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Sow et al.

Management and Economics Research Journal, Vol. 3, Pages 1–10, 2017

Original Research Article The Relationship between Leadership Style, Organizational Culture, and Job Satisfaction in the U.S. Healthcare Industry

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E-ISSN: 2469-4339

Management and Economics Research Journal, Vol. 3, Pages 1–10, 2017 1

ID: 403737 https://doi.org/10.18639/MERJ.2017.03.403737

The Relationship between Leadership Style, Organizational Culture, and Job Satisfaction in the U.S. Healthcare Industry

Mouhamadou Sow1,2,3*, Jeanie Murphy4, Rosa Osuoha5 1Faculty Member, National American University, Rapid City, SD, USA.

2Faculty Member, University of Phoenix, Tempe, AZ, USA. 3Faculty Member, City University of Seattle, Seattle, WA, USA.

4Director of Academic Affairs, University of Phoenix, Tempe, AZ, USA. 5Area Chair Lead Faculty, University of Phoenix, Tempe, AZ, USA.

*Correspondence: [email protected]

Received: Feb 1, 2017; Accepted: Feb 27, 2017; Published: Apr 11, 2017

Abstract

The purpose of this quantitative, correlational study, based on the theoretical framework of transformational lead- ership, was to examine the relationships between leadership style, organizational culture, and job satisfaction in the U.S. healthcare industry. The study addressed a problem faced by U.S. healthcare leaders, who are currently unaware as to how transformational leadership and organizational culture can impact job satisfaction in an industry with high burnout and low satisfaction levels. The following research questions for exploration are: (1) Is there a statistically significant relationship between transformational leadership and job satisfaction in the U.S. healthcare industry? (2) Is there a statistically significant relationship between organizational culture and job satisfaction in the U.S. healthcare industry? (3) Is the relationship between transformational leadership and job satisfaction in the U.S. healthcare industry mediated by organizational culture? Data to answer the research questions is from a collection through random sampling processes that resulted in a sample of 111 American healthcare employees and analyzed with Stata software. The main finding of the study was that an apparent effect of transformational leadership on job satisfaction disappeared when organizational culture variables are considered. The results suggest that healthcare organizations should attempt to move away from externally focused cultures in order to increase job satisfaction. Such a move could improve social outcomes by improving the quality of work for millions of stressed American healthcare employees.

Keywords: Transformational leadership; Leadership styles; Organizational culture; Job satisfaction; Organizational commitment; Healthcare professionals.

1. INTRODUCTION

1.1. Background Job satisfaction is rated low in the United States and throughout the world. According to a recent survey conducted by the Gallup Organization, only 13% of employees consider themselves to be highly satisfied (Crabtree, 2013). In the field of healthcare, job satisfaction is particularly low. The factors for the low satisfac- tion are high levels of burnout, long work hours, workplace bullying, demanding jobs, insufficient managerial support, time-consuming regulatory obligations, and many other factors (Adriaenssens, De Gucht, & Maes, 2015; Allen, Holland, & Reynolds, 2015; Cao, Chen, Tian, & Diao, 2016; Jesse, Abouljoud, Hogan, & Eshelman, 2015; Klopper, Coetzee, Pretorius, & Bester, 2012). In this climate, it is incumbent upon healthcare leaders to find novel and practical means of raising the satisfaction levels of their employees. One proven method of doing so is applying transformational leadership (Mesu, Sanders, & van Riemsdijk, 2015; Top, Akdere, & Tarcan, 2015; Welty Peachey, Burton, & Wells, 2014; Yahaya & Ebrahim, 2016; Yucel, McMillan, & Richard, 2014). A com- plementary method to transformational leadership application is that of altering organizational culture (Choi, Jang, Park, & Lee, 2014; Lok & Crawford, 1999; McKinnon, Harrison, Chow, & Wu, 2003; Silverthorne, 2004). However, little is known about the interactions between transformational leadership, organizational culture, and job satisfaction in the healthcare industry, posing a challenge for healthcare leaders.

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1.2. Purpose of the Study The purpose of this quantitative, correlational study was to measure the relationships between leader- ship style, organizational culture, and job satisfaction among a representative cross section of U.S. health- care professionals. The purpose of this study was to find not only a mere statistical correlation (obtainable through a Pearson or Spearman correlation analysis) also a causal relationship through a regression model (ordinary least squares regression). The contribution of the study was to identify the specific contributions of transformational leadership, organizational culture, and culture-mediated transformational leadership to job satisfaction in U.S. healthcare settings.

1.3. Problem Statement Fewer than one in five healthcare employees are satisfied in the workplace (Allen et al., 2015). Thus, the general business problem addressed in the study is low satisfaction, and the specific business problem is low satisfac- tion in healthcare. Both transformational leadership and organizational culture change have been proposed as viable solutions to the problem of dwindling job satisfaction. In particular, the contribution of transforma- tional leadership to job satisfaction and related constructs is well studied (Mesu et al., 2015; Top et al., 2015; Welty Peachey et al., 2014; Yahaya and Ebrahim, 2016; Yucel et al., 2014). Similarly, the relationships between organizational culture and job satisfaction have also been explored (Choi et al., 2014; Lok and Crawford, 1999; McKinnon et al., 2003; Silverthorne, 2004). However, there does not appear to be studies on transformational leadership, organizational culture, and the leadership-culture nexus in the healthcare industry. The current study was designed to address this gap in the literature and help American healthcare leaders understand how leadership and organizational culture can impact the satisfaction levels of their increasingly dissatisfied employees (Adriaenssens et al., 2015; Allen et al., 2015; Cao et al., 2016; Jesse et al., 2015; Klopper et al., 2012).

1.4. Research Objectives The objectives of the research study were to determine the extent to which (a) transformational leadership and job satisfaction are related, (b) organizational culture and job satisfaction are related, and (c) organizational culture mediates the relationship between transformational leadership and job satisfaction. These objectives were achieved through the application of a mediated ordinary least squares (OLS) regression approach.

1.5. Research Questions In this study, the goal was to provide information to organizational leaders within the U.S healthcare indus- try regarding the effects organizational culture and the promotion of transformation leadership have on job satisfaction. The process of achieving this objective included seeking answers to the following questions:

RQ1: Is there a statistically significant relationship between the independent variable of transforma- tional leadership and the dependent variable of job satisfaction in the U.S. healthcare industry? RQ2: Is there a statistically significant relationship between the independent variable of organizational culture and the dependent variable of job satisfaction in the U.S. healthcare industry? RQ3: Is the relationship between the independent variable of transformational leadership and the depen- dent variable of job satisfaction in the U.S. healthcare industry mediated by organizational culture?

1.6. Hypotheses The process of answering these research questions involved testing the following null and alternative hypotheses:

H10: There is not a statistically significant relationship between transformational leadership and job satisfaction in the U.S. healthcare industry. H1A: There is a statistically significant relationship between transformational leadership and job satis- faction in the U.S. healthcare industry. H20: There is not a statistically significant relationship between organizational culture and job satisfac- tion in the U.S. healthcare industry. H2A: There is a statistically significant relationship between organizational culture and job satisfaction in the U.S. healthcare industry.

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H30: The relationship between transformational leadership and job satisfaction in the U.S. healthcare industry is not mediated by organizational culture. H3A: The relationship between transformational leadership and job satisfaction in the U.S. healthcare industry is mediated by organizational culture.

1.7. Limitations of the Research The main limitation of the study was that employees were asked to comment not only on their own job satisfaction and on the organizational culture in which they worked and on the transformational leader- ship capacities of their immediate bosses. It is possible that employees are not reliable informants of either organizational culture or the leadership qualities of their bosses. It is also possible that different employees come into contact with different aspects of organizational culture and experience volatile relationships with bosses, in which case employee-contributed information about organizational culture and the transforma- tional leadership qualities of bosses might not be reliable or valid.

Another limitation of the study was the limited number of control variables. Only race, gender, and age were factored in as covariates. However, burnout, resilience, and several other psychological states are likely to play some role in the healthcare-employee assessments of job satisfaction. The possible roles played by variables such as burnout and resilience can be examined by future scholars.

The questionnaires on transformational leadership and job satisfaction utilized in this study are attempts to measure enormously complex constructs. A delination in the research could be verification of construct validity from the chosen instrument, in which case the results from this research study could reflect deficiencies in the instruments rather than reflect actual qualities and perceptions related to trans- formational leadership, organizational culture, and job satisfaction.

2. THEORETICAL FOUNDATION AND LITERATURE REVIEW

The management theory utilized in this study is the transformational leadership theory of Bass and Avolio (1990). Transformational leadership theory addresses how to improve worker satisfaction and engagement. Therefore, transformational leadership theory is an appropriate framework for a study on how to improve satisfaction through leadership type. This literature review includes an analysis and synthesis of current and previous literature surrounding the concepts of organizational culture, leadership styles, transformational leadership, and job satisfaction among U.S. healthcare professionals.

2.1. Organizational Culture Organizational culture has been defined in many ways, with prior methods of classification distinguishing between organizational cultures that were flat and organizational cultures that were hierarchical (Ashkanasy, Vilderom, & Peterson, 2011). The competing values framework (Quinn & Rohrbaugh, 1983) of organizational culture ranks organizations as belonging to one of four quadrants. The quadrants are: (a) external focus and control-oriented structure, (b) external focus and flexible structure, (c) internal focus and control-oriented struc- ture, and (d) internal focus and flexible structure. Given evidence from organizational psychology (Herzberg, 1965; Maslow, 1965) that workers prefer flexibility to control, contentions about how organizational cultures are flexible, can be correlated with the likeliness of higher levels of job satisfaction among employees.

Schein (2004) describes how organizational culture and leadership work together to create shared beliefs, assumptions, and shared values that shape organizational behaviors. Culture influences how employees think, solve problems, take risks, and manage change. These beliefs and values are passed down to new employees as a guide to influence organizational work processes and social interactions (Schein, 2004). A strong culture emerges when leaders and employees agree with the core values, behaviors, and beliefs of the organization.

2.2. Leadership Styles There are numerous leadership styles, and there are also numerous ways of measuring the different lead- ership styles that exist (Abdelgawad, Zahra, Svejenova, & Sapienza, 2013; Avolio, Waldman, & Einstein, 1988; Bass & Avolio, 1990; Breevaart et al., 2014; Chen & Silverthorne, 2005; Clinebell, 2014; Daft, 2009; Kouzes & Posner, 2006). One increasingly common means of classifying leadership styles is through the

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Multifactor Leadership Questionnaire (MLQ) (Bass and Avolio, 1990), which recognized three main kinds of leadership: (a) transformational leadership, (b) transactional leadership, and (c) laissez-faire (or passive) leadership. Considering the styles of leadership, the transformational leadership style has been widely described (Mesu et al., 2015; Top et al., 2015; Welty Peachey et al., 2014; Yahaya & Ebrahim, 2016; Yucel et al., 2014) as the most effective form of leadership in relationship to job satisfaction and other outcomes.

Transformational leadership has being defined as follows:

As its name implies, transformational leadership is a process that changes and transforms peo- ple. It is concerned with emotions, values, ethics, standards, and long-term goals. It includes assessing followers’ motives, satisfying their needs, and treating them as full human beings. Transformational leadership involves an exceptional form of influence that moves followers to accomplish more than what is usually expected of them. (Northouse, 2010, p. 171).

Essentially, transactional leaders use bargaining power to manage employees and achieve organizational goals. This leadership style motivates employees with contingent rewards, raises, promotions, and perks that increase job satisfaction. However, transformational leaders seek to change and develop employees. These leaders are naturally charismatic and committed to innovation, social responsibility, and motivating and engaging their followers. They motivate employees and manage performance with vision, and accord- ing to the Multifactor Leadership Questionnaire (MLQ) (Bass & Avolio, 1990), these leaders use 1) idealized influence, 2) intellectual stimulation, 3) inspirational motivation, and 4) individualized consideration.

2.3. New Approaches to Leadership There is a consensus in the recent (Mesu et al., 2015; Top et al., 2015; Welty Peachey et al., 2014; Yahaya & Ebrahim, 2016; Yucel et al., 2014) leadership literature that the best approach to leadership is transfor- mational in nature. New paradigms of leadership emphasize the need to beyond coordinating existing resources, both human and physical, and to find a way of eliciting the generation of new, extraordinary resources among followers (Abdelgawad et al., 2013; Avolio et al., 1988; Bass & Avolio, 1990; Breevaart et al., 2014; Chen & Silverthorne, 2005; Clinebell, 2014; Daft, 2009; Kouzes & Posner, 2006). Transformational lead- ership can be considered an example of this new approach to leadership. Examining transformational lead- ership style and its effect on job satisfaction in the healthcare industry will provide a better understanding of the healthcare-industry employee shortage and allow for the development of potential strategies to mitigate high turnover rates in the healthcare industry.

Giltinane (2008) suggests that because healthcare organizations face constant changes, a combination of transformational leadership with situational leadership can be supported. Grimm (2010) model of situ- ational leadership is based on a leader’s approaches to supporting, directing and mentoring followers.

2.4. Organizational Commitment/Job Satisfaction The constructs of organizational commitment and job satisfaction are rooted in older theories (Herzberg, 1965; Maslow, 1965) of workplace motivation. Organizational commitment is considered to be the behav- ioral reflection of the cognitive and affective dimensions of job satisfaction (Breevaart et al., 2014; Fernet, Trépanier, Austin, Gagné, & Forest, 2015; Schmitt, Den Hartog, & Belschak, 2016). Transformational leader- ship attempts to build job engagement through appealing directly to followers’ senses of meaning, engage- ment, and interest (Mesu et al., 2015; Top et al., 2015; Welty Peachey et al., 2014; Yahaya & Ebrahim, 2016; Yucel et al., 2014). Thus, transformational leadership has been found to correlate positively with the con- structs of organizational commitment and job satisfaction.

Transformational leadership results in committed employees who will perform above their job require- ments and exhibit citizenship behaviors for the good of the company and to achieve organizational goals (Purvanova, Bono, & Dzieweczynski, 2006).

Thamrin (2012) cites Allen and John (1990) that organizational commitment consists of three compo- nents: 1) affective, where employees desire to identify with the organization because they share the same values, 2) continuance, where employees do not want to lose the benefits they receive from the organiza- tion, and 3) normative, where employees have the strong desire to not leave the organization. Another study found that there are strong ties between transformational leadership, jobs satisfaction, motivation, organi- zational commitment, and performance (Tharmin, 2012; Avolio, Zhu, Koh, & Bhatia, 2004).

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ID: 403737 https://doi.org/10.18639/MERJ.2017.03.403737

3. METHODOLOGY

The research approach used in this study was a quantitative method with a correlational design. Correla- tional designs have been described as follows:

The variables included in the correlational research are isolated and measured by the investiga- tor, but they are characteristics that occur naturally in the subjects…a correlation study consists of establishing a relationship between variations in the X variable to variations in the Y variable. (Keppel, Saufley, & Tokunaga, 1992, p. 460).

In this study, the variables of job satisfaction and employee perceptions of both transformational leader- ship and organizational culture were naturally occurring variables. Therefore, only a correlational research design could be applied in the study. The individual elements of the study’s methodology have been dis- cussed below.

3.1. Population and Sampling The population for this study consisted of the employees of U.S. healthcare institutions, defined primar- ily as hospitals but also including clinical and medical support settings of various kinds. A simple random sampling approach was utilized to send study recruitment messages to the human resources (HR) heads of over 17 medical sites in the United States. HR heads were requested to disseminate a web link to the Sur- veyMonkey site where data for the study were collected anonymously and privately.

An a priori sample size calculation was carried out for this study. The calculation method by Cohen’s recommendations (Cohen, 2013) and the use of G*Power 3.1.5 (Faul, Erdfelder, Buchner, & Lang, 2009) software. The chosen method was a two-tailed OLS regression with an effect size of 0.15, an Alpha of 0.10, a Power of 0.95, and five predictors (transformational leadership, organizational culture, race, gender, and age). Based on these inputs, a minimum sample size of 59 was recommended for the study. The final col- lected sample consisted of 111 individuals.

3.2. Instruments, Reliability, and Validity In this study, the construct of transformational leadership was measured by the transformational leadership subscale of the MLQ (Bass and Avolio, 1990). There are 16 questions on this subscale, which, with the use of a seven-point Likert scale, yields a range of 16-112, with higher scores representing higher levels of transfor- mational leadership. The Cronbach’s Alpha of the transformational leadership subscale is over scale, and the content validity of this scale was established through Bass and Avolio’s use of confirmatory factor analysis to ensure that the items on the transformational leadership subscale were weighted on components other than the items on the transactional and laissez-faire subscales.

The variable of job satisfaction was measured through the Work-Related Basic Need Satisfaction Scale (WRBNS) (Broeck, Vansteenkiste, Witte, Soenens, & Lens, 2010). WRBNS actually contains separate sub- scales for (a) work satisfaction and (b) job resources. However, for the purposes of this study, all 11 WRBNS items were collated into an index measure of job satisfaction. With a seven-point Likert scale, the range of WRNBS is from 11 to 77, with higher scores representing higher measures of job satisfaction. The WRNBS has a Cronbach’s Alpha over 0.8. Confirmatory factor analysis was used to measure and distinguish between its distinct constructs of job resources and work satisfaction.

Finally, Quinn and Rohrbaugh’s (1983) competing values framework was used to ask participants to rate their organizations as belonging to one of the four quadrants recognized in this framework: (a) external focus and control-oriented structure, (b) external focus and flexible structure, (c) internal focus and control- oriented structure, and (d) internal focus and flexible structure. Quinn and Rohrbaugh’s (1983, p. 367) chart was used in order to assist participants in situating their company in the matrix of organizational culture.

Permission to use each of the instruments in the study was sought and obtained from the respective authors of the instruments.

3.3. Data Collection All data were collected anonymously and privately through SurveyMonkey. Participants were asked to pro- vide their race, gender, age, and job-satisfaction levels (as measured by the items on WRBNS). Subsequently,

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participants were asked to evaluate their immediate bosses on the transformational leadership subscale of the MLQ.

3.4. Data Analysis OLS regression was utilized to answer each of the research questions of the study. For each regression, measures of significance, effect size, coefficient values, and diagnostics were reported. Data analysis was carried out in Stata, version 14.0.

4. RESULTS

The purpose of this quantitative, correlational study was to measure the relationships between leadership style, organizational culture, and job satisfaction among a representative cross section of U.S. healthcare professionals. This purpose was achieved through mediated OLS regression. Three research questions were asked: (1) Is there a statistically significant relationship between transformational leadership and job satisfac- tion in the U.S. healthcare industry? (2) Is there a statistically significant relationship between organizational culture and job satisfaction in the U.S. healthcare industry? (3) Is the relationship between transformational leadership and job satisfaction in the U.S. healthcare industry mediated by organizational culture?

The first research question was answered by regressing transformational leadership, employee gender (treated as a dummy variable, with 0 5 male, 1 5 female), employee race (treated as a dummy variable with 0 5 white, 1 5 nonwhite), and employee age on the dependent variable of job satisfaction.

The regression for RQ1 was significant, F (4, 106) 5 1.07. The effect size of the regression was 0.0389, meaning that 3.89% of the variation in job satisfaction was accounted for by variation in transformational lead- ership, employee age, employee gender, and employee race. However, only transformational relationship was a statistically significant predictor (Beta 5 0.22, p 5 0.076, t 5 1.79, SE 5 0.122). There was no statistically sig- nificant effect of gender (Beta 520.53, p 5 .849, t 5 20.19, SE 5 2.78), race (Beta 5 21.2, p 5 0.664, t 5 20.44, SE 5 2.77), or age (Beta 5 20.12, p 5 0.405, t 5 20.84, SE 5 0.15). The constant was 67.30. Based on these findings, the following OLS regression was fit for the effect of transformational leadership on job satisfaction:

Job satisfaction 5 (Transformational leadership * 0.22) 1 67.30

Thus, for every one-point increase in transformational leadership, job satisfaction rose by 0.22. However, as measured by the coefficient of determination, the effect of transformational leadership on job satisfaction was fairly small. To determine whether the OLS regression equation for RQ1 was reliable, a Breusch-Pagan / Cook-Weisberg test for heteroscedasticity was performed. The results indicated that the regression for RQ1 met the assumption of heteroscedasticity, c2(1) 5 0.75, p 5 0.388. Figure 1 below depicts the relationship between job satisfaction and transformational leadership, with both the OLS line of best fit and the 95% confidence interval imposed. Figure 1 provides visual evidence that there were many data points that fell

20

30

40

50

60

70

40 60 80 100 Transformational Leadership

95% CI Fitted valuesJob Satisfaction

Figure 1. Scatterplot, RQ1.

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outside (both above and below) the 95% confidence interval, which accounts for the relatively small effect size obtained in RQ1.

The second research question of the study was as follows: Is there a statistically significant relationship between organizational culture and job satisfaction in the U.S. healthcare industry? The second research question was answered by regressing organizational culture (treated as four separate dummy variables for the four quadrants of organizational culture), employee gender, employee race, and employee age on the dependent variable of job satisfaction. In this regression, a dummy coding system (i.e., dichotomous cod- ing) was utilized in order to distinguish between the impacts of the four recognized organizational culture types: (a) external focus and control-oriented structure (dubbed OC1), (b) external focus and flexible struc- ture (dubbed OC2), (c) internal focus and control-oriented structure (dubbed OC3), and (d) internal focus and flexible structure (dubbed OC4). Because of the greater number of variables in the OLS for RQ2, a table was employed to display the coefficient results. The coefficient results are presented in Table 1 below.

The regression for RQ2 was significant, F (7, 103) 5 2.63. The effect size of the regression was 0.1519, meaning that 15.19% of the variation in job satisfaction was accounted for by variation in organizational cul- ture, employee age, employee gender, and employee race. However, only OC1 (external focus and control- oriented structure) and OC2 (external focus and flexible structure) were statistically significant predictors. Because OC1 and OC2 were mutually exclusive dummy variables, they required two equations, as follows:

Job satisfaction 5 (OC1 * 217.42) 1 91.35 Job satisfaction 5 (OC2 * 212.31) 1 91.35

Thus, the presence of an external focus and control-oriented structure reduced overall employee job sat- isfaction by 17.42 points, whereas the presence of an external focus and flexible structure reduced overall employee job satisfaction by 12.31 points. External structures therefore appeared to reduce job satisfaction in comparison to internal structures. Finally, in order to determine whether the OLS regression equation for RQ2 was reliable, a Breusch-Pagan / Cook-Weisberg test for heteroscedasticity was performed. The results indicated that the regression for RQ2 met the assumption of heteroscedasticity, c2(1) 5 0.10, p 5 0.754.

The third research question of the study was as follows: Is the relationship between transformational leadership and job satisfaction in the U.S. healthcare industry mediated by organizational culture? The third research question was answered by regressing organizational culture, transformational leadership, employee gender, employee race, and employee age on the dependent variable of job satisfaction. Because of the greater number of variables in the OLS for RQ3, a table was employed to display the coefficient results. The coefficient results are presented in Table 2 below.

Table 1. Coefficient Results, RQ2.

Variable Coefficient S.E. t p

95% confidence

interval (lower bound)

95% confidence

interval (higher bound)

Gender 21.627472 2.692952 20.6 0.547 26.968307 3.713363

Race 22.274995 2.66127 20.85 0.395 27.552997 3.003007

Age 20.1565731 0.1428327 21.1 0.276 20.4398481 0.1267019

OC1 217.42278 5.528626 23.15 0.002 228.38751 26.458055

OC2 212.30631 5.852054 22.1 0.038 223.91248 20.700142

OC3 25.547755 5.396513 21.03 0.306 216.25047 5.154957

OC4 28.897602 6.026755 21.48 0.143 …