UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Pham Nhu Huynh THE ROLE OF ETHICS INSTITUTIONALIZATION IN INFLUENCING QUALITY OF WORK LIFE AND JOB SATISFACTION. A STUDY IN VIETNAMESE PETROLEUM INDUSTRY MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Pham Nhu Huynh THE ROLE OF ETHICS INSTITUTIONALIZATION IN INFLUENCING QUALITY OF WORK LIFE AND JOB SATISFACTION. A STUDY IN VIETNAMESE PETROLEUM INDUSTRY ID: 22130032 MASTER OF BUSINESS (Honours) SUPERVISOR: DR. NGUYEN THI NGUYET QUE Ho Chi Minh City – Year 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Acknowledgement I would like to express my sincere thankfulness to my supervisor, Dr.
Nguyen Thi Nguyet Que, who made me believe in myself and gave me the possibility to complete the thesis. Her guidance helped me in all the time of research and writing this thesis. I am sure that this thesis would not have been possible without her support. I would like to express my gratitude to all staffs in ISB who supported necessary materials and helped submit my papers.
My sincere thanks also go to friends and colleagues who participated in the pilot study that led to the development of the final survey questionnaire and their support over the time when I was busy to conduct the research. Especially, I would like to give my special thanks my family for supporting me spiritually throughout my life. Pham Nhu Huynh February 2017 i LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Abstract Purpose – This research aims to explore the role of ethics institutionalization in influencing quality of work life and job satisfaction – A study in Vietnamese Petroleum Industry. Methodoldy/Sample – A total of 280 questionnaires were distributed out at many oil and gas companies in Vietnam.
As the method is directly interviewing combining with online surveying, all of respondents who working at petroleum companies (e., staffs, team leaders, line managers and top managers), thus, data collecting also was primary sources. The hypothesized relationships were tested using structure modeling. Findings – This research found that a positive relationship between implicit ethics institutionalization and quality of work life. The results also indicate that implicit ethics institutionalization and quality of work life have positive impacts on the job satisfaction of employees.
Key words – Ethics institutionalization, quality of work life, job satisfaction. ii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Contents Acknowledgement. iii List of figures. v List of tables.
vi List of abbreviations. Quality of work life. Ethics institutionalization and Quality of work life. Ethics institutionalization & Job satisfaction.
Research model and hypothesis. The research design. Main survey method. Measurement scale building.
Sample size and sample method. Data analysis method. DATA ANALYSIS AND RESULTS. Exploratory factor analysis (EFA).
Confirmatory factor analysis (CFA). 35 iii LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Reliability and validity check. Structure equation modeling (SEM).
Conclusions and discuss of the findings. Limitations and future research. 55 Appendix 1 – Guidelines for in-depth interview. 63 Appendix 4 – Frequencies Table.
67 Appendix 5 – Reliability results. 69 Appendix 6 – EFA results. 73 Appendix 7 – CFA results. 75 Appendix 8 – SEM results.
77 iv LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of figures Figure 2.1 – Conceptual model---------------------------------------------------------------------------------------19 Figure 3.1 – Research process ----------------------------------------------------------------------------------------22 Figure 4.1 – Confirmatory factor analysis model -----------------------------------------------------------------37 Figure 4.2 – SEM of research model --------------------------------------------------------------------------------41 Figure 4.3 – Final research model -----------------------------------------------------------------------------------42 v LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of tables Table 3.1 – Measurement scale --------------------------------------------------------------------------------------24 Table 3.2 – Key indices ------------------------------------------------------------------------------------------------29 Table 4.1 – Sources of data collection ------------------------------------------------------------------------------30 Table 4.2 – Description of sample -----------------------------------------------------------------------------------31 Table 4.3 – Reliability test results -----------------------------------------------------------------------------------32 Table 4.4 – The list of deleted items --------------------------------------------------------------------------------33 Table 4.5 – KMO and Bartlett's Test --------------------------------------------------------------------------------34 Table 4.6 – Pattern Matrix --------------------------------------------------------------------------------------------34 Table 4.7 – Standardized Regression Weights --------------------------------------------------------------------36 Table 4.8 – Confirmatory factor analysis results -----------------------------------------------------------------38 Table 4.9 – Construct correlations, AVE & CR ------------------------------------------------------------------39 Table 4.10 – Fitness of conceptualized model --------------------------------------------------------------------40 Table 4.11 – Final results of hypotheses testing result ----------------------------------------------------------42 Table 4.12 – Final results of relationship checking of model’s constructs ----------------------------------43 Table 4.13 – Modified scales -----------------------------------------------------------------------------------------43 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of abbreviations No. Abbreviation Meaning 1 AVE Average Variance Extracted 2 CFA Confirmatory factor analysis 3 CR Composite Reliability 4 EEI Explicit ethics institutionalization 5 EFA Exploratory factor analysis 6 GDP Gross domestic product 7 KNOC Korean National Oil Corporation 8 IEI Implicit ethics institutionalization 9 JS Job satisfaction 10 PetroVietnam Vietnam Nation Oil and Gas Group 11 PVD-DD PetroVietnam Drilling Division 12 PVEP POC PetroVietnam Domestic Exploration Production Operating Company Limited 13 PVD TECH Petroleum Trading & Drilling Technical Services Company 14 QWL Quality of work life 15 SEM Structural equation modeling vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Research background Each organization has its own assets which contains two main components – labor and capital. Capital is so important to the achievement of the business, while labor is the vital factor for creating profits to it.
The labor does everything daily and the whole existing time of the organization. The reality of working life today is that employees are frequently trying to control their work and personal lives. In the context of integration into the world economy, along with the introduction of many domestic petroleum companies and foreign petroleum companies have made the competition attract high-quality human resources to be more intense. Therefore, the vital importance which leaders should perform are to retain current employees because the stability of personnel will help organization save time, costs of recruitment, training.
According to Tett and Meyet (1993), job satisfaction is negatively associated with turnover intention. Job satisfaction was associated with decreased intentions to leave a company (Hom & Griffeth, as cited in Valentine et al., 2011; Jaramillo, Mulki & Solomon 2006). Thus, besides the ways to improve business efficiency, management efficiency, cost savings, etc. the methods to improve the job satisfaction of employees are the concern of all organization.
The job is considered an important part of human life since the majority of their lives is devoted to the organization. Many people believe that the work represents their value in society. Therefore, the quality of life will depend on the quality of work life which they have been at the workplaces. Improving the quality of work life will contribute to bring good quality of life for each individual.
Quality of work life including the life aspects related to the work such as wages, working hours, work environment, benefits, career prospects, the human relationship, the balance between work and life. These aspects contribute to the satisfaction and motivation of employees. According to Efraty, Sirgy and Claiborne (1991), high quality of work life results in an increase in job satisfaction and performance of employees, and at the same time, cause a decrease in both alienation and turnover intention. From that, employees are willing to contribute to an 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com organization where quality of work life exists because they feel that their work fulfills their needs (Cascio, as cited in Koonmee, Singhapakdi, Virakul, and Lee, 2010).
Recent studies have shown that quality of work life is not the unique factor affecting to job satisfaction of employees, the institutionalization of ethics is also considered the important factor influencing to employees’ job satisfaction. According to Sims and Kroeck (1994), ethical working environment is an important factor in the person-organization study. That is, employees usually choose to work in organizations whose ethical preferences fit their own. And so, employees who work for organizations that institutionalize ethics would tend to be more satisfied with their jobs (Singhapakdi & Vitell, 2007).
And finally, Valentine, Godkin, Fleischman, and Kidwell (2011) indicated that corporate ethical values and job satisfaction were associated with decreased turnover intention. Therefore, it is necessary to study the association between institutionalization of ethics, quality of work life and job satisfaction. Because of in parallel to the importance of ethics institutionalization, both quality of work life and job satisfaction have been important topics in human resource and organizational development (Leopold, as cited in Koonmee et al. The oil and gas company is a type of specific enterprise, operating in the field of petroleum exploration and production.
Its operation and business are conducted through laborers. The works at the oil and gas company is considered to be extremely stressful, contain many risks, frequently long working hours, working fully stretched in harsh environments and often facing danger, be able to occur injury or even dangerous to life. Such as explosives, gas eruption, falling into the sea, labor accidents due to work with heavy machinery, etc. although safety regulations are very closely on the rig.
To work well in the petroleum sector, employees need more skills such as analysis, synthesis, teamwork and have good health. Besides, the petroleum sector is the operation field related to exploration and production of natural resources therefore the intelligence is pre-requisite for the employees working there. In addition, soft skills are such as presentation, conflict resolution, establishing good relations with colleagues; fast processing unexpected problems occur, etc. those are the important skills which staffs need to equip themselve.
Therefore, when there is an employee 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com meeting the above requirements, any petroleum company which wishes to maintain existing staff and make them meet the job satisfaction to engage with the organization in the long-term, especially employees with high technical qualifications. The research of Al Muftah and Lafi (2011) related to petroleum industry in Qatar supports that quality of work life is positively and significantly related to employees’ job satisfaction. Regarding the importance of ethics and quality of work life and the effect of them on job consequences such a job satisfaction of employee and spirit of team work, Chamesghali and Salimiare (2014) considered the relationship between ethics institutionalization, quality of work life and job-related outcomes in the form of case study of employee of national Iranian oil product distribution company. Nowadays, the common problem of the petroleum company is to improve the job satisfaction of employees, creating incentives for employees to work effectively and engage long-term with the organization.
Therefore, the determination of the degree of influence of the ethics institutionalization and the quality of work life to the job satisfaction of petroleum employees is a necessary matter. Research problem For the last decade, organizations have increased effort to institutionalize ethics, partly because such efforts positively affect employee behavior. In addition, given increasing ethical problems in business, many organizations have tried to control these problems by institutionalizing ethics. Therefore, ethics institutionalization is not only a process developed through continual ethical operation but also an important topic in business ethics research and ethics become institutionalized by “the persistence of specific behaviors associated with an organization and its employees behaving ethically” (Sims, 1991, p.
According to Purcell and Weber (1979), mechanism for ethics institutionalization within an organization is the utilization of a code of ethics. This code describes the general value system of the organization, defines the purpose of the organization, and provides guidelines for decision-making consistent with these principles. Ethics institutionalization is a part of the organizational environment, and it is also an important determinant of the decision-making processes of employees in situations involving ethical issues (Hunt & Vitell, 1986; Ferrell & Gresham, 1985). 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Sims (1991) also discusses the important of institutionalizing organizational ethics and emphasizes the importance of an ethically oriented culture to ethics institutionalization within organizations.