The relationship of service climate, employee commitment, and life satifaction in banking industry in vietnam

ABSTRACT This study examines the roles of service climate through its factors: customer orientation, managerial support, and work facilitation affecting on employee commitment.. Using a

International School of Business

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Vuong Thi Thanh Binh

THE RELATIONSHIP OF SERVICE CLIMATE, EMPLOYEE COMMITMENT, AND LIFE

SATISFACTION IN THE BANKING INDUSTRY

IN VIETNAM

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2014

Vuong Thi Thanh Binh

THE RELATIONSHIP OF SERVICE CLIMATE, EMPLOYEE COMMITMENT, AND LIFE SATISFACTION IN THE BANKING INDUSTRY

ACKNOWLEDGEMENT

Firstly, I would like to express my heartfelt gratitude to my supervisor Dr Nguyen Thi Mai Trang for her professional guidance, enthusiastic support, valuable advices and instructions as well as the encouragement that I was received from her during the time of doing my research

Secondly, I would like to express my deep gratefulness to Professor Nguyen Dong Phong, Professor Nguyen Dinh Tho and Dr Tran Ha Minh Quan for their precious time as the members of ISB Research Committee which gave me some useful comments and meaningful suggestions All of their comments and suggestions were contributed importantly in my completion of this research

Thirdly, I would like to express my sincere thanks to my professors in International Business School (ISB) – University of Economics Ho Chi Minh City for all the knowledge which I were received in the past two-year master course

Finally, I would like to say thank you to my classmates in ISB for their support during the time I studied and wrote the thesis Moreover, my truly thanks are also sent to my workmates as well as all people who joined in my survey and gave the valuable opinions for

my research

ABSTRACT

This study examines the roles of service climate through its factors: customer orientation, managerial support, and work facilitation affecting on employee commitment Based on employee commitment created from service climate, it also evaluates the effect of employee commitment on life satisfaction of employees in the banking industry in Vietnam

The test processed in a sample of 140 banking staffs in Ho Chi Minh City and Binh Duong province Using a seven-point Likert-type scale to measure data together with some methods of data analysis (Cronbach’s Alpha test, Exploratory factor analysis and Multiple regression analysis), the findings confirm that working environment included managerial support merged with work facilitation has the positive effect on employee commitment From that result, employee commitment also has the positive significant effect on life satisfaction

Extracted from the findings of this research, in order to receive the commitment from employee, the bank must set up good environment for their staffs such as creating good relationship between the managers especially the direct manager and the employee This is one of the most important conditions to get the employee commitment Besides, the work facilitation included the workmate relationship and facilities, which the bank provides to employee affect on keeping the commitment of employee However, the most important thing in this study is having the commitment in job; the employee in the bank will have the life satisfaction

Key words Service climate, Employee commitment, Life satisfaction

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

ABSTRACT ii

TABLE OF CONTENTS iii

LIST OF FIGURES vi

LIST OF TABLES vii

CHAPTER 1: INTRODUCTION 1

1.1 Research background 1

1.2 Research problem 2

1.3 Research objectives 3

1.4 Scopes and research methodology of the thesis 4

1.5 Significance of the study 5

1.6 The structure of the study 5

CHAPTER 2: LITERATURE REVIEW 7

2.1 Life satisfaction 7

2.2Service climate 7

2.3 Employee commitment 9

2.4 Service climate and employee commitment 9

2.5 Employee commitment and life satisfaction 11

2.6 Summary 12

CHAPTER 3: RESEARCH METHODOLOGY 13

3.1 Research process 13

3.2 Measurement scale 16

3.3 Questionnaire design 18

3.3.1Qualitative research 19

3.3.2 Quantitative research 20

3.4 Data collection method 20

3.5 Sampling design 20

3.5.1 Population 20

3.5.2 Sample size 21

3.6 Data analysis method 22

3.6.1 Data code 23

3.6.2 Cronbach’s alpha 23

3.6.3 Exploratory factor analysis (EFA) 23

3.6.4 Multiple regression analysis 24

3.7 Summary 24

CHAPTER 4: DATA ANALYSIS AND DATA RESULTS 25

4.1 Sample characteristics 25

4.2 Data analysis process 27

4.2.1 Scale Validity and Reliability 28

4.2.2 Exploratory Factor Analysis(EFA) 29

4.2.2.1 Exploratory Factor Analysis (EFA) for independent variables 29

4.2.2.2 Exploratory Factor Analysis (EFA) for dependent variables 32

4.2.3 Multiple Regression Analysis 34

4.2.3.1 Multiple Regression analysis to evaluate the effect of customer orientation, working environment on the employee commitment 35

4.2.3.1.1 Correlation analysis 36

4.2.3.1.2 Test of assumptions: 36

4.2.3.1.3 Regression analysis 38

4.2.3.2 Bivariate Regression analysis to evaluate the effect of employee commitment on life satisfaction 39

4.2.3.2.1 Test of assumptions 40

4.2.3.2.2 Regression analysis 40

4.2.3.3 Summary the result of multiple regressions and linking to the situation in banking industry in Vietnam 42

4.3 Summary 43

CHAPTER 5: CONCLUSIONS, IMPLICATIONS, AND LIMITATIONS 45

5.1 Conclusion 45

5.2 Managerial implications 46

5.2.1 Customer orientation has not a significant positive effect on employee commitment 46

5.2.2 Working environment has a positive effect on employee commitment 46

5.2.3 Employee commitment has a positive effect on life satisfaction 47

5.3 Limitations and future research 49

References 51

Appendix A: In-depth Interview’ refinement measurement scale 58

Appendix B: Questionnaire (English Version) 61

Appendix C: Total Variance Explained 71

Appendix D:Testing assumptions of multiple linear regression 73

Appendix E:Testing assumptions of simple linear regression 77

LIST OF FIGURES

Figure 2.1: Research Model 11Figure 3.1 Research Process 15Figure 4.1: Adjusted Research Model 34

LIST OF TABLES

Table 3.1 Measurement scale of the research 17

Table 3.2: The result of collecting questionnaire 22

Table 4.1: Sample Characteristics 27

Table 4.2: Scale validity and Reliability 28

Table 4.3: KMO and Bartlett's Test 29

Table 4.4: Rotated Component Matrix 30

Table 4.5: KMO and Bartlett's Test 32

Table 4.6: Component Matrix 32

Table 4.7: KMO and Bartlett's Test 33

Table 4.8:Component Matrix 33

Table 4.9: Correlations 36

Table 4.10: Model Summary 38

Table 4.11: Anova 39

Table 4.12: Coefficients 39

Table 4.13: Model Summary 40

Table 4.14: Anova 41

Table 4.15: Coefficients 41

Table 4.16: Summary of hypotheses testing result 42

CHAPTER 1: INTRODUCTION 1.1 Research background

According to Krau and Oswald, one of the highest human and societal goals is enhancement the quality of life (as cited in Frank and Enkawa, 2009) and life satisfaction is the final goal of the human being Every year, Organization for Economic Co-operation and Development (OECD) does the survey with 36 members including countries, which have the highest income in the world and choose some countries have the happiest life all over the world Beside some ratio to survey such as health, education, environment quality…it also has the ratio of life satisfaction in their survey (Thu Hang, 2014).The large part of the developed countries has the high satisfaction level to their lives and the frequently survey about life satisfaction express that life satisfaction is important in developed country

In Vietnam, life satisfaction seems not to be paid attention in the past because Vietnam is still the developing country (Ready and Dinh,2008), so the economy is not strong and rich enough to enjoy the life.Vietnamese still have the quotation that “eating for being full and wearing for being warm” and they do not have the concept of life satisfaction.In the past ten years, Vietnam is rarely to survey about life satisfaction in our lives because it is hard to find out the information about life satisfaction of Vietnamese in the magazines or newspapers

However, some recent years, life satisfaction starts to be known in the communication media in Vietnam.According to Linh San (2014), Business Insider, a prestige magazine of United States of American(USA) is ranked Vietnam in number 16 of the top 20 the most valuable places to live all over the world In addition to, the newest declaration of Pew, a research center in Washington D.C, say that 60 percentage of Vietnamese has the high life satisfaction just after Mexican and USA (Tra My, 2014).Besides, the survey about the happy level of youth also conducts in Vietnam by Hilton Worldwide, Vietnam is ranked number eleven, and the rank is higher than some

countries in the same area such as Indonesia and Philippines It shows that Vietnamese begin to know and pay more attention to life satisfaction

1.2 Research problem

In some previous research, there are many studies about life satisfaction There is the research about the relationship between organization support, work-family conflict and the job-life satisfaction in the University (Dixon and Sagas, 2007) or the other research about the relative contributions of ethnicity, socioeconomic status, health, and social relationships

to life satisfaction in United States (Barger et al., 2009) On other hand, the research of the role of personality in life satisfaction also process by Baudin et al (2011).It also has the researcher provide the study of the role of work on life (Streimikiene and Grundey, 2009) or the effects of consumption and work satisfaction on the life of Professional (Hampton et at.,2013) Cheng and Chan (2006) have the research about the life satisfaction in later life of the gender and widowhood such as how men and women examine life satisfaction differently in the context of relationship of each other Frank and Enkawa (2009) process the research of whether economic growth enhances life satisfaction of the people

The most of previous research show that among those factors making life satisfaction, work plays an important role among them Job satisfaction is found in many research being the factor affect life satisfaction, however, the effect of employee commitment on life satisfaction does not find out in the previous research

Besides, many researches investigate about the factors affect employee commitment McGuire and McLaren (2009) process the research about the impact of physical environment on employee commitment in call centers Fedor et al (2006) make research about the effects of organizational changes on employee commitment There are the research about the effect of service climate on employee commitment of He et al (2011); Little and Dean (2006) However, the effect of service climate on employee commitment find out in service sector of call center and hospital It does not find out the research of the effect of service climate on employee commitment in the banking industry

In Vietnam, there are many research about life satisfaction of Vietnamese about many aspects of life satisfaction such as the satisfaction about the family relationship, individual life, family facilities, life condition, etc (Hoang Ba Thinh, 2012) Besides, it also has the research about the life satisfaction of Vietnamese people from the occupations, jobs and living standard (Nguyen Thi Van Hanh, 2013) It means that some people in Vietnam begin to think of life satisfaction as well as the factors effect on life satisfaction However, it does not find out the research about life satisfaction of employee in service sections, especially the banking industry in Vietnam In terms of previous research, related to banking industry in Vietnam, there just have research about the factors influencing to the job satisfaction of the commercial banks’staff (Phan Thi Minh Ly, 2011).Other research concentrates on the employee satisfaction of banking staff (Nguyen Thi Thuy Quynh, 2012) but it does not study the life satisfaction of banking staff

Schneider et al (as cited in Little and Dean, 2006) say that service climate was significantly related to each of three predictors: customer orientation, managerial practices and customer feedback Customer feedback considers as one aspect of customer orientation (He et al., 2011) Therefore, in order to fulfill the gap of effect of service climate on the employee commitment in the banking industry; and in an effort to identify the key factors of service climate influence on employee commitment, the research considers the concepts of customer orientation, managerial support and work facilitation, three factors of service climate, to employee commitment in banking industry Moreover, the relationship of employee commitment and life satisfaction of employee in banking industry are also investigated in this research That is the reason in my study, I concentrate on the service climate which the bank creates to get employee commitment and from that employee commitment, how it effect to life satisfaction of employee

1.3 Research objectives

Based on the research background and research gap, the overall objective of this study is to examine the relationship between service climate through its three factors: customer orientation, managerial support, and work facilitation, and employee commitment

as well as the effect of employee commitment on life satisfaction of employee in the banking industry in Vietnam In specific, this research has the purpose of investigating:

1 The effect of customer orientation on the employee commitment in the banking industry

2 The effect of managerial support on the employee commitment in the banking industry

3 The effect of work facilitation on the employee commitment in the banking industry

4 Under the effect of service climate on employee commitment – the influence of employee commitment to life satisfaction of employee in the banking industry

1.4 Scopes and research methodology of the thesis

By using the service climate to evaluate the employee commitment and thank to this employee commitment, it measures the life satisfaction that is the reason why the field of research is the service industry Banking is one of service sectors in service industry chosen joining this survey, especially the banking industry in Vietnam Through some dimensions

of service climate are customer orientation, managerial support, and work facilitation, effect

to employee commitment – to draw the relationship between employee commitment and life satisfaction

Examining the relationship of three independent variables of service climate, employee commitment and life satisfaction, the author uses the scale of previous research – structured questionnaire – to collect data from employees in some other bank in Ho Chi Minh City (HCMC) such as Taipei Fubon Commercial Bank HCMC Branch, Huanan Commercial Bank HCMC Branch, Far East National Bank HCMC Branch, The Bank of Tokyo-Mitsubishi HCMC Branch, Agricultural Bank of Vietnam Cho Lon Branch and one bank in Binh Duong province is Taipei Fubon Commercial Bank Binh Duong Branch The constructs were measured by using established scales Using a seven-point Likert-type scale

to measure the survey

1.5 Significance of the study

After this study, it is hopeful that its finding will contribute in bankers’ knowledge about employee commitment as well as some factors effect on it From that, the manager of the bank knows the way to hold the commitment of their employee based on the knowledge about what thing is important to create the commitment of the employee in banks’ working environment Besides, through this study, Vietnamese bankers know more clearly about the concept of life satisfaction as well as how employee commitment effect on life satisfaction

in order to make the life of bank’s employee more satisfied

1.6 The structure of the study

This thesis consists of five chapters

Chapter 1: Introduction

In this chapter, the author introduces the research background of the study, research problem, research objectives, research methodology and scopes, the significance of the study and the structure of the study

Chapter 2: Literature review and hypotheses

In this chapter, the fundamental theories and definition of each concept in the study are explained based on quoting or paraphrasing the same concepts in some previous research by the author Besides, the research model together with hypotheses of this study are also presented by the author in this part

Chapter 3: Research Methodology

This chapter discusses about the research design, measures of the constructs together with the measurement scales of this study Research process is also mentioned

in this chapter The method of data analysis with Cronbach’s alpha, Exploratory factor analysis (EFA) and Multiple regression analysis is introduced

Chapter 4: Data analysis and data results

The author presents the characteristics of the collected samples as well as the result of the research after analyzing the samples with data analysis method mentioned

in chapter 3 From that result, the author draws the conclusions for the hypotheses in chapter 2

proposed-Chapter 5: Conclusions, implications and limitations

In this chapter, the author confirms the supported hypotheses based on the results of the research in the chapter 4 Based on those supported hypotheses, the author suggests the contribution of the study in management theory and practice and draws the limitation of the study for future research

CHAPTER 2: LITERATURE REVIEW

In this chapter, the author presents the literature related to service climate as well as the literature of three factors standing for service climate: customer orientation, managerial support, and work facilitation Besides, the overview of literature about employee commitment and life satisfaction is also introduced by the author Based on the literature review about the concepts, the author develops the hypothesis from the relationship between service climate and employee commitment through the relationship of customer orientation, managerial support and work facilitation to employee commitment

2.1 Life satisfaction

According to Henrich and Herschbach, life satisfaction is defined as the subjectively perceived quality of life based on individual preferences and reported satisfaction in various life domains (as cited in Besier and Goldbeck, 2012) Rode (2004) said life satisfaction refers to the cognitive element of the subjective well-being of employees Judge et al., (2001) defined life satisfaction as an individual’s conscious, cognitive appraisal of the quality of his or her life and Lent et al (2009) said life satisfaction is a lasting indicator towards the employee’s triumphant adjustment to changes in life (as cited in Mafini, 2014)

It may be described as an emotional reaction of an individual to life consisting of time, spare time, and time after work as well as expressing individual’s satisfaction about life (Heller et al., 2002) Shichman and Cooper (as cited in Wang et al., 2008) stated that living better, enjoying life and having a high quality of life is life satisfaction

of organizational climate such as the perceptions of employees about what is important in their organization Schneider and Bowen (as cited in Johnson, 1996) stated that creating a climate service starts from identifying the needs and expects of the market for service quality This involves measuring customer expectations and satisfaction, sharing the data with affected employees, and generating goals and plans to ensure improvement in service delivery

Schneider and Bowen (1993) argued that service climate might include some practices, which encourage offering high quality service and creating supportive conditions, such as efforts toward removing obstacles to work, and other HR policies In addition, Shainesh and Sharma (as cited in He et al., 2011) suggested other facets of service climate, including customer orientation, managerial practices and customer feedback Schneider (as cited in Carrasco et al., 2012) showed that customer feedback refers to the request and use

of feedback by customers, customer orientation describes efforts to meet customer needs or expectations for service quality

He et al (2011) stated, “Customer feedback may be considered as one aspect of customer orientation and climate service is proposed to have three major components in their research, including customer orientation, managerial support and work facilitation” Little and Dean (2006) in their research, the dimensions of service climate are consist of organizational customer orientation, managerial practices, customer feedback and human resource management According to Shainesh and Sharma (as cited in He et al., 2011), customer orientation mean creating systems to act on the information about customers which includes the component of customer feedback So that, in this study, the author chooses the components to measure the service climate are customer orientation, managerial and work facilitation

Customer orientation is defined as the importance that service providers place on their customers’ needs and expectations relating to a firm’s service offerings (Kelly, as cited

in Scotti et al., 2007).Saxe and Weitz (as cited in Dimitriades, 2007) said that customer orientation has been defined as the satisfaction of customer needs at the level of the

employee-customer interaction In addition, customer orientation means placing a high priority on customer interests (Day, as cited in He et al., 2011) He et al (2011) quoted that

“managerial support means actions taken by an employee’s immediate manager in a manner that supports and rewards delivery of quality service Work facilitation means all working conditions that support delivery of quality service, such as general HR practices, guidance, and cooperation among workmates” Three components such as customer orientation, managerial support, and work facilitation use to measure the service climate in this research

He et al.(2011) recognized that “customer orientation is the basic component of service climate which determines the direction and guideline of serviceand managerial support and work facilitation are the two “wheels” of the carriage, to realize quality service”

2.3 Employee commitment

Herscovitch and Meyer (2002) defined commitment of workers when they recognize the goals and objectives of the organization and try to make effort and to work harder to help it prosper In addition, Bateman and Strasser (1984) described commitment relating employees’ devotion and faithfulness to readiness to exert effort on behalf of the organization and the desire to maintain membership El-Kassar et al (2011) recognized that normative commitment is an emotional obligation towards the organization of the employees who accept about their responsibility towards the organization

Employee commitment is defined as “the psychological attachment felt by a person for the organization Committed individuals believe in, and accept, organizational goals and values They want to remain in the organization and commit themselves to provide quality service on behalf of the organization” (Chen, as cited in He et al., 2011)

2.4 Service climate and employee commitment

Banking industry is the service industry, so customer is the most of their concerns in bank’s business All their products of service concentrate on their customer satisfaction Mechinda and Patterson (2011) said, “Consumers are better served if service organizations are structured to meet and satisfy the needs of their employees” It means that customer will

be served well when the organization meets the needs of their employee Tsai et al (2008) said if in the service organization, employee can perceive a superior service climate, then they show the service behavior which the organization desires So that, building the good service climate for employee plays the important role to lead to customer satisfaction as well as job satisfaction From above literature, it shows that there is the relationship of customer orientation to the employee commitment in the service sector, especially in the banking industry And the hypothesis is set up base on the relationship of customer orientation and employee commitment

H1 Customer orientation (CO) has a positive effect on employee commitment (EC) According to Ready and Dinh (2008, p.11) “Vietnamese students are indicating that

it is very important to them to receive feedback from their supervisor and organization for the contributions they are making” The Vietnamese students after graduated, they will become the employee which may be work in the bank or in another field of the Vietnamese economy With the recognition of Ready and Dinh (2008), it shows that the reaction of the supervisor as well as the manager in workplace has the effect to the employee From this concept, the relationship between managerial support and employee commitment is set up

H2 Managerial support (MS) has a positive effect on employee commitment (EC) The previous literature mentions service climate is measured by customer orientation, managerial support, and work facilitation Service climate is the environment for employee to work with high commitment and the work facilitation being all working conditions that support delivery of quality service, such as general HR practices, guidance, and cooperation among workmates Mottaz (1988) says that employees who got the supportive and friendly relationship with their co-workers and supervisors has a strong, positive commitment to their organization Basing on this, the hypothesis is made to evaluate the effect of work facilitation to employee commitment

H3 Work facilitation (WF) has a positive effect on employee commitment (EC)

2.5 Employee commitment and life satisfaction

According to the literature, employee commitment is the desire to be a part of the organization; it is the commitment of the employee to provide the quality service on behalf

of the organization to the customer By the way trying one’s best to provide the high quality service to the customer in order to make the organization prospective, employee can be had the strong connection to this organization Especially in the banking industry, providing the good service for the customer is the final target in business of all the banks in Vietnam Based on the employee commitment with the bank, this employee gives us the signal that someone feels satisfied with the current job Ofovwe et al (2013) say people who are satisfied with their job will have the tendency to be satisfied with life Therefore, through the job satisfaction, we can see the link from employee commitment to life satisfaction Therefore, the hypothesis to express this relationship of two factors is created

H4 Employee commitment (EC) has a significant positive effect on life

satisfaction(LS)

Basing on four hypotheses setting up, the research model for this study is drawn

Figure 2.1: Research Model

Life Satisfaction

Customer

Orientation

2.6 Summary

In this chapter, the author introduces the concept of service climate evaluates by three factors of customer orientation, managerial support and work facilitation These concepts of three these factors are more understand by its definitions that quoted in previous research The literature of employee commitment and life satisfaction are mentioned in this chapter as well Besides, the author introduces the relationship of service climate and employee commitment together with the relationship of employee commitment and life satisfaction From these relationships, the author presents four hypotheses extracted from

them

CHAPTER 3: RESEARCH METHODOLOGY

The purpose of this chapter is to introduce methodology used in this research Firstly, the research process is introduced Secondly, the measurements scale applying for this research is mentioned in this part Thirdly, the questionnaire design, data collection methods and sampling design are mentioned Finally, the introduction of data analysis method using for reporting the research data is presented

3.1 Research process

Determining the research problem was the important step of this research After that,

by reviewing the literature, the relevant concepts related to service climate, employee commitment, as well as life satisfaction was found out These concepts were the foundation for proposing the research model and the hypotheses in the next step In this study the main purpose evaluated the factors affecting employee commitment consist of customer orientation, managerial support and work facilitation After that, based on that employee commitment, evaluating the effect of employee commitment on life satisfaction of banking staffs An operation model was presented in Figure 2.1 The research design was applied to identify data resources, methods of collecting data, measurement scale used in this study, sampling design, and data analysis methods

Relying on the measurement scale borrowed from previous studies, the questionnaire’s draft was designed and translated into Vietnamese The draft of questionnaire was revised by researcher’s supervisor to correct mistakes before making qualitative research

The research was processed through two steps: qualitative research and quantitative research The qualitative research was made by in-depth interview used to adjust the measurement scale for more understandable Moreover, qualitative research helped to set the final questionnaire for the main research After processing qualitative research, the final questionnaire was used in a quantitative research for main survey to collect data for data

analysis process (Cronbach’s Alpha test for the scale, Explore Factor Analysis and Multiple Regression Analysis) to test the hypothesis proposed in Chapter 2

Figure 3.1 Research Process

Literature review

Research model and Hypotheses

Draft questionnaire

In-depth interview (n=5)

Revision scale

Final questionnaire

(n = 80)

Main survey (n = 140)

Determining the

research problem

Research design

Cronbach Alpha test for scales

Explore Factor Analysis

Multiple Regression Analysis

Conclusions andRecommendations Data analysis (to test hypotheses)

3.2 Measurement scale

A seven-point Likert-type scale (1 = strongly disagree, 7 = strongly agree) for measuring customer orientation, managerial support, work facilitation, employee commitment and life satisfaction was used in this study The scale of customer orientation included six items was gotten from Day; Shainesh and Sharma (as cited in He et al., 2011) The scale of managerial support made to measure about relationship between an employee and his direct manager with four items, which was adapted from Foley and Hang (2005) The scale of work facilitation, which included four items were adapted from Shainesh and Sharma (2003) Peterson (2004) was the source to borrow the measurement of employee commitment, which included four items The measurement of life satisfaction was drawn from Diener’s Satisfaction with Life Scale (Diener et al.; Pavot and Diener as cited in Slocum-gori et al.,2009) with the design of questionnaires see in Table 3.1

Table 3.1 Measurement scale of the research

Measurement scale/ Source

2011)

CO1 My bank has clear ideas about customers and their needs

CO2 High quality service is emphasized as the best way to keep customers in my bank

CO3 My bank defines its products/services from customers’ perspectives

CO4 My business does a good job of keeping customers informed of changes, which affect them CO5 We are informed about external customer evaluations of the quality of service delivered by

my business

CO6 My bank always responds to the customers’ feedback and suggestions quickly

MS1.My direct manager supports me when I come up with new ideas on how to improve customer service

MS2 My direct manager encourages me to deliver high quality service

MS3.My manager is responsive to my requests for help or guidance

MS4 My manager is very committed to improving the quality of our area’s work and service

WF1 I receive adequate support from workmates to do my job well

WF2 If I perform job well, I receive appropriate recognition and reward

WF3 I have the manuals and resource materials I need to provide services

WF4 I have access to the product and policy information when I need them to do my work in my business

EC1 I feel as though my future is intimately linked to that of this organization

EC2 I would be happy to make personal sacrifices if it were important for the business unit’s being

well-EC3 I feel a sense of commitment to our company

EC4 I am proud to tell others that I am part of this organization

al., 2009)

LS1 In most ways my life is close to my ideal

LS2 The conditions of my life are excellent

LS3 I am satisfied with my life

LS4 So far I have gotten the important things I want in life

LS5 If I could live my life over, I would change almost nothing

3.3 Questionnaire design

All the item of scales were transferred to questionnaire The original transferred questionnaire was in English, so it was translated into Vietnamese for survey The questionnaire included two parts: part one consist of measurement scales using a seven-point Likert-type scale to ask respondents choose one item that ranged from (1) strong disagree to (7) strongly agree; part two was some general demographic information of the respondent Both versions of the questionnaire (Vietnamese version and English version) are shown in Appendix B

In demographic information, there were five groups of characteristics in demographic information: gender, age, income, department, working duration, and bank type (see in table 4.1)

About the gender, the author collected data from male and female

About age, there were five group of age used to survey data started group one from

21 years old to 25 years old, that was the group of age had just graduated the University because the basic requirement of staff recruitment in the bank was at least graduated the University Group two from 26 years old to 30 years old was the group quire seniority as well as the good experience in banking industry Group three from 31 years old to 40 years old, this group was people having good position in the bank This group was usually included the position of supervisor who had good experience as well as accumulating some management experience Group four belonged to the years old from 41 to 50, these was group including people with high position as well as the experience in banking industry People in this group were usually included the position of manager or higher position in the bank The last group of age for people above 50 years old, this group was designed for people who donated the most of lifetime for working and nearly reach the age of retirement

as well as the high seniority of working in the bank

Income was divided into five levels The lowest income was below 5 million Vietnam dongs per month (VND/month) Surveying the salary of some banks in Ho Chi

Minh City, this was the basis salary level for newcomers working in the bank (Oceantran, 2011).The second income level from over 5 million (VND/month) and lower 10 million (VND/month), this level was designed for some employee in the bank with the time working in the bank more than one year Level three and four of income with the tolerance fluctuated within 10 million (VND/month) 10≤ Income<20,20 ≤ Income<30 accordingly Level three of income was suitable for the supervisor who worked in the bank from over 3 years to 6 years meanwhile level four was suitable for manager of the bank with high working experience as well as management experience The last level of income was over

30 million (VND/month) using for people with high position and experience in the bank

Department designed in questionnaire was based on some department in the bank There were 5 kinds of department in this research including Operation department, Marketing department, Human Resource and Administration department, Treasury department and other departments

Working duration was designed in 4 groups with the distance of 3 years for each group The first group of working duration was working in the bank from 1 to 3 years, this group was used for the newcomer or junior employee with few working experience in the bank The second group was set up for employee having enough experience working in the bank for undertake the position of supervisor The third and the last group were for people with very high experience work in the bank, in this also had the manager with a lot of experience about working as well as management

Bank type included State-capital Bank and Foreign investment capital bank to have the diversification of the observations that belonged to foreign bank and local bank in Vietnam

3.3.1Qualitative research

After finishing the draft questionnaire, the researcher conducted the in-depth interviews with 5 people working in the bank in Ho Chi Minh City to obtain their ideas about the questionnaire in the context of Vietnamese culture, check the content and meaning

of words used in the initial measurement scales and modify them to be more suitable and understanding Although most of the measures of the constructs were mentioned in the previous literature, this step is necessary to make them appropriate and easy to understand

in the context of studying

During the interview, the author received some significant feedback and suggestions from the interviewees to make the improvement for the official questionnaire (See Appendix A)

3.3.2 Quantitative research

After revising the draft questionnaire from the result of qualitative research, the questionnaire was re-adjusted to create the final questionnaire by the author to let it be more suitable with Vietnam and easier for interviewer to understand and answer When the author evaluated that the questionnaire was designed well, after that the main survey was processed widely to collect data for data analysis process

3.4 Data collection method

The author used the method of self-administered survey to collect data Questionnaire was sent to the respondents via paper version

3.5 Sampling design

3.5.1 Population

The author issued questionnaires to 200 respondents who work in the bank in Ho Chi Minh City and Binh Duong province to collect data Data collection was conducted during 4days The author collected 49 questionnaires from Taipei Fubon Commercial bank Hochiminh City Branch, 8 questionnaires from Taipei Fubon Commercial bank Binh Duong Branch, 15 questionnaires from Huanan Commercial Bank, HCMC Branch, 18 questionnaires at Far East National Bank, HCMC Branch, 40 questionnaires from The Bank

of Tokyo-Mitsubishi HCMC Branch and 35 questionnaires at Agricultural Bank of Vietnam In total, three was 165 questionnaires returning to the surveyor

3.5.2 Sample size

Sample size is important in each research and depends on the analysis method (regression, exploratory factor analysis, etc.) Roscoe (as cited in Sekaran and Bougie, 2011), proposes the following rules of thumb to identify sample size:

 500 > Sample sizes > 30 are appropriate for most research;

 Where samples are to be broken into subsamples (males/females, juniors/seniors, ), a minimum size of 30 for each subgroup is necessary;

 In multivariate analysis, the sample size should be several times (preferably 10 times

or more) as large as the number of variables in the analysis

Besides, the minimum size of sample for factor analysis should be 50, preferably 100 and should be 5 times (preferably 10 times or more) as large as the number of variables in the analysis (Hair et al., as cited in Nguyen, 2012): n ≥ 100 and n ≥ 5k (where k is equal to the number of variables)

Otherwise, Tabachnick and Fidell (as cited in Nguyen, 2012) say the minimum sample size, which is required for the Multiple Linear Regression should be: n ≥ 50 + 8p (where p is equal to the number of independent factors)

The model in this study consists of 5 factors with 23 scales so that the minimum sample size should be: 23*5 = 115 observations Moreover, because there are five independent factors in the proposed research model, the minimum sample size that is required for the Multiple Linear Regression is 50 + (8 x 5) = 90 Finally, the minimum sample size that is appropriate for doing data analysis in this research is 115 However, the author used the sample size with 140 observations

The author collected 165 answers After checking and removing the error questions which were missed answered as well as answered with same number of questions in the questionnaire from six banks As a result, the qualified data of this study was 140 observations It is suitable with the requirement of minimum sample size: 115 observations Below table summarized collected data from the survey

Table 3.2: The result of collecting questionnaire

questionnaires were deliveried

Number of questionnaires were returned

Percentage (approximately)

number of questionnaires were usable after cleaning data

Taipei Fubon Commercial

Bank, HCMC branch

Taipei Fubon Commercial

Bank, Binh Duong branch

Agricultural bank of Vietnam,

Cho Lon branch

From the results showed on Table 3.1, the author used one way to survey being face

to face interview so the summary of collecting questionnaire just for summary the figure of

six banks which the author sent questionnaire to survey The percentage of questionnaires

collecting from Taipei Fubon Commercial Bank HCMC branch occupied high level (30% in

total) because the author was one of staff of this bank Bank of Tokyo Mitsubishi occupied

24% in total of number of questionnaire was returned The table also showed the rest of data when the author made cleaning data

3.6 Data analysis method

The SPSS (Statistical Package for Social Science) was used in this study for

analyzing collected data Firstly, the reliability and validity of measurement scales were

evaluated by using Cronbach’s alpha and exploratory factor analysis (EFA) Secondly, the

author used Multiple Regression to test the relationship between independent variables and

dependent variables of the hypotheses Based on the findings of Multiple Regression analysis, the hypotheses was evaluated to be supported or not

3.6.3 Exploratory factor analysis (EFA)

Norris and Lecavalier (2010, p.9) say that “EFA is based upon a testable model and can be evaluated in terms of its fit to the hypothesized population model; it indices can be generated to help with model interpretation” Besides, EFA method is used to identify which of a large set of items go together as a group, or are answered most similarly by respondents (Leech et al., 2005) This method is applied to identify the number of underlying factors that explain the correlations among a set of variables together with testing the convergent validity and discriminant validity Convergent validity indicates the degree of two measurements of the same concept are correlated while discriminant validity shows that two measurement scales are used to measure two different concepts need to be discriminant from each other(Hair et al., as cited in Nguyen Dinh Tho, 2012)

3.6.4 Multiple regression analysis

The multiple regression analysis is used to test the hypotheses and predict one outcome measure from several independent variables (Leech et al., 2005) According to Leech et al (2005), the multiple regression analysis requires many assumptions but it is better to focus on the major ones that are tested easily with SPSS The assumptions include:

1 No significant outliers or influential points

2 A linear relationship between each of the predictor variables and the dependent variable

3.Homoscedasticity of residuals (equal error variances)

CHAPTER 4: DATA ANALYSIS AND DATA RESULTS

In this chapter, the result of the survey was analyzed and reported by the author First, the author described the characteristics of the samples collected in these banks mentioned in chapter 3 After that, the author was used some methods of data analysis to analysis the collected data which was supported or unsupported four hypotheses mentioned

in chapter 2

Basing on the model of the research (See Figured 2.1), the first, the author tested the reliability and validity of the scales by Cronbach’s alpha reliability to recognize the item made a good component of a summated rating scale in each variable or not based on the correlation of each item in the construct (Leech et al., 2005) The second, Exploratory factor analysis (EFA) was used to distinguish the components in all the items of the scale After running EFA, if the components of the model were splitted or merged, the author had adjusted the research model with the variables following the components appeared in EFA process.Finally, the adjustment research model was tested with multiple regressionto make the conclusion of supported hypotheses and unsupported hypotheses

Income was also divided into 5 levels from the lowest level of below 5 million VND per month to the highest level of over 30 million VND per month The most of interviewees belong to the second income level of over 5 million VND to less than 10 million VND per month with 62 people (44.3% in total) The third income level of over 10 million to less than 20 million VND per month was occupied 50 people (35.7% in total)

The most respondents were belongs to Operation Department with 65 people (46.4%

in total) This was the department to serve customers and provide the demand for customers directly in the bank

Regarding to the working duration, it was ranged from 1 year to over 9 years The large part of respondents worked in the bank from over 3 years to 6 years with 56 people (occupied 40%) The next crowded group had the seniority working in the bank from over 6 years to 9 years with 36 respondents (25.7% in total)

In terms of the kind of bank (bank type), the author surveyed two kind of bank being state-capital bank and foreign investment capital bank The majority of interviewees worked

in foreign investment capital bank with 119 people (occupied 85%) The rest was capital bank with 21 respondents (25% in total)

state-All the detail of sample characteristics was showed in the Table 4.1

Table 4.1: Sample Characteristics

26-30 31-40 41-50 Over 50

40 6.4 0.7 Income per month

5.7 23.6 Working duration 1 - 3 years

Foreign investment capital Bank

21

119

15

85

4.2 Data analysis process

In this part, the author used the SPSS to process the collected data analysis

4.2.1 Scale Validity and Reliability

The result performed 5 scales had the result of Cronbach’s alpha fluctuated from 0.857 of managerial support to 909 of life satisfaction Moreover, the corrected item-total correlation of each item was above 0.5 It showed that the scale had high validity and reliability As a result, the scale was used in establishing the main survey to check all the hypotheses of this research

Table 4.2: Scale validity and Reliability

Correlation

Cronbach's Alpha

Customer Orientation

CO1 CO2 CO3 CO4 CO5 CO6

.660 642 679 728 648 579

.862

Managerial Support

MS1 MS2 MS3 MS4

.746 613 685 761

.857

Work Faciliation

WF1 WF2 WF3 WF4

.564 722 798 795

.866

Employee

EC2 EC3 EC4

.723 804 760 869

.904

Life Satisfaction

LS1 LS2 LS3 LS4 LS5

.735 802 789 748 776

.909

4.2.2 Exploratory Factor Analysis(EFA)

After testing the validity and reliability with the Cronbach’s alpha and Corrected Item-Total correlation, the author had enough the items of all variables with the high validity and reliability Next, the author used exploratory factor analysis (EFA) to evaluate the measurement scales This method would help to gather the items, which measured under the same component In other words, by understanding the constructs that underlie variables, EFA was used to understand the relations among variables (Leech et al., 2005)

4.2.2.1 Exploratory Factor Analysis (EFA) for independent variables

In the research model of this study, there were five variables consisting ofthree factors standing for service climate such as customer orientation, managerial support, work facilitation beside employee commitment and life satisfaction First, the author tested EFA with three dependent variables of service climate the same time, with the result of KMO in the table 4.3 and the Rotated Component Matrix in the Table 4.4

Table 4.3: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .912

Bartlett's Test of

Sphericity

Approx Chi-Square 1245.408

df 91 Sig .000

After testing the EFA of independent variables, the KMO of three of them was 0.912, it meant the EFA suitable to the data survey The Bartlett was significant because it was 0.000 (less than 0.05) showing that having the high correlation enough in the variable for making

a reasonable basis factor analysis (Table 4.3)

Table 4.4: Rotated Component Matrix

Component

If I perform job well, I receive appropriate recognition and reward

My direct manager supports me when I come up with new ideas on

how to improve customer service

My manager is very committed to improving the quality of our area’s

work and service

I have the manuals and resource materials I need to provide services

I have access to the product and policy information when I need them

to do my work in my business

My manager is responsive to my requests for help or guidance

I receive adequate support from workmates to do my job well

My bank always responds to the customers’ feedback and

suggestions quickly

My direct manager encourages me to deliver high quality service

WF2 MS1

MS4

WF3 WF4

MS3 WF1 CO6

MS2

.847 814

.795

.767 725

.657 632 552

.545

My bank has clear ideas about customers and their needs

High quality service is emphasized as the best way to keep customers

in my bank

My business does a good job of keeping customers informed of

changes, which affect them

My bank defines its products/services from customers’ perspectives

My bank always responds to the customers’ feedback and

suggestions quickly

CO1 CO2

CO4

CO3 CO5

.827 824

.737

.636 536

By proceeding EFA, all factor loadings were over 0.500, it meant the factors were qualified However, the result showed that from three independent variables with 14 items measure: customer orientation, managerial support and work facilitation, these items of three factors were merged and two factors were extracted from 14 items of three factors Two independent variables, managerial support and work facilitation, were merged together with “My bank always responds to the customers’ feedback and suggestions quickly”- item number 6 of the independent variable - customer orientation (table 4.4) From merging

factors in EFA of independent variables, it showed that all 9 items of two independent variables and 1 item of the rest independent variable were measured the same component

This result was acceptable because managerial support with 4 items showed one main idea of the effect of direct manager as well as the manager to the employee in the bank In the working environment, the behavior of manager, especially the direct manager plays the most important role to the employee commitment as well as the loyalty of the employee According to careerbuilder website, the excellent manager would inspire employees with inspiration to work well and keep their loyalty From this reason, it is clear that managerial support being one of the factors belongs to working environment which created by the manager provide to the employee In addition, surveying this factor means survey the employee’s feeling about working environment with the interference of the human being

It is easy to recognize that work facilitation is the factor belongs to working environment In 4 items measuring work facilitation, there is 1 item measures the effect of workmates to the employee Farrell and Weaver (1998, p.45) defined that “facilitation is a process in which a person helps others complete their work and improve the way they work together” And this item is the working environment created by the relationship of workmates with each other However, not only facilitation but also work facilitation applied in this study so besides the relationship of workmates, the bank also provide to employee other facilitation to fulfill their job So that other items in work facilitation scale measure, what the employee will receive when they play well performance as well as the facilitation the bank provides the employee Basing on those concepts, work facilitation measures the feeling of employee about the working environment through banking facilitation and the workmates

In conclusion, merging between managerial support and work facilitation were acceptable because those items of two factors together measure the same component-the feeling of the employee about the working environment

However, there was item 6 (CO6) of customer orientation in the merging factor This item evaluated the feedback of the bank to the customer It was not related to the