The Impact of Cross Culture on Employee Performance in Multinational Companies in Sri Lanka

Abstract

Today business environment in Sri Lanka is growing in a rapid manner and it is functioning as a backbone of the economic development. Contribution by the employees to organizational performance differs from one to another based on number of factors. Therefore this study focuses on the impact of cross culture on the employee performance in multinational companies in Sri Lanka. Currently multinational companies in Sri Lanka are facing cultural issues as many employees are from different cultural background. Thus this particular study would help to identify the cultural gaps and also to rectify in a way that will increase the performance level. As the study objectives, the study aims to explore the impact of cross-cultural issues on employee performance through employee productivity. Moving towards the research methodology, the study has used survey method through the structured questionnaire as the research strategy. Quantitative methods are used as the research methods and cross sectional data is used as the time horizon of the study. Further the study has gathered the needed data from 260 employees of multinational companies operating in Sri Lanka. The sample was selected using simple random sampling method and convenient sampling method. Multivariate Probit Model and structural equation method were used as the data analytical and estimation tool. The study concluded that the impact of cross culture issues on organizational performance is in two folds of ethnicity and religion. Muslim and Islam employees are motivated from extrinsic factors while Sinhala and Buddhist employees are motivated through intrinsic factors. However in the case of Tamils and Christian employees have no major difference. Regarding the case of attitude, Muslim and Islam employees are more flexible in job engagement and job involvement while Sinhala and Buddhist employees are more flexible in attitudes for Perceived Organizational Support (POS). Further the employees in Christianity and Tamil are balanced in attitude for job engagement, involvement and perceived organizational support. In case of culture and employee commitment, Muslim and Islam employees are more in affective commitment while Sinhala and Buddhist employees are more in normative commitment. Tamil and Christian employees are more towards continuance commitment. Finally Muslim and Islam employees are more productive than other two while Sinhala and Buddhist employees are having the lowest labor productivity. This indicates culture has an influenced on labor productivity through motivation and employee commitment which is fostered by the employee attitudes.