CHAPTER ONE

INTRODUCTION
1.0 Introduction
This chapter provides background of the study, statement of the problem, objectives of the study,
the research questions, significance of the study, and scope and limitation of the study.

1.1 Background of the Study

Despite the growing significance and research, many of the attempts to generate organizational
performance including intended financial results fail. Effective organization performance is
realized when all persons and resources are synchronized, balanced and given direction whether
managerial job is accounting, selling, designing, engineering, the managers effectiveness
depends on the ability to listen and to read, or ability to speak or write. The manager needs skills
in thinking across to other people as well as skills on finding and what other people are after.
Recent studies reveal that financial performance efforts often suffer a dismal fate. Organization
managers are obliged to develop new techniques to struggle harder to gain competitive edge over
other competitors. These modern management techniques to a large extent aim to raise
employees performance by using the power of communication (Erogluer, 2011). The beginning
of the universe was the beginning of communications. There was no beginning which was devoid
of communication. Thus, communication facilitates transformation of the human society.
Communication is a many-sided phenomenon that means different things to different people. It is
a process of a means of access to the mind or thought of another. According to Wilson (1997),
communication can also be seen as a reduction of uncertainty, thus, communication is an
exchange of meanings

Some research indicates a failure rate of one-third to two-thirds of major organisational financial
performance initiatives (Beer & Nohria, 2000; Bibler, 1989); more pessimistic results suggest a
higher rate of failure (Burns, 2004) that may reach up to 80 to 90 percent (Cope, 2003) or may
make the situation even worse (Beer et al., 1990). It has been found out that at least more than
half of all the organisational financial performance approaches implemented by managers; do not
often provide the intended outcomes leaving them with uncertainty of what needs to be done to
achieve such results (Bennebroek et al., 1999). Poorly managed organisational financial
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performance communication results in rumours and resistance to organisational financial
performance and enlarging the negative aspects of the organisational financial performance
(DiFonzo et al., 1994; Smelzer & Zener 1992). Communication is considered to be vital for the
effective implementation of organizational organisational financial performance (DiFonzo &
Bordia, 1998). Communication is used to promote a product, service or organization, with the
objective of making sales.

Good communication network in organisations can be a driving force behind improved

organisational performance efficiency. Some feel it is the channel along which the message is
passed while other terms it as the cut off message, passing. Failure in communication or
perception clashes of interest of value, gap between anticipated and actual event, degree of
flexibility and capacity of organization to respond to the unexpected all those by no means are
possible constraints to organizational intention but the major concern is the breakdown in
management function due to poor communication. Communication is the glue that holds a
society and organisational stakeholders together. It is one way that employers, employees,
customers or clients and other concerned parties relate to each other. Companies apply
communication as a performance strategy in many ways. These companies interpret market
problems and respond by designing and developing products and services to address those
problems. This is followed by social marketing that gives impression that the product or idea in
question is the best, is the solution to the problem hoping to improve on its level of profitability
and revenue generation growth. Employees are a key audience because they often serve as the
conduit to other audiences. If employees are informed and engaged, communications with other
constituencies are likely to be strong as well. The ability to communicate enables organisations
to form and maintain core elements of relationships.

The quality of such relationships depends on the caliber of communication between the parties
and their benefits are hoped to translate into viable results including profit generation and growth
achievement yet these companies still suffer large financial losses leading to shutdown of some
of them (Brennan, 1974). The cause for the suffering from financial performance improvement
even though they invest large financial resources in various strategic plans including corporate
communication have not been found although past researchers agree that over 70% of problems
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faced by managers come from communication, these research have not provided findings that
relate poor financial performances and losses to organization communication (). Organisation
Communication is expected to be the pivotal centre through which product development,
customer relations, and employee management virtually every facet of a business' operations are
based yet companies spend a lot in training on communication with little success in translating
results from such activities into financial benefit to the company. The business environment is
full of information about financial crisis facing many industry players.

There is great concern on the difficulty and complexity associated with changing environment
and increasing complexity of the 21st century workplace (Blalock, 2005). What works well today
for managers will be their failure in future, a situation that subjects them to continued pursuit for
working strategies of Revenue Growth. In the United States of America, companies actively
communicate with clients, media and stakeholders yet at the end of the day record poor financial
results in the stock market. In Malaysia, Malaysia airline, the national carrier is ever facing
financial difficulties, forcing the government to keep pumping money for its recovery. In Kenya,
both public and private firms, there are many such similar cases for example supermarkets, some
public and private universities, mid level colleges, airline companies, paper millers, sugar
companies, government departments, and many such companies including the banking sector,
the degree of financial crisis faced is worrying. While this takes place, these companies invest a
lot in communication through the media, social networks to reach out to their clients.

Communication is the process of sharing ideas, information, and messages with others in a
particular time and place. Communication includes writing and talking, as well as nonverbal
communication, visual and electronic communication. Communication is a vital part of personal
life and is also important in business, education, and any other situations where people encounter
each other (Encarta, 1998). The importance of organisation communication during intended
return on equity has been empirically demonstrated and commonly agreed among practitioners.
The empirical picture appeared indicated that organisational financial performance and
communication process are inextricably related processes (Lewis, 1999). Recent studies about
communication show that communication has positive correlation with many organizational
outputs like organizational commitment, performance, organizational citizenship behaviours, and
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job satisfaction. In contrast communication failure may cause functionless results like stress, job
dissatisfaction, low trust, decrease in organizational commitment, severance intention, and
absence (Bastien, 1987; Malmelin, 2007) and this can affect organizations efficiency negatively
(Zhang & Agarwal, 2009). Organisation communication is common in the business world, where
they are used as part of a business plan, detailing how to communicate with various groups of
people. A single business may have multiple strategies for different categories of people, such as
clients, investors, competitors or employees. Some companies even have an internal organisation
communication for communicating within the business itself. These strategies are used to
determine things like what information to share with the clients or investors, as well as how that
information should be presented.

Organisation communication is expected to articulate, explain and promote a vision and a set of
well-defined goals. It creates a consistent, unified voice that links diverse activities and goals
in a way that appeals to your partners, or stakeholders. The ultimate goal of communication is to
facilitate change in behaviour that would drive firm resources to achieve management objectives
(World Bank, 2001). This implies that communication can be both a symptom and a cause of
organization performance challenges. Poorly designed organizations, ineffective processes,
bureaucratic systems, unaligned rewards, unclear customer or partner focus, fuzzy visions,
values, and purpose, unskilled team leaders and members, cluttered goals and priorities, low trust
levels, and weak measurements and feedback loops all cause communication problems.

This means that organisation communication is needed to transmit information critical for the
operational and ordinary activities ongoing, and that it can have effect on the attitudes of people
on the organization. Hence communication is essential for both internal and external functioning
of the enterprises for it integrates the managerial function into a solid path towards achieving
intended objectives. It needs internally, included to develop plans for their achievement, to
organize resource in the most effective and efficient manner to select develop and apprise
members of the organization to lead, direct, motivate and create climate in which people want to
contribute and to control performance. It needs externally included, on the other hand the
following first and foremost through which information exchange that the managers become
aware of the needs of customer, aware of the availability of supplies, the claims of stockholder,
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the regulation of government and the concerns of the community, which can drive products
branding to fit customer needs.

Hence managers are aware of the opportunities and threats on the surrounding environment and
therefore know what to do and not to do; for example, the mangers can know whether to recruit
staff or not, other managerial decisions. The essence of communication cannot be over-
emphasized. This implies that organisation communication is comparable to the blood that runs
through the veins and arteries of human beings because the function of integration, maintained,
orientation, decision making and the growth of organization member are performed through
communication including dealing with customer satisfaction and dissatisfaction.

1.2 Statement of the Problem

The desire to achieve intended results such as target financial results improvement including
revenue generation growth are core challenges managers of organisations strive to overcome
daily. This is because environment of managing may differ between businesses, and between
differing cultures in areas of economic and social development. This implies that managerial
functions are basically the same but at various degree of performance. This study focused on
effects of organisation communication on organisational performance specifically on financial
performance. Individuals with little or no qualifications find themselves holding managerial
positions in a company. This lack of a competence leads to wrong decision making especially
when subordinates are not consulted.

One of the uniqueness of the employees is the ability to objectify their thoughts and ideas
through language. The desire to achieve intended performance is not always achievable yet
organizations strive to put in place necessary techniques to ensure achieving their objectives.
Also most companies lack intra-communication facilities like intercoms and memos. This leads
to ignorance on the part of the subordinate, about the aim and the objective of the company as
well as the standard expected of them. This could lead to liaises-faire attitude to work, which is
harmful to the growth and progress of the company. As a result of all the above problems
discussed, the researcher intends to help such companies by elaborating on how effective
communication can improve their performance.
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1.3 Objective of the Study
The broad objective of this study is to determine the effects of organizational communication on
financial performance. The specific objectives are to:
i) To establish the level of financial performance in Presbyterian University of East
Africa
ii) To determine effects of bureaucratic communication on financial performance in
Presbyterian University of East Africa
iii) To examine effects of manipulative communication on Financial Performance in
Presbyterian University of East Africa
iv) To determine the effects of democratic communication on Financial Performance in
Presbyterian University of East Africa
v) To establish relationship between organisation communication and financial performance
in Presbyterian University of East Africa

1.4 Research Hypothesis

i) There is no relationship between Bureaucratic Communication and organisation financial
performance
ii) Manipulative Communication has no relationship with organisation financial performance
iii) Democratic Communication has no relationship with organisation financial performance

1.5 Significance of the Study

It is understood that organisation performance is the desire of management through executing
four managerial functions that are expected to be improved through effective communications
thereby aiding the organization achieve its intended outcomes including financial improvements.
This study would aid different stakeholders including managers, shareholders, researchers, and
financial information analysts among others in the making and managing of organization. It
would aid students studying management to understand the theoretical background on how
information is very vital to efficiency. The study would enable them to start off well when
establishing or when heading an enterprise and its organization structure. As regards those who

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are already managers, the study would help them to achieve their goal if they have not or to
improve on their performance or they are just on the average.

1.6 Scope of the Study

The researcher has a wide coverage in mind, which includes organization of all sorts such as
academic institution as well as profitable organization. For this research, the researcher would
limit the scope to Presbyterian University of East Africa (PUEA), based in Kikuyu sub-County. It
is a university founded on the Christian foundation under the fundamentals of Presbyterian
Church of East Africa (PCEA). This is hoped to be the basic foundation for effective
communication to enable the institution increase population of its community and realising
growth in revenue collection and profitability returns improvements.

1.7 Limitation of the Study

It is a known fact that researchers encounter a lot of problem, which are inherent in our society
and this research is no exception. This problem will range from personal constraints to
environment problems. Time for instance will be constraints. A lot of time will be consumed
before this research could be carried out. The researcher has to forfeit a lot of appointment,
assignments, and other commitments especially during the collection of information that will be
used for the literature review. Lack of statistic will be another major setback to this research. It
will be due to the impossibility of obtaining some accurate information required. It should be
noted that lack of accurate statistic limits accuracy of any research work. They seriously guided
most information considered confidential to the organization.

CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter covers the literature on the proposed issue of investigation both generally as a
globally used concept as well as in particular organization setting, the objectives and essence of
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the study will be also presented. This chapter accounts for the key conceptual frameworks and
the body of knowledge relevant to the research topic. The literature specifically explores effects
of organisation communication on organisation financial performance.

2.1 Organisation Communication Concept

A concept is the starting point for corporate behaviour. It expresses an organizations ambitions,
sets out its chosen direction and describes the principal initiatives and projects necessary to
achieve its mission. Organisation communication is common in the business world, where they
are used as part of a business plan, detailing how to communicate with various groups of people.
A single business may have multiple strategies for different categories of people, such as clients,
investors, competitors or employees. Some companies even have an internal organisation
communication for communicating within the business itself. These strategies are used to
determine things like what information to share with the clients or investors, as well as how that
information should be presented.

Organisation communication, systems, and practices do play a central role in high-performance.

Information, understanding, and knowledge are the lifeblood of the organizational body. A
thoughtful and comprehensive organisation communication is a vital component to any
successful change and improvement. Organisation communication is conceptualized as a
functional strategy, providing focus and direction to the Communication function. It is facilitated
by a practitioner performing the role of the communication manager at the functional
organizational level. It is the outcome of a strategic thinking process by senior communication
practitioners and top managers, taking strategic decisions on the management of, and the
communication with, strategic stakeholders. Organisation communication is an intentional
process of presenting ideas in a clear, concise, and persuasive way. A manager must make an
intentional effort to master communication skills and use them strategically, that is, consistently
with the organizations values, mission, and strategy.

Communication is one of the concepts defined in many ways in the literature. For example,
Hoben et al. (2007) consider communication as a whole concept comprising of speech and verbal
symbols thereby constituting an exchange process, while according to Kekelis and Andersen
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(1984), communication denotes the process when the parties understand each other. On the other
hand Bozdoan (2003) cites that Gordon considers communication as a process that commences
when the individual makes own needs meaningful to rectify the state of imbalance that occurs
within oneself and relay it to outer world. Schramm (1954) simply calls communication as the
exchange process between two or more parties and Barnlund (2008) explains that
communication is the exchange process in which the parties send and receive messages
simultaneously. Despite these different definitions, the main point in communication lies within
sharing. It is, therefore, the process of sharing emotions, thoughts and information between two
or more parties and thus, uncovering common meanings (Karaktk, 2011).

After this brief introduction to communication, it would be appropriate to revert to the concept of
organizational communication. Organizational communication denotes the communication
occurring in organizational environment and the main objectives thereof are to communicate
organizational policies, establish a continuous coordination among organizational members,
solve the organizational problems and share information (Karaktk, 2011). According to Price
(1997), the delivery of information to organizational members of another organization denotes
organizational communication.

In another study, it is seen that organizational communication is defined by a number of different

approaches (Elving, 2005): According to internal approach, intra-organizational communication
is the process regarding the transfer of a message about the organization to a recipient of that
organization. According to social structure approach, organizational communication is a
common language that social structures such as human groups, working groups and teams have
developed in order to interact with each other. In the traditional approach, organizational
communication denotes the total of receiving, sending, storing, and processing vital
organizational information.

These different definitions bring forth different types of organizational communication. As

Kocaba (2005) has cited, Neski refers to four different types of organizational communication:
Bureaucratic Communication: Only official information is exchanged and is usually in the form
of superior-subordinate relationship. Manipulative Communication: In this way of
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communication, only selected information is exchanged, and thus, some information is hidden or
changed. Democratic Communication: All information can be exchanged mutually in an
objective way. Disproportionate Communication: All required information cannot be received or
the received partial information is fully utilized.

The direction of the organizational communication may also be used to list the types. In this
case, communication can be vertical (from superior to subordinate or from subordinate to
superior), horizontal (between those in equal levels) and diagonal (between those in different
levels of hierarchy as well as in different units) (Varol, 1993). Another approach would be to use
the nature of the network the parties form in order to communicate (Eroluer, 2008; Guetzkow
and Simon, 1955): In the wheel model, only the highest manager has the decision-making
authority and communication must comply with the chain of command. In the chain model, the
parties are arranged side by side, like the rings of a chain and the parties in the farthermost
positions can communicate directly only in one direction, while the parties inside can make a
two-way communication directly. In the star model, the parties must get aid or permission from
some other parties that assume the role of concierge in order to communicate with a particular
party. The parties are arranged as the rings on a circle in the circle model and each party has the
opportunity to have two-way communications directly.

A fifth way, which is more advanced and more democratic than these mentioned is bureaucratic
communication. Bureaucratic communication denotes flow of information and news in a free and
healthy way from the uppermost level to the lowermost level and if necessary, in the opposite
direction through more than one channel (Dutton, 1998; Sarkam, 2006). The opposite is the
manipulative communication in which the information flow is partially restricted or directed, a
formal tone is usually preferred while communicating, and employees active participation in the
communication process is not considered (Buchholz, 2001).

The literature posits that organizational communication, in the form of bureaucratic

communication, is beneficial for job satisfaction and organisational performance. An example
belongs to Yksel (2005), who finds that factors such as openness in communication, receiving
feedback and constructive criticism have a direct positive effect on the job satisfaction. Similarly,
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Halis (2000) concludes that job satisfaction increases when superiors establish a courteous and
continuous communication with subordinates; receive feedback according to the nature of the
work performed, and when the participation of the employees to achieve organizational goals are
maintained. Pettit Jr. et al. (1997) express that organizational communication significantly affects
job satisfaction and an open, positive communication increases the satisfaction. Ayranc (2011)
acts with a different approach and while he chooses the job satisfaction of business owners as his
subject, he reveals that communication of business owners with the employees thereof is by itself
a job satisfaction factor, and the fact that business owners consider communication as one of the
determinants of organizational performance.

The literature reveals that organizational communication has an effect on organisational

performance in a very similar way. For example, Carriere and Bourque (2009) express that
satisfaction from organizational communication is an intermediate variable in influencing
organisational performance. Chen et al. (2006) find that in organizations where organizational
communication is more continuous and open, organisational performance is higher. Leiter and
Maslach (1988), who consider organizational communication in the form of communication
networks, find that subordinates who show a similar degree of organisational performance, tend
to establish communication networks among themselves and that negative superior-subordinate
relationship reduces organisational performance seriously. There are, however, some studies that
cannot find a relationship between organizational communication and commitment. An example
is the one that belongs to Trombetta and Rogers (1988) revealing that organizational
communication affects job satisfaction but has no influence on organisational performance.
2.1.1 Bureaucratic communication

2.1.2 Manipulative communication

2.1.3 Democratic Communication

2.2 Organizational Performance

Communication is an integral component of any performance improvement approach.
Organizations eager to accomplish strategic goals establish well defined organisation
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communication. A well-defined strategy is one that engages employees and aligns with the
organizations business goals. According to Richard et al. (2009) organizational performance
encompasses three specific areas of firm outcomes: financial performance (profits, return on
assets, return on investment); product market performance (sales, net profit margin) and
shareholder return (total shareholder return, economic value added).

Generally firm performance refers to the success of the firm. Alchian and Demsetz, (1972)
defined it as the comparison of the value created by a firm with the value owners expected to
receive from the firm. According to Flapper, Fortuin, and Stoop, (1996) it is the way organization
carries its objectives into effect. Studies in organisational performance have extended into two
main streams (March and Sutton, 1997). The first is to investigate the ways of improving the
firm performance and the second is to study the predictors of firm performance. Consequently,
firm performance has widely been studied as a dependent variable in organizational research
(Rogers and Wright, 1998; March and Sutton, 1997). Most of the studies which used
performance as a dependent variable have attempted to explain the variation of the performance
of SMEs (Carton and Hofer, 2010; Brush and Vanderwerf, 1992).

Performance is the level of achievement or obvious outcome that is obtained which sometimes is
used to obtain positive result. Performance is also defined as the personnels successfulness in
achieving strategic objective from four perspectives: finance, customer, process, as well as
learning and growth. The definition above implies that organizational performance is the
management decisions outcome to achieve particular objective in effective and efficient way.
Keats formulated brief conceptual framework of organizational performance by making a
proposition that correlated entrepreneurship, environment effect, and performance. Related to
SME performance, it had been described in some thoughts through scientific study, consultation,
and business practice (Mohant & Rath, 2012).

The paradigmatic definition difference on the term of performance is distinguished from the
development stages during examining and planning the business management. The research
spectrum has been categorized into theoretical perspective. Business performance is the quality
and quantity of the tasks achievement, both by individuals and by group or organization (Rovero,
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2004). There are five indicators used for measuring performance that are the preciseness in
fulfilling demand, ability to maintain good relationship with customers, sufficient inventory,
keeping quality of the product, and providing affordable price for customers. Organizations
apply many methods and strategies to assess their performance. These methods measure
everything from financial viability, efficiency, effectiveness and relevancy among others. These
measurements may prove especially important to all organizations depending on the main
reasons for measuring performance.

Ricardo (2001) argued that performance measures could include result-oriented behavior
criterion-based and relative normative measures, education and training, concepts and
instruments, including management development and leadership training, which were the
necessary building skills and attitudes of performance management. Hence, from the above
literature review, the term performance should be broader based which include effectiveness,
efficiency, economy, quality, consistency behavior and normative measures (Ricardo, 2001).

Organisation communication, systems, and practices do play a central role in high-performance.

Information, understanding, and knowledge are the lifeblood of the organizational body. A
thoughtful and comprehensive organisation communication is a vital component to any
successful change and improvement. The communication strategy sets the tone and direction of
improvement efforts. Effective strategy links to organizational goals. Aligned strategies tend to
enhance organizational performance. Organisation communication influences the energy levels
for change and improvement. Strong communications keep everyone focused on goals and
priorities while providing feedback on progress. Effective organisation communication, systems,
and practices have a huge and direct effect on organization learning and innovation.

2.2.1 Organisation Financial Performance

2.2.1.1 Profitability

2.2.1.2 Revenue Growth

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2.2.2 Effects of Organisation Communication on Financial Performance

2.2.3 Relationship between Organisation Communications on Financial Performance

2.3 Theoretical Framework

2.4 Conceptual Framework

2.5 Empirical Review

Communication covers all activities that an individual does when he wants to make a
transformation in someone elses mind. This is a meaning bridge between an individual or
individuals and organization. Communication is a process that contains expressing, listening and
understanding (Banerji and Dayal, 2005). Similarly, emphasizing social aspect of
communication, communication that takes part on the base of social life and forms the content of
organizational structure is a process which aims at conducting good relationships between groups
and organizations (Dogan, 2005). Price (1997) defined organizational communication as the
degree to which information about the job is transmitted by an organization to its members and
among members of the organization. Ayatse (2005) observed that communication is needed to
establish and disseminate the goals of the enterprise. This is because the competencies and skills
they possess will enable them to exhibit work behaviours appropriate and relevant to the
performance of the job. It is further theorized that employees are likely to be more productive if
their performance is rewarded assuming that the reward received has value to them, as argued by
the expectancy theory (Victor Vroom, 1964).

Accordingly, for organization and human as a social being, communication has a vital
importance, whether pros or cons are an inseparable piece of life and also it has an important role
on all activities aimed at gaining organizational objectives (Ada et al., 2008). Attention has been
given to the study of organizational communication in organizational behaviour research as a
result of the significance of this variable to organizational effectiveness. For instance, it has been
found that effective communication improves job satisfaction (Holtzhausen, 2002) and which in
14
turn improves productivity (Litterst & Eyo, 1982). Research has also shown that communication
improves employee job performance (Goris, 2007), while poor communication results to low
employee commitment to the organization (Kramer, 1999).

Chen et al. (2006) pointed out that research is lacking in examining employee satisfaction with
communication process. There is therefore the need to explore the relationship between
organizational communication and workers performance since communication integrates
different units and functions in the organization. Communication is the human activity that links
people together and create relationship (Duncan & Moriaty, 1998). This means that individuals
relate with each other by means of communication. It is the glue that binds people together in an
organization. Managers have traditionally spent the majority of their time communicating in one
form or another (face-to-face discussion, memos, notice boards, mass meeting, employees hand
book, public lectures). Today, however, more and more workers find out that an important aspect
of their work is communication which is the mutual exchange of understanding, originating with
the receiver that leads to effective and efficient work performance in an organization because its
the essence of management. The basic functions of management (Planning, Organizing, Staffing,
Directing and Controlling) cannot be performed well without effective communication. Different
units exist in an organization and it is through communication that interaction takes place for the
attainment of organizational goals.

On the other hand, Workers Performance is regarded as how well an employee is able to dispatch
his/her duties to the specified organization. Setting and clearly communicating performance
standards and expectations, observing and providing feedback, and conducting appraisals enable
you to achieve the best results through managing organisation performance. According to Bass
(1985), employees choose to perform tasks out of identification with the managers or with the
organization roles and objectives. This relationship results in the employees basic agreement
with the norms to which they are required to perform. Thus, the flow of communication can
create identification with workers internalizing desirable values, as regarding an organizations
goals and objective. However, better performance can be achieved only when there is a
reasonable level of expectation-fit and when the social exchange between managers and
employees is fair and equal Wang (2005). Within the perspective of human resource
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management, it has often been theorized that employees knowledge, abilities and skills will
enable them to be good performers when they are hired. Thus, the management must gear its
policies and objectives in such a manner that employees perform their work and do their
assigned task. We are living in a time when communication systems are evolving rapidly which
is essential for success and growth of an organization and is being perennially called upon to
play a greater role in the quest for economic and political stability. Effective workplace
performance is the key element in the success of an organization and the effectiveness of the
workers employed will determine just how successful the organization will be. Effective
communication between employees and managers is crucial in that employees will need to know
what is expected of them, managers will need to provide a clear job description for every
employee which would make employees have immediate access to the necessary tools to
complete each assignment given to them. Communication covers all activities that the
management does to enhance workers performance.

Despite the above numerous advantage of effective communication business all over the world
today is very challenging. To stay profitable in the highly challenging and competitive global
market economy, all factors of production, i.e. men, machine, method, market, money and
materials, should be wisely managed. Among the factors of production, the human resource
constitutes the biggest challenge because unlike other inputs, employee management demands
skilful handling of thoughts, feelings and emotions to secure highest productivity. Organisational
communication plays an important role in this challenge. Inability of a heads or Managers of any
organization to coordinate a perfect and smooth flow of communication interaction among
employee and outside business environment may likely create and facilitate low productivity
with high degree of workers boring and disarray. However, people understand and interpret
messages differently. In communication, there are many unwanted interference that can distort a
message and remain always a potential threat to effective communication, because it can
interfere with the accuracy of a message being communicated (Koontz 2001).

Similarly, organizations in Nigeria have been faced with an array of problems that seem to be an
impediment to the growth of any organization such as, mismanagement of funds and resources,
poor leadership skills, low level of real income, and poor infrastructural facilities to mention but
16
a few. It is in this context that this study examines the impact of communication on worker
performance, their productivity and their general commitment to work, using selected
organization in Lagos state as an empirical study.

Communication is vital in organizations such that Orpen (1997) argued that communication has a
vital role in the failure or accomplishment of any organization, it is used for the purpose of
resolving the contradictions in work organization in other that such organization may progress.
People must come together, think together, work together, learn together and advance together.
Human interaction allows man to forge new horizons and explore new possibilities. Thus, by
meeting people, they can communicate in the language of themselves. The variety of
communication aids/ techniques used in an organization depends on the nature of the
organization, its kind and range of personnel that best suits the management and also the location
of the workplace. According to Ince and Gl (2001) communication is the exchange of ideas,
emotions and opinions through words, letters and symbols among two or more people. He states
that this may be defined as a technical fact. Yet it is uncertain whether symbols are transfer truly
or not, to what extent symbols meet the transmitted message and how effective transmitted fact
on the receiver (Kalla, 2005; Baltas and Baltas, 2002).

Without communication, through readings, listening (the receptive skills), speaking and writing
(the productive skills) mankind would find it difficult to unravel some of the mysteries of life.
Those things that we are ignorant of or have knowledge of, or that we have doubts about can be
explained to us better through communication. Altinz (2008) defines communication as a means
through which the task and the resources needed to carry out an assignment, the roles and duties
and the expected results are made known to the subordinates. This means that communication is
the transfer of information (a message) from one person to another. Thus effective
communication is therefore the transfer of message, followed by feedback, from the receiver to
the sender, indicating an understanding of the message. Multidimensional aspect of the notion of
communication along with its analyses from different viewpoints affects its definition,
communication is needed to review, conceptualize and direct interaction in an organization.
Employee communication is the dissemination of information which is related to the daily
performance of an employers job and also important if the worker is expected to be an effective
17
member of staff. It connotes a consideration of human beings as a vital resource (Buchanan and
Doyle 1999).

Communication is the transfer of information from a sender to a receiver, with the message being
understood by the receiver. Myers and Myers (1982) defined organizational communication as
the central binding force that permits coordination among people and thus allows for organized
behaviour, and Rogers and Rogers (1976) who argue that the behaviour of individuals in
organizations is best understood from a communication point of view. In many ways,
organizations have evolved in directions that make the latter view more appropriate. Changes
confronting organizations and the associated changes in organizational forms have made
organizational communication increasingly important to overall organizational functioning.
Communication is said to be the foundation for sound management, communication helps
greater coordination and interaction among workers, good communication helps in motivating
the workers, and communication helps in establishing links between different hierarchies and
functions of management, communication clears confusion, misunderstanding and delays in
administration, it helps in achieving maximum productivity with minimum cost, it helps in
building genuine human relation. Communication is not only an essential aspect of these recent
organizational changes, but effective communication can be seen as the foundation of modern
organizations (Grenier and Metes 1992; DAprix 1996; Witherspoon 1997; von Krogh et al.
2000). Effective communication is needed for management to develop and sustain a competitive
advantage for organizational performance and improvement (Aviolio,Lado, Boyd & Wright,
1992; Rowe, 2001). Effective communication between leaders and employees is critically
important for the potential success of a company. Leaders need to enact strategies to improve
communication that could lead to positive work consequences (Gray and Laidlaw, 2002).
Improvements in supervisor-subordinate communication will assist organizations toward the goal
of managing diversity by promoting equality and integration in the workplace.

Effective communication succeeds when employees support the leader and the organization if
there is a belief that employees' efforts will be rewarded. Leadership succeeds when initiating
response or responding to change and leadership is inextricably linked to the credibility of those
leading. Constituents will become willingly involved to the extent that they believe in those
18
sponsoring the change (Desanctis & Janet, 1999). The association between employee satisfaction
and job performance suggests that an important contributor to the employees engagement
within the organization is the leader employee relationship. Foong (2001) concludes that
managers use leadership behaviours to influence employees. Lee and Chuang (2009) explain that
an excellent leader not only inspires subordinates, giving them the potential to enhance
efficiency, but also meets their requirements in the process of achieving organizational goals.

How a leader communicates is as important as to how he leads. The leader is the guiding force
within a group and organization. A leadership style that resonates with followers will allow the
leader to achieve greater employee productivity. Conversely, poor leadership styles lead to poor
communication and can have negative effects on workers performance and in turn productivity.
The process by which employees are made aware of organizational goals and their involvement
in the achievement of them is recognized to play an important role in fostering job commitment
(Anderson and Martin, 1995; Haskins, 1996). Goris et al. (2000) and Ooi et al. (2006) find
organizational communication to have an important positive association with affective
commitment, whilst (Brunetto and Farr-Whartons 2004) findings suggest a strong relationship
between communication processes and job satisfaction and affective job commitment. The
importance of communication may appear intuitively obvious, but does research support this
assumed importance; the short anDCr is yes. Research has shown that when employee needs are
met through satisfying communication, employees are more likely to build effective work
relationships. (Gray & Laidlow 2004, quoted in Tsai and Chuang 2009). This research
satisfaction the sum total of an individuals satisfaction with information flow and relationship
variables (Downs & Hazen, 1977, in Tsai and Chuang 2009) has been correlated with key
variables such as job performance and turnover rates. Further, certain facets of employees
communication satisfaction that exhibit both information and relationship features supervisory
communication, personal feedback, and communication climate were found to be the major
dimensions of communication-job performance relationships (Tsai and Chuang 2009). In other
words, the ways in which information flows in an organization is critical to the way that
personnel understand their relationship to and within the organization. In short, as Chen (2008)
stated, each passing study seems to reveal that the relationship between internal/employee

19
communication and corporate effectiveness is more significant than what has previously been
assumed.

CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.0 Introduction
This chapter provides research methodology that was used to collect data for the study. It also
covered data collection and administration of the questionnaire, pilot study, data analysis and
validity and reliability.

3.1 Research Design

The research design adopted for this study was descriptive survey method. This is because the
method was deemed appropriate, as the study collected information on impact of communication
on workers performance in an organization. Oniye (1997), states that the descriptive survey
deals with systematic description of an event in a very factual and accurate manner. This study
employed a descriptive case study design so that relevant and accurate information could be
obtained. A descriptive research is conducted in a natural setting and involves a process of
building a complex and holistic picture of the phenomenon of interest (Sekaran, 2003). A case
study design allowed the collection of significant amount of data in an economical and efficient
manner. This was used for administration of the questionnaires to all 200 participants at the case
organisation. Both qualitative and quantitative research designs were used to enable the
20
collection of requisite information about the effects of tenure components on performance. Such
a design is a systematic empirical inquiry in which the researcher does not have direct control of
independent variables because they cannot be manipulated (CreDCll, 2005). Inferences about
relations among variables are made without direct intervention from concomitant variation of
independent and dependent variables (CreDCll, 2005). As this design does not allow the
researcher to manipulate either the independent variables or the research setting, it is apt, because
of its higher external validity and less cost. This allowed the study to be completed within the
constraints imposed by limited time and financial resources.

A standard structured questionnaire was administered to all the participants in order to determine
the effects of effects of organisation communication on organisation financial performance
(Saunders, et al., 2009). The quality of a research project depends, among the other things, upon
the suitability of the method selected for it (Krishnaswami and Ranganatham, 2007). For this
reason care was taken in selecting the appropriate method of research. Structured close ended
questionnaires are a reasonably reliable tool for gathering data from large, diverse, varied and
scattered social groups. This included a list of questions sent to respondents for them to anDCr
and which obtained results that were tabulated and tested statistically (Shajahan, 2004). In order
to attain the research objectives the researcher needed to employ a quantitative design that
enabled the research to be executed yielding maximum information with minimal expenditure of
effort, time and money (McBurney, 2001).

3.2 The Study Area

The study area is the Presbyterian University of East Africa, main campus in Kikuyu Sub-county
of Kiambu County in Kenya. Kikuyu is arguably the most economically important sub-county of
Kiambu; it is the countys largest urban area with vast number of organizations, which makes it a
relevant study area for this research work. The study was conducted at Presbyterian University of
East Africa. The university is accredited by the Commission for University Education (CUE) to
offer various programmes at undergraduate and post graduate levels. The university must
therefore strive to comply with the requirements of the Commission including sound financial
performance apart from the core role of education achievements.

21
3.3 Target Population
According to Saunders, et al. (2003), a target population consists of the full group of potential
participants to whom the researcher wants to conduct the research for the study. It comprises of
all employees working at the Presbyterian University of East Africa including teaching and non-
teaching staff and students. The total target population was employees included 20
administrators, lecturers 100, students 2000 and others 30 totaling to 2250. The source list of the
total number of employees was obtained from the Human Resources Department of the
institution at the time of survey. This population is familiar with the operation of the institution
and is able to give the researcher more information about the effects of organisation
communication on organisation financial performance through the structured questionnaires that
were administered.
3.4 Sample Size and Sampling Procedure
Sampling is the process of selecting individuals for a study to represent the whole population.
According to Gay (1987) and Hilton (1995), a sample of 10% of the population is considered to
be the minimum while 20% of the population is required for a smaller population. The study
sample will consist of 2250 composed of all levels of management, teaching staff and students.

A sample size of 384 respondents from the case organization was selected as a 18%
representation of the target population. This was useful to examine the effect of organisational
communication on the organizational performance causing exploratory factor analysis and a
structural equation modeling technique. The study adopted a two stage sampling process. The
first stage involved selection of region and the second stage involved selection of participants.
Non-probability sampling strategy used to select the regions and participants in the study. The
region and participants were selected conveniently as organizations and participants who were
interested in the study and have time to complete the research instrument were selected. The
sample drawn for the study was predominantly guided by socio-demographic characteristics
features such as gender, length of stay in current organization, education, and job position.

Random samples within each department were selected from which structured questionnaires
were distributed. A subsequent respondent was obtained by skipping every two employees. The

22
384 respondents were drawn from all the departments of the institution under study. The sample
size was determined using standard formulae (Andrew Fishers Method 1994) Pop > 10,000.
Formular n = z2pq/d2

Where n = Sample size

z = The standard normal derivate usually set at 1.96 and corresponding to 95% confidence level
5
p= know characteristics of the target population (50%)
q= 1.0 p
d= desired precision level or allowed standard error level 5%

(1.962*0.5*0.5)/0.052= 384.16 approximately 384 hence desired sample size 384. This
represented a sample size of 17.86% 18.0%

3.5 Data Collection Procedure

In order to measure the influence of organisational communication on organizational
performance, the study conducted a quantitative survey. Questionnaires were designed and
distributed to the respondents and given time frame enough to collect back completed
questionnaire. Before the administration of questionnaire, a letter requesting permission to
conduct the research was requested from the University and the Organisation that was selected
for the study. Thereafter, the researcher attached a covering letter to the questionnaire and
requested the respondents to participate in this study. The letters for participation from
respondents were required by the researcher before distribution of questionnaires.

When using the personal method, a questionnaire is handed to the respondents who completed it
in his own time, but the researcher is available in case problems are experienced. The researcher
also distributed the questionnaires by hand, so that respondents could complete them
immediately and collect those (De-Vos, et. al. (2007). The researcher then asked all respondents
to return the completed questionnaires after a week. After two weeks the researcher personally
collected the questionnaires from the participants. The completed questionnaires from the target
population of 200 respondents were collected using the personal method for data collection.
23
3.5.1 Primary Data Collection
The study gathered primary data for use in achieving the objectives. Structured questionnaires
were used to obtain the primary data. The researcher hand delivered the questionnaires to the
participants using the personal method of data collection. Participants were asked to return all
questionnaires within two weeks. According to Saunders, Lewis and Thornhill (2009), the two
most commonly used primary data collection methods are the questionnaire and the interview.
All research is generally concerned with obtaining anDCrs to questions. Questionnaire and
interview are data collection instruments that enable the researcher to pose questions to subjects
in his/her search for anDCrs to the research questions. Both questionnaire and interviews have
distinct features that have a bearing on the correct and appropriate use of each for specific data
collection purposes. Primary sources using structured close ended questions are the first
occurrence as a point of departure for the empirical investigation. The primary data that was used
in this research followed structured close ended questionnaire. When the researcher knows what
is required and how to measure the variables of interest, a questionnaire is an efficient data
collection mechanism (Sekaran, 2003).

3.5.2 Secondary Data Collection

Secondary data was also used in support to the primary data. This was collected using the content
analysis of the annual reports of the financial statements of the institution. According to Hussey
and Collis (2007), secondary data, is data collected by the researcher in the field of study.
Secondary data analysis saves time that would otherwise be spent collecting data. A clear benefit
of using secondary data is that much of the background work needed has already been carried
out, for example: literature reviews, case studies, published texts, the internet and accredited
journals. Secondary data is the data that is already available from other sources. Such data are
easier and more quickly obtainable than the primary data (Sekaran, 2003).

3.6 Data Collection Instruments

The instruments that were used included questionnaire, interview and content analysis. The
questions covered areas of the objectives and research hypotheses of this thesis.

24
3.7 Pilot Study
The pilot study or test is performed to refine the questions on the questionnaire to eliminate
ambiguity or bias where necessary so that the measuring instrument is fine tuned for data
collection. For the purpose of this study, 20 participants from the Catholic University of East and
Central Africa were sampled to participate in this study and they were randomly selected to test
the questionnaire so that the necessary revisions were made before administration of the
questionnaire to the target respondents. The respondents were not included those in the target
population of 200 elements. The omission of pilot study is a big error, as researchers always rush
to get into the main inquiry (Bhattacharyya (2003). The pilot study omission error must be
avoided as the pilot study increases the precision of a research project (McBurney, 2001).
Moreover, the researcher should be satisfied that the procedures are effective and free from
errors and are reliable and valid (Sarantakos, 2000). That means, so as to successfully complete a
sound research project, a pilot study is mandatory (De Vos, et al., 2007).

The entire procedure and instrument must be open for criticism and comments by the random
participants and the input by the respondents must be considered when amending the
questionnaire for the main enquiry (Burns and Bush, 2010). Pilot studies accumulate data from
the ultimate subjects of the research project to serve as a guide for the larger study (Zikmund,
2003). Once a modus operandi has been developed, a pilot study should be conducted to find the
flaws in the procedure. The procedure of a pilot study is priceless and is an aid to careful
research (Cohen and Marion, 2003). A pilot study of the questionnaire for this research was
undertaken to determine if the proposed data analysis techniques can have any potential
problems; to authenticate if the research procedure was realistic and workable for this study; and
to determine the elimination of any ambiguities that can create statements and instructions that
may be confusing in the questionnaire (Blumberg, et. al. (2005).

3.7.1 Validity of the Instruments

The supervisor opinion was sought to assist in assessing the questionnaire and gave
recommendations for possible adjustments. A researcher also tested the validity by pre-testing
the instrument with some participants from selected firms from neighbouring Town of Athi
River. The pretest enabled the researcher to stamp out ambiguity; hence was rectified to suit the
25
study. The questionnaire did not reveal any defects. The firms selected for pretest was not used in
the real study in order to minimize biasness of the subjects during the study.

Table 3.1: Pearson Correlations of all constructs with the overall Organisational Financial
Performance (OFP) (n=2050)
Subscales OFP BC MC DC
(OFP) 1.00
Bureaucratic Communication (BC) .763 1.00
Manipulative Communication (MC) .850 .754 1.00
Democratic Communication (DC) .682 .786 .792 1.00
All correlations are significant at the 0.01 level (2-tailed)

Therefore validity of the instrument was realized after the researchers had examined the content
of the instruments, through judgment of experts and the supervisors validations, which guided
the researchers on the content validity. The study applied different techniques to assess the
Cronbachs (1951) reliability coefficient alpha and to assess face and construct validity. In order
to ascertain face validity, an initial questionnaire was passed through the routine editing after it
was given to the panel of experts. They were asked to respond to the questionnaire. Very few
comments were received and some minor changes were done to enhance the clarity.

3.7.2 Reliability of the Questionnaire

A reliability of the measuring instrument addresses the question of whether the results of the
measuring processes are consistent on occasions when they should be consistent (Trochim,
2006). It is a statistical concept that is related to consistency and dependability, that is,
consistency in obtaining the same relative anDCr when measuring phenomena that have not
changed (Burns and Bush, 2010). Questionnaires have a very limited purpose as they are often
one-time data gathering methods with a very short life, administered to a limited population
26
(Norval, 2006). The following are important parts of reliability: test-retest reliability (coefficient
correlation of stability). Consistency is estimated by comparing two or more repeated questions
of the measuring instruments. This gives an indication of the dependability of the result on one
occasion which may then be compared with the results obtained on another occasion and internal
consistency reliability. This indicates how well the test items measure the same thing (Blumberg,
et al., 2005).
Table 3.4: Reliability & Validity Analysis
Constructs No of No of Alpha value Variance
original items (.60 and above) Mean Std explained
items retained Dev <.50
Organisational
Financial Performance 15 12 0.7839 4.03 .480 .57
Bureaucratic Communication 10 07 0.8102 3.87 .441 .52
Manipulative Communication 15 08 0.9195 3.79 .609 .63
Democratic Communication 10 06 0.8761 4.00 .452 .58
Total 50 33 3.82 .60
(Number of items retained that has corrected-item total >.40)

Table 3.4 shows the reliability coefficients and convergent validity for the various constructs.
In this study reliability of the questionnaire was determined using a sample of respondents. The
items were measured by a 5-point Likert-scale, which ranges from strongly disagree (1) to
strongly agree (5). Reliability analysis was subsequently done using Cronbachs Alpha which
measures the internal consistency to establish if certain items within a scale measure the same
construct. Cronbach Alpha was established for every variable. The findings were as shown in In
general, validity refers to the degree to which instrument truly measure the constructs for what it
is intended to measure. Table 3.3 shows the reliability values for the various constructs with
variance extracted. It indicated that Manipulative communication had the highest reliability (=
0.9195), followed by Bureaucratic Communication (=0.8102), and Organisational Financial
Performance (=0.7839). This is an illustration that all the three variables were reliable as their
reliability values exceeded the prescribed threshold of 0.7. This concurs with Gliem & Gliem
(2003) who established the Alpha value threshold at 0.7. Cronbachs alpha for the constructs
ranged from 0.7839 to 0.9195 that indicated a sufficient level of reliability with the variance
explained above 50% for all the constructs showing sufficient validity of all constructs. In
general results show that the constructs of Financial Performance and Organisation

27
Communication as both dependent and independent variables respectively, used in this study has
sufficient reliability and validity.

3.7.3 Materials and Methods

Quantitative data was collected through a questionnaire. The instrument contained eight
dimensions of organisation performance. Organisation performance consists of 08 items
measuring employees ability to interact effectively with colleague, supervisor, and clients and to
adjust their behaviour to different situational demands. Organisational communication refers to
the length of employment in the organization in this study. The variable (Organisational
communication) was measured base on ordinal scale. Employees who have worked in the
organization for a long period of time More than 10 years of services considered as longer
tenured employees and less than 10 years of services as shorter tenured employees.

Specifically, the study anticipates that the strength of organisational communication-organization

performance relationship depends on the four variables that include: bureaucratic
communication, manipulative communication, Democratic communication and cost
effectiveness. This is because when employees stay in an organization for long, they tend to
become emotionally and mentally attached to the organization and therefore more willing to
engage in extra role behaviors because of loyalty.

A multiple linear regression model was used to predict organization performance using the three
independent variables in the study: bureaucratic communication, manipulative communication,
Democratic communication and cost effectiveness. In addition, the coefficients for each
independent variable generated from the model was subjected to a ztest, in order to test each of
the hypotheses under study. The regression model used to test is shown below:
= + 1X1 + 2X2 +3X3 +..1

Where; Organizational Financial Performance

- Constant

28
1, 2, and 3 - Coefficient indicating degree of change of organizational performance as
bureaucratic communication, manipulative communication, and Democratic communication
changes.
X1 Bureaucratic Communication (BC)
X2 Manipulative Communication (MC)
X3 Democratic Communication (DC)
- Error term
Therefore the final equation model was presented in the following function:
= + 1BC + 2MC +3DC +.2

All the above statistical tests were analyzed using the Statistical Package for Social Sciences
(SPSS), version 20. All tests were two-tailed. Significant levels were measured at 95%
confidence level with significant differences recorded at p < 0.05.

3.8 Analysis of Data

Data analysis as data that is statistically analyzed in order to determine whether the generated
hypotheses have been supported (Sarantakos, 2000). The questionnaires were collected and
counted to ensure that all respondents had anDCred and completed the questions. The returned
questionnaires were coded and captured on the computer. De Vos, et al. (2007) describes data
analyses as the process of bringing order, structure and meaning to the mass of collected data.

Questionnaires received from respondents, content analysis and interview schedules were
checked for completeness with repeat calls being made for incomplete questionnaires to maintain
the number of respondents. Categorization and coding was then done and data entered into SPSS
for windows version 20 for analysis. Both descriptive and inferential tests were used in the
analysis. Data was described or summarized using descriptive statistics such as mean and
frequencies, which helped in meaningfully describing the distribution of responses. Various
inferential statistics was used to infer population characteristics from the sample. Pearsons
correlation coefficient was used to establish relationships between variables.

3.9 Ethical Considerations

29
The study observed and complied with the ethical procedures to protect the rights of the research
participants, involving the principle of voluntary participation which requires that participants do
not need to be coerced into participating in this research. The following ethical measures were
adhered to (Sekaran, 2003). The thesis strived to ensure that no attempt is made to harm
participants deliberately and those who could experience any form of harm be it through
victimization, emotional or otherwise, were informed in advance of their right to withdraw from
participating in the study. Confidentiality means that information from participants was not be
divulged to the public nor made available to colleagues, subordinates or superiors. In this study,
all information about participants was treated with confidentiality and the participants were
anonymous (Saunders, et al., 2003). A covering letter also assured respondents that all responses
would be treated with confidentiality and anonymity.

30
 CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.0 Introduction
The main objective of this chapter is to obtain usable and useful information. It describes, and
summarise the data, identify relationships between variables, compare variables, identify the
difference between variables and forecast outcomes aiming to anDCr the research questions. As
already indicated in the preceding chapter, data is interpreted in a descriptive form. The purpose
of this study was to investigate the effects of organisational communication on organizational
performance.

The objectives of the study were:

i) To determine the level of organisational financial performance
ii) To examine the effects of bureaucratic communication on financial performance in
Presbyterian University of East Africa
iii) To determine the effects of manipulative communication on financial performance in
Presbyterian University of East Africa
iv) To examine the effects of democratic communication on financial performance in
Presbyterian University of East Africa
v) To establish the relationship between organisation communication and organisational
financial performance in Presbyterian University of East Africa

Questionnaires were given to employees of the university. After signing the consent form
indicating their willingness to participate in the study, these participants completed the
questionnaires. The signed consent form was folded and put into a separate box from the
anonymously completed questionnaires to ensure anonymity. In this way no signed consent form
could be linked to any specific completed questionnaire.
31
A total of one hundred and fifty (384) participants completed questionnaires between March
2016 and April 2016. The data from the questionnaires were statistically analysed. The SPSS
version 17 program was used for the data analysis. The findings are discussed according to the
sections of the questionnaire and then with reference to the four components of the
organisational communication. The four sections of the questionnaire were:
Part A: Demographic Information (biographical) data
Part B: Organizational Performance
Part C: Organisational communication

The Organisational communication was used to contextualize the literature review. The four
main components of the Organisational communication, namely Bureaucratic communication,
Manipulative communication, and Democratic communication were modified as factors that are
cumulated as an level of communication increases and likely to influence organizational
performance were used to summarise the findings. The case study organization assesses, collects,
administers and enforces laws relating to revenue management.

This chapter presents the results and findings as obtained from the information collected in the
field. Thus the bureaucratic communication, manipulative communication, and democratic
communication are key tools that may drive forward its performance. The chapter comprises the
analysis, presentation and interpretation of the findings resulting from this study. The analysis
and interpretation of data is carried out in two phases; in the first two sections data description
and analysis is presented. The model estimation and the analysis of the results are then discussed.
Finally concluding remarks are made. Data description involves a discussion on the sources of
data and definitions of the dependent and the independent variables. Data collected was
quantitatively analyzed and presented in tables. Hypotheses are also tested with the study
accepting or failing to accept them depending on the p values and t test value.

4.1 Response Rate

There were 384 participants surveyed in the sample and as indicated in Table 4.1 where 250
participants successfully completed and returned the questionnaires, resulting in a response rate

32
of 65%. This response rate was way above the Mugenda and Mugenda (2003) who suggested
that for generalization a response rate of 50% is adequate for analysis and reporting.

Table 4.1: Response Rate of Respondents

Participant Type N Returned Not Returned Sub-Total
Top Level 02 00 (00.52%) 02 (100.0%) 02 (00.5%)
Mid-Level 02 00 (00.52%) 02 (100.0%) 02 (00.5%)
Lower Level 18 18 (04.69%) 00 (00.0%) 18 (04.69%)
Subordinates 05 05 (01.30%) 00 (00.0%) 05 (01.30%)
Students 357 329 (92.0%) 28 (8.0%) 357 (93.0%)
Total 384 250 (65.0%) 134 (35.0%) 384 (100.00%)
As shown in Table 4.1, response by the top level and mid level management was lowest, none of
them returned the form, this may be due to the fact that they were also engaged in the face to
face interviews so they might have exhausted their interest in the interview so had little interest
to spare time for the questionnaire. Although the participants were asked in advance to create
time to participate in the survey and even scheduled specific days for this exercise, in this case it
might have been that most of senior management who participated in the study did not abide by
this requirement or were not able to return their dully filled questionnaires to the researcher. The
lower level and the subordinates had the highest response rate (100.0%) as all the 18 and 05
participants sampled dully returned their completely filled questionnaire forms. It was followed
by students. The higher response by lower level management could be attributed to the fact that
they are lecturers and had a lot of interest in the study and also the researcher had a personal
contact with them during administering the questionnaires. At the same time, this could be to the
fact that they were able to create some time off their schedules to participate in this study. This is
an indication of their involvement of matters relating to their firms.

4.2 Demographic Information

This section of the questionnaire covered the respondents gender, marital status, highest level of
education, and age bracket age. The demographic information is important to visualize the
general picture of any environment being considered for research. This research considered the
following areas of demographic features in order to understand more about Organizational
33
Performance and organisational communication. Finding out the general information of the
respondents is very important because it enables the researcher to gauge the reliability of the data
received and know the type of people that he/she is dealing with. Though not central to the study,
the personal data helped contextualise the findings and the formulation of appropriate
recommendations to enable more organizations to utilise or not the concept that organisational
communication is likely to influence organisational performance.

4.2.1 Respondents Gender

The participants were asked to indicate their gender. The results are as shown in Table 4.2.

Table 4.2: Distribution of Respondents Gender

Valid Frequency Percent Valid Percent
Male 168 67 67
Female 82 33 33
Total 250 100 100
Results in Table 4.2 indicate that male accounted for 168 (67%) and female 82 (33%). This
implies that majority of participants are male accounting for over 60% of the total participants of
this study. The gender results indicate the skewed representation of organisation performance and
also the communication in the institution; however, it informs the study that gender is
imbalanced in terms of employment of its staff according to the participants of this study. This
implies that organisation communication in this institution is male influence were main
indicators that influence organisation performance activities; hence the characteristics of male
dominancy would influence the performance outcome with little input of female communication
strategic styles leaving them with little room for equal participation in productivity in the
institution.

4.2.2 Respondents Marital Status

The participants were asked to indicate their marital status by the time they were completing the
questionnaire. The results are as shown in Table 4.3.

34
The results in Table 4.3 indicate that 08 (03%) were single, 193 (77%) married,
separated/divorced accounted for 18 (07%), while widowed accounted for 33 (13%). This imply
that majority of participants were married. It is period of maturity where majority of people settle
to real life situation including a decision to stay and take things serious thus when
communication is planned as a strategic tool to deliver financial performance, the marital status
wound enhance the desire of the participants to emphasize seriousness in communicating to
enable the organisation achieve its intended goals.

Table 4.3: Distribution of Respondents Marital Status

Valid Frequency Percent Valid Percent
Single 08 03 03
Married 193 77 77
Separated /Divorced 18 07 07
Widowed 33 13 13
Total 250 100 100
The results are indication that married participants influence the longevity decision hence the
performance of their organization.

4.2.3 Respondents Highest Level of Education

The participants were asked to indicate their level of education during the time they were
completing the questionnaire. The results are as shown in Table 4.4.

Table 4.4: Distribution of Respondents Highest Level of Education

Valid Frequency Percent Valid Percent
PRIMARY /Secondary 08 03 03
Certificate 13 05 05
Diploma 08 03 03
Bachelors Degree 155 62 62
Masters Degree 50 20 20
PhD 18 07 07
Total 250 100 100
35
The results in Table 4.4 indicate that primary/secondary school level scored 08 (03%), certificate
level scored 13 (05%), diploma scored 08 (03%), Bachelors Degree 155 (62%), Masters Degree
scored 50 (20%) while PhD level of education scored 18 (07%). This implies that with more
knowledge, skills and education training level, many participants undertook to tertiary education
that may improve their bureaucratic communication, manipulative communication, and
democratic communication adding value to their communication process in the institution.

That means having completed their bachelor degree level of education would have afforded the
participants more opportunities to be competitive and productive, in their communication in the
institution, conditions that are likely to influence organisational performance. Better education
would benefit not only the employees but also the employers this combined with employee
longevity may influence their productivity in the work place, these findings concur with the
findings of Brockmeier, Sermon, & Hope, (2005).

4.2.4 Respondents Ages Bracket

The respondents were asked how old they were at their previous birthdays. The results are as
shown in Table 4.5.

Table 4.5: Distribution of Respondents Ages at the time of completing the Questionnaires
Valid Frequency Percent Valid Percent
18-24 25 10 10
25-34 75 30 30
35-44 58 23 23
45-54 50 20 20
55Above 43 17 17
Total 250 100 100

The results in Table 4.5 indicate that the age bracket of participants ranged from 25-54 mainly.
This range scored the highest frequencies and percentages. The age bracket of 18-24 scored 25
(10%), 25-34 scored 75 (30%), 35-44 scored 58 (23%), 45-54 scored 50 (20%) while 55Above
scored 43 (17%). This implies that the modal age bracket was 25-44. It should be borne in mind
36
that employees age bracket determines job experience and likely to determine the tenure as
experience gained is a prerequisite of organisational communication with a given organization.

4.2.5 Employee Length of Stay with Current Employer

This study also sought to establish the length of time participants have taken in their current
designations; the results were as shown in Table 4.6.

Table 4.6: Frequency Distribution of Duration in the Organization

Duration in the post Frequency Percent Valid Percent
Valid recently appointed 200 80 05
Less than 15 years 50 20 18
15-35 years 00 00 40
35-45 years 00 00 00
45-Above years 00 00 00
Total 250 100 100

The respondents also indicated in Table 4.6 that they have been to the firm on the following
length of time: recently appointed accounted for 200 (80%), less than 10 years 50 (20%), 15-35
years 00 (00%), 35-45 years accounted for 00 (00%) while 45-Above category accounted for 00
(00%). The results also imply that the majority of the participants have been with their current
employer as for a term less than 15 years.

This period is a factor not enough for employees to acquire artistic skills necessary for effective
organisation communication such as listening, writing and speaking experience for they have
gone through little trainings and development, undergone little challenges necessary for
performance improvement in the institution. That if the communication has effects on financial
performance of the institution, then there would be non-target achievements.

4.3 Organisation Performance

37
The performance was measured on client loyalty, profitability including returns on capital
employed, net profit margin, and net profit retained as well as the revenue growths. These items
were tested n 5-points scale of measure and the results are presented in the section that follows:

4.3.1 Level of Organisational Performance

The section sought to determine the performance level of the case organization in this study. The
results are as shown in Table 4.7.

Table 4.7: Level of Organisational Performance

Level Frequency Percentage
Valid Leading Performance 13 05.0
Strong Performance 25 10.0
Solid Performance 50 20.0
Building Performance 163 65.0
Total 250 100.0

The results in Table 4.7 shows that at the leading performance level represented a 05.0% (13),
strong performance level 10.0% (25), solid performance level 20.0% (50), building performance
level 65.0% (163) and not meeting expectations level of performance accounted for 0.00% (00).
This implies that organisational performance is at its very performance building level as majority
of participants indicated. This means effective communication is a reflection of a n environment
favourable for performance in this institution, in which communication activities are done to
build on performance and effectively prioritize work thus contributes to the overall objectives of
the institution and or the organization thereby achieving improvement in several critical areas
such as profitability and growth.

4.3 Organisational Financial Performance

38
Managers can improve their organisations performance significantly by communicating with
their staff and involving them in decisions. This also improves overall employee satisfaction and
productivity. The financial performance of this institution was measured on two indicators:
profitability and revenue growth. The institution was rated as poor, low, average or high
performance in its profitability and revenue growth measures.
Poor Level of Performance= 0-3% lower than the industry average
Low Level of Performance=4-5% lower than the industry average
Average Level of performance= 5-10% equal to the industry average
High Level of Performance= 10-Above the industry average

The elements of profitability Performance were returns on equity and net profit margin while
revenue growth was measured on percentage number of sales volume in monetary terms. These
items were tested n 5-points scale of measure and the results are presented in the section that
follows:

4.3.1 Organisational Financial Performance Dimensions

It was important to identify the components of Financial Performance in ht institution under
study. There were three financial performance dimensions, which are returns on equity, net profit
margin, and revenue growth. The first two measures profitability performance while the last
element measures general growth in revenue collection. The participants were asked to state their
level of agreement or disagreement with the statement that the organisational communication has
influenced each dimension of the financial performance in the institution. The results are as
shown in Table 4.8.

Table 4.8: Responses to Organisational Financial Performance Dimensions

Item Disagree Disagree Disagree Agree Agree Agree
39
 Strongly moderately slightly slightly moderately Strongly
Organisational Financial Performance (OFP)

Returns on Equity 00%(00) 00%(00) 01%(03) 55%(138) 34%(85) 07%(18)

Net Profit Margin 05%(13) 00%(00) 10%(25) 35%(88) 25%(63) 25%(63)
Revenue Growth 00%(00) 00%(00) 00%(00) 10%(25) 47%(118) 40%(100)
Overall OFP 03%(08) 02%(05) 14%(35) 28%(70) 40%(100) 13%(33)

The results in Table 4.8 show that returns on equity scored 55% on agree slightly, agree
moderately accounted for 34% while agree strongly scored only 7%. This was an indication that
majority of the sampled participants were of the opinion that there is the return on equity (ROE)
is in the average level of performance that means it falls within the range of 5-10% as the
industry average. The results for net profit margin show that slightly agree accounted for 35%,
agree moderately accounted for 25% while agree strongly scored only 25%. This was an
indication that majority of the sampled participants were of the opinion that there is an average
level of net profit margin equal to 5-10% of the industry average. This implies that the financial
performance measured by net profit margin falls within the average level of the industry. These
findings agree with the findings of Dyduch, (2008) who found out that some institutions
although effectively communicate had little activities on their profitability and revenue collection
strategies.

Finally the results also indicate that revenue growth accounted for 10% on slightly agree, 47% on
moderately agree and 40% on very much agree that the revenue collection growth is above the
industry average hence falls within the high level of performance indicator 10-Above the
industry average. This implies that there majority of the sampled participants were of the opinion
that revenue growth activities are moderately and highly in the growth path. This infers that the
studied institution has strong concern to its revenue growths; these findings are in agreement
with the findings of Kuratko D. F., Hornsby, J. S., and Covin, J. G., (2014) who also found out
that Revenue Growth is an important element of Organisational Financial Performance and
therefore corporations ensure that it has high level of prevalence.

4.3.2 The Mean Scores on Organisational Performance Dimensions

There are three indicators used to measure Organisational Performance in terms of Bureaucratic
Communication, Net Profit Margin, Revenue Growth and Strategic Alignment that determines

40
the firms strong desire to improve on its Organisational Performance activities. The higher the
mean and low standard deviation indicates a moderately high and stable Organisational
Performance activity level in the sampled listed firms while highest mean with low standard
deviation implies the moderately high level of Organisational Performance and the small mean
and large standard deviation implies low level of Organisational Performance activities in the
sampled listed firms. The results are as shown in Table 4.9.

Table 4.9: Overall Mean Scores on Organisational Performance and its Indicators
N Mean Std. Dev
OFP Activities 200 4.6364 .10045
Return on equity (ROE) 200 2.0123 .13213
Net Profit Margin 200 3.1284 .21457
Revenue Growth 200 3.6699 .11482

Results in Table 4.9 show the descriptive statistics of the three indicators of Organisational
Performance level as determined by the four components. The mean scores for each indicator
ranged from 2.0123(SD = .13213) to 4.6364 (SD = .10045). Return on equity (ROE) of the firm
had the highest mean and least deviation, followed by Revenue Growth activities of the firm with
a mean of 3.6699 and standard deviation of .11482 and lastly was Net Profit Margin of the firm
with a mean of 3.1284 and a standard deviation of .21457. Overall, the item mean for
Organisational Performance was 4.6364 (SD = .10045), which was slightly below average. This
implies that there is high level of concentration on Return on equity (ROE) and strategic
alignment activities in the sampled firm as reported by the participants. These results concur with
that of Kabiru and Sakiyo, (2013) show that the overall mean (1.83) of all items indicate low
level of competence by the two groups of respondents indicating that firm performance activities
are at their average level and a desire to achieve above average outcomes is yet to be realised.

4.3.3 Overall Performance Ratings

This question sought to establish the level of Organisational Performance given that there is
indication that the Organisational Performance sampled organisation. The overall performance of
the regional departments of KRA were rated based on 5-performance ratings that included
41
leading performance, Average Level of Performance , solid performance, Poor Level of
Performance and not meeting expectations. The results are shown in Table 4.10.

Table 4.10: Organisational Performance Level

Level Frequency Percentage
Valid High Level of Performance 25 10.0
Average Level of Performance 150 60.0
Low Level of Performance 63 25.0
Poor Level of Performance 13 05.0
Total 250 100.0

The results in Table 4.10 shows that at the High Level of Performance level represented a 10.0%
(25), average level of performance level 60.0% (150), low level of performance level 25.0%
(63), poor level of performance level 05.0% (13) and not meeting expectations level of
performance accounted for 0.00% (00). This implies that organisational performance is at its
average level of performance level, an indication of achievement of 5-10% equal to the industry
average as majority of participants indicated. This means communication influence could be the
outcome of this level of performance and hence the desire for effective communication to
improve on this level to move above industry level which is considered fair performance.

4.4 Corporate Communication

This study pursued the independent variable of Organisational Communication (OC) with four
dimensions that is: Bureaucratic Communication (BC), Manipulative Communication (MC), and
Democratic Communication (DC). This independent variable was considered important in
enhancing profitability increases and revenue generation and collection growth of the institution
under study. Therefore the communication characteristics such as bureaucratic communication
(BC), Manipulative Communication (MC), and Democratic Communication (DC) engagement in
corporate activities are considered to influence the return on equity (ROE) of the institution.

4.4 Bureaucratic Communication

42
Organisational Communication was measured using four components. These included:
Bureaucratic Communication, Manipulative Communication, Democratic Communication
stability and cost effectiveness to determine performance of an organization measured on a 5-
point Likert scale and a multifactor questionnaire. These components are presented in the
sections that follow:

4.4.1 Bureaucratic Communication (BC)

The study sought to determine the bureaucratic communication (BC) in the structure of the
Organisational Communication (OC). This was important to this study as it helped to understand
the way the bureaucratic communication is where official information conveyed in a formal tone,
information flow is partially restricted or directed, superior sub-ordinate relationship with
employee participation not considered and full utilisation of partially received information and
how this influences the financial performance. The results are as shown in Table 4.11.

Table 4.11: Distribution of the Bureaucratic Communication (BC)

Bureaucratic Communication (BC) Frequency Percentage
Official Information Conveyed in a formal tone 175 70.0%
Information flow is partially restricted or directed 13 05.0%
Superior Sub-ordinate Relationship with employee
participation not considered 40 16.0%
Full Utilisation of partially received information 20 08.0%
Total 250 100%
The results in Table 4.11 show that it involves the official information conveyed and in a formal
tone 70% (175) of the sampled participating respondents, 05.0% (13) consisted of the form that
information flow is partially restricted or directed, 16.0% (40) of the sampled participants
indicated that superior sub-ordinate relationship with employee participation not considered
while 08.0% (20) of the sampled participants indicated that full utilisation of partially received
information. This implies that majority of the participants indicted that the bureaucratic
communication involved mainly official information conveyed and in a formal tone. These
findings are consistent with Ledgerwood, (2006) recommendation that bureaucratic

43
communication should always keep its communication process official with official tone and
little participation of employees especially the sub-ordinates.

4.4.2 Elements of Bureaucratic Communication (BC)

The results in descriptive statistics are displayed in Table 4.12 with variables reflecting influence
of elements of Bureaucratic Communication (BC).

Table 4.12: Descriptive Statistics for Elements of Bureaucratic Communication (BC)

Variable N Range Min Max Mean S.D. Var
Stat Stat Stat Stat Stat Std. Error Stat Stat
BC 250 80.45 -38.0 69.00 4.133 1.17 11.15 0.240
Official Information
Conveyed in a formal tone 250 4.77 3.54 5.26 4.100 0.551 0.624 0.400
Information flow is partially
restricted or directed 250 5.96 1.94 2.74 7.965 0.667 1.177 2.330
Superior Sub-ordinate
Relationship with employee
participation not considered 250 7.33 3.18 3.57 0.314 0.581 0.264 0.615
Full Utilisation of partially
received information 250 8.12 4.90 6.25 7.451 0.691 0.180 0.360

The results from Table 4.11 show that the Bureaucratic Communication (BC) has shown a
moderate. It shows a mean performance of almost 4.13%, the maximum reported influence is
around 69% and the minimum is -38.0% with deviation of 11.15 between components. The mean
of the official information conveyed in a formal tone is 4.100, with the maximum and minimum
are 5 and 4 respectively. The official information conveyed in a formal tone shows an experience
of annual frequencies of a maximum of five times the influence in the total degree of influence
of Bureaucratic Communication (BC). The mean of the official information conveyed in a formal
tone is 55.1%, which is 55.1% of influence of the total influence of Bureaucratic Communication
(BC) on financial performance leaving the rest 44.9% be influenced by other factors.

The information flow is partially restricted or directed shows an experience of annual

frequencies of a maximum of three times influence with a minimum of two levels of experiences.
This implies that information flow is partially restricted or directed registered quite a small
44
number of influences. The mean of information flow is partially restricted or directed influence is
only 66.7%, which is 66.7% of the bureaucratic communication influence on financial
performance activities.

The superior sub-ordinate relationship with employee participation not considered indicates an
experience of annual frequencies of a maximum of four times and a minimum of three times the
level of influence. This implies that the superior sub-ordinate relationship with employee
participation not considered registered quite a moderate level of influences on the bureaucratic
communication effects on organisational communication approaches to financial performance.
The mean of superior sub-ordinate relationship with employee participation not considered is
58.1%, which is 58.1% of the total bureaucratic communication influence on financial
performance of the institution.

The full utilisation of partially received information indicates an experience of annual

frequencies of a maximum of six times and a minimum of five times of level of influence. This
implies that full utilisation of partially received information registered quite a large level of
influence of the total bureaucratic communication influence on financial performance. The mean
of full utilisation of partially received information of the bureaucratic communication is only
about 69.1%, which is 69.1% of the financial performance.

4.4.1.1 Effects of Bureaucratic Communication (BC) on financial performance

The study sought to determine the influence of Bureaucratic Communication (BC) on the
financial performance. This was important to this study as it helped to understand the nature in
which Bureaucratic Communication (BC) as a dimension of independent variable has an effect
on the dependent variable. The results are as shown in Table 4.13.

The results in Table 4.13 show that the statement that the current bureaucratic communication
affects the financial performance had a mean score of 4.28 and a standard deviation of 0.28, the
next statement that the board meetings are held regularly during the year to review its financial
performance and operations had a mean score of 4.33 and a standard deviation of 0.23, next was

45
the item that the board considers strategic matters and other issues that impact on the financial
performance scored a mean average of 4.11 and a standard deviation of 0.27.

Table 4.13: Distribution of Bureaucratic Communication (BC) Statements

Statement Mean Standard Dev.
The current Bureaucratic Communication (BC) affects the corporate
entrepreneurship performance 4.28 0.28
The board meetings are held regularly during
the year to review its financial performance
performance and operations 4.33 0.23
The board considers strategic matters
and other issues that influence the
financial performance 4.11 0.27
Decision making processes are quick and fast in
response to new opportunities in the market 4.29 0.22
Board members usually avail themselves to
support management on areas of their entrepreneurial
expertise and experience 4.18 0.24
The board is effective at improving
institutional culture 4.24 0.23
The management undertakes self-evaluation and review
its performance in areas of entrepreneurship 4.10 0.25

The other item was that the decision making processes are quick and fast in response to new
opportunities in the market with a mean average of 4.29 and standard deviation of 0.22; also the
item that board members usually avail themselves to support management on areas of their
entrepreneurial expertise and experience scored a mean average of 4.18 and a standard deviation
of 0.24 and on the mean score of 4.24 and standard deviation of 0.23 was reported on the
statement that the board is effective at improving entrepreneurial culture in the firm, finally on
the statement that the board undertakes self-evaluation and review its performance in areas of
entrepreneurship reported 4.10 and 0.25mean and standard deviation scores respectively.
46
This is an indication that bureaucratic communication affects the financial performance as shown
by mean of 4.10 to 4.33 of the items of measure, the communication channel through
bureaucracy forces only official information sharing, this can have influence the financial
performance as shown by mean of 4.11, such communication Board members usually avail
themselves to support management on areas of their entrepreneurial expertise and experience as
shown by mean of 4.28, the board is effective in improving entrepreneurial culture of the firm as
shown by mean of 4.24, and that the board undertakes self-evaluation and review of its
performance as shown by mean of 4.10. These findings are in agreement with the findings of
Muriri and Ngugi, (2014), they found out that Bureaucratic Communication (BC) has an impact
on financial performance.

4.4.2 Manipulative Communication (MC)

Effective Organisational Communication (OC) seeks to ensure that there are transparent and
efficient mechanisms for monitoring and disclosing the efficiency and effectiveness with which
those entrusted to board of directors use entrusted resources; and that they account for
stewardship (Gatamah 2000). Manipulative Communication (MC) refers to the size of the board
and the mix of different directors demographics (insiders, outsiders, male, female, foreign or
local) and the degree of affiliation directors have with the corporation (Zahra and Pearce, 1989;
Maassen, 1999). The results in descriptive statistics are displayed in Table 4.18 with variables
reflecting influence of elements of Manipulative Communication (MC).

The results from Table 4.18 show that the Manipulative Communication (MC) has shown a large
deviation among the listed firms sampled. It shows a mean performance of almost 4.88%, the
maximum reported influence is around 68% and the minimum is -55.8% with deviation of 10.24
between firms sampled for this study. The mean of composition of CEO on the Board is 3.231,
with the maximum and minimum are 4 and 3 respectively. The inclusion of CEO inclusion on the
Board implies that the expertise and experience of the CEO is sought by the board to provide
corporate management direction, it shows an experience of annual frequencies of a maximum of
four times board member participation in matters of financial performance. The mean of CEO

47
inclusion on the board is almost 68.1%, which is 68.1% of the financial performance leaving the
rest 42.4% be influenced by other factors.

4.8 Effects of Organisational Communication on Organisational Performance

The study sought to determine the effects of Organisational Communication on Organisational
Performance. Analysis of the relationship of ET variables and Organisational Performance (OP)
variables was performed using the data from the sample. To contrast the hypothesis, an analysis
of mean difference, R of Pearson, and multiple regression analysis was tested. Different
statistical techniques were used in function of the type of variables quantitative or qualitative and
the goals of the study. The sections include the results of descriptive statistics, following by
correlation analysis, and the multiple liner regression. The results are presented in the sections
that follow.

4.8.1 Descriptive Statistics

The results in descriptive statistics, including the pooled correlation matrix, are displayed in
Table 4.35. The variables in the table reflect the one-year lag between the independent variables
and the dependent variable.

Table 4.35: Descriptive Statistics for Pooled Data

Variable N Range Min Max Mean S.D. Var
Stat Stat Stat Stat Stat Std. Error Stat Stat
1. OFP 200 109.80 -69.8 44.00 5.788 1.12 12.30 124.733
ROE 200 4.19 3.15 4.45 3.469 0.576 0.598 0.420
NPM 200 6.99 1.98 2.58 8.000 0.413 1.147 2.546
RG 200 0.15 0.87 0.15 0.414 0.181 0.179 0.362
2. OC 200 115.80 48.8 72.00 4.79 1.10 18.30 144.761
BC 200 3.12 6.99 11.98 6.369 0.696 0.557 0.319
MC 200 0.99 0.00 0.99 0.497 0.569 0.190 0.359
48
 DC 200 7.99 3.98 11.98 7.960 0.687 1.566 2.446

Table 4.35 shows the descriptive statistics. It is clear from Table 4.35 that the Organisational
Performance (OP) has shown a large deviation as reported by participants in this study. It shows
a mean performance of almost 5.79%, the maximum reported performance is around 44% and
the minimum is -69.8% with deviation of 12.30.

The mean of return on equity (ROE) is 3.5, with the maximum and minimum are 4 and 3
respectively. The return on equity (ROE) dimension of the organisational financial performance
portrays an experience of annual frequencies of a maximum of four times. Therefore, it is clear
that the return on equity (ROE) have recorded quite a large number of performance activities on
average. The mean of return on equity activities is almost 57.6%, which is 57.6% of the
organisational performance leaving the rest 42.4% be shared among remaining dimensions of
organisational performance.

The net profit margin (NPM) dimension of the organisational financial performance portrays an
experience of annual frequencies of a maximum of three times. This implies that net profit
margin (NPM) registered quite a small number of entrepreneurial activities in average. The mean
of net profit margin (NPM) activities is only about 41.3%, which is 41.3% of the organisational
financial performance. In relation to Organisational Communication, results in Table 4.35 show
the descriptive statistics. It is clear from Table 4.35 that the Organisational Communication (OC)
has shown a large deviation. It shows a mean effect of almost 4.79%, the maximum reported
influence is around 72.0% and the minimum is 48.8% with deviation of 18.30 between firms.

With regards to Bureaucratic Communication, results in Table 4.35 show that the mean of
Bureaucratic Communication is approximately 6.369 with maximum 11 competencies and
minimum 6 competencies. The mean of Bureaucratic Communication activities is only about
69.6%, which is 69.6% of the Organisational Communication level of influence.

The Manipulative dimension of the Organisational Communication portrays an experience of

influence level of a maximum of 6 times magnitude on the Organisational Communication
49
activities. This implies that Manipulative Communication registered quite a moderate average
level of influence on average. The mean of kills Support System activities is only about 56.9%,
which is 56.9% of the Organisational Communication level of influence.

The Democratic dimension of Organisational Communication portrays an experience of

influence level of a maximum of 12 times magnitude on the Organisational Communication
activities that are considered influential to the firm performance. This implies that Democratic
Communication registered quite a very high level of influence on average. The mean of
Democratic Communication activities is only about 68.7%, which is 68.7% of the Organisational
Communication level of influence.

4.8.2 Relationship between Organisational Communication and Organisational Financial

Performance
The study identified various items of Organisational Communication that were measured against
the organizational performance. The items were measured on a Likert scale of 1-5. That is the
degree of agreement; strongly agree, disagree neutral strongly agree, and agree. The item score
on the level of agreement measure indicated the scale of its probability of it being main
component of employee performance as influenced by tenure. The percentage of the degree of
agreement was converted into index of measuring the relationship between effects of the
component and performance outcome. Hence, the probabilities were calculated against each item
and the results summed up then divided by the total items to give the total probability of the
whole organizational performance.

To measure the effects of Organisational Communication a multifactor components to

performance, Bureaucratic Communication, Manipulative Communication, Democratic
Communication stability and cost effectiveness questionnaire measured on a Likert scale of 5-
points was used, there were 26 items for these variable developed by Jun et. al., (2006) was used.
The items were measured on a 5-point Likert scale, which ranges from strongly disagree (1) to
strongly agree (5). Different performance measurements have different effects on the
Organisational Communication. This research used multifactor questionnaire on

50
analysis of organizational performance outcomes regression analysis. The outcomes
construct comprises of 26 measurement items.

This study used regression analysis to find out the relationships between predictive variable and
criterion variable. Regression analysis result as shown in Table 4.36 indicates that tenure has
significant connection with organizational performance success or failure.

Table 4.36: Effects of Organisational Communication and Organisational Performance

Unstandardized Standardized
Coefficients Coefficients
Model Std. Error Beta t-value Sig. R2
Constant
Organizational 2.727 .210 10.317 .000
Performance -.199 .097 -.165 -2.178 .031 .027
Bureaucratic Communication 3.227 .273 11.5600.000
-.171 .068 -.198 -2.669 .008 .039
Manipulative Communication 2.069 .232 9.350 0.000
.055 .067 .062 .816 .416 .004
Democratic Communication 3.221 .332 10.457 .000
.659 .068 .611 .963 .028 .019

Regression of Bureaucratic Communication on performance as shown in Table 4.36 indicates

that Bureaucratic Communication has positive relationship with organisational performance
outcomes. That means where there is high level of bureaucratic communication involvement
there is high level of organisational financial performance and vis avis.
Regression analysis of Manipulative Communication and Democratic Communication influence
organizational financial performance as shown in Table 4.36 indicates that Manipulative
Communication and Democratic Communication have positive relationship with financial
performance. It means that the high level of return on equity (ROE), and net profit margin, the
high level of performance recorded.

4.8.3 Correlation Analysis

51
The correlations of the independent variables of Bureaucratic Communication, Manipulative
Communication, and Democratic Communication and the dependent variables Organisational
Performance were tested and their significant relationship recorded. This was important to help
understand the relationships that exist between the independent and dependent variables. The
results are as shown in Table 4.37.

Table 4.37: Correlations of Overall Variables

OFP BC MC DC
OFP Pearson 1 0.68** 0.708** 0.76**
Correlation
Sig. (2 tailed) 0.007 0.000 0.002
N 200 200 200 200
BC Pearson 0.68** 1 -0.55* 0.510**
Correlation
Sig. (2 tailed) 0.007 0.016 0.006
N 200 200 200 200
MC Pearson 0.708** -0.55** 1 0.267
Correlation
Sig. (2 tailed) 0.000 0.016 0.66
N 200 200 200 200
DC Pearson 0.76** 0.78** 0.267 1
Correlation
Sig. (2 tailed) 0.002 0.006 0.66 0.018
N 200 200 200 200
**Correlation is significant at the 0.01 level (2 tailed)
*Correlation is significant at the 0.05 level (2 tailed)
The results in Table 4.37 summarize the correlation between the independent variables and
dependent variable. It displays that Bureaucratic Communication, Manipulative Communication;
Democratic Communication and cost effectiveness are all significantly related to organisational
performance (OP). This relationship is either positive or negative. The components of
Organisational Communication of Bureaucratic Communication and cost effectiveness both have
significantly negative relationships. The results shows that Bureaucratic Communication is
negatively associated with organisational performance with summary of Pearson Correlations
show that Bureaucratic Communication was positively and significantly correlated to
performance of the case organisation (r=0.687, <0.05).

Thus Bureaucratic Communication had 68.7% positive relationship with organizational

performance. Manipulative Communication was the second component to be positively related
52
with performance (r = 0.708, <0.05) an indication that Manipulative Communication had 70.8%
significant positive relationship with performance. Democratic Communication was significantly
associated with performance as shown by (r = 0.721, <0.05) implying that Democratic
Communication had a 72.1% positive relationship with performance.

4.8.4 Multiple Liner Regression Analysis

The result of regression analysis for both linear and multiple regression analysis provides the
functions of the equation that represents the best prediction of a dependent variable from several
independent variables. This method is used when the independent variables are correlated with
one another and with the dependent variable. The following regression equation is estimated as
follow: OFP = 0 + 1BC + 2MC + 3DC + ..2

Where: OFP: Organisational Financial Performance

0: Constant
BC: Bureaucratic Communication
MC: Manipulative Communication
DC: Democratic Communication
: Error term.
Table 4.38: Summery of the Regression Model
Model R R2 Adjusted Std. Error Change statistics
R2 of the R2 F df1 df2
Estimate Change Change sig. f
Change

1 0.877a 0.769 0.045 13.3200457 0.769 2.393 4 95 0.078

a
. Predictors: (Constant), BC, MC, DC

Table 4.38 shows multiple regressions which is related to OFP as dependent variable. The Table
shows the influence of independent variable BC, MC, and DC on dependent variable OFP. The
Table indicates that the independent variables determine 76.9% of the OP variance. This means
that the other factors influence OFP by 23.1%.

4.8.5 Multiple Regression Analysis

53
A Multifactor linear regression model was used to predict organizational performance in the
study. The prediction was carried out basing on the effect of the three independent factors:
Bureaucratic Communication, Manipulative Communication, and Democratic Communication.
In addition, the b coefficients for each independent variable generated from the model was
subjected to a t-test. The multiple regression analysis was evaluated to determine any effects of
the independent variables on the dependent variable. This was important since it was
necessitating the test of hypotheses on individual Organisational Communication dimensions that
included Bureaucratic Communication (BC), Manipulative Communication (MC), and
Democratic Communication (DC). The results are as shown in Table 4.39.

Table 4.39: The Coefficients of Multiple Regression Analysis

Model Unstandardized Coefficient Standardized
Coefficients
Std. Error Beta t Sig.
(Constant) 12.103 8.907 1.359 0.177
BC 1.493 2.056 -0.074 -0.726 0.469
MC 1.194 4.501 0.026 0.265 0.791
DC 0.678 0.758 0.093 0.894 0.374
CE -14.768 5.950 -0.249 -2.482 0.015
a
. Dependant Variable OP
CE = 0 + 1BC + 2MC + 3DC +4OFP +
12.103+1.493BC+1.194MC+0.678DC-14.768OFP+
Table 4.38 shows the relationship between independent variables namely BC, MC, DC on
dependent variable OFP. Statically, there is significant relationship between four dimensions of
the OC mechanisms used in this study; BC, MC, DC, and OFP, on the Organisational Financial
Performance (OFP). It is clear that the increasing in the percentage of Organisational
Communication dimensions, OFP will increase although some components have decreasing
effects. If the Manipulative Communication increases by 1, the OP will decrease by about -14.8.
If Organisational Communication components BC, MC, DC, and OFP are equal to zero, OFP
will be 12.103 units of level of performance.

4.9 Hypotheses Testing

The effects of OC on OFP were evaluated based on dimensions of Bureaucratic Communication,
Manipulative Communication, and Democratic Communication. These were evaluated against
54
the indicators of Organisational Financial Performance in order to test the influence on
dimensions, various regressions were done to find out if the combined effects were sufficient or
not to support the hypothesis. Thus, the first hypothesis (H01) stated in the null form is as
follows: There is no relationship between Bureaucratic Communication and Organisational
Performance.

Hypothesis one sought to establish the effects of Bureaucratic Communication on Organisational

Performance. This hypothesis was tested by regressing BC and Organisational Performance
guided by the equation: = 0+1BC: Where BC represented Bureaucratic Communication and
denotes OFP. The results of the regression are presented in Table 4.40.

Table 4.40: Effect of Bureaucratic Communication of Organisational Communication on

Organisational Performance
Model Summaryb
2
Model R R Adjusted Std. Error of the Durbin-Watson
R2 Estimate
1 0.782a .611 .610 .1047843 1.597
a
. Predictors: (Constant), HR Functional Competency, Technical Competency, Behavioural Competency
b
. Dependent Variable: OP

Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients t Sig.
Std. Error Beta
1 (Constant) .687 .044 -16.015 .000
BC 1.249 .060 .782 20.901 .000
a
. Dependent Variable: OFP

= 0+1BC = .687+1.249BC
ANOVAa
Model Sum of Squares Df Mean Square F Sig.
1 Regression 4.797 1 4.797 436.858 .000b
Residual 3.052 200 .011
Total 7.849 120
a
. Dependent Variable: OFP
b
. Predictors: (Constant), BC

Residuals Statisticsa
Minimum Maximum Mean Std. Dev N
55
Predicted Value -.028314 .421485 .205132 .1311186 200
Residual -.4120858 .2454981 0E-7 .1045964 200
Std. Predicted Value -1.780 1.650 .000 1.000 200
Std. Residual -3.933 2.343 .000 .998 200
a. Dependent Variable: OFP

The results presented in Table 4.40 show that the effect of Bureaucratic Communication on OP
was significant negative (R= 0.687). This was an indication that Bureaucratic Communication
explained 61.1% (R2 =.472) of OP. The other variables in the firms explained the remaining
38.96%. The analysis from the model had the F value of 436.8. At p-value less than 0.05, the
findings thus were sufficient to support effects of Bureaucratic Communication on
Organisational Performance activity level, implying that Bureaucratic Communication had
statistically significant positive effects on Organisational Performance activity level. The results
indicate that there is a significant positive relationship between BC and Organisational
Performance activity level. The firm under study with longevity of tenure creating Bureaucratic
Communication score tended to have higher level of Organisational Performance activity. =
0+1BC = .687+1.249BC; if BC is zero will be 1.936 units level of Organisational
Performance activity performance while if BC is 10; will be 0.687+(1.249*10) which is equal
to 13.177 showing an increasing effect of BC on OP. The hypothesis that there is no relationship
between Bureaucratic Communication and Organisational Performance activity level was
therefore rejected. The results were consistent with the study conducted by Shleifer and Vishny
(1997) who reported that there is a negative relation between ownership concentration and firm
performance.

Second Hypothesis (H02)

The second objective of this study was to establish the effects of Manipulative Communication
on Organisational Performance Activity level from among the sampled departments. The effects
of Manipulative Communication were evaluated based on certain dimensions. These were
evaluated against the indicators of Organisational Performance activity level. To test the effect of
MC on Organisational Performance components, various regressions were done to find out if the
combined effects were significant or not to support the hypotheses. This resulted in the second

56
hypothesis (H02) stated that there is no relationship between Manipulative Communication and
Organisational Performance. Hypothesis two sought to establish the relationship between
Organisational Communication and Organisational Performance activity levels. This hypothesis
was tested by regressing Manipulative Communication and Organisational Performance guided
by the equation = 0+1MC Where MC represented Manipulative Communication and
denoted Organisational Performance Activity Level. The results of the regression are presented
in Table 4.41.

Table 4.41: Relationship between Manipulative Communication and Organisational

Performance
Model Summary
Model R R2 Adjusted Std. Error of the
2
R Estimate
1 .814a .662 .292 .53541
Predictors: (Constant), Role model and referral agent, common interest, Close friends and helpers, Respect
Competence and Challengers, inside/outside employees

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 9.173 1 1.529 5.333 .000b
Residual 16.340 200 .287
Total 25.513 120
a
. Dependent Variable: Organisational Performance
b
. Predictors: (Constant), Role model and referral agent, common interest, Close friends and helpers, Respect Competence and
Challengers, inside/outside employees
Coefficientsa
Model Un-standardized Standardized Significance
Coefficients Coefficients t-value p-value
Std Error Beta
(Constant) .328 .117 3.030 .051
Manipulative Communication .623 .111 .654 4.564 .000
a
. Dependent Variable: Organisational Financial Performance activity level
b
. Predictors: (Constant), Role model and referral agent, common interest, Close friends and helpers, Respect
Competence and Challengers

= 0+1MC = .3283+.623MC

57
The results from Table 4.41 are observation that there is a significant positive relationship
between Manipulative Communication and Organisational Performance Activity level (R=.814).
This was an indication that Manipulative Communication explained 66.2% (R 2= .662) of
Organisational Performance activity level. The other variables affecting Organisational
Performance activity level explained the remaining 33.8%. The analysis from the model had the
F value of 5.333 at p-value <0.05, the findings were sufficient to support the relationship
between Manipulative Communication and Organisational Performance activity level, inferring
that Manipulative Communication had statistically significant positive effects on Organisational
Performance activity level.

The results indicate that there is a positive significant relationship between MC and
Organisational Performance activity level. The profit maximization, Cost management, problem
solving and Client loyalty ratio increases as MC increases. Therefore given the equation =
0+1MC= .3283+.623MC when MC is zero will be equal to 0.3283 and when MC is increased
to 10 units then will be .3283+.623(10), which will be 6.5583 units of OFP level of activity
showing an increasing effects of MC on OFP. Therefore the null hypothesis that there is no
relationship between Manipulative Communication and Organisational Performance is rejected.

Although in the literature there are varied results but this finding concurs with the finding of
Berger and Lubrano, (2006) who found that firms with larger boards that are weak, MC tend to
have higher desire for improved Organisational Performance activities, which could be to
leverage on their weak performance areas. They found out that Manipulative Communication as
a dimension for OC which are more entrenched due to effective communication process in the
organisation.

Third Hypothesis (H03)

The third objective of this study was to establish the effects of Democratic Communication on
Organisational Performance activity level. This effect of Democratic Communication was
evaluated based on Beginning Environment, organisational environment, managerial
environment and individual environment, while Organisational Performance was evaluated by
considering return on equity (ROE), learning, growth and processes, and client loyalty. This
58
generated the third hypothesis (H03) which stated that there is no association between
Democratic Communication and Organisational Performance activity level. Hypothesis three
sought to establish the influence of Democratic Communication on firm performance. This
hypothesis was tested by regressing Democratic Communication and Organisational
Performance activity level guided by the equation = 0+1DC where DC represented
Democratic Communication and denoted CE. The results of the regression are presented in
Table 4.42.

Table 4.42: Effect of Democratic Communication on OP

Model R R2 Adjusted Std. Error of the
2
R Estimate
1 -.888a .789 .157 .62228
a.
Predictors: (Constant) Beginning Environment, organisational environment, managerial environment, and
individual environment

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 4.054 1 4.054 10.470 .002a
Residual 19.361 200 .387
Total 23.416 120
a
. Predictors: (Constant) Beginning Environment, organisational environment, managerial environment, and
individual environment
b
. Dependent Variable: Organisational Performance activity level
Coefficients
Model Un-standardized Standardized Significance
Coefficients Coefficients t-value p-value
Std Error Beta
(Constant) 1.996 .712 2.804 .007
Democratic Communication .940 .256 .651 3.666 .001
a
. Dependent Variable: Organisational Financial Performance (OFP)
= 0+1DC = 1.996+.940DC

The results of analysis to establish the effects of Democratic Communication dimensions on

Organisational Performance activity level are shown in Table 4.42. Results indicate a significant
negative relationship between Democratic Communication and OFP (R= -.888). The results

59
indicate that a relationship exists between Democratic Communication and OP. Democratic
Communication as a variable explained 78.9% (R= -.789) of Organisational Performance activity
level the remaining 21.1% explained by other variables. The corresponding F value for the model
was 10.470 at p-value greater than 0.05 (p<0.5), hence implying that Democratic
Communication variable was statistically significant effects on Organisational Performance level
of the firms. Given the equation = 0+1DC = 1.996+.940DC; when DC is zero will be 1.996
units, while when DC is increased to 10 units, then will be 11.396 units of Organisational
Performance activity level. This shows increasing effects of DC on OFP. Hence the hypothesis
that there is no relationship between Democratic Communication and Organisational
Performance activity level is rejected.

These findings are in agreement with the findings of Pinegar and Wilbricht (1989) who found out
that there is a significantly negative relationship between Democratic Communication and
Organisational Performance activity level as measured by OP. The results were consistent with
the study conducted by Pinegar and Wilbricht (1989), they argued that Democratic
Communication can be used by increasing innovative ideas, risk taking portfolio, Client loyalty
skills, without increasing agency costs and this will force the managers to invest in profitable
ventures that will benefit the shareholders, because if they decide to invest in non-profitable
ventures they will be unable to contain the composition of the board that benefits the firm.

60