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Go Back       IAR Journal of Business Management | IAR J Bus Mng, 2020; | Volume:1 Issue:3 ( Oct. 21, 2020 ) : 142-147.
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DOI : 10.47310/iarjbm.2020.v01i03.009       Download PDF       HTML       XML

The Influence of Organizational Culture And Integrity On Company Performance Through Organizational Commitment As A Mediation Variables In PT Ganada


Article History

Received: 15.09.2020; Revision: 24. 09.2020; Accepted: 07. 10.2020; Published: 10. 10.2020

Author Details

Ahmad Furqon1, Abdul Rivai1 and Suharto1

Authors Affiliations

1Universita Krisnadwipayana Campus Unkris Jatiwaringin PO BOX 7774/Jat CM Jakarta 13077, Indonesia


Abstract: The purpose of this study was to determine and analyze the effect of organizational commitment on organizational performance, analyze the effect of work ethic on organizational performance, analyze the effect of organizational commitment on discipline, analyze the effect of work ethics on discipline, analyze the effect of discipline on organizational performance at the the directorate general of regional development of regional ministry of domestic analyzes the effect of organizational commitment and work ethic on organizational performance through discipline in the the directorate general of regional development of regional ministry of domestic. The research was conducted at the the directorate general of regional development of regional ministry of domestic. The sampling technique used a random sample involving 75 employees. Data analysis using path analysis. Based on the data analysis, it is known that the variable organizational commitment partially affects organizational performance. Work ethic variables partially influence organizational performance. The discipline variable partially affects organizational performance. Organizational commitment affects discipline partially. Work ethic variables affect discipline partially. The effect of organizational commitment on organizational performance is 0.507. The effect of organizational commitment on performance through discipline is 0.640 x 0.844 = 0.540. In this case, the indirect effect is greater than the direct effect, so it can be said that the work discipline variable is intervening. The direct effect of work ethic on organizational performance is 0.613. While the influence of work ethic on organizational performance through discipline is 0.766 x 0.844 = 0.647. In this case, the indirect effect is greater than the direct effect, so it can be said that the work discipline variable is intervening.


Keywords: organizational commitment, work ethic, discipline, organizational performance.


Introduction

Company performance is what is produced by the company which includes outcomes, namely financial performance such as profit as measured by return on assets, return on investment and so on, market performance such as market share expansion, and sales. Besides, the return from the shareowner is the return of the shareowner and the economic increase of the shareowner. In some areas, company performance can also be measured from other things such as strategic plans, operations, finance, legal and company development. Developing an institution or company is a must to survive in the world's competitive climate.


Company performance is influenced by various factors, namely organizational culture, integrity and organizational commitment. Organizational culture as what workers perceive and how these perceptions create patterns, beliefs, values ​​and expectations. Mangkunegara (2005; 133) organizational culture is a set or assumption or belief system, values ​​and norms developed within the company that serves as a code of conduct for its members to overcome external adaptation and integration problems. Armstrong (2005) organizational or corporate culture is a pattern of values, norms, beliefs, attitudes and assumptions that can no longer be articulated, but the shape and determines how people behave and get things done. " Furthermore, Robbins (2008) argues that organizational culture as the dominant values ​​disseminated in the company is used as an employee work philosophy that guides company policies in managing employees and consumers. According to Robbins (2008), a strong organizational culture is a culture in which the core values ​​of the company are held intensively and widely shared by company members.


Another factor that has an impact on company performance is integrity. Integrity is consistency and unshakable persistence in upholding noble values ​​and beliefs. Another definition of integrity is a concept that points to consistency between actions with values ​​and principles. In ethics, integrity is defined as the honesty and truth of one's actions. The opposite of integrity is hypocrisy. A person is said to have "integrity" if his actions are under the values, beliefs and principles he holds (Wikipedia). Simply put, the characteristic of a person with integrity is marked by only words and deeds, not someone whose words cannot be grasped. A person who has integrity is not a human type with many faces and appearances that are tailored to his motives and personal interests. Integrity is a key character for a leader. A leader who has integrity will earn the trust of his employees. Leaders with integrity are trusted because what they say becomes their actions.


The definition of integrity is a way of thinking, saying, behaving and acting properly and correctly and upholding the code of ethics and moral principles. Integrity is consistency and unshakable persistence in upholding noble values ​​and beliefs. Another definition of integrity is a concept that points to consistency between actions with values ​​and principles. In ethics, integrity is defined as the honesty and truth of one's actions. The opposite of integrity is hypocrisy.


Organizational commitment also has an impact on company performance. Organizational commitment is the attitude of employees who are interested in the goals, values ​​and goals of the company as shown by the individual acceptance of the company's values ​​and goals and a desire to be affiliated with the company and the willingness to work hard for the company so that individuals feel at home and want to stay in the company for the sake of achievement of goals and company continuity.


Literature Review

1. Organizational Culture

Drucker quoted by Tika (2010: 4) the organizational culture is the body of solution to an external and internal problem, s that has worked consistently for a group and that is therefore taught to new members as the correct way to perceive, think about and feel concerning those problems ". Meanwhile, Gibson, quoted by Wibowo (2016; 15), states organizational culture as what workers perceive and how these perceptions create patterns, beliefs, values, and expectations ". Furthermore, Mangkunegara (2005; 133organizational culture is a set or assumption or belief system, values ​​and norms developed within the company which serve as a code of conduct for its members to overcome external adaptation problems and internal integration, Armstrong (2005) cited by Chatab (2007: 10) organizational or corporate culture is a pattern of values, norms, beliefs, attitudes and assumptions that can no longer be articulated, but the shape and determine how people behave and get things done. "


Furthermore, Robbins (2008) argues that organizational culture as the dominant values ​​disseminated in the company is used as an employee work philosophy that guides company policies in managing employees and consumers. According to Robbins (2008), a strong organizational culture is a culture in which the core values ​​of the company are held intensively and widely shared by company members.


2. Integrity

Integrity is consistency and unshakable determination in upholding noble values ​​and beliefs. Another definition of integrity is a concept that denotes consistency between actions with values ​​and principles. In ethics, integrity is defined as the honesty and truth of one's actions. The opposite of integrity is hypocrisy. A person is said to have "integrity" if his actions are following the values, beliefs and principles he holds (Wikipedia). Simply put, the characteristic of a person with integrity is marked by only words and deeds, not someone whose words cannot be grasped. A person who has integrity is not a human type with many faces and appearances that are tailored to his motives and personal interests. Integrity is a key character for a leader. A leader who has integrity will earn the trust of his employees. Leaders with integrity are trusted because what they say becomes their actions.The definition of integrity is a way of thinking, saying, behaving and acting properly and correctly and upholding the code of ethics and moral principles. In the Big Indonesian Dictionary, the meaning of integrity is (1) quality, character, or condition that shows a complete unity so that it has the potential and ability to radiate authority; (2) honesty.


2. Organizational Commitment

According to Cherrington (1995) organizational commitment as a personal value, which sometimes refers to a loyal attitude to the company. Robbins (2008) argues that organizational commitment is one of the attitudes that reflect feelings of like or dislike towards the company where you work.

Organizational commitment is the attitude of employees who are interested in the goals, values ​​and goals of the company as shown by the individual acceptance of the company's values ​​and goals and a desire to be affiliated with the company and the willingness to work hard for the company so that individuals feel at home and want to stay in the company for the sake of achievement of goals and company continuity.


Meyer and Allen (1993) suggest three components of organizational commitment:

  1. Affective commitment occurs when employees want to be part of the company because of an emotional bond or feel they have the same values ​​as the company.

  2. Continuance commitment, namely the willingness of individuals to stay in the company because they do not find other jobs or because of certain economic rewards.

  3. Normative commitment arises from employee values. Employees stay as members of the company because there is an awareness that is committed to the company is what they should be doing.


4. Company Performance

The definition of company performance refers to the ability of employees to carry out all the tasks that are their responsibility. These tasks are usually based on indicators of success that have been implemented. As a result, it will be known that an employee belongs to a certain level of work. The level can be various terms. Performance can be categorized as over target, on target, or under target. Departing from the things referred to as a whole for the work of an employee. The definition of company performance is a description of the level of achievement of the implementation of an activity program or policy in realizing the goals, objectives, vision and mission of the company as outlined in the strategic planning of a company (Moeheriono, 2010: 60). Mangkuprawira (2011: 218-219) says that performance is a matter, or the overall success rate of a person during a certain period in carrying out a task compared to various possibilities, such as work standards, targets, or targets or criteria that have been determined in advance and have been agreed together.


According to Wibowo (2010: 19), performance is a management style in managing performance-oriented resources that carries out an open and sustainable communication process by creating a shared vision and a strategic and integrated approach as a driving force to achieve company goals. According to Rivai and Sagala (2009: 548) suggest that: "Performance is a function of motivation and ability to complete a task or someone's job should have a certain degree of willingness and level of ability. According to Richard et al (2009) company performance is something that is produced by a company that includes results, namely financial performance such as profit as measured by return on assets, return on investment and so on, market performance such as market share expansion, and sales. Also, the return from the shareowner is the return of the shareowner and the economic increase of the shareowner. In some areas, company performance can also be measured from other things such as strategic plans, operations, finance, legal and company development. Developing an institution or company is a must to survive in the world's competitive climate.


Companies proposed by experts, including Sudarmanto (2009: 11-12), suggest that four dimensions can be used as benchmarks or indicators in assessing company performance, namely:

a. Quality, namely: the level of error, damage, accuracy.

b. Quantity, namely: the number of jobs produced.

c. The use of time at work, namely: absenteeism, tardiness, effective working time / lost work hours.

d. Cooperation with other people at work.

RESEARCH METHOD

Time and Location of Research

The research will be conducted in October-December 2019 by taking the location at PT. Ganada.


Research Design

This study uses an explanatory analysis approach. This means that every variable presented in the hypothesis will be observed through testing the causal relationship of the independent variable to the dependent variable. The relationship between variables can be described in the form of a path analysis diagram as follows:

Figure Image is available in PDF Format

Figure 1. Research Model


Population and Sample

The population in this research are employees who work at the PT. Ganada. While the sample used includes 111 employees who work in company offices. This sampling uses the saturated sample method because it uses all employees at the company office. Data analysis using path analysis.

Research Result

  1. Partially influence of organizational culture on company performance

The results of the analysis of the effect of organizational culture on company performance partially show that the coefficient of organizational culture is 0.530. The t value is 6,529. The significance value is 0.00. This significant value is smaller than 0.05. This means that the variable organizational culture partially affects company performance. The magnitude of the influence of organizational culture on company performance is known to be the value of r squared of 0.281. This means that the influence of organizational culture on performance is 28.1% and the rest is influenced by other variables that are not included in the equation model.


2. Partially influence of integrity on company performance

The results of the analysis of the effect of work organizational culture on performance partially show that the coefficient of integrity is 0.653. The t value is 8.998. The significance value is 0.00. This significant value is smaller than 0.05. This means that the integrity variable partially affects company performance. The magnitude of the influence of integrity on company performance can be seen that the value of r squared is 0.426. This means that the influence of the integrity variable on company performance is 42.6% and the rest is influenced by other variables that are not included in the equation model.


3. Partially influence of organizational commitment on company performance

The results of the analysis of the effect of organizational commitment on performance partially show that the coefficient of organizational commitment is 0.861. The t value is 17.661. The significance value is 0.00. This significant value is smaller than 0.05. This means that the variable organizational commitment partially affects company performance. The magnitude of the influence of organizational commitment on company performance can be seen that the value of r squared is 0.741. This means that the influence of the organizational commitment variable on company performance is 74.1% and the rest is influenced by other variables that are not included in the equation model.


  1. Partially influence of organizational culture on organizational commitment

The results of the analysis of the effect of organizational culture on organizational commitment partially show that the coefficient of organizational culture is 0.666. The t value is 9.333. The significance value is 0.00. This significant value is smaller than 0.05. This means that the variable organizational culture partially affects organizational commitment. The magnitude of the influence of organizational culture on organizational commitment is known to have the value of r squared of 0.444. This means that the influence of the organizational commitment variable on company performance is 44.4% and the rest is influenced by other variables that are not included in the equation model.


5. Partially influence of integrity on organizational commitment

The results of the analysis of the effect of integrity on organizational commitment partially show that the coefficient of integrity is 0.779. The t value is 12,972. The significance value is 0.00. This significant value is smaller than 0.05. This means that the integrity variable partially affects organizational commitment. The magnitude of the influence of integrity on organizational commitment is known to have the value of r squared of 0.607. This means that the influence of the integration variable on organizational commitment is 60.7% and the rest is influenced by other variables that are not included in the equation model.


6. The influence of organizational culture on company performance through organizational commitment variables

Based on the partial path analysis above, it can be described as follows. The analysis is an analysis on a path with a substructure image as follows.

Figure Image is available in PDF Format

Figure 2. Path analysis of the influence of X1 on Y through X3

Based on the picture above, it can be seen that the influence of organizational culture on company performance is 0.530. The influence of organizational culture on performance through organizational commitment is 0.666 x 0.861 = 0.573. In this case, the indirect effect is greater than the direct effect, so it can be said that the organizational commitment variable is intervening.


7. The influence of integrity on company performance through organizational commitment variables

Based on the partial path analysis above, it can be described as follows. The analysis is an analysis on a path with a substructure image as follows.

Figure Image is available in PDF Format

Figure 3. Path analysis of the influence of X2 on Y through X3

Based on the picture above, it can be seen that the direct influence of integrity on company performance is 0.653. While the influence of work organizational culture on company performance through organizational commitment is 0.779 x 0.861 = 0.671. In this case, the indirect effect is greater than the direct effect, so it can be said that the organizational commitment variable is intervening.

CONCLUSION

Organizational culture variables partially influence company performance. The t value is 6,529. The significance value is 0.00. This significant value is smaller than 0.05. The value of r squared is 0.281. This means that the influence of organizational culture variables on performance is 28.1% and the rest is influenced by other variables that are not included in the equation model.


The integrity variable partially affects company performance. The t value is 8.998. The significance value is 0.00. This significant value is smaller than 0.05. The value of r squared is 0.426. This means that the influence of the integrity variable on company performance is 42.6% and the rest is influenced by other variables that are not included in the equation model.


The organizational commitment variable partially affects company performance. The t value is 17.661. The significance value is 0.00. This significant value is smaller than 0.05. The value of r squared is 0.741. This means that the influence of the organizational commitment variable on company performance is 74.1% and the rest is influenced by other variables that are not included in the equation model.


Organizational culture variables partially influence organizational commitment. The t value is 9.333. The significance value is 0.00. This significant value is smaller than 0.05. The value of r squared is 0.444. This means that the influence of the organizational commitment variable on company performance is 44.4% and the rest is influenced by other variables that are not included in the equation model.


The integrity variable partially affects organizational commitment. The t value is 12,972. The significance value is 0.00. This significant value is smaller than 0.05. the value of r squared is 0.607. This means that the influence of the integration variable on organizational commitment is 60.7% and the rest is influenced by other variables that are not included in the equation model.


The influence of organizational culture on company performance is 0.530. The influence of organizational culture on performance through organizational commitment is 0.666 x 0.861 = 0.573. In this case, the indirect effect is greater than the direct effect, so it can be said that the work organizational commitment variable is intervening.


The direct influence of integrity on company performance is 0.653. While the influence of work organizational culture on company performance through organizational commitment is 0.779 x 0.861 = 0.671. In this case, the indirect effect is greater than the direct effect, so it can be said that the organizational commitment variable is intervening.


Suggestion

In increasing company performance, it is necessary to develop organizational culture, integration and organizational commitment. Organizational culture is developed by familiarizing employees in carrying out activities with a disciplined attitude, increasing leadership roles and increasing the role of employees with a larger portion.


Integration also needs to be considered by considering the desires of the employees at work. Integration is also enhanced by paying attention to the organization or company employees. Because this company is like a labor company, its desires must be considered so that there is a synergy between employees and company management.


Organizational commitment also needs to be developed with attention to employee needs. A normative commitment that is shown by defending the company and obeying the company is enhanced by meeting the needs of employees and paying attention to the desires of employees so that they can defend the organization well. Sustainability commitment (continuity) is carried out by paying attention to the ratio of income when working for the company and the existence of impartial regulations so that employees entrust their life in the future to the company.

References

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  2. Allen, N. J., & Meyer, J. P. (1993). The Measurement and Antecedents of Affective, Continuance, and Normative Commitment to The Organization. Journal of Occupational Psychology, vol: 63, pp. 1-18.

  3. Armstrong, M., & Baron, A. (2005). Managing Performance: Performance Management in Action. UK: CIPD Publishing.

  4. Chatab, N. (2007). Profil Budaya Organisasi. Bandung : Penerbit Alfabeta.

  5. Cherrington, D. J. (1995). The Management of Human Resources (4th Edition).New Jersey: Prentice Hall Inc.

  6. Long, Richard, (2009). Strategic Compensation in Canada. Nelson Education Limited, 2009.

  7. Mangkuprawira, S.Tb. (2011), Manajemen Sumber Daya Manusia Strategik, Ghalia Indonesia, Bogor.

  8. Moeheriono. (2010). Pengukuran Kinerja Berbasis Kompetensi. Surabaya: Ghalia Indonesia.

  9. Rivai, Veithzal dan Sagala, Ella Jauvani. (2009). Manajemen Sumber Daya Manusia untuk Perusahaan dari Teori ke Praktik. Jakarta: PT Raja Grafindo.

  10. Robbins, S. (2008). Perilaku Organisasi, Jilid I dan II, alih Bahasa : Hadyana Pujaatmaja. Jakarta: Prenhallindo.

  11. Sudarmanto. (2009). Kinerja dan Pengembangan Kompetensi SDM, Yogyakarta: Pustaka Pelajar.

  12. Tika H. Moh. Pabundu, (2010). Budaya Organisasi dan Peningkatan Kinerja Perusahaan, Cetakan Pertama, PT. Bhumi Aksara, Jakarta.

  13. Wibowo. (2016). Manajemen Kinerja. Jakarta: PT Rajagrafindo Persada.



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