CHAPTER I-V

7/30/2019 CHAPTER I-V

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CHAPTER I

INTRODUCTION

1.1Background of the StudyErgun Ozen, CEO of Turkish Garanti Bank once stated that the superior

performance of firm such as IBM, GE, P&G and Intel might be at least partly or

moderately due to their strong culture. Change is one of many characteristics in

todays dynamics world. The need to adapt to changes has pushed individual and

organizations alike discover the need for learning (Ashton, 2004). To adapt with

new changes, organization should provide ground for organizational growth and

development. These organizations are called learning organization (McClelland,

1987). Consumer retailing has been inseparable in our daily lives. In Indonesia,

consumer spending is accounted for 12% of Indonesias gross domestic product;

hence it can be regarded as lucrative sector.

This research is conducted because this study will show that organizational

culture no matter how big or small the company is. The object of this study is a

company that is was recently established in the past few years; hence the

dominant organizational culture is not known yet.

To survive in highly competitive market, all organizations no matter of its

sizes must be adaptive in dealing with the dynamic environment. The key of

survival is organization learning, not individual learning (Dymock and McCarty,

2006). Thus researchers have studied on applicability of learning organization in

real life practices and its antecedents (Dymock and McCarty 2006; Change and

Lee, 2007; Huber 1991; Jacobs, 1995). According to Coutu (2002), organizational

learning is relatively new concept, hence there is little known about it, but whats

certain is researcher dont know exactly on how to intervene in culture to create

transformational learning across the organization. This statement supports the

need to study culture as an antecedent variable towards shaping of learning

organizations. Previous researches showed that the benefits of a that learning

organization include: improved quality of outputs at all level, improving corporate

image by becoming more people oriented (Pedler and Boydell, 1997), maintained


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levels of innovation, and remaining competitive, being better placed to external

pressure (McHugh and Alker, 1998).

The object of this study is a company located in Jakarta. The company

specializes in managing foreign food and beverage franchises in Indonesia. As of

2012, the company holds 3 licenses, 2 are beverages franchise and 1 food

franchise. There are numerous studies regarding on how to improve performance

of an organization but only a few studies use organization culture as its variable.

Based on the description above, the researcher is intrigued to conduct a further

study about organizational culture in a limited liability company in Jakarta. The

researcher wanted to find out the relationship between types of culture as an

independent variable and learning organization as dependent variable. Therefore

the researcher conducts a study entitled: The Effect of Organizational Cultures

in Shaping Learning Organization in Company X.1.2Research problem

The proposed research problem for this study is:

1. What is the dominant type of organizational culture in Company X?2. How does organizational culture contribute in Company X as learning

organization?

1.3Research ObjectivesThe objective of this proposes research are:

1. To identify the dominant type of organizational culture in CompanyX; and

2. To determine how the types of organizational culture contribute inshaping the learning organization in Company X.

1.4Research ContributionsThis research expects to give benefits:

1.4.1 For the CompanyThe company can use the result of this study for management direction and

strategy formulations


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1.4.2 For the ResearcherThe researcher can gain knowledge on how organizational cultures contribute

towards shaping the learning organization.

1.5Research LimitationThis study is limited only to one object; hence its findings might not be

applicable if it is applied to other organization. This study will test

organizational culture as the independent variable in shaping learning

organization.

1.6Research OutlineChapter I

This chapter sets up the research problem of this study entitled The

Effect of Organizational Cultures in Shaping Company X As Learning

Organization. this chapter also provides background information defining the

importance of organizational culture. This chapter specifies the research

objectives of the study in detail to contribute to understanding the effect of

organizational culture in shaping Company X as learning organization.

Chapter II

This chapter summarizes the previous studies and findings that have been

published regarding organizational cultures and learning organization. This

chapter also covers on how it will contribute or add to what has already been

studied. This chapter also states a clear description of organizational culture and

learning organization that apply to the research problem, an explanation of why it

is relevant, and how the framework addresses the hypothesis to be tested.

Chapter III

This chapter explains the detailed technical and scientific activities, which

include the research design, sampling plan, instrumentation, statistical tools

(pretest, classical assumption test, simple regression).

Chapter IV

This chapter discusses the presentation of the findings that addresses the

research problem and focus on how these findings relate to the theory and

previous researches.


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Chapter V

This chapter discusses the conclusion, implication and recommendation to

advance the study of the research topic in terms of theoretical, methodological and

managerial contribution that may be necessary to eliminate limitation of this

study.


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CHAPTER II

REVIEW OR RELATED LITERATURE

2.1 Organizational Culture

According to Schein (1992), organizational culture can be defined as a

pattern of shared basic assumption invented, discovered, or developed by a given

group that are taught to new organizational members as way of perceiving, and

even thinking and feeling. Other researchers defined organizational culture in

more detailed statement; organization member engage in rituals, pass along

corporate myths and stories, and use arcane jargon and these informal practices

may foster or impede organizations goals (Baker, 1980; Deal and Kennedy, 1982;

Peters and Waterman, 1982).

Kotter and Heskett (1992) described the need of good organizational

culture as the optimal organizational culture and later stated that only cultures that

can help organizations anticipate and adapt to environmental change will be

associated with superior performance over periods of long time.

Organizational culture is vital because it has measurable impact on

organizations ability to achieve their goals. Director-HR of Microsoft India, Joji

Gill stated that culture is the values and beliefs of the organization that describes

the organization works. She added that values are the foundation of any company.

If the foundation is weak, it wont be able to grow, hence it is important to build

strong foundation these values should be focus on how resources are utilized and

creates vision of the organization. Strong culture is considered to be driven force

to improve the performance of the employees because it enhances self-confidence

and commitment of employees and reduces jobs stress and improve ethical

behavior of employees (Saffold, 1998).

Schein (1990) divided organizational culture into two layers of concept;

visible and invisible characteristics. The visible layer means external building,

clothing, behavior modes, regulations, stories, myths, language and rites. Invisible

layer on the other hand means common values, norms, faith and assumption of

business organizational members.


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In contemporary managers view, Schein (1990), organizational culture is

widely understood as an instrument to be used by management to shape and

control in some way the belief, understandings and behaviors of individuals, and

thus the organization to reach specific goals. Bluedorn and Lundgren (2003)

further emphasize the impact of organizational culture by stating organizational

culture is integral to effective change initiatives and strategies. Previous studies

have been conducted and the result shows that organizational culture has

numerous impacts both directly and indirectly towards various outcomes. A study

by Harvard Business School on 2003 examined management practices at 160

organizations and discovered that culture can enhance performance and has

significant impact toward long-term economic performance. Peters and Waterman

(1982) also found out that organizational culture proved to be detrimental toward

positive economic performances. However, according to Denison, Haaland and

Goelzer (2004) not all dimensions of organizational culture contribute to success

in economic performance.

Empirical evidence shows that there is several outcomes that can be

associated either directly or indirectly with strong organizational culture. Alicia

Bosnier from UC Berkeley stated the benefits include the following: competitive

edge from innovation and customer service, efficient employee performance,

increased team cohesiveness, high employee morale and strong company

alignment towards goal achievement. Kotter and Hesket (1992) conduct a study

and found out that strong culture raised the income of organization up to 765%

between 1977 to 1988 and only 1% increase in the same period for firms without

strong culture. According to Ergun Ozen, CEO of Garanti Bank, the superior

performance of firms like IBM, GE, P&G and Intel may be, at least partly or

moderately, a reflection of their strong organizational culture.

In this study, the researcher uses organizational culture typology developed by

Hellriegel and Slocum


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Figure 1

Four Types of Organizational Culture

Source: Hellriegel and Slocum, 1994. Management, 6e. New York: Addison Wesley

Figure 1: Four Types of Organizational Culture

1. Bureaucratic culture: This types of organization is highly structured,values rules and formalization and standard operating procedures to ensure

predictability and stability. In this culture, the tasks and responsibilities of

employees are clearly stated. For this organization success means

dependable delivery and smooth scheduling (Hellriegel et al., 2004: 365-

366).

2. Participative culture: This type of organization is an open place to work.This type of organization is assumed to depend on teamwork and

participation. Great importance is given to group consensus and long term

benefits of human resource development. For this organization, success

means achieving customers need and concern for people (Hellriegel et al.,

2004: 366).

3. Learning culture: This type of culture emphasize on dynamic and creativeplace to work. Innovation and risk-taking are characterized in this

organization. Organization with this type of culture reacts quickly to

changes. Formal control is flexible to foster innovation and change. For


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this organization success means gaining new and unique product or

services (Hellriegel et al., 2004: 367).

4. Competitive culture: This type of culture is result-driven focused mainlyon job completion. In this culture relationship of employee and

organization is contractual. Competitiveness exists in every level of

management because performance is rewarded through increased

compensation from organization. For this organization success means

market leadership (Hellriegel et al., 2004: 367).

When an organizational culture is deemed unhealthy, it requires

organizational culture change. This change process can be very daunting but

necessary nonetheless because organizational culture change may lead to reduced

employee turnover, improve companys performance and achieve organizational

goals. According to Edgar Schein, culture is the most difficult organizational

attribute to change, because organizational culture outlast organizational products,

services, founders, and leadership, and all other physical attributes of the

organization. There are numerous ways to change organizational culture such as

mergers and acquisition, however strong cultures can provide organizations with

significant advantages, but when the basis for survival rests on organizations

ability to change and adapt, a strong culture can be liability

2.2 Learning Organization

According to Senge (1990), learning organization is a group of people

working together to collectively enhance their capabilities to create results they

really care about. Nevis et al (1995), define learning organization as capacity

within an organization to maintain or improve performance based on experience.

Dixon (1999) defines learning organization as organization that facilitates the

learning of all its members and which continuously transforms itself. Other

previous studies stated that learning organization covers individual, group and

organizational learning to increase organizational and individual learning (Small

and Irvine, 2006; Argris and Schon, 1978). Many research papers have been

published about the impact of various variables on learning organization such as

increase competitiveness, responsive to external pressure, improve quality at all


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levels, etc. (Gardiner and Whiting, 1997; Hall, 2001; Edmondson and Moingeon,

1998).

Senge et al (1994), suggested, for an organization to transform into

learning organization, it must undergo five steps. First step was to build shared

vision that can be achieved through empowering individuals to create shared

image of the future of the organization and all employees would contribute know

and share the vision. Second step is to engage in whole team learning and transfer

of new knowledge. Senge suggested that collective learning is outweighs the

benefit of individual learning. Third model is to allow new view of the future to

be shared and new vision to develop what is necessary and can be done. Fourth

step, individual need to know their weaknesses and internalize their learning.

Final step is to view things in big picture; meaning how each pieces interact with

each other and the environment

According to Applebaum and Reichart, there are 3 key characteristics of

learning organization. Those 3 key characteristics are learning process, learning

orientation and facilitating factors within the organization. In order to cope with

rapid changes learning is seen as continuous activities wherein employee need to

learn quickly in order to support organization (Slater and Narver, 1995). Stata

(1989), stated that by learning quickly, employee can discover innovative ways of

working and make it easier to adopt new technology, which in turn give the

organization competitive advantage over other competitors. In their work,

Sambrook and Stewart (2000) stated that learning organization is necessary to

enable employee become proficient in at a certain task by allocating resources to

facilitate communication platform and training programs to create more

opportunities for continuous employee learning through teamwork and

empowerment.

In this study, the researcher used learning organization typology developed by

Senge (1990).

1. Systems thinking: Organizations are system of interrelationships. Hence tobecome more successful people need to analyze these relationships and


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vision, systemic thinking and team learning. This study focused only in dimension

of organizational culture proposed by Hellriegel and Slocum (1994), which are:

competitive culture, bureaucratic culture, participative culture and learning

culture. In this study, researcher studies the relationship between organizational

cultures towards shaping learning organization.

2.4 Hypothesis of the Study

Based on the theoretical framework, the following research hypotheses are

defined as:

H1: There is a significant relationship between organizational cultures

towards shaping learning organizations.

2.5 Operational Framework

The operational framework of the study adopted theoretical framework

presented in Figure 3 taken from Fard, Rasmy, and Taghiloo (2011). The

measurement of this study consists of several dimensions. The researcher wants to

observe whether there is a relationship between organizational cultures towards

shaping learning organization.


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Figure 3

Operational Framework

Organizational Culture

Competitive Culture

1. High flexibility2. Low integration3. Contract relations between

employee and the

organization

4. Low loyalty5. Low cultural identity6. Achieving to quantitative

objects

Bureaucratic Culture

1. Inflexibility2. Rigid regulations and use3. High level of centralization4. Affirmative leadership styleParticipative Culture

1. Low flexibility2. High integration3. Loyalty4. Personal commitment5. Team working6.

High level of societyacceptance

7. Tendency to satiabilityLearning Culture

1. Trend to change2. Knowledge expansion3. Sensitive and responsive to

external changes

4. Complex environment5. Competitive advantage6. Informed about the

environment

7. Gathering environmentalinformation and process8. Service development9. Encourage innovation,

creativity and learning

10.Organizational commitment

Learning Organization

Personal Mastery1. Try to achieve the goals2. Try to improve the ability3. Skill and ability4. Be informed of the updated knowledge5. Continuous improvement of the activities6. Skill developmentMental Models1. Simple opinion about the performance2. Serotype view points3. Accepting other opinions4. Rationality in problem solving5. Believe to find better alternative6. Irrational advocacyShared Vision

1. Common objective2. Commitment to the vision3. Participating in defining organizational

objectives4. Commitment to achieve organizational

objectives5. Homogeneity of individual and

organizational objectives6. Clear organizational objectivesSystemic Thinking

1. Use of system thinking2. Attention to the effect of decisions3. Try to find causes of the problems4. Considering and monitoring changes in

external environment5. Able to make comprehensive decisionsTeam Learning

1. Tend to dialogue and discussion2. Information exchange in decision-

making3. Group assessment and evaluation4. Commitment to group decision making5. Importance of team learning and training6. Using others experiences


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Learning organization is a group of people working together to collectively

enhance their capabilities to create result they really care about (Senge, 1990). This study

uses learning organization typology developed by Senge (1990), which are personal

mastery, mental models, shared vision, systemic thinking and team learning. List of

operational variables can be seen in Table 1.

Table 2

List of Operational Variables

Hypothesis Indicators Scale

H1: Organizational cultures

Learning organization

6-points

Likert scale

- Flexibility- Regulations- Centralization- Leadership style- Flexibility- Integration- Contract relations- Loyalty- Cultural identity- Companys objectives- Flexibility- Integration- Loyalty- Personal commitment- Teamwork- Society acceptance- Satiability- Trend to change- Knowledge expansion- Response to external changes- Environment- Competitive advantage- Knowledge of environment- Service development- Innovation- Commitment

Learning organization - Achieve goals- Improved ability- Skill and ability- Updated knowledge- Continuous improvement- Skill development- Simple opinion- Stereotype viewpoints- Accepting opinions

6-points

Likert scale


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- Problem solving- Looking for alternative- Advocacy- Common objective- Commit to vision- Participate in defining

organizational objectives

- Commit to achieve objectives- Homogeneity of individual and

objectives

- Clear objectives- Use of systemic thinking- Attention to effect of decisions- Try to find cause of problem- Consider and monitor changes in

external environment

- Able to make comprehensivedecision

- Dialogue and discussion- Information exchange in decision

making

- Assessment and evaluation- Commitment to group decision

making

- Importance of tem learning andtraining

- Using others experiences3.2.2 Variables to be tested

The source of information in this research is from primary and secondary data.

1. Primary data: data obtained directly from the object under research by researcher.The source for primary data came from the questionnaires that were distributed to

the employees of Company X.

2. Secondary data: secondary data in this study is list of employee from Company Xand necessary online resources such as online-posted journals, and related

previous research and many guideline books

3.2.3 Levels of Measurement

In this study, level of measurement used was interval measurement. This

measurement allowed researcher to measure the difference between points in scale and

will also help in measure dispersion of range, standard deviation and also the variance

This study used 6-points Likert scale. Even number Likert scale was chosen

because researcher can make respondent to convey their real position rather than

choosing a neutral position, which is available in odd number Likert scale. To measure


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the respondents response in organizational culture variable, each number will represent

the following statement:

Table 2

Likert Scale Representations

Score Answers

1 Strongly Disagree (SD)/ Sangat Tidak Setuju (STD)

2 Disagree (D)/ Tidak Setuju (TS)

3 Moderately Disagree (MD)/ Agak Tidak Setuju (ATS)

4 Moderately Agree (MA)/ Agak Setuju (AS)

5 Agree (A)/ Setuju (S)

6 Strongly Agree (SA)/ Sangat Setuju (SS)

To measure learning organization, each number will represent following statement:

Table 3

Likert Scale Representations

Score Answers

1 Never (N)/ Tidak Pernah (TP)

2 Almost Never (D)/ Hampir Tidak Pernah (HTP)

3 Sometimes Never (SN)/ Kadang Tidak Pernah (KTP)

4 Sometimes Always (SA)/ Kadang Pernah (KP)

5 Almost Always (AA)/ Hampir Setiap Saat (HSS)

6 Always (A)/ Setiap Saat (SS)

3.3 Methods of Data Collection

3.3.1 Sources of Data

In this study, the researcher will use primary data and secondary data. Primary

data will be firsthand information collected from all employees of Company X in form of

questionnaire. Secondary data will be previous studies from books, journals and reports.

3.3.2 Sample and Sampling Plan

As the research conducted toward a company, which is Company X, the

population for this research is all employees of Company X. The quantity of the

population in this research is known, which is 138 employees, 11 are managerial level

and 127 are staff and cook. Population is taken regardless of gender education and work

experience. Later on, population will be divided into two groups, managerial level and

non-managerial level respectively. Out of 138 employees, the research gets 124


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employees (89.8%) as respondent. The incomplete sampling is caused by the different

working shifts, unavailability of employee during the data collection

3.3.3 Research Instruments

In this study, the research instrument used will be questionnaire. Questionnaire

will be divided into two parts. First part of questionnaire is to know general information

of respondent based on demographic and position in Company X. this data will be

analyzed to know whether there is distinct characteristic that can differentiate respondent

choice. This part will consist of gender, age and position, years of employment,

educational background and work experience.

Second part of questionnaire is necessary to get data needed in analyzing

relationship between variables. The questionnaire will use 6-points Likert scale and will

be closed questionnaire to help respondent in answering it quickly and it will also help

researcher to code the answer for further analysis (Sekaran, 2003).

3.4 Methods of Data Analysis

In this study, quantitative method will be used in analyzing data relative to

answering the proposed research objectives and operational framework

3.4.1 Descriptive Statistics

In order to know respondents general profile or demographic characteristic, severalquestions need to be answered the demographic data of respondents is processed using

Statistical Package for Social Scientists (SPSS) version 16.0. The demographic data are:

1. Age2. Gender3. Position4. Years of employment5. Latest educational background6. Work experience prior joining Company X

3.4.2 Validity and Reliability Test

a. Validity Test

Validity will be used as well to measure if the indicators of the research will

really be able to measure the concept. As the author will use SPSS 16.00 as the software

to analyze the research data, technique that will be use is Bivariate Pearson. Bivariate

Pearson will analyze by correlating each item score with total score it will show that the

items are able to support in measuring the concept. Indicator are considered valid when

the value of its coefficient is greater than 0.4.


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b. Reliability Test

Reliability test is a test of consistency in data acquired and whether it is

dependable and can be used for further testing. In measuring reliability test, one way is to

use Cronbachs Alpha. If the data has Cronbachs Alpha on standardize items greater than

0.06 then it can be considered as reliable (Hair et al, 2006).

3.4.3 Classical Assumption Test

a. Normality test

The objective of this test is to test whether the independent variable and

dependent variable used in this study is normally distributed. This study will use

probability plot. If the plot is scattered along the diagonal line, then the model is

considered to be normally distributed

b. Homoscedasticity Test

The objective of this test is to know whether there exist inconsistent covariance

or not in a model. It can cause inefficient estimator, which will affect the result. This

study uses Spearmans Rho coefficient in which the significance value must be greater

than 0.05.

c. Linear test

The purpose of linearity test is to examine whether or not there exist arelationship between independent and dependent variables. The variables have significant

relationship if significance level of linearity is less than 0,05

d. Autocorrelation test

The objective of autocorrelation test is to test the relationship between values

separated from each other given a certain time of period in the residuals or prediction

errors from an analysis. This study uses Durbin-Watson statistics to detect presence of

autocorrelation. According to Wijaya (2009), data can be considered to pass the test if the

Durbin-Watson coefficient is between du < dw < (4-u). The table below shows that the

Durbin-Watson statistics is higher than the du, hence there is no autocorrelation in the

model of this study

3.4.4 Simple Regression Analysis

The objective of multiple regression analysis is to test the relationship between

independent and dependent variable. The standardized beta coefficient will reflect how

strong the relationship of independent to dependent variable According to Hair et al.

(2003), regression models should use standardized regression coefficient. The researcher

will examine the standardized coefficient, which ranges from 0.00 to 1.00.


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3.4.5 Correlation Coefficient

In this study, correlation coefficient is done using Product Moment Pearson. If the

correlation coefficient is +1, then the relationship of X and Y is positive and perfect. If X

increase, then Y increases and vice versa. However if correlation coefficient is negative,

then relationship of X and Y is negative and perfect. If X increase, then Y decreases and

vice versa. In this study, the researcher will find the correlation between:

Organizational Culture (X) and Learning Organization (Y)The interpretation of correlation coefficient can be seen in Table 5.

Table 5

Correlation Coefficient (r) Interpretation

Coefficient Interval Relationship Level

0.8001.000 Very Strong

0.6000.799 Strong

0.4000.599 Moderately

0.2000.399 Weak

0.0000.199 Very Weak

Source: Sugiyono (2007)


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CHAPTER IV

RESULTS AND DISCUSSIONS

4.1 Research Object Description

4.1.1. Company Description

Company X is a company specializes in managing international franchises in

Indonesia, which was founded in mid 2008. At first the company hold license of 1

franchise with 4 outlets. The business was improving and expanding until on early 2012,

wherein the company holds licenses of 3 franchises with 25 outlets in Jakarta.

In 2011, Company X ownership structure was changed from. At first one person

only funded the company, but since 2012 the company was funded by four people and

one of its partner act as managing partner. The transition of ownership proves to be

beneficial for Company X. As of July 2012, the company had holds 3 licenses with 25

outlets in various locations in Jakarta and headquartered in Total BuildingJakarta.

The Company control license of 3 international franchises which are a ramen

restaurant bringing authentic bowls Tokyo food, with its signature dish such as ramen

topped with pork mean and bamboo shoots; Fresh tea and juice, a tea and juice bar

serving tea combined with urban varieties; a gelato bar where in introduces hand crafter

gelato made with traditional ingredientsCompany X business is mainly focuses on the field of food and beverages. The

companys core key retail business is in service industry through numerous outlets. Since

this company was established 4 years ago, the brand name cant be leveraged, however

the company relies on popularity of franchises the company holds.

4.2 Respondent Description

The respondent of this study is all employees of Company X, which means all

employees in every outlet in every franchise. The respondents are taken by using

complete enumeration method.

From total employee of 138 questionnaires distributed in this company, 124 are

returned and used for study, the characteristic description of the respondents can be

known through classification of data or personal data acquired based on gender, age,

position, years of employment, educational background and work experience. The results

of each classification are explained as follows:

4.2.1 Respondent Description based on Age

The respondents are not given series of answer, hence respondent write their age.

However for convenience purposes, the age will be classified into four groups as follows


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4.2.4 Respondent based on Years of Employment

The respondents are given classified into four groups of range with years of

employment basis as follows:

Table 7

Respondent based on years of employmentYears of employment Total Percentage

6 months1 year 48 38.7%

1 year2 years 70 56.4%

3 years4 years 6 4.8%

Total 124 100%

From the table above, it is known that most of employee in Company X have

worked for the company for 1 year to 2 years (56.4%). 47 (38.7%) employees have

worked for 6 months to 1 year and only 7 (4.8%) employee have worked for 3 years to 4

years.

4.2.5 Respondent based on Educational Background

The respondent are given options of educational background to fill in as follows:

Table 8

Respondent based on educational background

Educational Background Total Percentage

High School 52 41.9%

Bachelors Degree 70 56.4%

Masters Degree 2 1.6%

Total 124 100%

From the table above, it is known that most employees (56.4%) in the company is

educated until level of S1. Second highest is high school level (41.9%) and third is S2

level (1.6%)

4.2.6 Respondent based on Prior Work Experience

The respondents are given options of yes and no to fill in. The results are as

follows:


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Table 9

Respondent based on prior work experience

Prior Work Experience Total Percentage

Yes 98 79%

No 26 21%

Total 124 100%

From the table above, it is known that majority of employee (79%) in the

company has work experience prior joining Company X. 26 employee (21%) has no work

experience prior joining Company X

4.3 Mean Rating and Standard Deviation

Descriptive statistics of research variables describes the mean and standard

deviation of each organizational culture. This study uses 6-point likers scale, hence 6

being the highest minus 1 being the lowest divided by 6. Interpretation of the ratings used

class intervals from given formula

The classification of each ratings are shown below

Table 10

Categories of respondents answer

4.3.1 Mean Rating and Standard Deviation of Organizational Culture

Organizational culture is measured by 4 types of organizational culture in

which each culture has their own indicators. Learning culture has the highest overall

mean among all types of culture; hence it is perceived by respondent as the most

dominant culture in the company. Learning culture has overall mean of 4.38, this finding

suggest that most employee perceived the culture of the company is learning culture.

Interval Statement

1 x < 1.833 Strongly disagree

1.833 x < 2.666 Disagree

2.666 x < 3.499 Moderately disagree

3.499 x < 4.332 Moderately agree

4.332 x < 5.166 Agree

5.166 x < 6 Strongly agree


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4.3.2 Mean Rating and Standard Deviation of Each Indicator of Learning

Organization

Learning organization is measured using 5 dimensions with total indicators of 22

indicators. The overall mean rating for all indicators is 4.63, hence most employees

percieved that the company can transform into learning organization.

Table 13

Mean Rating and Standard Deviation of Each Indicator of Learning Organization

Indicator Mean Standard

Deviation

Statement

Achieve Goals 4.11 0.61 Moderately

Agree

Improved ability 5.26 0.65 Strongly

Agree

Updated Knowledge 4.51 0.69 Agree

Simple opinion about performance 4.58 0.75 Agree

Stereotype viewpoints 4.56 0.76 Agree

Accepting other opinions 4.50 0.70 Agree

Rationality in problem solving 5.15 0.75 Agree

Believe to find better alternative 4.66 0.75 AgreeCommitment to vision 4.74 0.74 Agree

Participate in defining organizational

objectives

4.67 0.78 Agree

Commitment to achieve organizational

objectives

4.58 0.82 Agree

Share same organizational objectives 4.69 0.78 Agree

Clear organizational objectives 4.69 0.84 Agree

Use of system thinking 4.60 0.86 Agree

Attention to effect of decisions 4.59 0.82 Agree

Try to find causes of problem 4.65 0.80 Agree

Consider external changes 4.82 0.77 Agree

Make comprehensive decision 4.85 0.74 Agree

Tend to dialogue and discussion 4.66 0.89 Agree

Information exchange in decision making 4.50 0.86 Agree

Group assessment and evaluation 4.66 0.88 Agree

Commitment to group decision making 4.78 0.84 Agree

Overall Mean and Standard Deviation 5.10 0.85 Agree


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Based on Table 13, most employees perceived that employees try to improve their ability

with mean rating of 5.26 being the highest. On the other hand, most employees perceived

that employee try to achieve organizational goals with mean rating of 4.11 being the

lowest.

4.4 Data Analysis

4.4.1 Pretest

a. Validity Test

The validity used in this study is Pearson Correlation Coefficients computed

using SPSS software. The data is considered valid when the Pearson correlation for each

indicator is higher than R table at significance level of 0.05 (Priyanto, 2012).

Table 14

Validity test result on Learning Culture variable

Variable Indicator Pearson coefficient Criteria

Learning

Culture

Trend to change 0.723 Valid Knowledge expansion 0.758 Valid Response to external changes 0.715 Valid Informed about environment 0.714 Valid Competitive advantage 0.819 Valid Knowledge environment 0.759 Valid Service development 0.733 Valid Innovation 0.749 Valid Commitment 1 Valid

Table 15

Validity test result on Learning Organization

Variable Indicator Pearson coefficient Criteria

Learning

Organization

Achieve Goals 0.630 Valid Improved ability 0.583 Valid Updated Knowledge 0.658 Valid Simple opinion about

performance

0.747 Valid

Stereotype viewpoints 0.771 Valid Accepting other opinions 0.751 Valid Rationality in problem solving 0.789 Valid Believe to find better alternative 0.807 Valid


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Commitment to vision 0.777 Valid Participate in defining

organizational objectives

0.802 Valid

Commitment to achieveorganizational objectives

0.799 Valid

Share same organizationalobjectives

0.780 Valid

Clear organizational objectives 0.804 Valid Use of system thinking 0.835 Valid Attention to effect of decisions 0.791 Valid Try to find causes of problem 0.801 Valid Consider external changes 0.831 Valid Make comprehensive decision 0.833 Valid Tend to dialogue and discussion 0.815 Valid Information exchange in decision

making

0.814 Valid

Group assessment and evaluation 0.797 Valid Commitment to group decision

making

0.838 Valid

From the tables above, all the component matrix values for each indicators are

more than R table, which indicates validity, hence it can be concluded that all the

indicators in this study are valid.

b. Reliability Analysis

This study uses Cronbachs Alpha to test the reliability. Cronbachs Alpha is a

coefficient that indicates how well the indicator positively correlated to one another. A

variable is considered reliable when the Cronbachs Alpha of a variables greater than 0.6

(Priyatno, 2012).Table 16

Reliability test result on the research variables

Variable Cronbachs Alpha CriteriaCompetitive Culture 0.883 Reliable

Bureaucratic Culture 0.643 Reliable

Participative Culture 0.823 Reliable

Learning Culture 0.967 Reliable

Learning Organization 0.706 Reliable


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Table 17

Homoscedasticity test result

Variables TestedSpearmans Rho

SignificanceStatement

H1 Organizational culture has an impact towards

shaping learning organization

.372 No Homoscedasticity

From the table above, it can be concluded that the research variables is free of

homoscedasticity because the Spearmans Rho significance value is greater than 0.05.

c. Linearity Test

Linearity test is conducted to know whether there is or isnt a relationship

between independent and dependent variables. To pass the test, linearity significance

must be lesser than 0.05. Table below shows that there exist a significance relationship

between independent and dependent variables

Table 18

Linearity result on research variables

Variables TestedLinearity

SignificanceStatement

H1 Organizational culture has an impact towards

shaping learning organization

.000 Have significant

linear relationship

d. Autocorrelation test

The objective of test is to analyze the relationship of values given a certain time

lag. This study uses Durbin-Watson statistic to measure autocorrelation. No auto

correlation is detected if DW statistic is du < dw < (4-du). The table below shows that

there are no autocorrelation detected

Table 19

Results of Autocorrelation test

Variables Tested k duDurbin-Watson

statistics

4-du Statement

H1 Organizational culture

has an impact towards

shaping learning

organization

1 1,691 1,918 2,082 Absence of

autocorrelation


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4.4.3 Regression analysis

Simple regression analysis is used to analyze linear relationship between

independent and dependent variables by estimating coefficients for the equation.

Table 20

Regression analysis result

Independe

nt

Variable

(s)

Depende

nt

Variable

Standardized

Beta coeff

t-

statstics

Sig R2 Adj

R2

Statement

H

1

Organizati

onal

Culture

Learning

Organiza

tion

,793 15,163 ,000 ,628 ,626 Accepted

From the table above, it can be concluded that learning culture positively

influences dependent variable with value of 0.793. In other words if the company

improve learning culture by 1 unit, it will shapes Company X as learning organization by

0.793 units. The value also shows that the independent variable has significant

relationship towards dependent variable. The hypotheses testing shows that

organizational culture has a impact towards shaping learning organization. This means

that the effect of learning culture towards learning organization exist, hence the equation

is as follows:Y= 0,793X

Where: Y = Learning Organization

X= Learning culture

4.4.4 Coefficient of Determination and R2 Analysis

Coefficient of determination calculates the strength correlation between the

dependent and independent variables. On the other hand, R2 calculate the amount of

variance in dependent variable related to independent variable.

From the table above, it can be concluded that there is a positive and strong

correlation between independent and dependent variable. Adjusted R2 value is 0.626,

which means that 62.6% variance in dependent variables in influenced by independent

variables, the other 37.4% is explained by other variables outside the proposed research

model.

4.5 Discussion

Based on the pretest step, it can be concluded that data of this study is valid

where in the Pearson correlation value must be greater than R table, hence indicators

measure the variable correctly. This shows that respondents understand the questions


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given. Pretest step also shows that data used in this research is reliable with Cronbachs

Alpha coefficient greater than 0.6, hence indicators on each variable are free of bias and

ensures consistency of measurement across all questions.

From the Bivariate Pearson analysis, the strongest indicators influenced learning

culture is commitment with r value of 1 and the least dominant is informed about

environment with r value of 0.714. Commitment and competitive advantages as dominant

factors influencing learning culture has been perceived highly by respondents. The

weaker factors are explained by informed about environment and response to external

changes. Due to early establishment of the company, being only 4 years in operation, the

network of the company is relatively small. If it is possible, the company should conduct

company visit as to absorb knowledge and assign third party to conduct market survey in

order to keep updated with recent changes. The company can also create benchmarking,

which will be costly but necessary nonetheless. Competitive being the second most

dominant gives high mean rating probably because most employee working in the

company are relatively young, hence theyre more passionate and aims for result and

incentives are given for over-achievers. The most dominant factor in shaping learning

organization, commitment to group decision-making has been perceived highly by

respondents. The weaker factor are explained by achieve goals and improved ability. Thisoutcome is probably because due to early establishment of the company, employee cant

learn as much as they expected. To improve this, the company can hire experienced

people to occupy strategic position, so they can improve the overall ability of their

respective subordinates.

The classical assumption step shows that the regression model in this study is

good and acceptable. From the normality scatterplot, it can be concluded that the data is

normally distributed. The result of homoscedasticity test also shows that Spearmans Rho

significance coefficient is greater than 0.05 hence independent variables are free from

homoscedasticity. Linearity also shows that the data acquire is linear. Autocorrelation test

also shows that the data is free of autocorrelation

Regression step shows that independent variables have strong positive effect on

shaping learning organization, which means when the independent variables are

increased, so does the dependent variables. However, learning culture only contributes

62.6% to shaping learning organization. This shows that there are other factors that

influences shaping learning organization besides learning culture. This means that


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CHAPTER V

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary

With the increasing competition both domestic and foreign, organization must be

adaptable with changes in dynamic world. The researcher wants to apply the theory in

this study, which consist of dimensions organizational culture and shaping learning

organization in Company X.

This study used SPSS to test the relationship between variables. Based on the

data analysis the result of the analyses can be explained as follows:

The data acquired based on questionnaire. This study used the 124 respondents.

Based on the results characteristics of respondent, it can be concluded that all employee

of Company X is centralized on 25-29 years old (47.5%) and the rest are distributed to

20-24 years old (13.7%), 30-34% years old (20.9) and >35 years old (17.7%). Gender of

customers is also distributed almost equally with male 52.4% and female 47.6%. Most

employee in Company X is employed as staff (91.1%) while managers is accounted for

8.9%. Most employees have been employed for 1 to 2 years (56.4%) and the rest are 6

months to 1 year (38.7%) and 3 to 4 years (4.8%). Most employees in Company X have

educational background of S1 (56.4%) while the rest are high school graduates (41.9%)

and S2 (1.6%). 79% of employees has work experience prior joining company X and

21% has no experience prior joining company X. Hughes (2002) in his work explained

that gender differences might influence organizational culture in many different ways.

Ismail (2008) suggest that differences in education background, age and gender can also

influence organizational culture. Studies by Kahn (2010) suggest that differences in job

position might also affect the employee behaviorFrom the descriptive analysis of respondents, the respondents evaluate that the

organizational culture from most dominant to least dominant in the company are learning

culture followed by competitive culture, participative culture and bureaucratic culture.

This study uses pretest step to test the validity and reliability of data. Second step

is the classical assumption test, which consist of normality test, homoscedasticity test,

linearity test and autocorrelation test. Last step is the regression analysis and correlation

test


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expected to perform beyond their usual pay grade; hence it will increase the companys

outcome.

This research may become a suggestion for other companies big or small to not

underestimate the role of culture in determining the success of an organization.

Organization should not randomly operate because it will be inefficient. The study results

shows that the statement in my organization people are committed to groups decision

making has the highest Pearson coefficient in measuring learning organization. It shows

that most of employees are committed to decision made by the company. In order to

maintain this, the company should invite all necessary employees in decision-making

process. In real life, this can be translated as having all departments manager sit in one

room and give feedback regarding the companys performance. On the other hand,

statement in my organization, people try to improve their ability has the lowest Pearson

coefficient in measuring learning organization. It means that the employee think their

employment there; do not increase their overall ability. This statement might be vital to

companys survival since no matter how good a company is, it can only be as good as the

people running it since this company isnt only consist of managers, but also staffs and

cooks. So, the company has to ensure the employee that their employment there is not just

for them to receive paychecks. The solution is to held necessary training and seminars toensure that all employees their growth is essential for the company

In order to shape learning organization, learning culture must be fostered. The

result of learning organization is an organization that is adaptable to changes. When a

company is adaptable to changes, that company can perform better because theyre

always keeping up with changes. Furthermore, according to Fard et al (2011) by being

adaptable, it can lead to efficiency. Commitment and competitive advantage are the two

most dominant indicators in learning culture, hence managers should maintain and

improve this achievement. However there are some factors such as informed about

knowledge must be improved.

The result of this study confirms that organizational culture has an impact

towards shaping Company X as learning organization. The result from previous studies

by Fard et al (2011) also confirms this finding. In addition, organizational culture is

proven have significant positive impact towards shaping learning organization. Empirical

suggestion of this study, Company X has to increase learning culture in order to be

adaptable with changes.

CHAPTER I-V

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