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CHAPTER I
INTRODUCTION
1.1Background of the StudyErgun Ozen, CEO of Turkish Garanti Bank once stated that the superior
performance of firm such as IBM, GE, P&G and Intel might be at least partly or
moderately due to their strong culture. Change is one of many characteristics in
todays dynamics world. The need to adapt to changes has pushed individual and
organizations alike discover the need for learning (Ashton, 2004). To adapt with
new changes, organization should provide ground for organizational growth and
development. These organizations are called learning organization (McClelland,
1987). Consumer retailing has been inseparable in our daily lives. In Indonesia,
consumer spending is accounted for 12% of Indonesias gross domestic product;
hence it can be regarded as lucrative sector.
This research is conducted because this study will show that organizational
culture no matter how big or small the company is. The object of this study is a
company that is was recently established in the past few years; hence the
dominant organizational culture is not known yet.
To survive in highly competitive market, all organizations no matter of its
sizes must be adaptive in dealing with the dynamic environment. The key of
survival is organization learning, not individual learning (Dymock and McCarty,
2006). Thus researchers have studied on applicability of learning organization in
real life practices and its antecedents (Dymock and McCarty 2006; Change and
Lee, 2007; Huber 1991; Jacobs, 1995). According to Coutu (2002), organizational
learning is relatively new concept, hence there is little known about it, but whats
certain is researcher dont know exactly on how to intervene in culture to create
transformational learning across the organization. This statement supports the
need to study culture as an antecedent variable towards shaping of learning
organizations. Previous researches showed that the benefits of a that learning
organization include: improved quality of outputs at all level, improving corporate
image by becoming more people oriented (Pedler and Boydell, 1997), maintained
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levels of innovation, and remaining competitive, being better placed to external
pressure (McHugh and Alker, 1998).
The object of this study is a company located in Jakarta. The company
specializes in managing foreign food and beverage franchises in Indonesia. As of
2012, the company holds 3 licenses, 2 are beverages franchise and 1 food
franchise. There are numerous studies regarding on how to improve performance
of an organization but only a few studies use organization culture as its variable.
Based on the description above, the researcher is intrigued to conduct a further
study about organizational culture in a limited liability company in Jakarta. The
researcher wanted to find out the relationship between types of culture as an
independent variable and learning organization as dependent variable. Therefore
the researcher conducts a study entitled: The Effect of Organizational Cultures
in Shaping Learning Organization in Company X.1.2Research problem
The proposed research problem for this study is:
1. What is the dominant type of organizational culture in Company X?2. How does organizational culture contribute in Company X as learning
organization?
1.3Research ObjectivesThe objective of this proposes research are:
1. To identify the dominant type of organizational culture in CompanyX; and
2. To determine how the types of organizational culture contribute inshaping the learning organization in Company X.
1.4Research ContributionsThis research expects to give benefits:
1.4.1 For the CompanyThe company can use the result of this study for management direction and
strategy formulations
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1.4.2 For the ResearcherThe researcher can gain knowledge on how organizational cultures contribute
towards shaping the learning organization.
1.5Research LimitationThis study is limited only to one object; hence its findings might not be
applicable if it is applied to other organization. This study will test
organizational culture as the independent variable in shaping learning
organization.
1.6Research OutlineChapter I
This chapter sets up the research problem of this study entitled The
Effect of Organizational Cultures in Shaping Company X As Learning
Organization. this chapter also provides background information defining the
importance of organizational culture. This chapter specifies the research
objectives of the study in detail to contribute to understanding the effect of
organizational culture in shaping Company X as learning organization.
Chapter II
This chapter summarizes the previous studies and findings that have been
published regarding organizational cultures and learning organization. This
chapter also covers on how it will contribute or add to what has already been
studied. This chapter also states a clear description of organizational culture and
learning organization that apply to the research problem, an explanation of why it
is relevant, and how the framework addresses the hypothesis to be tested.
Chapter III
This chapter explains the detailed technical and scientific activities, which
include the research design, sampling plan, instrumentation, statistical tools
(pretest, classical assumption test, simple regression).
Chapter IV
This chapter discusses the presentation of the findings that addresses the
research problem and focus on how these findings relate to the theory and
previous researches.
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Chapter V
This chapter discusses the conclusion, implication and recommendation to
advance the study of the research topic in terms of theoretical, methodological and
managerial contribution that may be necessary to eliminate limitation of this
study.
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CHAPTER II
REVIEW OR RELATED LITERATURE
2.1 Organizational Culture
According to Schein (1992), organizational culture can be defined as a
pattern of shared basic assumption invented, discovered, or developed by a given
group that are taught to new organizational members as way of perceiving, and
even thinking and feeling. Other researchers defined organizational culture in
more detailed statement; organization member engage in rituals, pass along
corporate myths and stories, and use arcane jargon and these informal practices
may foster or impede organizations goals (Baker, 1980; Deal and Kennedy, 1982;
Peters and Waterman, 1982).
Kotter and Heskett (1992) described the need of good organizational
culture as the optimal organizational culture and later stated that only cultures that
can help organizations anticipate and adapt to environmental change will be
associated with superior performance over periods of long time.
Organizational culture is vital because it has measurable impact on
organizations ability to achieve their goals. Director-HR of Microsoft India, Joji
Gill stated that culture is the values and beliefs of the organization that describes
the organization works. She added that values are the foundation of any company.
If the foundation is weak, it wont be able to grow, hence it is important to build
strong foundation these values should be focus on how resources are utilized and
creates vision of the organization. Strong culture is considered to be driven force
to improve the performance of the employees because it enhances self-confidence
and commitment of employees and reduces jobs stress and improve ethical
behavior of employees (Saffold, 1998).
Schein (1990) divided organizational culture into two layers of concept;
visible and invisible characteristics. The visible layer means external building,
clothing, behavior modes, regulations, stories, myths, language and rites. Invisible
layer on the other hand means common values, norms, faith and assumption of
business organizational members.
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In contemporary managers view, Schein (1990), organizational culture is
widely understood as an instrument to be used by management to shape and
control in some way the belief, understandings and behaviors of individuals, and
thus the organization to reach specific goals. Bluedorn and Lundgren (2003)
further emphasize the impact of organizational culture by stating organizational
culture is integral to effective change initiatives and strategies. Previous studies
have been conducted and the result shows that organizational culture has
numerous impacts both directly and indirectly towards various outcomes. A study
by Harvard Business School on 2003 examined management practices at 160
organizations and discovered that culture can enhance performance and has
significant impact toward long-term economic performance. Peters and Waterman
(1982) also found out that organizational culture proved to be detrimental toward
positive economic performances. However, according to Denison, Haaland and
Goelzer (2004) not all dimensions of organizational culture contribute to success
in economic performance.
Empirical evidence shows that there is several outcomes that can be
associated either directly or indirectly with strong organizational culture. Alicia
Bosnier from UC Berkeley stated the benefits include the following: competitive
edge from innovation and customer service, efficient employee performance,
increased team cohesiveness, high employee morale and strong company
alignment towards goal achievement. Kotter and Hesket (1992) conduct a study
and found out that strong culture raised the income of organization up to 765%
between 1977 to 1988 and only 1% increase in the same period for firms without
strong culture. According to Ergun Ozen, CEO of Garanti Bank, the superior
performance of firms like IBM, GE, P&G and Intel may be, at least partly or
moderately, a reflection of their strong organizational culture.
In this study, the researcher uses organizational culture typology developed by
Hellriegel and Slocum
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Figure 1
Four Types of Organizational Culture
Source: Hellriegel and Slocum, 1994. Management, 6e. New York: Addison Wesley
Figure 1: Four Types of Organizational Culture
1. Bureaucratic culture: This types of organization is highly structured,values rules and formalization and standard operating procedures to ensure
predictability and stability. In this culture, the tasks and responsibilities of
employees are clearly stated. For this organization success means
dependable delivery and smooth scheduling (Hellriegel et al., 2004: 365-
366).
2. Participative culture: This type of organization is an open place to work.This type of organization is assumed to depend on teamwork and
participation. Great importance is given to group consensus and long term
benefits of human resource development. For this organization, success
means achieving customers need and concern for people (Hellriegel et al.,
2004: 366).
3. Learning culture: This type of culture emphasize on dynamic and creativeplace to work. Innovation and risk-taking are characterized in this
organization. Organization with this type of culture reacts quickly to
changes. Formal control is flexible to foster innovation and change. For
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this organization success means gaining new and unique product or
services (Hellriegel et al., 2004: 367).
4. Competitive culture: This type of culture is result-driven focused mainlyon job completion. In this culture relationship of employee and
organization is contractual. Competitiveness exists in every level of
management because performance is rewarded through increased
compensation from organization. For this organization success means
market leadership (Hellriegel et al., 2004: 367).
When an organizational culture is deemed unhealthy, it requires
organizational culture change. This change process can be very daunting but
necessary nonetheless because organizational culture change may lead to reduced
employee turnover, improve companys performance and achieve organizational
goals. According to Edgar Schein, culture is the most difficult organizational
attribute to change, because organizational culture outlast organizational products,
services, founders, and leadership, and all other physical attributes of the
organization. There are numerous ways to change organizational culture such as
mergers and acquisition, however strong cultures can provide organizations with
significant advantages, but when the basis for survival rests on organizations
ability to change and adapt, a strong culture can be liability
2.2 Learning Organization
According to Senge (1990), learning organization is a group of people
working together to collectively enhance their capabilities to create results they
really care about. Nevis et al (1995), define learning organization as capacity
within an organization to maintain or improve performance based on experience.
Dixon (1999) defines learning organization as organization that facilitates the
learning of all its members and which continuously transforms itself. Other
previous studies stated that learning organization covers individual, group and
organizational learning to increase organizational and individual learning (Small
and Irvine, 2006; Argris and Schon, 1978). Many research papers have been
published about the impact of various variables on learning organization such as
increase competitiveness, responsive to external pressure, improve quality at all
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levels, etc. (Gardiner and Whiting, 1997; Hall, 2001; Edmondson and Moingeon,
1998).
Senge et al (1994), suggested, for an organization to transform into
learning organization, it must undergo five steps. First step was to build shared
vision that can be achieved through empowering individuals to create shared
image of the future of the organization and all employees would contribute know
and share the vision. Second step is to engage in whole team learning and transfer
of new knowledge. Senge suggested that collective learning is outweighs the
benefit of individual learning. Third model is to allow new view of the future to
be shared and new vision to develop what is necessary and can be done. Fourth
step, individual need to know their weaknesses and internalize their learning.
Final step is to view things in big picture; meaning how each pieces interact with
each other and the environment
According to Applebaum and Reichart, there are 3 key characteristics of
learning organization. Those 3 key characteristics are learning process, learning
orientation and facilitating factors within the organization. In order to cope with
rapid changes learning is seen as continuous activities wherein employee need to
learn quickly in order to support organization (Slater and Narver, 1995). Stata
(1989), stated that by learning quickly, employee can discover innovative ways of
working and make it easier to adopt new technology, which in turn give the
organization competitive advantage over other competitors. In their work,
Sambrook and Stewart (2000) stated that learning organization is necessary to
enable employee become proficient in at a certain task by allocating resources to
facilitate communication platform and training programs to create more
opportunities for continuous employee learning through teamwork and
empowerment.
In this study, the researcher used learning organization typology developed by
Senge (1990).
1. Systems thinking: Organizations are system of interrelationships. Hence tobecome more successful people need to analyze these relationships and
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vision, systemic thinking and team learning. This study focused only in dimension
of organizational culture proposed by Hellriegel and Slocum (1994), which are:
competitive culture, bureaucratic culture, participative culture and learning
culture. In this study, researcher studies the relationship between organizational
cultures towards shaping learning organization.
2.4 Hypothesis of the Study
Based on the theoretical framework, the following research hypotheses are
defined as:
H1: There is a significant relationship between organizational cultures
towards shaping learning organizations.
2.5 Operational Framework
The operational framework of the study adopted theoretical framework
presented in Figure 3 taken from Fard, Rasmy, and Taghiloo (2011). The
measurement of this study consists of several dimensions. The researcher wants to
observe whether there is a relationship between organizational cultures towards
shaping learning organization.
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Figure 3
Operational Framework
Organizational Culture
Competitive Culture
1. High flexibility2. Low integration3. Contract relations between
employee and the
organization
4. Low loyalty5. Low cultural identity6. Achieving to quantitative
objects
Bureaucratic Culture
1. Inflexibility2. Rigid regulations and use3. High level of centralization4. Affirmative leadership styleParticipative Culture
1. Low flexibility2. High integration3. Loyalty4. Personal commitment5. Team working6.
High level of societyacceptance
7. Tendency to satiabilityLearning Culture
1. Trend to change2. Knowledge expansion3. Sensitive and responsive to
external changes
4. Complex environment5. Competitive advantage6. Informed about the
environment
7. Gathering environmentalinformation and process8. Service development9. Encourage innovation,
creativity and learning
10.Organizational commitment
Learning Organization
Personal Mastery1. Try to achieve the goals2. Try to improve the ability3. Skill and ability4. Be informed of the updated knowledge5. Continuous improvement of the activities6. Skill developmentMental Models1. Simple opinion about the performance2. Serotype view points3. Accepting other opinions4. Rationality in problem solving5. Believe to find better alternative6. Irrational advocacyShared Vision
1. Common objective2. Commitment to the vision3. Participating in defining organizational
objectives4. Commitment to achieve organizational
objectives5. Homogeneity of individual and
organizational objectives6. Clear organizational objectivesSystemic Thinking
1. Use of system thinking2. Attention to the effect of decisions3. Try to find causes of the problems4. Considering and monitoring changes in
external environment5. Able to make comprehensive decisionsTeam Learning
1. Tend to dialogue and discussion2. Information exchange in decision-
making3. Group assessment and evaluation4. Commitment to group decision making5. Importance of team learning and training6. Using others experiences
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Learning organization is a group of people working together to collectively
enhance their capabilities to create result they really care about (Senge, 1990). This study
uses learning organization typology developed by Senge (1990), which are personal
mastery, mental models, shared vision, systemic thinking and team learning. List of
operational variables can be seen in Table 1.
Table 2
List of Operational Variables
Hypothesis Indicators Scale
H1: Organizational cultures
Learning organization
6-points
Likert scale
- Flexibility- Regulations- Centralization- Leadership style- Flexibility- Integration- Contract relations- Loyalty- Cultural identity- Companys objectives- Flexibility- Integration- Loyalty- Personal commitment- Teamwork- Society acceptance- Satiability- Trend to change- Knowledge expansion- Response to external changes- Environment- Competitive advantage- Knowledge of environment- Service development- Innovation- Commitment
Learning organization - Achieve goals- Improved ability- Skill and ability- Updated knowledge- Continuous improvement- Skill development- Simple opinion- Stereotype viewpoints- Accepting opinions
6-points
Likert scale
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- Problem solving- Looking for alternative- Advocacy- Common objective- Commit to vision- Participate in defining
organizational objectives
- Commit to achieve objectives- Homogeneity of individual and
objectives
- Clear objectives- Use of systemic thinking- Attention to effect of decisions- Try to find cause of problem- Consider and monitor changes in
external environment
- Able to make comprehensivedecision
- Dialogue and discussion- Information exchange in decision
making
- Assessment and evaluation- Commitment to group decision
making
- Importance of tem learning andtraining
- Using others experiences3.2.2 Variables to be tested
The source of information in this research is from primary and secondary data.
1. Primary data: data obtained directly from the object under research by researcher.The source for primary data came from the questionnaires that were distributed to
the employees of Company X.
2. Secondary data: secondary data in this study is list of employee from Company Xand necessary online resources such as online-posted journals, and related
previous research and many guideline books
3.2.3 Levels of Measurement
In this study, level of measurement used was interval measurement. This
measurement allowed researcher to measure the difference between points in scale and
will also help in measure dispersion of range, standard deviation and also the variance
This study used 6-points Likert scale. Even number Likert scale was chosen
because researcher can make respondent to convey their real position rather than
choosing a neutral position, which is available in odd number Likert scale. To measure
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the respondents response in organizational culture variable, each number will represent
the following statement:
Table 2
Likert Scale Representations
Score Answers
1 Strongly Disagree (SD)/ Sangat Tidak Setuju (STD)
2 Disagree (D)/ Tidak Setuju (TS)
3 Moderately Disagree (MD)/ Agak Tidak Setuju (ATS)
4 Moderately Agree (MA)/ Agak Setuju (AS)
5 Agree (A)/ Setuju (S)
6 Strongly Agree (SA)/ Sangat Setuju (SS)
To measure learning organization, each number will represent following statement:
Table 3
Likert Scale Representations
Score Answers
1 Never (N)/ Tidak Pernah (TP)
2 Almost Never (D)/ Hampir Tidak Pernah (HTP)
3 Sometimes Never (SN)/ Kadang Tidak Pernah (KTP)
4 Sometimes Always (SA)/ Kadang Pernah (KP)
5 Almost Always (AA)/ Hampir Setiap Saat (HSS)
6 Always (A)/ Setiap Saat (SS)
3.3 Methods of Data Collection
3.3.1 Sources of Data
In this study, the researcher will use primary data and secondary data. Primary
data will be firsthand information collected from all employees of Company X in form of
questionnaire. Secondary data will be previous studies from books, journals and reports.
3.3.2 Sample and Sampling Plan
As the research conducted toward a company, which is Company X, the
population for this research is all employees of Company X. The quantity of the
population in this research is known, which is 138 employees, 11 are managerial level
and 127 are staff and cook. Population is taken regardless of gender education and work
experience. Later on, population will be divided into two groups, managerial level and
non-managerial level respectively. Out of 138 employees, the research gets 124
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employees (89.8%) as respondent. The incomplete sampling is caused by the different
working shifts, unavailability of employee during the data collection
3.3.3 Research Instruments
In this study, the research instrument used will be questionnaire. Questionnaire
will be divided into two parts. First part of questionnaire is to know general information
of respondent based on demographic and position in Company X. this data will be
analyzed to know whether there is distinct characteristic that can differentiate respondent
choice. This part will consist of gender, age and position, years of employment,
educational background and work experience.
Second part of questionnaire is necessary to get data needed in analyzing
relationship between variables. The questionnaire will use 6-points Likert scale and will
be closed questionnaire to help respondent in answering it quickly and it will also help
researcher to code the answer for further analysis (Sekaran, 2003).
3.4 Methods of Data Analysis
In this study, quantitative method will be used in analyzing data relative to
answering the proposed research objectives and operational framework
3.4.1 Descriptive Statistics
In order to know respondents general profile or demographic characteristic, severalquestions need to be answered the demographic data of respondents is processed using
Statistical Package for Social Scientists (SPSS) version 16.0. The demographic data are:
1. Age2. Gender3. Position4. Years of employment5. Latest educational background6. Work experience prior joining Company X
3.4.2 Validity and Reliability Test
a. Validity Test
Validity will be used as well to measure if the indicators of the research will
really be able to measure the concept. As the author will use SPSS 16.00 as the software
to analyze the research data, technique that will be use is Bivariate Pearson. Bivariate
Pearson will analyze by correlating each item score with total score it will show that the
items are able to support in measuring the concept. Indicator are considered valid when
the value of its coefficient is greater than 0.4.
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b. Reliability Test
Reliability test is a test of consistency in data acquired and whether it is
dependable and can be used for further testing. In measuring reliability test, one way is to
use Cronbachs Alpha. If the data has Cronbachs Alpha on standardize items greater than
0.06 then it can be considered as reliable (Hair et al, 2006).
3.4.3 Classical Assumption Test
a. Normality test
The objective of this test is to test whether the independent variable and
dependent variable used in this study is normally distributed. This study will use
probability plot. If the plot is scattered along the diagonal line, then the model is
considered to be normally distributed
b. Homoscedasticity Test
The objective of this test is to know whether there exist inconsistent covariance
or not in a model. It can cause inefficient estimator, which will affect the result. This
study uses Spearmans Rho coefficient in which the significance value must be greater
than 0.05.
c. Linear test
The purpose of linearity test is to examine whether or not there exist arelationship between independent and dependent variables. The variables have significant
relationship if significance level of linearity is less than 0,05
d. Autocorrelation test
The objective of autocorrelation test is to test the relationship between values
separated from each other given a certain time of period in the residuals or prediction
errors from an analysis. This study uses Durbin-Watson statistics to detect presence of
autocorrelation. According to Wijaya (2009), data can be considered to pass the test if the
Durbin-Watson coefficient is between du < dw < (4-u). The table below shows that the
Durbin-Watson statistics is higher than the du, hence there is no autocorrelation in the
model of this study
3.4.4 Simple Regression Analysis
The objective of multiple regression analysis is to test the relationship between
independent and dependent variable. The standardized beta coefficient will reflect how
strong the relationship of independent to dependent variable According to Hair et al.
(2003), regression models should use standardized regression coefficient. The researcher
will examine the standardized coefficient, which ranges from 0.00 to 1.00.
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3.4.5 Correlation Coefficient
In this study, correlation coefficient is done using Product Moment Pearson. If the
correlation coefficient is +1, then the relationship of X and Y is positive and perfect. If X
increase, then Y increases and vice versa. However if correlation coefficient is negative,
then relationship of X and Y is negative and perfect. If X increase, then Y decreases and
vice versa. In this study, the researcher will find the correlation between:
Organizational Culture (X) and Learning Organization (Y)The interpretation of correlation coefficient can be seen in Table 5.
Table 5
Correlation Coefficient (r) Interpretation
Coefficient Interval Relationship Level
0.8001.000 Very Strong
0.6000.799 Strong
0.4000.599 Moderately
0.2000.399 Weak
0.0000.199 Very Weak
Source: Sugiyono (2007)
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CHAPTER IV
RESULTS AND DISCUSSIONS
4.1 Research Object Description
4.1.1. Company Description
Company X is a company specializes in managing international franchises in
Indonesia, which was founded in mid 2008. At first the company hold license of 1
franchise with 4 outlets. The business was improving and expanding until on early 2012,
wherein the company holds licenses of 3 franchises with 25 outlets in Jakarta.
In 2011, Company X ownership structure was changed from. At first one person
only funded the company, but since 2012 the company was funded by four people and
one of its partner act as managing partner. The transition of ownership proves to be
beneficial for Company X. As of July 2012, the company had holds 3 licenses with 25
outlets in various locations in Jakarta and headquartered in Total BuildingJakarta.
The Company control license of 3 international franchises which are a ramen
restaurant bringing authentic bowls Tokyo food, with its signature dish such as ramen
topped with pork mean and bamboo shoots; Fresh tea and juice, a tea and juice bar
serving tea combined with urban varieties; a gelato bar where in introduces hand crafter
gelato made with traditional ingredientsCompany X business is mainly focuses on the field of food and beverages. The
companys core key retail business is in service industry through numerous outlets. Since
this company was established 4 years ago, the brand name cant be leveraged, however
the company relies on popularity of franchises the company holds.
4.2 Respondent Description
The respondent of this study is all employees of Company X, which means all
employees in every outlet in every franchise. The respondents are taken by using
complete enumeration method.
From total employee of 138 questionnaires distributed in this company, 124 are
returned and used for study, the characteristic description of the respondents can be
known through classification of data or personal data acquired based on gender, age,
position, years of employment, educational background and work experience. The results
of each classification are explained as follows:
4.2.1 Respondent Description based on Age
The respondents are not given series of answer, hence respondent write their age.
However for convenience purposes, the age will be classified into four groups as follows
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4.2.4 Respondent based on Years of Employment
The respondents are given classified into four groups of range with years of
employment basis as follows:
Table 7
Respondent based on years of employmentYears of employment Total Percentage
6 months1 year 48 38.7%
1 year2 years 70 56.4%
3 years4 years 6 4.8%
Total 124 100%
From the table above, it is known that most of employee in Company X have
worked for the company for 1 year to 2 years (56.4%). 47 (38.7%) employees have
worked for 6 months to 1 year and only 7 (4.8%) employee have worked for 3 years to 4
years.
4.2.5 Respondent based on Educational Background
The respondent are given options of educational background to fill in as follows:
Table 8
Respondent based on educational background
Educational Background Total Percentage
High School 52 41.9%
Bachelors Degree 70 56.4%
Masters Degree 2 1.6%
Total 124 100%
From the table above, it is known that most employees (56.4%) in the company is
educated until level of S1. Second highest is high school level (41.9%) and third is S2
level (1.6%)
4.2.6 Respondent based on Prior Work Experience
The respondents are given options of yes and no to fill in. The results are as
follows:
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Table 9
Respondent based on prior work experience
Prior Work Experience Total Percentage
Yes 98 79%
No 26 21%
Total 124 100%
From the table above, it is known that majority of employee (79%) in the
company has work experience prior joining Company X. 26 employee (21%) has no work
experience prior joining Company X
4.3 Mean Rating and Standard Deviation
Descriptive statistics of research variables describes the mean and standard
deviation of each organizational culture. This study uses 6-point likers scale, hence 6
being the highest minus 1 being the lowest divided by 6. Interpretation of the ratings used
class intervals from given formula
The classification of each ratings are shown below
Table 10
Categories of respondents answer
4.3.1 Mean Rating and Standard Deviation of Organizational Culture
Organizational culture is measured by 4 types of organizational culture in
which each culture has their own indicators. Learning culture has the highest overall
mean among all types of culture; hence it is perceived by respondent as the most
dominant culture in the company. Learning culture has overall mean of 4.38, this finding
suggest that most employee perceived the culture of the company is learning culture.
Interval Statement
1 x < 1.833 Strongly disagree
1.833 x < 2.666 Disagree
2.666 x < 3.499 Moderately disagree
3.499 x < 4.332 Moderately agree
4.332 x < 5.166 Agree
5.166 x < 6 Strongly agree
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4.3.2 Mean Rating and Standard Deviation of Each Indicator of Learning
Organization
Learning organization is measured using 5 dimensions with total indicators of 22
indicators. The overall mean rating for all indicators is 4.63, hence most employees
percieved that the company can transform into learning organization.
Table 13
Mean Rating and Standard Deviation of Each Indicator of Learning Organization
Indicator Mean Standard
Deviation
Statement
Achieve Goals 4.11 0.61 Moderately
Agree
Improved ability 5.26 0.65 Strongly
Agree
Updated Knowledge 4.51 0.69 Agree
Simple opinion about performance 4.58 0.75 Agree
Stereotype viewpoints 4.56 0.76 Agree
Accepting other opinions 4.50 0.70 Agree
Rationality in problem solving 5.15 0.75 Agree
Believe to find better alternative 4.66 0.75 AgreeCommitment to vision 4.74 0.74 Agree
Participate in defining organizational
objectives
4.67 0.78 Agree
Commitment to achieve organizational
objectives
4.58 0.82 Agree
Share same organizational objectives 4.69 0.78 Agree
Clear organizational objectives 4.69 0.84 Agree
Use of system thinking 4.60 0.86 Agree
Attention to effect of decisions 4.59 0.82 Agree
Try to find causes of problem 4.65 0.80 Agree
Consider external changes 4.82 0.77 Agree
Make comprehensive decision 4.85 0.74 Agree
Tend to dialogue and discussion 4.66 0.89 Agree
Information exchange in decision making 4.50 0.86 Agree
Group assessment and evaluation 4.66 0.88 Agree
Commitment to group decision making 4.78 0.84 Agree
Overall Mean and Standard Deviation 5.10 0.85 Agree
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Based on Table 13, most employees perceived that employees try to improve their ability
with mean rating of 5.26 being the highest. On the other hand, most employees perceived
that employee try to achieve organizational goals with mean rating of 4.11 being the
lowest.
4.4 Data Analysis
4.4.1 Pretest
a. Validity Test
The validity used in this study is Pearson Correlation Coefficients computed
using SPSS software. The data is considered valid when the Pearson correlation for each
indicator is higher than R table at significance level of 0.05 (Priyanto, 2012).
Table 14
Validity test result on Learning Culture variable
Variable Indicator Pearson coefficient Criteria
Learning
Culture
Trend to change 0.723 Valid Knowledge expansion 0.758 Valid Response to external changes 0.715 Valid Informed about environment 0.714 Valid Competitive advantage 0.819 Valid Knowledge environment 0.759 Valid Service development 0.733 Valid Innovation 0.749 Valid Commitment 1 Valid
Table 15
Validity test result on Learning Organization
Variable Indicator Pearson coefficient Criteria
Learning
Organization
Achieve Goals 0.630 Valid Improved ability 0.583 Valid Updated Knowledge 0.658 Valid Simple opinion about
performance
0.747 Valid
Stereotype viewpoints 0.771 Valid Accepting other opinions 0.751 Valid Rationality in problem solving 0.789 Valid Believe to find better alternative 0.807 Valid
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Commitment to vision 0.777 Valid Participate in defining
organizational objectives
0.802 Valid
Commitment to achieveorganizational objectives
0.799 Valid
Share same organizationalobjectives
0.780 Valid
Clear organizational objectives 0.804 Valid Use of system thinking 0.835 Valid Attention to effect of decisions 0.791 Valid Try to find causes of problem 0.801 Valid Consider external changes 0.831 Valid Make comprehensive decision 0.833 Valid Tend to dialogue and discussion 0.815 Valid Information exchange in decision
making
0.814 Valid
Group assessment and evaluation 0.797 Valid Commitment to group decision
making
0.838 Valid
From the tables above, all the component matrix values for each indicators are
more than R table, which indicates validity, hence it can be concluded that all the
indicators in this study are valid.
b. Reliability Analysis
This study uses Cronbachs Alpha to test the reliability. Cronbachs Alpha is a
coefficient that indicates how well the indicator positively correlated to one another. A
variable is considered reliable when the Cronbachs Alpha of a variables greater than 0.6
(Priyatno, 2012).Table 16
Reliability test result on the research variables
Variable Cronbachs Alpha CriteriaCompetitive Culture 0.883 Reliable
Bureaucratic Culture 0.643 Reliable
Participative Culture 0.823 Reliable
Learning Culture 0.967 Reliable
Learning Organization 0.706 Reliable
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Table 17
Homoscedasticity test result
Variables TestedSpearmans Rho
SignificanceStatement
H1 Organizational culture has an impact towards
shaping learning organization
.372 No Homoscedasticity
From the table above, it can be concluded that the research variables is free of
homoscedasticity because the Spearmans Rho significance value is greater than 0.05.
c. Linearity Test
Linearity test is conducted to know whether there is or isnt a relationship
between independent and dependent variables. To pass the test, linearity significance
must be lesser than 0.05. Table below shows that there exist a significance relationship
between independent and dependent variables
Table 18
Linearity result on research variables
Variables TestedLinearity
SignificanceStatement
H1 Organizational culture has an impact towards
shaping learning organization
.000 Have significant
linear relationship
d. Autocorrelation test
The objective of test is to analyze the relationship of values given a certain time
lag. This study uses Durbin-Watson statistic to measure autocorrelation. No auto
correlation is detected if DW statistic is du < dw < (4-du). The table below shows that
there are no autocorrelation detected
Table 19
Results of Autocorrelation test
Variables Tested k duDurbin-Watson
statistics
4-du Statement
H1 Organizational culture
has an impact towards
shaping learning
organization
1 1,691 1,918 2,082 Absence of
autocorrelation
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4.4.3 Regression analysis
Simple regression analysis is used to analyze linear relationship between
independent and dependent variables by estimating coefficients for the equation.
Table 20
Regression analysis result
Independe
nt
Variable
(s)
Depende
nt
Variable
Standardized
Beta coeff
t-
statstics
Sig R2 Adj
R2
Statement
H
1
Organizati
onal
Culture
Learning
Organiza
tion
,793 15,163 ,000 ,628 ,626 Accepted
From the table above, it can be concluded that learning culture positively
influences dependent variable with value of 0.793. In other words if the company
improve learning culture by 1 unit, it will shapes Company X as learning organization by
0.793 units. The value also shows that the independent variable has significant
relationship towards dependent variable. The hypotheses testing shows that
organizational culture has a impact towards shaping learning organization. This means
that the effect of learning culture towards learning organization exist, hence the equation
is as follows:Y= 0,793X
Where: Y = Learning Organization
X= Learning culture
4.4.4 Coefficient of Determination and R2 Analysis
Coefficient of determination calculates the strength correlation between the
dependent and independent variables. On the other hand, R2 calculate the amount of
variance in dependent variable related to independent variable.
From the table above, it can be concluded that there is a positive and strong
correlation between independent and dependent variable. Adjusted R2 value is 0.626,
which means that 62.6% variance in dependent variables in influenced by independent
variables, the other 37.4% is explained by other variables outside the proposed research
model.
4.5 Discussion
Based on the pretest step, it can be concluded that data of this study is valid
where in the Pearson correlation value must be greater than R table, hence indicators
measure the variable correctly. This shows that respondents understand the questions
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given. Pretest step also shows that data used in this research is reliable with Cronbachs
Alpha coefficient greater than 0.6, hence indicators on each variable are free of bias and
ensures consistency of measurement across all questions.
From the Bivariate Pearson analysis, the strongest indicators influenced learning
culture is commitment with r value of 1 and the least dominant is informed about
environment with r value of 0.714. Commitment and competitive advantages as dominant
factors influencing learning culture has been perceived highly by respondents. The
weaker factors are explained by informed about environment and response to external
changes. Due to early establishment of the company, being only 4 years in operation, the
network of the company is relatively small. If it is possible, the company should conduct
company visit as to absorb knowledge and assign third party to conduct market survey in
order to keep updated with recent changes. The company can also create benchmarking,
which will be costly but necessary nonetheless. Competitive being the second most
dominant gives high mean rating probably because most employee working in the
company are relatively young, hence theyre more passionate and aims for result and
incentives are given for over-achievers. The most dominant factor in shaping learning
organization, commitment to group decision-making has been perceived highly by
respondents. The weaker factor are explained by achieve goals and improved ability. Thisoutcome is probably because due to early establishment of the company, employee cant
learn as much as they expected. To improve this, the company can hire experienced
people to occupy strategic position, so they can improve the overall ability of their
respective subordinates.
The classical assumption step shows that the regression model in this study is
good and acceptable. From the normality scatterplot, it can be concluded that the data is
normally distributed. The result of homoscedasticity test also shows that Spearmans Rho
significance coefficient is greater than 0.05 hence independent variables are free from
homoscedasticity. Linearity also shows that the data acquire is linear. Autocorrelation test
also shows that the data is free of autocorrelation
Regression step shows that independent variables have strong positive effect on
shaping learning organization, which means when the independent variables are
increased, so does the dependent variables. However, learning culture only contributes
62.6% to shaping learning organization. This shows that there are other factors that
influences shaping learning organization besides learning culture. This means that
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CHAPTER V
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
With the increasing competition both domestic and foreign, organization must be
adaptable with changes in dynamic world. The researcher wants to apply the theory in
this study, which consist of dimensions organizational culture and shaping learning
organization in Company X.
This study used SPSS to test the relationship between variables. Based on the
data analysis the result of the analyses can be explained as follows:
The data acquired based on questionnaire. This study used the 124 respondents.
Based on the results characteristics of respondent, it can be concluded that all employee
of Company X is centralized on 25-29 years old (47.5%) and the rest are distributed to
20-24 years old (13.7%), 30-34% years old (20.9) and >35 years old (17.7%). Gender of
customers is also distributed almost equally with male 52.4% and female 47.6%. Most
employee in Company X is employed as staff (91.1%) while managers is accounted for
8.9%. Most employees have been employed for 1 to 2 years (56.4%) and the rest are 6
months to 1 year (38.7%) and 3 to 4 years (4.8%). Most employees in Company X have
educational background of S1 (56.4%) while the rest are high school graduates (41.9%)
and S2 (1.6%). 79% of employees has work experience prior joining company X and
21% has no experience prior joining company X. Hughes (2002) in his work explained
that gender differences might influence organizational culture in many different ways.
Ismail (2008) suggest that differences in education background, age and gender can also
influence organizational culture. Studies by Kahn (2010) suggest that differences in job
position might also affect the employee behaviorFrom the descriptive analysis of respondents, the respondents evaluate that the
organizational culture from most dominant to least dominant in the company are learning
culture followed by competitive culture, participative culture and bureaucratic culture.
This study uses pretest step to test the validity and reliability of data. Second step
is the classical assumption test, which consist of normality test, homoscedasticity test,
linearity test and autocorrelation test. Last step is the regression analysis and correlation
test
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expected to perform beyond their usual pay grade; hence it will increase the companys
outcome.
This research may become a suggestion for other companies big or small to not
underestimate the role of culture in determining the success of an organization.
Organization should not randomly operate because it will be inefficient. The study results
shows that the statement in my organization people are committed to groups decision
making has the highest Pearson coefficient in measuring learning organization. It shows
that most of employees are committed to decision made by the company. In order to
maintain this, the company should invite all necessary employees in decision-making
process. In real life, this can be translated as having all departments manager sit in one
room and give feedback regarding the companys performance. On the other hand,
statement in my organization, people try to improve their ability has the lowest Pearson
coefficient in measuring learning organization. It means that the employee think their
employment there; do not increase their overall ability. This statement might be vital to
companys survival since no matter how good a company is, it can only be as good as the
people running it since this company isnt only consist of managers, but also staffs and
cooks. So, the company has to ensure the employee that their employment there is not just
for them to receive paychecks. The solution is to held necessary training and seminars toensure that all employees their growth is essential for the company
In order to shape learning organization, learning culture must be fostered. The
result of learning organization is an organization that is adaptable to changes. When a
company is adaptable to changes, that company can perform better because theyre
always keeping up with changes. Furthermore, according to Fard et al (2011) by being
adaptable, it can lead to efficiency. Commitment and competitive advantage are the two
most dominant indicators in learning culture, hence managers should maintain and
improve this achievement. However there are some factors such as informed about
knowledge must be improved.
The result of this study confirms that organizational culture has an impact
towards shaping Company X as learning organization. The result from previous studies
by Fard et al (2011) also confirms this finding. In addition, organizational culture is
proven have significant positive impact towards shaping learning organization. Empirical
suggestion of this study, Company X has to increase learning culture in order to be
adaptable with changes.