A study on the impacts of organizational culture on employee engagement with the organization in Vietnamese enterprises

of each aspect of organizational culture affects each employee engagement elements through a sense of voluntariness and a cohesive behavior that gives human resources managers a clearer view of the 8 research direction that needs to be supplemented, further researched to have specific directions, solutions, the most effective in developing organizational culture positively to improve employee engagement with the organization. Third, there is little research on employee engagement with the organization under perspective of three elements of engagement “employees’ pride, effort and loyalty”. Previous research in Vietnam mainly stop in researching organizational commitment, engage with the organization; focus on employees' psychological and emotional state. Fourth, however, is expressed quite clearly through management practices and enterprise managers and is an aspect that constitutes organizational culture clearly in Vietnamese enterprises; but very few studies have addressed the cultural expression through the dimension “Management practices” impact on employee engagement with the organization in Vietnamese enterprises. According to Sarros et al. (2008) “management practices are part of organizational culture and are inseparable” and leaders are like “an architect who shapes organizational culture and can change organizational culture ". Management practices are how leaders show their role, how they communicate, act, and treat employees according to their perceptions. CHAPTER 2: THEORETICAL BASES AND RESEARCH MODEL OF THE IMPACT OF ORGANIZATIONAL CULTURE ON EMPLOYEE ENGAGEMENT WITH THE ORGANIZATION 2.1 Theoretical bases 2.1.1 Concepts related to organizational culture Some research emphasized the dimensions of values and behavior in organizational culture. Some research on the impact of organizational culture to improve work efficiency. Some research focus on the aspect of organizational culture manifestation through behavioral behavior and practice activities. The concept of organizational culture is diverse, reflecting the new and rich research direction; the thesis approach and use research model of organizational culture by Recardo & Jolly (1997); Robbins & Judge (2013) to be the basis of the research; “organizational culture defines a system of values expressed through behavior, practical activities and some of the management policies of the organization which are shared and acted by employees”. 2.1.1 The concept related to employee engagement to the organization The concept of employee engagement is becoming increasingly important in research about the organization and behavior of employees in the workplace. Some research refers to engagement through emotion and behavior. Some research emphasized the influence of employee engagement values with the organization on 9 the performance of the organization. Some research emphasized elements of engagement, including specific dimensions. The thesis approaches the concept of employee engagement with the organization by Mowday, Steers & Porter (1979), inherited and supplemented by research by Tran Kim Dung (2006); emphasized employee engagement elements with the organization “Engaging employees with the organization is the voluntariness of the employees, a sense of effort, pride and willingness to be loyal to the organization, helping to promote the operational efficiency of the organization.” 2.2 Research model and hypotheses 2.2.1 Research model According to resource-based enterprise development theory, enterprises can achieve competitive advantage, improve their competitiveness if they know how to build and exploit and use effectively resources, in which there are human resources. How to make human resources valuable, rare, difficult to copy and replace is the issue that enterprises really care about. Focus on building management systems, control and build organizational culture, design the organization structure and the management practices of human resources will help enterprises consolidate and strengthen human capital and social capital, contributing to improving the organization’s capacity and creating competitive advantage for enterprises (Barney & Clark, 2007). Organizational helps to reinforce and strengthen the social capital of enterprises (loyalty, commitment and trust of employees to the organization). This theory is considered to be the base theory to explain the establishment of research model of the thesis. Management practices Future planning Innovation and risk-taking Decision making Personal - Gender - Age - Academic level - Job position - Working period Employee engagement with the organization Efforts Pride Loyalty Dimensions of organizational culture Training and development Rewards and recognition Teamwork Communications in the organization Enterprises - Scale - Areas of work - Type of enterprises 10 Figure 2.1: Research model The model has a combination of independent variables according to theory by Recardo & Jolly (1997); Robbins & Judge (2013); the dimension of management practices is discovered and added. The dependent variable is approached according to the theory by Mowday, Steers, & Porter (1979), with inheritance and addition from research by Robinson et al., (2004); Tran Kim Dung (2006); Markos & Sridevi, 2010; Soane et al., (2012). 2.2.2. Research hypotheses H1. Organizational culture has a positive effect on employee engagement with the organization H1a; H1b; H1c: organizational culture has a positive effect on alternately “employees’ loyalty, pride and effort” H2. The culture dimension “organizational communications” has a positive effect on employee engagement with the organization H2a; H2b; H2c: The culture dimension “organizational communications” has a positive effect on alternately “employees’ loyalty, pride and effort”. H3. Organizational culture focusing on the dimension “Training and development” has a positive effect on employee engagement with the organization H3a; H3b; H3c: organizational culture focusing on the dimension “Training and development” has a positive effect on alternately “employees’ loyalty, pride and effort”. H4. Organizational culture focusing on the dimension “Rewards and recognition” has a positive effect on employee engagement with the organization H4a; H4b; H4c: organizational culture focusing on the dimension “Rewards and recognition” has a positive effect on alternately “employees’ loyalty, pride and effort”. H5. The dimension “Teamwork” culture has a positive effect on employee engagement H5a; H5b; H5c: organizational culture focusing on the dimension “Teamwork” has a positive effect on alternately “employees’ loyalty, pride and effort”. H6. Organizational culture focusing on the dimension “Future planning” has a positive effect on employee engagement with the organization 11 H6a; H6b; H6c: organizational culture focusing on the dimension “Future planning” has a positive effect on alternately “employees’ loyalty, pride and effort”. H7. The dimension “Innovation and risk-taking” has a positive effect on employee engagement H7a; H7b; H7c: organizational culture focusing on the dimension “Innovation and risk-taking” has a positive effect on alternately “employees’ loyalty, pride and effort”. H8. The dimension “Decision making” has a positive effect on employee engagement H8a; H8b; H8c: organizational culture focusing on the dimension “Effective decision making” has a positive effect on alternately “employees’ loyalty, pride and effort”. H9. Organizational culture focusing on “Management practices” has a positive effect on employee engagement with the organization. H9a; H9b; H9c: organizational culture focusing on the dimension “Management practices” has a positive effect on alternately “employees’ loyalty, pride and effort”. CHAPTER 3: RESEARCH METHOD AND DESIGN 3.1. Research process Research process is developing by main steps as in Figure 3.1 Results Tools Implementation steps Research overview Preliminary model / scale Quantitative research (n = 711employees) Cronback’ Alpha, EFA Official scale Qualitative research (Specialists, High-level leaders, middle-level managers, employees) In-depth interview, observation Adjusted model / scale Hypotheses testing Peason, multiple regression analysis. Conclusion Figure 3.1: Overall research process 12 3.2. Research design 3.2.1. Research method With proposed and chosen research design, the author proceeded in the following order: Step 1- Desk research; Step 2- Conducting interviews; Step 3- Large-scale survey; Step 4- Analyzing the data to give results and recommendations for Vietnamese enterprises. 3.2.2. The process of developing questionnaire The process of developing questionnaire was proceeded in the following order: Questionnaire build after research overview, in which dimensions of organizational culture and employee engagement with the organization are main contents. Simultaneously, based on the discovery of the thesis on the dimension “Management practices” in the context of Vietnam. A mock questionnaire was conducted with 3 specialists, 3 high-level leaders, 6 managers of enterprises and 8 employees in enterprises to comment on the logic, difficulty and ease of the question content. 3.2.3 Build the scale To develop the scale, the thesis based on discussion in reality, comments from employees, managers, high-level leaders and recommendations from specialists so that the questionnaire is suitable with Vietnamese context. 3.2.4 Research sample The thesis conducted surveys with employees in Vietnamese enterprises, chose samples by using the stratified purposeful sampling method. Step 1, the thesis conducted selection in 3 survey areas, which are Northern, Central and Southern Step 2, the thesis selected enterprises and try to ensure the representativeness of the survey sample with selection criteria (The criteria of enterprises are based on dominant equity; Criteria on the main field of activity; Criteria on the size of employees of enterprises; the criteria of the operation time of enterprises). Step 3, the thesis sent questionnaire via Email channel, online surveys are designed in GoogleDoc, paper questionnaire to employees. Due to difficult access to the response rate of Enterprises, the author uses additional sampling methods of convenience, through the suggestion and recommendation of interviewees, through friends, coworkers in Enterprises. The number of valid survey questionnaires used in the analysis were 711 surveys. In which, the number of surveys in the Northern area were about 6% 13 higher than expected, while surveys in Central area were about 92% higher than expected, the declines in Central also corresponded to the increase of the Northern area. However, basically the total number of surveys were distributed evenly across the three regions, and the sample was acceptable for analysis. 3.3. Qualitative research 3.3.1 In-depth interview objectives The objectives of in-depth interview are to test and screen the concept of independent variables in the recommended thesis model and initially specify the relationship between independent variables and dependent variables as the foundation for hypothesis and research model. In-depth interview helps the thesis confirm the appropriate factors to the context of Vietnam and preliminary assessment of the extent of the impact of factors to employee engagement with the organization. Next, the objective of in-depth interview is to test the rationality of the scale. 3.3.2 In-depth interview method 3.3.2.1 In-depth interview subjects Interviewees consist of 20 people who are representatives from enterprises, specialists with knowledge about organizational culture and people working directly on human resources. The interview was conducted with 3 leaders (deputy directors and directors), 6 middle-level managers (managers and deputy managers); 8 employees in enterprises and 3 specialists teaching Human Resources Management. 3.3.2.2 Collection and processing of data In-depth interview, the thesis designed a discussion outline, including kinds of effective interview questions (open, have more choice,) contents related to the models and scales. The thesis asked interviewees about organizational culture (i) how is organizational culture understood; (ii) role of organizational culture in enterprises operations; (iii) Expressive dimensions of organizational culture in behavior and activities of the organization. For contents about employee engagement with the organization, the thesis exchanged with interviewees about (i) their perceptions of engagement; (ii) elements constituting employee engagement; (iii) expected relationship between the impact of organizational culture on employee engagement with the organization; (iv) and what enterprises do to improve employee engagement with the organization. 3.4. Quantitative research 3.4.1 EFA analysis and scale testing After discovering analysis and testing the scales, dimensions/measurement variables in organizational culture and employee engagement is confirmed whether it is suitable with context of Vietnamese enterprises. This data processing part is conducted based on the survey questionnaire and the analytical and evaluation process as follows: 3.4.2 Descriptive statistical analysis method This method is used to analyze the situation of Vietnamese enterprises, analyze research sample, organizational culture and employee engagement with the 14 organization in enterprises. This method is also used to analyze the correlation between dimensions of organizational culture and employee engagement with the organization. Descriptive statistical analysis will use the tables and figures to describe variables or the relationship between variables to achieve the research objectives. 3.4.3 Regression analysis method Based on the theory and model used to measure the impact of organizational culture on employee engagement with the organization, the thesis used the following estimation model:
=  +  +  + (1) In which, Y is employee engagement with the organization which is measured by three dimensions “(i) Loyalty, (ii) Pride, (iii) Effort”. X is a vector that includes eight aspects of measuring organizational culture. Z is the vector representing the characteristics of the individual employees, F is the vector representing the characteristics of enterprises and is the random error. The estimation model in Equation (1) is also used to estimate the impact of eight dimensions of organizational culture to three elements of employee engagement: “Loyalty”; “Pride” and “Effort”. On that basis, the thesis considers how the dimensions of organizational culture affect employee engagement with the organization in general and the elements employee engagement with the organization. CHAPTER 4: RESEARCH RESULTS OF THE IMPACT OF ORGANIZATIONAL CULTURE ON EMPLOYEE ENGAGEMENT WITH THE ORGANIZATION IN VIETNAMESE ENTERPRISES 4.1 Overview of Vietnamese enterprises Vietnamese enterprises are increasing in number, diversifying forms of capital ownership, have multi-sector expansion activities... Vietnamese enterprises face many challenges in management, branding, communication strategy and organizational culture; Vietnamese enterprises gradually define their own characteristics, which are considered their own identities to develop organizational culture effectively; Some Vietnamese enterprises consider organizational culture as endogenous resources, and is competitive advantage; organizational culture has been widely deployed in many enterprises. 4.2 Qualitative research results 4.2.1 In-depth interview results From qualitative research, dependent and independent variables were investigated, checked and screened. Most of the respondents gave the idea to adjust the words and the content of questionnaire, specifically considering the duplication of variables with similar contents and meanings. 4.2.2 Some of the statements are discoverable in in-depth interview 15 During the in-depth interview process, the thesis noted a lot of ideas about the dimensions of organizational culture and employee engagement with the organization; also, the relationship between them. These are valuable ideas that open interesting discoveries and build up the theoretical basis. 4.2.3 Some results after in-depth interview (i) There is an adjustment of the research model, hypotheses; (ii) Adjust the scale wording to be easier and clear to understand; (iii) Many interviewees view “Management practices” as a factor that strongly influences employee engagement. The author acknowledges this opinion and introduces it to a model for testing; (iv) some findings help the author comment and contribute specific ideas in solutions and recommendations. 4.3 Research sample and quantitative scale 4.3.1 Descriptive statistics research sample The number of surveys used in the thesis was 711 surveys from 285 enterprises, in which in Northern were 291 surveys (accounting for 40.93%), Central was 178 surveys (25.04%) and Southern was 242 surveys (34, 04%). 4.3.2 Descriptive statistics of the independent variables The independent variables statistical results show that the answers to the statements of the independent variables scale are quite diverse. The average value of dimensions of organizational culture fluctuates from 2.992 to 3.945. 4.3.3 Descriptive statistics of the dependent variables The dependent variables statistical results, the selected opinion for the statements of the scale of sub-variables are diverse. The average value of dimensions of employee engagement with the organization fluctuates from 2,866 to 3,754. 4.4 Test results of scale and correlation 4.4.1 Verifying the reliability of the scale With the survey data, all the independent variable scales used have good reliability; the lowest is Cronbach’s Alpha = 0,875 which is of the “effective decision making” scale and the highest is Cronbach’s Alpha = 0,932 of the “Future planning” scale. With the dependent variable scale, Cronbach's Alpha coefficients are all greater than 0.88. Specifically, the Cronbach's Alpha coefficient of loyalty variable is 0.941; pride is 0.938; effort 0.896. Simultaneously, the correlation coefficients with the total variable of both the independent and dependent variables were greater than 0.3, so the observed variables all correlated well with the total variable. 4.4.2 Verifying the authenticity of the scale 16 Verify the authenticity of the employee engagement scale with the organization, the KMO result is 0.932, satisfying the condition that KMO is greater than 0.5 (Kaiser, 1974). Moreover, Bartlett test showed P < 5%. The results of EFA analysis, all 16 observed variables were satisfactory. The total explainable variance when the factor group is drawn is 76,472% (>50%). Verify the authenticity of the organizational culture scale. KMO is 0,952 satisfies condition that KMO is greater than 0.5. Bartlett test showed P < 5%. Moreover, the standard of variance extracted was 74,831% (>50%) showed that these eight factors explained over 74,831% of the variability of the data. 4.4.3 Results of correlation test The thesis used the Pearson correlation test to examine the relationship between variables. The results of correlation coefficients show that the correlation between the independent variable and the dependent variable is relatively reasonable in both direction and degree. Specifically, the correlation coefficient values are both greater than 0 and less than 0.8. The correlation coefficient values are positive and significant (Sig is 0.000). In addition, the magnitude of the correlation coefficients ensures that there is no multicollinearity phenomenon. 4.5. Regression results and hypothesis testing 4.5.1 Regression results Experimental estimation model mentioned in model (1)
=  +  +  + (1) The impact of organizational culture on employee engagement with the organization is showing the results of the multivariate regression model, shown in Table 4.19. Table 4.19: Estimated results of the impact of organizational culture on employee engagement in the organization Variables Employee engagement with the organization VIF β Sig. Gender 0,013 0,511 1,085 Age -0,034 0,158 1,621 Academic level -0,003 0,881 1,153 Work position -0,027 0,235 1,462 Working time at enterprises 0,029 0,186 1,408 Years of operations 0,017 0,411 1,178 Enterprise size 0,011 0,582 1,182 17 Variables Employee engagement with the organization VIF β Sig. Agriculture -0,020 0,345 1,315 Services 0,003 0,885 1,376 Government enterprises -0,050** 0,014 1,157 Foreign enterprises -0,023 0,244 1,111 Organizational communications 0,141*** 0,000 1,553 Training and development 0,155*** 0,000 1,683 Rewards and recognition 0,130*** 0,000 1,694 Effective decision making 0,102*** 0,000 1,842 Future planning 0,168*** 0,000 1,638 Innovation and risk-taking 0,207*** 0,000 1,621 Teamwork 0,101*** 0,000 1,775 Management practices 0,209*** 0,000 1,676 Number of observations 711 Adjusted R2 0,750 F 112,863*** The symbols *, ** and *** shows the significance level simultaneously at 10%, 5% and 1%. Source: Calculated from the author’s survey data Results in table 4.19 showed that characteristics of employees and enterprises do not affect significantly to employee engagement with the organization in Vietnamese enterprises. Organizational culture has a significant impact on employee engagement with the organization (R2=0,750; F=112,863, p<000,1). It can be said that 75,0% variation of employee engagement with the organization is explained by organizational culture. Although organizational culture has a strong impact on employee engagement with the organization, but the degree of the impact to the elements that make up employee engagement with the organization is different. Table 4.20: Estimated results of the impact of organizational culture on employee engagement dimensions with the organization in Vietnamese enterprises Variables Loyalty Pride Effort Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 18 Variables Loyalty Pride Effort Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Gender -0,019 0,010 -0,067* -0,023 0,037 0,050 Age -0,012* -0,054 0,023 0,005 -0,034 -0,035 Academic level -0,005 -0,019 0,012 0,010 -0,010 0,002 Work position -0,060 -0,042 -0,021 0,004 -0,060 -0,030 Working time at enterprises 0,089** 0,058** 0,014 -0,009 0,042 0,025 Years of operations -,018 -0,017 0,065 0,042 0,043 0,015 Enterprise size 0,142*** 0,056** 0,095** 0,013 0,020 -0,047 Agriculture -0,032 -0,010 -0,043 -0,015 -0,049 -0,026 Services -0,062 0,011 -0,081* -0,004 -0,080 0,001 Government enterprises -0,020 -0,060** -0,025 -0,055** 0,016 -0,003 Foreign enterprises -0,093** -0,054** -0,051 -0,006 -0,041 0,006 MGT 0,120*** 0,171*** 0,050 MDT -0,005 0,212*** 0,178*** MKT 0,019 0,030 0,295*** MHQ 0,095*** 0,092*** 0,062 MDH 0,342*** 0,082*** -0,026 MDM 0,312*** 0,246*** -0,076** MLV 0,071** 0,040 0,147*** MHV 0,106*** 0,201*** 0,214*** Number of observations 711 711 711 711 711 711 Adjusted R2 0,028 0,649 0,018 0,602 0,001 0,431 F-test 2,865 70,169 2,179 57,588 1,051 29,290 The symbols *, ** and *** shows the significance level simultaneously at 10%, 5% and 1%. Source: Calculated from the author’s survey data Results in table 4.20, the impact of the observational factors to employees’ loyalty makes sense. In model 1, R2 adjusted = 0,028; the model is statistically significant. In model 2, when considering the impact of organizational culture on “employees’ loyalty to the organization”, the model has R2 adjusted = 0,649 (p < 0,001); the model is statistically significant and explains 64.9% of the “employees' loyalty to the organization” fluctuation. 19 In model 3, the impact of the observational factors on “employees’ pride” makes sense. The model has R2 adjusted = 0,018, P<0,05; The model is statistically significant and explains 1,8% of the fluctuation in employees’ pride with the organization. In model 4, when considering the impact of organizational culture on “employees’ pride with the organization”, the model has full s