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TLO
20,4/5 Organizational learning culture
and leader-member exchange
quality
322
The way to enhance organizational
Received 9 December 2012 commitment and reduce turnover intentions
Revised 25 March 2013
15 May 2013 Talat Islam and Saif ur Rehman Khan
Accepted 11 June 2013
Faculty of Management, Universiti Teknologi Malaysia, Johor Bahru, Malaysia
Ungku Norulkamar Ungku Bt. Ahmad
Department of Business Administration, Faculty of Management,
Universiti Teknologi Malaysia, Johor Bahru, Malaysia, and
Ishfaq Ahmed
University of the Punjab, Lahore, Pakistan
Abstract
Purpose – In this global era every organization aims to retain its key workers through salary,
incentives, rewards and recognition. Organizational learning culture and leaders’ support are amongst
those aspects that have not been focused on extensively by organizations to retain their key
employees. The present study aims to investigate the relationship between organizational learning
culture, leader-member exchange quality, organizational commitment and turnover intention.
Design/methodology/approach – A total of 415 employees working in Malaysian banks were
approached on the basis of convenience sampling. Respondents were asked about leader-member
exchange, organizational learning culture, organizational commitment and their intention to leave the
organization through a questionnaire-based survey.
Findings – Leader-member exchange, organizational learning culture and organizational
commitment are found to correlate with each other. Furthermore, structural equation modeling
confirms that organizational commitment performs the role of mediator between organizational
learning culture and turnover intention.
Research limitations/implications – HR managers should know the importance of leaders’
support and learning environment, as these affect employees’ level of commitment, which ultimately
reduces their intentions to leave the organization. Limitations are also discussed.
Originality/value – The current study elucidates the importance of learning culture for both
employers and employees. It produces several unique findings and managerial takeaways for building
a better organizational environment for employees to learn and stay with the organization.
Keywords Leadership, Employee turnover, Learning
Paper type Research paper
This framework was derived from earlier theories on antecedents and consequences of
organizational commitment (Figure 1).
Figure 1.
Conceptual framework
Thus, learning organizations are those in which continuous learning, empowerment, Organizational
embedded system and dialogue sharing are essential for collective means and values
(Confessore and Kops, 1998).
learning culture
Organizational commitment
Commitment is the psychological association between individual and organization. An
assortment of conceptualizations regarding organizational commitment can be found
in the literature (e.g. Mowday et al., 1982; Meyer and Allen, 1991, 1997). Organizational
commitment is defined by Mowday et al.(1982) as “the relative strength of an
individual’s identification with and involvement in a particular organization” (p. 27).
Hall et al. (1970) view it as the process of integrating and assimilating the
organization’s goals and the individual’s goals.
Meyer and Allen (1991) conceptualized the construct into three dimensions:
(1) affective commitment;
(2) continuance commitment; and
(3) normative commitment.
TLO Mowday et al.(1982) also characterized the construct into three components, defined as:
20,4/5 (1) strong belief in the organization’s values and goals;
(2) willingness to put effort into the organization; and
(3) willingness to be with the organization.
The primary focus of the study is on affective organizational commitment, which can
326 be further defined as an “individual’s emotional attachment with the working
organization. Emotionally attached individuals don’t think to leave their organization
because they want to continue with it” (Meyer and Allen, 1991, p. 67).
Allen and Meyer’s (1996) study on impact of organizational commitment on the
organizational effectiveness and performance of employees has given new dimension
to researchers in the same field (Mowday, 1998). Understanding employees’
work-related behavior has become more essential than ever because it is recognized
as less thematic and relative to daily realities than satisfaction in this knowledge-based
economy (Mowday et al., 1982). In a meta-analysis, Mathieu and Zajac (1990) concluded
that along with certain demographical characteristics, job satisfaction, motivation and
organizational characteristics positively influence organizational commitment.
Furthermore, organizational commitment negatively influences employee turnover
intentions.
Turnover intentions
For the most part, a turnover plan has been shown to be the strongest antecedent to
turnover. Those who pioneered improvements in the behavioral intentions literature
(e.g. Fishbein and Ajzen, 1975) advanced a contemplated activity model that
recognized the best single indicator to be a measure of the prior planning of a conduct.
There is a large collection of study affirming the linkage between turnover
propositions and the real behavior of leaving. Highlighting turnover expectation as a
core component in the demonstration of worker turnover behavior, researchers have
resolved that behavioral expectations are the single best indicator of turnover (Lee and
Bruvold, 2003; Bluedorn, 1982).
Methods
This section explains the procedure through which data was collected, as well as
information about the measures and analytical strategy.
Measures
Almost all the scales regarding the construct used in this study were developed and
used in the USA and Europe. The same scale was prepared for use in Malaysia.
Questionnaires were measured on a five-point Likert scale ranging from 1 (strongly
disagree) to 5 (strongly agree).
LMX quality. To assess the mutual respect between supervisor and subordinates,
Scandura and Graen (1984) developed a seven-item scale regarding LMX quality. In the
same study, Scandura and Graen (1984) collected data twice and reported reliability
coefficient a values of 0.86 and 0.84. Using the same scale with Korean participants, Joo
(2010) reported a reliability coefficient a of 0.87. The reliability in the present study
was 0.86. A sample item was “My supervisor understands my needs and job related
problems very well”.
Organizational learning culture. Watkins and Marsick (1997) developed a scale for
organizational learning culture, and later Yang et al. (2004) shortened the scale to seven
items. This study used the same seven-item scale including an item for each dimension
with the highest factor loading (i.e. continuous learning, team learning, dialogue and
inquiry, empowerment, system connection, embedded system, and strategic
leadership) as this study was related to the employees’ perceptions regarding
learning culture. This shortened version of the scale by Yang et al. (2004) was used to
study organizational learning culture as a single construct and coefficient a values for
the seven dimensions ranged from 0.68 to 0.83. The reliability of the seven items in this
study was 0.84. A sample statement is “In my bank, whenever people state their views,
they also ask what others think”.
Organizational commitment. Based on three dimensions of organizational Organizational
commitment (i.e. affective commitment, continuance commitment and normative learning culture
commitment) an eight-item scale regarding affective commitment developed by Meyer
et al. (1993) was used in the study. The median reliability of the scale reported by
Meyer et al. (1993) in many studies was 0.85. In the present study the internal reliability
was 0.87. A sample item is: “I would be very happy to spend the rest of my career with
this bank.” 329
Turnover intentions. To measure the turnover intention of employees, a three-item
scale was used as developed by Mobley et al. (1978). In the factor analysis, items were
distinct from each other. In the present study the reliability was 0.86. An sample item
is: “As soon as I can find a better job, I will leave the bank”.
Results
This section contains confirmatory factor analysis (CFA), correlation, reliability,
descriptive statistics and structure model assessment to measure the results.
The values of test adaptability were found to be: NNFI ¼ 0:94, NFI ¼ 0:91,
CFI ¼ 0:95, RMSEA ¼ 0:07, x 2 ¼ 2; 538:97 and x 2 =df ¼ 2:71. All the figures
regarding model fitness were better than the stated values.
Table II shows the correlations among all the variables along with their mean
reliability and standard deviation. Organizational learning culture was found to be
positively associated with LMX quality and organizational commitment (i.e. r ¼ 0:58
and 0.55, respectively) but negatively associated with turnover intentions (r ¼ 2 0:37).
Leader-member exchange quality was also found to be positively associated with
organizational commitment (r ¼ 0:62) and negatively associated with turnover
intentions (r ¼ 2 0:41). Finally, a high negative correlation was found between
organizational commitment and turnover intentions (r ¼ 2 0:59). All measures
demonstrated adequate levels of reliability (0.84-0.87).
Variables Mean SD 1 2 3 4
Discussion
The study developed and tested a model regarding the joint impact of leader-member
exchange and organizational learning culture on employee turnover intentions through
Figure 2.
Hypothesized model
Figure 3.
Alternate model
TLO organizational commitment. The results of the study have revealed a positive and
20,4/5 significant association between organizational learning culture, organizational
commitment and leader-member exchange quality among employees working in the
Malaysian banking sector. On the other hand, organizational learning culture,
leader-member exchange and organizational commitment were found to be negatively
associated with employee turnover intentions. Thus it might be concluded that when
332 employees of an organization are exposed to a culture where they can learn on a
continual basis and are supported by their supervisors they exhibit more commitment
towards their organization, and this commitment towards the organization helps them
to reduce their intentions to leave. According to the recent findings of Islam et al.
(2012a), a learning culture diverts the employee’s intentions to leave the organization
and has a negative influence on these intentions. Other researchers have also derived
the same results (e.g. Lee-Kelly et al., 2007; Guidice et al., 2009). In addition,
organizational commitment was found to perform the role of mediator between the
relationship of organizational learning culture and employee turnover intentions with
42 percent of the variance, while organizational commitment was not found to mediate
the relationship between LMX and turnover.
Only a few studies have been conducted by researchers to examine the relationship
between organizational learning culture and organizational commitment (e.g. Islam
et al., 2012b; Joo, 2010). The present study suggests that employees’ perception of
organizational support and learning culture enabled them to be more committed to
their organizations. The social exchange theory of Blau (1964) also supports the notion
that when employees perceive something positive about their organization, they
reciprocate with commitment.
Secondly, several studies in the past have confirmed the relationship between
supervisor’s or leader’s support and organizational commitment (Allen and Meyer,
1990; Mottaz, 1988; Eisenberger et al., 1986; Vancouver et al., 1994). Thus the results of
the present study are in agreement with earlier studies and it can be said that relational
context enhances the employee’s commitment towards their organization.
The literature on HRD has confirmed that organizational commitment lessens
employees’ intentions to leave the organization (e.g. Bluedorn, 1982; Koch and Steers,
1978; Lee and Bruvold, 2003; Hollenbeck and Williams, 1986; Sturman et al., 2006;
Meyer and Allen, 1997). The results of the present study also revealed that there is an
inverse relationship between organizational commitment and turnover intentions. It
could be said that employees’ emotional attachment to the organization is essential to
reduce their intentions to leave the job.
Implications
The present study has theoretical and practical implications. One of the theoretical
implications is that the organizational learning culture is a valid construct not only in
the manufacturing sector but also in the service sector (i.e. banking). On the other hand,
this study emphasized how cultural (organizational learning culture), relational
(leader-member exchange) and behavioral (organizational commitment) aspects will
help organizations and HR managers to understand employees’ intention to leave the
organization, which has become a chronic situation in Malaysia due to the arrival of
multinational banks.
Turnover intentions have become the main problem for HR managers since Organizational
organizations are becoming more active in seeking to hire their rivals’ best employees. learning culture
It is thought that being an employer of choice is essential to retain and gain key and
talented employees (Sutherland et al., 2002). This has affected overall organizational
performance because most talented and well-skilled individuals are shifting their jobs
towards those organizations where they are given the opportunity to learn.
The study will benefit HR managers in retaining key talented individuals by 333
enhancing exchange relations and providing them with an environment with
continuous learning, as the organizational learning culture, leader-member exchange
and organizational commitment reiterate the significant impact of turnover intention
(Jo and Joo, 2011; Agarwal et al., 2012). The results of the study are not confined to
Malaysian HR managers, but are also applicable for European HR managers, as
Lee-Kelly et al. (2007) noted the same problem in the UK and suggested the
development of a learning culture to retain key employees.
Like previous studies, this study found that to enhance employees’ commitment
towards their organization, group-level and organizational-level efforts are required.
This is important for HR managers, as they want to enhance employee commitment.
Thus, organizations should provide a research culture (learning culture) along with
leader support.
By improving and developing new practices, managers could enhance employee
commitment at the group and organizational levels. HR managers can be supported by
HRD professionals through relevant practices. Thus, one factor (leader or supervisor’s
support) is not enough to develop commitment towards an organization, and other
factors (like a learning culture) are also required. In short, these practices should not be
implemented alone. Quite simply, enhancing commitment requires the incorporation of
cultural management, organizational strategy, leadership development and job redesign.
Conclusion
The present study aimed to explore how leader-member exchange and organizational
334 learning culture influence an employee’s commitment towards their organization and
eventually the turnover intentions among employees working in the banking sector.
The findings of the study revealed that both LMX and learning culture positively
influence employee commitment, but have a negative influence on turnover intentions.
It has become essential for organizations to retain their key and talented employees. To
do this, organizations are trying to become an employer of choice. To attain this, an
organizational learning culture, innovativeness, and supervisor’s support enable them
to be among the list of employers of choice.
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Corresponding author
Talat Islam can be contacted at: talatislam@yahoo.com