DOI 10.5281/zenodo.8116364
Ton That Anh Tuan Gia Dinh University
THE IMPACT OF CORPORATE CULTURE ON EMPLOYEE COMMITMENT TO THE ORGANIZATION IN INFORMATION TECHNOLOGY ENTERPRISES
Abstract. Corporate culture is the glue that binds members of the business. Culture helps members agree on how to understand problems, evaluate, choose, and guide actions. When we face a tendency to conflict with each other, culture is the factor that helps people integrate and unify. New technology helps corporate culture become fast andflexible, and information and data are updated continuously and widely. Survey subjects are employees in information technology enterprises. There were 187 questionnaires distributed and 15 questionnaires were discarded due to incomplete information. Thus, a total of 172 questionnaires were used for further analysis. The research results show that the factors affecting the commitment to develop with the organization include: (1) Equity and empowerment, (2) Organizational investment, (3) Training and development, (4) Recognition of contributions, and (5) Information exchange system
Keywords: Corporate culture, commitment, development.
JEL Classification Code: O15, M12, M14
1. Introduction
With the development of science and technology and globalization in all aspects of life, today the whole world is turning to a strong breakthrough whose foundation is the perfect combination of human knowledge and achievements of science and technology. Today, there is a new factor that makes the competitive picture of resources in enterprises very unpredictable. Labor resources in enterprises not only compete with each other, but workers in this area also have to compete directly with the results of human creation - robots or artificial intelligence brought with me have many advantages. Employees who have not yet determined for sure the organization they want to contribute to will not completely put their mind and energy into work, they only work at the request of their superiors. They do not put their heart into the work and mission of the business. They care more about personal success than business success. They easily leave to look for job opportunities with better conditions and positions.
Many studies confirm that companies with a high percentage of committed employees consistently achieve higher business performance than companies with low employee engagement rates, specifically: "Satisfaction of employees 10% more customers, 22% higher profits, and 21% higher working efficiency. At the same time, the proportion of other factors in the organization is lower such as the
turnover rate is reduced (25% compared to 65%), the rate of employees taking time off is 37% less" (Gallup, 2013). Or according to the 2017 Gallup survey results, 1 in 4 employees is not engaged with the company. It is a corporate culture that is the thread linking members to get high labor efficiency and the intimate relationship between members with each other and with the enterprise. If the enterprise has a negative corporate culture background and it is not clear that the corporate culture to the commitment of employees in IT enterprises is still limited and modest compared to that which is often the place where laziness develops, inefficiencies, low productivity, lack of accountability, lack of transparency, even nepotism, financial misappropriation. From there affect their affection and patience and at some point, they will leave the organization. In Vietnam, although the IT industry has developed quite strongly in recent years, it is still a late-developing industry compared to many countries in the world.
2. Literature Review
Corporate culture concept
According to Denison (1990), "an organization is like a miniature s ociety, so culture is a system of common values, beliefs, attitudes, thoughts and behavioral principles that are shared by all members of the organization.
Corporate culture is a set of values and beliefs that are widely understood and embraced by the members of an organization. These values help to differentiate one business from another while also facilitating the development of attitudes, working styles, and behaviors aligned with the organization's mission and objectives (Recardo & Jolly, 1997).
Schein (2010), introduced the concept of corporate culture as "the synthesis of common concepts that company members learn in the process of solving internal problems and dealing with problems with the surrounding environment".
Denison's corporate culture model
In the early 1980s, Denison systematically analyzed the performance data of 34 companies and found a link between the proper division of jobs and the ability to express their views and thoughts on individual decision making with return on investment (ROI) and return on investment (ROS) (Denison, 1990); In 1995 he continued to expand the research scale with the number of companies increasing to 764 companies. Unlike previous studies, which only focused on regions with developed economies or large companies and transnational corporations, this study uses a database collected from more than 1500 companies around the world worldwide, therefore, it is highly representative and the scope of application to the analysis of corporate culture is worldwide (Denison et al., 2004).
When applying these frameworks to running organizations, Denison shows that four different cultural traits are associated with several criteria of effectiveness. Research shows that returns are highest when matched to task characteristics and consistency; conversely, innovation was most appreciated with regard to characteristics of participation and adaptability; Sales growth is highest
in relation to the characteristics of adaptability and duty. Like many modern models of effective organizations, this model focuses on the contradictions involved in achieving internal integration and external adaptation at the same time.
Employee commitment to the organization
Previous studies (Lok & Crawford, 2004) related to organizational commitment all applied the organizational commitment questionnaire (OCQ) system and the definition developed by Porter et al., (1974). According to Clugston et al., (2000) this questionnaire has many limitations as it only "measures an employee's emotional commitment to their o rganization and is limited to examining the impact of culture on organizational commitment". The definition of organizational commitment by Allen & Meyer (1990) includes both Porter et al., (1974) definition of affective commitment, and it also includes continuing commitment and ethical commitment. Therefore, "the measurement tool developed by Allen & Meyer (1990) is more appropriate to assess organizational commitment and its effect on organizational culture" Clugston et al., (2000).
Allen and Meyer's Model of Employee Engagement in Organizations
The measure of organizational commitment by Allen & Meyer (1990) is widely known and many works confirm it to be a reliable tool and find it to be "an effective method for classifying organizational commitments" of employees in the organization".
Affective commitment: Rashid et al., (2003) added the concept of affective commitment to the concept of Allen & Meyer (1990) by stating that it is "the employee's emotional attachment to their organization". Meyer & Allen (1991) developed three elements of affective commitment, including: "personal characteristics", "organizational structure", and "work experience" (Meyer & Allen, 1991).
Continued commitment: In this aspect of commitment, there are few better job alternatives for workers at other organizations, so this commitment to the current organization becomes strong (Rashid et al., 2003). The committee continues to represent an employee's perception of the costs associated with leaving their organization, and therefore anything that can be perceived to increase employee awareness can be considered as a premise (Clugston et al., 2000).
Ethical commitment: "Individuals inside and outside the organization who have experience working with the organization will both influence this type of commitment" (Rashid et al., 2003).
Ethical commitment: Ethical commitment refers to "the feeling of obligation of employees to continue working for the organization due to pressure from others" (Greenberg & Baron, 2003).
The relationship between corporate culture and employee commitment to the organization
Along with the development process of the economy, the transition from growth based on quantity to growth based on quality - is sustainable development. Therefore, the methods, methods of operation, and management in the organization must also focus on in-depth research. Employees who clearly understand their tasks, understand the mission of the organization or understand the goals and value systems that the organization pursues... are good resources for businesses to achieve high profits and growth, sustainability (Cameron & Quinn, 1999). Or employees who are cared for and have a good environment to develop professional skills, are timely recognized by management for their contributions, etc.) creating the cultural foundation of the business is also a factor for the success of the organization.
Saeed and Hassan (2000) state that corporate culture plays a crucial role in fostering cohesion between businesses and their employees, thereby creating a significant competitive advantage for organizations.
Many scholars learn about the impact of corporate culture on employee commitment in the organization with the recognition and application of corporate culture theory in those studies, the results have confirmed that there are different impacts on the employees. Cultural factors on the elements of employee commitment in the organization have since helped practitioners have a basis for making decisions to improve the level of commitment.
3. Research model and hypothesis
3.1. Research models
Based on the theoretical models of Hogg & Terry (2014), Angle & Perry (1981), Denison (1990), Recardo & Jolly (1997), Siverthorne (2004), Macey et al. (2011), research works of previous scholars combined with the research process of the current situation in IT enterprises. Corporate culture has an important role, in affecting the existence, development, and affirming the position of enterprises. The proposed research model in which the factors constituting corporate culture, which affects the commitment of employees to the organization in enterprises, include: (1) Equity and empowerment, (2) Organizational investment, (3) Training and development, (4) Recognition of contributions, and (5) Information exchange system, impact on a dependent variable commitment to developing with the organization:
Figure 1: Research model
3.2. Research hypothesis
Through studying the theory and reality related to commitment to developing with the organization, the author proposes the following research hypothesis:
Equity and empowerment: in IT enterprises, it promotes individuals and passionate employees to strive to achieve the common goals of the organization as well as their own, which is a motivating factor for employees to give their best, create products, and high efficiency in work. Fairness and empowerment will show employees' sense of responsibility for their work in the organization (Nongo & Ikyanyon, 2012). In the study, Yiing and Ahmad (2009) showed that: The empowerment that leaders and managers give to employees has created a positive motivation in each individual, increasing engagement with the organization. So, the hypothesis
H1: The proposed fairness and empowerment have a positive effect (+) on the dependent variable, commitment to developing with the organization.
Organizational investment: Meyer & Allen (1991) feel that ethical commitment is increased organizational investment in employees. These investments exceed the expectations and the governance policies are common to all businesses, making employees feel different in the organizational relationship, thereby creating a sense of gratitude, so they start forced to respond by not wanting to leave the organization until they feel that the debts have been paid So, the hypothesis
H2: The proposed organization's investment has a positive (+) impact on the dependent variable, commitment to developing with the organization.
Training and development: Recardo & Jolly (1997) employees' success depends to a large extent on acquiring new skills. Rastegar & Aghayan (2012) make the observation that: Training and development become a way to gain the competitive advantage of enterprises through increasing efforts to develop knowledge, skills, and attitudes of enterprises' employees to maximize organizational performance and increase competitiveness. Wambui & Gichanga
(2018) state that "Training and development" has a role in changing the long-term intention of employees to engage with the organization. So, the hypothesis
H3: It is suggested that training and development have a positive (+) impact on the dependent variable commitment to developing with the same organization.
Recognition of contributions and compensation: can be understood as salary increases, bonuses, and promotions for employees with outstanding performance (Macey et al., 2011). The way an organization gives rewards to employees for completing assigned tasks is seen as an invisible "glue" connecting employees with the organization. Compensation is a part of organizational culture, which will positively affect employees' commitment to the organization. So, the hypothesis
H4: Contribution recognition and proposed remuneration have a positive (+) impact on the dependent variable commitment to developing with the organization.
An information exchange system: is considered a two-way information transmission bridge, between enterprises and the market. It can be said that the information exchange system is an effective tool to help businesses develop, compete, and build brands. This contributes to the satisfaction of employees working in the organization - a positive factor that creates an individual's commitment to the organization. So, the hypothesis
H5: The proposed information exchange system has a positive (+) impact on the dependent variable commitment to developing with the same organization.
4. Research Methods
In the study, there are 29 questions that are quantitative questions, according to Bollen (1989), the minimum sample size is 145 (29x5). However, to ensure a sufficiently large sample size and reliable results in T-test and ANOVA analyses, the study sample should be around 200.
The survey was conducted from the beginning of October to December of 2021, conducted through direct paper questionnaires or by emailing, each question is measured on a 5-point Likert scale. There were 200 questionnaires distributed, and a total of 187 questionnaires were collected. There were 15 questionnaires that were discarded due to incomplete information. So, in the end, 172 questionnaires were used for further analysis.
Exploratory factor analysis (EFA) to determine the number of appropriate factors, the indexes are often interested in testing such as KMO coefficient (Kaiser-Meyer-Olkin) > 0.5 is a sufficient condition. For the appropriate factor analysis (Qualitative research was carried out through the focus group interview technique. According to Hair et al., (1998) the minimum sample size should be between 100 and 150, according to Hoelter (1983) the critical sample size should be 200 and according to Bollen (1989), the minimum sample size should be five samples for a parameter need estimation. In addition, according to Tabachnick & Fidell (1996) for regression analysis to achieve the best results, the sample size
must satisfy the formula n > 8m + 50. Where: n is the sample size, m is the number of variables model independence.
According to Trong & Ngoc (2008), the factor loading, if the factor loading is less than 0.4 in EFA, it will be rejected (Anderson & Gerbing, 1998) and the Eigenvalue has to stop when extracted factors have eigenvalue coefficient > 1 and total variance extracted (AVE > 50%) (Trong & Ngoc, 2008).
Finally, we tested the reliability of the scale using Cronbach's Alpha, EFA, CFA, and SEM. The results of the linear regression analysis show the relationship between the factors constituting a commitment to developing with the same organization.
Table 1: Cronbach's Alpha tesi after EFA
No Components Number of variables Cronbach's Alpha Corrected Item-Total Correlation
1 Equity and empowerment (EE) 6 0.886 0.638
2 Organizational investment (OI) 5 0.933 0.749
3 Training and development (TD) 5 0.862 0.522
4 Recognition of contributions (RC) 5 0.857 0.609
5 Information exchange system (IES) 4 0.787 0.450
6 Commitment to develop together with the organization (CDO) 4 0.707 0.403
Total 29
(Source: Author's calculation)
• Exploratory Factor Analysis (EFA)
In this study, the author uses EFA exploratory factor analysis method to extract 25 component variables into a number of component factors (Trong & Ngoc, 2008) to measure the impact of corporate culture on employee commitment to the organization in information technology enterprises
- As a result of EFA, there are 25 observed variables in 5 components of the impact of corporate culture on employee commitment to the organization in information technology enterprises extracted into 5 components with KMO = 0.822 with 23 observed variables so the EFA is suitable. Chi-square statistics of Bartlett's test reached 2728.737 with a significance level Sig = 0.000; Therefore, the observed variables are correlated with each other. With an eigenvalue of 1.207 and extracted variances of 68.619%, it proves that the analytical data is suitable for EFA, satisfactory.
Table 2: Summary of results EF FA
Number
Components of observed variables Reliability Alpha Extracted variance (%) Evaluation
Equity and empowerment 6 0.886
Organizational investment 5 0.933
Training and development 5 0.862 68.619
Recognition of contributions 5 0.857 Qualified
Information exchange system 4 0.787
Commitment to develop together with the organization 4 0.707 54.778
Total 29
(Source: Author's calculation)
• Confirmatory factor analysis (CFA)
Regarding the general relevance, factor analysis confirmed that this model has a chi-square statistical value of 343.865 with 75 degrees of freedom (p = 0.000). The relative chi-squared for degrees of freedom CMIN/df is 1.577 (<2). Other indicators are: GLI = 915 (> 0.9), TLI = 0.933 (> 0.9), CFI = 0.943 (> 0.9) and RMSEA = 0.064 (< 0.08). Therefore, this model is suitable for market data. Convergence values, and standard weights of all scales are > 0.5 and statistically significant at p < 0.5. Therefore, the scales achieve convergent values.
Chi-square=343.865 ; df=218 ; P=.000 ;Chi-square/df=1.577 ;GFI=915 ; TLI=.933 ; CFl=.943 ;RMSEA=.064
31
Figure 2 - CFA analysis results (Source: Authors' own calculations)
Table 3: Results of estimating the correlation between factors of commitment to developing with the same organization_
Correlation Estimate S.E. C.R. P
TD OI .283 .057 4.945 ***
TD IES .158 .042 3.751 ***
TD EE .074 .044 1.673 .044
TD RC .198 .048 4.158 ***
OI IES .276 .064 4.294 ***
OI EE .186 .070 2.637 .008
OI RC .384 .074 5.167 ***
IES EE .033 .054 .613 .040
IES RC .260 .058 4.445 ***
EE RC .009 .058 .148 .002
(Source: Author's calculation)
• Structural equation modeling (SEM) results.
The research model includes 5 concepts. After checking CFA and SEM, all concepts are satisfactory: (1) Equity and empowerment, (2) Organizational investment, (3) Training and development, (4) Recognition of contributions, and (5) Information exchange system,
The results show that this model has a chi-squared value of 438.936 with 281 degrees of freedom (p = 0.000). The relative squared value of CMIN/def degrees of freedom is 1.562 (<2). Other indicators include: GTI = 0.915 (> 0.9), TLI = 0.925 (> 0.9), CFI = 0.935 (> 0.9) and RMSEA = 0.063 (< 0.08). Therefore, this model achieves compatibility with the collected information. The factors include (1) (1) Equity and empowerment (EE) (ES = 0.057, P = 0.022); (2) Organizational investment (OI) (ES = 0.062, P = 0.006); (3) Training and development (TD) (ES = 0.227, P = 0.002); (4) Recognition of contributions (RC) (ES = 0.010, P = 0.026); (5) Information exchange system (IES) (ES = 0.116, P = 0.049).
Figure 3: Structural Equation Model (SEM) (Source: Author's calculation)
Table 4: Results of estimating the causal relationship between factors
Correlations Estimate S.E. C.R. P Label
CDO <— TD .342 .129 2.662 .008 Yes
CDO <— OI .056 .069 .812 .017 Yes
CDO <— IES .054 .086 .623 .033 Yes
CDO <— EE .119 .065 1.842 .005 Yes
CDO <— RC .425 .108 3.947 *** Yes
The bootstrap method is usually used to test the model estimates, with the pattern repeatedly being N =1000. The estimation results for 1000 samples averaged together with the deviations are presented in Tab. 4. CR has a very small absolute value, thus, it can be stated that the deviation is very low, while also being not statistically significant at the 95% confidence level. Thus, we can conclude that the model estimates can be trusted.
Table 5: Estimated results according to bootstrap, N = 1000
Correlations SE SE-SE Mean Bias SE-Bias CR
CDO <— TD 0.179 0.004 0.347 0.005 0.006 0.83
CDO <— OI 0.096 0.002 0.04 -0.006 0.003 -2.00
CDO <— IES 0.098 0.002 0.06 0.006 0.003 2.00
CDO <— EE 0.066 0.001 0.124 -0.005 0.002 -2.50
CDO <— RC 0.154 0.003 0.425 0.001 0.005 0.20
5. Discuss the results
The direction of "Commitment to developing with the organization" in this study, developed on the basis of Macey's theory (2011) and the scales of Angle & Perry (1981), is designed to suit employees. IT Vietnam. The multiple linear regression equation, helps the author evaluate that all hypotheses have a positive impact and are similar to the initial qualitative research results.
If the study of Zaraket et al., (2018) in the IT business environment in India affirms that "Equity and empowerment" mean human resource stability, then this study, adding Further scientific evidence confirms that "Equity and empowerment" have a positive influence on "Commitment to developing with the same organization". Research Hypothesis H1(P=0,119, Sig <0.005) has been tested to support by a standardized regression equation. Previously, research by Yiing & Ahmad (2009), and Messner (2013), have shown that: The empowerment that leaders and managers give to employees has stimulated the creation of Positive motivation in each individual increase's engagement with the organization.
Research hypothesis H2 (P=0.056, Sig <0.017) "Organizational investment" has a positive impact on the dependent variable "Commitment to developing with the same organization". Employees in IT enterprises voluntarily commit to sticking with the development of the organization when the "investment of the organization" is clear, and short-term and long-term strategies are in line with the development orientation of the individual. Research by Messner (2013) also confirms the role of this core factor, which has a very important influence on employees' commitment to the organization.
Many domestic and foreign studies have explained that: "Training and development" is a strategic element of an organization to improve its competitiveness against rivals, associated with the ability to long-term and sustainable profitability for the organization. Research results show that research hypothesis H3 (P=0.342, Sig < 0.008) is supported in the environment of IT enterprises, "Training and development" has a positive relationship to commitment. The development team with the same organization (Giao et al., 2020; Zaraket et al., 2018), all have similar research results.
Research hypothesis H4 shows that "Recognition of contributions and compensation" has a positive impact on the commitment to developing with the organization. According to the results of qualitative research on this factor,
increasing the stability of human resources in enterprises. Research results show that research hypothesis H4 (P=0.425, Sig <0.000, the beta value of the regression equation greater than zero, explains that: The more valuable the recognition and remuneration factors are, the more committed employees in IT enterprises are to develop with the organization.
The information exchange system positively affects the "Commitment to develop with the organization". Research hypothesis H5 (P=0.054, Sig < 0.033). This conclusion is also consistent with the published conclusions of Recardo & Jolly (1997), Inanlou & Ahn (2017), Giao et al., (2020), the factor "Information exchange system" has a positive influence on the commitment of employees in the enterprise. Because, it is a bridge between individuals in a collective, linking departments together, creating cohesion and unity in an organization.
• Conclusion
Corporate culture is an invisible strength of any organization and plays an important role in stabilizing resources and creating competitive advantages for businesses. Corporate culture has long been a topic of interest to many academics, and practice managers, looking for solutions to enhance employee engagement, create competitive advantages, and improve employee performance and enterprise efficiency. On the basis of a research review, a theoretical system of corporate culture, on commitment, a research model is built to explore the impact of elements of corporate culture on the engagement of employees working in Vietnamese IT enterprises.
From the affirmation that the commitment of employees in Vietnamese IT enterprises is positively affected by the elements constituting corporate culture, the author has proposed some managerial implications to help managers in order to manage IT enterprises, state management agencies to build an appropriate corporate culture environment and promote policies to strengthen the connection between employees and the organization. Thereby, contributing to improving the organization's competitiveness and efficiency, bringing success in the digital transformation of the national economy.
• Policy implications
In order to help enterprises, improve their commitment through the development of corporate culture. It is necessary to build a Vietnamese corporate culture with 5 specific contents:
Firstly, "Raise awareness, thoroughly grasps the role of corporate culture in the business community and each Vietnamese enterprise since its establishment and throughout the process of production and business activities."
Second, "Building and developing the foundation of Vietnamese corporate culture associated with the finest traditional values of the nation. Considering the development of corporate culture as a basic and urgent requirement for sustainable development and capacity building enterprise competition."
Third, "Promoting the positive and repelling the negative in production and business activities. Each businessman and each enterprise resolutely say no to acts that violate the law and business ethics, causing harm to society."
Fourth, "Make a healthy business environment with the spirit of respecting the law; ensure publicity, transparency, fair competition and business integrity; compliance with international business standards; encouraging the spirit of entrepreneurship and creative labor."
Fifth, "Improve the spiritual culture, strengthen the physical strength of employees and employees through building cultural institutions and working environment."
At the same time, it was also recognized that the key role of cultural resources in the process of building competitive advantage, as well as strengthening and increasing the level of commitment of the workforce in organizations.
• Limitations of the study
The author uses a random sampling method, which does not guarantee the representativeness of the sample. Most of the author scales are inherited from the research of foreign authors. Therefore, employees and the organization must be compatible with each other, the relationship of commitment will last for a long time.
Conduct deeper research to find out specifically the level of impact of each factor of the control variable on each factor in the corporate culture framework and employee commitment framework factors thereby finding the reasons to explain the difference between the levels affecting employee commitment in different types of enterprises.
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