Skip to main content

Organizational culture and its effects on organizational performance; evidence from the Edirisinghe Trust Investment (Pvt) Ltd

Culture of an organization can be identified as the embodiment of its joint systems, beliefs, norms, ideologies, myths and rituals. Furthermore, those factors can motivate employees to become valuable sources of efficiency and effectiveness (Sudarsanam, 2010). Generally, organizational leadership is directly associated with the organizational culture and due to same, it is very difficult to change it even under good leadership (Denison, 1990). According to Kotter and Heskett (1992), corporate culture is included with a significant positive impact on the organizational long-term economic performance while highlighting all the key managerial constituencies such as customers, stockholders, and employees and leadership.

Edirisinghe Trust Investment (Pvt) Ltd (ETI) was a leading and strong finance companies registered under the Monetary Board of the Central Bank of Sri Lanka under the Finance Companies Act No. 78 of 1988, providing services in the areas of Fixed Deposits, Pawning, Gold Sales, Leasing, Hire Purchase and Property Development. It was started by Dr Soma Edrisingehe an entrepreneur, film producer, a philanthropist and a social worker in Sri Lanka. At the time the financial the crisis hit the company, ETI has over 34 billion rupees in financial strength with a customer base of over 24,000 (Mudugamuva, 2019).

After the death of the chairperson of ETI, heavy cash withdrawals took place due to false media reports published on social media. In addition, the fall of the price of gold during the same period also affected the performance of ETI. As a result of the financial crisis that emerged ETI, could not maintain their Cooperate Social Responsibilities and the new culture that prevailed was unable to cope with the challenge. Therefore, customer and employee confidence and trust about ETI was highly tainted and also accelerated employee turnover as well as the withdrawal of deposits (Srilnakamirrio,2018). As per the above facts, the sudden change in the organizational culture was directly associated with the negative performance of ETI.

References

Denison, D.R. (1990), “Corporate culture and organizational effectiveness”. New York: John Wiley.

Kotter, J.P. & Heskett, J.L. (1992). “Corporate culture and performance”. New York: Macmillan

Madugamuva M,2019 ‘ETI crisis deepens’,The morning 13 March. Available from: <http://www.themorning.lk/eti-crisis-deepens/>.[30 May 2019].

Srilnakamirrio 2018, What happened to ETI Finance?.Available from:< https://srilankamirror.com/biz/6548-what-happened-to-eti-finance>.[30 May 2019].

Sudarsanam (2010), “Creating Value from Mergers and Acquisition”. Pearson Education Ltd. UK.

Comments

  1. Leadership plays a huge role in organizational culture. Inspiring leaders can create cultures and departure of such leaders can change the values of an organization. steve jobs departure from apple also prompted a value change.

    ReplyDelete
  2. Leadership leads the organization to the success or failure. As you mentioned leadership clearly pay the way to organization's culture and its performances. What happens to the Eti was, depositors withdrawn their deposits. Finance companies are running on deposits and loans when deposits are going down they can't operate their operations. nice right up.

    ReplyDelete
  3. Studying organizational culture of an organization is important because we can find the organization's weaknesses and differences between current and desirable situation from the viewpoint of that organization's employees.

    ReplyDelete

Post a Comment

Popular posts from this blog

Recruitment process and its impact for the Armed Forces

Recruitment forms a core part of the central activities underlying Human Resource Management  ( Bratton & Gold, 2001) . Mainly there are two types of recruitment such as internal source of recruitment and external source of recruitment. Recruitment is affected by several factors such socioeconomic factors, demographic factors, personal factors and organizational factors  ( Bratton & Gold,2001; Boudreau &   Rynes,1985) .The current recruiting process in armed forces involves with numerous methods under the external sources of recruitment to contact and ultimately contract, potential recruits that include; local and international advertising, informational visits to schools and social groups, traveling military exhibits, direct mail advertising, telephone solicitation, web sites, and contacts and visitations  ( Bachman et al , 2000). However,military recruitment is one of the most challenging human resources staffing operations in the modern world...

Reasons for failure induction process in the plantation sector in Sri Lanka

The induction can be defined as the process that turning to the new employee as part of the organization by providing an opportunity to gain all the new information, knowledge and skills they require to perform their new tasks and that process can depend according to the professional field (Sprogoe and Elkjaer, 2010). However, high levels of employee turnover, constant recruitment as well as loss of team spirit, efficiency and innovation can be occurred based on the induction process (Geldenhuys et al. 2014; Shantz, Alfes and Truss, 2012). Plantation industries have been recruited Assistant Managers based on the English language, family, and secondary education qualification. After recruiting, employees have been gained knowledge, ability, and skills through six months in the house training period. Furthermore, human resource management courses, agriculture diploma, and business management courses are also included as part of the induction process (Sivaratnam,2013). According...

Human Resource Function and ongoing labour shortage of Sri Lankan construction industry

Human Resources are fundamental to all industries, including the construction industry. However, the workforce in the construction industry is extremely diverse with, skilled and unskilled workers, craftsman, managerial and administrative workers. Therefore the use of correct human resource functions in recruitment, remuneration, conditions of employment, performance management, training and development is essential for the long term survival of the construction industries (Spooner and Kaine, 2010). Generally, the performance of the construction industry is often considered as an indicator of economic development. The construction industry in Sri Lanka contributes about 9% to the GDP with around 600,000 employees. During 2018, the total annual construction turnover was about Rs. 800 billion. As per data in appendix A, the construction costs for middle-class housing clearly indicates that the unit cost of construction in Sri Lanka is the highest in the region, second only to Singa...