The effect of transpormational leadership factors on organizational commitment, job satisfaction and trust in Vietnamese state-owned organizations

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Pham Trong Kha THE EFFECT OF TRANSFORMATIONAL LEADERSHIP FACTORS ON ORGANIZATIONAL COMMITMENT, JOB SATISFACTION AND TRUST IN VIETNAMESE STATE-OWNED ORGANIZATIONS MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Pham Trong Kha THE EFFECT OF TRANSFORMATIONAL LEADERSHIP FACTORS ON ORGANIZATIONAL COMMITMENT, JOB SATISFACTION AND TRUST IN VIETNAMESE STATE-OWNED ORGANIZATIONS ID: 22120051 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr Pham Quoc Hung Ho Chi Minh City - Year 2014 TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Research objectives 1.3 Significance of research 1.4 Research methodology and research scope 1.5 Research structure CHAPTER 2: LITERATURE REVIEW 2.1 Transformational leadership 2.2 Relationship between transformational leadership factors and job satisfaction …8 2.3 Relationship between transformational leadership factors and trust 11 2.4 Relationship between transformational leadership and organizational commitment…………………………………………………………………………………12 2.5 Relationship between idealized influence, empowerment and organizational Commitment 14 2.6 The conceptual model and hypotheses of the research 17 CHAPTER 3: RESEARCH METHODOLOGY 19 3.1 Sample 20 3.2 Data collection and procedure 21 3.3 Questionnaire design 22 3.4 Data analysis method 25 CHAPTER 4: DATA ANALYSIS AND RESULTS 27 4.1 Respondents’ demographics 27 4.2 Reliability Analysis 28 4.3 Exploratory Factor Analysis (EFA) 30 4.4 Regression Analysis 34 4.4.1 Multiple Regression Analysis to define the effect of idealized influence, inspirational motivation, intellectual stimulation, individualized consideration on job satisfaction ……………………………………………………………34 4.4.2 Multiple Regression Analysis to define the effect of inspirational motivation, intellectual stimulation, individualized consideration on Trust 40 4.4.3 Multiple Regression Analysis to define the effect of inspirational motivation, intellectual stimulation, individualized consideration on Commitment………… 43 4.4.4 Simple Regression Analysis to define the effect of idealized influence on empowerment ………… .46 4.4.5 Simple Regression Analysis to define the effect of empowerment on commitment……………………………………………………………………… 47 CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATIONS 51 5.1 Conclusion and discussion 51 5.2 Implications 52 5.3 Limitations and future research direction 53 REFERENCES 55 APPENDICES 65 Appendix A: Guidelines for In-depth Interview Appendix B: Questionnaire (English Version) Appendix C: Questionnaire (Vietnamese Version) Appendix D: Histogram, Normal Regression & Scatter plot of Dependent LIST OF FIGURES Figure 2.1: A theoretical model Figure 3.1: Research Process Figure D-JS1: Histogram of Job Satisfaction Figure D-JS2: Normal Plot of Job Satisfaction Figure D-JS3: Scatter Plot of Job Satisfaction Figure D-TR1: Histogram of Trust Figure D-TR2: Normal Plot of Trust Figure D-TR3: Scatter Plot of Trust Figure D-CO1: Histogram of Organizational Commitment Figure D-CO2: Normal Plot of Organizational Commitment Figure D-CO3: Scatter Plot of Organizational Commitment Figure D-EM1: Histogram of Empowerment Figure D-EM2: Normal Plot of Empowerment Figure D-EM2: Scatter Plot of Empowerment LIST OF TABLES Table 3.1 Source of measurement scale Table 4.1: Sample Demographics Table 4.2 Reliability test result Table 4.3 KMO and Bartlett's Test Table 4.4 Rotated Component Matrix Table 4.5 Total Variance Explained Table 4.6 Correlations matrix of Job Satisfaction, Idealized influence, Inspirational motivation, Intellectual stimulation and Individual consideration Table 4.7 Model Summary of multiple regression analysis Table 4.8 ANOVA of multiple regression analysis Table 4.9 Coefficients of multiple regression analysis Table 4.10 Correlations matrix of Trust, Inspirational motivation, Intellectual stimulation and Individual consideration Table 4.11 Model Summary of multiple regression analysis Table 4.12 ANOVA of multiple regression analysis Table 4.13 Coefficients of multiple regression analysis Table 4.14 Correlations matrix of Commitment, Inspirational motivation, Intellectual stimulation and Individual consideration Table 4.15 Model Summary of multiple regression analysis Table 4.16 ANOVA of multiple regression analysis Table 4.17 Coefficients of multiple regression analysis Table 4.18 Model Summary of simple regression analysis Table 4.19 ANOVA of simple regression analysis Table 4.20 Coefficients of simple regression analysis Table 4.21 Model Summary of simple regression analysis Table 4.22 ANOVA of simple regression analysis Table 4.23 Coefficients of simple regression analysis Table 4.24 Summary of hypotheses testing result ABSTRACT According to many previous studies, the effective leaders are one of the most important factors creating influences on the performance in the Vietnamese stateowned organizations; The purpose of this study was to investigate the relationship between transformational leadership factors and job satsifactions, trust and organizational commitment in Vietnamese state-owned organizations There are 208 qualified respondents including 123 men (occupied 59 percent) and 85 women (occupied 41 percent), aged from 22 to over 40 years old All of respondents have over 2-year working experiences and there are about 23% of respondents who are keeping at least Deputy Manager positions The findings of the study indicated that transformational leadership factors including indealized influence, inspirational motivation, intellectual stimulation and individualized consideration have significant and positive correlations with job satisfaction, trust and organizational commitment The research results have contributed to the literature and provided more evidences for the managers in their decisions of their workforce However, the sample for the research is still limited due to the application of convenient sampling method and surveyed only in Ho Chi Minh City and Vung Tau city Keywords: transformational leadership, indealized influence, inspirational motivation, intellectual stimulation and Individualized consideration, organizational commitment job satisfaction, trust and - 64 - Walton, R E (1985) From control to commitment in the workplace Harvard Business Review, 63, 76-85 Wellins, R S., Byham, W., & Wilson, J (1991) Empowered teams: Creating self-directed workgroups that improve quality, Productivity, and Participation San Francisco: Jossey-Bass Zaccaro, S J., & Klimoski, R J (2001) The nature of organizational leadership: Understanding the performance imperatives confronting today's leaders San Francisco: Jossey-Bas - 65 - Appendices Appendix A: Guidelines for In-depth Interview Measure scales Instills pride in me for being associated with him/her Goes beyond self-interest for the good of the group Behaves in ways that builds my respect Display confidence in each other Talks about their most important values and beliefs Considers the moral and ethical consequences of decisions Comments All respondents expressed that they understood the meaning of words used in Emphasizes the importance of having a collective sense of the scales and what the mission scales implied However, Clarify the central purpose underlying our actions the interviewees proposed Sets high standards 10 Talks optimistically about the future 11 Talks enthusiastically about what need to be accomplished my”for all items 12 Expresses confidence that goals will be achieved that the researcher should change the now "you" to "me" and “your” to “ Moreover, they also recommended to add the 13 14 15 16 17 18 Re-examines critical assumption to question whether they subject “ Manager” before are appropriate each sentence to be easy to Seeks differing perspectives when solving problems understanding in Suggests new ways of looking at how to complete assignments Encourage each other to rethink ideas which had never been questioned before Spend time teaching and coaching Treats me as an individual rather than just as a member of a group Vietnamese questionnaire version - 66 - 19 Helps me to develop my strengths 20 Provide useful advice for each other’s development 21 The work I am doing is important 22 I feel I have a lot of latitude in what I am doing 23 I have a sense of freedom in what I am doing 24 I am determining what I on my job All respondents expressed that they understood the meaning of words used in the scales and what the scales implied However, the interviewees proposed 25 I would be happy to spend the rest of my career with this that the researcher should organization change the now “ you” to “I” 26 27 28 Right now, staying with my organization is a matter of necessity as much as desire the researcher should change the “ your” to “my” I not feel any obligation to remain with my current employers I really feel as if this organization's problems are my own All respondents expressed 29 I feel quite confident that my leader will always try to that they understood the treat me fairly meaning of words used in 30 I feel a strong loyalty to my leader the scales and what the 31 I would support my leader in almost any emergency 32 I have a strong sense o f loyalty toward my leader 33 The way my job provides for steady employment change the now “ you” to 34 The way my co-workers get along with each other “I” 35 The working conditions 36 The chances for advancement on this job scales implied However, the interviewees proposed that the researcher should - 67 - Appendix B: Questionnaire (English Version) Dear Sir/Madam, This survey is done by the University of Economics of Ho Chi Minh City The primary purpose of this study is to improve the understanding of the relationship between transformational leadership factors and job satisfaction, organizational commitment and trust This questionnaire is completely confidential and will only be used in this research scope When you finish, please seal your questionnaire in the envelope provided Thank you very much In relation with your organization, to what extent you disagree or agree with the following statements? Please circle one suitable number for each statement: Strongly disagree Strongly agree ▼ ▼ Instills pride in me for being associated with him/her Goes beyond self-interest for the good of the group Behaves in ways that builds my respect Display confidence in each other 5 Talks about their most important values and beliefs Considers the moral and ethical consequences of decisions 5 Emphasizes the importance of having a collective sense of mission Clarify the central purpose underlying our actions Sets high standards 10 Talks optimistically about the future 11 Talks enthusiastically about what need to be accomplished 12 Expresses confidence that goals will be achieved 13 Re-examines critical assumption to question whether they - 68 - are appropriate 14 15 16 17 18 Seeks differing perspectives when solving problems Suggests new ways of looking at how to complete assignments Encourage each other to rethink ideas which had never been questioned before Spend time teaching and coaching Treats me as an individual rather than just as a member of a group 5 5 19 Helps me to develop my strengths 20 Provide useful advice for each other’s development 21 The work I am doing is important 22 I feel I have a lot of latitude in what I am doing 23 I have a sense of freedom in what I am doing 24 I am determining what I on my job 5 5 25 26 27 I would be happy to spend the rest of my career with this organization Right now, staying with my organization is a matter of necessity as much as desire I not feel any obligation to remain with my current employers 28 I really feel as if this organization's problems are my own 29 I feel quite confident that my leader will always try to treat me fairly 30 I feel a strong loyalty to my leader 31 I would support my leader in almost any emergency 32 I have a strong sense o f loyalty toward my leader - 69 - 33 The way my job provides for steady employment 34 The way my co-workers get along with each other 35 The working conditions 36 The chances for advancement on this job There are following positions in the organization: Director Deputy director Department manager Department deputy manager Employee Please select a suitable number for each of following questions: (a) What was your first position in the organization? (b) What is your present position? Lastly, a couple of questions about you: Gender: □ Male □ Female What year did you start working? Year ………… What year did you start working in Company? Thank you very much Year ………… - 70 - Appendix C: Questionnaire (Vietnamese Version) Kính gửi Anh/Chị, Khảo sát thực Trường Đại Học Kinh Tế TP.HCM Mục đích nghiên cứu để nâng cao hiểu biết yếu tố lãnh đạo hài lịng cơng việc, tính cam kết tin tưởng tổ chức Kết khảo sát hồn tồn bí mật sử dụng phạm vi nghiên cứu Khi Anh/Chị hoàn thành khảo sát, xin vui lòng bỏ vào bao thư cung cấp, niêm phong gửi cho Chân thành cảm ơn đóng góp Anh/Chị Tại nơi làm việc, Anh/Chị đồng ý không đồng ý mức độ khác với nhận định sau Anh/Chị vui lòng khoanh tròn lựa chọn Anh/Chị từ đến cho nhận định Cấp mang lại cho niềm tự hào làm việc Cấp hướng tơi gạt bỏ lợi ích cá nhân để hướng đến lợi ích tập thể Việc làm cấp làm cho tơi tơn trọng Có tin tưởng lẫn công việc cấp Cấp thường đề cập giá trị niềm tin công việc Cấp thường xem xét yếu tố đạo đức trước định Cấp thường nhấn mạnh tầm quan trọng tập thể Cấp làm rõ mục tiêu chung để làm sở triển khai công việc Cấp đặt tiêu chuẩn cao công việc Rất không đồng ý Rất đồng ý ▼ ▼ 5 5 5 5 - 71 - 10 Cấp đề cập điều lạc quan tương lai 11 Cấp say mê trao đổi công việc cần đạt 12 Cấp thể tự tin mục tiêu hoàn thành 5 5 13 14 15 16 Cấp thường xem xét giả thiết quan trọng để đưa định phù hợp Cấp tìm kiếm quan điểm cách nhìn nhận khác giải vấn đề Cấp gợi ý, đề xuất cách nhìn mẻ để hồn thành cơng việc Cấp khuyến khích suy nghĩ lại ý tưởng mà trước chưa hỏi đến 17 Cấp dành thời gian đào tạo huấn luyện nhân viên 18 Cấp quan tâm đến cá nhân 19 Cấp giúp phát triển mạnh 20 Cấp đưa lời khuyên giúp cho phát triển 21 Công việc thực quan trọng 5 22 Tôi cảm thấy tơi có quyền xử lý cơng việc tơi phụ trách 23 Tơi có tự định xử lý công việc làm 24 Tơi có quyền định công việc làm 5 5 25 26 27 28 Tơi vui làm việc cho tổ chức đến hết quãng thời gian làm việc lại Hiện tại, lại làm việc cho tổ chức điều mà mong muốn Tôi không cảm thấy bị ràng buộc phải lại làm việc cho tổ chức Tôi thực cảm thấy vấn đề tổ chức - 72 - vấn đề tơi 29 Tơi cảm thấy tự tin cấp luôn đối xử với cách công 30 Tôi cảm thấy trung thành cấp 31 Tôi hỗ trợ cấp trường hợp khẩn cấp 32 Tơi có ý thức mạnh mẽ trung thành cấp 33 Công việc mang lại cho ổn định vững 34 Tơi cảm thấy hài lịng đồng nghiệp 35 Tôi đánh giá tốt điều kiện môi trường làm việc tổ 5 chức 36 Cơng việc có hội thăng tiến tương lai Có vị trí sau tổ chức Anh/Chị: Giám Đốc Phó Giám Đốc Trưởng Phịng Phó Trưởng Phịng Nhân viên Vui lòng chọn số phù hợp để điền vào ô trống bên cho câu hỏi sau: (a) Vị trí Anh/Chị vào làm việc tổ chức này? (b) Vị trí Anh Chị? Sau cùng, vài câu hỏi Anh/Chị: Giới tính: □ Nam □ Nữ Anh/Chị bắt đầu làm từ năm nào? Năm ……… Anh/Chị bắt đầu làm việc tổ chức từ năm nào? Xin Cám ơn Năm ……… - 73 - Appendix D: Histogram, Normal Regression & Scatter plot of Dependent Variable: Job Satsifaction Figure D-JS1: Histogram of Job Satsifaction Figure D-JS2: Normal Plot of Job Satsifaction - 74 - Figure D-JS3: Scatter Plot of Job Satsifaction Variable: Trust Figure D-TR1: Histogram of Trust - 75 - Figure D-JS2: Normal Plot of Trust Figure D-TR3: Scatter Plot of Trust - 76 - Variable: Organizational Commitment Figure D-CO1: Histogram of Organizational Commitment Figure D-CO2: Normal Plot of Organizational Commitment - 77 - Figure D-CO3: Scatter Plot of Organizational Commitment Variable: Empowerment Figure D-EM1: Histogram of Empowerment - 78 - Figure D-EM2: Normal Plot of Empowerment Figure D-EM3: Scatter Plot of Empowerment