The Mediator Role of Organizational Innovativeness Between Organizational Culture and Organizational Effectiveness

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THE MEDIATOR ROLE OF ORGANIZATIONAL INNOVATIVENESS BETWEEN


ORGANIZATIONAL CULTURE AND ORGANIZATIONAL EFFECTIVENESS

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British Journal of Education

Vol.2, No.6, pp. 30-54, November 2014

Published by European Centre for Research Training and Development UK (www.eajournals.org)

THE MEDIATOR ROLE OF ORGANIZATIONAL INNOVATIVENESS BETWEEN


ORGANIZATIONAL CULTURE AND ORGANIZATIONAL EFFECTIVENESS

Giti Ashraf
Department of Education, Darab Branch, Islamic Azad University, Darab, Iran

Suhaida Abd. Kadir


Faculty of Educational Studies, University Putra Malaysia, Malaysia

Zaidatol Akmaliah Lope Pihie


Faculty of Educational Studies, University Putra Malaysia, Malaysia

Abdullah Mat Rashid


Faculty of Educational Studies, University Putra Malaysia, Malaysia

ABSTRACT: Organizational culture and organizational innovativeness are viewed as


important factors for improving the organizational effectiveness in institutions of higher
education. The aim of this study was to examine the correlations among organizational culture,
organizational innovativeness and organizational effectiveness. Moreover, the mediating role
of organizational innovativeness between organizational culture and organizational
effectiveness was studied.The method used in the study was survey research. Based on the
cluster sampling method, all full time faculty members from five branches of Islamic Azad
University (IAU), Pars Province, Iran, were included in the sample of the study. The number
of respondents was 369 participants. For measuring variables, three questionnaires were
employed. The findings indicated that the adhocracy culture, market culture and clan culture
were found to have significant positive correlations with organizational innovativeness and
organizational effectiveness. However, hierarchy culture showed no significant relationship
with either organizational innovativeness or organizational effectiveness. Additionally,
organizational innovativeness partially mediated the relationships among clan, adhocracy and
market cultures with organizational effectiveness.Therefore, organizational culture not only
directly influences both innovativeness and effectiveness but also influences effectiveness
through innovation. The university administrators should be aware of the benefits from the
implementation of a culture that supports innovation in order to assure the effectiveness of
universities.

KEYWORDS: Adhocracy culture, Market culture, Clan culture, Hierarchy Culture,


Innovation, Iran

INTRODUCTION

Quality assessment in higher education is both a national and a global concern for academic
leaders (O’Brien, 2009). Over the past decade, challenges and demands for higher education
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institutions to demonstrate institutional effectiveness and accountability from the government


as well as the nongovernment sectors have steadily increased (Behr & Walker, 2009;
Middaugh, 2009).

Based on literature, it was found that the type of organizational culture has a significant
association with organizational effectiveness (Anderson, 2000; Dela Cruz, 2011; Lejeune &
vas, 2009). A few studies explored variables that moderated or mediated the relationship
between organizational culture and organizational performance. For example communication
(Garnett et al., 2008), Leadership (Chen, 2004), and human resource-related performance (Ngo
& Loi, 2008).

There are researches concerning the link between organizational culture and organizational
innovativeness (Bratianu & Vasilache, 2009; Duréndez & Garcia, 2008; Obenchain, Johnson,
& Dion’s, 2004). A number of researchers have demonstrated that there is a positive
relationship between organizational innovativeness and organizational effectiveness.
(Gopalakrishnan, 2000; Lin, 2006; Tajeddini, 2011; Wang, 2005). A few studies support the
important role of organizational innovativeness as a partial mediator between environmental
and organizational variables and organizational performance (Vincent, Bharadwaj and
Challagalla, 2004).

Considering above points, there is a lack of understanding surrounding the relationship between
the organizational culture, organizational innovativeness, and organizational effectiveness.
Moreover, these relationships have yet to be empirically investigated together. In the current
study, the gap in the literature leading to the study on whether organizational innovativeness
has a mediating effect on relationship between organizational culture and organizational
effectiveness? By addressing this concern, via the proposed objective, this investigation
provides more insight to the organizational culture and organizational effectiveness literature.

ORGANIZATIONAL CULTURE

Cameron and Quinn (2006) defined organizational culture as some valuable notions such as
the language and symbols, the dominant leadership styles, the definition of success, the
procedures, and routines that make an organization unique. In this study, organizational culture
refers to the perceptions held by university teaching staff as regards their organizational
context. It is conceived of four culture types: clan, adhocracy, hierarchy, and market. The focus
of attention of clan is the inside maintenance with flexibility, attention and sensitivity to
customers and people. Adhocracy stresses external focus with a high degree of individuality
and flexibility. Hierarchy culture emphasizes the internal maintenance requiring control and
stability. Finally, the market culture concentrates on outside positioning requiring control and
stability.

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ORGANIZATIONAL INNOVATIVENESS

According to West and Farr (1990), the organizational innovativeness is the deliberate use of
procedures, products, processes and ideas inside a group or organization to the intended unit
of adoption which is supposed to be significantly beneficial for the person or group or any other
bigger organizations. In the present study, the organizational innovativeness is defined as the
frequency of times each type of innovation (technical and administrative) is actually
implemented in the organization during the past 3-year-long period. Administrative innovation
in this study refers to the implementation of a structure, procedure, system, or process in the
administrative core of an organization that is new to the prevailing organizational practices. On
the other hand, technical innovation is defined as the implementation of a service, program, or
product that is new to the prevailing organizational practice.

ORGANIZATIONAL EFFECTIVENESS

Organizational effectiveness can be defined as capability of an institution in reaching its set


aims and the individual objectives together with the final goals of the organization (Slack,
1997). A unit which is individually ineffective in terms of cooperation with the rest of the
organization is doomed to failure (Gigliotti, 1987). Organizational effectiveness is defined as
the faculty member’s perception of the nine dimensions of organizational effectiveness to
describe the current situation of their university. Based on Cameron’s (1978) model these
dimensions are:

1. Student educational satisfaction: This criterion shows how much students are happy
with their academic progress and experiences.
2. Student academic development: This criterion shows the extent to which students grow
and attain academic achievements.
3. Student career development: This criterion determines how much students make
progress in their jobs with a special attention to their work progress and the opportunities they
are given by the university.
4. Student personal development: This criterion indicates how much a student’s social,
emotional and cultural aspects develop and to what extent the institution plays a role in this
development.
5. Faculty satisfaction with employment: This criterion determines to what extent
administrators and the members of the faculty are satisfied with their jobs at the university.
6. Faculty quality and occupational progress: This criterion shows how much a faculty
develops and to what degree occupational quality is achieved in addition to the institution’s
contribution to this purpose.
7. System community interaction and openness: This criterion indicates the significance
of interaction with, service in and adaptation to the external settings.
8. Capability in obtaining resources: This criterion deals with the institutions’ capability
in obtaining resources from outside; the sources can include the faculty and good students,
financial support and so on.

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9. Organizational health: This criterion shows viability, vitality, and benevolence in the
processes and practices inside the institution.

RESEARCH OBJECTIVES

This research pursues the following objectives:


1. To determine the relationship between organizational culture types, organizational
innovativeness and organizational effectiveness in private universities as perceived by the
faculty members.

2. To determine the mediation effects (if any) of organizational innovativeness between


organizational culture types and organizational effectiveness in private universities as
perceived by the faculty members.

RESEARCH QUESTIONS

This study addresses two research question as follows:


1. What are the relationships among organizational culture types, organizational
innovativeness, and organizational effectiveness in private universities as perceived by the
faculty members?

2. Does organizational innovativeness mediate the relationship between organizational


culture types and organizational effectiveness in private universities as perceived by the faculty
members?

LITERATURE REVIEW

Relationship between Organizational Culture and Organizational Effectiveness

Researchers have investigated the relationship between organizational culture and


organizational effectiveness in higher educational organizations. The results of a study by
Anderson (2000) indicated that the four culture types (clan, adhocracy, hierarchy and market)
were significantly related to the organizational effectiveness in the Tennessee Community
Colleges. The associations were found to be strong (p < .001) and positive. It was also found
that for the maximum performance on the nine dimensions, effective use of all four culture
types in the appropriate circumstances is needed. Anderson (2000) suggested college members
to obtain specific actions to learn how to use aspects of the four culture-types in order to achieve
the maximum performance on the nine dimensions of effectiveness.

The findings of Kwan’s research (2002) revealed that in Hong Kong universities, the “Group”
and the “Developmental” cultural types are stronger predictors of organizational effectiveness
than the “Hierarchal” and the “Rational” cultural types. Moreover, it was found that
organizational effectiveness is positively related to both “Cultural strength” and “Cultural
congruence” but negatively to “Cultural compliance”. Furthermore, Kwan (2002) concluded
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that the effective organizations are those that can constantly adapt to the environment. Since
the environment is ever-changing, as are organizations, the study of organizational
effectiveness is expected to figure continually on the agenda of management and organization
researchers.

In another study, Smart (2003) studied the relationship between organizational culture and
organizational effectiveness of community colleges. To collect data, a survey method was
administered among full-time faculty and administrators in a statewide system of 14
community colleges in the U.S.A. Based on Smart’s suggestion, the most effective campus
culture is one that reflects a healthy balance of the four culture types (adhocracy, clan,
hierarchy, and market) rather than a focus on only one or two of these culture types. The
importance of campus leaders in the management and change of campus cultures was another
finding of Smart’s study.

To examine the relationship between organizational culture and organizational effectiveness in


residence hall associations, Faerman (2009) conducted a study using Cameron’s instrument.
The findings showed a significant relationship between the organizational culture and
organizational effectiveness. A highly strong correlation was found between the clan ideal
culture type and the three indicators of organizational effectiveness (housing relationship, RHA
effects, and formal processes). However, the pervasiveness of clan culture which was found in
these organizations served as a detriment to the employment of new personnel as well as the
retention of those members who did not become immersed in the organization.

Lejeune and Vas (2009) investigated the perceived impact of an accreditation process on
organizational effectiveness and culture in business schools. In this research 31 deans and
directors general of European Quality Improvement System (EQUIS) were surveyed. The
findings showed that adhocracy and market cultural types were strongly correlated to
effectiveness. Bureaucracy was not associated with any of Cameron’s nine dimensions of
organizational effectiveness. Lejeune and Vas (2009) concluded that dimensions of
organizational culture and effectiveness are at the heart of organizational identity. Values and
perceptions of effectiveness are indeed strong vectors of identity.

Dela Cruz (2011) examined the roles of organizational culture, management strategy, and
decision-making process on institutional effectiveness. The participants were full-time tenured
and tenure-track faculty members at a four-year public higher education institution in
South/Central Texas, the Blue University. In addition, the results showed that market culture
was the best predictor of institutional effectiveness while adhocracy, bureaucracy, and clan
cultures were the least effective predictors of institutional effectiveness. Overall, the study
suggested that faculty support, consensus, and participation are necessary in institutionally
effective activities and initiatives to improve organizational performance.

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Relationship between Organizational Culture and Organizational Innovativeness

Obenchain (2002) explored the association of organizational culture type, and size with
organizational innovation in higher educational centers. The findings indicated that the
technical innovation was used at higher frequency than the innovation in the administrative
part by institutions. Particularly, the most frequently occurring innovation created entirely new
programs and services. It was also found that most of the higher educational institutions
represent a superior culture type of clan. A statistically significant difference was also reported
between the mean scores on administrative and technical innovation based on the cultural
types. Nevertheless, the dominant adhocracy culture was linked to the innovation at higher
levels for two innovation types, namely administrative and technical. The prospect of
implementing innovation in higher educational institutions is linked with culture type,
especially the attributes of the adhocracy type.

Jaskyte (2002) examined the relationship between organizational culture and organizational
innovation in non-profit offices. The findings indicated that greater types of values and ideas
within the organization were linked to innovativeness at a top-level. It was also revealed that
larger organizations inclined to behave more innovatively, and on the whole, they tended to
show cultural consensus at lower levels. Jaskyte (2002) concluded organizations should be
willing to be innovative, give enough flexibility to employees to express their creativity and to
enable them to experiment, take risks, and take advantage of opportunities. Therefore, leaders
should seek to introduce cultural changes in order for the organizations to be innovative.

Duygulu and Özeren (2009) in their research showed the effects of organizational culture and
leadership styles on firm’s innovativeness. The relevant data was collected through a survey
instrument. The most significant finding of the study was that adhocracy culture was a common
variable for all the firms in explaining innovativeness. Duygulu and Özeren’s (2009) study
showed a strong need for change in the organizational culture and leadership style of the firms
toward adhocracy culture and change centered leadership.

Valencia, Valle, and Jiménez (2010) studied the relationship between organizational culture
and product innovation. They found that organizational culture can enhance product innovation
but that it can also inhibit it depending on the values that culture fosters. In particular, they
found that product innovation is positively associated with adhocracy culture and has a negative
relationship with hierarchical culture. They suggested that firms hoping to enhance product
innovation should pay attention to their organizational culture. In particular, firms must make
efforts to develop an adhocracy culture, which fosters creativity, entrepreneurship, openness,
risk taking, etc. On the contrary, companies should try to avoid hierarchy culture, which
emphasizes internal control, close adherence to regulations, and internal orientation.

In another study, Soltani, Damirchi and Darban (2011) explored how organizational culture
can affect organizational innovation in Cultural Institutions. As their findings indicated, a
rather low level of organizational innovation was observed in the institutions. Additionally,
positive relationships were found between organizational culture and organizational
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innovation. Soltani et al.’s (2011) results indicated that the existing organizational environment
was not suitable enough to improve organizational innovation at different levels of the
institutions. Therefore, they recommended that structures and rules of these institutions be
modified based upon an organizational culture supporting innovativeness.

Relationship between Organizational Innovativeness and Organizational Effectiveness

The findings of a study by Lin (2006) revealed that constructs like organizational learning
culture, innovativeness, and absorptive capacity have direct or indirect effects on
organizational effectiveness. It was also found that organizational learning culture plays an
important role in enhancing the organizational absorptive capacity and innovativeness. Lin also
reported that the influence of structural organicity on innovativeness is not as significant, and
that both absorptive capacity and innovativeness are critical to organizational effectiveness.

Chen et al. (2009) in their research examined the links between organizational learning,
innovation, and performance. Findings indicated that organizational performance was
positively affected by administrative and technical innovation. They suggested that in order to
get the opportunity and retain competitive advantage in rapidly changing environment,
organizations must continue to learn and innovate. They should both enhance administrative
and technical innovations. Then organizations can achieve better performance.

Damanpour et al. (2009) studied the combinative effects of three types of innovation (service,
technological, and administrative) on organizational performance. Findings indicated that the
positive effect of innovation on performance can be enhanced by the compositions of
innovation types. They suggested that research in service organizations can be beneficial by
focusing on breadth of innovation activity in multiple service areas, examining the dynamics
of adoption of technological and non-technological innovations, as well as exploring the impact
of adoption of different compositions of innovation types on organizational conduct and
outcome.

The purpose of a study by Tajeddini (2011) was to examine potential influences of


innovativeness on organizational effectiveness and efficiency. Regression analysis showed that
innovativeness has a positive significant association with the overall organizational
effectiveness. In other words, an innovative restaurant is able to yield greater effectiveness.
Tajeddini (2011) suggested that marketing managers continuously be open to new ideas,
processes, and products if they want to enhance their business performance.

Kasim and Noh (2012) in their survey using questionnaire argued that organizational
innovativeness may have some influence on university performance. The participants were
academic and management staffs of selected private universities. The key finding of this study
suggests that activities of the organizational innovativeness had given a high positive effect on
the university performance. In the end, they concluded that an innovation activity is an
important path that the university can take to make it possible for the academic members and
graduates to engage in innovative behavior.
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The present study differs from the reviewed body of research in that it looks into the
relationship between organizational culture, organizational innovativeness and organizational
effectiveness in higher education content in Iran. Approximately all the aforementioned studies
utilizing different instruments from the questionnaires to be used in this study.

METHODOLOGY

Population and Sample

Based on its research objectives, this study follows a quantitative method in which the survey
research technique is used. The population of the present study consisted of full-time faculty
members of Islamic Azad University (IAU), who were working in Pars Province in Iran. The
total population, based on a report by the Central Office of IAU in 2011-2012 academic years
was 2034 full time faculty members. The one-stage cluster sampling was conducted through
the steps as below.
1. Definition of IAU branches within the Pars province.
2. Determination the number of faculty members within each IAU branch.
3. Selection the IAU branches randomly to be sampled.
4. Participation the all full time faculty members within each selected IAU branch to be
surveyed.

Therefore, the five branches were selected among 24 branches of IAU within Pars Province by
simple random sampling. Then, all 485 full time faculty members within these five branches
were included in the survey. The respondents received the questionnaires in person without
being imposed any specific direction in their colleges, classes and offices. The actual size of
the respondents who completed the questionnaire comprised 369 faculty members (Response
rate= 76%) consistent with the sample size proposed by Cochran formula.

Instrumentation

The questionnaire of the current study includes two sections: first, the socio-demographic
characteristics of the respondents; second, a 122 item questionnaire including three separate
instruments to measure organizational culture, organizational innovativeness, and
organizational effectiveness.

Organizational Culture Questionnaire

In the current study a Persian version of OCAI was used to examine organizational culture in
IAU in Iran. The English version of OCAI was initially developed by Cameron and Quinn
(2006). This instrument can measure six dimensions of the organizational culture. These
dimensions are organizational leadership, organization glue, strategic emphases, management
of employees, dominant characteristics, and criteria of success which measure participants’
perception towards the principles under which the organization is run. The respondents were
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supposed to answer 24 questions related to the six dimensions. OCAI follows a five-point
Likert scale ranging between ‘strongly disagree’ and ‘strongly agree’. One of the four questions
within each dimension was related to one of the four desired culture types (Clan, Adhocracy,
Market, and Hierarchy). The organizational culture score for each participant was obtained
through the mean of the six scores which were related to the ideal culture type. This mean score
would indicate the respondents’ perception of organizational culture.

Organizational Innovativeness Questionnaire

In this study, all seven items of Obenchain’s (2002) questionnaire were employed to assess the
organizational innovativeness. The items asked the faculty members to decide how many times
they had experienced each innovation type in the last three years at their universities. In the
original questionnaire, for each item there was a numeric scale ranging from 1 to 10 showing
the frequency of such experiences. However, since it is difficult to remember the exact number
of innovations experienced by the participants during the past three years, in the current study,
the numeric scale was converted to a Likert scale from 1 (rarely) to 5 (very frequently), based
on a discussion with some experts. In addition, 8 out of 14 questions from Jaskyte's research
(2002) were added after they were modified to Likert scale. She evaluated organizational
innovativeness in a group of nonprofit organizations using interview questions. In order to
increase the relevance of the questionnaire, two other items were added based on Bordia et al.
(2005) paper. This resulted in a 17-item questionnaire that was used as research tool for
measuring organizational innovativeness in the current study.

Organizational Effectiveness Questionnaire

In this study, a questionnaire was improved by the researcher based on literature review (e.g.
Allen, 2011; Betebenner & Linn, 2010; Bilimoria et al., 2006; Cameron, 1978; Collins &
Apple, 2000; Cornell University, 2010; Friedman, 2005; Gill et al., 2010; Kim et al., 2010;
Kwan & Walker, 2003; Lejeune & Vas, 2009; Mavondo, Tsarenko, & Gabbott, 2004; Mit
career development handbook, 2011; OECD, 2005; Prevatt, Welles, Festa-Dreher, Yelland, &
Lee, 2011; Ramirez, 2011; Russo & Fouts, 1997; Smith et al., 2009; Williamson et al., 1949).

Cameron (1978) provided a model to measure nine dimensions of organizational effectiveness


in the institutes of higher education. The dimensions are (1) student educational satisfaction,
(2) student academic development, (3) student professional development, (4) student personal
development, (5) faculty and administrator employment satisfaction, (6) professional
development and quality of the faculty, (7) system openness and community interaction, (8)
ability to acquire resources, and (9) organizational health.

In the present study, after reviewing the related literature, the 87 items was classified in the
nine dimensions of organizational effectiveness based on Cameron’s model (1978) as the initial
version. The questionnaire was a five – point Likert style from 1 (strongly disagree) to 5
(strongly agree). After it had been developed, the questionnaire was delivered to three experts
from University Putra Malaysia and some experts from Iran to be consulted on its adequacy.
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The comments provided by these experts helped improve the quality of the instrument. The
experts indicated the items that were important or unimportant for measuring every dimension.
They reworded the items if they considered them unclear. They also added any comments on
each dimension. Finally, an 81- item questionnaire was developed to determine the
organizational effectiveness.

Validity and Reliability

The face validity and content validity of the research instrument was checked in a pilot study.
The reliability of the questionnaire was measured by alpha Cronbach in the IAU context,
through several stages:
 First, the researchers collected comments from three experts from University Putra
Malaysia about the face validity and content validity of the English version of the instrument.
 Second, the English questionnaire was translated in to Persian by two professional
bilingual translators independently. The translators were familiar with the linguistic and
cultural backgrounds in both cultures, were acquainted with the subject matter of the research,
and could translate the text into their native language based on Adler’s (1983) guidelines.
 Third, after the confirmation of face and content validity of the Persian version of the
questionnaire by some Iranian experts, and having received permission from the authorities to
make use of the research questionnaire, the researcher personally delivered the instrument to
60 IAU faculty members in Pars Province. The respondents were invited to complete the
questionnaire, to pinpoint those items that were difficult to interpret, and to provide suggestions
on the wording and phrasing of the items.
 Fourth, a total of 54 sets of questionnaires returned. Four sets were incomplete.
Cronbach’s Alpha was calculated to measure the internal consistency of the instrument based
on the 50 responses. According to the feedback received from participants, some wording
modified in the final instrument.

As indicated in Table 1, Cronbach’s alpha coefficients are listed for each cultural type in their
respective column. All the cultural types have coefficient values above 0.70 that are acceptable,
according to George and Mallery’s (2003) rules of thumb. Once more, the results of this study
provide support for Cameron and Quinn’s (2006) assertion that the OCAI is a reliable
instrument that measures culture types consistently.

Subscale Number of items Cronbach’s Alpha


Clan culture 6 .715
Adhocracy culture 6 .775
Market culture 6 .763
Hierarchy culture 6 .750
Total items 24
Table 1. Reliability Estimates for the Organizational Culture Types from the Pilot Test
(N=50)

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Moreover, the reliability analysis of the organizational innovativeness results indicated a good
internal consistency of .864. Similarly, the coefficients for the technical innovation (.774) and
administrative innovation (.748) results indicate acceptable internal consistency according to
George and Mallery’s (2003) rules of thumb for Likert-type scales. Table 2 shows the reliability
estimates for the organizational innovativeness scale from the pilot test.

Subscale Number of items Cronbach’s Alpha


Technical innovation 9 .774
Administration innovation 8 .748
Organizational innovativeness 17 .864
Table 2. Reliability Estimates for the Organizational Innovativeness Construct from the
Pilot Test (N=50)

The alpha for overall organizational effectiveness was .958, which indicates excellent internal
consistency of the instrument. Similarly, the alpha for the nine dimensions indicates the internal
consistency from acceptable (.722) to excellent (.907) based on George and Mallery’s (2003)
guiding principle. The results are shown in Table 3.

Subscale Number of Cronbach’s Alpha


items
Student educational satisfaction 8 .830
Student academic development 8 .860
Student career development 10 .848
Student personal development 10 .899
Faculty employment satisfaction 9 .874
Professional development and 10 .722
quality of the faculty
System openness and community interaction 9 .907
Ability to acquire resources 10 .906
Organizational health 7 .823
Organizational effectiveness 81 .958

Table 3. Reliability Estimates for the Organizational Effectiveness Construct from the
Pilot Test (N=50)

Construct Validity

A principal component factor analysis with varimax rotation was conducted to assess the
construct validity of research instrument upon completion of the final data collection. In
reference to Hair, et al (2006), since the number of culture types, innovativeness types and
organizational effectiveness dimensions in this study have been reported in a number of other
studies in the domain of higher education (e.g. Cameron, 1978; Cameron and Quinn, 2006;
Dela Cruz, 2011; Kwan, 2002; Obenchain, 2002; Shin, 1996), the number of factors is already
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known. Then a priori criterion can be useful in extracting the same number of factors that were
found in previous studies. For each of the four culture subscales, two innovativeness subscales
and nine effectiveness subscales, one component was extracted.

In this regard, several assumptions were tested. The Kaiser- Meyer – Olkin (KMO) measure
should be greater than .70, and is inadequate if less than .50. The KMO test tells one whether
or not enough items are predicted by each factor. The Bartlett test should be significant (i.e., a
significant value of less than .50); this means that the variables are correlated highly enough
to provide a reasonable basis for factor analysis (Leech, Barrett, & Morgan, 2008). Table 4
shows the SPSS output for these analyses for organizational culture.

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .725


Bartlett's Test of Sphericity Approx. Chi-Square 601.563
df 6
Sig. .000
Table 4. Results of KMO and Bartlett's Test for Organizational Culture (N = 369)

The Bartlett’s test of sphericity is significant since its value (p = .000) is less than alpha (α =
.05). On the other hand, the Kaiser- Meyer- Oklin measure of sampling adequacy (.725) is more
than the threshold of (.50). According to these two statistics, the data set is suitable for factor
analysis. The varimax rotation technique was used to determine the factor loading of each
factor (Table 5). Varimax rotation is frequently used in factor analysis since it “reduces the
number of complex variables and improves interpretation” (Coakes and Steed, 2007, p.131).
The result of rotated component matrix confirmed the presence of four subscales including:
clan, adhocracy, market, and hierarchy types for organizational culture scale. Their factor
loadings were ranged between .998 and .838. In other words, each subscale was
unidimensional.

Component
1 2 3 4
Clan .310 .876 .049 .366
Adhocracy .913 .284 .050 .289
Market .353 .414 .044 .838
Hierarchy .040 .037 .998 .031
Table 5. Rotated component matrix for organizational culture (N = 369)

In addition, the results from KMO and Bartlett's test for organizational innovativeness are
reported in Table 6. The Bartlett’s test of sphericity is significant since its value (p = .000) is
less than alpha (α = .05). On the other hand, the Kaiser- Meyer- Oklin measure of sampling
adequacy (.500) is equal with the threshold of (.50). According to these two statistics, the data
set is suitable for factor analysis.
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Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .500


Bartlett's Test of Sphericity Approx. Chi-Square 370.772
df 1
Sig. .000
Table 6. Results of KMO and Bartlett's Test for Organizational Innovativeness
(N = 369)

Based on results of rotated component matrix, there were two subscales of technical and
administrative innovations for organizational innovativeness scale in the present study. Both
factor loadings were .895. Then, each subscale was unidimensional. These results are shown
in Table 7.

Component
1 2
Technical .895 .446
Administrative .446 .895
Table 7. Rotated component matrix for organizational innovation (N = 369)
Regarding to organizational effectiveness, the results of KMO and Bartlett's test for this
variable (Table 8) indicates the Bartlett’s test of sphericity is significant since its value (p =
.000) is less than alpha (α = .05). On the other hand, the Kaiser- Meyer- Oklin measure of
sampling adequacy (.731) is more than the threshold of (.50). Using these
two statistics, the data set is suitable for factor analysis.

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .731


Bartlett's Test of Sphericity Approx. Chi-Square 675.886
df 36
Sig. .000
Table 8. KMO and Bartlett’s test for organizational effectiveness (N = 369)

In addition, as can be seen in the rotated component matrix (Table 9), there were nine subscales
for organizational effectiveness scale in the present study. Their factor loadings were ranged
between .979 and .913. In other words, each subscale was unidimensional.

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Component
1 2 3 4 5 6 7 8 9
Student educational satisfaction -.009 .965 -.006 .060 .054 .109 .181 .090 .101
Student academic development .182 .198 -.014 .039 .065 .141 .938 .072 .132
Student career development .042 .119 .036 .073 .227 .936 .142 .081 .153
Student personal development .043 .057 .034 .083 .934 .229 .065 .195 .143
Faculty employment satisfaction .060 .099 .140 .151 .197 .083 .074 .930 .169
Professional development and quality of faculty .202 .118 .079 .053 .154 .164 .142 .179 .913
System openness and community interaction .960 -.010 .022 .112 .040 .039 .169 .055 .173
Ability to acquire resources .110 .060 .147 .965 .076 .067 .037 .136 .047
Organizational health .021 -.006 .979 .140 .031 .032 -.012 .120 .065
Table 9. Rotated component matrix for organizational effectiveness (N = 369)

FINDINGS AND DISCUSSIONS

Research Question 1

What is the relationship among organizational culture types, organizational innovativeness, and
organizational effectiveness in universities as perceived by the faculty members?
In order to answer the first research question, Pearson’s product moment correlations (r) were
computed among the four culture types, organizational innovativeness and organizational
effectiveness. Using the Bonferroni approach to control for Type 1 error across the fifteen
correlations, a p value of < .003 was required for significance. The results in Table 10 indicate
that there were strong significant positive correlations among the three organizational culture
types of adhocracy (r =.772), market (r = .710) and clan (r = .704) with organizational
innovativeness in order of high to low. Moreover, the moderate positive significant
relationships were observed between these three organizational culture types and
organizational effectiveness as follows: adhocracy (r = .474), market (r = .437) and clan (r =
.427). Hierarchy culture did not have any significant correlation neither with organizational
innovativeness nor with organizational effectiveness. In addition, there was a moderate
significant positive correlation (r = .481) between organizational innovativeness and
organizational effectiveness according to Cohen’s (1992) guidelines. In general, based on the
results, the organizational culture types that were positively correlated to organizational
innovativeness had also positive links with organizational effectiveness.

Clan Adhocracy Market Hierarchy Organizational


culture culture culture culture innovativeness
Organizational .704* .772* .710* .091
Innovativeness
Organizational .427* .474* .437* .074 .481*
Effectiveness
*p < .003
Table 10. Bivariate correlations among six research variables (N = 369)
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The positive correlations among adhocracy, market and clan cultures with organizational
innovativeness as well as the lack of association between hierarchy culture and organizational
innovativeness support the claim that organizational culture is considered to be one of the key
elements related to innovation. While adhocracy culture can increase the development of new
services or products, hierarchy culture does not provide support for them Valencia et al. (2010).
Further, these findings are also in accordance with other studies which propose that a number
of culture features, for instance creativity (Miron, Erez & Naveh, 2004), freedom and autonomy
(Martins & Terblanche, 2003), empowerment (Gudmundson, Tower & Hartman, 2003), and
risk taking (Jamrog, Vickers, & Bear, 2006) which are the features of adhocracy cultures, cause
an enhancement in novelty and innovation.

The results concerning the link between market culture and organizational innovativeness are
also consistent with Obenchain, Johnson, and Dion’s (2004) argument that the adhocracy and
market culture types share similar functional value on external focus. This reasoning matches
with that of Detert et al. (2000). He states that organizations, which focus on external features
like clients, contestants, and the environment at large, base their novelty on data attained from
these external sources. Saraph, Benson, & Schroeder (1989) reported that external orientation
(client orientation and strong social relations, suppliers, and other external components) prefers
procedures of continuous improvement, which are by themselves means of novelty and
innovation. Based on this idea, it is determined that organizational cultures of external
orientation prefer novelty. Therefore, the market culture type is likely to be accompanied by
upper levels of innovation.

The correlation between clan culture and innovativeness is supported by Duréndez and Garcia
(2008). They found that clan culture that is characterized by a managerial style, which promotes
working as team, consensus and participation, is associated with innovation. According to
Martins and Terblanche (2003), it is to be expected that clan culture as a flexibility-oriented
culture will favor innovation since in the literature flexibility is regarded as one of the values
most associated with innovative culture.

On the other hand, hierarchy culture is known as a very formalized, structured and controlled
place at work (Cameron & Quinn, 2006). According to Bratianu, and Vasilache (2009),
innovation is by its own nature associated with some risks. In a culture of permanent control,
innovation cannot be developed. Innovation can be implemented and developed in an open
organizational culture based on trust and transparency. That is to say, improving
communications and breaking down the practices of controlling people and not processes.
Therefore, the findings of this study are supported by Bratianu, and Vasilache (2009) who
demonstrated hierarchy culture is not related to organizational innovativeness.

The results of this study supported the link between the types of organizational culture and
organizational effectiveness. It was found that the type of culture that is dominant in a
university has a significant association with organizational effectiveness (Anderson, 2000;
Gigliotti, 1987; Dela Cruz, 2011; Lejeune & vas, 2009). Making reference to the literature, one
can safely estimate that universities possess attributes of numerous types of organizational
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cultures, and that no university can be regarded as having one cultural type. The findings of
this study propose that considering organizational culture type, a university will adjust to
continuous change and use suitable actions of organizational effectiveness that are related to
the organization and significant to its long-term existence. This idea has been reverberated and
supported by some other researchers (Kwan, 2002; Smart, 2003; Tierney, 2008) as well.

Adhocracy culture creates an entrepreneurial place to work. The clan culture prioritizes
teamwork, and the market culture is characterized by creating external partnerships (Cameron
& Quinn, 2006). Entrepreneurs in an adhocracy culture are more likely to be innovative.
Entrepreneurs embedded in entrepreneurial teamwork are more likely to provide customers
with something new, using newly introduced technology and attracting a high proportion of
their customers outside their home market. These features positively influence organizational
effectiveness (Klyver, Hunter, & Watne, 2008). So, it is not surprising that these three culture
types at the same time were correlated to organizational effectiveness.

Moon (1999) found that the layers of administration cause delays and undermine
communications. Organizations with highly hierarchical systems may have greater transaction
costs for each decision and function. Such type of environment may hurdle innovative
decisions and new programs. Ingram and Clay (2000) wrote that rules and enforcement
mechanism insist to follow general patterns of behaviors, attitudes, and values. So, high profile
formalization in an organization may reduce the chances of risk-taking and innovative
activities. Therefore, it was expected that hierarchy culture might not be correlated with
organizational effectiveness in the current study. This result is supported by Ul Hassan, Shah,
Ikramullah, Zaman, & Khan (2011) who reported that organizational effectiveness and
bureaucratic sort of culture are not related.

Moreover, the findings of this study indicated a positive and significant correlation between
organizational innovativeness and organizational effectiveness. Kasim and Noh (2012) regard
organizational innovativeness as an important means for changing an organization in response
to changes that occur in its internal and external environment. Supporting the finding of the
current study, Hult, Hurley and Knight (2004) explained that when the environment evolves,
organization must adopt innovations over time and the most important innovations are those
that allow organizations to achieve some sort of competitive advantage contributing to its
performance. According to Rowley, Baregheh, and Sambrook (2011), if organizations want to
survive, they need to invest in different types of innovation since different types of innovation
influence organization in different ways and achieve different outcomes and impact.

Research Question 2

Does organizational innovativeness mediate the relationship between each organizational


culture type and organizational effectiveness in universities as perceived by the faculty
members?
To answer research question 2, the partial correlation coefficients were computed among the
four organizational culture types and organizational effectiveness holding constant the
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organizational innovativeness. A p value of < .005 was required for significance using the
Bonferroni approach to control for Type 1 error across the ten partial correlations. The findings
in the Table 11 indicate that partial correlations between clan culture (r p = .142, p < .005),
adhocracy culture (r p = .184, p < .005) and market culture (r p = .155, p <.005) with
organizational effectiveness were positive, significant, and small in magnitude, according to
Cohen (1992). This result illustrated that the correlations between organizational culture types
and organizational effectiveness partialling out the effects of organizational innovativeness
were not equal to zero in value. Therefore, organizational innovativeness was not the sole
determinant in the relationship between organizational culture and organizational
effectiveness. Organizational culture had both a direct and indirect (through innovation)
relationship with organizational effectiveness in reference to Green and Salkind (2011). Table
11 shows the findings for this research question.

Clan Adhocracy Market Hierarchy


culture culture culture Culture
Organizational .142* .184* .155* .035
effectiveness
*p < .005
Table 11. Partial correlations controlling for organizational innovativeness (N=369)

Then, to further explore the mediation effects of organizational innovativeness between each
type of organizational culture and organizational effectiveness, Baron and Kenny’s (1986) and
Kenny’s (2012) four steps of regression were used. The first step showed a significant relation
between the organizational culture type and the organizational effectiveness. The second step
indicated that organizational culture type was related to organizational innovativeness. The
third step showed that organizational innovativeness was related to organizational
effectiveness. The final step revealed that the strength of the relationship between the
organizational culture type and organizational effectiveness is significantly reduced when
organizational innovativeness is added to the model. The relationship between the
organizational culture type and organizational effectiveness disappears when organizational
innovativeness is a full mediator. If the relationship gets weaker but still remains significant, a
partial mediation effect of organizational innovativeness is found. Both Steps 3 and 4 are
estimated in the same equation (Judd & Kenny, 2010; Zhao, Lynch, & Chen, 2010).

Table 12 shows the results of statistical analysis that examined the mediating role of
organizational innovativeness between clan culture and organizational effectiveness. Based on
Baron and Kenny’s (1986) approach, in step 1 of the mediation model, the regression of clan
culture on organizational effectiveness, ignoring the organizational innovativeness, was
significant (β = .427; p < .001), Step 2 showed that the regression of the clan culture on the
mediator, organizational innovativeness, was also significant (β = .704; p < .001). Step 3 of the
mediation process showed that the mediator (organizational innovativeness), controlling for
the clan culture, was significant (β = .357; p < .001). Step 4 indicated that, the introduction of
the organizational innovativeness into the equation weakened the direct relationship between

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clan culture and organizational effectiveness, but still remained significant (β = .175; p = .005).
This suggests that organizational innovativeness acts as a partial mediator.

Steps Predictor Prediction B SEB β T P


1 Clan culture Organizational .188 .021 .427 9.045 .000
effectiveness
2 Clan culture Organizational .705 .037 .704 19.015 .000
innovativeness
3&4 Clan culture .077 .028 .175 2.741 .005
and Organizational
Organizational effectiveness
innovativeness .157 .028 .357 5.590 .000

Table 12. Results of the SPSS mediation analysis for clan culture (N = 369)

Table 13 shows the results of statistical analysis that examined the mediating role of
organizational innovativeness between adhocracy culture and organizational effectiveness.
Based on Baron and Kenny’s (1986) approach, in step 1 of the mediation model, the regression
of adhocracy culture on organizational effectiveness, ignoring organizational innovativeness,
was significant (β = .474; p < .001). Step 2 showed that the regression of adhocracy culture
on organizational innovativeness was also significant (β = .772; p < .001). Step 3 of the
mediation process showed that the mediator (organizational innovativeness), controlling for
adhocracy culture, was significant (β = .285; p < .001). Step 4 indicated that, the introduction
of organizational innovativeness into the equation weakened the direct relationship between
adhocracy culture and organizational effectiveness, but still remained significant (β = .254; p
<.001). This suggests that organizational innovativeness acts as a partial mediator.

Steps Predictor Prediction B SEB β T P


1 Adhocracy culture Organizational .173 .017 .474 10.306 .000
effectiveness
2 Adhocracy culture Organizational .641 .028 .772 23.298 .000
innovativeness
3&4 Adhocracy culture .093 .026 .254 3.580 .000
and
Organizational Organizational
innovativeness effectiveness
.125 .031 .285 4.012 .000
Table 13. Results of the SPSS mediation analysis for adhocracy culture (N = 369)

Table 14 shows the results of statistical analysis that examined the mediating role of
organizational innovativeness between market culture and organizational effectiveness. Based
on Baron and Kenny’s (1986) approach, in step 1 of the mediation model, the regression of
market culture on organizational effectiveness, ignoring the mediator, was significant (β =
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.437; p < .001). Step 2 showed that the regression of the market culture on the mediator,
organizational innovativeness, was also significant (β = .710; p < .001). Step 3 of the mediation
process showed that the mediator (organizational innovativeness), controlling for the market
culture, was significant (β = .344; p < .001). Step 4 indicated that the introduction of
organizational innovativeness into the equation weakened the direct relationship between
market culture and organizational effectiveness, but still remained significant (β =. 193; p =
.003). This suggests that organizational innovativeness acts as a partial mediator.

Steps Predictor Prediction B SEB β T P


1 Market culture Organizational .172 .019 .437 9.306 .000
effectiveness
2 Market culture Organizational .636 .033 .710 19.337 .000
innovativeness
3&4 Market culture .076 .025 .193 2.993 .003
and Organizational
Organizational effectiveness
innovativeness .151 .028 .344 5.346 .000
Table 14. Results of the SPSS mediation analysis for market culture (N = 369)

The hierarchy culture is not reported because it showed no significant relations with either
organizational innovativeness (r = .091, p = .82) or organizational effectiveness (r =.074, p =
.156), indicating that this variable could not be entered into the regression equations. Overall,
these results confirm the earlier partial correlation analysis of the data.

Based on the findings, organizational innovativeness was found to play a partial mediating role
between organizational culture types (Clan, Adhocracy, and Market) and organizational
effectiveness. The three primary criteria for establishing that one variable causes another to
change include: (a) there is an association between the two variables; (b) the association is not
spurious; and (c) the cause precedes the effect in time. On a conceptual level, the proposed
relationships between the predictor and the mediator should be grounded in the previous
research (Frazier, Tix, & Barron, 2004). Furthermore, given that the meditational model
essentially is one in which the predictor causes the mediator to change, which in turn causes
the outcome to change, the mediator ideally should be something that can be changed
(Mackinnon et al., 2002). All these conditions were considered in the current study.

It seems that there is practically no previous research on the mediation effects of organizational
innovativeness between organizational culture and organizational effectiveness. The results of
the current study provide an invaluable direction for research. As organizational culture
enhances organizational effectiveness through organizational innovativeness, organizational
culture and innovativeness must be considered simultaneously by academic authorities in
universities. This will pave the way for institutes of higher education to achieve better
organizational effectiveness.

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CONCLUSION

Drawing upon existing empirical evidences, this study presented a study of the relationships
between organizational culture, organizational innovativeness and organizational
effectiveness. Existing literature is abundant in explaining these three variables as separate
constructs. But the literature seldom sheds light on the relationship between the three.

In the literature, there are two substantial predictors of institutional effectiveness: (1)
organizational culture (Bergquist & Pawlak, 2008; Schein, 2004), and (2) organizational
innovativeness (Damanpour et al., 2009; Lin, 2006; Tajeddini, 2011; Wang, 2005). There were
two research objectives for the current study. These objectives were as follows:
1. To determine the relationship between organizational culture types, organizational
innovativeness and organizational effectiveness in private universities as perceived by the
faculty members;

2. To determine the mediation effects (if any) of organizational innovativeness between


each organizational culture type and organizational effectiveness in private universities as
perceived by the faculty members.

The results of the statistical analyses for the two research questions of the present study proved
that:
1. There were strong positive correlations among the three organizational culture types of
adhocracy, market and clan with organizational innovativeness. The moderate positive
relationships existed between these three organizational culture types and organizational
effectiveness. Hierarchy culture did not have any significant relationship either with
organizational innovativeness or with organizational effectiveness. There was a moderate
positive correlation between organizational innovativeness and organizational effectiveness.
This result that was related to the first research question may imply that organizational culture
has a connection with organizational effectiveness mainly by facilitating innovation. Therefore,
universities should improve innovativeness to become more effective.
2. The results illustrated that a partial mediation effect of organizational innovativeness
was found between clan, market, and adhocracy cultures with organizational effectiveness.
Therefore, organizational culture not only directly influences both innovativeness and
effectiveness but also influences effectiveness through innovation. The implication of the
second research question is that the university administrators should be aware of the benefits
from the implementation of a culture that supports innovation. In reference to Vermeulen
(2004), academic administrators should understand that an innovative attitude implies the
adoption of new ideas and values that are not threats but strengths, in order to assure the future
of universities.

RECOMMENDATIONS

This study defined the types of the culture and innovativeness that anticipate effectiveness of
nongovernmental universities. A review of the findings of this study, in conjunction with the
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current literature on organizational culture, organizational innovativeness, and organizational


effectiveness lead to the following recommendations:

Despite the significant effect of organizational culture and organizational innovativeness on


organizational effectiveness, these two variables are not sufficient to explain the variance of
universities’ effectiveness comprehensively. There is a myriad of other organizational factors
not captured in this study. Variables, including organizational learning (Jiménez-Jiménez &
Sanz-Valle, 2011), knowledge management (Zheng, Yang & Mclean, 2009), organizational
trust (Johnson, Shelton, & Yates, 2012), positive practices (Cameron, Mora, Leutscher, &
Calarco, 2011), and organizational justice (Park & Yoon, 2009), can have significant effects
on organizational effectiveness. As such, it is proposed that future studies expand the findings
of the current study by involving other variables in order to explore the extent to which different
factors may operate synergistically with respect to organizational effectiveness.

Moreover, future research is needed to identify other mediating variables in the culture-
effectiveness relationship, as they would help expand the current understanding of “how” and
“why” an organization's culture plays a role in its effectiveness. Understanding the mediators
between culture and effectiveness allows for a more informed approach to guide and direct
organizations towards adopting constructive cultures. Mediating variables can provide
immediate feedback on the appropriateness of an organization's culture. Based on this
feedback, corrections could be identified and implemented to the organization's culture in order
to improve its effectiveness.

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