Factors influencing organizational commitment and intention to stay of core employees in small medium sized companies in hochiminh city

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huỳnh Thiên Hải FACTORS INFLUENCING ORGANIZATIONAL COMMITMENT AND INTENTION TO STAY OF CORE EMPLOYEES IN SMALL - MEDIUM SIZED COMPANIES IN HOCHIMINH CITY MASTER OF BUSINESS (Honours) Ho Chi Minh City - Year 2012 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huỳnh Thiên Hải FACTORS INFLUENCING ORGANIZATIONAL COMMITMENT AND INTENTION TO STAY OF CORE EMPLOYEES IN SMALL - MEDIUM SIZED COMPANIES IN HOCHIMINH CITY ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR Dr NGUYỄN THỊ NGUYỆT QUẾ Ho Chi Minh City - 2012 INDEX ACKNOWLEDGEMENTS LIST OF FIGURES LIST OF TABLES LIST OF APPENDIX ABSTRACT 1.1 Background to the research 10 1.1.1 The importance of small and medium sized companies 10 1.1.2 The facts of labor force in SMEs and problem statement 10 1.2 Research objective 12 1.3 Scope of the study 12 1.4 Significances of the study: 12 1.5 Structure of the study 13 CHAPTER 2: LITERATURE REVIEW 14 2.1 Chapter introduction 14 2.2 Relative concepts and definition 14 2.2.1.Small and medium companies 14 2.2.2 Core employees 15 2.2.3 Core employee retention 15 2.3 Review of previous study 17 2.3.1 Organizational commitment 18 2.3.2 Training 19 2.3.3 Leadership 19 2.3.4.Working environment 20 2.3.5 Remuneration and reward 21 2.3.6 Organizational culture and policies 22 3.3.7 Intention to stay 22 2.4 Proposal research hypotheses 23 2.5 Chapter conclusion 24 CHAPTER 3: METHODOLOGY 25 3.1 Research process 25 3.2 Questionnaire design 26 3.2.1 Measure of variable 26 3.2.2 Draft questionnaire 30 3.3 Pilot study 30 3.4 Main survey 31 3.4.1 Sample method 31 3.4.2 Sample size 31 3.5 Data analysis technique 32 3.5.1 Recoding data 32 3.5.2 Testing of Reliability 32 3.5.3 Exploratory factor analysis (EFA) 33 3.5 Hypotheses testing: Multiple Regression Analysis 33 3.7 Chapter conclusion 34 CHAPTER 4: DATA ANALYSIS 35 4.1 Sample description and data clearance 35 4.2 Demography Sampling 35 4.4 Testing of Reliability 36 Exploratory factor analysis (EFA) 37 4.7 Chapter conclusion 43 5.1 Finding and discussion 45 5.2 Limitation 46 5.3 Suggestion for future Research 47 APPENDIX 55 APPENDIX 1.1: QUESTIONAIRE (English version) 55 APPENDIX 1.2: QUESTIONAIRE (Vietnamese version) 59 APPENDIX 4.1 CODING 62 Appendix 4.2 Demography 65 Appendix 4.3: Testing of reliability variables 65 Appendix 4.4 EFA for all independent variables 67 Appendix 4.4 EFA for all independent variables (The first time in times) 67 Appendix 4.4.2: EFA with all independent variable (the second time in times) 68 Appendix 4.4 EFA for all independent variables (The third time in times) 70 Appendix 4.4 EFA for all independent variables (The fourth time in times) 71 Appendix 4.5 Regression, model Independent variables: Training, leadership, remuneration and company policies; dependent variable: Commitment 73 Appendix 4.6 Regression, model Independent variables: Organizational Commitment; dependent variable: intention to stay 76 ACKNOWLEDGEMENTS First at all, I would like to express my sincere gratitude to my supervisors, Dr Nguyen Thi Nguyet Que for her continuous support of my thesis I would like to take this opportunity to thank leaders, teachers and staffs in ISB who help me usefully all the subjects of my master course My sincere thanks also goes to the friends and colleagues who participated in the initial trial survey stages that led to the development of the final survey questionnaire and their support over the time when I am busy to study I would like to thank my Mummy, my sisters, brothers and my special friend who is my moral support in all my studying period Last at all, I would like to present the achievement to my Dad's soul who spent all the life for my family Ho Chi Minh City, December 28, 2012 Huynh Thien Hai LIST OF FIGURES Name of configure Figure 2.1 proposal research hypothesis Figure 3.1 Research Design Process Figure 4.1 Final model LIST OF TABLES Table name Table 2.1 Classification of SMEs in Vietnam Table 3.1 Measurement of training and career development Table 3.2 Measurement of Table 3.3 Measurement of working environment Table 3.4 Measurement of remuneration and rewards Table 3.5 Measurement of company policies Table 3.6 Measurement of commitment Table 3.7 Measurement of Table 3.8: Cronbach’s alpha reliability coefficient Table 4.1 Sample Demography Table 4.2: Cronbach’s alpha reliability coefficient of variable Table 4.3: Pattern matrix in the last time (the fourth time) of regression analysis Table 4.4 Correlations model b Table 4.5 Model Summary model Table 4.6 ANOVA of model a Table 4.7 Coefficients of medel b Table 4.8 Model Summary model a Table 4.9 Coefficients of model Table 5.1 Questionnaire for organizational polices LIST OF APPENDIX Appendix name APPENDIX 1.1: ENGLISH QUESTIONAIRE APPENDIX 1.2: VIETNAMESE QUESTIONAIRE APPENDIX 4.1 CODING Appendix 4.2 Demography Appendix 4.3: Testing of reliability of variables Appendix 4.4 EFA for all independent variables Appendix 4.4 EFA for all independent variables (The first time in times) Appendix 4.4.2: EFA with all independent variable (the second time in times) Appendix 4.4 EFA for all independent variables (The third time in times) Appendix 4.4 EFA for all independent variables (The fourth time in times) Appendix 4.5.Correlation bivariable model Appendix 4.5.Correlation bivariable model SME SMEs HCMC VCCI HR VND WTO WB 64 38 C Policies 22 "Progress towards meeting planned objectives is periodically om28 reviewed" 39 C Policies 23 "The organizational structure facilitates the way we things." om29 Policies 24 " This organization has a defined vision/mission to meet its 40 C goals" om30 COMMITMENT 41 C Commitment 25 "I feel a strong sense of belonging to this organization" om31 Commitment 26 "I could just as well working for a different organization if the type of work was similar (negative) " 42 C Commitment 27 "I find it difficult to agree with this organization's om32 policies (negative) Commitment 28 "This organisation really inspires the very best in me in 43 C the way of job performance" om33 Commitment 29 "My values and this organisation's values are very similar" Commitment 30 "There is little to be gained by sticking with this organization indefinitely (negative) " Commitment 31 "I am willing to put in a great deal more effort than normally expected to help this organisation be successful" Commitment 32 "I am proud to tell others that I am part of this organization" Commitment 33 "I really care about the future of this organization" INTENTION TO STAY 44 Int34 45 Int35 46 Int36 47 Int37 Intention 34 "I plan to work at my present job for as long as possible" Intention 35 " I will most certainly look for a new job in the near future (negative) " Intention 36 "I plan to stay in this job for at least two to three years" Intention 34 "I would hate to quit this job" 65 Appendix 4.2 Demography AREA FIELD EDU GENDER MARRIED STATUS Appendix 4.3: Testing of reliability variables Item-Total Statistics Group Training Leader Environment 66 Remunerations & rewards Organizational Policies Commitment Intention 67 Appendix 4.4 EFA for all independent variables Appendix 4.4 EFA for all independent variables (The first time in times) Total Variance Explained The first time in times Factor 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Extraction Method: Principal Axis Factoring a When factors are correlated, sums of squared loadings cannot be added to obtain a total variance 68 Pattern Matrix The first time in times TRA 01 TRA 02 TRA 03 LEA 04 LEA 05 LEA 06 LEA 07 LEA 08 LEA 09 LEA 10 LEA 11 ENV 12 ENV 13 ENV 14 ENV 15 REM 16 REM 17 REM 18 REM 19 REM 20 POL 21 POL 22 POL 23 POL 24 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization a Rotation converged in iterations Appendix 4.4.2: EFA with all independent variable (the second time in times) Total Variance Explained the second time in times Factor Total 69 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Extraction Method: Principal Axis Factoring a When factors are correlated, sums of squared loadings cannot be added to obtain a total variance a Pattern Matrix the second time in times TRA 01 TRA 02 TRA 03 LEA 05 LEA 06 LEA 07 LEA 08 LEA 09 LEA 10 LEA 11 ENV 12 70 ENV 13 ENV 14 ENV 15 REM 16 REM 17 REM 18 REM 19 REM 20 POL 21 POL 22 POL 23 POL 24 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization a Rotation converged in 10 iterations Appendix 4.4 EFA for all independent variables (The third time in times) Total Variance Explained The third time in times Factor 10 11 12 13 14 15 16 17 18 71 19 20 Extraction Method: Principal Axis Factoring a When factors are correlated, sums of squared loadings cannot be added to obtain a total variance a Pattern Matrix The third time in times TRA 01 TRA 02 TRA 03 LEA 05 LEA 06 LEA 07 LEA 08 LEA 09 LEA 10 LEA 11 ENV 15 REM 16 REM 17 REM 18 REM 19 REM 20 POL 21 POL 22 POL 23 POL 24 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization a Rotation converged in iterations Appendix 4.4 EFA for all independent variables (The fourth time in times) Variance Explained The fourth time in times Factor Total 10 11 12 13 14 15 16 17 18 19 Extraction Method: Principal Axis Factoring a When factors are correlated, sums of squared loadings cannot be added to obtain a total variance a Pattern Matrix The fourth time in times TRA 01 TRA 02 TRA 03 LEA 05 LEA 06 LEA 07 LEA 08 LEA 09 LEA 10 LEA 11 ENV 15 REM 16 REM 17 REM 18 REM 19 POL 21 POL 22 73 POL 23 POL 24 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization a Rotation converged in iterations Appendix 4.5 Regression, model Independent variables: Training, leadership, remuneration and company policies; dependent variable: Commitment Model 1: Correlations Pearson Correlation Sig (1-tailed) Model R 749 a Predictors: (Constant), POL, TRA, LEADER, REM b Dependent Variable: COM Model a Dependent Variable: COM b Predictors: (Constant), POL, TRA, LEADER, REM Regression Residual Total a 74 Model Coefficients a Model (Constant) TRA LEADER REM POL a Dependent Variable: COM a Model Model 1: Collinearity Diagnostics Dimension 1 a Dependent Variable: COM a Model 1: Residuals Statistics Predicted Value Residual Std Predicted Value Std Residual a Dependent Variable: COM 75 Charts 76 Appendix 4.6 Regression, model Independent variables: Organizational Commitment; dependent variable: intention to stay Model 2: Model Summary Model a Predictors: (Constant), COM b Dependent Variable: INT b R 621 a 77 Model 2: ANOVA a Model Regression Residual Total a Dependent Variable: INT b Predictors: (Constant), COM Model 2: Coefficients a Model (Constant) COM a Dependent Variable: Model 2: Collinearity Diag Model a Dependent Variable: INT Predicted Value Residual Std Predicted Value Std Residual a Dependent Variable: INT Dimension 78 Charts ... on factors that have impact on the intention to stay of core employees stay in SMEs Specially, the study will investigates what factors influencing the intention to stay of core employees and. ..UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huỳnh Thiên Hải FACTORS INFLUENCING ORGANIZATIONAL COMMITMENT AND INTENTION TO STAY OF CORE EMPLOYEES IN SMALL. .. deep the influencing factors effect organizational commitment and intention to stay of core employees 1.3 Scope of the study Purpose of the research investigate and determine the factors the