Organizational Culture and Employee Job Satisfaction
Organizational culture has become a major theme in academic research, organizational theory and management practice. The reasons for the enthusiasm in the study of this concept is owing to the fact that the scientific management has long been replaced by the softer and humane side of management which does not look only at how to get the job done but also how to motivate or influence the workforce to perform without much cohesion from the management. There are some factors that are responsible for the increase in the particular interest, they are the following; first increasing globalization which in recent years has put organizational culture in the spotlight along with national culture. Second, the enduring assumption that organizational performance is dependent on some employee values which are aligned with the companies’ missions, visions and values. The third reason is the contentious view that management can consciously manipulate their culture to achieve organizational change. As a result of this, management scholars and practitioners have undertaken many researches which have been published by a number of top rated journals, magazines and books in discussing the findings of their different kinds of studies. Some results have argued the existence of a relationship between organizational culture and financial performance while others have argued that there is no link between these two concepts. (Huczynski & Buchaman 2007; Ogbonna & Harris 2000:769, Kunda 1992, Parker 2000)
Despite the number of past researches done, there has not been enough literature examining the actual relationship between organizational culture and employee job satisfaction. For those that have been involved in this study, they have only focused on either qualitative or quantitative study, leaving gaps in their study. Of particular concern is that no research has been carried out to study organizational culture within the Nigerian banking industry. Therefore this study attempts to examine this relationship by finding out the perception of employees of the culture of Guaranty Trust Bank UK vis-a-vis their level of job satisfaction. In this study, both an anthropological view will be taken for the immeasurable aspects of culture constructs and also statistical methods will be applied to analyse the raw data collected from the instrument applied used to get information from the sample . (Schein 1983 )
Problem Statement
Whist many studies have examined the link between organizational culture and the financial performance of organizations; others have examined the relationship between this variable and other concepts such as customer satisfaction, competitive advantage and leadership styles. (Trice and Beyer 1993; Hentze 1994; Deal and Kennedy 1982) These studies have a global focus of the organization without considering the effect of the human capital that made the huge contribution to the improved competitiveness, growth and performance of these organizations. In view of the above, some academics and management practitioners embarked on carrying the investigation further by focusing on the organizational culture dimensions (e.g. competitiveness, effective decision making, employee involvement) in relationship to employees’ job satisfaction. These studies were seen to more people oriented and research in this would enable managers understand how their culture affects their employees. Despite these further studies, it has been argued that they were limited in scope and were often affected by methodological constraints. In order to overcome some of the constraints, this study attempts to contribute to existing literature by carrying out an analytical study using recognizable dimensions of organizational culture and investigating if they have a significant relationship with employee job satisfaction. It is important to note here that these dimensions under study are relevant to productivity, increased competitiveness and employee performance thus would make significant impact on the growth and development of organizations.
1.3 Research Objectives
This study aims to achieve the following objectives:
Determine the relationship between organizational dimensions (Stability and Communication , performance orientation , Support, focus on rewards , Innovation ) and employee job satisfaction
Identify the organizational culture dimension that contributes most to employee job satisfaction
1.4 Research Questions
Do organizational dimensions (Stability and Communication, performance orientation, Support, focus on rewards, Innovation) significantly affect employee satisfaction at Guaranty Trust Bank?
Which organizational culture dimension contributes most to employee job satisfaction?
1.5 Scope of the study
This study is limited to studying the relationship between the organizational culture dimension and the level of employee job satisfaction among employees of Guaranty Trust Bank UK.
1.6 Significance and Contribution to the study
The Nigerian banking industry is one that has witnessed tremendous growth in the last two decades. Due to new regulations from the Central Bank, the industry in the last five year witnessed various mergers and acquisitions, and some experienced down-right collapse of some banks. Whilst some banks were said to have remained unshaken despite the recession which hit the whole world badly, others were hit badly. GtBank established in 1989 is one of the banks that have remained strong in the face of the mandatory financial capitalization which occurred in Nigeria in 2000 and the recession in late 2008. There have been various opinions by practitioners as to the factors responsible for these successful banks maintaining their position in the industry. A factor opined by some is that the organizational culture built by the owners of these firms from inception and is still being passed down the old employees to green horns. This culture comprising expected behavioural norms and rituals enabled the firms to running smoothly, contributing immensely to the effectiveness of these organizations. This study intends to make a contribution to existing literature on the impact of organizational culture on the employee satisfaction in the Nigerian context.
1.7 Limitations of the study
1.8 Conclusion
The rest of this dissertation is organized as follows. The next chapter takes an in-depth look at the conceptual framework surrounding Organizational culture and reviews the previous empirical evidence as documented by various researchers in peer-reviewed journals. The third chapter justifies and explains the research methods applied; it also explains how the data was collected. The fourth chapter presents our findings and the final chapter draws conclusion from the study.
CHAPTER TWO
LITERATURE REVIEW
Introduction
This chapter explains the background to the studies of Organizational culture and goes further to discusses the two views of culture. It provides various definitions of Organizational Culture and its elements according to Driskill and Brenton (2005). It also reviews past studies and arguments of academics and researchers. These past empirical studies based on the relationship between Organizational culture and employee performance and satisfaction will also be reviewed and gaps identified with respect to the methodologies applied in reaching their conclusions. This discussion would lead to the main purpose of the study as described in the previous chapter. Some dimensions of organizational culture as identified by O’Reilly (1999) will be described. Following this, the concept of Job satisfaction will be introduced and discussed. The model of will be used for the purposed of this research.
2.2 Overview of Organizational Culture
The concept of Culture stems from an anthropological background which can simply be seen as a ‘social pattern’ existing in a particular setting over a long period of time. This anthropological metaphor has often been applied or employed in research and consultancy in organisations. The methodological principle in studying culture is to view organizations as mini-societies. This is because culture is more useful for the analysis of groups and organizations than total societies (e.g. countries) due to the homogeneous nature of smaller units and the possibility of reconstructing the entire history of an organization in a peculiar ways that is inapplicable to total societies. Also the anthropological view provides the best direction for studying what actually goes on in groups and organizations. (Alvesson 2002; Schein 1988).
As mentioned above, management consultants and academics who have carried out researches since the 1980’s have argued that culture has an influence or long-term impact on its employees and organization as a whole; just like stable factors like formal structure and authority. The term generally has been used to describe intangible aspects of an organization such as its beliefs, values, customs which is built by workers over time.
However, Babbie 2001 (as cited by Driskill and Brenton 2005) argued that Culture can been described as a construct, which simply means a theoretical creation that is based on observation, but cannot be observed directly or indirectly. Similar to other constructs like personality, motivation, attitude, climate, it only has value if it helps us to make sense of our world. These two views are amongst many descriptions of culture indicating that there is still some ambiguity in the usage of the term in organizational studies. Hence, the need for us to make some inquiry into the concept and demystify it. Before giving the definitions of organizational culture and its dimensions, it is expedient to understand the two conceptual views of culture. This would give a good understanding of the construct and give a good understanding for the reason to study culture under the quantitative and qualitative research methods. (Deal and Kennedy 1982)
2.3 Conceptual Views of Organizational Culture [SHORTEN TO COVER THE ASPECT U NEED]
According to Smircich (1983), culture can either be viewed as what an organization ‘has’ (culture being a critical variable) or as something an organization ‘is’ (that is root metaphor). The ‘has’ view holds that every organization possesses a culture, just as it has a strategy, structure, technology and employees. This perspective is called the functionalist perspective. The culture of each organization is a unique attribute that is handed to new employees because they do not participate in its formation. Culture thus serves as the lever for change that management of an organization can use. (Smirich 1983) According to Huczynski and Buchanan (2007), this view sees organizational culture as ‘constituting an objective reality of artefacts, values and meanings that academics can quantify and measure’. Thus it uses culture as a variable which is able to predict and cause certain outcomes. For example, culture which is variable x (e.g. norms, values) is able to influence the outcome of variable y (e.g. productivity). The challenge is how to we ascertain this culture in question? Culture is not an easily identifiable variable hence, how do we know what makes a culture is good or strong? The complexity of the culture variable may not give us a clear sense of what is to be strengthened and how culture influences productivity. Thus the solution is to explore particular aspects of culture for example leadership values, structures, norms that predict job satisfaction and helps to promote organizational survival and effectiveness (Collins 2001) Academics and consultants who support this view include Deal and Kennedy 1982; Peters and Waterman 1982; Ouchi 1981; Schein 1985; Pascale and Athos 1982)
On the other hand, the root metaphor view is the contrasting one which sees culture as something that the organization ‘is’. Huczynski and Buchanan (2007) explain that culture constitutes ‘a subjective reality of rites and rituals and meanings’. It is known as the symbolic, social constructionist or shared cognitions perspective’. It focuses on how organizational members create cultures and how the culture affects the members who belong to this group. Unlike the functionalist, this school of thought argues that culture cannot be quantifiable or measured, and that academics must study it holistically exactly the way anthropologists study tribes and societies. It is seen as a way of understanding social relations of an organization and rejects the notion that culture maybe manipulated or managed. Researchers include Ogbonna 1993; Harris and Ogbonna 1999; martin 185;1992; Ray 1986
For the purpose of this project both views will be examined in order to increase the validity and reliability of this research and to reduce any methodological errors that have occurred in past studies. This is also in line with the suggestions put forward by number of academics who advise that students should start with a qualitative orientation and to follow up with a quantitative orientation. (Selltiz et al 1965; Blalock and Blalock 1971 as cited by Hofstede 1990) However, it is important to note that some scepticism has been raised by Siehl and Martin 1990 as cited by Denison 1996) that this type of research runs the risk of reducing culture to ‘just another variable’
2.4 Definitions of Organizational Culture
There are various definitions of culture, all of which have differing takes on culture.
Alvesson (2002) used the term ‘organizational culture’ as an umbrella concept for the way of thinking which takes a serious interest in cultural and symbolic phenomena. He agrees with the definition of Frost et al (1985 as cited by Alvesson 2002) which he describes as the what importance people hold of symbolism – of rituals, myths, stories and legends- about the interpretation of events, ideas and experiences that are influenced and shaped by the groups within which they live. This description also includes values and assumptions about people’s social reality. This view is similar to that of Geertz (1973) and Kunda (1992) who describes culture to be a system of common symbols and meanings which provides the shared rules governing cognitive and affective aspects of membership in an organization, and the means whereby they are shaped and expressed.
Hofstede (1991 as cited by Denison and Fey, 2003), adds the differentiating element of culture with his explanation that ‘organizational culture denotes a series of beliefs, values and behaviours giving shape to an organization’s self-identity and differentiating it from other organizations’. Schein (1988) explains that Culture is a property of groups as it is thought of as a form of accumulated learning that is acquired by a group during its history and is consequently and continually passed on to new members of the group. He therefore defined culture as ‘A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems’. This theme exposes the fact that culture actually develops during interaction between employees and the organization. As an organization grows workers have to find solutions to constant problems (business processes e.g. Research & Development, maintenance, production processes) and have to work out method and systems for the proper functioning of the organization. These solutions reduce the initial uncertainty which initially created a traumatic experience. (Schein, 1985).This process is used as the appropriate manner for new employees of an organization to learn to behave; thereby culture can perpetuate organizational survival and growth.
For culture to gain strength and attain the degree of integration, there has to be a length of time which members must spend together and a deep level of structural stability which is by nature unconscious, intangible and invisible. IT IS FELT, EXPRESSED…
Also the intensity of the group’s learning experiences, the mechanisms by which the learning has taken place, i.e. positive reinforcement or avoidance conditioning, and the strength and clarity of the assumptions held by the founders and leaders of the group are paramount. (Schein 1988) As the definition describes, the learning process which covers perceptual, cognitive, and emotional response, occurs both with respect to external survival issues and internal integration issues.
All the definitions given above can be summarised into a central theme as being a system of beliefs, meanings and values which have a prevailing background fabric of prescriptions and proscriptions for shaping employee behaviour; this includes the accepted approaches to handling its technology and tasks. In short, Culture is to the organization what personality is to the individual. Green (1989)
2.6 Dimensions of Organizational Culture
Hofstede et al (1990), Denisnon & Mishra (1995) and O’Reilly (1991) identified many dimensions of Organizational culture. Denison and Mishra (1995) identified three dimensions of culture: adaptability of the organization, mission/goal orientation and employee involvement and participation. Hofstede (1991) gave six dimensions namely process oriented vs. results oriented, employee oriented vs. job oriented, parochial vs. professional, open system vs. closed system, loose control vs. tight control, and normative vs. pragmatic. It is important to note that he did not relate these dimensions to be either antecedents or consequences of organizational culture.
Using a Q-sort methods on 54 value statement obtained through an extensive literature review, O’Reilly (1991) identified seven dimensions that may define the essence of organizational culture when taken as a whole. These are innovation, outcome orientation, respect for people, team orientation, stability, aggressiveness and attention to detail. According to O’Reilly (1991), out of these dimensions, stability, innovation, focus on rewards, communication, performance orientation and support are conceptually related to relationship skills and they have the greatest impact on employee behaviour and attitudes. Therefore none of his dimensions will be used in this study. The dimensions which may be related to job satisfaction will be discussed and used for this study because they are constructs that are not socially constructed and are measurable. According to Robbins (1999), these seven dimensions are evident in every organization as they provide an image of how things are organized and activities performed in an organization. They also show the manner employees are expected to behave thus bringing forth comprehension to organizational culture.
2.6.1 Focus on Rewards
This refers to the degree to which management focuses more on outcomes or results than applied to obtain the results. Reward and recognition can be defined as ‘benefits as increased salary, bonuses, and promotion, which are conferred as public acknowledgement of superior performance with respect to company’s objectives’ (Juran and Gryna, 1993).
Kerr (1987) asserts that the reward system is a powerful means through which management influences an organization’s culture. It defines the relationship between the organization and employee by defining the exchange terms i.e. it specifies the contribution expected and the feedback they should expect as a result of their performance. According to Zhang 2000 rewards are much valued by employees therefore it provides incentives for more commitment towards the organization. Also a study carried out by O’Driscoll and Randall (1999) shows that rewards have a significant impact on the attitudes of employees towards their jobs. Thus we propose the hypothesis to test that focus on rewards affects employee job satisfaction.
2.6.2
2.7 Job Satisfaction
Extensive literature written on Job satisfaction shows that job is an important work place construct is of concern for effective measurement, Job satisfaction is defined as ‘a pleasurable or positive emotional state resulting from the appraisal of one’s job. (Locke 1976 as cited by Silverthorne 2005) This is similar to the definitions of Kerego & Mthupha (1997) who defined job satisfaction as the feeling of employees about their job and Hutcheson (1996) who referred to it as the difference between the outcomes, which a person actually receives and those that he expects to receive. This concept is of job satisfaction has been linked to positive workplace outcome, such as increased commitment. (Brown and Peterson 1994) The reason for this is that Job satisfaction is related to employees’general job characteristics and they would evaluate their satisfaction level according to their perception of what they define as important and meaningful to them. In the light of this, the evaluation of the different aspects of the job by employees will be of a subjective nature, and people will reflect different levels of satisfaction around the same job factors.
Robbins (1993) supported the five main job satisfaction dimensions as pay, nature of work, supervision, promotional prospects and relations with co-workers. Employees with higher levels of job satisfaction are less likely to seek out a different job or have intention to leave an organization. (Tuch and Martin 1991)
2.8 Organizational Culture and Job Satisfaction
Brooke et al (1988) claimed that job satisfaction stems from the gratification of his needs and wants from a job and this reflects on the individual’s general attitude towards his job. On the other hand, Roberts and Roseanne (1998) argue that employees have the tendency to a greater level of job satisfaction when their abilities, experiences and personal values are recognised, appreciated and utilized at the work place and when their overall expectations are met.
Although a number of definitions have already been given above, the definition according to Deshpande and Webster (1989) is used here. They refer to Organizational culture as “the pattern of shared values and beliefs that help individuals understand organizational functioning and thus provide them with norms for behaviour in the organization”. There have been arguments regarding the relevance of Organizational culture in the making of success in organizations. Alvesson (2005) observed that there is bias towards the ‘positive ‘functions of culture and how it affects harmony, communication, consensus in organizations. An obvious aspect are the symbols which are seen as functional (or dysfunctional) for the organization in terms of goal attainment, reducing tension in communication and so on. Peters and Waterman’s (1988) qualitative study argued that ‘strong’ cultures cause success, weak ones cause failure. They therefore advised business owners that their ability to control culture successfully would result to higher productivity and more employee involvement. The idea is that the more understanding an employee has of his employer’s culture, the more likely he would succeed in it. Havard Business School researchers Kotter and Heskett (1992) supported the importance of strong organizational culture and strong leadership . (Huczynski 2000)
The debate amongst researchers with respect to the relationship between organizational culture and job satisfaction has also been a long standing one. A number of researchers have found supporting evidence about the relationship between these two concepts (Schneider & Snyder,1975; Field & Abelson, 1982; Hellriegel & Slocum, 1974; Kerego & Mthupha, 1997). Studies have indicated that personal values are a major composition of an employee’s psychology of their work environment so this in turn determines the perception of organizational features. By forming a particular manner of thinking process, the culture embedded in the work place influences their interpretation of organizational reality and further formulates their attitude and behaviour towards work and their organization. (Verplanken 2004; Ott 1989; Cameron and Quinn, 1999) Past empirical reviews of earlier studies on organizational culture that affect employee’s job satisfaction are presented below.
Odom et al (1990) examined the impact of organizational culture on job satisfaction using the four types of culture as postulated by Cameron, Kim and Quinn (1999) He also used the elements of work-group cohesion, job satisfaction and organizational commitment Although they found out that bureaucratic culture was dominant in the case study, it was not the desired type of culture for a conducive environment for the creation of employee commitment, job satisfaction, and work-group cohesion.
Silverthorne (2004) in his studies concluded that the level of job satisfaction increases when the culture is bureaucratic and there is opportunity to be innovative. Nystrom (1993) who investigated the health industry discovered that employees in strong cultures tend to have higher commitment and higher job satisfaction. In spite of these studies found and reviewed, there is a gap in investigating the direct link between organizational culture and job satisfaction.
A number of studies also looked in the cultural dimensions in relation to employee job satisfaction. Regarding cultural dimensions, McKinnon et al. (2003) argued that these cultural dimensions including respect for people, innovation, stability and aggressiveness have a significant impact on job satisfaction. In addition Platonova et al. (2006) who investigated hospital employees discovered that employees are more likely to be satisfied when they perceive that the management recognises their job performance. Despite these studies, Detert et al. (2000) claimed that the direct relationship between organizational culture and job satisfaction needs further investigation. Also, there is no study that incorporates Organizational Culture Profile (OCP) in examining this link. This is despite the fact that these dimensions can be used as a measure. (Sarros et al., 2005) As a result of this, this study seeks to add to the existing literature in investigating this relationship.
Hypotheses
Chapter Three
Research Methodology
3.1 Introduction
The objective of this study is to investigate the existence and impact of the relationship between organizational culture and the dimensions of organizational culture and employee satisfaction namely communication, performance orientation, reward and so on.
As mentioned earlier, the quantitative method will be used in this research. This is to enable a proper assessment and measurement of the dimensions of culture under discussion. These quantitative assessments provide the opportunity to understand the systematic effects of organizational culture on employee behaviour and outcome.
3.2 Research Design
In order to investigate the relationship between employee job satisfaction and the organizational culture dimensions, the questionnaire was chosen as the appropriate instrument required for the collection of statistical data and for the empirical testing.
3.3 Primary Data
Questionnaires were self-administered to examine the relationship between organizational culture dimensions being the independent variables and job satisfaction being the dependent variable. Ethical approval was received by the authority of the university and the consent of Guaranty Trust Bank plc was also obtained before the questionnaires were administered. The questionnaires were prepared in an easily readable format and questions written in a straight-forward manner. Careful steps were also taken to ensure that sensitive questions were not featured which respondents would feel hesitant to answer or would arouse negative responses towards the researcher or the organisation being investigated. The confidentiality of the respondents was also ensured. (Kumar 1999)
3.4 Secondary Data
These data were obtained from the Guaranty Trust Bank UK website, newsletters, write-ups and other peer-reviewed academic journals made available by Queen Mary University of London and the British library.
3.5 Sample and Data Collection
A sample size of 30 employees of out of a total population of …was chosen by random sampling to represent the staff of Guaranty Trust Bank. An online questionnaire was sent to 70 employees of the bank. The e-mail directory obtained from the Human resource management department was useful for this purpose. A random sampling procedure was used in this study to select the individual respondents from the population. The average amount of time estimated for the completion of the questionnaire was twelve minutes. It was divided into five sections, each section was for a page. It was designed in such manner to encourage each respondent to fill each section systematically without being weighed down by the sight of a long list of questions.The respondents were given a week to fill the online questionnaire out of which thirty respondents responded. The eventual number of responses was obtained two weeks after the initial mail was sent. Reminders were sent two times to encourage more responses from our sample.
3.6 Variable Measurements
3.6.1 Independent Variables: Organizational Culture Dimensions
According to Cooke and Rousseau (1998), organizational culture is a multidimensional construct therefore it is essential for us to evaluate each dimension. As mentioned earlier, it has been argued that these dimensions are more likely to affect employee behaviour and attitudes and ultimately their job satisfaction. The independent variables which were the dimensions of organizational culture were evaluated using the Likert 5-point scale which ranged from 1 = strongly disagree to 5 = strongly agree. Sample items included ‘Problem solving is done collectively in the organization’ (Satisfaction and Communication), ‘There is equity in the distribution of rewards (Focus on Rewards) and I have a sense of ownership in the company (Job Satisfaction)
3.6.2 Dependent Variables: Job Satisfaction
This Section 2 which is for Job satisfaction is being operationalized by a five-item scale adopted from Wright and Cropanzana (1998) reflecting overall general satisfaction with the job. Each item measured a variable of the satisfaction constructs: degree of satisfaction with work, co-workers, supervision, total pay and promotional opportunities. Each respondent is expected to indicate their agreement on a five point scale ranging from scale 1 to 5. Scale 1= strongly disagree, 2= Disagree, 3= Neutral, 4= Agree and 5 = strongly agree. Sample items included ‘I make an impact in the lives of other people’ and ‘I am satisfied with my basic pay’. Lastly, section 3 is for demographic factors. This inquired basic details of each respondents, this include Gender, employment status, age range, length of time they have worked in the organization.
3.7 Questionnaire Design
The questionnaire consists of six sections namely sections A to F (see Appendix A) as mentioned above, a five point scale ranging from strongly disagree to strongly agree was used to measure the variables. Illustrations for each sections are as stated below:
Section A: indicates the significance of the relationship between innovation and employee job satisfaction
Section B: indicates the significance of the relationship between communication and stability and employee job satisfaction
ETC TYPE
Section F: collects information relating to the demographics of each respondent
3.8 Data Analysis Technique
The Statistical Package for the Social Sciences (SPSS, version 17.0) was used to input and analyze the data. All the items and variables were coded before sending the questionnaires to the employees. The responses and information collected from the survey were tested using statistical techniques such as frequency distribution and regression analysis.
3.9 Data Analysis
ADOPT ANAS
In addition to descriptive statistics, the analyses included factor analyses and reliability assessment of the scales used in the study, calculation of P-O fit scores, and hierarchical regression analyses to examine the relationships between the six independent variables and one dependent variable measured.
CHAPTER FOUR – FINDINGS
This chapter highlights and discusses the results and findings of the data analysis obtained from data collected from respondents. The main purpose of this study is to study the relationship between organizational culture dimensions as the independent variables and employee job satisfaction as the dependent variable. This study aims to achieve the research objectives as well as answer the research questions highlighted in chapter one. In addition, this study intends to verify the hypotheses made in chapter two.