MBA Thesis Daniella Griffith - Kranenberg

FHR Lim A Po Institute for Social Studies Maastricht School of Management
MBA VII Management &Business Strategy

2010-2012
----------------------------------------------------------------------------------------------------------------
THE EFFECT OF ORGANIZATIONAL CULTURE AND LEADERSHIP

STYLE ON ORGANIZATIONAL COMMITMENT WITHIN SMES IN
SURINAME, WITH JOB SATISFACTION AS A MEDIATOR
By
Danille Griffith- Kranenburg
(SRFHR0710004)
Suriname
February 2013
Supervised by
Dr. Mirdita Elstak
This paper was submitted in partial fulfillment of the requirements for the Masters of Business
Administration (MBA) degree at the FHR Lim A Po Institute for Social Studies (FHR) in
association with the Maastricht School of Management (MSM),February 2013.
This page was left blank intentionally
Unless
Commitment is made,
there are only promises and hopes;

but no plans
Peter F. Drucker
ACKNOWLEDGEMENT
Writing this thesis has been one of the most challenging moments in my life. Without the
guidance of my supervisor, the understanding and support of my husband, children, family
and friends, I would not have been able to finish this study successfully.
First and far most I like to thank GOD, because his blessings and grace makes all possible
Special thanks to the team of the FHR Lim A Po Institute for giving me the opportunity to
develop my knowledge further.
I am very grateful to my supervisor, Mirdita Elstak, who inspired me to perform well with her
critical comments, suggestions, insight and motivational words.
I would like to thank my employer, Remas nv, and my colleagues for giving me the
opportunity and support to attend this MBA program.
Gratitude to my MBA colleagues for their support during the program.
Special thanks to my uncle, Lucin Kloof, without whom I would not have started this
journey.
I would also like to thank my family, especially my parents and in-laws, for their support and
encouraging words.
Most of all I would like to dedicate this thesis to my loving husband, Rodney, and my
children Cailynn, Khalil and Raz, who was born during this journey. I will be eternally
grateful for the many sacrifices you have made for me and the love, understanding, patience
and encouragement you have given me.
Thank you all

Sincerely,
Danille Griffith-Kranenburg
iv
ABSTRACT
The purpose of this study was to determine what is different about the role that organizational
culture and leadership style play in Small and Medium-sized Enterprises (SMEs). How they
influence employee commitment to the organization and how job satisfaction mediates that
relationship. It was said that the effect of Leadership style and the Organizational culture on
Organizational commitment was mediated by Job satisfaction.
Data was gathered through questionnaires distributed to eight SMEs in Paramaribo. This was
done to investigate the different relationships between and the impact of the variables on each
other. The scales used were the Multifactor Leadership Questionnaire, MLQ, the
Organizational Culture Index, OCI, the Job Satisfaction Survey, JSS and the Organizational
Commitment Questionnaire, OCQ. The gathered data was statistically analyzed with SPSS.
Multiple regression was applied according to the steps of Kenny and Baron(1986) who gave
the specifications of the procedure for regression analysis when a mediating variable is
involved. Some of the results were according to the expectation after theory examination, but
others were surprisingly contradictive.
Transformational leadership had a direct and indirect (through job satisfaction) effect on
Organizational commitment. Of the other 4 predicted indirect effects 1 was significant
namely one with bureaucratic culture. This effect was positive instead of negative as was
hypothesized. Bureaucratic and Supportive culture had a significant direct effect on
Organizational commitment.
Based on the result of this research it is recommended that transformational leadership style
should be practiced in SMEs to gain satisfied and committed employees. Leaders need to
state their views clearly; they need to consider employee capabilities and needs. This could
ultimately lead to a better performance and a competitive advantage for the organization.
Key words
Leadership, Leadership style, Transformational leadership, Organizational culture, Job
satisfaction, Organizational commitment and SMEs
TABLE OF CONTENTS
Acknowledgement .................................................................................................................... iv
Abstract ...................................................................................................................................... v
List of Figures ........................................................................................................................... ix
List of Tables ............................................................................................................................. x
1
Introduction ........................................................................................................................ 1
1.1
General ........................................................................................................................ 1
1.2
Background ................................................................................................................. 1
1.3
Relevance and justification ......................................................................................... 4
1.4
Problem Statement ...................................................................................................... 4
1.5
Research Objectives .................................................................................................... 5
1.6
Research Questions ..................................................................................................... 6
1.7
Research Limitations ................................................................................................... 6
1.8
Outline of the Thesis structure .................................................................................... 7
Literature Review ............................................................................................................... 8

2.1
Introduction ................................................................................................................. 8
2.2
Concept of Leadership ................................................................................................ 8
2.2.1
Leadership defined ............................................................................................... 8
2.2.2
Leadership vs. Management ................................................................................ 9
2.2.3
New Approach to Leadership ............................................................................ 10
2.3
Organizational culture ............................................................................................... 11
2.4
Job satisfaction .......................................................................................................... 13
2.5
Organizational commitment ...................................................................................... 13
2.6
Small and Medium-sized Enterprises ........................................................................ 14
2.6.1
2.7
General definition of SMEs ............................................................................... 15
Relationship between the variables ........................................................................... 16
2.7.1
Job satisfaction and Leadership styles ............................................................... 16
vi
2.7.2
Job satisfaction and Organizational Culture ...................................................... 17
2.7.3
Organizational commitment and Job satisfaction .............................................. 19
2.7.4
Organizational Commitment and Leadership style............................................ 19
Methodology..................................................................................................................... 21
3.1
Introduction ............................................................................................................... 21
3.2
Research Philosophy ................................................................................................. 21
3.3
Research design ......................................................................................................... 21
3.4
Questionnaire design and measures .......................................................................... 22
3.4.1
Survey administration ........................................................................................ 22
3.4.2
Reliability and validity....................................................................................... 23
3.4.3
The questionnaire and measurement scale ......................................................... 23
3.4.4
Data processing .................................................................................................. 27
3.5
Research population and Sample .............................................................................. 27
3.6
Data analysis ............................................................................................................. 28
3.7
Summary ................................................................................................................... 28
Findings and Analysis ...................................................................................................... 29

4.1
Introduction ............................................................................................................... 29
4.2
Sample population profile ......................................................................................... 29
4.3
Descriptive statistics .................................................................................................. 33
4.4
Correlation ................................................................................................................. 34
4.5
Regression Analysis .................................................................................................. 36
4.5.1
Regression analysis Leadership style and Organizational Commitment ........... 38
4.5.2
Regression analysis Leadership styles, Organizational culture and Job
satisfaction ........................................................................................................................ 39
4.5.3
Regression analysis Leadership styles, Organizational culture, Job satisfaction
and Organizational Commitment...................................................................................... 40

4.6
Hypothesis testing ..................................................................................................... 41
4.7
Summary ................................................................................................................... 45
vii
Discussion, Conclusions and Recommendations ............................................................. 46

5.1
Introduction ............................................................................................................... 46
5.2
Discussion and conclusions....................................................................................... 46
5.3
Implications for Theory and Practice ........................................................................ 49
5.4
Recommendations ..................................................................................................... 51
References ................................................................................................................................ 52
AppendiX ................................................................................................................................... a
Appendix A: Introduction of the researcher to the questionnaire respondent........................ b
Appendix B: The Questionnaire ............................................................................................. c
viii
LIST OF FIGURES
Figure 1-1Structure of the thesis ................................................................................................ 7
Figure 2-1 Proposed Conceptual Framework .......................................................................... 16
Figure 2-2 Conceptual Framework specifying the variables and the research Hypotheses .... 20
Figure 4-1 The gender response in % of the sample population.............................................. 29
Figure 4-2 Job level response in % of the sample population ................................................. 30
Figure 4-3 Age division in % of the sample population .......................................................... 30
Figure 4-4 The education level in % of the sample population ............................................... 31
Figure 4-5 The monthly salary in % of the sample population................................................ 31
Figure 4-6 Tenure in % of the sample size .............................................................................. 32
ix
LIST OF TABLES
Table 2-1 Relationship between Culture, motivators and Job satisfaction .............................. 18
Table 3-1 Cronbachs Alphas for Leadership style ................................................................ 24
Table 3-2 Cronbachs Alphas for Organizational culture ...................................................... 25
Table 3-3 Cronbachs Alpha from Job satisfaction ................................................................. 26
Table 3-4 Cronbachs Alpha from Organizational commitment ............................................. 27
Table 3-5 Analysis Overview ................................................................................................. 28
Table 4-1 Independent, Dependent and Mediating variables with the mean, median, mode,
standard deviation and skewness ............................................................................................. 33
Table 4-2 Correlation Matrix ................................................................................................... 35
Table 4-3 Regression coefficient Transformational leadership and Organizational
Commitment ............................................................................................................................ 38
Table 4-4 Model Summary Transformational leadership on Organizational Commitment .... 38
Table 4-5 Regression coefficient Leadership styles, Organizational Culture and Job
Satisfaction ............................................................................................................................... 39
Table 4-6 Model Summary Leadership styles, Organizational Culture on Job Satisfaction ... 39
Table 4-7 Regression coefficient Leadership styles, Organizational Culture, Job Satisfaction
and Organizational commitment .............................................................................................. 40
Table 4-8 Model Summary Leadership styles, Organizational Culture, Job Satisfaction and
Organizational commitment..................................................................................................... 41
Table 4-9 Summary Regression Analysis ................................................................................ 41
Table 4-10 Overview Null and Alternative Hypotheses .......................................................... 42
1
1.1
INTRODUCTION
General
In this chapter the background of the research project is presented, followed by an elaboration
on the relevance and justification of the study. Furthermore the key concepts of the study are
stated which is followed by the problem statement, the research objectives and the research
questions. Lastly the limitations and the outline of the thesis structure are stated.
1.2
Background
Human Capital, which gives competitive edge due to its uniqueness, is one of the resources
that work as a pillar for an organization (Holland, Sheehan and de Cieri, 2007). The focus has
therefore shifted to people, the employees of the organizations (Cohen, 2005). Employees
play an important role in organizations, they are the greatest resource an organization can
have and it is through their involvement and commitment that the organization can become
competitive (Sempane, Rieger & Roodt, 2002). Employees who are committed are liable to
increase their performance and devote their time to the organization (Saal & Knight, 1987).
Organizational commitment is often described as the key factor in the relationship between
employees and organizations (Raju & Srivastava, 1994). It incorporates thoughts of being
connected, attached and going beyond the basic requirements of the job which tend to
improve organizational efficiency and effectiveness (Williams & Anderson, 1991).
Recruiting, managing, developing and retaining the employees, its human resource, is what
an organizations effectiveness depends on (Wallach, 1983). These four aspects influence
stability and productiveness of the workforce. Finding ways to improve how employees feel
about their job (achieving job satisfaction), so they would become more committed to their
organization, is the basis to achieving a competitive organization. Satisfied employees are
more willing to try new ideas and could participate more in the decisions that need to be
made (Kivimaki & Kalimo, 1994).
Due to their impact on performance and the success of an organization, Organizational

commitment and job satisfaction, characteristics of the way employees behave, received a lot
of attention in workplace studies. Organizational commitment and job satisfaction increased in
importance over the last few years (Lok & Crawford, 2004) because, they predict the input of
employees and as Wilson and Rosenfeld (1990) indicated positive and negative feelings
towards work and the organization may have powerful effects on the way employees behave in
an organization. Organizations try to encourage commitment in their employees in order to

achieve stability and avoid cost when employees leave.
When employees are satisfied with their job, they are committed and usually not tempted to
look for other opportunities (Lok, Wang, Westwood & Crawford, 2007). According to Porter
& Smith (1970) organizational commitment is achieved when the employee strongly beliefs
in and accepts the organizational goals and values, when they are willing to do their utmost
on behalf of the organization and when they are willing to stay with the organization. In this
definition commitment is something more than submissive loyalty to an organization. It
means that you have an active relationship with the organization in the sense that you are
going beyond normal duties with the intention of adding to the well being of the organization.
Commitment could be concluded not only from employees their experiences and opinions but
also out of their actions. Job satisfaction is a set of feelings an individual has about his or her
job (Robbins, 2005). In research done by Lawler (1992) his theory offers a theoretical
connection between more instant positive emotions like satisfaction, and longer lasting
feelings like commitment. As a concept commitment differs from job satisfaction.
Commitment represents a general response to the whole organization, goals and values
included. Job satisfaction only focuses on ones job or certain aspects of the job; it
emphasizes specific surroundings of a task where the employee executes his duties. Due to all
these factors organizational commitment is more stable overtime, it is not influenced by day
to day events (Porter et al, 1974) like job satisfaction which can quickly increase or decrease
as a result of immediate reactions to different incidents or aspects of the work location.
People tend to evaluate their jobs on the basis of factors that they find important (Sempane et
al, 2002). If the employees get the salary, the working conditions, the recognition and the
advancement they want, they will probably be more productive and will also stay with the
organization (Mc Neese-Smith, 1997; Randeree & Chaudhry, 2012).
Leadership is seen as a determinant of several aspects in the way employees behave, so its
impact cannot be overlooked (Randeree & Chaudhry, 2012).
Organizational crises, mostly due to the world economic crises, emphasized the need for
leadership and organizational culture development by organizational decision makers (Earle,
1996). Changes occurred in employment practices and the decision makers needed to get
their organizations through the crises by creating trust, influencing employees to achieve
common organizational goals (Leadership) with certain values and beliefs of the organization
in mind (Northouse, 2007).
Different studies showed leadership and organizational culture to have a significant influence
on organizational commitment and job satisfaction (Lok and Crawford, 1999, 2001). If a
leader and his style are seen as trustworthy, employees are willing to follow that leader in
accomplishing the organizations goals. This leads to positive results for the organization
which in time affects job satisfaction and organizational commitment. In the case of
organizational culture, having a set of values and beliefs which are commonly shared creates
affinity and a connection with the organization (O Reilly, 1989; Chen, 2004) because people
than identify with the organization and want to be part of the collective and they are also
more likely to have values which benefit the organization. Organizational culture is the
shared understanding of the beliefs, values, norms and philosophies of how things work
(Wallach, 1983). Employee behavior (their commitment and job satisfaction), their
expectations and their performance will determine if the implementation of plans, policies
and strategies is successful and if the organization will be competitive.
This research will be done in Small and Medium-size Enterprises (SMEs). They usually have
a flatter organization structure. The small number of employees, centralized decision making,
depending on the sector a small number of highly educated employees, the high level of
informality, the close personal relationships and the short lines of communication cause
different interactions between leaders and their employees in small organizations than in
large organization (Bolden &Terry, 2000;). SMEs are often used as an option for unskilled
and semi skilled employees to earn the knowledge and experience before moving to another
bigger and or better organization. Therefore SMEs repeatedly experience the loss of skilled
employees who could play a part in the improvement of the organizations production. This
loss of skilled employees could be the result of them being dissatisfied which could influence
their commitment to the organization.
It would be interesting to see how leadership and organizational culture, influence
organizational commitment and what kind of mediating affect job satisfaction has on this
relationship within SMEs.
1.3
Relevance and justification
The majority of businesses in most countries are Small and Medium-sized Enterprises. They
are the mainstay of most economies in the world especially when we look at employment and
the impact they have on development of those countries1.
With current conditions, like high employee turnover and slow economic growth, facing the
established small and medium sized enterprises, the main goal of this research is to determine
what type of leadership style and organizational culture keeps employees committed to an
organization, an SME where the relationships (as mentioned earlier) between the leader and
the employees are different from those in large organizations and if job satisfaction had a
mediating effect in this relationship.
This research will show what is expected by employees in terms of leadership style,
organizational culture, being satisfied with their job and being committed to an organization.
It will also add value to leadership and organizational culture studies in Suriname by being a
guide for current and future leaders in their struggle with retaining employees through job
satisfaction and organizational commitment. Retaining skilled employees is needed to survive
and be competitive in local, regional and international markets.
1.4
Problem Statement
Organizational commitment has received a lot of attention in research of the work

environment. It has been measured and conceptualized in many different ways, but still
remains a challenging construct (Lok et al, 2007). The relationship between organizational
commitment, organizational culture and leadership style, namely the effect that culture and
leadership style, as independent variables, have on commitment as a dependent variable in
SMEs, has not been given much attention in research (Lok et al 2007).
Many of the studies on the earlier mentioned constructs were done in large companies and in
different concept relationships, so this research will view these concepts from another angle
by looking at the relationships between them in Small and Medium sized Enterprises. The
relationships are different because they have fewer resources, smaller communication
systems, different leadership styles and slim growth opportunities. These characteristics are
expected to be different in SMEs.
Issue Briefing Note: Small and Medium-sized Enterprises, 2004.
As mentioned earlier SMEs form the mainstay of most economies in the world. That is also
the case in Suriname. Having committed employees is therefore important to guarantee
performance within and the survival of the organizations which in turn can benefit the
Surinamese economy. Research on how to reach that goal, committed employees, is thus of
eminent importance, especially in the Surinamese context.
1.5
Research Objectives
If the employees are satisfied and committed improved productivity, profit and growth of the
organization are achieved. Organizational commitment results in a stable workforce
(Mohanty et al, 2012) and the retention of valued skills because the organization can thus
form a consistent group of employees who worked with each other longer and know the
strengths and weaknesses they have amongst each other. This results in improved
communication among employees and workforce support for the organization. When
employees are committed they are involved and have an active relationship with the
organization, they are also willing to give something of themselves for the organizations
well being (Porter et al, 1979). So organizational commitment is very important for an
organizations survival.
The main purpose of this research is to determine what is different in SMEs about the role
that organizational culture and leadership style play, how they influence organizational
commitment of employees within SMEs and how job satisfaction mediates that relationship.
Ultimately this research should give Small and Medium sized enterprises a view on how to
improve their organizational culture and leadership style with the intention of creating and
keeping a committed workforce.
1.6
Research Questions
The research will address the following questions:

Main Research Question:
How and why do leadership style (Transformational,

Transactional) and organizational culture (Bureaucratic,
Innovative or Supportive) affect organizational commitment in
Small and Medium-sized Enterprises, through job satisfaction?
This research will argue that organizational commitment is influenced by different types of
organizational culture and different styles of leadership. Job satisfaction has a mediating role
in this relationship; it can either strengthen or weaken the organizational commitment of
employees.
The following secondary research questions will also be answered:

1. How and why does leadership style (Transactional, Transformational) affect job
satisfaction within SMEs?
2. How and why does organizational culture (Bureaucratic, Innovative or Supportive)
affect job satisfaction within SMEs?
3. How does job satisfaction affect organizational commitment?
4. Does Transformational leadership have a direct effect on Organizational
commitment?
The secondary research questions will help determine the answer to the main research
question and clarify the different concepts mentioned.
1.7
Research Limitations
The limitations in this research are as follows:
Other variables, beyond the earlier mentioned will not be considered in this research;
Not all the needed company data is correctly documented or retraceable;
Not all company data is up-to date;
There is no information of the total number of SMEs in Suriname.
1.8
Outline of the Thesis structure

1. Introduction
2. Literature Review
3. Research Methodology
4. Findings and Analysis
5. Discussion, Conclusions and

Recommendations
Figure 1-1Structure of the thesis
This thesis consists of 5 chapters of which the first chapter covers the Introduction to the
subject with the relevance and justification, the research questions, problem statement,
objectives and the limitations. Next the literature review (2) where the researcher analyzes the
existing literature about the subject and develops a theoretical framework for the study.
Thereafter the research methodology (3) is described. Here the methods used to achieve the
research objectives are explained. In the finding and analysis chapter (chapter 4) the results
are presented. These results will be analyzed and tested. Furthermore the researcher will
discuss the meaning of the findings in chapter 5. The conclusions and the recommendations
will also be given this chapter.
2
2.1
LITERATURE REVIEW
Introduction
In order to answer the research questions several steps need to be taken. One of these steps is
viewing relevant theory about the concepts Organizational culture, Leadership, Job
satisfaction and Organizational commitment which is done in this chapter. The theory of
Small and Medium sized Enterprises (SMEs) is also explored because this is a different type
of organization. So the definitions and the characteristics of this type of organization are also
looked at. A review of past findings on the relationships between the earlier mentioned
variables is presented and at the end of this chapter the theoretical framework for this study
will be presented.
2.2
Concept of Leadership
2.2.1 Leadership defined

For as long as there was interaction between people, leadership existed. The topic of
leadership has been the focus of studies for the past 20 years and gradually became a topic of
great interest. This interest sprung forth out of the fact that leaders provide guidelines and
they have to motivate their followers to accomplish tasks (Gill, 1998).
Early on, leadership definitions had the tendency to view the leader as the center or the focus
of a group activity. The leader restructures the problems, offers solutions to the problems,
establishes priorities and initiates developmental operations (Bass B. , 1990). Leadership was
associated with strength of personality (Bass 1990; Bowden, 1926). A leader was seen as a
person with many popular traits of personality and character (Bass, 1990; Bingham, 1927).
The current descriptions of leadership no longer regard only individual characteristics or
differences (Avolio 2007; Yukl 2006).
In Basss (1998) current definition, leadership is an interaction between one or more
members of a group. In another more recent definition, leadership is a relationship between
leaders and followers where they influence each other and they intend real changes and
outcomes that reflect their shared purposes (Daft, 2005).
According to Northouse (2007) leadership as a process means that, as mentioned earlier, it is

not a characteristic someone is born with, it is an interaction between leaders and their
followers. The leaders influence and are influenced by their followers (a group). Leadership
is available to everyone; it is not limited to the person in power (Northouse, 2007).
For this research the following definition for leadership will be applied:
Leadership is a process whereby an individual influences a group of individuals to
achieve common goals (Northouse, 2007)
This definition is best suited for this research due to the ongoing interaction between leaders
and followers in SMEs due to the short communication lines and the flatter organization
structure.
Leadership style is the combination of attitude and behavior of a leader, which leads to
certain patterns in dealing with the followers (Dubrin 2004). It is the result of the philosophy,
personality and experience of the leader. There are several leadership styles such as:
autocratic, bureaucratic, charismatic, democratic, participative, situational, transformational,
transactional and laissez faire leadership (Mosadeghrad, 2003a). Leadership style has been
the deciding factor of more than one facet of employee behavior in organizations.
2.2.2 Leadership vs. Management
Leadership and management are considered to be overlapping concepts and are often
confused. According to Kotter (1999) leadership and management are two concepts which
are unique and matching systems of action. He distinguished different main factors where
these concepts have complementary actions (Kotter, 2009).
These are:
Leadership involves the development of a vision of the future, having a sense of

direction. Leaders have to clarify the big picture and set strategies (Northouse, 2007).
Management uses management processes, like planning and budgeting, to set the
direction for the organization;
Management is the development of the ability to realize plans in organizations by

creating an organizational structure. Leaders however align people and share the new
direction, they communicate goals, seek commitment and build teams and coalitions
(Northouse, 2007);
Motivation and inspiration of people are important characteristics of leadership which

make sure that the organization keeps moving in the right direction. They satisfy
unmet needs and empower followers.
Although both, leadership and management are needed in an organization this study focuses
on leadership as an independent variable because setting direction, alignment, motivation and
inspiration of people (Kotter, 2001) is needed to keep employees satisfied and committed to
the organization. These are the qualities of leaders, thus the focus on leadership style.
Leadership considers follower feelings while management has a more controlling manner of
getting things done.
2.2.3 New Approach to Leadership
Relationships between supervisors and their employees are different now. Leaders now do
not depend as much on their legitimate power to convince people to do as they are told but
they participate in an interaction with their employees or they widen and raise the interest of
their employees (Northouse, 2007).
Based on the new approach to leadership, there are two contemporary leadership styles which
will be researched namely (Bass, 1990):
1. Transactional leadership motives and directs followers by appealing to their own self
interest. The focus is on basic management processes like controlling, organizing and
short-term planning. This style is more responsive and deals with present issues. It also
relies on inducement of rewards, punishment and sanction for unacceptable performance
and the ability of the leaders to motivate followers by setting goals and promising rewards
for the desired performance.
An exchange takes place between leaders and followers to achieve the desired
performance. These exchanges involve four components of Transactional Leadership
namely (Bass, 1990; 1999):
Contingent Reward (CR): Leaders explain their expectations, provide the needed
resources, set shared goals and link them to various rewards for doing well;
Management by Exception Active (MBEA): Here leaders specify rules and

standards. Furthermore they observe the work of the employees, watch for
deviations and take corrective actions when mistakes or errors occur;
Management by Exception Passive(MBEP): Leaders do not intervene until

problems occur, they wait for things to go wrong before they take action;
Laissez-Faire (LF): The leader renounces responsibility and avoids making

decisions which leaves the employees without direction.
10
2. Transformational leadership anticipates future trends, inspires to understand and

embrace new possibilities and builds the organization into a community of challenged and
rewarded learners. This style also develops others to be leaders or to be better leaders. Its
focus is on being proactive, expecting nothing in return, inspiration and motivation of
followers to work for goals that go beyond their self- interest. Learning opportunities are
created and followers are stimulated to solve problems. The leaders develop strong
emotional bonds with their followers and they posses good visioning and management
skills.
This leadership style has four components which are (Bodla & Nawaz, 2010; Robbins,
2005):
Idealized Influence (II): Leaders act in such a way that they can be perceived as
role models by the people they lead. They are admired, respected and trusted.
These leaders are willing to take risks and they are described by followers as
having exceptional capabilities, being persistent and determined. They have high
ethical and moral standards and can be trusted to do the right thing.
Inspirational Motivation (IM): These leaders arouse the team spirit and show
enthusiasm and optimism. They involve followers in defining the desired future
state of affairs which creates commitment to the goals and the shared vision.
Intellectual Stimulation (IS): The transformational leaders stimulate their

followers to be creative and innovative by creating an environment in which they
are forced to think about old problems in new ways. Mistakes are not publicly
criticized.
Individualized Consideration (IC): The leaders act as mentors and coaches. Twoway communication is regular and differences are accepted. They respect
individual desires and needs. They also delegate different tasks to develop
follower skills.
2.3
Organizational culture
Organizational culture is a complex phenomenon (Dubkvis & Barbars, 2010). This concept
can be very broad and take on many aspects. While conducting research the researcher can
come across many definitions of organizational culture. However many define organizational
culture as a value system which determines attitude (Schein, 1985, 1990; Peters & Waterman,
1982).
11
The most popular organizational culture definition was given by Edgar Schein (1985). He
defined organizational culture as (a) a pattern of shared basic assumptions, (b) invented,
discovered, or developed by a given group, (c) as it learns to cope with its problems of
external adaption and internal integration, (d) that has worked well enough to be considered
valid and, therefore (e) is to be taught to new members as the (f) correct way to perceive,
think and feel in relation to those problems. Schein (1990) and Daft (2005) discussed that
there are three levels of culture manifestation namely:
1. The observable values (artifacts): this is the level that can be observed, the visible
organizational structures and processes. This level is still hard to understand;
2. The espoused values: on this level an image of the organization is created. The strategies,
goals and philosophies are formulated through answered certain questions, to create that
image;
3. Basic underlying assumptions: these are deep beliefs which form the essence of culture.
In this research the following definition for organizational culture will be applied:
Organizational culture is the shared understanding of the beliefs, values, norms and
philosophies of how things work (Wallach, 1983)

According to Wallach (1983) another way to analyze culture is by dividing culture into three
categories namely: (1) Bureaucratic, (2) Innovative or (3) Supportive cultures.
A bureaucratic culture is a very organized and systematic culture based on power

and control with clearly defined responsibilities and authority. Organizations with this
culture are mature, stable, structured, procedural, hierarchical, regulated and poweroriented;
An innovative culture has a creative, result oriented, challenging work environment

and is portrayed as being entrepreneurial ambitious, stimulating, driven and risktaking;
A supportive culture displays teamwork and is a people-oriented, encouraging, and

has a trusting work environment. This culture is open harmonious, trusting, safe,
equitable, sociable, humanistic and collaborative.
Wallach (1983) also stated that an employee is more effective in doing the assigned job and
realizes his or her full potential when the individual motivation and the organizational culture
match. This is very important in recruiting, managing, motivating developing and retaining
employees.
12
2.4
Job satisfaction
Job satisfaction has been a topic of interest among researchers for several decades (Currivan,
1999; Lund, 2003) due to the fact that many experts (managers and researchers) belief that it
can affect and influence work productivity, employee commitment, employee turnover and
employee retention (Eslami & Gharakhani, 2012). Job satisfaction is the level to which an
employee is satisfied with his current work. This depends on how many of his/her needs and
wants are satisfied (Finn, 2001). Job satisfaction is known as a construct with multi facets
that includes the employee feelings about different job elements, intrinsic as well as extrinsic.
It includes specific features of satisfaction associated with pay, benefits, supervision,
organizational practices, promotion, work conditions and relationships with co-workers
(Misener et al, 1996).
In this research the following definition for job satisfaction will be applied:
Job satisfaction is the extent to which people like (satisfaction) or dislike (dissatisfaction)
their jobs (Spector, 1997)

According to literature job satisfaction is influenced by several factors. Worrell (2004)
divided these factors into three groups:
Demographic data: age, gender and race;
Intrinsic factors: achievement, recognition, work itself, responsibility, advancement

and growth;
Extrinsic factors: company policy, supervision, relationship with boss, work

conditions, relationship with peers and salary.
In this research the focus will be on the five factors of job satisfaction which are salary (pay),
work itself (nature of the work), supervision, advancement and growth (promotional
prospects), relationship with peers. These factors correspond with the feelings, like or dislike
of their jobs, mentioned in the definition and are relevant to determining the level of
commitment to an organization. Furthermore research (Randeree & Chaudhry, 2012) showed
that these factors strongly affect job satisfaction. Employees who feel satisfied with their job
are more productive and are likely to stay with the organization (Mc Neese-Smith, 1997).
2.5
Organizational commitment
Organizational commitment is an individuals psychological attachment to the organization.

The individual feel a sense of belonging and identification with the organization.
13
This adds to their desire to achieve the goals of the organization and their motivation to
remain with the organization (Raju & Srivastava, 1994).
Organizational commitment has also been defined as the belief of an employee in the goals
and values of an organization and the aspiration to stay with that organization (Mowday et al
1982). Robbins (2005) also had a similar definition of organizational commitment, the
condition where the employee identifies with the organization and its goals and desires to
continue being a member of that organization.
In this research the following definition for organizational commitment will be applied:
Organizational commitment is a strong belief in and acceptance of the organizations goals and
values; a willingness to exert considerable effort on behalf of the organization; and a strong desire
to maintain membership in the organization (Mowday, Steers, & Porter, (1979)
Initially organizational commitment was conceptualized as a one-dimensional construct but it

is now known as multi dimensional. Porter et al (1974) stated that organizational commitment
contains 3 components which are:
Value commitment: employees trust, accept and commit to the goals and values of the
organization;
Effort commitment: employees display a high degree of effort to an organization;
Retention commitment: employees want to continue being a part of the organization.
According to Porter et al (1974) and Mowday et al (1982) the degree of organizational and
managerial collaboration an employee feels, their participation in decision making, the
leadership style and organizational culture influence whether an employee has high or low
organizational commitment.
2.6
Small and Medium-sized Enterprises
Small and medium-sized Enterprises (SMEs) are the backbone of many economies because
they account for close to 95% of all firms and also play an important role in employment.
These enterprises need to invest, produce innovative product and operate efficiently and
effectively to maintain their position and ensure that their business activities have added
value.
14
2.6.1 General definition of SMEs

The majority of businesses in any country are SMEs. They have become the driving force
responsible for growth and development.
SMEs are defined as non- subsidiary, independent firms which employ less than a given
number of employees2. This number may vary from country to country.
Various countries and regions apply different criteria for the definition of SMEs because they
have different levels of development, inhabitant size or average business size. The criteria
used in the definition of SMEs are:
1. Number of employees;
2. Amount of yearly sales;
3. Amount of total assets;
4. Amount of total revenues.
The International Labor Organization (ILO) only uses the number of employees in
categorizing enterprises in the different sectors. This is done because there is no official
definition of SMEs. The following categories are specified:
Micro-enterprise: 1 to 5 workers (full- or part-time)
Small-enterprise: 6 to 20 workers (full- or part-time)
Medium-enterprise: 21 to 50 workers (full- or part-time)
Large-enterprise: 51 or more workers (full- or part-time)
In Suriname the criteria for SMEs commonly used is the number of employees. The
categorization, according to the Suriname Trade and Industry Association (VSB) is as
follows:
Micro-enterprise: 1 to 10 workers (full- or part-time)
Small-enterprise: 10 to 25 workers (full- or part-time)
Medium-enterprise: 26 to 100 workers (full- or part-time)
Large-enterprise: 101 or more workers (full- or part-time)
This research is done in the Surinamese context which is why the definition of the VSB is
used. It is important to work with a definition formulated by Surinamese authorities because
the inhabitant size, the average business size and the level of development differs from other
countries
2
OECD Policy Brief: Small and Medium-sized Enterprises: Local Strength, Global Research, June 2000.
15
2.7
Relationship between the variables
Figure 2.1 presents a summary diagram of the proposed causal model for the prediction of
organizational commitment from the concepts: leadership style, organizational culture and
job satisfaction. The model specifies the role of job satisfaction as a mediator of the effect
that leadership and organizational culture have on organizational commitment. In this section
the basis of the proposed conceptual framework is presented and the hypotheses regarding the
relationships between the variables are specified.
Leadership style
Job
Organizational
Satisfaction
commitment
Organizational Culture
Figure 2-1 Proposed Conceptual Framework
2.7.1 Job satisfaction and Leadership styles

It is important for an organization to function efficiently and effectively. Leadership and job
satisfaction play an important role in creating and maintaining the effectiveness of an
organization.
The relationship between leadership style and job satisfaction received a lot of attention in
research, however, findings were mixed (Yousef, 2000). Understanding this relationship may
help to reveal underlying causes of satisfaction or dissatisfaction with the job. Strategies
could be developed to improve overall job satisfaction among employees. Different aspects
of the leadership styles could lead to satisfaction. Many suggest that the leadership style
needs to adapt to the situation in order to reduce dissatisfaction of employees. Research also
indicates that if the employees trust their leader, it leads to positive outcomes for the
organization due to the reflection of the attention that leaders give their employees on the
employees positive attitude towards work and the conditions within the work environment.
The response of employees to their leaders will generally rely on the characteristics of the
employees as well as that of the leaders (Wexley & Yukl, 1984).
16
Job satisfaction is affected by the internal organization environment, which includes

organizational climate, leadership styles and personnel relationships (Seashore & Taber
1975). The quality of the leader-employee relationship or the lack thereof - has a huge
affect on the employees sense of worth and job satisfaction (Chen, Spector& Jex 1991).
Employees are more satisfied with leaders who are thoughtful and encouraging than with
those who are either indifferent or judgmental towards employees (Yukl, 1971). Negative
leader-employee relations decrease productivity and increase absenteeism and the intention to
leave the organization can be high (Ribelin, 2003).
Transformational leadership style reduces work stress and increases employee morale. This
leadership style moves employees to achieve more than is expected. Having a good
connection with employees and having a clear vision plays an important role in attaining
positive results from employees (Bass & Avolio, 1990; Shamir, 1995). Researchers (Smith&
Peterson, 1988; Mohammad et al, 2011) belief that certain qualities a transformational leader
has produce satisfied employees. Transformational leadership is found to be positively related
to job satisfaction.
Transactional leaders however only reach their expected outcomes when they offer rewards
or other incentives in return (Bass & Avolio, 1990). This leadership style is negatively related
to job satisfaction.
According to Robbins (2003), less employees leave with transformational leadership than
with transactional leadership. Hence the hypotheses for Leadership:
H1: Transformational leadership has a positive effect on Job satisfaction in SMEs
H2: Transactional leadership has a negative effect on Job satisfaction in SMEs.
2.7.2 Job satisfaction and Organizational Culture
Organizational culture evolves slowly over time and has a powerful influence on behavior
within an organization (Slocum and Hellreigel, 2007).Every organization has a predefined
culture which makes the way employees behave vary from a positive to a negative attitude
towards their jobs. Understanding the basics of culture is necessary to understand official and
unofficial behavior of employees. According to Wallach (1983) individual outcomes, like job
satisfaction, depend on the match between an individuals characteristics and the
organizations culture. An employee can be more effective in his/ her current job when the
culture is appropriate to the business and a certain level of job satisfaction is reached. The
bureaucratic culture is based on power and control which makes it difficult for some
17
employees to be satisfied because they are for example achievement motivated. These
employees are driven to improve their personal performance and not by doing everything in a
regulated and ordered way (Wallach, 1983).
The following relationships between organizational culture, Individual motivators and job
satisfaction can be concluded:
Table 2-1 Relationship between Culture, motivators and Job satisfaction
Individual motivator
Job Satisfaction
Bureaucratic Culture
Need for Power and Control
Supervision
Innovative Culture
Need for Achievement
Promotion
Supportive Culture
Need for Affiliation
Coworkers
From: Wallach 1983- Individuals and Organizations: The culture match
The table describes the fact that an employee is more efficient in doing the job and will have
a greater chance for advancement or being part of the whole when a match exists between
culture and motivation. This ultimately results in job satisfaction. When an organization has a
bureaucratic culture, which is based on power and control, the connection is made with the
factor supervision of job satisfaction. Literature (Rashid et al, 2003; Lok & Crawford, 2000,
Brewer, 1993; Kratrina, 1990; Wallach, 1983) suggests that bureaucratic culture has a
negative effect on job satisfaction, because the need for power and control, often has a
negative effect on the satisfaction level of employees. Supervision, in a bureaucratic culture,
is than mainly power oriented and when that power is used to control and dominate
subordinates it is often seen as negative (Wallach, 1983). The other two culture aspects are
positively related to job satisfaction because they are experienced as being good work
motivators with their motivation to develop personal performance and to be with others,
enjoying shared friendships.
Therefore the following hypotheses were formulated:
H3: Bureaucratic culture has a negative effect on Job satisfaction in SMEs.
H4: Innovative culture has a positive effect on Job satisfaction in SMEs.
H5: Supportive culture has a positive effect on Job satisfaction in SMEs.
18
2.7.3 Organizational commitment and Job satisfaction

According to Meyer et al. (2002), job satisfaction is a determinant of organizational
commitment. Job satisfaction and organizational commitment focus on the feelings and the
thoughts employees have towards their work and the organization. The key difference
between organizational commitment and job satisfaction is that while organizational
commitment can be described as the emotional reaction which an employee has about his
organization; job satisfaction is the responses that an employee has about any job. It is
believed that these two variables are highly interconnected. In other words, while an
employee has positive feelings towards the organization, its values and objectives, it possible
for him to be unsatisfied with the job he has in the organization. Researchers taking this
position believe that employee orientations about a specific job inevitably precede
orientations toward the entire organization. Typically, researchers have coupled this view
with a corollary assumption that compared to organizational commitment, job satisfaction
varies more directly and instantaneously with changing working conditions (Mowday et al.,
1982). The relationship between job satisfaction and organizational commitment is very
important at the moment because now people often do not wish to continue working for the
same organization for longer periods of time. It is difficult to influence employees to continue
working for the organizations. Similarly, if employees are highly satisfied with their work,
coworkers, pay, and supervision, the probability is higher that they are committed to the
organization than if they are not satisfied. These two key concepts are very important because
job satisfaction and commitment are the main determinants of employee turnover,
performance, and productivity (Opkara, 2004). Committed and satisfied employees normally
have a high performance which contributes towards organizational productivity (Samad,
2007). Therefore the following hypothesis is formulated:
H6: Job satisfaction has a positive effect on Organizational commitment
2.7.4 Organizational Commitment and Leadership style
Prior research suggested that leadership is a key determinant of organizational commitment
(Mowday et al, 1982). In particular transformational leadership is positively linked with
organizational commitment (Bono & Judge, 2003; Dumdum et al., 2002; Koh, Steers, &
Terborg, 1995; Lowe et al., 1996; Walumbwa & Lawler, 2003). Leaders with this leadership
style includes employees in the decision making process, they encourage them to be critical
and use different approaches to solving problems and they recognize and appreciate the need
19
of each employee to develop their own potential (Avolio, 1999; Bass & Avolio, 1994;
Yammarino, Spangler & Bass, 1993).Transformational leaders provide mission and vision;
enhance the sense of belonging and devotion so that employees want to stay a member of the
organization. This makes them eager to put in effort for achieving the goals of the
organization. This results in involvement of employees in their work and high organizational
commitment. Transactional leaders however use rewards to influence employee behavior to
their benefit at low costs or they have a total disregard for what happens in the organization
and do not feel responsible for anything, which often result in dissatisfaction of the
employees. Hence the hypothesis:
H7: Transformational leadership has a positive direct impact on Organizational
commitment
Transformational
leadership
H1
H7
Transactional
H2
leadership
Job satisfaction
H6
Organizational
Commitment
Bureaucratic
H3
culture
H4
Innovative culture
H5
Supportive
Culture
Figure 2-2 Conceptual Framework specifying the variables and the research Hypotheses
20
3
3.1
METHODOLOGY
Introduction
The literature related to organizational culture, leadership, job satisfaction and organizational
commitment has been reviewed in the previous chapter. This chapter will give the reader a
clear view of how this research was carried out. The philosophy, design and the different
instruments used for collecting data are described in sections 3.2, 3.3 and 3.4. Furthermore
the selected population and sample size are given in section 3.5. Finally the data analysis
method and the statistical techniques used in this study are presented in section 3.6.
3.2
Research Philosophy
There are several general orientations about the nature of research and on how to execute
different studies (Creswell, 2003). The nature of this research can be categorized as
positivism. In this type of research a theory is developed, data is collected which either
supports or contests the theory, necessary revision is done and the theory is tested again.
Positivism is when the researcher adopts the position of a philosopher, works with available
data and the observable reality (de Bono, 2012). Positivism is the best suitable research
approach because in this research the reality is observed and described from an objective
viewpoint without interfering with the variables being studied. The researcher relies on the
respondent to provide truthful data. Research objectivity is achieved through a strict
methodology, where the data ensures that there is a distance between the subjectivity of the
researcher and the objectivity of the reality which is studied (Cohen & Crabtree, 2006).
Based on theory the hypotheses were formulated (deductive approach). Through a
questionnaire the real situation was explored (quantitative data) and the data was analyzed.
3.3
Research design
The research design identifies the method of data gathering, which instruments are used, how
they are dealt with and how the gathered information is arranged and analyzed.
The intention of this study is to analyze the effect that organizational culture and leadership
style (independent variables) have on organizational commitment (dependent variable) within
Small and Medium sized Enterprises. Job satisfaction, as a mediating variable, could change
the impact that the independent variables have on the dependent variable.
21
A descriptive and quantitative research approach was deemed appropriate to gather the
primary data and attend to the research questions. Descriptive research determines and
reports the way things are. This choice was made because this research involves investigating
possible relationships among two or more variables and collecting data to test hypotheses.
The variables are measured once through a survey where the opinions of the respondents are
illustrated.
3.4
Questionnaire design and measures
Questionnaires assist in gathering information for analyses. Every respondent faces the same
questionnaire with standardized questions and format. This makes measurement accurate and
guarantees the collection of comparable data.
The questions are designed to be clear and easy to understand. The questionnaires include
items to measure the different variables of the research model.
Specification of the required information is the first step in choosing an appropriate
questionnaire. The different variables are identified through the research questions, the
research objectives, the hypotheses and the exploratory research done for the literature
review. The questionnaire is then chosen in accordance with the selected definition for the
variables used in the research.
When designing a good questionnaire, questions must be clear and communicate the desired
information to the respondents. Double barreled questions, embarrassing questions and bias
words within the questions should also be avoided.
The questionnaire is based on the English version of the different instruments, so it had to be
translated to Dutch.
3.4.1 Survey administration
Primary data can be collected through different methods namely mail surveys, telephone
surveys, self-administered surveys, personal interviews, focus groups, observations etc.
Choosing the proper method to administer the questionnaire depends on the research
objectives and the restrictions.
The choice for a self-administered survey in this study was based on the advantages and
disadvantages of the different methods and also on the research question and objectives.
Survey research through a self-administered questionnaire was the best choice for this
research which investigates variables which cannot be directly observed. More than one
variable could be studied at one time in a realistic setting and it is also possible to collect
22
large amounts of data. In a self-administered survey the respondents answer the questions
directly on the form without the interaction of an interviewer. They complete the form on
their own, in their own time and pace.
The respondent is therefore assured of anonymity and privacy which can increase the
probability of honest answers to the questions.
3.4.2 Reliability and validity
In order for results to be usable in further research steps they must be reliable and valid.
Reliability is when a measure gives the same outcome, under the same circumstances even
when it is measured at different points in time.
A qualitative pilot survey is carried out within a small sample of 10 respondents to identify
and eliminate possible problems in the questionnaire. There were different reasons that lead
to leaving out some questions. The reliability was tested after the survey was conducted.
Gliem and Gliem (2003) (from George and Mallery, 2003:p.231) provided the following rule
of thumb for the Cronbachs alpha>.9 excellent, >.8 good, >.7 acceptable, >.6 questionable,
>.5 poor and <.5 unacceptable.
Validity is the degree to which the test measures what it is supposed to measure. The
questionnaire should be in line with the definition used in the research. When a measure is
reliable and valid the results can be correctly utilized and understood.
3.4.3 The questionnaire and measurement scale
An integrated questionnaire combining instruments of the different variables and
demographic questions was developed for this research. The questionnaire consists of five
parts which are:
1. Leadership style;
2. Organizational culture;
3. Job satisfaction;
4. Organizational Commitment;
5. Demographics (like gender, age, level of education, job title, and monthly salary).
After thoroughly describing the theory about the concepts, organizational culture, leadership,
job satisfaction and organizational commitment, the appropriate instruments were recognized
and used in this research. They were as follows: the Multifactor Leadership Questionnaire
(Bass and Avolio, 2000), Organizational Culture Index (Wallach, 1983), Job satisfaction
23
Survey (Spector, 1994), Organizational Commitment Questionnaire (original: Porter, Steers,

Mowday & Boulian, 1974 and revised Mowday, Steers & Porter, 1979).
Multifactor Leadership Questionnaire (MLQ)

This questionnaire was developed by Bass and Avolio (2000) and has been used in studies to
establish the leadership style used in organizations. Respondents were asked to rate the
leadership style of the managers with the next highest position to their own. The
questionnaire contains 45 items of which 36 statements determine the key characteristics of
leadership behavior.
From this number 8 were removed after the qualitative pretest due to problems with
understanding the questions mentioned by pretest respondents. Some of these statements
were:
1. Shows that he /she is a firm believer in if it aint broke, dont fix it. Most of the
pretest respondents did not know this expression. I had to explain what was meant by
this expression and this explanation would not be possible during the selfadministered questionnaire;
2. Emphasizes the importance of having a collective sense of mission. The pretest
respondents did not know the mission of the company. It was not communicated to
them. One knew the mission, but he was an upper level manager.
In the combined instrument 28 items were used to rate leadership style. Some of these items
were: Acts in ways that build my respect, Keeps track of all mistakes and Expresses
satisfaction when I meet expectations.
The MLQ has a scale of 1 to 5 with 1 indicating a not at all rating of the statement and the
other end of the scale 5 indicating a frequently if not always rating for the statement (Bass
& Avolio, 2005).
The Cronbachs alphas found in this research and the original study, for the Multifactor
Leadership Questionnaire were:
Table 3-1 Cronbachs Alphas for Leadership style
Leadership style
Alphas MLQ 5x short form
Alphas this research
Transformational leadership
0.74
0.76
Transactional leadership
0.83
0.72
Source: Generated by the researcher
24
Organizational Culture Index (OCI)

To measure organizational culture the Organizational Culture Index of Wallach (1983) was
used to determine the culture profile of the organization. Wallach classified organizational
culture as bureaucratic, innovative and supportive cultures. This instrument was also
downsized from a 24 item instrument to an 18 item instrument after pretest respondents had
trouble understanding and interpreting some of the words in the original instrument. Some of
the words left out were:
1. Sociable: the pretest respondents could not rate the organization on this word because
they did not think it was appropriate for rating an organization;
2. Equitable: they did not know what the word meant. A lot of explaining was needed
for this word;
3. Driving: this word was misinterpreted by 9 of the 10 pretest respondents.
Other words which were included in the questionnaire to describe the respondents their
organization were: risk taking, structured and challenging. The OCI has a scale of 1 to 5 with
1 indicating a not at all rating of the statement and the other end of the scale 5 indicating a
frequently if not always rating for the statement.
The original questionnaire had a 4-point Likert scale which forced the respondent to make a
choice (Wallach, 1983). But the questionnaire format with a 5-point Likert scale of this
research left an opening for respondents who could not decide. The reliability values of the
original research and the current study were:
Table 3-2 Cronbachs Alphas for Organizational culture
Alphas of the OCI
0.71
0.70
Innovative Culture
0.87
0.72
Supportive Culture
0.77
0.64
The Cronbachs Alpha for Innovative Culture was .67. When assessing the reliability if one
item is deleted the highest possible reliability was .72 when item 1 was deleted. The item
which was deleted regarded the risk taking nature of the company. Innovation is better
described by the other statements like result orientation, stimulation, creativity, challenge and
enterprising.
25
For Supportive Culture the same procedure was followed and the highest possible reliability
when one item was deleted was .65. This Cronbachs Alpha was not changed because the
improvement was minimal.
Job Satisfaction Survey (JSS)

Measurement of job satisfaction was done with the Job satisfaction Survey of Paul Spector
(1994). Questions regarding the five main job satisfaction factors (Sempane et al 2002;
Kerego & Mthupha, 1997; Hutcheson, 1996; Robbins, 1993), pay, promotion, coworkers
nature of the work, supervision were chosen to test the job satisfaction level within the
companies. The pretest respondents also stated that these five factors mainly determined job
satisfaction, the other factors seemed far less important to them in the determination of job
satisfaction.
The instrument was thus downsized from 36 items to 20 items representing the five factors.
Some of the items included in the questionnaire were: I feel I am paid a fair amount for the
work I do, I like the people I work with. These were items regarding pay and coworkers.
The JSS has a scale of 1 to 5 with 1 indicating a strongly disagree rating of the statement
and the other end of the scale 5 indicating a strongly agree rating for the statement. The
alphas were as followed:
Table 3-3Cronbachs Alpha from job satisfaction
Job Satisfaction
Alphas of the JSS
Job Satisfaction
0.91

0.80
Organizational Commitment Questionnaire (OCQ)

Employee commitment was measured by the 15-item Organizational Commitment
Questionnaire (Mowday, Steers, and Porter, 1979), which has been used with a wide variety
of job categories (Mowday et al., 1979).
The two subscales, value commitment and commitment to stay, appear to differentiate
between the respondents' commitment to support the goals of the organization and their
commitment to retain their organizational membership.
The OCQ has a scale of 1 to 5 with 1 indicating a strongly disagree rating of the statement
and the other end of the scale 5 indicating a strongly agree rating for the statement. The
Cronbachs Alphas in the research using the original questionnaire and this study were:
26
Table 3-4Cronbachs Alpha from Organizational commitment
Organizational Commitment
Alphas of the OCQ
0.90

0.75
Also important in the design of a questionnaire is the response set-up for measurement. There
are four different levels of measurement: nominal, ordinal, interval and ratio (NOIR).
In the demographic part of this research the nominal scale was used and in the other 4 parts
the interval scale was used.
3.4.4 Data processing
After the questionnaires were collected, they were checked for completeness. Questionnaires
which were blank or extensively incomplete were barred from processing. From the
remaining questionnaires incomplete questions were incorporated as errors and coded with
99 during processing.
A total amount of 207 questionnaires were distributed and 197 (95.2%) were returned. Of the
197 returned questionnaires 7 were barred and 190 (91.8 %) were processed. The barred
questionnaires were example where more than 50% of the items were not answered or had 2
answers to one question.
3.5
Research population and Sample
With the purpose of testing the research hypotheses ten (10) companies which qualified as
SMEs in Paramaribo, were randomly selected and approached. Eight (8) of these companies
were willing to participate in the research. Due to lack of accurate statistics about the number
of SMEs in Suriname or within a particular sector, company data and other required
information, the researcher chose to select the companies randomly. The company owners
were first approached and in the first meeting the research was explained and some
information was collected about the company. This information was needed to determine if
the company was an SME.
The participating companies consisted of construction and production companies, electrical
companies, a pest control company, a printing company and a hardware store. SMEs have
certain characteristics which makes it possible for researchers to put different organization
types together when doing research.
27
These companies had the following characteristics in common:

1. They have a flat organizational structure which means a smaller management top and
a broader base with operational and administrative personnel;
2. They had similar managerial styles: they have a smaller more independent
management;
3.6
Data analysis
The data gathered from the survey was analyzed in SPSS (Statistical Package for Social
Science) version 19. The following analyses were conducted:
Table 3-5 Analysis Overview
Reliability
Descriptive
Cronbachs Alpha
Frequency
Correlations
Descriptive
Multiple regression
3.7
Summary
Based on the kind of research that is done the research methodology is selected. The
approach used in this study was positivism-deductive approach. This type was considered as
the appropriate approach. The questionnaires were designed, tested and distributed within 8
SMEs. The later gathered questionnaires were analyzed on validity and completeness.
Furthermore various analyses such as frequencies, correlations, descriptive and regression
were performed with SPSS.
28
4
4.1
FINDINGS AND ANALYSIS

Introduction
In the previous chapter an explanation was given of the method used to gather the data within
the eight small and medium sized enterprises. In this chapter the data is statistically analyzed
and the results are presented in the different paragraphs. In section 4.2 different
characteristics of the respondents will be analyzed. In section 4.3, 4.4 and 4.5 the descriptive
statistics, correlation and regression are presented.
4.2
Sample population profile
Demographic information of sample population, 190 respondents, was gathered through

questionnaires. The figure below illustrates the gender distribution of 83% male and 17%
female respondents with a response rate of 98% for gender.
Gender
Male
0%
Female
17%
0%
83%
Figure 4-1 The gender response in % of the sample population
For job level (function) the largest group of respondents is operational level employees (67%)
and the smallest group is upper level management (8%). This was expected due to the earlier
mentioned flat organizational structure of SMEs. The response rate for job level was 93%.
29
Function
70%
60%
50%
40%
30%
20%
10%
0%
Operational(workfloor)
Administrative personnel
Supervisor
Manager (upper level)
Figure 4-2 Job level response in % of the sample population
The age division of the sample population shows that the majority of the respondents are
younger than 44 years (79%). And more than half of the sample population is younger than
34 years (54%). This means that the respondents are relatively young. The response rate for
age division was 98%.
34%
35%
30%
25%
16-24
25%
20%
25-34
20%
35-44
14%
15%
45-54
55-64
10%
>65
5%
5%
2%
0%
16-24
25-34
35-44
45-54
55-64
>65
Figure 4-3Age division in % of the sample population
30
Looking at the education level of the sample population it is striking that 88% only finished
the second part of secondary education (VWO or MBO).
The remaining 12% has a higher education level (HBO or University). The response rate for
education level was 96%.
Education level
7%
5%
26%
primary education
16%
Mulo
VWO
13%
MBO
HBO
33%
University
Figure 4-4 The education level in % of the sample population
In the salary division, as can be seen in the figure below 75% of the sample population, earns
less than SRD 2000 a month. Only 5% earn twice as much or more than the earlier mentioned
75%. The response rate for salary division was 98%.
Salary division
61%
70%
60%
<949
50%
950-1999
40%
2000-2799
30%
20%
10%
14%
11%
8%
2800-3999
3%
0%
3%
4000-5999
>6000
Figure 4-5 The monthly salary in % of the sample population
31
In the next figure tenure of the respondent is illustrated. More than half of the respondents
(55%) have 5 or less years of service with the company. 12% is working longer than 15 years
for the same company. The response rate for years of service was 99%.
Tenure
44%
45%
40%
35%
28%
30%
<1 year
25%
1-5 years
20%
6-10 years
15%
12%
11%
10%
11-15 years
>15 years
5%
5%
0%
<1 year
1-5 years
6-10 years
11-15
years
>15 years
Figure 4-6 Tenure in % of the sample size
32
4.3
Descriptive statistics
The main characteristics of the data are quantitatively described in the descriptive statistics.
In the descriptive statistics summaries about the sample population responses are provided.
The mean, median, mode, minimum, maximum, the standard deviation and the skewness in
relation to the independent, dependent and mediating variables are presented in the table
below.
Table 4-1Independent, Dependent and Mediating variables with the mean, median, mode, standard deviation and
skewness
No
Variable
No of
Min
Max
Mean
Median
Mode
STD
Measures
Skewness
Independent Variables
1
Transformational
15
3.92
4.00
4.00
.68
-.68
Transactional
13
3.80
4.00
4.00
.70
-.21
Bureaucratic
3.97
4.00
4.00
.68
-.60
Innovative
4.06
4.00
4.00
.59
-.33
Supportive
4.09
4.00
4.00
.55
-.15
20
3.59
4.00
4.00
.70
-.29
15
3.84
4.00
4.00
.54
-.30
Mediating variable
6
Job Satisfaction
Dependent variable
Source: Calculated with the researchers survey data
The descriptive statistics show that the average respondent is satisfied with their job and that
they are committed to their organization.
In the following sections the inferential statistics analysis will be conducted with parametric
tests. This method was chosen after the conclusion that the distribution of the observed data
was fairly similar to a normal distribution.
33
4.4
Correlation
Correlation determines whether and how strong pairs of variables are related. The correlation
analysis can lead to greater understanding of your data. To know whether there is a
correlation between the variables and what the level is of the linear relationship between the
variables, the Pearson R correlation coefficient was examined. This coefficient indicates the
direction and the strength of a linear relationship between two variables. The Pearsons
correlation coefficient (r) can vary from -1 to +1. The larger the value, the stronger the
relationship. A coefficient of +1 indicates a perfect positive relationship and a coefficient of 1indicates a perfect negative relationship. 0 indicates that there is no linear relationship
between the variables (Field, 2009).
The values for interpretation according to statistics are as follows (Pallant, 2007; Cohen,
1988):
Rho = .10 to .29 or -.10 to -.29 (small effect)
Rho = .30 to .49 or -.30 to -.49 (medium effect)
Rho = .50 to 1.0 or -.50 to -1.0 (large effect)
To test the hypotheses the p-value was computed. The p-value measures the support (or lack
thereof) given by the sample for the null hypothesis. Accepting or rejecting the null
hypothesis relies on the p-value, whether it is smaller than or equal to the significance level.
In this case the level of significance is .05. In the following table the correlation values are
presented.
34
Table 4-2 Correlation Matrix

Correlations
1
Transactional Leadership
Transformational Leadership
.383**
3
4
Innovative Culture
.247
.324**
.294
**
.408
**
.516**
.299
**
**
.536**
.182
Job Satisfaction
.026
.254**
.321**
.239**
.287**
-.018
**
**
**
**
.488**
-.099
8
9
10
11
12
13
gender
function
age
education
salary
Tenure
-.225
**
-.086
-.249
**
-.187
-.140
-.119
10
11
12
13
.322
-.133
.033
-.038
-.094
.064
.052
.383
Supportive Culture
**
.308
-.226
**
-.212
**
-.119
-.287
**
-.153
-.135
.323
-.147
.038
.017
.368
.149
-.036
-.126
.055
.043
-.061
.192
.013
-.159
.034
-.067
.007
.208
**
-.049
1
-.058
**
.282**
-.016
.377**
.192
**
**
.751
**
.413
**
.749
**
.234
.183
.094
.413
.155
.067
.183
1
.099
.563
**
.534**
.616
**
-.060
.446**
**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).
35
4.5
Regression Analysis
In the previous section the focus was on measurement of the relationships between the
variables. Here the research is taken a step further. In regression analysis we fit a model to
our data and use it to forecast the value of the dependent variable from the one or more
independent variables. This research uses multiple regression analysis (more than one
predictor) to determine the value of the dependent variable.
To determine the influence of transformational leadership, transactional leadership,

bureaucratic culture, innovative culture and supportive culture on organizational commitment
the researcher conducted a regression analysis. The model for this research contains a
mediating variable which intervenes in the relationship between the independent and the
dependent variable, the stepwise procedure developed by Baron and Kenny (1986) was used
to test for mediation of organizational commitment The following regressions were analyzed:
Step 1Leadership variable Transformational (independent, IV) and control variables
against Organizational Commitment (dependent, DV)
IV
DV
OC=Constant+1TF+2Gender+3Function+4Age+5Education+6Salary+7Service
Step 2 Leadership variables, Culture variables (independent, IV) and control variables
against mediating variable Job Satisfaction (M)
IV
DV
JS=Constant+1TF+2TA+3BC+4IC+5SC+6Gender+7Function+8Age+
9Education+10Salary+11Service
36
Step 3 Leadership variables, Culture variables (independent, IV), mediating variable (M) Job
Satisfaction and control variables against Organizational Commitment (dependent, DV)
IV
DV
OC=Constant+1TF+2TA+3BC+4IC+5SC+6JS+7Gender+8Function
+9Age+10Education+11Salary+12Service
Before the results of the regression analysis are given, the researcher will explain some
characters and terms by giving a simple definition.
Constant = the point where the value of the dependent variable relates to a value of zero for
the independent variables. At this point the regression line intersects with the X-axis in the
graph. The constant is the starting value of the outcome when there is no influence from the
predictors and the control variables (Field, 2009:199).
= the unstandardized regression coefficient which signifies the strength of the relationship
between a given predictor, I, and an outcome in the units of measurements of the predictors.
It represents the change in outcome connected with the unit change in the predictor (Field,
2009: 781).
R square = the coefficient of determination, a measure for how much of the variation in
outcome can be accounted for by the predictors (Field, 2009: 207).
Adjusted R square = a measure of the loss of predictive power or shrinkage in regression.

This value tells us how much variance in the outcome would be accounted for if the model
had been derived from the population from which the sample was taken (Field, 2009: 781)
37
4.5.1 Regression analysis Leadership style and Organizational Commitment

The regression of the leadership style, Transformational Leadership, with the control
variables on dependent variable, Organizational commitment, was performed first. The
results show that Transformational leadership, salary and tenure have a significant direct
effect on Commitment. In the table below the linear relationship between the variables is
shown. The equation for this model is:
OC = 2.438 + .273* Transformational - .112*Service + .285*Salary
Table 4-3 Regression coefficient Transformational leadership and Organizational Commitment
Unstandardized Coefficients
Model
1
(Constant)
2.438
Std. Error
.280
.273
.056
Gender
-.011
Function
Standardized
Coefficients
t
8.703
Sig.
.000
.339
4.886
.000
.117
-.008
-.097
.923
-.133
.071
-.250
-1.877
.062
Age
.049
.046
.108
1.053
.294
Education
.031
.043
.088
.730
.467
Salary
.285
.058
.591
4.887
.000
Tenure
-.112
.047
-.236
-2.389
.018
Transformational
Beta
In the model summary we find that 32.6% of Organizational Commitment can be accounted
for by transformational leadership, salary and tenure. The adjusted R square is .294.
Table 4-4 Model Summary Transformational leadership on Organizational Commitment
Model Summary
Model
1
R
.571a
R Square
.326
Adjusted R
Square
.294
Std. Error of
the Estimate
.45298
38
4.5.2 Regression analysis Leadership styles, Organizational culture and Job satisfaction
The second regression was executed with Leadership styles, Organizational culture (the
independent variables), the control variables on the mediating variable, Job satisfaction. The
results showed that Transformational leadership, Salary and Bureaucratic Culture have a
significant effect on Job satisfaction. The table below shows that there is a linear relationship
between transformational leadership, salary and bureaucratic culture on one side and job
satisfaction on the other side. The equation for this model is:
JS = 1.923 + .259*Transformational + .266*Bureaucratic Culture+ .342*Salary
Table 4-5 Regression coefficient Leadership styles, Organizational Culture and Job Satisfaction
Model
1
1.923
Std. Error
.602
.259
.087
Gender
-.147
Function
Standardized
Coefficients
t
3.193
Sig.
.002
.243
2.964
.004
.168
-.076
-.875
.383
-.124
.100
-.186
-1.243
.216
Age
-.090
.066
-.156
-1.351
.179
Education
-.030
.060
-.066
-.504
.615
Salary
.342
.082
.573
4.168
.000
Tenure
-.061
.064
-.103
-.954
.342
.266
.089
.266
2.979
.003
Innovative Culture
-.022
.116
-.019
-.190
.850
Supportive Culture
.042
.116
.035
.361
.719
-.117
.086
-.111
-1.364
.175
(Constant)
Transformational
Transactional
Beta
The R square value states that 30.9% of Job satisfaction can be credited to transformational
leadership, bureaucratic culture and salary. The adjusted R square value is .254.
Table 4-6Model Summary Leadership styles, Organizational Culture on Job Satisfaction
Model Summary
Model
1
R
.556a
R Square
.309
Adjusted R
Square
.254
Std. Error of
the Estimate
.59166
39
4.5.3 Regression analysis Leadership styles, Organizational culture, Job satisfaction and
The last regression involved the whole model with Leadership styles, Organizational Culture
(independent), Job Satisfaction (mediating), the control variables and Organizational
Commitment (dependent). The table showed that transformational leadership, salary,
bureaucratic culture, supportive culture and job satisfaction have an effect on Organizational
Commitment. The equation for the model becomes:
OC = .590 + .158*Transformational + .142*Bureaucratic Culture + .192*Supportive Culture
+ .209*Job satisfaction + .143*Salary
Table 4-7 Regression coefficient Leadership styles, Organizational Culture, Job Satisfaction and Organizational
commitment
Model
1
(Constant)
.590
Std. Error
.436
Transformational
.158
.061
Gender
.132
Standardized
Coefficients
t
1.355
Sig.
.178
.185
2.572
.011
.118
.085
1.118
.265
-.104
.068
-.195
-1.514
.132
Age
.086
.045
.189
1.908
.059
Education
.073
.040
.202
1.794
.075
Salary
.143
.060
.300
2.390
.018
Tenure
-.060
.044
-.127
-1.363
.175
.142
.063
.178
2.267
.025
Innovative Culture
.025
.079
.027
.320
.750
Supportive Culture
.192
.079
.198
2.423
.017
-.034
.059
-.040
-.570
.570
.209
.058
.263
3.595
.000
Function
Transactional
Job Satisfaction
Beta
The R square value found is that 50.9% of the organizational commitment can be credited to
Transformational leadership, bureaucratic culture, supportive culture, salary and job
satisfaction. The adjusted R square value is .466.
40
Table 4-8Model Summary Leadership styles, Organizational Culture, Job Satisfaction and Organizational
commitment
Model Summary
R
R Square
Model
1
.714a
.509
Source: Calculated with the researcher survey data
4.6
Adjusted R
Square
.466
Std. Error of
the Estimate
.39998
Hypothesis testing
The results from the regression analysis which were presented in section 4.5 are summarized
in the table below.
Table 4-9 Summary Regression Analysis
Model 1
Model 2
Model 3
2.438
1.923
.590
Organizational Commitment (DV)

Constant
Control variables
Gender
-.011
-.147
.132
Function
-.133
-.124
.104
Age
.049
-.090
.086
Education
.031
-.030
.073
Salary
.285
.342**
.143*
Tenure
-.112*
-.061
.060
.259**
.158*
Direct effect
Transformational Leadership
.273**
Mediating effect
Job Satisfaction
.209**
Indirect effect
Bureaucratic culture
.266**
.142*
Innovative culture
.042
.025
Supportive culture
-.022
.192*
Transactional leadership
-.117
-.034
.326
.309
.509
Adjusted R
.294
.254
.466
**p<0.01; *p<0.05
Source: Calculated with the researcher survey data
41
The table shows that transformational leadership has a direct effect on organizational
commitment. Furthermore it shows that only 2 of the 5 independent variables namely
transformational leadership and bureaucratic culture have an effect on Job satisfaction. So job
satisfaction can be seen as a mediating variable.
Contrary to expectation the bureaucratic culture has a positive effect on job satisfaction and
bureaucratic and supportive cultures have a direct effect on organizational commitment. The
relationships can be considered fairly weak. This model explains 50.9% of organizational
Commitment behavior. An overview of the research questions with their hypotheses is
presented below. Based on the results and formulation of the hypotheses the decision to
accept or reject the null hypothesis is made.
Table 4-10Overview Null and Alternative Hypotheses
Research Question 1
Hypothesis
Hypothesis 1
H0: Transformational Leadership has no effect on
Job satisfaction within SMEs
H1: Transformational Leadership has a positive effect on
Hypothesis 2
H0: Transactional Leadership has no effect on
H1: Transactional Leadership has a negative effect on
Research Question 2
Hypothesis 3
H0: Bureaucratic Culture has no effect on
H1: Bureaucratic culture has a negative effect on
Hypothesis 4
H0:Innovative culture has no effect on
H1: Innovative culture has a positive effect on
Hypothesis 5
H0: Supportive culture has no effect on
H1: Supportive culture has a positive effect on
P - value
Result
p = .004
= .259
Reject H0
Accept H1
p = .175
= -.117
Accept H0
Reject H1
p =.003
=.266
Reject H0
Reject H1
p =.850
=.042
Accept H0
Reject H1
p =.719
=-.022
Accept H0
Reject H1
42
Research
Question 3
Hypothesis 6
H0:Job satisfaction has no effect on Organizational
Commitment within SMEs
H1:Job satisfaction has a positive effect on Organizational
Commitment within SMEs
Research
Question 4
Hypothesis 7
H0: Transformational Leadership has no direct effect on
Organizational commitment within SMEs
H1: Transformational Leadership has a positive direct
effect on Organizational Commitment within SMEs
p =.000
=.209
Reject H0
Accept H1
p =.000
=.273
Reject H0
Accept H1
Looking at the hypothesized model, it becomes clear that certain relationships are not as was
expected. There are also new relationships found between the different variables. Another
noteworthy fact is that Bureaucratic Culture has a direct as well as an indirect effect on
Organizational commitment and the relationship is positive instead of negative. The
following figure shows the hypothesized model adjusted to the results of the regression
analysis.
43
Transformational
leadership
.273**
.259**
Transactional
leadership
NS
.209**
Job satisfaction
Organizational
Commitment
.143*
.342*
.266**
-.112*
NS
Salary
Tenure
Bureaucratic
culture
Innovative culture
.142*
.192*
Supportive
Culture
Figure 4.7 Model based on Regression Analysis
44
4.7
Summary
Different analyses were done in this chapter to test the formulated hypotheses. The first
analysis was the reliability test. The following test was the analysis of the demographics
gender, function, education level, age, salary and years of employment. There were 3 striking
results in the demographics. First the high percentage (79%) of young people among the
respondents, second the high percentage (88%) of people with secondary education as their
highest level of education and third the high percentage (75%) of respondent who earns less
than SRD 2000 a month.
In the descriptive statistics part of this chapter the mean, median, mode, minimum,
maximum, standard deviation and the skewness were calculated. Thereafter the different
steps executed in the multiple regression analysis were presented. These led to a few different
relationships than was predicted in the theoretical framework presented in chapter 2. The
hypotheses were tested and rejected or accepted and the model based on the results of the
regression analysis was presented.
45
5
5.1
DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

Introduction
The main goal of this research was to determine what type of Leadership style and
Organizational Culture keeps employees committed to their organization and if job
satisfaction had a mediating effect in this relationship. In this chapter the results are
discussed, conclusions will be drawn, an implication for theory and management and
recommendations will be given for future research.
5.2
Discussion and conclusions
Organizational commitment is has a big influence on the success of an organization and is

highly valued. Human resources are said to be the greatest asset of an organization. That
being the case than the commitment of human resources should be seen as the organizations
competitive advantage. To sustain that competitive advantage, organizations need to develop
a relationship with their employees. Nowadays the attitude of remaining with one employer
has decreased and cut backs are a frequent event. Employees with a higher level of job
satisfaction are less likely to be absent or to leave.
The main research question of this research was formulated as follows: How and why do
leadership style (Transformational, Transactional) and organizational culture (Bureaucratic,
Innovative or Supportive) affect organizational commitment in Small and Medium-sized
Enterprises, through Job satisfaction?
With this in mind an elaboration is given on the following results:
Transformational Leadership styles has a direct effect on Organizational Commitment

The results showed that there was a significant direct effect (p=.000, =.273) of
transformational leadership on the level of organizational commitment shown by employees.
The expected effect that transformational leadership would have on organizational
commitment was significant. The workforce within SMEs is usually not large which makes it
possible for leaders to be involved in tasks and consider employees individual needs,
capacities and ambitions. According to Glisson (1989) leadership explains a great deal of the
variation in Organizational commitment.
Transformational leadership has a direct effect on Organizational commitment because
commitment has been found to be directly dependent on behaviors of the transformational
leaders (Barling 1996).
46
Bureaucratic culture has a direct positive effect on with Organizational commitment

There was little empirical evidence, according to Lok and Crawford (2001), which suggested
that there was a direct effect from organizational culture on organizational commitment.
However for some characteristics of organizational culture, such as corporate beliefs and
values, a relationship was suggested (Harrison, 1972; Peter & Waterman, 1982; Trice &
Beyer, 1993). Still a direct effect for the different types of Organizational culture was not
predicted nor expected, because the researcher did not find significant literature about this
relationship. In the research of Lahiry (1994) a weak association between Organizational
culture and commitment was found. It is said that organizational culture is too abstract and
too far from most employees everyday activities within their organizational lives (Lok,
Wang, Westwood & Crawford, 2007). However the results from this research indicated that
there was indeed a significant direct effect from Bureaucratic (p=.025; =.142) on
Organizational commitment. The expectation was that the effect of this culture type on
organizational commitment was only mediated by job satisfaction. Another interesting
outcome was that the direct effect of bureaucratic culture was positive. Employees of SMEs,
of which the majority is operational, could also be comfortable in a bureaucratic environment
where everything is ordered, structured and procedure is well thought out. Authority in SMEs
is centered at the top, because the enterprises are usually privately owned and decisions are
made at the top. Information flows from the top down and this supports a culture which is
concentrating on rules and standards for operational processes. The processes are closely
monitored and supervised (Kemble, 2012).
Supportive culture has a direct positive effect on Organizational commitment

Research suggested that there was an effect of Supportive Culture on Job satisfaction
(Brewer, 1993; Lok & Crawford, 2000; Kratrina, 1990; Rashid et al, 2003), but not that there
could be a strong positive direct effect (p=.017; =0192) between Supportive Culture and
Organizational commitment. Being supported in everything you do, being able to work in a
team were people are helpful, they are friendly and fair (Lee, 2008) could be some of the
reasons why this result was found.
47
Transformational Leadership had a positive effect, through job satisfaction, on

All the effects of the independent variables on the dependent variable were expected to be
intervened by Job satisfaction. This however was not the case. Transformational leadership
had a significant effect (p=.004) on the mediator, but also had a direct effect on
Organizational commitment as was predicted. Transformational leadership models reduce
work stress and raise the morale of employees which result in the promotion of job
satisfaction (Bass & Avolio, 1990; Northouse, 2001 Waldman et al, 2001). Employees
perform beyond what is expected of them (Medley & La Rochelle, 1995).
Bureaucratic culture had a strong positive effect, through job satisfaction, on

Bureaucratic culture also had a highly significant relationship with job satisfaction (p=.003)
but it was a positive relationship instead of a negative one as was hypothesized. Research
done by Odom, Boxx and Dunn (1990) established that bureaucratic culture neither improved
nor reduced an employees commitment and job satisfaction. Another explanation could be
that there is a culture match between the employees and the organization as Wallach (1983)
discussed. The characteristics like clear lines of responsibility and authority, a solid,
regulated and ordered organization with efficient systems could be what employees want,
hence the positive effect of bureaucratic culture on job satisfaction and also on organizational
commitment.
The transactional leadership and the other culture type, Innovative culture, did not have a
significant relationship with the mediator, job satisfaction or with Organizational
commitment. Most SMEs do not have a research and development department, so job
satisfaction due to an Innovative culture is not likely to occur. On the other hand the control
variable salary division also has a highly significant positive effect (p=.000; =.342) on job
satisfaction. A high salary often, if not always, leads to a satisfied employee.
The direct relationship between Job satisfaction and Organizational commitment

Job satisfaction had a significant direct and positive effect on Organizational commitment.
When employees are satisfied they are most often also committed to the organization. In
literature job satisfaction is said to have the largest effect on commitment. In this research Job
48
satisfaction also has the largest effect on Organizational commitment when we look at the
regression of the whole model. This factor needs to be strengthened to enhance commitment
of the employees to an organization.
Salary division and Tenure had a significant direct positive effect on Organizational
Commitment
Salary division and years of employment (tenure), two of the control variables, also had a
significant direct effect on organizational commitment. Salary division has a positive direct
effect on commitment and tenure has a negative direct effect. This was also the case in earlier
research (Allen & Meyer, 1990; OReilly , Chatman & Caldwell, 1991) where employees
stated that if they get the pay they deemed fit for their supposed job input which includes
skills, effort, experience and present performance they would stay with the organization.
However it is striking that the longer some employees stay with a company the less
committed they get. One would think that the opposite is the case, the longer you work for a
company the more committed you are to that company.
The result that tenure has a negative effect could be attributed to the fact that employees only
stay with the organization because they have nowhere else to go to.
This could be the commitment for where employees stay with the organization because they
ought to; they feel obligated to stay (Allen and Meyer, 1991). A reason for this withdrawal
could be that front line employees get less satisfaction from their job as the years progress.
The work could have become monotonous to them because there were few training and
development programs available (Kemble, 2012).
5.3
Implications for Theory and Practice
The findings of this thesis research have implications for both theory and practice. All results
are discussed in the previous sections and conclusions are drawn. This section addresses the
reasons why this research is relevant for theory and practice.
Theoretical Implications
The theoretical importance is found in the fact that this research showed that certain
relationships are not always what theory has found. Every situation, organization, employee
and leader is different. Investigating the concepts alone and/or in different relationships with
other variables will result in greater understanding of organizational and employee behavior.
49
When conducting the research it became clear that the SMEs differ significantly from large
companies. The structure, the communication lines, how employees experience leadership
and their level of job satisfaction and commitment are all different.
Statistical and company information should be made available for students who want to do
research in the field of SMEs. The chamber of commerce should obtain and structure the
information which should be made available to everyone who wants use it for research
purposes. This study also is an addition to the few inquiries about organizational and
employee behavior in SMEs. Also the finding that Bureaucratic culture has a positive effect
on Job satisfaction and Organizational commitment as well as the framework conditions,
where this result was found, are of importance to theory.
Practical Implications
It is important to keep employees committed and retain their strengths and sustain
productivity, which guarantees the stability of an organization. SMEs are seen as the
backbone of the economy so they need to maintain active. The ability of to lead an
organization now has a lot of challenges and demands.
This study could offer a useful guidance for SMEs on the researched topics. Managers could
use the information to improve or change their leadership style and the culture of the
organization. Attention should be paid to the following specific results:
Tenure having a negative effect on Organizational Commitment. Employees need to

be trained, so that they have different opportunities. If an employee stays with the
organization because he feel obligated to stay it is not a healthy situation for any
party;
Bureaucratic culture having a positive effect on job satisfaction and Organizational

commitment. This is a surprising result and needs to be looked at carefully. The
employees within SMEs could want a structured and ordered environment to thrive in.
this makes them worry less about chance of not having a job tomorrow;
The other found effects were expected but still need to be looked at and improved or
changed if needed within the organizations.
50
5.4
Recommendations
Based on the results presented earlier in chapter 4 the following recommendations could be
made:
More studies should be conducted on organizational and employee behavior in SMEs.

This could improve this could improve the life span of the organization;
Further research should be conducted to other concepts that influence Organizational

Commitment. Leaders should realize that influencing the commitment of employees
leads to higher performance and lower turnover rates among other things.
Institutions, such as the chamber of commerce, central bureau for statistics, should
realize the need for specific and adequate information about SMEs. Establishing
countrywide recognized criteria for SMEs in Suriname and communicating those
criteria to those specific organizations;
Leadership in organizations should be assessed and managers should become aware

of what is needed to obtain positive results from employees in order to improve
performance.
51
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APPENDIX
Appendix A: Introduction of the researcher to the questionnaire respondent

Paramaribo, December 2012
Dear Participant,
I am Danielle Griffith-Kranenburg, a student at FHR Lim A Po Institute for Social
Studies in Paramaribo. In order to finish my study Master of Business Administration in
Management and Business Strategy, I need to conduct research.
My research is about the effect that organizational culture and leadership style have on
organizational commitment and what role job satisfaction plays in these relationships.
Your input is important to this research because it will help form an overall picture of
how employers can work towards having satisfied and committed employees.
This questionnaire is developed to gather information for the purpose of this research.
It will take an average of 20 25 minutes to fill it out. Your answers will be handled
strictly confidential and will exclusively be used for the purpose of this research.
Therefore I request you to answer the questions as honest and objective as possible in
order to contribute to the success of this research.
Many thanks for your time and support.
Danielle Griffith- Kranenburg BSc.
Appendix B: The Questionnaire
Part 1 Leadership
This part of the questionnaire is to describe the leadership style of your supervisor as you
perceive it. Please answer all items on the answer sheet. Judge how frequently each statement
fits the person you are rating. Use the following scale:
1= not at all
2= once in a while
3= sometimes
4= fairly often
5=frequently, if not always
Scale
My leader/Manager
1.
Provides me with assistance in exchange for my efforts
2.
Re-examines critical assumptions to questions whether they are

appropriate
3.
Fails to interfere until problems become serious
4.
Focuses attention on irregularities, mistakes, exceptions and

deviations from standards
5.
Avoids getting involved when important issues arrive
6.
Talks about their most important values and beliefs
7.
Is absent when needed
8.
Discusses in specific term who is responsible for performance

targets
9.
Waits for things to go wrong before taking action
10. Talks enthusiastically about what needs to be accomplished
11. Specifies the importance of having a strong sense of purpose
12. Spends time teaching and coaching
16. Acts in ways that build my respect
17. Considers the moral and ethical consequences of decisions
18. Keeps track of all mistakes
19. Displays a sense of power and confidence
20. Articulates a compelling vision of the future
13. Makes clear what one can expect to receive when performance
goals are achieved

14. Goes beyond self interest for the good of the group
15. Demonstrates that problems must become chronic before taking
action
Part 1 Leadership
21. Directs my attention towards failure to meet standards
23. Gets me to look at problems from many different angles
24. Helps me to develop my strengths
25. Suggests new ways of looking at how to complete assignments
26. Delays responding to urgent questions
27. Expresses satisfaction when I meet expectations
28. Expresses confidence that goals will be achieved
22. Considers me as having different needs, abilities and
aspirations from others
Part 2 Organizational culture

For each item identified below, circle the number that most closely describes how you see
your whole organization.
Use the scale below to select the quality number.
1=not at all
2 = once in a while
3 = sometimes
4 = most of the time
5 = frequently, if not Always
Scale
My organization is:
1.
Risk taking
2.
Collaborative
3.
Hierarchical
4.
Procedural
5.
Relationship - oriented
6.
Results - oriented
7.
Creative
8.
Encouraging
9.
Structured
10. Stimulating
11. Personal freedom
12. Safe
13. Challenging
14. Enterprising
15. Established, solid
16. Cautious
17. Trusting
18. Power - oriented
Part 3 Job satisfaction

For each item identified below, circle the number to the right that comes the closest to
reflecting your opinion about it.
Use the scale below to select the number.
1= disagree very much
2 = Disagree
3= Cant decide
4 =Agree
5 = Agree very much
Scale
On my present job this is how I feel about .
1.
I feel I am being paid a fair amount for the work I do
2.
There is too little chance for promotion on my job
3.
My supervisor is quite competent in doing his/her job
4.
I like the people I work with
5.
I sometimes feel my job is meaningless
6.
Raises are too few and far between
7.
Those who do well on the job stand a fair chance of being

promoted
8.
My supervisor is unfair to me
9.
I find I have to work harder at my job because of the

incompetence of people I work with
14. I enjoy my coworkers
15. I feel a sense of pride in doing my job
16. I feel satisfied with my chances for salary increases
17. I like my supervisor
18. I am satisfied with my chances for promotion
19. There is too much bickering and fighting at work
20. My job is enjoyable
10. I like doing the things I do at work

11. I feel unappreciated by the organization when I think about
what they pay me

12. People get ahead as fast here as they do in other places
13. My supervisor shows too little interest in the feelings of
subordinates
Part 4 Organizational Commitment
Part 3 Job satisfaction

Listed below is a series of statements that represent feelings that individuals might have
about the company or organization for which they work. Circle a number from 0 to 4
using the scale below.
1= Strongly disagree
2 = disagree
3= Cant decide
4 = agree
5 = strongly agree
Scale
Indicate your feeling about the organization you are working for
I am willing to put in a great deal of effort beyond which is
normally expected in order to help this organization be
successful.
2. I talk up this organization to my friends as a great
organization to work for.
1.
3.
I feel very little loyalty to this organization. (R)
4.
I would accept almost any type of job assignment in order to

keep working for this organization.
5.
My values and the organizations values are very similar.
6.
I am proud to tell others that I am part of this organization.
7.
I could just as well be working for a different organization as

long as the type of work was similar. (R)
This organization really inspires the very best in me in the
way of job performance.
It would take very little change in my present circumstances
to cause me to leave this organization. (R)
I am extremely glad that I chose this organization to work for
over others I was considering at the time I joined.
Theres not too much to be gained by sticking with this
organization indenitely. (R)
Often, I nd it difficult to agree with policies on important
matters relating to this organization (R)
8.
9.
10.
11.
12.
13. I really care about the fate of this organization.

14. For me this is the best of all possible organizations for which
to work.
15. Deciding to work for this organization was a denite mistake
on my part. (R)
Below are some questions to get a better overall view of the respondent. Please note that all data
remains anonymous.
1. What is your gender?
Male
Female
2. What is your current job category within the organization?

Operational(work floor)
Administrative personnel
Supervisor (middle management)

Manager(upper management)
3. What is your age range?
16 24
25 34
35 44
45 54
55 64
>65
4. What is the highest level of education you have completed?
PRIMARY EDUCATION
MULO
VWO
MBO
HBO
UNIVERSITY
5. What is your average monthly salary range (in SRD)?
<949
950 1999
2000 2799
2800 3999
4000 5999
>6000
6. Which range indicates the number of years you are employed within the organization?
<1 Year
1 5 years
6 10 years
11 15 years
>15 years

MBA Thesis Daniella Griffith - Kranenberg

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FHR Lim A Po Institute for Social Studies Maastricht School of Management

MBA VII Management &Business Strategy

THE EFFECT OF ORGANIZATIONAL CULTURE AND LEADERSHIP

This page was left blank intentionally

there are only promises and hopes;

Gratitude to my MBA colleagues for their support during the program.

Thank you all

Relevance and justification ......................................................................................... 4

Problem Statement ...................................................................................................... 4

Research Objectives .................................................................................................... 5

Research Questions ..................................................................................................... 6

Research Limitations ................................................................................................... 6

Outline of the Thesis structure .................................................................................... 7

Literature Review ............................................................................................................... 8

Concept of Leadership ................................................................................................ 8

Leadership defined ............................................................................................... 8

Leadership vs. Management ................................................................................ 9

New Approach to Leadership ............................................................................ 10

Organizational culture ............................................................................................... 11

Job satisfaction .......................................................................................................... 13

Organizational commitment ...................................................................................... 13

Small and Medium-sized Enterprises ........................................................................ 14

General definition of SMEs ............................................................................... 15

Relationship between the variables ........................................................................... 16

Job satisfaction and Leadership styles ............................................................... 16

Job satisfaction and Organizational Culture ...................................................... 17

Organizational commitment and Job satisfaction .............................................. 19

Organizational Commitment and Leadership style............................................ 19

Research Philosophy ................................................................................................. 21

Research design ......................................................................................................... 21

Questionnaire design and measures .......................................................................... 22

Survey administration ........................................................................................ 22

Reliability and validity....................................................................................... 23

The questionnaire and measurement scale ......................................................... 23

Data processing .................................................................................................. 27

Research population and Sample .............................................................................. 27

Data analysis ............................................................................................................. 28

Findings and Analysis ...................................................................................................... 29

Sample population profile ......................................................................................... 29

Descriptive statistics .................................................................................................. 33

Regression Analysis .................................................................................................. 36

Regression analysis Leadership style and Organizational Commitment ........... 38

Regression analysis Leadership styles, Organizational culture and Job

Regression analysis Leadership styles, Organizational culture, Job satisfaction

and Organizational Commitment...................................................................................... 40

Hypothesis testing ..................................................................................................... 41

Discussion, Conclusions and Recommendations ............................................................. 46

Discussion and conclusions....................................................................................... 46

Implications for Theory and Practice ........................................................................ 49

Due to their impact on performance and the success of an organization, Organizational

an organization. Organizations try to encourage commitment in their employees in order to

Relevance and justification

Organizational commitment has received a lot of attention in research of the work

Issue Briefing Note: Small and Medium-sized Enterprises, 2004.

The research will address the following questions:

How and why do leadership style (Transformational,

The following secondary research questions will also be answered:

The limitations in this research are as follows:

Not all the needed company data is correctly documented or retraceable;

Not all company data is up-to date;

There is no information of the total number of SMEs in Suriname.

Outline of the Thesis structure

4. Findings and Analysis

5. Discussion, Conclusions and