leveraging organizational culture to transform offshore it ...€¦ · • empirical study...

1 PMPC

2013

Dr. Wolfgang Messner

14 September 2013

Leveraging Organizational Culture to

Transform Offshore IT Service Delivery Teams

2 PMPC

2013

Dr. Wolfgang Messner: Leveraging Organizational Culture to Transform

Offshore IT Service Delivery Teams


Associate Professor of International Management

MYRA School of Business, Mysore

Director

GloBus Research – Messner Consulting & Training Pvt. Ltd.

Author of 6 books and a good number of journal publications

3 PMPC

2013



Agenda

Employee commitment and attrition in India’s ITES industry

Correlating employee commitment with organizational culture

A 2012 empirical study with 291 employees in Pune and Bangalore

Descriptive statistics of employee commitment

How organizational culture impacts employee commitment

Challenges in changing organizational culture

4 PMPC

2013

Demotivation of the employee base – even if

unintended – often leads to attrition

• Frequent complaints by clients of India’s ITES offshoring industry

– Not adequately skilled employees

– Difficulty to retain employees on project

• Reported attrition rate around 15% across ITES industry in India (2012)

• Client experiences a much higher project attrition rate, sometimes as

high as 90%

• Employees are the most important asset in the ITES industry

Employee commitment is a business issue – and not only one of

many HR problems.



5 PMPC

2013

Most providers have organizational HR measures

in place to combat attrition

Yet, there is surprisingly little research available in India’s ITES

industry linking organizational culture with employee commitment.

Compensation Career

development Motivation



6 PMPC

2013

Employee commitment is about an employee’s

loyalty to the organization

Committed employees provide a comparative advantage – as

postulated by the resource-based view (RBV) of a firm

Affective factor

Normative factor

Continuity factor

Employee

commitment

Emotional attachment

Identification & involvement

Moral obligation

Willingness to make sacrifices

Costs of leaving

Monetary, skills, relationships



7 PMPC

2013

Organizational culture is ‘the glue’ that guides

behavior and shapes decision making

Shaping the culture is an often cited priority in management circles.

Institutional

collectivism

Organizational

culture reflects the

society in which it

is embedded

(GLOBE study)



8 PMPC

2013

We examined the linkage between organizational

culture and employee commitment

• Empirical study conducted in 2012 using Team-ICCA™•

• 291 respondents from Capgemini/Pune and Infosys/Bangalore

• Professional work experience

Average: 7.4 years



44

124

14

47

62

..2 3..5 6..10 11..15 16..

• Gender distribution

Female: 25 %

Male: 75 %

• Time in current company

Median: 2 years

9 PMPC

2013

Descriptive statistics provide insight into

employee commitment in India’s ITES industry

As the sample is from across a typical offshore project hierarchy, the

statistics should provide a fairly reliable picture.



4 5

24 24

57 59

68

28

16

04

30

74 76

55

28

7

5258

2822

4 26

14

32

11

34

77

[1; 1.5[ [1.5; 2.0[ [2.0; 2.5[ [2.5; 3.0[ [3.0; 3.5[ [3.5; 4.0[ [4.0; 4.5[ [4.5; 5.0[ [5; 5.5[ [5.5; 6.0]

Affective factor

mean = 4.1

Normative factor

mean = 4.2

Continuance factor

mean = 3.3

low high

10 PMPC

2013

In our study we have …

• Correlated the factors of employee commitment with each other

• Hypothesized the segregation of continuance commitment into two

sub-factors using confirmatory factor analysis (LISREL 9.1)

• Analyzed the correlation of employee demographic variables with

employee commitment

• Related the 9 dimensions of organizational culture with the 3

factors of employee commitment using correlation analysis and

multiple regression analysis (LISREL 9.1)



The results reveal a number of implications for transforming the

management and leadership practice in India’s ITES industry.

11 PMPC

2013

What works in the U.S. or Europe, may not

necessarily work in India

• Correlation between the employee commitment factors is

considerably higher than in comparable North American studies

• With increasing work experience, age, management span, and time

spent in the organization, continuance commitment decreases

• There is no significant correlation with subfactor sacrifice

(continuance commitment) and management span resp. time in the

company; this is in contrast to older North American studies which show

positive path factors between age and employee commitment via job

satisfaction

Some of these findings can possibly be explained by national culture,

others by the dynamics of India’s ITES industry.



12 PMPC

2013

In-group collectivism and performance orienta-

tion are strongly related to employee commitment

Humane orientation, uncertainty avoidance, and institutional

collectivism also correlate positively with employee commitment.



Organizational culture

Performance orientation

In-group collectivism

Reciprocal feeling of pride

Active support structures

Emotional attachment

Encourage performance, excellence, and innovation

Monetary reward and group recognition of individual achievement

Employee commitment

Affective factor

Continuance factor

Normative factor

13 PMPC

2013

Power distance correlates negatively with

(affective and normative) commitment

• Bonding and sharing power throughout the organization seems to help

increase employee commitment (affective and normative factor)

• No significant correlation with continuance commitment could be

unveiled



Changing an organization’s culture for increased employee

commitment is one of the most difficult leadership challenges.

14 PMPC

2013

Single-fix changes are not likely to be successful

• Organizational culture is a system of

– Goals

– Values

• Interlocking takes over when single-fix changes applied

• In India’s ITES setup, employees shift between organizational

subcultures when they change projects

• Subcultures must not overwrite organizational culture

• Cultural dynamics are different in every organization and team



For changes to be successful, research has to be done on firm or

even team level; Team-ICCA™ provides a diagnosis framework.

– Processes

– Roles

– Practices

– Assumptions

15 PMPC

2013

Thank you for your attention!




Associate Professor of International Management

& Director, GloBus Research

Phone: +91 99 8659 8650

E-Mail: [email protected]

[email protected]

Web: www.myra.ac.in/wolfgang-messner

www.globusresearch.com

mailto:[email protected]

mailto:[email protected]

http://www.myra.ac.in/wolfgang-messner



http://www.globusresearch.com/

leveraging organizational culture to transform offshore it ...€¦ · • empirical study...

Documents