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Organisat ional Cult ure and Employee Turnover in Saudi Arabian Banks
Abdullah Aldhuwaihi, Himanshu Shee
Organisat ional cult ure, job sat isfact ion and higher educat ion service qualit y: T he case of Technologic…
Panagiot is Trivellas
Organizat ional cult ure: t he case of Turkish const ruct ion indust ry
Heyecan Girit li
An executive summary for
managers and executive Organizational culture and job
readers can be found at the
end of this article satisfaction
Daulatram B. Lund
Associate Professor of Marketing, Managerial Sciences Department,
College of Business Administration, University of Nevada, Reno,
Nevada, USA
Introduction
Organizational culture The 1980s witnessed a surge in popularity to examine the concept of
organizational culture as managers became increasingly aware of the ways
that an organizational culture can affect employees and organizations. This
interest led management scholars and practitioners to undertake research
investigations resulting in numerous articles, including a complete issue of
Administrative Science Quarterly (September 1983), Organization Dynamics
(Autumn 1983) and Journal of Management Studies (May 1986) being
devoted to corporate or organizational culture issues. In marketing literature,
despite the importance given to the study of culture in the 1960s towards
understanding consumer behavior, particularly in market segmentation,
communication, diffusion of innovations, and cross-cultural comparisons
(Engel et al., 1968; Zaltman, 1965), relatively few studies have investigated
organizational culture and its impact on marketing management issues
(Deshpande and Webster, 1989). These studies include those that have
recognized the importance of corporate culture in modeling selling
effectiveness (Weitz et al., 1986), implementation in marketing strategy
(Walker and Ruekert, 1987), customer orientation within organizations
(Bonoma, 1984; Deshpande et al., 1993), and strategic market planning
(Deshpande and Parasuraman, 1986; Mahajan et al., 1987).
The pervasiveness of an organization's culture requires that management
recognize the underlying dimensions of their corporate culture and its
impact on employee-related variables such as satisfaction, commitment,
cohesion, strategy implementation, performance, among others. However,
relatively few empirical studies have examined these relationships. For
example, Sheridan (1992) examined the organizational culture-employee
retention link among college graduates in accounting firms, while
Vandenberghe (1999) investigated that link among nurses in hospitals.
Other studies, such as Buono et al. (1985), examined the effects of
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 18 NO. 3 2003, pp. 219-236, # MCB UP LIMITED, 0885-8624, DOI 10-1108/0885862031047313 219
organizational culture on its employees in the merger process in banking
firms; Koberg and Chusmir (1987) examined the relationship between
organizational cultures and managerial credibility, motivation, and other
variables; while Deshpande et al. (1993) examined the relationship of
organizational culture, customer orientation, and innovativeness to business
performance in Japanese firms. Each of these studies employed different
corporate cultural measurement instrumentation. While much of the early
conceptual framework for corporate cultures has been developed and
investigated in management literature, Deshpande et al.'s (1993) study
adapted a comprehensive framework of corporate culture typology and
showed its applicability in the marketing context. Utilizing Deshpande et
al.'s (1993) typology of corporate cultures, the present empirical
investigation focuses on examining the relationship between organizational
culture types and job satisfaction of marketing professionals in a cross-
section of firms in the USA.
Literature review
Organizational culture
``Culture'' The notion of ``culture'' is often associated with exotic, distant peoples and
places, with myths, rites, foreign languages and practices. Researchers have
observed that within our own society, organization members similarly
engage in rituals, pass along corporate myths and stories, and use arcane
jargon, and that these informal practices may foster or hinder management's
goal for the organization (Baker, 1980; Deal and Kennedy, 1982; Peters and
Waterman, 1982). In the organizational behavior literature, a number of
definitions for organizational culture have been proposed. For example,
Kilmann et al. (1985, p. 5) defined corporate culture as ``the shared
philosophies, ideologies, values, assumptions, beliefs, expectations, attitudes
and norms'' that knit an organization together. Deal (1986, p. 301) defined it
as ``the human invention that creates solidarity and meaning and inspires
commitment and productivity.'' Uttal (1983) defined it as a ``system of
shared values (what is important) and beliefs (how things work) that interact
with a company's people, organizational structures, and control systems to
produce behavioral norms.'' While no strong consensus has formed on a
definition, in the present study corporate culture is defined as ``the pattern of
shared values and beliefs that help individuals understand organizational
functioning and thus provide them with norms for behavior in the
organization'' (Deshpande and Webster, 1989, p. 4).
Organizational literature Organizational literature also acknowledges the difficulty of measuring and
identifying a typology of organizational cultures, mainly, because the shared
assumptions and understandings lie beneath the conscious level for
individuals. Early researchers identified them through stories, special
language, artifacts, and norms that emerge from individual and
organizational behavior (Adler and Jelinek, 1986; Bate, 1984; Deal and
Kennedy, 1982; Ouchi and Wilkins, 1985; Trice and Beyer, 1984, among
others). Cameron and Freeman (1991) identified a useful framework of
organizational culture types by integrating the works of several researchers
(Campbell, 1977; Jung, 1923; Mason and Mitroff, 1973; Mitroff and
Kilmann, 1975; Quinn, 1988; Quinn and McGrath, 1985; Quinn and
Rohrbaugh, 1983; Smircich, 1983; Wilkins and Ouchi, 1983, among others).
This framework presented in Figure 1 is based on four sets of attributes:
(1) the dominant characteristics or values;
(2) the dominant style of leadership;
Job satisfaction
Organizational research Job satisfaction has been widely studied over the last four decades of
organizational research (Currivan, 1999). Job satisfaction has been defined
and measured both as a global construct and as a concept with multiple
dimensions or facets (Locke, 1969, 1970; Price, 1997; Scarpello and
Campbell, 1983). In general, overall job satisfaction has been defined as ``a
function of the perceived relationship between what one wants from one's
job and what one perceives it as offering'' (Locke, 1969). A large number of
studies have investigated the relationship between job satisfaction and
various organizational variables. For example, several researchers have
examined the relationship between job satisfaction and organizational
commitment (Agho et al., 1993; Brooke et al., 1988; Cramer, 1996;
Currivan, 1999; Glisson and Durick, 1988; Lance, 1991; Lok and Crawford,
1999; Mowday et al., 1979; Vandenberg and Lance, 1992). Other researchers
have examined the link between satisfaction and performance (Lawler and
Porter, 1969; Locke, 1970; Tvorik and McGivern, 1997), cohesion (Odom
et al., 1990), age and gender (Morgan et al., 1995), gender, organizational
level, and management practices (Burke, 1995, 1996), and organizational
climate (Argyris, 1973; Downey et al., 1975; Friedlander and Margulies,
1969; Pervin, 1968).
Literature review The preceding literature review notwithstanding, relatively fewer studies
have investigated the link between job satisfaction and organizational
cultures. For example, Odom et al. (1990) investigated the relationships
between organizational culture and three elements of employee behavior,
namely, commitment, work-group cohesion, and job satisfaction. They
concluded that the bureaucratic culture, which dominated their sample of
transportation organizations, was not the culture most conducive to the
creation of employee commitment, job satisfaction, and work-group
cohesion. In related studies, Nystrom (1993) investigating health care
organizations, found that employees in strong cultures tend to express greater
organizational commitment as well as higher job satisfaction. Despite these
few studies, a void appears to exist in literature examining the direct link
between organizational culture types and job satisfaction. In addition, none
of the studies have examined the relationship within the framework of
corporate cultures presented in Figure 1.
Research hypothesis
Given the need for management to recognize the pervasive impact of
organizational culture on employee-related variables in today's competitive
environment, the present study focuses on the relationship of corporate
culture types with employee job satisfaction within the typology of cultures
Method
Research instrument
Questionnaire A self-administered structured questionnaire elicited responses from
marketing professionals on several issues, including organizational culture
and job satisfaction. The operationalization of the culture construct was
adapted from Cameron and Freeman (1991) and similar to that utilized by
Deshpande et al. (1993). They constructed brief scenarios to describe the
dominant characteristics of each of the four culture types, based on the
framework presented in Figure 1. In the research instrument (see Appendix)
all four culture types were presented as alternatives in each question. To give
respondents the opportunity to indicate both the type of culture(s) and the
strength of the culture, respondents were instructed to distribute 100 points
among the four scenarios in the questions, depending upon how similar
respondents thought each scenario was to their own organization. As shown
in the Appendix, each respondent was presented with four questions, each
assessing the organization's general cultural characteristics, leadership style,
institutional bonding and strategic emphases.
Satisfaction measures Job satisfaction measures were adapted from Wright and Cropanzano (1998).
A five-item scale operationalized job satisfaction. Each item measured a
dimension of the satisfaction construct: degree of satisfaction with the work,
co-workers, supervision, total pay, and promotional opportunities. Each of
the items was measured on a seven-point scale ranging from ``strongly
disagree'' to ``strongly agree'' (see Appendix). Respondents were classified
into low and high satisfaction groups based on a median split of their
summed scores, with ties at the median assigned to the high satisfaction
group.
Results
The results of undertaking an analysis similar to that reported by Deshpande
et al. (1993) who used the same framework of culture typology, are
presented as follows. Table II presents a summary of respondents' mean
scores for the four culture types they perceived in their respective
organizations and their job satisfaction. Each respondent's four culture
scores were computed by adding all four values of the A items (see
Appendix) for clans, of the B items for adhocracy, of the C items for
hierarchy, and of the D items for market. As previously mentioned, job
satisfaction score represents summated ratings of the five-item job
satisfaction scale related to work, co-workers, supervision, pay, and
promotional opportunities. Scale reliability for each culture type and job
satisfaction was measured by Cronbach alpha coefficient. As can be seen in
Table I.
Meansa (SD)
No. of Cronbach Low High
Scale items alpha All satisfaction satisfaction
Culture
Clan 4 0.60 97.9b (55.8) 85.9 (53.3) 108.4 (55.8)
Adhocracy 4 0.80 93.6b (63.7) 82.6 (63.2) 103.1 (62.8)
Hierarchy 4 0.63 89.9b (57.2) 102.8 (64.0) 78.8 (48.1)
Market 4 0.63 117.8b (59.0) 127.5 (61.0) 109.4 (56.1)
Job satisfaction 5 0.75 23.8b (5.8) 18.7 (3.5) 28.2 (3.0)
nc 355 165 190
Notes: aNumbers are summations of the four individual components for each culture
type. The four culture scores were computed by adding all four values of the A items
for clan, of the B items for adhocracy, of the C items for hierarchy, and of the D
items for market (see Appendix). bHighly significant univariate differences between
high and low job satisfaction scores. cOf the 360 firms in the sample, five firms with
one or more missing variables were not included in the analysis
Table II, the reliability coefficients range from 0.62 to 0.81, thus adequately
meeting the standards for such research (Nunnally, 1967).
Mean scores The overall mean scores indicate that respondents perceived their
organizational culture type to be predominantly market, a fact which is
consistent given the sample comprised of marketing professionals.
Respondents identified clan culture type as the next most similar in their
organizations, followed by adhocracy, and last by hierarchy culture type. It is
emphasized that in all cases the self-reported cultures of individual firms
contain elements of all the four culture types. This is consistent with past
studies that have reported multiple subcultures in a firm to be the rule and
unitary culture the exception (Deshpande et al., 1993; Van Maanen and
Barley, 1984). Table II also reports significant differences in employee job
satisfaction across the four corporate culture types. Respondents expressed
lower levels of job satisfaction in organizations in which market or hierarchy
Canonical Wilks'
Eigenvalue Correlation Lambda Chi Square df Significance
0.085 0.280 0.921 28.7 4 0.000
Pooled within-group correlations of
function and independent variable Univariate F-test p-value
Culture
Clan 0.705 0.000
Adhocracy 0.556 0.002
Hierarchy ±0.734 0.000
Market ±0.532 0.004
Groups Centroid Percent correctly classified
High job satisfaction 0.271 62.4
Low job satisfaction ±0.313
Table III. Summary of discriminant analysis between high and low job
satisfaction
Discussion
Corporate culture types This study set out to explore the influence of corporate culture types on
employee job satisfaction. A typology of organizational cultures consisting
of four forms ± clan, adhocracy, hierarchy, and market was utilized. Job
satisfaction levels varied significantly across corporate cultural typology and
invoked an alignment of culture types on the vertical axis continuum that
ranges from organic processes to mechanistic processes (Figure 1). Both,
clan culture (characterized by its emphasis on mentoring, loyalty, and
tradition) and adhocracy culture (characterized by its emphasis on
innovation, entrepreneurship, and flexibility) elicited significantly higher
levels of employee job satisfaction than market culture (characterized by its
emphasis on competition, goal achievement, and market superiority) and
hierarchy culture (characterized by its emphasis on bureaucratic order, rules
and regulation, and predictability).
It is, however, emphasized that while overall job satisfaction in clan and
adhocracy organizational culture types is higher than overall job satisfaction
in market and hierarchy cultures, it does not imply that employee
performance will be correspondingly higher in adhocracy and clan cultures
than in market and hierarchy cultures. In fact, Deshpande et al. (1993)
Job satisfaction
Dominant culture Number of firms Mean SD
Clan 26 25.23 5.2
Adhocracy 33 25.67 5.6
Hierarchy 30 19.70 5.9
Market 84 22.59 5.2
Analysis of variance of job satisfaction
Sum of squares df Mean square F p
Between cultures 696.25 3 232.083 8.04 0.000
Within cultures 4,876.20 169 28.853
Total 5,572.45 172
Duncan's homogeneous subsets
Subset for alpha = 0.05
Dominant culture N 1 2 3
Hierarchy 30 19.70
Market 84 22.69
Clan 26 25.23
Adhocracy 33 25.67
Managerial implications
Given the exploratory nature of the study results, suggestions for practice are
necessarily speculative and brief. First, being cognizant of the organization's
dominant culture(s) can help management assess inherent strengths and
limitations of their strategies. Furthermore, since in most organizations,
attributes of several cultures are present, some of which have opposing
values and emphasis (i.e. attributes of a market and a clan may exist in the
same organization although these are opposite in emphasis), managers'
sensitivity to the existence of these paradoxes can be heightened towards
more effective strategies.
Mergers and acquisitions Second, mergers and acquisitions have flourished in the past decade.
However, success in such activities is likely to depend upon not only the
resulting economic synergy but also on the cultural compatibility of the
merging entities. As discussed in the previous paragraph concerning cultural
paradoxes within a single corporation, the same arguments apply in
instituting changes of perhaps higher magnitudes during merger and
acquisition activities. Clashes in corporate cultures of merging entities could
easily overshadow synergistic benefits resulting in undesirable
consequences.
The final suggestion concerns the relationship between corporate culture and
employee job satisfaction. To maintain competitive advantage, companies
need to nurture a relationship with workers. The womb-to-tomb mentality of
staying with one employer appears to have disintegrated and combined with
downsizing and layoff from mergers and acquisitions, management may be
hard pressed in retaining and developing a loyal work force. Literature
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Job satisfaction
The following statements describe your feelings toward certain job-related issues regarding the
organization you currently work for. For each, please indicate the extent to which you agree/
disagree with the statement by circling the appropriate number on the scale.
Strongly disagree Strongly agree
1 2 3 4 5 6 7
(1) All in all, I am satisfied with the work of my job.
(2) All in all, I am satisfied with my co-workers.
(3) All in all, I am satisfied with the supervision.
(4) All in all, I am satisfied with my pay (total wages and tips).
(5) All in all, I am satisfied with the promotional opportunities.
(The job satisfaction score was computed by adding responses to all five items. The scale was
adapted from Wright and Cropanzano (1998).)
&