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The impact of organizational culture and person-organization fit on organizational commitment and job satisfaction in Taiwan Colin Silverthorne University of San Francisco, San Francisco, California, USA Keywords Organizational culture, Job satisfaction, Job commitment, Taiwan Abstract The related concepts of organizational culture and person-organization (P-O) fit or congruence between the person and organization are important to organizational success. The psychological contract, which is both perceptual and individual, forms the basis of the P-O fit. However, there has been little attention paid to the interaction of fit and organizational culture with such concepts as job satisfaction and organizational commitment and the application of this concept in non-western cultures. The results of this study, conducted in Taiwan, indicate that P-O fit is a key element in both the level of job satisfaction that employees experience and also in their level of organizational commitment whether measured by an instrument or turnover rates. An organization is not a passive or stable institution and it evolves and grows within an organizational culture. While P-O fit may be linked to organizational culture, the impact of specific types of organizational culture was also assessed. Involvement in an organization that had a bureaucratic organizational culture resulted in the lowest levels of job satisfaction and organizational commitment. An innovative culture was next highest and a supportive culture had the highest level of employee job satisfaction and organizational commitment. These findings indicate that organizational culture plays an important role in the level of job satisfaction and commitment in an organization. In terms of the impact of the P-O fit on job satisfaction and organizational commitment in Taiwan, the results indicate that the degree of fit plays an important role in all of the types of organizational culture studied. The better the fit the higher the levels of these two variables. The results indicate that the P-O fit is an important variable within the organizations in non-western cultures. Introduction Today, organizations operate in a very competitive global environment. Countries can no longer depend on a protected domestic market while at the same time exporting to other countries. Trade barriers have come down and Taiwan has made significant changes to its trade policies to come into compliance with regulations required for admittance to GATT and the WTO. Given the rapid changes that are occurring in the market place in Taiwan, organizations there must do everything possible to become or remain competitive. Given the major expense for most organizations is the cost of labor, any steps that can be taken to reduce these costs will be beneficial. While downsizing and automation can be effective, these approaches have their own costs. Therefore, increasing productivity and/or reducing employee turnover are better strategies. Research has indicated that the degree of fit between a person and the organization is related to both productivity and employee turnover (Rousseau and Parks, 1992; Ryan and Schmit, 1996). The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at www.emeraldinsight.com/researchregister www.emeraldinsight.com/0143-7739.htm LODJ 25,7 592 Received October 2003 Revised May 2004 Accepted May 2004 The Leadership & Organization Development Journal Vol. 25 No. 7, 2004 pp. 592-599 q Emerald Group Publishing Limited 0143-7739 DOI 10.1108/01437730410561477

The impact of organizational culture and person‐organization fit on organizational commitment and job satisfaction in Taiwan

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Page 1: The impact of organizational culture and person‐organization fit on organizational commitment and job satisfaction in Taiwan

The impact of organizationalculture and person-organizationfit on organizational commitment

and job satisfaction in TaiwanColin Silverthorne

University of San Francisco, San Francisco, California, USA

Keywords Organizational culture, Job satisfaction, Job commitment, Taiwan

Abstract The related concepts of organizational culture and person-organization (P-O) fit orcongruence between the person and organization are important to organizational success.The psychological contract, which is both perceptual and individual, forms the basis of the P-O fit.However, there has been little attention paid to the interaction of fit and organizational culture withsuch concepts as job satisfaction and organizational commitment and the application of thisconcept in non-western cultures. The results of this study, conducted in Taiwan, indicate that P-Ofit is a key element in both the level of job satisfaction that employees experience and also in theirlevel of organizational commitment whether measured by an instrument or turnover rates. Anorganization is not a passive or stable institution and it evolves and grows within an organizationalculture. While P-O fit may be linked to organizational culture, the impact of specific types oforganizational culture was also assessed. Involvement in an organization that had a bureaucraticorganizational culture resulted in the lowest levels of job satisfaction and organizationalcommitment. An innovative culture was next highest and a supportive culture had the highest levelof employee job satisfaction and organizational commitment. These findings indicate thatorganizational culture plays an important role in the level of job satisfaction and commitment in anorganization. In terms of the impact of the P-O fit on job satisfaction and organizationalcommitment in Taiwan, the results indicate that the degree of fit plays an important role in all ofthe types of organizational culture studied. The better the fit the higher the levels of these twovariables. The results indicate that the P-O fit is an important variable within the organizations innon-western cultures.

IntroductionToday, organizations operate in a very competitive global environment. Countries canno longer depend on a protected domestic market while at the same time exporting toother countries. Trade barriers have come down and Taiwan has made significantchanges to its trade policies to come into compliance with regulations required foradmittance to GATT and the WTO. Given the rapid changes that are occurring in themarket place in Taiwan, organizations there must do everything possible to become orremain competitive.

Given the major expense for most organizations is the cost of labor, any steps that canbe taken to reduce these costs will be beneficial. While downsizing and automation canbe effective, these approaches have their own costs. Therefore, increasing productivityand/or reducing employee turnover are better strategies. Research has indicated that thedegree of fit between a person and the organization is related to both productivity andemployee turnover (Rousseau and Parks, 1992; Ryan and Schmit, 1996).

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

www.emeraldinsight.com/researchregister www.emeraldinsight.com/0143-7739.htm

LODJ25,7

592

Received October 2003Revised May 2004Accepted May 2004

The Leadership & OrganizationDevelopment JournalVol. 25 No. 7, 2004pp. 592-599q Emerald Group Publishing Limited0143-7739DOI 10.1108/01437730410561477

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Numerous organizational behavior theorists believe a good fit between the personand organization is important. One measure of the degree of fit is based on the idea ofthe psychological contract, which is both perceptual and individual (Rousseau andParks, 1992). The individual nature of the psychological contract and that it is based onperceptions rather than actual reality make it different from all other forms ofcontracts. The ambiguous and unwritten nature of the psychological contract makesany evaluation difficult. The psychological contract extends the concept of loyalty andcommitment to the organization and uniquely focuses on both the employee and theemployer and forms the basis of the P-O fit (Rousseau and Parks, 1992). However, thepsychological contract must be implemented within an organizational culture, which inturn impacts the implementation process of the contract (Robinson et al., 1994).If middle managers fail to implement the psychological contract, it can have an adverseeffect on employee behavior including job satisfaction and organizational commitment(Hallier and James, 1997).

Changing work environments have led to more independence of employees andredefinition of the psychological contract (Hall and Moss, 1998) and requireadjustments in both the implementation of the psychological contract and humanresource management (McBain, 1997). For example, Levinson (1994) concluded that acomprehensive diagnosis of the organization is critical if the organization is tounderstand employee turnover and that employee and managerial characteristics needto be assessed in order to adequately measure the degree of fit between new employeesand the organization and the role of organizational culture in affecting the fit.

The idea of organization or corporate culture has been identified as an importantaspect of organizational behavior and as a concept that is useful in helping tounderstand how organizations function, (Kristof, 1996). In addition, culture helpsdetermine how well a person “fits” within a particular organization because the “fit”includes feeling comfortable with the culture (O’ Reilly, 1989). While the study of theseconcepts has been primarily limited to Western and in particular Americanorganizations, there has been some research in other cultures. Hofstede et al. (1993)studied organizational culture in several national cultures and found that individuals’values and organizational practices need to be integrated and that demographicvariables, such as age and gender, impact the degree of P-O fit. Elizur et al. (1991)examined the relative importance of work value items and organizational structure ineight different countries. While some cultural differences in value ratings were found,these differences were actually relatively small in the context of organizationalstructure differences. Calori and Sarnin (1991) examined the relationship betweenorganization cultural traits and economic performance and between strength ofcorporate culture and economic performance in France and concluded that economicperformance of the organization is directly tied to the strength of the corporate cultureand the match between work-related values of employees and cultural traits.

The research in Taiwan on organizational culture and the P-O fit is limited. In a casestudy of the China Steel Company, Chao (1990) discussed the Confucian tradition andethos and their implications for management and worker performance in Asiansocieties and found that the management philosophy and corporate culture were rootedin and guided by Confucianism in the Chinese character and approach to work.Another study in Taiwan investigated organizational structure and managerialassumptions, values, and other socio-demographical features of senior managers

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(Jou and Sung, 1993). The results indicated that four different managerial patterns existin Taiwanese organizations. Two of these, labeled mainlander and grass roots, weresaid to represent an approach characteristic of traditional Chinese value orientations.A third type of managerial pattern was labeled the specialist type and this was said toassimilate the Western logic of rationalism as its basic value. The fourth type ofmanagerial pattern, transition, was considered a hybrid of the traditional Chinesevalues, Japanese management style and Western rationalism.

Organizational commitment is a work attitude that is directly related to employeeparticipation and intention to remain with the organization and is clearly linked to jobperformance (Mathieu and Zajac, 1990). Organizational commitment includes the threecomponents of affective (desire to remain), continuance (perceived cost of leaving) andnormative (perceived obligation to remain) commitment (Meyer and Allen, 1991).A study of Japanese employees found that organizational commitment could be viewedas a multidimensional construct that applied in Japan and that the organizationalcommitment questionnaire (OCQ) is an effective cross-cultural tool for measuringorganizational commitment (White et al., 1995).

Job satisfaction is a general attitude that the employee has towards their job and isdirectly tied to individual needs including challenging work, equitable rewards and asupportive work environment and colleagues (Ostroff, 1992). It is also related topersonality-job fit, one of the components of the P-O fit (Kristof, 1996). Job satisfactionhas also been linked to productivity (Katzell et al., 1992). Greater productivity impliesthat many non-material costs will remain the same while output and profits shouldincrease (Stiles et al., 1997).

An individual learns to perform in an organization through socialization (Schein,1980). Individuals come to appreciate the values, the expected behaviors, and socialknowledge that are essential for effective organizational behavior. Since organizationalculture serves many purposes including establishing the norms for employeesbehavior, it has a direct impact on the P-O fit. In trying to improve effectiveness,companies look to engaging the employees more in the organization and the goal ofthis research was to explore issues relating to the influence of P-O fit and culture onorganizational commitment and job satisfaction.

MethodSamplePrevious research (Wallach, 1983) identified three different broadly defined corporatecultures: bureaucratic, innovative and supportive. While every organization is acombination of these three cultures, generally, one type of culture is dominant. Basedon information from personal contacts, three companies were identified for inclusion inthis study. A pilot study using a small sample of employees (10) from each of thecompanies was used to identify and verify the corporate culture type. The results of thepilot study confirmed that of the three companies studied, each had one of the threetypes of culture as their primary culture. Next, data was collected from subjects in thethree companies in order to generate key organizational and individual needs for eachorganization (Reilly, 1974). This process generated a list of ten organizational needsand ten individual needs for each organization. The mesh or degree of similaritybetween these lists is an indicator of the degree of the P-O fit. A sample pair of lists isincluded in Table I.

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The final questionnaire, including all of the scales, was then given to a sample ofemployees at each of the companies either at group meetings or individually asappropriate to ensure a high response rate. While the size of each of the companies wasdifferent, a sample of 120 subjects was selected randomly from each of the populationsusing a table of random numbers and employee identification numbers. Since thenumber of males in each organization was significantly greater than the number offemales, a stratified random sampling process was used to ensure gender proportionequivalency across the three samples. With a ratio of three males to each female, eachsample contained 90 males and 30 females. Each organization also provided turnoverrates for the previous year.

InstrumentationA questionnaire booklet was assembled containing several scales. Organizationalculture was measured using the organizational culture index (Wallach, 1983),organizational commitment using the OCQ (Mowday et al., 1982) and job satisfactionusing the Minnesota satisfaction questionnaire (Weiss et al., 1967). All of the scaleswere translated from English into Chinese using the double translation method unlessalready available in Chinese. The instruments have been validated for use in the USand the reliability and validity for Chinese use were established using the sample fromthe pilot study.

In order to measure P-O fit the individual and organizational needs lists for theirorganization were given to participants in Chinese. The items on the two lists werethen ranked one through ten by each of the subjects. The differences between therankings were totaled creating a single score for a measure of the P-O fit and the lowerthe score the better the fit (Reilly, 1974).

ResultsThe pilot data was used to identify the organizational culture and appropriatecoefficient as were computed for each of the three organizations. The coefficient alphagenerates an estimate of how likely it is that the same organizational culture profilewould emerge if the population rather than just the sample is measured. The alphavalues ranged from 0.88 to 0.91 indicating strong scale reliability. In addition, thecorrelations between the firms’ profiles were low (ranging from 0.15 to 0.22) indicatingthat the organizations did, in fact, have different cultures.

Organizational needs Individual needs

Loyalty to the organization Good salaryHard work Job securityEmployee cooperation Being with other peopleCreativity Good supervisionFollowing directions Opportunity for promotionGood quality of work outcomes Challenging workCommitment to the organization’s objectives Feeling of achievementComradeship with colleagues Good working conditionsRespect for authority Being involved in the organizational climateEmployee satisfaction Ability to take responsibility

Table I.Sample organizational

and individual needs list

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Job satisfaction scores were compared using a one-way analysis of variance. Theresults indicated that the level of job satisfaction is a function of the organizationalculture (F½2; 357� ¼ 4:64; p , 0:05). Post hoc t tests were used to measurespecific statistical differences. The bureaucratic and supportive culture scores werestatistically different (t ¼ 23:17; df ¼ 238; p , 0:05); the bureaucratic and theinnovative cultures were also statistically different (t ¼ 22:10; df ¼ 238; p , 0:05);and the supportive and innovative cultures were not statistically different (t ¼ 1:89;df ¼ 238; p . 0:05) indicating that innovative and supportive cultures create a higherlevel of job satisfaction than a bureaucratic culture.

Organizational commitment scores were also compared using a one-way analysis ofvariance. The results indicated that the level of organizational commitment is afunction of the organizational culture and mirrored the findings for job satisfaction(F½2; 357� ¼ 3:97; p , 0:05). Post hoc t tests found statistically significant differences:for bureaucratic and supportive cultures (t ¼ 23:26; df ¼ 238; p , 0:01); forbureaucratic and innovative cultures (t ¼ 23:09; df ¼ 238; p , 0:01); and forsupportive and innovative cultures (t ¼ 2:08; df ¼ 238; p , 0:05), indicating the levelof commitment is highest in the supportive, second highest in the innovative andlowest in the bureaucratic culture.

The fit and job satisfaction relationship was measured using Pearsonproduct-moment correlations. In the bureaucratic culture the correlation was r ¼0:34; df ¼ 119; p , 0:001; in the supportive culture, r ¼ 0:41; df ¼ 119; p , 0:001 andin the innovative culture r ¼ 0:33; df ¼ 119; p , 0:001: Since the relationship betweenjob satisfaction and P-O fit was statistically significant in all three cultures, the datawas combined to yield an overall picture of the relationship between the two variables.This yielded a correlation of r ¼ 0:39; df ¼ 359; p , 0:001:

The relationship between fit and commitment, as measured either by questionnaireor by turnover rates, was assessed using Pearson product-moment correlations. Thecorrelations between OCQ scores and fit in the bureaucratic culture was r ¼ 0:29;df ¼ 119; p , 0:01; in the supportive culture, r ¼ 0:31; df ¼ 119; p , 0:01; and in aninnovative culture, r ¼ 0:37; df ¼ 119; p , 0:001: Since all the correlations werepositive and statistically significant, the data was combined to yield an overall pictureof the relationship between the two variables. This yielded a correlation of r ¼ 0:31;df ¼ 359; p , 0:01: When turnover rates were used the correlations were: For theBureaucratic culture, r ¼ 20:28; df ¼ 119; p , 0:01; for the supportive culture,r ¼ 20:28; df ¼ 119; p , 0:01; and for the innovative culture, r ¼ 20:32; df ¼ 119;p , 0:01: Since all three relationships yielded strong negative correlations the datawas combined yielding an overall correlation of r ¼ 20:31; df ¼ 358; p , 0:01: Theseresults indicate that a better P-O fit will result in higher organizational commitmentand lower turnover rates.

DiscussionAs mentioned earlier, the concept of P-O fit has received attention from a number oftheorists. However, there has been little attention paid to the interaction of this fit tosuch concepts as job satisfaction and organizational commitment. Since turnoverresults from a lack of commitment to an organization and turnover causes significantexpense to an organization, this interaction has important implications fororganizations. Turnover costs include direct expenses related to replacing an

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employee and indirect expenses related to loss of experience and lowered productivity.Anything that can be done to increase organizational commitment and reduce turnoverwill lead to significant benefits to an organization.

The results indicate that P-O fit is key in both the level of job satisfactionthat employees experience and also in their level of organizational commitmentwhether measured by turnover rates or an OCQ. Specifically, the research tested thehypothesis that organizational culture impacts job satisfaction. For the Taiwan sample,involvement in an organization that has a bureaucratic organizational culture resultedin the lowest level of job satisfaction indicating that bureaucratic organizations havea greater problem with maintaining employee job satisfaction than organizations thathave an innovative or supportive culture. Clearly organizational culture can play animportant role in the level of job satisfaction of employees.

The data analysis yielded similar but stronger results for organizational commitment.The bureaucratic organizational culture had the lowest level of organizationalcommitment. The innovative culture had the middle level of commitment and thesupportive culture showed the highest level of employee organizational commitment.However, this time all of the differences were statistically significant. The bureaucraticorganization had the least amount of organizational commitment and the lowest level ofemployee job satisfaction. Clearly, any organization that has a bureaucratic organizationalstructure in Taiwan needs to pay close attention to employee feelings on these twodimensions. At the same time organizations with a culture that is basically supportive innature are likely to have the highest level of employee job satisfaction and organizationalcommitment. Supportive organizational cultures appear to be the most effective in Taiwanon the two critical organizational dimensions measured in this study.

A second key issue is the impact of the P-O fit on employees. This was explored bylooking at the impact of fit on job satisfaction and organizational commitment and theresults indicate that the degree of fit plays an important role. The better the fit the higherthe level of job satisfaction will be, regardless of the organizational culture studied. This isan important finding since it indicates that culture plays an important role in attracting orkeeping employees and the maintenance of the good fit is essential for maintaining jobsatisfaction. When a questionnaire designed to measure organizational commitment wasused, there was a strong relationship between fit and organizational commitment in allthree cultures. When the measure of commitment was the level of turnover in theorganization during the previous year, the turnover rates were directly related to the levelof organizational commitment. The greater the turnover rate the lower the organizationalcommitment as indicated by a series of negative correlations between these two variables.Once again, this was true in all organizational cultures studied.

These results indicate that a good fit is a powerful variable within the organizationand that it has a positive impact on job satisfaction and organizational commitmentand a negative impact on turnover rates. The better the fit the higher the jobsatisfaction, the higher the organizational commitment and the lower the turnover rate.More importantly, these effects occurred in each of the three organizational cultures.While the culture may provide a framework within which the influence of the P-O fitoccurs, a good fit is important in all organizational cultures implying that sharinginformation about the culture before hiring employees and using culture to guide theselection process and criteria will result in a better P-O fit and hence higher jobsatisfaction and organizational commitment.

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The results reinforce the findings from earlier research (Chatman, 1989) that theconcept of P-O fit plays an important role for employees in a variety of organizationalsettings. The results also indicate that although the impact of fit is consistent acrossorganizational cultures, there are differences in levels of job satisfaction andorganization commitment between cultures. Finally, this research provides support forthe importance of P-O fit in organizations in Taiwan.

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