CHAPTER – I

INTRODUCTION AND DESIGN OF THE STUDY

1.1 INTRODUCTION

The term organizational Culture has come into existence by bringing two
words together, that is organisation and culture. According to the dictionary literary
meaning of the word organizational means something pertaining to organisation or
which is of the organization. The term culture is defined in the Oxford Dictionary as
way of life, the customs and beliefs, art, way of life, and social organisation of a
particular country or group. Culture can be said to denote the way the people live their
lives which would include their behavior with one another in their daily life and on
varied occasions. It includes their perception and reactions to the conditions
prevailing from time to time and also involves prolonged and repeated practices
which become a part of their way of work, belief, norms, and practices of their
everyday life. The life that prevails within the organisation or firm would constitute
the culture of that particular organization.

On the other hand, the term organisation cannot be bounded into the
boundaries of a single definition which may be used universally but the same has been
defined differently by the different people/ authors but having the common meaning
with diversification of terminology such as in the professional language, the universal
meaning of the word ‘organization’ is a group of people working as team comprising
of members of management and employees working with each other within specific
premises or field and work with coordinated and combined efforts of several people
working in different sections or departments of single business entity for achieving
the target of meeting common objective. Another meaning in business terminology,
an ‘organization’ is systematically combined and coordinated act of more than one
person with mutual support for achieving the predetermined common goal in
business. Organisation can be said to be a collection of individuals working
individually and in groups, in a firm which has a structure, policies, rules and
regulations. The individuals may work with or without remuneration helping the firm
or organisation to meet the purpose, goals and targets for which it is set up.

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 The primary component of an organisation is its “human resources or people
at work”. Human resources from a national point of view have been defined as the
knowledge skills, creative abilities, talents and aptitudes possessed by the members of
the population; whereas from the view point of the individual enterprise, they
represent the total of the inherent abilities, acquired knowledge and skills as
exemplified in the talents and aptitudes of its employees. Jucious has defined these
resources as human factors referring to the whole and consisting of inter related,
interdependent and interacting, physiological, psychological, sociological and ethical
components. It is the human resource which is of paramount importance to the
success of any organization, because majority of the problems in organizational
settings are people related, social rather than physical, technical or economic. Failure
to organize the human resources of a country or of an organisation or a member of the
organisation can in fact cause immense loss to the nation, enterprise and to the
individuals who belong to such organized set up. Oliver Sheldon has rightly observed
that no industry could be rendered efficient as long as the basic fact that it is human is
over looked or as long as it remains un-recognized.

Efficiencies of bodies, firms, organisations or nations are not just a collection

or mass of machine or technical process alone, but these are primarily constituted by a
body of men and women. It was not a complex of matter but a complex of humanity.
It discharges its duty not by virtue of some personal force but the energy of human
force. Its body is not an intricate mass of mechanical devices but an organised
physical body of living, thinking, feeling and innovative persons working in an
organised manner. Every organisation functions through its people at work or the
human resources who are associated with it and work with a common objective of
accomplishing the organisational goal. In every organisation, the people at work
comprise of a large number of individuals of different sex, age, socio-religious group
and different educational and literary background. Up to a certain degree, these
human resources exhibit at their work place similar behavior characteristics, but at the
same times there is much individual dissimilarity between these individuals.

Each person has his different socio cultural background, personality traits, and
physical capacities, personal and family needs biological and psychological
differences as compared to their co-workers. Each human being is not only a product

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of his biological inheritance but also a product of his interaction with his environment
and the body of his experiences. Family relationships, religious influences, racial or
caste backgrounds, educational accomplishment, the application of technological
innovations and many other influences of environment impacts on and influences the
individual.

1.2 PROCESS OF AN ORGANISATION

The structure of an organisation is the forming of inter-personal relationship

into a well defined structure. There are eight steps that may be involved in this
process and they are: The organisation or the firm has to determine and decide its
organizational goals or objectives towards which the factors of production that
includes man, machine, materials, money are which in the case of an organisation
could be defined by its articles of association, vision, short, medium and long term
goals and objectives. Once the organisational goals or objectives are clearly defined,
the organisational leaders have to determinate the task requirement i.e. knowledge,
skills, and efforts required for accomplishment of goal along clear action plan for
achieving the organisational goals. Once the organisational objectives are finalized
and tasks to meet the objectives are identified, these tasks clubbed are to be assigned
to different jobs in order to understand the requirement of human resources required
for completion of the tasks. The jobs are then integrated into different departments or
work groups to take advantage of the specialization and efficiency. Once the jobs and
human resources are estimated the exercise has to start to undertake selection of
personnel to fill jobs. The selection of human resources results in various individuals
being assigned to work positions. Once the selection and assignment of work
positions are determined the need to grant authority to the persons to carry out the
duties of their jobs is to be detailed. Jobs and positions with commensurate authority
would entail work execution individuals and in groups which would also need
supervision and as such there has to be proper determination of superior-subordinate
relationship to facilitate the performance of the jobs and its subsequent evaluation for
meeting objectives and to help in maintenance, rewards and retention of the work
force.

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 An organisation is a mechanism with which a management directs,
coordinates, and controls the activities of its people or human resources. It is distinct
from administration which would broadly deal with managing the assets,
environment, ambience and cost adherence to budgets. Drawing from what Sheldon
has stated about an organisation as the formation of machine and management and
effective administration of the factors namely men, materials, money and methods in
an organisation.

1.3 STATEMENT OF THE PROBLEM

A lot of attention has been paid by the research in the area of Organisational
culture and its impact on Human resource management. Snell and Dean (1992)
examined the relationship between integrated manufacturing, defined as the use of
advanced manufacturing technology, Just in Time Inventory controls and Total
Quality Management and Human Resource Management from a capital perspective.
Vaishali Sable (2006) found a positive relationship between Human resource
management and Organisation performance in manufacturing and service sector
industries in Kazakhstan. A number of research works have been carried out in the
area of human resource practices and organisation performance in various countries.
However, in India, especially in Chennai, studies focusing on impact of
Organisational culture on Human resource management practices are lacking. There
appears to be very little empirical evidence to support the relationship between human
resource management practices in manufacturing industry and Organisation
performance. This study focuses mainly on three variables: Organisational culture,
Human resource management practices and Organisation performance in
manufacturing industry. This study also examines the impact of Organisational
culture on Human resource management practices and Human resource management
practices over Organisation performance in selected manufacturing industries in and
around Chennai.

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1.4 PURPOSE AND SCOPE OF THE STUDY

The main purpose of this study is to examine out the Organisational culture,
Human resource management practices and Organisation performance in
manufacturing units in and around Chennai. Large scale industries with more than
500 employees in the unit are considered for selecting the respondents for the study.
Organisational culture, Human resource management practices and Organisation
performance are the key focus of this survey. This survey study makes an attempt to
investigate the impact of Organisational culture on Human resource management
practices and Human resource management practices on Organisation performance in
selected manufacturing units in and around Chennai. This study concentrates on
various types of manufacturing units. All levels of employees in the selected
organization/unit are considered as the respondents for the survey. The conceptual
scope of this study includes Organisational culture which consists of Teamwork and
participative management, Conflict Resolution Adequacy, Employee Empowerment,
Transactional and Transformational Leadership, Structural and process Interventions,
Extrinsic Rewards, Support and Security, Parental Leadership, Concern for Welfare
and Team Building. It includes Human resource management dimensions like
Manpower planning, Staffing, Compensation and Benefits, Appraisal methods,
Training and Development, Career growth and Development, Employee relations and
Productivity, Motivation, Quality, Skills, Growth, reorganisation and effectiveness are
the areas covered in Organisation performance.

1.5 RESEARCH QUESTIONS

This study raises the following questions to be answered:

 What are the factors that influence the Organizational culture?

 How Organizational culture impacts Human resource management practices?

 How Organizational culture and Human resource management practices

impacts Organisation performance?

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1.6 OBJECTIVES OF THE STUDY

 To assess the factors influencing the Organisational culture in the

Manufacturing industry

 To study the perception of employees on Human resource management in

Manufacturing industry

 To ascertain the impact of Organisational culture on Human resource

management.

 To study the relationship between Organisational culture and Organisation

performance.

 To study the relationship between the Human resource management and

Organisation performance.

 To assess the influence of demographic variables on Human resource

management and Organisation performance.

1.7 HYPOTHESES OF THE STUDY

The hypotheses are developed for enriching the objectives stated above

I. There is no significant impact of Organisational culture on Human Resource

Management practices

II. There is no significant influence of personal variables on Human resource

management practices

III. There is no significant influence of work connected variables on Human

resource management practices

IV. There is no significant relationship between Organisational culture and

Organisation performance

V. There is no significant impact of Organisational culture on Organisation

performance

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 VI. There are no significant relationship between Human resource management
practices and Organisation Performance

VII. There is no significant impact of Human resource management on

Organisation performance

VIII. There is no significant influence of personal variables on Organisation

performance

IX. There is no significant influence of work connected variables on Organisation

performance

1.8 METHODOLOGY

1.8.1 Research Design

The most important step after defining the research problem is preparing the
design of the research project, which is popularly known as the ‘Research design’. A
research design is the conceptual structure within which research is conducted. Thus,
research design provides an outline of what the researcher is going to do in terms of
framing the hypothesis, its operational implications and the final data analysis. It is a
detailed outline of how an investigation will take place and typically includes how
data is to be collected, what instruments will be employed, how the instruments will
be used and the intended means for analyzing data collected.

This quantitative research study adopts the survey design to achieve the
research objectives. It is a formal, objective systematic process in which numerical
data is used to obtain information about the world. This research method is used to
describe variables, examine relationships among variables and determine cause and
effect interactions between variables. This survey research also adopts a descriptive
research design. A descriptive study is one in which information is collected without
changing the environment. It is used to obtain information concerning the current
status of the phenomenon to describe “what exists” with respect to variables or
conditions in a situation and it involves a range from the survey which describes the
status quo, the correlation study which investigates the relationship between variables,
to developmental studies which seek to determine changes over time.

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1.8.2 Data Collection Method

The research used both Primary and Secondary data to present the research
report.

Primary data: Primary data has been collected through questionnaire circulated to
the employees in selected manufacturing units in and around Chennai.

Secondary Data: The Secondary Data was obtained from available sources like
Books, Newspapers, Magazines, Journals, Reports, Internet etc. from both national
and international publications.

1.8.3 Unit of analysis

The respondents focused on the study are known as the Unit of analysis, here
in this study the respondents (employees) working in Manufacturing industry in and
around Chennai are considered as the unit of analysis.

1.8.4 Area of study

Organisational culture is the value set of the firm which helps in forming the
organisational structure and it relates the employees within the organisation. At this
juncture organisational culture is one of the key aspects of the Manufacturing industry
along its relationship with Human resource management practices. Undoubtedly
Organisational culture and Human resource management practices has impact on the
Organisation performance. Hence Organisational culture enhanced Human resource
management practices are selected as the area of study.

1.8.5 Research instrument

Questionnaire is the research instrument designed with four sections. First

section contains Organisational culture scales, Human resource management and
Organisation performance scales are in second and third section. Personal and work
connected information are gathers in the last section. Organisational culture scales,
Human resource management and Organisation performance scales are of 5-point
likert scale type. The personal and work connected variables are of categorical type.
Only three open ended variables like name, department and space for suggestion are
present in the last section. Table 1.1 presents the structure of the questionnaire.

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 Table 1.1

Questionnaire structure

S.no Section and description Number of Variable

variables Type
1. I-Organizational Culture 46 Scaled
2. II-Human resource management 41 Scaled
practices

3. III –Organisation Performance 8 Scaled

4. IV-Personal and Work Connected 11 Categorical&
information open ended

1.8.6 Pilot study

A pilot study is a small-scale rehearsal for a larger main study. Pilot study
provides valuable insight for the researcher. The pilot study was carried out among 50
respondents in Chennai before actual collection of data. It constitutes more than 10%
of the total sample size. The survey instrument was pretested to check for any
inconsistencies. The data collected through pilot study was statically analysed to
establish the reliability and validity of the instrument. The reliability of the pilot study
was 0.802 and it is well above the desired limit of 0.7. This process has directed the
researcher to pursue the main study further.

1.8.7 Calculation of sampling size

There are a few methods to calculate the sample size in a research study.
Cochrane Statistical Method is one of the most widely used formulas for sample size
and the calculation is given below

N = (z2*p*q) / S.E2

Where,

Z – represent the z value for the corresponding confidence interval

P – represent probability of occurrence of an event
q – represent probability of non-occurrence of the event (Q = 100 – P)
S.E. is the desired margin of error (acceptable sample error)

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 In this research, 95% confidence interval is preferred and the corresponding z
value for that confidence interval is 1.96. When the probability of occurrence of an
event is unknown it is assumed to be 0.5. This is a conservative assumption where we
assume that the chances of the event occurring is 50%. And the margin of error is to
be limited to +/- 5 percent of the true value, and then the sample size is calculated as,

N = (1.96 * 1.96 *0.5 * 0.5) / (0.05 * 0.05)

= 384.16

Hence the desired sample size has to be at least 385 for this research.

1.8.8 Sampling Frame

A total of 580 questionnaires were distributed in person and in e-mail to the

respondents and collected from them after reasonable period of time and around 554
filled in questionnaires were received. Out of 554 filled in questionnaire, 16 were
found to be incomplete. Hence, the total sample size of the research study is 538
respondents employed in manufacturing industry, which is more than the minimum
required sample size of 385 derived using formula.

1.8.9 Sampling design

Purposive sampling has been adopted by the researcher to select the samples.
This sampling design is defined as a non- probability sample where the researcher
selects population members who are good prospects for accurate information. The
individuals who are working in the Manufacturing industry have been selected for the
study. Totally twenty Manufacturing organisation were selected and the questionnaire
was circulated in person and through e-mail according to the respondent’s
convenience.

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1.8.10 Reliability of the study

The reliability of the study is evaluated by using the help of Chronbach’s

alpha value. The reliability of the variables taken in the study is displayed in the
Table-1.2.

Table 1.2
Reliability of the study
Number Chronbach’s
S.N Factors
of Items alpha
I Organisational culture
1. Team work and Participative
6 0.82
Management
2. Conflict Resolution Adequacy 5 0.83
3. Employee Empowerment 6 0.78
4. Transactional and Transformational
5 0.81
Leadership
5. Structural and process Interventions 5 0.79
6. Extrinsic Rewards 4 0.82
7. Support and Security 4 0.75
8. Parental Leadership 3 0.85
9. Concern for Welfare 4 0.81
10. Team Building 4 0.84
II Human Resource Management
1. Manpower Planning 5 0.85
2. Staffing 6 0.81
3. Compensation and Benefits 10 0.77
4. Appraisal Methods 6 0.81
5. Training and Development 4 0.76
6. Career Growth and Development 5 0.84
7. Employee Relations 5 0.83
III Organisation performance 8 0.82
Overall reliability of the study 0.83

From the above table it is seen that the measures of reliability, that is
Cronbach alpha and Construct reliability are more than the acceptable value of 0.7.
Reliabilities range from 0.76 to 0.85, which is above the acceptable value.

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1.8.11 Validity of the study

Face validity and Content validity were obtained in the study. The
investigator established the face validity whereas the experts in the same field reveal
the content validity. Face validity is nothing but the measure that the investigator
already has in mind as what he thought he was measuring. The content validity is
examining the extent to which a assessing tool provides the adequate exposure of the
topic.

1.8.12 Statistical tools and package used

Data analysis is done by IBM SPSS Statistics v23 and Structural equation modeling is
performed by using AMOS v23.

 Percentage analysis is used to express the respondents personal as well as the

work connected information.

 Exploratory factor analysis is employed to identify the factors of

Organisational Culture and Human resource management practices.

 One way ANOVA is used to find the influence of personal and work
connected variables over Human resource management practices and
Organisation performance.

 Bi-variate Correlation analysis is used to identify the impact of

Organisational culture on Human resource management practices and the
relationship between Organisational culture, Human resource management
practices and Organisation performance.

 Cluster analysis is employed to identity the different types of culture existing

in Manufacturing industry based on the responses given by the employees.

 Multiple regression analysis is used to find the impact of Organisational

Culture and Human resource management practices on Organisation
performance.

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  Confirmatory factor analysis is used to confirm the factor structures of
Organisational Culture and Human resource management practices and
Organisation performance.

 Structural Equation Modeling is used to develop a proposed model for

Organisation performance in manufacturing industry.

1.9 LIMITATIONS OF THE STUDY

 The study is restricted to 538 respondents only.

 The study was restricted to the areas in and around Chennai. The complete
analysis was done with statistical tools which has its own limitation.

 This study is conducted only in selected Manufacturing unit in and around

Chennai, so the results cannot be generalized.

1.10 CHAPTER SCHEME

Chapter I: Introduction and Design of the study which covers the introduction,
Process of an Organisation, Purpose and Scope of the study, Statement of the
problem, Research questions, Objectives of the study, methodology, limitations of the
study and Chapter scheme.

Chapter II: Review of Literature covers the earlier studies on the relevant study
area and important development in the field of study and related studies.

Chapter III: Conceptual frame work of Organisational culture, HRM practices and
Organisation performance.

Chapter IV: Analysis and Discussion, this chapter provides the Analysis, results and
discussion about the study.

Chapter V: Findings, Suggestions and Conclusion, this chapter summarizes the

findings of the study. It also presents the suggestions, conclusion and scope for further
research.

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1.11 SUMMARY

This chapter presented the Introduction, Purpose and Scope of the study,
Statement of the problem, Research questions, Objectives of the study, methodology,
limitations of the study and Chapter scheme. The next chapter presents the review of
literature regarding the previous studies related to this topic.

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