Organizational culture and corporate performance in the ecuadorian environment

Tulcanaza Prieto, Ana Belén; Aguilar-Rodríguez, Iliana E.; Artieda, Carlos Article Organizational culture and corporate performance in the ecuadorian environment Administrative Sciences Provided in Cooperation with: MDPI – Multidisciplinary Digital Publishing Institute, Basel Suggested Citation: Tulcanaza Prieto, Ana Belén; Aguilar-Rodríguez, Iliana E.; Artieda, Carlos (2021) : Organizational culture and corporate performance in the ecuadorian environment, Administrative Sciences, ISSN 2076-3387, MDPI, Basel, Vol. 11, Iss. 4, pp. 1-17, https://doi.org/10.3390/admsci11040132 This Version is available at: https://hdl.handle.net/10419/275250 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Aguilar-Rodríguez and Carlos Artieda   Citation: Tulcanaza-Prieto, Ana Belén, Iliana E. Aguilar-Rodríguez, and Carlos Artieda. 2021. Organizational Culture and Corporate Performance in the Ecuadorian Environment. Administrative Sciences 11: 132. https://doi.org/10.3390/ admsci11040132 Received: 31 August 2021 Accepted: 29 October 2021 Published: 12 November 2021 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. Copyright: © 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). Escuela de Negocios, Universidad de las Américas, UDLA, Vía a Nayón, Quito 170124, Ecuador; [email protected] (I.E.A.-R.); [email protected] (C.A.) *Correspondence: [email protected] Abstract: This study examines how organizational culture influences corporate performance in the Ecuadorian service sector. The study employs four organizational culture features and twelve concepts for corporate performance using a self-designed online questionnaire, which were supplied to postgraduate students from academic programs at Universidad de Las Americas (UDLA) in Quito, Ecuador. The respondents were working as managers or employees in small Ecuadorian service firms. The operational items of the questionnaire to measure organizational culture and corporate performance were designed using the Denison model. The findings reveal a statistically positive relationship between organizational culture and firm performance. Moreover, involvement, adaptability, consistency, and mission affect the non-financial performance of the Ecuadorian service sector. Involvement is the critical determinant of the influence of organizational culture on corporate performance, while training shows the strongest association with organizational culture. This study provides a perspective on long-term organizational strategies, vision, and performance. Future research should include the characteristics of the studied firms to increase the effectiveness of the proposed model. Keywords: organizational culture; organizational performance; model of Denison 1. Introduction Organizational culture is viewed as the basis of knowledge management. It considers employees as the most vital asset of a firm because they directly contact customers and competitors. Therefore, employees might provide ideas for products and services that will be readily accepted by the market, generating high profits for companies (Mojibi et al. 2013). Generally, organizational culture is linked with the administrative area by developing models and theories according to strategic management to obtain better financial results (Deal and Kennedy 1982;O’Reilly and Chatman 1996;O’Reilly et al. 1991;Schein 1988). Cameron and Quinn (2006) argued that organizational culture is the main characteristic that distinguishes successful companies (Cameron and Quinn 2006), and when a firm shows a high level of culture, its organizational performance also increases (Denison 1990; Kirkman et al. 2016;Oberföll et al. 2018;Schein 1988). Previous studies developed different models of organizational culture. Denison’s model (1990) is based on the attitudes of employees. It suggests that an organization’s culture reflects cultural traits and administrative behaviors based on the beliefs and assumptions of the organization and its environment (Denison 1990). Denison and Mishra (1995) demonstrated that the relationship between organizational culture and firm performance depends on effectiveness measures. Therefore, each firm must establish its own cultural characteristics to achieve a specific performance (Denison and Mishra 1995). Denison (2003) proposed financial indicators as measures of organizational performance, while current research includes non-financial indicators as proxies for non-financial firm performance (Triguero et al. 2012) . The study analyzed the firm’s non-financial performance, including Adm. Sci. 2021,11, 132. https://doi.org/10.3390/admsci11040132 https://www.mdpi.com/journal/admsci Adm. Sci. 2021,11, 132 2 of 17 selection, training, evaluation, job stability, and others that have not been studied deeply in the Ecuadorian context. Previous investigations demonstrated a positive relationship between organizational culture and firm performance based on (1) effective alignment between strategy, structure, and culture (Bennett et al. 1994;Deal and Kennedy 1982;Denison and Mishra 1995), (2) sustained competitive advantage (Zhao et al. 2018), (3) clarity of organizational processes, goals, and routines (Sørensen 2002), (4) involvement, consistency, adaptability, and mission (Denison 1984;Denison and Mishra 1995), and (5) innovative ideas and the ability to transform these ideas into possible successful products (Porter and Kramer 2006;Schuldt and Gomes 2020;Tulcanaza-Prieto and Morocho-Cayamcela 2018). The purpose of this study was to identify the relationship between t organizational culture and corporate performance in the Ecuadorian service sector, using four criteria for organizational culture: involvement, adaptability, consistency, and mission (Denison 1984;Denison and Mishra 1995), and twelve factors for corporate performance: selection, training, evaluation, flexible remuneration, job design, bidirectional communication, job stability, individual-level performance, group-level performance, and organizational-level performance (Triguero et al. 2012). The findings revealed a positive and significant relationship between organizational culture and firm performance. Moreover, involvement is the most important factor of the organizational culture that influences corporate performance, while training has the strongest association with the organizational culture. This paper has several implications for employees, managers, and researchers. First, the non-financial performance model offers a link between what employees expect from and perceive about the organizational culture and what managers and stakeholders transmit as culture in a firm. Second, employees tend to be loyal to and satisfied with companies that demonstrate a cultural strategy; these firms invest more in cultural, social, and environmental activities. Therefore, managerial plans might strategically allocate financial and non-financial resources to promote organizational culture, which helps employees to feel protected by the firm, thereby potentially increasing profits. The rest of the paper is composed as follows. Section 2presents a literature review and describes the development of the hypothesis. Section 3illustrates the empirical design. Section 4defines the data collection procedure and presents the empirical findings. Section 5 presents the discussion part. Section 6exhibits the results, highlights the conclusions, and offers recommendations for future research. 2. Literature Review and Hypothesis 2.1. Organizational Culture Organizational culture is defined as the set of differentiated elements between organizations (Hofstede 1983;O’Reilly et al. 1991;Schein 1988), including customs, norms, rules, symbols, ideologies, beliefs, rituals, and myths (Gallivan and Srite 2005;Lee et al. 2016). Furthermore, it involves the collective mental programming of the members of a firm because it analyzes the members’ identity as an integral, historical, and social phenomenon, which reflects the history of the firm (Hofstede et al. 2010), showing that organizational culture communicates the identity of the firm’s members (Cheung et al. 2011;Marulanda and López 2018). Organizational culture is grounded in common practices, where employees adopt behaviors according to the symbols, heroes, and rituals that the firm represents, such as changes in the productivity and satisfaction of workers (Rossi et al. 2016). Therefore, organizational culture arises from the habitual practices shared by an organization’s members (De Mooij and Hofstede 2011). Similarly, a firm’s culture is the key to preserving its competitive advantage, which also integrates innovation, teamwork, response to the market, and the satisfaction of customers (Nazariana et al. 2017). Firm culture also includes company values, rules, and conduct with customers, business partners, suppliers, and stakeholders; thus, employees are conscious of their firm’s values and rules of conduct during their business activities (Nadanyiova and Durana 2019). Adm. Sci. 2021,11, 132 3 of 17 Models for the study of organizational culture were designed by (1) Denison (1984, 1990,1996,2003); (Denison et al. 1995,2006,2015), including four dominant characteristics to measure the organizational culture, involvement, consistency, adaptability, and mission; (2) Schein (1988), using artifacts/signs/symbols, values, and basic assumptions (Schein 1988), (3) Hofstede (1983,1999,2011); Hofstede et al. (2010), identifying six dimensions of cultural grouping that affect the behavior of societies and organizations (Hofstede 1983, 2011;Hofstede et al. 2010;De Mooij and Hofstede 2011); (4) O’Reilly et al. (1991), measuring the association between the values of the worker and the values of the firm (O’Reilly et al. 1991); and (5) Cameron and Quinn (2006), introducing four dominant types of culture (clan, adhocracy, hierarchy, and market) that influence organizational performance (Cameron and Quinn 2006). Fundamentally, Denison (1990) showed that cultural and administrative behavior arises from the beliefs and assumptions of the firm and its environment (Denison 1990), which are related to firm performance (Denison and Mishra 1995). Therefore, his model is represented by a circle, and its center denotes the firm’s beliefs and assumptions, presenting the center as the company’s heart (Hofstede 1999), and the area of the circle as the firm’s environment and its financial and non-financial performance. Similarly, the dimensions established by Denison (1990) directly influence the firm through: (1) involvement, referring to the ability of employees to work as a team and develop capabilities within the internal environment of the firm (e.g., empowerment, team orientation, and capabilities development); (2) consistency, showing that the behavior of employees is grounded in values, which create agreements and coordinates activities in the firm (e.g., coordination, integration, agreements, and values); (3) adaptability, suggesting the ability of firms to face changes in the environment and act in accordance with new customer demands (e.g., organizational learning, customer focus, creation of change); and (4) mission, defining the strategic objectives by the sense of the firm’s purpose and direction (e.g., direction, strategic intention, goals, objectives, and vision) (Denison 1996,2003;Denison et al. 1995, 2015;Denison and Mishra 1995;Schein 1988). The Denison model (1990) diagnosed firms’ profiles by identifying their cultural strengths and weakness, generating strategies that ensured effectiveness in the business world’s global and dynamic market (Mojibi et al. 2013). 2.2. Corporate Performance Corporate performance evaluates organizational decisions’ efficiency and effectiveness (Jones and Linderman 2014;Neely et al. 2005;Randhawa and Sethi 2017). Performance measurement is considered the most critical factor in a company (Koufopoulos et al. 2008;Tulcanaza-Prieto and Lee 2018). Performance management describes an integrated process between organization managers, employees, customers, the firm’s administration policies, corporate and functional objectives, and its strategies and goals (Bititci et al. 1997;Short et al. 2007). Therefore, firm performance measurement is a mediator variable between business innovation and management (Wang and Kim 2018). Firm performance improvement requires measurements through which to identify the level of organizational resources and their effect on business performance over a certain period (Madu et al. 1996), including financial, market, and innovation indicators (Slater et al. 2010). The measurement of a firm’s performance helps to develop its strategy because it includes the organizational objectives and the methodology to compensate managers (Tulcanaza-Prieto et al. 2020a) . Financial and non-financial indicators can be used to evaluate the performance of a firm. Financial firm performance is generally measured using the firm’s value from the financial statements reported by a company, which describe the benefits stemming from the firm’s shares by shareholders (Rouf 2015). The most common measures of financial firm performance are: return on assets (ROA), return on sales (ROS), return on equity (ROE), Tobin-Q, profit margin (PM), earnings per share (EPS), dividend yield (DY), price-earnings ratio (PE), sales-to-assets (STS), and expenses-to-sales (ETS) (Al-Matari et al. 2014). On the other hand, non-financial firm performance measures in- Adm. Sci. 2021,11, 132 4 of 17 clude combined indicators between individual, group, and organizational performance (Moyano-Fuentes et al. 2018). Moreover, non-financial performance involves increasing competitiveness through the promotion of sustainable competitive advantages over time (Alinejad and Anvari 2019) and employees’ intellectual capital; both conditions raise the organization’s performance (Barkat and Beh 2018). Non-financial metrics cannot be formulated in monetary units; instead, some measures are customer satisfaction, market share, category ownership, and new product adoption rate, among others (Atkinson 2000;Searcy 2012). 2.3. Organizational Culture and Corporate Performance Organizational culture is one of the determinants used to model behavior and performance through the collective efforts of individual members (Joseph and Kibera 2019). Moreover, cultural organization stabilizes individual behavior (Cooper et al. 2001), pulls organizational behavior in the direction desired by management (Giberson et al. 2009), and provides social control of behavior and beliefs (O’Reilly et al. 1991). Cultural organization might include corporate social strategies, which promote employee motivation as a communication channel within the company, exerting a positive impact on the approach to employees, effective personal management, and a reduction of personnel risk (Rozsa et al. 2021). Therefore, a firm’s success depends on the effective alignment between strategy, structure, and culture (Bennett et al. 1994). Empirical findings demonstrated a positive relationship between organizational culture and firm performance (Denison and Mishra 1995), meaning that there is consistency between strong culture and superior performance because it involves the alignment between strategy structure and other supportive organizational resources, suggesting that a strong culture involves the majority of an organization’s members through the adherence to common values and beliefs, which are promoted by leaders of the firm (Deal and Kennedy 1982). Corporate culture generates a sustained competitive advantage and, thus, sustainable financial performance (Zhao et al. 2018). Sørensen (2002) studied the relationship between strong corporate culture and the variability of firm performance. His findings revealed that a solid organizational culture with clear goals and routines facilitates internal administrative processes (Sørensen 2002). Similarly, Denison (1984) and Denison and Mishra (1995) reported a positive relationship between organizational culture and company performance. These findings revealed a positive association between (a) effectiveness and firm performance, (b) mission, consistency, and profitability, (c) adaptability, mission, and growth in sales. The authors concluded that involvement, consistency, adaptability, and mission influence the effectiveness of firms, which is associated with product development, sales growth, and quality, generating a direct positive impact on firms’ financial performance (Denison 1984;Denison and Mishra 1995). Moreover, Porter and Kramer (2006) reported the positive effect of culture on firm performance, given that this relationship is the response to innovative ideas and successful products (Porter and Kramer 2006). Previous studies concluded that organizational culture plays a key role in promoting organizational success (Denison 1996;Denison and Mishra 1995;Naranjo-Valencia et al. 2016;O’Reilly and Chatman 1996;Umrani et al. 2017). Therefore, the hypothesis of this study is: Hypothesis 1. Corporate performance is positively affected by organizational culture. 3. Research Model The study analyzed the effect of organizational culture on the corporate performance of small Ecuadorian service companies. Specifically, the sample comprised postgraduate students from academic programs at Universidad de Las Americas (UDLA), located in Quito, Ecuador. The postgraduate students were working as managers or employees in small Ecuadorian service firms. Figure 1displays the research model based on organizational culture and corporate performance. Adm. Sci. 2021,11, 132 5 of 17 Adm. Sci. 2021, 11, x FOR PEER REVIEW 5 of 17 small Ecuadorian service firms. Figure 1 displays the research model based on organizational culture and corporate performance. Figure 1. Model based on organizational culture and corporate performance. Measurement of Concepts A survey was designed to identify the effect of organizational culture on corporate performance in the Ecuadorian service sector. The study measured sixteen concepts: involvement, adaptability, consistency, mission, selection, training, evaluation, flexible remuneration, job design, two-way communication, job stability, equality, job quality, performance at the individual level, performance at group level, and performance at the organizational level. The concepts of organizational culture and corporate performance were measured by multiple items. Each item employs a five-point and seven-point Likert scale: 1 for strongly disagree and 5 or 7 for strongly agree, respectively. The study adapted the items from prior research to warrant content validity. The item’s operational definition was based in organizational culture and corporate performance aligned with the Denison model (Bonavia et al. 2009; Denison 1996; Denison and Mishra 1995; Triguero et al. 2012). Powell (1992) suggested using subjunctive measures to include confidential information of firm performance (Luo and Bhattacharya 2006; Powell 1992). Thus, special items were selected and designed for each concept to achieve the research objective (Table 1). Denison’s organizational culture model might be applied to evaluate management approaches and might serve as measure of business competitiveness (Wahyuningsih et al. 2019). The advantages of the constructs designed in the Denison model include (1) the link between external and internal assessment, (2) the dual balance challenges of external adaptation and internal integration, (3) a balanced firm profile with cultural strengths, and (4) the motivation of leadership to support business performance improvement (Denison and Mishra 1995; Denison and Neale 1994; Denison et al. 2015). However, the Denison model excludes other variables that are antecedents and consequences of organizational culture. Culture is a controllable aspect in any organization; therefore, it is susceptible to manipulation in order to improve profitability, sales growth, market share, product quality, and overall performance, suggesting that culture needs to be permanently monitored (Roldán and Bray 2009). Selection (SLC) Training (TRN) Evaluation (EVL) Flexible remuneration (FRM) Involvement (IVL) Job design (JDG) Adaptability (ADP) Bidirectional communication (BDC) Cultural organization (CO) Corporate Performance (CP) Consistency (CST) Job stability (JST) Mission (MSO) Equality (EQU) Job quality (JQU) Individual-level performance (ILP) Group-level perfrmance (GLP) Organizational-level performance (OLP) Figure 1. Model based on organizational culture and corporate performance. Measurement of Concepts A survey was designed to identify the effect of organizational culture on corporate performance in the Ecuadorian service sector. The study measured sixteen concepts: involvement, adaptability, consistency, mission, selection, training, evaluation, flexible remuneration, job design, two-way communication, job stability, equality, job quality, performance at the individual level, performance at group level, and performance at the organizational level. The concepts of organizational culture and corporate performance were measured by multiple items. Each item employs a five-point and seven-point Likert scale: 1 for strongly disagree and 5 or 7 for strongly agree, respectively. The study adapted the items from prior research to warrant content validity. The item’s operational definition was based in organizational culture and corporate performance aligned with the Denison model (Bonavia et al. 2009;Denison 1996;Denison and Mishra 1995;Triguero et al. 2012). Powell (1992) suggested using subjunctive measures to include confidential information of firm performance (Luo and Bhattacharya 2006;Powell 1992). Thus, special items were selected and designed for each concept to achieve the research objective (Table 1). Denison’s organizational culture model might be applied to evaluate management approaches and might serve as measure of business competitiveness (Wahyuningsih et al. 2019). The advantages of the constructs designed in the Denison model include (1) the link between external and internal assessment, (2) the dual balance challenges of external adaptation and internal integration, (3) a balanced firm profile with cultural strengths, and (4) the motivation of leadership to support business performance improvement (Denison and Mishra 1995;Denison and Neale 1994;Denison et al. 2015). However, the Denison model excludes other variables that are antecedents and consequences of organizational culture. Culture is a controllable aspect in any organization; therefore, it is susceptible to manipulation in order to improve profitability, sales growth, market share, product quality, and overall performance, suggesting that culture needs to be permanently monitored (Roldán and Bray 2009). Adm. Sci. 2021,11, 132 6 of 17 Table 1. Scale items for constructs. Constructs Items Label Related Literature Demographic information Academic program, job, tenure, and gender Nominal scale Involvement (IVL) Most workers are highly involved in their work. IVL1 (Bonavia et al. 2009;Denison 1990; Denison and Mishra 1995;Denison and Neale 1994;Denison et al. 2015) Information is shared with everyone when he or she needs it. IVL2 Work is organized so that everyone sees the relationship between his or her job and the goals of the firm. IVL3 Authority is delegated; therefore, people act on their own. IVL4 The capacity of people is constantly improving. IVL5 Problems decrease because people have enough skills to do their job. IVL6 Adaptability (ADP) The firm’s procedures are very flexible and easy to change. ADP1 The firm’s response to competitors and other changes in the business environment is adequate. ADP2 Changes are generated using customer comments and recommendations. ADP3 Decisions are made using customer input. ADP4 Failure is an opportunity for learning and improvement. ADP5 Innovation and risk are tools to improve firm performance. ADP6 Consistency (CST) Leaders and managers are aligned with what they preach. CST1 The firm has a consistent set of values. CST2 Consensus is easy to reach. CST3 Key issues are solved by reaching an agreement. CST4 Working in teams with colleagues from different departments is easy. CST5 There is a good alignment of goals and levels. CST6 Mission (MSO) The firm has a long-term purpose and direction. MSO1 The progress of stated goals is tracked permanently. MSO2 Employees and managers understand what needs to be done for them to succeed in the long run. MSO3 There is a shared vision of the firm in the long run. MSO4 Leaders have a long-term viewpoint. MSO5 Short-term and long-term thinking are aligned in the firm. MSO6 Selection (SLC) The firm has processes of recruitment and selection to fill vacancies. SLC1 (Denison 2003;Denison et al. 2006,2015; Triguero et al. 2012) Applicants are informed about negative aspects of the job in the selection process. SLC2 The firm has developed its systems to select its staff, in addition to interviews and/or curriculum analysis. SLC3 Training (TRN) “Key positions” have special training offered by the firm. TRN1 All employees receive training for their job. TRN2 The performance of employees improves when they receive training. TRN3 Job promotions take into account employees’ training. TRN4 Evaluation (EVL) Non-management employees are measured by a performance appraisal. EVL1 Third parties (e.g., superiors, customers, and suppliers) provide information to non-management employees about their performance. EVL2 Adm. Sci. 2021,11, 132 7 of 17 Table 1. Cont. Constructs Items Label Related Literature Flexible remuneration (FRM) The individual performance of non-management employees involves extra remuneration. FRM1 The group performance of non-management employees involves extra remuneration. FRM2 Job design (JDG) The firm shows a strong implementation of self-managed or self-directed teams. JDG1 The firm shows a strong presence of project-based teams. JDG2 The firm shows a strong implementation of flexi-jobs (e.g., flexi-time, online work, and videoconferencing). JDG3 Employees are well qualified and develop their new skills. JDG4 Employees have the opportunity to change jobs. JDG5 Bidirectional communication (BDC) Employees have access to information about the business operations and business behavior of the firm. BDC1 The views and opinions of employees are taken into account by the firm. BDC2 Employees access information about the business plan regularly. BDC3 Job stability (JST) Vacancies that require experience are filled by internal promotion. JST1 (Denison 2003;Denison et al. 2006,2015; Triguero et al. 2012) Internal promotion is allowed by the firm. JST2 The firm is committed to securing job stability. JST3 Employees are often made redundant. JST4 Equality (EQU) The firm generates actions to ensure that all employees have equal job opportunities. EQU1 Job quality (JQU) Problem-solving situations are managed by employees. JQU1 The firm has a strong presence of quality circles. JQU2 The firm facilitates the involvement of its employees through teamwork. JQU3 Employees feel committed when assured of the quality of their work. JQU4 Individual-level performance (ILP) Employees are satisfied working in the firm. ILP1 Employees are happy working in the firm. ILP2 Employees are satisfied with their performance. ILP3 Group-level performance (GLP) Employee groups make a strong contribution to the organization. GLP1 Employee groups performs well as a team. GLP2 Employee groups meet their performance targets. GLP3 Organizational-level performance (OLP) The firm is successful. OLP1 The firm meets its clients’ needs. OLP2 The firm is well represented within the industry. OLP3 Adm. Sci. 2021,11, 132 8 of 17 4. Empirical Results The online questionnaire was distributed and collected by Google Forms, while IBM SPSS Statistics 26 was employed to process all the data. A total of 240 questionnaires were prepared. However, the response rate was 64%. This percentage is in line with the optimal response rate for electronic surveys (between 45% to 60%) (Malhotra et al. 2013). Duplicated data and invalid responses were dropped from the database. Hence, a total of 154 observations was used for the analysis. Furthermore, the study required selected participants to fill in the questionnaire based on the researchers’ judgment, given that their expertise areas are business administration, quality management, and human resources. This criterion helped to reduce the error margin in the selection of respondents, providing high sample representativeness. 4.1. Demographic Analysis In the statistical characteristics of this study, 82% of the respondents were men and 18% were women. Postgraduate students of Strategic Management in Projects represented 21% of the total respondents, while 79% were students of the Operations and Industrial Safety Management Program. Most of the surveyed (90%) were employees in the service sector, and 10% were managers. The tenure of respondents was three years or more. Finally, there was an insignificant relationship between managers’ and employees’ responses, demonstrating that the study does not suffer from sampling biases. 4.2. Descriptive Statistics and Exploratory Factor Analysis A principal components analysis with Oblimin was used as the rotation method. The component correlation matrix revealed values higher than 0.3. The factor loading values were determined based on 0.5. Twenty-one items were removed and omitted in the subsequent analysis because they presented lower internal consistency and discriminant validity. The initial number of items was 61, and we reduced it to 40 items. The descriptive statistics and Exploratory Factor Analysis (EFA) are presented in Table 2. The EFA components showed that the Kaiser–Meyer–Olkim (KMO) was 0.727 (KMO > 0.5), and the Bartlett’s sphericity test significance was 0.000 (Sig. < 0.05). On the five-point Likert scale, the composite score of ADP was 3.889, which was the highest value compared to the remaining organizational culture factors ( µ = 3.679–3.759). This result reflects that Ecuadorian service firms include adaptability as a key factor in their cultural structure. Fundamentally, service firms use customers’ comments and recommendations (customer input) to make changes. On the seven-point Likert scale, the OLP composite score was 5.593, the highest corporate performance component. This finding is supported because service firms meet their clients’ needs ( µ = 5.648) and firms are well-represented within the industry ( µ = 5.537). The respondents displayed a condensed sensitivity for FRM ( µ = 3.176), indicating that employees and managers of service firms did not receive extra remuneration according to their individual and group performance. The composite score for GLP was 5.241, meaning that the respondents distinguished high group-level performance in their service firms. The strong contribution of employee groups and their performance targets were the most agreed-to statements more by employees and managers in the Ecuadorian service sector ( µ = 5.463 and µ = 5.019, respectively). The composite score for JQU was 5.037. 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