Organizational Culture, Job Satisfaction and Performance: The Mediating Role of Innovation and Motivation: Evidence Form Workplaces in Pakistan

Abstract

The core objective of this research is to study the interrelations between organizational culture, innovation, motivation, job satisfaction, and performance. We proposed a theoretical framework whereby organizational culture that can both stimulate or restrain innovation directly or through motivation. And these two factors play a mediatory role in job satisfaction. We also proposed a bidirectional effect running from job satisfaction to innovation. For this, we modified the Naranjo-Valencia et al (2016) model and Cameron and Quinn (1999) Competing values framework was adopted which differentiates organizational culture into four types i.e. clan, adhocracy, hierarchy, and market culture. We also establish empirical validity by collecting data from 200 respondents including males and females of different age groups working in different sectors of Pakistan. Data was collected by means of Likert scale type questionnaire and analyzed using PLS CFA and SEM techniques. The results show that the culture can foster innovation and ultimately improve job satisfaction and performance, or it can be an obstacle for both depending on the norms and values promoted by the culture. It has been found explicitly that adhocratic culture is the one that enhances innovation, job satisfaction and performance whereas the hierarchy culture inhibits them. Based on these results, it can be concluded that organizational culture type has a significant impact on innovation as well as a strong mediatory role of motivation and innovation has its effect on job satisfaction and performance. Moreover, Job satisfaction also seems to foster innovation. The findings provide useful insights for organizations operating in Pakistan, to achieve a competitive advantage through innovation. Organizations can use the result in favor of their organizational effectiveness by motivating the employees to embrace innovation in the culture which will ultimately lead to job satisfaction and increased employee performance. The overall result supports that the culture of organizations has a significant positive impact on employee job performance.

Keywords: Organizational culture; Innovation; Performance; Motivation; Job Satisfaction; Clan; Adhocracy; Hierarchy; Market culture; SEM; CFA