Management Decision

Impact of perceived corporate culture on organizational commitment

Antonio Ortega-Parra Miguel ngel Sastre-Castillo

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Antonio Ortega-Parra Miguel ngel Sastre-Castillo, (2013),"Impact of perceived corporate culture on organizational
commitment", Management Decision, Vol. 51 Iss 5 pp. 1071 - 1083
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Impact of perceived corporate

culture on organizational
commitment
Antonio Ortega-Parra

Perceived
corporate culture

1071

Centro de Estudios Garrigues, Madrid, Spain, and

ngel Sastre-Castillo
Miguel A
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Universidad Complutense de Madrid, Madrid, Spain

Abstract
Purpose Previous research demonstrates the link between corporate culture and organizational
commitment. Given the potential differences in espoused corporate culture and its perception by
employees, the purpose of this paper is to find an answer to the following question: how does
employees perception of company values affect their own commitment to that organization?
Design/methodology/approach The authors conducted a survey to 216 business leaders, using
three types of questionnaires to collect data: values, HR practices and commitment. They designed
ad hoc the questionnaires on values and HR practices, and the last one follows Allen and Meyers
model. Hypotheses were tested by using correlations, regression analysis, structural equation
modeling and comparisons of averages.
Findings The results confirm the authors hypothesis: a better adjustment between the perceived
and the stated values has a positive relation with commitment. Particularly, people-oriented values
and ethical behavior are the ones that best predict affective commitment. The study verifies, also, that
appropriate human resources practices greatly affect the perception of values.
Practical implications The greater importance of affective dimension in organizational
commitment, reinforced by ethical and people-oriented values, makes clear the need for companies to
pay real attention to this set of values beyond the simple formulation in the corporate culture. Therefore,
companies should ensure there is congruence between human resources practices and values statements.
Originality/value There are many previous research studies analyzing the link between corporate
culture and commitment. This paper focuses on the existing gap between the espoused and the
perceived values, finding that a better adjustment has a positive relation with organizational
commitment.
Keywords Human resource management, Values, Workers, Commitment, Organizational culture,
Individual perception
Paper type Research paper

1. Introduction
In recent decades, there has been much research on the concept of corporate culture,
and especially its relationship with organizational performance. At the same time,
public companies have been making their own culture, and concepts of vision, mission
and values a regular part of their literature. This diffusion of values, stemming from
the academic world, has led to the popularization of concepts such as values-based
management (Blanchard and OConnor, 1996; Anderson, 1997; Dolan and Richley,
2006; Nielsen and Lassen, 2012a,b), and may also respond to different corporate
motives, such as an imaging effect addressed to interest groups rather than
considering it a key element in implementing strategy and management change
(Kabanoff, 1993; Kabanoff and Holt, 1996).

Management Decision
Vol. 51 No. 5, 2013
pp. 1071-1083
q Emerald Group Publishing Limited
0025-1747
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In this way, corporate cultures show a suspicious uniformity since they bring
together particular widely-held values that follow social trends (which in itself is not
negative) but could be different from the deeply held beliefs which are the source of
corporate culture (Schein, 1985).
Previous works demonstrate the link between corporate culture and organizational
commitment. Equally, the relationship between human resource practices and culture
attracts the attention of scholars. Following this, and given the potential differences in
espoused corporate culture and its perception by employees, the analysis of values and
its effect on organizational commitment will be made on these perceptions and not on
formulations.
For these reasons, the purpose of this paper is to find an answer to the following
overriding question: How does employees perception of company values affect their
own commitment to that organization? In order to provide a better analysis, we divide
the question into the following issues:
.
What values are most commonly reported by the major Spanish companies?
.
What are the values profiles of Spanish companies, as perceived by their managers?
.
What is the influence, or strength, of human resource practices in companies
values?
.
What impact do corporate values have on employees commitment to the
company?
The following sets out the theoretical framework underlying our model and guidance
for testing hypotheses and formulating of conclusions.
2. Theoretical framework
2.1 The formulation of corporate culture
There are a great number of definitions of corporate culture. From a selection
(Schwartz and Davis, 1981; Hofstede, 1984; Schein, 1985; Arogyaswamy and Byles,
1987; Barney, 1986; OReilly and Chatman, 1986), we can infer that corporate culture
refers to a set of values, beliefs and behavior patterns that form the basic identity of an
organization, and have their origin in the thinking of the founders, evolving over time
by the accumulation of experiences, new social trends and the changing values of
managers up to the present day.
However the critical issue in terms of culture lies, in our view, not on a more or less
adequate definition but rather on the interpretation of its operability. At this point, we
find two apparently opposed theories:
(1) The purist approach, which assumes that culture is an emergent process rooted in
a set of deeply held values and beliefs (Smircich, 1983; Krefting and Frost, 1985).
(2) The pragmatic approach, which sees culture as a tool to encourage commitment
and achieve the goals of an organization (Schwartz and Davis, 1981; Deal and
Kennedy, 1982; Lee et al., 2011; De Cleyn and Braet, 2012).
In the light of the different positions referred to above, we consider this work under the
pragmatic approach. Here we come to the key point of the formulation of corporate
culture: what should be the espoused values and, above all, how did we arrive at this
choice and not another?

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In addition to the beliefs of the founders and directors, the company values are also
be influenced by the legal and social trends of each period, as well as the cultural
traditions of society (Tajeddini and Mueller, 2012).
Thus we have a set of formulated values, which can be defined as those which
reflect what top management really believe that their organizations should be, or prefer
they were, or what major stakeholders think they should be (Kabanoff and Daly, 2002,
p. 90). As we see, the definition ranges from an aspirational approach to the clearly
manipulative, and another simply voluntary.
Corporate culture has an important role in building employer brand, which is
reinforced by employees who join a company because they are attracted by it, helping
to increase productivity. It is therefore no coincidence that companies try to
accommodate their statements of values to current trends. Moving from words to
action is a different issue. If the expectations of employees who joined the company
with the lure of an attractive culture are not met, retaining them will be difficult.
2.2 Human resources practices and their effect on the perception of culture
After Barney (1991) contribution, there is general acceptance that the intellectual
capital of company teams is a valuable asset that can generate competitive advantage.
The objective of human resource management is to develop the skills, knowledge
and motivation of employees, so that they behave in ways that are instrumental for the
implementation of a particular strategy (Bowen and Ostroff, 2004). In a more
conceptual approach, human resources management is the combination of different
practices to improve organizational effectiveness, and achieve better results.There are
sufficient grounds to assert that high performance practices affect positively the
results of companies (Arthur, 1994; Huselid, 1995; Becker and Gerhart, 1996; Bergh
et al., 2011).
Conceptually, values influence always on organizational practices (Schein, 1985)
and, therefore, they should be consistent. Several authors (Hamel and Prahalad, 1994;
Powell, 1995; Chan et al., 2004) have defended the necessary relation between human
resources practices and corporate culture. This issue has also been studied from a
double approach, that is, from the understanding that practices and their effects on the
behaviour of members of an organization modulate corporate culture; or, practices
which could be designed as tools to implement corporate culture, while reinforcing it at
the same time. We may speak therefore of culture as antecedent or mediator of human
resources practices (Wei et al., 2008).
2.3 Organizational commitment
Exchange theory by Blau (1967) serves usually as the theoretical framework within
this context. According to this theory, a certain norm of reciprocity means that
someone who feels well treated by a person or an organization, experiences a sense of
reciprocal obligation. Undoubtedly, this attitude has a positive influence on the results
of an organization (Porter et al., 1974; OReilly and Caldwell, 1980; Angle and Perry,
1981; Farrell and Rusbult, 1981; OReilly and Chatman, 1986; Caykoylu and Egri, 2007;
Sommer and Haug, 2011).
Assuming this has an influence on results, there has been much research and
definitions of the concept. According to Porter et al. (1974), commitment is
characterized by three factors, and this opinion is widely accepted:

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(1) a strong belief and acceptance of the values and goals of the organization;
(2) a willingness to undertake substantial efforts on behalf of the organization; and
(3) a strong desire to remain in the organization.
Allen and Meyer (1990) develop a model that identifies three components of
commitment with their roots based in these two typologies, and with the purpose of
designing a framework that integrates them:
(1) Affective defined as the employees emotional attachment, which identifies
and engages with the organization.
(2) Continuance which is based on the costs associated with leaving the company
and estimated by the employee.
(3) Normative which is dominated by a sense of duty.
Since we can assume a relationship between culture and commitment, it becomes clear
that we need to handle it in a two-pronged approach.
First, companies must define a set of values considered appropriated for their
corporate strategy (Lahiry, 1994; Williams et al., 2007), as not all cultural pattern lead
to the same level, either in scale or dimension, of commitment.
Second, they have to apply this values on daily basis, and must be perceived in this
way by the employees. In this sense, human resources practices acquire greater
relevance (Welch and Welch, 2006).
2.4 Model of analysis: the impact of human resources values and practices on
organizational commitment
2.4.1 Selected values in the research. In order to determine values as stated by Spanish
companies, we have undertaken a study of corporate culture in the 35 companies that
make up the Ibex-35 Spanish Stock Market index. While this is a reduced number to
draw firm conclusions, it is significant in terms of the quality of the companies that
constitute it since these companies are in fact at the forefront of management
organizations and corporate culture.
In this study, we use the information displayed on the corporate websites of each, a
source used in previous research (Williams, 2008), in which companies make clear
statements of vision, mission and values.
There is a predominance of seven values in the analysis of the information that
amount to 67.30 percent of the total values declared by the companies in the sample:
(1) customer oriented;
(2) results oriented;
(3) innovation;
(4) respect for people;
(5) transparency;
(6) ethics; and
(7) social responsibility.
2.4.2 Corporate culture and commitment. We mentioned earlier that a company
formulates its values because they are either derived from deep beliefs, or, among others,

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are corresponding to a strategy of brand creation as an employer. If the latter, both

aspiring to work in the company, as those already employed, are disappointed in their
expectations if they perceive the values being applied in practice are different from those
stated, and the disappointment could result in a lesser commitment to the company.
As stated above, we have analyzed the seven principal values reported by
companies in the Ibex-35, considering these values as those that best reflect the
corporate culture in Spanish companies.
Accepting this as our base and in accordance with previous considerations, the
degree of perception, by Spanish managers, of the application of these values, should
be reflected in organizational commitment. Based on this, we have formulated the
following hypothesis:
H1. The high perception of Spanish companies application of the seven analyzed
values has a positive effect on organizational commitment.
In addition, following previous research that shows that different sets of values predict
different components of commitment (Finegan, 2000; Ghosh, 2010), we have grouped
the aforementioned seven values into three principal areas to establish their differential
impact on the type of commitment:
(1) Task-oriented values: customer oriented, results oriented, and innovation.
(2) People-oriented values: respect for people, internal dimension of transparency.
(3) Values related to ethical behaviour: ethics, social responsibility and
transparency in the external dimension.
Under this classification, we also analyze the specific contribution of each of these
groups to the level of organizational commitment.
2.4.3 Human resources practices and corporate culture. Organizational culture may
operate as an antecedent to human resources management, or as a mediator in relation
to performance. Assumptions and organizational commitment shape human resources
practices, which in turn, reinforce cultural norms and routines that shape individual
and company performance (Bowen and Ostroff, 2004). Regarding the type of practices
that most influence the reinforcement of values, it would be appropriate to highlight
the following:
.
Rewarding Schein (1985) states that leaders could effectively communicate
their priorities, values and beliefs by associating them consistently to a system of
rewards and punishments related to behaviour. We clarify that the concept of
reward collects both monetary compensation and promotion.
.
Performance evaluation Murphy and McKenzie Davey (2002) take into account
primary and secondary mechanisms that reinforce commitment. They cite,
among the former, personal performance reviews (evaluations).
.
Training following Klein and Weaver (2000) training and mentoring programs
contribute especially to learning the history and culture of the company.
H2. Human resources practices directly affect the perception of organizational
commitment by employees.

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We also have studied the relative importance of the four dimensions that make up
human resources, namely promotion, retribution, training and evaluation, and the
perception of these and corporate values by employees.
The above led us to develop the following research model shown below in Figure 1.

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3. Research methodology
3.1 Participants
We conducted a survey to 216 business leaders recruited from two Executive Masters
at two business schools based in Madrid: IESE Business School and Centro de Estudios
Garrigues. The range of age in the study was from 25 to 63 (average: 35.98, SD: 6.90). Of
these, 47.9 percent were female.

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3.2 Measures
We have used three types of questionnaires: values, HR practices and commitment. We
have designed ad hoc for this study the questionnaires on Values and HR practices, and
the last one follows Allen and Meyer (1990) questionnaire, of recognized validity.
The questionnaire also includes seven direct questions on socio-demographic
characteristics (age and sex), on the company, and on the relation of the respondent
with the company. Indirect questions to measure the variables which are the aim or
this study, are Likert type format responses that go from 1 to 6 points, where 1 means
Strongly disagree and 6 Strongly agree.
The final questionnaire includes 90 questions that measure the following features:
.
Values (32 items) We started by standardizing terms since it was evident that
some companies refer to identical values with different names.
.
HR practices (34 items) We have selected a panel of twenty experts from
human resources, with responsibilities in large national and multinational
companies based in Spain, from different industrial sectors, who advised us on
the drafting of the questionnaire following Delphi method (Dalkey, 1969;
Schmidt, 1997; Okoli and Pawlowski, 2004).

Figure 1.
Research model

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Commitment (24) Our sample was adapted from the Allen and Meyer (1990)
questionnaire, which has been extensively validated in previous studies and is
widely acknowledged.

3.3 Procedure
Upon completion of the surveys, we began the statistical treatment of the information
obtained. A database with SPSS program (Statistical Package for Social Science) was
set up for that purpose.
From this database we proceeded to study the psychometric qualities of the
subscales detailed in the questionnaire in two phases: being one, the analysis of the
items, and the other, the analysis of the final test for each indirect variable.
After studying the psychometric validity of the instruments used, we turn next to
comparing the formulated hypothesis in our research, by calculating correlations,
regression analysis, structural equation modelling and comparisons of averages.
4. Results
First, we applied to each item a corrected standardization index (HC). We analyzed each
subtest validation considering only the responses to the appropriate items, by use of
Cronbachs alpha coefficients and the unifactorial structure of each of the final scales. The
number of factors was prefixed with reference to the theoretical framework. The method
of extraction of the factors was the unweighted least squares. As indicators of adjustment
the measure of sampling adequacy model was used (KMO: Kaiser-Meyer-Olkin), as well
as Bartletts test of sphericity. Given the size of the sample, factorial weights greater than
or equal to 0.35 (Hair et al., 2005) were assumed as significant.
The Cronbachs alpha coefficient for each subscale (dimension in each scale) has
high values. The different subsets of items co-vary much with each other because
presumably they measure the same dimension. These values of internal consistency
are higher for the total of scales, suggesting a trend within companies towards a
simultaneous presence of human resources values/practices and levels of commitment.
For this reason, the three variables must be assumed as large scale.
The adjustment rates were also appropriate for each factorial-dimensional model.
Each selected item has appropriate weights in each correspondent scale, but also in a
unifactorial model for each studied variable. It reaffirms the notion of
unidimensionality of the scales, especially in the scales for measuring values and
human resources practices. Score on the affective dimension seems to have the greatest
impact on the total score of the scale of commitment.
In this regard it is important to mention that the KMO adequacy ratios are good (0.8
0.9) or very good (0.9 1), except for the dimensions of normative and continuance
commitment with values assumed to be acceptable (0.7 0.8). The Bartlett sphericity
test resulted in values less significant than 0.0005.
Next, we have obtained Pearson correlations between independent variables and
those with the dependent variable (we use factorial scores for each exploratory model).
There are high and significant correlations between all the scales of perceived
corporate values and human resources practices and between values and practices in
the three dimensions of organizational commitment. Note that the dimension with more
weight in the total score on the scales of commitment is affective commitment; and it is
also that related to human resources practices and perceived values.

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Figure 2.
Confirmatory model

Given the theoretical hypothesis and the results achieved, we performed a step by
step regression analysis to explore which of the independent variables predicted the
dependent variables directly; and a Confirmatory Factorial Analysis by using AMOS
software 16.0. The Least Square Weighted calculated the estimated method. We have
evaluated the adequacy of the model by an SRMR index. In addition, we have
determined the magnitude of residues from the matrix of correlations reproduced
following the model.
The regression analysis showed that the perceived values genuinely predicted the
organizational commitment (the model explained 44.3 percent or variance, p , 0:0005).
The inclusion in the model of human resources practices only increased by a 2.5 the
percentage of explained variance (p 0:029), assuming no significant change
a 0.01. As for the three dimensions of commitment, affective has a similar pattern
(the model including values only explained the 46.5 percent of variance, p , 0.0005; the
inclusion of the practices increased 2.1 percent of the explained variance p 0:040),
while the variability in the normative and continuance commitment are poorly
explained by their respective models (12.7 percent and 6.7 percent respectively).
The results of the confirmatory analysis shows that the proposed model provided a
good fit (SRMR 0.035). In addition, there are not significant residues (a 0:05) for the
reproduced matrix of correlations. The estimated regression weights of the model appear
in Figure 2. In general, all the latter data are high and none is lower than 0.40. Thus, we
were able to prove that human resources practices strongly affect perceived values, and
these in turn predict the commitment level that individuals have with their organization.
Finally, we carried out a comparison of means, the calculation of correlations and
the analysis of regression in order to explore the established relations between the
different variables included in our study more profoundly.
There are not significant differences in perceived values (one-way ANOVA for
independent samples, post of comparisons, Bonferroni, a 0:05), human resources
practices and commitment in terms of the company size; however, the trend is to have
high scores in these three variables as commensurate with a higher position in the
company. The longer an employee stays in a company does not affect the perception of

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values or the assessment of human resources practices, but the level of commitment:
those who average less than five years in a company feel on average less committed
than those there for more than ten years. With regard to the department, those
belonging to top management value more positively the application of values and
human resources practices and are more committed than others.
Regarding gender, male tend to have higher scores on all three variables than
female (t test for independent samples; p , 0.001). Age has a significant positive
correlation with values (r 0:287), HR practices, and commitment (r 0:326).
Human resources practices that greatly affect the perception of organizational values
are promotion and training (in this order), accounting for 76.7 percent of the variance
(step by step regression analysis, p , 0:0005). As for commitment, people-oriented
values and ethical behaviour (in this order) are the values that best predict affective
commitment, explaining 48.1 percent of the variance. Continuance commitment is
predicted by task-oriented values (8.2 percent of the explained variance), and normative
commitment by people-oriented values (15 percent of the explained variance).
5. Discussion and conclusions
The analysis clearly confirms several assumptions that were the aim of this study.
The first, which corresponds to our H1, is that corporate culture is a suitable tool to
enhance organizational commitment, and that a better adjustment between the
perceived and the stated values has a positive relation with commitment. All of this
seems to support both the pragmatic approach of corporate culture defended by several
authors (Schwartz and Davis, 1981; Deal and Kennedy, 1982) as the concept of culture
as an antecedent of commitment (Wiener, 1982; OReilly, 1989; Chatman and Cha, 2003;
Welch and Welch, 2006).
Affective dimension stands out for the considerable weight of its scale compared
with the rest, and shows a strong link to the values related to people and ethical
behaviour. This is consistent to both the exchange theory by Blau (1967), that is
generally applicable to any commitment dimension, as to the idea that companies have
to adapt to new social trends.
The greater link of continuance commitment with task-oriented values is also
consistent with Ghosh (2010), who links this kind of commitment to the so called
bottom-line values, which are related to economic concepts and efficiency in
management of the organization. Since this type of commitment is a mere calculation of
the costs leaving a company, results oriented values, quality and innovation (good
management indicators) tend to reinforce arguments in favour of permanence in a
employee who is seeking security in his employment and satisfactory financial
retribution.
The study verifies H2, after proving that appropriate human resources practices
greatly affect the perception of values. Hence, they are a tool to implement culture,
while strengthening it at the same time (Hamel and Prahalad, 1994; Powell, 1995; Chan
et al., 2004; Wei et al., 2008).
The most effective practices to reinforce the perception of corporate culture are
those related to reward systems (retribution and promotion), and training, as shown by
previous research (Schein, 1985; Klein and Weaver, 2000).
Where the perception of values indicating greater commitment in terms of
sociodemographic variables or relationship to a company is concerned, it is worth

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noting that top managers in the company and those belonging to general management,
know and value better both human resources practices and corporate culture. This
may be consistent with the basic definition of culture that emphasizes the importance
of shared beliefs, as well as the role of founders and current managers of the
organization (Schein, 1985; Barney, 1986; OReilly and Chatman, 1986).
Greater commitment resulting from tenure in a company, as observed in previous
studies (Meyer and Allen, 1984; Natarajan and Nagar, 2011; Noordin et al., 2011) who
argue that this could be due to both an association to a life cycle in the job comprising
three stages with different degrees of affection (higher in childhood-maturity, and
lower in adolescence), as to an increase of benefits of being in the company. Is is also
true that employees with less commitment might have left the company before.
In any case, it should be noted that the lowest commitment rate observed in the
younger generation of employees might be an object of further research focused on the
improvement of the adjustment of personal-organizational values when recruiting and
selecting staff, as well as adequate immediate socialization processes when joining the
company.
We can offer some final recommendations to business practicioners, based on our
results.
The consideration of culture as an antecedent of commitment, and its validity as a
tool to modulate behaviour patterns, needs an adjustment between the espoused and
perceived values.
Given the greater importance of the affective dimension in organizational
commitment, reinforced by ethical values and respect to people, all of which are also
closely tied to social trends, makes clear the need for companies to pay real attention to
this set of values beyond the simple formulation in the corporate culture.
It is clear that human resources practices, at least for the four used in this study,
reinforce the perception of values. Therefore, companies should ensure there is
congruence between human resources practices and values statement, if they want
employees perceive the corporate culture in the right way.
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Corresponding author
Antonio Ortega-Parra can be contacted at: antonioortega@bankia.com
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