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The Study of Organizational Climate in Sime Darby

Master's Thesis 2013 201 Pages

Business economics - Business Management, Corporate Governance

Excerpt

TABLE OF CONTENTS

ACKNOWLEDGEMENT

ABSTRACT

CHAPTER 1 INTRODUCTION
1. 0 Introduction
1.1 Background of the study
1.2 Problem Statement
1.3 Research Objectives
1.4 Research Questions
1.5 Significance of the study
1.6 Definitions organizational terms:
1.7 Summary of Chapter 1

CHAPTER 2 LITERATURE REVIEW
2.0 Introduction
2.1 Theories of Administration and Operation Climate
2.1.1 Mission and Vision
2.1.2 Organizational culture and Organizational structure
2.1.3 Innovation
2.2 Theories of Work Motivation Climate
2.2.1 Leadership
2.2.2 Support
2.2.3 Rewards
2.3 Theories of Ethics at workplace
2.3.1 Trust/Openness
2.3.2 Communication
2.3.3 Professional and organizational espirit
2.4 Relationship of administrative and operation climate with organizational climate
2.4.1 Mission and Vision
2.4.2 Organizational culture and structure
2.4.3 Innovation
2.5 Relationship of work motivation climate with organizational climate
2.5.1 Leadership
2.5.2 Supports
2.5.3 Rewards
2.6 Relationship of ethics at workplace with organizational climate
2.6.1 Trust/Openness
2.6.2 Communication
2.6.3 Professional/organizational spirit
2.7 Organizational Climate
2.8 Conclusion/Summary

CHAPTER 3 RESEARCH METHODOLOGY
3.1 Introduction
3.2 Methodology
3.2.1 Primary Research Techniques
3.3 Research Framework
3.3.1 Dependent Variable
3.3.2 Independent Variables
3.3.2.1 Administration and Operation Climate
3.3.2.2 Work Motivation Climate
3.3.2.3 Ethics at the workplace Climate
3.4 Research Hypotheses
3.5 Research Instruments
3.5.1 Questionnaires
3.6 Population and Sampling Techniques
3.7 Data Collection
3.8 Data Analysis
3.9 Summary of Chapter 3

CHAPTER 4 RESEARCH FINDINGS
4.0 Introduction
4.1 Cronbach Alpha
4.1.1 Reliability Test on the Variables
4.2 Descriptive studies
4.2.1 Age
4.2.2 Gender
4.2.3 Nationality
4.2.4 Employments
4.2.5 Education Level
4.3 Mean Score Interpretation
4.3.1 Level of awareness on administration and operation climate
4.3.2 Level of awareness on work motivation climate
4.3.3 Level of awareness on ethics at the workplace
4.3.4 Level of awareness on organizational climate
4.4 Relationship on the Independent Variables and Dependent Variable
4.4.1 Correlation
4.4.2 Results of Relationship Tested
4.4.2.1 Relationship between Administration and Operation Climate and Organizational Climate
4.4.2.2 Relationship between work motivation climate and organizational climate
4.4.2.3 Relationship between ethics at the workplace and organizational climate
4.5 Summary

CHAPTER 5 RECOMMENDATIONS AND CONCLUSIONS
5.0 Introduction
5.1 Overall Mean Score Value
5.2 Summary of the Relationship Tested
5.3 Recommendations
5.3.1 Organizational Climate
5.3.2 Administration and Operation Climate
5.3.3 Work Motivation Climate
5.3.4 Ethics at the workplace Climate
5.4 Future Researches
5.5 Limitations
5.5 Conclusion

References

APPENDIXES

ACKNOWLEDGEMENT

I would like to take this opportunity to thank all the people who have given me so much of their contribution in completing this research paper

Firstly, I would like to thank the representative who has helped me to send all the questionnaires to her colleagues. She has given me so much support and guidance with extra information to add up the reasoning behind Sime Darby organizational climate. I would like to thanks to the whole Sime Darby employees for their sincere and kind evaluation of the questionnaires.

Second, I would like to express my highest gratitude and sincere appreciate to my supervisor, Assoc. Prof. Dr. RusinahSiron, the coordinator of MBA program at University Tenaga National for her help, support and guidance throughout this research paper. Thank you Assoc. Prof. DrRusinah. May Allah bless you and your family.

ABSTRACT

SIME DARBY is one of the biggest multinational companies in Malaysia. It has large number of plantations around Malaysia. Not to mention, it has ventured into other businesses that brought profit to the business. The pressures are increasingly heavy that it might cause negative effects on the employees and organization. In addition, the bribery and corruption cases happened before, causes the pressure to build the image and name of Sime Darby. Organizational climate is known as the weather for the employees that changes accordingly to the emotions, moods, feelings and environments as well as surrounding of the places. One employee can affect the moods, feelings and environment of those above. The purpose of this study is to find the level of awareness on these variables: administration and operation climate, work motivation climate and ethics at the workplace climate. Also, it is used to find the relationship between the independent variables with dependent variable. The independent variables used are administration and operation climate, work motivation climate and ethics at the workplace climate. The dependent variable is organizational climate. The results showed that there is a relationship between each independent variable with the dependent variable. The correlations fall within +1 and -1 for all variables towards dependent variable. Several recommendations have been given to the readers to understand the effects of positive and negative organizational climate to the organization.

CHAPTER 1 INTRODUCTION

1. 0 Introduction

Almost 200 years ago, pioneering English planters established rubber plantations in Malaya, most of which were later converted to oil palm. Among those pioneers were Alexander Guthrie, Daniel and Smith Harrison, Joseph Crosfield, William Sime and Henry d’Esterre and Herbert Mitford Darby - founders of three great companies that today live on in Sime Darby Berhad.

Alexander Guthrie founded Guthrie & Co. in 1821 as one of the first British trading enterprises in South East Asia. Daniel and Smith Harrison and their friend Joseph Crosfield, on the other hand, formed a tea and coffee trading partnership called Harrisons & Crosfield in England in 1844. Sime Darby came to be when European businessmen William Sime, Henry d’Esterre Darby and Herbert Mitford Darby established Sime, Darby & Co. in 1910.

The Sime Darby brand is more than 100 years old though the company bears little resemblance to the small outfit that started its life in Malacca in 1910. It is the legacies of all three companies that very much make up today’s Sime Darby.

1.1 Background of the study

As Sime Darby is growing, there are more organizational climates may occur that the top managements or managers need to handle very well. Every multinational company has to suffer with its different organizational climate that may cause certain problems to fit with different employees in the organization. Organizational Climate Survey is the closest thing a business can get to a Profit and Loss statement of how well a company uses its people (Hay Group, 2009). In this case, the feedback from the survey shall help the organization by showing its current climate. Hence, it will help the leaders to understand the relationship between their actions and the climate they may have created on their employees. The climate of an organization refers to those aspects of the environment that are consciously perceived by organizational members (Armstrong, 2003). It helps the managers to understand the climate that they might have experience themselves on daily operation. When the managers understand the climate and its relationship to others, they may use those as part of coaching interventions to shift the climate or they may provide one-to-one coaching and developmental process for their employees. That is the way they can change their organizational climate to avoid dissatisfied employees and reduce employee turnovers.

Armstrong 2013 examined the dimension of the organization climates based on organizational design, communication, leadership, teamwork, decision-making, culture, job satisfaction and motivation. This researcher has decided to take a part of Armstrong’s dimension into their dimensions in order to connect the needs with organizational climate. The independent variable in this study is administration and operation climate, work motivation climate and ethics at the workplace. The dependent variable in this study is the organizational climate. However, several sub-independent variables were found in this research. The sub independent variables under the administration and operation climate are organizational culture and structure, mission, vision and organizational innovation. The sub-independent variables under work motivation climate are leadership, support and rewards. The sub-independent variables for ethics at the workplace are trust or openness, communication, professional and organizational spirit. In the other hand, the sub-dependent variables for organizational climate are morale and commitment, communication and relationship, rewards and career development and quality of services. All of these variables have been found to have connections towards the effects of organizational climate either by presenting the negative effects or positive effects around the organization. Negative airflow might reduce productivity and innovation in the employee’s works. However, positive airflow might increase productivity, motivation and innovations in the work of the employees that increases the profits and long-term images of the organizations.

According to Hay (2012), organizational climate has the ability to affect the performance of organizations through motivating the employees. When the employees are motivated, they will increase their self-motivation to work better for the organization. They may strive for the better in the future to ensure that the organizational performances are improved within the short-term period. In most of the jobs, there is always a space between what the employees need to do or get by compared to what they can do if they give their performance at the highest level they could perform. Hay found that a positive organizational climate will encourage highest effort and commitment from the employees. In the other case, Jamnik (2011) founds that enhancing positive ethics at the workplace can reduce the conflicts between companies or managers interests and preventing other unethical issues. This is very good to keep a long-term benefits and images of the companies through a good practice of corporate social responsibility. Hence, the organization might practice ethics to ensure that the employees follow their cultures and strive towards the mission and vision of the organizations.

1.2 Problem Statement

As every employees work in the same building, the effects of organizational climate can be passed to one employee to another. That is why organizational climate is defined similarly to the effect of weather. It is the weather situation that has it’s up and down in the organization. Organizational climate might have high consequences when the negative energy is being passed around. However, organizational climate might posses positive energy when everyone is working together towards the same goals. Hence, the researchers found some research problems that needed to be identified. Firstly, Dailey (2010), Martin and Terblanche (2003) and Wallace, Hunt and Richards (1999) found that organization are hardly integrated or implemented their missions, visions, goals and organizational culture into their heart and mind of employees well. This is very important because the employees need to feels the same as another. They need to understand other people’s culture to avoid the conflicts. The organizations needs to aligned their mission and goals based on the culture of the host country and its employees. Second, the organization has been found to lack of concentration on some areas of ethics practices in the workplace (Shim [2009]; Ratliff [2012]; Nelson [2010]). Many companies found that ethics are not important, thought, it is something that is not practicable enough. Bribery, fast track money and other are jeopardizing the image as well as the climate of the organization. The employees who saw it might feels depressed to keep it inside them, and changes the whole climate to negative effects. Third, the organization has been found to lack of concentration on work motivation. Work motivation can bring negative effects when the employees felt negative presences of other employees or their work nature itself. If all of these are connected towards organizational climate, then the level of accuracy that those connections have great impact on the organizational climate needs to investigate. That is what the problems arises in this study and the researcher is finding the ways to solve them.

1.3 Research Objectives

There is several research objectives needed to be accomplished for this project paper:

1. To identify the level of awareness or acceptance of administration and operation climate, work motivation and ethics at the workplace that may have direct or indirectly affected the organizational climate.
2. To identify the relationship between human resource climate, work motivation climate and ethical behavior climate towards organizational climate
3. To identify the level of acceptance or awareness towards organizational climate.

1.4 Research Questions

Here are some of the research questions derived to answer the needs of this study:

1. What is the awareness level on the human resource climate?
2. What is the awareness level on work motivation climate?
3. What is the awareness level on the ethical behavior climate?
4. What is the awareness level on organizational climate?
5. What is the relationship between administration and operation climate towards organizational climate?
6. What is the relationship between work motivation climate and organizational climate
7. What is the relationship between ethics at the workplace climate and organizational climate?

1.5 Significance of the study

This study is conducted to finds the relationship between the independent variables (administration and operation climate, work motivation climate and ethics at the workplace climate) towards the dependent variables (organizational climate). Many organizations have lost their productivity due to the problems of organizational climate. It is because organizational climate are the weather that might have directly or indirectly exposure towards the employees of the organization. In many case, the employees are heavily affected by the organizational climate that were not much focus by the organizational. Hence, this study is to expose the truth about organizational climate to ensure that the organizations can prevent those problems from affecting their employees. It shall benefits the employees when the organization learned that the current year has changed rapidly for the employees development. It is no longer useful to retain the employees using salary only as they are emerging towards the future success. This study shall brief more about administration and operation climate that have directly or indirectly exposure to the organizational climate.

In the administration and operation climate, the researcher tested on three matters which are organizational culture and structure, mission and vision as well as innovation. It shall provide useful information for the organizations out there that understanding on these matters shall help to increase productivity and success. This study will also brief more on work motivation climate. Employees nowadays needed something to motivate them against the current workflow that might negatively affect their moods and their productivity. In this case, the researcher tested on leadership, rewards and support. It shall benefit the organizations to understand that these matters are important to create positive effects on their employees. Lastly, this study will brief more on ethics at the workplace climate.

It is important to follow ethical practices as one unethical practice might bring the whole company down. It creates negative airflow for the employees. It tested on three areas which are communication, trust and openness and professional and organizational spirit. It shall benefit the organization when there are ethical practices on place because customers prefer an organization that made an effort to ensure transparency has been practiced in their companies.

1.6 Definitions organizational terms:

a) Administration and Operation Climate

Administration and Operation Climate is where the social network of an organization has been affected by the architectural designs to facilitate interaction and the policies and procedures that designed to stimulate synergy among the organizational members (Ibrahim & Dickie, 2010). For example, the administration and operation department decided to increase communication and transparency of works through opening the door between each department to assist each others in increasing the organization’s performance.

b) Work Motivation

Work Motivational climate means that the organization tends to encourage and promote certain types of behaviors more than others (Seth, 2009). For example, the organizations tried to give benefits and work independence to allow freedom and job security to the employees who has been fulfilling its skill and working requirements.

c) Ethical Behavior

According to (Mayer D. , 2011), ethical behavior climate is the general perception organizational employees have about whether the organization is ethical. In this case, Sime Darby has ruled out and required their employees to follow their company rules and procedures on gifts and personal interests after the discovery of fraud and corruptions to public years ago.

d) Organizational climate

Business Dictionary (2013) has found that organizational climate is the properties of the business environments in the workplace observed by staff that strongly influences their actions and job performance. In my point of view, organizational climate is the weather that affecting directly or indirectly the employees from various departments for many reasons that hinder productivity, innovation and intention to stay in the same company. For example, the cooperation given by the parties or other departments may ease the tasks required by the staff, however lack of communication can damage such performance as difficulty in obtaining materials occurred.

1.7 Summary of Chapter 1

This section summarizes chapter 1 from the introduction until the organizational terms. Firstly, the researcher talked about Sime Darby organizations before proceeding to the research problems. Second, the researcher believes that organizational climate survey is the closest thing a business can get to a Profit and Loss statement of how well a company uses its people (Hay Group, 2009). In this case, the feedback from the survey shall help the organization by showing its current climate. Hence, it will help the leaders to understand the relationship between their actions and the climate they may have created on their employees. Third, the research agreed on Armstrong 2013 examined the dimension of the organization climates based on organizational design, communication, leadership, teamwork, decision-making, culture, job satisfaction and motivation. The researcher has chosen a part of the Armstrong’s dimension on their dimensions to connect it with the organization climate. The independent variable in this study is administration and operation climate, work motivation climate and ethics at the workplace. The dependent variable in this study is the organizational climate. Fourth, the research derives the objectives of study. It is to identify the level of awareness or acceptance of each dimension that may have direct or indirectly affected the organizational climate, to identify the relationship between human resource climate, work motivation climate and ethical behavior climate towards organizational climate and to identify the level of acceptance or awareness towards organizational climate. Fifth, the research constructed some benefits for this study to other organizations and researchers in the world.

CHAPTER 2 LITERATURE REVIEW

2.0 Introduction

Organizational climate is the weather that influence or affect employees directly or indirectly. Simply, organizational climate is a dangerous thing because it does not affect one person. It affected more than several person. Sometimes, a particular group is affected on several reasons. Their self-leadership has fallen apart or their motivation simply went down to the bottom. Hence, it is necessary to keep the employees satisfied and motivate to ensure productivity and innovations are alive in the corporation. Let’s take Apple for an example. Their organizational climates are positive that actually increases productivity and innovations for a particular product. Apple has rises a lot through its invention of products in the market. Apple’s previous owner, Steve Jobs has the ability to motivate the employees by thanking them after they created the products. He showed them the sales received in that year. He showed them their products that sold a fortune in the markets. He said encouraging words to make them continue believing and striving to the tops by being the number one company in the world. Apparently, yes, Apple rises above the ground due to its success innovation and success applications. Apple is the only product that hardly imitate by the numbers of competitors in the markets. It is because the products are difficult and risky compared to normal computer or phone products.

Before we started the research by reading the relationship, the researcher decided to pull out some theories on these climates. What does it means and how it was operated to understand why such relationship brought positivity or negativity to the organization. Hence, the researcher found some theories to show the right way of organizational climate with those independent variables under administration and operation climate, work motivation climate, and ethics at the workplace.

2.1 Theories of Administration and Operation Climate

2.1.1 Mission and Vision

Diffen (2010) has given some ideas on mission and vision statements. It is useful to create positive organizational climate when the employees understand and follow those statements. A mission statement talked about ways to get to the places the organizations wishes to go. It normally defined the objectives and purposes to serve the needs of customers and the values of organizational members. For example, here is Sime Darby mission statement (Sime Darby, 2013):

To be a leading multinational corporation delivering sustainable value to all stakeholders Diffen (2010) has given a meaning on vision statement. Vision statement provides the path of the organization in a future time. Normally, it communicates both the purpose and value for the business and customers. It is a good way when the employees understand the mission and vision. They will be happy to strive for success without any rewarding purposes. For example, here is Sime Darby vision statement (Sime Darby, 2013):

- We are committed to developing a winning portfolio of sustainable businesses
- We subscribe to good corporate governance and high ethical values
- We continuously strive to deliver superior financial returns through operational excellence and high performance standards
- We provide an environment for our people to realize their full potential

2.1.2 Organizational culture and Organizational structure

Organizational structure is the formal system of task and reporting relationships that allows the employee to use the resources to achieve a particular organization’s goal. According to the contingency theory, the organization’s structure needs to be fit or match the factors or conditions that might affects them heavily and cause uncertainty in the future of the business. In order to create a positive organizational climate, a good organizational structure needs to be designed well and accepted by all levels of employments in the organization. Here is the sample of contingency theory for organizational structure:

There are two organizational structures which are:

1) Functional structure

Functional structure is an organizational structure that combines all the people together in a group with similar positions to perform a similar task or skills they have obtained during their works. Dell uses functional structure and it has worked well to give the best services to the customers. Here is a sample of Dell’s functional structure:

2) Divisional structure

Division is categorized in different areas which might focused on products, market and geographic. A divisional structure is a structure that groups the employees into a function but allowing them to focus deeply in their expertise of activities or services. It is a good for headquarters with different products serving customers and locations. Sime Darby is one of the companies with different branches and products for the customers in different location.

Organizational culture is a set of shared values, beliefs and norms that have the ability to influences the way employees think, feel, and behave toward others and toward people outside the organizations. Japanese company brought their culture to Malaysia where loyalty is a must for their companies. However, they adapted the culture of Malaysia that Muslim needs to be given time for Friday prayers at least one hour and half.

2.1.3 Innovation

Innovation means successful implementation of creative ideas. It means that the employees can create a new idea and it has been proven successful through sales or acceptance of products. Apple is known to be innovative because they can produce a different smartphone with its application. The Iphone, Ipod, Mac and others showed that nobody can be as innovative as Apple’s organization. It includes the ability to not being able to imitate the products being produced by the company.

2.2 Theories of Work Motivation Climate

2.2.1 Leadership

Leadership is where the leader has the ability to influence the other members of the organization to help achieving the goals of the groups or the organizations. It is common that the leader has the traits that can force or politely support their employees in the same group or different group. For example, leaders can be manager, group leaders, CEO or directors that pursue to strive success by motivating the employees and rewarding them.

2.2.2 Support

Under leadership, the leader will support the employees in the whole works or tasks until it’s completed. It can be done through brainstorming or realizing the potential of each idea when they are being taken into productions. Hence, there are many ways a leader can support the employees. They can listen to the problems of their works and give suggestions or ideas to trigger their creativity and minds. It is a good way to increase positive organizational climate for the employees and employers.

2.2.3 Rewards

Reward has the ability to increase the motivation inside and outside of the employees. An organization’s reward system should recognize the hard work and creativity of the employees. The employees love it when they are being appreciated, recognized and rewarded through bonuses or raises. Hence, it increase positive organizational climate when the bosses gave bonuses, raises or benefits to them. It can create negative organizational climate when they are being punished by the bosses.

2.3 Theories of Ethics at workplace

2.3.1 Trust/Openness

Trust means the willingness for one person or group to have faith in the other person although it can put them in danger or risk. Trust is a big thing, however, it can damage a person’s work, task or lives. That is why it is hard to the employees to trust one another because the other might steal their works and use their credits. However, trust is the only way to increase positive organizational climate and healthier environment for the employees. It allowed them to socialize and gained newest information faster from the other departments for decision making.

2.3.2 Communication

Communication means the needs of sharing information between two or more individuals to reach a common understanding. It is necessary to communicate in the same building or same departments. That is how the other members can receives or hear about the latest news. It is a good because it spreads healthier environment to others. When an employee happy, they might try to make others happy. So, communication is a way to increase positive organizational climate and trust in the organization.

2.3.3 Professional and organizational espirit

It is necessary to be professional in the workplace. Of course, it is very important to increase the spirit of working in the organization. The employees need to be professional and say no to all unethical activities in the business. It is because they need to stay strict and firm by avoiding such unethical activities. Hence, it can create positive organizational climate because they do not needs to hide anything under their surface.

2.4 Relationship of administrative and operation climate with organizational climate

In the case of administrative and operation climate, there are three sub variables underneath the main variables. Administrative and operation climate includes organizational culture and structure, organizational innovation and mission and vision. How each sub variables are related back to the organizational climate? In which case the sub variables lead the main variables that change the organizational climate? That is why the researchers decided to confirmed using prior research by other authors to see whether it has defined to have relationship between administrative and operation climate towards organizational climate.

2.4.1 Mission and Vision

Dailey (2010) found that there is a relationship between mission and vision towards organizational climate. It is one of the dimensions that she tested on her research. She found that organizational climate are positively related to job satisfaction and negatively related to other nurse’s outcomes of interest. In this case, the other nurse outcomes of interests were burnout, work-to-family stress, intent to leave and intent to exit the work. Hence, the employees who understand the mission and vision are capable to create better organizational climate for their work.

Martins and Terblanche (2003) checked on organizational culture that helped to stimulates creativity and innovation. The researchers began its research on mission and vision. Mission and vision is defined as determining the personnel’s understanding of the vision, mission and values of the organization and how those can be turned into measurable individual and team goals and objectives (Martins and Terblanche (2003). It is because mission and vision are capable to increase the spirit and motivation of their employees to strive for the better future. Also, it helped to redirect the employees to ensure that they followed the same path as the organizations heading to. The researcher, in this case, found that the values, norms and beliefs play a vital role of creativity and innovation in the organizations. However, it depends on how they influence the behavior of individuals and groups.

2.4.2 Organizational culture and structure

Dailey (2010) has uses organizational culture as one of the dimension she tested in her research. Organizational climate has a positive relationship when the organizational culture are fully accepted and adopted by the employees. As the world emerging globally, the employee’s needs to understand that different country and different companies have different culture being practiced in there. They need to fully adopt them in their practices as well. Dailey founds that stronger professional practice environment was negatively related to burnout, intention to leave or exit and other while positively related with job satisfaction in both unadjusted and adjusted analysis.

Broody, Pester and Trotter (2012) found four dimensions in organizational culture change of the companies. Firstly, it is cultural adaptiveness. It is when the employees recognize the necessity of change that occurred in their organizations. Not everyone has the same culture that was practiced in the same countries or companies. The employees must itself adapt with the culture adopted by the company. If an employee work in Japanese company, they must adapt and follow the Japanese culture to ensure their success in the organizations. In the other way, it is known as survival. For example, Japanese company practiced very high disciple and time concerns which needed to be adopted by the employees if they want to continue their employees with the company.

Second dimensions under Briody, Pester and Trotter (2012) are cultural responsiveness. The employees are required to respond appropriately to the others as well as the culture itself. For example, a person who works in the Japanese company must respond properly to the highest levels and even its colleagues. When a Japanese director appeared in Malaysia, he will show all his powers like he owns the company. However, when a Malaysia director flew to Japan Headquarters, the Malaysian director will be treated like King there. Here, it shows how the employees need to responds accordingly to the status of employments in the countries.

Third dimensions stated by Briody, Pester and Trotter (2012) are cultural contradictions. Cultural contradictions occurred when organizational members encounter obstacles and they needs to solve it together. Again, culture is talking about different attitudes and personality in every individual that worked in one organization. It also talked about different culture that they may carry with them inside. When organizational members encounter obstacles, they might bring conflicts due to their problems in adapting each other culture and beliefs. For example, Sony used to force all muslim employees not to go for their Friday prayer which are contradicted with the muslim belief in Malaysia. Hence, cultural contradictions occurred when employees from home country’s culture couldn’t match with the host country’s cultures.

Broody, Pester and Trotter (2012) lists down that resistance to change may occurs because they couldn’t match the culture of one person to another. It is when employees do not want to change for the better of organization. Employees may resist changing if their beliefs on fairness and justice are high. For example, Indian employees shall not work in beef or meat section as they believe cow is one of their gods. So, they will not go against their will if the company of chicken productions added meat productions into their lists. In the other case, Muslim employees will not work during Friday prayer because that is their belief toward their religion. Hence, they may resist changing even if it could bring success to the organizations. However, the authors found that the Hoist Story is very strong evidence that not only have individual impact but organizational impacts.

Lee and Yu (2004) have decided to test on corporate culture and organizational performance. They tested several dimensions which are organizational culture, organizational of works, decision making, and adaptability. However, organizational culture is the only main reason behind this research as it is listed under administration and operation climate. They found that a strong culture regardless of content, in which a substantive value was placed on the value of adaptability, was associated with stronger performance. Hence, their results have supported their idea that cultural modes have growing slowly to fit demands and dynamics of the industry.

Jing, Avery and Bergsteiner (2011) conducted a research on organizational climate and performance in retail pharmacies. It seems that various factors being contributed into their research. However, the factors concerning this research are organizational structure. Organizational structure allowed the employees to understand the chain of commands in helping them with the works. Sometimes, it contains the procedures, rules and quality checks to ease the tasks of the employees. Organizational structures are important to enhance innovations and productivity of the employees. It seems that the results indicated that positive relationships between organizational climate and all the performance measures only happened in small business. Yet, it is consistent with previous findings that revealed the link between climate and performance in large businesses.

Nazari, Herremans, Isaac, Manassian and Kline (2011) discussed on their research about organizational culture, climate and IC which focused on interaction analysis. Organizational culture is one of the variables used in their research. Organizational culture, as defined by them, helped because of the organizational values. It influences the knowledge-sharing activities of the employees in either positive or negative ways. It resembles the nature of culture from the home country as being practiced in their lives. For example, Japanese culture doesn’t celebrate Hari Raya, however Japanese companies needs to allocated longer Hari Raya celebration for muslim employees. It is the same during Ramadhan where the employees (non-muslim) cannot eat in front of muslim employees. The findings suggest that cultures posses some kinds of characteristics of cooperation, deferences to power as well as fear for the unknown support of intellectual capital management system. It also, supported previous research and extending the relationship to all three dimensions being tested in their research.

Wallace, Hunt and Richards (1999) focused on the relationship between organizational culture, organizational climate and managerial values. There are three main variables which are organizational culture, organizational climate, culture and values. Organizational culture is one of the sub categories under administration and operations climate. In their research, their organizational culture is being supported through individualism, uncertainty avoidance, power distance and masculinity. Working in a company holds different individualism with different needs. It is good to reduce individualism to avoid any uncertainty problems and keeping the power far from the hands. Individualism can increase conflicts which damage the organizational climate as well as the relationships of the employees and employers. For example, individual A believes that project B is beneficial while the whole followers believe project A is more valuable. If individual A holds the power, then it would be a problem because individual A might become autocratic and choose project B which reduces the culture of the organizations for cooperation and tolerations. The findings revealed that individualism is considerably lower than recorded for the national level.

Shim (2009) conducted a research on the effects of organizational culture and climate on employee’s turnover in public child welfare agencies. Organizational culture is one of the variables used in this research. According to Shim, there are three types of organizational culture were being tested. Those are organizational culture inventory, organizational culture profile and organizational social context. The result found that positive organizational culture encourages the employees to actively communicate with the co-workers. Also, it helped to motivate the employees to engage in the activities that increases achievement, innovation and competence. At the same times, the researcher found that it helped to motivate and spread positive behaviors that enhance the cooperation between the employees and achieving higher performance levels in their works.

Wichinsky (2008) found some dimensions on organizational culture for her research title organizational culture, organizational climate and collaborative capacity planning. Organizational culture is listed under administration and operation climate. Constructive culture, passive culture and aggressive/defensive culture were the variables in her research. The finding found that organizational culture has relationship with organizational climate. It supported the literature of Glisson (2000) who found that these two affects one another in many ways. Even, some researchers stated that culture indicators were highly associated with the climate scales. It seems that perceived participants are highly supportive of their efforts and can express themselves individually in a specific culture which increases the success of collaborations.

Reynolds (2006) conducted a research on perception of organizational climate and job satisfaction among full-time and part-time community faculty members. This variable will be discussing now is organizational structure. Organizational structure contributed its idea under administrative and operation climate. A t-test was run to checked whether there is a significant difference might exist in the perceptions of organizational structure between full-time and part-time faculty members. The mean for this was found to be 4.19 for full-time rating while 3.92 for part-time rating. It showed that the difference was not significant between two parties. That was to answer for research question 1. Research question 3 has different mean answer to be related for significance. The mean for full-time faculty is 3.53 while the part-time faculty is 3.81. Again, the difference was not significant.

Also, Reynolds (2006) mentioned a part of organizational structure findings for his research. There was no significant differences were found in the perceived levels of organizational structure towards full-time faculty members and part-time faculty members. It seems that there is a phenomenon involved in this test. A phenomenon that is of some interest with regard to perceptions of organizational structure in this particular study is the absence of any significant difference in the perceived level of organizational structure between full-time and part-time faculty members. Thus, it actually give different kinds of perceptives from those two groups that likely to have in term of organizational structure of the faculty or institution.

2.4.3 Innovation

Dailey (2010) found that innovation have a simple relationship with organizational climate. Innovation falls under supportive manageable practices. It means the employees are allowed to use their own ideas to cater the needs of their works. In the case of nurse, they needs to be innovative during the time of surgery, limited room and needs to solve the matter. Nurses are required to follow procedures; however innovations are allowed to keep the success. In the research under Dailey, it has found that supportive manageable practices are positively associated with job satisfaction. It means through job satisfaction, positive organizational climate can be created.

Montes, Moreno and Fernandez (2004) were conducting a research on assessing the organizational climate and contractual relationship for perceptions of support for innovations. In this case, they found several variables which separated into three categories. It is individualist approach and structuralist approach. Individualist approaches are individual characteristics that determine the innovation. Its variables are resistance to change, innovation support roles and leadership. In this case, innovation has fallen into sub-categories of administration and operations climate. In the case of structuralist approach, there are two factors that contribute towards innovations. It is environmental which the nature of innovations are needed.

Montes, Moreno and Fernandez (2004) tested on organization effects. It is organizational effects which defined as structural characteristics that determine the innovation. It includes environment, sizes, complexity, differentiation, formalization, centralization and types of strategy which required by the organizations. Most of the times, it forces the organizations to follow and differentiate their products. For example, Nokia currently uses android as its system compared to Belle, Symbian and iOs. It is because android is heavily needed by the consumers lately which force them to change it. Some applications such as LINE and KakaoTalk needed to use android systems which Nokia only started to install in Nokia Asha. Most of old Nokia cannot install LINE and KakaoTalk. Hence, it forces Nokia to differentiate their products to meet customer’s demands and needs. The researchers found that analyzing the information has confirmed the establishment of short-term contractual relations, by way of temporary contracts. Thus, it has created an impact of the relationship between organizational climate and perceptions of support for innovation.

Ismail (2005) has tested on innovation to see whether it has some relationship with the organizational climate. There are two types of innovations that were tested in this research. It is technological innovations and organizational innovations. Technological innovations are creating the latest technology such as Apple and Samsung. For example, Samsung creates high technology television that uses voices to change the channels. Hence, they need high class and newest technology for their production lines. Organizational innovations happened when the employees create something new for the organizations. It could occur through marketing department or revising the current departments to enhance the skills of employees. The finding stated that there were no differences observed in member’s perceptions of creative climate, learning organization culture and innovation between MNCs and local organizations. Additionally, there were no differences in participant’s perceptions of creative climate, learning organization culture and innovation among the three job levels in the sampled organizations. As conclusion, the learning organization variable with its seven dimensions makes a more significant contribution towards explaining innovation than the ten factors of the organizational creative climate.

Haakonsson, Burton, Obel and Lauridsen (2008) wondered on how failure to align organizational climate and leadership style affects performance. It seems that many variables affected performance of the organizations. The researcher tested on several variables which productivity and innovation became importance to this research. Whereas, Bengtson and Solvell (2004) showed them a variable called innovative performance Leadership variables are taken from Jung et. al (2003), Bass and Avolio (1997). Jung and Bass are two best researchers for leaderships which proven that it affected performance greatly. It is because leadership skills are important to enhance the ways works are being distributed, done and supported. Employees felt the same ways too. The researchers argues that organizational climate are essentially grabbed the organization’s affective events that in facts, influence the employees’ emotions and consequent information-processing behaviors.

Haakonsson, Burton, Obel and Lauridsen (2008) has decided to test on failure reasoning in aligning the organizational climate and leadership styles that greatly affected organizational performance. Productivity and innovation is one of the variables tested by these researchers. However, for this research, innovation is one of the variables under administration and operation climate. These researchers took their variables of productivity and innovations from Patterson et. al (2005). The researcher argued that organizational climate and leadership styles needs to be aligned properly to provide enough support necessary for the climate to increase the organizational performance. The results of the study confirmed the complicated relationship needed between organizational climate and leadership styles as well as their affects towards the organizational performance.

Kunnanatt (2007) conducted a research on the impact of ISO 9000 on organizational climate. ISO 9000 are standards that were released by the government or private organizations to provide sufficient guidance and tools for the companies and organizations. In this case, this research concentrates on innovation and change as part of administration and operation climate. The results of the study showed that ISO 9000 indeed has the ability to transform and change the organizational climate. At the same times, it enhances the positive components of the organizational climate by controlling the organizational climate. Indeed, it kept the negative climate under supervision. For example, ISO 9000 has the set of rules and procedures that ease the tasks of employees for technical and other expertise. The researchers also found that it can be used as a mechanism to transfer the needs of character and quality of the manpower in the organizations.

Chen, Huang and Hsiao (2010) revealed their results on their research of knowledge management and innovativeness. It is how the role of organizational climate and structure increases innovativeness and knowledge management functions. These researchers stated that organizational structures are used to indicate the extent to which the firms design their organization in order to give power in decision making process. It can be said affected the flexibility needed and ease of knowledge exchange due to the impact of contact members and accessibility of the members. Ratliff (2012) made their research about effects of organizational climate on job performance and employee engagement. The variable used in this research is innovation. It seems that innovation has been affecting the job performance and employee engagement. The ways to get the employee to engage in their jobs are providing ample motivation and satisfy the employees. It relates back to job satisfaction. The results of ages showed increment in organizational climate scores towards employee engagement scores through positive standardized regression.

Shim (2009) conducted a research on the effects of organizational culture and climate on employee’s turnover in public child welfare agencies. In this case, this research is focusing more on innovation that was used in his research before. Innovation increases positive organizational climate when the new products or services increases profits or been accepted by the market well. The research founds that higher values of AIC which are achievement, innovation and competence represent positive organizational culture. An independent t test has resulted significant differences in AIC between others. It seems that those who wanted to leave score lower for achievement, innovation and competence than those who don’t want to leave.

2.5 Relationship of work motivation climate with organizational climate

2.5.1 Leadership

Also, Martins and Terblanche (2003) decided to test on leadership factors that helped to stimulates creativity and innovation. Leadership as defined by Martins and Terblanche (2003) focuses on specific areas that strengthen and enhances the leadership, as perceived by the personnel. There are two types of leaderships for the individuals. The types of leadership are transactional and traditional leaderships. Many researchers found that transactional leaderships are best for success and innovation. It is best because they tend to change and differentiate with the current time. For example, Apple and Air Asia owners are transactional leaderships that create best products because they adapted the future to grab their customers well. It is similar with Samsung that always rapidly differentiate the products for their customers.

Ismail (2005) believes in leadership that creates either positive or negative organizational climate. Her research was on creative climate and learning organization factors towards innovation, leadership and organizational developments. She believes that leaderships are very important under learning organizations. In order to create leadership, it is best for the organizations to provide training that enhances the leadership skills of the individuals. There are many organizations that provide such leadership training for a year or less than a year. It is enhance the leadership skills of the individuals who will manage a particular branch or departments. For example, management trainees can create positive organizational climate for the employees when the managers understand the problems surfaced in the organizations.

Davidson (2003) conducted a research on the possibility of organizational climate towards adding a good service quality in hotels. Leadership, facilitation and support were one of their variables in his research. Several researchers were found to be related to this variable in Davidson. Those are Davidson, M.C.G., Manning, M., Timo, N. and Ryder, P. (2001), Jones, A.P. and James, L.R. (1979) and Ryder, P.A. and Southey, G.N. (1990). It means leadership, facilitation and supports are very important as it create positive organizational climate towards the individual itself in the organizations. For example, a leader can motivate their employees to strive for success while providing enough supports throughout the process. It means the leader work together with the employees. Air Asia’s owner, Tony Fernandes reflects the needs of leadership, facilitation and support well.

Haakonsson, Burton, Obel and Lauridsen (2008) wondered on how failure to align organizational climate and leadership style affects performance. It seems that many variables affected performance of the organizations. The researcher tested on several variables which productivity and innovation became importance to this research. Whereas, Bengtson and Solvell (2004) showed them a variable called innovative performance Leadership variables are taken from Jung et. al (2003), Bass and Avolio (1997). Jung and Bass are two best researchers for leaderships which proven that it affected performance greatly. It is because leadership skills are important to enhance the ways works are being distributed, done and supported. Employees felt the same ways too. The researchers argues that organizational climate are essentially grabbed the organization’s affective events that in facts, influence the employees’ emotions and consequent information-processing behaviors.

Schyns, Veldhoven and Wood (2009) made a research on organizational climate, relative psychological climate and job satisfactions. It is more focusing on supportive leadership climate. It showed that leadership is very important to increase the positive air around the organizational. Leadership facilitation and supports are the variables used by these researchers. The researcher focused on supportive leadership as it is concerned on the needs and well-being of the employees or followers. It is also facilitate an amount of desirable climate that allows a better communication between the leaders and followers. It seems that personality B employers are more preferred as it is easy to communicate and discussed with them. The findings confirmed that supportive leadership climate and their new climate concept, individual relative leadership climate are associated with job satisfaction. Also, it increases job satisfaction in both situational factor and personal factor.

Spruill (2008) conducted a research on correlational analysis relating organizational climate to employee performance. It is a case study that discussed previous findings from different authors. This researcher tested on leadership variables. It seems that a significant relationship between the productivity and leadership variables exists. The correlation value (r=0.7999) showed that there is a strong positive correlation between productivity and leadership within the organization. It seems that there is a significant relationship between the retention and leadership variables existence. The correlation value (r=0.735) suggests a strong positive correlation between retention and leadership within the organization. The author tested on 15th null hypothesis for their research. 15th null hypothesis created to check on no linear relationship exists between customer service and leadership. Spruill (2008) found that there is a very strong relationship exists between customer service and leadership variables. The correlation value (r=0.757) suggested that a strong correlation between customer service and leadership variables within the organization. Hence, null hypothesis was rejected for this case.

Ratliff (2012) tested on leadership behavior and supervisory support for their research about effects of organizational climate on job performance and employee engagement. Although there are many types of variables were tested in this research, those variables related with this research as those are under work motivation. A multiple regression analysis was conducted to check on those variables of age affects the relationship between organizational climate and employee engagements. The first relation is age. The results showed positive standardized regression coefficient between the age and employee engagement.

Heyart (2011) tested on leadership for the research titled the role of organizational climate and culture in service encounter. Leadership was one of the variables tested under her research. Her finding is that the leadership under B1 companies is actively taken responsibility for their department’s culture which enforces some reasonably rules. It proves that they manage to leads their employees by example from other companies or leaders. Also, it created a very positive team-oriented ritual. Hence, B1 culture has a positive and healthy culture compared to the A1 culture. In summary, it means that B1 members can recognize their interdependence much better than the A1 members. In the same times, they are willing to help each other in the same teams to meet the needs of their patients. Hence, positive organizational climate is found under Heyart (2011) for B1 team.

It seems that there have some evidences between self-leadership and work performances. Phelan and Young (2003) and Carmeli et al. (2006) has found about creative self-leadership that talked about reflective internal processes. It means individual has constructed their thoughts and intentions towards making a specific change, improvement and innovations. In addition, Phelan and Young (2003) has found a relationship between self-leadership and creativity towards their performance. Self- leadership is actually when the employees are capable to motivate themselves and navigate their ways to receives certain behaviors. However, no everyone can be innovative due to the self-leadership. The individual must have very good self-leadership qualities which will direct themselves and motivate themselves to success. This is according to Neck and Manz (2003). Howell (2005) has found similar explanation on the importance of innovation behaviors of the individuals in the work place. It seems that the success of innovative ideas can be based on the champion’s status which means individuals who emerge to promote the idea with conviction, persistence, and energy and willingly risk their position and reputation to ensure the innovation’s success (Howell, 2005, p.108).

2.5.2 Supports

Dailey (2010) tested on supports as one of her dimensions towards the organizational climate of nurses in home healthcare. She has found that supportive management practices have relatively positive effects towards job satisfaction and reducing largely on the intent to leave or intent to exit system. This also proves that the nurses are capable to manage large workloads as there is positive relationship with organizational climate due to supportive management practices. As a nurse, they need plenty of supports to cater the needs of their customers or patients. Hence, the manager or administration allowed such things by giving them the nurse autonomy to perform their duties at their best levels.

Ahmed (1998) conducted a research on culture and climate for innovation. This researcher tested on many areas; however we are only focusing on support and rewards which relates back to organizational climate. Support and rewards are a good way to create positive organizational climate. It is actually a good way to increase motivation for the employees in order to increase productivity. The findings revealed that companies aspiring towards innovative goals need to learn from the examples of highly successful companies like 3M, The Body Shop whose leaders spend their energy and effort in building organizational cultures and climates which perpetually create innovation with high quality products.

Jing, Avery and Bergsteiner (2011) conducted a research on organizational climate and performance in retail pharmacies. It seems that various factors being contributed into their research. However, the factors concerning this research are rewards and supports. Those are separated into rewards and recognitions and warmth and supports. It is very important to rewards their employees as a way to motivate the employees to work better. Supports needed to be given to ensure the works are flawless and high quality. It is similar to the concept of supervision. The results indicated that positive relationships between organizational climate and all the performance measures only happened in small business. Yet, it is consistent with previous findings that revealed the link between climate and performance in large businesses.

Ratliff (2012) tested on leadership behavior and supervisory support for their research about effects of organizational climate on job performance and employee engagement. Although there are many types of variables were tested in this research, those variables related with this research as those are under work motivation. A multiple regression analysis was conducted to check on those variables of age affects the relationship between organizational climate and employee engagements. The first relation is age. The results showed positive standardized regression coefficient between the age and employee engagement.

Shim (2009) conducted a research on the effects of organizational culture and climate on employee’s turnover in public child welfare agencies. There are many variables they use for organizational climate. The variables are work experience, age, education, emotional exhaustion, supervisor support, encouragement, provision of training, collaboration and appearances. In this case, this research needed supervisory supports to relate them. The findings found a significant relationship existence between organizational climate and employee’s intention. Higher values of organizational climates are associated with lower rates of leavers from the agencies. Organizational climate had lower rate for those who intent to leave compared to not intent to leave group. The finding suggested that a country with lower rate of organizational climate has higher employee’s intention to leave.

Shim (2009) conducted a research on the effects of organizational culture and climate on employee’s turnover in public child welfare agencies. One of the variables needed for this research is supportiveness. Supportiveness means a lot to employees as each department needed to support one another for success. Another employees need to support each other in doing their works, brainstorming, creating their projects or finishing their projects perfectly. This can shown through Property Company. The architect designs the houses, the contractors helped to supervise and teach their followers or employees to finish the house exactly like the designs. CSR (cooperation, supportiveness and responsiveness) has the ability to influence the employees’ behavior expectations as well as norms that leads the employees to be retained in their organizations. In addition, they will continue to provide their services. Higher values of CSR (cooperation, supportiveness and responsiveness) will represent more positive organizational climate and reduces those who wanted to leave the organizations.

2.5.3 Rewards

Dailey (2010) found that extrinsic rewards are the reasons why nurses don’t intent to exit or intent to leave the agency or hospital. However, they tend to stay longer due to their efforts being appreciated by the community. Home healthcare is not an easy task because they are far from supervision by managers or higher parties. Hence, they need to solve the problems by themselves if required. However, Dailey (2010) found that intrinsic rewards and social rewards do increase the organizational climate by bringing positive attitude towards the nurses and everyone around them. This falls under supportive management practices in the research.

Ahmed (1998) conducted a research on culture and climate for innovation. This researcher tested on many areas; however we are only focusing on support and rewards which relates back to organizational climate. Support and rewards are a good way to create positive organizational climate. It is actually a good way to increase motivation for the employees in order to increase productivity. The findings revealed that companies aspiring towards innovative goals need to learn from the examples of highly successful companies like 3M, The Body Shop whose leaders spend their energy and effort in building organizational cultures and climates which perpetually create innovation with high quality products.

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Pages
201
Year
2013
ISBN (eBook)
9783668138483
ISBN (Book)
9783668138490
File size
1.7 MB
Language
English
Catalog Number
v313317
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Tags
study organizational climate sime darby

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Title: The Study of Organizational Climate in Sime Darby