Assessing an Indonesian Organization Culture Readiness

8/8/2019 Assessing an Indonesian Organization Culture Readiness.

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organization factors to external organization environment. The instrument is considerable

punctual in portraying organizational current condition which is flexible or stable.

Educational education particularly Universities is characterized apparent with

inflexible and resistant to change organization (Friedman, Friedman, & Pollack, 2005). In

free trade era, universities have to learn to run their organizations in more business-like.Inflexibility and the failure to respond quickly decisively to environmental change can be

dangerous. Assessing Universities organization culture will provide academician description

of their organization in its readiness to respond environmental change. This paper is

subjected to provide an organization picture to adapt in the free trade environment.

Universities organization in free trade era context

Free trade era refers to internalization trade process, which is signed with flow of

product and production factors (e.g. labor and capital) across geographical boundaries.

Internalization flow of product and production factors increase competitive among countries.

The developed countries race to market their products and expand their production factorover the world while developing countries attempt to provide competitive advantageous

environments.

Recently, Indonesia emphasizes its competitiveness factors on low cost of production

factors such cheap labor force and abundant supply of natural resources. Technology

advancement and limit availability unrenewable resources have changed the competitiveness

factors. Moreover, demand on natural conservation, health, security, and human right leads

industrialization practice into more sociable and more responsible. The competitiveness

factor turns into technology, knowledge and expertise (Tambunan, 2004). As the result, to

sustain and increase Indonesian competitive position, fulfillment of the competitiveness

factor is undeniable.

Free trade era brings its challenges on neo-liberals that emphasizes on private

ownership and distributive effect of prosperity exploration. This condition leads to

commercialization and comodification of global system economic, including water, food,

health, arts, sciences, and technology (UGM, 2004). Universities as a part of culture-

conserving and culture-creating institution in the civilizing process and humanizing are

encouraged into market based preference. Universities in free trade era are challenged into

three main changes: first, the implication of technology development and its application and

its consequences. Universities have to perceive society development that driven by market

preference criteria. Information and technology development will available as long as its

benefited. Second, globalization of information technology will be resulted citizen and

economic grow onto corporate capitalism that manifest into oligopoly and monopolistic

corporation. Third, as result of the two main challenges, class inequality will control the

society. The class will determine who and what information must be received.

All three main challenges must drive university to build sense of crisis and sense

of emergency that an action and a policy should be taken to prevent degradation of

university ability to create an education and conservation institute and culture creation. In the

other side, Universities as a provider national labor are challenged not only on their

graduates ability to compete with international workforce but also responsible to createnational expertise. Two statements above give insight that universities must able to adapt


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creates a "strong" culture based on a shared system of beliefs, values, and symbols that are

widely understood by members of an organization (Mobley, Wang, & Fang, Summer 2005).

Consistency is manifested into (1) coordination and integration-rely on different functions

and units of the organization are able to work together well to achieve common goals without

interfered by organization boundaries. (2) Agreement is an ability to reach agreement incritical issues that includes both the underlying level of agreement and the ability to reconcile

differences when they occur. (3) Core values rely on share a set of values that create a sense

of identity and a clear set of expectations.

Adaptability emphasizes translation demand of the business environment into action.

This aspect integrates a system of norms and beliefs that support the organization's capacity

to receive, interpret, and translate signals from its environment into internal behavioral

changes that increase its chances for survival, growth, and development. The adaptability

aspect impact on first, the ability to perceive and respond to the external environment;

second, the ability to respond to internal customers, regardless of level, department, or

function; and third, the capacity to restructure and re-institutionalize a set of behaviors and

processes that allow the organization to adapt (Denison & Neale, 1999). Adaptability

manifests into creating change, customer focus, and organizational learning. Creating change

imply the organization to create adaptive ways to meet changing needs. It is able to read the

business environment, quickly react to current trends, and anticipate future changes.

Customer focus highlights the organization to understand and reacts to their customer, and

anticipates their future needs. It reflects the degree to which the organization is driven by a

concern to satisfy their customer. Organizational learning underlines on how the organization

receives, translates, and interprets signals from the environment into opportunities for

encouraging innovation, gaining knowledge and developing capabilities.A mission trait provides purpose and meaning by defining a social role and external

goals for the organization. It provides a clear direction and goals that serve to define an

appropriate decision action for the organization and its members. A sense of mission allows

an organization to shape current behavior by envisioning a desired future state. It also align

internalization and identification an organization's mission that contributes to both short and

long-term commitment to the organization. Mission manifests into (1) strategic direction and

intent and intent and intent deal with clear strategic intentions convey the organization's

purpose and make it clear how everyone can contribute, and make their mark in the

industry. (2) Goals and objectives deal with clear set of goals and objectives can be linked to

the mission, vision, and strategy, and provide everyone with a clear direction in their work.

(3) Vision is a shared view of a desire future state. It embodies core values and captures the

hearts and minds of the organization's people, while providing guidance and direction (Fey &

Denison, 2003).

Applying this framework guides organization into effectiveness criteria. Previous

studies (Fey & Denison, 2003; Mobley, Wang, & Fang, Summer 2005) proved organizational

culture model focuses on the contradictions involved in simultaneously achieving internal

integration and external adaptation. At the core of this model, underlying beliefs and

assumption as the deeper level of organizational culture are typically difficult to measure and

harder to generalize (Schein E. H., 2009). However, practically this model provides


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observable and presentation underlying beliefs and assumption into the four key of cultural

traits, involvement, adaptability, mission, and consistency.

One of the uniqueness of this model is that it focuses on two paradoxes that each

company is constantly seeking to balance (Mobley, Wang, & Fang, Summer 2005). For

example, consistency versus adaptability: companies that are market-focused may encounterproblems with internal integration but those too well integrated may be over-controlled and

lacks adequate flexibility to adjust to the environment. The other is top-down vision (mission)

versus bottom-up (involvement): organizations with too much emphasis on general corporate

mission may frequently ignore the issue of employee empowerment and buying but

organizations with strong participation may have a hard time in establishing direction.

Effective organizations are those that are able to resolve these contradictions without relying

on simple trade-offs (Fey & Denison, 2003).

Research Method

The research questions are guiding this study concern on applying the models to

describe organization readiness of university in free trade era. The first question addresses

organizational culture according to the four cultural traits through descriptive research.

Second question support to emphasize the first question answer by conducting case study.

This study involves both research approaches quantitative and qualitative that data is

characterized supplemental and mutually interdependent. The collection and analysis

quantitative data followed by collection and analysis qualitative data is referring sequential

explanatory design (Tashakkori & Teddue, 2003). The purpose of the sequential explanatory

design is typically to use qualitative results to assist in explaining and interpreting the

findings of a primarily quantitative study.

(Denison & Neale, Denison

Figure 1. Denison Organization Culture


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The study is conducted in university institution as an object study. Quantitative study

involved survey on Denison culture survey to member of the organization. The questionnaire

items are adapted from Denison organization Culture survey that worked by Fey and Denison

(2003). The four traits in the model each have three indexes that are the mean of three five-

point Likert scale questions ranging from 1-5 (strongly disagree to strongly agree). Thequestionnaires distribute within simple random sampling that provides least bias and offer the

most generalizability (Sekaran, 2003). Qualitative approach considers the judgmental

sampling that the choice of respondents who are most advantageously placed or in the best

position to provide information required (Veal, 2005). About four informants are selected

according to their best organization position and their understanding on the culture context.

Reliability test is conducted to test for consistency and stability. Cronbachs alpha is

reliability coefficient that indicates how well the items in a set positively correlated to one

another (Sekaran, 2003). Cross sectional studies distribute eighty questionnaires. The respond

rate is 43, 75 percent data that are sufficient to be analyzed.

Descriptive analysis is conducted to obtain organizational cultural traits. While

univariate analysis involving differences test (t-test results) is represent influence of gender

bias.Anova (analysis of variance) provide influence of current position and educational

background In line with quantitative approach, case study method addresses reflective

opinion of organization. This approach aims

Result

The goodness of data is justified according reliability test. The result for reliability

test is .809 that considered good (Sekaran, 2003). Respondents are characterized gender

differences, position, and educational background. Position within organization are divided

into four position, there are lecture refers to teaching staff; functional staff refers to

employees who authorize certain department, administration staff refers to administrative

employees including receptionist, secretary, librarian receptionist; and supporting staff refers

to employee who support the functional staff.

54.3 percent respondents are male; this percentage does not refer to describe total

employees gender. About 52.4 percent respondents are supporting staff and lectures are least

respondents. This indicates that questionnaire responds may high in supporting staff. Most of

respondents obtain bachelor degree followed by master degree. This indicates the

organization is contained with educated resources.

Table1. Respondents Characteristics frequencies

Frequency Percent

Gender differencesMale 19 54.3

Female 16 45.7

Current positionLecture 2 5.7

Functional staff 11 31.4

Administration staff 4 11.4

Supporting staff 18 51.4

Educational background

Undergraduate/ diploma 1 2.9Bachelor 20 57.1

Master degree 13 37.1

Doctoral degree 1 2.9

Total 35 100.00Source, primary data


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Table 2 provides descriptive value of cultural traits. Involvement (3.75) trait is the

highest mean than mission (3.63) consistency (3.48) and adaptability (3.31). Within

involvement traits, empowerment (4.0) is the highest index mean, in the consistency traits

coordination and integration (4.0) is the highest. Creating change has 3.9 index mean, higher

than other manifest factors of adaptability. In mission trait, vision has highest index mean

(3.8).t-test (appendix 1) indicates genders are not influence difference perception of the

cultural traits (sig.> 0.05) except involvement trait (t=-.116;sig=016


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vary according to educational background. Case study result will be analyzed in the

following section

Discussion

Descriptive result of Independent test presents involvement (3.75) has greater index

mean than mission (3.63) consistency (3.48) and adaptability (3.31). Involvement represents

the university rely on informal, voluntary, and implied control systems, rather than formal,

explicit, bureaucratic control systems. The university organization provide internal

environment that encouraged employees active participation on the decision making. Within

involvement traits, empowerment has higher index rather than capability that indicates people

in the university organization are making decisions that they may not be capable of making.

The condition may be potential disaster waiting to happen, occurring when people

confuse empowerment with abdication or think that by saying the magic word, people wake

up capable of making business decisions regardless of experience, education, knowledge, or

ability (Denison & Neale, 1999). It is contradicting with educational demographic that mostof respondent obtain high educational background (bachelor degree). High educational

background of university organization members may be assumed sufficiency to generate right

decision for organization. However, educational degree does not enough equipped university

organization members to make right decision. Experience, knowledge, and ability are key

factor of taken right decision. Experience, knowledge, and ability are manifestation of

organizational intellectual assets (Sumita, 2008). Those intellectual assets are form of a

university organization members learning in facing business challenges.

Mean index of mission (3.63) trait addresses a clear direction and goals that serve to

define an appropriate course of action for the university organization and its members.

Direction and goals are clearly communicated to university organization members. With high

empowerment, members are encouraged to engage on goals achievement. Unfortunately,

within mission trait, vision is higher than Goals and Objectives indicates that the university

organization may have a difficult time executing or operationalizing its mission. At the helm

may be brilliant visionaries who have a difficult time translating dreams into reality.

Difficulties on executing the organization result may be indicated by lack decision making

capability of organization members particularly person in charge (authorized leaders) in those

organization.

A consistency trait is lower mean index (3.48) than involvement and mission traits.

Low consistency mean index addresses low internal integration coordination and control. The

organization has low committed employees, no key central values, a unclear method of doing

business, no tendency to promote from within, and a blurred set of do's and don'ts (Denison

& Neale, 1999). Low consistency is considerable weak culture because a shared system of

beliefs, values and symbols that are not widely understood by members of university

organization. Agreement (3.37) has the lowest index than core value and coordination (3.80)

and internal integration traits (3.97) indicate that university organization have a good

intention but become less bond when conflict or differing opinions arise. In the arising

conflict or differing opinion, everyone talking at once, people ignoring the input of others, or

withdrawal are frequently observed behaviors (Mobley, Wang, & Fang, Summer 2005).


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Adaptability (3.31) presents organization norms and beliefs that support

organizations capacity to respond external challenges has lowest mean index among other

traits. The low adaptability trait indicates, first, organization is considered less able to

perceive and respond external environment; second, less able to respond internal customers,

regardless of level, department or function and third, less capacity to restructure and re-institutionalize a set of behaviors and processes that allow the organization to adapt.

High level anxiety among employee may exist due to high mean index of creating

change (3.94) than customer focus (3.05) and organizational learning (3.65), and vision

(3.80) and strategic direction and intent (3.7), are on the low side. This condition indicates a

"change for change sake" mentality, and the changes made are often not perceived by

employees as having any particular direction or purpose.

Within free trade era, when market force is the driven factor, the crucial failure may

appear when organization address changed environment due to free trade era. University

organization will have difficulties in addressing change to adapt the new environment.

Commercialization and commodifications are undeniable in free trade era that forces many

organizations to engage including university organization. Crucial issue may appear when

university in the state of weak culture. It leads to lack of organization self identity as culture-

conserving and culture-creating institution in the civilizing process and humanizing. The

organization suffers for losing its role as educational institution.

University organization members may lead to anxiety and frustration on blurred

organization condition. Organization members experience of integration internal organization

(norms and value) to external condition (environment) drives into organization climate

discussion. Climate, portrays organizational environments as being rooted in the

organization's value system, but tends to present these social environments in relatively staticterms, describing them in terms of a fixed (and broadly applicable) set of dimensions

(Denison, 1996).

t-test by gender differences resulted there is no variation between male and female

respondent except on involvement trait(t=-.116;sig=016


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organization learning process; second, higher educational background may trigger resistance

on learning process. Vision is perceived varying by educational background. Educational

background influences variation of vision among university organization members. This may

imply that higher education background drive the vision is clearly communicated but difficult

to implement.

Case study

Case study is conducted to obtain reflective organization culture condition by

university organization members. The case study began with face to face interviews to

informants that considerable in the best position and understanding the context. The four

informants are coming from different position within organization including (lecture,

functional, administrative, and supporting staff). The informants provide information of

organization culture implementation through reflection of the norms and value of

organization.

Norms and value of organization underlies behavior of organization member. Theculture of organization is still struggling to be implemented since this organization newly

exists. Different value and characters university organization members that influence their

behavior still become challenge for internal integration (support low agreement mean index).

Although formal value and norms are socialized through formal organization forum,

organization culture does not manifest in the day to day task. The integration of norms and

value that underlies members behavior tends growing difference than institutionalized norm

and value. Organization member admit its norm and values are more effective to cope with

daily activity and relation harmonization.

In the organizational life, people tend competing against each other rather than

fighting the real competition. The heavy internal focus, the organization tends to focus on

internal competition, rather than external competition. The competition is developed to drive

the quality of members work. Employees are encouraged to give the best ability in

organization development. However, the negative competition impact has not being

considerable.

Leader of this organization have strong characters and often influence in the taken

decision. Taken decision often involve of leader personal desire and ambition that less

consider organization resources capability. The strong force of leader asides with high

potential employee capability may address low organizational buying in. Low organizational

buying is being realized by the informant due to employee resignation frequency. Employee

resignation frequency tends high (data of employee resignation cannot be provided) in this

university organization. Although various possibilities appear due to reason of employee

resignation, This condition proves that the organization failed to engage organization vision

and employee vision.

Conclusion and limitation

The study captures current condition of university organization. Involvement is the

highest trait among cultural traits. Although the highest involvement means the positive side,

high empowerment that does not aside with lower capability index lead into waiting potential


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disaster. The statement implies that university organization members are lack of capability in

executing strategy and create right decision.

Adaptability is the lowest traits of university organization culture implies lack of

organization respond on external environment, respond to internal customer and less capacity

to restructure and re-institutionalize a set of behaviors and processes that allow theorganization to adapt. This condition is not benefited the organization because they will

unable to exist. In the context of free trade era, which emphasizes running organization like

business fashioned, lack ability to adapt and create right decision is a potential factor for

organization failure. The organization will unable to exist and compete within turbulence

environment.

Denison organizational culture survey provides the importance insight of current

organization condition. The survey is practitioner approach that simple to apply but capture

reality or organization. Aside with descriptive study, face to face interview provides

reflective opinion of captured cultural traits. Indirectly, qualitative study gives cause and

effect linkages of the organization condition.

This study emphasize on simple analysis and considers less provide linkage on other

variable such as existing environment, organization performance. Control variable such as

gender differences and educational background is unexpected influence variation of cultural

traits. Due to lack linkage to other variable, this study is limited to explain the variation.

During discussion of this study several result test can be answered due to lack of provided

data such as insight of difference culture perceive by gender. Further research may examine

influence of gender more specific.

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Appendix

Appendix 1. Independent sample test result

Independent Samples Test

Levene's Test

for Equalityof Variances t-test for Equality of Means

F Sig. t df

Sig.

(2-tailed)

Mean

Difference

Std. Error

Difference

95% Confidence

Interval of the

Difference

Lower Upper

Involvement Equal variances

assumed6.470 .016 -.123 33 .903 -.03563 .29015 -.62594 .55467

Equal variances

not assumed-.116 20.855 .909 -.03563 .30649 -.67328 .60201

Empowerment Equal variances

assumed.053 .820 -.823 33 .416 -.29276 .35551 -1.01606 .43053

Equal variances

not assumed-.816 30.527 .421 -.29276 .35894 -1.02529 .43976

Team orientation Equal variances

assumed2.353 .135 -.872 33 .389 -.27303 .31308 -.91000 .36394

Equal variances

not assumed-.830 22.005 .415 -.27303 .32889 -.95509 .40904

Capability

Development

Equal variances

assumed.812 .374 .941 33 .354 .33224 .35305 -.38605 1.05053

Equal variances

not assumed.924 28.874 .363 .33224 .35950 -.40316 1.06764

Consistency Equal variances

assumed.514 .479 -.162 33 .872 -.04179 .25758 -.56584 .48226

Equal variances

not assumed-.159 28.591 .875 -.04179 .26264 -.57928 .49570

Core value Equal variances

assumed2.818 .103 .575 33 .569 .20724 .36039 -.52598 .94045

Equal variances

not assumed.563 28.229 .578 .20724 .36809 -.54649 .96096

Agreement Equal variances

assumed.005 .947 .306 33 .762 .10855 .35474 -.61317 .83027

Equal variances

not assumed.304 31.275 .763 .10855 .35656 -.61840 .83550

Coordination and

integration

Equal variances

assumed.016 .901 -1.824 33 .077 -.51316 .28132 -1.08551 .05919

Equal variances

not assumed-1.843 32.887 .074 -.51316 .27841 -1.07966 .05335

Adaptability Equal variances

assumed

.045 .833 -.539 33 .593 -.15393 .28549 -.73477 .42691


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Equal variances

not assumed-.540 32.147 .593 -.15393 .28513 -.73461 .42675

Creating change Equal variances

assumed.602 .443 -1.439 33 .160 -.45066 .31323 -1.08793 .18661

Equal variances

not assumed -1.442 32.249 .159 -.45066 .31254 -1.08709 .18578

Customer focus Equal variances

assumed.034 .854 -.313 33 .756 -.12500 .39952 -.93782 .68782

Equal variances

not assumed-.314 32.443 .755 -.12500 .39789 -.93504 .68504

Organizational

learning

Equal variances

assumed.741 .396 .607 33 .548 .17434 .28708 -.40972 .75840

Equal variances

not assumed.602 30.637 .552 .17434 .28966 -.41671 .76539

Mission Equal variancesassumed

2.588 .117 -1.710 33 .097 -.50034 .29265 -1.09574 .09506

Equal variances

not assumed-1.759 32.248 .088 -.50034 .28445 -1.07957 .07889

Strategic

direction and

intent and intent

Equal variances

assumed4.664 .038 -1.538 33 .134 -.57895 .37651 -1.34495 .18706

Equal variances

not assumed-1.598 30.676 .120 -.57895 .36226 -1.31810 .16020

Goals and

objectives

Equal variances

assumed.265 .610 -.976 33 .336 -.29605 .30338 -.91329 .32118

Equal variancesnot assumed

-.977 32.187 .336 -.29605 .30289 -.91287 .32077

Vision Equal variances

assumed.306 .584 -1.506 33 .142 -.48355 .32119 -1.13701 .16991

Equal variances

not assumed-1.529 33.000 .136 -.48355 .31631 -1.12709 .15998

Source, primary data

Appendix 2. ANOVA table by current position

ANOVA

Sum of Squares df Mean Square F Sig.

Involvement Between Groups .011 1 .011 .015 .903

Within Groups 24.130 33 .731

Total 24.141 34

Empowerment Between Groups .744 1 .744 .678 .416

Within Groups 36.227 33 1.098

Total 36.971 34

Team orientation Between Groups .647 1 .647 .760 .389Within Groups 28.095 33 .851


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Total 28.743 34

Capability development Between Groups .959 1 .959 .886 .354


Total 36.686 34

Consistency Between Groups .015 1 .015 .026 .872


Total 19.032 34

Core value Between Groups .373 1 .373 .331 .569


Total 37.600 34

Agreement Between Groups .102 1 .102 .094 .762


Total 36.171 34

Coordination and internal

integration

Between Groups 2.287 1 2.287 3.327 .077


Total 24.971 34

Adaptability Between Groups .206 1 .206 .291 .593


Total 23.568 34

Creating change Between Groups 1.764 1 1.764 2.070 .160


Total 29.886 34

Customer focus Between Groups .136 1 .136 .098 .756


Total 45.886 34

Organizational learning Between Groups .264 1 .264 .369 .548


Total 23.886 34

Mission Between Groups 2.174 1 2.174 2.923 .097


Total 26.722 34

Strategic direction and

intent and intent

Between Groups 2.911 1 2.911 2.364 .134


Total 43.543 34


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Goals and objectives Between Groups .761 1 .761 .952 .336


Total 27.143 34

Vision Between Groups 2.031 1 2.031 2.267 .142


Total 31.600 34


Appendix 3. ANOVA Table by educational background

ANOVA

Sum of Squares df Mean Square F Sig.

Involvement Between Groups 1.817 3 .606 .841 .482


Total 24.141 34

Empowerment Between Groups 2.048 3 .683 .606 .616


Total 36.971 34

Team orientation Between Groups 2.020 3 .673 .781 .514


Total 28.743 34

Capability development Between Groups 1.716 3 .572 .507 .680


Total 36.686 34

Consistency Between Groups 2.115 3 .705 1.292 .295


Total 19.032 34

Core value Between Groups 1.973 3 .658 .572 .638


Total 37.600 34

Agreement Between Groups 1.191 3 .397 .352 .788


Total 36.171 34

Coordination and

internal integration

Between Groups 5.479 3 1.826 2.905 .050


Total 24.971 34


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Adaptability Between Groups 1.307 3 .436 .607 .616


Total 23.568 34

Creating change Between Groups 3.828 3 1.276 1.518 .229


Total 29.886 34

Customer focus Between Groups .413 3 .138 .094 .963


Total 45.886 34

Organizational learning Between Groups 6.936 3 2.312 4.228 .013


Total 23.886 34

Mission Between Groups 1.294 3 .431 .526 .668


Total 26.722 34

Strategic direction and

intent and intent

Between Groups 3.035 3 1.012 .774 .517


Total 43.543 34

Goals and objectives Between Groups 2.143 3 .714 .886 .459


Total 27.143 34

Vision Between Groups 2.281 3 .760 .804 .501


Total 31.600 34


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Assessing an Indonesian Organization Culture Readiness