The Effect of Organizational Culture Gaps on Individual Readiness to Change through Organizational Commitment
Megatian Ananda Kemas1*, Rosiwarna Anwar1
1 Faculty of Economics and Business, University of Indonesia, Depok, Indonesia
*Corresponding Author: [email protected] Accepted: 15 September 2021 | Published: 1 October 2021
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Abstract: The success of an organization in the face of challenges and complexity of the business world is largely determined by the readiness to change of its members. This is often influenced by the culture that exists within the organization. Cultural gap perceived by the member of organization will trigger individual readiness to change when they realize that current conditions are not ideal. On the other hand, the level of individual readiness to change is strongly influenced by the commitment to the organization. This study aims to understand the influence of organizational culture gaps on individual readiness to change through organizational commitment in the food and beverage industry. The measurement was conducted using a questionnaire to 283 respondents. The Structural Equation Modelling (SEM) method was used to analyze structural relationship between organizational culture gaps, organizational commitments and individual readiness to change. The results showed that current and preferred organizational culture gaps positively affect individual readiness to change and negatively affect organizational commitments. While the organizational commitment shows positive influence on individual readiness to change.
Keywords: organizational culture gaps, individual readiness to change, organizational commitment
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1. Introduction
Individual readiness for change is considered to be the essential factor in change management.
Unfortunately, although a number of empirical studies on individual readiness for change have been conducted, very few have attributed it to a particular type of industrial business sector.
Meanwhile, it is important for organization to have a capability to adapt for change to maintain its competitiveness in current business situation (Bouckenooghe et al., 2009; Rafferty et al., 2013).
One of the important aspects that can support or hinder the process of change is organizational culture (Zheng et al. in Nesbit & Lam, 2014). This barrier may occur due to gap between current and the organizational culture favored by the member of organization.
In the process of changes that occur within the organization, the role of organizational commitment is also one of the important things in driving change. A number of researchers have identified the importance of organizational commitment as a prerequisite for the successful implementation of organizational change (Bellou, 2007; Yousef, 2000; Lau &
Woodman, 1995; Vakola & Nikolaou, 2005). Other studies also found that organizational culture gaps had a negative influence on organizational commitment (Bourantas &
Papalexandris, 1992; Gustari et al., 2013). Cultural gaps occur when there is a dissimilarity between the dominant culture that exists in the organization and the culture preferred by the member of organization (Bourantas & Papalexandris, 1992; Hariandja & Sembiring, 2014;
Suwaryo et al. 2016). The greater gap of organizational culture perceived by the member of organization will reduce their willingness to try their best to support change process.
Although individual readiness for change is an important aspect to determine the success of organization in making changes, research on the effects of the perceived organizational culture gaps on individual readiness for change is still limited. Through a practical point of view, this study is conducted to provide new insight regarding managing the change process by providing significant suggestions and strategies to prepare employees to achieve success in organizational change. This study aims to understand the influence of organizational culture gaps on individual readiness for change through organizational commitment in the food and beverage industry.
2. Literature Review
Organizational Change
Change has always been an integral part of an organization's life cycle. Unnoticeably, a person, group, or organization is bound for change (Gareis, 2010). The evolving business situation and globalization process make the organization's ability to innovate and change even more important. Companies that are open to the process of change will be more effective in achieving their goals. Therefore, the ability of the organization in implementing successful changes becomes very important (Petrou et al., 2018).
Kurt Lewin who is widely regarded as the founding father of change management introduced a three-stages change model. These three stages are known by many as the classic approach to managing change (Cummings et al., 2015). The three stages of the change model are Unfreezing, Change, and Refreezing. Unfreezing refers to efforts to 'dilute' habits that embedded in both organizations and individuals in order to reduce factors that may hinder the process of change (Esa et al., 2017). Change is the stage at which the implementation of change actually happens and as people learn to adapt to new things. Refreezing is the process of strengthening change by ensuring its acceptance and widely implemented all the time and becomes a habit that settles within the organization.
Individual Readiness for Change
Readiness can be said to be one of the most important factors involved in the initial support of employees for change initiatives (Armenakis et al., 1993; Armenakis et al., 1999). Holt et al.
(2007) stated that the individual readiness for change is the first of the three stages of the entire process of successful change. Individual readiness for change is the extent to which a person has a tendency to accept, embrace, and apply a particular concept to change the status quo (Holt et al., 2007). Evaluation of employee readiness for change will help the change agents, business consultants and management to understand the gap between their own expectations about change and employee anticipation of change (Abdel-Ghany, 2014). Hanpachern (1997) developed three-dimensional model of individual readiness to change namely participating, promoting, and resisting. Participating refers to the active involvement of organization members in carrying out change process. Promoting refers to the efforts by organization members to disseminate information the benefits of changes to their colleagues. While resisting refers to employee’s negative behavior in rejecting changes.
Organizational Commitment
Organizational commitment has a very important role in ensuring the effectiveness of the organization so that if it is ignored, it can damage and cause harm to the organization (Allen &
Meyer, 1990). Someone who are committed to the organization will put extra effort into being part of the organization (Morrow, 1993), protect the company assets, and share the same values and goals with the company (Meyer & Allen, 1997). Meyer and Allen (1991) view organizational commitment as "a psychological state that (a) characterizes an employee's relationship with the organization, and (b) has implication toward the decision to continue membership in the organization". Meyer and Allen (1991) further developed a model of organizational commitment which consisted of three components, namely affective commitment, continuance commitment and normative commitment. Affective commitment is employee's positive emotional attachment to the organization and is related to the identification of individuals who are firmly committed to involvement in the organization as well as enjoying membership in the organization (Allen & Meyer, 1990). The continuance component refers to a commitment based on the losses that a person must bear when leaving the organization (Lok
& Crawford, 2001). While normative commitment refers to employees' perception of their moral obligations to the organization (Srivastava, 2013).
Organizational Culture
Organizational culture has become an important aspect of organizational behavior research and, in turn, has become a popular topic in scientific research (Manetje & Martins, 2009;
Martins & Martins, 2003; Van der Post et al., 1998; Meijen, 2007). Broadly speaking, organizational culture is an understanding of norms, values, attitudes, and beliefs shared by all members of the organization (Stoner et al., 1995). Organizational culture is also a framework that becomes a guideline for daily behavior in making decisions and directing the actions of organization members to achieve organizational goals. Furthermore, an organization's culture will be different from other organizations because it depends on how its members define how their organization works (Van den Berg & Wilderom, 2004). There are four types of organizational culture based on models developed by Harrison and Stokes (1992) namely power, role, achievement, and support. Power is a cultural orientation characterized by one's control over the resources in the organization. Role is a cultural orientation characterized by the existence of formal rules, policies and procedures in the organization. Achievement is a cultural orientation characterized by the awareness of organization members in achieving common goals and objectives. While support is characterized by trust between members of the organization.
Organizational Culture Gap
Branson (in Bourantas et al., 1990) argues that it is possible that there are three types of ideologies in an organization: (1) subjective ideologies, which is what others’ think, (2) perceived ideologies, which is what people think of others’, and (3) objective ideologies, which is part of what people think that is already known, shared, and discussed together with others.
This then leads to a frequent gap between the existing organizational culture and the preferred organizational culture as stated by Rowe et al. (1994). Bourantas et al. (1990) define the perception of cultural gap as the level of conformity between the culture of the organization and the sub-culture of individual member of groups.
Organizational Culture Gap and Individual Readiness for Change
To survive in a growing business environment, organizations must always be ready to adapt and change their ways of conducting business (Holt & Vardaman, 2013). One of the important aspects in the process of change is the organizational culture. This happens because the
organizational culture has the capability to assist the organization in addressing problems by conducting internal integration and adapting externally to achieve the organization's goals (Schein, 1992). However, it is not uncommon for rejection to appear from members of the organization which affects the outcome of change efforts (Chiung-Hui & Ing-Chung, 2009).
This is due to the increasing pressure, stress, and uncertainty that organization members must face when change occurs (Armenakis & Bedeian in Abdel-Ghany, 2014). Thus, the ability of the organization to change must be created before the changes are implemented (Holt &
Vardaman, 2013). That's why it is important to bring up individual readiness for change in order to ensure organization's ability to implement change (Vakola, 2013). Furthermore, Flamholtz and Randle (2012) expressed the importance of identifying the perception of cultural gap between current and preferred organizational culture in order to better managing changes.
Members of organizations need to be realize that the current conditions are not ideal so that it requires them to create new conditions that will drive the implementation of changes.
Therefore, the first hypothesis of this study is as follows:
Hypothesis 1: Perceived organizational culture gap positively affects an individual readiness for change.
Organizational Culture Gap and Organizational Commitment
An organization may thrive organizational culture that its members liked or disliked (Rowe et al. in Gustari et al., 2013). Cultural gaps occur when there is a difference between the dominant cultural forms that exist in the organization and the preferred or desired form of culture (Bourantas & Papalexandris, 1992; Hariandja & Sembiring, 2014; Suwaryo et al., 2016).
Furthermore, according to Meyer et al (2010), organizational commitment can be improved by changing the culture in the direction favored by members of the organization. Research conducted found that cultural gaps had a negative influence on organizational commitments (Bourantas & Papalexandris, 1992; Gustari et al., 2013). Therefore, the second hypothesis of this study is as follows:
Hypothesis 2: Perceived organizational culture gap negatively affects organizational commitments.
Organizational Commitment and Individual Readiness for Change
Employee attitudes towards change are essential to successful organizational change (Elias, 2007). However, the main challenge of change lies in the difficulty to obtain employees' willingness to commit to change efforts (Soumyaja et al., 2011). Thus, Kotter (in Jaros, 2010) says that managers who are able to make their subordinates committed to new goals, programs, policies, and procedures can have a better chance of making organizational changes. Madsen et al. (2005) prove that employees feel they have a higher level of individual readiness for change when they have a solid commitment to the organization. Therefore, the third hypothesis of this study is as follows:
Hypothesis 3: Organizational commitment positively affects an individual readiness for change.
Organizational Commitment, Organizational Culture Gap and Individual Readiness for Change
Harrison emphasizes the importance to align employees’ perception on current organizational culture and those preferred in order to improve organization performance (Hofstede, 2001) as well as minimize the resistance toward change (Kandula, 2006; Suppiah & Sandhu, 2011).
Moreover, according to Madsen et al. (2005), individual readiness for change can be improved when employees have a strong commitment to the organization. Meanwhile, organizational commitment can be enhanced by changing the culture towards the preferred culture by organization members (Meyer et al., 2010). Therefore, the fourth hypothesis of this study is as follows:
Hypothesis 4: Organizational commitment mediates the effect of the perceived organizational culture gap on individual readiness for change.
Based on the description above, the research framework in this study is structured as shown in Figure 1.
Figure 1: Research Framework
3. Methods
The population of this study was all employees who worked in the food and beverage industry in Indonesia with a minimum working period of 1 year. The number of samples used in this study was adapted to the analysis method, Structural Equation Modeling (SEM). There are several categories of sample size mentioned in the literature of SEM that are less <100, categorized into small sample, 100-200 is categorized into the moderate sample, and >200 is categorized into large sample (Kline in In'nami & Koizumi, 2013). Since the number of the samples obtained by the researchers was 283 samples, it was categorized into the large sample.
The measurement tools used in this study were divided into three parts of a questionnaire on the perceived gaps of organizational culture, organizational commitments, and individual readiness for change. The measurement tools used pre-existing instruments, questionnaires developed by Harrison and Stokes (1992) to measure perceived gaps of organizational culture, organizational commitment questionnaires by Allen and Meyer (1990), and individual readiness for change questionnaires by Hanpachern et al. (1998).
Data analysis techniques was quantitative analysis using SEM (Structural Equation Modeling) model. SEM is a set of statistical techniques that allows testing a relatively complex set of relationships simultaneously. These complex relationships can be interpreted as a series of relationships built between one or more dependent variables (endogenous) with one or more independent variables (exogenous), and those variables are in the form of factors or constructs built from several indicators observed or measured directly.
4. Results
Table 1 shows that those who completed the survey were mostly male (73.5%) compared to women (26.5%). Respondents were dominated in age between 26 to 30 years or equals to 28.3% and the smallest group is the age group over 45 years of age of 6%. Regarding education,
the majority of the sample (44.5%) are undergraduate degree. As for job position, 42.4% are operator.
Table 1: Profile of Respondents
Demography Category Number of
respondents (%)
Sex Female 75 26.5
Male 208 73.5
Age (Years) 20-25 years 40 14.1
26-30 years 80 28.3
31-35 years 73 25.8
36-40 years 52 18.4
41-45 years 21 7.4
>45 years 17 6.0
Education High School 116 41
Diploma 37 13.1
Undergraduate 126 44.5
Postgraduate 4 1.4
Position Operator 120 42.4
Leader/Supervisor 73 25.8
Assistant Manager 38 13.4
Manager 52 18.4
Figure 2 reveals that there are perceived organizational gaps and the respondents expected the power culture to be weaker than the current culture and other cultural orientations are stronger.
Figure 2: Perceived Organizational Culture Gaps
Paired sample t-test was done to test the mean score of each dimension (power, role, achievement, and support) and to measure the group of current and preferred culture. Table 2 shows the results of paired sample t-test for dimension of power and achievement are significant with p-value 0.004 and 0.007, respectively, smaller than the set limit of 0.05.
Therefore, there is a difference in perceived culture gap on power and achievement dimensions.
Meanwhile, the results show on paired sample t-test for dimension of role and support are significant with p-value of 0.862 and 0.109, respectively, greater that the set limit of 0.05.
Therefore, there is no perceived culture gap on role and support dimensions. The perceived gap between the current and the preferred culture by the employees indicates the need for organizational culture change.
Table 2: Test Results of Organizational Culture Gap Dimensions Paired Sample Dimension Group Mean Difference t-value P-value
Power Current 2.2955
-0.176 2.914 0.004 Preferred 2.1198
Role Current 2.4499
0.006 -0.175 0.862 Preferred 2.456
Achievement Current 2.5308
0.093 -2.718 0.007 Preferred 2.6237
Support Current 2.7239
0.077 -1.606 0.109 Preferred 2.8008
To evaluate the fit of the proposed model, an indicator of goodness of fit is used. Table 3 shows all indicators provide good model fit. Therefore, standardized path coefficients can be used to test the theoretical hypothesis.
Table 3: Model Goodness of Fit Test Results
GOF Cut off value Research result value Result suitability ChiSquare
43.63
df 30
p-value ≥ 0.05 0.052 Good fit
RMSEA ≤ 0.08 0.040 Good fit
GFI ≥ 0.90 0.97 Good fit
AGFI ≥ 0.90 0.94 Good fit
RMR ≤ 0.05 0.026 Good fit
RFI ≥ 0.90 0.97 Good fit
CFI ≥ 0.90 0.99 Good fit
NFI ≥ 0.90 0.98 Good fit
Figure 3, shows that power and support on the perceived culture gaps latent variable have the highest loading factor value of 0.92. This means that perceived culture gaps is influenced by power and support culture orientation. Meanwhile, for organizational commitment latent variable, the highest loading factor value is the normative commitment of 0.95. This means that the attitude and involvement of employees is based on their sense of responsibility towards the organization. While in the individual readiness for change latent variable, participating has the highest loading factor value of 0.96. This indicates that employee's acceptance towards change efforts is dominated by their willingness to engage in the change implementation process.
Figure 3: SLF Main Model
From Table 4, it can be seen that perceived culture gaps have significant positive impacts on individual readiness for change with coefficient value 0.27 and t-value 4.00, thus supports the hypothesis that perceived gaps of current and preferred organizational culture positively affect individual readiness for change. It means that when perceived culture gaps increase, individual readiness for change will also climb up. In contrast, the perceived culture gaps indicate significant negative impacts on organizational commitment with coefficient value -0.33 and t- value -5.07, thus supports the hypothesis that perceived gaps of current and preferred organizational culture negatively affect organizational commitment. It means that when the perceived culture gaps increase, it will lessen the organizational commitment. Furthermore, coefficient value of organizational commitment to individual readiness for change is 0.30 with t-value 4.42. It shows a positive and significant impact, thus supports the hypothesis that organizational commitment positively affects individual readiness for change. It means that when the organizational commitment increases, the individual readiness for change will also improve.
Table 4: Coefficient Test Results
Relationships Coefficient t-value Result Perceived
Culture Gap → Individual Readiness for Change
0.270 4.000 Significant
Perceived
Culture Gap → Organizational
Commitment -0.330 -5.070 Significant
Organizational
Commitment → Individual Readiness for Change
0.300 4.420 Significant
Afterward, hypothesis testing was performed on mediation using Sobel Test to test whether organizational commitment mediated the effects of perceived organizational culture gaps on individual readiness for change. Based on the calculation, it obtained Z-value of 3.332, greater than the critical limit of 1.96 with a level of significance 0.05. Therefore, it can be concluded that organizational commitment can mediate perceived organizational culture gap and individual readiness for change.
5. Discussion
As business competitive increases, it is very important for organizations to have the ability to adapt to both internal and external pressure. Cunningham et al (2002) emphasized that employee readiness should be considered by the organization in carrying out changes. It is done to avoid resistance from the employees. Therefore, it is important for organizations to be able to identify the current perceived cultural gap with the preferred one to manage changes better.
On the other hand, individual readiness for change can be improved when employees resolutely commit to the organization (Madsen et al, 2005). Meanwhile, organizational commitment can be enhanced by changing the culture in the direction favored by organizational members.
(Meyer et al., 2010).
The results of this study indicate that perceived organizational culture gaps have positive effects on individual readiness for change. This study supports previous research conducted by Armenakis et al (1993) which stated that the perceived gap between organization’s current and preferred state will increase individual readiness for change. Organization members who think that the current state is not ideal will be encouraged to initiate changes. Meanwhile, the
perceived organizational culture gaps show negative impacts on organizational commitment.
It is due to the difference between the culture of the organization and the culture desired by the employees. Organization members will be reluctant to devote their energy on behalf of the organization when they feel that the dominant culture of the organization is different from the one they prefer. This is in line with the previous research conducted by Bourantas and Papalexandris (1992) which stated that the perceived organizational culture gaps between the current culture and the preferred culture will reduce organizational commitment. In addition, this study supports the research conducted by Nazir (2005) which finds that employees have a commitment to the organization due to the similarity between their values and the organization values. Moreover, organizational commitment has positive impacts on individual readiness for change. This is due to employee's high moral responsibility towards the organization. This result supports the previous research conducted by Madsen et al (2005) which stated that employees feel they have a higher level of individual readiness for change when they have a strong commitment to the organization. Employees who engaged themselves in the organization will support changes since they have strong beliefs in the goals and values of the organization. The effects of perceived organizational culture gaps on individual readiness for change is shown to be mediated by organizational commitment.
6. Conclusion
The results showed that perceived organizational cultural gaps positively affect individual readiness for change and negatively affect organizational commitment. While organizational commitment shows positive effects on individual readiness for change and mediates the impacts of perceived organizational culture gaps on individual readiness for change.
Longitudinal research is recommended to be held in the future to identify how organizational commitment and individual readiness for change are increasing when organizational culture shifts to the preferred culture.
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