identifying organizational culture criteria system – applying in vietnamese enterprises

1 THE PREAMBLE 1. Rationale For centuries, people have been conscious of the important role of culture to life. The formation of culture is associated with the appearance of mankind, and it serves both as the objective of, and the driving force for, the development of society. Culture increasingly penetrates into every aspect of life, being the lodestar for the creative activities of human beings. Although the cultural issues in management and business administration were paid great attention from researchers for a long time, there is still lack of a solid theoretical and practical methodologies for effective people management at the macro level and institutional level. Cultural awareness in business management is still vague and confused, thus making the process of building and developing organizational culture in enterprises difficult. While organizational culture is a new scientific field that has a very broad range covering many different areas and there are still many controversies as to the theoretical backgrounds related to it, research efforts would be limited to the study of how to build a system of criteria to identify the most noticeable signs of the organizational culture of an enterprise, or organization. And this is why the author intends to carry out a research titled, "A criteria system for identifying organizational culture, as applicable to Vietnamese enterprises". 2. Research objectives The objective of the thesis is to determine what factors constitute organizational culture; from which to build the system of cultural recognition criteria in enterprises on the basis of synthesizing and generalizing the arguments about organizational culture, from the managerial perspective. 3. The object and scope of research The subject of research is, “A criteria system for identifying organizational culture”. The study covers the time span from June 2012 to November 2012 and 2 is conducted in 5 cities, namely Ha Noi, HCM, Da Nang, Hai Phong, and Can Tho. 4. Research methods The main methods used are: systematic method, generalization, analysis, synthesis, comparison; both qualitative and quantitative research methods are used. 5. The new contribution of the thesis The thesis has the statistical criteria to identify organizational culture. At the same time, it delineates these criteria into different groups, namely organization, management, and leadership. In addition to the identity element groups developed by the antecedent and contemporary researchers, the author also developed some more new elements of organizational, management and leadership factors which have impact on the system of criteria for identifying organizational culture. 6. Thesis layout In addition to the preamble, conclusion, bibliography, Appendix, the thesis is structured in five chapters. Chapter 1: An overview of research on criteria for identifying organizational culture. Chapter 2: Study method of organizational culture through the criteria. Chapter 3: Results of studies on criteria for identifying organizational culture of Vietnam's businesses. Chapter 4: Proposed solutions to develop organizational culture in Viet nam. 3 CHAPTER 1: AN OVERVIEW OF RESEARCH ON CRITERIA FOR IDENTIFYING ORGANIZATIONAL CULTURE 1.1. The concept of organizational culture Enterprise culture or company culture is a concept that is known under other names such as institutional culture (organizational culture) or business culture. There are many different definitions of organizational culture, however, from a managerial perspective, the organizational culture can also be defined as follows: "Organizational culture includes a system of meanings, values, dominant beliefs, ways of thinking and perceptions that are shared by all members of an organization and have extensive influence on the manner of the members’ behaviors". 1.2. The approaches to organizational culture The research about organizational culture can be seen in two areas: - The first research area focuses on finding, exploring the managerial nature of the cultural factors in enterprise management (Allaire & Firsirotu, 1984; Hatch, 1993; Martin, 1992; Meek, 1988; Pettigrew, 1979; Smircich, 1983). - The second research area focuses on the impact of cultural factors on businesses, especially those with a multi-cultural operating or organizational environment (Calori & Sarnin, 1991; Camerer & Vepsalainen, 1988; Denison & Mishra, 1995; Gordon & DeTomaso, 1992; Kotter & Heskett, 1992). 1.3. Model research on enterprise culture 1.3.1. Three-layer model of organizational culture Schein Schein's model focuses on three levels of culture and also the three cultural criteria, going from realism, implying to the invisible:  Level one: practicality (Artifacts)  Level two: the standard value (Espoused Values)  Level three: the assumption implied in common (Shared Tacit Assumptions) 4 1.3.2. Multi-dimensional cultural model of Hofstede Geert Hofstede, a doctor in psychology, launched the model about the dimensions of culture. The cultural dimensions introduced by Hofstede include: Power distance; Collectivism/Individualism; Masculinity; Uncertainty; Long-term orientation. 1.3.3. Research on the culture by Trompenaars Trompenaars launched seven aspects of culture within the company that performs business activity, namely: - Universalism vs. particularism - Individualism vs. collectivism (communitarianism) - Neutral vs. emotional - Specific vs. diffuse - Achievement vs. ascription - Sequential vs. synchronic - Internal vs. external control. 1.3.4. Studies by model Cameron & Quinn Cameron and Quinn (2006) classify businesses into four main cultural types based on four different criteria: collaborate-clan culture, create-adhocracy culture, control-hierarchy culture, compete-market culture. These are a combination of two variable values in the competitive value framework developed by Robert Quinn and John Rohrgough. 1.3.5. Model of Denison In his study, Denison gave a scale, or criteria, to evaluate the strength or weakness of the business culture using the four characteristics of culture, adaptability, mission, consistency, and involvement. These are the traits in the Denison model. Each of these organizational traits is further broken down into three indexes. These indexes describe specific behaviors in business language to make the results both relevant and actionable in the organization. 5 1.3.6. Some other research models in the world Research by Jim Sellner (2009) classifies businesses based on six different criteria to identify organizational culture: values and manners; elements inside and outside; the vision; innovation; our mission; new look. According to Recardo and Jolly (1997), the culture of the company is measured based on the following eight aspects: communication, education & development, awards and recognition, decision making, risk-taking, orientation, teamwork, management policies. David H. Maister in his research on cultural identity business has conducted cultural measurement on 9 specific aspects, namely: quality and customer relations, education & development, training, dedicated enthusiasm, high standards, long-term goals, empowerment, equitable remuneration and satisfaction. Another aspect of organizational culture, pledge of attachment to organization and the influence of it to the results of the business, was introduced by many organizational behavior researchers across the world, most notably Allen and Meyer (1990). 1.3.7. The model of research culture in Vietnam In Vietnam, the business culture began to be mentioned from the 90s of the last century, and over the past 20 years, several studies on the issue were published, most noticeable of which were works of Nguyen Hoang Anh and Nguyen Manh Quan, Duong Thi Lieu, Phung Xuan Nha, Do Thuy Lan Huong, and some others. 6 CHAPTER 2: METHODS OF STUDYING BUSINESS CULTURE THROUGH THE CRITERIA 2.1. Research orientation Based on the research objectives as discussed above, the author suggests three particular groups of factors that constitute the organizational culture, namely: organizational factor group (corresponding to the system of matter), the management factor (the value systems of action), and the leadership factor (value system awareness). 2.2. Developing research questions The research questions set for this thesis are: - How does the organizational system impact the creation and change of business culture? - How does the management system impact the creation and change of business culture? - How does the leadership system impact the creation and change of business culture? - How can the set of criteria for organizational culture, which consist of three elements groups - organizational, management, and leadership, help managers in the evaluation and measurement of business culture? 2.3. Research model and hypotheses The research model proposed by the author is as follows: organizational culture enterprise organizational organizational culture enterprise manager enterprise organizational culture leadership 7 Figure 2.1: Study model for identification of organizational culture The research hypotheses:  H1: Management factors have a proportional relationship that dominates the establishment of criteria for identifying organizational culture.  H2: Organizational factors have a proportional relationship that dominates the establishment of criteria for identifying organizational culture.  H3: The leadership factors have a proportional relationship that dominates the establishment of criteria for identifying organizational culture. 2.4. Research design a. Qualitative research: the author has selected five experts who had taught in the field of organizational culture at the National Economics University to interview experts and an audience of 30 people including staff, leaders and managers working in enterprises to participate in in-depth interviews. b. Quantitative research: this is done through the method of investigating a selected sample. 2.5. Data sources and methods of data collection The data source - Primary data: opinions, the views of the staff, management and leadership on the cultural aspects in enterprises such as organization, management, leadership and commitment levels of employees for business. - Secondary data: reference sources of information related to organizational culture and organizational behavior that is obtained from researchers, scholars in the world. The method of data collection  Secondary data collection From sources such as books, magazines, data from the Internet or other mixed data.  Primary data collection a criteria system for identifying organizational culture 8 In primary data collection for the subject, the author also used interviews as a method to help acquire the necessary information. 2.6. Design of questionnaires Questionnaires were designed to consist of 2 parts: Part A: General information on individuals and businesses. Personal information that is required from each object investigated includes: gender, age, education level, current rank/ position in the organization. Section B: organizational culture. This section includes close-end questions relating to the organizational, management and leadership factors as constituting elements for the identification of organizational culture, which the author quotes from a number of other studies while trying to develop several new aspects. 2.7. Sample design The research sample is selected under the convenient method from the whole set of all staff working full-time at the Vietnamese businesses that are established by Vietnamese businessmen and operating in the territory of Vietnam. The sampling is limited within the 5 cities of Hanoi, Ho Chi Minh, Da Nang, Can Tho, and Hai Phong. The 5 samples per measurement variable rule applies, resulting in a sample size of approximately 600 samples. 2.8. Data processing methods Before proceeding with the analysis, the data is checked and cleaned. Then, the following analysis methods are used: descriptive method, the method of evaluating the reliability of scales, factors analysis method, the method of regression analysis of impact factors, the method of ANOVA testing. 9 CHAPTER 3 RESEARCH RESULTS: THE CRITERIA FOR IDENTIFYING THE ORGANIZATIONAL CULTURE OF VIETNAMESE ENTERPRISES 3.1. Sample description According to the sampling plan, the sample size would be 705 samples with a total of 1,000 questionnaires issued at the expected response rate of 70.5%. In fact, out of the 1,000 questionnaires handed out, 725 samples were collected, resulting in a response rate of 72.5%. The objects investigated included enterprise staff, management and leaders in Hanoi, Ho Chi Minh, Da Nang, including those working in state companies (15.2%); in partnerships (15.2%); in private enterprises (21.8%); in limited liability companies (24.0%); and in joint stock companies (23.8%). 3.2. Analysis measurement tools As suggested in the research model, the system of criteria used for identifying business culture is determined based on the study of the three factors, namely management factor (which is considered from 6 aspects), leadership (12 aspects), and organizational (13 aspects). 3.2.1. Cronbach’s alpha reliability coefficient  As for the Organizational Factor scale: Organizational factor is measured by 13 aspects. In general, Cronbach’s alpha coefficient of each aspect reaches 0.6, so the scale for every aspect has reliability, namely: the Cronbach’s alpha coefficient specific to each aspect is as follows: Communication in organization = 0.73; Education & Development = 0.749; Reward and recognition = 0.715; Team-work = 0.619; Group orientation = 0.705; Satisfaction = 0.755; Pledge of attachment to organization = 0.763; Accordance = 0.689; Organizing skill = 0.638. But for the Quality and the relationship with the customer aspect (Cronbach’s alpha = 0.43), Collaboration and integration (Cronbach’s alpha = 0.257), Customer orientation (Cronbach’s 10 alpha = 0.391), Cronbach’s alpha coefficient is very low, and an elimination of the observation variations used for the scale of this aspect does not increase Cronbach’s alpha coefficient to 0.6 and thus does not ensure reliability, so the author removes the scales of those aspects. For the Change aspect (with Cronbach’s alpha = 0.451), the TĐ5 and TĐ4 observation variables have an item-total correlation coefficient of < 0.3; so the author proceeded to remove the 2 variables from the scale for Change and therefore the Cronbach’s alpha coefficient for the scale of this aspect reached 0.631 (guaranteed reliability).  As for the Management Factor scale: Management factor is measured in 6 aspects. Cronbach’s alpha coefficients of these 6 aspects are as follows: Accepting risks from creative and innovative work = 0.691; Control = 0.622; Orientation = 0.562; Coordination = 0.619; Empowerment = 0.741; Regulation = 0.621. The scale for Orientation aspect does not guarantee reliability, and an elimination of observation variables from the scale of this aspect does not increase Cronbach's Alpha coefficient up to 0.6, so the author decided to remove this scale. For the scale for Control, the observation variables KS2 and KS5 have an item-total correlation coefficient of < 0.3 and when these 2 variables are removed, the value of Cronbach's Alpha increases to 0.646, so the author proceed to exclude the 2 variables, KS5 and KS2, from the scales for Control.  As for the Leadership Factor scale: Leadership factor is measured in 12 respects. Cronbach’s alpha coefficient of > 0.6 include: Orientation and plan in the future = 0.713; Strategy orientation = 0.737; Target system = 0.747; Core values = 0.685; The control of the leadership = 0.681; Leadership experience = 0.655; Mission = 0.614. The scale is gaining credibility. Particularly for the scales for Core values, the observable variable GTCL4 has an item-total correlation coefficient of < 0.3, and when this variable is removed, Cronbach’s alpha coefficient for the scale increased to 0.745, so the author removed GTCL4 from the scale for Core values. As for the [...]... constituting the identification criteria system for organizational culture per types of businesses shows no difference in the respondents’ evaluation of each constituent element of the identification criteria system for organizational culture (the reason being that they all have a sig > 0.05) 3.4 Criteria system for identifying organizational culture and the reality of organizational culture in Vietnam... dominates the establishment of criteria for identifying organizational culture [Source: author-made] 14 3.2.4 Testing the difference in mean values of the sample of the factors constituting the system of identification criteria for organizational culture by business type A calculation of mean values of the sample of the factors constituting the system of identification criteria for organizational culture. .. weak in Vietnam businesses are leadership skills and management skills CHAPTER 4: SUGGESTED SOLUTIONS FOR THE DEVELOPMENT OF BUSINESS CULTURE IN VIETNAM Through the study of the criteria system for identifying organizational culture, the author proposes to apply the criteria to Vietnamese businesses that are established and managed by Vietnamese people in the territory of Vietnam when this business culture. .. 3.4.1 The criteria system for identifying organizational culture Through the steps of Cronbach’s alpha coefficient analysis and explorative factor analysis, the scale consisting of 116 observable variables has been adjusted 2 times, with the total number of variables decreasing from 116 to 79, as presented in table 3.20: Table 3.20 Summary of criteria system for identifying organizational culture Factors... presented in table 3.17 Table 3.17: Summary of testing results for the hypotheses The hypothesis Results H1: Management factors have a proportional relationship that Accepted dominates the establishment of criteria for identifying organizational culture H2: Organizational factors have a proportional relationship that Accepted dominates the establishment of criteria for identifying organizational culture. .. Vietnam when this business culture is weak, when businesses have not yet started building 21 business culture for their organization, or when organizational culture is found to be weak and businesses want to renovate it Having combined analysis results of practices and testing results for the research model for identifying enterprise culture in Ho Chi Minh City, Hanoi, Da Nang, Hai Phong and Can Tho,... the pettiness of individual persons and prevent bureaucratic practices inherent in the business In short, to get real results in business activities in general and in organizational culture in particular, it is necessary to emphasize again that the role of the leader is the atmost important one, the leader has to have a leadership style with traditional and contemporary perspectives, to be determined... namely organizational, management and leadership 3 A testing of the calibrated scale has provided evidence that the elements Organization, Management, Leadership have an influence on the system of identification criteria for the enterprise culture 4 In the era of international economic integration, Vietnamese businesses need to pay more attention to the construction of enterprise culture in order to gain... entrepreneur culture through the criteria identified Through practice, the role of leaders along with their management style are decisive factors for developing the culture of every business Therefore, leaders need to regularly examine, urge, assess the culture of the business in order to timely and reasonably adjust it while avoiding the enterprise's culture being deflected too far The business leader... knowledge for the leaders so that they are aware of their role in the construction of enterprise culture In the context of increasing social progress, life is becoming increasingly civilized, global competition is increasingly intense, a good leader not only knows of success of today but also tries to get a vision in the future They are the pioneers in the field of knowledge Therefore, leaders need to be . 0.05). 3.4. Criteria system for identifying organizational culture and the reality of organizational culture in Vietnam 3.4.1. The criteria system for identifying organizational culture Through. research on criteria for identifying organizational culture. Chapter 2: Study method of organizational culture through the criteria. Chapter 3: Results of studies on criteria for identifying organizational. constituting the system of identification criteria for organizational culture by business type shows that values of the elements constituting the identification criteria system for organizational culture