Developing corporate culture of Vietnamese tourism companies

Each enterprise has its own culture, but it is not a simple

thing for corporate culture to contribute greatly to the efficiency of

production and business activities. Corporate culture has core values,

including corporate vision and mission. Not only Vietnam, but also

developed countries in the world, tourism has become a key

economic sector. Therefore, the construction and development of

cultural culture according to its own characteristics, characteristics

and originality has a great effect in improving the efficiency and

competitiveness of the tourism industry in the domestic industry and

with the integration process. Based on the assessment results of the

current situation and the factors affecting corporate culture of

Vietnam travel companies, the author hopes to find the central

characteristics that have a positive effect to find suitable solutions to

help. The development of tourism companies' business culture is

increasingly strong

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nd think. 1.1.2. Roles of corporate culture  Retaining and attract talents  Building trust and attract customers and partners  Creating organizational identities and developing solidarity  Coordinating and controlling organizational activities  Reducing risks in daily activities 1.1.3. Models of corporate culture 1.1.3.1. Schein’s model of corporate culture Schein (1985) argues that there are three layers of corporate 5 culture. The first layer is artefacts which are tangible and easily seen by outsiders. The second layer includes espoused values of the organization such as strategies, goals, operating philosophies and principles which can be directions to the behaviors within the organization. The most important layer of corporate culture is the deepest level, underlying assumptions. Underlying assumptions are considered as a way of guiding behaviors by directing the way people within an organization should perceive, think, and behave. 1.1.3.2. Hofstede’s model of corporate culture Hofstede (1991) developed a model of corporate culture with four layers. The most overt and visible element of corporate culture is the first layer in this model, symbols. These symbols such as gestures, objects, acts and words are meaningful for individuals within the organization. The next layer is heroes. Heroes are still alive or dead, real or imaginary, but they have admirable characteristics. The third element is rituals which are activities with the participating of the people within an organization. The deepest element is values. They can determine preference of certain states to others or what people think they should do. 1.1.3.3. Denison’s model of corporate culture This model is based on the links between corporate culture and performance after many years of Denison’s researches with the involvement of 765 organizations. This model includes four cultural traits which are mission, involvement, consistency and adaptability. In each trait, there are three sub-dimensions. By measuring these above cultural traits, it is possible for organizations to define their weaknesses and where needs to be improved in order to enhance performance. 6 1.2. Overview of corporate culture development 1.2.1. Definition of corporate culture development Corporate culture development is defined as a process of learning values and assumptions after solving problems of external adaption and internal integration to make it valid (Schein, 1985). Similarly, according to Nguyen Quang Trung (2019), corporate culture development is related to creating and improving values and symbols for organizations and making it valid and matching. To sum up, corporate culture development can be seen as developing values and spreading them to members of organizations. 1.2.2. The importance of developing corporate culture Developing corporate culture is very important to sustainable development, integration and competitiveness capabilities of firms. There are many challenges in the business environment that require firms to be active and effective in management. Therefore, a strong corporate culture will suitable values can help firms improve their competitive advantages and build stronger human resources to achieve the goals. 1.2.3. Corporate culture development activities As mentioned in the definition of corporate culture development, the 2 keys to develop corporate culture include creating values and symbols for the organization, then sharing them to the rest of the organization and make it valid to influence the way people think, feel and act. 1.2.4. Factors influencing corporate culture development 1.2.4.1. Internal factors  Founders 7 When investigating the characteristics of corporate culture, researchers found that characteristics of strong members such as organization's founder (Schein, 1985) have influence the content, size and consensus of an organization's values. The founder is the person who sets the foundation of an enterprise with the most core values of vision, strategy, mission, etc. in the early stage of establishment. In fact, founders establish the core values of the company they are aiming for, shape the cultural rhythm they want, and nurture that culture within the organization.  Leaders Researchers found that leadership can be an important factor in the success of an organization, can modulate behavior by providing incentives, correlating rewards with employee performance and their fairness (Avolio et al., 2009). Research by Mintzberg and Waters (1982) highlights the strong positive influence of leaders on the organization. According to them, the effect is not only “positive” but also “substantial”.  Corporate social responsibility (CSR) Danner & Odenwelder (2015) confirmed the strong and positive mutual relationship between organizational culture and CSR efforts. CSR efforts have changed the organizational culture and underlying assumptions. These changes have influence on culture in the way members and surrounding communities treat and communicate with each other. In Vietnam, promoting corporate CSR is starting to thrive for long-term benefits. CSR studies in Vietnam are quite plentiful in many fields such as the animal feed industry, textile industry, hotel services, but there are still quite a few studies going into cooperation. CSR's impact on the cultural characteristics of businesses, especially 8 businesses providing travel and tourism services.  Internal communication Elias (1991) emphasizes the importance of internal communication within an organization. Internal communication can be implemented by a variety of methods such as internal magazines, documents, profiles or sharing opinions on social networks, blogs, websites. In fact, the intention to examine the relationship between organizational culture and internal communication systems comes from the importance of internal communication within the organization, especially in establishing relationships with employees (Miller, 2012). 1.2.4.2. External factors  National culture Fey & Denison (2003) conducted research and pointed out the positive impact of Russian culture on subcultural groups, thereby affecting work collaboration and performance. in business. The author proposes to consider the impact of the ethnic cultural factors on cultural culture. To clarify the ethnic cultural factors of the Vietnamese people when put into the survey, the author points out the features based on Hofstede's theory of cultural dimensions, including power distance, uncertainty avoidance, individualism vs collectivism, ferminity vs masculinity (Hofstede, 2010).  Adopted culture Immigrated or adopted cultures come from external factors, such as other individuals, other organizations, or even other countries. In the current globalization context, cultural interference is inevitable. Especially with businesses in the tourism industry, currently operating both at home country and abroad, the impact from 9 international culture cannot be denied. Companies operating in many different territories often have a more diverse culture than domestic companies, changing that culture. Vadini (2014) pointed out the positive effects of the immigrated factors on strong cultural culture through the example of the cultural interference of two separate companies. Based on the theory of imported culture, the author proposes to focus on three factors: global trends, other organizations and new company employees.  Characteristics of the industry Organizations have different features based on industry standards (Pennings & Gresov, 1986). While businesses operating in the same field have cultural similarities due to the common characteristics of the profession and the interaction, learning from each other. Well- known authors and scholars agree that Corporate culture contributes to enhancing the effectiveness of strategy execution, organizational change and a positive image of the company in the eyes of its customers (Deal & Kennedy, 1982). A broadly shared set of values held by employees - a “strong” corporate culture is especially beneficial for companies in the service sector. There might be more factors the influence corporate culture development, but the above are the most popular ones which were mentioned in previous papers. In this research, they are also used to investigate the case of Vietnamese tourism companies. CHAPTER 2: RESEARCH HYPOTHESIS AND RESEARCH METHODS 2.1. Research hypothesis Based on the literature reviews in Chapter 1, the hypothesis 10 of this study can be formulated as follows. 2.1.1. Hypothesis 1: National culture has a positive impact on corporate culture Hypothesis H1.a: National culture has a positive impact on Involvement Hypothesis H1.b: National culture has a positive impact on Consistency Hypothesis H1.c: National culture has a positive impact on Adaptability Hypothesis H1.d: National culture has a positive impact on Mission 2.1.2. Hypothesis 2: Adopted culture has a positive impact on corporate culture Hypothesis H2.a: Adopted culture has a positive impact on Involvement Hypothesis H2.b: Adopted culture has a positive impact on Consistency Hypothesis H2.c: Adopted culture has a positive impact on Adaptability Hypothesis H2.d: Adopted culture has a positive impact on Mission 2.1.3. Hypothesis 3: Characteristics of tourism industry have a positive impact on corporate culture Hypothesis H3.a: Characteristics of tourism industry have a positive impact on Involvement Hypothesis H3.b: Characteristics of tourism industry have a positive impact on Consistency Hypothesis H3.c: Characteristics of tourism industry have a positive impact on Adaptability 11 Hypothesis H3.d: Characteristics of tourism industry have a positive impact on Mission 2.1.4. Hypothesis 4: Founders have a positive impact on corporate culture Hypothesis H4.a: Founders have a positive impact on Involvement Hypothesis H4.b: Founders have a positive impact on Consistency Hypothesis H4.c: Founders have a positive impact on Adaptability Hypothesis H4.d: Founders have a positive impact on Mission 2.1.5. Hypothesis 5: Leaders have a positive impact on corporate culture Hypothesis H5.a: Leaders have a positive impact on Involvement Hypothesis H5.b: Leaders have a positive impact on Consistency Hypothesis H5.c: Leaders have a positive impact on Adaptability Hypothesis H5.d: Leaders have a positive impact on Mission 2.1.6. Hypothesis 6: Internal communication has a positive impact on corporate culture Hypothesis H6.a: Internal communication has a positive impact on Involvement Hypothesis H6.b: Internal communication has a positive impact on Consistency Hypothesis H6.c: Internal communication has a positive impact on Adaptability Hypothesis H6.d: Internal communication has a positive impact on Mission 2.1.7. Hypothesis 7: CSR has a positive impact on corporate culture Hypothesis H7.a: CSR has a positive impact on Involvement 12 Hypothesis H7.b: CSR has a positive impact on Consistency Hypothesis H7.c: CSR has a positive impact on Adaptability Hypothesis H7.d: CSR has a positive impact on Mission 2.2. Research methods 2.2.1. Qualitative methods 2.2.1.1. Methods description Qualitative methods are used in this research to analyze the current situation of corporate culture development of Vietnamese tourism companies including observations and surveys. Schein’s model of corporate culture is applied to collect data and information. According Schein (1985, 1992), these three levels of corporate culture make a flow with the highest level is underlying assumptions. The lower levels are driven by the higher levels. In addition, a change in a higher level leads to transformative changes in all lower levels (Unwill, 2002). This model was widely used in different countries including Asian countries to collect information about corporate culture of companies in different industries including services. 2.2.1.2. Respondents As mentioned in Chapter 1, management is responsible for developing corporate culture, so respondents of the survey are leaders of Vietnamese tourism companies. They can give detailed and relevant information about what they have done to develop their corporate culture. 2.2.1.3. Questionnaire design In order to design the questionnaire, 3 layers of corporate culture in Schein’s model and 11 steps to develop corporate culture of Heifetz & Hagberg (2000) were applied. Experts are also interviewed to give feedback to the questionnaire which will be 13 tested and fixed later to be available. The questionnaire includes 2 parts: information about the company and the respondent and corporate culture development. There are 25 questions including 7 questions for the company and the respondent and 18 for corporate culture development. 2.2.2. Quantitative methods 2.2.2.1. Methods description Denison’s model is used to collect information about the corporate culture of Vietnamese tourism companies. This model has been applied to measure corporate culture of many organizations all over the world, and has been widely used in many international researches and in different conditions; thus, it has shown the popularity and validity in previous researches. In addition, after reviewing previous researches and interviewing experts, a research model of 7 factors including national culture, adopted culture, characteristics of tourism industry, founders, leader, internal communication and CSR was developed. The 5-point Likert scale (Ricardo and Jolly (1997) is used to measure aspects of the factors (measurement of observed variables) in this study. Point 1 is "completely disagree" and the score 5 is "totally agree" to analyze the frequency statistics to describe the attributes of the survey sample group such as: Gender, Age group, Experience, Department, Position. Descriptive statistical analysis used for observed variables of the scale according to the research model. 2.2.2.2. Sample size and selection According to Gorsuch (1983), if the sample size selected is based on the rules and requirements of Exploratory Factor Analysis (EFA), the minimum size is 5 times the observed variable (n = 5*m). 14 (Hair et al., 2010). In the research scope, the author applied the sample size above 472 which is suitable to the model. From the above reasons, the author decided to choose a sample size of n=472 samples (who are working for Vietnamese tourism companies), evenly distributed among departments, units with different titles, working years, ages and genders. 2.2.2.3. Data processing methods Data collected through the questionnaires will be processed by SPSS software, encrypted and cleaned, then tested and analyzed according to the following steps: descriptive statistics, reliability testing of Cronbach's Alpha scale, Exploratory Factor Analysis (EFA), correlation analysis and multivariate regression to test research hypotheses. CHAPTER 3: RESEARCH RESULTS OF CORPORATE CULTURE DEVELOPMENT OF VIETNAMESE TOURISM COMPANIES 3.1. Corporate culture development of Vietnamese tourism companies 3.1.1. Understanding level about corporate culture development and its importance The aforementioned survey result indicates that 96% of participants believed that corporate culture development in Vietnamese tourism companies is necessary (34%) and even extremely necessary (62%). This shows that firms focus more on corporate culture in their business activities. Only 4% of the answers show that corporate culture development is unnecessary. 3.1.2. Time and Investment budget to develop corporate culture 15 The result shows that most corporate cultures are built in the company establishment stage; however, it has just been put into careful consideration since 2000. This is also the time when corporate culture became a trend, especially in tourism industry, which shows catch-up of the firms and the vision of the managerial system. 100% of the survey participants answered that the members in managerial systems and levels are responsible for corporate culture development activity. Accounting for the highest proportion - 56% - are companies who spend the budget for corporate culture development from 1% to 5% of their revenue. 14% of companies spend more than 5% of their revenue, and 10% of companies invest less than 1% for this activity. The remnant of 20% did not set out any specific budget for corporate culture development. 3.1.4. Level of innovation and addition of values in corporate culture development process Among the surveyed companies, up to 50% of them “have regular innovation”, 16% “have continuous innovation”, and only 34% have little or no innovation. However, companies have not placed much importance on innovation as the percentage of companies with little innovation accounts for a large proportion. 3.1.5. Outcomes of corporate culture development  Development of visible artifacts in companies 70% of the surveyed companies have founded several visible artifacts. Only 8% have no visible elements and 22% of companies said that they have a few.  Development of espoused values 84% of companies have had numerous espoused values 16 which have been made and developed over the past years. Only 2% have no espoused values and 12% have few espoused values.  Development of basic underlying assumptions of corporate culture 68% of companies have built and developed their own fundamental concepts, 18% of which have good development. Only 2% (1 company) in surveyed companies has no fundamental concepts development and nearly 30% have succeeded in developing their concepts. However, the statistics show that companies have not paid much attention to fundamental concepts development. 3.1.6. Activities of corporate culture development in Vietnamese tourism companies It can be seen from the survey result that 11 steps of the Heifetz and Hagberg (2000) have been applied by Vietnamese tourism companies. In which, step 1, 2 and 7 are conducted the most, with the proportion of 76%, 72% and 70% respectively. Step 5, 8 and 11 are the least conducted stages by companies, accounting for 46%, 58% and 54% respectively. 3.2. Advantages and drawbacks of corporate culture development in Vietnamese tourism companies 3.2.1. Advantages Firstly, a large number of Vietnamese tourism companies have been aware of the significance of the corporate culture in the success of the whole company. Secondly, most companies have developed their distinct culture from logo, slogan or other visible elements, espoused values and 17 fundamental concepts. Thirdly, the corporate cultures of several tourism companies (more than 50% of the surveyed companies) have regular innovation and development without rigidity. Fourthly, several companies have conducted stages in professional corporate culture development with care and orientation from leaders who have had the strong and clear sense of responsibility in this activity. 3.2.2. Drawbacks Firstly, a few companies still consider corporate culture development as an unnecessary activity, or have little or no information about this matter, or lack the confidence of their knowledge about this field (4% of companies say that they have never been introduced about corporate culture development and 26% say that they have little knowledge). Secondly, throughout the whole process, despite the fluctuation in tourism industry and business environment, several companies have not been active in changing or adding new values in their corporate culture and activities. Thirdly, although tourism companies have focused on investing for corporate culture development, they have not had specified long-term plans for this activity. Fourthly, managerial activities have shown ineffectiveness, and companies still lack the advanced training segments about corporate culture. Fifthly, with regard to human resources and competency, some individuals who are in charge of corporate culture development still have inadequate advanced knowledge or inadequate training 18 about this field; the lack of capital is a frequent situation in several companies. 3.2. Factors that influence corporate culture development of Vietnamese tourism companies 3.2.1. Research reliability Table 1.1: Cronbach’s alpha test Variables Cronbach's Alpha National culture 0.75 Adopted culture 0.642 Characteristics of tourism industry 0.593 Founder 0.264 Leader 0.634 Internal communication 0.694 CSR 0.798 (Source: Conducted by author, 2020) In order to assess the impact of the factors proposed above on corporate culture in Vietnam tourism companies, the author uses a survey with seven scales corresponding to 7 factors, each scale has 4 variables of observations, so the regression model is built on 28 measurement observed variables. The seven scales include: "National culture"; "Adopted culture"; "Characteristics of the tourism industry"; "Founder"; " Leader"; "Internal communication" and "CSR". All of these variables have been assessed reliability by using Cronbach's alpha coefficients. Cronbach's alpha coefficients are greater than 0.6 19 and total variable correlation coefficients are greater than 0.3 to reach the necessary confidence in a research concept. Detailed results of reliability test are showed in Appendix 4, in which "founder" scale was removed because Cronbach's Alpha coefficient is 0.264, lower than the required minimum of 0.6. Four variables of other scales have variable-total correlation coefficient lower than 0.3 were also eliminated. Thus, six scales are accepted. In fact, through interviews with staff in travel agencies, some founders are currently taking leadership positions of the company (as in the case of Vietravel) or the founders are retired. Therefore, the role of the founders in these companies is no longer as influential as the "leader". After removing non-conforming variables, the remaining scales and variables all meet the reliability requirements and are accepted into EFA. KMO coefficient considers the appropriateness of factor analysis, this value must be greater than 0.5 (0.5 <KMO <1.0) to be eligible for factor analysis to be considered as fit. Here, the KMO value is verified to yield 0.738, which means that the appropriate factor analysis applies to the data set of the study. Barlett test results with Sig.= 0, less than 0.05, proves that the observed variables are correlated with each other, in other words, the selected variables are correlated and suitable to explain for factors affecting organizational culture. The results of the EFA show that the study still follows the factor structure proposed by the author from the beginning with 6 subgroups representing 6 factors: National culture, Immigrated culture, Tourism industry characteristics, Leaders, Internal Communication, and CSR. These 6 factors can explain up to 64.824% of the variance of the research model. 20 For each model of the 4 dependent variables, the significance level Sig of F-test is equal to 0 (less than 0.5), that is, the built-in linear regression model is consistent with the whole. Thus, the independent variables in the model are related to 4 dependent variables of corporate culture. All VIF values in the table are less than 10, so there will be no multicollinearity. Thus, the research model is suitable for the overall tourism businesses in Vietnam, the results are reliable and can be applied to many other businesses. 3.2.2. Research results From the research, author proposes the following equation of corporate culture: Involvement =0.125*DT + 0.030*DN + 0.184*DL + 0.787*LD + 0.045*TD + 0.044*TN Consistency =0.134*DT + 0.057*DN + 0.162*DL + 0.385*LD + 0.326*TD + 0.377*TN Adaptability =0.280*DT + 0.232*DN + 0.315*DL + 0.221*LD + 0.084*TD + 0.169*TN Mission =0.282*DT + 0.088*DN + 0.18*DL + 0.488*LD + 0.070*TD + 0.153*TN Corporate culture = 0.222*DT + 0.111*DN + 0.227*DL + 0.51*LD + 0.132*TD + 0.190*TN Explanation: “Corporate culture”: DT; “Adopted culture”: DN; “Characteristics of tourism industry”: DL; “Leaders”: LD; “Internal communication”: TD và “CSR” TN. 3.2.3. Discussion The research has shown that travel

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