Organisational culture of construction companies in Lagos State, Nigeria

Organisational culture compares the prevailing culture with the ideal to evolve a better organisational performance. In the past few years, it has gained attention as one of the central elements that contribute to organisational success and performance (Choi et al. 2010). Its unique nature in terms of cultural type and strength allows an organisation to change the emphasis on certain values and shift to the values peculiar to the cultural type with highest strength (Choi et al. 2010) although project participants measuring organisational culture have different criteria, because their cultural fundamentals comprise differing beliefs and values (Abu-Jarad et al. 2010). Cameron and Quinn (1999) suggested that measures used for strengths of cultures are significantly questionable.

Organisational performance of construction companies is significantly below expectations due to poor forecasts, poor realisation of project objectives or both (Fellows and Liu 2006). Aniekwu and Igboanugo (2012) reported that it is apparent that the Nigeria construction industry has failed to maintain parity with other sectors such as the retail, automotive, electronics and aerospace industries despite obvious short-term successes (using indices of productivity) and the divergence is increasing yearly (Bew and Richards 2008). Thus, there is a need for the industry to improve and keep improving its efficiency. However, the obstacles and uncertainties facing the industry due to changing environment can only be addressed when there is a means for assessing construction organisations (Maloney and Federle 1993). Hence, organisational culture is one of such means for assessing construction organisations. Magee (2002) contended that without considering the impact of organisational culture, organisational practices such as performance management could be counterproductive because the two are interdependent and change in one will impact the other.

Research on organisational culture especially in the construction industry is limited (Ankrah 2007). A lot of research studies in organisational theory have focused on developed countries (95%), whereas only 5% of the studies are found to be carried out in developing countries (Farashahi et al. 2005: Ahmad 2012). Novana and Ogunlana (2006) assessed the organisational culture profile of construction companies in Thailand and reported that the hierarchy culture (HC) is predominant, followed by market, clan and adhocracy. Thai contracting companies do not focus on innovation, growth and response acquisition. Oney-Yazic et al. (2007) investigated the cultural features and profile of US construction companies and reported that the organisations are dominated by a strong clan culture (CC), which is relevant to internally focused organisations. In Nigeria, there is a dearth of studies on organisational culture of construction companies. Although Olanipekun et al. (2013) studied the effects of organisational culture on the performance of quantity surveying firms in Nigeria using an assessment approach comprising dimensions suited to service organisations like quantity surveying firms rather than construction companies that produce buildings. Abiola-Falemu (2013) studied the relationship between organisational culture, job satisfaction and employee commitment, which impact on and could be an antithesis to poor performance problem of the construction industry; however, the absence of a two-way approach to measuring and confirming organisational culture of construction companies in Lagos State, Nigeria, leaves a lot of questions that could unravel the fundamental organisational culture issues in the Nigeria construction industry unanswered. Such issues include identification of the prevailing organisational culture in the industry and its features and profile. These are the stimuli for this study and they raise the following research questions.

What are the features of organisational culture exhibited by construction companies in Lagos State, Nigeria?

On the definition of organisational culture, most authors agreed that organisational or corporate culture referred to something that is holistic, historically determined (by founders or leaders), related to things anthropologists study (such as rituals and symbols), socially constructed (created and preserved by the group of people who together form the organisation), soft and difficult to change (Abu-Jarad et al. 2010). Organisational culture can be observed at three levels of the organisation as follows: artefacts, espoused values and basic assumptions, and these levels can be analysed by the degree of visibility to observers (Schein 2004). According to Maleka et al. (2015), Schein’s (1992) model distinguishes the following three levels of culture: artefacts (visible, tangible, audible results of activity grounded in values and assumptions), values (social principles, philosophies, goals and standards considered to have intrinsic worth) and basic assumptions (taken-for-granted beliefs concerning reality and human nature). This coheres with Hofstede’s (1999) ideas about underlying worldviews that are manifested in a “collective programming of the mind”. However, Lunenburg (2011) viewed organisation’s culture as consisting of outcomes that the organisation seeks to achieve and the behavioural procedures or procedural behaviours the organisation encourages for doing things. They become personalities on their own just like people with the face of the leader and can be flexible or rigid, supportive or unfriendly and innovative or conservative (Lunenburg 2011). People exchange values with the person of the organisation in a transaction like camaraderie among themselves (Kotler 1972). The experience is business.

These definitions of organisational culture, its component levels and examples are summed up in Figure 1.

Fig. 1

Organisational culture can be described by its aspect, features, dimensions, traits and elements. Scientists use different concepts that have the same meaning (Ginevičius and Vaitkūnaitė 2006). Features of organisational culture are used to assess organisational culture and to evaluate its relationship with organisational performance. Jung et al. (2009) identified prominent dimensional features by surveying a host of renown instrument. These include the following: achievement or accomplishment, attitudes to change or creating change, employee development capability, employee commitment or participation, valuing of ethics, long-term customer focus, goal clarity or orientation, innovativeness or risk taking, job satisfaction or job security, confidence in leadership, individual learning and organisational learning, organisational identity and attributes, performance facilitation measures, power, relationships (collegial or interdisciplinary relations), results, rewards, supportiveness, task structure, team approach and trust. Ginevičius and Vaitkūnaitė (2006) analysed 53 works in selecting organisational culture features and came out with a final list of 12 features which includes the following: involvement, cooperation (collaboration), transmission of information, learning, care about clients, adaptability, strategic direction, reward and incentive system, system of control, communication, agreement, coordination and integration. These features are broken down into hierarchical structure and corrected as presented in Figure 2.

Fig. 2

The organisational culture assessment tool assesses four culture types based on six different dimensions as follows: (i) dominant characteristics (culture type), (ii) organisational leadership, (iii) management of employees, (iv) organisational glue, (v) strategic emphases and (vi) criteria for success. It was originally developed to understand organisational effectiveness (Cameron and Quinn 1999) and was later applied to explore different issues relative to organisations such as TQM (Al-Khalifa and Aspinwall 2001), leadership development and managerial styles (Martin and Simons 2000) and finally organisational culture (Cameron and Quinn 1999). It encompasses four quadrants, each representing a different set of organisational culture indicators. Each quadrant is given a distinguishing label that denotes its most notable cultural characteristics, namely, (1) clan or family, (2) adhocracy or ad hoc, (3) market and (4) HCs. This is presented in Figure 3.

Fig. 3

The general information of respondents is presented in Table 1, whereas Table 2 shows the types of construction contracts undertaken by the companies. Result revealed that a majority of respondent professionals had Bachelor of Science (BSc) (f = 62, 44.3%). This is followed by Masters (MBA/March/MSc) (f = 39, 27.9%), Higher National Diploma (HND) (f = 31, 22.1%), Ordinary National Diploma (OND) (f = 6, 4.3%) and NCE (f = 2, 1.4%). Most of the companies had been operating for 6–10 years (f = 38, 27.1%), followed by 11–15 years (f = 35, 25.0%), 16–20 years (f = 24, 17.1%), above 20 (f = 24, 17.1%) and 0–5 years (f = 19, 13.6%). Builders responded most to the research (f = 55, 39.3%), then, Architects (f = 30, 21.4%), Engineers (f = 26, 18.6%), Public administration staff (f = 12, 8.6%), Office managers (f = 9, 6.4%), Facility managers (f = 4, 2.9%) and Accountants and Quantity surveyors (f = 2, 1.4%). Sixty five (46.4%) of the respondents have 0–5 years professional experience, 56 respondents (40.0%) have 6–10 years, eleven respondents (7.9%) have 11–15 years, whereas four respondents (2.9%) have 16–20 and above 20 years each. Respondents’ professional qualification showed predominant absence of membership (f = 54, f = 38.6%). This is followed by membership of the Nigerian Institute of Building (MNIOB) (f = 28, 20.0%), National Society of Engineers (NSE) (f = 20, 14.3%), Nigerian Institute of Architecture (NIA) (f = 20, 14.3%), National Institute of Management (NIM) (f = 8, 5.7%), ICAN (f = 4, 2.9%), Chartered Institute of Personnel Management in Nigeria (CIPM) (f = 2, 1.4%), NIQS (f = 2, 1.4%) and Occupational Safety and Health (OSH) (f = 2, 1.4%). Most of the construction companies surveyed within the study location worked more on private projects (f = 89, 63.6%), then, both public and private projects (f = 31, 22.1%) and public projects (f = 20, 14.3%).

The study adopted factor analysis to reduce the item statements and consequent features to principal components. The value of Kaiser–Meyer–Olkin (RMD, 0.575) measure of sampling adequacy test carried out (Table 2) showed that the data collected were adequate for the analysis, and the Barlett’s test of sphericity (0.000) was highly significant. Thus, the data upon which the analysis was carried out were reliable. The total variance explained by the factors (30 factors) is shown in Table 3. By considering a cut-off point for the score loading with absolute value greater than 0.500, the components and the corresponding critical factors loading are presented in Tables 4 and 5.

All (nine) components were extracted via principal component analysis with Eigen values greater than 1.000 (Figure 4). The extracted nine components explain approximately 66.3% variability in the original 30 variables. The rotation sums of squared loadings revealed percentage of variables accounted for by extracted components as listed in a uniformly distributed manner of 17.73%, 9.66%, 8.43%, 6.88%, 5.53%, 4.98%, 4.76%, 4.36% and 3.98%, respectively.

Fig. 4

Table 5 shows the summary of factors as given by factor analysis and also their corresponding MS to buttress factor scores for the purpose of ranking. The first component in the analysis is mostly correlated with strategic direction. This factor has an Eigen value of 5.32 and a percentage variance of 17.73% with statements including ‘the company works with specific strategies, plans and a long term goal’ (0.780), ‘the company reflects a leader showing direction and employees follow it’ (0.772), ‘if a client is dissatisfied, it is duly noted and removed’ (0.594) and ‘there is continuous improvement of service quality’ (0.547). Hellriegel et al. (2004) opined that the achievement of measurable and demanding goals, especially those that are finance-based and market-based are characteristics of a market culture (MC). Employees focus personal energy in the pursuit of common goals to realise the organisation’s common vision or purpose (Harrison and Stokes 1992). This intone a mission culture orientation as it reflects that the organisation’s strategic direction, goals and vision are clearly defined and are comprehended by employees (Maleka et al. 2015). This mission culture orientation is viewed by Baker (2002) to be in congruence with Cameron and Quinn’s MC. Customer satisfaction and service quality are regarded as measures of competitiveness and performance, which is core to a market-oriented culture.

The second component is highly correlated with communication issues. This component has an Eigen value of 2.90 and a percentage variance of 9.66% with ‘managers advices and attitudes are always at variance’ (0.799), ‘managers are authoritative’ (0.726), ‘the person who is the leader of a work group is often recognised as being more important than the company’ (0.537) and ‘employees and/or managers often misunderstand each other’ (0.501). This is supportive of an HC where communication, routinisation and formalisation are core values and people behave appropriately when procedures are formally defined by rules and regulations (Hartnell et al. 2011). Managers within a bureaucratic or hierarchical culture setting are good coordinators and enforcers of rules and procedures that are clearly defined. Tasks, responsibilities and authority for employees are also clearly stated (Hellriegel et al. 2004). As also reported by Alkhamali (2014), this kind of culture features control and formality, and leaders use their power and authority to influence organisations’ members. Also, the possibility of conflicts and disputes is associated with hierarchical culture due to the weakness of people and internal focus.

The third component is most highly correlated with adaptability concerns. The component has an Eigen value of 2.53 and a percentage variance of 8.43%. It comprises ‘employees most often agree when solving problems or conflicts’ (0.842), ‘existing rules and norms show more of direction than restrictions’ (0.530) and ‘sometimes there are situations when norms are only partially followed’ (0.527). This implies that employees react to change, as well as creating change due to the fact that individual initiative, flexibility and freedom promoting growth are encouraged and rewarded (Hellriegel et al. 2004). This is corroborated by the low rank of item statements 22 (mean = 2.6194): ‘It is difficult for employees to adapt to changes in culture and they sometimes resist it.’ These attributes typify a dynamic or adhocracy culture.

The fourth component is highly correlated with employees’ involvement. This component has an Eigen value of 2.06, a percentage variance of 6.88% and had factor loading of ‘there is investigation of product characteristics and personnel needs’ (0.820) and ‘employees have favourable conditions for decision making and for giving various ideas, suggestions, notes and so on’ (0.510). Employees strive to meet up with standard requirements and keep improving (mean = 4.1159, rank 1). There is focus on the growth of the organisation’s employees through problem solving and effective planning. These attributes typify a quality culture, and it is more flexible in its approaches and therefore more accepting when change occurs. It also has a strong technical orientation within an organisation (Maleka et al. 2015).

The fifth component is most highly correlated with reward orientation with an Eigen value of 1.66 and a percentage variance of 5.53%. This component has ‘training programs are encouraged to enhance skills of employees’ (0.743), ‘new or other important information reaches employees in due time’ (0.709) and ‘there are fringe benefits and managers prioritize the welfare of employees’ (0.511). This is to enrich the job design of the construction companies in focus and to lubricate the work environment.

The sixth component ‘Agreement’ has an Eigen value of 1.49 and accounted for 4.98% of the total variance. This component has the factor loadings of ‘employees agree about most rules, norms and values’ (0.786) and ‘employees have too much freedom and autonomy’ (0.642).

The seventh component in the analysis is most highly correlated with coordination and integration. This component has an Eigen value of 1.43 and a percentage variance of 4.76%. It comprises ‘different departments (groups) have many common things (goals, tasks etc.) (0.816), there are created good conditions for the interesting work, therefore employees get used to their work willingly (0.661), reward system is correct (employees get paid according to the results and efforts’ (0.584).

The eighth component in the analysis is most highly correlated with organisational learning. This component has an Eigen value of 1.31 and a percentage variance of 4.36% with ‘managers are eager to advise employees and motivate with charisma’ (0.759), ‘team approach is used more often than individual work especially when solving important questions on a project’ (0.647).

The ninth component shows confidence in leadership with an Eigen value of 1.19 and a percentage variance of 3.98%. It has ‘sanctions and punishment are sometimes overlooked. i.e. managers get away from regulations and try another solution’ (0.857) and ‘there is great dependence on the leaders of the company’ (0.703) (mean = 3.7971, rank 9).

Table 6 shows the Organisational Culture Profile of the construction companies sampled. Mean response analysis was used to rate the elements under the five dimensions (i.e. organisational leadership, management of employee, organisational glue, strategic emphases and criteria of success) presented in the assessment instrument and the aggregate score of the four culture types (CC, adhocracy culture [AC], MC and HC) calculated by average. Findings reveal a predominant MC with the highest score (3.6188). This is followed by HC (3.6036), AC (3.5622) and CC (3.4681). This is represented in Figure 5, and it agrees with the study by Abiola-Falemu (2013) who discovered that a people or CC appears to be subjugated within the industry. This is probably because of the nomadic nature of the industry and that most of the construction companies are not disposed to having an organisational setting where their employees would work as a family. Also, the number of respondent decreases across increasing number of years of professional experience, meanwhile, a reasonably stable membership is assumed to be necessary to produce social understandings by Schein (1981), in other words to develop clan characteristics. The development of a MC is expected above other forms in Lagos, a place often adjudged the business capital of Nigeria.

Fig. 5