The influence of organizational culture-related factors on voluntary turnover in SMEs

Dang, Ngoc Hung
Ingley, Coral
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Master of Business
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Auckland University of Technology

Literature reveals a strong link between organizational culture and the motivation of employees (including their commitment to the firm). By building a positive organizational culture which facilitates the involvement of employees in teamwork, innovation and proficiency, a company is said to be able to retain their skilled workers more effectively (Shim, 2010). This study partially replicates and extends the work of Shim (2010) to New Zealand SMEs (small and medium sized enterprises).

The study explores the influence of the five organizational culture-related factors used by Shim (2010) on the staying intention of employees in SMEs. The five factors used in the study involve teamwork orientation, innovation orientation, supportiveness, proficiency and reward orientation. Data was collected using an online survey (Google online survey). PLS modeling was used to analyze the data to determine the impact of each factor on staff intentions to either stay or leave their job.

Similarly to Shim (2010), the findings of this study highlight the significant role of organizational culture-related factors on voluntary turnover. Therefore, managers can build a positive environment in accordance with the five factors in order to better retain the firm’s workforce. Furthermore, by examining the strength of the impact of each factor, this study predicts that teamwork orientation has the strongest influence on the staying intention while innovation orientation is predicted to have a slightly weaker effect. Given that not all SMEs are able to invest in the five factors simultaneously, by determining the strength of the impact of each factor, the study gives them the chance to focus on factors with the greatest relevance for them.

By replicating and extending the study of Shim (2010) in New Zealand SMEs, this study contributes to existing SMEs literature (which is not abundant due to the low attraction to scholars) (Cassell, Nadin, Gray & Clegg, 2002) by emphasizing the important role of organizational culture on employees’ intention to stay or leave. However, a low response rate to the survey and the prediction-oriented characteristics of PLS modeling adversely influence the generalization of the finding of this study to a larger population. Areas for further research are suggested (e.g. research about the interconnection between factors, the use of qualitative method).

Organizational culture , Voluntary turnover , SMEs , Leaving intention
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