The Impact Of Organizational Culture On Employee Commitment
The following research concerned with the objective to find the impact of organizational culture on employee commitment. Employee commitment is used to measure the attitude, behavior and conducts of employee within the boundaries of organizational culture. For data analysis and for performing different validity tests IBM SPSS V. 21 was used. It was found that organizational culture have a considerable impact on employee commitment. It was also discovered that Age had notable relation with employee commitment. When employees turn 35+ they do not like to switch jobs and they prefer to remain in the organization where they are working.
Keywords: Organizational Culture, Employee Commitment.
First and foremost I would like to thanks Allah Almighty for giving me the power and wisdom to complete this research thesis and without whose help this could not have been completed. I am also exceptionally thankful to my supervisor, who guided me at each step and from whose knowledge and experience I benefited a lot. Last but not the least I would like to thank my parents and family for giving me support and encouraged me to complete this research. I would also like to thank my friends and class fellows for their kind support and valuable feedback.
Table of Contents
Scope of the Study 8
Problem Statement 8
Dependent Variable 35
Independent Variables 35
Demographic Variables 36
Conceptual Framework 36
Research Hypothesis 37
Hypothesis 1 37
Hypothesis 2 37
Hypothesis 3 37
Hypothesis 4 37
Hypothesis 5 38
Hypothesis 6 38
Research Methodology 39
Research Objectives 39
Research Design 39
Purpose of study 39
Type of study 39
Study setting 40
Unit of Analysis 40
Time Horizon 40
Sampling Type 40
Sample Size 41
Research Tool 41
Applied Tests 41
Regression test Analysis between Organizational Culture and Employee Commitment 49
Correlation Tests 51
Nonparametric Correlations 51
Mann-Whitney Tests 52
Mann-Whitney test between Genders of Employees and Employee Commitment 52
Mann-Whitney test between Marital Status of Employees and Employee Commitment 53
Kruskal-Wallis Tests 54
Kruskal-Wallis test between Age group of employees and employee commitment 54
Kruskal-Wallis test between Monthly Income of employees and employee commitment 55
Kruskal-Wallis test between education of employees and employee commitment 56
Findings and Recommendations 57
Organizational culture describes the procedures in which employees behave in a firm. Organizational culture can be seen as the exceptional design of common goals, behaviors, customs, principles, values, opportunities, socialization and expectations of individuals in the company. Organizational culture is therefore associated with the character of the company, showing people’s behavior even when they are not directed regarding their tasks. Research studies stated that organizational culture puts a substantial impact on corporate culture, especially in the field of competence, efficiency and commitment of employees. This mean that by emerging a suitable organizational culture, companies can achieve success. That’s why there is necessity to study the impact of organizational culture on individual’s commitment to the company. (Clugston, Kennedy, Denison 1984)
It is assumed that organizational culture impacts individual’s sense of commitment, empathy and belongingness to work place. Lokand Crawford noticed that such thoughts might rationally be expected to make an impact on employee’s commitment. The study is important for quickly emerging country such as Pakistan as there is great necessity to understand how organizational culture create values in forming positive behavior of employees towards organizational commitment. This could help in improving behaviors of employees at workplace which will lead to employee commitment. Tentatively, it is imperious to improve our understanding of how organizational culture impacts employees commitment in a developing country like Pakistan. Finally the research findings will help managers in decision making especially in the field of hiring, recruitment, up gradation, training, motivation and instituting in organizational culture. (Lok and Crawford 2004)
Employee commitment is defined as, “the degree to which an employee identifies with the organization and wants to continue actively participating in it”.
The interest in this topic is due to the fact the employee commitment is an important elements which is compulsory for organizational success. When employee is strongly committed with an organization then there are less chances for disloyalty with company. Employee empowerment, job satisfaction, performance appraisal and employee retention formulates a strong foundation for organizational commitment. Because of the importance of employee commitment several research studies has been conducted to check out the importance of relationship between organizational culture and employee commitment. (George, Allen, Mackenzie 2003)
According to Nelson, employee commitment is very worthy for the sound growth of organization. Intensified or demotivated employees are unproductively affect the work place environment continuously. In today’s world if employees need are not fully satisfied they will become demotivate which will cause ultimate problems for organization. Because without human capital you can’t even think of doing business. So Nelson, in his research findings put a great emphasize on employee’s commitments. If today you show care for your employees then they will show care for your clients. It’s just like a give and take relation. So employee commitment in any business is very important. Now old trends have been changed when people say that make your customers happy, but in today’s world make your employees happy they will make your customers happy. So Nelson stated that adopt a friendly culture in your office so that employee can feel relaxed at work place, when he/ she feels relaxed then he/ she will show performance as well. (Nelson, Allen, Shenroy 2002)
Scope of the Study
The scope of this research study is to find out how an organizational culture influences employee commitment in organizations. In this research study our key focus is on to determine the relationship between organizational culture and employee commitment. I am going to conduct research study on the IT sector of Pakistan, as it is rapidly developing industry in Pakistan and mostly researchers at the corporate culture in this sector. So, this research will help managers in finding out the linkages between organizational culture and employee commitment in the IT industry of Pakistan.
In this research study our main focus will be on finding out the impact of organization culture on employee commitment in the IT sector of Pakistan. So mentioned below statement will describe problem statement.
A focused statement of the problem would be:
What is the impact between organizational culture and employee commitment in the IT sector of Pakistan?
In any organization, culture has very strong roots which is willfully and intentionally nourished and is transferred to all those employees who are going to be the part of it. It helps in holding organizational norms tightly. Consistency and supremacy of culture are important signs of outstanding companies. Strong culture of organization makes it directed to the market place, because of strong culture need for policy manuals, organizational structural charts is reduced. With detail guidance in organizational culture, role and task of all employees are very much clear to them. Organizational culture is very strong and persistent. If we talk about business itself organizational culture is a force of limitation, means they have to follow the ethical values for doing business activities. For employees, culture is a strong connecting force that holds them together in a powerful thread. Because of continuous innovation, it’s a challenge for managers to keep on changing organizational culture positively keeping in view current trends in industry. The purpose of this study is to put emphasis on the importance of cultural values in any organization. Moreover this study highlights the importance of favorable organizational culture in making employees committed with their work. (Peters and Waterman 1999)
Organizational culture has been studied from different perspectives and from different fields, that’s why we cannot confined it with single definition. Organization culture is Combination of different qualities that makes an organization different from others. Robbins said, Organizational culture has been used by many researchers and managers in past to specify the environment and policies that firms deploy for managing of their employees and other internal organizational matters. Similarly, Mullins said, organizational culture is the mixture of customs, norms, policies, behaviors and beliefs that collectively forms universal framework for everyone who is part of that organization. According to Hofstede, it’s the organizational culture that creates differentiation in the thinking of employees of one organization as compared to other organizations. Schein Said, combination of different values and behaviors of employees in any organization makes an organizational culture. If we want to generalized it, then culture is basically collection of knowledge, ethics, standards, principles, behaviors and communication of all people within an organization at same time. Cultural values must be communicated within organizational boundaries. Culture of any organization is based on rational processes which assists in discussing the norms of organization with employees. These cultural norms and values help employees in decision making process. He further discussed that culture of an organization form the basis of different beliefs, norms and also different ways of conducting business. (Hofstede, Schein, Kotter 1990)
Now a days, many organizations have made their specific cultural policies, which are followed strictly. In any organization there are two important factors in formulating a culture; structural stability of a group and integration of single item in superior standard. According to Hodgetts and Luthans define organizational culture as, “defined as system of shared values, norms and beliefs which can be assessed that people describe the same organization culture even with different backgrounds at different levels within the organization”. Stewart said, values and beliefs of organization have a strong emphasis on all those employees who are attached with a firm or working in a firm. (Hodgetts, Luthans, Robbins, Stewart 2002)
Characteristics of Organizational culture:
Collins and Porras, describe few features of organizational culture which are described below.
• Innovation and risk taking:
In any organizational culture this thing is really appreciated if its employees are motivated for taking risks and innovative decisions.
• Attention to details:
In organizational culture employees are expected to display accurate scrutiny and attention to all aspects.
• Outcome Orientation:
In a well organizational culture, top management is only concerned with end results, they do not focus on processes and practices that are used by employees for attaining those consequences.
• People Orientation:
That type of organizational culture in which decisions by top management is directly impacted on the people.
• Team Orientation:
In this type of organizational culture task is divided or assigned within team rather than dividing among individual employees.
In some organizational cultures people are antagonistic and inexpensive in their approach towards decision making as compared to doing it with relaxation.
Some organizational cultures do not like to adopt innovative techniques, they uses old fashioned techniques of doing things in their daily business activities.
The Cultural Web Model of Organizational culture:
In Culture web different elements of organizational culture are organized for studying. Mullins described culture web in a form of Diagram which is shown below with explanation as well.
Different Elements of Culture web are explained below:
The conducts which describes that how employees of the organization should act with every employee of the organization and with other circumstances outside of the organization. Routines behavior mentions that how specific tasks should be done under particular circumstances.
Rituals are basically those customs which organizational top management highlights. These norms and customs are very important for organization which include all formal and informal organizational procedures.
Stories are shared by old and present employees of the organization with the new employees. It includes the history, success stories, main contributors of organization and other informal information about the organization.
Symbols are basically identity of any organization. It includes brand name logos, color themes, labels, type of language and jargons which are used and which depicts the nature of organization.
• Power Structures:
Power structures include all those influential individual personalities or groups who are part of top management. All rules and regulations in the organization has been set by them.
• Control Systems:
Those processes by which conducts, behaviors and work of employees are measured. Promotions and rewards are given to employees by monitoring and establishing these systems.
• Organizational culture:
Organizational culture is collection of all those norms, procedures, behaviors, customs and beliefs which are followed by all individuals. All activities are performed under these rules and regulations.
These elements of cultural web collectively forms the basis of any organizational culture. If any one of these elements is missing then organizational culture can be collapsed. (Mullins 1999)
The Importance of Organizational culture:
Mullins discussed that organizational culture helps to make positive changes among organizations and managers both at local level and at international level. Organizational culture of every organization is different, on the basis of differ enation in organizational cultures employees of different companies performs their roles and duties in dissimilar ways. Organizational culture is also helpful in reducing complications and hesitations. Decision making and tem work among employees is easier with flexible organizational culture.
Saiyadin and Schein highlights the importance of organizational culture in such a way, that now a days keeping in view the current trends organizational culture is more valuable than past. Due to more competition, globalization, joint ventures, coalitions and associations created a great need for following developments which are explained below:
• Organizational culture complements that it’s a balanced organized process. It takes time to change culture of any organization, it cannot change the behavior of employees quickly. Symbols, norms, language and physical settings are used to connect with employees by using organizational culture.
• Well organized organizational culture focuses on giving training to employees and promotes friendly atmosphere among employees. Training is a procedure through which new employees are informed about the conducts, norms and rules of organization. New employees absorbs the culture of organization by these formal training sessions. It is helpful for them to change their attitudes and behaviors to get permanent position in organization.
• Code of conduct, rules and regulations and other formal details are discussed with employees by organizational culture. It is clearly informed to them what kind of behavior is acceptable and what kind of acts are against the norms of organization. In those organizations where employees of organization shares
• Similar beliefs, norms and code of conduct it shows the strength of culture of that organization. Those organizations give productive results where cultural norms are fully followed by every employee of organization.
• Synchronization and incorporation through organizational departments in order to increase competence, production, speed of designing and quality of delivering products and services.
• Adopting innovative techniques and new procedures of production.
• By cooperative organizational culture operations in any organization becomes smooth which results in process improvement. Because of improvement in manufacturing procedures organization can successfully familiarize new technologies.
• Active management of discrete organizational units which improves employee’s multiplicity.
• Flexible organizational culture gives facilities and support for teamwork.
• Friendly organized culture brings harmony among employees.
Additionally Mullins said, if organizational culture is strong then it will be more directed to marketplace. With strong organizational culture need for policy manuals, organization’s structural charts and detail procedures will be less. In such kind of organizations employees are well aware with their roles and duties, because they are clearly informed with their responsibilities. Therefore the significance of organizational culture cannot be neglected, it’s an essential part of organization. (Mullins, Saiyadin and Schein 1998)
Types of Culture:
Hellrigel, Slocum and Woodman explained eight types of organizational cultures. These types are discussed in detail one by one.
i) Bureaucratic Culture:
An Organization which follows decorum, proper rules, standardized operating processes and tiered harmonization, such type of culture is termed as bureaucratic. Expectedness, competence and constancy are main elements. Code of conduct is formal. Managers work as boss not as trainers or leaders. Duties and responsibilities of all employees are clearly mentioned. In such type of culture all rules and regulations are writing out in guides and employees are forced to follow same rules strictly.
ii) Organizational culture:
Ritual, faithfulness, wide socialization, coordination, self-management and social encouragements are key elements of organizational culture. Employees of such kind of organizations believe that their roles are much more than written agreements. In such type of organizations, company is long term committed to employees and in return employees remained committed to organizations. People believe that company will treat them equally from salary’s prospective, promotions and other incentives.
iii) Entrepreneurial Culture:
Risk taking, vigor and innovation these are the key elements of entrepreneurial cultural organizations. Employees are committed to adopt innovative technologies in all operations. In entrepreneurial cultural organizations top management believe that they can only succeed if they use innovation in their operating processes. New ideas, innovative techniques and freedom of expressions are encouraged by top management.
iv) Market Culture:
The attainments of quantifiable and challenging targets, especially those goals that are monetary and market oriented, makes a market culture. Competition is very high in market culture and top management’s focus is to make maximum profits. There is a predetermined relationship between employees and organization. There is less pressure of employees and they also do not share a shared set of hopes concerning management style or attitude. This type of organizational culture is weak because of less commitment between employees and organization.
v) The Power Culture:
In power cultural organizations resources among employees are not distributed equally. Those people who are in top management or who are in power use their influence to control over resources. In this way employees are demotivated and frustrated.
vi) The Role Culture:
Roles and responsibilities are informed to all employees, every employee is answerable for his/ her conducts. In this way rights of employees are also protected in role cultural organizations. People in role cultural organizations are only responsible for their tasks. Top management expects that every employee will full fill his/ her roles honestly. Rewards and punishments are decided according to individual roles. Instruction, reliability, wisdom and stability are the key elements of such type of organizations. These types of companies gives constancy, fairness and equally opportunities to all employees as per their roles.
vii) The Achievement Culture:
Such type of organizations are known as “Aligned”, because in achievement cultural organizations employees are gathered for mutual vision or goal. In achievement cultural organizations top management share their vision with employees for gathering them on the accomplishment of common task. Commitment and employees moral is high because they work in a team and after completing their task they feel inner satisfaction.
viii) The Support Culture:
The support culture is grounded on the basis of joint trust among the employees and organization. In such type of organizations employees are valued as human beings. Top management believes to share love, warmth and care with employees in such type of cultural organizations because they believe their employees are important for them. Employees are more committed with organization and they feel that they are also working as business partners. Employees feel a sense of fitting and they have a personal interest in the organization.
Hofstede’s Five Value Dimensions of Culture:
Greet Hofstedeis a Dutch researcher who is considered as a reputed research in intercultural studies. His book, “Cultures and Organizations” and “Software of the Mind” is recognized as an important contribution in research field. Many business schools have adopted his theory in their business studies as a context book and many other inter cultural training programs are created on the basis of his findings. Hofstede’s theory is more noteworthy from two prospective. Firstly, it is separated from verbal/ non-verbal communication, which is greatly linked to the external expressions of the Tree Model and that’s why it is easy to change. He further draw a model of values, deep traditions, and guiding morality that are complex to see and not easy to change. In his second he directed methodical research on these values and estimated them on a 100-point scale of dimension. Hofstede’s research findings gives us an opportunity to observe cultures widely with a relative viewpoint and attach a number to it. Hofstede has presented five values dimensions of culture which details are given below.
i) Power Distance:
If we see anywhere in world, we will observe that power is a basic concern for everyone. For example if we see in our families, family head, tribe head and boss in any company they all have power to make decisions. They all have specific power values which is called “power distance”. In power distance culture low level employees feel that they have no rights and resources are distributed unequally. Generally all people admit to a particular level that everybody has not same degree of power. It does not matter from where you belong, from which country, which family and from which country you belong you have to admit that fact someone in your family have influence on you and that particular person have more power than you. If we want to conclude that concept then we will observe in power distance cultural organizations your managers and seniors have more power than you and you have to accept their order.
ii) Group Attachment:
All of us know the simple fact that every human is a social animal. Commonly if we observe then we will admit one fact we are born with a very observant mind to be ready in joining the first cultural group we see after birth. With the passage of time humans get linked with different groups according to their age, like schools, offices, friends and other groups and they feel themselves as a part of that particular group and they think that they are different from other group. The affinity for humans to form different groups is because cultural variety is a complex process to protect shared information and legacy. This cultural diversity assists us in understanding to which group we belong in group and thus guides us to whom we can trust and with whom we can share our information. Group attachment is therefore a basic concern, which is generally important in all human societies. So all those groups who share similar characteristics all attached in a same group which collectively terms as “Group Attachment”.
iii) Gender Association:
Now a days, men and women roles are coincided. Men are increasing working in those fields which are more related to women and similarly women are working in those professions which are related to men. It is all due to Hostede’s cultural teaching which don’t depend on gender but develop collected wisdom and technology to reach the most optimum labor requirement. In organizational cultures gender issues did not carry any importance in decision making, only capability and skills matters. However our psychology still impacts that by the contrast of men-women to a certain level, to a certain degree that notwithstanding the more convergent reality. Competition and anger are few trains which specifically more related to men and women are considered to be the symbol of love and care. By this vary reason we have changed the real term by using Hofstede’s “Masculinity-Femininity” for gender association. Gender association as an organizational norms are not considered to be separate from each other but in some cultural aspects that are stereotypically linked with a man or woman.
iv) Uncertainty Avoidance:
To protect yourself from any danger or harm is a basic human nature. Fear comes from internal feelings and from society’s thinking. These fears naturally are always there in our body, it is in our genes. For example the fear of falling down from height, fear of drowning while swimming and many other fears like that. This uncertainty of fear is avoided by using rules. Value of “uncertainty avoidance” is generally about how rules are imposed in a society to deal with vagueness and the unknown”. There are generally two types of rules: Institutional rules concentrates on professional conducts, prescribed written rules, structured guidelines or organized procedures. Examples of these industrial rules are everywhere around us, from the way we keep a work diary of meeting. The second type of rule is “Social Rule”, which are not formally and these rules are agreed on certain agreed-upon code of conducts or operation.
v) Time Orientation:
Space and time are considered to be the important elements in human communities. The former shows the association between human and nature and the latter concerns with how we understand and plan our daily routine activities across the given time spam. Time orientation is a generic value that connects to how we observe the impact of past, presence and future in our life. Collectively, time range puts different level of impact in different communities, creating two approaches on this value dimension: short and long-term time orientation. Collectively emphasis on the past and the present would lead toward short-term orientation, and attention on the future will move towards long-term orientation. (Greet Hofstede 1989)
Workplace structures has been changed completely in 21st century. Now a days employees are more educated and are continually getting authority. With the innovation in technology, competition has been increased and globalization has totally changed workplace environment that tolerates little similarity to the business of past. In today’s world employers have realized that they can only get advantage by investing on their people, means they are hiring intellectual people.
The concepts of long term loyalty and inherent job security have disappeared. These terms has been substituted by a tacit mutual commitment contract between employer and employee. Competitive environment challenges and tussle between employers has started a war to hold skilled and committed employees from increasingly large group of available talent. Employers need talented employees to gain competitive advantage over others. As competition is increasing day by day, companies are feeling pressure to find new and innovative processes to make different ion as compared to their competitors.
Now time has come when employers have to admit that they cannot get progress without acknowledging the efforts of their employees.
Newstrom and Davies said, employee commitment as “the degree to which an employee identifies with the organization and wants to continue actively participating in it”. It is basically an employee’s willingness to continue with a same company in future. It frequently replicates the individual’s confidence in the mission and objectives of organization, readiness to spend effort in their achievement and intents to endure working here. Those employees who have achieved personal goals while working with organization they are more committed. (Newstrom and Davies (2002)
Luthans defined employee commitment as, “a strong desire to remain a member of a particular organization”. We can additionally said that commitment is an approach by which individuals show their level of faithfulness with firm and it’s a continuous procedure by which organizational employees show their worry for the company and its ongoing achievement. Commitment of any employee within an organization is judged by a number of years he/ she has spent in organization, attitude and behavior with coworkers also comes in this approach. Even if employee has availability of other options, still he/ she remained committed with the organization, it’s a great gesture by any individual. (Luthans 1995)
Pareek stated employee’s commitment as, “a person’s feeling with regard to continuing his or her association with the organization, acceptance of values and goals of the organization, and willingness to help the organization achieve such goals and values”. Madigan, Nortan and Testa said, those individual who are committed with firm they work attentively, carefully, give their best effort, promote firm’s services or offering and work for constant success. In return they expect that management will take care of their rights, they will get friendly environment to work, continuous growth and they will have freedom to maintain a balance between their professional and personal life. Employees also expect that firm will give them necessary training for their future growth. Hellrigel highlights that employee’s commitment is not only a matter of faith, it also include an energetic participation of individuals to complete organization’s objectives. Employee commitment is a vast term it is not only confined to loyalty, rather than it is spread over employee’s personal effort for accomplishing organizational goals. (Pareek, Madigan, Hellrigel 2002)
Sources of Employee Commitment:
Hellrigelsaid that, individual’s commitment with organization may different from person to person. Individual’s primary obligation to a firm is judged largely by their features (for example, character and behavior) and how well their preliminary work practices match their hopes. Employee commitment is formed on the basis of working environment’s conditions, rewards, incentives, relations with superiors and colleagues and other factors. As employee spends more time in organization then individual’s commitment becomes strong because they grow a durable and long lasting relation with their colleagues and organization. When they reaches at senior level their behavior is more positive, they feel themselves as key member of organization thus employees becomes more attached with organization. Madigtan said, employees are confident and aware of their worth to organizations. They work only for those organizations who protect their rights and full fill their needs. Those organization who show commitment with their workforce in full filling their rights they can retain their employees easily and eventually win war for acquiring talented employees. Simpson said, in article for “Mansis Development Corporation” highlights that employee attitude on the work in prejudiced directly- positively or negatively by his or her instant boss. Positive attitude by managers is vital for establishment of employee’s commitment. There for building employee’s commitment firmly top management must improve the superiority of management. Nelson stated that although monetary incentives builds employee’s faith fullness with a firm but only monetary incentives are not enough. He said that give your people a sense of accomplishment by appraising their work, this act will motivate them to do work with more sincerity and resultantly he/ she will show commitment with organization. (Hellrigel, Madigtan, Nelson, Simpson 2004)
Strategies for Increasing Employee Commitment:
Nelson presented the power of “Five I’s”. He stated that there five I’s methods to form employee commitment. Organizations frequently fail to recognize that by adopting some strategies they can retain their best employees and it will cost them very less to adopt such strategies. Details of “Five I’s” method is discussed below:
• Interesting Work:
Nelson said give your employees a challenging and interesting work to do, it’s a human nature if they keep on doing same task again and again they got bored with same routine. If you give your employees new tasks on weekly basis they will remain motivated.
According to Nelson necessary information must be share with employees. If proper information is being shared with individual then they will be aware of their roles and duties in organization and they can perform much better. Communication between top management and employees must be common so that employees can know about the common objectives of organization that top management is looking for to achieve.
With the increasing challengers for managers they have short time to take decisions. So Nelson suggested in “Five I’s” theory that managers should involve their employees in decision making process. When employees will be involved in decision making process it can cause two benefits, first employee will be committed and decision taking can be done easily. It will save time and when many minds will work on solving one problem then they will collectively form a better solution.
Nelson suggested when you will give freedom to your employees they can take decisions more confidently. If organizations give authorities to their employees they feel more confident and happy. When organizations show trust on their employees then they work with more honest, sincerity and are committed to the organization.
• Increased Visibility:
Nelson suggested when your employees perform well, give them recognition by appraising their work. It comes them inner satisfaction and sense of accomplishment. By doing so they feel themselves as an important member of the organization and they show more commitment and sincerity towards work.
Madigan also shared some practical strategies which are very helpful to make employees committed with an organization. These practical strategy steps are mentioned below:
• Flexible work routine
• Give relaxation to employees so that he/ she can maintain a balance between his/ her professional and personal life.
• Condensed work weeks
• Work from home arrangements.
• Plan annual recreational trip for employees so that they can feel stress free from daily hectic routine. (Madigan 2003)
Because of this multidimensional nature of organizational commitment Meyer and Allen have proposed a three dimensional model of employee commitment which details are explained below.
• Affective Commitment:
When employee is emotionally attached and involve with organization then it comes in affective commitment.
• Continuance Commitment:
It involves the cost that individual employee acquaintances if he/ she leave the firm.
• Normative Commitment:
Individual’s feelings of responsibility to remain inside the firm. (Meyer and Allen 1996)
Three stages/ process of Employee Commitment:
Mullins presented three stages of employee commitment which are mentioned below.
• Compliance when employee admits the power of his/ her senior colleagues in order to get something from them, for example, salary.
• Identification, when employee admit the power of other in order to establish a long term nourishing relationship and feel proud to be the part of that firm.
• Internalization, when employee feels that when he/ she will fulfill organizational goals, ultimately in return chances of his/ her growth will be more. (Mullins 1999)
A Motivational Based Model of Commitment:
In this model different types of commitment is explained. By using theoretical framework diagram different type of commitment is being explained. According to Reichers, commitment level of individuals vary from situation to situation. Though for reader’s easiness we explained commitment from several purposes, like from self-based prospective, from group based prospective and from partner based prospective.
• Self-Based Commitment:
Although shared and interpersonal self-identities align individual’s self-definitions and goals with exterior social entities, the motivations that complement a long-lasting employee individuality are decided individually. Brewer and Gardner said, employees with their personal identities feel themselves different from others, they follow their own dreams, goals and targets which are beneficial for them. Triandis stated that, “individualism is associated with competition, self-sufficiency, emotional distance from in-groups and self-indulgence”. In companies individual oriented employees act in ways that assists them in becoming financially strong. In self based commitment individuals only performs when they are getting fair compensation against their services. Employees with firm attitude kept their organizational association as long as company give them valued rewards, take care of their rights and maintain a healthy strong relationship between top management and employees. In self-based commitment orientation employees think only for their own benefits, they will work for society when society in general give them rewards.
• Partner-Based Commitment:
As we have seen in self-based commitment in which employees are committed with themselves for achieving their life goals. Similarly, partner-based commitment is another relative term. When two persons work together their mutual cooperation and commitment with each other is very essential. In partner-based commitment, instead of commitment with particular company or organization, individual is committed with his/ her partner for achieving their mutual benefits. Anderson, Chen, Slussand Ashforth, stated that individuals with long-lasting relational identities also view their partner’s objective as their own goals and objectives, that’s why they mutually cooperative with each other which forms the basis of “Partner-Based Commitment”. According to Nelson, Joshi, Fedrick they said, in partner- based commitment employees are committed with their supervisors, because their roles are very closely related to each other. So in some situations they mutually work for the benefits of each other.
• Group-Based Commitment:
A strong combine individuality leads individuals to define themselves and others in form of groups they belong to. According to Jackson, Johnson and Chang, combine level also regulates the criteria that employees use to assist their acts, which are social customs, norms and objectives certified by the organization to which employees belong. In group-based commitment employees have to behave according to certain prewritten parameters and they have to follow certain rules. Certainly in group-based commitment everyone is evaluated at the collective level, because in groups everyone gives feedback about performances of each other at combine level. That’s why individuals with long-lasting collective identities observe themselves as being gratified to keep a strong relation in significant social groups, including working firms. (RusselJohson and Chu Hsian 2010)
Relation of Organizational culture with Employee Commitment:
Research study of organization’s culture in Pakistan has been led by Mujeeb Ehtesham, Tahir Masood Muhammad and Shakil Ahmed Muhammad at Comsats University. In their research they have shown an impact of components of organizational culture on employee commitment. The consequence of research study showed that participation of individuals within the companies is highly interconnected with the consistency and flexibility. They have shown the positive relationship between the components of organizational culture and employee commitment, they said that commitment level of employees will be high in organization if the component of organizational culture is flexible for working. (Masood, Shakil, Mujeeb 2011)
Fakhar Shahzad, Rana , Ayesha Rashid Khan and Lalarukh Shabbir also contributed their research studies on analyzing the impact of components of organizational culture on employee commitment. They showed that if the employees have same values, their rights are protected and they are treated fairly then that type of organizational culture will have positive influence on the employee’s commitment level. Another aspect of that research was to keeping a balancing relationship between components of organizational culture and employee commitment. Further research has been conducted by Alharbi Muhammad Awadhand Alhaya Muhammad Saad, they also showed that the significant relationship between the components of organizational culture and employee commitment. They also focused on making such procedures which can play a positive and significant role in increasing the level of employee commitment. (AlharbiAwadh, Saad, FakharShahzad, Ayesha Khan 2012)
Ezekiel SaasonguNongoand Darius NgutorIkyanyon presented another prospective that corporate culture has an influence on the employee commitment. Another research study examined the impact of organizational culture on employee commitment level in the public sector of Pakistan. The analysis of research study determined that culture in the public sector of Pakistan needs to be improved so that the commitment level of employees enhanced. It is generally believed that organizational culture has a significant influence on the performance and commitment level of employees. There are other extents of organizational culture that play major in making positive relation between organizational culture and employee commitment level. Research study has indicated that different components of organizational culture and organizational efficiency has significant influence on different level of employee commitment who are working within the organization. For example if low-level employees are provided with a facility of transport service it will increase their commitment level with the organization. Ultimately it will be beneficial for company it-self, like, less % of absenteeism and operating costs. (Engr. Hafeez Ur Rehman, Syed Munir Ahmed Shah 2012)
Organizational Corporate culture touches the way in which employee works in an organization. Organizational culture can be seen as the distinctive design of shared norms, behaviors, formal procedures, beliefs, values, traditions, socialization and expectations of employees in the organization. That’s why organizational culture is associated with the character of company, portraying employee’s attitude even when they are not trained on what to do. Research study proposes that organizational culture puts a significant impacts on organizational behavior, especially in the field of competence, efficiency and commitment. It means that by maintaining a suitable organizational culture, companies can achieve success. That’s why study of employee commitment needs to be practiced carefully for achieving organizational success. It is supposed that organizational culture impact employees’ sense of loyalty, active participation, identification and attachment to the organization. Lokand Crawford analysis that such feelings might rationally be expected to affect commitment. This research study is important for a quickly developing country like Pakistan as there is enormous need to understand how organizational culture impact individuals attitude of commitment to the organization. This research study can make improvement in organization to assist employees become more loyal and commitment with their work. Conceptually. It is imperious to improve our understanding of how organizational culture impact on employee commitment. Conclusively this study will help top management and managers in decision making especially in the fields of hiring, selection, promotion, training, motivation and instituting in the companies. (Salami, Peters and Watermann 2008)
The efficiency of a corporate is prejudiced by organizational culture, which affects the way management plans the functions of planning, organizing, recruiting, leading and controlling. Employee commitment is seen as the psychological power of an individual’s loyalty and level of engagement with the company. A loyal employee is expected to stay with the company regardless of whether the company is in a good or bad condition. Organizational culture is universal and strong as it either motivates or encourages change in the organization. For individuals, organizational culture is either the gum that holds employees to organization or the wind that blows them away. Organizational culture is significant in improving companies’ key functions. Culture is also important in analyzing how well an individual fits in to company. In the meantime, the significance of a good fit between an individual and company cannot be overlooked. Organizational culture affects the commitment of employees within the company and power of corporate commitment is interlinked with the power of organizational culture. A powerful organizational culture assists individuals in understanding the objectives of company, and as they work towards corporate objectives, their level of loyalty, sincerity and commitment increases. Organizational culture is energetic in making and supporting employee commitment and concentration level that is often features of successful companies. Furthermore, common values which are a characteristic of organizational culture improves employees’ identification and engagement to the company. This obviously depicts that individuals designate to be committed to the companies whose values they share. Though experimental research has been conducted on organizational culture and employee commitment to the company, there has been less indication to prove the impact of organizational culture on employee commitment. In a study of Hong Kong and Australian managers, Lokand Crawford found a positive impact of organizational culture on employee commitment. Zain studied the impact of four scopes of organizational culture namely, teamwork, communication, reward, recognition, training and their impact of the development of employee commitment deduced that all four aspect of organizational culture were significant elements of employee commitment. Mahmudahalso proposed a prominent relationship between organizational culture and employee commitment. (Zain, Kennedy, Silverthorne, Nazir, Sathe, Bretz 2010)
There are a total nine variables in this research. One is dependent variable, one is independent variables and the other seven are demographic variables.
The dependent variable of this research is “Employee Commitment”. It has four dimensions:
2. Professional Development
3. Balance between work and life
4. Performance appraisal
One independent variable in this research is “Organizational Culture”
The dimensions of organizational culture are:
2. Training and development
4. Rewards and Recognition
There are seven demographical variables which are used in this research. These are as following:
4. Monthly Income
6. Marital Status
In my research study I have used following hypothesis. H˳ represents Null Hypothesis whereas H₁ represents Alternate Hypothesis.
H˳: There exists no relationship between Organizational Culture and Employee Commitment.
H₁: There exists a relationship between Organizational Culture and employee commitment.
H˳: There exists no relationship between gender of employees and employee commitment.
H₁: There exists a relationship between gender of employees and employee commitment.
H˳: There exists no relation between marital status of employees and employee commitment.
H₁: There exists a relation between marital status of employees and employee commitment.
H˳: There exists no relation between age groups of employees and employee commitment.
H₁: There exists a relation between age groups of employees and employee commitment.
H˳: There exists no relation between education level of employees and employee commitment
H₁: There exists a relation between education level of employees and employee commitment.
H˳: There exists no relation between monthly income of employees and employee commitment
H₁: There exists a relation between monthly income of employees and employee commitment.
Following are the research objectives for this research:
1. To find the relation between organizational culture and employee commitment.
2. To find the relation between Gender of employees and employee commitment.
3. To find the relation between Marital Status of employees and employee commitment.
4. To find the relation between Age group of employees and employee commitment.
5. To find the relation between Monthly Income of employees and employee commitment.
6. To find the relation between Education level of employees and employee commitment.
Purpose of study
The purpose of this research study is to find out the impact of organizational culture on employee commitment in the IT sector of Pakistan.
Type of study
This study describes the phenomena that can help in finding and understanding the correlation between independent variable “Organizational Culture” as well as the dependent variable “Employee Commitment”.
This research is basically a field study in which the respondents freely respond to the research tool which in this case is a questionnaire. The impact of researcher is extremely limited and negligible and does not influence the respondent.
The population for this research study would be consisting of employees in the IT sector of Pakistan.
Unit of Analysis
The unit of analysis for this research is an individual as one individual will fill one questionnaire and these one respondent questionnaires will help in knowing the views of each person.
The time horizon is cross sectional instead of time series as we will be asking the respondent to fill the questionnaire once only and not on the basis of time series in which the respondent would have to respond to the research tool again and again with time on multiple occasions after specific period intervals.
A non- probability sampling technique known as convenience sampling would be used for our research. This technique is used when we are selecting the sample on the basis of convenience and the availability of respondents for the researcher. Usually the respondents are in close vicinity of the researcher hence convenient for the researcher to approach them.
For this research we are taking the sample size of One hundred and Nighty nine (199) employees from Arfa Software Technology Park Lahore who work in software houses. Research Tool
Among the various research tools available to us we would be using the questionnaire tool which will be representing different variables and their dimensions of our research. Then these questionnaires will be given to the respondents who will fill it later their answers to be analyzed in order to deduce results. The questions are close ended measuring the response from respondent on the basis of “Likert Scale”.
For statistical analysis IBM SPSS 21 will be used which will help in analyzing and computing the data by conducting specific tests.
Following tests are applied in the research by using SPSS V. 21:
1. Frequency Tests
2. Reliability Tests
3. Normality Tests
4. Correlation Tests
5. Regression Tests
6. Mann-Whitney Tests
7. Kruskal-Wallis Tests
Data Analysis and Interpretation:
From statistics table we can determine that from the 199 questionnaires that all were genuinely entered and none was missing.
From Gender table we can check that out of 199 respondents of our research study the majority gender is consists of males which is 51.8% while the rest of the defendants are females which percentage is 48.2%. The total number of respondents for our research study are one hundred and nighty nine.
Marital status table shows that from 199 respondents 161 are single, consisting of 80.9% whereas the number of unmarried participants were 38 consisting of 19.1%. The reason most of our respondents are male and they have 21 to 30.
Age table concludes that most of our respondents lie into the age group which ranged from 21-30 consists of 166. Its percentage is 83.4%. Similarly between age 31 to 40 there are 27 respondents which percentage is 13.6%, respondents between age group 41 to 50 are 5 which percentage consists of 2.5% and similarly goes on.
Education table shows that majority of respondents are bachelors passed consists of 84 people whose percentage is 42.2%. M.Phil qualified employees are 14.1%and doctorate percentage is 0.5%.
Case Processing Summary
From the above table we concluded that there were 199 participants in our research study whose questionnaires were completely filled and valid. I got filled questionnaires from Arfa Software Technology Park.
From Reliability table we concluded that value of Cronbach’s alpha is 0.802. For a questionnaire to be valid and reliable its value should be greater than 70% (0.700). So from the table’s value we can see that the value is greater than 0.700. This value of
80.2% (0.802) for 40 questions out of which 7 were demographical and the remaining 33 were based on the Likert scale shows that the questionnaire is valid and reliable.
Tests of Normality
From the above table and the histogram we conclude that our data is abnormal. The data is uneven instead of being plotted symmetrically. We can check that the data is irregularly distributed. Instead of the data being bell shaped the data’s left tail is much longer as compared to its right tail. The data is also more concentrated on the right side.
As we can see the plotted points on Normal Q-Q plot are normal in case of average employee commitment which is our dependent variable. It shows the data is normal and all points are normally distributed. Normal Q-Q plot is drawn when data is not normally distributed on histogram. Normal Q-Q plot is used for checking the normalization of data.
Normality Test for Organizational Culture:
Tests of Normality
From the above table and the histogram we conclude that our data is abnormal. The data is uneven instead of being plotted symmetrically. We can check that the data is irregularly distributed. Instead of the data being bell shaped the data’s left tail is much longer as compared to its right tail. The data is also more concentrated on the right side.
As we can see the plotted points on Normal Q-Q plot are normal in case of average organizational culture which is our independent variable. Dots are positioned in a symmetry which shows the data is normal and all points are normally distributed. Normal Q-Q plot is drawn when data is not normally distributed on histogram. Normal Q-Q plot is used for checking the normalization of data.
Regression test Analysis between Organizational Culture and Employee Commitment
The regression analysis of the dependent variable (employee commitment) and independent variable (organizational culture) is performed on the data collected. In the table below, AvgOrgCul (which is the average/mean of organizational culture) represents strategic leadership and AvgEmpCom (which is the average/mean of employee commitment) represents the employee commitment.
The table below shows the overall significance of the model. It shows us that if the model is significant or not. In order the model to be significant, its p-value (which is also called the significant value) should be less than the value of alpha which is 0.05. As in the table, we can see that the p-value (Sig.) is 0.000 which is less than the alpha-value 0.05 so the model is significant. F (50.230) =24.407, p=0.000
The above table shows the effect of AvgOrgCul on AvgEmpCul. The value of R square is 0.203 which means that 20.3% variation caused in the dependent variable (employee commitment) can be explained by the independent variable (organizational culture) i-e 20.3% variation in the dependent variable is caused by the independent variable.
The value of R should be:
• R = 1 (for perfect relationship)
• R = closest to 1 (for strong relationship)
• R = 0.5 (for moderate relationship)
• R = closest to zero (for weak relationship)
• R = 0 (for no relationship)
Moreover, as we can see the value of R is 0.451 which is closer to 0.5 so it shows that there is a moderate relationship between the organizational culture and employee commitment.
From the above table, we can see that the beta value for Avg. Organizational Culture is 0.483 so the regression equation would be as follows:
Y = 0.483(X) + 2.041
Avg Employee Commitment = 0.483*Avg Organizational Culture + 2.041
Employee Commitment = 0.483*Organizational Culture + 2.041
So from the above equation we can conclude that for 2% change in the organizational culture, employee commitment changes by 0.483. It means that 2% increase in organizational culture can increase the employee commitment by 48.5%.
Correlation tests are performed in order to check hypothesis and are used to reject or accept the null hypothesis.
Correlation between the Organizational Culture and Employee Commitment
H˳: There exists no relationship between Organizational Culture and Employee Commitment
H₁: There exists a relationship between Organizational Culture and Employee Commitment
In the above mentioned table N represents the sample size or the number of respondents to our research survey. Instead of Spearman Correlation we have used Pearson Correlation as the data was normal. For the null hypothesis to be rejected it is important that the value should be less than 0.005. We can see in the above table that the value Sig. (2-tailed) is 0.000 which lies below 0.005 which means that we reject null hypothesis. The value of Sig. (2-tailed) is very important as it shows the level of significance for the relationship as well as how strong is the bond between the variables being tested. The value of coefficient of correlation between Organizational Culture and Employee Commitment is 0.451 which shows that the relation between Organizational Culture and Employee Commitment is 45% Moderate. In light of the above analysis we can safely reject H˳ the null hypothesis and accept the alternate hypothesis H₁. Thus we accept the following hypothesis.
H₁: There exists a relationship between Organizational Culture and Employee Commitment.
Mann-Whitney test between Genders of Employees and Employee Commitment
H˳: There exists no relation between Gender of Employees and Employee Commitment
H₁: There exists a relation between Gender of Employees and Employee Commitment
Interpretation and Analysis:
The above mentioned table shows relation between Genders of Employees and Employee Commitment. To find out whether this relation is significant or not, the value of Asymp Sig. (2-tailed) plays an important role. If its value is greater than 0.05 we accept the null hypothesis and if it is less than the value of 0.005 then we accept the alternate hypothesis. As the value 0.249 is greater than 0.05 thus we accept Null Hypothesis.
Mann-Whitney test between Marital Status of Employees and Employee Commitment
H˳: There exists no relation between marital status of employees and employee commitment
H₁: There exists a relation between marital status of employees and employee commitment
Interpretation and Analysis:
The above mentioned table shows relation between marital status of employees and employee’s commitment. To find out whether this relation is significant or not, the value of Asymp Sig. (2-tailed) plays an important role. If its value is greater than 0.05 we accept the null hypothesis and if it is less than the value of 0.005 then we accept the alternate hypothesis. As the value 0.021 is less than 0.05 thus we accept Alternate Hypothesis.
Kruskal-Wallis test between Age group of employees and employee commitment
H˳: There exists no relation between Age group of employees and employee commitment
H₁: There exists a relation between Age group of employees and employee commitment
Interpretation and Analysis:
The above mentioned table shows relation between age group of employees and employee commitment. To find out whether this relation is significant or not, the value of Asymp Sig. (2-tailed) plays an important role. If its value is greater than 0.05 we accept the null hypothesis and if it is less than the value of 0.005 then we accept the alternate hypothesis. As the value 0.283 is greater than 0.05 thus we accept Null Hypothesis and reject Alternate Hypothesis.
Kruskal-Wallis test between Monthly Income of employees and employee commitment
H˳: There exists no relation between Monthly Income of employees and employee commitment
H₁: There exists a relation between Monthly Income of employees and employee commitment
Interpretation and Analysis:
The above mentioned table shows relation between monthly income of employees and employee commitment. To find out whether this relation is significant or not, the value of Asymp Sig. (2-tailed) plays an important role. If its value is greater than 0.05 we accept the null hypothesis and if it is less than the value of 0.05 then we accept the alternate hypothesis. As the value 0.004 is less than 0.05 thus we accept Alternate Hypothesis.
Kruskal-Wallis test between education of employees and employee commitment
H˳: There exists no relation between education of employees and employee commitment
H₁: There exists a relation between education of employees and employee commitment
Interpretation and Analysis:
The above mentioned table shows relation education of employees and employee commitment. To find out whether this relation is significant or not, the value of Asymp Sig. (2-tailed) plays an important role. If its value is greater than 0.05 we accept the null hypothesis and if it is less than the value of 0.05 then we accept the alternate hypothesis. As the value 0.010 is less than 0.05 thus we accept Alternate Hypothesis.
Findings and Recommendations
From the research I have conducted I have found some results and conclude them here along with some recommendations on important points for management.
1. I used employee commitment as a dependent variable to measure the commitment level of employees in an organization with respect to organizational culture. This means that if an employee is committed with an organization than it show that organizational culture and employee commitment are related with each other.
2. However if employee is not committed with organization then it show organizational culture have not any impact on employee commitment.
3. When I applied the regression analysis between average of organizational culture and average of employee commitment I found out that for 2% change in organizational culture, has affected employee commitment by 0.483 units. This clearly shows that there is a moderate relation between organizational culture and employee commitment. Thus the management should focus more on organizational culture to make relation stronger between organizational culture and employee commitment.
4. I found out from hypothesis testing under correlation that organizational culture do have impact on employee commitment. The correlation between organizational culture and employee commitment is about 0.451 which is about 46%. Therefore the management should pay more focus on improving organizational culture so that employee commitment can be increased.
5. During this research study I found out that Gender of employees has no significant impact on the employee commitment.
6. In my research study I also found that Marital Status of employees and employee commitment have significant relation between them.
7. It was discovered that Age group of employees and employee commitment do not have a significant relation between them. Most of the respondent fell into the age group between the ages of 21 to 30 and consisted of 123 out of 199 respondents. This indicates that the management should pay attention to this relation and explore it further so that it could be beneficial for building employee commitment between this age group of employees.
8. It was found that Monthly Income of employees and employee commitment have significant relation between them.
9. A significant relation was discovered that exists between Education of employees and employee commitment.
10. In the literature review we came to discover that friendly organizational culture have more impact on employee commitment. Therefore the management is advised to focus on forming a friendly corporate culture rather than conservative culture. If culture is friendly then employee can work freely.
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