Research Article

International Journal of Engineering

Business Management
Volume 9: 1–9
Factors affecting the organizational ª The Author(s) 2017
DOI: 10.1177/1847979017712628
performance of manufacturing firms journals.sagepub.com/home/enb

Ahmad Adnan Al-Tit

Abstract
Numerous studies have been conducted to explore the individual effects of organizational culture (OC) and supply chain
management (SCM) practices on organizational performance (OP) in different settings. The aim of this study is to
investigate the impact of OC and SCM on OP. The sample of the study consisted of 93 manufacturing firms in Jordan. Data
were collected from employees and managers from different divisions using a reliable and valid measurement instrument.
The findings confirm that both OC and SCM practices significantly predict OP. The current study is significant in reliably
testing the relationship between SCM practices and OP; however, it is necessary to consider cultural assumptions, values
and beliefs as the impact of OC on OP is greater than the impact of SCM practices. Based on the results, future studies
should consider the moderating and mediating role of OC on the relationship between SCM practices and OP.

Keywords
Organizational culture, supply chain management practices, organizational performance, manufacturing firms

Date received: 9 November 2016; accepted: 4 May 2017

Introduction hierarchical cultures) on financial OP using a sample con-

sisting of managers of Turkish companies. Their results
Research on organizational performance (OP), either with
indicated that none of these dimensions were related to the
regard to its financial or its operational aspects, has
financial dimensions of OP. On the other hand, Prajogo and
revealed different factors that have significant effects on
McDermott20 found a positive relationship between OC
OP. Examples of these factors include enterprise risk man-
and OP.
agement,1 multidivisional structures of organizations,2
In a study on the impact of human resources on SCM
CEO charisma,3 stakeholders’ involvement and support,4
and OP, Gómez-Cedeño et al.21 found a direct influence of
intellectual capital,5 human capital,6 CEOs’ social net-
an SCM implementation on SCM outcomes and an indirect
works,7 organizational learning,8 the strategic integration influence on OP of firms from different industries in Spain.
of human resource management,9 managerial practices
Using a sample of manufacturing and service firms from
related to strategies, performance measurement, corporate
Malaysia, Chong et al.22 asserted the positive impact of
governance, innovation and development, along with the
SCM practices on OP.
external environment,10 adoption of green supply chain
management (SCM) practices,11 human resource prac-
tices,12 knowledge management capacity,13 supportive Business Administration Department, College of Business and Economics
organizational climate,14 supply chain quality manage- (CBE), Qassim University, Al Malida, Kingdom of Saudi Arabia
ment,15 supply chain innovation,16 human capital disclo-
sure17 and knowledge creation.18 Corresponding Author:
Ahmad Adnan Al-Tit, Business Administration Department, College of
Concerning the relationship between organizational cul- Business and Economics (CBE), Qassim University, Al Malida, Buraidah
ture (OC) and OP, Yesil and Kaya19 carried out a study to 15452, Qassim, Kingdom of Saudi Arabia.
explore the impact of OC (clan, adhocratic, market and Emails: aa.altit@qu.edu.sa; ahmteet@yahoo.com

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2 International Journal of Engineering Business Management
Evidence from China has confirmed the positive impact
of supply chain integration (internal, customer and supplier
integration) on OP. Li et al.23 investigated the impact of
four practices of SCM (supplier and customer partnership,
the level and quality of information sharing and postpone-
ment) on OP, measured by market and financial perfor-
mance. Their results pointed to a significant influence of
these practices on OP dimensions. Miguel and Brito24 ana-
lysed data collected from companies in different industries
in Brazil to explore the relationship between SCM and OP.
They concluded that SCM practices exert positive influ-
ences on OP.
Okongwu et al.25 investigated the impacts of quality of
information sharing and supplier–customer partnerships on
the OP of industrial firms in France. Their results supported
the hypothesis that SCM practices positively predict OP. In
light of the aforementioned findings, the aim of this study is
to explore factors affecting financial and non-financial per-
formance via investigating the impact of OC dimensions
and SCM practices on OP.
The remainder of the article is organized as follows:
‘Literature review and hypothesis development’ section
provides a literature review and hypothesis development;
this is followed by the presentation of the conceptual
model for the study in section ‘Conceptual model’. The
‘Research methodology’ section addresses the research
methodology, and results are presented in section ‘Data
analysis and results’. A discussion of the findings and
conclusion are provided in the sixth section. The final
section highlights the research implications and provides
future research directions.
Literature review and hypothesis
development
Organizational culture
Scholars have defined OC as shared values and beliefs
held by individuals that form the basis for patterns of
behaviour in solving problems.26 Denison27 argued that
the core content of OC covers beliefs, values and assump-
tions held by individuals within organizations. In contrast,
Schein28 described OC as a behaviour that determines
how an organization grasps and reacts to the external and
internal environments, thus embedding the reaction to the
organizational environment in the definition of OC. Many
attributes concerning OC emerge in the literature. It has
been considered to guide individual communications
within an organization29 and to be a critical antecedent
factor for the success of knowledge management initia-
tives30 and a predictor of OP.31
In terms of the dimensions of OC, studies such as that of
Balthazard et al.32 have used the Organizational Culture
Inventory® (OCI), (# 2012 Human Synergistics International)
developed by Robert Cooke and J. Clayton Lafferty, which
covers three types of OC: aggressive/defensive, passive/
defensive and constructive cultures. The OCI measures 12
behavioural norms called 1–12 o’clock positions. Chang
and Lin33 plotted OC on four axes (flexibility, internal,
external and effectiveness), which cover four types of
OC: cooperative, innovative, consistent and effective.
According to these authors, cooperation, information
sharing, empowerment and teamwork distinguish a coop-
erative culture. Adaptability and creativity are the major
features of innovative cultures. Rules and regulations, as
well as efficiency, are the dimensions included in a con-
sistency culture.
Finally, the main focus of the effectiveness, culture is on
competitiveness, goal achievement and effectiveness. In
their study of the relationship between OC, total quality
management and operational performance, Baird et al.34
used the organizational culture profile to measure OC. The
profile consists of six dimensions: teamwork/people
respect, outcome orientation, innovation, stability, atten-
tion to detail and aggressiveness. For this study, two OC
dimensions were adopted: adaptability26 and performance
orientation.35 According to Ahmad,26 customers, risks and
mistakes drive an adaptable organization. Performance
orientation refers to the accountability of members towards
results and high levels of performance.35 Table 1 shows
examples of the OC dimensions used in the literature.
Supply chain management
Chong et al.22 defined supply chain management (SCM)
based on two approaches: supply management and logistics
management. The focus of the supply management is inte-
gration, while the focus of logistics management is inven-
tory reduction. According to Park and Krishnan,38 cited in
Chong et al.,22 SCM can be defined as activities aimed at
integrating partners in the supply chain to produce the right
quantity of a product to be distributed in the right place at
the right time.
Huang et al.39 classified SCM research into three cate-
gories: (i) an operational approach that relates to produc-
tion, inventory and operational tools; (ii) a design approach
that deals with operational systems and information and
(iii) a strategic approach that refers to relationships and
competitive advantage. Huang et al.40 used information
sharing and technological interdependence to measure the
level of integration in the supply chain. Okongwu et al.’s25
study explored the relationship between SCM practices and
OP. They measured SCM practices in terms of information
sharing, supplier partnerships, customer relationships and
information quality. Two of these dimensions (supplier
partnerships and customer relationships) were adopted to
meet the purposes of this study (Table 2).
Organizational performance
Performance indicates to the achievement level of the mis-
sion at the work place that develops an employee job.44
Al-Tit 3

Table 1. Organizational culture dimensions used in the literature. Table 2. Supply chain management dimensions used in the
literature.
Dimensions of organizational culture Researcher (s)
Dimensions of supply chain management Researcher (s)
Clan culture Yesil and Kaya19
Adhocracy culture Customer relationship Chong et al.22
Market culture Information sharing
Hierarchy culture Information technology
Cooperativeness Chang and Lin33 and Internal operation
Innovativeness Akhavan et al.30 Strategic supplier partnership
Consistency Training
Effectiveness Collaborative distribution Arif-Khan et al.41
32
Aggressive/defensive cultures Balthazard et al. Distribution flexibility
Passive/defensive culture IT-enabled distribution
Constructive cultures Inventory management
Adaptability culture Ahmad26 Order commitment
Consistency culture Transparency in the distribution process
Involvement culture Supply chain integration Jabbour et al.42
Mission culture Information sharing
Culture management Erwee et al.35 Strategic relationships with suppliers and
Conflict resolution customers
Change disposition Support customer order
Employee participation Information sharing, information quality Okongwu et al.25,
Goal clarity Supplier partnership Al-Tit43
Identification with the organization Customer relationship
Organization focus and integration Technological interdependence Huang et al.40
Authority locus Information sharing
Management style
Customer orientation
Human resource orientation
Task orientation
In the SCM domain, Arif-Khan et al.41 identified three
Performance orientation
Information flow Sikorska-Simmons36 categories of OP related to SCM: flexibility, output and
Involvement resource performance. According to these authors, flexi-
Meetings bility in performance relates to an organization’s respon-
Staff perceptions of teamwork siveness, output performance pertains to an organization’s
Staff perceptions of teamwork ability to deliver a superior level of customer service and
supervision resource performance concerns an organization’s ability
Results-oriented vs. process-oriented Chang and Lin37
to achieve efficiency. Using a sample consisting of 652
cultures
Tightly controlled vs. loosely controlled firms in Singapore, Chia et al.47 examined performance
cultures measurements used by SC managers. They found that the
Job-oriented vs. employee-oriented most usable indicators were cost reduction, gross revenue,
cultures pre-tax profit and customer satisfaction. Table 3 shows
Closed system vs. open system cultures examples of the OP dimensions used in the existing
Professional vs. parochial cultures literature.
Teamwork/people respect Baird et al.34
Outcome orientation
Innovation, stability Relationship between OC and OP
Attention to details
Aggressiveness On the association between OC and OP, Yesil and Kaya19
provided evidence from Turkey using a sample consisting
of 300 companies operating in the textile, food and service
industries. Measuring OC in terms of adhocratic, clan, hier-
Treacy and Wiersema,45 cited in Zack et al.,46 suggested archical and market cultures and OP by sales growth and
three OP-related capabilities that provide a baseline for return on assets, they found no significant relationship
competitive advantage: customer intimacy, product leader- between their OC dimensions and OP indicators. Prajogo
ship and operational excellence. Product leadership refers and McDermott20 examined the relationship between OC
to competition based on product and service innovation. and OP using four cultural dimensions adopted from Quinn
Customer intimacy relates to the competition in terms of and Spreitzer50 – group culture, developmental culture,
the strength of customer satisfaction and retention. On the hierarchal culture and relational culture – and four dimen-
other hand, operational excellence relates to competition by sions of performance, namely, product and process quality,
virtue of the efficiency of internal processes.44 product and process innovation. Their findings indicated a
4 International Journal of Engineering Business Management

Table 3. Organizational performance dimensions used in prior literature.

Dimensions of organizational performance Researcher (s)

 Sales-based performance Ismail et al.48, Al-Tit43, Chong et al.22 and Lee and Yu31
– Sales revenue, profitability, return on investment
– Return on assets, manufacturing productivity
– Product added-value, employee added-value
– Sales growth and market share
 Organizational-based performance
– Product leadership (product and service innovation)
– Product and service quality
– Customer intimacy (customer satisfaction and retention)
– Operational excellence (internal processes efficiency)
– Employee development, and job satisfaction
 Supply chain-based performance Arif-Khan et al.41
– Flexibility performance
– Output performance
– Resource performance
– Cost reduction Treacy and Wiersema45
– Gross revenue
– Profit before tax
– Customer satisfaction
– Profitability, revenue, sales volume and growth Tan and Sousa49
– New customers, customer satisfaction, company reputation

positive relationship between developmental culture and
three of the OP dimensions (product quality, product inno-
vation and process innovation).
Al-Tit51 conducted a study to investigate the mediating
role of OC between Human Resource Management (HRM)
practices and OP. It was found that OC moderated the rela-
tionship between HRM practices and OP. Lee and Yu31
investigated the relationship between OC and OP using a
sample of companies from three sectors: high-tech firms,
hospitals and insurance companies. Their results confirmed
the positive impact of OC on OP.
In Jordan, Bashayreh52 investigated the relationship
between OC and OP. It was found that there is a relationship
between OC (policies and procedures) and OP. Based on 240
valid questionnaires collected from insurance companies,
Al-Nsour53 investigated the role of OC in improving employ-
ees’ performance in the Jordanian banking sector. The results
identified there is a relationship between OC components
(expected Organization) and Employees’ Performance. Con-
sequently, the following hypothesis is proposed:
H1: OC (cultural adaptability and performance orienta-
tion) predicts OP.
Relationship between SCM and OP
Chong et al.22 collected data from a sample consisting of
163 manufacturing and service companies in Malaysia to
test the relationship between SCM practices and OP (opera-
tional and innovative performance). They found a direct
influence of SCM practices, on both the operational and
the innovative performance of Malaysian companies.
Based on 128 valid questionnaires collected from different
manufacturing companies in India, Arif-Khan et al.41
investigated the relationship between agile SCM practices
and OP. The results identified four SCM practices related
to the agile supply chain: collaborative distribution, distri-
bution flexibility, inventory management and order com-
mitment. In addition, they confirmed the association
between these practices and OP. Using the four dimensions
of SCM (information sharing, cooperation, long-term rela-
tionships and process integration) and four dimensions for
OP (cost, delivery, flexibility and quality), Miguel and
Brito’s 24 results supported the positive relationship
between SCM and OP. In addition, in a study of the rela-
tionship between SCM and OP with a sample of 450 man-
ufacturing companies in France, Okongwu et al.25 found
direct and indirect impacts of SCM practices on OP. There-
fore, the following hypothesis is proposed:
H2: SCM (supplier partnership and customer relation-
ship) predicts OP.
Conceptual model
Figure 1 shows the study variables and the relationships
postulated between them. The conceptual model consists
of three variables: OC, SCM and OP. Two potential relation-
ships between the variables are assumed: OC is significantly
related to the OP, and SCM is significantly related to the OP.
Research methodology
Research sample and data collection
The study population comprises manufacturing firms oper-
ating in Amman, the capital city of Jordan. Of these firms, a
Al-Tit 5

Table 4. Measurements used in the study.

Variables Dimensions Researcher (s)

OC Cultural Ahmad26 and Erwee et al.35
adaptability
Performance
orientation
SCM Supplier Okongwu et al.25 and Quinn and
partnership Spreitzer50
Customer
relationship
OP Operational Okongwu et al.25 and Al-Tit51 and
performance Quinn RE and Spreitzer50

OC: organizational culture; SCM: supply chain management; OP: organi-

zational performance.

(strongly agree). Table 4 summarizes the measurements

used to evaluate the study variables.
Figure 1. Research model.
Validity and reliability
sample of 300 firms was randomly selected. The study
Construct validity was assured as a measure previously
sample intentionally involved employees from different
developed and validated. Reliability testing is defined as
departments because OC might differ among organiza-
a measure that ensures the stability and consistency of
tional units. A questionnaire-based survey was carried out
results over time.56
to collect data from the participants. The response rate was
The findings of validity and reliability assessments, as
34% (102) due to the low percentage of firms that agreed to
displayed in Table 5, confirm the acceptability of the mea-
participate in the study. Of the questionnaires returned,
surements used in the current study as recommended55,57,58
nine were incomplete. This left 93 questionnaires usable
(Cronbach’s a values above 0.7, w2/df < 2.0, RMSEA <
for data analysis.
0.080, and CFI > 0.9).

Measures
The OC measure comprises two dimensions: adaptability26
and performance orientation.35 Four items were developed
to measure this variable. SCM practices were measured
using two dimensions adapted from Okongwu et al.25 and
Flynn et al.54: supplier partnerships (information networks,
market information sharing, inventory level sharing,
demand forecast sharing) and customer relationships
(information networks, market information sharing,
computer-based orders, customer feedback and com-
plaints). Also based on these authors, mutual collaboration
and inventory management were used to evaluate supplier
partnerships, while practices directed towards the manage-
ment of customer complaints and building long-term rela-
tionships with customers were used to evaluate customer
relationships. Eight items were developed to measure this
variable. In addition, following Okongwu et al.25 and
Quinn and Spreitzer,50 employee satisfaction, customer
satisfaction and the introduction of new products were used
to measure non-financial performance, based on Hallavo55
and Quinn and Spreitzer.50 Five items were developed to
measure this variable. Therefore, the total number of items
in the questionnaire was 17 items. The questionnaire was
anchored based on a 5-point Likert-type scale that con-
sisted of from 1 point (strongly disagree) to 5 point
Data analysis and results
Intercorrelation matrix
The Pearson’s correlation coefficients in Table 6 indicate
that all the study variables are associated with each other.
There are significant relationships between OC, SCM prac-
tices and OP indicators.
Hypothesis testing
The results of the paths postulated for this study, as summar-
ized in Table 7 and portrayed in Figure 2, provide support for
H1 and H2. The OC dimensions explain 45% of the variance
in OP and have a significant positive impact on OP (Cultural
adaptability, b ¼ 0.367, t ¼ 4.897, p value  0.05; Perfor-
mance orientation, b ¼ 0.321, t ¼ 4.132, p value  0.05).
The SCM dimensions explain 40% of the variance in OP and
have a significant positive impact on OP (Supplier partner-
ship, b ¼ 0.281, t ¼ 3.897, p value  0.05; Customer rela-
tionship, b ¼ 0.275, t ¼ 3.712, p value  0.05).
Discussion and conclusion
This study aimed to investigate factors affecting OP by
exploring the effect of OC and SCM practices on the OP
6 International Journal of Engineering Business Management

Table 5. Reliability and validity of measurements.

Construct Items Mean SD a w2/df RMSEA CFI p Value

OC Cultural adaptability 2 3.74 0.90 0.83 1.22 0.061 0.94 0.00
Performance orientation 2 3.80 0.89 0.81
SCM Supplier partnership 4 3.86 0.88 0.78 1.63 0.074 0.91 0.00
Customer relationship 4 3.98 0.91 0.78
OP Operational performance 5 3.81 0.81 0.80 1.47 0.067 0.96 0.00
OC: organizational culture; SCM: supply chain management; OP: organizational performance.
p  0.05.

Table 6. Intercorrelation of variables.

1 2 3 4 5
1 1.00
2 0.42 1.00
3 0.52 0.40 1.00
4 0.61 0.39 0.46 1.00
5 0.66 0.71 0.63 0.69 1.00

1: Cultural adaptability; 2: performance orientation; 3: supplier partner-

ship; 4: customer partnership; 5: operational performance.
p  0.05.

Table 7. Hypothesis testing.

Hypotheses Dimensions r2 b T Result

H1: OC Cultural 0.446 0.367 4.897* Accepted
predicts OP adaptability
Performance 0.321 4.132*
orientation
Figure 2. Final model.
H2: SCM Supplier 0.397 0.281 3.897* Accepted
predicts OP partnership
Customer 0.275 3.712* partnerships are related to operational performance. How-
relationship ever, they explained that this was due to the introduction of
internal integration in the model. In this study, the ultimate
OC: organizational culture; OP: organizational performance; SCM: supply
aim of which was to investigate factors affecting OP, the
chain management.
*p Value  0.05. results show that both OC and SCM practices are examples
of such factors. Overall, the study concludes that organiza-
tions driven by customers, partners, risk and mistakes and
of manufacturing firms from Jordan. The findings of the oriented towards high levels of employee performance will
study indicate that both OC and SCM practices signifi- experience more enhanced levels of OP.
cantly predict OP. Concerning the relationship between
OC and OP, the results in the literature are mixed. In a
Implications and future research
study of the relationship between the same constructs, Yesil
and Kaya19 revealed a non-significant relationship between directions
OC and OP. On the other hand, Lee and Yu31 confirmed Despite the significant contribution of SCM practices to
that OC positively predicts OP. The findings of this study OP,41,22,24,25 the findings of this study indicate that the
are consistent with Abu-Jarad et al.,59 suggesting that OC is impact of OC on OP is greater than the impact of SCM
a key dimension in studies intending to investigate OP, practices on the same construct. Therefore, both research-
particularly in non-Western settings. ers and managers should give importance to organizational
On the relationship between SCM practices and OP, beliefs, values and assumptions along with other variables.
Chong et al.,22 Arif-Khan et al.,41 Miguel and Brito24 and Hence, future research should examine the moderating and
Okongwu et al.25 found a positive effect of SCM practices mediating role of OC on the relationship between supply
and OP. Consistent with Quinn and Spreitzer,50 this study chain practices and OP. The aim of this study is to explain
found a significant relationship between customer partner- the direct relationship between SCM, OC and OP in the
ship and operational performance. The results of Quinn absence of previous studies conducted in Jordanian
and Spreitzer 50 rejected the hypothesis that supplier settings. However, the intended direct relationship is
Al-Tit
considered an initial point to develop new models on
direct–indirect relationship between these variables in the
same context. Hence, neither mediating nor moderating
effects were studied in the current study. As recommended,
future research is required to examine such casual effects of
mediating and moderating variables.
The sample used in this study is limited to manufac-
turing firms in Amman, the capital city of Jordan. This
study is limited by its low response rate due to firms’
refusal to participate in the study, since they regarded the
required data, as secrets should be preserved from com-
petitors. Consequently, the findings should be considered
with caution based on the declined response rate. Accord-
ing to Holbrook et al.,60 a lower response rate will only
affect the survey estimates.
Future studies should assess the impact of OC and sup-
ply chain practices on the OP of other manufacturing
firms in other countries. Finally, the research model
should include additional variables that contribute to OP
level to explore more factors that may affect OP in
Jordanian settings.
Acknowledgement
The author would like to thank the Jordanian firms who partici-
pated in this research. He would also like to thank the Deanship of
Scientific Research in Qassim University, Saudi Arabia.
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with
respect to the research, authorship, and/or publication of this
article.
Funding
The author(s) received no financial support for the research,
authorship, and/or publication of this article.
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