Organizational Culture and Performance of Microfinance Institutions in Machakos County, Kenya

This study sought to determine the influence of organizational culture on performance of MFIs in Machakos County. The study focused on the influence of values, responsive customer service, innovativeness, stakeholder engagement and collaboration on performance of MFIs in Machakos County. The study adopted a descriptive research design. The study was anchored on the theory of organizational excellence. The target population for the study included 63 staff members from the 21-registered MFIs in the county. The study utilized purposive sampling technique in an effort to identify the most suited respondents for the study. A structured questionnaire was utilized as the data collection tool. The questionnaire was divided into two parts containing the demographic data relating to the respondent’s background as part one and the second part covering organizational culture factors. Descriptive and Inferential statistics were used in the analysis of the data. The linear regression analysis method was used to assess the associations between organizational culture and performance. The study findings revealed that while having clear organizational values is essential, their integration into strategy may not always be beneficial. Secondly, Innovation and stakeholder engagement are identified as crucial drivers of performance, with strong positive and statistically impacts. However, an overemphasis on values and work ethics has a negative significant influence on performance. Lastly, collaboration is important but has a minimal positive and significant statistical effect. The study recommended that MFIs should prioritize fostering innovation and engaging stakeholders effectively to enhance performance. Also, organizational values should be integrated into strategy thoughtfully to avoid negative effects, and ethical practices should be aligned with performance goals to balance organizational culture with strategic objectives.