The Impact of Organizational Culture on Customer Retention

Abstract

Learning centers across the United States have always played an integral role in supplementing the educational needs of students. As small business owners, customer retention is important for learning centers to stabilize enrollment and remain sustainable. Recently however, low retention rates have plagued these centers and have compelled them to reevaluate their services to their customers. To safeguard their sustainability, many learning centers have explored several approaches to improve the manner in which business is conducted. One such approach was to develop a competitive advantage through cultural innovations since organizational culture influences every aspect of an organization’s performance. This quantitative non-experimental correlational research study was undertaken to explore what impact if any, organizational culture had on customer satisfaction and therefore customer retention. Theories of Organizational Culture and Expectancy Disconfirmation were integrated to demonstrate the role organizational culture played as an impetus in managing service quality, which translates into customer satisfaction and retention. A total of 147 individuals participated in this study. Two survey items were distributed: the Denison Organizational Culture Survey, 60-item Likert-type survey and a 30-item customer satisfaction/retention survey. A final sample size of 94 (n = 94) was achieved for the customer satisfaction/retention survey and a sample size of 42 (n = 42) was achieved for the Denison Organizational Culture Survey. The data were analyzed using Pearson correlation, regressions, and one-way analysis of variance. The findings revealed that overall, organizational culture related to customer satisfaction and customer retention. The implication is that learning center operators should focus on developing strong organizational culture in their settings because it is vital to the success of their centers.