1.

1 Introduction

Organisational culture has been an important theme in management and business research for
the past few decades due to its effect and potential impact on organisationally and individually
desired outcomes such as commitment, loyalty, intent to turnover and satisfaction (Chow et al.,
2001). In today's business environment, organisational culture is used as a powerful tool that
portrays many facets of a workplace as well as to quantify the way a business functions (Gray,
Densten & Sarros, 2003). Research has confirmed that organisational culture is not only able to
change, guide and display but also give significant contributions by influencing the thought,
feeling, interacting and performance in the organisation (Ab. Aziz Yusof & Juhary Ali, 2000).
The importance of culture is enhanced through its impact on employee morale and work
attitudes such as job satisfaction (Dose, 1997).

Similarly, employee morale is a workforce phenomenon that confronts every organisation at

some time. The understanding of morale is important because it can have tangible and wide-
ranging effects and outcomes for an organisation. Morale is not a simple concept and the
outcomes associated with high or low morale may impact upon staff turnover, attainment of
organisational or personal goals, the ability to adopt new practices, learning new skills and the
delivery of good customer service. As early as the 1940s morale was being viewed as an
important workplace issue. At the time, it was suggested that when any person holds a position
of responsibility in a business, the word "morale" comes to have real meaning and refers to
something that has great importance, even if that something remains vague and illusive. At
times the feelings of poor morale are difficult to articulate by those that are affected by it.
While there are a number of thematic variations on the definition of morale, for the purposes of
this review, positive morale is seen as an attitude of confidence in the mind of the individual
where they identify with a group, accept group goals and work towards achieving them
collectively. The fact that there has been no unifying definition of morale goes some way to
explaining the reasons why definitive empirical studies on the phenomenon have been
somewhat sporadic.

1
Despite the considerable body of organisational literature that has been conducted to examine
the relationship between corporate culture and employees' satisfaction in various countries as
well as industries (for example, Chow et al., 2001; Mohammad Saeed & Arif Hassan, 2000;
Pool, 2000; Rashid et al., 2003; Grifford, Zammuto & Goodman, 2002; Lund, 2003; Sheridan,
1992), there is very little literature that recognises organisational culture studies within the
context of the Banking industry, particularly on how employee morale amongst employees is
affected by organisational culture dimensions that have otherwise attracted considerable
attention in organizational literature. As the banking industry is the spotlight of the global
service industries and is considered to be one of the major contributors to the global economy,
organisational culture is strategically and tactically important for gaining a competitive
advantage. Moreover, the banking industry differs from other industries in terms of their
organizational structures, responses to the environment, managerial styles and the ways in
which they compete with other firms. The importance of culture is enhanced through its impact
on employee morale and work attitudes such as job satisfaction (Dose, 1997). In order to
bridge the gap and provide organisations with practical assistance in dealing with this issue,
this research is aimed towards examining whether the application of eight dimensions of
organisational culture adoption results in an improvement of employees' working conditions
that contribute towards the higher employee morale specifically in the context of the Indian
Banking Industry.

In view of the absence of such research on these relationships, therefore, this paper reports the
results of a survey that was designed to answer a general research question: "Does
organisational culture predict employee morale in banking sector?"

This research is particularly important, as most of the studies carried out in the Indian
environment attempt a partial understanding in the sphere of organizational culture and
employee morale. Most of these stress only a single characteristic of these two aspects.

Indian organizational culture with both its formal and informal characteristics has been the
object of hardly any studies. Most of our knowledge about it is derived from day to day
experience and heresay rather than a comparative, systematic and scientific analysis. It’s effect

2
on morale too how escaped scientific analysis and is subject to rough estimates and highly
personal perceptions in most cases.

To address the knowledge gap, this study contributes to the literature by attempting to satisfy
the clear need for an analytical study that examines recognizable dimensions of organisational
culture, and linking organizational culture and employees' morale, using appropriate statistical
methods (i.e. data analyses were used based on both descriptive and inferential methods)
within five major banks, both the private and the public sector banks in the tricity region.
Based on an extensive study of previous research on organisational culture, eight core
dimensions of organisational culture have been identified as key dimensions, which support an
organisation's business strategy towards the increase in employees' work outcomes. These
dimensions of organisational culture are: Openness, Confrontation, Trust, Authenticity,
Proaction, Autonomy, Collaboration and Experimenting. Similarly, the dimensions of
Employee morale are the Index Of Job Satisfaction, the Index Of Organisational Image, the
Index Of Career Growth, the Index Of Satisfaction With Superiors, the Index Of Satisfaction
Of Emotional And Physical Needs. Finally, this research project uses quantitative methods to
study the impact of organisational culture on employee morale in the banking sector within the
tricity region.

The purpose of this investigation is two-fold. Firstly, to provide a greater understanding of the
influence of organizational culture on employee morale. Secondly, to present a comparative
study of the organizational culture and employee morale in the two types of banks – private
and public sector banks.

1.2 Introduction to the Banking Sector

Banks are the most significant players in the Indian financial market. They are the biggest
purveyors of credit, and they also attract most of the savings from the population. Dominated
by public sector, the banking industry has so far acted as an efficient partner in the growth and
the development of the country. Driven by the socialist ideologies and the welfare state

3
concept, public sector banks have long been the supporters of agriculture and other priority
sectors. They act as crucial channels of the government in its efforts to ensure equitable
economic development.

The Indian banking can be broadly categorized into nationalized (government owned), private
banks and specialized banking institutions. The Reserve Bank of India acts a centralized body
monitoring any discrepancies and shortcoming in the system. Since the nationalization of
banks in 1969, the public sector banks or the nationalized banks have acquired a place of
prominence and has since then seen tremendous progress. The need to become highly customer
focused has forced the slow-moving public sector banks to adopt a fast track approach. The
unleashing of products and services through the net has galvanized players at all levels of the
banking and financial institutions market grid to look anew at their existing portfolio offering.
Conservative banking practices allowed Indian banks to be insulated partially from the Asian
currency crisis. Indian banks are now quoting al higher valuation when compared to banks in
other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems
linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are
nimble footed in approach and armed with efficient branch networks focus primarily on the
‘high revenue’ niche retail segments.

The Indian banking has finally worked up to the competitive dynamics of the ‘new’ Indian
market and is addressing the relevant issues to take on the multifarious challenges of
globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive
players capable of meeting the multifarious requirements of the large customer’s base. Private
Banks have been fast on the uptake and are reorienting their strategies using the internet as a
medium The Internet has emerged as the new and challenging frontier of marketing with the
conventional physical world tenets being just as applicable like in any other marketing
medium.

The Indian banking has come from a long way from being a sleepy business institution to a
highly proactive and dynamic entity. This transformation has been largely brought about by

4
the large dose of liberalization and economic reforms that allowed banks to explore new
business opportunities rather than generating revenues from conventional streams (i.e.
borrowing and lending). The banking in India is highly fragmented with 30 banking units
contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks (banks
owned by the government) continue to be the major lenders in the economy due to their sheer
size and penetrative networks which assures them high deposit mobilization. The Indian
banking can be broadly categorized into nationalized, private banks and specialized banking
institutions.

The Reserve Bank of India acts as a centralized body monitoring any discrepancies and
shortcoming in the system. It is the foremost monitoring body in the Indian financial sector.
The nationalized banks (i.e. government-owned banks) continue to dominate the Indian
banking arena. Industry estimates indicate that out of 274 commercial banks operating in
India, 223 banks are in the public sector and 51 are in the private sector. The private sector
bank grid also includes 24 foreign banks that have started their operations here.

The liberalize policy of Government of India permitted entry to private sector in the banking,
the industry has witnessed the entry of nine new generation private banks. The major
differentiating parameter that distinguishes these banks from all the other banks in the
Indian banking is the level of service that is offered to the customer. Their focus has always
centered on the customer – understanding his needs, preempting him and consequently
delighting him with various configurations of benefits and a wide portfolio of products and
services. These banks have generally been established by promoters of repute or by ‘high
value’ domestic financial institutions.

The popularity of these banks can be gauged by the fact that in a short span of time, these
banks have gained considerable customer confidence and consequently have shown impressive
growth rates. Today, the private banks corner almost four per cent share of the total share of
deposits. Most of the banks in this category are concentrated in the high-growth urban areas in
metros (that account for approximately 70% of the total banking business). With efficiency

5
being the major focus, these banks have leveraged on their strengths and competencies viz.
Management, operational efficiency and flexibility, superior product positioning and higher
employee productivity skills.

The private banks with their focused business and service portfolio have a reputation of being
niche players in the industry. A strategy that has allowed these banks to concentrate on few
reliable high net worth companies and individuals rather than cater to the mass market. These
well-chalked out integrates strategy plans have allowed most of these banks to deliver
superlative levels of personalized services. With the Reserve Bank of India allowing these
banks to operate 70% of their businesses in urban areas, this statutory requirement has
translated into lower deposit mobilization costs and higher margins relative to public sector
banks.

The key players in the banking sector in India are State Bank of India (SBI) and Punjab
National Bank (PNB) in the Public Sector Banks while Industrial Credit and Investment
Corporation of India (ICICI) and Housing Development and Finance Corporation (HDFC) in
the private sector.

1.3 Chapter Scheme

This research consists of five chapters. The first chapter gives the introduction and background
of this study along with an industry overview. The second chapter is a review of the literature
on organisational culture and employees' morale. The third chapter leads to the development of
the conceptual framework and hypothesis development that is tested in this study and also
provides a description of the methodology that is used in the research. The fourth chapter
provides the discussion of the results obtained after analysing the data, and is followed by the
limitations and suggestions for future research, conclusion and implications in the last section.

6
2.1 ORGANISATIONAL CULTURE

2.1.1 Introduction
The information age has arrived in full force and technology along with all of its advancements
is here to stay. Even though businesses seem to be all about numbers and making a fast buck,
companies are again realizing the immeasurable significance of their human workforce. The
recent awareness of organizational culture theory is evidence that ‘the time has come to write
meaning and emotion back into organizations’ (Gabriel 1991, p. 319).

This chapter presents a literature review on different aspects of organisation culture and
employee morale. It also explores selected tools used by other researchers to assess
organisational culture and employee morale. A brief review of some works studying the
relationship between organisational culture and employee morale is also presented in this
chapter.

2.1.2 Organisational culture

This sections looks at different aspects of organisational culture including its concepts,
definitions, its importance and components. A brief review of some tools used by other
researchers to assess organisational culture is also included.

A. Concepts and definitions of organisational culture

The concept of ‘organisational culture’ has become popular since the early 1980s. Along with
the growing interest in the topic, there seems to be little agreement within the literature as to
what ‘organisational culture’ actually is and, therefore, there are different definitions and
perspectives on this topic. Some define organisational culture as the observable behavioural
rules in human interaction (Van Maanen 1979); some as the dominant values in an organisation
(Deal & Kennedy 1982); others as a consistent perception within an organisation (Robbins
1998). One of the most common definitions of organisational culture includes shared values,
beliefs, or norms (Beyer & Trice 1987; Tunstall 1983; Wilkins & Patterson 1985; Martin 1985;

7
Barney 1986; Kerr 1991) (Chen, CS 1994). As a summary, Yanagi (1994, p. ii) stated that
organisational culture can be defined as ‘philosophies and values shared by the members of
organisations and their behavioural patterns for translating them into practical actions’.
Another often referred-to definition of organisational culture was devised by Schein (1989,
1992). According to Schein (1989), culture is a coherent system of assumptions and basic
values, which distinguish one group or organisation from another and orient its choices.

Hence, organisational culture implies ‘a pattern of basic assumptions – invented, discovered, or

developed by a given group as it learns to cope with its problems of external adaptation and
internal integration – that has worked well enough to be considered valid and, therefore, to be
taught to new members as the correct way to perceive, think, and feel in relation to those
problems’ (Schein 1989, p. 9).

‘Culture is the unique whole, the heart and soul that determines how a group of people will
behave. Cultures are collective beliefs that in turn shape behaviour’ (Organisations @ Onepine
2003). A key role for organisational culture is to differentiate the organisation from others and
provide a sense of identity for its members.

An important point made by some researchers while exploring the concepts and definitions of
organisational culture is the stress that culture is a dynamic, evolving process, not at all static.
Morgan (1986), for example, argued that culture must be understood as an active, living
phenomenon through which people create and recreate their worlds. Schein (1989) also stated
that organisational culture changes over time and becomes more embedded into the ‘out-of-
awareness’ functioning of an organisation. Both Morgan and Schein’s views imply that key
individuals have a crucial role to play in shaping and refining the culture. Schein (1989, p. 2)
claimed that ‘organisational culture are created by leaders and one of the most decisive
functions of leadership may well be the creation, the management, and – if and when that may
become necessary – the destruction of culture’. Although the main focus of this research is
culture at the organisational level, it is also important that due attention be given to the broader
external societal, cultural context within which organisations are embedded. Cultures are
“layered” as stated by researchers. Cultures permeate many levels of social life simultaneously.

8
Some aspects of culture are nearly universal, like the high value placed on family bonds and
good childcare. Other cultural themes are characteristic of whole regions of the world (regional
culture). A culture becomes characteristic of a specific nation (national culture), or even of a
particular social group (organisational/corporate culture), largely because of its linkage to
specific locales and experiences. Organisational culture, therefore, has to be viewed in a
broader perspective, with due consideration given to the interrelation or the linkages between
cultural themes at the regional, national, organisational and individual levels.

Despite the various definitions and perspectives on organisational culture, one thing is
universal amongst most of them, and that is the shared nature of the beliefs, philosophies,
norms …etc. In essence, many claimed that the function of organizational culture is to create a
feeling of ‘esprit de corps’ within the organisation (Van Maanen & Barley 1985, p. 39). If this
is so, then we should attempt to examine why organizational culture is regarded so important
and valuable.

B. Increasing importance of organisational culture and research on organizational culture

Organisational culture is the key to organisational excellence and the function of leadership is
the creation and management of culture (Schein 1992). ‘In general we find that outstandingly
successful organisations usually have strong and unique cultures… Unsuccessful organisations
have weak indifferent sub-cultures or old sub-cultures that become sclerosed and can actually
prevent the organisation’s adaptation to changed circumstances’ (Hofstede 1980, p. 394).
Organisational researchers are becoming more aware of the importance of understanding and
enhancing the cultural life of an organisation. ‘One study of a group of high-performance
companies in North America indicated that paying attention to organisational culture is an
important ingredient in organisational success’ (Frost et al. 1985, p. 16). Organisational
learning, development and planned change cannot be understood without considering
organisational culture as the primary source of resistance to change (Schein 1992).
The ability to perceive and assess the limitations of one’s own culture and to develop the
culture adaptively is the essence and ultimate challenge of leadership (Schein 1992).
Interpreting and understanding organisational culture is an important activity for managers,

9
researchers and consultants because it affects strategic development, productivity and learning
at all levels. Organisational culture has been shown to ‘affect workers’ commitment to and
identification with the group and organisation, as well as their sense of involvement with their
work assignments’ (Louis 1985, p. 85). With respect to the issue of change and culture, there is
solid documentation that overlooking organisational culture has impeded efforts to change
organisational functioning. Examination of past failures in organisational development efforts
points to the role of culture as a critical force to be considered in effecting change (Beer 1980).
Some of the reasons why it is important to understand an organisation’s culture are:
It will determine the responses that an organisation will make to new problems and
challenges. It may facilitate change or be a stumbling block.
It will determine the kinds of people who are attracted to the organisation and who will be
successful in it.
It determines what counts as important in the organisation and so gives a clear direction for
planning training and management development programs. Failing to understand and manage
the organisational culture can lead to much time being wasted on irrelevant activities and even
to conflict between different levels in the organisation, cynicism and disillusionment. Without
control of the culture, subsidiaries, departments and functions may take on their own culture.
While some differences in culture between groups within the same organisation may be
acceptable or desirable, there may be core values, which are vital to the success of the
organisation and should be shared by all. These core values need to be identified and
embedded in the culture. The process involves being explicit about what values are important
to the organization and getting people to understand and commit themselves to these values
(Human Factors International 2004).

Schein (1989, p. 48) stated ‘failing to understand how culture works is just as dangerous in the
organisational world as failing to understand gravity and the atmosphere in the
physical/biological world’.

10
C. Different aspects of organisational culture

While exploring the ‘content’ of organisational culture, researchers seems to use a wide variety
of approaches, methods and terms to describe what organisational culture might contain and/or
entail. The organization ‘has’ perspectives sees organizational culture as consisting of
variables, subsystems or components. These components have been described in McKinsey’s
7-S framework. (Peters and Waterman, 1982; see Figure 2.1)

Figure 1- McKinsey’s 7-S framework

In this framework, components have certain functionality and management can control and
integrate different components to form strong or weak cultures. As Meek (1988) stated:
“’strong cultures are somehow more likely to be associated with effectiveness than are weak
cultures and strong cultures can be deliberately created” (p.196) and “Organisational cultures
are created by leaders and one of the most decisive functions of leadership may well be the
creation, the management, and - if and when that may become necessary – the destruction of
culture”

Similarly, Schein (1989) referred to various ‘cultural elements’ such as the physical layout of
an organisation’s offices, rules of interactions that are taught to newcomers, basic values that

11
come to be seen as the organisation’s ideology or philosophy, and the underlying conceptual
categories and assumptions that enable people to communicate and to interpret everyday
occurrences. He distinguished among these elements by treating basic assumptions as the
essence – what culture really is – and by treating values and behaviours as observed
manifestations of the cultural essence. In a sense, he classified these elements into three levels
of culture (see Figure 2.1)

Figure 2 Levels of culture and their interaction

Earlier, Lundberg (1985, p. 171-172) had offered a very similar view and distinguished four (4)
separate levels of meaning for an organisation’s culture (adapted from Schein (1981) and Dyer
(1982) (See Figure 2.3)

12
 Figure 3 Organisational culture – levels of meaning

Source: Adapted from Lundberg, CC 1985, 'On the feasibility of cultural intervention in organisations',
Organisational Culture, Sage Publications, Beverley Hills, CA, pp. 171-172.

At the more visible or superficial levels of culture in Schein’s and Dyer’s formulation are
artefacts. These are tangible aspects shared by members of an organisational group, including
variable verbal, behavioural and physical attributes. Also included are such things as the
language, stories and myths, rituals, symbols and ceremonies, technology and art used by an
organisation. The next level involves perspectives: the rules and norms the members of a group
or organisation develop and share socially in any given context. Perspectives may be viewed as
the solutions to a common set of problems encountered by organizational members from time
to time. They define and interpret situations of organisational life and prescribe the bounds of
acceptable behaviour in such situations. They are relatively concrete and members are usually
aware of them The values are the evaluation base that members of an organisation use for
judging the ‘rightness’ or ‘wrongness’ of situations, acts, objects and people. Values reflect the
real objectives, standards and goals in an organisation and define as well its transgressions,
sins, and wrongdoings. At the deepest level of an organisational culture are the basic
assumptions, which are the tacit beliefs that members hold about themselves and the world,
their relationships to one another and the nature of the organisation in which they work.
Largely unconscious, they underpin the first three levels above. They can be viewed as the
implicit and abstract axioms that determine the values, perspectives and artefacts of an
organisation’s culture.

Another well-known author, whose ideas influence organisational work, Geert Hofstede, has
argued that organisational cultures should be distinguished from national cultures. Cultures

13
manifest themselves, from superficial to deep, in symbols, heroes, rituals and values etc.
National cultures differ mostly on the values level; while organisational cultures at the levels of
symbols, heroes and rituals, together labeled ‘practices’. Hofstede (1980) studied the
differences in national cultures for over fifty countries. The cultures show five independent
dimensions of values: power distance; individualism versus collectivism; masculinity versus
femininity; uncertainty avoidance; and Confucian dynamism.
Power distance: a measure of the inequality between ‘bosses’ and inferiors, the extent to
which this is accepted.
Uncertainty avoidance: the degree to which one is comfortable with or feels threatened by
ambiguous, uncertain situations, the extent one can or cannot tolerate uncertainty and tries to
avoid it by establishing more structure.
Individualism – Collectivism: the degree to which a culture relies on and has allegiance to
the self or the group. In other words, it is the degree to which one thinks in terms of ‘I’ versus
‘we’; either ties between individuals are loose or people are part of a cohesive group
throughout their lives.
Masculinity – Femininity (also known as achievement versus nurturance orientation): the
degree to which a culture values such behaviour as assertiveness, achievement, acquisition of
wealth or caring for others, social support and quality of life.
Confucian dynamism: this fifth dimension was later added following Hofstede’s work
with Michael Bond (Hofstede & Bond 1988) which was meant to explain the rapid economic
development of many Asian countries. This dimension refers to the selective promotion of
particular set of ethics found in Confucian teachings. Particular teachings that lead to economic
development include thrift, perseverance, a sense of shame, and following a hierarchy. The
impact of long-term or short-term orientation is also studied as part of this dimension.

In his research into organisation cultures, Hofstede identified six independent dimensions of
practices:
process-oriented versus results-oriented;
job-oriented versus employee-oriented;
professional versus parochial;
open systems versus closed systems;
14
 tightly versus loosely controlled; and
pragmatic versus normative
The position of an organisation on these dimensions is determined in part by the business or
industry the organisation is in. Hofstede (1991, 1997) emphasises that culture is not a property
of the individuals, but of groups.

Some other researchers, while studying organisational culture, noted that an organisation’s
structure is a determinant of its culture, i.e. certain structures create certain type of cultures, as
reflected in Charles Handy’ s work. He outlines a simple framework for categorising cultures.
Handy also uses four (4) Greek Gods to illustrate his basic approaches and the organisational
cultures that result (Handy 1991):
Role Culture: is perhaps the most readily recognised and common of all the cultural types.
It is based around the job or role rather than the personalities and is epitomised by what we
tend to think of as the traditional hierarchical structure. Its strengths are in its predictability,
stability and consistency while its obvious opposites of inflexibility and slowness of reaction
and adjustment are its weakness.
Task Culture: is one where management is basically concerned with the continuous and
successful solution to problems. Performance is judged in terms of results and problems
solved. Although a structure exists, it is flexible and capable of being formed and reformed
depending upon the task in hand (more flexible and adaptable). Individuals empowered with
discretion and control over their work. Power and respect come from individual knowledge and
talent rather than rank or position.
Power Culture: In this type of organisation, power derives from the top person, and a
personal relationship with that individual matters more than any formal title or position. The
dominant influence of the centre results in a structure that is able to move quickly and respond
to change and outside threats. This culture is often found in small entrepreneurial organisations
and political groups but will frequently breakdown as they grow since the web is more difficult
to maintain with size.
Person (Star) Culture: The individual is the central point. If there is a structure, it exists
only to serve the individuals within it. The culture only exists for the people concerned; it has
no super-ordinate objective. The culture is that of educated and articulate individuals,

15
specialists who have come together because of common interest – solicitors, academic
researchers, consultants etc…

D. Some tools / instruments used to assess organisational culture

Given the importance of organisational culture, many researchers, consultants and managers
have attempted to search for a valid and applicable measurement tool/instrument to help
understand, diagnose, measure and manage an organisation’s culture. Various tools have been
developed with a variety of qualitative and quantitative approaches to measuring organisational
culture, making the choice of methods a matter of goal and purpose of the particular
investigation. In some cases, qualitative measures may have an advantage in the assessment of
certain aspects of an organisational culture e.g. attitudes, satisfaction. The diversity of
measurement tools and approaches reflects the diversity in perspectives on the content, levels,
dimensions, typology and the formation and development of organisational culture which
ultimately dictate what needs to be uncovered and/or measured and who need to be involved in
the process.

The Denison organisational culture survey (Denison 1990) is one of the instrument for which
evidence of sensitivity to organisational change has been presented. This tool assesses
organisational culture along the four basic cultural traits, which are presented by certain
organisational dimensions. The tool consists of 60 items, which are used to assess and measure
the dimensions. Table below gives a brief description of the structure of the instrument.

16
Source: Adapted from Denison, DR 1990, Corporate culture and organizational effectiveness, Wiley, New
York.

Denison’s Organisational culture survey offers a quantitative multi-dimensional assessment of

the main organisational cultural traits. The assessment has also been correlated with
organisational performance measures.

Organisational culture profile (OCP) (O’Reilly, Chatman & Caldwell 1991) has been used
extensively in various researches as an instrument for assessing cultural characteristics of
organisations. The OCP contains 54 value statements that can generically capture
organisational values and characteristics. The general procedure was to ask respondents
familiar with the organisation to sort the 54 items into nine categories ranging from least to
most characteristic of the organisation. Scores are allocated accordingly. The OCP was further

17
tested and developed which led to the identification of seven organisational culture dimensions
underlying the OCP: Innovation, Stability, Respect for people, Outcome orientation, Detail
orientation, Team orientation and Aggressiveness.

The Human Factors International’s (2004) Organisational Culture Questionnaire (OCQ) was
designed as a practical instrument of measurement and management of organisational culture
change. It is a tool used for identifying the culture which is at present operating in the
organisation. The OCQ does not categorise the organizational culture into a particular type but
describes it in terms of its predominant characteristics, behaviours and attitudes. The OCQ
comprises 130 questions relating to 13 different dimensions of organisational culture:
Leadership, Conflict management, Productivity, Innovation, Participation, Communication,
Decision making, Organisational goal integration, Organisation structure, HR management,
Customer focus, Professionalism and Fun.

Organisational Culture Inventory (OCI) is another tool for measuring organizational culture. It
was researched and developed by Cooke and Lafferty (1987). Basically, the OCI provides a
profile of an organisation’s operating culture in terms of the behaviours that members believe
are required to ‘fit in and meet expectations’ within their organisation. It measures ‘how things
are done around here’. The OCI examines how members of an organisation experience its
operating culture. Through members’ answers, the OCI measures twelve (12) distinct patterns
or styles of behavioural norms and expectations that members of an organisation might be
expected to adopt in carrying out their work and interacting with others. The 12 patterns are
classified into 3 groups of “styles” with Achievement, Self-actualising, Humanistic
encouraging and Affiliative belonging to the ‘Constructive Styles’; Approval, Conventional,
Dependent and Avoidance belonging to the ‘Passive/defensive Styles’; Oppositional, Power,
Competitive and Perfectionistic belonging to the ‘Aggressive/defensive Styles’.

The 12 patterns are also categorised in terms of members’ needs: Perfectionistic, Achievement,
Self-actualising, Humanistic-encouraging, Affiliative and Approval represent ‘Satisfaction
Needs’; Conventional, Dependent, Avoidance, Oppositional, Power and Competitive represent
‘Security Needs’. The 12 patterns are also used to measure an organisation’s culture in terms of

18
its orientation with some patterns are distinctively related to the ‘People orientation’ such as
Self-actualising, Humanistic, Encouraging, Affiliative and Dependent while some other
patterns are related to the ‘Task orientation’ such as Competitive, Perfectionistic, and
Achievement. Combined OCI scores are then transferred to a circular graph to form a visual
profile, or picture, of an organisation’s current culture.

Given the existence of a wide variety of organisational culture measurement tools and
methods, careful selection of a relevant method should be made based on the goals, focus and
the purpose of each particular study. The best practice would seem to involve a combination of
qualitative and quantitative approaches customised for the research questions under
investigation. A broad range of methods may be appropriate, ranging from participant
observation and in-depth and semi-structured interviews to some of the of the more recently
validated culture assessment tools. The good news is: the research results to date ‘suggest that
useful measures of organisational culture are feasible, even if no one measurement strategy can
yet be considered the “gold standard”’ (Boan & Funderburk 2003, p. 12).

2.2 EMPLOYEE MORALE

2.2.1 Introduction

How do managers maintain or improve worker morale? Despite unanimous agreement in the
existing literature about the importance of morale in influencing worker performance and
hence firms’ profits, neither a well-defined theory nor a well-defined set of factors that
contribute to a high level of employee morale has emerged (Howitt, 2002). Numerous studies
identify select worker and workplace characteristics that appear to influence morale, but to
date, the literature continues to measure morale in a variety of ways, making comparisons
across studies and thus the formulation of an appropriate and effective managerial strategy to
improve worker morale somewhat problematic.

19
2.2.2 Concepts and definitions of morale

A survey of the very extensive literature on morale yields definitions which are as varied as
they are numerous. There seem to be, however, at least three distinct approaches.

The first approach developed out of the classical "needs psychology" and includes those
theories which stress the personal determinants of morale. In this approach, "needs" are seen as
giving rise to "drives" which aim at the satisfaction of these "needs." A dichotomy between
basic and acquired needs is generally made. Basic needs are those having a physiological
substratum such as hunger, thirst, and sex; whereas derived or acquired needs are largely
social, such as the need to achieve status and self-esteem and the need to affiliate with other
people. Studies concerning the personal determinants of morale include those of McGregor,
Burling, Allport, and Fraser.

The second approach to the definition of morale deals with a hierarchy of needs. The most
systematic development of this concept is given by Maslow. Very briefly, the theory holds that
when basic needs are satisfied "higher" needs emerge which dominate the organism until these
in turn are fully or partially satisfied. The physiological needs (hunger, thirst, sex, etc.) are
regarded as the most basic and prepotent. When these are satisfied, "higher" needs arise which
are more social in nature and which concern the realization of the self. In a small but
suggestive study by Haire and Gottsdanker there is a discussion of the hierarchical character in
the factors of morale. This is illustrated by the fact that "pay" appears to be a basic need and
when "pay" is satisfactory "higher" self-actualization needs become dominant, whereas such
needs are eclipsed when the individual's security is threatened and financial incentives are
dominant.

A third approach, stemming from the perspectives of Elton Mayo, led to an emphasis upon the
significance of interactions among members of a working group. It is held that, in work as in
other activities, one of man's strongest characteristics is to be continuously associated with his
fellows. The investigations at the Hawthorne plant of the Western Electric Company during the
years 1927-19329 led to the conclusion that overriding the effect of changes in physical

20
working conditions (such as levels of illumination, wage incentives, hours of work, length and
position of rest pauses) upon output were the feelings and sentiments attached to being an
integrated part of a special work group. The investigations made a very significant contribution
in calling attention to the existence and importance of the "social" motives in industry and in
showing the need to investigate the pattern of group activity. Among the most systematic
approaches to a theory of motivation applied to both individual and group patterns of behavior
is the "field theory" as formulated by Lewin. Viteles has summarized the findings of individual
studies applying field theory which have helped establish the importance of the view earlier
formulated by the Hawthorne investigators. Levels of motivation and morale are not
necessarily the end effects of specific incentives, i.e., of specific elements in the work situation
or specific items of personnel practice. Levels of motivation and morale are a result of the total
work situation and of its many overlapping dynamic interrelations which involve both the
individual and the smaller groups in a larger social field.

So, Morale is a word with multiple meanings. MAYO defined it as ‘the maintenance of
cooperative living.’ In this sense it refers to a sense of belonging to a group.

Dr. Leighton described morale as the capacity of a group of people to pull together persistently
and consistently in pursuit of a common purpose.’ Thus, acceptance of a goal and commitment
on the part of the group to work for it are important components of high morale, according to
this view.

Yet another view expressed by Prof. Kossen links morale with employee attitudes. It refers to
‘employees’ attitude towards either their employing organizations in general or towards
specific job factors, such as supervision, fellow employees and financial incentives.
Researchers, to add to the confusion, generally came out with two formulations while using the
term morale: a) job satisfaction as the concern of an individual and b) morale as a group
phenomenon.

21
According to McFarland, morale is a concept that describes the level of favourable or
unfavourable attitudes of employees collectively to all aspects of their work-the job, the
company, their tasks, working conditions, fellow workers, supervisors and so on.

The Merriam-Webster Collegiate Dictionary defines morale as “the mental and emotional
condition (as of courage, discipline, enthusiasm, confidence, or loyalty) of an individual or
group with regard to the function or tasks at hand.”

In their article examining the importance of employee-management relationship closeness,

McKnight, Ahmad, and Schroeder (2001) define morale, in the context of the workplace, as
“the degree to which an employee feels good about his or her work and work environment.”
The authors say morale serves as a broad term that encompasses smaller concepts including
intrinsic motivation, job satisfaction, experienced work meaningfulness, organizational
commitment, and pride in one’s work.

2.2.3 Factors related to morale

Early work in employee morale was generally directed toward the fostering of group rapport
and the internalization of management goals by employees. Later research indicated that
employee morale was something more than group solidarity and the internalizing of
management goals. Since the Western Electric studies, several lines of research have
developed in this field.

Melany E. Baehr and Richard Renck used an employee attitude questionnaire, the Employee
Inventory, and the technique known as multiple-factor analysis for identifying the factors of
morale. The results of two separate and independent factor analyses of employee attitudes on
two widely different groups of employees yielded essentially the same five factors. These five
factors, based on factor analyses of category scores (group averages for sets of related items),
were thought to represent certain basic attitudes in the general industrial population which
affect the morale of industrial employees. The factors are defined as follows:

22
Factor A (Organization and Management). This factor deals with the employee's relationship
with management and the organization which management represents to him. In a sense, it is
the image of management and the company in the employee's mind. Thus it reflects sentiments
of identification with the organization and of security for the present and future. It is also an
evaluation of the communication in the organization and of management's efficiency,
effectiveness, and concern for employee welfare.
Factor B (Immediate Supervision). The attitude toward immediate supervision represented by
this factor includes both the human relations aspect and the purely administrative aspects of the
supervisor's job.
Factor C (Material Rewards). This factor deals with the material rewards the employee gets
from his work both in terms of pay and in terms of employee benefits.
Factor D (Fellow Employees). This factor deals with the friendliness of fellow employees and
their ability to work together without friction. It reflects interpersonal relations among
employees on the job.
Factor E (Job Satisfaction). This factor represents the intrinsic satisfactions associated with
actually doing the job and with the belief that the job is worthwhile and affords opportunities
for personal growth and development.
These factors describe the personal satisfactions which the employee derives from gainful
occupation (Material Rewards and Job Satisfaction) and the employee's relationship to other
groups in the work environment. One of these groups deals with management and the structure
of the formal organization (Organization and Management), and the others deal with the
employee's relationship with the primary work group (Fellow Employees) and with his
relationship to that group of employees (Immediate Supervision) whose influence permeates
the work environment. These factors represent some of the basic dimensions in the structure of
morale in industrial society today. They represent a basic pattern of satisfactions which the
employee hopes to derive as a member of various interrelated and overlapping groups with-in
the organization. These five factors in employee morale have been defined in terms of 30
selected Inventory items, which are understandable to the industrial employee and to which he
can respond. They can be used as a core of items for attitude survey questionnaires developed
especially for particular types of employees (e.g., professional or retail employees) or for
particular types of industries (e.g., manufacturing or merchandising). In short, the five factors

23
identified by this research appear to be relatively stable, define basic dimensions of employee
morale, and lend themselves to a variety of research purposes and pragmatic uses in many
different types of organizations.

Also, Motivation and morale were closely related. However, motivation was not morale. But
the response to motivation of an individual reasonably would make satisfaction promoted the
morale in each individual. (Santiwong, 1987, p.359)

The content theories of motivation focused on the factors within the person that energized,
directed, sustained, and stopped behavior. They attempted to determine the specific needs that
motivated people. The important content approach to motivations was Herzberg’s two-factor
theory. (Ivanvich & Matteson, 2002, p.151)

Herzberg developed a content theory known as the two-factor of motivation. The two factors
are called the dissatisfies or the hygiene- motivators or the extrinsic – intrinsic factors,
depending on the discussant of the theory. The original research which led to the theory gave
rise to two specific conclusions.
First, the set of intrinsic conditions, the job content, when present in the job, builds strong
levels of motivation that can result in good performance. These conditions are not present, job
do not prove highly satisfying. The factor in the set are called the satisfiers or motivators and
included: achievement, recognition, work itself, responsibility and advancement.
Second, the set of extrinsic conditions, the job context, which results in dissatisfaction among
employees when the conditions are the dissatisfiers or hygiene factors, since they are needed to
maintain at least a level of “no dissatisfaction”. They included: salary, status, interpersonal
relationship, job security, policies and administration, supervision and working conditions.
One appealing aspect of Herzberg’s explanation of motivation is that the terminology is
morale. There is no need to translate psychological terminology into everyday language.
Despite this important feature, Herzberg’s work has been criticized for a number of reasons.
Some researchers believe the Herzberg’s work oversimplifies the nature of job satisfaction.

24
2.2.4. Measuring Employee Morale

Employee morale is a fundamental component of business operations – high morale coincides

with job satisfaction, high work effort, creativity and initiative, a sense of pride in one’s work,
a commitment to one’s organization, and the desire to put the achievement of group (common)
goals ahead of personal goals, thereby enhancing an organization’s performance. Low morale,
typically corresponding to high absenteeism, labor turnover, unresolved grievances or strikes,
impedes the achievement of the organization’s desired outcomes.

Widely recognized in the psychology, management, and human relations literatures as a

primary factor governing worker effort and thus in determining overall company performance
(Howitt, 2002), employee morale has nonetheless been difficult to quantify. Because morale is
a feeling, rather than an action or outcome, it cannot be measured directly. Moreover, even
among studies conducted in developed market economies, the jury is still out regarding
whether morale is best evaluated as a group phenomenon (Milton et al., 1984; Smith, 1966
1976) or an individual experience (Doherty, 1988; Evans, 1992; Hart, 1994; Watson, 1988) and
some confusion exists regarding how best to differentiate the causes from the manifestations of
a particular level of morale (Abbott, 2003; Howitt 2002; Norquist et al., 2002; Straka, 1993).

Efforts to separate morale from its determinants or outcomes have generated a range of
measures. Some measures of morale attempt to capture its positive affect -- morale is identified
with persistence and energy, cohesion and cooperation, and enthusiastic striving (Hart, 1994;
Hart & Conn, 1992; Hart et al., 2000; Smith, 1966). Other measures of morale focus on efforts
to assess an individual’s mental health (Doherty, 1988; Watson, 1988) or how individuals feel
at a particular point in time. These measures tend to include such elements as anxiety and
depression, as well as other elements that would likely be found in measures of neuroticism
(Costa & McCrae, 1985; Hart et al., 2000).

Two primary approaches have emerged to develop a proxy for employee morale. The first
approach involves measures of job satisfaction and organizational commitment as a proxy for
employee morale (Hull & Azumi, 1988; Koeske & Kirk, 1995; McKnight et al., 2001;

25
Pestonjee & Singh, 1977; Reed, 2002). The second approach uses measures of consequences
such as quit rates, grievances and strikes (Norsworthy & Zabala, 1982, 1986, 1990; Straka,
1993).

2.3 IMPACT OF ORGANIZATIONAL CULTURE ON EMPLOYEE

MORALE

Two studies have been found in this regard. First done by Nandita Kasal (1992) regarding the
relationship between organizational culture and employee’s morale. The organizational culture
was measured using the 11 dimensions - interpersonal trust, degree of autonomy, freedom of
decision–making, communication patterns, importance given to merit, receptiveness to new
ideas, importance to excellence, inter-departmental relations, concern for people, use of status
symbol and leadership style and employee morale using the following five dimensions - index
of organizational image, index of career growth, satisfaction, index of satisfaction with
physical and emotional needs. The study was conducted in electronic units of Himachal
Pradesh. The technology factor was also included. The finding was that organizational culture
had a significant impact on employee morale.

The second study was done by Harinder Bir Kaur in selected commercial and co-operative
banks. The banks were compared on the same above 11 dimensions of organizational culture
and five dimensions of employee’s morale and also on some demographic variables - age,
education, experience and level (manager, officer, supervisor).

In the analysis of the 11 dimensions of organizational culture the 7 dimensions show

significant differences in the two types of banks. These are interpersonal trust, communication
patterns, importance given to merit, receptiveness to new ideas, importance to excellence, use
of status symbol and leadership style. Dimension-wise, commercial bank employees have a
higher level of interpersonal trust, as compared to their counter-parts in cooperative banks.

26
Good autonomy has been given to the employees, yet decision-making power is limited in both
types of banks. Most of the decision-making power is vested in few hands at the top level.
Excellence is overlooked. Greater importance is given to individuals in commercial banks.
They are encouraged to give new ideas and their input in this respect is welcomed. Emphasis is
given to the individual’s training and development. Communication patterns are well
developed. Use of status symbol is quite less. All these factors taken together give rise to an
open organizational culture which is more prevalent in commercial banks as compared to
cooperative banks.

The analysis of employee morale indicates that there is significant difference in all the five
indices of morale in both categories of banks. Commercial banks scored significantly higher
than co-operative banks. The author emphasis that though the organizational image is high, job
satisfaction and satisfaction with supervisors is average. Thus their morale tends to be low
which can be attributed to fewer career prospects and chances of advancement. This is evident
in cooperative banks where there is widespread frustration due to fewer opportunities for
advancement.

A positive and high degree of correlation exists between organizational culture and employee
morale. Nine dimensions of organizational culture except the freedom in decision making and
use of status symbol show significant relationships with morale.

27
3.1 INTRODUCTION

The conceptual schema of this study focuses on the development of a theoretical organisational
culture model as a systematic way in measuring the employees' morale. Examining the
relationship between the organisational culture and employee morale should contribute to our
knowledge of the relationship that exists between them.

In this theoretical framework, organisational culture dimensions are independent variables and
employees' morale dimensions are a dependent variable. The present study thus attempts to
bridge the gap by providing a basis for a thorough and insightful discernment of organisational
culture and employee morale. The model suggests that the greater the extent to which these
eight dimensions of organisational culture are present, the greater will be the employee morale.

Also, in this chapter, details of the research design and questionnaire used for the survey are
provided. Also, we discuss sample and data collection procedures and operational measures of
variables used in the study as well as the statistical tests used to evaluate the hypothesis.

3.2 THE OBJECTIVES OF THE STUDY

The basic aim of this research is to assess the impact of the level of organizational culture on
an employee’s morale in selected banks and to find the relationship between them. So, the
various objectives which would be fulfilled by this report are:

1. To study the difference in the perceptions of employees regarding the organizational culture
at public and private sector banks.
2. To study the difference in the perceptions of the manager and staff level employees
regarding organizational culture.
3. To study the level of morale among the employees of public and private sector banks.
4. To find out the relationship between organizational culture and employee morale in the
respective banks.

28
3.3 RESEARCH HYPOTHESES

1. Private sector banks would manifest a better organizational culture than public sector banks.
2. Private sector banks would have a higher level of employee morale than public sector banks.
3. There is no difference in perception regarding the organizational culture between the staff
level and manager level.
4. There is no difference in perception regarding the employee morale between the staff level
and manager level.
5. The strong organizational culture is positively correlated with the high morale of the
employees.

3.4 RESEARCH DESIGN

A questionnaire survey was used to assess the impact of organizational culture on employee
morale in selected banks.
Survey research is defines as “the administration of questionnaires to a sample of respondents
selected from some population” (Babbie 1989, p.257). Survey research is especially
appropriate for making descriptive studies of large populations and may be used for
explanatory purposes as well. Also, it is relatively objective, can be anonymous and is able to
be analysed statistically. Hence, it is appropriate for this study.

3.5 SAMPLING PROCEDURE AND DATA COLLECTION

The target population of this study was the Banking Industry in the Tricity region (Chandigarh,
Panchkula & Mohali). A set of five banks (two private sector banks and three public sector
banks) were selected.
Private Sector Banks – ICICI & HDFC
Public Sector Banks – SBI, Central Bank of India & Union Bank of India

29
SBI and ICICI have been chosen for the study based upon their size in their respective sectors.
Both SBI and ICICI are the largest banks in their own arenas. HDFC has been chosen on the
premise that it own second maximum number of branches in Chandigarh as compared to other
banks in their respective sectors. The rest two were selected randomly.
The survey was conducted between December 2008 and January 2009.

The survey was the main form of data collection. The questionnaires were distributed to
employees from different job levels and functions within these organisations. They were either
personally distributed to each employee or were distributed through an officer/coordinator
from the organisation. The questionnaire consisted of two parts. The section-A consists of the
questionnaire developed by Udai Pareek and deals with the dimensions of organizational
culture and Section-B consists of the questionnaire developed by Nandita Kasal and deals with
the indices of employee morale. A total of 120 questionnaires were distributed to employees in
these organizations. Out of these, 91 usable questionnaires were returned, yielding a response
rate of 76%.

There were 43 (47.30%) female and 48 (52.70%) male respondents. Out of this group of
respondents, 28.6% aged were between 21-25 years old, 33% between 26-30 years old, 9.9%
between 31-40 years old and the remaining 28.6% aged over 40 years old. From the age group
results, we can conclude that these organisations consisted of a rather young population with
about 61.5% of them being younger than 30 years of age. Out of all the respondents, 62 (over
68.00%) had achieved a Postgraduation qualification. Employees from two types of
occupational groups were represented in the sample (i.e. managerial level, N = 40; staff level,
N = 51). And sector-wise, the respondents were equal in number from both the sectors. Also,
there were 20 respondents from State Bank of India, 12 from Union Bank of India, 14 from
Central Bank of India, 21 from HDFC and 24 from ICICI.

3.6 VARIABLE MEASUREMENTS

30
ORGANISATIONAL CULTURE DIMENSIONS

This measure is based on the eight dimensions of organizational culture developed by Udai
Pareek i.e. OCTAPACE Profile.

A brief introduction of the parameters is given below:

Openness
Openness can be defined as a spontaneous expression of feelings and thoughts, and the sharing
of these without defensiveness.

Confrontation
Confrontation can be defined as facing rather than shying away from problems. It also implies
deeper analysis of interpersonal problems.

Trust
It is reflected in maintaining the confidentiality of information shared by others, and in not
misusing it. It is also reflected in a sense of assurance that others will help, when such help is
needed and will honor mutual commitments and obligations.

Authenticity
Authenticity is the congruence between what one feels, says and does. It is reflected in owning
up one's mistakes, and in unreserved sharing of feelings. Authenticity is closer to openness.

Proaction
Proaction means taking the initiative, preplanning and taking preventive action, and calculating
the payoffs of an alternative course before taking action.

Autonomy

31
 Autonomy is using and giving freedom to plan and act in one's own sphere. It means respecting
and encouraging individual and role autonomy.

Collaboration
Collaboration is giving help to, and asking for help from, others. It means working together
(individuals and groups) to solve problems and team spirit.

Experimenting
Experimenting means using and encouraging innovative approaches to solve problems; using
feedback for improving, taking a fresh look at things, and encouraging creativity.

Table 1: Tentative norms for OCTAPACE profile

Authenticit Pro- Collaboratio Experimentin

Openness Confrontation Trust Autonomy
y action n g
Low 13 10 10 10 12 11 13 11
High 17 16 16 14 18 16 17 16

EMPLOYEE MORALE

The following indexes of morale as found by Ms. Nandita Kasal are used for the purpose of
measuring it:
The Index Of Job Satisfaction:
Job satisfaction refers to the feelings and the emotional aspects that the individual experiences
towards his job as different from intellectual or rational aspects.

The Index Of Organisational Image:

This measures whether an employee opinion about his organization is one of pride or disgust or
whether his feelings are ambivalent.

The Index Of Career Growth:

32
This is a measure of the strength of an employee’s expectancy of a rewarding future in the
organization in the course of his performance being in lines with the goals of the organization.

The Index Of Satisfaction With Superiors:

It measures whether the leadership satisfies the common desires of the men over whom it is
exercised.

The Index Of Satisfaction Of Emotional And Physical Needs:

It measures the degree to which the emotional and physical needs of the employees are
satisfied.

Table 2: Tentative Norms for Employee Morale Profile

Index of Job Index of Index of Index of Index of
Satisfaction Organisational Satisfaction Career Growth Satisfaction of
Image with Emotional &
Superiors Physical Needs
Low 4–8 4-8 4-8 3-6 5 – 10
Medium 8 – 12 8 - 12 8 - 12 6-9 10 – 15
High 12 – 16 12 - 16 12 - 16 9 - 12 15 – 20

The Validity and Reliability of the Questionnaire

The Part A of the questionnaire, relating to the organisational culture as perceived by the
employee is based on the OCTAPACE profile as developed by Mr. Udai Pareek. This
instrument has a high degree of validity and reliability.
The Part B of the questionnaire deals with morale. It borrows heavily from the Brayfield and
Rothe' Index of job satisfaction, and the job satisfaction and morale questionnaire developed by
Dr. A.K.Srivastava et al for the measurement of employee job satisfaction. Both these
instruments have a high degree of validity and reliability. And the final questionnaire
developed by Ms. Nandita Kasal by the use of above two also have a high concurrent validity
and face validity.

33
The Part C of the questionnaire consists of demographic variables: name, age, gender,
educational qualification, designation, organization name and sector.

3.7 ANALYSIS OF DATA

The statistical computer programme used for the questionnaire data analysis was SPSS
Statistics 17.0. Central measures of tendency and standard deviation were calculated for each
variable. One way Anova test was used to test the hypotheses and to confirm the statistically
significant differences. Correlation studies were used to determine the relationship between the
dependent (employee morale) and independent variables (organizational culture).

34
4.1 INTRODUCTION
In this chapter, the analysis of the results of the survey is presented. A demographic summary
of the sample used in provided in section 4.2.1. In the section 4.2.2, descriptive statistical
analysis of the variables is provided, while in section 4.2.3, correlation studies between the
organizational culture variables and employee morale variables is provided. And finally in
section 4.2.4, the testing of hypothesis is done.

4.2 RESULTS OF THE SURVEY

4.2.1 Demographic Summary

Table 3: Demographic Summary

VARIABLE RESULT
Age Median Range 26-30 years, modal range 26-30 years
Gender 47.30% female and 52.70% male
Educational 32% Graduate and 68% Postgraduate
Qualification
Level 44% from Managerial Level and 56% from staff level
Sector 50% from both public and private sector

4.2.2 Descriptive Statistical Analysis

35
The figure 4.0 shows the average means of the eight dimensions of organizational culture as
perceived by the employees of public and private sector banks.

Figure 4: Sector wise comparison of average means of eight dimensions of organizational culture.

When we compare the scores of Public Sector & Private Sector Banks with tentative norms of
octapace profile, the results show that Private sector Banks have scored higher than the Private
Sector Banks for all of the eight core values of culture for their organization.

The Private sector banks have scored high for seven of the eight core values of the
organizational culture. Those seven core values are openness, confrontation, trust, authencity,
proaction, collaboration, experimentation. It has scored low only on one dimension i.e.
autonomy.

On the other hand, the average responses for Public sector banks are in a low to medium range
for all the eight dimensions. The dimensions on which it has scored low are confrontation,
trust, proaction and experimentation, while the dimensions for which the public sector banks
have scored low are openness, authencity, autonomy and collaboration.
The standard deviations were quite high, indicating the dispersion in a widely-spread
distribution.

36
Figure 5: Sector wise comparison of average means of five indexes of employee morale.

Abbreviation
IJS Index of Job Satisfaction
IOI Index of Organisational Image
ISS Index of Satisfaction with Superiors
ICG Index of Career Growth
IEP Index of Satisfaction of Emotional & Physical Needs

When we compare the scores of Public Sector & Private Sector Banks with tentative norms of
employee morale profile, the results show that Private sector Banks have scored higher than the
Private Sector Banks for all of the five indexes of employee morale.

The Private sector banks have scored high for four of the five indexes of employee morale.
These four indexes are Index of Job Satisfaction, Index of Organisational Image, Index of
Career Growth, and Index of Satisfaction of Emotional & Physical Needs. It has scored
medium on one index i.e. Index of Satisfaction with Superiors.
On the other hand, the average responses for Public sector banks are in a medium range for all
the indexes except one index i.e. Index of Organisational Image on which they have scored
high.
Table 4: One-Way Anova Test : Organisational Culture & Employee Morale Dimensions By Sector

37
 ANOVA
Sum of Squares df Mean Square F Sig.
Between Groups 182.174 1 182.174 33.707 .000
O Within Groups 481.013 89 5.405
Total 663.187 90
Between Groups 179.757 1 179.757 30.465 .000
CN Within Groups 525.144 89 5.900
Total 704.901 90
Between Groups 55.180 1 55.180 9.592 .003
T Within Groups 511.963 89 5.752
Total 567.143 90
Between Groups 54.770 1 54.770 10.852 .001
A Within Groups 449.186 89 5.047
Total 503.956 90
Between Groups 44.924 1 44.924 4.745 .032
P Within Groups 842.681 89 9.468
Total 887.604 90
Between Groups 38.414 1 38.414 6.988 .010
AU Within Groups 489.256 89 5.497
Total 527.670 90
Between Groups 179.942 1 179.942 52.016 .000
CB Within Groups 307.882 89 3.459
Total 487.824 90
Between Groups 174.178 1 174.178 41.591 .000
E Within Groups 372.723 89 4.188
Total 546.901 90
Between Groups 152.176 1 152.176 40.316 .000
IJS Within Groups 335.934 89 3.775
Total 488.110 90
Between Groups 20.812 1 20.812 6.218 .014
IOI Within Groups 297.913 89 3.347
Total 318.725 90
Between Groups 56.142 1 56.142 10.574 .002
ISS Within Groups 472.539 89 5.309
Total 528.681 90
Between Groups 75.372 1 75.372 29.108 .000
ICG Within Groups 230.452 89 2.589
Total 305.824 90
Between Groups 225.398 1 225.398 27.419 .000
IEP Within Groups 731.635 89 8.221
Total 957.033 90

Also, One–Way Anova Test was applied to test if there was a significant difference between
the two types of Banks for all the eight core values of organizational culture. An overall test of
the null hypothesis of no differences in means for all variables showed significant differences
between these two categories of banks. The results show that there were significant differences

38
between the public and private sector banks for all of the eight values of organizational culture:
openness (F=33.7, p<0.01), confrontation (F=30.47, p<0.01), trust (F=9.59, p<0.01),
authencity (F=10.85, p<0.01), pro-action (F=4.75, p<0.05), autonomy (F=6.99, p<0.01),
collaboration (F=52.02, p<0.01) and experimentation (F=41.59, p<0.01).

Similarly, One–Way Anova Test was applied to test if there was a significant difference
between the two types of Banks for all the five indexes of employee morale. An overall test of
the null hypothesis of no differences in means for all variables showed significant differences
between these two categories of banks. The results show that there were significant differences
between the public and private sector banks for all the five indexes of employee morale: Index
of Job Satisfaction (F=40.32, p<0.01), Index of Organisational Image (F=6.218, p<0.05), Index
of Satisfaction with Superiors (F=10.574, p<0.01), Index of Career Growth (F=29.10, p<0.01),
and Index of Satisfaction of Emotional & Physical Needs (F=27.419, p<0.01).

Figure 6: Level wise comparison of average means of eight dimensions of organizational culture.

39
When we compare the scores of Managerial & Staff Level employees of both the banks with
tentative norms of OCTAPACE profile, the results show that both the managerial level and
staff level employees have responded in an almost similar fashion for all of the eight core
values of culture for their organization with slightly little differences for some of the values.
The values of openness, authencity and collaboration are perceived to be higher in their banks
by the managerial level employees then the staff level employees, while autonomy is perceived
to be higher by the staff level employees than the managerial level.

Both the Managerial & Staff Level Employees have responded to these eight dimensions of
culture in a medium range. According to them, these dimensions are not present in a very high
degree in their banks, with autonomy being on the lesser side.

Figure 7: Level wise comparison of average means of five indexes of employee morale.

By comparing the scores of Managerial & Staff Level employees of both the banks with
tentative norms of Employee Morale profile, we find that like for the eight core values of
organizational culture, here also both the managerial level and staff level employees have
responded in an almost similar fashion for all of the five indexes of employee morale with
slightly little differences for some of the values except one Index of Satisfaction with Superiors
for which staff level have responded more favourably than the managerial level. The Index of
Job Satisfaction is perceived to be a little higher in their banks by the managerial level

40
employees then the staff level employees, while Index of Organisational Image is perceived to
be higher by the staff level employees than the managerial level.

Both the Managerial & Staff Level Employees have responded that the Index of Job
Satisfaction, Index of Satisfaction with Superiors and Index of Satisfaction of Emotional &
Physical Needs are present to a not so high level in their organizations while Index of
Organisational Image and Index of Organisational Image are present in a high degree in their
organizations.

Table 5: One-Way Anova Test: Organisational Culture & Employee Morale Dimensions By Level

ANOVA
Sum of Squares df Mean Square F Sig.
Between Groups 5.506 1 5.506 .745 .390
O Within Groups 657.681 89 7.390
Total 663.187 90
Between Groups .115 1 .115 .014 .904
CN Within Groups 704.786 89 7.919
Total 704.901 90
Between Groups .233 1 .233 .037 .849
T Within Groups 566.910 89 6.370
Total 567.143 90
Between Groups 3.828 1 3.828 .681 .411
A Within Groups 500.128 89 5.619
Total 503.956 90
Between Groups 1.806 1 1.806 .181 .671
P Within Groups 885.799 89 9.953
Total 887.604 90
Between Groups 2.084 1 2.084 .353 .554
AU Within Groups 525.586 89 5.905
Total 527.670 90
Between Groups 7.261 1 7.261 1.345 .249
CB Within Groups 480.563 89 5.400
Total 487.824 90
Between Groups .007 1 .007 .001 .973
E Within Groups 546.894 89 6.145
Total 546.901 90
Between Groups 2.723 1 2.723 .499 .482
IJS Within Groups 485.387 89 5.454
Total 488.110 90
IOI Between Groups 3.892 1 3.892 1.100 .297

41
 Within Groups 314.833 89 3.537
Total 318.725 90
Between Groups 17.667 1 17.667 3.077 .083
ISS Within Groups 511.014 89 5.742
Total 528.681 90
Between Groups .012 1 .012 .004 .952
ICG Within Groups 305.812 89 3.436
Total 305.824 90
Between Groups .964 1 .964 .090 .765
IEP Within Groups 956.069 89 10.742
Total 957.033 90

Here also, One–Way Anova Test was applied to test if there was a significant difference
between the two levels of employees for all the eight core values of organizational culture and
the five indexes of employee morale. An overall test of the null hypothesis of no differences in
means for all variables showed no significant differences between the two levels of employees
for all the variables except for one variable which was Index of Satisfaction with Superiors
(F=3.077, p=0.83).

4.2.3 Correlation Analysis: Relationships between the variables

The correlation matrix in Table 6 indicates that all the dimensions of organisational culture
were positively and moderately correlated with dimensions of employees' morale.

There were strong positive relationships between confrontation and index of job satisfaction (r
= 0.63, p < 0.01), openness and job satisfaction(r = 0.591, p < 0.01), openness and satisfaction
with physical and emotional needs (r = 0.57, p < 0.01), collaboration and job satisfaction (r =
0.62, p < 0.01), collaboration and satisfaction with physical and emotional needs (r = 0.647, p
< 0.01) and between experimentation and job satisfaction (r = .596, p < 0.01).

The moderate positive correlations were for openness and organizational image (r = 0.424, p <
0.01), trust and job satisfaction (r = .492, p < 0.01), trust and satisfaction with physical and
emotional needs (r = 0.494, p < 0.01), authencity and satisfaction with superiors (r = 0.431, p <

42
0.01), proaction and organizational image (r = 0.472, p < 0.01), proaction and satisfaction with
superiors (r = 0.455, p < 0.01), collaboration and organizational image (r = 0.457, p < 0.01),
collaboration and career growth (r = 0.482, p < 0.01) and between experimentation and
satisfaction with physical and emotional needs (r = 0.442, p < 0.01).

The weakest correlation was for openness and satisfaction with superiors (r = 0.278, p < 0.01),
authencity and career growth (r = 0.184, p < 0.05), proaction and career growth (r = 0.205, p <
0.05), experimentation and organizational image (r = 0.295, p < 0.01) and between
experimentation and satisfaction with superiors (r = 0.258, p < 0.01). Also, another major
finding was that autonomy has the least impact on all the dimensions of employee morale with
(r <= 0.3).

Thus the findings show that the organizational culture has a positive impact on the employee
morale.

Table 6: Correlation of Organisational Culture Dimensions and Employee Morale Dimensions

Correlation of Organisational Culture Dimensions and

Employee Morale Dimensions (N=91)
Satisfaction
Job Satisfactio with physical
Organizationa Career
satisfactio n with and
l image growth
n superiors emotional
needs
Pearson
Openness .591** .424** .278** .403** .570**
Correlation
Pearson
Confrontation .630** .344** .353** .405** .402**
Correlation
Pearson
Trust .492** .392** .408** .347** .494**
Correlation
Pearson
Authencity .538** .335** .431** .184* .355**
Correlation
Pearson
Proaction .527** .472** .455** .205* .339**
Correlation
Pearson
Autonomy .299** .145 .255** .219* .173
Correlation
Sig. (1-
.002 .086 .007 .018 .051
tailed)

43
 Pearson
Collaboration .620** .457** .366** .482** .647**
Correlation
Pearson
Experimentation .596** .295** .258** .394** .442**
Correlation

**. Correlation is significant at the 0.01 level (1-tailed).

*. Correlation is significant at the 0.05 level (1-tailed).

4.2.4 Hypothesis Testing

The results of the survey provided the following conclusions relating to the hypothesis stated
earlier in this report.
Hypothesis 1:
Private sector banks would manifest a better organizational culture than public sector
banks.
Results in Figure 4 had shown that Private sector Banks have scored higher than the Private
Sector Banks for all of the eight core values of culture for their organization. And even the
Table 4 shows that there were statistically significant differences between the two types of
banks. Thus, Hypothesis 1 is accepted.

Hypothesis 2:
Private sector banks would have a higher level of employee morale than public sector
banks.
Results in Figure 5 had shown that Private sector Banks have scored higher than the Private
Sector Banks for all of the five indexes of employee morale. And even the Table 4 shows that
there were statistically significant differences between the two types of banks. Thus,
Hypothesis 2 is accepted.

Hypothesis 3:
44
There is no difference in perception regarding the organizational culture between the
staff level and manager level.
Results in Figure 6 show that both the managerial level and staff level employees have
responded in an almost similar fashion for all of the eight core values of culture for their
organization with slightly little differences for some of the values. And even the Table 5 shows
that there were no statistically significant differences between the two types of banks. Thus,
Hypothesis 3 is accepted.

Hypothesis 4:
There is no difference in perception regarding the employee morale between the staff
level and manager level.
Results in Figure 7 show that both the managerial level and staff level employees have
responded in an almost similar fashion for all of the indexes of employee morale except for one
Index of Satisfaction with Superiors and even Table 5 showed no significant differences
between the two levels of employees for all the variables except for Index of Satisfaction with
Superiors (F=3.077, p=0.83). Thus, a part of Hypothesis 4 is accepted.

Hypothesis 5:
The strong organizational culture is positively correlated with the high morale of the
employees.
The correlation shown in Table 6 (in section 4.2.3) suggest that in general, there were positive
and significant correlation between all the eight core values of organizational culture and five
indexes of employee morale. Hence, results from this study support Hypothesis 5.

45
5.1 Introduction

In this chapter, a summary and general discussion in relation to the results of the studies is
provided in section 5.2. Section 5.3 considers the possible limitations of this research and
suggests areas which may be useful to explore in future research. Section 5.4 provides the
conclusion for this chapter.

5.2 Discussion

The overall objective of this study was to compare the organizational culture and employee
morale among the private and public sector banks and investigate the impact of organisational
culture on employee morale. The setting used in this study was the banking sector and the
sample consisted of managerial level and staff level employees from the three public sector and
two private sector banks. This research was prompted by the lack of attention given in the
literature to the influence of organizational culture on employee morale.

The main results of the research in this study were derived from questionnaire survey.

The results of this study revealed that Private sector Banks have scored higher than the Private
Sector Banks for all of the eight core values of culture for their organization and even the
Private sector banks have scored high for seven of the eight core values of the organizational
culture except autonomy while the average responses for Public sector banks are in a low to
medium range for all the eight dimensions. Also, the Private sector Banks have scored higher
than the Private Sector Banks for all of the five indexes of employee morale. And the Private
sector banks have scored high on four indexes of employee morale except Index of Satisfaction
with Superiors. On the other hand, the average responses for Public sector banks are in a
medium range for all the indexes except one index i.e. Index of Organisational Image on which
they have scored high. The results show that there were significant differences between the
public and private sector banks for all of the eight values of organizational culture and the five
indexes of employee morale.

46
Further, the results show that both the managerial level and staff level employees have
responded in an almost similar fashion for all of the eight core values of culture for their
organization with slightly little differences for some of the values. And they have ranked the
presence of these eight dimensions of culture in a medium range.

Also both the managerial level and staff level employees have responded in an almost similar
fashion for all of the five indexes of employee morale with slightly little differences for some
of the values except one Index of Satisfaction with Superiors for which staff level have
responded more favourably than the managerial level.
Also, it was shown that no significant differences between the two levels of employees for all
the variables except for one variable which was Index of Satisfaction with Superiors (F=3.077,
p=0.83).

Further, the correlation analysis indicates that all the dimensions of organisational culture were
positively and moderately correlated with dimensions of employees' morale. Thus the findings
show that the organizational culture has a positive impact on the employee morale.

5.3 Limitations And Future Research

It is realised that there are some limitations that must be considered in future investigation.
Firstly, a major limitation of this study is the small sample size. As a result, the power of the
test is generally weaker. Secondly, the findings are based on the use of self-reported survey
data, which may be affected by response bias. Thirdly, data were collected at a single point in
time, which does not allow for changes in perceptions and attitudes over time. Fourthly, a
cross-sectional analysis cannot confirm the direction of causality implied in our research
model, so it is necessary to be cautious in conclusions regarding causality. Fifthly, the results
of this study may not be transferable to another business sectors as another sectors may not
operate under similar environmental or organizational settings. Furthermore, due to differences

47
in national cultures, the results of this study may not be applicable to countries which have
different organizational settings.

It is proposed that future research should include the types of organizational culture such as
consensual, entrepreneurial, bureaucratic and competitive using a similar approach. Finally, the
measure of employee morale comprises only a small number of items which tapped different
aspects of employee morale, and does not represent an overall view of employee morale;
therefore this is a considerable biased view of this study. Future research may be beneficial if
more items and better measures are developed in relation to this outcome variable.

5.4 Conclusion

In summary, this paper reports on an exploratory investigation of the relationship between

organisational culture and employees' morale based on five major Banks from both public and
private sector. This study endeavours to make both theoretical and practical contribution to the
literature, and it also contains several implications for further research. The findings enhance
our understanding of the organisational culture and employees' morale within the Banking
sector in the tri-city region. This research has also provided us with a better understanding of
the relationship between these factors in order to enhance managerial effectiveness and
organizational success. The findings stress the need to monitor organizational culture and to
evolve better management practices so that employees' morale is maintained at a high level. In
other words, the findings could prescribe potential practical implications for managers and
consultants in management development programmes consistent with the training needs of the
employees in the organisation. Hence, employees will be likely to perform better and feel a
high level of morale, and in turn will develop more commitment towards their organisations.
Finally, the higher levels of employees' morale in such organisations may give an advantage
over other organisations in attracting and retaining employees in a competitive environment.

48