the construction industry as indicated by Smith (2010) has undergone significant change over the past two decades due to factors such as changing industry/client demands and project procurement practices, information Technology (IT) developments and increased levels of competition for services. The concomitant impact on the quantity surveying (QS) profession has seen tremendous changes in the scope and type of services provided by the profession both within and outside of the construction industry. Therefore, innovation culture is desirable more than ever in quantity surveying firms. 2.4.3
Stability
Sarros et al. (2005) emphasises general organisation stability, calmness, minimal conflict level and security of employment as tenets of stability culture. Organisations that maintain proper channel of grievance handling and explicit communication channels experience minimal conflicts. General organisational stability is viewed in terms of maintenance and strives for consistency and control through clear task setting and enforcement of strict rules. Stability culture also emphasises security of employment of employees in the organisation, thereby minimising conflict level and ensuring calmness. The inability of an organisation to ensure robust stability culture results to what Isaacs, Brady, Reeves, Burroway and Reynolds (2011) describe as poor or declining stock performance, an obligatory restatement of financial earnings, scandal, fraud, large lay-offs or restructurings, or mergers and acquisitions. In Nigeria, mergers and lay-offs are common phenomenon in quantity surveying firms signalling the lack of stability culture in the firms. 22
2.4.4
Supportiveness
Sarros et al. (2005) describes the supportiveness organisational culture in terms of team and people orientation, sharing information freely and general collaboration within an organisation. This is in agreement work environment scale (WES) developed by Moos (1987). Supportiveness culture represents people-focused and team-oriented approach that consists of the ability to collaborate and share information with work colleagues. Wei and Morgan (2004) also stated that supportiveness organisational culture is important to developing market orientation in firms. The study also indicated indirect relationship between supportiveness organisational culture and new product performance.
Explicitly, employees involved in new product development who perceive they are being supported by management are more likely to feel comfortable in engaging in the kinds of risk taking that have been linked with successful innovation (Sethi, Rajesh, Smith and Park, 2001). Such, supportive organizational climates can increase organizational commitment of personnel. This transform to peer supportiveness within an organization, reduce conflict, enhance cohesiveness and communication within product development teams and between the product development team and the rest of the organization. The boutique nature of the Nigerian quantity surveying firms enhances cooperation and team working. Joint and collaborative efforts are visible in the quantity surveying firms when projects are on-going. Henard and Szymanski (2001) indicated that all the aspects of supportiveness culture have been found to be associated directly with performance outcomes. Corroborating this fact, Sovos group (2010) stated specifically that collaboration among employees is a major driver of performance of such employee organisation; in which case, collaboration is a construct of supportiveness organisational culture. 2.4.5
Social responsibility
This is a form of corporate self-regulation integrated into a business model functioning as a built-in and self-regulating mechanism where business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. This enhances goals of embracing responsibility for the company’s actions and encourages a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere (Wikipedia, 2011). The culture of corporate social responsibility according to Sarros et al. (2005) includes 23
reflection undertaken by organisations on its past and using it as a guide to react to the present and the future. Organisations that place so much emphasis on its image and reputation are said to indulge the social responsibility culture. Emphasis placed on image and reputation informs the social contributions of such organisations to the society. Therefore, organisations that continually give back to the immediate and the larger society definitely imbibe the culture of social responsibility. Suffice to say that standard guiding philosophy on matters related to the society is formalised rather than arbitrary approach. The reason may be to ensure coherence and congruence of social contributions of an organisation to the society; which is also fundamental to the principle of corporate social responsibility. In Nigeria, some quantity surveying firms have imbibed the social responsibility culture. Quantity surveying firms have been seen to organise training and workshops for the benefit of quantity surveyors and allied professionals. Higher institutions that offer quantity surveying have been benefitting from the benevolence of some quantity surveying firms in cash, kind and students’ internship training. However, Nigerian quantity surveying firms have not been seen putting infrastructures (borehole, city halls, road networking) in communities like other organisations such as banks, construction companies and telecommunication companies. This may be due the fact that image and reputation of the firms is not directed at community development but stakeholders that has other criteria for staking with the firms. 2.4.6
Emphasis on Reward
Rewards confine itself to compensation which focuses almost entirely on pay and benefit. Medcof and Rumpel (2005) define rewards as a strategy to meet the needs of both the organization and the employee in a way that helps employees understand the full value proposition they work under. Reward system is an important ingredient in managing a company (Nacinovic et al., 2009). Bashayreh (2009) stated that reward culture exists when organisations ensure these threepoint of view of reward culture. First, there’s a reward culture when employees’ input (job skills, education, effort, and performance) is commensurate with the mix of extrinsic and intrinsic rewards they receive in organisations. Second, there’s a reward culture when employees’ input-reward ratio is at par with other organisations. Third, there’s a reward culture when organisations emphasise the prompt communication of the candid evaluation of the performance of employees to the employers. This will enable the employees to develop a 24
realistic view of their own performance and by extension, the reward received. Web book (2012) describe reward culture as people orientated culture made visible in pay, health care services, reimbursement for expenses and tea/coffee provision. The reward culture is said to reduce employee turnover. Oyediran (2011) feared for the below expectation performance of employees of quantity surveying firms. This dismal performance of employees in quantity surveying firms is attributable to the poor reward culture of the firms. In Nigeria, quantity surveying firms are faced with constant loss of employees to other firms within and outside the construction industry. Quantity surveyors do prefer contracting than consulting in Nigeria. The preference results from reward and motivation issues. 2.4.7
Competitiveness
Competitiveness on a firm’s level is defined by Ambastha and Momaya (2004) as the ability of the firm to design, produce and or market products superior to those offered by competitors, considering the price and non-price qualities. Beyond ability, it is necessary to ingrain this competitiveness attribute as a culture within organisations. That way; it becomes the way of life of such organisations. Web-book (2012) describes competitiveness culture as aggressive orientated culture that value competitiveness and outperforming competitors. It was also said that organisations that imbibe this culture falls short of corporate social responsibility. According to Sarros et al. (2005), competitiveness culture emphasises achievement orientation, emphasis on quality, product/service differentiation and competitiveness in organisations. That is, organisations that are achievement orientated emphasise quality and differentiation have competitiveness as its culture. In Nigeria, competitiveness culture in terms of emphasis on quality of service in quantity surveying firms will be best assessed from the level of satisfaction of clients with the services rendered by the firms. Unfortunately, the clients experience undesirable service quality (Oyediran, 2011). Also, not much has been done by quantity surveying firms in terms of service differentiation from one another. The same service has been rendered by most quantity surveying firms in Nigeria and specialisation on service is ubiquitous. These situations are indicative of the level at which quantity surveying firms in Nigeria embrace competitiveness culture.
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2.5
ORGANISATIONAL CULTURE AND PERFORMANCE
The culture within an organisation is often regarded as a measure of the performance of the organisation. A two way question was asked by Human Synergistic International in Australia that ‘Is there a link between organisational culture and organisational effectiveness? and Does organisational culture impact upon financial performance and staff satisfaction?’. These questions were answered in Baker (2002) advising that once goals are defined, it is necessary to address the type of culture that is necessary to advance these goals and objectives and ensure the successful implementation of the necessary changes. Jung, Scott, Davies, Bower, Whalley, McNally, and Mannion (2007) provides information on the research works of Ogbonna and Harris (2002); Fey and Denison (2003); Mannion et al. (2003); Moynihan and Pandey (2004); Flamholtz and Kannan-Narasimhan (2005) and Davies et al. (2007) who all explored and made explicit the links between organisation culture and performance. However, there are contradicting opinions from various researchers. A study by Eperjesi (2006) indicated that there is a correlation between organisation culture and outcomes. Sinickas (2006) opined that corporate culture can help drive business results, but it takes a cultural audit to differentiate which elements of the culture can lead to superior performance. Bhatti, Zaheer and Rehman (2011) and Gray and Densten (2010) stated that knowledge management practices driven by the culture process in an organisation affect organisation performance. Organisational culture which represents the assumptions, beliefs and norms shared by members of the organisation according to Cheung et al. (2010) has been identified as an essential organisational stabiliser and growth driver. Ilies and Gavrea (2005) reported Ogbinna and Harris (2002) that the only variable that had a purely direct effect on performance was innovative culture while the competitive culture had both a direct and indirect effect. Provincial Government Western Cape (2009); Aidla and Vadi (2003); Khan et al. (2010); Cheung et al. (2010) and Baker (2002) agreed with the contribution of organisation culture on performance. Other culture variables which assume a dominant practice in an organisation had been proved to have effect on the performance and the effectiveness of an organisation are: Organisation learning (Yu, 2007); knowledge management (Boon, 1996; Long, 1997; Nor and Egbu, 2010; Davis, Watson, Man and Sar, 2007); innovation (Page et al. 2004); management practices (Bruno, 2007); strategic planning (Hassan and Minden, 2010); and 26
ICT (Oladapo, 2006 and Musa et al. 2010). The performance of quantity surveying firms has been attributed to organisation culture practices of knowledge management (Sonia, 2005); and high innovative tendencies in data collection, management and monitoring processes (Hardie, Miller, Manley and McFallan, 2005). Ojo (2010) stated that several writers argued that strong organisational culture is good for business as it serves three important functions. First, organisational culture is a deeply embedded form of social control that influences employee decision and behaviour. Second, organisational culture is the social glue that bonds people together and makes them feel part of organisational experience. Finally, it helps employee understand organisational event and employees can communicate more effectively and efficiently, thereby reaching higher level of cooperation with each other. Barney (1986) was cited by Ojo (2010) that for a firm’s organisational culture to provide sustainable competitive advantage and by extension, superior performance, three conditions must be met. The organisational culture must be valuable, rare and imperfectly imitable. The focus of the management of service firms in the construction industry (including quantity surveying) is therefore encouraged to shift towards performance; driven by organisational culture. This will enable the firms to meet up the practices within construction industry where client requirements are paramount, where efficiency and effectiveness of service delivery are important, and where new and existing competitors are targeting customers in a new and innovative ways according to Scullion, Ross and Crook (2010). 2.6
PERFORMANCE OF QUANTITY SURVEYING FIRMS
Performance can be ascribed to corporations, business units or firms, support or functional units, teams and workgroups and individuals (Long, 1997). Performance is the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfilment of an obligation, in a manner that releases the performer from all liabilities under the contract. Going to the specifics in terms of business performance as it relates to organisation, it is how businesses perform having carried out activities in a manner that supports and allow survival and thriving of the business (Kellen, 2003); and quoted Lebas and Euske (2002) in defining business performance as doing today what will lead to measured value outcomes tomorrow. Chermack (2003) also describe performance as the valued productive output of a system in 27
the form of goods or services and the accomplishment and fulfilment, not the potential or capability as defined by the goals of the organization. Abdullah and Haron (2005) describe the performance of quantity surveying firms in terms of its performance profile which identify perceptions on future directions of quantity surveying practice. The performance profile of quantity surveying firms which was corroborated by Page et al. (2004) include: the size of firms, the number of employees employed, average number of jobs per year, profit level of the firm, ICT infrastructure, annual turnover. Others are professional status of employees, newest services rendered, entrance into new markets, ownership structure of firms, research activities, export of services, types of work undertaken and age of the firm. Quantity surveying is a service based practice (Page et al., 2004). The performance of quantity surveying firms should thus be viewed in terms of the services the profession offer. This research therefore considers the service orientated performance variables below in assessing the performance of quantity surveying firms. In Ambastha and Momaya (2004), profitability/financial measures, value creation, customer satisfaction and competitiveness are described as measures of performance of organisations. Naranjo-Valencia et al. (2011) also stated that innovation is crucial for attaining a competitive advantage for companies. Innovation is also said to better construction services in the UK as reported in Business Enterprise and Regulatory Reform (2008). Muthu, Whitman and Cheraghi (1999) and Weerakkody and Currie (2003) described business process re-engineering as a performance measure in organisations. Akimova (2009) and Aranda (2003) linked market orientation and service flexibility as a measure of competitiveness and performance in service firms respectively. Zingheim and Schuster (2007) stated that innovation and customer satisfaction are also measures of performance. Job satisfied employees can strongly contribute to an organization’s success by having a customer-centric approach in their work and in their work-related interactions (Bulgarella, 2005). This assertion then justifies job satisfaction, customer satisfaction and service quality as measures of organisation’s performance. Value creation, competitiveness, performance orientation, service flexibility, service quality, financial profitability, customer and employee satisfaction, innovation, business process reengineering and market orientation provide the best measure of performance in service firms like quantity surveyings’. These performance measure variables provide a level of 28
compliance to the advice of Frei and Mbachu (2009). Frei and Mbachu (2009) advised that in order to remain relevant, globally competitive and successful, quantity surveyors need to constantly scan their business landscape to discern new directions and to adapt to imminent changes in their professional practice. 2.6.1
Value creation
A firm creates value by producing and delivering goods/services at a cost that is lower than what the consumer is willing to pay for that good/service. Lieberman and Balasubramanian (2007) described value created value by a firm as quantitatively equivalent to improvements in the firm's efficiency of resource use. Strategic management researchers have equated value creation with return to shareholders and profit made by an organisation (Lieberman and Balasubramanian, 2007). In quantity surveying firms; most of which have not acquired corporate status; has no shareholders but clients. Such, returns to clients of quantity surveying firms can thus be the extent to which clients’ expectations are met by the firms. 2.6.2
Financial measures/Profitability
Financial performance is a broad measure of organizational performance that is more inclusive of the various benefits and costs of team production (DeVaro, 2006). The financial performance measures adopted in this research work include: the approximate profit after tax in a year, the approximate value of consultancy commissions per firm in a year and the average number of newer clients acquired per annum. These measures are believed to represent the financial performance of quantity surveying firms. Suffice to say that these measures are adequate in its ramifications especially since quantity surveying firms in Nigeria are not corporate organisations. 2.6.3
Customer satisfaction
Customers are the lifeblood of any organization. Without customers, a firm has no revenues, no profits and therefore no market value (Gupta and Zeithaml, 2006). In quantity surveying firms, the satisfaction of the clients which are the customers is an important consideration because the satisfaction or not of the clients of a firm determines the continuing standing or not of the firms. In-depth insight was provided by Oyediran (2011) and Babalola et al. (2011) into what and what not constitutes the satisfaction of clients to the quantity surveying practice. The notable ones include value addition to clients business as well meeting their 29
expectations. Anderson, Fornell and Rust, (1997) stated that overall customer satisfaction should be a more fundamental indicator of the firm’s performance. 2.6.4
Competitiveness
Competitiveness on a firm level is defined by Ambastha and Momaya (2004) as the ability of firm to design, produce and or market products superior to those offered by competitors, considering the price and non-price qualities. Gelei (2003) has defined a firm’s competitiveness as the basic capability of perceiving changes in both the external and internal environment and the capability of adapting to these changes in a way that the profit flow generated guarantees the long term operation of the firm. Firm’s competitiveness was also described as basically a function of two factors. First, it is determined by the extent a company can identify those value dimensions that are important for their customers. These are the main features of the firms’ complex product and service package a customer expects (Burange and Yamini, 2008). The second factor of firm’s competitiveness is the sum of resources and capabilities that make a firm’s capacity to create and deliver the identified important value dimensions for the customer A firm’s competitiveness can thus be examined as a function of factors such as its own resources, its market power, its behavior toward rivals and other economic agent and its capability to adapt to changing circumstance. Others are its capability to create new markets and the institutional environment, largely provided by the government, including physical infrastructure and the quality of government policies (Burange and Yamini, 2008). The research of Razalli (2008) thus affirmed competitiveness as a measure of performance outcomes in organisations. 2.6.5
Innovation
Freeman (1989) describes innovation as non-trivial change and improvement in a process, product or system that is novel to the institution developing the change. Innovation is seen as crucial for attaining a competitive advantage for companies (Naranjo-Valencia et al., 2011). Firms that are innovation orientated have strategy for developing and introducing innovative new products or services into the market before their competitors (Naranjo-Valencia et al., 2011). Relating this to quantity surveying firms, the introduction of new services into the market by a firm can endear such firm to have a larger client share among competitors which 30
can also translate to higher profitability. As such, the firms can be regarded as performing better than others both within the quantity surveying service sector and the construction industry at large. The research of Razalli (2008) however affirmed innovation as a measure of performance dimensions in organisations. 2.6.6
Business process re-engineering
Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed. BPR focuses on processes and not on tasks, jobs or people (Muthu, Whitman and Cheraghi, 1999). It endeavours to redesign the strategic and value added processes that transcend organizational boundaries. By this, BPR enhances the performance of organisations. This is corroborated by Willmott (1994) stating that BPR demands that old assumptions, values and rules, are challenged and superseded. Also stated was that BPR encourages a fundamental questioning of conventional wisdoms. Instead of striving to make incremental improvements to existing processes, BPR urges the radical reexamination of current practice in order to ‘determine which of its steps really add value and search for new ways to achieve the result (Willmott, 1994). Increased competition among organisations across industries including the construction industry has necessitated the need for improved performance of organisations. This was corroborated by Weerakkody and Currie (2003) describing the global market as competitive which places organisations under increasing pressure to improve performance. BPR was thus advocated as a means of ensuring organisational change and improvement. 2.6.7
Market orientation
A market orientation establishes the norms and beliefs that shape an integrated organizational effort to respond efficiently and effectively to customers and competitors. Thus market orientation is believed to have a positive effect on firm performance (Zou, Brown, Zen and Agarwal, 2006). Slater and Narver (1994) described a market orientated business as one that is systematically and entirely committed to the continuous creation of superior customer value. Akimova (2009) observed that market orientation results in a deeper understanding of customer needs, the peculiarities of marketing environment and of strengths and weaknesses of the 31
competitors. As such, it was concluded that firms with a higher level of development of market orientation have higher level of competitive advantage and superior in terms of performance and adaptability to the changing environment than the firms with an underdeveloped market orientation (Akimova, 2009). Corroborating this, the findings of Morgan, Vorhies and Mason (2007) indicated that market orientation contributes to superior firm performance. 2.6.8
Service flexibility
Flexibility is generally accepted as a useful tool to improve the competitive position of the firm, especially when related to the process of decision-making in technologies adoption and implementation (Âlvarez Gil, 1994). In this context, flexibility in services involves the introduction of new designs and services into the service delivery system quickly, adjust capacity rapidly, customize services, handle changes in the service mix quickly and handle variations in customer delivery schedules (Suarez, Cusumano and Fine, 1996). Also, flexibility in firms is described by Anderson (2005) as the ability to respond to changing conditions which can help firm to mitigate the effect of major economic and environmental swings. Service flexibility as an attribute of a firm helps to take strategic alternative course of actions in the pursuance of goal accomplishment. The research of Razalli (2008) affirmed service flexibility as a measure of performance outcomes in organisations. 2.6.9
Service quality
Frei, Kalakota and Marx (1997) stated that service quality has become an essential part of organizational success due to increased customer expectations and customization of services in many markets (including the construction industry market). The concept of service quality was also said to be evolving to mean uniformity of the service output around an ideal (target) value determined by the customer. Hill et al. (1998) stated that service quality performance metrics are; the percentage customers willing to return, percentage of customers willing to recommend the service provider to others, percentage of customers who are unwilling to return and the ratio of complaints per service. All these can be said to be the areas in which the service provider
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must be effective; invariably constituting service quality. The research of Razalli (2008) affirmed service quality as a measure of performance outcomes in organisations. 2.6.10 Employee satisfaction Derus, Yunus and Saberi (2009) stated that organization successes stand on its employees’ performance. Employee performance is attributable to employee satisfaction. Employee job satisfaction describes that how much happy an individual is with his/her job (Ahmad, Ahmad and Shah, 2010). The happier the individual, the higher is level of job satisfaction. Also positive attitude towards work and greater organizational commitment increases job satisfaction which in return enhances performance of the individual (Linz, 2002). As the performance of the employees increase, it affects firm’s performance and ultimately profitability of the firm (Ahmad et al., 2011). Thus, employee satisfaction is said be said to be an indicator of performance of organisations. Table 2.1
Measures of organisational performance in firms
PERFORMANCE MEASURE VARIABLES Productivity Finance
AUTHORS Mckee, 1989; Francis, 1989; Baumol, 1985; Mehra, 1998; Ramasamy, 1995; Buckley, 1991; Market Share Schwalbach, 1989; Differentiation Porter, 1990; Profitability Pace, 1996;Scott, 1989 Price Dou, 1998; Cost Porter, 1990; Variety, Product Range Dou, 1998; Efficiency Porter, 1990; Value Creation Porter, 1990; Customer satisfaction Hammer, 1993; New Product Development Man, 1998. Source: Adapted from Ambastha and Momaya (2004). 2.7
FORMALISING ORGANISATIONAL CULTURE
Organisational culture performs two functions according to Martins and Terblanche (2003). The functions are internal integration and external adaptation. The former can be described as the socialising of new members in the organisation, creating the boundaries of the organisation, the feeling of identity among the personnel and commitment to the organisation. 33
This function is also the glue that holds the organisations together (Smit, 1996). The nature of this internal integration function of organisational culture requires that it be formalised to achieve sanity, unity, coherence and compliance. Patterson, West, Lawthom and Nickell (2003) described formalisation as a concern with formal (often written) rules and procedures. Formalising culture in an organisation refers to dictating or precedenting the way things are done in the organisation by way of policies documented. Balzarova, Castka, Bamber and Sharp (2006) cited Wallace, Hunt and Richards (1999) describe formal culture as idealised statements, what beliefs and behaviour should be; which is typically manifested through mission/vision statements, policies, procedures and rules. The implication for quantity surveying firms is that if the ‘way things are done’ are documented in form of mission/vision statements, policies, procedures and rules, then there is a formal organisational culture.
Smit (1996) described formal control mechanism in organisations as one that provides check and balances which prevent employees from making costly mistakes or abuse the authority. By way of formalising organisational culture, employees easily identify it and clients identify with it. Identifying with organisational culture, employees are shielded from making neither mistakes nor abuse of authority. As for quantity surveying firms, clients are of utmost importance. A quantity surveying firm that can successfully satisfy its client can be categorised as a successful. The reason is that the main challenge quantity surveying firms across the globe are facing is how to satisfy clients. Abdullah and Haron (2005), Cartilage (2006) and Oyediran (2011); all made clear the inability of quantity surveying practice and its firms to satisfy clients. It is however viewed that formalised organisational culture in quantity surveying firms will provide an alternative which will invoke clients to identify and identify with the quantity surveying firms.
McAleese and Hargie (2004) recommended common course of action, which will steer leaders and managers towards best practice on how to build, maintain or modify their organisational culture. The recommendations include: formulation of an overall culture strategy, development of culture leaders, sharing the culture by communicating effectively with staff, measuring culture performance and communicating culture in all dealings with customers. The framework presented above is a typology of formalised organisational culture. The decision that informed recommending this course of action by McAleese and Hargie (2004) was based on the premise of providing information on how organisations 34
should be defined and the future overall direction or path that it must follow. By implication, formalised organisational culture is a way of defining corporate strategy and direction of organisations. Suffice to say that corporate strategies of organisations are majorly inclined towards performance. For quantity surveying firms, performance cannot be excluded from its organisational strategy. However, what should not also be excluded is organisational strategy that has formal organisational culture as its nucleus.
Kabillano (2008) also stated that formalizing and spreading the organisational culture is a precondition to cope with environment turbulence. This means formalising culture in an organisation enhances its external adaptation and survival. O’Donnell and Boyle (2008) carried out a research on understanding and managing organisational culture.
It was
discovered that culture has become important to managers and employees in organisations that it has become organisational strategy and policy. The importance of recognising culture in an organisation’s strategic plan, in terms of risk management and corporate governance was also stated. The research therefore buttressed the importance of formalising organisational culture and made explicit the level of awareness of formalising culture in organisations. Formalising organisational culture is now inevitable more than ever. The global business environment changes and gets more competitive on a daily basis. The construction industry has its share of this constant changes and competitiveness including its professional service firms. The contribution of organisational culture towards its performance has become a fact and it can only get better by formalising the culture of organisations including quantity surveyings’.
2.8
CHALLENGES TO THE FORMALISATION OF ORGANISATIONAL CULTURE IN QUANTITY SURVEYING FIRMS
Culture gives a sense of identity and determines, through the organisation’s legends, rituals, beliefs, meanings, values, norms and language, the way in which ‘things are done around the organisation’. The culture of an organisation encapsulates what has been good and what has worked in the past (O’Donnell and Boyle, 2008). This assertion made reference to good and past times of organisation with respect to its culture, conversely bad and present times. This means challenges bedevil organisational culture in its ramifications including formalising the concept. The strangeness and the relative obscurity of the organisational culture to the 35
quantity surveying practice can be seen as the first challenge to formalising it in the firms. The strangeness transits to low level of awareness and application of organisational culture in the Nigerian quantity surveying firms. Thus, formalising organisational culture in the firms is as strange as the concept itself. High employee turnover in organisations can be a source of hindrance to formalising organisational culture. McAleese and Hargie (2004) reiterated employee point of view as one of the perspective in which organisational culture can be looked at. It is thus deduced that the employee view to organisational culture is important and by extension; formalising it. Therefore, an organisation bedevilled by high employee turnover will have it more challenging in formalising its culture. The organisation will have to bear with the constant loss of employees that it had indoctrinated its culture in. Also, such organisation will be faced with the problem of bringing in replacements that can quickly adapt to the organisational culture which is new to the replacements. High employee turnover is thus a difficulty for organisations to adopt and maintain a formal organisational culture. In Nigeria, quantity surveying firms are faced with constant loss of technical employees like quantity surveyors because of their preference for contracting than consulting. This situation makes organisational issues like formalising organisational culture a challenge. Frei and Mbachu (2009) described the traditional partnership structure of quantity surveying firms as a weakness and outdated. This is a pointer to the dearth of effective management process in quantity surveying firms including formal processes. Thus, in attending to the challenges impeding the formalisation of organisational culture in quantity surveying firms, the traditional partnership management structure is outdated and constitutes a challenge. Northern Leadership Academy (2007) described leadership as the architect and product of organisational culture. It was made believed that leaders shape culture. The importance of leadership to organisational culture and by extension formalising it can thus not be overemphasised. However, the leadership can be the undoing of an organisation in formalising its organisational culture. How? Lang (2005) stated that success depends more on leaders being able to walk their talk than on the actual details of the direction they have defined. This goes to say that strategies defined, cultures formalised and directions documented cannot be effective in organisations where the leadership does not walk their talk. Another side to this is that employees are always alert to signals from their managers and expect to see consistent and exemplary standards of behaviour. Therefore, unless all managers live up to the company's desired standards and values, the organisational culture 36
will be weakened (Lang, 2005). The weakness here is attributable to both the leadership not walking their talk and employees following suite. In the Nigeria, the leadership of the quantity surveying firms are the Principal partners. The principal partners thus have the tendency not to walk their talk considering the fact that they answer to no one. Quantity surveying practice is serviced based which require an establishment of a firm (organisation) by qualified and registered quantity surveyors. However, the curriculum of Nigerian institutions reveal dearth of organisational culture study. The road to professional certification by the Nigerian quantity surveyors does not encompass organisational culture study. This definitely results to setback for practising firm in understanding its organisational culture and by extension; formalise it. This is because the quantity surveyors within quantity surveying firms do not have the academic and professional background required to understand and manage organisational culture. This situation is better understood from the position of Oyediran (2011) that once a particular tenet is ingrained in quantity surveying practice pattern in Nigeria, it becomes a permanent feature of the profession. Conversely, if no tenet like organisational culture is ingrained, then it can’t be a feature of the profession. It therefore becomes a challenge to the formalisation of organisational culture in quantity surveying firms. Lang (2005) highlighted a number of factors that can enhance corporate (organisational) culture and by extension; formalising it. They are good leadership, formal systems, policies and regulations, clear direction and employees understanding and acceptance this direction. Others are that the organisational culture must be based on the needs of all stakeholders, effective communication of the organisational culture to the employees as well as insight to informal practices within the organisations. O’Donnell and Boyle (2008) also highlighted leadership commitment and culture awareness training. Invariably, all these can become the undoing of organisations in terms of formalising its culture. For example, if employees are not effectively communicated to, they will fail to perform to best collective ability (Lang, 2005). If also informal or unwritten rules are not taken into cognizance of in an organisation like quantity surveyings’, formal procedures may be hampered. O’Donnell and Boyle (2008) reiterated how important resource is; to the managing and application of organisational culture. Resources are financially and humanly driven. Therefore, in quantity surveying firms, the formalisation of organisational culture therein can 37
be hampered by financial challenges. Since most quantity surveying firms are small business nature and low on finances according to Hardie et al. (2005), due consideration will not be given to formalising organisational culture. McAleese and Hargie (2004) made explicit the importance of when the values of the individual and the values of the organisation are working in tandem. Derus, Yunus and Saberi (2009) likened the position of McAleese and Hargie (2004) to behavioural competencies. Derus, Yunus and Saberi (2009) suggested that since organization successes stand on its employees performance; thus it is utmost important for organization to identify not only the right technical but also behavioural competencies for each and every individual position created. Value and behavioural competence can therefore enhance or hamper the formalisation of organisational culture. If the values of individual recruited and the set values of the organisation recruiting are in contrast, conflicts and personal mistakes will result on the part of the employee invariably hampering formal organisational culture procedures. Also, if the wrong behavioural competence is engaged in a position in an organisation, formal processes will sure be hindered. Most quantity surveying firms in Nigeria hardly maintain human resources management department due to their boutique nature. Therefore, ensuring the congruence of the values of newly recruited employees and that of the firms will almost be unachievable. This then impede organisational issues including the formalisation of organisational culture. Balzarova et al. (2006) stressed the influence of external environment on organisation directly (legislation, government regulations) and indirectly (expectations and values of employees). Expectedly, direct relationship exists between organisations and their environment. Corroborating this, McAleese and Hargie (2004) advised that companies (organisations) need to tweak or fine-tune internal strategies and procedures (Including organisational culture) from time to time in order to survive and evolve in the business world (environment). By implication from the direct relationships between organisations and their environment on issues like organisational culture, formalising organisational culture in organisations (including quantity surveyings’) can be hampered by the environment. In Nigeria, external issues like the state of the economy, Procurement Act and labour laws and relations influence quantity surveying organisations directly and indirectly. This influence can either be positive or negative as the case may be. If negative, then issues like formalising organisational culture in the quantity surveying firms will be hampered.
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2.9
QUANTITY SURVEYING PRACTICE IN NIGERIA
Quantity surveying practice is getting entrenched better in the Nigerian scene inspite of initial challenges. Oke (2009) citing Odeyinka (2006) stated that quantity surveying was pioneered by Britain. The history of quantity surveying practice in Nigeria can be traced back to 1969 when the Nigeria Institute of Quantity Surveyors (NIQS) was formed by a group of Nigerians who trained and practised in the UK. The NIQS was formed as a parallel body to the Royal Institute of Chartered Surveyors (RICS) of the UK. The regulated and other professions (Miscellaneous Provision) Act 1978 in Nigeria recognised quantity surveying profession as one of the scheduled professions in Nigeria while the decree No 31 of 1986 gave legal backing and recognition to quantity surveying profession. The decree No. 31 of 1986 set up the Quantity Surveyors Registration Board of Nigeria (QSRBN) to regulate the profession (NIQS, 2011). RICS (2008) stated that quantity surveyors are the cost managers of construction initially involved with the capital expenditure phase of a building or facility. The phases include feasibility, design and construction phases. They can also be involved with the extension, refurbishment, maintenance and demolition of a facility corroborating (NIQS, 2011). A Registered quantity surveyor is expected to have sound knowledge of estimating, cost planning, procurement, tendering, contract selection, contract procedures, post contract cost control or commercial management of contracts, quantification of works and construction technology. According to NIQS (2011), the construction industry is global and extends across all real estate and infrastructure markets and quantity surveyors function as cost management expert in all sectors of the construction industry. The real estate covers residential, commercial, industrial, leisure, agricultural and retail facilities. In infrastructure it covers roads, railways, waterways, airports, sea ports, coastal defences, power generation and utilities. Quantity surveyors may also work in process engineering, such as chemical engineering plants and oil rigs. The understanding of quantity surveyors covers all aspects of construction. Quantity surveying services span the whole life of a building or facility and they have the ability to manage cost effectively with equating quality. The competencies required of quantity surveyors are categorised into mandatory, core and optional competencies (RICS, 2008). However, competencies required of Nigerian quantity surveyors based on local prevailing conditions and needs are found in (Olanrewaju and Anavhe, 2009). 39
The requirements for establishing quantity surveying firm in Nigeria are clearly stated in NIQS (2011). Quantity surveying firms are also characterized by hierarchical structure as noted by Yu (2007). This means that ranking system exist in quantity surveying firms where professionals within occupy various hierarchies. Abdullah and Haron (2005) categorised the workforce in quantity surveying firms into professionals and sub-professionals. Professional staffs are those with a degree in quantity surveying (which includes management staff consisting of directors, partners and associates). Sub-professionals are those with a diploma in quantity surveying. Others include other technical and non-technical staff. Three hierarchical levels of Principal partner, senior quantity surveyor and junior quantity surveyors have been identified by Sonia (2005). The directors/partners seek for business opportunities and are delegated to accept business appointments from clients. Senior quantity surveyors act as the agent of the directors/partners to keep a close eye on the quality of deliverables, work progress, project financial status and resources levels. Junior quantity surveyors operate at the working level involved in the actual operation and to be associated with every aspect from project inception to completion. Suffice to say that each of the hierarchy has differing roles and responsibilities in quantity surveying firms. 2.10
HIERARCHICAL PERCEPTION OF ORGANISATIONAL CULTURE IN QUANTITY SURVEYING FIRMS
Corley (2004) stated that one of the intriguing boundaries in which an organisation can be differentiated is organisational hierarchy. Hierarchy is also seen to play significant role in determining the perceptions of organizational members (Corley, 2004). Therefore, hierarchical perception in organisations refers to the feel about the issues across the various ranks/hierarchies within an organisation. There are variants of issues where there can be perceptions across hierarchical levels in organisation. Organisational culture being a social phenomenon presents itself among such issues. The research of Jones et al. (2008) which assessed the impact of hierarchical level on the employee perception of organisational change found differences in the executives, supervisory and non-supervisory hierarchies in a major tertiary Hospital in Australia. Treviño, Weaver and Brown (2007) also express the differences in the perception of the identified senior management and lower-level management hierarchies in organisations. 40
Corley (2004) identified senior leadership, middle management, and operational employees as hierarchies in organisations. Corley (2004) also provides insight into differences in hierarchical perception of organisational identity among the hierarchies. Treviño, Weaver and Brown (2007) stated that differences in perceptions of issues in organisations are often explained in terms of the roles individuals fill. Therefore, the differences in perception can be explained in terms of differences in the roles filled by the identified hierarchies. In most organisations, roles are formalised into hierarchies. For organisational culture, Hofstede, Bond and Luk (1993) stated that since it is a soft characteristic, one way to assess it is through perception by individuals who function within the organisations. Also, when culture is defined as a system of shared meaning, it is expected that individuals with different backgrounds or at different levels in the organization will tend to describe the organization’s culture in similar terms (Robbins and Sanghi, 2007); which is in contradiction to Treviño, Weaver and Brown (2007) and Jones et al. (2008). People are affected by the culture in which they live. Similarly, an individual working for any organization with a firmly established culture will be taught the values, beliefs, and expected behaviours of that organisation (Revathi, 2008). Organizational culture is a descriptive term which is concerned with how employees perceive the characteristics of an organization’s culture, not withstanding whether or not they like them (Revathi, 2008). This definition is a pointer to the fact that employees within an organisation have perceptions of the culture within it. Robbins and Sanghi (2007) also buttressed this definition stating that the appraisal of the organization on its characteristics gives a composite picture of the organization’s culture. This picture in turn becomes the basis for feelings of shared understanding that members have about the organization, how things are done in it, and the way members are supposed to behave. Given that organisational culture is another organizational phenomenon based in the social construction of shared beliefs about the organization (Corley, 2004); there is also a high tendency that there will be differences in the perception of the concept across the hierarchies in organisations. Oladapo (2006) describes the construction industry as hierarchical such that some of the major participants do not consider themselves to be part of the same industry. This can also be viewed as participants in the industry seeing theirselves incongruently. The incongruent view among actors in the construction industry extends to perception of issues. The division 41
in the construction industry was also observed by Hassan and Minden (2010) stating that the construction industry is fragmented comprising large and small firms. These firms comprise of developing firms, consultant-service firms, construction firms and manufacturing firms. Murphy (2011) stated that quantity surveying firms are professional service firms in the construction industry and such; cannot be exempted from perception bias either within the firms or on issues external to the firms. In Malaysia, the structures of quantity surveying firms are still based on hierarchical and bureaucratic procedures (Nor and Egbu, 2009); which signals differentiation in actions and perceptions of individuals in the hierarchies. Christabel and Vincent (2010) found to exist the differences among the perception of professional quantity surveyors on the basis of age, membership levels and work experience. Fan, Ho and Ng (2001) also pointed to the differences in perceptions of professional quantity surveyors due to differences in trainings. The research of Ho (2008) found that in the Academics, Public sector, Consultancy service and Contracting organisations; the less experienced the quantity surveyors are, the more emphasis they place on the interest of their colleagues; and the more senior the membership and less educated they are, the more emphasis they would place on the interest of their employer. This is another pointer to the differences in the perception of various hierarchies of quantity surveyors across organisations. In a research carried out by Lowe and Skitmore (2011) on the learning climate of chartered quantity surveying practices, it was found out that as quantity surveyors rise in the hierarchy of an organisation, their perception of its ability to provide an appropriate learning environment increases. By implication, the perception of quantity surveyors changes by increasing as their hierarchies increase in organisations. Sonia (2005) affirmed that quantity surveying firms are structured into hierarchies. Director/partner, senior quantity surveyor and operational level quantity surveyors were identified as hierarchies in quantity surveying firms by Sonia (2005) as well as differences in their perceptions.
Hassan and Minden (2010) identified three hierarchies in quantity surveying firms to include Director, senior quantity surveyor and junior quantity surveyor in Malaysian quantity surveying firms. The research also made explicit the expressed differences in perceptions of the hierarchies. The differences in hierarchical perception in organisations are due to differences in level of compensation, interaction, differing roles, differing hierarchies 42
(Treviño, Weaver and Brown, 2007). Corley (2004) further stated that the differences in the hierarchical perception on organisational culture in organisations is due to the fact that organizational culture is a phenomenon based in the social construction of shared beliefs about the organization. Since organisational culture is a social phenomenon which bothers on employees, the hierarchies in quantity surveying firms are expected to have segmented perception of organisational culture. Simister (1995) identified four hierarchies in professional service firms in the construction industry. They are as follows: 2.10.1 Direct work This is the lowest professional level. The people at this level may be training for membership of an institute for progression up the ladder of the firm’s hierarchy. Alternatively they may not be interested in the career structure and wish to specialise at this level, preferring to be involved in the detail of the organisation activities instead of the overview. Generally, the tasks performed at this level are of a detailed, technical nature and persons are often referred to as technicians. It is common for contract staff to be employed at this level to help out at peaks of consultancy engagement. 2.10.2 Operation This is the most diffuse level. Depending on the size of the firm, the people at this level can be either newly qualified or have some experience and be project quantity surveyors or team leaders having limited control of junior personnel. Generally, they will be graduates from recognised institutions consolidating their knowledge base. In some quantity surveying firms, contract staffs are employed at this level to help out at peaks of project involvement.
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2.10.3 General This level is occupied by persons generally called associates. They have specialised experience within a particular field and will normally control all projects for a particular client and/or sector of work. They may be brought in from outside the firm to fill in gaps within a firm’s expertise base. They will have normally been a member of a relevant professional institution for several years. 2.10.4 Strategic This is the top level. In the majority of the professional firms, this level would be occupied by Partners. They generally own the firm and are therefore persons of some standing, having wide experience of the construction industry. They will normally be fellows of their respective professional institutions. It is probable that they will have been working for the same firm for some considerable time, having worked their way up through the hierarchy. In very large firms it is possible for the individual at this strategic level to be above partner level, sometimes being referred to as director.
Sonia (2005) stated that quantity surveyors at different levels/hierarchies perform different roles and by extension, differences in the perception of issues. This research; in a bid to reflect the peculiarity of the Nigerian environment being a developing economy, identifies with the three hierarchies stated in Sonia (2005) in respect of quantity surveying firms in Hong Kong. Hong Kong is also a developing economy like Nigeria. 2.10.5 Principal Partner Principal partners in quantity surveying firms direct the firm’s strategy, working procedures and standard of deliverables and are supposed to know their firm inside out. They also seek for business opportunity and are delegated to accept business appointments from clients. However, the schedules of principal partner may be packed with oversea travels, social functions and seminars so as to promote their firms’ edge and professionalism to potential clients. In this way, it is expected that existing clients are convinced of their firm’s capability and may probably grant more business opportunity to them in future.
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2.10.6 Senior quantity surveyor Senior quantity surveyors are assigned to operate at the second level of the organisational hierarchy. They are seen as close to the management, rich in experience in quantity surveying field and an in-depth understanding of the practice of their firms 2.10.7 Junior quantity surveyor This hierarchy is also termed the working level. This hierarchy in quantity surveying firms presents the highest number of quantity surveyors. Quantity surveyors at this level are involved in the actual operation and to be associated with every aspect from project inception to completion. 2.11
QUANTITY SURVEYING FIRM AS AN ORGANISATION
Wikipedia (2011) defined business (also known as enterprise or firm) as an organization designed to provide goods, services, or both to consumers. It was further stated that businesses are predominant privately owned and formed to earn profit to increase the wealth of their owners. However, businesses may be profit or state-owned. A business owned by multiple individuals coupled with profit making intention is referred to as a company. From these definitions, a quantity surveying firm is a business enterprise owned by private quantity surveying practitioners providing service to clients (consumers). In corroboration, Yu (2007) stated that quantity surveying firms may be owned by more than two partners with the aim of making profit in service delivery. An organization is defined by the elements that are part of it (who belongs to the organization and who does not?), its communication (which elements communicate and how do they communicate?), its autonomy (which changes are executed autonomously by the organization or its elements?), and its rules of action compared to outside events (what causes an organization to act as a collective actor?) (Wikipedia, 2011). Yu (2007) also stated that organizations are made up of divisions, departments, committees and teams. From the foregoing definitions, the structure of quantity surveying firms in Nigeria can be examined in terms of its conformity as an organisation. Visible organisational structures in quantity surveying firm in Nigeria has technical and non-technical staff (elements), scope of service rendered (space), purpose (mission), focus (vision), firms infrastructure (identity) and the internalisation process (organisational culture). Also, in most of the quantity surveying firms in Nigeria, matrix organisations with functional and 45
projectised structures within the firms are dominant. The Nigerian quantity surveying firms maintain functional departments within and there are also project teams. The functional departments within quantity surveying firms provide specialised functions based on their disciplinary background. Examples of functional department within quantity surveying firms are the account, administration and the quantity surveying departments. From within the quantity surveying department, quantity surveyors are also assigned to projects; thereby justifying the projectised structure. Comparing quantity surveying firms with organisations in other industries like the banking, manufacturing and telecommunication, there are areas of similarities. They are all required to be registered with corporate affairs commission (CAC), pay tax and follow labour laws. They are also all subjected the constitution of the Federal Republic. Visible difference between quantity surveying firms and other organisations in the banking, manufacturing and telecommunication is in the area of corporate standing where the latter are all listed on the Nigerian stock exchange.
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CHAPTER THREE RESEARCH METHODOLOGY 3.1
INTRODUCTION
This section discusses in details the methodology adopted in answering the research questions raised for the study. It includes research design, population of the study, type of respondents to be involved, sampling techniques, the data collection instrument, validity and reliability of the research instrument as well as methods of data analysis and data gathering method. This section provides the assurance that appropriate procedures were followed in the course of the study. 3.2
RESEARCH DESIGN
Research design is simply the plan for getting from the research question to the conclusion and it explains procedures to be followed before arriving at the understanding of a phenomenon (Adeniyi, 2012). This research therefore employs survey design approach. Xenos and Christodoulakis (1997) stated that surveys provide a good measure of aspects of employee workplace (Including quantity surveying firms). Survey design approach allows for focusing on just the issues of interest, since it offers complete control on the questions being asked. Furthermore, surveys are quantifiable and therefore are not only indicators in themselves, but also allow the application of more sophisticated analysis techniques appropriate to organisations (Xenos and Christodoulakis, 1997).
Thus, well structured
questionnaire was used as survey tool for data collection. The questionnaire was based on the Organisation Culture Profile (OCP) validated by Sarros et al. (2005). It is used in this research to measure the organisational culture in quantity surveying firms. The OCP was chosen due to its reliability and validity which has been tested severally by many researchers (Sarros et al., 2005). Another reason is that the OCP has as business/performance culture as one of its dimensions. This is an advantage for this research which tends to assess performance variables in quantity surveying firms. The instrument assesses seven organisational culture types which are supportiveness, innovation, competitiveness, performance orientation, stability, emphasis on reward and social responsibility.
47
Questions on performance (value creation, financial measures, employee satisfaction, customer satisfaction, market orientation, service quality, competitiveness, innovation, service flexibility and business process re-engineering) were designed from the literatures. The measures of the challenges to the formalisation organisational culture are leadership, employees, resources, education, external environment, awareness, management structure and informal practices; all gotten from the literature. Questions were asked on a 5-point Likert scale with 5 being the highest and 1; the lowest. The Likert scale is chosen for ease and uniformity of response. Likert scale also provides a more versatile and user-friendly means to investigate individual perceptions of organizational culture using large samples (Sarros et al. 2005). 3.3
RESEARCH POPULATION
The population for this research are the registered quantity surveying firms in Lagos State as at January 2012. The data sourced from the Nigerian Institute of Quantity Surveyors (NIQS) indicates that there are seventy four registered quantity surveying firms in Lagos State. 3.4
SAMPLING FRAME
The adequacy of a sample is assessed by how well such sample represent the whole population of participants from which the sample is drawn (Aje, 2008). From 3.3, the population for this study is seventy four (74) firms. However, the aim of this research which is to explain the performance of quantity surveying firms using their organisational culture demands that the opinion of more than one respondent per firm be sampled. Sonia (2005) affirmed the hierarchies in quantity surveying firms and the differences in functions and perceptions of the hierarchies. It is thus believed that the opinion of the three hierarchies of quantity surveyors in quantity surveying firms will provide a robust assessment of the organisational culture within. Therefore the three hierarchies of quantity surveyors in quantity surveyors identified from the literature were sampled per firm. The first category/hierarchy was the directors/Principal Partners of registered quantity surveying firms in Lagos state. The other two categories/hierarchies are the senior quantity surveyors and junior quantity surveyors employed in quantity surveying firms in Lagos state. The number targeted per hierarchy is one in each of the firms. This is to prevent overlapping of responses for each hierarchy. 48
Therefore, the redistribution now makes the total number of respondents to be two hundred and twenty two (222). 3.5
SAMPLE SIZE
The sample size in respect of the various hierarchies of quantity surveyors in quantity surveying firms (respondents) were determined from the following formulae as used by Yamane (1967):
..................................................................1 Where, n is the sample size, N is the population size, and e is the level of precision which is taken as + 10% The sample size value for each hierarchy gotten from the equation 1 above is forty two (42). The total sample size for the three hierarchies now becomes one hundred and twenty six (126). 3.6
SAMPLING TECHNIQUE
This research combines both convenience and purposive sampling techniques. Convenience sampling was used in this research work due to the submission of Teddlie and Yu (2007). Teddlie and Yu (2007) stated that convenience sampling involves drawing samples that are both easily accessible and willing to participate in a study. The distortion in the data on the number and the location of quantity surveying firms in Lagos state makes case for the adoption of convenience sampling. In which case, firms that are assessible and willing to respond were sampled. This research also involves grouping of respondents by hierarchies (Principal Partner, Senior quantity surveyor and junior quantity surveyor) in quantity surveying firms. This therefore demands the use of purposive sampling. The adoption of purposive sampling technique ensured that responses were gotten from each of the three group of respondent in a firm by specifically directing questionnaires to each of the three groups of respondents. This was also done on purpose so as to satisfy the findings on hierarchical perception on organisational culture in quantity surveying firms.
49
Another justification for the use of purposive sampling in this research work is to ensure that firms with less than five years of establishment are not considered. The reason being that culture within an organisation will not take lesser time to maturity, and by extension, asses and study. In that light, the research instrument was administered on purpose to firms that fall into this category. Palys (2008) stated that if the way sample is to be taken is tied to the objective of the study, purposive sampling should be used. 3.7
DATA COLLECTION INSTRUMENT
The instrument for the collection of data is a well structured questionnaire which enables the operationalisation of the variables of this research in quantitative terms. Instruments have been developed overtime for measuring organisational culture. One of such is Organisational Culture Profile (OCP) validated by Sarros et al. (2005) and therefore adopted for this study. The questionnaire designed for this research is a multiple-choice type. The questionnaire is also in two sections. The preliminary section of the questionnaire dwells on background information of profession/designation, years of working experience, years of working experience of respondent in consultancy business and membership of professional bodies of the respondents. Information gotten from this section provides quality check to the data gotten from the other sections of the research instrument. The other section dwells on matters relating to the research study. The validated version of Organisation Culture Profile (OCP) by Sarros et al. (2005) with seven measures of organisational culture therein was adopted in this study to measure organisational culture. The variables are supportiveness, innovation, competitiveness, performance orientation, stability, emphasis on reward and social responsibility. The seven organisational culture variables have four statements (sub variables) each. This section also has questions on the performance and challenges to the formalisation organisational culture in quantity surveying firms. Questions on performance and challenges to the formalisation of organisational culture are as gotten from the literature. Value creation, financial measures, employee satisfaction and customer satisfaction are the measures of performance on the research instrument. Others are market orientation, service quality, competitiveness, innovation, service flexibility and business process re-engineering. The measures of the challenges to the formalisation of organisational culture on the research 50
instrument are: leadership, employees, resources, education, external environment, awareness, management structure and informal practices. 3.8
PROCEDURE FOR DATA COLLECTION
The instrument for the collection of data was the administration of questionnaires. Copies of the approved questionnaires were administered by the researcher to all the quantity surveyors in quantity surveying firms that falls within the sample frame of this research work. All the categories of respondent for this research were ensured to complete the questionnaires sent to each firm.
3.9
METHODS OF PRESENTATION AND ANALYSIS
Tables are employed in this research for data presentation. The questionnaire is a mixture of nominal and ordinal data. For the nominal data, frequency and percentage were used in carrying out the analysis. The premise of the decision was based on the variables with the highest percentage. The analysis of the ordinal data was carried out using the following descriptive and inferential statistical methods: Relative index (RI); mean score, Kruskal Wallis H-test, stepwise regression and Spearman rank correlation coefficient. Cronbach’s alpha test was also used in determining the reliability of the data collection instrument and prescribed approaches were employed in ensuring the validity of the contents and constructs in the research instrument. 3.9.1
Validity
Validity is the degree to which an assessment measures what it is supposed to measure (Sushil and Verma, 2010); and does so without accidentally including other factors. There are face, content, construct and external validity respectively. The research of Sarros et al. (2005) substantiated the face and content validity of the aspect of this research instrument that deals with organisational culture. In substantiating Sarros et al. (2005), further face validity was also carried out in accordance with Sushil and Verma (2010). Sushil and Verma (2010) stated that face validity is assessed by having expert researchers to review the contents of the test to see if the items seem appropriate. This was done by the supervisors of this research work and the research instrument was adjudged face valid.
51
Content validity refers to the extent to which a measure represents all aspects of a given social concept. In the opinions of Wong, Ong and Kuek (2012), content validity refers to the extent that the measuring instrument has adequate coverage of the concept and proposed two ways to determine content validity. First, the questionnaire designer must have read sufficiently and comprehensively so that the topic can be defined both theoretically and operationally. Second, adequate coverage may be evaluated by reading from other studies that deliberate on the same topic. This study reflects a robust literature review and evaluations from similar topic was carried. This signals compliance and conformity with construction of survey questionnaire as indicated in Wong et al. (2012). Construct validity is the degree to which an assessment instrument measures the targeted construct which is the degree to which variance in obtained measures from an assessment instrument is consistent with predictions from the construct targeted by the instrument (Haynes, Richard and Kubany, 1995). Wong et al. (2012) states that a way to establish constructs validity may be to explore the regression analyses of the two studies. These two studies must be the current study and a past related one. The novelity of this area of research in quantity surveying does not allow for cross-regression comparison. However, the regression analysis carried out in this study provides significant variability in the dependent variables by the independent variable (Table 4.8). External validity refers to whether the results of the study could be generalized to other people, situations or times and thus the evaluation of external validity concerns the whole research design (Wong et al., 2012). It was also stated that not only will the research measuring instrument be considered; the research method and approach will also be assessed to establish external validity. In ensuring the external validity of this study, the research was designed based on the peculiarities of the problems to be solved. Suffice to say that the research design for this study was informed by (Yin, 2009). Yin (2009) stated that survey research design used in this research is best when the research goal is to describe the incidence or prevalence of a phenomenon. It was further stated that survey research design answers on ‘what’ question, requires no control of behavioural events and focuses on contemporary events. All these conditions were met in this study before choosing survey design approach. It is therefore justifiable that the findings of this study are generalisable.
52
3.9.2
Reliability
Reliability is a measure to ensure the consistency of the construct over time (Doloi, 2008). The internal consistency of the measured attributes as perceived among the respondents within the Likert scale (0 to 5) was explained by the reliability coefficient that is based on the average correlation among the attributes and the total number of attributes in the sample. In order to examine the internal consistency of the scale, the Cronbach’s alpha (α) test was performed on the attributes under each factor and on all the attributes. The value of α is anywhere in the range of 0 to 1 where a higher value denotes greater internal consistency and vice versa. According to George and Mallery (2000), the rule of thumb applicable to most situations falls within the following ranges: 0.9 ≤ Ca ≥ 1.0: Excellent 0.8 ≤ Ca ≥ 0.9: Good 0.7 ≤ Ca ≥ 0.8: Acceptable 0.6 ≤ Ca ≥ 0.7: Questionable 0.5 ≤ Ca ≥ 0.6: Poor 0.0 ≤ Ca ≥ 0.5: Unacceptable Using the statistical Package for Social Sciences (SPSS), the Cronbach’s alpha (α) was computed to test the reliability of the 5-point Likert scale used for the study. Results obtained from the tests are shown in the Table below:
Table 3.1 Reliability coefficients for the measuring instrument Scale of measure
N
α-value
Types of organisational culture
28
0.862
Level of importance attached to organisational culture
22
0.869
Performance measures
40
0.860
Challenges to the formalisation of organisational culture
28
0.921
From Table 3.1, the cronbach’s alpha values for scales of measure of the research instrument ranged from 0.860 to o.921. Using the ranges indicated above, it is thus concluded that the instrument used for the research is reliable. The conclusion on the reliability of the research instrument is based on the rule of thumb of George and Mallery (2000) where cronbach’s alpha (α) value ≥ 0.8 for research instruments is considered good. 53
3.9.3
Profile of respondents and the firms
Frequency distribution and percentage were used to analyse the profile of respondents and firms involved in the survey. This covered the hierarchy of respondents in each firm, educational and professional qualification and years of experience in the present firm as well as the designation of respondent. Age of the firm, staff strength and business structure was also profile of respondents analysed. The unit profile of respondents and firms with the highest percentage was deemed the prevalent in quantity surveying firms. 3.9.4
Types of organisational culture
Mean item score (MIS) was employed in determining the types of organisational culture(s) in quantity surveying firms. The dominant organisational culture in quantity surveying firms was also determined with the mean item score. For the types of organisational culture in quantity surveying firms, the organisational culture variable with a mean score of ≥2.5 was considered current culture in the firms. The decision rule of ≥2.5 was based on the submission of Johns (2010). Johns (2010) stated that for a Likert scale that uses a ‘decided’ midpoint, the midpoint is a useful means of determining what might otherwise be a more or less random choice between agreement and disagreement. In this case, the choice was to determine the organisational culture(s) that are current in the quantity surveying firms.
As for the dominant organisational culture, the premise of decision is that the ranked organisational culture type with the highest mean item score “MIS” is ranked 1st and others in such subsequent descending order. Since a Likert of 5-point scale was employed for the collection of data, the formula for mean item score is written as: …………………………2 Test of Hypotheses 1 To test hypothesis H1, which states that there’s no significant difference between the perception of Principal partners, senior quantity surveyors and junior quantity surveyors on organisational culture in quantity surveying firms; Kruskal-Wallis H-test was used. The Kruskal-Wallis H-test is used with k independent groups, where k is equal to or greater than 3, and measurement is at least ordinal (Weaver, 2002). Chan and Walmsley (1997) buttressed Weaver (2002) stating that Kruskal- Wallis H-test is used to determine whether 54
three or more independent groups are the same or different on some variable of interest when an ordinal level of data or an interval or ratio level of data is available. In this study, KruskalWallis H-test was used to determine if there’s a significant difference in the perception of the hierarchies in quantity surveying firms (Principal partner, senior quantity surveyor and junior quantity surveyors) on the types of organisational culture. The premise of decision was based on rejecting the null hypothesis if the p-value is < 0.05. The formulae for Kruskal-Wallis Htest will be as Weaver (2002) and shown below:
………………………3 3.9.5
Level of importance attached to organisational culture
Importance index was used in analysing the level of importance attached to organisational culture in quantity surveying firms as gotten from the respondents. A rating value from 5 to 1 was attached to the level of importance since the scale of measurement is ordinal. The importance index was derived for the quantity surveying firms using the following formular by El-Haram and Homer (2002) as follows: 5
Importance index = ∑ (wi x fxi) x 100 ………………………………….4 t=i 5n Where: wi is the weight given to ith response and i = 1, 2, 3, 4, or 5 is response frequency fx5 = very important and fx1 = not important n = total number of responses The importance index indicated the level of importance attached to organisational culture in quantity surveying firms. The rank value revealed the importance attached to the various organisational culture variables.
3.9.6 Correlation between organisational culture and performance of quantity surveying firms In investigating the relationship among the types of organisational culture and performance variables in quantity surveying firms, Spearman Rank Correlation was used because the data 55
is ordinal. Spearman's Rank Correlation is a technique used to show whether any one set of numbers has any relationship with another set of numbers. The variables of organisational culture were correlated with performance variables of quantity surveying firms to show the strength of relationships. The equation of Spearman Rank Correlation adopted for this objective and the basis of decision was as equation 4 below.
………………………………….5
Where: n ∑ di
represents the number of pairs of data denotes the summation of the items indicated is the difference in the ranks given to the two variable values for each item of data.
The decision in relation to the strength of association is based as shown below: If the Rs value •
is -1, there is a perfect negative correlation.
•
falls between -1 and -0.5, there is a strong negative correlation.
•
falls between -0.5 and 0, there is a weak negative correlation.
•
is 0, there is no correlation
•
falls between 0 and 0.5, there is a weak positive correlation.
•
falls between 0.5 and 1, there is a strong positive correlation
•
is 1, there is a perfect positive correlation between the 2 sets of data.
3.9.7
Effect of organisational culture on performance
Test of hypothesis 3 Testing hypothesis H3, which states that the types of organisational culture in quantity surveying firms has no effect on its performance variables, stepwise multiple regression analysis was applied to the data with all the culture variables included as predictors (independent variables) and each of the performance measures taken one after the other as the outcome (dependent variable). Okoko (2001) highlighted stepwise regression as one of the variants of multiple regressions. Stepwise regression is designed to find the most 56
parsimonious set of predictors that are most effective in predicting the dependent variable. Abiola (2012) stated that stepwise regression analysis is appropriate not only because it provides the means of assessing the predictive ability of individual variables; it also show the factors that influence an outcome. Thus, the stepwise regression analysis enabled the identification of the organisational culture variables with the most predictive power for each of the measure of performance in quantity surveying firms. The equation for the stepwise multiple regression as defined in Okoko (2001) is: + ε1 ………………6
Where: ϒi is the performance variables for the quantity surveying firms. χ1,2,3,4,5,6, and
7
represent
(independent
variables)
performance
orientation,
competitiveness, innovation, supportiveness, emphasis on rewards, stability and social responsibility organisational cultures respectively for the quantity surveying firms. The percentage value of the adjusted R2 indicated the proportion of the dependent variable to be explained or credited to the independent variable. Also, the null hypothesis was rejected for situations where p-value was higher than the significance level (α). 3.9.8
Challenges to formalisation of organisational culture
Mean item score (MIS) was employed in assessing the identified challenges to the formalisation of organisational culture(s) in quantity surveying firms The premise of decision is that the ranked challenge to the formalisation of organisational culture with the highest mean item score “MIS” was ranked 1st and others in such subsequent descending order. Since a Likert of 5-point scale was be employed for the collection of data, the formula for mean item score be written as: ………………… ……7
57
CHAPTER FOUR RESULTS 4.1
INTRODUCTION
This section presented the result and the analysis of the data obtained for the purpose of the study in accordance with the objectives of the study. It also discussed and related the results obtained with previous studies. The hypotheses stated earlier were tested using appropriate statistical tools with a view to accepting or rejecting them. The results of other findings were also reported. 4.2
RESPONSE TO QUESTIONNAIRE
Table 4.1: Response rate of respondents and firms
Hierarchies Principal partner Senior quantity surveyors Junior quantity surveyors Total
No sent out per hierarchy in each firm 42
Number returned per hierarchy in each firm 21
% returned per hierarchy in each firm 50%
42
29
69%
42 126
40 95% 90 71.42% Source: Author (2012)
Number of firms that returned questionnaire
% number of firms that returned questionnaire
40
95.23%
Out of the one hundred and twenty six (126) questionnaires that were sent out to forty two (42) quantity surveying firms, ninety (90) from forty (40) firms were returned (Table 4.1). The forty (40) firms represent 95.23% of the firms in which questionnaires were sent to. The ninety questionnaires returned represent 71.42% of the total questionnaires sent out. From the hierarchical perspective, the three identified hierarchies (Principal partner, Senior quantity surveyors and the junior quantity surveyors) has ≥ 50% response rate as shown on Table 3. The entire percentage response rate (Table 4.1) are similar to Abiola-Falemu (2012) which was described as encouraging judging by the antecedents of respondents in the construction industry. 58
4.3
THE PROFILE OF RESPONDENTS INVOLVED IN THE STUDY
The profile of the respondents involved in this study is as displayed on Table 4.2. As for the respondents, 48.9% have consultancy experience of six years and above while 51.1% have less than six years experience in consultancy business. 37.2% of the respondents have above six years experience in their respective firms. 62.8% of the respondents have five or less years of experience in their respective firms. The table 4.2 also indicates that the respondents were academically qualified with 73.3% having bachelor degree and above. Apart from the encouraging educational qualification of the respondents, they were also professionally qualified with 46.6% having attained the corporate member of the Nigerian Institute of Quantity Surveyors (NIQS). 30% were also probationer members of the professional body. For the organisational hierarchy, the junior quantity surveyors dominate with 44.4% of the responses. The senior quantity surveyors followed with 32.2% and lastly, the principal partners with 23.3% response rate. 97.4% of the respondents indicate awareness of organisational culture. Thus, responses on organisational culture from the respondents can be relied upon.
59
Table 4.2: Profile of respondents
Description Years of respondents' experience in consultancy business (N = 90) 1-5yrs 6-10yrs 11-15yrs 16-20yrs >20yrs Respondents' experience in the firm (N = 86) 1-5yrs 6-10yrs 11-15yrs 16-20yrs >20yrs Educational qualification of respondents (N = 90) Higher National Diploma Bachelors Degree Masters Degree Membership of the Nigerian Institute of Quantity Surveyors (N = 90) Graduate Membership Probationer Membership Corporate Membership Fellow Organisational hierarchy of respondents (N = 90) Principal Partner Senior quantity surveyor Junior quantity surveyor Awareness of organisational culture in the firms (N = 76) Yes No
Number of respondents
Percentage
46 15 5 7 17
51.1 16.7 5.6 7.8 18.9
54 9 10 5 8
62.8 10.5 11.6 5.8 9.3
24 41 25
26.7 45.6 27.8
21 27 38 4
23.3 30.0 42.2 4.4
21 29 40
23.3 32.2 44.4
74 2
97.4 2.6
Source: Author (2012)
4.4
THE PROFILE OF FIRMS INVOLVED IN THE STUDY
The profile of the firms involved in this study is as displayed on Table 4.3. The table indicates that 82.7% of the firms have over ten years of establishment. This is considered good for this research because firms’ with such years of establishment would have had a matured organisational culture. Of the four categories of business structure, sole proprietorship and partnership structure dominates with a joint percentage of 96.5%. Firms 60
with corporate and multidisciplinary structure seem to be uncommon. In the firms, 52.3% of the firms have norms (culture) expected of all employees therein. 47.7% indicate otherwise. Table 4.3: Profile of firms
Description Years of establishment of the firms (N = 75) 6-10yrs 11-15yrs 16-20yrs >20yrs The business structure of the firms (N = 86) Sole proprietorship Partnership Corporate status Multidisciplinary structure The presence of organisational culture norm in the firm (N = 87) Yes No
Number of respondents
Percentage
13 14 21 27
17.3 18.7 28.0 36.0
37 46 1 2
43.0 53.5 1.2 2.3
46 41
52.3 47.7
Source: Author (2012)
4.5
TYPES OF ORGANISATIONAL CULTURE IN QUANTITY SURVEYING FIRMS
This relates to the first objective which seeks to identify and assess the types of organisational culture in quantity surveying firms. Going by Johns (2010) stating that for a Likert scale that uses a ‘decided’ midpoint, the midpoint is a useful means of determining what might otherwise be a more or less random choice between agreement and disagreement. In this case, the choice was to determine the organisational culture(s) that are current in the quantity surveying firms. From Table 4.4, the mean score for all organisational culture types in quantity surveying firms are more than the midpoint of the 5-point Likert scale (2.5) used for this study. This indicates that all the types of organisational culture identified; with mean scores not less than 4.00; are current in the quantity surveying firms. This is in agreement with Line (1999) that every organisation has a culture whether it knows it or not. The currency of all the types of organisational culture in quantity surveying firms is also in agreement with multiple culture theory of Web book (2012). Web book (2012) stated that in reality, there might be multiple cultures within organisations. 61
From the hierarchical perspective, the mean scores for the response of the various hierarchies on the types of organisational culture differ as revealed on Table 4.4. The Principal partners rank first innovation and supportiveness cultures. The senior quantity surveyors rank first corporate social responsibility and performance orientation cultures. The differences also extended to the second and third ranked among the hierarchies as shown on the Table 4.4. However, the principal partners agreed with the senior quantity surveyors as both ranked first stability culture. The junior quantity surveyors did not rank first any of the types of organisational culture. This may be attributed to their lack of focus on organisational matters because of their status as juniors. Hypothesis 1 In order to test if significant difference in the response of the respondents, Kruskal-Wallis test (H-test) was carried out. From the H-test carried out on the three hierarchies identified in the study, the result shows that the p-value is 0.553, therefore since the p-value is greater than 0.05, then it shows that there’s no significant difference in the responses of the hierarchies on organisational culture.
From the general opinion, the dominant organisational culture in quantity surveying firms is the competitiveness culture with an overall mean score of 4.56. Closely following the competitiveness culture is the stability culture with an overall mean score of 4.38. Other organisational culture types dominating in quantity surveying firms are corporate social responsibility culture, performance orientation culture and supportiveness culture having overall mean scores of 4.33, 4.24 and 4.21 respectively. The less dominant organisational cultures are innovation culture and reward culture having overall mean scores of 4.18 and 4.13 respectively. The implication from the findings of this objective is that quantity surveying firms are organisational culture orientated which contradicts the popular believe that organisational culture is strange to the firms. Also, quantity surveying firms exhibit multiple dimensions of organisational culture because all the factors (types) that constitute the dimension of organisational culture are current in quantity surveying firms. The dimensions stated in Sarros et al (2005) are people oriented, goal accomplishment and environment; and all are exhibited in quantity surveying firms as indicated by the findings of this study.
62
Table 4.4: Types of organisational culture based on Hierarchies ORGANISATIONAL MEAN CULTURE TYPES HIERARCHY MEAN RANK Principal Partner 4.48 2 Competitiveness Senior QS 4.79 1 culture Junior QS 4.43 3 Principal Partner 4.48 1 Stability culture Senior QS 4.48 1 Junior QS 4.25 3 Principal Partner 4.43 2 Corporate social Senior QS 4.45 1 responsibility culture Junior QS 4.20 3 Principal Partner 4.19 3 Performance Senior QS 4.28 1 orientation culture Junior QS 4.25 2 Principal Partner 4.43 1 Supportiveness culture Senior QS 4.34 2 Junior QS 4.00 3 Principal Partner 4.38 1 Innovation culture Senior QS 4.1 3 Junior QS 4.13 2 Principal Partner 4.43 1 Emphasis on reward Senior QS 4.03 3 culture Junior QS 4.05 2 Source: Author (2012) 4.6
GROUP MEAN
GROUP MEAN RANK
4.56 1 4.38 2 4.33 3 4.24 4 4.21 5 4.18 6 4.13 7
LEVEL OF IMPORTANCE ATTACHED TO ORGANISATIONAL CULTURE
Respondents were asked to indicate the level of importance quantity surveying firms attached to the types (factors) of organisational culture. Table 4.5 reveals the index of importance attached to the types of organisational culture in quantity surveying firms. The table indicates that stability culture, performance orientation culture and competitiveness culture are considered so much important to quantity surveying firms as they ranked first, second and third respectively. Notably, innovation culture was ranked last which means it is considered least important to the quantity surveying firms. The less importance attached to innovation culture is not good as it will rid quantity surveying firms the benefit of innovation culture as stated by Bashayreh (2009). Bashayreh (2009) stated that organisations that encourage and support innovation, cooperatively create change, develop new and improved ways constantly 63
and respond well to competitors. The overall mean index of importance is 0.835. This implies that 83.5% importance is attached to organisational culture in quantity surveying firms. Table 4.5: Level of importance attached to organisational culture Types of organisational culture
N
Importance index (II)
Rank
Stability culture
90
0.952
1
Performance orientation culture
90
0.927
2
Competitiveness culture
90
0.876
3
Supportiveness culture
90
0.822
4
Corporate social responsibility culture
90
0.818
5
Reward culture
90
0.810
6
Innovation culture
90
0.643
7
4.7
INTER-CORRELATION AMONG THE TYPES OF ORGANISATIONAL CULTURE
The types of organisational culture in quantity surveying firms are all positively correlated as revealed on Table 4.6. The table also reveal a low positive inter-correlation among the types of organisational culture with r ≤ 0.355 ≥ 0.104. Stability culture is more positively correlated to corporate social responsibility culture at r = 0.339, p < 0.01 which upheld the organisational culture dimension of environment. Corporate social responsibility correlates more positively with competitiveness culture at r = 0.329, p < 0.01. There is also more positive correlation between competitiveness culture and performance orientation culture at r = 0.355, p < 0.01 which also upheld the organisational culture dimension of goal accomplishment. It is thus inferred that in quantity surveying firms, stability culture prompts corporate social responsibility culture; corporate social responsibility culture then leads to the culture of competitiveness which therefore; results to performance orientation culture. The implication of this positive of inter-correlation among the types of organisational culture is that status quo is maintained as the findings of the validated OCP when used in other industries and firms are similar to quantity surveying. Quantity surveying firms can thus be said to share similarities with these other firms. Some of these firms are IT, manufacturing, banking among others.
64
Table 4.6: Inter-correlation among the types of organisational culture
Stability culture
Innovation culture
Corporate social responsibility culture
Supportiveness culture
Reward culture
Competitiveness culture
Stability culture
1.000
Innovation culture Corporate social responsibility culture Supportiveness culture Reward culture Competitiveness culture Performance orientation culture
.168**
1.000
.339**
.263**
1.000
.193**
.310**
.290**
1.000
.081
.213**
.158**
.228**
1.000
.299**
.158**
.329**
.154**
.104*
1.000
.236**
.192**
.258**
.139**
.183**
.355**
Performance orientation culture
1.000
Source: Author (2012) **
Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed)
4.8
CORRELATION
BETWEEN
THE
TYPES
OF
ORGANISATIONAL
CULTURE AND THE PERFORMANCE OF QUANTITY SURVEYING FIRMS Table 4.7 illustrates the result of the correlation analysis between the types of organisational culture and the performance measures in quantity surveying firms. The table reveals that one or more of the types of organisational culture has significant correlation with one or more of performance variables. This is in agreement with Eperjesi (2006) indicating that there is a correlation between organisation culture and outcomes. The table also reveals that stability culture (r = -0.252, p < 0.01), corporate social responsibility culture (r = -0.181, p
