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The relationship between the commercial orientation, organisation, organisational culture and social performance of community finance organisations in Victoria, Australia

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posted on 06.12.2017, 12:32 by P Bandara
The commercialisation of socially oriented finance organisations providing services to financially excluded individuals, households and communities has received increased attention by researchers in recent years. However, there have been few studies focussing on the social performance of community finance organisations, in particular studies in developed countries. Research exploring organisational factors which may influence the social performance of these organisations is also limited, including research exploring the relationship between organisational profit orientation, culture and social performance. This study examined this relationship as concerns financial organisations providing services to financially excluded communities in Victoria, Australia. Popular organisational culture models such as Hofstede’s (1980), Schein’s (1990), Cameron’s (2006) and Denison’s (2007) were examined in order to develop the theoretical relationship model for this study. Empirical finidngs were interpreted mainly as per Denison’s organisational culture model. The study used cross-sectional data from seventeen organisations, representative of those targeting financially excluded communities in Victoria. The organisations belong to three groups: non-profit organisations, for-profit socially oriented organisations, and purely commercial organisations. Staff perceptions of their organisation’s culture and social performance was examined and related to these indicators as measured by survey instruments. The Denison Organisational Culture Survey was used to measure organisational culture. The study found staff perception of this aspect tends to be inverse to the organisation’s commercial focus. Three cultural traits (involvement, adaptability, and mission) were found to be significant differentiators. Social performance was measured using the CERISE Social Audit Survey. The study confirmed earlier studies which have found the social performance of CFOs is inverse to the organisation’s focus on profit. This suggests mission drift may be intrinsic to commercialisation. The study found CFOs that have a positive organisational culture also tend to have stronger social performance, irrespective of the organisation’s primary focus on profit. This suggests non-profit organisations intending to commercialise may be able to mitigate, at least to some extent, the negative social impact of commercialisation through the pro-active management of their organisation’s culture. Within this context, the study found that the adaptability, involvement and consistency elements of organisational culture may have a role in preserving focus on social performance. The major implication of the study resides in the information it makes available to the not- for-profit sector. The need for this sector to be fully conscious of the trend towards commercialisation is urgent, and failure to combat this trend will have significant implications for the way in which this sector serves the community. Studies of this challenge to public institutions such as hospitals, universities, and, indeed, CFOs, are limited across the sector. Thus, the development of relevant investigations on the negative impact of an increasingly commercial orientation in such institutions is critically important.




Open Access


Era Eligible



Assoc Prof David Hamilton, Assoc Prof Jonathan Sibley

Thesis Type

Doctoral Thesis