identifying organizational culture criteria system – applying in vietnamese enterprises

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 le

THE PREAMBLE

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".

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

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

is conducted in 5 cities, namely Ha Noi, HCM, Da Nang, Hai Phong, and Can Tho

The main methods used are: systematic method, generalization, analysis, synthesis, comparison; both qualitative and quantitative research methods are used

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

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

CHAPTER 1: AN OVERVIEW OF RESEARCH ON CRITERIA FOR IDENTIFYING 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"

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)

1.3.1 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:

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:

- 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

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

CHAPTER 2: METHODS OF STUDYING BUSINESS CULTURE

THROUGH THE CRITERIA

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

organizationalculture

culture

leadership

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

the establishment of criteria for identifying organizational culture

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

From sources such as books, magazines, data from the Internet or other mixed data

a criteria system for identifying organizational culture

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

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

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

scale for Efficiency in decision making (Cronbach’s alpha = 0.595); the Vision (Cronbach’s alpha = 0.589); Leadership qualities (Cronbach’s alpha =-0.33); Leadership personality (Cronbach’s alpha =-0.67), the Cronbach’s alpha coefficient falls under 0.6, and an elimination of the observable variables in the scale for this aspect does not increase Cronbach's Alpha coefficient up to 0.6 and thus the scale does not achieve the reliability, so the author proceed to remove this scale The scales for Leadership’s responsibility has Cronbach’s alpha = 0.518 while the 2 observable variables TNLĐ1 and TNLĐ5 have an item-total correlation coefficients of < 0.3; but after these 2 observable variables are removed, the Cronbach’s alpha coefficient for the scale stands at 0.642, thus gaining credibility

In summary, the measurement scales for organization, management and leadership factors are gaining credibility; the scale for Leadership achieved the highest reliability, then the scale for Organisation and lastly, Management After analyzing the reliability of the scales for each factor, the factors for Organization (consisting of 37 observable variables), Management (19 observable variables) and Leadership (27 observable variables) continue to be analyzed in the section below

3.2.2 Factor analysis

A KMO and Bartlett's test performed in factor analysis of 37 observable variables in the scale shows the high level of the KMO (0.766) with a significance equaling 0 (sig = 0.000) The Rotation Sums of Squared Loadings reached 58.98% and there are 11 factors that have a typical value greater than 1 This reveals that the use of 11 factors representing the 37 observable variables can explain 58.98% of the variability of the data

After the implementation of EFA, CK4 variable is eliminated because no factor loading for it is found on any column So, one observable variable is removed from the set of the 37 observable variables used to measure the organizational factor Also, as a result of this, the number of factors is 11, which

exceeds the number of the original aspects that was designed to measure the organizational factor To be specific, the group of aspects of organizing skills were divided into two sub-groups Based on the content of the components in the group, the author renamed the 2 sub-groups: Organizing skills sub-group, which comprises observable variables KNTC1, KNTC2, KNTC3, and the Target and guarantee sub-group, which contains the observable variables KNTC4, KNTC5

A KMO and Bartlett's test performed in factor analysis of 19 observable variables in the scale used to measure the Management factor returns a high KMO index (0.741) with zero significance level (sig = 0.000) The Rotation Sums of Squared Loadings reached 53.22% and there are 5 factors that have a typical value greater than 1 This shows that the use of 5 elements representing

19 observable variables is able to explain 53.22% of the variability of the observable variables

After the implementation of EFA, 2 observable variables RR1 and RR5 is eliminated because no value factor loading for them is found on any column

A KMO and Bartlett's test performed in factor analysis of 27 observable variables in the scale shows the high level of KMO (0.779) with zero significance level (sig = 0.000) The total Rotation Sums of Squared Loadings reach 59.64% and there are 8 factors that have a typical value greater than 1 After the implementation of EFA, the MT5 variable was eliminated because

no value factor loading for it was found on any column

3.2.3 Regression analysis

The three independent variables, managerial, organizational and leadership, have a correlation coefficients R greater than 0.3 with dependent variable Organizational culture So, 3 independent variables in the scale can be used for