The impact of organization culture on employees commitnent

Table of Contents Abstract I INTRODUCTION 1.1 Background of the study 1.2 Problem statement .5 1.3 The objective of the study 1.4 Significance of the Study 1.5 Scope of the study .7 1.6 Operational Definition .8 1.7 Organization of research II LITERATURE REVIEW 10 2.1 The concept of Organizational Commitment 10 2.2 The concept of Organizational culture 11 Functions of Organizational Culture 14 2.4 The effect of factors of organizational culture on employees’ commitment 16 2.5 Conceptual framework 17 2.6 Research Hypothesis 18 2.7 Specific Hypothesis 19 III METHODOLOGY 20 3.1 Research Design 20 3.2 Sample .20 3.3 Data collection instrument 20 3.4 Data Analysis Tools and Interpretation 21 3.5 Sample profile 21 IV DATA ANALYSIS 23 4.1 Scale Purifications 23 4.2 Scale Reliability 28 4.3 Hypothesis testing 29 V CONCLUSION AND DISCUSSION .31 5.1 Summary and discussion 31 5.2 Conclusion and Implication .32 5.3 Limitations and Future Research 33 REFERENCES 36 THE IMPACT OF ORGANIZATION CULTURE ON EMPLOYEES COMMITNENT JULY, 2020 Abstract The objective of the study is to identify the effect of organizational culture of the company on employee commitment This study was descriptive and correlational research that was conducted through the survey method Its population consist of the entire 250,000 employees in the electronic companies in Thai Nguyen province and 250 was selected as volume of sample from 10% of the population size Descriptive and inferential statistics were used to analyze the data, though SPSS software The main finding of this research is how strong of the employee commitment being has impacted by four main traits which are involvement, consistency, adaptability and mission Organizational culture is compulsory part of the organization on which organization’s success or failure depends Those organizations, which succeed in implementing the culture efficiently in the organization, lead the marker or gained high profitability The organizational culture increases the employee’s commitment through installing different level (surface level, espoused values, basic assumptions and values) of culture in the organization Keywords: Organizational Culture, Organizational Commitment, Organizational Performance I INTRODUCTION 1.1 Background of the study The employees’ commitment is a vital factor in the success of many businesses Because it decides the way how he engages at work, how much time and effort he spends on the company’s task, and therefore the commitment identifies the work productivity Moreover, employees’ commitment is influenced directly and strongly by the organizational culture and environment The concept of organizational commitment has attracted a great deal of interest in the human resource management and psychology research For example, employee commitment and loyalty are central features in the high performance workplace literature in which they are seen as mediating factors linking different types of human resource management and employment practices to enhanced performance Meyer et al (1993, 2002) argue that strong affective commitment to an organization arises because employees share values with both the organization and its members and it is therefore predicted to be positively associated with job performance Moreover, establishing a committed and loyal workforce may be associated with enhanced firm performance through less opportunistic behavior on the part of employees (Green, 2008) or through influencing their supply of effort, and hence output Employees’ decisions over their supply of effort play a key role in various incentive models of worker compensation (see, for example, Lazear, 2000) as well as in the efficiency wage literature (see Akerlof, 1982 and Akerlof and Yellen, 1990) Given such a relationship between employee effort and commitment, an interesting line of enquiry concerns how the firm may influence the level of affective commitment via human resource (HR) practices Employee commitment and loyalty thus arguably play an important role in the principalagent issues surrounding the separation between the ownership and control of an organization The costs associated with delegated decision-making clearly depend on the extent to which the interests of the principal and agent differ (see, for example, Aghion and Tirole, 1997, and Athey and Roberts, 2001) In so far as employees who exhibit commitment and loyalty towards their employer may have interests which are aligned with those of their employer, the agency costs often associated with the employeeemployer relationship are reduced Ongoing processes through which organization members express their concern for the organization and its continued success and well-being The success of an organization highly depends on the active employee commitment due to the fact that it can be directly tied to increased productivity and, ultimately, higher profitability for an organization 1.2 Problem statement As depicted on the background of the study different authors and researchers asserted that there is positive and significant relationship between overall organizational culture and organizational commitment Furthermore, a study by Nongo and Ikyanyon (2012) proved that corporate culture is important in improving the level of employee commitment to the organization but not all corporate cultural measures have effect on employee commitment Accordingly, these researchers conclude that, consistency & Mission; two of the corporate culture traits on Dennison Model, are not significantly correlated with organizational commitment To the contrary, Asghar, Mojtabaand Sadeghi (2015); Ghader and Afkhami (2014); Azadi, Bagheri , Eslami and Aroufzad (2013) research finding depict that there is significant relationship So there is further need to research which organizational culture trait has effect on organizational commitment Hence, examining effect each organizational culture traits enables organizations to identify a cultural trait which has greater effect on employee commitment The organization’s culture of electronic companies in Thai Nguyen encompasses shared values, norms and attitudes which guide the way employees behave Accordingly, studying the organizational culture and its effect on employee commitment might help organizations to enrich its organizational culture practice and adjust its focus on most important organizational culture type that can bring employee commitment Therefore, this study is conducted to identify effect of each selected organizational culture (Involvement, consistency, adaptability and mission) on employee commitment Thus, this study addressed the following research questions: Is there the relationship between organizational culture traits including involvement, consistency, adaptability, and mission and employee commitment in electronic companies in Thai Nguyen? 1.3 The objective of the study The general objective of the study is to identify the effect of organizational culture of the company on employee commitment and propose some solutions to help electronic company improve their performance Under this broader objective, the study has the following specific objectives: • To identify Literature review of previous research between organizational culture and employees’ commitment • To explain the relationship of factors of organizational culture to employees’ commitment • To find out the relationship between Involvement and employee commitment • To identify how Consistency impact on employee commitment • To measure the effect of Mission on employee commitment • To identify the relationship of Adaptability on employee commitment • To propose solutions to help companies improve performance by building the organizational culture and achieve employee’s commitment 1.4 Significance of the Study Organizational culture is one of the critical factors that enhance the attainment of organizational goals and objectives (Nongo & Ikyanyon, 2012) Thus, it seems highly essential that ensuring to have highly committed employees might help companies to meet the strategic objectives and goals outlined in their vision Furthermore, this study will have the following significance: • The study could benefit the case organization by determining which type of organizational culture has highest effect on employee’s commitment This could also lead to improvements in workplaces to help employees become more committed to their jobs • Effect of organizational culture on enterprises employee’s commitment is not evidently known Therefore, this study can help companies to enrich their organizational culture practice and adjust them focus on most important organizational culture type that can bring employee commitment • The company might use the study finding as an input to amend its policy and procedure on organizational culture and other related human capital management strategies • The study might contribute to the existing literature through identifying the significance relationship between the selected organizational culture and employee commitment Moreover, empirically identifying the contribution of organizational culture traits to employee commitment in company context is an important addition for the literature as well • Lastly, similar stake holders might use it as an input for further study and to investigate more in the area: in a broader and wider scope The findings of this study will not only redound to the benefit of society considering that organizational culture plays an important role in employees’ commitment today, but also make the further greater demand for consistent commitment 1.5 Scope of the study Purpose of this study is to explore how culture of the company consists of almost all human resource management (HRM), norms and values affect to employee commitment After this study prove that organizational culture exists in organization is necessary, it enhances the organizational commitment and employee commitment Corporate management can find best ways to bring best culture, which causes an employee's towards organizational commitment and their own commitment Hence, organizations should critically examine which type of culture will be beneficial for their organization, what will happen if they not improve their organizational culture, and then properly communicate it with every employee and member of the organization to make sure that all employees will increase their commitment and have responsibility for their job and company 1.6 Operational Definition Professional Employee: refer to employees who have administrative or strategic exposure in the business and possess a minimum of Diploma in their educational qualification Semi/Non-Professional employee: refers to those employees engaged in low level tasks with limited/no exposure to strategic and administrative decisions in the business, also their educational level is certificate or lower 1.7 Organization of research This thesis is divided into five chapters: Chapter 1: Introduction This chapter presents an overview of study, the problem statement, research objectives and limitations to the study Chapter 2: Literature review This chapter examines literature about organizational culture The literature reviewed starts by defining organizational culture, and then goes on to discuss how culture is created and sustained in an organization This chapter also looks at other research studies on organizational culture Then, this chapter reviews literature on employee commitment and its importance to an organization The ways of maintaining and sustaining employee commitment as well as research initiatives on the subject of employee commitment are also discussed Chapter 3: Research methodology to test the hypotheses proposed This chapter shows how the research was conducted It provides insight into the sampling method used, data collection techniques, research design, variable measurements, questionnaire construction Chapter 4: Analysis and research results This chapter presents the way of analyzing the data after being collected and he tools to test that raw data set The research results also are analyzed here to evaluate the relation of organizational culture and employee's commitment Chapter 5: Conclusion and discussion Summary of the main results of the study, contributions of the research implications for organization management as well as the limitations of the present study and suggestions for further research in the future research II LITERATURE REVIEW 2.1 The concept of Organizational Commitment Employees and organizations have reciprocal responsibilities and mutual commitments both stated and define their relationship There are three main dimensions compacts in all companies These are formal, psychological and social Employee’s familiar relationship between employees to employee is also important because basic task and performance is job description and agreements According to US corporation research many companies lose half of their employees due to some reasons (J.Kreisman, 2002) Organizational commitment has been defined as multidimensional in nature and involving an employee’s loyalty to the organization It also identifies the attitude and behavior of the employees Loyalty of employee cannot be determined through direct questioning no one can assume whether employees today work effectively It is commonly know that loyalty and a commitment is more than simple behavior it’s all just like customer loyalty and commitments (Angle, 1983) Meyer, (1997) identifies three types of commitments Normative commitment is defined as organizational commitments Affective commitments are defined by emotional attachments, identification, and involvement to achieve the goal of organization Continuance commitment is the willingness to remain in an organization because of different investments Yousef (2001) examined the associations between job satisfaction, organizational commitment, and turnover intention among temporary employees According to North craft and Neale (1996), commitment is an attitude reflecting an employee’s loyalty to the organization, and an ongoing process through which organization members express their concern for the organization and its continued success and well-being Organizational commitment is “the degree to which an employee identifies with a particular organization and its goals, and wishes to maintain membership in the organization” (Robbins, 1998, p 142) Walker (2005) states organizational commitment as “multidimensional in nature, involving an employee’s loyalty to the organization, 10 V CONCLUSION AND DISCUSSION 5.1 Summary and discussion The main objective of this paper is to measure the relationship between four traits of organizational culture and the employee commitment The employee commitment has impacted by four main traits which are involvement, consistency, adaptability and mission Involvement was the first major factor that affect employee commitment with a value of its regression is 0.283 and (p