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A Project Report on

“IMPLICATIONOF ORGANIZATION CULTURE ON EMPLOYEE

PERFORMANCE IN THE BANKING SECTOR”

Survey Project Report


Submitted to

Department of Management Studies, BHIMTAL

In partial fulfillment of the requirements for the

Master’s in Business Administration

Under the guidance of

Mr. Narendra Kumar

Asst. Professor
Submitted by
PRASHANT MISHRA

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DECLARATION

We hereby declare that the project work entitled “A study on implication of organization
culture on employee performance in banking sector” submitted to Department of
Management Studies Bhimtal, Kumaun University is a record of an authentic work done by us
under the guidance of Asst. Prof. Narendra Kumar, Department of Management Studies, in
order to fulfill the requirement of project. This work has not been copied from any source and
whatever decoration and connection made in the circuit is a total dedicated work of all the three
members in our group.

Prashant Mishra
MBA- IV Sem.

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CERTIFICATE

This is to certify that the Report entitled “A study on implication of organization culture on
employee performance in Banking sector” is submitted in partial fulfillment of the
requirements for the award of Degree of Master of Business Administration in MBA at the
Department of Management studies, Bhimtal is an original work carried out by them under my
guidance. To the best of my knowledge and belief the matter embodied in the report has not
been submitted by them to any other University/Institute for the award of any Degree/Diploma.

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ACKNOWLEDGEMENT

It is our extreme pleasure presenting our report on “A study on implication of


organizationculture on employee performance in banking sector”.We expressed our deep
gratitude to ourproject mentor as project guide Asst. Prof. Narendra Kumar, who gave us the
inspiration to take the project and guided us regarding each and every minute detail about this
attempt. She has been a constant source of motivation for us throughout the whole project work.
We deeply thank her for all the hard work and inspiration she inputted upon us for carrying on
with the project work. Last but not the least we are thankful to all the faculty members who
directly or indirectly helped us at various stages of our project duration and ultimately
contributing in making our project fully operational. We thank our parents for their emotional
support and constant encouragement which helped us strive and move forward. We would like to
thank all our friends for their support, for all the thoughtful and stimulating discussions that
encouraged us to think out side box

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INDEX

CONTENT PAGE NUMBERS

1. INTRODUCTION

2. REVIEW LITERATURE

3. OBJECTIVE AND NEED OF


THE STUDY

4. SCOPE AND LIMITATIONS

5. RESEARCH METHODOLOGY

6. CONCLUSION

7. REFRENCES

8. ANNEXURE

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Introduction

Each and every organization has their own unparalleled personal appeal, just like people do. The
unparalleled personal appeal of an organization is denoted to as its culture. In groups of people
who work together, organizational culture is an unseeable but right force that regulates the
behavior of the members of that group.
Organizational culture is an arrangement of shared out presumptions, assesses, and faiths, which
rules how people act in organizations. These shared out values have a right act upon on the
people in the organization and prescribe how they attire, behave, and do their jobs. Every
organization builds up and maintains an unparalleled culture, which rendersroad map and limits
for the behavior of the members of the organization.
Organizational culture is compiled of 7 features the priority from high to low. Every
organization has a clear-cut value for each of these characteristics, which, when combined,
defines the organization's unparalleled culture. Members of organizations make opinions on the
value their organization places on these features and then adapt their behavior to cope with this
comprehended set of values.

Characteristics of Organizational Culture

1. Innovation – Organizations with cultures that direct a high value on conception


advocatetheir employees to take chances and introduce in the carrying out their jobs.
Organizations with cultures that place a low value on invention expect their employees
to do their job as the way they have been trained, without any improvement in their
performance.

2. Attention to Detail - these features of organizational culture prescribesthelevel to which


Employees are required to be exact in their work. A culture that directs a high value on
care to detail expects their employees to perform their work with preciseness.

3. Accent on Outcome- organizations that concentrate on results, instead of how theresults


are achieved, place a high stress on this value of organizational culture. An organization
that teaches its sales force to do whatever it takes to get sales orders has a culture that
places a high value on the stress on outcome features.

4. Accent on People - organizations that aim a high value on this features of organizational
culture place a lot of grandness on how their ideas will involve the people in their
Organizations. For these companies, it is important to treat their employees with respect
and self worth.

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5. Teamwork -Organization that manages work actions around teams rather than how an
individual place a high value on this characteristic of organizational culture. People who
work for these types of organizations incline to have a convinced relationship with their
fellow worker and managers

6. Aggressiveness- The feature of organization culture prescribes about whether the


groupmembers are awaited to be self-assertive or easy going when carrying on with
company
within the market compete place. Companies with an fast-growing culture provides a
high value on competitiveness and exceeding the competition at all cost

7. Stability–A company who places a high value on stability are principle oriented,
certainand bureaucratic in nature. This type of companies typically provide uniform and
certain levels of output and function and best in non-changing market condition.

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BANKING

Banking developed in the 14th C in the prospering cities of Renaissance Italy but in many ways
was a continuation of opinions and conceptions of credit and lending that had their roots in the
ancient world. Banking history says that the number of banking dynasties – notably, the
Medicis, the Fuggers, the Welsers, the Berenbergs and the Rothschilds – have played a central
role over many centuries. The most former existing retail bank is Banca Monte deiPaschi
diSiena, while the oldest existing merchant bank is Berenberg Bank.
A bank is a monetary institution that takes deposits from the public and creates credit. Lending
actions can be performed either directly or indirectly through capital markets. Due to their
significance in the monetary stability of a country, financial institutions are highly determined in
most countries. Most countries have devoted a system known as fractional reserve banking under
which banks agree liquid assets equal to only a portion of their current liabilities. In accession to
other regulations aimed to confirm liquidity, banks are generally subject to lower capital
requirements based on an international set of capital standards, known as the BaselAccords.

BANKING IN INDIA
Banking in India, in the advanced sense, comes from the last decades of the 18th century.
Amongst the first banks were the Bank of Hindustan, which was founded in 1770 and liquidated
in 1829–32; and the General Bank of India, founded in 1786 but failed in 1791.
The largest bank, and the oldest still in being, is the State Bank of India (S.B.I). It came from
the Bank of Calcutta in June 1806. In 1809, it was renamed as the Bank of Bengal. This was one
of the three banks subsidized by an administration government; the other two were the Bank of
Bombay in 1840 and the Bank of Madras in 1843. The three banks were converged in 1921 to
frame the Imperial Bank of India, which upon India's autonomy, turned into the State Bank of
India in 1955.
In 1960, the State Banks of India was given control of eight state-related banks under the State
Bank of India (Subsidiary Banks) Act, 1959. These are presently called its partner banks. In 1969
the Indian government nationalized 14 noteworthy private banks; one of the enormous banks was
Bank of India. In 1980, 6 more private banks were nationalized. These nationalized banks are the
lion's share of moneylenders in the Indian economy. They rule the keeping money division in
view of their expansive size and across the board arranges.

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The Indian banking sector is broadly classified into:
 Scheduled banks
 Non schedule Bank

The scheduled banks are those included under the 2nd Schedule of the Reserve Bank of India
Act, 1934. The scheduled banks are further classified into:

 Nationalized banks
 State bank of India
 Regional rural banks
 Foreign banks
 Other Indian private sector banks

The term commercial banks refer to both scheduled and non-scheduled commercial banks
regulated under the Banking Regulation Act, 1949.
Generally banking in India is reasonably mature in terms of supply, product range and reach-
even though reach in rural India and to the poor still remains a challenge. The government has
developed first step to address this through the State Bank of India expanding its branch network
and through the National Bank for Agriculture and Rural Development (NABARD) with
facilities like microfinance.

MAJOR PLAYER IN INDIA:



 HDFC BANK LTD
 ICICI BANK LTD
 STATE BANK OF INDIA LTD
 PUNJAB NATIONAL BANK LTD
 BANK OF BARODA LTD
 FEDERAL BANK LTD
 AXIS BANK LTD
8. ING VYSA BANK LTD
9. IDBI BANK LTD

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CURRENT PERIOD

The Indian banking sector is broadly separated into scheduled banks and non-scheduled banks.
All banks accepted in the Second Schedule to the Reserve Bank of India Act, 1934 are
Scheduled Banks. These banks let in Scheduled Commercial Banks and Scheduled Co-
operative Banks. Scheduled Co-operative Banks includes Scheduled State Co-operative Banks
and Planned Urban Cooperative Banks. Scheduled Commercial Banks in India are separated
into five different groups according to their holding and/or nature of operation:

 State Bank of India and its associates


 Nationalize Banks
 Private sector Banks
 Foreign Banks
 Regional Rural Banks

By 2010, banking in India was broadly mature in terms of provision, product range and reach-
even though reached in rural India still continues to compete for the private sector and foreign
banks. In terms of character of assets and capital adequacy, Indian banks are believed to have
clean, firm and crystal clear balance sheets relative to other banks in corresponding economies
in its region. The Reserve Bank of India is an independent body, with minimum pressure from
the government. The growing of Indian economy anticipated being strong for quite some
time-especially in its services sector-the want for banking services, especially retail banking,
mortgages and investment services are expected to be strong. One may also expect M&as,
takeovers, and asset sales.

In March 2006, the Reserve Bank of India has allowed Warburg Pincus to increase its stake in
Kotak Mahindra Bank (a private IDBI sector bank) to 10%. This is the first time an investor
has been permitted to hold more than 5% in a private sector bank since the RBI declared norms
in 2005 that any stakes increasing 5% in the private sector banks would need to be vetted by
them.
In recent years critics have charged that the non-government owned banks are too strong-
growing in their loan recovery efforts in connection with housing, vehicle and personal loans.
There are press reports that the banks' loan recovery efforts have driven defaulting on borrowers
to suicide.

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In 2013 the Indian Banking Industry employed 1,175,149 employees and had amount of 109,811
branches in India and 171 subdivisions abroad and manages an aggregate deposit of ₹67,504.54
billion (US$1.1 trillion or €890 billion) and bank credit of ₹52,604.59 billion(US$820 billion or
€690 billion). The profit of the banks operating in India was ₹1,027.51 billion (US$16 billion or
€14 billion) against a turnover of ₹9,148.59 billion (US$140 billion or €120 billion) for the
financial year 2012–13.


 

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BANKING STRUCTURE IN INDIA:

In today is dynamic world banks are inevitable for the development of a country. Banks play a
pivotal role in enhancing each and every sector. They have helped bring a draw of development
on the world’s horizon and developing country like India is no exception. Banks fulfills the role
of a financial intermediary. This means that it acts as a vehicle for moving finance from those
who have surplus money to (however temporarily) those who have deficit. In everyday branch
terms the banks channel funds from depositors whose accounts are in credit to borrowers who
are in debit. Without the intermediary of the banks both their depositors and their borrowers
would have to contact each other directly. This can and does happen of course. This is what has
led to the very foundation of financial institution like banks. Before few decades there existed
some influential people who used to land money. But substantially high rate of interest was
charged which made borrowing of money out of the reach of the majority of the people so there
arose a need for a financial intermediate. The Bank have developed their roles to such an extent
that a direct contact between the depositors and borrowers in now known as disintermediation.
Banking industry has always revolved around the traditional function of taking deposits, money
transfer and making advances. Those three are closely related to each other, the objective being
to lend money, which is the profitable activity of the three. Taking deposits generates funds for
lending and money transfer services are necessary for the attention of deposits:

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INDIAN BANKING INDUSTRY ANALYSIS;

The banking scenario in India has been changing at fast pace from being just the borrowers and
lenders traditionally, the focus has shifted to more differentiated and customized product/service
provider from regulation to liberalization in the year 1991, from planned economy to market.
Economy, from licensing to integration with Global Economics, the changes have been swift.
Almost all the sector operating in the economy was affected and banking sector is no exception
to this. Thus the whole of the banking system in the country has undergone a radical change. Let
us see how banking has evolved in the past 57 years of independence. After independence in
1947 and proclamation in 1950 the country set about drawing its road map for the future public
ownership of banks was seen inevitable and SBI was created in 1955 to spearhead the expansion
of banking into rural India and speed up the process of magnetization. Political compulsions
brought about nationalization of bank in 1969 and lobbying by bank employees and their unions
added to the list of nationalized banks a few years later. Slowly the unions grew in strength,
while bank management stagnated. The casualty was to the customer service declined,
complaints increased and bank management was unable to item the rot. In the meantime,
technology was becoming a global phenomenon lacking a vision of the future and the banks
erred badly in opposing the technology up gradation of banks. They mistakenly believed the
technology would lead to retrenchment and eventually the marginalization of unions. The
problem faced by the banking industry soon surfaced in their balance sheets. But the prevailing
accounting practices unable banks to dodge the issue. The rules of the game under which banks
operated changed in 1993. Norms or income Recognition, Assets classification and loan loss
provisioning were put in place and capital adequacy ratio become mandatory. The cumulative
impact of all these changes has been on the concept of state ownership in banks. It is
increasingly becoming clear that the state ownership in bank is no longer sustainable. The
amendment of banking regulation act in 1993 saw the entry of new private sector banks and
foreign banks.

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Review of literature:

 Litwin and Stringer (1968)[32] are of the sentiment that activity fulfillment increments
as the individual sees the earth as having greater accomplishment openings. People who
are in accomplishment atmosphere rate themselves as higher entertainers than people in
less propelling atmosphere. Sales people are evaluated higher in execution in the event
that they see an accomplishment atmosphere. Assistants are appraised higher in
execution on the off chance that they see a power atmosphere.

 Kaezka and Kirk (1968) in their investigation found that execution is influenced by
authoritative atmosphere. As indicated by them, representative focused atmosphere was
related with superior as far as lower unit cost, higher benefit and so on.

 Frederickson (1968) in his examination "A few Effects of Organizational Climate on
Administrative execution" found that 'inventive' atmosphere yields more noteworthy
profitability and unsurprising undertaking execution.

 Friedlander, F and Margulies, N (1969) in their examination "Numerous effect of
authoritative atmosphere and individual esteem framework upon work fulfillment is of
the conclusion that hierarchical atmosphere is a noteworthy determinant of individual
employment fulfillment (e.g.: - between individual relations, assignments included self-
acknowledgment and accomplishment)" they say that connection between authoritative
atmosphere and occupation fulfillment fluctuates with the sort of atmosphere and
measure of occupation fulfillment.

 Dewhirst D.(1971)[15] in his examination "Effect of hierarchical atmosphere on the
want to oversee Among Engineers and Scientists" led among 320 administrators and
non-chiefs in 2 non-benefit advancement associations achieved the conclusion that
supervisors who put more noteworthy incentive on overseeing additionally had experts
who set more prominent incentive on turning into a director.

 Payne and Mansfield (1973) [47] found that the perception of organisational climate by
managers tend to be more positive than perceptions by non-managers.

 Pritchard, R. also, Karsick B.(1973) [50] in their investigation, "The impacts of
Organizational Climate on Managerial Job Performance and Job Satisfaction" opines
that hierarchical atmosphere was more firmly identified with workers' activity
fulfillment than their activity execution.

 The connection between authoritative structure and occupation fulfillment has been
analyzed by Ivaneevich and Donnelly(1975) [26] with a specimen of 295 exchange
businessperson in a level association and found that they were more fulfilled regarding
self-sufficiency and self-completion, experienced lower measure of tension anxiety and
performed more productively than their partners working in a medium and a tall
association.

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 Khanna, B.B.(1986) [4] in his unpublished doctoral paper "Connection between
Organizational Climate and Organizational part push and their effect upon
Organizational Effectiveness" says that hierarchical atmosphere has no huge relationship
with the requirement for autonomy, poise and development. Accomplishment
atmosphere has positive relationship with work inclusion, authoritative responsibility,
hierarchical connection, work fulfillment; add up to fulfillment and aggregate adequacy.
Control atmosphere has negative connection with authoritative duty, hierarchical
connection, work fulfillment, adds up to fulfillment and aggregate adequacy. Expansion
atmosphere is decidedly related with authoritative responsibility, work fulfillment, add
up to fulfillment and aggregate viability. Reliance atmosphere has no relationship with
any measure. Alliance atmosphere has negative relationship with work fulfillment and
aggregate viability. Master impact atmosphere has positive connection with hierarchical
connection.

 Denison D.R. (1996)[13] says that atmosphere is for the most part worried about those
parts of the social condition that are deliberately seen by authoritative individuals.

 Burk R.J. (1996)[10] found that authoritative factors, for example, measure, nature of
business, open versus private areas and workers statistic calculate, for example, years
the association and various leveled level likely impact the consequences of
representatives' appraisal of occupation fulfillment. He additionally found that guys who
were at essentially higher hierarchical levels than females revealed fundamentally more
elevated amounts of occupation fulfillment. At the point when the authoritative level
was controlled the sexual orientation distinction was not found.

 Throughout the most recent two decades, there have been marvelous changes in
authoritative administration on the planet (Schein, 2011). This has been ascribed to new
forceful rivalry in the commercial center close by the developing differing
representatives in numerous associations (Rhine and Christen, 2012). The intricacy of
business condition has likewise constrained associations to scan for more effective
administration methodologies. Therefore, an attention on hierarchical culture is getting
awesome significance in the business division. As indicated by Kotter (2012)
hierarchical culture directly affects an assortment of authoritative factors. Research
likewise demonstrates that if representatives are guided by similar standards and
qualities in their association, their execution would enhance (Hofstede, 2007).The study
was guided by the Schein's theory of organizational culture, the equity theory and the
theory of organizational excellence by Thomas Peters and Robert Waterman. Schein's
theory of organizational culture focuses on the basic underlying organizational
assumptions, espoused values and artifacts and how their linkages can influence
performance (James & Jones, 2005). Equity theory maintains that individuals make
comparison by looking at how their efforts are rewarded in respect to those of people in
similar positions. The view of individuals on the fairness of rewards they get relative to
others affects their level of work drive hence their performance. The theory explains
how organizations can improve the performance of employees by adopting.

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 Organizational culture that rewards employees appropriately. The theory of
organizational excellence by 2 Thomas Peters and Robert Waterman (2014) states that a
good organization is characterized by a preconceived notion leaning toward its
accomplishment, being focused on the customer, self-sufficiency and skills of doing
business. The theory also considers culture as a component of an integrated social
system serving the common good, thereby promoting organizational performance and
the well-being of all its stakeholders (Smelser, 2005).

 As indicated by Magee (2002) hierarchical culture is the arrangement of suspicions that


individuals from an association subscribe to. The presumptions are basically convictions
and qualities. Convictions concentrate on reality and they originate as a matter of fact
while values are about standards that are attractive and worth taking a stab at. It is the
particular variety of rule that is shared by everybody in the association. This thusly
controls the way these individuals mix with each other and with outcasts. The sharing of
these convictions and qualities make a business culture (Azhar, 2003). 

 Robbins (2012) sees authoritative culture as a homogeneous acumen of the association


in view of remarkable uniqueness isolating one association from the other.

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OBJECTIVES:

 To analyze the factor effecting culture


 To analyze the factor effecting performance

Need of the study:


Organizational culture as a significant contextual factor in performance management is hardly
studied. The need of this study is to expand the base of knowledge and empirically test the
relationship between the effects of organizational culture on performance of employees.
Organizational culture has the ability to increase job satisfaction, and awareness about problem
solving and developing coordination among the employees.
If the organizational culture becomes incompatible with the employees’ expectations, the
organization's success will also decrease so it is the duty of managers to focus more on the
culture of the organization that has a significant effect on employee’s performance, if they want
to succeed in their businesses. As the organizational values has a significant effect on employee's
job performance as the organisation climate is mostly assumed as a vice versa relationship. As an
employee it is main asset of an organisation and that of the organization depends on individual
employee performance which affects positively or negatively the organisation performance at
large.
Every business has their own way of doing things, has developed norms and procedures over
time and has different atmosphere and feeling and this is the organisation culture. The study
analyses the influence of organisation culture on employee's performance in the banking. It has
offered recommendations on what can be done to achieve optimum performance while ad opting
the right culture.

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SCOPE OF THE STUDY
 This study includes performance management, employee job satisfaction and leadership
behaviour, personal –organizational fit and organizational change.

 This study has made an attempt to measure the organizational culture and performance
by conducting the survey done on 31 employees in banking sector.

LIMITATIONS OF THE STUDY:


 This study is focused on the factors affecting culture and performance.

 The research is done on the basis of non random sampling on banking employees

 This study limits itself to organizational culture and how this influence employee job
performance.

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RESEACH METHODOLOGY

Type of research Descriptive research


Data collection method Primary data
collection through
questionnaire
Sample Size

Sampling Technique

Non random sampling

A sampling method where some elements of the population have no chance of selection, or
where the probability of selection cannot be accurately determined. We have selected non
random sampling because the topic of study is limited to banking sector and its employees.

Convenience sampling

With convenience sampling, the samples are selected because they are accessible to us.
Subjects are chosen simply because they are easy to access and convenient for us.

DATA COLLECTION

To collect the data, Primary data collection method has been used. Primary data is that those
which is new, fresh data being collected for first time and has far greater importance then the
already existing data. These are required in solving the problem which requires some new
measures to be done.

Method for Primary Data collection- QUESTIONNAIRE

In our report the questionnaire method of data collection was selected. We have taken the data
through the face to face interaction

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