Organizational Culture and Public Service Motivation in Executive Agencies: Mediating Role of Adhocracy Culture

Public organizationmanagement studies has emphasized the role of organizational culture in terms of organizational innovation and effectiveness. In addition, many studies have been interested the role of public service motivation. However, little studies have not been focused on the relationship between organizational culture and public service motivation(PSM) and mediating role of adhocracy culture in the relationship. This study tries to find the way how to reduce the side effects of markettype reform and how to increase public employee attitudes(public service motivation) by exploring the the relationship and the mediating effect.

Organizational Culture and Public Service Motivation

in Executive Agencies: Mediating Role of Adhocracy

Culture*1)

* hur.seunguk@gmail.com

Copyright © 2021 by the Korean Association for Comparative Government This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License which permits unrestricted non-commercial use, distribution and reproduction in any medium,

provided the original work is property cited.

(Design/mehodology/approach) Using survey data from executive agency (46 agencies)

in Korea, this article examines the relationship between four types of culture (clan, adhocracy, market, and hierarchy) and public service motivation (PSM) In particular, the mediating effect of adhocracy is explored based on positive organizational behavior

In this study, the role of organizational culture is explored by applying competing values framework

(Findings) The results of direct and indirect effects present that adhocracy culture fully mediates the impacts of market culture on PSM, whereas it partially mediates the impact of clan and hierarchy culture on PSM The results also demonstrate that clan and adhocracy culture can improve PSM

(Research implications or Originality) This study contributes to elaborating the relationship between organizational culture and PSM by employing four types of culture from the CVF and considering the possible mediating role of adhocracy culture The results suggest that scholars and practitioners need to focus on the role of clan and adhocracy culture to eliminate negative effects of NPM reforms and to improve PSM Especially, it is important for them to consider about how to cultivate and manage adhocracy culture importantly, when they make policies or practices for the development of employees' moral and attitudes

주제어: 조직문화, 혁신문화, 공공봉사동기, 책임운영기관

Keywords: Organizational culture, Adhocracy culture, Public service motivation, Executive

agency

I Introduction

The spreading of new reform efforts such as Governance and New Public Service responding to the market model in public sectors is a noticeable trend in diverse countries (Denhardt and Denhardt, 2015) In this context, the side effects of the NPM model for public service have been a significant issue in the public administration studies (Dunleavy, Margetts, Bastow, and Tinkler, 2006) For instance, NPM reforms can give a harmful effect on the identity of public organizations and public employees Especially, they also give negative effects of employees' motivations and attitudes.1)

With respect to the problems, several public management studies have suggested that cultivating public service motivation (PSM) can work as a prominent prescription for reducing side effects of the NPM model and increasing public employee attitudes (Kim and Han, 2017; Moynihan, 2010; Perry, Hondeghem, and Wise, 2010), and culture is an important antecedent of PSM (Lee, Oh, and Park, 2020; Moynihan and Pandey, 2007b; Houston, 2000) The underlying assumption of the previous studies is that organizational culture plays

a significant, albeit informal, role in guiding employees' attitudes because of either the socializing power of values (Hartmann and Khademian, 2010; O'Reilly and Chatman, 1996) or the bounded rationality of public employees (Dull, 2010).Although the significance of culture has been discussed by many scholars, there are still controversies about the role played by each type of culture' role (Kim and Kim, 2015; Kim and Han, 2017; Lee, Oh, and Park, 2020) For instance, there are contradictory opinions about the impact of market and hierarchy cultural values on public employee attitudes (Cho and Ringquist, 2011; Kim and Han, 2017; Moynihan, 2010; Paarlberg and Lavigna, 2010; Park and Rainey, 2008; Yang and Kassekert, 2010) On the other hand, clan and adhocracy cultural values have been shown to have positive effects on employee attitudes measured by job satisfaction and intrinsic motivation In particular, autonomy and innovation, which are representative values in adhocracy culture (e.g., Cameron and Quinn, 2011; Hartnell, Ou, and Kinicki, 2011; Yang and Kassekert, 2010), generally show a positive relationship with employee attitudes Although Paarlberg and Lavigna (2010) point out that autonomy can play a positive role in supporting PSM, it remains unclear as to whether and how much of adhocracy culture plays a significant role in the relationship with PSM

1) Moynihan (2010, 24) argues that tying contingent pay incentives to performance measures in a public service agency does not solve moral hazard problems and results

in crowding out the effects of intrinsic motivation

To fill these gaps, this article explores on the mediating role of adhocracy culture in the association with three types of culture (clan, market, and hierarchy culture) and PSM The reason behind testing the mediating role of adhocracy culture is that autonomous-supportive cultural values have the characteristics of positive psychological capital (Luthans, Norman, Avolio, and Avey, 2008; Luthans and Youssef, 2007) The studies of POB imply a significant mediating effect of adhocracy culture, but little empirical analysis has been done for testing the potential mediating effect of adhocracy culture on PSM Particularly, using the case of Korea executive agency system may provide useful understanding to the current debate on market-type reforms in public agencies and PSM First, the executive agency system, known as agencification, is a core element of NPM initiatives (Moynihan, 2006) Second, in contrast to worldwide trend, the evaluation of the executive agency by the Korean government demonstrates several positive results: improved agency performance, increased quality of public service, and higher levels of collaboration within/between agencies as well as between agencies and the central government (MOSPA, 2009, 2013) Especially, the central government and executive agencies have tried to improve managerial autonomy of the executive agency in terms of personnel and organizational flexibility (Kang, 2021; MOSPA, 2009, 2013) Thus, this study also can provide insights about how to deal with cultures, especially adhocracy culture, in running public organizations

II Theoretical Background and Hypotheses Building

1 Self-Determination Theory

SDT differentiates between extrinsic motivation and intrinsic motivation based

on the extent of lack of autonomy and suggests that two types of motivation can

be changed by employee' intention (Deci, Connell, and Ryan, 1989) More specifically, SDT differs from other motivation theories in that the nature of individual motivation can be placed on a continuum: as an individual moves towards internalizing the external regulations and incentives and integrating them with his or her own values, the person moves toward more autonomous and intrinsic motivation (Park and Rainey 2008, 114-115) For instance, when public employees consider that some public values are important for them to carry out their task, the values serve as a critical mechanism in public employee motivation, even though external rewards or incentives are not guaranteed

SDT also suggests that social-contextual environments work as important external factors in formulating intrinsic motivation (Corduneanu, Dudau, and Kominis, 2020) In the process or development of individual motivation, the role

of cultures is crucial: cultures and values are important because they suggest that cultures play a role in whether the people can experience satisfaction of their basic needs (Deci and Ryan, 2012) Different types of culture can facilitate

or diminish intrinsic motivation depending on whether certain cultures satisfy the extent of the needs of autonomy, competence, and relatedness1 (Deci and Ryan, 2000; Gagn and Deci, 2005) For instance, cultures emphasizing competition and control are likely to have harmful effects on intrinsic motivation On the other hand, autonomous supportive cultural values such as trust and empowerment can promote internalization of a regulation or given values in an organization and thus enhance intrinsic motivation of employees (Deci and Ryan, 2012)

Implicitly or explicitly, the intersection of culture and the intrinsic motivation has provided public administration studies a framework for understanding about how to deal with culture or values in the relationship with PSM (Moynihan and Pandey, 2007b; Park and Rainey, 2007, 2008) In addition, it provides basic logic

of how to solve the negative effects of market type reforms for public service in terms of PSM (Moynihan, 2010)

2 Public Service Motivation

Diverse types of motivation have been used to study the effects of organizational functions or management reforms on public employees' attitudes (Corduneanu, Dudau, and Kominis, 2020; Moynihan and Pandey, 2007b; Pitts, Marvel, and Fernandez, 2011; Yang and Kassekert, 2010) Among diverse motivations, intrinsic motivation has gained much attention recently relative to extrinsic motivation (Bertelli 2007; Cho and Perry, 2011), because it increases employees' passion and enthusiasm about the job, promotes optimistic and positive attitudes toward work and commitment to the organization, and helps maintain a consistent level of high performance (Deci and Ryan, 2012) In the study of intrinsic motivation, SDT plays as one of main theory and many studies use SDT to explores PSM in the relationship with macro, meso, and micro levels

of factors (Corduneanu, Dudau, and Kominis, 2020)

PSM is defined as an individual's predisposition to respond to motives grounded primarily or uniquely in public institutions and organizations (Perry and Wise, 1990, 368) The theory of PSM suggests that PSM is a unique and

fundamental attitude of public employees (Perry et al., 2010; Perry and Wise, 1990) Public employees' attitudes are guided by public values: attraction to public affairs, commitment to the public interest, compassion, and self-sacrifice (Perry, 1996) In a similar vein, Vandenabeele (2007) characterizes PSM as belief, values and attitudes that go beyond self-interest and organizational interest, that concern the interest of a larger political entity (P 547)

Taking up the opinions of Perry and his colleagues, public management scholars have paid attention to diverse antecedents or consequence of PSM Some studies confirm that PSM dose exit and verify diverse antecedents of PSM (Houston, 2000; Perry and Hondeghem, 2008; Perry et al., 2010; Ritz, Brewer, and Neumann, 2016) In addition, PSM, explained by SDT, the more PSM public employees possess, the more likely they will enjoy the task and perform the job well (Lee, Oh, and Park, 2020; Park and Rainey, 2008; Moynihan, 2010) Employees who have a higher level of PSM exhibit more organizational commitment, job satisfaction, and higher performance as well as lower turnover (Crewson, 1997; Perry, Hondeghem et al., 2010; Kim, 2012) Finally, strong PSM is not easily altered in response to adverse environments such as the change of financial rewards and the adoption of market-oriented reforms (Moynihan, 2010)

3 Organizational Culture and Competing Values Framework

Culture is important but complicated and ambiguous (Khademian, 2002) Although there have been various definitions and approaches to culture, this study views culture as shared a set of values among employees that can be cultivated by managers in order to improve employee attitudes (Cameron, 2006; Hartmann and Khademian, 2010; O'Reilly and Chatman, 1996; O'Reilly, Chatman, and Caldwell, 1991) In other words, this study follows the socio-functional approach (Cameron and Quinn, 2011),2) and value is regarded as a crucial factor because of its socialization power (O'Reilly and Chatman, 1996; O'Reilly, Chatman, and Caldwell, 1991)

This study employs culture types developed by the competing value framework (CVF) (Cameron and Quinn, 2011) The CVF has been increasingly found to be useful in studying the role of culutre in the public sectors (Andersen and Moynihan, 2016; Jrgensen and Bozeman, 2007; Moynihan and Pandey, 2007a, 2) Socio-functional approach means that culture is a socially constructed attribute of organizations that serve as the social glue binding an organization together (Cameron and Quinn, 2011, 18)

2007b; Moynihan, Pandey, and Wright, 2012; Stazyk and Goerdel, 2012) Furthermore, the reliability and content validity of the CVF has been empirically supported in existing research by applying multidimensional scaling and structural equation modeling (Howard, 1998; Quinn and Spreitzer, 1991) Finally, the CVF provides the survey, Organizational Culture Assessment Instrument (OCAI), for measuring the four types of culture in the CVF (Cameron and Quinn, 2011).The CVF pays attention to the underlying competing core values that are indicative of what people value about an organization's performance (Cameron and Quinn, 2011) and how those values can be applied to organizational changes It

is a multidimensional model, which employs four distinct cultural types: Clan, Adhocracy, Market, and Hierarchy in the four quadrants created by two major dimensions: the internal/external and flexibility/stability The internal/external dimension reflects whether the organization is concentrated on its internal dynamic processes or on the demands of external environmental pressures The flexibility/stability dimension represents whether the organization pursues social coordination and control based on the internalization of belief, participation, commitment, and improving members' ability to achieve success in an organization, or if the organization's emphasis is on the formal systems of control and coordination for efficient and effective organizational management

Clan culture emphasizes trust, commitment, and human development for improving participation, openness, and discussion (Cameron and Quinn, 2011; Jrgensen and Bozeman, 2007) There are largely two perspectives about clan culture One perspective approaches the needs of clan culture from a utilitarian perspective (Ouchi, 1979; Terry, 1998) This perspective posits that clan culture can reduce transaction costs in information exchange, adapting to a changing situation and so on (Zaheer, McEvily, and Perrone, 1998) On the other hand, positive organization behavior (POB) studies claim that important values in clan culture such as trust and empowerment can strengthen intrinsic motivation, since those values can work as catalysts in cultivating the goodness of employees and positive human potential in an organization (Dutton, Glynn, and Spreitzer, 2006; Luthans and Youssef, 2007) For instance, empowerment can lead employees to feel a sense of significance, community, and even fun (Rainey, 2009, 328) In short, both perspectives demonstrate that clan culture can facilitate positive employee attitudes Empirical results support that clan values such as trust exert

a positive effect on PSM (Chen, Hsieh, and Chen, 2013)

H1: Clan culture has a positive influence on PSM

Market culture stresses competition, direction, and goal clarity to facilitate productivity, accomplishment, and improve public service quality (Cameron and Quinn, 2011; Jrgensen and Bozeman, 2007; Talbot, 2008) However, some scholars who emphasize democratic and constitutional public values have criticized adopting market culture in public sectors (Denhardt and Denhardt, 2011; Terry, 1998) This perspective suggests that reforms supported by the market culture, such as pay-for-performance systems, may have harmful effects on public employees' morale and attitude, since it can damage public or constitutional values (e.g., loyalty, due process, and transparency) held by individuals and organizations (Moynihan, 2010; Rosenbloom, 2007) While there are mixed empirical results for the effects of market type reforms on employee attitudes (Yang and Kassekert, 2010), this study assumes that market culture may reduce public employee's morale and damage public values, and thus reduce PSM (Moynihan, 2010)

H2: Market culture has a negative influence on PSM

Hierarchy culture develops a strategic thrust toward information management and documentation, standardized rules and procedures through stability, control, and continuity (Cameron and Quinn, 2011; Jrgensen and Bozeman, 2007) Hierarchy culture has been regarded as one of primary characteristics of public organizations (Downs, 1967; Stazyk and Goerdel, 2011) Downs (1967) claims that hierarchy systems are invented in order to facilitate coordination, cooperation, resource allocation, and communication within and between bureaus However, as the level of hierarchy increases, it can distort information flows and communication A series of scholars focuses on dysfunctional roles of hierarchical values, since they can not only produce inefficiency, resistant management reforms, and impersonality, but also spread red-tape in public organizations (Bozeman and Scott, 1996; Gore, 1993) However, Quinn (1998) suggests that hierarchical culture has a positive impact on employees' attitudes, when the extent of hierarchy culture is not excessive Rubin (2009) also demonstrates that procedural justice presents positive relationship with employee satisfaction With respect to the contradictory results, SDT explains that hierarchy cultural values are far from intrinsic motivation and work to prevent the development of intrinsic motivation because in order to sustain continuity and order, hierarchical approaches usually use sanctions

H3: Hierarchy culture has a negative influence on PSM

Adhocracy culture develops a strategy of creating new services and resource acquisitions by emphasizing autonomy, adaptability, and innovation (Cameron and Quinn, 2011; Jrgensen and Bozeman, 2007; O'Reilly et al., 1991) It encourages employees and leaders to take on hardship, adapt to new directions, and use performance information (Cameron, 2006; Cameron and Quinn, 2011) SDT explains that autonomy is a core value in intrinsic motivation so that the more autonomy employees have, the more likely they will enjoy the task and produce good performance (Ryan and Deci, 2012) Finally, Paarlberg and Lavigna (2010) demonstrate that autonomy have a positive relationship with PSM

H4: Adhocracy culture has a positive influence on PSM

4 Mediating Role of Adhocracy Culture

The four types of culture in the CVF that are located on different quadrants are assumed to have tensions or competing relationship with each other (Cameron and Quinn, 2011) That is, each culture having different values, assumptions, and orientations may have negative relationship with other types of culture in the CVF For instance, hierarchy culture that stresses out control may undermine creativity and autonomy addressed in adhocracy culture SDT claims that autonomy cannot be grown up, when social contexts are control-oriented or competition-oriented (Deci and Ryan, 2000) Clan culture placing more significance on groups or collaboration among employees than individuals can reduce individual autonomy and creativity

Adhocracy culture can serve not only as an antecedent of PSM, but also a mediator between other types of culture and PSM (Deci and Ryan, 2000) According to Reeve and Deci (1996), perceived autonomy shows a mediating role between interpersonal context conditioned by competition or control situation and intrinsic motivation In addition, adhocracy culture can serve a distinguishable role relative to other types of culture According to Positive Organizational Behavior (POB) perspective (Luthans et al., 2008; Luthans and Youssef 2007),3)

adhocracy culture shares commonality with positive psychological capital For instance, Luthans et al (2008, 223) characterize positive psychological capital as the followings: (1) having confidence (self-efficacy) to take on and put in the

3) POB is defined as the study and application of positively oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today's workplace (Luthans and Youssef,

2007, 327)

necessary effort to succeed at challenging tasks; (2) making positive attribution (optimism) about succeeding now and in the future; (3) persevering toward goals and, when necessary, redirecting paths to goals (hope) in order to succeed; and (4) when beset by problems and adversity, sustaining and bouncing back and even beyond (resiliency) to attain success†

This approach explains that positive psychological capital has state-likecharacter and thus can be developed by intentional efforts or training (Luthans, Avolio, Avey, and Norman, 2007) Luthans et al (2007) address psychological capital components (self-efficacy, optimism, hope, and resiliency) build values

In other words, desirable and positive strengths of positive psychological capital are closely connected with cultural values In addition, positive psychology capital increases moral or ethical decision-making, attitudes, performance (Cho and Perry, 2011; Luthans et al., 2007) Finally, POB scholars stress out that positive psychological capital has a distinguishable character compared to other values such competition and control In particular, it can diminish the negative and amplify the positive conditions or contexts in the relationship with work motivation (Dutton et al., 2006; Luthans et al., 2008) In sum, positive psychological capital and adhocracy culture share common grounds in terms of roles, characters and components

Taking up the commonalities and possibility of the mediating role, it is expected that adhocracy culture may serve as a mediating variable that transmits

or change the effects of clan, market, and hierarchy culture on PSM

H5: Clan culture has a negative influence on adhocracy culture

H6: Market culture has a negative influence on adhocracy culture

H7: Hierarchy culture has a negative influence on adhocracy culture

H8: Adhocracy culture mediates the relationship between clan culture and PSMH9: Adhocracy culture mediates the relationship between market culture and PSM

H10: Adhocracy culture mediates the relationship between hierarchy culture and PSM

5 Control Variables

In order to separate the effects of culture on PSM, a number of individual and organizational characteristics are controlled in the analysis For instance, education and length of service show significant impacts on PSM (Moynihan and

Pandey, 2007) Each executive agency was created during different years According to Vandenabeele (2007), the formation of PSM can be guided through institutional or cultural socialization Furthermore, time performs an important role in building culture and PSM Therefore, we employ the age of an agency to control for varying power of socialization in each agency and to address the limitation of cross-sectional nature of the data In addition, demographic factors such as age and gender are included Perry (1997) demonstrates that female employees are more likely to have lower levels of PSM than male employees and that age is one of important antecedents of PSM

Finally, satisfaction about a pay is also added as a managerial control variable PSM can work as an intrinsic motivation (Park and Rainey, 2008, Moynihan, 2010) According to SDT, extrinsic rewards result in harmful effects to employees' creativity or autonomy (Deci and Ryan 2000) Several recent studies also suggests that extrinsic rewards have a negative association with intrinsic motivation or PSM and crowds out intrinsic motivation (Cho and Perry, 2011; Moynihan, 2010) On the other hand, Wright (2007) finds that extrinsic rewards allow individuals to find importance in their job Taken together, extrinsic rewards have a substantial influence on PSM In this sense, satisfaction about a pay is included to control the direct and indirect impacts of each type of culture

on PSM

III Methods

To test the hypotheses developed above, an empirical analysis is conducted using the case of the executive agencies in Korea The case of the executive agency system in the non-western county like Korea is useful in that it provides insights about the ongoing debate of the market-type reform mainly developed in the western countries

Following up recommendation of the International Monetary Fund (IMF), the Executive Agency system was aggressively adopted as a part of NPM reforms and driven by the Korean government as a 'small government' reform strategy.4)

4) Korea government launched executive agency system based on a British model by adopting the Executive Agency Law (#5711) to establish and operate responsible administrative agencies by separating implementing functions of the central government from policy functions and by strengthening achievement/resource contract, performance reporting, performance accountability, performance audit, and strategic management for improvement of public service delivery Executive agencies have been still running as

The Korean government launched executive agency system in 1999 to change existing culture in a public organization: decrease hierarchy culture and increase market culture After ten years the survey for 'the Performance Analysis and the Development of Executive Agency of Korea' was conducted to evaluate the executive agency policy A total of 1,535 surveys were distributed to all 46 executive agencies and 1,370 completed surveys were returned, and 1,232 surveys were used for this study after every missing data were eliminated PSM was measured by 6 items considering previous studies.5) Items reflects three dimensions such as normative motive, public orientation, intrinsic motivation Factor analysis and reliability analysis were conducted by SPSS 20.0 The results showed that factor loading values were all above 700 and reliability value was 882 'The Organizational Culture Assessment Instrument (OCAI) was employed to measure organization cultures.6) Table 1 shows descriptive statistics and reliability of each variable.

Three models are developed to test ten hypotheses The scores of each type

of culture are made by the OCAI, which has the attribution of ipsative data (Hicks, 1970; Jones et al., 2005) Hicks (1970) suggests that if one or more culture types are deleted in the analysis, the culture scores do not meet the standard for pure ipsativity This study develops three models on the basis of the suggestion of Hicks (1970) and the strategy used in Jones, Jimmieson and Griffiths (2005).7)

of today

5) Korean contexts and the characters of executive agencies are considered to measure PSM First, Kim (2009) suggests that Attraction to Public-Policy Making (APM) does not play a significant role in Korea In addition, the main role of an executive agency

is not policy development but execution of public service Second, Vandenabeele (2008) points out that customer orientation is one of important dimensions in PSM, because providing a quality public service or holding citizen orientation is an important value in recent management reforms and traditional government roles Third, Park and Rainey (2008) explore the role of PSM They use three variables reflecting norm-based motives, affective motives, and intrinsic rewards

6) The OCAI is created to measure organizational cultures in conjunction with the CVF (Cameron and Quinn, 2011) The OCAI consists of six categories (e.g., Dominant characteristics, Organizational leadership, Management of employees, Organization glue, Strategic emphases, and Criteria of success) Each category is composed of four questions consistent with clan culture, adhocracy culture, market culture, and hierarchy culture Each set of four questions has a total of 100 points The respondents can subjectively distribute 100 points to each set of four questions Each culture is formulated by calculating mean of six items

7) Harman's single-factor test is used to investigate the seriousness of common method bias In the test, common method bias is assumed to exist when a single factor emerges from unrotated factor solutions, or a first factor explains the majority of the variance in the variables (Podsakoff, MacKenzie, Lee, and Podsakoff, 2003) In this

<Table 1> Descriptive Statistics and Reliability of Each Variable (n = 1232)

Notes: There are no univariate indices of skewness and kurtosis which are greater than the absolute value of 3.0 and of 7.0 respectively (Kline 2010)

is not proper here because each type of culture has a single latent construct in each model except for the PSM (Morgeson et al., 2011) Figure 1 presents the hypothesized model of cultures and the PSM

study, factor analysis indicates that four factors are extracted, and the biggest factor

is not more than 50% in each model

Mean SD Skewness Kurtosis

Length of Service (month) 176.05 104.49 0.17 -0.93

Satisfaction about a Pay 2.76 0.98 -0.04 -0.42