UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGO CONG TRUONG THE IMPACT OF ORGANIZATIONAL FACTORS ON EMPLOYEES’ PERFORMANCE IN VIETNAMESE COMPANIES MASTER OF BUSINESS (Honours) SUPERVISOR: CAO HAO THI Ho Chi Minh City – Year 2012 i ACKNOWLEDGEMENTS This thesis could not be accomplished without the help, advise, support, guidance and encouragement of many people. I wish to express my sincere gratitude to my advisor, Dr. Cao Hao Thi, for his clear and careful direction, guidance and correction to my thesis, especially for his enthusiasm in answering reminding, help and support. Secondly, I would like to thank my dear colleagues, friend and classmates for their invaluable advice, help, encouragement and support during the time I was doing this thesis. Last but not least, I would like to express my great thanks to my beloved wife and my family for their support, assistance and encouragement for my study and thesis fulfillment. ii ABSTRACT Vietnam is a developing country and has the emerging market, so the employees' performance in Vietnamese companies plays a significant role to increase the competitive advantages. However, so far the study for employees' performance in Vietnamese companies has not yet been thoroughly conducted. This research is carried out with the objectives to identify the measurement scale of employees’ performance, identify the organizational factors that impact on employees’ performance and measure the strength of relationship between organizational factors and employees’ performance in the Vietnamese companies. This research is done by a thorough literature review on concepts relating to employees' performance from which the initial research model and hypotheses are constructed. Research process has three steps including Generation of Items, used to assure the appropriateness of the initial research model and its components; Pilot Survey, used to verify the initial questionnaires and see if there should be any adjustment or modification needed; Survey and data analysis used to collect the answer for the survey on various employees in the South organizational factors Vietnam with the sample size of 175 for data analysis. Number of statistical analysis techniques are used to analyze the data collected via SPSS program. Factor analysis results in the identification of factors having significant impact to employees' performance, and the extraction of four factor groups named as Organizational Culture, Leadership, Communication and Working Environment. Regression analysis proved that these four groups have statistically significant influence to the employees' performance in Vietnamese companies, which Communication has the highest impact. The research results can be used as a reference for the team leaders, managers, supervisors in Vietnamese companies to enhance and better the employees' performance in the future. iii TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT ii TABLE OF CONTENTS iii ABBREVIATION v LIST OF TABLES vi LIST OF FIGURES vii LIST OF EXHIBITS viii LIST OF FORMULA ix THE IMPACT OF ORGANIZATIONAL FACTORS ON EMPLOYEES' PERFORMANCE IN VIETNAMESE COMPANIES 1 CHAPTER 1 1 INTRODUCTION 1 1.1 Background 1 1.2 Research questions and objectives 2 1.3 Research scope 3 1.4 Research contribution 3 1.5 Research structure 4 CHAPTER 2 5 LITERATURE REVIEW 5 2.1 Introduction 5 2.2 Theoretical review 5 2.2.1 Employees’ performance 5 2.2.2 Organizational factors 7 2.2.3 Relationship between organizational factors and employees' performance 14 2.3 Research model 16 2.4 Hypotheses summary 17 2.5 Summary 18 CHAPTER 3 19 RESEARCH METHODOLOGY 19 3.1 Introduction 19 3.2 Research design 19 3.3 Measurement scale 20 iv 3.4 Sample size 22 3.5 Sampling techniques 22 3.6 Data collection methods 22 3.6.1 Primary data collection 22 3.6.2 Secondary data collection 22 3.7 Data quality control 23 3.7.1 Validity 23 3.7.2 Reliability 23 3.8 Data analysis method 23 3.9 Summary 24 CHAPTER 4 25 DATA ANALYSIS 25 4.1 Introduction 25 4.2 Pilot testing 25 4.3 Descriptive statistics 27 4.4 Assessment and refinement of measurement scale 28 4.4.1 Refinement of measurement scale 28 4.4.2 Exploratory Factor Analysis (EFA) 31 4.4.3 Refined research model and hypotheses 35 4.5 Hypotheses testing 36 4.5.1 Regression analysis 36 4.5.2 Hypotheses testing 39 4.6 Summary 40 CHAPTER 5 42 CONCLUSIONS 42 5.1 Introduction 42 5.2 Findings 42 5.3 Managerial implications and recommendations 43 5.4 Limitations and future research direction 45 REFERENCE 46 APPENDICES 51 APPENDIX A: QUESTIONNAIRE IN VIETNAMESE 51 APPENDIX B: DESCRIPTIVE STATISTICS 57 APPENDIX C: SURVEY RESULTS 59 APPENDIX D: SURVEY RESULTS 62 APPENDIX E: SURVEY RESULTS 64 v ABBREVIATION ORGF: Organizational Factors ORGC: Organizational Culture WENV: Working Environment LEAD: Leadership COM: Communication TEAM: Teamwork SPSS: Statistical Package Software for Social Science vi LIST OF TABLES Table 2.1: List of variables 8 Table 3.1: Measurement scale 21 Table 4.1: Reliability analysis of pilot survey 26 Table 4.2: Descriptive statistics 28 Table 4.3: Reliability analysis of official survey 30 Table 4.4: KMO and Barlett’s Test 31 Table 4.5: Refined rotated component matrix 31 Table 4.6: Reliability analysis of refined model 32 Table 4.7: KMO and Barlett;s test for employees’ performance 32 Table 4.8: Component matrix 33 Table 4.9: Variables in Leadership 34 Table 4.10: Regression analysis of employees' performance 37 Table 4.11: Hypotheses summary 37 vii LIST OF FIGURES Figure 2.1: Research model 17 Figure 3.1: Research process 19 Figure 4.1: Refined research model 36 Figure 4.2: Result of refined research model 38 viii LIST OF EXHIBITS Exhibit 1.1: Vietnam competitiveness ranking, 2010-2011 3 ix LIST OF FORMULA Formula 3.1: Cronbach’s alpha coefficient 23 [...]... presented list of organizational factors There is limited research on the strength of the relationship between organizational factors and employees' performance, and the intercorrelations among these factors There are even less analysis on the causal effects between these factors and employees' performance, especially in Vietnamese companies Based on the theoretical review, there are four hypotheses developed... is therefore limited to all kinds of Vietnamese companies in the Southern Area of Vietnam Respondents of this research include department head, managers, team leaders and supervisors The employees’ performance will be evaluated by the result at the end of 2011 The research duration is six months 1.4 Research contribution The contribution of this research is finding the way to improve the employees' performance. . .THE IMPACT OF ORGANIZATIONAL FACTORS ON EMPLOYEES’ PERFORMANCE IN VIETNAMESE COMPANIES CHAPTER 1 INTRODUCTION This chapter includes five sections The first section introduces the background of the research, where and why this research takes place The second and third sections introduce research questions and objectives of research respectively while the fourth and fifth sections introduce the scope... relationships between the organizational factors and employees' performance was developed This chapter presented a summary of definitions and perceptions in literature for the concepts of employees' performance Given there has no previous research conducted to determine the organizational factors or identify the set of criteria used to measure the employees' performance in Vietnamese companies Based on the. .. collection method explored the originality of data through gathering information relevant to the study Primary data was obtained from respondents in Vietnamese companies By using of the questionnaires and interview manuals, the research gathered data from the respondents which in fact were the primary concern of this survey de sign approach 3.6.2 Secondary data collection Secondary data collection explored... the relationship among them The research questions are presented as: - Are there identifiable factors affecting employees' performance? - How is the relationship between these factors and employees' performance? Which will influence employees’ performance the most? The objectives of this research are to: - Identify the organizational factors that impact employees’ performance in Vietnamese companies. .. close coordination is needed for success of the unit Employees are performing different jobs in an organization depending upon the nature of the organization They mainly perform tasks like production, storage, manufacturing, transportation, marketing, purchasing, distribution, promotion of business, finance and accounting, human resource, research and public relations All these activities are inter-related... available in the market In summary, this part presented the theoretical review of employees' performance, organizational factors and the relationship between employees' performance and organizational factors on previous studies are presented Most previous studies consider that organizational factors should be based on Organizational Culture, Working Environment, Communication and Teamwork Many studies in the. .. because the two are interdependent and change in one will impact the other Employees are the most valuable asset in any organization A successful and highly productive business can be achieved by engaging them in improving their performance Not all employees are equal in their working and they have different modes of working in that some have the highest capability regardless of the incentive while others... from other disciplines The information gathered is ordered thematically and includes investigations into different models used for typologies, the affects organizational culture has on performance, the measurability of organizational culture, and ways in which organizations can manage cultural change Organizational culture was once seen as “how things are done around here” (Drennan, 1992) 7 The list of . UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGO CONG TRUONG THE IMPACT OF ORGANIZATIONAL FACTORS ON EMPLOYEES’ PERFORMANCE IN VIETNAMESE COMPANIES . identify the organizational factors that impact on employees’ performance and measure the strength of relationship between organizational factors and employees’ performance in the Vietnamese companies. . THE IMPACT OF ORGANIZATIONAL FACTORS ON EMPLOYEES’ PERFORMANCE IN VIETNAMESE COMPANIES CHAPTER 1 INTRODUCTION This chapter includes five sections. The first section introduces the