CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Nowadays, the microfinance industry has been experiencing substantial changes in their operations. The sector has become more competitive due to the upsurge of other institutions and the rising need of customers. These conditions require micro finance establishments to provide good quality services and it’s expected to perform well in serving the various needs of the customers which are changing daily by offering to them quick, appropriate, and comfortable services. For this to be achievable, a micro finance institution relies on the inputs of the employees who are often referred to as the lifeblood of every institution. So, for the business operations to be conducted efficiently, it is imperative for the employees to perform at their very best to attain the institution’s goals. As it is well-known, employee behaviors in the workplace have important consequences on the overall organizational effectiveness. Organizational behavior has been linked to overall organizational effectiveness. Organizational citizenship behavior (OCB) contributes positively to overall organizational effectiveness (Yildirm 2014).

OCB consists of behaviors to perform the job and require that these behaviors contribute to the overall success of the organization. Since 1970, OCB has been studied and a huge literature is available. Researchers have developed a variety of measures for OCB. Empirical research regarding the consequences of OCBs has focused on organizational performance. Smith, Organ, and Near (1983) proposed a research model that includes altruism and compliance linked to organizational effectiveness. Bateman and Organ’s (1983) research was one of the first measurement of OCB. Bateman and Organ (1983) constructed a 30-item OCB scale that measured cooperation, altruism, compliance, punctuality, housecleaning, protecting company property, conscientiously following company rules, and dependability. Organ (1988) deconstructed a five-factor model consisting of altruism, courtesy, conscientiousness, civic virtue, and sportsmanship. In 1990, Podsakoff, MacKenzie, Moorman, and Fetter conducted an important study using the five dimensions of OCB: altruism, conscientiousness, sportsmanship, courtesy, and civic virtue. These researchers developed a 24-item scale. Organ and Ryan (1995) proposed the correlation between perceived fairness, organizational commitment and leader supportiveness with OCB. Organ and Ryan (1995) conducted a meta-analysis of 28 studies and found a modest relationship between job satisfaction and OCB. Podsakoff, MacKenzie, Paine, and Bachrach (2000) searched the effect of personality characteristics, conscientiousness, and agreeableness as antecedents of OCB and indicated the relation between leader-member exchange and altruism.  Yildirm (2014) also identified five dimensions of OCB: Altruism;  formed by the voluntary behavior of the employee to help his colleagues in an organizational responsibility or with a problem,  Courtesy;  formed by an employee’s asking other colleagues’ advice on a decision in case they might be affected and inform them in advance, Sportsmanship which  consists of principals like employees not complaining about organizational problems, Conscientiousness; formed by employees’ fulfilling the organizations expectations with an excessive manner for some role behaviors and Civic Virtue  formed by voluntary behaviors like following the changes and improvements in the organisation and taking an active part for the acceptance of the changes and contributing with a positive manner to the organizations image. According to Shweta and Srirang (2010)  Nofa et al., (2019)  the factors that influence OCB include: individual disposition and individual motivation, group cohesiveness, satisfaction, member attitude (organizational commitment), and interpersonal communication.

David (2013) suggested that communication is a process where people create, maintain, and manage managerial activities in various activities. Orebiyi and Orebiyi (2011) also suggests that the communication model involves an encoding process (deciding what and how to communicate), decoding (interpreting the message) and interpreting the message received. Communication in the research Bambacas (2008) states that two-way communication between individuals is more effective than one-way communication because in interpersonal communication relates to the substance of the message, the relationship between  communicators, and their credibility in producing interpretations of messages received by the receiver. So, it can be concluded that the communication process involves sending messages, listening and giving feedback. Anam (2017), stipiulated that interpersonal communication has a positive and significant effect on Organizational Citizenship Behavior (OCB). The increasing practice of communication in an organisation will increase organizational citizenship behavior in a better direction. Interpersonal communication is very potential to carry out instrumental functions as a tool to influence or persuade other people.

Organizational communication is studied in the literature in detail by considering all aspects. In general, organizational communication is divide into three main dimensions; (1) communication with coworkers, (2) communication with managers and (3) organizational communication policy. There has been a huge literature about organizational communication. Researchers have developed a variety of measures for organizational communication. Fulk and Boyd (1991) pointed out the availability of communication Technologies and effective usage of these Technologies in organization. Some researches tried to determine factors which have influences on effectiveness of organizational communication (Rice and Case, 1983; Moch, 1990; Allen, 1995). On the other hand, communication competences are also very big issues to be determined (Reinsch, Steele, Lewis, Stano ve Beswick, 1990; Monge, 1990). The determination of communication priorities (Stine ve Skarzenski, 1979) and needs of effective communication should be defined to increase the overall organizational performance (Bennett, 1971).

In conceptualization of organizational communication, most of the researches focused on a one-dimensional construct of communication (for example see Anderson & Narus, 1984; Carriere & Bourque, 2009; Litterst & Eyo, 1982), while they mentioned informal and formal figures of communication as common approach of communication practiced in an organizational setting (Anderson & Narus, 1984; Carriere & Bourque, 2009).
Kandlousi et al., (2010) stipulated that  both formal and informal communication are essential to achieve communication satisfaction. Formal communication channels are recognized officially by the organization. Instruction and information are passed downward and upward along these channels (Anderson & Narus, 1984). Information in an organisation provided by the formal communication makes managers’ activities easier (Litterst & Eyo, 1982). Formal communication follows the formal structure or hierarchy of the organisation (Guffy, Rhoddes, & Rogin, 2005). It can be upward, downward, or side-to-side directions of communications. Price (1997) defined formal communication as the degree to which information about job is transmitted by an organisation to its member and among the members of an organization. By knowing the formal chart of an organization, a great deal of the nature of the communication flows within the organisation is predictable (Evertt & Rekha, 1976). As well as the formal communication, informal communication also plays an inevitable role in an organizational life (Crampton, Hodge, & Mishra, 1998).

According to Homans (1951), existence of informal system in an organisation is unavoidable because employees resist being treated as means to an end, and they interact as whole, bringing with them their own problems and purposes that give rise to spontaneous behavior that seek to control their condition of work (Ogaard, Marnburg, & Larsen, 2008, p. 2). Colleagues during their interactions discover their similar attitudes, opinions, and values and consequently they become acquainted and mates to one another, which result in becoming friends (Hargie, Dickson, & Nelson, 2003).

The effectiveness and efficiency of communication channels and services rendered by any organizational can be associated to the commitment and dedication of the employees to provide time and effort in increasing the performance, productivity and profitability of the company to attain specific targets through its vision and mission. Commitment is expressed in affective domain with traces of humanitarian values such as fairness, courtesy, forgiveness, and moral integrity (Mcshane & Glinow, 2009). If a company treats employee well, employees will give back as much or more in mental and physical effort (Algane, 2009). Measuring employee commitment is considered a factor in retaining personnel with high job satisfaction and will ultimately reduce employee turnover. Commitment is usually stronger among longer-term employees, those who have lower turnover rates (Newstom, 2009). Effective communication has something to do with the employees’ commitment as they were well-informed of the policies, rules and regulations of the organisation and they make necessary personal adjustments in attitude and behavior on how to follow these processes.

The financial sector especially the micro finance institutions needs a workforce capable of serving the clients and other stakeholders in developing a responsible community. The goals of micro finance establishments could be realized through retaining qualified and devoted employees who will support all endeavors of the organisation especially in maintaining Quality Assurance mechanisms which require active involvement of all employees. Participation of the employees in decision making strengthens the employees’ psychological ownership and social identity that make valuable contribution in the planning process. The communication procedure of involving employees in decision making is a good illustration of a democratic organisation where everyone’s view is being heard and considered. On this way, employees understand and appreciate the goals and objectives of the micro finance institution towards the benefits of all the accreditation and certification from regulatory bodies for them to increase their level of awareness and motivation to work (Buenviaje et al., 2016).  Effective organizational communication is therefore primordial for the success of micro finance institutions.

In most of the world’s economies, micro finance institutions are regarded as vectors for job and wealth creation (World Bank, 2014). Through their investments and consumption, they create value and produce a plethora of goods and services, thereby playing a significant role in funding public services and creating a dynamic local economy (Goudreault and Hébert, 2013). In short, they are a unique asset for development, serving as both a motor for growth and a tool for redistribution of wealth (ESF, 2009, p. 1). Microfinance has been termed as the banks of the poor. When looking at the global development of this financial systems, because for 10 years, the world’s largest aid agencies have worked together under the banner of the Consultative Group to Assist the Poor (CGAP), committing people, money, and countless hours to building more inclusive financial systems that work for the poor. Before, small heavily subsidized microcredit schemes used to be the norm, hundreds of profitable microfinance providers of all institutional shapes and forms are now offering a wide range of financial services money transfers, deposit services, and insurance to ever-larger numbers of poor people in their communities. In a sure sign that microfinance is going mainstream, domestic and international commercial banks are now entering the fray, motivated by the excellent performance of poor clients and the promise of new information and delivery technologies to reduce cost and risk. Worldwide, “best practice” microfinance is becoming standard practice. Almost 600 microfinance institutions now report to the Microfinance Information exchange (MIX), the CGAP-created portal that has become “the Bloomberg of microfinance” to give a no-nonsense picture of transparency, sustainability, and growth in the microfinance sector (World Bank, 2020).

In Sub-Saharan Africa (SSA), the SME sector accounts for more than 90% of all firms. Between 70% and 80% of SMEs are micro-finance institutions. They are the main source of jobs, financing and income for Africans, after subsistence farming (Josee et al., 2016). If the African countries wish to speed up their economic development, they would certainly gain from supporting the emergence and growth of micro finance establishments. Some have understood this, and have set up dedicated small business agencies and ministries. In addition, growing numbers of researchers are suggesting that political decision-makers who wish to strengthen the private sector should focus on the legislation, regulations and institutional mechanisms that condition or shape economic life (World Bank, 2019).

In Africa, incomes in poor households are typically not only low, but also irregular. Poor people need to be able to smooth consumption flows or finance larger expenditures, but they generally lack access to banks and other formal facilities. Traditional financial institutions generally shy away from this market, either because they are unaware of it or because they deem it unprofitable. Yet providing a whole range of financial services to the poor including credit for small and micro-enterprises, savings facilities, insurance, pensions, and payment and transfer facilities is clearly desirable and can contribute to the achievement of the Millennium Development Goals. When properly harnessed, microfinance offers a variety of benefits to the African people. Foremost, microfinance initiatives can effectively address material poverty, the physical deprivation of goods, services, and the income to attain them. When properly guided, the material benefits of micro financing can extend beyond the household into the community. At the personal level, microfinance can effectively address issues associated with “non-material poverty, which includes social and psychological effects that prevent people from realizing their potential (World Bank, 2019).

For many years in Cameroon, the microfinance sector has evolved and has been transformed into a system of provision of short term loans, savings, credits, money transfers, etc thanks to various financial sector policies and programs undertaken by the government since independence. MFIs now are the primary sources of funds to small and medium size enterprises in Cameroon and other countries in the process of economic growth (GICAM, 2019). According to a report by Cameroon tribune (2020),   the performance of microfinance institutions has been decreasing since the 2017 fiscal year but, in 2019, the trend changed slightly. This is revealed in the background note published, on April 1, by the Ministry of Finance in the framework of its coming three bond issuances. At end-December 2019, the note informs, the total equity of the microfinance sector was XAF2, 122.9 billion (representing 32.8% of commercial banks’ equity). Deposits stood at XAF90.09 billion (18.5% of deposits recorded by banks) and credits reached XAF839.14 billion (22.90% of the credits granted by banks by that period). On December 31, 2019, 418 accredited microfinance institutions were operating in Cameroon. Of those institutions, 88.04 % were first-class (123 private and 245 organized as cooperative), 11.24 % were second-class (47 institutions) and 0.72 % third class. MFIs in Cameroon are classified under three categories. Category one, two and three. Category one or class one-institutions are those that have just members, accept deposit and lend money just from and to the members, This category includes associations, cooperatives and credit unions (GICAM, 2019).

Despite the immense contribution of micro finance institutions to the economy of Cameroon, they sometimes face challenges owing to the fact that hardworking and valuable employees who experience negative experiences in the workplace, have their hopes dashed, their goals derailed and or their confidence undermined and  these organizational citizenship behaviours result in  low productivity in the workplace as it affects the organizational outcomes of micro finance institutions such as decrease in performance, increase in absenteeism and dissatisfaction. At times the consequences of organizational citizenship behavior are far-reaching leading to reduction in the quality and quantity of job performance. Communication activities are in somewhat manner factors which influence this OCB.

Communication is essential part of management. The success and failure of organisation depends upon the effective communication. Communication is a two-way channel of transferring ideas, plans, commands, reports and suggestions which influence organisation in order to make desired objectives (Altinoz, 2009; Broca&Baesu, 2014). The quality decision-making is based on the quality communication. Without quality information, it is impossible to delegate instruction and orders. Moreover, effective communication in organisation increases smoothness and efficiency of organizations. The exchange of idea and information through communication helps to bring unity of action in organisation which quests for the common objectives (Chen, 2008; Femi, 2014). Communication transfers goals and desires, training allocate duties, issues instructions and duty and responsibility and evaluated performance of staff. Thus, effective and efficient communication increases managerial efficiency (Arnold &Silva, 2014; Fellows, 2012).  Effective communication system in micro finance institutions is important for understanding and managing organizational behaviors from macro to micro levels. Moreover, screening and monitoring employees improve management efficiency through effective communications (Calomiris & Pornojngkool, 2009; Shrestha et al., 2020). The present study therefore focuses on the influnce of effective communication on organizational citizenship behaviour in micro establishments.

1.2 Statement of the Problem

Business all over the world today is very challenging. To stay profitable in the highly
challenging and competitive global market economy, all factors of production, i.e. men, machine and materials, should be wisely managed. Among the factors of production, the human resource constitutes the biggest challenge because unlike other inputs, employee management demands skilful handling of thoughts, feelings and emotions to secure highest productivity. Organizational communication plays an important role in this challenge. Understanding human behavior in workplace has been one of the most prioritized tasks for any organisation including micro financial establishments (Mutuku. & Mathooko, 2014). Organizational communication, in today’s organizations has not only become far more complex and varied but has become an important factor for overall organizational functioning and success. The way the organisation communicates with its employees is reflected in organizational citizenship behaviors, morale, motivation and performance of the employees. Salem (2008) outlines seven communication reasons why organizations fail to change that include insufficient communication, distrust, poor interpersonal communication skills, and conflict avoidance. Salem also claims that “research indicates that up to 70 per cent of change programmes fail and poor internal communication is seen as the principal reason for such failure. Communication as an integral element of management is ignored in many organizations including micro finance institutions in Cameroon which lead to practices of use of poor communication techniques, untimely communication, and misunderstanding of information and at times total lack of communication. When this takes place there are possibilities of strikes, go- slows, and in extreme cases closures.

It is important to appreciate that many organizations world over have suffered enormous loss due to lack of proper or inadequate communication. In some cases communication between employees and management is poorly carried out and may lead to confusion and lack of direction, frustration of employees, decrease in motivation, purpose and productivity and even exit of highly skilled and dependable employees. This may eventually make the organisation fail to achieve its goals and objectives. The Workplace Communication Consultancy (2005) reported that statistics show that 90% of those who are kept fully informed are motivated to deliver added value; while those who are kept in the dark almost 80% are not”. However, such results are industry specific. Industries vary in terms of culture and structure.

Mitchell et al (1990) stipulated that Employee Involvement in Decision Making greatly enhances OCB. They outlined three predominant types of participation comprising: representative, consultative and substantive. Representative participation would include
participation which consists of employees serving on boards, or some other formal
representation, in which employees are able to express their views. The second type of
participation is consultative which is similar to representative in that employees have the ability to make inputs to the work process, although not through formal means such as boards. The final type of participation is substantive. In substantive participation, employees are more likely to have control over the work process and be able to have a direct impact on their working life. Organizational researchers from all around the world consider the job involvement as an important factor which influence both employees’ as well as organizational outcomes (Lawler, 1986). Employees with high levels of job involvement make the job a central part of their personal character and focus most of their attention on their jobs. They are likely to exhibit less unexcused lateness and unexcused absences than employees with lower levels of job involvement. Also job involvement is negatively related to intentions to quit and positively associated with job satisfaction and organizational climate perceptions. It also promotes organizational citizenship behaviors as OCBs are more influenced by what employees think and feel about their jobs and that job involvement shows a positive attitude towards the job. However it has been noticed that most micro finance institutions in the Cameroonian context neglect this aspect thus reason for poor OCBs.

Equally today, numerous channels are used for internal and external organizational communication. Yet, while channels such as bulletin boards, intranets, newsletters and e-mail are an efficient mode of communication for certain messages, the power of face-to-face communication cannot be underestimated. Media such as reports and letters are less effective for information exchange than “dynamic” channels such as one-on-one conversations, corridor chats and small-group meetings that incorporate dialogue in the workplace (Grunig, 1992). For example, CEO meetings with employees help to build affinity and trust. Luncheons, roundtables and cross depart mental work groups facilitate communication among employees. To encourage face-to face communication, HR and top management” can work together to enable supervisors to be key communicators in the organization. However most managers in micro finance institutions neglect the role of communication channels on OCBs.

Information sharing is one of the easiest and most effective management for the participation of workers in firms (Babbie, 2004). Good information on organizational goals and objectives, new events, activities and services can reveal features of their employees from others. At the level of internal communication organisation aims to create a unified corporate identity, understanding the philosophy of the organization. There are radicals who believe that the involvement and motivation of staff is the only way to ensure customer satisfaction and the organisation must ensure that its employees are highly motivated to communicate, “are necessary, and we need you”. Work related to enrichment design jobs so that employees have a high level of vigilance and choice. This can be achieved through the development of individual workstations, including features that Barker (2002) stated that independence is a key element or the formation of groups that independence, the following example, the principles social and scientific design. The dissemination of information, extension and mastery of content to ensure that employees have the right to information, skills and rewards for using their power so as to make a significant contribution to the goals of the organisation (Mutuku. & Mathooko, 2014). However, there is no study that has been done in the Cameroonian context specifically evaluate the role of effective organizational communication on OCBs and more so in the micro finance industry.

This is despite the critical role that communication plays in the management of human resources in an organization. As such there is still a rather limited understanding of communication -driven OCBs in the Cameroonian micro finance sector. There is therefore an academic gap that exists in this field and this study seeks to fill it. This study therefore seeks to evaluate the influnce of organizational communication on OCBs in micro finance institutions in the city of Bamenda.

1.3 Research Questions

The main research question of this study is to what extent does organizational communication influence OCBs in micro finance institutions in the city of Bamenda? The specific research questions are as follows.

1. To what extent does employee involvement in decision making influence OCBs in micro finance institutions in the city of Bamenda?
2. To what extent does communication channels influence OCBs in micro finance institutions in the city of Bamenda?
3. To what extent does information sharing influence OCBs in micro finance institutions in the city of Bamenda?

1.4 Objectives of the Study

The main objective of this study is to investigate the extent to which organizational communication influence OCBs in micro finance institutions in the city of Bamenda. Specific objectives are to:

1. Assess the extent to which employee involvement in decision making influence OCBs in micro finance institutions in the city of Bamenda.
2. Assess the extent to which communication channels influence OCBs in micro finance institutions in the city of Bamenda.
3. Evaluate the extent to which information sharing influence OCBs in micro finance institutions in the city of Bamenda.