Organizational culture, employees job satisfaction and turnoverintention in the hotel industry in thai nguyen province

ABSTRACT ORGANIZATIONAL CULTURE, EMPLOYEES’ JOB SATISFACTION AND TURNOVER INTENTION IN THE HOTEL INDUSTRY IN THAI NGUYEN PROVINCE Nguyen Van Thong This study is to examine the influence

ORGANIZATIONAL CULTURE, EMPLOYEES’ JOB

SATISFACTION AND TURNOVER INTENTION IN THE HOTEL

INDUSTRY IN THAI NGUYEN PROVINCE

A DISSERTATION PAPER

Presented to the Faculty of the Graduate Program

of the College of Business and Accountancy Central Philippine University, Philippines

In Collaboration with Thai Nguyen University, Vietnam

CAMPAIGNS

I pledge that this is my own research The data stated in the thesis is true, all citationsare indicated origin The research results of the dissertation were published in the scientificjournal, not identical with any other works

The author of the thesis

Nguyen Van Thong

LỜI CAM ĐOAN

Tôi xin cam đoan đây là công trình nghiên cứu của riêng tôi Các số liệu nêu trong luận án là trung thực, mọi trích dẫn đều được chỉ rõ nguồn gốc Những kết quả nghiên cứu của luận án đã được tác giả công bố trên tạp chí khoa học, không trùng với bất kỳ công trình nào khác.

Tác giả luận án

Nguyễn Văn Thông

To the leadership of International Cooperation Center for Training and Study Abroadand their staff for their enthusiasm to support executive for the participants completed thestudy program.

To the faculties and researchers of Thai Nguyen University of Economics andBusiness Administration and the respondents of the study, for their active involvement andcooperation which made the conduct of the study possible;

To my family and friends for their love and support in one way or another, and to allwho have contributed to make this study a success

Thank you so much!

NGUYEN VAN THONG

người hướng dẫn khoa học đã tận tình giúp đỡ và định hướng để tôi hoàn thiện Luận án.

Trong quá trình học tập và nghiên cứu, tôi cũng đã nhận được sự hỗ trợ và giúp đỡ tận tình từ Ban Giám hiệu, Lãnh đạo và cán bộ của Trung tâm Hợp tác Quốc tế về Đào tạo và

Du học, Lãnh đạo Khoa Kinh tế cùng toàn thể các thầy cô giáo tại Trường Đại học Kinh tế và Quản trị Kinh doanh - Đại học Thái Nguyên và Đại học Central Philippine, tôi xin ghi nhận

TABLE OF CONTENTS

CAMPAIGNS i

LỜI CAM ĐOAN .ii

ACKNOWLEDGEMENT iii

LỜI CẢM ƠN iv

TABLE OF CONTENTS v

LIST OF TABLE viii

LIST OF FIGURES x

ABSTRACT xi

CHAPTER 1 THE PROBLEM AND ITS SETTING

1 1.1 Background and Rationale of the Study 1

1.2 Objectives 4

1.3 Theoretical Framework 4

1.4 Conceptual Framework 9

1.5 Hypotheses 11

1.6 The Operational Definitions 13

1.7 Significance of the Study 16

1.8 Scope and Delimitation 16

CHAPTER 2 LITERATURE REVIEW 18

2.1 Organizational Culture in Service Businesses 18

2.2 Job Satisfaction 21

2.3 Turnover Intention 26

2.4 Influence of Organizational Culture on Employee Job Satisfaction 32

2.5 Influence of Organizational Culture on Employee Turnover Intention 35

2.6 Mediating role of Employee’s Job Satisfaction 37

2.7 Related studies 37

CHAPTER 3 METHODOLOGY 44

3.1 Research Design 44

3.2 Population, Sample Size, Sampling Technique 46

3.3 Research Instruments 48

3.4 Reliability and Validity test 51

3.5 Data Collection Procedures 61

3.6 Data Analysis Procedures 62

CHAPTER 4 DATA PRESENTATION, ANALYSIS AND INTERPRETATION 64

4.1 Sample Profile 64

4.2 The Results of Descriptive Analysis 65

4.2.1 Descriptive Analysis for Clan Culture Scale 65

4.2.2 Descriptive Analysis for Adhocracy Culture Scale 67

4.2.3 Descriptive Analysis for Market Culture Scale 68

4.2.4 Descriptive Analysis for Hierarchy Culture Scale 70

4.2.5 Descriptive Analysis for Employees’ Job Satisfaction Scale 72

4.3 Confirmatory Factor Analysis and Hypotheses Testing 72

4.4 Hypothesis Testing 82

CHAPTER 5 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 94

5.1 Summary 94

5.2 The Current Situation of Business of Hotels in Thai Nguyen Province 96

5.3 Recommendations 98

REFERENCES 103

APPENDIX 108

48Table 3.3 List of Items (continue)

50Table 3.4 Factor Pattern and Reliability of Organizational Culture

52Table 3.5 EFA for Clan Culture Scale

56Table 3.6 EFA for Adhocracy Culture Scale 57Table 3.7 EFA for Market Culture Scale

58Table 3.8 EFA for Hierarchy Culture Scale

58Table 3.9 EFA for Job Satisfaction Scale

59Table 3.10 EFA for Turnover Intention Scale 60Table 3.11 Scale Reliability

61Table 4.1 Characteristics of Sample 64Table 4.2 The Descriptive Statistic Results of Clan Culture Scale 65Table 4.3 The Descriptive Statistic Results of Adhocracy Culture Scale

67Table 4.4 The Descriptive Statistic Results of Market Culture Scale

69Table 4.5 The Descriptive Statistic Results of Hierarchy Culture Scale

70

Table 4.6 The Descriptive Statistic Results of Hierarchy Culture Scale

72Table 4.7 Confirmatory Factor Analysis Results for Clan Culture Scale 74Table 4.8 Confirmatory Factor Analysis Results for Adhocracy Culture

75Table 4.9 Confirmatory Factor Analysis Results for Market Culture Scale

75Table 4.10 Confirmatory Factor Analysis Results for Hierarchy Culture Scale

76Table 4.11 Confirmatory Factor Analysis Results for Employee Job Satisfaction Scale

78

Table 4.12 Confirmatory Factor Analysis Results for Employee Turnover Intention Scale

79

Table 4.13 Measurement Model Results 79

Table 4.14 Construct Correlation Matrix 82

Table 4.15 The Results of Structural Equation Modeling Analysis 83

Table 4.16 The regression Results with EJS and Clan 85

Table 4.17 The regression Results of Clan and Turnover Intention 86

Table 4.18 The regression Results of Clan and Turnover Intention with ETI 86

Table 4.19 The regression Results with EJS and Adhocracy 87

Table 4.20 The regression Results with ETI and Adhocracy 88

Table 4.21 The regression Results with ETI and Adhocracy and EJS 88

Table 4.22 The regression Results with EJS and Market Culture 89

Table 4.23 The regression Results with ETI and Market Culture Coefficientsa 90

Table 4.24 The regression Results with ETI and Market and EJS 90

Table 4.25 The regression Results with EJS and Hierarchy Culture 91

Table 4.26 The regression Results with ETI and Hierarchy Culture 92

Table 4.27 The regression Results with ETI and Hierarchy and EJS 92

Table 5.1 Information about Hotel Industry of Thai Nguyen province 97

LIST OF FIGURES

Figure 1.1 The Competing Values Framework 5

Figure 1.2 Conceptual Framework 9

Figure 1.3 Research Model 9

Figure 3.1 The Research Process 45

Figure 4.1 The Results of Structural Equation Modeling Analysis

83

ABSTRACT ORGANIZATIONAL CULTURE, EMPLOYEES’ JOB SATISFACTION

AND TURNOVER INTENTION IN THE HOTEL INDUSTRY

IN THAI NGUYEN PROVINCE

Nguyen Van Thong

This study is to examine the influence of organizational culture on employee jobsatisfaction and employee turnover intention by clarifying the mediating role of jobsatisfaction on relationship between organizational culture and turnover intention and is topropose some managerial implications to help hotels in Thai Nguyen province build theirorganizational culture, to increase employees’ job satisfaction, and reduce employee’s turnoverintention

This study was conducted among respondents who are employees in hotels in ThaiNguyen Province, in Vietnam Total 401 participants took part in this research ExploratoryFactor Analysis (EFA) was used to identify the factors initial items The purification processwas conducted to assure that all scales are convergent and reliable The confirmatory factoranalysis was also conducted to check the measurement model and showed that all constructswere discriminant and convergent

In this study, the effect of organizational culture on employee job satisfaction wastested The results suggest that organizational culture has a significant influence onemployee job satisfaction as it predicted overall job satisfaction These results wereconsistent with those of the study by Lund (2003) which found that there was a positiverelationship between job satisfaction and organizational culture The results imply that theclan culture is primarily concerned with human relations The positive impact of the clanculture on employee job satisfaction can be explained by the fact that the importance of

12personal values and respect for people is presumptively universal regardless of culturalboundaries The findings of the study supported the hypothesized positive relationship

between adhocracy culture and overall job satisfaction Concerning the hypothesized therelationship between market culture and overall job satisfaction, the findings of the currentstudy revealed a negative relationship

Hotels in Thai Nguyen province should develop organizational culture to increaseemployee satisfaction and reduce turnover intention Based on a strong relationship betweenorganizational culture and employee satisfaction, hotel managers/leaders should developshared values, or belief that creates favorable organizational climate that influencesemployee’s satisfaction From the good perception about organizational culture, employeesmay commit to work for hotels for long time

CHAPTER 1 THE PROBLEM AND ITS SETTING

1.1 Background and Rationale of the Study

Human resource is a valuable asset of the enterprise in the era of economic integration;

it determines the success or competitive position of a company in the market because peopleare the key factors to build core competencies of the business Therefore, the strategy ofinvestment and development in human resource has always been the foundation of everybusiness and retaining trained human resources is as a priority in the companies Because ifworkers leave the jobs now, the entire cost that enterprise spent for training activities will not

be recovered

Turnover directly and indirectly affect financial performance of the enterprise because

it not only makes businesses lose, some direct costs such as recruitment and initial trainingcosts, which also all kinds of indirect costs as loss of social capital, workload and loss ofmorale of existing employees

With many favorable conditions, in the past years, Thai Nguyen tourism has graduallydeveloped and made an important contribution to the socio-economic development of theprovince There are many business enterprises are effective in the field of tourism, manyservices to serve attractive tourists are deployed The basic economic indicators in tourismbusiness activities have the growth rate of the following year higher than last year, such as thenumber of tourist arrivals to Thai Nguyen increased over 30%, the social revenue in tourismincreased 20%, number of accommodation establishments increased by 25%, labor in tourismincreased by 15% (Report of Thai Nguyen Tourism Association, 2016) The achievements ofthe tourism industry have affirmed the position and role of tourism in the development of thelocality, while enhancing the image of Thai Nguyen in the community of Vietnamese ethnic

2groups and friends in the world, creating strength and strength for Thai Nguyen tourismgradually developed into a key economic sector of the province.

However, at present, a reality shows that, although there are many advantages, ThaiNguyen tourism development is not commensurate with the existing potential of the localscale of tourism activities are small, not diversified The quality of the tourist types is nothigh, not really attractive to tourists, especially foreign tourists The contribution of tourism tothe socio- economic development of the province has not been as desired, the businessperformance of the tourism industry is low In 2013, the total number of tourists to ThaiNguyen reached over 1.78 million, of which 32,700 were international visitors, and 1,138.2billion were from social tourism (Statistical Yearbook, 2013)

Although the total number of visitors to Thai Nguyen in 2017 increased 6% over thesame period last year compared with the potential development of tourism Thai Nguyen,this number is not high (Statistical Yearbook, 2016) In addition, the development ofmechanisms and policies to attract investment in tourism development is limited There areonly mechanisms and policies to attract investment in general but there are no separatemechanisms and policies for investment To develop tourism, businesses have not activelyresearched and proposed specific support mechanisms and policies The promotion andpromotion of tourism is not good, the planning investment, the upgrading of tourist sitesand areas are not synchronous and meet the needs of tourism development, tourismproducts, and nature Low level, professional qualifications of cadres, civil servants,tourism workers are limited For example, the Nui Coc Lake tourist area, which is ahighlight of Thai Nguyen tourism, but now is not effectively exploited and is really anattractive destination for tourists The tourism infrastructure here is poor, the activiti es areless active, less attractive, and the quality of service is not good With the current ticketprice, I find the quality of activities in the tourist area does not meet the needs of visitors

In recent years, many service firms in Thai Nguyen province face the difficulty thatemployees quit their jobs There are many reasons why employees quit their jobs However, insome service firms with organizational culture, employees seem not to leave the job and want

to work for long time for company According to Tourism Association in Thai Nguyen, therate of employees who quit their jobs after one year is around 20%, after two years the rate is40% and after 5 years is nearly 80% (Report of Thai Nguyen Tourism Association, 2016).With the high rate of turnover intention, hotels in Thai Nguyen have to spend much moneyfor recruitment, training, and other cost

A better understanding of the relationship between organizational culture, jobsatisfaction and turnover intention will help emphasize the importance of organizationalculture within the service industry If this study reveals that there is a significant relationshipbetween organizational culture and the other variables, then it could help solve some of themajor problems that managers in service firms are facing

Previous studies did not identify the relationship among organizational culture,employee’s job satisfaction, and turnover intention This study will examine the effect oforganizational culture on employee’s job satisfaction and employee turnover behavior, whichhas become a serious problem for many organizations, which cannot be ignored Sadly, theservice industry is characterized by high turnover rates (Cheng & Brown, 1998) which results

in equally high costs These turnover costs include the money invested in recruitment andtraining of additional staff, paying existing employees overtime, the impact on service, as well

as additional turnover among other employees who feel pressured and overworked (Frank,Finnegan, Finnegan, & Taylor, 2004; Hendrie, 2004) Babakus, Yavas, and Karatepe’s (2008)study on hotel frontline employees showed that “the best predictor of turnover intentions isemotional exhaustion followed by job demands and intrinsic motivation”

1.2 Objectives

In general, this study is to examine the influence of organizational culture on employeejob satisfaction and employee turnover intention by clarifying the mediating role of jobsatisfaction on relationship between organizational culture and turnover intention and is topropose some managerial implications to help hotels in Thai Nguyen province build theirorganizational culture, to increase employees’ job satisfaction, and reduce employee’sturnover intention

Particularly, this study intends to do some followings objectives:

- Identify the influence of four types of organizational culture on job satisfaction ofemployees in hotels in Thai Nguyen province

- Analyze the influence of job satisfaction on turnover intention of employees in hotels in

Thai Nguyen province

- Clarify the mediating role of employees’ job satisfaction in relationship among fourtypes of organizational culture and turnover intention

- Analyze the influence of four types of organizational culture on turnover intentionthrough the mediating role of job satisfaction of employees in hotels in Thai Nguyen province

- Propose some solutions to help hotels in Thai Nguyen to build their organizationalculture, to increase job satisfaction, and reduce employee’s turnover intention

1.3 Theoretical Framework

To explain the influence of organizational culture on employee job satisfaction andturnover intention, some theories were presented These theories are as followings:

Organizational Culture Assessment Instrument

Organizational culture plays a major role in the long-term success of organizations.Therefore, it is very important to have a reliable instrument to measure and and identify the

6key dominant organizational culture type (Cameron & Quinn, 2011) developed the OCAIbased on

the Competing Value Framework to map and describe dominant types of cultures inorganizations Cameron and Quinn (2011) found two main dimensions that are theirintersection produces four main quadrants or types of cultures As shown in Figure 3.2, thesefour quadrants constitute the characteristics of competing values in organizations Thesedimensions represent internal focus and integration versus external focus and differentiationand values of flexibility and discretion versus those of stability and control The resultingCompeting Value Framework is illustrated in Figure 3.2; a different type of organizationalculture is represented by each

Stability and Control

Figure 1.1 The Competing Values Framework

The hierarchy culture is based on a bureaucratic and official process and valuestradition, emphasizing stability, teamwork, and agreement It focuses more on internal thanexternal issues and values steadiness and control over flexibility The hierarchy culture ischaracterized by a formalized and structured place of work The hierarchy culture’s keyvalues focus on keeping an efficient, consistent, speedy, steady flow of products or services(Cameron & Quinn, 2011)

The term market in the market culture is not the same as the marketing function, but

rather refers to an organization that functions as a market itself (Cameron & Quinn, 2011) Itvalues steadiness and control, but in addition focuses more on external environments ratherthan internal issues This culture is likely to view the external environment as threatening,and searches to recognize threats and opportunities as it looks for competitive advantage andprofits It is characterized by its external orientation and competitive stance The marketculture’s main principles are competitiveness and productivity (Cameron & Quinn, 2011).

The adhocracy culture focuses on external issues and values flexibility and carefulnessrather than looking for stability and control It is characterized by originality, creativity, risktaking, and entrepreneurial focus Organizational charts and formal structure are notemphasized or non-existent Job roles and established physical space are also considered to beflexible The adhocracy culture is also characterized by a self-motivated, entrepreneurial andcreative workplace (Cameron & Quinn, 2011)

Maslow's Need Hierarchy

Maslow (1943) Hierarchy of Needs is the model that presents the need of people withsome level of satisfaction The theory of Hierarchy of Needs which is considered one of themost well-known theories in the field of human behavior and one of the first theories thatattempt to categories the different human needs (Kreitner & Kinicki, 2009) Factors such asachievement, power, and even biology were considered to shape the human behavior In thisthesis, job satisfaction is the motivation for employees to quit the job or not

Expectancy Theory

The Expectancy Theory stems from the much earlier work of Edward Tolman in 1932,who promoted the idea that the relationship between stimulus and response is mediated byunobservable variables or cognitions (Levy, 2006) However, it was not until the 1960s whenVroom (1964) developed what has been called the “Expectancy Theory” which viewsmotivation as a meta- mathematical function of three types of cognitions (Spector, 2003)

The theory explains that motivation is a conscious process, and individuals choosewhich activities to put their effort into to achieve desired outcomes Thus, human behaviortowards motivation is shaped by preference and possibility of the desired outcomes.Consequently, individuals will be motivated when they believe their behavior will result inoutcomes or rewards they value (Spector, 2003).

Equity Theory

The way that individuals measure justice and fairness is at the heart of equity theory.This theory is usually applied in work contexts to explain how an individual's motivation isinfluenced by his/her perception of how fairly he/ she is treated in social exchanges atwork (Ivancevich, 2010) Different equity theorists argue that individuals at work must berewarded according to their actual contribution, implying that those who contribute more atwork deserve to have more rewards or privileges than those who contribute less (Deutsch,1985)

ERG Theory

The ERG theory developed by Alderfer (1972) is considered an extension to Maslow'stheory of Hierarchy of Needs However, the ERG theory is narrowed down to theorganizational context by explaining work behavior in organizations (Steers, Porter, & Bigley,1996) Alderfer (1972) provided an alternative to Maslow's theory which is based on five needlevels In the ERG theory, Alderfer (1972) argues that these five levels of needs could bebased on a three- dimensional conceptualization of human needs, namely existence,relatedness, and growth By developing the ERG theory, Alderfer (1972) argued that the fiveneed categories in Maslow’s theory could be incorporated into three main categories, being

“Existence”, “Relatedness”, and “Growth” The name of the ERG theory is derived from thefirst letters of these three categories (Plunkett, Attner, & Allen, 2007)

Herzberg Two-Factor Theory

Frederick Herzberg and his colleagues proposed the “Two-Factor Theory” in 1957.The theory, also known as “the Motivator-Hygiene Theory” was first published in Herzberg's(1959) book “The Motivation to Work” which was built on Maslow's observations Herzbergdistilled these observations into a more straightforward “Two-Factor Theory” (Robertson,2009) Herzberg developed his Two- Factor theory by studying 200 accountants and engineers

in Pittsburgh The aim of this study was to identify the factors which make workersdissatisfied and isolate them from those factors that bring about satisfaction Participants wereasked two questions:

(a) When did you feel particularly good about your job?

(b) When did you feel exceptionally bad about your job?

After analyzing the responses, Herzberg (1959) and his colleagues found that two sets

of factors emerged The first set related to job aspects associated with job satisfaction, whilethe other related to those associated with job dissatisfaction Herzberg labelled those

associated with job satisfaction motivators, and those associated with job dissatisfaction labelled as hygiene factors Hygiene factors include security, supervision, pay, co-workers,

and policies Motivator factors consist of job aspect relevant to growth needs, such asresponsibility, recognition, and achievement By separating these two factors, Herzbergargued that job satisfaction is a distinct construct from job dissatisfaction Therefore,removing the hygiene factors do not necessarily lead to job satisfaction Herzberg arguedthat there is a dual continuum Murugan (2007, p 304) explained it as “the opposite

of 'satisfaction' is 'no satisfaction' and the opposite of 'dissatisfaction is no dissatisfaction'”

Many scholars have criticized Herzberg's Two-Factor Theory and consider it invalid (Locke

& Henne, 1986) The major problem with the Two-Factor Theory is that it has not beenempirically supported by other studies (Spector, 2003) Also, critics argue that the Two-FactorTheory is observed because it is natural for people to take credit themselves when things go

9well In case of failure, they tend to blame the external environment (Wall, Stephenson &Skidmore, 1971).

1.4 Conceptual Framework

The purpose of this study is to theorize and test a model on the impact oforganizational culture on job satisfaction, and employee turnover intention in some servicefirms in Thai Nguyen Province in Vietnam

Independent variable Mediating Variable Dependent Variable

- Job Satisfaction - Turnover intention

Figure 1.2 Conceptual Framework

Turnover Intention

Figure 1.3 Research Model

Previous research has shown that organizational culture does have an impact onseveral key organizational variables (Cameron & Freeman, 1991) Peters and Waterman(2004) extolled the virtues of organizational culture in enhancing organizational performance.Many other studies reported a profound impact of organizational culture on organizationalperformance and effectiveness (Cameron & Quinn, 2011; Deal & Kennedy, 2000; Frost,Moore, Louis, Lundberg, & Martin, 1985; Schein, 1985) In addition to the reported impact oforganizational culture on overall organizational performance, the literature suggests thatorganizational culture affect individual attitudes and behaviors (MacIntosh & Doherty, 2010).Therefore, employees' perceptions of the nature of organizational culture are a critical element

in human resource management, change management and leadership

Kangas, Kee and McKee-Waddle (1999) investigated differences in the relationshipsbetween job satisfaction and organizational structures The results indicated that job satisfactionand retention of nurses were influenced by supportive culture that encourages self-governance,support for education, and opportunities for professional growth Silverthorne (2004) exploredthe impact of organizational culture on job satisfaction and organizational commitment inTaiwan The author used a typology of three organizational culture types, namely supportive,innovative and bureaucratic The results indicated that a bureaucratic culture resulted in thelowest levels of job satisfaction and commitment, while a supportive culture resulted in thehighest levels of job satisfaction and commitment followed by an innovative culture as thenext highest Goodman et al (2001) affirmed these results in a study that looked at the impact

of organizational culture on the quality of work life They found that hierarchy cultures arenegatively associated with job satisfaction and organizational commitment while clan culturesare positively associated with job satisfaction and organizational commitment

Lund (2003) adopted the CVF to explore the relationship between the four culturetypes and job satisfaction The results pointed out to a positive relationship between clan(emphasizing flexibility and internal orientation) and adhocracy (focusing on innovation andadaptability) cultures

1.5 Hypotheses

The model first proposes that positively perceived organizational culture will have

a positive effect on employees’ job satisfaction If a company’s employees perceive thatworking environment is good and people have some shared belief, then the employees’ jobsatisfaction ratings are high, turnover rates were low, and their intention to leave thecompany was also low There are a positive relationship between organizational culture in

an organization and job satisfaction, turnover intention The discussion above leads to thefollowing hypotheses:

H1: Employees perceive highly the clan culture of the company will feel more satisfied with the job

H2: Employees perceive highly the Adhocracy Culture of company will feel more satisfied with the job

On the other hand, job satisfaction had a negative relationship with hierarchy(emphasizing control and efficiency) and market (focusing on goal achievement andoutperforming competitors) cultures Using a different yet closely similar model to the CVF,San Park and Kim (2009) conducted a study of the impact of organizational culture types onjob satisfaction and turnover intention among hospital nurses in Korea The results showedthat job satisfaction was positively correlated with clan and market cultures, while theinfluence of adhocracy and hierarchy cultures was not statistically significant

H3: Employees perceive highly the market culture of the company will feel less satisfied with the job

H4: Employees perceive highly the hierarchy culture of the company will feel less satisfied with the job

Most of theories of turnover suggest that employee turnover occurs as a result ofemployee job dissatisfaction (Bluedorn, 1982; Mobley, 1977; Mobley & Fisk, 1982) Thisrelationship is formed through a process in which unsatisfied employees will compare therewards and costs related to their current job, evaluate their investments with the return of analternative employment chance, and intend to leave the organization (Rusbult & Farrell, 1983;Sager, Griffeth, & Hom, 1998).

The model also proposes that positively perceived Clan and Adhocracy Culture willhave a negative effect on employees’ turnover intention When employees perceive Clan andAdhocracy organizational culture, their job satisfaction levels increase, but there was also asignificant decrease in employee turnover rates Other studies also showed that there was anegative relationship between employees’ perception of their organization climate as ethicalatmosphere and their intention to leave Similarly, Pettijohn, Pettijohn and Taylor’s results(2008) showed that sales professionals’ beliefs about organizational ethics were positivelyrelated to job satisfaction, but negatively related to their turnover intention Cacioppe, Forster,and Fox (2008, p 689) also found that organizations that are socially responsible ‘‘can attractand retain quality employees because the organizations’ values and practices are more closelyaligned to the values that such individuals hold”, which led to decreased intentions to leave theorganization, along with other positive work outcomes

One more relationship that the model proposes is that job satisfaction will have astrong impact on turnover intention This is based on previous research findings (Choy1995; Li & Tse, 1998; Lam, Zhang & Baum, 2001), which supported that there is arelationship between employee turnover and job satisfaction Additionally, they found arelationship between employee turnover intention and job facets as perceived by theemployees/managers in the service industry in relation to employee turnover The resultsrevealed that the main reason for increased employee turnover is the employee’s lack ofsatisfaction with their jobs

There was a negative relationship between employee’s job satisfaction and theirintention to leave Additionally, the most important contributors to employee satisfactionproved to be professional development opportunities for employees as well as the long -termgrowth prospects of the services firms themselves Taking all the above i nto consideration,this model supports that higher levels of employee job satisfaction will result in decreasedemployee turnover.

According to expected theory, when people perceive that their working environmentseem to be safe, they may feel satisfied with this Then, these emotions may lead to theirbehavior intention It is clearly that job satisfaction can be considered as mediating variable inthe relationship between organizational culture and job satisfaction

From above discussion, the following hypotheses were proposed:

H5: Job satisfaction mediates the effect of perception of clan culture on employee turnover intention.

H6: Job satisfaction mediates the effect of perception of adhocracy culture on employee turnover intention.

H7: Job satisfaction mediates the effect of perception of market culture on employee turnover intention.

H8: Job satisfaction mediates the effect of perception of hierarchy culture on employee turnover intention.

H9: Job satisfaction has a negative effect on employee turnover intention.

1.6 The Operational Definitions

Job satisfaction

Job satisfaction is a term used to describe how content an individual is with his/her job

In this study, author use the overall satisfaction with job in general as indicator of level of

satisfaction In order to measure job satisfaction, this study will use the same tool thatSchwepker (2001) used in his study The job satisfaction scale consists of the same questions

as Schwepker’s (2001) where he found a scale reliability of 90 However some changes wasmade to the wording of Schwepker’s questions for this survey Five items were used tomeasure employee’s satisfaction scale This measure uses 7 - point scale from “stronglydisagree to strongly agree” Table 1.1 shows the list of items for this scale

Table 1.1 Employees’ Satisfaction Scale

Perception of organizational culture

Organizational culture refers to the shared perceptions of organizational work practiceswithin organizational units that may differ from other organizational units To measure theeffect of organizational culture, the perception of organizational was used The perceptions oforganizational culture were measured with four dimensions:

+ Perception of clan culture

+ Perception of adhocracy culture

+ Perception of market culture

+ Perception of hierarchy culture

The four archetypical profiles of organizational culture were measured using the 24item Organizational Culture Assessment Instrument (OCAI) This measure was used inseveral studies examine organizational culture (e.g Bradley and Parker, 2001; Gifforg et al.,2002; Parker and Bradley, 2000) participants responded on a seven point scale rangingfrom

1(strongly disagree) to 7 (strongly agree) The work of Lehman et al., (2002); Hoagwood, 2005; Sharp et al., (2003) also supported the self-administered questionnaires

Turnover Intention

To measure turnover behavior, turnover intention was used to test the ability to findother job or intention to quit current job, or intention to find better opportunity Turnoverintention is a measurement of whether a business’ or organization’s employees plan to leavetheir positions or whether that organization plans to remove employees from positions.Turnover intention, like turnover itself, can be either voluntary or involuntary

To measure turnover intention, four items were used adapted from Schwepker’s (2001)study on a seven point scale ranging from 1(strongly disagree) to 7 (strongly agree) The table1.2 shows the list of items

Table 1.2 Turnover Intention Scale

1.7 Significance of the Study

The study will assist managers of hotels in Thai Nguyen province understandorganizational culture and its impact on job satisfaction, and turnover intention Understandingthe role of organizational culture can help managers to determine where to strive to helpimprove employees’ job satisfaction The results of this study may also help managers whowish to decrease employees’ turnover Given the need for management to recognize theimpact of organizational culture on employee-related variables in today’s competitive world,this study will help Hotels in Thai Nguyen province to build the appropriate organizationalculture that entails the highest levels of job satisfaction and organizational commitment andthe lowest levels of turnover intention The improving the quality of hotels in Thai Nguyenmay help to increase the number of tourists visiting Thai Nguyen Province government mayreceive more money from businesses of hotels in Thai Nguyen and can improve theinfrastructure and living condition of citizens

1.8 Scope and Delimitation

This study focuses on studying the effect of organizational culture on employee’s jobsatisfaction and turnover intention of hotels in Thai Nguyen province However, due to timeand other resource constraints, author intends to choose randomly some hotels in Thai Nguyenprovince to collect the data This study will use survey as the main data collection method.The participants were employees of hotels in Thai Nguyen The data collection was conductedwithin a limited period of five months

- Content scope: The study focuses on studying the effect of organizational culture on

employee’s job satisfaction and turnover intention of hotels in Thai Nguyen province

- Time scope: Research was conducted from 2015 to 2016

+ Secondary data was collected of the year of 2013-2016

+ Primary data was collected in 2016

- Space scope: The research was conducted at Thai Nguyen hotels, Thai Nguyen

to participate in this study

CHAPTER 2 LITERATURE REVIEW

2.1 Organizational Culture in Service Businesses

The concept organizational culture is often described as the way we do thingsaround here Van den Beg & Wilderom (2004) define organizational culture as the sharedperceptions of organizational work practices within organizational units that may differfrom other organizational units It is the interdependent set of shared values and ways ofbehaving that are common to the organization and tend to perpetuate themselves Schein(1992) defines it as a pattern of basic assumptions invented, discovered or developed by

a given group as it learns to cope with its problems of external adaptation and int ernalintegration

Organizational culture encompasses the values and norms that are shared by anorganization’s members and refers to the way things are done in a social unit (Deshpande

& Farley, 2004) Organizational or corporate culture provides individual employees withnorms for behavior in the firm and serves as a tool utilized by management to shape thedirection of their firms (Fiol, 1991) Culture influences how firms adapt to both internal andexternal exigencies, helps motivate employees, enhances productivity, and exertsconsiderable influence on the overall functioning of organizations (Deal & Kennedy, 1982)

As such, organizational culture may be a critical element by which strategic managersinfluence the course and direction of their firms (Naranjo Valencia, San Valle, & JimenezJimenez, 2010; Øgaard, Larsen, & Marnburg, 2005) Thus it appears, strategic managersshould shape and mold organizational culture in order to mobilize and direct the energies

of employees to achieve managerial objectives (Asree, Zain, & Rizal Razalli, 2010;Morgan, Rapp, Richey, & Ellinger, 2014)

The concept of culture has principally stemmed from the study of ethnic and nationaldifferences in the varied disciplines of social sciences The concept of organizational culturehas used by management and organizational scholars over the last decades Schein (1997)defined organizational culture as a pattern of basic assumptions invented, discovered, ordeveloped by a given group as it learns to cope with the problems of external adaptation andinternal integration Based on the literature the concept of organizational culture has four keyelements First, organizational culture is a shared phenomenon (Schein, 1997; Wilson, 2001;Baumgartner, 2009) Second, organizational culture has visible and less visible levels (Schein,1997; Wilson, 2001; Baumgartner, 2009) Third, each new member of the organization learnsthe culture (Wilson, 2001; Baumgartner, 2009) Finally, culture tends to change slowly overtime (Wilson, 2001; Baumgartner, 2009)

Van den Berg & Wilderom (2004) use the following definition of organizationalculture: “shared perceptions of organizational work practices within organizational units thatmay differ from other organizational units” At the deeper and less visible level, culture refers

to the values that are shared by the people in a group and that tend to persist over time evenwhen group membership changes At the more visible level, culture represents the behavior,patterns or style of an organization that new employees are automatically encouraged tofollow by their fellow employees

Cameron and Quinn (1999), culture defines the core values, assumptions,interpretations and approaches that characterize an organization Cameron and Quinn (1999),

in their study, investigated the contribution of developed organizational culture onorganizational effectiveness of organizational success In that study, it is claimed that each ofthe organizational culture types may contribute to organizational success depending on theneeds of external environment and strategic orientation of organization Organizationalperformance is taken as dependent variable for this study therefore organizational culturetypes in Cameron and Quinn (1999) typology were considered as independent variables

The culture of an organization is conceived as having multiple layers (Buelens, vanden Broeck, Vanderheyden, 2006) The outer layers are considered to be explicit, observableelements, while the inner layers represent implicit, imperceptible elements of organizationalculture There are several ways to describe the layers of organizational culture, but most arebased on Schein’s dimensions (1990) Schein (1990) distinguishes three dimensions oforganizational culture: observable artefacts, values and basic underlying assumptions.Artifacts are the more solid or physical representation of culture that includes everything fromthe physical layout to the more permanent archival manifestations Artifacts are tangible but

as a non-member of the culture, the meanings are difficult to decipher accurately Peopleknow how to react to artifacts but this does not necessarily mean that it is a reliable indicatorfor the behavior of members of the organization

According to Wallach (1983), a bureaucratic culture refers to an organized,systematic, procedural, and regulated work environment Organizations high on thisdimension lack flexibility and emphasize efficiency, predictability, and consistency(Wallach,

1983; Berson et al., 2008) An innovative culture is represented by a work environment that

is creative, results-oriented, and challenging This dimension involves an enterprising andopportunity seeking environment that attracts employees seeking challenge and risk (Ireland,Hitt, & Sirmon, 2003; Berson et al., 2008) A supportive culture is manifested in a workenvironment that is trusting, people-oriented, and encouraging Such cultures facilitate openrelationships among employees and provide a workplace that is equitable, friendly, andhelpful (O’Reilly, Chatman, & Caldwell, 1991) The Wallach (1983) framework is adoptedfor the purposes of this study because the three cultural types addressed here are widelyresearched and appear consistently across a broad range of culture studies (Berson et al.,2008; Chen, 2013; McClure, 2010)

Organizational culture is considered on the basis of Quinn and Rohrbaugh’s (1983)competing values model This model consists of two dimensions with contrasting poles:internal vs external orientation and flexibility vs control The first dimension reflects theorganization’s point of view The focus can be internally directed, when the central issue ofthe organization is the organization itself, its processes or its people, or, on the other hand,externally directed, when the central issue is the relation of the organization with the market.The second dimension measures the flexibility, the tendency towards decentralization anddifferentiation, and on the opposite pole the control, i.e., stability and order as the centralissues The combination of both dimensions creates four organizational culture orientations:support, innovation, rules and goal orientation (Van Muijen et al., 1999)

A pattern of shared values and beliefs that help individuals understand organizationalfunctioning and thus provide those terms of behavior in the organization Culture is comprised

of the assumptions, values, norms and tangible signs (artifacts) of organization members andtheir behaviors Members of an organization soon come to sense the particular culture of anorganization Culture is one of those terms that are difficult to express distinctly, but everyoneknows it when they sense it for example, the culture of a large profit corporate organization isquite different from that of a hospital which is quite different from that of a University Onecan tell the culture of an organization by looking at the arrangement of furniture, what theybrag about, and what members wear

2.2 Job Satisfaction

With the great number of organizations and institutions globally, it is only natural thatthe general well-being of workplaces has become an object of theoretical interest andextensive research An organization’s well-being is described as the way in which its functionand quality are perceived by employees (Warr, 1992) It includes the employees’ physical andmental health, sense of happiness and social well-being, which are all attributed with the term

“job satisfaction” (Grant et al., 2007)