“The Impact of Transformational Leadership and Transactional Leadership, and Organizational Culture on Employees’ Job Satisfaction and job performance in a Transnational Corporation in Egypt: A Case Study”
CHAPTER 1
INTRODUCTION
This chapter presents a background of the research topic, purpose, problem, objective, questions, scope and importance. In addition, to the thesis structure outline
1.1Research Background
Today, transnational corporations (TNCs) experience a lot of competition in the global market. A lot of changes happen quickly in the global setting and thus, the companies have to excel and perform well to stay in the competition, to ensure this, the first thing managers should consider is the satisfaction of the employees’. A content and well compensated set of workers tend to become more effective and efficient in doing their jobs. Numerous studies regarding job satisfaction, specifically the positive emotional response given by the employee to his/her job individually or as member of team has become a big deal.
Job satisfaction essentially refers to the collection of beliefs and feelings that people have about their existing job. Employees’ job satisfaction levels can change easily from extreme satisfaction to extreme dissatisfaction, they can also have attitudes about various aspects of their jobs such as the kind of work they do, communication between supervisors and subordinates, their pay, the culture of the organization..etc (George et al., 2008). Another most widely used definition of job satisfaction is the pleasurable or positive emotional state arising from the praising of one’s job or job experiences(Locke, E. A., 1976).
Job satisfaction is an important aim for any organization to achieve. When the employees’ satisfaction level increases, then this will lead in more returns to the organization. However employees’ dissatisfaction has negative effects on effectiveness and efficiency of the organization. So studying job satisfaction is one of the most considerable areas of organizations setup (Lai Wan, 2007).
Happy employees positively affect productivity in the workplace and on the larger society which in fact the general public which also impacts positively the organization's brand image. Job satisfaction also affects the bottom line by impacting on the job performance of the employee though some indicate that this connection is weak or contrary to the belief that a happy employee is more efficient (Bassett, G., 1994).
There are various factors that affect job satisfaction such as leadership practices, management associations, communications,workload, teamwork, pay, personal growth and organization culture (Simons et al ., 2002). For the purpose of this paper we will be looking at two factors that affect employees’ job satisfaction in TNCs which are namely; leadership styles and organizational culture.
1.2 Research Purpose
This research is focusing on employees’ job satisfaction and job performance in transnational corporations (TNCs) in Egypt. The purpose of this study is to determine the impact of transformational leadership and transactional leadership and organizational culture on employees’ job satisfaction in relation with job performance in order to know how leadership style and culture of an organization assist in enhancing employees’ job satisfaction and job performance.
1.3 Research Problem
Due to increasing complexity and pace of progress confronted by the Egyptian firms and particularly after the Egyptian revolution, leaders are currently confronted by the task of moving from bureaucratic arrangement of managing individuals to a well tested framework in which both the leaders and the followers are involved in problem solving and decision making. (metwally 2012), yet astonishingly, transformational versus transactional leadership was not paid enough attention disregarding their dominance since 1980s as most organizational leaders concentrate on the development of action plans and neglect the individuals responsible for executing organizational change. Moreover, organizational failure can be traced back to the fact that only few leaders give organizational culture the attention it deserves ( Madu, 2011). In addition individuals and groups working in most organizations ignored the role that organizational culture can play a huge role in employees’ job satisfaction.
In the Egyptian transnational corporations, a culture that supports major organizational achievement exists but managing methods in which success can be gained is ignored. Thus, there is a great need to lead effectively and consider organizational culture in order to attain success. Reviewing a wide array of studies, the researcher noticed a lack of research on the relationship between among the four variables of leadership styles, organizational culture and employees’ job satisfaction and job performance, as most studies addressed only two of them at a time. Accordingly the present research seeks to identify and explore the nature of association between the leadership style , organizational culture and employees’ job satisfaction and job performance.
Therefore the main question in this study is: do leadership style and organizational culture affect employees’ job satisfaction and job performance in (TNCs) in Egypt.
Thus, the research problem statement will be as follows:“Measuring the impact of transformational leadership and transactional leadership, and organizational culture on employees’ job satisfaction and job performance in a Transnational Corporation in Egypt”.
1.4 Research Objectives
This research has four main objectives:
1)To study the effect of transformational and transactional leadership on employees’ job satisfaction.
2)To study the effect of organizational culture on employees’ job satisfaction.
3)To study the effect of job satisfaction on job performance.
1.5 Research Questions
The research study will attempt to answer the following questions:
1)To what extent the transformational and transactional leadership affect employees’ job satisfaction in a transnational corporation?
2)To what extent the organizational cultureaffect employees’ job satisfaction in a transnational corporation?
3)To what extent employees’ job satisfaction affect job performance in a transnational corporation?
1.6 Scope of research
The independent variables aretransformational and transactional leadership and organizational culture. The moderating variable is employees’ job satisfaction and the dependent variables is job performance. The respondents of this research focus on the employees’ who work in transnational corporations in Egypt.
1.7 Research Importance
This study is both academically and practically important. The following section will explain the reasoning behind this importance.
1.7.1 Academic Importance
Most studies in this context examines the effect of leadership and culture separately on performance and job satisfaction (e.g. Dension,1984;Gordon&Ditomaso 1992;Marcoulides & Heck,1993; Sourehleyla 2014).but only a few of them have gone ahead and researched the impact these variables have on employees’ job satisfaction all together . Employees’ job satisfaction is essential to all organizations and therefore has to be maintained and improved daily. For that to happen, more research studies should be done to increase the knowledge base and open more doors for other scholars to do further research on the relationship between employees’ job satisfaction and job performance and factors such as those researched on this study.
This research study will help further the existing knowledge on factors that influences the employee job satisfaction rate of an organization. It will also go ahead and address various areas of concern that managers should look into to improve employee job satisfaction and performance especially in transnational organizations.
1.7.2 Practical Importance
The research will gain information on two factors leadership styles and organizational culture, which plays a huge role in employees’ job satisfaction and job performance . By focusing on just these two factors we will be able to deeply analyze these factors and turn the inside out as well as expose any mythology surrounding these two determinants. This will directly affect how these factors are considered by corporations and organization in all forms and sizes. This is because all businesses and organizations stand on the shoulders of its human capital which is in fact its employees who bring their intelligence and skill sets into the achievement of a firm’s goals. Putting in perspective job satisfaction, looking after the psychological health of this primary resource will greatly impact the firm. The psychological wellbeing is greatly impacted by the workplace as most of the general population tends to define themselves by their profession (Warr et al, 1979) This will enable firms to better understand how the determinants affect the job satisfaction and job performance and help in making corrective actions inn order to increase employees’ job satisfaction and enhance performance.
1.8 Thesis Structure
Chapter 1: This chapter is an introduction to the research study.
Chapter 2: This chapter is composed of four main sections that provide a comprehensive leadership styles and organizational culture overview. The first section reviews general literature about leadership styles organizational culture. The second section focuses on organizational culture, the third on employees’ job satisfaction in relation with the two variables and the fourth section reviews general literature about job performance in relation with the moderating variable which is job satisfaction
Chapter 3: This chapter also offers an explanation of the methodology of this research. It presents the research design, the research framework, hypotheses, conceptual and operational definitions for the research variables. In addition, it describes the sampling, data collection methods and statistical analysis techniques used.
Chapter 4: This chapter presents the data that are generated from this study and their empirical examinations. It includes frequency tests, reliability (Chronbach Alpha), validity (Intrinsic and content), descriptive statistics (mean, mode, median, range, and standard deviation), correlation, and regression.
Chapter 5: This chapter also discusses the findings of the present study in comparison with that of previous studies in order to draw a conclusion. Moreover, it highlights the research implications and some recommendation for transactional corporations in Egypt. It also presents the academic and practical contributions. Finally, it outlines the research limitations and suggests directions for further research