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The Impact of Effective Communication on Organizational Performance with

Moderating Role of Organizational Culture

Research · December 2020

DOI: 10.13140/RG.2.2.22101.35048

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Muhammad Zahid Hussain

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Abstract
The study evaluates the impact of effective communication on organizational performance
with moderating role of organizational culture as suggested by Faris Alghamdi, 2018. The
data was collected from 64 professionals working in Islamabad based IT and Telecom
sector organizations. The results of study show that there is positive impact of effective
communication on organizational performance however, if organizational culture is not
supportive then it put negative effect on organizational performance. The results of this
study recommend management of organizations to encourage and implement the culture
of effective communication within and between the organizations for better performance.

Keywords: Effective communication, Organizational performance, organizational culture,

Telecom and IT etc.

1
1. Introduction
1.1 Background
The principles of effective communication management can be applied to both
public and private sector organizations. It provides a culture of improvement through which
successful organizations are striving to meet goals of stakeholders and boost organizational
performance. The relationship between effective communication and an organizational
performance has been examined many times. According to Kujala and Lillrank (2004) and
Metri (2005), organizational culture is one of the most important variables in the success
or failure of organization performance. Udeze (2000) stated that communication as the act
of imparting a common idea or understanding to another in every organization, goals are
set as the procedure or ways through which the organization instead to achieve it. It is
stated that culture change or at least culture awareness is an essential precondition for
excellence. Nwachukwu (1988) contends that communication is at the root of personnel
and ministration, it is the transaction and interpretation of information for the efficient
operation of an enterprise. Therefore, management must recognize the importance of
effective communication to its productivity. Communication require that the climate that
promote the exchange of ideas as well as one that permits every member of the organization
to actualize his view without fear.
Furthermore, knowing fully that poor communication rank as the single most important
reason that people do not advance in their career. Thou there are many barriers to
communication; filtering, selective perception, information overload, personal bias,
language and communication apprehension. Hence management must try to address these
barriers for effective result. Drucker (1995) stated that management is concerned with the
direction and control of an enterprise and involves planning and the direction of the work
of others. These managerial functions cannot be successfully carried out in the absence of
effective communication. Brown (2008) defined communication as the process of
transmitting ideas and thought from one person to another for the purpose of creating
understanding in the thinking of the person receiving the message, effective
communication supports organizational productivity.
In effective communication the manager has a specific tool – information. He does not
“handle” people but motivates guides and organizes people to do their own work. His duty
is the spoken or written words, no matter whether the manager’s job is an engineering,
accounting or marketing kind. Every manager needs skill in getting his thinking across to
other people as well as skills in finding out what other people are after. In recent years,
communication has been of growing information in large organization and also because it
has been realized that communication is not forced but has to be learnt to enhance the
productivity of every organization.

2
1.2 Problem Statement
Today number of projects delayed or failed due to lack of communication with in
the project team and outside the team. If organizations trying to increase productivity
without proper communication management different barriers occurred which reduces
productivity overloading which bogs down the entire system. Due to communication gap
the organizational performance was compromised. In the view of Okoye (2004),
psychologically transmission goes beyond reception of information but understanding and
feedback. Most organizational conflict has been traced to breakage in communication as
supported by (Lee, 2003; Scott, 2004). According to Chudi –Oji (2013), In spite of the
laudable roles of effective communication in improving organizational performances, it is
regrettable that some faculties pay lip service to the maintenance of effective
communication systems.
Furthermore, the constant delay in accessing information by staff seems to limit their work
performance, which could create maladministration in coordinating of organizational
activities. Therefore, an adequate culture is needed for an effective communication
management implementation. Also performance of employees in relation with their duties
and responsibility seems to question their communication techniques in terms of
performance in the organization.
1.3 Research Gap:
Today in most of under developing countries including Pakistan suffer from lack
of effective communication within the organizations. The impact of effective
communication on organizational performance with moderating role of organizational
culture has not yet been abundantly examined in IT and Telecom industry of Pakistan, so
it is not obvious what effect organizational culture put on relationship between effective
communication and organizational performance.

1.4 Research Objective:

The basic objective to perform this research is to investigate the how much impact
effective communication can put on organizational performance along moderating role of
organizational culture in IT and telecom industry of Pakistan. The specific objective
includes:

RO1: To understand the impact of effective communication on the performance of

organization.

RO2: To investigate moderating effect of organizational culture on relationship between

communication and organizational performance.

RO3: To understand the impact of organizational culture on effective communication.

3
RO4: To predict the moderating impact of organizational culture on organizational
performance.

1.5 Research Question:

Following are the questions derived for this study:

RQ1: What is the impact of effective communication in organizational performance?

RQ2: What is the moderating impact organizational culture on effective communication

and organizational performance?

RQ3: What is the impact of communication on organizational culture?

RQ4: What is the moderating impact of organizational culture on organizational

performance?

1.6 Scope and Significance:

The current study helps strengthen to increase and improve the communication in
an organization. Also, organizational culture should be that helps and motivates every
individual in an organization to communicate easily which will facilitate to increase
productivity and improve organizational performance. The performance of employee’s
plays an important role in achieving organizational goals and objectives. Therefore,
employees must work professionally and efficiently to boost the performance of
organization which can only occur if the organizational culture influences and motivates
individual to communicate effectively.

4
2. Literature Review:
2.1 Effective Communication:
To explain effective communication first of all it is better to take a look at the
subject matter of communication in depth. Meaningful communication informs and
educates employees at all levels and motivates them to support the strategy (Barrett, 2002).
Communication is viewed by (Haiemann, 2011) as the imparting of ideas and making
oneself understood by others. In simple it is a process of sharing information between
people and organizations. In this one person or group is sender (|who transmits message)
and other is receiver. It is a continuous process between the two parties involved and it
occurs in many levels, such as intra-individual communication level (Keith, 2014)
Communication can also occur within or between an individual or group. Effective
communication is a process by which sender of message, received feedback from receiver
in intended (Peter, 2015). The communication is said to be ineffective when receiver is
unable to decode the message. It is through feedback that information achieves its desired
results. Berrels A. (2010), Effective communication takes place when the person to whom
it is intended, subsequently, the receiver understand the meaning intended and reacts
accordingly. Effective communication is a transaction of ideas, directory command or
guide into oral or written words, or actions on the path of the communicator in such a way
that the receiver gets the same message and reacts in manner envisaged by the
communicator (Victor Akam; 2011).

2.2 Organizational Performance

Organizational performance is a used to assess organizational internal and external

standards from different dimensions. To assess organization there is two popular concepts
organizational performance and effectiveness. These concepts are used for assessing both
private and public sector organizations. Yet, most of the organizational literature uses
organizational performance to refer to the evaluation of private and public organizations
In addition, there is a debate in academic literature on certain aspects of terminology, leve
l of analysis, and conceptual basis for evaluating organizational performance. It has been
considered three different levels of performance within organizations: financial
performance, business performance, and organizational performance (Montes et al., 2003;
Chu-Hua et al., 2001).

Greenslade and Jimmie son (2007) explained that Borman and Motowidlo’s performance
theory suggests that the behaviors including the job performance domain can be classified
into two types, namely, task and contextual performance. To perform is some work is a
general behavior job quality is a conduct that directly contributes to the technological
center of the company, including those tasks typically referred to as part of a worker's job.
The behaviors of performing task is based on role requirements and identified through job
analysis. It is also called in-role performance. Secondly, and the behaviors which can

5
maintain the boarder social environment in which the technical core has to function is
called contextual performance. The initiative of employees is included which kept outside
the limitations of description of job and are performed by employees at their own
discretion. The behaviors that represent contextual performance are more stable across
roles and contain organizational support, job-task support, and interpersonal support.
Contextual performance is also referred to as extra-role performance (Bott et al., 2003;
Coleman and Borman, 2000). Boyne (2002) proposed five conceptual categories: outputs,
efficiency, effectiveness, responsiveness and democratic outcomes. So, this study used
different indicators of effectiveness which are refers to reach the primary goal to measure
the performance of organization.

2.3 Organizational Culture

The term organizational culture has reveal highly popular among the theories of
management. Culture is present is different level which includes national, traditional and
organizational. In universe there is no agreement on the construct of organizational culture.
So, it is a combination of moral principles, faith and feelings which is being share among
all employees of organization (Gimenez-Espino et al., 2013; Aside and Mahmood, 2012;
Helfrich et al., 2007). There is a framework called Competency Value Framework (CVF)
which was was innovated by (Denison and Spritzer, 1991) is designated for the purpose of
this study in order to identify culture in organizations, style and how its effect other
variables of this research. Throughout it was largely recognized classification of
organizational culture and it was implemented in many researches in past. (Gimenez-
Espino et al., 2013; Zu et al., 2010; Stock et al., 2007; Lau and Ngo, 2004; Enchain and
Johnson,(2004).

There was as connection between concepts and claims of organizations which can
be represented by them in two aspects each explaining alternate approach to the basic
problems according to which organizations seems to be work in structured and systemic
way. One aspect of CVF is explain an extent where organizations can centralize and control
their organizational process rather than decentralization. However, second dimension is
defined as the level to which internal environment of organization and relations with
external parties are pushed towards its own. The classification of organizations on these
two levels are defined in four different terms which are “hierarchical”, "rational”,
“entrepreneurial”, and culture in team (Zu et al., 2010; Helfrich et al., 2007). Studies based
on culture in comparative management, acted upon as a characteristic as independent facto
produced by the organization or as by product of organizational goal (Legge, 1989). The
organization which is internally focuses on culture where upper management have all
controls of authority and organizational processes, their employees takes formal
management into account, obeying rules and prioritizing. The organizations whose internal
structure is clear and focused are , put concentration on versatility, enhancing worker group
engagement, and promoting collaboration and motivation, prioritizing the development of

6
human resources. Also, an organization which can focus externally on clear goals and
objectives, roles defined, placing a priority on measurable results and work efficiency. The
development to positive and supportive culture in an organization can only be led by the
leaders themselves. And one of the most important function of leaders is the insight of
activity by which targets, and objectives of organization can be [Link] times the
difference in culture provides manager an insight to such valuable areas as cultural
influence, organizational design, motivation and individual differences.

The framework of the CVF does not promote one culture over the other. In spite of that a
key assumption of the CVF is that all four communities’ function on an organizational
level and are reasonably. In many organizations there is only one type of culture
implemented which becomes dominant and also some organizations reveal different types
of culture.

2.4 Impact of effective communication on organizational performance

(Husain, 2013) described that effective communication implementation in business
is important factor of success. To bring effective changes in an organization employee play
key role in it. So, for this it is important for management organizations to address the issues
and problems of their employees and appreciate them when necessary. It is important to
reduce job insecurity and create an environment of community so that employees know
their responsibilities well. Reforms in organization and their advantages would inspire the
employees to invest in and implement the transition program. Conferring (Kibbe, 2014)
studied the possible relationship between strategies of communication and organizational
performance for this he used a descriptive research design and questionnaires were
distributed among 132 workers. Results of study showed that there for any organizational
performance to be effective, an open communication environment should be encouraged.
Once members of the organization feel free to share feedback, ideas and even criticism at
every level it increases performance.

(Berry & Otieno, 2015), investigated the impact of communication among workers
on performance of an organization in horticulture department of Kenya. This study was
conducted in farms of flowers. He takes all farms of flowers as population and size of
sample is 14 which were registered flowers farms of Kenya. A total of 2460 respondents
were targeted by the study out of which 1888 responded giving a response rate of 76.7%.
Correlation and regression analysis were used to test on the relationship between the
variables of the study. The results of study showed that communication helps in exchange
of information and opinion within the organization that communication helps in improving
efficiency of daily routine operations which improved the organizational performance.
From this it is concluded that communication is an important component of organization
performance. So, organizations must develop effective communication plans which helps
in passing of information in external and internal environment of organization which
improve performance.
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 Based on the above discussions, the following hypothesis was developed:

H1: There is a significantly positive impact of effective communication on organizational

performance.

2.5 Role of organizational culture

Many researches was conducted for assessing the moderating effect of
organizational culture on communication and organizational performance. Effective
communication have significantly positive impact on organizational performance. In real
scenario, during the execution failure of few of the communication principles are
mentioned in the literature. The main reason of this failure is not realizing the importance
of organizational culture. In the entrepreneurial culture employees are being encouraged
and appreciated to innovate and implement the new ideas to bring continues improvement,
this is major principle of communication management.

From the aforementioned discussion, we developed following hypothesis:

H2: Organizational culture moderates the relationship between effective communication

and organizational performance.

Organizational Culture

(Moderator)

H2
Effective Organizational
Communication Performance
H1
(Independent Variable)
(Dependent Variable)

Figure 1: Theoretical Framework

8
3. Methodology
This chapter explains the research design which explains the following:

1. Type of study

2. Population

3. Sampling

4. Data collection

5. Instruments

6. Data analysis

3.1 Type of Study:

In this we used Cause and Effect study type because one factor or action is leading
to another circumstance. For example, the effective communication is causing a positive
or negative effect on the performance of organization and the moderating effect of
organizational culture has a certain impact on effective communication and organizational
performance. Also, this is cross-sectional study and will be based on limited time. The
focused of research to check the way people people explain their experiences and research
will be used find out the experiences and feelings of employees and their understanding
about these three elements through questionnaire.

3.2 Population
The respondent of the study is either manager level individuals or are subordinates.
The targeted respondent of this study is registered/hired employees and to avoid
discrimination both male and female individuals will be our research population. This study
will be conducted in IT and Telecom organization of Islamabad.

3.3 Sampling
Our sampling technique is non-probability convenient sampling. Data will be
collected randomly from Islamabad base IT and Telecom organizations. We distributed
almost 500 questionnaires to employees of these organizations but unfortunately we get
only 64 responses.

3.4 Data collection

As our research is quantitative so, our source of collecting reliable data is
closed/structured questionnaires. Reliable data will be collected through questionnaire and
result will be drawn accordingly. To collect this data, we prepared structured questionnaire
online and emailed it to the respondents. Also, we visited the organization and got the scale
filled.

9
3.5 Instruments
The instruments are adopted questionnaires. Data was collected using five-point
Likert scales in the questionnaire. Different type of questions from three variables was
asked from targeted population. The questions mentioned in the questionnaire will be
answered according to the five-point Likert scale in which 1 is strongly disagree, 2
disagree, 3 neutral, 4 agree and 5 strongly disagree respectively. The questionnaire was
divided in three parts. First section contain demographic information about respondents. In
the second section, respondents will be asked about their education and work title, in the
third section, respondents will be asked about their organizational culture, organizational
performance (M Arumugam) and effective communication (Amber Suthers).

3.6 Data Analysis

For this study we used SPSS 22 software for testing descriptive statistics, reliability
and validity analysis, hypothesis, correlation and regression. For regression we use Model
1 of Hayes process [Link] and reliable interpretation was done after testing above
discussed tests.

10
4. Data Analysis and Interpretation
This chapter includes the tests and their interpretation that explains the result of each
test in our research to find out whether our drawn hypothesis are accepted or rejected. The
chapter includes interpretation of following test:

1. Descriptive test
2. Demographic test
3. Reliability test
4. Validity test
5. Correlation
6. Regression
7. Moderation effect (Hayes Process 2008)

4.1 Table of Descriptive:

N Mean Skewne Kurtosi

ss s
Statistic Statistic Statistic Statistic
64 1.6250 -.529 -1.777
Age 64 1.4844 .898 -.165
Gender 64 1.0625 3.702 12.082
OC1 64 3.4844 -.754 -.645
OC2 64 3.6250 -.588 -.733
OC3 64 3.9687 -1.271 2.801
OC4 64 3.984 -1.255 1.100
OC5 64 3.7656 -.635 .086
OC6 64 3.0781 -.152 -.988
OC7 64 3.4531 -.501 -.133
OC8 64 3.7500 -.344 -1.234
OC9 64 3.8594 -.868
OC10 64 3.7031 -.901
OP1 64 4.1406 -.652 Industry
OP2 64 3.3594 -.571 -.718
OP3 64 3.7031 -.816 .042
OP4 64 3.6563 -1.008 .694
OP5 64 3.4063 -.451 -.604
EC1 64 3.5312 -.726 -.265
EC2 64 3.7813 -.800 .331
EC3 64 3.5000 -.563 -.417
EC4 64 3.2187 -.071 -1.236

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 EC5 64 3.8125 -.961 .355
OCA 64 3.6672 -.096 -.475
OPA 64 3.5313 -.402 -.477
ECA 64 3.5208 -.206 1.391
Valid N 64
(listwise)

Descriptive statistics are used primarily to summarize the data. The table above shows
that N: 64 it is aggregate number of respondents. The Skewness shows the size of data
and kurtosis shows the distribution of data with in the +3 and -3 threshold.

4.1.1 Table of Industry

Frequency Percent

Valid Telecom 24 37.5

IT 40 62.5
Total 64 100.0

Table 4.1.1shows the detail of industry selected in this research. The table shows that IT
respondents are more than telecom respondents.
.
4.1.2 Table of Age

Frequency Percent

Valid 20-30 37 57.8

31-40 23 35.9

41-50 4 6.3

Total 64 100.0

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Table 4.1.2 shows the varied age group appeared in this research. The respondents in this
research were more in their 20-30 age. Though the data was collected from all working
age group
4.1.3 Table of Gender

Frequency Percent

Valid Male 60 93.8

Female 4 6.3

Total 64 100.0

Table 4.1.3 shows the gender diversity in this research. The data is collected from both
male and female but the percentage of male respondents is higher than female because of
male dominance in IT and telecom industry.

4.2 Reliability:
Table 4.2.1 Reliability statistics

Reliability Statistics
Cronbach's N of Items
Alpha
Effective Communication .719 3

Organizational Culture .637 8

Organizational Performance .744 3

The reliability analysis of Effective Communication and Organizational performance

dimensions yielded Cronbach’s alphas of 0.719 and 0.744, which is above the threshold
for sufficient reliability (> 0.7) and for Organizational Culture Cronbach’s alphas is 0.637
which is just below the threshold for sufficient reliability (> 0.7) leading to the conclusion
that the reliability measurement of the three dimensions are almost adequate.

13
4.3 Factor Analysis:
4.3.1 Table Factor Analysis

Factor loading

OC1 .789
OC2 .731
OC3 .619
OC4 .647
OC5 .712
OC6 .627
OC7 .698
OC8 .770
OC9 .819
OC10 .656
OP1 .664
OP2 .847
OP3 .684
OP4 .668
OP5 .755
EC1 .780
EC2 .731
EC3 .716
EC4 .793
EC5 .841
OCA .915
OPA .936
ECA .951

14
The above table 4.3.1 shows threshold value we take for factor analysis is .650 or above
and values below this we reject them and rejected values are (OC3, OC4, OC6) for
correlation.

4.4 Correlation:
Table 4.4 correlation
Correlations
OCA OPA ECA
OCA Pearson Correlation 1

Sig. (2-tailed)
N 64
OPA Pearson Correlation .722** 1

Sig. (2-tailed) .000

N 64 64
ECA Pearson Correlation .409** .393** 1

Sig. (2-tailed) .001 .001

N 64 64 64
**. Correlation is significant at the 0.01 level (2-tailed).

We checked the correlation of the scales as shown in below Table. 4.4. We noted that all
correlation values are significant at .000 & .001 level showing a strong correlation between
variables under consideration. So a strong relationship exists and we can go ahead and run
regression.

4.5 Regression:
Table 4.5.1

paths Beta t R2 P
ECA OPA .542 3.364 .154 .001
ECA OCA .447 3.531 .154 .001
OCA OPA .912 8.212 .521 .000

15
Table 4.5.1 shows the effect of:
1. Effective communication on Organizational performance.
2. Effective communication on Organizational culture.
3. Organizational culture on organizational performance.
4. P value in less than 0.05 which approves all the hypothesis.

Table 4.5.2 Moderating effect:

Model 1

coeff se T p LLCI ULCI

Int_1 -.1323 .2166 -.6107 .5437 -.5655 .3010

The table 4.5.2 below shows the moderating relationship between effective communication
management and organizational performance. The p value is .5437 which shows the
insignificant relationship and thus the hypothesis has been rejected. Coeff is negative so
relationship is inversely related and there is no significance as value above 0.05.

16
5. Discussion and Future Directions

5.1 Discussion

Effective communication is considered to be important factor in success of

organizational objectives and outcomes. Today many projects fail due to communication
gaps with in team or outside the team. From literature it was observed that poor
communication leads to delay in accessing the information by employees limit their work
performance which put negative effect on organizational daily routine activities. It was also
observed that if organizations trying to increase productivity without proper
communication management different barriers occurred which puts negative impact on
productivity of organization that leads to damage the entire system. For this study data was
collected from 64 professionals working in IT and Telecom industry of Islamabad,
Pakistan. The male respondents were 94% and females were 6% and their age was from 20
to 50 years.

From result it was observed that effective communication has positive relationship
with organizational performance. However, if organizational culture did not support and
encourage communication management then it leads to poor organizational performance.

5.2 Conclusion

The current research investigate the impact of effective communication

management on organizational performance with moderating role of organizational
culture. Effective communication management is important knowledge area in project
management by following principles of communication organization can enhance their
productivity, services and improve their performance. This study approved this in term of
relationship between effective communication and organizational performance with
moderating role of organizational culture. Data analysis results proved that the relationship
between the variables were significant positive. Therefore, management of these
organization should promote the culture of effective communication among the employees
and with other organizations. Commitment of higher management helps organizations to
improve performance and fulfill customers need. Organizational culture work as a
moderator between two variables when we used this variable to check the impact of
relationship, and results showed that organizational culture put greater influence on these
two variables and also strongly contribute to the impact of effective communication on
organizational culture. Management of IT and Telecom organizations in Islamabad,
Pakistan is recommended that performance of organization does not improve unless
organization promotes the culture of effective communication among their own employees
and outside the organization. Also the thing important for top management of organizations
is to identify and implement the type of culture which is suitable for implementation of
communication management principles. This is only possible when collective measures

17
will be taken by all employees of organization all employees of organization are confident
to communicate with anyone at any level within the organization and outside for better
outcome.

5.3 Implications

This study suggests management of IT and Telecom organizations to implement

the principles of effective communication management in their organizations. There should
be no communication barriers at any level within an organization and between
organizations. The management can take new measures and directives to establish proper
data flow channels to communicate properly and fastly.

This research covers one knowledge area of project management which is

communication management. Also, this study is done on two industries IT and telecom.
The upcoming researches can extend this work on other knowledge areas of project
management to evaluate their impact on organizational performance with moderating role
of organizational culture by adding more industries.

5.4 Limitations and Future Researches:

As like other studies this study also have some limitations, like this study covers
only one knowledge area of project management and conducted only in one specific city
Islamabad, Pakistan and chose two industries IT and Telecom. Sample size of study is also
low as this study was focused only on two industries located at one specific city of Pakistan.

For future greater sample size would be recommended to get better results. Also
more industries can be added for measuring the impact during data collection. Moreover,
study would be perform on more than one city or country. Also work can be done on other
knowledge areas of project management as this study covers only one knowledge area.

18
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