The Role Of Organizational Resources And Environment In Organizational .

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Journal of Business and Management Research, 6 (2014) 151-161p-ISSN : 2356-5756 / e-ISSN: 2356-5764 Knowledge Journalswww.knowledgejournals.comResearch articleThe role of organizational resources and environment in Organizational performanceand customer loyalty; service climate as mediator: A Study of TelecommunicationSector of PakistanNajeeb Haidera, Naveed Ahmadb*, Omer Farooqc, Iram Rasheedd, Shazia ParveendaFaculty of Statistics, Ghazi University, Dera Ghazi Khan, Pakistan.Head of management & Social Sciences, Indus International Institute, Pakistan.cFaculty of management & Social Sciences, Bahaudin Zakariya University, Multan, Pakistan.dMS Scholars, Bahaudin Zakariya University, Multan, Pakistan.*Corresponding author: E-mail address: naveedahmad@indusdgk.edu.pk (Naveed Ahmad)bArticle history:Received 2 August 2014; Accepted 11 September 2014; Available online 16 September 2014.AbstractEmployees are the most important asset for organizations have significant importance and their performance caninfluence customer satisfaction and loyalty. This research is both from employee and customer perspective inTelecom Sector of Pakistan. The rationale of this exploratory study is to investigate the link among organizationalresources, work environment, employees, and customers. Structured questionnaires were given to employees andcustomers. For the study 100 employees of telecom companies of Pakistan were selected and customers of telecomservices by using convenient sampling technique. Statistical tools such as factor analysis, regression and correlationanalysis are designed to examine impacts. Results proposed that environment and resources influence service climatethat influence employee work engagement and performance that ultimately impact on job satisfaction, customersatisfaction and loyalty. Tenure has a little impact on performance and satisfaction. This work will enhance theunderstanding of service sector of telecom industry in Pakistan.Keywords: Organizational Resources, Work environment, Service climate, Employee job satisfaction, Employeework engagement, Employee performance, Tenure, Customer satisfaction, Loyalty. 2014 Knowledge Journals. All rights reserved.1. IntroductionThe most important priority in the service sectorof organization is customer satisfaction to evaluateorganizational performance (Wisniewski, 2001).Employee interests and engagement play a very vitalrole in the customer satisfaction and loyalty (Barnes,Ponder and Hopkins, 2014, Bettencourt and Brown,2003). For this purpose to keep customers loyal andsatisfy, organizational resources and environment isvery much important. Climate for service enhancescustomer satisfaction and employee performance;hence the service researchers and practitionersrecognize that service climate will lead to high jobsatisfaction (Pantouvakis and Bouranta, 2013). Betterservice climate can lead to employee’s engagementwhich in turn in higher value and better results. Highlevels of employee engagement occur when employeesare involved with, committed to, enthusiastic, andpassionate about their work (Truss et al., 2013).For service industry growth and qualityimprovement, continuous effort is necessary especiallywhen environment is unbalanced. The telecom sectorof Pakistan is highly pressurized by customer demandsand worldwide issues, suffering from many problemsrelating to work environment and services. Pressure tobring massive and rapid structural modifications totackle upcoming challenges from government is one ofthem. According to Malik et al. (2013), the alteration intelecom sector of Pakistan is not only restrictedtowards the social and economic area rather it has alsoaffected the psychological globe of the humanresources and they are suffering exhaustion. These

N. Haider et al., 2014changes have enhanced employees’ turnover rate.Due to privatization telecom sector has facingdifficulties in retaining personnel (Khurram et al.,2011). In the existing scenario where employeeretention has become an important element forachieving organizational goals it is necessary toenhance employee work engagement with jobsatisfaction by improving service climate (Salanova etal., 2005).A climate for service rests on a foundation offundamental support in the way of resources, training,managerial practices, and the assistance required toperform effectively that have a direct, both positive andnegative, effect on work engagement of an employeewithin the organization (Salanova et al., 2005). Moreengaged employees enhance the productivity of theorganization. Engagement impacts on customer loyaltyin more ways than simply interactions with frontlinestaff. The quality of products produced by engagedemployees is better, as previously reported and moreproductive staff make less mistakes that could impacton customer (Ram and Prabhakar, 2011). Serviceclimate is built on foundations of caring for bothinternal and external customers. Highly engagedworkers are highly satisfied and vice versa. Tenureplays a negative role as a mediator. However, theeffects of tenure as a moderator have been conflicting.Tenure negatively affected the relationship between jobsatisfaction and productive work/work engagement(Bakker et al., 2007).Most of research is conducted in health andpsychology dealing with nurses and doctors,restaurants and retailing mainly in Japan, America,U.K, Canada, Rome, and Germany. In telecom sectormost of the work is done on job satisfaction,motivation and empowerment (Ahmed and Islam,2011, Rana et al., 2009, Saleem et al., 2010). Someresearch is also done on work engagement is conductedin retails shops, fast-food restaurants, softwareindustries, banking, and hotels (James et al., 2011;Koyuncu et al., 2006, Roberts and Davenport, 2002,Salanova et al., 2005, Xanthopoulou et al., 2009). Butthere exist very few studies exist in telecom sectorespecially in Pakistan. So the area of special interest isto understand the behaviors of employees in Telecomsector of Pakistan imply best practices within theorganization. To date, there is no research exist whichdeals with impact of all these variables together.Therefore, the objective of this study is to evaluatethe effectiveness of proper work environment practicesand conditions associated with a service climate, andby determining the relationships between serviceclimate components and customer satisfaction inTelecom sector. This study also examine whether workengagement influence job satisfaction and if tenure actsas a moderator to this relationship.152This study will make a unique contribution to theliterature by examining the relationship between workengagement and employee performance, jobsatisfaction as well as customer loyalty along with howtenure and service climate affects this relationship. Todate, no research has been conducted that examines therelationship between dimensions of work engagementand job satisfaction, employee performance, customersatisfaction & loyalty together. By understanding thisrelationship, upper level management can implementchanges that can improve work engagement employeeperformance, customer satisfaction and loyalty and jobsatisfaction.The results will also provide an objective insightto Telecom sector to plan necessary course of action toachieve and sustain service based competitiveadvantage. The study will generate information thatwill be useful for organizational leaders in evaluatingwork engagement based practices in their ownorganizations, in Pakistan, to enhance organizationalperformance as well as this study is helpful for bothmarketing and human resource sector for furtherresearch.2. Review of Literature:Service quality literature identifies that there is aneed for organizations to create and maintain a climatefor service in order to deliver excellent service(Salanova et al., 2005). In the case of service climate,the priority is customer satisfaction (Johnson, 1996).Employees are motivated and delighted to deliverexcellent service to customers when the organizationrewards such behaviors and organize practices thatimprove service delivery (Grigoroudis et al., 2013,Schneider et al., 1992). Kehoe and Wright (2013)investigated and empirically evaluated that humanresource practices (realistic job information, jobanalysis, work family balance, career development,compensation and Supervisor support) may impact onmarketing executive intention to leave or turnover incompanies. Foong-ming (2008) investigated the role ofcareer development practices. Sajjad et al., (2013)examined the impact of motivation on employeeturnover.Even though there is much discussion which canbe held on this topic, there is very few researchesdesigned to enhance service delivery to investigate theeffectiveness of esources refers to the organizational context of a jobthat are proved functional in achieving work goals,reduce job demands and their associated physiologicalcosts, and, finally, could stimulate personal growth,learning, and development (Demerouti et al., 2001).Resources are motivational source for an organizationas according to the conservation of resources theory(Hobfoll, 2001), basic human motivation is directed

153toward the creation, maintenance, and accumulation ofresources. Resources are valued in their own right inmotivation process. The presence of available jobresources enhances personal development andincreases motivation. More specifically, Bakker et al.(2007) found that job resources (performance feedback,supervisor support, job control) were stimulator ofengagement. Kahn (1990) examined that engagementalso varies according to the resources people expectedthemselves to have their availability. In this study, weperceived organizational resources as “facilitators”in the workplace because they treated as potentialmotivational factors to increase work engagement.Service Climate: Service climate deals withemployee attitudes toward the practices, procedures,and behaviors that get rewarded, supported, andexpected related to customer service and customerservice quality (Schneider et al., 1998). It is theemployees view about management practices across arange of disciplines including human resources,leadership and marketing (Kopperud et al., 2014).Service climate is established according to caring forboth internal and external customers. It is the messagefor employees about how service is important in theirorganization. The organizational climate is based onbeliefs among the employees according toorganizational policies, procedures, and practice thatare supported and rewarded (Randhawa and Kaur,2014). A climate for service organization is built on afoundation of fundamental support in the way ofresources, training, managerial practices (Schneider etal., 1998). Reynoso and Moores (1995) proposes twocategories of foundation issues: (a) the quality ofinternal service received from other departments withinthe organization, and (b) general conditions whichincludes efforts toward removing barriers to work(Buzaglo and Wheelan, 1999), and HR policies(Schneider and Bowen, 1993). It is important formanagement to find out from the market, about whatare the customers’ expectations from the organizationin terms of customer service. This information shouldbe analyzed and give to employees. This would helpmanagement to create the right work environment andother plans for actually delivering the expected servicequality.Management can recruit the right type ofemployees with the right skills, train and compensatethem for providing excellent service. Properprocedures, equipment, tools and technology shouldfacilitate service delivery in the eyes of both theemployees and the customers. The functions ofoperations management, marketing, and humanresources should work together to create an integratedservice system. Albrecht and Zemke (2002) suggesteda similar set of practices and conditions that theyexpected to be related to an organization's ability todeliver high quality service. Schneider (1990) was thefirst to link employee perceptions of service climateJournal of Business and Management Researchwith customer satisfaction. Customer retention alsodepends on customer satisfaction. Current customerscan also be a source of good ideas. More importantly, itis less expensive for an organization to keep a currentcustomer than to gain a new one. Bhatti and Qureshi(2007) investigated the impact of employeeparticipation on job satisfaction.Work Engagement: In the literature, employeeengagement has been defined in different ways. Kahn(1990) defined engagement as “the binding oforganization members‘ selves to their work roles; inengagement, people employ and express themselvesphysically, cognitively, and emotionally during roleperformances”. Thus, according to Kahn (1990)engagement means to be psychologically present whenoccupying and performing an organizational role.According to the bestselling book, ‘First, Break Allthe Rules’, which first compiled the results, fewerthan one in every five workers is actively engaged intheir work (Buckingham and Coffman, 1999). Britt,Adler, and Bartone (2001) found that engagement canlead to expected benefits from the work. Other researchusing a different measure of engagement (i.e.involvement and enthusiasm) has related it to employeeturnover, customer satisfaction–loyalty, safety, and toproductivity and profitability (Harter et al., 2002).Thus, there are practical reasons that managers andresearchers of organizations should be concerned withemployees’engagement in work.Engagement has been defined more completelywhen employees feel positive emotions toward theirwork, find their work to be personally meaningful,consider their workload to be manageable, and havehope about the future of their work (Nelson andSimmons, 2003). The evidences of different researchesconducted have refined definition including threedimensional concept of work engagement (May et al.,2004, Schaufeli et al., 2008). The three factors includea physical component (I put a lot of energy performingmy job.), an emotional component (I really put myheart into my job), and a cognitive component(Performing my job is so absorbing that I forget abouteverything else).Work engagement is mainly new area of interest.The concept of work engagement was first introducedby Kahn in 1990 as a type of personal engagement,which is related to personal presence (physical,cognitive and emotional), and active, full roleperformances" (Kahn, 1990).Kahn (1990) research statement was based onHackman and Oldham (1980) findings that people'sattitudes and behaviors are driven by theirpsychological experience of work (Kahn, 1990,Hackman and Oldham, 1980). In 1997, Maslach andLeiter redefined work engagement when they studiedjob burnout as barrier of work engagement.

N. Haider et al., 2014According to Hakanen and Schaufeli (2012) jobburnout is the opposite of work engagement because"energy turns into exhaustion, involvement turns in tocynicism, and efficacy turns into ineffectiveness" (p.416). They characterize engagement as energy,involvement and efficacy, which are the direct oppositeof job burnout.In study conducted by Schaufeli et al., Bakker(2002) work engagement practices were verified andredefined it as a positive work-related state of mindthat is determined by three dimensions: vigor,dedication and absorption. The first dimension isVigor, as high level of energy and, persistence and awillingness to invest effort into work.The second dimension, dedication, a sense ofsignificance, inspiration, pride, enthusiasm, andchallenge. The final dimension is absorption, havingdifficulties detaching oneself from work while fullyconcentrating and being deeply involved in work(Schaufeli et al., 2002). Conceptualization of workengagement is used in this study because it providesempirical evidence that work engagement is adistinguished from job burnout (Gonzalez-Roma et al.,2006). This study treats job burnout and workengagement as two different and independentconstructs.Customer satisfaction: Customer satisfactionrefers to an affective situation that is the emotional andcontented reaction to an experience with a seller. It isproduced by the customer's evaluation of the degree towhich a seller‘s performance is expected (Andersonet al., 1994). The concept of customer satisfaction isconsistent with previous research. It has been arguedthat the job satisfaction of a company's employees is animportant element of customer satisfaction. Resultsdescribe a positive relation between salespeople's jobsatisfaction and customer satisfaction (Ugboro andObeng, 2000).The existing studies provide evidences for apositive relation between employee’s job satisfactionand customer satisfaction in several industries. Theresearchers developed a direct relation between jobsatisfaction and customer satisfaction. This relation isstronger when innovative products are involved due tothe need understand product changing (Homburg &Stock, 2004). If a customer examine that an employeedoes not have a positive attitude, a customer candevelop the wrong perceptions leading the customer toquestion the integrity and safe image of the companyand results are, decreased sales (Ahearne et al., 2005).It is backbone importance for manager to focus onincreasing employee satisfaction to create a positivework environment which is an integral part oforganization. Employees with positive attitudes shouldbe encouraged to develop contact with customers atevery point to create the best customer relations. They154should also be encouraged to take responsibility forcustomer satisfaction that will be beneficial of higherprofits for the organization (Loveman, 1998).Job Satisfaction: Job satisfaction has been definedin many ways as emotional beliefs of employees howone feels about his/her job or one's thoughts abouthis/her job. Job satisfaction is most simply defined as"the extent to which people like their jobs". Jobsatisfaction has been related to many different contextsof the job, including job performance, life satisfaction,health, productive work behavior and retentionbehaviors, turnover (Millán et al., 2013). Differentstudies has evaluated that people who are satisfied withtheir jobs perform better experiencing productive workbehavior and less withdrawal (Bartling et al., 2013).The Job Characteristics Theory (JCT) was firstdeveloped by Hackman and Oldham (1975). From theJob Characteristics Theory, Hackman and Oldhamidentified the Job Characteristics Model (Hackman andOldham, 1975, 1976, 1980). In this model, a set ofthree psychological states act as mediator betweenbasic job characteristics and results. These physicalstates deal with meaningfulness of the work,experienced responsibility for outcomes of the workand knowledge of the actual results of the workactivities (Hackman and Oldham, 1976). In the JCM,the five basic job characteristics are skill variety, taskidentity, task significance, autonomy and feedbackfrom job and the job results are high internal workmotivation, high satisfaction with the work, lowabsenteeism and turnover and high quality workperformance (Hackman and Oldham, 1975). In the JobCharacteristics Model, job satisfaction is composed offour dimensions; satisfaction with job security,satisfaction with compensation, satisfaction with coworkers and satisfaction with supervision (Hackmanand Oldham, 1980). In review of job satisfaction,Fritzsche and Parrish (2005) found that Hackman andOldham's measure is one of the most popularmeasurements of job satisfaction. By examining thecontext of job satisfaction, it is easily possible todescribe why employees are satisfied or dissatisfiedwith their jobs. For example, if employees have lowoverall job satisfaction it could be simply analyzed thatthey have low satisfaction with their job security,supervision and compensation (Yousef, 1998).3. HypothesesH1: Work environment is positively correlated toservice climate.H2: There is significant positive relation betweenService climate and employee job satisfaction.H3: Service climate will positively influence employeeengagement.

155Journal of Business and Management ResearchH4: Work engagement positively enhances jobsatisfaction.H5: Employee job satisfaction, both positively andnegatively, influences customer satisfaction andloyalty.H6: There is a positive relation between workengagement and customer satisfaction.H7: Service climate positively influences customersatisfaction.H13: Service climate mediate the relationship betweenorganizational resources and environment and workengagement, employee performance, and customersatisfaction also.H14: service climate mediate relationship betweenenvironment and resources and employee jobsatisfaction.H15: Work engagement mediates the relationshipbetween service climate and customer satisfaction andloyalty.H8: Tenure influence negatively. Tenure as moderatorbetween service climate and work engagement havenegative relation. Having long occupancy at same levelcan effect engagement.H16: Employee performance act as mediator betweenwork engagement and customer satisfaction.H9: There is positive relation between Employeeperformance and customer satisfaction.The conceptual framework of this study focuseson an organizational resources and service climatefollowed by systematic links. Figure 2 shows thehypothetical relationships among the variables that areinvestigated.H10: Work engagement influence positively Employeeperformance4. Conceptual frameworkH11: Job satisfaction positively affects employeeperformanceH12: Service climate positively influence employeeperformance.Figure 1: Conceptual model

N. Haider et al., 20145. Research MethodologyThe purpose of this study is to identifyorganizational work environment and an appropriateservice climate that can improve the delivery of serviceby analyzing the relationships between organizationalwork environment and actual aspects of customersatisfaction. The measurement of service climate usedin this study is an employee opinion survey that is builtto measure employees' perceptions about theperformance of their organization in handling the ofquality service. It is based on the service climatecomponents identified by Schneider et al. (1998) whichare work engagement components, customersatisfaction and loyalty. The current research isconducted on Telecom sector in Pakistan.The telecom sector of Pakistan selected for thisresearch and unit of analysis of this study areemployees working in this sector. There are manydivision and networks in telecom sector of Pakistansuch as PTCL, Ufone, Warid, Mobilink, Zong, andTelenor. A lot of companies, franchises, and customerservice centers are working in Pakistan. We targetedDera Ghazi Khan Region of Pakistan. There are 11franchises, 1 PTCL center and 1 customer servicecenter of Zong is working. The total population of thissector is near about 800. The main reason to select thisarea is that this region is considered as backward area,facilities for employees are limited rather than bigcities. We want to examine what they think, what theywant.This study is cross sectional because the data isgathered in one point in time to determine therelationship between the variables at particular time.Sample is selected through simple convenient samplingtechnique to collect primary data. Total 101questionnaires were distributed.According to the objectives of this study andresearch variables, as well as different dimensions inthe conceptual structure, the questionnaire wasorganized into six parts: organizational resources, workengagement, performance, service climate, customerloyalty and employee job satisfaction.The questionnaire was adapted from Salanova etal. (2005) which is developed by different studies asBrown and Mitchell (1993), and Peters, O'Connor, andEulberg (1985). The scale for organizational resourcecomposed of three categories: training, job autonomy,and technology. This questionnaire consisted of 11items, 4 items of training scale, 3 items autonomyscale, and 4 items technology scale. We askedemployees about the extent to which theseorganizational resources had been important tofacilitate employee performance and had helped themto face challenges at workplace. A 5-point rating scaleranging from 1 (not important) to 5 (very important) isused. Work engagement scale is adapted from version156of the Work and Well-Being Survey (Schaufeli et al.,2002). Work Engagement Scale is categorized intovigor, dedication, and absorption. This questionnaire ismade up of 17 items (6-item vigor scale, 5-itemdedication scale, and 6-item absorption scale). Allitems scored on a 7-point frequency rating scaleranging from 0 (never) to 6 (always). Service climate isadapted from 7-item Global Service Climate Scale(Schneider et al., 1998). All items scored on a 7-pointrating scale from 1 (completely agree) to 7 (completelydisagree). Scale is composed of empathy and excellentperformance which shows expected behaviors forrelated employees. Empathy scale is composed of 3items based on the SERVQUAL Empathy Scale.A further scale of 3 items was based on theService Provider Performance Scale. All items scoredon a 7-point rating scale from 1 (completely agree) to 7(completely disagree). Employee job satisfactionquestionnaire is composed of 7 items. A 7-point ratingscale is used for the level of agreement ranging from 1(strongly disagree) to 7 (strongly Agree). Customerloyalty scale composed of 3 items that measurepositive word-of-mouth behaviors. A 7-point ratingscale ranging from 1 (strongly disagree) to 7 (stronglyagree). The questionnaire targeted to employees oftelecom sector as well as to customers. Only 65 werecollected. Employee performance and loyalty questionsare given to customers, remaining for employees.5.1 Data collectionSurvey approach for data collection is used in thisresearch. To present the overall picture of the variablesthe descriptive statistics are used. Descriptive statisticsare used to describe the basic features of the data in astudy, to determine characteristics of sample. Theyprovide simple summary about the sample and themeasures. The factor analysis, regression analysis, andcorrelation analysis technique is used to check thevalidity and reliability of this research. To examine thelink between variables, the study has used step by stepregression.5.2 Data analysisA total of 101 questionnaires were distributed forthis study, and only 65 valid questionnaires werecollected, the proportion of male ( 92.3 per cent) ishigher than that of their female (7.7 per cent), theirages are mostly in the ranged between 26-30 years old(33.8 per cent). Also 76.9 per cent of the respondentswere post graduates. In addition 50.8 per cent of therespondents’ monthly income was above 30,000 and66.2 per cent of the respondents were married, 47.7 %of respondents’ job experience was less than 5 years,56.9 % respondents have less than 10 year job tenure,and job nature of 90.8 % respondents was full time.Reliability: Reliability is a measuring tool thatdescribes variable error. Cronbach’s alpha values arecommonly used to measure consistency of various

157Journal of Business and Management Researchaspects in the same dimension. The questionnaireincludes a variety of dimensions, and a higherreliability coefficient represents a higher onbach’s alpha value is greater than 0.70, it showshigh reliability; when the value falls between 0.70 and0.35, it is considered as acceptable reliability and thevalue smaller than 0.35 is shows low reliability.The results of the questionnaire reliability analysisshow that the Cronbach’s alpha value oforganizational resources (autonomy) is 0.805,organizational resources(tech) is bsorption0.810,service climate is 0.840, job satisfactionis0.811,performance is 0.778,loyalty is0.791and overallreliability is 0.942. Its variables all reach a level ofhigh reliability, it describes that the overall consistencyof the questionnaire of this study is in highly reliable.Validity:KMO & Bartlett’s test is used to checkvalidity. To show validity of questionnaire is, it isnecessary that factors measurement is greater than0.40. The overall validity of the questionnaire is goodand all the questions are appropriate. According to thefactor analysis, each question’s factor loading isbetween 0.400 and 0.896 and overall validity is 0.684.It demonstrate that the questionnaire in this researchfulfill the requirement of criteria of validity.Correlation analysis: This research usedPearson’s correlation analysis to illustrate thecorrelation between variables and the correlationcoefficients of variables. Data shows thatorganizational resources, engagement, performance,service climate, employee job satisfaction andcustomer loyalty have significant positive correlation.5.3 Hypotheses testingThe regression analysis is adopted to test therelationship of hypothesis. The results of the regressionanalysis are shown in Table 5. From data, Model 1 ofTable 5, b 0.144, t 0.913, 0.365 0.05, which doesnot has a statistical Significance, it means WOE andSC have a significant positive correlation is notsupported. From data of Model 2, b 0.134, t 1.072,0.288 0.05, which has no statistical significance, itmeans SC and EJS have a significant positiverelationship is not supported. And as data shown inModel 3, b 0.163, t 1.311, 0.195 0.05, which hasno statistical significance, it means SC and WE have asignificant positive relationship is supported. Theregression analysis for the influence of workengagement on job satisfaction is shown as Model 4,b 0.725, t 8.363, 0.000 0.05, which has astatistical significance, it means that WE with EJS havea highly significant positive relation is supported.Model 5, b 0.618, t 6.238, 0.000 0.05, which hasa statistical significance, it means EJS with have asignificant positiv

The role of organizational resources and environment in Organizational performance and customer loyalty; service climate as mediator: A Study of Telecommunication . The organizational climate is based on beliefs among the employees according to organizational policies, procedures, and practice that are supported and rewarded (Randhawa and .

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