Service competency in shaping organisational culture and performance: SEM evidence

Abstract

Orientation: Non-bank financial institutions play a crucial role in economic development, but most studies on organisational culture and service competency focus on banking institutions.
Research purpose: To analyse the influence of service competency on shaping organisational culture and its impact on organisational performance, with job satisfaction as a mediating variable at non-bank financial institutions in West Sumatera.
Motivation for the study: Most previous studies place organisational culture as a determinant of service competency. This study adopts a new approach by analysing service competency to shape organisational culture and its impact on organisational performance by mediating job satisfaction.
Research approach/design and method: This quantitative study used structural equation model (SEM) with AMOS for data analysis, with a sample size of 246 employees at branch office non-bank financial institutions in West Sumatera, Indonesia.
Main findings: Service competency significantly affects organisational culture, which contributes to increasing job satisfaction. Job satisfaction influences organisational commitment, ultimately increasing organisational performance. However, organisational culture and service competency do not directly affect organisational performance but are mediated by job satisfaction.
Practical/managerial implications: Organisations should prioritise the development of service competency to foster a client-oriented culture. Moreover, cultural efforts must genuinely enhance job satisfaction to drive performance.
Contribution/value-add: This study contributes to the science of organisational behaviour and a new paradigm of the role of service competency in shaping organisational culture and improving organisational performance through job satisfaction.