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 TIEU LUAN MOI download : skknchat@gmail.com 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 TIEU LUAN MOI download : skknchat@gmail.com 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, empowerment impact, job satisfaction, service, manufacturing. i TIEU LUAN MOI download : skknchat@gmail.com 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 TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENT ABSTRACT. ii CHAPTER 1: INTRODUCTION .1 Background of the study .3 Research objective and questions.4 Scope of the research .5 Significances of the research .6 Structure of the research.
6 CHAPTER 2: LITERATURE REVIEW, HYPOTHESIS AND RESEARCH MODEL. 7 Models of Employee Involvement. 7 Models of Empowerment. 8 Theory of Motivator – Hygiene .2 Overview on psychological empowerment and job satisfaction .1 Empowerment meaning and job satisfaction .2 Empowerment competence and job satisfaction .3 Empowerment self-determination and job satisfaction .4 Empowerment impact and job satisfaction.
15 CHAPTER 3: RESEARCH METHODOLOGY. 17 iii TIEU LUAN MOI download : skknchat@gmail. 25 CHAPTER 4: EMPIRICAL RESULTS AND DISCUSSIONS .1 Preliminaries of data analysis.3 Exploratory Factor Analysis .5 Multiple Linear Regression Analysis. 43 CHAPTER 5: CONCLUSION, IMPLICATIONS AND DIRECTIONS FOR FURTHER STUDIES .1 Key findings of the thesis .3 Limitation and directions for further studies.
66 iv TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 2. 1: Conceptual framework of the study. 2: The Normal P-P Plot of Regression Standardized Residual. 65 v TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 4.
1 : Summary of employees’ profile. 3: KMO and Barlett’s test. 4: Total Variance Explained. 5: Rotated Component Matrix.
40 vi TIEU LUAN MOI download : skknchat@gmail.com 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 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. 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.
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 1 TIEU LUAN MOI download : skknchat@gmail.com 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. 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, 2 TIEU LUAN MOI download : skknchat@gmail.com and directed supervision are well manifested more in high power distance cultures than in low power distance cultures.2 Research problem After becoming an official member of the World Trade Organization, Vietnam has opportunities as well as challenges to adapt with globalization trend in the world. In order to moving forward successfully, organizations in Vietnam should take the advantages of not only the new technology but also improve their workforce with high competence, empowerment and development. In the literature, many prior studies on psychological empowerment (Tsui et al., 1997; Shaw et al., 1998; Gerhart and Rynes, 2003) indicate that management of the organization must improve employee satisfaction and that can encourage employees to improve the performance of their tasks and boost the level of their work performance, which in turn contribute to the company’s growth. Hunjra et al (2011) and Bowen and Lawler (1992) found that there is association between psychological empowerment and job satisfaction.
So it is essential to take these factors into account. According to Hofstede center (2010), Vietnam with the score of 70 is considered as high power distance country. That means Vietnamese people accept hierarchical order. The eldest person has the most influence.
In addition, hierarchy can be classified in terms of age, education level and job positions. Power distance exists not only in workplace but also in daily life. In a high power distance cultures, powerful individuals strive to maintain or increase influence at the expense of less powerful ones, who accept and present no challenge to the status quo (Hofstede, 2001). As such, understanding psychological empowerment and job satisfaction in the Vietnamese context is crucial for the organizational development.
The literature, there are many researches for psychological empowerment in Western countries, but little empirical studies for Eastern ones especially in Vietnam, except from Thang et al (2007) who considerate the employee empowerment in 3 TIEU LUAN MOI download : skknchat@gmail.com Vietnam’s firms. In addition, difference from the previous studies, this research focuses on the comparison in the two industries service and manufacturing, which plays decisive roles in developing the national economy. According to Looney (2014), the rapid growth of manufacturing output keeps the high share of manufacturing in Vietnam’s GDP, while service keeps growing. Hence, more than a third of Vietnam’s growth is attributed to structural change caused by the movements of labor from low productivity agriculture toward more productive manufacturing and services (McCaig and Pavcnik 2013).
As such, due to continuous changes of the economic context in Vietnam, a study on the relationship between psychological empowerment and job satisfaction is needed to investigate.3 Research objective and questions The objective of this thesis is to investigate the relationship between psychological empowerment and job satisfaction. Four factors of psychological empowerment as given by Spreitzer (1995), Thomas and Velthouse (1990) are taken into consideration in this thesis, namely empowerment meaning, empowerment competence, empowerment self- determination, empowerment impact. More specifically, two research questions are given as follows: Question 1: Do the empowerment meaning, empowerment competence, empowerment self- determination and empowerment impact affect the job satisfaction in Vietnam? If yes, to what extent do these above factors affect the job satisfaction in Vietnam? Question 2: Is there any difference on the impacts of psychological empowerment on the job satisfaction between the service industry and manufacture industry in Vietnam? 1.4 Scope of the research In the literature, empowerment can be classified into two main streams namely structural empowerment and psychological empowerment (Laschinger, 2004 and Thomas and Velthouse, 1990). This research only investigates the influence of four 4 TIEU LUAN MOI download : skknchat@gmail.