UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Thai Van Trung Hieu THE LINKAGES AMONG ADAPTIVE LEADERSHIP, LEARNING ORGANIZATION AND ORGANIZATIONAL PERFORMANCE MASTER OF BUSINESS (Honours) Ho Chi Minh City – 2014 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Thai Van Trung Hieu THE LINKAGES AMONG ADAPTIVE LEADERSHIP, LEARNING ORGANIZATION AND ORGANIZATIONAL PERFORMANCE ID: 21110006 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr. Nguyen Huu Lam Ho Chi Minh City – 2014 TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGE I gratefully acknowledge the constructive comments provided by Dr. Nguyen Huu Lam. His ideas and suggestions play an important role for research orientation.
I would like to thank the following people for their efforts and support, who gave me much valuable advice in the early stages of this work: Mrs. Lan (MBA - HCMC University of Technology), and a lot of friends of friends who attended my survey, without whose helped this work would never have been possible. In addition, I want to thank you for all of friends at AMIGOS Company, who stood in the breach when I concentrated on research. Last but not least, my sincere thanks owe to my family who gave me good conditions to complete this work.
TIEU LUAN MOI download : skknchat@gmail.com PLAGIARISM STATEMENTS I hereby declare that this thesis represents my own work and any sign of plagiarism would significantly drive rejection results by International School of Business (ISB belong to University of Economic, HCMC). I fully understand the statement above. TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT In the last years, the plight of the Vietnam economy has forced a lot of companies to bankrupt. Enterprises are seeking ways to overcome this dark cloud to survive and develop on the market, this made them aware of the importance of learning capabilities and role of leader in organization which are considered as one of the efficient ways to improve business’s performance outcome.
Hence, this research aims to explore whether there is the chain impact from adaptive leadership and learning organization to organizational performance in chemical companies in a Vietnam business environment or not. The collected data was analyzed and evaluated by structural equation modeling (SEM) method through Analysis of Moment Structures (AMOS software) at the sample size of 29 chemical companies with 128 responses returned from middle level managers. This study finds out the effects of adaptive leadership on learning organization and learning organization has positive impact on a part of organizational performance. In addition, learning organization plays mediating variable role in this correlation.
Nonetheless, this research has its limitations due to only focusing on chemical manufacturing field. Hence, it could not represent a general characteristic for other areas. The correlation among adaptive leadership, learning organization and perceptual performance outcome are interesting because the result is a vindication of the important of applying adaptive leadership as well as building learning organization will contribute how to success of organization. Therefore, firms can use this correlation or knowledge from it to improve their adaptability to continuously compete in turbulent market.
TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS ACKNOWLEDGE PLAGIARISM STATEMENTS ABSTRACT CHAPTER 1: INTRODUCTION .4 Research methodology and research scope. 6 CHAPTER 2: LITERATURE REVIEW .4 Relationship among AL, LO and OP. 17 CHAPTER 3: RESEARCH METHODOLOGY.1 Carry out reliability analysis for AL scale.2 Analyze reliability for LO scale .3 Conduct reliability analysis for OP scale .4 Introduce main research. 36 TIEU LUAN MOI download : skknchat@gmail.
37 CHAPTER 4: RESEARCH RESULTS .1 Evaluate the measurement by CFA .1 CFA result for Adaptive leadership .2 CFA result for Learning organization .3 CFA result for Perceptual performance outcome .4 The saturated model.5 The theoretical model .6 The competitive model. 52 CHAPTER 5: CONCLUSIONS, IMPLICATIONS AND LIMITATIONS.2 Implications of research .3 Limitations and directions for further research. 61 APPENDICES TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 3.1 Results for discriminant validity of each variable .2 Relationship between each concept in theoretical model (standardized) .3 Relationship between each concept in competitive model (standardized) .4 Estimated result by bootstrap at N = 200 .5 Results of hypotheses. 52 TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 2.2 Research model revised .1 CFA result for adaptive leadership .2 CFA result for learning organization .3 CFA result for perceptual performance outcome .4 SEM analysis results for saturated model .5 SEM analysis results for theoretical model .6 SEM analysis results for competitive model.
50 TIEU LUAN MOI download : skknchat@gmail.com LIST OF ABBREVIATIONS The following table describes the significant of various abbreviations used throughout the thesis. Abbreviation Meaning LO Learning organization OL Organizational learning AL Adaptive leadership OP Organizational performance PPO Perceptual performance outcome DLOQ Dimension Learning Organization Questionnaire SEM Structural equation modeling EFA Exploratory factor analysis CFA Confirmatory factor analysis TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 1: INTRODUCTION In this chapter, the important of becoming learning organization to adapt to changing business environment is demonstrated. Briefly tell about the business situation of Vietnam enterprise in last year and propose solution to face the difficult circumstances. Furthermore, what is factor influencing organization to make it up learning organization and the outcome of this process are also mentioned in here.
The aim, scope and significance of the study are also introduced.1 Research background We are living in the world where changing happen continually. Currently, organizations confront a turbulent market; business environment becomes fierce competition and unpredictable changing. Thus, in order to survive and continue developing, they have to enhance their ability through learning process (Burke et al. De Geus (as cited in Dimovski, Skerlavaj, Kimman & Hernaus, 2008, p.
3063) states that “ability to learn faster than your competitors might be the only sustainable competitive advantage you have”. In addition, according to Haley and Lazouskas (2008) the learning organization (LO) is that the successful organization must continually adapt and learn in order to respond to changes in environment and to grow. Besides, adapting with changing environment through learning, organization needs leaders who have ability to confront the chaotic conditions. This requires one leadership style that can learn and confront new situation that never know before.
1 TIEU LUAN MOI download : skknchat@gmail.com Therefore, adaptive leadership (AL) becomes a vital factor, because AL relates to learning capability for adaptive challenges which considers matter as difficult to identify, require changes in values, attitude, and beliefs to work. In contrast to technical problems that is easy to recognize and carry out available solutions (Heifetz, Grashow & Linsky, 2009). 6) states that “Adaptive leadership is not about individuals and how well they are doing; it is about understanding adaptive pressures and dynamics and being able to use those insights to be more successful in leading change.” Additionally, when the organization adopt the features described as factors of LO, it will be improved for performance (Senge, Holton & Kaiser, as cited in Haley & Lazouskas, 2008). Hence, the positive result of LO is what the enterprises want to achieve.
It should be improved in outcome when LO is applied in firm. Presently, Vietnam organizations are coping with difficult situation from macro-economy. According to Dinh Thanh reporter come from Vietnam Chamber of Commerce and Industry (VCCI) described that “In 2012, thousands of Vietnam’s enterprises suffered losses, bankruptcy and closed down. Entering 2013, according to many experts, although the economy will gradually recover, there won’t be many opportunities for enterprises due to tight credit policies maintained by the Government”.
Thus, firms are under pressure to restructure and enhance competitiveness to be adaptive to the environment and responsive to change. Organizations want to continue surviving and expanding business activities need to absorb knowledge that can help an organization to diagnose the sign of difficulties in the early period before it’s too late. This means that building their organization 2 TIEU LUAN MOI download : skknchat@gmail.com become organizational learning. A lot of organizations had changed their business model; however, some improvement programs meet fail than succeed.
One of the reasons, leaders do not realize and commitment to learning to adapt and develop sustainably (Garvin, 1993). Hence, leaders have to know how to learn and choose what appropriate model to learn that helps each individual and organization perceive the important role of learning which will transform a normal organization to learning organization. According to discussion between Dr. Nguyen Huu Lam director of Center for Excellence in Management Development (CEMD) belong to Ho Chi Minh University of Economics with Bridge Investment newspaper, he said when business environment changed rapidly and knowledge increase sharply, who learn better and faster will be become winner.
Beside, learning creates ability to adapt with turbulent market. Vietnamese enterprises should improve considering learning as short term vision. They need to comprehend learning is a strategy that will engage with mission and vision tightly. The organization is the same individual, they want to exist they have to learn and learn to live better (Nguyen, 2011).2 Research questions LO has been considered to be one of the most important strategies to gain competitive advantage and organizational performance (Marsick & Watkins, 2003), related literature lacks conclusive to support the effect of learning organization on organizational performance (Moilanen, Weldy, as cited in Alipour & Karimi, 2011) 3 TIEU LUAN MOI download : skknchat@gmail.com Beside the influence of LO for performance, the impact of leadership styles on organizational performance (OP) has also been a topic of interest among academics and practitioners working in the area of leadership (Fatima & Al-Balqa, 2012).
Fenwick have devoted considerable attention to the potential effects of leadership on OP. Despite increased research into the leadership-performance relationship, major gaps still remain in our understanding. (Fenwick et al., as cited in Fatima & Al-Balqa, 2012). There are many factors affect to the development of learning organization and therein leadership is emphasized as the key element.
However, literature rarely addresses the particular relationship between AL and LO. These queries above lead to critical questions what leadership behaviors will have influence in creating and maintaining learning organizations? After selecting adaptive leadership, the research come up with a new question how the relationship between adaptive leadership and learning organization because two notions also support organization face up to turbulent environment and whether developing a learning organization lead to improved organizational performance or not? This is certainly important questions for organizations in all industries. Three vital questions to check linkage among three constructs: 1/ Whether adaptive leadership affect on the learning organization or not? 2/ Whether learning organization have any impact to organizational performance or not? 4 TIEU LUAN MOI download : skknchat@gmail.com 3/ Whether adaptive leadership have any effect to organizational performance or not? By addressing these research questions which will help the reader know more the gap exist in the literature between adaptive leadership and LO as well as the linkages among adaptive leadership, learning organization and organizational performance.3 Research objectives This research aims to endeavor to bridge a gap in literature by examining the three constructs – adaptive leadership, learning organization, and organizational performance since offering insight for these relationships. Moreover, the research will support some necessary information for organizations that are looking for solutions to overcome the crisis, and adapt to change.4 Research methodology and research scope The aim of this study is to test measurement scale and conceptual model.
This research uses questionnaire to collect data with sample size 128 in the main research that obtains through snowball sampling method. The measurement scale is evaluated through two steps. First, the preliminary assessment uses Cronbach alpha and EFA method with SPSS software. Then, the measurement scale and research model are examined through SEM method by using AMOS software.
5 TIEU LUAN MOI download : skknchat@gmail.com The research is conducted at companies which do business in the field of chemical products in Ho Chi Minh City. This is one of the most important fields and has made significant contributions to development of the economy.