Determinants of organisational culture during turnaround: evidence from a regression model in the South African retail sector

Abstract

This research investigated key determinants of organisational culture during corporate turnaround in the South African retail environment. The investigation was focused on three key determinants – employee morale, employee’s perceptions about the effectiveness of retrenchments and organisational adaptability (leadership and flexibility) – and they influenced organisational culture during periods of corporate decline. A quantitative approach was taken with the use of validated and structured questionnaires circulated to employees throughout a retail group undergoing turnaround initiatives. Data was then statistically analysed using correlation, exploratory and confirmatory techniques, after which multiple regression modelling was applied to test the relationships between the variables. The results indicated that employee morale had a positive influence on organisational culture if combined with retrenchments and organisational adaptability. Retrenchments and organisational adaptability independently and when combined with the other determinants highlighted a significant negative relationship with organisational culture during turnaround. Employee morale therefore maintained organisational culture whilst retrenchments and organisational adaptability negatively influenced it. The studies contribution to turnaround theory, organisational culture and the three key determinants produced a multiple regression model. The model underscored the need to find a balance between effective communication, transparency, trust, leadership showing empathy and psychological safety.