CHAPTER ONE

INTRODUCTION

1.1     Background to the Study     

Culture makes up every organization and organizations are known for their culture. Culture is a binding phenomenon that characterises a group of people. Every organised group of people whether in a corporate, epic or ethnic arrangement, operates a particular prototype that each individual must follow to maintain a unified coordination. That is to say that organisational culture is a major aspect in the development of every organisation. Culture can be believed to be people’s way of doing things and the influences on their collective coordination and behaviour, beliefs and functions. In the corporate setting, it enhances how competitive the organisation can be in the global market. The 21st century organisation is majorly dynamic, encounters a huge number of opportunities and challenges to the stakeholders, hence, knowledge of such dynamic factors is relevant in the pursuit of their objectives. However, a good culture is in synchronisation with the environment where it is developed, thus, the culture of an organisation should be seen in the organisation’s internal capacity to ensure sustainable effectiveness in its works. Someone walking into an office environment will experience a certain atmosphere, feeling, and style that are unique. Every company, be it a microfinance bank, a hotel or a restaurant, has a personality, a charm, a feel that is unique to it, they have a cultural anchor that influence the way customers respond and the way employees interact with customers. Just like in LAPO, the orange and green colour is what you see in every branch across the nation. It also reflects in other factors and features of the organization. This contributes to the general behavior of the bank staff, which has further impact on the performance of the organization (Ogbor, 2013).

Performance of microfinance banks has generated much controversy among scholars over time owing to its sensitivity. Since organizations play a basic and crucial role in day-to-day lives of people, the conceptual consensus among scholars is that performance of firms could be understood from two perceptions – financial and non-financial indices. Elements of financial indices in this context are of the following: profit sharing, loan, return on sales and growth rate. The pattern or method of debt retrieval, sales return and recording pattern are considered expedient according the the organizational culture in LAPO.

At its most basic, corporate (or organizational) culture can be described as the personality of an organization, or simply as how things are done. Corporate culture is a broad term used to define the unique personality or character of a particular company or organization like LAPO and includes such elements as core values and beliefs, corporate ethics and rules of behavior. Corporate culture can be expressed in the company’s mission statement, communication style between heads and subordinates, between colleagues and the external community and as well as the architectural style or interior décor of offices, company colour by what people wear to work, by how people address each other, in the ceremonies and rituals performed in the organization and in the titles given to various employees. Basically, organisational culture is the workplace environment created or enacted from the interaction of the employees in the workplace.(Latif, Ahmad, Qasim, Mushtay, Ferdoos & Naeem, 2013).

Teamwork as a culture, plays a crucial role in enhancing organizational performance. Teamwork effectiveness could be used as a tool by organizations to remain competitively relevant in contemporary times. Abdul-Azeez, Olateju, Ibrahim and Remi (2019) revealed that when employees and managers of firms work as a team, they break grounds because difficult tasks are easily solved and brainstorming on issues posing as threat to the survival of their organizations becomes highly effective. LAPO employeeshave imbibed the team spirit to an extent. It is believed that teamwork continue to keep an organizationimproving, due to the fact that an atmosphere of coherence has been created, thereby providing an enabling environment whereby even the least employee in the firm is encouraged to offer constructive solution to difficult tasks.

A performing firm has a lot to do with effective and efficient way of rendering corporate services to clients. The uniformity of service to clients sends a signal or a properly arranged setup of an organization. The way and manner customers are attended to determine how long they will continue to patronize that firm.  Talib and Ali (2014).

Culture can be inculcated into the employees by leadership and reporting structures. The Managers send instructions and directives of the corporate methods and culture for them to obey or follow. This builds uniformity of cultures and behavior.Organisational culture is usually created by the founders of the organisation or could develop as the organisation grows and it consists of experiences, attitudes, values and beliefs of the organisation, which emanate through social interactions within the organisation and the external environment. It regulates the means that individuals and groups within an organisation interact with each other (Obeng, 2008).Followers carry out instructions based on the direction of their leaders and leaders in turn positively reward their efforts. Sadeghi and Pihie (2012) are of the view that leaders allow followers to fulfill the leader’s interest, minimize workplace anxiety and concentrate on clear organizational objectives such as increased quality, customer service, reduce costs and increase production. Certain facets have been identified to make up leadership style and these are contingent reward, active management by exception and passive management by exception.

1.2     Statement of the Problem

Culture plays a critical role in company success but many business leaders don’t really understand what culture means. It helps to think of corporate culture as a management system that guides the assumptions, values, and beliefs at the heart of the organization. As they pursue digital transformation, most leaders know they must also orchestrate a cultural shift from prioritizing flawless execution to valuing more agile learning and experimentation, from doing siloed work to fostering true interdisciplinary collaboration, and from evaluating people’s past performance to enabling their future development. Articulating the ambition is the easy part. Taking a wrecking ball to what’s really getting in the way is a lot harder.

Organizations that do not have a culture of information practice might tend not to perform well. In the case of LAPOmicrofinance firm, there have been reported cases of managers not divulging sensitive information to their employees basically because of the shady deals they get involved in and when discovered make them become  disrespectful and misbehave at the workplace. This disposition could go a long way in contributing to the low performance of the firm. However, factors like leadership styles, employee trust and information culture have been shown to influence organizational performance of financial institutions. The extent to which these factors contribute to organizational performance of LAPOMicrofinance Firms is not known yet. Hence, this research work seeks to establish the influence of leadership styles and culture on the organizational performance of LAPOmicrofinance firm in Nigeria.

1.3       Objective of the Study

The general objective of this study was to investigate the influence of organizational culture and leadership influence on performance in LAPO Microfinance Bank, The specific objectives are to:

1.       Determine the organizational culture level of LAPO microfinance firms in Nigeria;

2.       Identify existing leadership styles in LAPO microfinance firms in Nigeria;

3          Find out the level of performance in LAPO microfinance bank in Nigeria;

1.4        Research Questions

The research questions that guided this study are as follows:

1.       What is the organizational culture level of LAPO microfinance firms in Nigeria?

2.       What is the existing leadership styles in LAPO microfinance firms in Nigeria?

3          What is the level of performance in LAPO microfinance bank in Nigeria?

1.5       Hypotheses

The level of significance for the testing of these null hypotheses is at 0.05.

The Four null hypotheses tested in this study are:

Ho1:  The organizational culture level of LAPO microfinance firms in Nigeria is low.

Ho2:  The existing leadership styles in LAPO microfinance firms in Nigeria is poor

Ho3:  The level of performance in LAPO microfinance bank in Nigeria no satisfactory

1.6     Scope of the Study

This research considered the organizational cultural standard of LAPO Micro Finance Bank. Various leadership constructs that would determine the type of leadership style that existed in LAPO microfinance firms in Nigeria that helps foster cultural uniformity in the organization.

1.7       Significance of the Study

The significance of this study is to the management or administrative body of LAPO microfinance bank as it will present a blueprint as to how the company can improve on its cultural ethics using leadership influence.

1.8       Operational Definition of Terms

For the tenacity of this research work the expressions enumerated here are contextualized and used to mean as follows:

Employee   Trust:  This refers to   the level of mutual relationship that exists between employees and their superiors depending on certain components such as openness in communication, fair dealing, honesty, positive intention to employees and belief in management.

Culture: Denotes   behavioral practices created in an organization to foster the use of information such as information control, integrity, informality, transparency and pro-activeness.

Leadership Style: This refers to a personal trait of behavior displayed by the head of an organization towards his or her subordinates.

Organizational Performance: Intangible assets such as effective service delivery, employee satisfaction, teamwork, innovation etc. that will enhance the performance of a firm especially from a non-financial perspective.

Microfinance Firm: Refers to an organization that acts as an intermediary for stock market dealings and presents stockholders various choices of services in addition to asset guidance and also buys and sells off equities on behalf of investors.