CHAPTER 5 DISCUSSION AND RECOMMENDATIONS
5.1 Discussion of Research Findings
5.1.2 Discussion of the Findings Based on Research Hypotheses
The first hypothesis states that transformational leadership has a direct effect on organizational effectiveness, an indirect effect through organizational culture and an indirect effect through innovation climate.
Hypothesis testing found that transformational leadership has a direct effect on organizational effectiveness, with statistical significance based on the hypothesis, and an indirect effect through organizational culture based on the hypothesis. Innovation climate is directly influenced by transformational leadership and is directly influenced by organizational culture, but does not have an indirect effect on organizational effectiveness, which is not based on the hypothesis.
However, when considering R – SQUARE of organizational effectiveness, which was 0.89, it was shown that transformational leadership, organizational culture and innovation climate variables are able to explain the variance of organizational effectiveness variables at 89. 30 percent. This means that the concepts of transformational leadership, organizational culture and innovation climate can explain and predict organizational effectiveness at 89. 30 percent, which is considered at a high level. Therefore, it maybe possible to accept the first hypothesis.
The results of this study are based on the first hypothesis. It can be surmised that the results on transformational leadership are very important for contributing to organizational effectiveness because the most important characteristic of transformational leadership is the ability to change the whole organization for the better (Dubrin, 1998) . Transformational leadership has an indirect effect on organizational culture. This result of research confirms that academicians are interested in studying the connection between organizational culture and organizational effectiveness to prove how transformational leadership creates organizational culture; or if the organization has strong organizational culture, how transformational leaders can utilize organizational culture to contribute to organizational effectiveness.
In addition, both transformational leadership and organizational culture have an effect on innovation climate, which is the idea of innovation climate being something that both the government sector and private sector wish to have in their own sectors, because innovation climate takes part in creating change in the organization and being ready for any influence from the environment. Innovation climate will help to improve the quality of people in the organization, help to achieve the objectives of the organization, and lead the organization to operate efficiently, which is consistent with research by, ( B. J. Avolio et al. , 1999) who found that transformational leadership has an effect and promotes innovation climate and change in the organization. Meanwhile, (Johannessen et al., 1999) found that organizational culture contributes to innovative organizations. Organizational culture may be either a stimulus to contributions to innovation climate, or a barrier. The results of this research confirm that both transformational leadership and organizational culture have a direct effect on innovation climate.
The results of this study also revealed that the concepts of transformational leadership, organizational culture, and innovation climate can explain and predict organizational effectiveness up to 89 percent, which is very high. It means that if the public sector, which is Thailand Post Company Limited in this study, and the private sector, which involves two leading multinational private companies, give importance to transformational leadership, which aims to encourage employees to use reason and evidence to solve problems, have accurate, reliable and timely information as well as focus on organizational culture, focus on the needs of customers as much as possible, including creating innovation climate, by managing rules and regulations to support their work as much as possible. These three components will be able to predict organizational effectiveness in achieving rational goals, which mainly focus on quality and results of work, by up to 89 percent.
The second hypothesis states that organizational culture has a direct effect on organizational effectiveness and an indirect effect through innovation climate.
Hypothesis testing found that organizational culture has a direct effect on organizational effectiveness with statistical significance based on the hypothesis, and innovation climate is directly affected by organizational culture, but does not have an indirect effect on organizational effectiveness, which is not based on the hypothesis.
When considering R – SQUARE of organizational culture, which was 0.83, it was shown that the transformational leadership variable can explain and predict the organizational culture variable up to 83 percent of the time without innovation climate.
The results of this study show that the second hypothesis is acceptable in some parts, in that organizational culture has a direct effect on organizational effectiveness and leads to innovation climate. From the data analysis, it was found that organizational culture has the highest direct effect on organizational effectiveness, followed by transformational leadership and innovation climate. It can be said that organizational culture is the most important variable to contribute to organizational effectiveness among logistics service providers in Thailand.
Organizational culture, which means the values, beliefs, and fundamental principles that make up the foundation of an organization’s management system, with personnel in the organization participating in the development of the organization to achieve success and contribute to organizational effectiveness in the operation. When considering organizational culture, the researcher studied both public and private sectors, it was found that Thailand Post Company Limited is a government organization that has an organizational culture, especially in its basic principle, which is the foundation of its organizational management system and is stronger and clearer than in the private sector. This is because Thailand Post Company Limited has a history of establishment lasting over 100 years. Even though it has changed from its civil servant era in response to the mission of government officers and citizens into a state enterprise, the first era of being the postal service office of the Communications Authority of Thailand ( CAT) had a big transformation into a limited company in order to increase the potential of business competition, including having an income to sustain itself. The organization has a long history of operation, values, beliefs and principles of living, and so work in the organization will be inherited from past to present. Even though its organizational culture has adapted according to the context or situation, some of its fundamental values and beliefs are likely inherited.
As for the private sector, which included two leading multinational companies, one company has a history of establishment of about 50 years and the other has about 40 years. The companies established their headquarters and have operated for 15
years and 12 years, respectively. If we compare their time of operation for instilling organizational culture in their employees in order to create an organizational culture in which the personnel are involved in the success and development of the organization, it can be seen that the period of time is much shorter than Thailand Post Company Limited. In addition, in this study most of the data were collected from the public sector, which had four times more respondents than the private sector.
Therefore, we can conclude that the research findings reflect the organizational culture of the public sector more effectively.
One of the findings of this research found that organizational culture has the strongest effect on organizational effectiveness. It was also found that organizational culture in customer orientation is something that management and staff in logistics service providers adhere to, as they believe that if the organization has a clear policy to respond to customer needs, good customer service, and focuses on solving problems for customers, they will make the organization a success.
In the context of business operations among logistics service providers, nowadays it’ s highly competitive. Giving importance to customers, both inside and outside, is very important. Therefore, the use of management tools to respond to customers’ needs is extremely necessary, such as the use of customer relationship management tools in management systems and creating standards for work, gathering information about customers and communication channel management, and developing products and services to respond to customers’ needs, as well as the use of quality management systems by personnel at all levels, both management and staff.
They must give importance to customers’ needs and expectations by all those involved in the organization. These tools and management systems will contribute organizational efficiency and effectiveness. It can be seen that organizational culture in customer orientation is important for contributing to organizational effectiveness.
The results of this research also found that organizational culture has a direct effect on innovation climate, which is considered very important for any organization nowadays, whether the organization is in the public or private sector, because innovation climate means employees in the organization have freedom and participative safety, and they strive for excellence and support innovation. The component of organizational culture in managing change may affect innovation
climate more than other components. This is because organizational culture in managing change focuses on flexibility and adaptation when necessary, including giving the opportunity for employees to propose ideas and opinions freely to help the organization be able to survive from problems during times of improvement and change.
In conclusion, organizational culture has the strongest effect on organizational effectiveness, especially organizational culture in customer orientation. It also effects innovation climate in managing change.
The third hypothesis states that innovation climate has a direct effect on organizational effectiveness
Hypothesis testing found that innovation climate has a direct effect on organizational effectiveness with statistical significance based on the hypothesis.
When considering the R-SQUARE of innovation climate variable, which was 0.94, it shows that the transformational leadership and organizational culture variables can explain and predict a variance of innovation climate by 94 percent. This means the concept of transformational leadership, combined with the concept of organizational culture, can explain and predict innovation climate up to 94 percent of the time.
The results of this research confirm that innovation climate has an effect on organizational effectiveness. Innovation climate has several definitions, including employees who have freedom, can propose ideas for job development freely, are not scolded if those ideas are not successful, try to get the best results, and are supported to practice their skills and creativity. This research was consistent with the research of ( Adams, Bessant, & Phelps, 2006) , who found that whether an organization will be more effective partly depends on creating a climate that feels free to initiate creativity, combined with controlling that created innovation to get the greatest benefit. In addition, research by (Dunegan, Tierney, & Duchon, 1992) found that a creative work climate is one of the most important factors for driving innovation to happen within the organization. This is consistent with a study by (Mathison & Einarsen, 2004), who found that the working environment contributes to the creativity and innovation habits of employees.
Many scholars have expressed their opinions on this and have research that supports the premise that innovation climate encourages employees to create innovation or new approaches to work, learning new skills, and creating the stimulation needed for personnel to face risks reasonably. Innovation climate is something that young personnel need and accept, and it is important to help drive modern organizations to their goals, which is consistent with the concept of ( Gray, 2007), who concluded that one dimension of organizational success is the freedom to create innovation. Employees should be given the opportunity to try new frameworks or methods, and should have enough freedom from their leaders who are not too forceful to do things in only one way or pattern. If staff have creativity, the leaders should listen and give them an opportunity to work with new methods, which may be more effective than the old one.
As for the element of innovation climate, the management and staff in logistics service providers give the most importance to operating by rules and regulations that facilitate working conveniently, quickly and flexibly. The climate should not be too attached to the rules, which leads to the freedom to experiment with new work and methods, which results in innovation and success in work.
In the context of the public and private organizations used in this study, both try and strive to create innovation climate within their organizations. They believe that innovation is the most important component in creating profitability that leads to organizational competitive advantage. It can be seen that both Thailand Post Company Limited and the two leading multinational companies are trying to present innovation to respond to customers’needs as much as possible, especially when digital factors and E-commerce are more involved.
In conclusion, innovation climate has a direct effect on organizational effectiveness.