A Study on Organizational Culture and Its Relationship with Job Satisfaction in Manufacturing and Information Technology Sectors

Dr. Koteswara Rao, Dr. P.T.Srinivasan and S.George

Dr.P.K.Kotewara Rao is a senior executive in Southern Railway Dr.P.T.Srinivasan, professor, Department of Management Studies, University of Madras S.George, doctoral research scholar in Management, university of Madras

ABSTRACT Organizational culture has a significant effect on how employees view their organizational responsibilities and their job satisfaction. With increasing globalization, a greater knowledge of organizational culture and its effect in non-western cultures can be beneficial for practicing leaders and decision makers. This study explores the association between organizational cultural values and employee satisfaction in manufacturing and Information Technology companies in India. Surveys were distributed to 4 manufacturing companies and 4 IT companies. The sample size was 461. Significant findings are: (1) Organizational culture differs in terms of the mean scores of its dimensions between manufacturing and the sectors. (2) Employee job satisfaction differes between manufacturing and IT sectors, and the level of job satisfaction is high among employees in the IT sector compared to their counterparts in the manufacturing sector. (3) Dimensions of job

organizational culture explain significantly the variance in satisfaction of employees in both manufacturing and IT sectors. INTRODUCTION

Organizational culture has been perceived to have greater impact on a range of organizationally and individually desired outcomes (Jill L. Mckinnon,et all, 2003). Fortune conducted a survey on the most admired companies and it has indicated that the CEO respondents believed that corporate culture was their most important lever in enhancing key

capability (Anonymous, 1998). Research scholars have considered from earlier period onwards that organizational culture affects such outcomes as productivity, performance, commitment, self confidence, and ethical behavior (Ritchie 2000). More recent writers have reaffirmed that

organizational culture does affect significantly an organization employees behaviour and motivation and its financial performance (Holmes and Marsden, 1996). Yet, there is very little empirical research is done on the outcomes of organizational culture(Detert et al.,2000 and Schein,1996). Following are the few research papers which have studied organizational culture and outcomes: Sheridan (1992) found an association between

organizational cultural values and the rates at which new recruits voluntarily terminated their employment, and OReilly et al.(1991) identified an association between the fit of organizational culture with employee preferences for culture (the person-organization fit) and organizational commitment, job satisfaction, and turnover. These studies were conducted in the U.S. and, hence, within the particular national cultural context of that country. National culture has the potentiality to influence the relation between the organizational culture and individual outcomes (Chow 2000, Agarwal et al.1999 and Lee and Mathur, 1998). Some researchers like Agarwal et al. (1999) point out the necessity of broadening the study of organizational phenomena beyond the boundaries of AngloAmerican cultures.

This study (Koteswara Rao, 2002) attempts to broaden the boundary. The study examines empirically the association between organizational cultural values and employee satisfaction in a large manufacturing and information technology companies in India. DEVELOPMENT OF HYPOTHESES Organizational Culture Organizational culture has been defined in many ways in the literature, for example organizational culture is defined as a system of shared values (that define what is important) and norms (appropriate attitudes and behaviors) by OReilly and Chatmans (1996). In most definitions various combinations of assumptions, values, norms, beliefs and ways of thinking and acting are used to explain the organizational culture (Jill L. Mckinnon,et all, 2003) Antal, Dierkes and Hahner (1997) have observed the connection between corporate culture and the way firms perceive their environment in their research. To improve corporate performance, transformation of organizational culture to fit into the prevailing business environment is viewed as the utmost necessity (Peters and Waterman, 1982). Culture of a nation is directly related with its economy and particular kinds of culture more conducive for the economic success while others can be counter productive (Cartwright, 1999). For the

effective functioning of an organization, its culture has to be in tune with national culture (Redding, 1992). Unlike many other countries the Indian

subcontinent has the tremendous range of environmental regimes and supports a large range of human population and consist of a fascinating mosaic of varied castes and cultural traits (Joshi et all, 1993). Hierarchical relationship dominates in India (Sinha and Sinha, 1994). Indians find it easier to work in superior-subordinate roles rather than with equals ( Kotheri, 1970). A highly controlling superior is more successful in bringing out positive effect on subordinate performance and satisfaction in the organizations operating in India(Kakar, 1971). Job-satisfaction In organizational behavioral research, job satisfaction is the most frequently studied variable (Appelbaum, Bailey, Berg, and Kalleberg 2000; Spector 1997). Job satisfaction emphasizes the specific task environment of the employee (Mowday, Porter, & Steers, 1982). It is also the individuals affective attitude or orientations for work ( Blum & Naylor, 1968, Muchinsky, 1990). Many factors affect employees job-satisfaction. Porter and Lawler (1968) divide the factors into the intrinsic satisfactory factors related to work itself and the extrinsic satisfactory factors not directly related to work itself. Seasohore and Taber (1975) consider that personal attributes and environment and play major role in influencing the job

satisfaction.

Glisson

Durick(1988)

indicate

that

worker

himself/herself, work and organizational characteristics are the factors affecting job satisfaction.

Some organizational researchers argue that employing highperformance work systems improves organizational productivity and

increases job satisfaction (Appelbaum et al. 2000; Berg 1985). Other researchers focus more squarely on the promise of bilateral control as a mechanism for workers to have meaningful input into decision-making processes even as they directly relate to improving job satisfaction (Hodson 1999a). Organizational Culture and Job Satisfaction Jimfrase and his collegues propose that the culture of the workplace is the foundation from which workers develop an assessment of appropriate organizational behavior (Jimfrase & Co,2002). And their qualitative analysis highlights that the perceived gap between

organizational norms and their actual implementations creates a deeply felt discontent for many workers from a number of social groupings. Harris and Mossholder (1996) point out that organizational culture stands as the center from which all other factors of human resource management derive. It is believed that culture influences individuals attitudes concerning outcomes, such as commitment, motivation, morale, and satisfaction. Wallach (1983) has suggested that individual job performance and favorable job outcomes, including job satisfaction, propensity to remain with the organization, and job involvement, depend upon the match between an individuals characteristics and the organizations culture.

A study conducted by Jill L. Mckinnon and co in Taiwan(2003) indicates that there is a quite compelling support for the importance of organizational culture in affecting job-satisfaction. Odom, Boxx, and Dunn (1990), found that the bureaucratic culture neither improves nor distracts an employees commitment and

satisfaction. They also found that employee attitudes and behaviors are enhanced by an organizational culture that exhibits innovative

characteristics. Additionally, they found that employees who work in a supportive environment express more job-satisfaction. Therefore we formulated the following hypotheses based on the above mentioned literature: H1. Organizational culture (OC) as a composite index namely

Organizational culture composite Index (OCCI) as well as its dimensions will differ between manufacturing and Information Technology (IT) sectors. H2. Employee job satisfactions will differ between manufacturing and IT sectors. H3: The dimensions of OC will serve as significant predictors and explain the variance in employee job satisfaction in manufacturing and IT sectors. MEASURES An integrated questionnaire combining instruments and demographic questions has been developed specifically for this study. This integrated questionnaire has been

administered to the respondents who are working in India. It consists of three parts which are geared to the research questions. Organizational Culture Measuring Instrument (OCMI) This instrument is developed by the authors for the purpose of using the same in this research study. OCMI comprises of 46 items and adopts a 7-point- rating scale anchored from strongly disagree to strongly agree and the responses to items are scored from 1 to 7 respectively. The instrument taps the following 10 dimensions of organizational culture with the abbreviation and number of items forming the sub-scale for each dimension given in parentheses respectively: collaboration (COLLAB,7), open communication (COMMUN,4), employee concern (CONCERN,3), creativity adaptability (CREATIVE,5), code of conduct (CONDUCT,5), customer care (CUSTOMER,3), culture nurturing

(NURTURE,4), quality consciousness (QUALTY,4), role clarity (ROLE,6) and unity in diversity (UNITY,5). The organizational culture composite Index (OCCI) is computed by adding the scores of all the 10 dimensions. A typical item of each OC dimension is given in table 1. The psychometric properties of the scale have been examined first establishing the content validity of the dimensions of organizational culture and corresponding items for measuring them by factor analysis of the instrument adopting principle component analysis with varimax rotation( Eigen value > 1 and explaining 65.8% of variance was explained). The reliability of the dimensions was ascertained by finding

the internal consistency of the measures by using the cronbachs coefficient alpha ( > 0.7). Job Satisfaction Measuring Instrument (JSMI) The job satisfaction questionnaire was developed by Hackeman and Oldham (1975). The measure composes 5 items with 7 point response ranging from completely disagree to completely agree in each case. Two items were reverse scored. The internal reliability coefficient alpha was .77. The Job Satisfaction Index (JSI) is computed by adding the scores of all the 5 items. Table 1 A typical item of OC dimensions Dimension Item Unity in The unity among employees can easily be broken in diversity this organization Creativity Employees who come out with new ideas are adaptability encouraged in this organization Culture The employees are aware of dos and donts in this nurturing organization Customer care In this organization customer complaints are immediately attended to Quality Employees strongly believe here that it is very consciousness important to produce quality work for the survival of the organization collaboration Employees here strongly believe that working together is important to achieve goals and targets Open Employees feel free to convey their views to anyone communication at any level in this organization. Code of Strict discipline is in built in this organization and the conduct employees are used to it Role clarity Employees are having clear understanding about their roles and responsibilities in this organization Employee Prompt attention is given to employees grievances in concern this organisation SAMPLE AND DATA COLLECTION

The list of organizations operating in Chennai (state capital of Tamil Nadu, India) was obtained from confederations of Indian Industry and Madras management association, Chennai. Ten organizations from each sector was selected using random sample method. However permission to conduct the study could be obtained only from 4 organizations from each sector. The manufacturing companies are

named as MAN1, MAN2, MAN3 abd MAN4. And IT companies are named as IT1, IT2, IT3 and IT$. There were totally 625 questionnaires distributed and 461 filled in valid questionnaires were received back and used in the study. All the four manufacturing organizations are connected with production activities related to Transport sector and are ISO9002 certified. While MAN1 is government managed, manufacturing railway coaches, the other 3 are privately managed manufacturing automobile spares. All the four IT companies are SEI CMM Level 4 ones engaged in development of export oriented software packages. RESULTS Descriptive and Correlation Analysis Significant demographic findings include the following: (1) the mean age of the participants in Manufacturing sector was 37.33 with SD of 9.4 and in IT sector mean age was 26.22 with SD of 4.04. The female respondents constituted 2.2% of the Manufacturing sector and 12.1% of the IT sector. T-test:

From the results of t-test (Table2), it is evident that the mean scores of dimensions of OC in the organizations of Manufacturing sector differ significantly from the mean scores of the dimensions of OC in the organizations of IT sector. This indicates that organizational culture in manufacturing sector differs from culture existing in IT sector. This is in line with the findings of Bhatnagar and Bhandari (1998). They had pointed out the culture in Public sector, private sector and government sector in Indian context differs from one another. Table 2: Test for Mean differences of OC and Job satisfaction between Manufacturing and IT sectors Name of Dimensions UNITY CREATIVE NURTURE CUSTOMER QUALTY COLLAB COMMUN CONDUCT ROLE CONCERN OCCI JSI Manufacturing sector ( n = 279) mean SD 4.97 0.94 4.97 1.1 4.98 1.02 5.46 1.38 5.25 1.55 5.13 1.32 4.58 1.26 5.08 1.27 5.28 1.12 4.87 1.45 5.06 0.87 5.3 1.14 * p < .05 IT Sector (n=182) mean SD 5.55 0.89 5.28 0.92 4.68 1.37 6.15 0.86 5.68 1.39 5.96 0.86 5.16 1.32 5.46 1.07 5.7 1.12 5.18 1.36 5.5 0.72 5.64 0.98 ** p< .01 t- value -6.54** -3.16** 2.70** -5.95** -3.01** -7.58** -4.78** -3.31** -3.93** -2.32* -5.66** -5.99**

The findings consistently show that for all dimensions of organizational culture except culture nurturing, the employees in the IT sector tend to perceive more strongly than their counterparts in the manufacturing sector. Attention to customer needs and complaints and the collaborative spirit for achieving the organizational goals are

noteworthy aspects of the IT sector. Role clarity is more pronounced in IT as there are no rigid hierarchies and overlapping of responsibilities when compared to manufacturing sector. Since the manufacturing firms are established over a longer period of time, their culture is historical and hence tends to be nurtured. The mean value of unity in diversity in IT is on higher side which indicates that though IT firms tend to have a more diverse work force the unity among employees is more coherent when compared to the manufacturing sector. It is striking to note that the dimension code of conduct is rated high even though strict discipline has not been the phenomenon. The results provide overwhelming support to the H1, hence this hypothesis Organizational culture(OC) as a composite index namely

Organizational culture composite Index (OCCI) as well as its dimensions will differ between Manufacturing and Information Technology sectors. is accepted. In case of the H2, there is a significant difference between manufacturing and IT sectors, hence the hypothesis: H2. Employee job satisfactions will differ between manufacturing and IT sectors is also accepted. Multiple regression analysis

A step-wise Multiple Regression Analysis was conducted with jobsatisfaction as the dependent variable and dimensions of OC as the independent variable (table 2). The analysis has been made organization wise in each sector to examine the replication of independent variables in explaining the variance in Job satisfaction. In MAN 1, open communication and creativity adaptability emerged as the significant predictors of Job satisfaction which duly explained 20.9% of variance. In MAN 2 open communication and customer care emerged as the significant predictors which duly explained 40.1% of variance. In MAN 3, collaboration emerged as the significant predictor which explained 10.1% of variance. In MAN4, collaboration, customer care, culture nurturing, quality

consciousness and role clarity emerged as significant predictors that explained 59.2% of variance. In IT1, employee concern and role clarity emerged as the significant predictors of Job satisfaction which duly explained 77.6% of variance. In IT2, role clarity emerged as the significant predictor

which explained 26.4% of variance. In IT3, open communication and role clarity emerged as the significant predictors that duly explained 42.3% of variance. IT 4, code of conduct emerged as the significant predictor which explained 13.4% of variance.

Table 3:Multi Regression Analysis of OC with Job Satisfaction Organiz ation Sample size Dimension s (independ ent Variables) Entered in final equation COMMUN CREATIVE COMMUN CUSTMR COLLAB COLLAB CUSTMR NURTUR QUSLTY ROLE CONCRN ROLE COMMUN ROLE CONDCT Adju sted R Valu e F valu e

MAN1 (n=84) MAN2 (n=67) MAN3 (n=77) MAN4 (n=51)

1.05 0.73 0.95 0.62

11.9 7 23.0 6 09.2 0 15.4 9

IT1 (n=46) IT2 (n=48) IT3 (n=41) IT4 (n=47)

0.56 0.60 0.83 0.66

79.0 2 17.8 7 15.6 7 08.1 4

On the whole, the independent variables customer care , collaboration, open communication, creativity adaptability, culture nurturing , quality consciousness and role clarity of OC emerged as the predictors of the job satisfaction i.e customer care, collaboration and open communication in 2 of the 4 organizations and creativity adaptability, culture nurturing , quality

consciousness

and role clarity

in one organization. In the IT

organizations, role clarity, open communication, code of conduct,

and employee concern emerged as the significant predictors i.e role clarity in three organizations while open communication, code of conduct, and employee concern in one organization. Thus Role clarity emerged as the most significant variable in explaining the variance in job satisfaction and the other noteworthy variables being open communication, code of conduct and employee concern. It is of interest to note that only 4 dimensions of organizational culture emerged as the predictors of job satisfaction in IT sector where as seven dimensions emerged in the case of manufacturing sector. Hence the hypothesis: H3: The dimensions of OC will serve as significant predictors and explain the variance in employee job satisfaction in manufacturing and IT sectors is accepted. CONCLUSIONS In helping to understand the nature of organizational culture and its relationship to job satisfaction, both generally and in the Indian culture, the results have several important implications for research and practice. First, the results reveal that for the various dimensions of organizational culture, marked differences prevail across sectors. The IT sector with its pronounced people centred skills and activities tend to display a higher strength on most dimensions of OC. The higher level of job satisfaction seen for the IT sector in comparison to the

manufacturing sector, is in line with the differences witnessed for the

dimensions of OC and lend credence to the examination of OC as a concomitant of job satisfaction. Second, the results provide quite compelling support for the importance of organizational culture in affecting outcomes. Seven of the ten dimensions in the organizational culture set -Customer Care, Collaboration, nurturing, Open communication, and Creativity-adaptability Role clarity had Culture strong

Quality

consciousness

association with job satisfaction in manufacturing organizations. In IT organizations, four of ten dimensions Open communication, Code of conduct, employee concern and role clarity - were able to explain the variance in job satisfaction. These results confirm the fact that even though the nature of production is same in the organizations, the dimensions of

organizational culture may differ in explaining employee job satisfaction. Hence blindly imitating the success strategy of one organization will not be of much help unless the underlying and influencing culture is understood. The negative dimensions of a culture need to be paid attention and consciously corrected since it can block the growth and demotivate the employees thus creating discontent among them Of additional significance is that these findings are evidenced from a study in the Indian cultural context, a very different cultural context in comparison with the other studies done at US and other countries as reported in the literature.

There are limitations to this study. As the existing literature supports the measuring of OC in terms of values and beliefs, the same method is adopted in this study and methods like observation of rites and rituals and interview have not been incorporated in the research methodology. As India is a vast country with a diversity of cultures practiced by various ethnic groups, the restricted geographical region in and around Chennai for the data collection is another limitation. This may, nevertheless, be viewed as scope for further research by organization behaviour researchers.

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