linkage between organization culture and job

7/25/2019 Linkage Between Organization Culture and Job

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EXCEL International Journal of Multidisciplinary Management StudiesVol.1 Issue 2, November 2011, ISSN 2249 8834Online available at http://zenithresearch.org.in/

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earch.org.in

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LINKAGE BETWEEN ORGANIZATION CULTURE AND JOB

SATISFACTION

SALILA KUMAR PATTNAIK*

*Doctoral Scholar, HR & OB, School of Management,KIIT University, Bhubaneswar.

ABSTRACT

This paper presents an empirical investigation on the linkage between organization culture andjob satisfaction within Indian software organizations. Survey data was obtained from six IndianSoftware companies out of which three are larger and three are smaller organizations. A scale onorganizational culture was developed with Cronbach alpha of 0.819. Univariate and multivariatestatistical methods were used for data analysis and interpretation. The study shows that attributesorganizational culture, work inspiration, tolerance to employee mistake and employee

relationship has strong positive predictors of job satisfaction. The research brought an interestingfinding that smaller organization employees are more satisfied with its organizational culture aswell as have better job satisfaction level with respect to the larger software firms.

KEYWORDS: Competitive Advantage, Job Satisfaction, Organizational Culture, WorkInspiration.______________________________________________________________________________

1. INTRODUCTION

Past researches have shown supporting evidence about the relationship between organizational

culture and job satisfaction (Hellriegel & Slocum, 1974; Schneider & Snyder, 1975; Field &Abelson, 1982; Kerego & Mthupha, 1997). Kerego & Mthupha (1997) views job satisfaction asthe evaluation of the organizational context, while organizational climate provides a descriptionof the work context and defined job satisfaction as the feeling of employees about their job.Hutcheson (1996) on the other hand referred to it is the difference between the outcomes, whicha person actually receives and those that he expects to receive. Job satisfaction is thus related tojob characteristics and people will evaluate their satisfaction level according to what theyperceive as being important and meaningful to them (Sempanesa et al, 2002).

Organizational culture is an integral part of any organization. The concept of organizationalculture first emerged in the 1970s and 1980s (e.g., Hofstede, 1981; Ouchi & Price, 1993;

Pettigrew, 1979; Schwartz & Davis, 1981), and soon became one of the most influential conceptsin management research and practice (Crane, 1995; Jarnagin & Slocum, 2007). Culture theoristshave suggested a variety of definitions, ranging from notions of accepted behavioral rules, normsand rituals (Trice & Beyer, 1984), to shared values, ideologies and beliefs (Schwartz & Davis,1981), and at an underlying level, shared patterns of meaning or understanding (Louis, 1985;Smircich, 1983). As stated by Schein (2005), culture is the most difficult organizational attributeto change, outlasting organizational products, services, founders and leadership and all otherphysical attributes of the organization. In their study of 200 companies, Kotter and Heskett


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(1992) concluded that corporate culture or organization culture can have a significant impact ona firms or organizations long term economic performance.

According to NASSCOM (2009-10), the Indian Software industry will witness a healthy growthin 2011, led by growth in the core markets and supplemented by significant contributions from

emerging markets. The Indian IT-BPO Industry is expected to exceed USD 70 billion in FY11.The improving demand scenario has led to increased hiring and therefore employment grew byalmost 9% in a demand constrained environment. The industry headcount addition is expected todouble this year to touch 200,000 new employees, leading to 2.5 million direct employments.Poised to become a US$ 225 billion industry by 2020, the Indian information technologyindustry has played a key role in putting India on the global map (IBEF, 2011). Therefore, the ITorganization plays a crucial role on the countrys economical growth where the deliveries are

made by its human resources. Kennedy (2003) emphasized that employee efficiency as a key

factor for the success of organizations and it is influenced by several organizational factors.Conceptual models have suggested that there is relationship between organization culture andorganization performance (Ogbonna & Harris, 2000; Scholz, 1987). India has been referred to as

the electronic housekeeper of the world (Budhwar et al, 2006). Although this sector isincreasing in economic significance, it continues to be neglected in research settings especially inthe field of organizational culture and job satisfaction. Therefore, in the current research thefocus was to study the linkage between organization culture and job satisfaction within Indiansoftware organizations.

2. ORGANIZATIONAL CULTURE

The notion of organizational culture is rooted in cultural anthropology, psychology, andsociology. Although each of this discipline is concerned with human behavior and nature, thereare few commonly accepted theories among them (Oparanma, 2010). One of the most importantbuilding blocks for a highly successful organization and an extraordinary workplace isorganizational culture.

Hofstede (1980) advanced the most widely used model of cultural differences in theorganizations literature. Hofstede argues that it is possible to gain considerable insight intoorganized behavior across cultures based on the four dimensions but latter added one moredimension (Hofstede, 1991b; Hofstede & Bond 1984; Hofstede & Bond 1988) and those fivedimensions are Power Distance, Uncertainty Avoidance, Individualism-Collectivism,Masculinity-Femininity, Long-term vs. Short-term Orientation. Fons Trompenaars(Trompenaars, 1993; Trompenaars & Hampden-Turner, 1998) presented a model of culturebased on his study of Shell and other managers over a ten-year period. His model is based on theearly work of Harvard sociologists Parsons and Shils (1951) and focuses on variations in bothvalues and personal relationships across cultures. He proposed seven dimensions of organizationculture namely Universalism Particularism, Individualism-Collectivism, Specific-Diffuse,Neutral-Affective, Achievement-Ascription, Time Perspective. Relationship with Environemtn.The first five dimensions focus on relationships among people, while the last two focus on timemanagement and societys relationship with nature. Schwartz et al, (1992, 1994) asserted that theessential distinction between societal values is the motivational goals they express and identifiedten universal human values that reflect needs, social motives, and social institutional demands


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(Kagitcibasi, 1997). These values are purportedly found in all cultures and represent universalneeds of human existence. The human values identified are: power, achievement, hedonism,stimulation, self-direction, universalism, benevolence, tradition, conformity, and security.Organizational culture emerges from some common assumptions about the organization, whichthe members share as a result of their experiences in that organization. Cameron and Quinn

(1999) have mentioned that the most important competitive advantage of a company is itsorganizational culture. If an organization has a strong culture with a well integrated and effect setof values, beliefs and behavior, it normally demonstrates a high level of corporate performance(Schraeder & Self, 2003).

Despite the variety of interpretations and cultural dimensions, a number of common themes andsimilarities can be identified in organizational culture research (Parker & Bradley, 2000).Concepts used to identify and define organizational culture tend to overlap between studies;consequently, several scholars have attempted to develop frameworks to categorize importantdimensions and to provide a conceptual foundation for the study of organizational culture.Focusing on building and sustaining an organizational culture is one way of showing that people

are the organizations most valuable asset.

3 JOB SATISFACTION

Locke (1976) defines job satisfaction as a pleasurable or positive emotional state resulting fromthe appraisal of ones job or job experiences. Job satisfaction is a general attitude that employeeshave towards their jobs, and is directly tied to individual needs including challenging work,equitable rewards and a supportive work environment and colleagues (Ostroff, 1992). Schneiderand Snyder (1975) on the other hand defined job satisfaction as a personal evaluation ofconditions present in the job, or outcomes that arise as a result of having a job. Kerego andMthupha (1997) on the other hand viewed working conditions like, clear staffing policy, clearchannels of communication, staff participation in decision making, security and good governanceas having adverse effects on job satisfaction.

In a study by Amos and Weathington (2008), it was found that the perceived congruence ofemployee organizational values or culture by employees is positively associated with satisfactionwith the job and organization as a whole and employee commitment to the organization. Thus anorganization needs an innovative and group-oriented culture which promotes employee jobsatisfaction (Lee and Chang 2008). Job satisfaction is one of the critical factor for anorganization to improve retention and thus to achieve competitive advantage.

4. RESEARCH DESIGN AND METHODOLOGY

The present study intended to find out the linkage between organizational culture and jobsatisfaction by exploration of the factors of the organizational culture and then examined theimpact of those factors on the attribute job satisfaction. First of all exploratory research wasconducted for the basic understanding of the fact followed by a focus group discussion. Thefocus groups culminated in the generation of 21 potential scale items pertaining to organizationalculture. These items were then edited to ensure wording was as precise as possible (Churchill,1979) and subsequent procedure: data collection and scale purification.


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In this study job satisfaction was considered as the consequences of organizational culture andnot a component of organizational culture.

There is little doubt that hypotheses are important and indispensable tools of scientific research

(Kerlinger & Lee, 1985). Based on the literature review and focus group interview the followinghypotheses were developed for statistical analysis.

H1: Employer caring about employees and their family has significant impact on the level of jobsatisfaction.

H2: There is no difference in the level of organization culture, job satisfaction between largerand smaller companies.

H3: Organizational culture has significant impact on job satisfaction.

Then moved to the next step to test the hypotheses, which means conclusive research wasconducted. Among two types of conclusive research, descriptive research was chosen by which

the degree to which the variables are associated were determined and from descriptive researchquantitative research design was chosen to carry out the study. From the methods of descriptiveresearch the present study was administered through survey methods.

4.1 Sampling Size and Design

Sampling is the selection of a fraction of the total number of unites of interest to decision makersfor the ultimate purpose of being able to draw general conclusions about the entire body of units(Parasuraman et al. 2004). Therefore, six Indian IT organizations were selected for the study.Three of these organizations selected are from Indias top 20 IT organization as per NASSCOM

release of top 20 IT software and services exporters (NASSCOM, 2010). The rest of the threeorganizations are smaller organizations with employee strength of less than four hundred.Questionnaires were sent to 300 employees of these organizations and 187 responded with aresponse rate of 62.33 percent. Distribution of sample demographics is presented in table-1through table-4. Due to the confidentiality of the organization and respondents, the identities ofthese organizations are not disclosed in the current paper.

TABLE-1: GENDER

Category Frequency Percent

Male 132 70.6

Female 55 29.4

Total 187 100.0


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TABLE-2: AGE

FrequencyPercent

2025 Years84

44.9

2630 Years54

28.9

3135 Years34

18.2

36 -40 Years11

5.9

41 and Older 4 2.1

Total187

100.0

TABLE-3: DESIGNATION

Frequency Percent

Developer 101 54.0

Analyst 24 12.8

Tech Leaders 31 16.6

Project Leaders 11 5.9

Project Manager 20 10.7

Total 187 100.0


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TABLE-4: EDUCATION

Frequency Percent

BE/B.Tech 131 70.1

MCA 24 12.8

M.E/ M.Tech 13 7.0

MBA 2 1.1

Others 17 9.1

Total 187 100.0

4.2 SCALING METHOD

Examination of past scales revealed no consensus regarding what constitutes organizationculture. Based on the focus group discussion questionnaire was developed. The questionnaireconsists of a series of statements, where the employees of the six IT organizations wererequested to provide answers in the form of agreement or disagreement to express their attitudetowards the culture of their organization. Likert scaling was used with a range from 1 to 5 point

scaling because the research was based on five dimensions which are strongly disagree, disagree,neutral, agree and strongly agree. Demographic details were also part of the questionnaire. Incase of gender we used nominal scaling.

4.3 RELIABILITY AND VALIDITY

Reliability of the questionnaire was validated with computation of Cronbach alpha (Cronbach,1951). For all 21 items, Cronbach alpha was 0.819. According to Hair et al. (2007), thiscoefficient (0.819) indicates good reliability as it exceeds minimum acceptance level of 0.7.Further, Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy has proven good (0.762)which proves the construct validity. Face and content validity was judged through internal checkand discussion with the experts. Exploratory factor analysis was carried out through SPSSversion 15 to purify and reduce the data into meaningful form with principal component analysisalong with orthogonal rotation procedure of Varimax for summarizing the original informationwith minimum factors and optimal coverage. As the study was explorative in nature thestatements with Eigen values less than 1.0 were ignored for the subsequent analysis (Bagozzi &Phillips, 1991).


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5. RESULT

5.1 HYPOTHESIS ON CARING EMPLOYER AND JOB SATISFACTION

Paired sample T- test was carried out between employer caring about the employee and family

against job satisfaction. The outputs are presented in table-5.

TABLE-5: PAIRED SAMPLES T-TEST BETWEEN CARING EMPLOYER AND JOB

SATISFACTION

Paired Differences t df Sig. (2-tailed)

Mean Std.Deviation

Std. ErrorMean

95% ConfidenceInterval of theDifference

Lower Upper

Pair This company1 Cares not only

me but alsomy

family. - I amsatisfied withmy current

ob.

-.123 1.169 .085 -.291 .045 -1.43 186 .152

The P value is appearing 0.152 which is greater than 0.05. Hence, the hypothesis (H1) Employercaring about employees and their family has significant impact on the level of jobsatisfaction has been accepted.

5.2 HYPOTHESIS ON ORGANIZATION CULTURE AND JOB SATISFACTION

BETWEEN LARGER AND SMALLER ORGANIZATIONS

Independent T-test was done for organizational culture with grouping of large and smallorganization and the outputs are presented in table-6.


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From the above table we can see that for Levenes test, P-value is 0.147 (P value is greater than0.05), so we can conclude that we have equal variance and we look at the Equal variances

assumed row. The t-test for Equality of Means Sig. (2-tailed) score is 0.005 (which is less than0.05). Therefore, there is a significant difference on the mean of organizational culture betweenlarger and smaller organization.

Independent T-test was made for job satisfaction with grouping of large and small organizationsand the outputs are presented in table-7.

TABLE-6: INDEPENDENT T-TEST FOR ORGANIZATION CULTURE BY

GROUPING SIZE OF ORGANIZATION

Levene's Testfor Equalityof Variances t-test for Equality of Means


F Sig. T Df

Sig.(2-tailed)

MeanDifference

Std. ErrorDifference Lower Upper

I am veryhappywith theculture ofthecompany Iwork for.

Equalvariancesassumed

2.116 .147 -2.821

185 .005 -.3976 .1409 -.6757 -.1196

Equalvariancesnotassumed

-2.823

183.886

.005 -.3976 .1409 -.6755 -.1197


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From table-7 we can see that for Levenes test, P-value is 0.019 (P value is less than 0.05),sowe can conclude that we dont have equal variance and we look at the Equal variances not

assumed row. The t-test for Equality of Means Sig. (2-tailed) score is 0.006 (which is less than0.05). Therefore, there is a significant difference in the mean of the level job satisfaction betweenlarger and smaller organization. Thus, we accept the hypothesis (H2) that there is difference inorganization culture, job satisfaction between larger and smaller organizations.

5.3 HYPOTHESIS ON ORGANIZATIONAL CULTURE AND JOB SATISFACTION.

Exploratory factor analysis was carried out through SPSS and a subsequent regression analysiswas made. Based on the result of Varimax the factor loading of the component is presented intable-8 which shows that all the variables are grouped into five factors. Though F3 and F5 hasthree variables loaded to each of them still these two factors were considered for the present

study due to the high relevance of these variables identified during literature review and focusgroup discussion.

TABLE-7: INDEPENDENT T-TEST FOR JOB SATISFACTION BY GROUPING SIZE

OF ORGANIZATION

Levene'sTest forEquality ofVariances t-test for Equality of Means


F Sig. T Df

Sig.(2-tailed)

MeanDifference

Std. ErrorDifference Lower Upper

I amsatisfiedwith mycurrentjob.

Equalvariancesassumed

5.593 .019 -2.757

185 .006 -.3548 .1287 -.6088 -.1009

Equalvariancesnotassumed

-2.757

184.977 .006 -.3548 .1287 -.6088 -.1009


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TABLE-8: ROTATED COMPONENT MATRIX

Component

1 2 3 4 5

Factor-1 (F1)

This company inspires me to do my best work everyday. .972 .098 .073 .008 -.012

I am very happy with the culture of the company I work for. .971 .086 .070 .053 .002

My company does not take seriously about employees makingmistakes on their work.

.958 .092 .042 .022 -.016

My colleagues are more task oriented than relationshiporiented.

.940 .061 .094 .058 .085

Factor-2 (F2)

Relationship between supervisor and subordinate is often likefather and child. .108 .833 -.046 .045 .035

My organization rewards me for my loyalty. .060 .715 .329 .165 .107

I see strong evidence of effective leadership from seniorleaders.

.079 .597 .498 -.112 -.151

All employees are treated equally here. .252 .523 .310 .096 .277

I am sure I will be working for this company 5 years fromnow.

.257 .504 .313 -.045 .490

My organization has flexi-hour working culture. .125 -.484 -.354 .206 -.131

I get a lot of independence in carrying out my duties. .184 .366 .328 .251 .066

Factor-3 (F3)

My future career opportunities here look good. .159 .057 .767 .238 .205

In my organization roles and responsibilities are clearlydefined.

.062 .213 .763 -.087 .052

My company rewards me whenever I do good work. .016 .241 .712 .212 .012

Factor-4 (F4)

This company is for ambitious persons. -.007 .138 .061 .740 -.086

This company cares not only me but also my family. -.030 .346 .042 .662 .327

My Boss involves me adequately in decisions that affect mywork.

.142 -.149 -.038 .642 -.329

I would not think to work in any other organization in thisindustry.

.018 -.205 .316 .596 .224

Factor-5 (F5)

My company is not too hierarchical. .158 .264 .076 .239 -.680


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My organization has good Corporate Social Responsibility(CSR) record.

.088 .291 .005 .262 .674

The organization I work for is fair to its employees. .072 .201 .337 -.011 .639

The result of the factor analysis was carried forward by which the five independent variables (F1,F2, F3, F4, F5) were used to predict the dependent variable (Over all job satisfaction). Result ofregression analysis is presented in Table-9 and results of model fit is presented in Table-10 .Thefactors included in the multiple regression model are capable of explaining 92.1% variation inthe overall job satisfaction. This indicates that the regression model is statistically significantexplaining the linkage between job satisfaction and organizational culture.

The regression equation (Table-9) can be presented as;

Job Satisfaction = 3.824 + 0.846(F1) + 0.067 (F2) + 0.078(F3) + 0.062 (F4) + 0.088 (F5)Factor-1 having the attributes; company work inspiration for employee to do best of his/herwork, over all culture of the organization, company not over reacting about employees mistake,and a relationship oriented colleagues has high impact on job satisfaction.

Thus the third hypothesis (H3), organizational culture has significant impact on job satisfactionhas been accepted.

TABLE-9: REGRESSION COEFFICIENTS

Model

UnstandardizedCoefficients

StandardizedCoefficients

T Sig.B Std. Error Beta

1 (Constant) 3.824 .019 204.745 .000

REGR factor score 1 for analysis 1 .846 .019 .945 45.199 .000





a. Dependent Variable: I am satisfied with my current job

TABLE-10: COEFFICIENT OF DETERMINATION

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .960 .921 .919 .255


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6. DISCUSSION AND CONCLUSION

In helping to understand the organizational culture attributes that has significant effect on theprediction of the level of job satisfaction, in the Indian origin software organization, the currentstudy has derived several important implications for research and practice.

During regression analysis it was found that four out of the twenty one attributes of theorganizational culture set, specifically over all organizational culture, organizational workinspiration to its employee to perform the best of their work, tolerance to employee mistake andrelationship among employees has strong positive predictors of job satisfaction. The T-testresult confirmed that in order to have a better organizational culture, the job satisfaction ofemployees needs to be high. Thus the culture of the organization can also be predicted with thelevel of job satisfaction of the employees of that organization. There is also a significant impacton job satisfaction if the organization is caring about not only its employee but also the family ofthe employee.

One interesting finding of the research was that smaller organizations were shown betterorganizational culture and level of job satisfaction with respect to the larger one. Though thelarger organizations are doing extremely well in terms of revenue growth yet the culture and jobsatisfaction stands low with respect to smaller organization. Therefore, further research on thelinkage between corporate performance and organization culture of Indian IT firms seem to beuseful.

The samples collected for the present study was small. A more accuracy can be attained withlarge sample size by extending the research to more Indian IT organization. Applicability of thecurrent research results needs further analysis and consideration. Further research is needed tostudy the level of job satisfaction in companies with different types of organizational culture,especially the market type as this is the most widespread at present.

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linkage between organization culture and job

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