BEYOND AGGREGATE PERFORMANCE: EXAMINING ORGANIZATIONAL CULTURE, STRUCTURE, AND INNOVATION STRATEGY THROUGH THE BALANCED SCORECARD FOR PAKISTAN’S HOSPITALITY SECTOR

Abstract

This study focuses on the impact of organizational culture, structure, and innovation strategy on four aspects of Balance Scorecard (BSC) performance of hotels operating in Pakistan. The research is based on survey data gathered from 255 managers working in the hotel industry in Pakistan. It uses structural equation modeling on Amos to examine these relationships. The results show that there is a positive impact of innovation strategy on the four performance dimensions. The impact of organizational culture on financial performance, internal business performance, and learning and innovation performance is significant and positive, but its effect is not significant on customer performance. Furthermore, the organizational structure significantly and positively predicts financial, customer, and internal business performance but not learning and innovation performance. Thus, the results indicate that organizational factors affect various performance dimensions in a differential manner. This study breaks organizational performance into four perspectives of the BSC, giving a more detailed understanding of the relationship between the organizational characteristics and performance in the hospitality sector. The study provides implications for hotel managers who want to match organizational culture, organizational structures and innovation strategies with specific performance targets. Specifically, it suggests that hotels must go for organic structure, adopt innovation strategy, and cultivate a culture that focuses on best management principles, and is employee centered as well as customer centered to bring out the best of BSC performance.