The influence of organizational culture on employee commitment in german companies in ho chi minh city

THE INFLUENCE OF ORGANIZATIONAL CULTURE ON EMPLOYEE COMMITMENT IN GERMAN COMPANIES IN HO CHI MINH CITY In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMI

THE INFLUENCE OF ORGANIZATIONAL CULTURE ON EMPLOYEE COMMITMENT IN GERMAN COMPANIES IN HO CHI MINH CITY

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

September 2013

THE INFLUENCE OF ORGANIZATIONAL CULTURE ON EMPLOYEE COMMITMENT IN GERMAN COMPANIES IN HO CHI MINH CITY

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance and approval of the committee, and approved by all its members, this

thesis has been accepted in partial fulfillment of the requirements for the degree

Acknowledge

This study would not have been completed without the valuable guidance and the support

of my supervisor, my family and friends It is my big pleasure to sincerely thank all those

who made this thesis possible

First of all, I would like to express my sincere gratitude and appreciation to my

supervisor Dr Phan Trieu Anh for his patient guidance, advices and recommendations for

this research Thank you for your kind support and encouragement every time when I

have problems ort troubles You are really a nice and kind advisor that I am honored to be

advised by you

Secondly, I would like to express my great appreciation to all the teachers of the Master‘s

program in the International University, who imparted their knowledge and experience to

me during the past two years

To all my family, my friends, and colleagues who supported me in my research, I would

like to give you all my big thanks and appreciation for your time and advices for me

Thank you

Last but not least, I would like to thank the Examination Committee members very much

for your time and valuable comments for my thesis‘ improvement

Plagiarism Statements

I would like to declare that, apart from the acknowledged references, this thesis

either does not use language, ideas, or other original material from anyone; or has not

been previously submitted to any other educational and research programs or institutions

I fully understand that any writings in this thesis contradicted to the above statement will

automatically lead to the rejection from the MBA program at the International University – Vietnam National University Ho Chi Minh City

Copyright Statement

This copy of the thesis has been supplied on condition that anyone who consults

it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author‘s prior consent

© Pham Ngoc Diem/MBA04005/2011-2013

Table of Contents

List of Figure vii

List of Table viii

Abstract ix

INTRODUCTION 1

1.1 Background of Research 1

1.2 Problem Statement 2

1.3 Main research question 2

1.4 Objective 3

1.5 Implications of the study 3

1.6 Organization of research 4

CHAPTER II 6

LITERATURE REVIEW 6

2.1 Organizational Culture and Employee Commitment 6

2.1.1 Organizational Culture 6

2.1.2 Employee’s commitment 10

2.1.3 Organization culture and employee’s commitment 13

2.2 German organizational culture 15

2.3 Results of Empirical Research 16

2.4 Conceptual Framework and Research Hypotheses 17

2.4.1 Teamwork 18

2.4.2 Innovation Orientation 19

2.4.3 Supportiveness 20

2.4.4 Management Style 20

2.4.5 Customer orientation 21

2.4.6 Reward and recognition 22

CHAPTER III 24

METHODOLOGY 24

3.1 Research approach 24

3.2 Sampling Method 25

3.3 Data collection method 26

3.3.1 Secondary Data 26

3.3.2 Primary Data 26

3.4 Sample and Survey Procedures 27

3.5 Questionnaire constructs 28

3.6 Variable Measurements 29

3.6.1 Independent Variables: Corporate Culture Dimensions 29

3.6.2 Dependent Variable: Employees’ Organizational Commitment 30

3.7 Data Analysis Techniques 34

3.7.1 Descriptive Analysis 34

3.7.2 Reliability Analysis 34

3.7.3 Exploratory Factor Analysis (EFA) 34

3.7.4 Correlation 34

3.7.5 Multiple regressions 35

3.8 Limitation of the study 35

CHAPTER IV 36

DATA ANALYSIS AND RESULTS 36

4.1 Sample Description 36

4.2 Reliability Test 38

4.2.1 Organizational culture measurement 39

4.2.2 Employee’s commitment measurement 43

4.3 Validity Test: Exploratory Factor Analysis 45

4.3.1 Factor Analysis for independent variables 45

4.3.2 Factor Analysis for dependent variables 48

4.4 Revised conceptual framework 49

4.5 Testing the correlation between Independent Variables and Dependent Variable 51 4.6 Identifying factors influencing employee’s commitment 54

4.7 Further findings 58

4.7.1 Difference in Employee’s commitment between age groups 58

4.7.2 Difference in Employee’s commitment between male and female 58

4.7.3 Difference in Employee’s commitment between highest qualification 60

4.7.4 Difference in Employee’s commitment between monthly income 60

4.7.5 Difference in Employee’s commitment between working period 61

4.8 Summary 62

CHAPTER V 64

CONCLUSION AND DISCUSSION 64

5.1 Conclusion 64

5.2 Contribution and Suggestion for Organization 65

5.3 Limitation of study and Suggestion for further research 67

5.3.1 Limitation of study 67

5.3.2 Suggestion for further researches 68

LIST OF REFERENCES 70

APPENDIX I 72

APPENDIX II 77

APPENDIX III 79

APPENDIX IV 84

APPENDIX V 94

List of Figure

Figure 1: Seven primary characteristics of organizational culture 8

Figure 2: Four dimensions of organizational culture 9

Figure 3: The three pillar model of commitment 10

Figure 4: The three components model of employee’s commitment 12

Figure 5: The three factors of organizational commitment 12

Figure 6: Conceptual Framework 18

Figure 7: Research design 25

Figure 8: Summary of hypotheses for revised research model 51

Figure 9: Result of testing hypotheses for revised research model 57

List of Table

Table 1: Dimensions of corporate culture 7

Table 2 Systematization of empirical OC and Employee’s commitment studies 16

Table 3: Summary the structure of questionnaires for official survey 29

Table 4: Variable Measurements 30

Table 5: Descriptive statistics for demographic variables 36

Table 6: Reliability with Cronbach alpha for Organizational Culture dimension 41

Table 7: Reliability with Cronbach alpha for Employee’s commitment 43

Table 8: Reliability with Cronbach alpha for Employee’s commitment - New 44

Table 9: Factor analysis – Independent indicators - KMO and Bartlett's Test 46

Table 10: Eigenvalues and Sums of Squared Loadings- Independent indicators 46

Table 11: Factor analysis – Independent indicators – final 47

Table 12: Factor analysis – Dependent indicators - KMO and Bartlett's Test 48

Table 13: Factor analysis – Dependent indicators - Total Variance Explained 48

Table 14: Variables after the validity test 49

Table 15: Correlations 53

Table 16: Adjusted R Square – Hypotheses testing 55

Table 17: ANOVAb – Hypotheses testing 55

Table 18: Coefficientsa - Hypotheses testing 56

Table 19: Summary hypotheses testing 57

Table 20: Test of demographic variable - Age 58

Table 21: Test of demographic variable - Gender 59

Table 22: Test of demographic variable - highest qualification 60

Table 23: Test of demographic variable – Monthly income 60

Table 24: Test of demographic variable – Working period 61

Abstract

The aim of this study is to examine the influence of organizational culture factors

on employees‘ organizational commitment The organizational culture that investigates in this research was consist of six dimensions which are teamwork

orientation; innovative orientation; supportiveness, reward orientation, management style

and customer orientation within five German organizations in Ho Chi Minh City In this

regard, the components of organizational culture as the independent variable were

derived from Shim's model and the relationship between two kinds of variables was

tested through Pierson correlation testing The results from the study showed that there

was a significant relationship between four components of organizational culture

(including teamwork orientation; innovative orientation; reward orientation, and

management style) and employee‘s commitment to organizational culture

This study contributes to a better understanding of the influence of corporate culture

factors on organizational commitment among employees within five German

organizations in Ho Chi Minh City

Research methods used to test the hypotheses is quantitative methods with questionnaire

survey and sample size n = 360 Scale was assessed by Cronbach alpha analysis and

exploratoryfactor analysis (EFA) to examine the reliability and validity

The author also has some suggestions for future study of related topic

Keywords: organizational culture, organizational commitment, employee‘s

commitment

CHAPTER I INTRODUCTION

This chapter will basically introduce what the author intend to do in this research The

overview of the thesis includes the background of the study, the problem statement,

research question, research objectives and limitation to the study

Corporate culture has been ―an important theme in management and business research

for the past few decades due to its potential to affect a range of organizationally and

individually desired outcomes such as commitment, loyalty, turnover intent, and satisfaction‖ (Chow et al., 2001) The importance of corporate culture is stressed by Peters and Waterman (1999:808) that "Without exception, the dominance and

coherence of culture proved to be an essential quality of the excellent company

Moreover the stronger the culture, the more it was directed to the marketplace, the less

need was there for policy manuals, organization charts, detailed procedures or rules

In these companies, people way down the line knows what they are supposed to do in most situations because the handful of guiding values is crystal clear‖

There has been a significant change in the awareness of board of company‘s management about their employees A survey conducted by CareerBuilder – a leading job ‗seeking website in the world (the weekend Doanh Nhan Saigon newspaper on 10th Jan, 2008) has indicated the growing dissatisfaction among the employees that

out of every four people has one person is bored with his job, and the number of such

discouragement increased an average of 20% in the following 2 years With 6 out of

10 respondents are intending leave your current job Thus, solving the problem of

human resources is not an easy task for organizations nowadays

The main aim of the HR management is to manage human resources efficiency, which

reduces employee turnover (Rijamampianina, 2001) For that purpose, managers need

to understand what employees are looking for at work In other words, managers need

to understand their employees feeling about their work to enhance their commitment

with the company

There are many aspects of the company influencing the employee‘s commitment

However, the organizational culture is one of the most important aspects, sometimes

the employee cares much more about the organizational culture than other aspects in

the company

Therefore, in this study, the author will mention these aspects of the organizational cultures which involve in the employee‘s commitment with the companies

In Ho Chi Minh City, there are many foreign companies with different corporate

culture which are strongly attracting young and highly qualified workforce

However, the commitment of the staffs is also problematic with these foreign

enterprises The flow of staffs between foreign firms is relatively large at the moment

There are many aspects affecting the employee‘s commitment to companies So, the

question is whether organizational culture factors in the foreign companies, especially

in German companies, have anything affects the commitment of the employees

Within the scope of this thesis, the author will research the factors of organizational cultures which influence on the employees‘ commitment in 5 German companies in

Ho Chi Minh City

1.3 Main research question

To achieve the above objectives, the author needs to find the answer of the following

questions:

- Which factors of the organizational culture directly influence the

employee‘s commitment?

- What are the strengths of organizational culture‘s factors in influencing the

employee commitment?

1.4 Objective

The main aim of this study is:

- To study the relationship between organizational culture and

organizational commitment of employees

- To help the organization have deep understanding of their employee‘s

commitment

- To provide suggestions for organizational culture to enhance organizational

commitment of employees

1.5 Implications of the study

Organizational culture has a significant variety among the firms The relationship

between the employees' job performance and their commitment also varied

significantly with organizational culture values Every organization has set of

principles and policies mandatory for all the employees to follow If those policies are

so different from what exists in Vietnam for a long time, the employees will feel

uncomfortable and unacceptable with such a strange culture That‘s also the reason why the staff‘s commitment is short

In some previous study of some experts, they also consider the role of organizational culture on the employee‘s commitment Sheridan (1992) in his research observes that organizational culture was significantly related to performance and voluntary

turnover

Therefore, this research is to examine the relationship between the organizational

culture and the commitment with the companies of the employees So, the research

will help the companies to find out which aspects of their culture are positive or negative to the employee‘s commitment Also, the Vietnamese staffs also have a deep knowledge about their companies‘ culture to understand and adapt in long term period

1.6 Organization of research

This thesis is divided into five chapters:

- Chapter 1: Introduction

This chapter presents an overview of the 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

CHAPTER II LITERATURE REVIEW

Chapter one has briefed the objectives and meaning of the study regards to the relationship between corporate culture and employee‘s commitment The purpose of this chapter is to present the issues in theory and previous related research in the

world On this basis, the author will develop the research model and hypotheses This

chapter consists of three main parts: (1) The concept of corporate culture, (2) The notion of employee‘s commitment to the organization, (3) the relationship between corporate culture and employee‘s commitment to the organization

2.1.1 Organizational Culture

Organizational culture has no single definition However, after the author referred

some trustful sources, there are some of the definitions listed below:

- A set of common understandings around which action is organized

finding expression in language whose nuances are peculiar to the group

(Becker and Geer, 1960)

- A set of understandings or meanings shared by a group of people that

are largely tacit among members and are clearly relevant and distinctive to the

particular group which are also passed on to new members (Louis 1980)

- A system of knowledge, of standards for perceiving, believing,

evaluating and acting, etc that serve to relate human communities to their

environmental settings (Allaire and Firsirotu, 1984)

In previous study, there seems to be a general understanding regarding the

corporate culture values and activities that contribute to the development of

―business excellence.‖ Recardo and Jolly (1997) have identified eight established

dimensions of corporate culture: communication, training and development, rewards,

effective decision making, risk-taking for creativity and innovation, proactive

planning, teamwork, and fairness and consistency in management practices

Table 1: Dimensions of corporate culture

Source: Recardo and Jolly (1997)

Collins and Porras (2000:338) state that organizational culture refers to a system of

shared meaning held by members that distinguish one organization from other

organizations They believe that these shared meanings are a set of key characteristics,

and that the organization values and the essence of an organizations culture can be

captured in seven primary characteristics These characteristics are:

- Innovation and risk - taking The degree to which employees are

encouraged to be innovative and take risks;

- Attention to detail The degree to which employees are expected to

exhibit precision analysis and attention to detail;

- Outcome orientation The degree to which management focuses on

results or outcomes rather than on the techniques and processes used to

achieve those outcomes;

Corporate

culture

communication training and development rewards

effective decision making risk-taking for creativity and innovation proactive planning

teamwork fairness and consistency in management practices

- People orientation The degree to which management decisions take

into consideration the effect of outcomes on people within the

organization;

- Team orientation The degree to which work activities are organized

around teams rather than individuals;

- Aggressiveness The degree to which people are aggressive and

competitive rather than easygoing; and

- Stability The degree to which organizational activities emphasize

maintaining the status quo in contrast to growth

Figure 1: Seven primary characteristics of organizational culture

Source: Collins and Porras (2000:338)

In speaking of dimensions of organizational culture, Huijser (2006) also built up a

model of corporate culture including four dimensions which all national and

organizational cultures can be categorized All cultures fit into one or more of the

following orientations: Action, Process, Task and Role This corporate culture scan

follows the Model of Freedom, inspired by the work of Kolb (learning styles) and

Organization Culture Profile

Innovative

Aggressive

Outcome Oriented

Stable People

Oriented

Team Oriented Detail Oriented

Leary (Rose of Leary, behavior and influencing) In this structure, each dimension is

respected by one element such as Leading Behavior for Action factor, People Oriented

for Role, Following Behavior for Process and Task Oriented for task

Figure 2: Four dimensions of organizational culture

Source: Huijser (2006)

Conclusion

In the previous studies, corporate culture are defined and measured by many different

factors Each researcher has his own reasons to take out their own corporate culture

measuring However, within the scope of this paper, the author will focus on selection

which factors matched the culture of German companies German organizational

culture has some typical characteristics compared with other foreign companies

ACTION

PROCESS

Rebellious Accusing Withdraw

n

Competitive Aggressive Direct

Compliant Dependent Avoiding

Leading Supportive Engaging

LEADING BEHAVIOR

FOLLOWING BEHAVIOR

2.1.2 Employee’s commitment

The issue of organizational commitment is very important for managers in organization (Tushman and O‘Reilly (1997); Nadler, 1997).; and Limerick, et al., 1998), either government organization or private sector In order to increase

their competitive advantage, the managers always seek ways to enhance their employee‘s commitment They are more concern to find strategic way that has

a big influence toward commitment Organizational commitment refers to an employee‘s belief in the organization‘s goals and values, desire to remain a member of the organization and loyalty to the organization Mowday, et al., 1982; and

Hackett, et al, 2001) This definition, reflecting an individual‘s affective commitment,

represents a major approach to the study of organizational commitment (Meyer et al.,

2002 in Boon and Arumugam, 2006), and appears to be the most desired form of

formulated a model of commitment based on three major pillars, as shown in Figure 3

These pillars are:

A sense of belonging to the organization

A sense of excitement in the job

Confidence in management

- A sense of belonging to the organization: This builds upon the loyalty essential

to successful industrial relations The sense of belonging is created by

managers through ensuring the workforce is informed, involved and sharing in

success

- A sense of excitement in the job: Improved results will not be achieved unless

workers can also feel a sense of excitement about their work which results in

the motivation to perform well This sense of excitement can be achieved by

appealing to the higher-level needs of pride, trust and accountability for

results

- Confidence in management: The senses of belonging and excitement can be

frustrated if workers do not have respect for, and confidence in, management

leadership This respect is enhanced through attention to authority, dedication

and competence A large measure of the success of the organizations studied

derives from their management of people and from creating a climate for

commitment For example, if people feel trusted, they will make extraordinary

efforts to show the trust to be warranted However, creating commitment is

hard It takes time, the path is not always smooth and it requires dedicated

managers (Mullins, 1999:813)

Meyer and Allen (1991) in Parish, et al., (2008), have proposed model

comprising affective, continuance, and normative commitment According to

Meyer and Allen (1991) in Parish, et al., (2008), affective commitment (AC)

―refers to the employee‘s emotional attachment to, identification with, and involvement in the organization‖ (employees stay with a firm because they want to); continuance commitment (CC) ―refers to an awareness of the costs associated with leaving the organization‖ (employees stay with a firm

because they need to); and normative commitment ―reflects a feeling of obligation to continue employment‖ (employees stay with a firm because they ought to)

Figure 4: The three components model of employee’s commitment

Source: Meyer and Allen (1991) in Parish, et al., (2008)

Based on attitudinal commitment, Mowday et al (1979) define organizational

commitment as the relative strength of an individual‘s identification with, and

involvement in a particular organization This can be characterized by three related factors: a strong belief in and acceptance of the organization‘s goals and values; a willingness to exert considerable effort on behalf of the organization; and a strong

desire to maintain membership in the organization

Figure 5: The three factors of organizational commitment

continuance commitment (CC)

normative commitment (NC)

affective commitment (AC)

a strong belief in and acceptance of the organization‘s goals and values

a willingness to exert considerable effort

on behalf of the organization

a strong desire to maintain membership in

the organization

Source: Mowday et al (1979)

Conclusion

Most of previous studies deeply focused each factor measuring the employee's

commitment to the organization Each study has its meaning and suitability for each

company In this essay, author refers and concludes that the employees in German

companies are not following to any specific model Therefore, the author carefully

chooses which factors can be used in this research for independent variables The

author much focuses on the general definition of employee‘s commitment

2.1.3 Organization culture and employee’s commitment

Some writers have insisted that other group culture could stand alone of the

organizational culture, and a small working team might have its own particular set of

values, beliefs and attributes (Brown, 1995, Martin 1992, Martin and Siehl, 1983,

Schneider, 1990; Sackman 1991; Trice and Beyer, 1993) Brewers (1993) stated that if

an organization's culture is not strong enough, the group culture may be prioritized

over organizational culture for employees and therefore gain their commitment (Lok

and Crawford, 1999) So, it is the intention of the study is to investigate the

relationship of organizational culture with the commitment

As a result of the importance of organizational commitment, several studies (Allen

and Meyer, 1990; Chen et al., 2006; Clugston, 2000; DeCottis and Summers, 1987;

Iverson and Roy, 1994; Lok and Crawford, 2001; Khan et al., 2011; Michaels, 1994;

Salami, 2008; Steinhaus and Perry; Taormina, 1999) have sought to identify its causal

antecedents However, corporate culture has received relatively low levels of

empirical investigation among the possible antecedents of organizational commitment

(Lok and Crawford, 2004) The authors (Lok and Crawford) expressed their surprise that corporate culture was not mentioned in Mathieu and Zajac‘s (1990)

comprehensive meta-analysis and review of the antecedents and correlates of

organizational commitment

Although empirical research has been carried out on corporate culture and employee

commitment to the organization, there has been little evidence to prove the effect of

corporate culture on organizational commitment (McKinon et al., 2003) In a study of

Hong Kong and Australian managers, Lok and Crawford (2004) found a positive

effect of corporate culture on organizational commitment Zain et al (2009) examined

the effect of four dimensions of corporate culture namely teamwork, communication,

reward and recognition, and training and development on organizational commitment

and found that all the four dimensions of corporate culture were important

determinants of organizational commitment While Mahmudah (2012) report a

significant relationship between corporate culture and organizational commitment,

research by Lahiry (1994) showed only a weak association between corporate culture

and organizational commitment This study seeks to further examine this relationship

with particular reference to the Nigerian work environment

Regard to the relationship between organizational culture and the employees

commitment, other scholars focus on cultural dimensions, such as stability (a culture

emphasizing the importance of reducing uncertainty at work) and attention to detail (a

culture focusing on the detail of practices) Scholars such as Chuang, et al (2004);

O'Reilly III, et al (1991); Shim (2010) found a strong link between these dimensions

and employees‘ voluntary turnover and concluded that organizations can utilize such

elements to retain their employees O‘Reilly, et al (1991) has identified five main

organizational culture-related factors relevant to the dimensions of corporate culture:

- Teamwork orientation,

- Innovation orientation,

- Supportiveness,

- Proficiency,

- Reward orientation

Shim (2010) used this five factors to test his model by combining these five factors

into his model consisting of three main organizational components:

- achievement/innovation/competence (AIC),

- cooperation/supportiveness/responsiveness (CSR),

- emphasis on rewards (ER)

After testing the model based on data collected in the US child welfare industry, Shim

(2010) concluded that the three organizational culture-related components have a

strong influence on the staying intention of workers

In German companies orientation to performance is much stronger than orientation to

relations (Gontrard, 2002; Fischer, Steffens-Duch, 2000) Being collectivistic on

family level, the Germans strictly separate the family and friendship circle from job

issues, thus drawing a liner between their private and working lives In due turn, the organization‘s management accepts this attitude of German employees and avoids evoking excessive emotional involvement in organizational processes (thus

contrasting themselves with US-American companies) (Eckstein, 1997, p 134) The

analysis of Vadi (2006) leads to the conclusion that the following features may

characterize traditional German organizational culture:

1 German companies promote an orientation on product quality and

performance rather than on relations, thus employees are emotionally not

strongly bound

2 OC has a traditionally ―formal‖, instrumental nature For example, to simplify vertical communication, enthusiastic action-symbolism is rejected

3 Inflexibility, formalization of German OC causes its resistance to change

that hinders innovative thinking

4 Strong differences are detected between OC in West and East Germany as

well as between geocentric and ethnocentric companies

Table 2: Systematization of empirical OC and Employee’s commitment studies

in Nigeria

- Mowday et al.‘s (1979) model

The study found that involvement and adaptability significantly correlated with commitment, while consistency and mission did not correlate with commitment

Astri Ghina,

2012

- administered questionnaire

self 250 employees

of civil government in Indonesia

- Based on Boon and

Arumugam‘s paper (2006) work

Communication, training and development, reward and recognition and teamwork are positively associated with organizational commitment Also, communication was perceived as a dominant corporate culture dimension; and it was consistent with the result from original paper There were only

a few differences in the social variables (controlling variables) that also influence organizational commitment in the context of civil government in Indonesia

- 353employees

in MAHB

- Model and questionnaire from Lau and Idris (2001)

The results show that all dimensions of corporate culture which are teamwork, communication, rewards and recognition and training and development are

important determinants in motivating the employees to be committed to their organization

- Independent variables from Denison's model

- Dependent variables from Allen and Mayer's model

The results from the study showed that there was a significant relationship between all the components of organizational culture including adaptability, involvement, adjustment, mission and organizational commitment

Ooi Keng Boon

The results of this study revealed that communication, training and development, reward and recognition, and teamwork are positively associated with employees‘ commitment Also, communication was perceived as a dominant corporate culture dimension; it was associated with significant improvements in employees‘ organizational commitment

Upon literature review research of some authors, the conceptual framework of this

research will be built as Figure 6 The author referred many different factors and after

discussing and interviewing many German experts about their organizational cultures,

the author chose six factors which are suitable for the organizational culture of

German companies in HCMC It shows the theoretical framework proposed for this

study and it will be analyzed next section Two kinds of variables are included the

framework which are independent variables and dependent variable This framework

is developed in order to test the relationship between all variables There are six

independent variables which are teamwork orientation, supportiveness, management

style, innovation orientation, customer orientation, reward and recognition Only one dependent variable is employee‗s commitment is conducted

Figure 6: Conceptual Framework 2.4.1 Teamwork

The concept of teams and teamwork is increasingly important to productivity and employees‘ organizational commitment in the contemporary workplace (Adebanjo and Kehoe, 2001; Stough et al., 2000) Teamwork facilitates the

meeting of affiliate needs within the workplace and has been directly connected to

organizational commitment (Karia and Ahmad, 2000; Karia and Asaari, 2006) A

case study by Osland (1997) in Central America showed that working together

within a production unit led to better employee attitudes Anschutz (1995) stated

that participation in teamwork, continuous learning, and flexibility were the major

factors for success within organizations in achieving a partnership between workers

and managers Karia and Ahmad (2000) studied the impact of Empowerment and

Teamwork (E&T) practices on 104 employees in five Malaysian public and private

organizations that have implemented some level of E&T practices; they found

that an organization that practiced some level of teamwork experienced an

increase in employees‘ organizational commitment Silos (1999) stated that the

Employee’s Commitment

Teamwork orientation

O’Reilly, et al (1991)

Customer Orientation

O’Reilly, et al (1991)

Innovation orientation

key to Japanese efficiency was in how the people work together, and also

suggested that teamwork will result in more commitment and involvement of

employees within the organization Therefore, we propose the following hypothesis:

H1 - There is a significant relationship between teamwork orientation and organizational commitment

2.4.2 Innovation Orientation

In order to understand the relationship between innovation orientation and employees

commitment, it is necessary to look at employee motivation since motivation has a

strong impact on the way staff behave or act at work (Cadwallader, Jarvis, Bitner, &

Ostrom, 2010)

With the above discussion, innovation orientation is a significant strategy for surviving firms' operations in the business environments It definitely helps them enhance competitive advantage and receive better performance in the rigorous markets (Berthon, Hulbert, and Pitt, 2004) For sustaining competitiveness, innovation orientation is a key antecedent to successful business operations and it has a direct relationship with competitive advantage and performance Innovation-oriented firms are likely to achieve effective and efficient outcomes, employee and market advantages, and operational excellences (Simpson, Siguaw, and Enz, 2006) While most studies have attempted to link innovation orientation to competitive advantage, performance, and success, it also affect all job satisfaction, employee commitment in

an organization, and confidence in firm future performance (Zhou, Gao, Yang, and Zhou, 2005) Then, innovation orientation plays significant roles in explaining and determining both organizational commitment and competitive advantage Thus,

innovation orientation is likely to have a positive relationship with organizational commitment

H2 - There is a significant relationship between innovative orientation and organizational commitment

2.4.3 Supportiveness

Empowerment is associated with the degree of power employees may have regarding

their jobs and their workplace Empowerment is important to employees since they

need autonomy to fulfill their responsibilities (Kalmi & Kauhanen, 2008) It is evident

that a consistent level of delegated work authority will raise employee satisfaction

while high-turnover-rate organizations report a low level of discretionary effort at

their workplace (Chu, Hsu, Price, & Lee, 2003; Yankeelov, et al., 2009)

H3 - There is a significant relationship between supportiveness and organizational commitment

2.4.4 Management Style

The senses of belonging and excitement can be frustrated if workers do not have

respect for, and confidence in, management leadership This respect is enhanced

through attention to authority, dedication and competence A large measure of the

success of the organizations studied derives from their management of people and

from creating a climate for commitment For example, if people feel trusted, they will

make extraordinary efforts to show the trust to be warranted However, creating

commitment is hard It takes time, the path is not always smooth and it requires

dedicated managers (Mullins, 1999:813)

H4 - There is a significant relationship between management style and organizational commitment

2.4.5 Customer orientation

Customer orientation is an aspect of proficiency that a company should take into

consideration when they want to retain their employees, particularly their customer

service staff According to Donavan, Brown and Mowen (2004), customer orientation

is defined as ―an employee‘s tendency or predisposition to meet customer needs in an

on-the-job context‖ (p 129) Such aspect is influenced by personality traits (the

characteristics of a person which influence the way he/she thinks and behaves), and in

return, it affects individual performance (Donavan, et al., 2004)

Empirical research makes it quite evident that there is a positive link between job

satisfaction and customer orientation where those employees with high levels of

customer relationship skills reveal more job satisfaction (Donavan, et al., 2004) One

of the reasons comes from the natural characteristics of customer service jobs themselves Service workers deal directly with customers‘ needs and try to satisfy their requirements Since workers may receive less support when working in those

organizations which have a low level of customer orientation, they find it hard to cope

with their jobs; hence, their job satisfaction is adversely affected Secondly, due to a

close relationship with customers, employees working in high customer orientation firms are more likely to satisfy customers‘ needs; thus, employees are a better fit in their jobs than those without such good relationships As a result, they commit more to

their companies (Donavan, et al., 2004; Moncarz, Zhao, & Kay, 2009)

H5- There is a significant relationship between customer orientation and organizational commitment

2.4.6 Reward and recognition

Reward and recognition can be defined as benefits—such as bonuses, and

promotion—which are conferred as public acknowledgement of superior performance

with respect to goals (Juran and Gryna, 1993; in Boon and Arumugam (2006)

According to Chew and Chan (2008), remuneration and recognition positively

predicted organizational commitment and intention to stay Based on Liu

(2007),training satisfaction and perceived reward equity were the only antecedent

factors that showed significant positive relationship with organizational

commitment Rewards for quality efforts appear to have a significantly positive

relation to employee morale (Kassicieh and Yourstone, 1998 in Boon and Arumugam

(2006).The study was conducted by Williamson, et al (2009) showed a significant

two-way interaction between the cultural dimension of collectivism and organizational rewards on employee‘s commitment

H6 - There is a significant relationship between reward orientation and organizational commitment

H5- There is a significant relationship between customer orientation and

organizational commitment

H6 - There is a significant relationship between reward orientation and organizational

commitment

CHAPTER III METHODOLOGY

The second chapter presents the theory and previous studies of the authors involved in the field of corporate culture and employee‘s commitment to the organization, research model, and hypotheses development Chapter three will present issues related

to research design, scales to test proposed hypotheses This chapter includes the

following sections: (1) research design, (2) questionnaire construct, (3) variable

measurements, (4) methods and tools to collect information, (5) methods of data

processing

Research methods used to test the research model is quantitative method combined

With the model of Shim (2010), the author referred some trustful German manager to

develop some more factors and put them into the conceptual framework and proceed

the research This research is also to reconfirm the research of Shim (2010) to evaluate

whether the previous researches are still applicable for the German companies in Ho

Chi Minh City

The way to approach this research is questionnaire survey which the author thinks it is

most suitable and convenient for employees to answer The author decided not to

conduct the research in qualitative method due to the convenience for the response

With the survey, the employees will be more confident to answer because their

confidentiality will be kept Therefore, it would be better to use quantitative method to

conduct the research

The research has basically 5 stages:

- Design and development of survey: after referring the literature review, the author

will conduct the survey design with the questionnaires and prepare the direct

interview schedule

- Sample selection: The author will select sample size to decide who will be the

respondents of the research

- Data collection: the questionnaires will be distributed and collected back after the

respondents answer This will be the hardest stage and take time due to the way to

collect data from the respondents

- Data analysis: the collecting data will be filtered and which answer sheets are

valid will be put into the software to analyze

- Results: the research will come to the conclusion and recommendation based on

the result of the finished analysis

Figure 7: Research design

German companies locates in many districts of Ho Chi Minh City, the author focused

on some center cities to conduct this research such as district 1, district 3 The criteria

Design and

development of

survey

Sample selection

Data collection

Analysis Results

Interview Schedule Developm ent

Survey design

Data Source

s

Initial Analysis

Data Analy

Conclusion &

Recommendation

Questionn aire Literatu

re

to choose an employee to be in the sample is he/she have to work in a German

company, therefore he/she could understand the organizational culture in there The

study was performed on individual job function The author tested hypotheses using

only full-time employees Part-time and independent contract workers were not

included in this research Thus, our sampling methodology would give more limited

tests of hypotheses than a strategy whereby these other types of workers were also

included The staff positions included the administrative personnel and general clerks

The direct survey was the main form of data collection

This study investigated the commitment rates according to the culture of 360 staffs in

five German companies through questionnaires

The data is analyzed by using Microsoft Excel and the Statistical Package for the

Social Sciences (SPSS)

3.3 Data collection method

3.3.1 Secondary Data

Secondary information sources are from some topics of organizational culture, effects

of organizational culture, scholars around the world, newspaper and internet

3.3.2 Primary Data

The author will collect data from the feedback of 360 employees in 5 foreign

companies in HCMC through the questionnaires In this study, the respondents are the

Vietnamese white - collars working full time in various departments in German

companies The tentative companies will be chosen:

o BDG Vietnam: A German companies on consulting for foreign investment to

Vietnam

o Siemens Vietnam: a company has a strong presence in many vital sectors of the

national economy such as energy, industry and healthcare

o Fashion Inside: A Representative Office of Fashion Inside in Germany

o Roeders Vietnam: A German production company in precision mechanical in Vinh

Loc IP

o Einhell Vietnam: A Representative Office of Einhell Germany

Based on the personal relationship, the author will send the questionnaires to her

friends who are working on those companies to help her collect data

The survey was also made on Google docs and sent to the users via online and offline

methods accordingly Offline survey means the author will send the paper

questionnaires directly to the respondents The rationale for online survey data

collection was that it was cheaper and less time consuming because many smartphone

users have browsing capability In addition, online survey allows respondents to

answer at the leisure rather than often at the inconvenient time for responding to

survey questions However, the rate of collecting data from online method may be

lower than offline method because users might consider the survey email as a junk

mail or they are lazy to click the link on forum and complete the survey

The larger sample size, the more reliable the research will be Sample size depends on

estimation method used in specific study In this study, a sample of 360 employees

was drawn for this research The respondents who fully completed their questionnaires

were taken as the sample A sample size of 342 was obtained for the research The

locations of these organizations were confined to only in Ho Chi Minh City, which is known as Vietnam‘s most dynamic and developing city This city is one of most attractive cities in Vietnam of foreign investors to set up branches, subsidiaries,

representative offices, etc

3.5 Questionnaire constructs

The questionnaire was designed and tested in a number of phases to ensure the

information collection is reliable for the data analysis process

Phase 1: Construction of raw questionnaire is based on basic information which

collected in the theoretical models and previous related studies

Phase 2: Questionnaire‘s assessment by testing how the questions are clear and

understandable The evaluation is done by sending directly to close colleagues to

evaluate how they answer and understand each question

Phase 3: Questions‘ revision and survey finalization, and then proceed to send the

survey via email to respondents and hard copies directly if needed

Phase 4: Data collection and filtration

The questions measuring aspects of corporate culture are based on a survey

questionnaire of previous studies related to organizational culture

The questions measuring the employee‘s commitment to the organization are based on

a survey of questions related to previous studies about employee‘s commitments Types of questions are all structured as closed-ended questions with listed answers

and the respondents could only choose one suitable answer Questions include:

close-ended question with one possible answer, closed-close-ended dichotomous question – a

question with two answers and respondents choose one, closed-ended Likert question – a question with a scale from 1 to 5 and respondents choose one answer

Questionnaire content consists of three main parts

Part 1: Designed to collect information related to the employee's opinion about the

cultural aspects of the company

Part 2: Designed to collect information related to the employee's opinion about the

level of commitment to the organization

Part 3: Designed to collect personal information of respondents in order to filter the

- Satisfied with this position in my company

- Consider if this job is suitable

- Often visit some websites of job seeking

- Happy to spend the rest of my career with this organization

- Discuss with my friends about new jobs

- This organization deserves my loyalty

- Not leave this company if received other offers

3.6.1 Independent Variables: Corporate Culture Dimensions

This measure is based on the six dimensions of corporate culture According to Cooke

and Rousseau (1998), corporate culture is a multi-dimensional construct, and therefore

it is essential to evaluate each dimension The six dimensions, which consist of 31

items, are teamwork orientation, supportiveness, management style, innovation

orientation, customer orientation, reward and recognition These dimensions of

corporate culture have been selected because they have previously been identified as

those likely to have the greatest effects on employee behavior and attitudes (Recardo

and Jolly, 1997; Lau and Idris, 2001) Sample items included:

- ―My team members well listen to each other's ideas‖ (teamwork orientation);

- ―Other departments always support employee to complete my work.‖

(Supportiveness);