UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Truong Ngoc Anh Thu PSYCHOLOGICAL EMPOWERMENT AND JOB SATISFACTION: A COMPARISON OF MANUFACTURING AND SERVICES INDUSTRY IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City- Year 2015 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Truong Ngoc Anh Thu ID: 22120075 PSYCHOLOGICAL EMPOWERMENT AND JOB SATISFACTION: A COMPARISON OF MANUFACTURING AND SERVICES INDUSTRY IN VIETNAM MASTER OF BUSINESS (Honours) SUPERVISOR: Dr Tran Phuong Thao Ho Chi Minh City- Year 2015 ABSTRACT In this research, we can have a deep insight of overall findings for the relationship between four dimensions of psychological empowerment and the employee’s job satisfaction In particular, that relationship was put into the comparison in two industries service and manufacturing To examine the research model, the survey questionnaires were used to circulate to employees in service companies and manufacturing companies in Ho Chi Minh City through mail survey with the sample size of 200 respondents This study used the SPSS Statistic to analyze the data by using reliability analysis, exploratory factor analysis and multiple linear regression analysis Some findings in this study indicated that the degree of job satisfaction may differ from service to manufacturing but all the factors of psychological empowerment impact on it And among these factors, the empowerment self-determination impacts the most and the empowerment competence has less impact than the others, the impact of four dimensions of psychological empowerment on the employees’ job satisfaction in service industry and manufacturing industry are not the same In service industry, the empowerment meaning affects on employees’ job satisfaction stronger than in manufacturing industry The empowerment competence and empowerment impact in this case the stronger one belongs to service industry, and in manufacturing industry they impact slightly to employees’ job satisfaction This study also points out some implications for management to improve employees’ capability, productivity in their work, which can contribute to development of the company Keywords: psychological empowerment, empowerment meaning, empowerment competence, empowerment self- determination, satisfaction, service, manufacturing i empowerment impact, job ACKNOWLEDGEMENTS This research could not finish if there are not help, encouragement and supports during long time from many people who are gratefully acknowledged here First of all, I would like to express my deepest gratitude to my supervisor, Dr Tran Phuong Thao, for her clear guidance, advices and correction for my thesis Her support during the time of thesis motivated me, gave me valuable suggestions as well as good criticism to complete my Master’s thesis Secondly, I would like to thank all the ISB Research Committee, the lecturers, and the staff at International School of Business during all process of my course Thirdly, I would like to express my special thanks to my family and friends who provided continuously support, encouragement in my life Finally, I would like to say thank you to those who participated in this study Ho Chi Minh City, June 6, 2015 TRUONG NGOC ANH THU ii TABLE OF CONTENT ABSTRACT i ACKNOWLEDGEMENTS ii CHAPTER 1: INTRODUCTION 1.1 Background of the study 1.2 Research problem 1.3 Research objective and questions 1.4 Scope of the research 1.5 Significances of the research 1.6 Structure of the research CHAPTER 2: LITERATURE REVIEW, HYPOTHESIS AND RESEARCH MODEL 2.1 Theoretical foundations Models of Employee Involvement Models of Empowerment Theory of Motivator – Hygiene 2.2 Overview on psychological empowerment and job satisfaction 2.2.1 Psychological empowerment 2.2.2 Job satisfaction 11 2.3 Hypothesis development 12 2.3.1 Empowerment meaning and job satisfaction 12 2.3.2 Empowerment competence and job satisfaction 12 2.3.3 Empowerment self-determination and job satisfaction 13 2.3.4 Empowerment impact and job satisfaction 14 2.4 Research model 14 2.5 Chapter summary 15 CHAPTER 3: RESEARCH METHODOLOGY 16 3.1 Research process 16 3.2 Research design 17 3.2.1 Questionnaire design 17 iii 3.2.2 Measurement scale 18 3.3 Pilot test 21 3.4 Main survey 22 3.5 Chapter summary 25 CHAPTER 4: EMPIRICAL RESULTS AND DISCUSSIONS 26 4.1 Preliminaries of data analysis 26 4.2 Reliability analysis 27 4.3 Exploratory Factor Analysis 29 4.4 Correlation analysis 31 4.5 Multiple Linear Regression Analysis 32 4.6 Chapter summary 43 CHAPTER 5: CONCLUSION, IMPLICATIONS AND DIRECTIONS FOR FURTHER STUDIES 44 5.1 Key findings of the thesis 44 5.2 Implications 48 5.3 Limitation and directions for further studies 50 REFERENCES 51 APPENDIX A 58 APPENDIX B 61 APPENDIX C 64 APPENDIX D 66 iv LIST OF FIGURES Figure 1: Conceptual framework of the study 14 Figure 3.1: Research process 17 Figure C 1: The Histogram 64 Figure C 2: The Normal P-P Plot of Regression Standardized Residual 64 Figure C 3: Scatterplot 65 v LIST OF TABLES Table : Summary of employees’ profile 27 Table 2: Cronbach’s Alpha 28 Table 3: KMO and Barlett’s test 29 Table 4: Total Variance Explained 29 Table 5: Rotated Component Matrix 30 Table 6: Correlations 31 Table 7: Model Summary 33 Table 8: ANOVA 34 Table 9: Coefficients 34 Table 10: Model Summary 35 Table 11: Model Summary 36 Table 12: ANOVA 36 Table 13: Coefficients 36 Table 14: Model Summary 38 Table 15: ANOVA 38 Table 16: Coefficients 39 Table 17: Model Summary 39 Table 18: Coefficients 40 vi CHAPTER 1: INTRODUCTION This research studies factors of psychological empowerment which impacts on job satisfaction of employees in two industries, namely service and manufacturing This chapter provides an overview of research including research background, research problem, research objectives, scope of study, and significance of the study In this chapter, an overall structure of the research is also suggested 1.1 Background of the study Nowadays, in an evolving environment, organizations are working under highly competitive context In order to survive in such a tough environment, organizations try to seek out their competitive advantages The most critical challenges they have to face are the need to increase productivity, enhance organizational capabilities, expand into global markets, develop and implement new technologies…, etc (Burke and Cooper, 2005) Employee is regarded as a back bone of an organization that performs critical tasks for the survival of the organization With the needs of changing for the growing nowadays, organizations have forced not only to develop the quality of product of service but also the organization capabilities, especially their employee through their performance However, the impact of human resources on operational systems has often been overlooked (Boudreau et al 2003) An empowered and committed workforce is generally claimed to be essential for the effective functioning of modern organizations (Bowen et al, 1992; Sparrowe, 1995; Kirkman et al, 1999) In organizations, empowerment means delegating responsibilities to employees with complete confidence and trust so as to assume a more active and responsible role This strengthens their sense of effectiveness as well as by sharing power, information and the responsibility to manage their own work as much as possible There is a broad context of empowerment in many dimensions as well as perspectives Some approach by individual to proactive work orientation by increasing employee’s performance and some can be viewed as managerial practices to improve employee autonomy and responsibility Researchers such as Burke (1986) and Kanter (1977) have also defined empowerment in terms of job structure the transfer of power or authority or job support structures such as the sharing of resources and information (Blau and Alba, 1982; Hardy and Leiba O’Sullivan, 1998) In these studies, empowerment is viewed from the perspective of the leader’s role in empowering employees Many others studies view empowerment as individual task motivation (Conger and Kanungo, 1988; Thomas and Velthouse, 1990) or motivation from person and environment fit relationship (Zimmerman, 1990) while Randolph (1995) asserts that employee empowerment is a transfer of power from the employer to the employees Most of the literature which reviewed many perspective of empowerment concludes that an empowered workforce will lead their organization to achieve a competitive advantage Employee empowerment increases productivity by increasing employee pride, self- respect and self- worth In recent studies, one of the dominant classifications of employee empowerment accepted by many researchers is given by Spreitzer (1995) The author defines psychological empowerment as “the intrinsic motivation manifested in meaning, competence, self-determination, and impact, in which an employee feels able to shape his role in work and context” The concept is employed in a number of studies such as Avolio et al (2004), Corsun et al (1999), Carless (2004) and Jha et al (2008) According to Hofstede and Bond (1984), “power distance is defined as the extent in which less powerful members of organization accept that power is distributed unequally” In Vietnam, power distance is influenced by the Confucianism, in which the ordering relationships are in the hierarchical fashion and the behaviors in society are based on these orders, Gudykunst (2000) Taking more responsibility and authority always goes along with additional benefits in Vietnam Vietnamese are quite indecisive in delegating power Being a social republic state and high power distance, Vietnam is the country in which the power is not distributed equally and regarded as the basic fact in society In organizations, close supervision, fear of disagreement with supervisors, lack of trust among co-workers, McCaig, B., & Pavcnik, N (2013) Moving out of agriculture: structural change in Vietnam (No w19616) National Bureau of Economic Research Menon, S T (1999) Psychological empowerment: Definition, measurement, and validation Canadian Journal of Behavioural Science/Revue canadienne des sciences du comportement, 31(3), 161 Retrieved from http://search.proquest.com/docview/ 220524373?accountid=63189 Misener, T R., Haddock, K S., Gleaton, J U., & Ajamieh, A R A (1996) Toward an international measure of job satisfaction Nursing Research, 45(2), 87-91 Mowday, R T (1991) Equity theory predictions of behavior in organizations.Motivation and work behavior, 5, 111-131 Newstrom, J.W & Davies, W.J.K (1993) Human behavior at work McGraw-Hill Pallant, J (2001) SPSS Survival Manual: A Step by Step Guide to Data Analysis Using SPSS for WIndows (versions 10 and 11): SPSS Student Version 11.0 for Windows Open University Press Parker, L E., & Price, R H (1994) Empowered managers and empowered workers: The effects of managerial support and managerial perceived control on workers' sense of control over decision making Human Relations, 47(8), 911-928 Randolph, W A (1995) Navigating the journey to empowerment Organizational dynamics, 23(4), 19-32 Ripley, R E., & Ripley, M J (1992) Empowerment, the cornerstone of quality: empowering management in innovative organizations in the 1990s.Management Decision, 30(4) Robbins, S P., & Judge, T A (2007) Organizational Behavior, 12th ed Upper Saddle River, NJ: Pearson Education Inc Sashkin, M (1976) Changing Toward Participative Management Approaches: A Model and Method Academy of Management Review, 1(3), 75-86 Shaw, J D., Delery, J E., Jenkins, G D., & Gupta, N (1998) An organization-level analysis of voluntary and involuntary turnover Academy of Management Journal, 41(5), 511-525 55 Siddiqui, A., & Saba, I (2013) Determining the Job Satisfaction Level of the Academic Staff at Tertiary Academic Institutes of Pakistan Business and Management, 5(3) Retrieved from http://search.proquest.com/docview/1511381953?accountid=63189 Smith, P.C., Kendall, L.M & Hulin, C.L (1975) The Measurement of Satisfaction in Work and Retirement Rand McNally, Chicago Sparrowe, R T (1995) The effects of organizational culture and Leader-Member Exchange on employee empowerment in the hospitality industry Hospitality Research Journal, 18(3/1), 95-109 Spreitzer, G M (1995) Psychological empowerment in the workplace: Dimensions, measurement, and validation Academy of management Journal,38(5), 1442-1465 Spreitzer, G M (1996) Social structural characteristics of psychological empowerment Academy of management journal, 39(2), 483-504 Spreitzer, G M., Kizilos, M A., & Nason, S W (1997) A dimensional analysis of the relationship between psychological empowerment and effectiveness satisfaction, and strain Journal of management, 23(5), 679-704 Spreitzer, G M., De Janasz, S C., & Quinn, R E (1999) Empowered to lead: The role of psychological empowerment in leadership Journal of Organizational Behavior, 20(4), 511-526 Susman, G I (1976) Autonomy at work: A sociotechnical analysis of participative management Praeger Publishers Thang, L C., Rowley, C., Quang, T., & Warner, M (2007) To what extent can management practices be transferred between countries? The case of human resource management in Vietnam Journal of World Business, 42(1), 113-127 Thomas, K W., & Tymon, W G (1994) Does empowerment always work: Understanding the role of intrinsic motivation and personal interpretation Journal of Management Systems, 6: 39-54 56 Thomas, K W., & Velthouse, B A (1990) Cognitive elements of empowerment: An “interpretive” model of intrinsic task motivation Academy of management review, 15(4), 666-681 Tsui, A.S., Pearce, J.L., Porter, L.W & Tripoli, A.M (1997) Alternative approaches to the employee- organization relationship: does investment in employees pay off? Academy of Management Journal , 40(5), 1089-1121 Wagner, J A (1995) On beating dead horses, reconsidering reconsiderations, and ending disputes: Further thoughts about a recent study of research on participation The Academy of Management Review Wollack, S., Goodale, J G., Wijting, J P., & Smith, P C (1971) Development of the survey of work values Journal of Applied Psychology, 55(4), 331 Zimmerman, M A (1990) Taking aim on empowerment research: On the distinction between individual and psychological conceptions Psychology, 18(1), 169-177 57 American Journal of Community APPENDIX A QUESTIONNAIRES Dear Respondents, My name is Truong Ngoc Anh Thu I am student of MBUS Master program at BusinessInternational School of Business- University of Economics- HCMC I am on processing of my thesis with the topic “Psychological empowerment and job satisfaction: A comparison of manufacturing and services industry in Vietnam” I am looking forward to receiving your unprejudiced opinions through the following questionnaires There are not right or wrong answers Every answer is meaningful to me to complete this study You can feel secure that your information and answers will be kept secret and only collected for studying purpose If you have any question related to my thesis, please contact with me via email: thutruongngocanh@gmail.com or phone number: 0906 260 402 Thank you for your contributions! A Personal information Gender Male Female Age 18 – 25 26 – 35 36 – 45 46 – 55 Over 55 Education level High school Lower education Bachelor Master PhD degree Others What are your average years at company? – 0.5 years 0.5 - year - years - years - 10 years Over 10 years 58 Which organizational role you work as? Staff Professional Director Others Manager Which industry does your company belong to? Manufacturing B Service Multiple questions for studying the psychological empowerment and job satisfaction Please give your own opinion of the following statements by checking the appropriate number that is most fit to your level of agreement Strongly disagree Disagree Neutral Agree Empowerment meaning The work I is very important to me The work I is meaningful to me My job activities are not very meaningful to me personally I Empowerment competence I not have enough confidence in my ability to my job 59 Neutral Agree Strongly agree Item Disagree No Strongly disagree Strongly agree 5 I am self- assured about my capabilities to perform my work activities I have mastered the skills necessary for my job II Empowerment Self- determination I not have enough autonomy in determining how I my job I can decide on my own how to go about doing my work I have considerable opportunity for independence and freedom in how I my job III Empowerment impact 10 My impact on what happens in my department is large 11 I have a great deal of control over what happens in my department 12 I have a significant influence over what happens in my department IV Job satisfaction 13 I would recommend this company to a friend if he/she were looking for a job 14 I feel personal satisfaction when I my job well 15 I am proud to tell people that I am part of this company 16 This is the best organization for me to work for 60 agree Agree Strongly Neutral Disagree Item disagree Strongly No APPENDIX B QUESTIONNAIRES Kính gửi Anh/Chị, Tôi tên Trương Ngọc Anh Thư, học viên chương trình Thạc Sỹ Kinh Tế MBUS Viện Đào Tạo Quốc Tế- Trường Đại Học Kinh Tế TP.HCM Tôi trình thực luận văn với đề tài “Sự trao quyền theo yếu tố tâm lý hài lòng công việc nhân viên: so sánh ngành sản xuất dịch vụ công ty Việt Nam” Rất mong nhận ý kiến đánh giá khách quan Anh/Chị thông qua bảng câu hỏi khảo sát Không có câu trả lời hay sai Mỗi câu trả lời Anh/Chị có ý nghĩa quan trọng với việc hoàn thành đề tài nghiên cứu Các Anh/Chị yên tâm thông tin Anh/Chị câu trả lời giữ bí mật tổng hợp phục vụ cho mục đích nghiên cứu Nếu anh/chị có câu hỏi liên quan đến đề tài tôi, xin vui lòng liên hệ với qua địa email: thutruongngocanh@gmail.com số điện thoại: 0906 260 402 Xin chân thành cám ơn đóng góp Anh/Chị Phần A: Thông tin cá nhân Giới tính Nam Nữ Độ tuổi 18 – 25 26 – 35 36 – 45 46 – 55 Trình độ học vấn PTTH Trung Cấp/ Cao đẳng Cử nhân Thạc sĩ Tiến sĩ Khác Khoảng thời gian anh/chị làm việc công ty bao lâu? - 0.5 năm 0.5 - năm - năm - năm - 10 năm Trên 10 năm 61 Trên 55 Vị trí công việc anh/chị? Nhân viên Chuyên viên Giám đốc Khác Quản lý Ngành nghề công ty anh/chị làm việc? Sản xuất Dịch vụ Phần B: Các câu hỏi liên quan đến việc xác định trao quyền theo yếu tố tâm lý hài lòng công việc Anh/ Chị vui lòng cho biết ý kiến cá nhân phát biểu sau cách chọn số tương ứng với mức độ đồng ý Anh/ Chị: Hoàn toàn không đồng ý Không đồng ý Không có ý kiến Đồng ý Nhóm phát biểu liên quan đến mức độ ý nghĩa công việc Công việc làm quan trọng Công việc làm có ý nghĩa Các hoạt động công việc chẳng có ý nghĩa V Nhóm phát biểu liên quan đến mức độ lực thân công việc Tôi không đủ tự tin khả việc thực công việc 62 Đồng ý Hoàn toàn đồng ý Trung lập Nội dung phát biểu Không đồng ý STT Hoàn toàn không đồng ý Hoàn toàn đồng ý 5 Tôi tự tin có khả thi hành hoạt động liên quan đến công việc Tôi nắm vững kỹ cần thiết công việc VI Nhóm phát biểu liên quan đến mức độ tự định/ tự chủ công việc Tôi đủ quyền tự ý chí để định công việc Tôi tự định công việc thực Tôi có tự độc lập đáng kể công việc VII Nhóm phát biểu liên quan đến mức độ ảnh hưởng công việc 10 Ảnh hưởng hoạt động phận lớn 11 Tôi kiểm soát chặt chẽ hoạt động phận 12 Tôi có ảnh hưởng đáng kể hoạt động phát sinh phận Nhóm phát biểu liên quan đến mức độ hài lòng công việc 13 Tôi giới thiệu công ty cho bạn người tìm việc làm 14 Tôi thật càm thấy hài lòng làm tốt công việc 15 Tôi tự hào nói với người thành viên công ty 16 Đối với tôi, công ty tốt để làm việc 63 đồng ý Đồng ý Hoàn toàn Trung lập Không đồng ý Nội dung phát biểu không đồng ý Hoàn toàn STT APPENDIX C Figure C 1: The Histogram Figure C 2: The Normal P-P Plot of Regression Standardized Residual 64 Figure C 3: Scatterplot 65 APPENDIX D Table 3.1: Summary of employees’ profile No Items Gender Age Education level Average Years at Scale Frequency Percent Female 11 55.0 Male 45.0 18 – 25 11 55.0 26 – 35 40.0 36 – 45 5.0 Bachelor 15 75.0 Lower education 20.0 Master 5.0 - 0.5 years 10.0 0.5 - years 15.0 - years 40.0 - years 35.0 Manager 5.0 Professional 25.0 Staff 14 70.0 Manufacturing 45.0 Service 11 55.0 company Organizational role Industries 66 Table 3.2: Cronbach’s Alpha Item-Total Statistics Variable Scale Scale Mean if Variance Item if Item Deleted Deleted Reliability Statistics Corrected Cronbach's Item-Total Correlation Alpha if Cronbach's N of Item Alpha Items 804 861 819 858 830 Deleted Empowerment meaning EM1 7.55 3.839 616 768 EM2 7.45 3.629 711 673 EM3 7.40 3.411 634 756 Empowerment competence EC1 8.35 3.397 780 787 EC2 8.35 2.345 789 781 EC3 8.60 3.305 698 841 Empowerment Self- determination ESD1 7.30 2.853 643 782 ESD2 7.00 2.842 697 726 ESD3 6.90 2.937 679 746 Empowerment impact EI1 6.30 4.432 645 881 EI2 6.40 3.095 727 833 EI3 6.40 3.516 875 674 Job satisfaction JS1 11.80 6.379 833 698 JS2 10.80 11.011 364 892 JS3 11.00 7.789 761 738 JS4 11.70 8.326 723 759 67 Table 3.3: KMO and Barlett’s test Kaiser-Meyer-Olkin Measure of Sampling Adequacy .672 Approx Chi-Square 125.246 Bartlett's Test of Sphericity Df 66 Sig .000 Table 3.4: Total Variance Explained Component Initial Eigenvalues Total % of Cumulativ Variance e% Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Total % of Cumulativ Variance e% Total % of Cumulativ Variance e% 4.499 37.489 37.489 4.499 37.489 37.489 2.653 22.105 22.105 2.414 20.117 57.605 2.414 20.117 57.605 2.467 20.562 42.667 1.813 15.111 72.716 1.813 15.111 72.716 2.382 19.848 62.515 1.008 8.401 81.118 1.008 8.401 81.118 2.232 18.603 81.118 614 5.114 86.232 522 4.348 90.580 355 2.962 93.542 236 1.966 95.508 186 1.553 97.062 10 162 1.348 98.409 11 106 881 99.290 12 085 710 100.000 68 Table 4.5: Rotated Component Matrix Component EM2 893 EM3 852 EM1 786 EC2 863 EC1 860 EC3 824 EI3 880 EI2 846 EI1 705 ESD2 881 ESD3 868 ESD1 731 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization.a a Rotation converged in iterations 69 ... job satisfaction in service industry and manufacturing industry are not the same In service industry, the empowerment meaning affects on employees’ job satisfaction stronger than in manufacturing. .. there are many factors at any workplace that are related to the job satisfaction or job dissatisfaction The factors that are related to the job satisfaction are regarded as "motivators" and the factors... an increasing attention for job satisfaction theme in the literature Job satisfaction is defined as the feelings an employee has about the job in general (Smith et al 1975) or as an individual’s