Impact of organizational culture and locus of control on turnover

intentions with mediating impact of job satisfaction

Sadia Ishaque
Sadia.ishaque@aumc.edu.pk
Department of management Sciences, Air University (Multan campus)

ABSTRACT: The purpose of this paper is to examine the impact of organizational culture and locus of control on
turnover intentions with the mediating effect of job satisfaction. Target population for the study were customer
relationship officers of telecom sector. Approximately 550 respondents were approached. Out of these only 462
respondents responded properly. Data has been collected by convenient sampling. This study relates four original
concepts job satisfaction, locus of control, organizational culture and turnover intentions in order to develop an
essential model, which helps to explore turnover intentions among employees. Structural equation modeling (SEM)
is applied to verify the research framework. The empirical results show that locus of control positively affect job
satisfaction and turnover intentions, while organizational culture positively affect job satisfaction but negatively
affect turnover intentions as well as meditational impact of job satisfaction .Furthermore, this study demonstrates
that the relationships between locus of control, job satisfaction and turnover intentions are partially mediated and
no mediation occurred among organizational culture, job satisfaction and turnover intentions.
Keywords Job satisfaction, Organizational culture, Turnover intentions, locus of control
INTRODUCTION
One of the high flying aspects of 21 st
century organizations is the swift change in
environment. Retention of key employees has
always remained a critical matter for
organization. Firms have become gradually more
dependent on their top endowment to be
successful in adapting to market changes;
however,
these
rapid
market
changes
concurrently result in job dissatisfaction among
key employees. Challenges which organizations
face comprise diverse workforce, changing
organizational structure, global competition, and
hasty change in technology. Although every
organization has its own set of precedence which
it devotes to their human recourse in order to
achieve high productivity. For this purpose,
organizations always require satisfied employees.
Organizations are always seeking to
employ capable and suitable employees to
generate employee commitment for the
organization. Capable and dedicated work force
is the only feasible resource of competitive
advantage
Retention of existing capable and dedicated
personnel is a vital apprehension for
organization. Turnover in organization has been a
fundamental matter of research for well over 90
years [1]. Turnover intentions can be defined as
an individual enthusiasm to hunt for the
opportunities in other organizations [2]. It has a
great monetary impact on organization because
of the process of staffing, assortment, training,

and socializing substitute workers [3].

An employees walking out has some
oblique implications too, which include high
pressure on the left over personnel, decrease in
morale, the loss of social investment and new
expenditure of learning [4]. The impact becomes
more critical if the members of organization
leave the senior position such as departmental
heads [5].
Despite due emphasis on turnover
intention literature lacks evidence on relationship
of organizational culture and locus of control
with turnover intention. This study aims at
addressing this inadequacy and explores the
underlying processes explaining the impact of
organizational culture and LOC on turnover
intention with mediating role of job satisfaction.
Job satisfaction and turnover intention
are a few most researched topics in todays
vibrant environment. Organizations have to face
loss not only in terms of physical separation but
also in the form of leakage of information [6].
Organizations have to face both direct and
indirect costs in the form of low morale, anxiety
of employees and loss of social capital [7]
The impact of employee turnover on
organizational efficiency and worker self-esteem
has remained the focus of organizational
researchers in current era [8] Turnover intentions
can be defined as employees conscious
willingness to hunt for alternative job
opportunities in other organizations; turnover
hence is marked as a physical separation from
organization [9].

Since recruitment process is not only

time consuming but also costly for organizations,
thats why they are always willing to retain
employees as long as possible (Rayan and Sagas,
2013). When employees intend to leave the
organization, all their proficiency also go away
with them and unfilled positions have effect on
the organizational performance.(Abbasi and
Hollman, 2000).

Literature review
Job satisfaction can be defined as "the
measurement of one's total feelings and
attitudes
towards
one's
job"
(Graham,1982, p. 68).Job satisfaction is
any combination of psychological,
physiological,
and
environmental
circumstances that causes a person
truthfully to say, I am satisfied with my
job (Hoppock,1935, p. 47).
Job satisfaction can be defined as
the enjoyable and exciting feeling
resulting from ones job experiences
(Locke and Dunnette, 1976).The most
famous definition of job satisfaction in
organizational research is that of Locke
(1976), who described job satisfaction as
"a pleasurable or positive emotional state
resulting from the appraisal of one's job
or job experiences" (p. 1304).
.
Job satisfaction consists of three
dimensional psychological responses
such as evaluative, emotional and
behavioral components (Hulin and
Judge, 2013). Job satisfaction has five
facets which are salary, promotions,
colleagues, supervision and workplace
(Smith et al., 1969). Locke (1976) adds
some
other
facets
which
are
acknowledgment, working conditions,
company and management.
Job satisfaction relates to factors
for example absenteeism and turnover
(Sekaran, 1989). Job satisfaction is
actually considered to perform a vital
role in turnover process (Bluedorn,
1982). It is probably the most regularly
analysed psychological variable in the

satisfactionturnover
relationship
(Mobley, 1979; Griffeth, 1979; Hands
and Meglino, 1979). Job satisfaction in
this study belongs to the positive
emotional feelings caused by the
appraisal associated with ones job or
even job experiences (Locke, 1976, p.
1300).
There are numerous studies
which report the strong association
among the construct of job satisfaction
and turnover intentions (Mowday et al.,
1979;
Steers,
1977).
Different
researchers emphasize on different
factor, which cause the job satisfaction
like culture, pay scales etc. According to
Heneman and Judge (2000, p.85),
research has unequivocally shown that
pay dissatisfaction can have important
and undesirable impacts on numerous
employee outcomes.
A satisfied employee is more
productive and committed hence the
intention to leave the organization
reduces (Maqbol et al., 2012).According
to different studies, there is a correlation
between job satisfaction and turnover
intention (Griffeth et al., 2000; Hom et
al., 1992). Job satisfaction has a negative
impact on employees turnover intention
and collectively on actual turnover
behavior (Chen et al., 2011).This is not a
product of a single factor rather
numerous variables such as work related
factors, personal traits and external
factors have significant effect on
turnover intentions (Tyagi and Wotruba,
1993).
One of the key outcomes of low
level of job satisfaction is behavioral
withdrawal of employees from the job as
bunking off and turnover or early
retirement (Roznowski and Hulin, 1992

Number of studies addressed the

role of psychological variables in
understanding the relationship between
turnover intentions and job satisfaction
(Larwood et al., 1998).
Locus of control can be defined
as the difference in the belief of
individual that one can control the
environment, opposite to the belief that
one cannot control the environment
(Schilit, 1986; Newton and Keenan,
1990; Kren, 1992; Bogg and Cooper,
1995).The impression of internal and
external locus of control seeks to identify
that former attributes the reason of
control over incident to themselves and
latter to the environment they face
(Rotter, 1966). Studies robustly point out
that internals demonstrate higher
intrinsic
motivation
are
more
achievement oriented and account low
level of turnover intentions (Renn and
Vandenberg, 1991) and are reported to
exhibit higher job satisfaction as
compared to the externals (Organ and
Greene, 2012).
On the subject of the work
perception internals were found more
liable to attribute their performance of
present job and part consequence to their
own action (Blau, 1987). On the other
hand externals are not much motivated
because they attribute success or failure
to external sources, such as other people
or fate (Rotter, 1966).Externals are more
connected with low level of job
satisfaction and psychological distress
(Springer, 2000).
Literature documents plausible
evidence on antecedents of job
satisfaction (Price and Mueller, 1981;
Allen and Meyer, 1990; Mowday et al.,
1979; Mottaz, 1988a), but the influence
of organizational culture on job
satisfaction has received rare attention.

The antecedents and consequences of job

satisfaction
hardly
include
any
orientation regarding organizational
culture (Mathieu and Zajac, 1990).
Cultural variables play an
important part in an employees workrelated
attitudes
and
behaviour
(Hofstede,
1984).
Latest
work
emphasizes on the importance of
individualism and collectivism in
cultural and psychological studies
(Earley and Gibson, 1998; Triandis,
2001)).Culture contributes in continuous
improvement of a firm and also helps in
efficient adaptation of challenging
surroundings (Cunningham and Gerrard,
2000).
Another stream of work proved
that organizational culture helps to
improve employee attitude such as job
satisfaction (Rose et al., 2009), and can
affect how people intentionally think,
the way of making decision, their
feelings and actions, organizations
performance and commitment (Hansen
and Wernerfelt, 1989; Schein, 1990;
Deal and Kennedy ,1982).
Deal et al., (1982)
advise that organizational culture can
easily put in substantial effect inside
organizations
specifically
inside
locations like efficiency and also
determination.
Scientists
in
organizational
culture
have
got
furthermore offered diverse varieties or
perhaps forms of culture.
From the foregoing
the following hypotheses were derived:
H1: OC is related to JS.
H1a: OC is related to TOI.
H2: JS will mediate the relationship
between OC and TOI.
H3: LOC is related to JS.
H3a: LOC is related to TOI.
H4: JS will mediate the relationship
between LOC and TOI.

H5: Job satisfaction is related to

turnover intentions.
Methodology and measurement
Target population for the study is
customer relationship officers of
telecom sector and pesticide industry.
Approximately 550 respondents were
approached. Out of these only 462
respondents responded properly. Data
has been collected by convenient
sampling.
The
technique
of
convenience sampling is applied
keeping in view the confidentiality
and difficulty of data as it is collected
from two different sector. . As the
employees have been recruited on
same selection criterion therefore job
satisfaction is demonstrated in
homogenous way. So the use of
convenient sampling is justifiable.
The research framework is shown in Figure 1.

H1a
Organizational culture

H1

H2,H4
H5

H3a

Minnesota Satisfaction
Questionnaire (Weiss et al., 1967) is
used to measure JS. This scale consists
of 3 dimensions intrinsic job satisfaction
which consists of 12 items, extrinsic job
satisfaction which consists of 6 items
and general job satisfaction which has 2
items. Employee Turnover intention has
been measured by using the three item
scale given by (Mobley et al., 1978). The
organizational culture has been measured
by Zeitz et al., (1997). OC is measured
on five dimensions job challenge,
communication, trust, innovation and
Social cohesion. Locus of control is
measured by the scale (Rosenberg
1965).It includes 6 items which help to
measure the LOC. All Response will be
measured by using the 5-point likert
Scale ranging from 1= Strongly
disagree to 5= Strongly agree.
Empirical results
The results of the measurement model
The means, standard deviations, and
correlation matrix are shown in Table I.
There are positive correlations among
job satisfaction, organizational culture
and locus of control. While there are
negative
correlation
among
organizational culture and turnover
intentions
Job satisfaction

Locus of control

H3

Turn over intentions

Table I. Means, Standard Deviations and

Correlations of the Constructs
Mean
Standard
Deviation

A. Job Satisfaction

2.2518

.59132

B. Organizational culture

2.4387

.52949

C. Locus of control

2.5130

.83095

D. Turnover Intentions

3.0945

1.24236

Notes: * p < 0.05, **p < 0.01

In order to measure these constructs,
scales have been adopted from prior
researches. The factor analysis of the
mentioned constructs is given in table II.
Job satisfaction is classified into 3
factors, organizational culture into 5
factors, turnover intention and locus of
control are based on 1 factor. In order to
check the reliability and validity loading
of all individual measure is examined
which are significant and shown in table
3. On the other hand for measuring the
reliability Cranachs is used (shown in
table 3). According to Hair et al., (2010)
composite reliability should be greater
than .70 otherwise construct will not be
considered valid. In convergent validity
CR should be greater than AVE and
value of AVE should be greater than 0.5
otherwise convergent validity issue will
occur. And in discriminant validity MSV
and ASV should be less than AVE
otherwise discriminant validity issue will
occur (Hair et al., 2010).
Table II
Constructs

Job Satisfaction
Organizational
culture
Locus of control
Turnover Intentions

Number
Items
Before
deletion
20
18
6
3

TableIII
Constructs

Items

A. Job satisfaction

JSIS1
JSIS3
JSIS6
JSIS8
JSIS9
JSIS12
JSES3
JSES4
JSES5
JSES6,
JSGS1
JSGS2

.551
.601
.553
.554
.545

B. Organizational culture

OCJC1
OCJC2
OCJC3
OCCOM
1
OCCOM
2
OCCOM
4
OCIN1
OCIN3
OCIN4

of Number of
Items
After
deletion
11
12
6
3

C. Locus of control

OCT1
OCT2
LOC1
LOC2
LOC3
LOC4

Cronbachs

0.911

0.885

0.789

D .Turnover intentions

LOC5
LOC6
TOI1
TOI2
TOI3

CFI
RMSEA

Result of Structural Model

Initially the model consisted of forty seven
items where locus of control and turnover
intentions
was
uni-dimensional.
Job
satisfaction
had
3
dimensions
and
Organizational culture had 5 dimensions.
Exploratory factor analysis was conducted of
all the forty seven items, initially the model
shows the poor fit then by using the results of
CFA and EFA, a total of 15 items were deleted.
The model now comprises 32-items. In order
to test whether the model is a better fit to data,
structural model is assessed, the results of
which are shown in the table IV. The results
for 32-items reveal that the model is now an
adequate fit to the data with reduced 2 (df)
=846.751and improved CMIN/DF=1.886,
IFI=.90,
TLI=.90,
CFI=.904
and
RMSEA=.044 whereas model is also improved
with the help of modification indices. In this
case, 2-items have recognized for their
potential error correlation which results to the
better model fit. The Comparison of the
proposed and competing model is given in
table IV
Table IV
Comparison of Proposed and Competing
Model
Fit indices

Table V. The Result of the Structural Model

Hypothesis
Proposed Effect
Path Coefficien
H1:
+
.436
H1a:
+
-.038
H2:
+
.050
H3:
+
.438
H3a:
+
.158
H4:
+
.254
H5:
+
-0.657
Note: * p < 0.01

The result of full path model is shown in

figure 2. Therefore H1, H3, H3a, H4, H5 are
supported as shown in table V and H1a and H2
is not supported. These results show that locus
of control has positive impact on job
satisfaction and turnover intentions, on the
other hand results show that organizational
culture do not have positive impact on job
satisfaction and turnover intentions
The reason of this rejection may be
the employees preference about the job;
some employees prefer good pay and
incentives rather than culture. According
to them if organization is paying well to
them they can sacrifice the need of good
culture (Mathieu and Zajac, 1990).

Overall measurement model

Intial(47 items)

(df)
CMIN
IFI
TLI

1859.437
1.827
.866
.857

.865
.042

5.1 Conclusion
Job satisfaction and turnover
intentions are the most discussed topics
in todays environment. Now a days
organizations are more concerned with
the
retention
of
employees.
Organizations productivity can be
improved with the help of employees
who are more satisfied (Mobley, 1982).
The research questions of this
study can be summarized as how LOC
and OC can influence the turnover
intentions and how job satisfaction is
worked as a mediator among LOC, OC
and TOI. In order to define the
relationship
among
independent,
dependent and mediating variables, a

research model was projected to state the

effects of variables on each other while
using the literature support. A research
model was proposed which explained the
conceptual framework on the basis of
literature support.
Data is collected with the help of
self-administered
questionnaire.
Different statistical techniques such as
exploratory
factor
analysis
and
confirmatory factor analysis are used to
validate the items .A proposed and a
competing model was tested by AMOS.
According to the results OC does not
have direct and indirect effect on TOI
whereas LOC has both direct and
indirect effect.
In order to answer the research
questions of the study and to accomplish
the objective, we form both the
competing and the conceptual model. To
achieve the results SEM via AMOS,
modification indices, error terms
correlation were used.
The results of the model
illustrate that locus of control has
significant and direct impact on the
turnover
intentions
whereas
organizational culture does not have any
significant and direct impact on the
turnover intentions. In order to examine
the mediating impact LOC is significant
with JS and JS is significant to TOI. So it
can be concluded that partial mediation
occurs here. In case of organizational
culture OC is not significant to TOI. But
OC is significant to JS and further JS is
significant to TOI. So it can be
concluded that full mediation is occurred
here.

The results of this study can help the

management to understand the impact
of strong culture on the employees job
satisfaction and how they can take the

benefit from their employees who are

satisfied.
It helps the management to understand
the employees point of view and can
identify that how they can use the locus
of control in order to assess the
employees satisfaction level.
A
thorough
understanding
of
psychological assessment of events by
employees can help human resource
managers to understand the reasons of
various actions performed by their
employees
So any counterproductive behavior
thus appearing in the backdrop may be
tackled
wisely.
Employees
psychological assessment programs
should therefore be introduced and
employed frequently.
It helps the management to pin point
the reasons which cause employees
dissatisfaction and their intentions to
leave the organization and accordingly
provide remedial measures.
Another
rigorous
managerial
contribution is that, if the organization
increases the level of satisfaction of
employees regarding their job it will
also improve the productivity of the
organization.
In order to motivate employees to
create strong bonds with the
organization, it is crucial to formulate
strategies that may enhance employees
satisfaction. These may include better
reward system, working in teams and
job redesigns.
With improved
happiness, there will be more
association with the organization which
may lead to the long-term benefits of
organization.
Organizations
must
formulate
strategies to increase the satisfaction
level of employees. This may include
strong organizational culture (Lee,
1999).

5.2 Limitations of the study

.
Data has just been collected from
telecom industry and pesticides
industry so this is very much
difficult to assess the behavior of
employees belonging to other
industries.
Data is collected on the bases of
convenience sampling which is the
non-probability sampling technique.