MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  TRAN GIANG PHONG RELATIONSHIP BETWEEN AUTHENTIC LEADERSHIP AND JOB SATISFACTION & MODERATING ROLES OF SELF-EFFICACY AND OPTIMISM MASTER THESIS OF BUSINESS ADMINISTRATOR HO CHI MINH CITY – 2012 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  TRAN GIANG PHONG RELATIONSHIP BETWEEN AUTHENTIC LEADERSHIP AND JOB SATISFACTION & MODERATING ROLES OF SELF-EFFICACY AND OPTIMISM Subject: Master of Business Administrator Code: 60.34.01.02 THESIS OF MASTER OF BUSINESS ADMINISTRATOR SUPERVISOR: DR PHAM QUOC HUNG HO CHI MINH CITY – 2012 I ACKNOWLEDGEMENT I would like to express my sincerest gratitude to the following for their commitment, guidance and support: My family, my father and my mother for your unwavering love, Respectful lecturers of University of Economics Ho Chi Minh City, who have empowered me with considerably useful knowledge during the time I studied in the University, especially Dr Pham Quoc Hung, who have wholeheartedly instructed me to approach relevant matters in reality, scientific research methods, as well as the contents of the subject Students of the eMBA – K19 course, University of Economics Ho Chi Minh City for kindly helping me collect information necessary for the study My friends and work colleagues, who support me to collect data as well as emotional support during the completion of this thesis Although the author has tried the best to complete the thesis, but errors could not be comprehensively avoided Therefore, the author is looking forward to receiving the inputs and comments from respectful lecturers and friends, so that the thesis could be more and more improved Tran Giang Phong Ho Chi Minh, 26 Oct 2012 II COMMITMENT I would like to commit that this thesis, “relationship between authentic leadership and job satisfaction & moderating roles of self-efficacy and optimism”, was accomplished based on my independent and serious studies and scientific researches The data was collected in reality and it has clear origins In addition to that, the data would be trust-worthily handled and it has never been released in any menu Tran Giang Phong CONTENTS CHAPTER 1: INTRODUCTION TO THE STUDY 1.1 Research background 1.2 Research objectives: 1.3 Research scope and approach: 1.4 Research structure CHAPTER 2: LITERATURE REVIEW, THEORETICAL FRAMEWORK AND HYPOTHESES 2.1 Authentic leadership 2.1.1 Authenticity 2.1.2 Dimensions of authentic leadership 2.2 Job satisfaction 14 2.2.1 Definition 14 2.2.2 Role of job satisfaction 15 2.2.3 Determinants of job satisfaction 16 2.3 The influence of authentic leadership on job satisfaction 18 2.4 Self-efficacy 18 2.5 Optimism 20 2.6 Summary 21 CHAPTER 3: RESEARCH METHODOLOGY 23 3.1 Research design 23 3.2 Questionnaire development 24 3.2.1 Authentic leadership 24 3.2.2 Job satisfaction 25 3.2.3 Optimism and Self-Efficacy 25 3.3 Translation of the questionnaire 26 3.4 The pilot study 27 3.4.1 Pilot study phase 27 3.4.2 Pilot study phase 28 3.5 Target population 28 3.6 Sample size 29 3.7 Selecting the sample and collecting data 29 3.8 Sample characteristics 30 3.9 Methods of data analysis 31 3.9.1 Data screening 31 3.9.2 Reliability 31 3.9.3 Confirmatory Factor Analysis (CFA) 31 3.9.4 Correlation analysis 33 3.9.5 Multiple regressions 34 3.9.6 Independent Samples T-test 35 3.9.7 Summary 35 CHAPTER 4: DATA ANALYSIS 36 4.1 Data cleaning 36 4.2 Profiles of qualified respondents 36 4.3 Reliability of the measurements 39 4.4 Confirmatory factor analysis 40 4.5 Correlation analysis 41 4.6 Hypotheses testing 44 4.6.1 Effects of authentic leadership, self-efficacy and optimism on job satisfaction: 44 4.6.2 Moderating effects of self-efficacy and optimism on the relationship between authentic leadership and job satisfaction 45 4.7 Independent Samples T-test 49 4.8 Summary 50 CHAPTER 5: DISCUSSION 51 5.1 Discussions of findings: 51 5.2 Practical implications 52 5.3 Limitations and recommendations for future research: 54 REFERENCE: 55 Appendix 65 Appendix 1: Questionnaires 65 Appendix 2: result of reliability test of the measurements 71 Appendix 3: result of confirmatory factor analysis 73 Appendix 4: result of regression analysis 76 Figure 2-1: the hypothesized model……………………………………………… …………… ……………….……………… 22 Figure 3-1: The Research Process ……………….………………………………………………………….…………………………24 Figure 4-1: CFA model………………………….……………………………………………………………… ….………………………41 Figure 4-2: effect of interaction between authentic leadership and optimism on job satisfaction… 49 Table 3-1: Assessing Fit Indices………………………………………………………………………………………………….………33 Table 4-1: Socio-demographic Characteristics of The Qualified Samples………………………………….……….38 Table 4-2: Summary of Cronbach Alpha Measures Across Variables…………………………………….……………39 Table 4-3: Assessing Fit Indices – Hypothesized Model…………………………………………………… ….………… 40 Table 4-4: correlation………………………………………………………………………………………………………….………….…43 Table 4-5: result of regression analysis of authentic leadership on job satisfaction……………………….…44 Table 4-6: result of regression analysis of moderating effect of self-efficacy and optimism in groups …………………………………………………………………………………………………………………………………… …46 Table 4-8: Independent Samples T-test: difference of job satisfaction level on gender of respondents ……………………………………………………………………………………….…………………………………………………………………50 CHAPTER 1: INTRODUCTION TO THE STUDY 1.1 Research background Neither reputation, customers, technology nor physical resources, human resource is the most important asset which makes organization successful Without good manpower, organization could not develop their business Retaining the talents in organization is an emergent challenge that every organization must consider According to Berry (1997), organization must improve job satisfaction of employees to be successful Robbins & Judge (2007) found that the effective organization usually had more satisfied employees Moreover, satisfied employees are more likely productive In short, improving employees’ satisfaction is an essential solution for an organization to be successful The practice of leadership has existed for thousands of years and research efforts have been undertaken to better understand leadership in organizations for well over 50 years (Bass, 1990) Leaders and leadership play an important role in organizations in the way that effective leaders are related to successful team work, high morale, and effective performance; and on the contrary, ineffective leaders are related to job dissatisfaction, low commitment, and ineffective performance (Avolio & Bass, 2002; Bass, 1998; 1999; Collins, 2001a, 2001b; Day, Zaccaro, & Halpin, 2004) We also have seen some big scandals in ethical leadership in the world as well as in Vietnam In Vietnam, according to Thuc (2011), some big organizations such as Hàng Hải Đông Đô, Masan Group, Quoc Cuong Gia Lai announced to investors that they made large profit, but actually, they lost a lot In international level, we also know the big decrease of ethical leadership of the top managers of WorldCom, Enron, General Motors and Lehman Brothers in U.S Together with new societal challenge such as terrorism, aging society, and environmental pollution… these destroy the trust of investors In reality, according to National Leadership Index 2009, 63% of Americans not trust what business leaders say and 83% believe that business leaders work to merely their benefit or a small group with special interests, not society overall In the difficult situation, there is an urgent need of the positive and more genuine leadership (Avolio & Gardner, 2005) Reliability, integrity and authenticity are the essential characteristics of the business leaders in this situation (Blausten, 2009) In the light of current developments in global business, a new construct emerged: authentic leadership Authentic leadership refers to the extent to which an individual exhibits a pattern of openness and clarity in his or her behavior towards others by sharing the necessary information to make decisions, accepting other’s inputs, and disclosing his or her personal values, motives and sentiments in a manner that enables followers to more accurately assess the competence and morality of the leader’s actions Business practitioners are calling for leaders who lead with purpose, values, and integrity, leaders who build enduring organizations, motivate their employees to provide customer service, and create long-term value for shareholder 1.2 Research objectives: In this study, the author examines the effects of authentic leadership behaviors on followers’ job satisfaction while also taking into account possible moderating roles of self-efficacy and optimism to the relationship authentic leadership and job satisfaction Accordingly, the study aims at answering the research questions: “How does authentic leadership influence follower job satisfaction?” and “what are the moderating roles of self-efficacy and optimism between authentic leadership and job satisfaction?” In order to answer to this research question, the following four sub-questions are addressed in this research: What is the relationship between authentic leadership and follower job satisfaction? How does self-efficacy play a moderating role in the relationship between authentic leadership and job satisfaction? How does optimism play a moderating role in the relationship between authentic leadership and job satisfaction? Is job satisfaction level different between male and female? 1.3 Research scope and approach: First, this study is conducted in Ho Chi Minh City, the biggest city in Vietnam Second, the research includes into the analysis those respondents who have been working with their leaders for at least months to ensure that followers have enough time to observe and to be influenced by their leaders’ leadership behaviors Third, the research only focuses on employees who are graduated from highschool or higher This choice of population and sample frame makes the study feasible (given time and resource limitation) by facilitating online survey method and helps address the research questions in the simplest way possible Forth, this study considers self-efficacy and optimism as the moderating variables Self-efficacy, optimism are two of components of psychological capital However, other components of psychological capital which are resilience and hope are not considered in this study Fifth, the study is conducted in main phases: pilot study (comprising of subphases) and main study The purpose of the pilot study is to check the contents and to examine the measurement scales Then the main study is conducted to confirm the measurement scales, to test the hypotheses and to confirm the research model 1.4 Research structure The structure of study includes chapters as following: Chapter 1: Introduction will provide the research background, research objectives, as well as research scope and approach 67 D Cuối cùng, xin Anh (Chị) cho biết thông tin cá nhân: Giới tính Anh (Chị): □ Nam □ Nữ Tuổi: ………… Anh (Chị) làm cho công ty bao lâu? ……… năm …… tháng Trình độ học vấn Anh (Chị)? □ Phổ thông □ Cao đẳng □ Đại học □ Sau đại học Vị trí Anh (Chị) công ty? □ Nhân viên □ Quản lý Anh (Chị) làm việc với Sếp Anh (Chị) bao lâu? ……… năm …… tháng Giới tính Sếp Anh (Chị): □ Nam □ Nữ Quốc tịch Sếp Anh (Chị): …………………… Thu nhập Anh (Chị) từ Công ty: □ 2-5 triệu □ 5-10 triệu □ 10-15 triệu □ 15-20 triệu □ 20 triệu Thành thật cảm ơn Anh (Chị)! 68 English questionnaires Dear Sir/Madam, This survey is done by the University of Economic Ho Chi Minh City The primary purpose of this study is to discover relationship between authentic leadership and follower job satisfaction in Vietnamese organizations This questionnaire is completely confidential When you finish, please seal your questionnaire in the envelope provided Thank you very much for your support A The following survey items refer to your leader’s style, as you perceive it Please judge how frequently each statement fits his or her leadership style using the following scale and circling the suitable number for each statement: Note: if you have more than leader, please assess the one who most and directly influence you My Leader: Never Always ▼ ▼ tells you the hard truth makes decisions based on his or her core values asks you to take positions that support your core values listens carefully to different points of view before coming to conclusions shows he or she understands how specific actions impact others 69 B The following survey items refer to your current situation Please judge how you feel about yourself using the following scale and circling the suitable number for each statement Never Always ▼ ▼ I feel confident helping to set targets/goals in my work area 7 I feel confident presenting information to a group of colleagues If something can go wrong for me work-wise it will (R) I’m optimistic about what will happen to me in the future as it pertains to work 7 10 I approach this job as if "every cloud has a silver lining" C The following survey items refer to your job satisfaction Please judge how satisfied you feel about job using the following scale and circling the suitable number for each statement: Never Always ▼ ▼ 11 Most days I am enthusiastic about my work 12 I feel fairly satisfied with my present job 13 I find real enjoyment in my work 14 Each day at work seems like it will never end 15 I consider my job rather unpleasant 70 D Lastly, a couple of questions about you: Your gender: □ Male □ Female Your age: ………… Gender of your manager: ……… How long have you worked for your current company? ……… years …… month How long have you worked with your manager? ……… years …… month Nationality of your manager? □ Vietnamese □ Other Your income from the company? □ VND 2-5 mil □ VND 5-10 mil □ VND 10-15 mil □ VND 15-20 mil □ over VND 20 mil What is your education level? □ High school □ College □ Graduate □ Post Graduate What is your position in company? □ Staff □ Manager Thank you very much for your time 71 Appendix 2: result of reliability test of the measurements Authentic leadership: Reliability Statistics Cronbach's Alpha N of Items 876 Item-Total Statistics Scale Mean if Item Scale Variance if Deleted Item Deleted Corrected Item- Cronbach's Alpha Total Correlation if Item Deleted Leader1 20.0111 24.246 684 857 Leader2 20.1278 21.911 827 822 Leader3 20.5222 20.463 747 842 Leader4 20.0833 21.295 714 850 Leader5 20.0111 25.162 592 875 Job satisfaction: Reliability Statistics Cronbach's Alpha N of Items 911 Item-Total Statistics Scale Mean if Item Scale Variance if Deleted Item Deleted Corrected Item- Cronbach's Alpha Total Correlation if Item Deleted Jobsatis1 20.3944 19.134 686 911 Jobsatis2 20.6278 18.928 766 893 Jobsatis3 20.8611 18.076 796 887 Jobsatis4 20.6000 19.560 746 897 Jobsatis5 20.5611 18.393 893 868 72 Self-efficacy Reliability Statistics Cronbach's Alpha N of Items 800 Item-Total Statistics Scale Mean if Item Scale Variance if Deleted Item Deleted Corrected Item- Cronbach's Alpha Total Correlation if Item Deleted Selfefficacy1 5.8111 1.227 667 a Selfefficacy2 5.5667 1.342 667 a a The value is negative due to a negative average covariance among items This violates reliability model assumptions You may want to check item codings Job satisfaction Reliability Statistics Cronbach's Alpha N of Items 967 Item-Total Statistics Scale Mean if Item Scale Variance if Deleted Item Deleted Corrected Item- Cronbach's Alpha Total Correlation if Item Deleted Optimism1 11.1278 5.453 921 956 Optimism2 11.1000 5.185 935 946 Optimism3 10.9167 5.418 930 950 73 Appendix 3: result of confirmatory factor analysis Model Fit Summary CMIN Model Default model Saturated model Independence model NPAR CMIN DF P CMIN/DF 38 153.897 82 000 1.877 120 000 15 2175.392 105 000 20.718 RMR, GFI Model RMR GFI AGFI PGFI Default model 090 901 855 616 Saturated model 000 1.000 Independence model 641 297 196 259 NFI Delta1 RFI rho1 IFI Delta2 TLI rho2 CFI 929 909 966 956 965 Baseline Comparisons Model Default model Saturated model Independence model 1.000 000 1.000 000 000 Parsimony-Adjusted Measures Model PRATIO PNFI PCFI Default model 781 726 754 Saturated model 000 000 000 1.000 000 000 Independence model 1.000 000 000 74 NCP Model Default model Saturated model Independence model NCP LO 90 HI 90 71.897 40.790 110.821 000 000 000 2070.392 1922.450 2225.697 FMIN Model FMIN F0 LO 90 HI 90 Default model 860 402 228 619 Saturated model 000 000 000 000 12.153 11.566 10.740 12.434 Independence model RMSEA Model RMSEA LO 90 HI 90 PCLOSE Default model 070 053 087 030 Independence model 332 320 344 000 AIC Model AIC BCC BIC CAIC Default model 229.897 237.357 351.229 389.229 Saturated model 240.000 263.558 623.155 743.155 2205.392 2208.337 2253.287 2268.287 Independence model ECVI Model ECVI LO 90 HI 90 MECVI Default model 1.284 1.111 1.502 1.326 75 Model ECVI LO 90 HI 90 MECVI Saturated model 1.341 1.341 1.341 1.472 12.321 11.494 13.188 12.337 Independence model HOELTER Model Default model Independence model HOELTER 05 HOELTER 01 122 134 11 12 76 Appendix 4: result of regression analysis Result of regression analysis on relationship between authentic leadership and job satisfaction of group (respondents with higher level of job satisfaction): Variables Entered/Removed Model Variables Variables Entered Removed b Method Lnationality, Level, AuthenticLeader, GenderM, Enter Tenure, Income, Education, GenderE, Age a a All requested variables entered b Dependent Variable: JobSatis Model Summary Model R 430 R Square a 185 Adjusted R Std Error of the Square Estimate 117 a Predictors: (Constant), Lnationality, Level, AuthenticLeader, GenderM, Tenure, Income, Education, GenderE, Age 97579 77 b ANOVA Model Sum of Squares Regression df Mean Square 23.271 2.586 Residual 102.835 108 952 Total 126.106 117 F Sig 2.716 007 a a Predictors: (Constant), Lnationality, Level, AuthenticLeader, GenderM, Tenure, Income, Education, GenderE, Age b Dependent Variable: JobSatis Coefficients a Standardized Unstandardized Coefficients Model B (Constant) Std Error 4.945 912 222 084 GenderE -.288 Age Education Coefficients Beta t Sig 5.423 000 245 2.649 009 223 -.135 -1.290 200 -.283 197 -.178 -1.436 154 -.209 190 -.120 -1.099 274 165 110 162 1.505 135 Level -.092 241 -.036 -.381 704 GenderM -.190 230 -.078 -.826 410 Income 081 092 088 877 382 Lnationality 520 265 181 1.964 052 AuthenticLeader Tenure a Dependent Variable: JobSatis 78 Result of regression analysis on relationship between authentic leadership and job satisfaction of group (respondents with lower level of job satisfaction): Variables Entered/Removed Model Variables Variables Entered Removed b Method Lnationality, AuthenticLeader, Tenure, GenderE, Age, Enter Income, GenderM, Education, Level a a All requested variables entered b Dependent Variable: JobSatis Model Summary Model R 700 R Square a Adjusted R Std Error of the Square Estimate 490 401 85197 a Predictors: (Constant), Lnationality, AuthenticLeader, Tenure, GenderE, Age, Income, GenderM, Education, Level b ANOVA Model Sum of Squares df Mean Square Regression 36.235 4.026 Residual 37.744 52 726 Total 73.979 61 F 5.547 a Predictors: (Constant), Lnationality, AuthenticLeader, Tenure, GenderE, Age, Income, GenderM, Education, Level b Dependent Variable: JobSatis Sig .000 a 79 Coefficients a Standardized Unstandardized Coefficients Model B (Constant) Std Error 2.165 1.027 AuthenticLeader 609 102 GenderE 188 Age Coefficients Beta t Sig 2.108 040 637 5.992 000 273 080 689 494 -.012 188 -.007 -.062 951 Education -.330 243 -.170 -1.357 181 Tenure -.194 121 -.178 -1.606 114 Level -.026 380 -.011 -.068 946 GenderM 240 278 103 866 390 Income 023 132 027 177 860 Lnationality 641 342 207 1.875 066 a Dependent Variable: JobSatis 80 Result of regression analysis on relationship between authentic leadership and job satisfaction of group (respondents with all level of job satisfaction – mix of group and group 2): Variables Entered/Removed Variables Variables Entered Removed Model b Method AuthenticLeader, Income, Tenure, GenderM, Lnationality, Enter Education, GenderE, Level, Age a a All requested variables entered b Dependent Variable: JobSatis Model Summary Model R 481 R Square a Adjusted R Std Error of the Square Estimate 232 191 96482 a Predictors: (Constant), AuthenticLeader, Income, Tenure, GenderM, Lnationality, Education, GenderE, Level, Age b ANOVA Model Sum of Squares Regression df Mean Square 47.701 5.300 Residual 158.248 170 931 Total 205.949 179 F 5.694 Sig .000 a Predictors: (Constant), AuthenticLeader, Income, Tenure, GenderM, Lnationality, Education, GenderE, Level, Age b Dependent Variable: JobSatis a 81 Coefficients a Standardized Unstandardized Coefficients Model B Std Error (Constant) 3.838 690 GenderE -.175 174 Age -.064 Education Coefficients Beta t Sig 5.559 000 -.078 -1.010 314 137 -.039 -.469 640 -.232 142 -.128 -1.632 104 Tenure -.004 081 -.004 -.055 956 Level -.147 195 -.059 -.757 450 GenderM 050 176 021 285 776 Income 051 074 057 695 488 Lnationality 511 207 171 2.473 014 AuthenticLeader 368 063 402 5.857 000 a Dependent Variable: JobSatis ... Effects of authentic leadership, self- efficacy and optimism on job satisfaction: 44 4.6.2 Moderating effects of self- efficacy and optimism on the relationship between authentic leadership and job. .. is the relationship between authentic leadership and follower job satisfaction? How does self- efficacy play a moderating role in the relationship between authentic leadership and job satisfaction? ... research of moderating roles optimism and self- efficacy on relationship between authentic leadership and job satisfaction (according to knowledge of the author), the author suggest the moderating roles