The impact of perceived leadership styles on organizational commitment

The used methods were qualitative and quantitative one based on two instruments of Organizational Commitment Questionnaire Meyer and Allen, 2004 and Leadership Style Questionnaire Northo

-oOo -

Nguyen Thi Tuy An

THE IMPACT OF PERCEIVED LEADERSHIP STYLES

ON ORGANIZATIONAL COMMITMENT

MASTER OF BUSINESS ADMINISTRATION THESIS

HO CHI MINH City - 2012

-oOo -

Nguyen Thi Tuy An

THE IMPACT OF PERCEIVED LEADERSHIP STYLES

Major code: 60340102

MASTER OF BUSINESS ADMINISTRATION THESIS

SUPERVISOR: ASSOC PROF DR NGUYEN DINH THO

HO CHI MINH City - 2012

Contents

Acknowledgement i

Declaration ii

List of tables iii

List of figures iii

Abstract iv

CHAPTER I INTRODUCTION 1

1.1 Background 1

1.1.1 Organizational Commitment significance 1

1.1.2 The importance of Leadership Style 2

1.1.3 Current factors affect organizations in Ho Chi Minh City 3

1.2 Statement of the Problem 4

1.2.1 Employees’ commitment 4

1.2.2 Leadership 5

1.3 Research objective and its significance 6

1.3.1 Research objective 6

1.3.2 Research significance 7

1.4 Extent and methodology of the study 7

1.4.1 Extent of the study 7

1.4.2 Research methods 7

1.5 Some concepts related to the research 8

1.5.1 Organizational Commitment 8

1.5.2 Leadership and Leadership Style 9

1.6 Organization of the Remainder of the Study 10

CHAPTER II LITERATURE REVIEW 12

2.1 Introduction on Organizational Commitment 12

2.2 Introduction on Leadership Style 14

2.3 Concept of each element of Organizational Commitment and Leadership Style model 17

2.3.1 Affective commitment 17

2.3.2 Continuance commitment 17

2.3.3 Normative commitment 18

2.3.4 Task Orientation 18

2.3.5 Relation Orientation 18

2.4 Development of Research Hypotheses 19

2.4.1 Task Orientation and Organizational Commitment 19

2.4.2 Relation Orientation and Organizational Commitment 19

2.5 Research Model 20

CHAPTER III METHODOLOGY 23

3.1 Description of Instrumentation 23

3.1.1 Organizational Commitment Questionnaire 23

3.1.2 Leadership Style Questionnaire 25

3.2 Independent and Dependent Variables 26

3.3 Sample and Analysis Procedures 27

3.3.1 Sample 28

3.3.2 Analysis Procedures 28

CHAPTER IV ANALYSIS AND FINDINGS 31

4.1 Sample description 31

4.2 Reliability of Scales 32

4.2.1 Organizational Commitment 32

4.2.2 Leadership Style 33

4.3 Exploratory Factor Analysis 34

4.4 Descriptive Statistics for Leadership Style and Organizational Commitment Score 37

4.4.1 Organizational Commitment Score 37

4.4.2 Leadership Style Score 37

4.5 Relationship between Leadership Styles and Organizational Commitment 38 4.5.1 Regression of Relation Orientation, Task Orientation and Affective Commitment 40 4.5.2 Regression of Relation Orientation, Task Orientation and Continuance Commitment

45

4.5.3 Regression of Relation Orientation, Task Orientation and Normative Commitment

48

CHAPTER V SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 51

5.1 Research Hypotheses 51

5.2 Summary of Findings 51

5.3 Conclusions 52

5.3.1 Organizational Commitment and Leadership Style Scale 52

5.3.2 Organizational Commitment and Leadership Style Score 53

5.3.3 Organizational Commitment and Leadership Style Relation 54

5.4 Managerial Implications 54

5.4.1 Organizational Commitment 54

5.4.2 Leadership Styles 55

5.4.3 Leadership Styles and Organizational Commitment 57

5.5 Limitations and suggestions 57

BIBLIOGRAPHY 59

APPENDIX 1: LIST OF KEY CONCEPS IN THE STUDY 63

1 Organizational Commitment 63

2 Leadership and Leadership Style 64

a Leadership 64

b Leadership Style 65

APPENDIX 2: QUESTIONNAIRE 66

1 English version 66

2 Vietnamese version 69

APPENDIX 3: CHECKING RELIABILITY OF INSTRUMENTS 72

1 Organizational Commitment Scale 72

a Affective commitment 72

b Continuance commitment 72

c Normative commitment 73

d Reliability of Organizational Commitment Scale 73

2 Leadership Style Scale 74

a Task Orientation 74

b Relation Orientation 75

c Reliability of Leadership Style Scale 75

APPENDIX 4: EXPLORATORY FACTOR ANALYSIS 77

APPENDIX 5: REGRESSION 82

1 Multiple regression for Affective Commitment 82

a Assumptions 82

b Result 84

2 Multiple regression for Continuance Commitment 85

a Assumptions 85

b Result 88

3 Multiple regression for Normative Commitment 89

a Assumptions 89

b Result 91

My family, for encouraging me all the time

Even I have tried my best to complete the thesis, however, human errors might be found Therefore, all inputs, ideas, and comments would be greatly appreciated

Nguyen Thi Tuy An

Ho Chi Minh, November 2012

Declaration

Student number: 7701080001

I would like to declare that this dissertation, “The impact of perceived

leadership styles on organizational commitment”, was accomplished based on

my recent independent and serious studies and has not been previously, in its

entirety or in part, submitted at any university in order to obtain academic

qualifications, the data was collected in reality, and all used sources were

indicated and acknowledged by means of complete bibliography

Nguyen Thi Tuy An

List of tables

Table 2 1 Four periods of the development of Organizational Commitment 13

Table 2 2 Different points of Leadership Style Approach 16

Table 3 1 Surveyed items used in the study for independent variables 26

Table 3 2 Surveyed items used in the study for dependent variables 27

Table 4 1 Demographic data 31

Table 4 2 Reliability of Organizational Commitment Scale 33

Table 4 3 Reliability of Leadership Style Scale 34

Table 4 4 Factor Analysis of Organizational Commitment and Leadership Style 36

Table 4 5 Organizational Commitment Descriptive Statistics 37

Table 4 6 Leadership Style Descriptive Statistics 37

Table 4 7 Correlation between Leadership Styles and Organizational Commitment 39

Table 4 8 Overall relationship between Leadership Styles and Affective Commitment 1 43 Table 4 9 Overall relationship between Leadership Styles and Affective Commitment 2 43 Table 4 10 Relationship of each Leadership Style and Affective Commitment 44

Table 4 11 Overall Relationship between Leadership Styles and Continuance Commitment 1 46

Table 4 12 Overall Relationship between Leadership Styles and Continuance Commitment 2 46

Table 4 13 Relationship of each Leadership Style and Continuance Commitment 47

Table 4 14 Overall Relationship between Leadership Styles and Normative Commitment 1 48

Table 4 15 Overall Relationship between Leadership Styles and Normative Commitment 2 49

Table 4 16 Relationship of each Leadership Style and Normative Commitment 49

List of figures Figure 2 1 Research Model 22

Figure 3 1 Research Process 30

Figure 5 1 Research Findings 52

Abstract

The purpose of research was to explore the impact of perceived leadership styles on organizational commitment

The population was the employees working in Ho Chi Minh City

The used methods were qualitative and quantitative one based on two instruments of Organizational Commitment Questionnaire (Meyer and Allen, 2004) and Leadership Style Questionnaire (Northouse, 2010)

From this study, we could find that:

 The organizational commitment in Ho Chi Minh City was at moderate level

 The leadership style used by most leaders in Ho Chi Minh City was at moderate range of task and relation orientation

 There was a statistically significant relationship between organizational commitment of the employees and their perception of supervisors’ leadership styles

CHAPTER I INTRODUCTION

This chapter will present the background of Organizational Commitment and Leadership Style in Ho Chi Minh City recently Problem statement, objective, significance, extent and methods of the research and some key concepts used in the study will also be presented

1.1 Background

1.1.1 Organizational Commitment significance

Organizational commitment is important in human resource management and organizational achievement because of the following reasons:

 Firstly, organizational commitment affects the employees’ intention to stay or leave and cost of maintaining workforce of organizations By improving organizational commitment, an organization could have “an 87% reduction in employees’ probability of departure (Corporate Leadership Council, 2004, p.4)” and avoid the cost “estimated 100% to 150% of the departing worker’s annual salary (Mayfield and Mayfield, 2002, p 89).”

 Secondly, if the organizational commitment is low, along with the possibility of high turnover rate and huge expense as above mentioned, organizations could

be at risk of leaking customers’ or technology’s information which is extremely critical in current competitive environment

 Last but not least, committed employees provide high quality during their performance Corporate Leadership Council (2004, p.4) found that “By increasing employees’ engagement levels, organizations can expect an increase

in performance of up to 20 percentile points.”

In brief, organizational commitment could be considered as a predictor of turnover, replacement cost, information security and job performance of an organization

1.1.2 The importance of Leadership Style

The first role of a leader is to lead and the leadership style does matter since it influences her/his organization in every stage of its development For example, Pham Thi Dieu Hien, the leader of BiAnFishco, bought two RollsRoyce motor cars just in the purpose of building the brand name for her company and the current failure of this organization was attached with her style Mai Kieu Lien, the Chief Executive Officer of Vinamilk, is another example Under her leading way, her group becomes one of Vietnam's most profitable and respected brand-name across Asia and as a result, Forbes listed her in the top 50 Asia Power Businesswomen (Forbes, 2012)

Undeniably, every organization needs a leader and Inyang (2009, p.68) stated that “Leadership is the most important single factor in determining business success.” Being reflected in every single activity of that organization, the leadership style hence goes along with its reputation:

 Through her/his proper leading style, leader helps the organization to maximize efficiency and to achieve setting goals

 Under her/his wise leading style, leader initiates structure for working, motivates employees, provides instructions, creates confidence, and builds morale and working environment

1.1.3 Current factors affect organizations in Ho Chi Minh City

Ho Chi Minh City is the largest economic center of Vietnam Its Provincial Competitiveness Index (PCI) is ranked 20 (PCI, 2012), meaning it has acceptable indicator of entry cost, land access and tenure, transparency, time costs, informal charge, pro-activity, business support services, labor training, and legal institutions With such index, it is easy to explain the large number of enterprises and employees operating in this city However, enterprises in Ho Chi city do not easily run today due to recent challenges listed as following:

 Since 2011, under the affect of gloomy global economy and the disadvantages due to high inflation, bad debts, liquidity shortage, and foreign balance deficit… enterprises in Ho Chi Minh City have been undergoing an incredibly tough period As consequence, until June 2012, nation-widely, there are 23,689 enterprises cease operating (General Statistics Office, 2012) According to Tax Department (2012, as cited in VCCI, 2012), in Ho Chi Minh City, in the first two months of 2012, there were more than 3.100 enterprises declaring bankruptcy

 A survey conducted by Vietnam WVB Financial Intelligence Services showed that generally, Business Confidence Index (BCI) sharply dropped from 123 points in the 3rd quarter in 2011 to 116 points in the first quarter of 2012 (Saigon Times, 2012) This survey also revealed that mainly, enterprises faced the extreme difficulty in gaining access to capital In order to contend, the survivals are encouraged to cut cost, restructure and or join the wave of mergers and acquisitions

 The Government has been processing wider economy reform It also maintains strict fiscal and monetary policies to control inflation As result of the Governmental effort in administering macroeconomics, in last March, Bloomberg listed Vietnam in top 50 best countries for business ranking (Bloomberg, 2012) Also, in 06 June 2012, “Standard & Poor's revised the outlook on Vietnam to stable from negative and affirmed the 'BB-' long-term and 'B' short-term sovereign credit ratings for our country (Government Web Portal, 2012).”

1.2 Statement of the Problem

1.2.1 Employees’ commitment

Through many years of struggling against employees’ jumping, organizations have well acknowledged the risk of shifting employees and role of employees’ commitment in current competitive environment In this regard, they start paying attention into their salary scheme as well as their benefit and training policies Gradually, employee’s engagement programs have become priorities in Human Resource activities of some organizations and the concept of “employees as assets” has been formed

However, regardless of such great effort of organizations, according to the survey of Towers Watson, in Vietnam, the employees’ intention to stay with organization was just at low level of 54% This meant there was great potential for employees to leave their organizations (Ruge, 2011) and they often resigned after every Lunar New Year Even this tendency has decreased in 2012 and the turnover ratio is forecasted to reduce this year, still “the fact that employee turnover always

stays at a two-digit level has sparked great concern for managers (Nghia, 2012).” Meanwhile, based on the information of Center of Forecasting Manpower Needs and Labor Market Information Ho Chi Minh City, in the end of this year, organizations in Ho Chi Minh City will need the labor market to provide 135.000 employees more (Thuy, 2012) In that event, surely, organizational commitment will continue to remain as a difficult problem for enterprises to solve

1.2.2 Leadership

The year of 2011 has seen the biggest human resource change at the top levels

of Vietnamese economy In FPT, Truong Dinh Anh replaced Nguyen Thanh Nam;

in Bitexco, Vu Quang Bao was replaced by In Suk Ko (Thanh, 2011) Abnormally,

in banking sector, many banks appointed new leaders For example, Western Banks has just replaced Dang Duc Toan, LienVietPostBank has just accepted the resign letter of Le Hong Phong (Khanh, 2012), Vu Tu has been no longer with TienPhong Bank, Dang Quang Minh has been temporarily holding Chief Executive Officer position of ABBank, Phan Huy Khang moved from Southern Bank to Sacombank Even, some organizations have hired foreign Chief Executive Officers, for example Maritime Bank with Atul Malik, Mekong Bank with Lau Boon Tuan, Techcombank with Simon Morris (Business Times, 2012) Explaining for such replacement, resignation and foreign element, Hoang (2012) cited by Khanh (2012) suggested using the term “risk management.” Leaders’ transition means there would be a significant change in style which might threaten the ability to stay competitive of organizations

From part 1.1.1 and 1.1.2, both leadership style and employee commitment are very important for the performance achievement of any organization Whereas,

under the environment mentioned in part 1.1.3, strategic changes are necessary for every enterprise existing and developing To take advantage of opportunities and compete successfully through hard moment, enterprises need both effective leaders and professional employees However, based on the point 1.2.1 and 1.2.2, currently, there are two problems: the low level of employees’ commitment and replacement

or resignation of respected leaders Certainly, these facts affect organizations because through leadership style transition, the employees can experience the confusion of whether to leave or stay with the organizations or their commitment becomes an unknown variable Moreover, when a new leader comes, whether her/his style is accepted by the existing employees is unanswered question Meantime, the quality of leadership in an organization would be reflected through employee commitment (Stum, 1998) and “employee commitment is one of the most important measures of leaders success” (Mayfield and Mayfield, 2002, p 89), the employee commitment and leadership styles and their relation then should be discussed

1.3 Research objective and its significance

1.3.1 Research objective

As previously proposed, in current environment, to overcome the crisis and remain profitable, enterprises require their leaders to perform more effectively and professional employees to commit more deeply Considering that there is great potential that leadership styles play key role in building and retaining necessary organizational commitment, the main objective of this research is to examine the impact of perceived leadership styles on organizational commitment in organizations in Ho Chi Minh City

1.3.2 Research significance

It is obvious that there are not many researches processed on the relation between Leadership Styles and Organizational Commitment and the findings on this relation are not consistent, so a great niche is still left for exploring and re-assessing this interesting topic Basically, this study will help:

 To measure employees’ commitment

 To understand the leadership styles perceived by employees

 To explore the extent to which leadership styles can affect organizational commitment

1.4 Extent and methodology of the study

1.4.1 Extent of the study

For Organizational Commitment, the study would focus on Affective, Continuance and Normative component For Leadership Style, two dimensions of Task and Relation Orientation would be analyzed The targets of the study are the employees who work in Ho Chi Minh City

Quantitative method

Based on the first step, after adjusted, the final version of questionnaire would be delivered for dada collecting When this is done, Quantitative study - the second step would be implemented Through this step, the reliability and validity of used instruments would be checked and deep analysis would be carried out

1.5 Some concepts related to the research

Organizational commitment is the degree to which you identify with the organization, relative to other factors that affect you at work, such as work itself or factors outside the organization that compete with it for your commitment and identification (Tosi and Mero, 2003, p 47)

Organizational commitment is about identification with the goals and values of the organization, a desire to belong to the organization and a willingness to display effort on its behalf (Armstrong and Brown, 2006, p.54)

Organizational commitment is defined as the relative strength of an employee's identification with the company, hence increasing the desire to maintain membership (Smith et al., 2010, p 31)

In short, Organizational Commitment is the relative strength of an employee’s identification with, involvement in, linkage with, loyalty to, attachment with an organization With high degree of Organization Commitment, the employee believes in the goal and value of her/his organization She/he is also willing to make effort for the organization and remains the desire being one of its members

1.5.2 Leadership and Leadership Style

Leadership

In the field of Organizational Behavior and Management, Leadership was an important subject and popular topic There were many definitions and concepts for Leadership and we could summarize some of famous authors into Appendix 1 and several of them are as below:

Leadership is the “centralization of effort in one person as an expression of the power of all (Blackmar, 1911, p.626).”

Leadership is “an intrinsic part of management It is the manner in which managers conduct themselves in their role in order to obtain the best performance from the people they are managing (Walker, 2007, p.213).”

In brief, Leadership is the status of someone, at a special high position in compared with other group members Through her/his vision, influence, power, consideration, direction and judgment, she/he maintains the competitive environment for other members to achieve the group’s goal on performance

Leadership Style

In the word “leader” we could find the implication of “going in front” and

“showing the way.” So a leader should be the one with courage, taking the first step and guiding others, while his “style” is his way achieving these through thinking, reacting, relating others Few of academic definitions on Leadership Style were listed

in Appendix 1 Dominantly, we have:

Leadership style is the manner and approach of providing direction, implementing plans, and motivating people (Clark, 1997)

Leadership Style can be described by how the leader makes decisions, handles information, builds relationship with other people, and motivates and controls subordinates (Burton and Obel, 1998, p.92)

Leadership Style is the way in which a leader relates to staff and colleagues (Pelote and Route, 2008, p 298)

In sum, Leadership Style is one’s manner /ability to act in a manner/pattern/ approach/way to “lead” others “Lead” means guiding, controlling, motivating, making decisions, building relationships…, and most important, inspiring others

1.6 Organization of the Remainder of the Study

The reminder of the study would consist four parts

 Chapter 2 Literature Review

This chapter will review literature on Leadership Style, Organizational Commitment and development of research hypotheses and model

 Chapter 3 Methodology

This chapter will detail the research design and methodology of this study

 Chapter 4 Findings and Analysis

This chapter will present the data collected

 Chapter 5 Summary, Conclusions and Recommendations

This chapter will display the findings, conclusions and recommendations of this study

The Bibliography lists works cited in the study

The Appendixes contains the Questionnaire and results of the study

CHAPTER II LITERATURE REVIEW

The scope of this Chapter is to provide an overview of the background based

on which the thesis is built Under the scope of this study, the variables of organizational commitment including Affective, Continuance, and Normative Commitment and the variables of leadership style including Task and Relation Orientation would be focused In detail, five topics included in this Chapter are the introduction on Organizational Commitment and Leadership Style, concept of each element in Organizational Commitment and Leadership Style model, development

of research hypotheses and research model

2.1 Introduction on Organizational Commitment

In history, mainly, there were two theoretical approaches on Organizational Commitment:

 Attitude approach focusing on tendency or orientation of the employees

 Behavior approach focusing on action or reaction of the employees (Amernic and Aranya, 1983)

However, under the work of Meyer and Allen (1984), these two approaches have been integrated (Prabhakar and Ram (2011) So when mentioning on the development of Organizational Commitment, only its period section is taken into consideration The most generalized work in such division is Weibo et al’s review (2009) comprising all stages of its development Under this paper, till today, the research on organizational commitment has passed four periods

From the Table 2.1, we could see that currently, the model proposed by Meyer

and Allen has better content than models in Side-Bet and Middle Affective-Development Period Also, in comparing with the models proposed in New-Development which are not well validated and complex, Three components of Organizational Commitment of Meyer and Allen is most proper to focus under the scope of this research

Table 2.1 Four periods of the development of Organizational Commitment

N# Period Author Main content

Meyer and Allen

(1984, 1990,

1997)

At first, Meyer and Allen just proposed two components of Affective and Continuance Commitment In 1990, they added the third component named Normative Commitment into their theory They argued that these components could be sensed at the same time by an employee They also conducted analyses on the antecedents and consequences of organizational commitment By doing this, their theory contributes better content to the understanding of organizational commitment

Somers (2009)

Somers (2009) studied the influence of the combination of organizational commitment's components on work results He suggests eight commitment profiles including: highly committed, affective dominant, continuance dominant, normative dominant, AC–CC dominant, AC–NC dominant, CC–NC dominant and uncommitted These profiles are hard to measure and cause the complexity to the model

2.2 Introduction on Leadership Style

According to Porter-O'Grady and Malloch (2010), we could break down the development of Leadership into eight major theoretical frames including "Great

Man" Theories, Trait Theories, Contingency Theories, Situational Theories, Behavioral Theories, Participative Theories, and Management Theories (or Transactional Theories) Among the above frames, Behavioral Theories or Leadership Style Approach focuses on the leaders’ behaviors or concentrates on what leaders actually do Principal assumptions of this approach are: great leaders could be made, leadership capability could be learned, practiced and adopted over time, and as a result, leaders become more versatile and effective Two directions of this approach are:

 Leader behaves based on her/his point of view over employees’ characteristics Some authors with this direction include Lewin, Linkert, and Goleman

 Leader behaves based on her/his characteristics Researches verifying this direction were processed by Ohio State University, University of Michigan, and Blake and Mouton (Northouse, 2012)

Under the scope of this study, an analysis on the second direction is processed because it is most suitable with the research’s objective emphasizing on leadership styles perceived by employees

Generally, under Ohio State Studies, the University of Michigan Studies, and Blake and Mouton Grid, Leadership Style includes two kinds: Task and Relation Orientation, while the differences of these studies are summarized as Table 2.2

In summary, the points of view of the Ohio State Studies are most supported Because there is a strong agreement on the opinion that these two dimensions are

“two different continua (Northouse, 2010, p.71).” In fact, at the same time, we could found a leader with both Task and Relation Oriented characteristics with

different degree Therefore, Ohio State Studies are still valued for analysis

Table 2.2 Different points of Leadership Style Approach

Criteria Ohio State Studies The University of Michigan

Checked and improved in Exxon (The British Library Board, 2012)

Points of

view

Narrowing Leadership

Style into two categories:

initiating structure and

consideration

(Northouse, 2010)

Identifying Leadership Styles

by two types: production orientation and employee orientation (Northouse, 2010)

Described Leadership Styles

by two factors: concern for production and concern for people (Northouse, 2010)

These two styles are

distinct and independent

score are likely to be

(Northouse, 2010)

Employee oriented leaders are more favored (Northouse, 2010)

The most effective leadership style is team management (9, 9) (Northouse, 2010)

Instrument Leader Behavior

Description

Questionnaire

Survey of Organizations Leadership Grid

2.3 Concept of each element of Organizational Commitment and Leadership Style model

Under the model proposed by Meyer and Allen (1990), Organizational Commitment is driven by three components: Affective, Continuance and Normative Commitment While based on Ohio State Studies, Leadership Style comprises of two factors: Task and Relation Orientation The concept of each element of Organizational Commitment and Leadership Style is as below:

2.3.1 Affective commitment

Affective commitment is rooted and upgraded from the work of Mowday et al., (1979) (WeiBo et al., 2010) At this level of commitment, the employee wants to stay with the organization thanked to emotion-based reasons, or in other words, she/he stays because of her/his feelings (Colquitt et al., 2011) This kind of commitment is most beneficial to organizations because it always has strongest positive association with organizational outcomes (Meyer and Allen, 1997) Social network of organizations is one of keys fostering affective commitment (Colquitt, et al., 2011)

explains if a more favored option is at hand, employees at continuance level would leave the organization (Colquitt et al., 2011)

2.3.3 Normative commitment

Normative Commitment was added in the model of Meyer and Allen in 1990 (WeiBo et al., 2010) With normative commitment, the employee stayed just because she/he ought to, based on moral reasons Guided by assumption that staying

is the only right action, this employee commits In her/his mind, she/he should stay

to repay the investment that the organization has made on her/him Alternatively, when the employee feels fit with the organizational moral, she/he could have this kind of commitment (Colquitt et al., 2011)

2.3.4 Task Orientation

Task Orientation is the style of leaders who concern with achieving organizational tasks These leaders know well how to organize operation, give structure, define role responsibility, and schedule activities Actually, they give attention to technical and production aspects and view employees as a way to get work done (Northouse, 2010)

2.3.5 Relation Orientation

Relation Orientation is the style of leaders who focus on employees’ needs and build camaraderie, respect, and trust in working environment These leaders are skilful in linking leaders and followers They treat employees as human beings, emphasize employees’ individuality and attend to employees who are trying to achieve organizational goals Working with leader with Relation Orientation style, employees are viewed with a strong human relations aspect (Northouse, 2010)

2.4 Development of Research Hypotheses

2.4.1 Task Orientation and Organizational Commitment

During the work on leadership style inventory, Stogdill (1970) anticipated that

in Asian environment, we could find that the more Task-Oriented Leadership Style (or also called initiating structure) was the greater Organizational Commitment should be found (cited by Lok and Crawford, 2004) In 1982, in two studies, Mowday et al found that there was a relation between the Organizational Commitment of employees and Task Orientation (cited by Grant (2008) Indeed, Grant (2008) again confirmed that there is strong relation between Task Orientation and Organizational Commitment

So hypotheses concerning the affect of perceived Task Orientation on Organizational Commitment are formed as following:

Hypothesis 1: Perceived Task Orientation is positively related to Affective Commitment

Hypothesis 2: Perceived Task Orientation is positively related to Continuance Commitment

Hypothesis 3: Perceived Task Orientation is positively related to Normative Commitment

2.4.2 Relation Orientation and Organizational Commitment

In 1986, when examining the determinants of organizational commitment, Williams and Hazer's concluded that Relation Orientation (or also called consideration) did affect Organizational Commitment (cited by Lok and Crawford (2001) Huang and Tsai, in a study in 1998 (p.85), came up with a conclusion that

“subordinates' organizational commitment had positive relationship with supervisors' "consideration".” Also in 1999, John and Taylor, when implementing a study in education sector, again pointed out that “There was a significant positive relationship between the consideration subscale and organizational commitment of teachers, accounting for 16% of the variance” (John and Taylor, 1999, p 36) In

2010, Davenport concluded that (p.283) “there is a positive and significant correlation to supervisor consideration and organizational commitment (r= 58, p<.05).” Similarly, in 2011, in a research in Pakistan, Tatlah et al demonstrated that the Relation Orientation is significant related to Organizational Commitment

So coming hypotheses concerning the relation between perceived Relation Orientation and Organizational Commitment are stipulated in pursuit:

Hypothesis 4: Perceived Relation Orientation is positively related to Affective Commitment

Hypothesis 5: Perceived Relation Orientation is positively related to Continuance Commitment

Hypothesis 6: Perceived Relation Orientation is positively related to Normative Commitment

Davenport (2010) While a leader with Relation Oriented style provides employees with support, respect, trust, friendliness and recognition Eventually, the employees feel attached (Dale and Fox (2008) cited by Davenport (2010) Therefore, logically, Leadership Style does relate to Organizational Commitment

Blau (1985) demonstrated that there is a relationship between Leadership Styles and Organizational Commitment even “consideration leadership style has a greater influence than a structure-leadership style on commitment (cited by Morrison and Morrison, 2002, p.89).” By a study in 2001, Lok and Crawford stated the same and that (p 26) “consideration leadership style (β = 0.472) was found to have a greater influence than a task-oriented leadership style (β = 0.022) on commitment.” In 2008, Dale and Fox processed a study to verify hypotheses that perceived Task and Relation Orientation would be positively related to Organizational Commitment As a conclusion, Dale and Fox found out that perceived Task Orientation explains 3% of the variance in Organizational Commitment while perceived Relation Orientation explains 16%

In Vietnam context, there are some studies at level of dissertation on the relation between the leadership styles and organization commitment For example,

in Nguyen’s dissertation in 2008, organizational commitment was found to be related to leadership styles and leaders who cared on relations got higher score of commitment in compared with those who cared on task only

Combining the development of research hypotheses and these above backgrounds, the model of this research is built as Figure 2.1: perceived Leadership Style controlled by two factors Task and Relation Orientation, which is antecedent

of Organizational Commitment including three components: Affective, Continuance and Normative commitment

Figure 2.1 Research Model

Briefly, supported by theoretical review, six hypotheses and the proposed conceptual model for this research were constructed and presented in this chapter

H4 H3

H5 H6

CHAPTER III METHODOLOGY

The details on method, tools, and sample for analysis would be included in this chapter As mentioned in Chapter 1, there would be two steps included in this study:

Qualitative method

The initial questionnaire was built based on the original instruments and translated into Vietnamese By interviewing with 5 employees, the questionnaire then was adjusted with appropriate words to guarantee the proper understanding of each question in the list

Quantitative method

A final version was produced for survey design to collect data Survey approach was used for the current study because it is a popular and appropriate method for explanatory purposes Its strengths could be listed as economization in spending budget and standardization of collected data (Rubin and Babbie, 2011) When dada was available, the reliability and validity of used instruments would be checked and deep analysis would be carried out

3.1 Description of Instrumentation

Under the scope of this thesis, Organizational Commitment Questionnaire and Leadership Style Questionnaire were combined to form the questionnaire list for collecting data

3.1.1 Organizational Commitment Questionnaire

Organizational Commitment Questionnaire is a tool developed by Meyer and

Allen for both Academic and Commercial purpose Mainly, this tool was used because of its comprehensiveness with proven reliability reported of 0.82 for affective commitment, 0.76 for continuance commitment and 0.73 for normative commitment (Meyer et al., 2002) In order to obtain proper access, an online License Agreement was submitted to the authors through the website address of http://employeecommitment.com/academic-license.html

There are three versions for this tool The two first versions contained 24 questions while the last one contains 18 items for three subscales The definition of three dimensions of organizational commitment is as following:

 Affective commitment: wants to stay with the organization and feels emotionally attached

 Continuance commitment: needs to stay with the organization because the leaving cost is too high

 Normative commitment: feels obligated to stay with the organization because it

is moral and right thing to do

Original version of this instrument is with 7-point disagree-agree scale However, 5-point scale also works quite well (Meyer and Allen, 2004) Therefore,

in this study, the 5-point scale ranging from Strongly Disagree to Strongly Agree was used

About scoring purposes, based on the manual, the authors instruct that

“employees’ responses to all of the items within a scale are averaged to yield an overall score for each of the three components of commitment (Meyer and Allen,

2004, p.3).”

3.1.2 Leadership Style Questionnaire

Among instruments formed under Leadership Style Approach, the instrument named Leadership Behavior Description Questionnaire version 12 (LBDQ-XII), a 100-question-tool which was developed by the Ohio State University in 1963, is most widely used leadership assessment based on how employees perceive of their leaders’ style (Northouse, 2010) It is granted for usage with no cost and no need to request permission for research purpose Since there was a large number studies stated that dimensions of leadership style could be reduced into two factors called Consideration and Initiation of structure (Northouse, 2010), in this study, 20 items

of these two dimensions would be taken into consideration

The reason for using this tool in this research is that the reliability of subscales was recorded at 0.78 for Initiating structure and 0.9 for Consideration (Bass and Bass, 2008, p 541) In addition, it was largely used for many studies not only in Western countries but also applied for Asian countries (Selmer (1997) cited by Grant (2008)

According to the Manual of LBDQ-XII, the definition of two dimensions is as following:

 Initiation of Structure: clearly defines own role, and lets followers know what

Questionnaire XII was presented by Northouse (2010) for two dimensions of Task Orientation and Relation Orientation

3.2 Independent and Dependent Variables

The list of detailed questions for independent and dependent variables is as Table 3.1 and 3.2:

Table 3.1 Surveyed items used in the study for independent variables

Task Orientation (10 items)

TO1 Your direct leader tells group members what they are supported to do

TO2 Your direct leader sets standards of performance for group members

TO3 Your direct leader makes suggestions about how to solve problems

TO4 Your direct leader makes his or her perspective clear to others

TO5 Your direct leader develops a plan of action for the group

TO6 Your direct leader defines role responsibilities for each group member

TO7 Your direct leader clarifies his or her own role within the group

TO8 Your direct leader provides a plan for how the work is to be done

TO9 Your direct leader provides criteria for what is expected of the group

TO10 Your direct leader encourages group members to do high-quality work

Relation Orientation (10 items)

RO1 Your direct leader acts friendly with members of the group

RO2 Your direct leader helps others in the group feel comfortable

RO3 Your direct leader responds favorably to suggestions made by others

RO4 Your direct leader treats others fairly

RO5 Your direct leader behaves in a predictable manner toward group members

RO6 Your direct leader communicates actively with group members

RO7 Your direct leader shows concerns for the well-being of others

RO8 Your leader shows flexibility in making decisions

RO9 Your direct leader discloses thoughts and feelings to group members

RO10 Your direct leader helps group members get along with each other

Table 3.2 Surveyed items used in the study for dependent variables

Affective commitment (6 items)

AC1 I would be very happy to spend the rest of my career with this organization

AC2 I really feel as if this organization's problems are my own

AC3 I do feel like "part of the family" at my organization

AC4 I do feel like "emotional attached" to this organization

AC5 This organization has a great deal of personal meaning for me

AC6 I do feel a strong sense of belonging to my organization

Continuance commitment (6 items)

CC1 I do feel some obligation to remain with my current employer

CC2

Even if it were to my advantage, I do not feel it would be right to leave my organization now

CC3 I would feel guilty if I left my organization now

CC4 This organization deserves my loyalty

CC5 I would not leave my organization right now because I have a sense of obligation to the

people in it CC6 I owe a great deal to this organization

Normative commitment (6 items)

NC1 It would be very hard for me to leave my organization right now, even if I wanted to NC2

Too much in my life would be disrupted if I decided I wanted to leave my organization now

NC3 Right now staying with my organization is a matter of necessity as much as desire NC4 I feel that I have too few options to consider leaving this organization

NC5 One of few serious consequences of leaving this organization would be scarcity of

available alternatives NC6

One of the major reasons I continue to work for this organization is that leaving would require considerable personal sacrifice - another organization may not match the overall benefits that I have here

3.3 Sample and Analysis Procedures

A packet including list of questions, thank-you letter would be distributed The list of questions would comprise three sections: demographic items, leadership items (Leadership Style Questionnaire) and organizational commitment items

(Organizational Commitment Questionnaire) Both instruments were 5-likert scales and PAWS/SPSS was used to do data analysis

3.3.1 Sample

The target population in this case was Ho Chi Minh City and convenient sampling technique was used The data would be collected through four ways: online survey, on-site survey, email, and phone call There were total of 206 responses suitable for the research

3.3.2 Analysis Procedures

Step 1: re-checking the reliability of instruments by Cronbach alpha coefficient based on the rule that ideally, the Cronbach Alpha value of a scale

should be above 0.7 (DeVellis (2003) cited by Pallant, 2011, p.97) In addition, only

variables with the item-total correlation values which are less than 0.30 are acceptable (Nunnally and Bernstein (1994) cited by Nguyen, 2011)

Step 2: processing exploratory factor analysis to determine each level of commitment as well as each type of leadership style Exploratory factor analysis is a liking evaluation, thus all dependent and independent variables should be processed

at the same time (Nguyen, 2011) The criteria and conditions for exploratory factor analysis are:

 Sample size should be at least at the proportion of 5 observations for 1 variable (Hair et al (2006) cited by Nguyen, 2011)

 At least some correlations of 0.3 and above are found in correlation matrix The Bartlett’s test of sphericity should be significant (ρ<0.05) for factor analysis to

be considered appropriate and Kaiser-Meyer-Olkin index ranges from 0 to 1,

with 0.6 suggested as the minimum value for a good factor analysis (Pallant,

2011, p.183)

 Factor Extraction technique used in this study would be Principle Components based on the Kaiser’s criterion because largest number of variables would be retained Using this technique, only factors with an eigenvalue of 1.0 or more are kept for further investigation (Nguyen, 2011)

 Factor Rotation approach used in this study would be Varimax method, one of orthogonal factor solution Since “orthogonal rotation results in solutions that are easier to interpret and to report” and Varimax method “attempts to minimize the number of variables that have high loadings on each factor (Pallant, 2011, p 185).”

When all criteria and conditions were met, an evaluation on scale would be carried out based on:

 Discriminate validity: after reducing factors, the number of components remained should be five as the suggested model

above are significant (Hair et al., 2010) So, factor loadings set for this study is 0.5

Step 3: analyzing the relation between Leadership Styles and Organizational Commitment, including computing Pearson correlation coefficient and finding the linear regression model of collected data Since the rotation approach used in exploratory factor analysis was orthogonal and dependent and independent variables were processed at the same time, the created factor scores would be uncorrelated (Nguyen, 2011) Therefore, as suggested by Nguyen (2011), new variables created based on the average of measured variables are used for correlation and regression analysis Also, according to him, because research objective is to test hypotheses generating from the literature review, ENTER method then should be used

Summary of analysis procedures are displayed as below figure

Figure 3.1 Research process

scale wording)

QUANTITATIVE STUDY

(n=206) (Online survey, on-site survey, email, and phone call,

excluded respondents in pilot study)

Cronbach’s alpha (Step 1)