Employee effects on organizational outcomes: Korean travel industry

Seo, Heon Article Employee effects on organizational outcomes: Korean travel industry Global Business & Finance Review (GBFR) Provided in Cooperation with: People & Global Business Association (P&GBA), Seoul Suggested Citation: Seo, Heon (2022) : Employee effects on organizational outcomes: Korean travel industry, Global Business & Finance Review (GBFR), ISSN 2384-1648, People & Global Business Association (P&GBA), Seoul, Vol. 27, Iss. 5, pp. 27-41, https://doi.org/10.17549/gbfr.2022.27.5.27 This Version is available at: https://hdl.handle.net/10419/305864 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc/4.0/ I. Introduction In today’s global business environment, enterprises regard a human resources management as an important factor to have competitiveness and long-term success. It is well-known fact that an enterprise’s key to success Received: Apr. 10, 2022; Revised: Aug. 7, 2022; Accepted: Sep. 20, 2022 †Heon Seo E-mail: [email protected] lies in its organizational members who take the lead in making changes and performing their job responsibilities (Collins & Porras, 1994). To secure well-trained human resources, employees could make competition be stronger and leads the foundations compatible on organizational goals (Ozkeser, 2019). Therefore, as compared to other industries, travel industry heavily relies on personal service provided by employees (Kloutsiniotis & Mihail, 2020), employees in travel agencies have direct contact with customers ⓒ Copyright: The Author(s). This is an Open Access journal distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution , and reproduction in any medium, provided the original work is properly cited. GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue. 5 (OCTOBER 2022), 27-41 pISSN 1088-6931 / eISSN 2384-1648∣Https://doi.org/10.17549/gbfr.2022.27.5.27 ⓒ 2022 People and Global Business Association GLOBAL BUSINESS & FINANCE REVIEW www.gbfrjournal.org4) Employee Effects on Organizational Outcomes: Korean Travel Industr y Heon Seo† P rofessor, Department of Tourism Management, Inha Technical College, Building #1-503, 100 Inha-ro, Michuhol-gu, Inchon, Korea 22212 A B S T R A C T Purpose: This study aimed to identify the structural relationships among the self-efficacy, job satisfaction, organizational commitment, and customer orientation of travel agency employees in Seoul, Korea. Design/methodology/approach: Questionnaires were distributed to 250 potential respondents between February 1 and February 20 of 2020. The 225 valid cases were employees at travel agencies in Seoul. Data from the self-administered questionnaires were used to perform frequency, factor, and regression analyses. Findings: The study devised six hypotheses based on a review of the previous literature. The results found that self-efficacy positively influenced organizational commitment and job satisfaction, job satisfaction positively influenced customer satisfaction and organizational commitment, and self-efficacy and organizational commitment positively influenced customer orientation. Unlike previous studies, the validity and reliability of the constructs measuring the underlying factors were tested, and new measurement items were developed. The variation found among the statistical relationships provides support for strategic implications and fundamental data for personnel policies in the travel industry. Research limitations/implications: This study’s respondents’ self-efficacy was positively influenced by job satisfaction, organizational commitment, and customer orientation. Future studies may extend samples across the provinces in Korea for a comparative assessment of the results. Also, because the study focused on emotional commitment and do not consider other types of commitment, future studies should include measures of more of the dimensions of commitment to analyze relationships between organizational effectiveness and organization achievements. Originality/value: This study provides original and important results on the relationship between organizations and their employees. Keywords: Self-efficacy, job satisfaction, organizational commitment, customer orientation GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue. 5 (OCTOBER 2022), 27-41 28 whose satisfaction is influenced by the nature of its employees’ customer orientation (Hartline & Ferrell, 1996; Kloutsiniotis & Mihail, 2020). Within that industry, even if Covid-19 has led to serious profit declines and bankruptcies, travel agencies has tried to overcome employees’ anxiety and fear from the disaster of COVID-19 and to promote employees’ psychological recovery through training program focusing on improvement of self-efficacy and organizational commitment (Zenker and Kock, 2020). Travel agencies could also achieve a competitive edge through human resources management; especially employees’ attitudes and behaviors could significantly contribute to achieving a companies’ competitiveness (Ambrož & Omerzel, 2017). In Korea, studies dealing with the relationship among self-efficacy, job satisfaction, organizational commitment, and customer orientation in travel agencies are rare (Choi & Lee, 2014; Choi & Shin, 2020). An increasing focus on self-efficacy has found that it has a positive influence on job satisfaction and organizational commitment, increases employees’ accomplishments, and job satisfaction and organizational commitment have been stressed as important factors to enhance customer orientation by inducing positive job attitudes and behaviors (Burmann & Zeplin, 2005). In addition, self-efficacy could improve customer orientation, and job satisfaction has been found to positively influence organizational commitment (Choi & Lee, 2014) and self-efficacy influenced job satisfaction and organizational commitment significantly (Demir, 2020). Job satisfaction was the most powerful antecedent variable that had affected organizational commitment (Harrison & Hubbard, 1998; Swider et al., 2011). A large body of research has been published on personnel organization and organizational effectiveness, but analyses tend to focus on hospitals, department stores, and the food service industry as opposed to other types of businesses. Although the travel industry is important to Korea’s economy because it took 2.8 percent of GDP and employed 275,619 people (An et al., 2021), few studies have specifically investigated travel agencies along these lines. Moreover, previous studies have analyzed self-efficacy as a moderator or mediator, and this study therefore examined its direct link to organizational effectiveness, through job satisfaction and organizational commitment, as an antecedent factor. Furthermore, travel agencies heavily depend on human resources management, suggesting that higher self-efficacy and organizational effectiveness improve customer satisfaction and business outcomes. The purpose of this study was to identify the statistical relationships among the self-efficacy, job satisfaction, organizational commitment, and customer orientation of Korean travel agencies’ employees and to determine specific and practical implications for their human resources management. In particular, the study tests the validity and reliability of its measures of organizational commitment to develop new measurement items, develop strategic implications, and identify effective organizational management and personnel policies, which provide a foundation for future studies on travel agencies’ personnel management. II. Literature Review and Hypotheses A. The Relationship between Self-efficacy, Job Satisfaction, and Organizational Commitment The self-concept was so closed to organizational outcomes that many researches have recently been conducted on positive psychological capital including hope, self-efficacy, resilience and optimism. Especially, self-efficacy was an important factor to influence job satisfaction and organizational commitment (Jung & Yoon, 2015; Demir, 2020). Bandura (1986) defined self-efficacy as an individual’s confidence in his or her abilities to succeed in carrying out specific activities. The concept is not related to the techniques an individual uses to achieve goals; it comprises those actions that individuals could perform regardless of technique, which is an important factor to individuals’ capability systems. Previous studies on self-efficacy have found that individuals with relatively more self-efficacy are more likely to endure pain and stop undesirable actions than are those with Heon Seo 29 less self-efficacy. Gkolia et al. (2014) stated that selfefficacy positively affects job satisfaction. Furthermore, employees with high self-efficacy tend to take greater responsibility for accomplishing their job assignments, set more difficult and challenging goals for themselves, and more easily face challenges than do those with low self-efficacy. These outcomes suggest that selfefficacy strongly relates to factors that influence task performance, such as employees’ motivation, job satisfaction, and organizational commitment (Kirkpatrick & Locke, 1996; Prussia et al., 1998; Rosario et al., 2009). High self-efficacy implies that an employee understands the organization’s goals, highly rates his or her personal abilities to accomplish tasks, and has high task performance, and the more employees’ self-efficacy beliefs increased, the more their job satisfaction, organizational commitment increased. Both job satisfaction and organizational commitment were highly linked to the sense of self-efficacy (Demir, 2020). The previous studies have found significant relationships among self-efficacy, job satisfaction, and organizational commitment, and, therefore, the following hypotheses were derived. H1: Self-efficacy positively and significantly influences job satisfaction. H2: Self-efficacy positively and significantly influences organizational commitment. B. The Relationship between Self-efficacy and Customer Orientation Internal marketing in organization plays a pivotal role to increase employee’s self-efficacy and performance outcomes, and employees with high self-efficacy are more likely to try to satisfy customers, which eventually increases job satisfaction and customer orientation in organization (Hartline & Ferrell, 1996; Gountas et al., 2014; Jeon & Park, 2021). Furthermore, satisfied employees tend to provide customer service more than his or her expectations (Donovan et al., 2004), and it is consistent that employees oriented for customers be more easily to feel job satisfaction, as opposed to those low self-efficacious responds to customer less effectively (Judge & Bono, 2001). Park and Nam (2008) pointed out that higher self-efficacy could indicate a kind attitude and thoughts and behaviors oriented toward customers when employees come into contact with them because self-efficacy induces spontaneous and positive emotions regarding customers. Those who had high self-efficacy demonstrated positive behaviors, bright outlooks, and warm emotions toward customers, and they implemented more efficient service with better customer orientation (Lee & Chung, 2008). Suh et al. (2010) found that the self-efficacy of employees working at a call center positively influenced customer orientation, and Kim and Lee (2014) found that employees with high self-efficacy in the hotel industry could improve customer orientation because self-efficacy was a very important core capacity in the spontaneous behaviors of human resources. These findings suggest that employees with high self-efficacy relate positively to customer orientation, and the following hypothesis was derived. H3: Self-efficacy positively and significantly influences customer orientation. C. The Relationship between Job Satisfaction and Organizational Commitment Job satisfaction is one of the most researched subjects in the field of human resource management and organizational behavior. Job satisfaction refers to overall emotional contentment with task situations and experiences in the workplace (Brown & Peterson, 1993). Furnham, Eracleou, and Chamorro-Premuzic (2009) defined job satisfaction as the employees’ level of satisfaction on their work. Organizational commitment is the extent to which an employee is integrated into and attached to the organization to which he or she belongs (Williams, 1991). Robbins (2006) regarded organizational commitment as a stage of employees’ intention and behavior to participate in a certain group with the goals, and GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue. 5 (OCTOBER 2022), 27-41 30 hoped to maintain the status as the group member, and organizational commitment could be influenced by environmental circumstances in the workplace (Babin & Boles, 1996). More scholarly attention has been paid to organizational commitment because organizational commitment is a stable and consistent attitude that can be reliably measured and interpreted regarding organizational effectiveness (Porter et al., 1974; Bateman & Organ, 1983). Porter et al. (1974) found that organizational commitment is a more comprehensive concept than job satisfaction because job satisfaction is an employee’s response to particular tasks whereas organizational commitment reflects an employee’s overall attitude toward the organization. Porter et al. (1974) argued that job satisfaction should be easily changed based on changes in the workplace environment and should be temporarily formed in response to the current desires. However, organizational commitment indicates an employee’s expectations that long-term, developmental purposes and desires will be satisfied. Schumacker and Marcoulides (1998) and Jaccard and Choi (1996) suggested that the relationship between organizational commitment and job satisfaction could be a mutual two-way model as well as a one-way causal path, suggesting feedback effects. Many previous studies have found positive correlations between job satisfaction and organizational commitment (Bateman & Strasser, 1984; Eby et al., 1999; Meyer et al., 2002). Harrison and Hubbard (1998) found that job satisfaction was the most influential antecedent variable explaining organizational commitment. Williams and Hazer (1986) proposed that job satisfaction directly influences organizational commitment, and Shahab and Nisa (2014) also stated that job satisfaction had a positive and significant effect on organizational commitment. They posited a causal relationship in which organizational commitment occurs after job satisfaction, and that it has a more persistent effect because organizational commitment reflects organizational goals and values, expectations regarding compensation, and employees’ personal interests related to long-term employment. However, despite the large body of research, there is no consensus on the nature of the relationship between job satisfaction and organizational commitment, except that these factors have strong influences on each other. Therefore, the following hypothesis was derived. H4: Job satisfaction positively and significantly influences organizational commitment. D. The Relationship between Job Satisfaction, Organizational Commitment, and Customer Orientation The link between job satisfaction, organizational commitment and customer orientation has been researched relatively frequently (Siguaw et al., 1994; Giauque, et al., 2014; Ćulibrk et al., 2018). Saxe and Weitz (1982) defined customer orientation as employees’ sales behavior oriented for customers, and as an effort to help their customers make a satisfied decision in purchasing products, and Susskind et al. (2003) indicated that it was customer orientation that employees behaved to tailor customers’ needs and satisfy them successfully. Customer orientation is an aspect of market orientation, which is a perspective in which an enterprise aims to provide its customers with optimal values by applying specific information about the market, such as features of consumers’ characteristics, competitors, distributors, and suppliers, and by actively responding to customers’ demands. A market orientation entails the use of marketing ideas at the corporate level, but customer orientation is a marketing perspective at the individual customer level (Narver & Slater, 1990; Kohli & Jaworski, 1990). Customer orientation refers to employees’ attitudes and behaviors in which employees aim to understand the customers to provide them with the best service and value possible. Dunlap, et al. (1988) found that employees with high levels of customer orientation tend to aim to enhance customer satisfaction, which contributes to developing long-term mutually beneficial relationships between enterprises and their customers. Lapierre & Hackett (2007) proved job satisfaction positively influenced organizational commitment between employees, and Giauque, et al. (2014) found Heon Seo 31 that workers with job satisfaction encouraged themselves to be more immersed in organizational goals and organizational citizenship behavior. Other studies found that customer orientation significantly influenced organizational commitment (Hartline & Ferrell, 1996; Hartline et al., 2000; Ćulibrk et al., 2018), and customer orientation also has been found to significantly influence job satisfaction (Brown & Peterson, 1993; Kelley, 1992; Siguaw et al., 1994; Williams, 1991). Because the previous literature has found significant relationships among job satisfaction, customer orientation, and organization commitment, the following hypotheses were derived. H5: Job satisfaction positively and significantly influences customer orientation. H6: Organizational commitment positively and significantly influences customer orientation. Finally, Figure 1 shows the conceptual model of this study. III. Methods A. Sample Data were obtained from a survey of travel agency employees in the Seoul metropolitan area. The selected agencies handled over 300,000 outbound tourists in 2019, and each was designated as an outstanding travel agency by the Korean government (Korea Tourism Organization, 2020). A total of 10 on-site pollsters were trained to implement the survey of the respondents, and they visited the travel agencies at the previously determined times. The pollsters conducted individual interviews and administered the questionnaires. A total of 250 questionnaires were distributed at 14 travel agencies between February 1 and February 20 of 2020, 230 completed questionnaires were returned, and, of those, 225 valid questionnaires were used to test the hypotheses. In addition, to encourage participation in the survey and truthfulness, the respondents were given small tokens of gratitude. Table 1 shows the demographic characteristics of the respondents. The sample was slightly more likely to be male than female, almost one-half were between ages 30 and 39, and almost three-quarters had four years of college. About Variable Number of cases Proportion Mean S.D. Gender 1.53 .500 Male 105 46.7 Female 120 53.3 Total 225 100.0 Age 1.67 .681 20-29 99 44.0 30-39 105 46.7 40-49 18 8.0 50+ 3 1.3 Total 225 100.0 Table 1. Sample characteristics Figure 1. Conceptual model GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue. 5 (OCTOBER 2022), 27-41 32 one-half the sample held staff positions, about 40% were relatively new employees (less than 3 years), and the annual salary was most likely between KRW 21 and 40 (84%). B. Measurement and Data Analysis To test the hypotheses, 17 items in the questionnaire were used (Table S1). Each had response options on a five-point Likert-type scale where 1 = completely disagree to 5 = completely agree . The scale used to measure self-efficacy was adopted from Riggs and Knight (1994) and Chen et al. (2001). Five items were adapted from Riggs and Knight (1994) and Chen et al. (2001) to measure self-efficacy. Job satisfaction was measured following Warr et al. (1979) and Mason (1995). The study formulated three items to specifically address Korean employees in travel agencies. To measure organizational commitment, four items were developed from the scale of Allen and Meyer (1990), to which the authors added items to construct a new measure. Last, customer orientation was adopted from Williams and Anderson (1991) and involved five items regarding the respondents’ grasp of their customers’ needs and how to optimize their satisfaction. Frequency, factor, reliability, correlation, and regression analyses were performed to assess the relationships Variable Number of cases Proportion Mean S.D. Educational attainment 2.75 .502 High school 3 1.3 College two years 55 24.4 College four years 163 72.4 More than college 4 1.8 Total 225 99.9 Employment rank 2.31 1.356 Staff 102 45.3 Chief 20 8.9 Assistant manager 47 20.9 Manager 44 19.6 Above deputy general manager 12 5.3 Total 225 100.0 Length of employment (years) 2.13 1.130 < 3 90 40.0 3-5 48 21.3 6-10 61 27.1 11-15 19 8.4 16+ 7 3.1 Total 225 99.9 Annual salary (in KRW millions) 3.03 1.545 < 20 21 9.3 21-30 132 58.7 31-40 56 24.9 > 40 16 7.2 Total 225 100.1 Table 1. Continued Heon Seo 33 between the variables and test the hypotheses. SPSS 18.0 statistical software program was used. IV. Results A. Factor Analysis, Validity, and Reliability To verify the validity of the four constructs, factor analysis, using the maximum likelihood method and direct oblique rotation, was used. The goal was to simplify the constructs by eliminating weakly related items and to minimize the loss of information. Factors with eigenvalues greater than 1.0 were selected, and factor loadings greater than 0.4 were considered significant. The Kaiser-Meyer-Olkin (KMO) standard was used to assess validity, and Cronbach’s alpha was used to assess the extent of internal consistency within each construct to gauge the reliability. Table 2 shows the results of the factor analyses and the tests of validity and reliability regarding the selfefficacy, job satisfaction, organizational commitment, and customer orientation constructs. The factor loadings of all the constructs exceeded 0.7, indicating acceptable validity. In addition, the reliability levels all exceeded 0.7, indicating that the measurement tools were reliable (Nunnally, 1978). Factor Item Factor Loading Eigenvalue TEV alpha Customer Orientation (CO) Listening and promptly responding .807 3.309 66.175 .871 Providing information .774 Providing optimal service .756 Dealing with complaints .753 Accurate service procedures and explanations .709 Total variance explained (%) = 66.175***, KMO = .855, Bartlett’s Test = 517.633, df = 10 Factor Item Factor Loading Eigenvalue TEV alpha Job satisfaction (JS) Satisfaction with company .999 2.080 69.348 .772Satisfaction with job .711 Satisfaction with salary .531 Total variance explained (%) = 69.348***, KMO = .600, Bartlett’s Test = 230.244, df = 3 Factor Item Factor Loading Eigenvalue TEV alpha Organizational commitment (OC) Sense of belonging .886 2.984 74.611 .886 Emotional attachment .853 Empathy .819 Companionship .688 Total variance explained (%) = 74.611***, KMO = .806, Bartlett’s Test = 519.537, df = 6 Factor Item Factor Loading Eigenvalue TEV alpha Self-efficacy (SE) Confidence .774 3.135 62.702 .849 Persistence .766 Use of information .742 Accuracy .740 Problem-solving .627 Total variance explained (%) = 62.702***, KMO = .840, Bartlett’s Test = 446.931, df = 10 Table 2. Results of Factor Analyses, Validity Tests, and Reliability Tests GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue. 5 (OCTOBER 2022), 27-41 34 B. Correlation Analysis Table 3 shows the correlation coefficients of the relationships between the pairs of variables to assess the statistical relationships. The analysis revealed significant correlations among variables of all the pairs. The strongest correlation was between self-efficacy and customer orientation ( r = .666, p < .01), and the weakest correlation was between job satisfaction and customer orientation ( r = .378, p < .01). Statistically significant discriminant validity was established among the constructs, and the relational direction of all the correlations was positive, supporting the hypotheses. C. Hypotheses Test Results Table 4 provides the results of the regression analyses used to test the hypothesized relationships. The Adjusted R 2 statistics indicate that (net of the contributions of the constants) self-efficacy explained about 16.3% of the variation in job satisfaction, 21.7% of the variation in organizational commitment, and 44.4% of the variation in customer orientation. Similarly, job satisfaction explained about 42.0% of the variation in organizational commitment and about 14.3% of the variation in customer orientation. Net of the contribution of the constant, organizational commitment explained about 23.8% of the variation in customer orientation. All of these bivariate relationships were statistically significant ( p < .001). Therefore: Hypothesis 1. (Self-efficacy positively and significantly influences job satisfaction) was supported. Hypothesis 2. (Self-efficacy positively and significantly influences organizational commitment) was supported. Hypothesis 3. (Self-efficacy positively and significantly influences customer orientation) was supported. Factor Self-efficacy Organizational Commitment Job Satisfaction Customer Orientation Self-efficacy 1 Organizational Commitment .466** 1 Job Satisfaction .404** .648** 1 Customer Orientation .666** .488** .378** 1 Means 3.64 3.42 3.25 3.77 Standard deviation .600 .804 .797 .626 Table 3. Correlations among the dimensions ( factors ) Job Satisfaction Independent Variable B SE βt-value Constant 1.543E-16 .061 .000 Self-efficacy .436 .066 .404 6.594*** R² = .163, Adj R² = .159, F = 43.486, p = .000, Durbin-Watson = 1.558 Organizational commitment Independent Variable B SE βt-value Constant 1.588E-16 .056 .000 Self-efficacy .478 .061 .466 7.859*** R² = .217, Adj R² = .213, F=61.770, p = .000, Durbin-Watson = 1.698 Table 4. The effects of self-efficacy on job satisfaction and organization commitment, the effects of job satisfaction on organizational commitment and customer orientation, and the effect of organizational commitment on customer orientation Heon Seo 41 Factor Item Statement Customer Orientation (CO) Listening and promptly responding I listen to and promptly respond to customers Providing information I provide a variety of information to customers Providing optimal service I provide optimal service to customers Dealing with complaints I do my best to deal with a customer’s complaints Accurate service procedures and explanations I provide accurate and sufficient explanation on service procedures to customers Factor Item Statement Job satisfaction (JS) Satisfaction with company I am satisfied with my company Satisfaction with job I am satisfied with my job Satisfaction with salary I am satisfied with my salary Factor Item Statement Organizational commitment (OC) Sense of belonging I have a sense of belonging to my company Emotional attachment I have emotional attachment to my company Empathy I have empathy with my company Companionship I have companionship at my company Factor Item Statement Self-efficacy (SE) Confidence I have confidence to deal with my tasks Persistence I have persistence to accept challenges Use of information I use information to succeed at my job Accuracy I accurately handle my job Problem-solving I can solve problems about complaints Table S1. Items for measurement