Determining the Relationship between the Effective Factors of Strategic Behavior: A Case Study for Social Insurance Company of Tehran

Abstract

Purpose - In order to achieve the organizational objectives, the behavior of the employees and their collaboration with management should be taken into account. It has been shown that strategic behavior depends on a number of different factors. The aim of this article was determining the relationship between factors related to the strategic behavior. Research design, data, and methodology - Accordingly, a conceptual model was developed and tested in the form of a survey. Participants of the study were the employees working in the social Insurance company of Tehran. Data was collected using a questionnaire conducted among managers and the staff. A correlation model was used for data analysis by employing the SPSS software. Results - The findings showed there was a relationship between employees' engagement and the strategic behavior. Conclusions - Our research has demonstrated the effect of employees' engagement on the strategic-driven behavior, emphasizing the role of employees' engagement in health-care service firms. Although previous service research has focused on the factors that drive employees' performance, it seems that most of this research has been inspired by the idea of the service profit chain, focusing on the effect of employees' satisfaction on performance.

1. Introduction

Recently, considerable attention has been given to the study of the positive aspects and the development of employees’ optimal psychological and psychosocial functioning. (Sanchez-Cardona, 2012). In health-care organizations, employees are expected to be engaged in their work, taking initiatives and being innovative. In order to achieve this, organizations are required to arrange working conditions with sufficient motivating and energizing resources (Hakanen, 2008). It is important to understand the aspects of frontline employees’ roles that could contribute both to improving work performance and to strengthening the firm’s competitive advantage.

In recent years, there has been a growing interest in the concept of employees’ engagement and its role in work performance and competitive advantage. In particular, various studies have noted that employees’ engagement is able to predict an employee’s turnover intention, productivity, financial performance, customer satisfaction, and so forth. Baumruk (2004) stresses the important role of employees’ engagement, but labels this construct as the “the missing link” in relation to the factors that contribute to a firm’s success. Saks also describes employees’ engagement as a “new and emerging area” (Saks, 2006). Consequently, employees’ engagement has emerged as a critical element in business success (Slatten, 2011).

Therefore, it is important to identify those factors that engender strategic-driven behavior, on the one hand, and, on the other, how strategic-based behavior pays off for organizations. Given that firms in the healthcare industry are currently facing problems such as the incompatibility of structure, mission, and organizational culture with scientific findings, as well as goals and strategies not in line with the employees’ needs to achieve strategic planning for enriching the organization and improving profitability (Lashley, 2008; Onsoyen, 2009), it is necessary for employees to adjust their behaviors to the organization’s needs.

The social insurance company has emphasized the importance of those human resources that can have a significant influence on whether or not a system can reach its true potential. However, studies have shown that the employees’ monotonic behavior lacks innovation and creativity. In this organizational culture, things are done in a conventional repetitive manner, and there is little collaboration between employees. The hierarchical management structure and non-flexible regulations of this organization can have a very negative effect on the employees’ sense of creativity and responsibility (Nezhadsam, 2009).

In order to satisfy its needs and maintain its competitiveness, the organization needs to expand the range of its employees’ skills. Therefore, fundamental changes are needed to create and maintain the strategic behavior in employees and managers. This is the problem addressed in this research.

This study contributes to the call for more research related to employees’ engagement, job autonomy, organizational status and objects. Specifically, this article focuses on employees’ engagement in relation to frontline employees, with regard to the strategic behavior in a hospitality company. This company offers a valuable opportunity for research because of the critical role that frontline employees play in determining the success of a hospitality company (Lashley, 2008; Onsoyen, 2009). Although there have recently been studies focusing on employees’ engagement in hospitality organizations (Kim et al., 2009), this is the first study in hospitality research that has empirically examined certain antecedents and the effects of employees’ engagement on the strategic behavior from a frontline perspective.

This article begins with a discussion of the concept of employees’ engagement, job autonomy, organizational status and objects. Next, there is a discussion of the antecedents and the effects of job autonomy, role benefits and organizational status on employees’ engagement and organizational objects; also, the impact of employees’ engagement and organizational objects on the strategic behavior under examination in this study is addressed. Third, the methodology used in this study is described. Fourth, there is a presentation of the analysis and empirical findings. This article concludes with a discussion of the implications of this study and points out the limitations and suggestions for the future research.

2. Literature Review

Day (1999) has identified important aspects of an appropriate strategy. It was argued that “a sound strategy is directional ... it includes activities ... to deliver a particular value proposition to a target group of customers ... [And] to gain competitive advantage”. Day (1999) has further assumed that “everyone working in the organization could do something to contribute to the strategy. These statements point to five fundamental dimensions or challenges related to a firm’s strategy. First, a strategy should be goal-oriented (“directional”), that is, a strategy should incorporate a motivational aspect for reaching those goals. Second, there is (or should ideally be) a close link between strategy as a plan and strategy as an act (“including activities”). This idea stresses the importance of implementing the strategy through the organization. Third, a strategy should embrace all employees in the organization (“everyone ... contributes to the strategy”), implying that everyone (from the bottom to the top in the firm) is responsible to live up to the firm’s selected strategy. Fourth, all strategies deal with the challenge of how to please customers in a satisfactory way (“to deliver value proposition to customers”). Fifth, strategy is about how to achieve or uphold a reasonable level of performance, thereby ensuring survival in the future (“to gain the competitive advantage”). This last consideration refers to retaining and attracting new customers, thereby making the foundation for survival, in both short and long term. Although all the aforesaid aspects of the strategy are important, it is reasonable to assume that the implementation of strategy is the most critical. Without implementation, an organization’s strategy is likely to be useless. Consequently, implementation can be taken to be fundamental for a firm’s success (Slatten, 2011).

According to Kahn, if people are engaged, they express themselves psychically, cognitively, and emotionally while serving their role. In his qualitative mapping of the general conditions of experiences that influences degrees of personal engagement, he found that there were three psychological conditions associated with engagement or disengagement: Meaningfulness, Safety, and Availability. Consequently, it was revealed that workers were more engaged when they were in situations giving them greater meaning and when they felt mentally safe and more psychologically available (Slatten, 2011).

Work engagement is defined as a positive, fulfilling, work-related state of mind characterized by vigor, dedication, and absorption. Vigor refers to high levels of energy and mental resilience while working; it is also the willingness to invest effort in one’s work and persistence in the face of difficulties. Dedication is characterized by a sense of significance, enthusiasm, inspiration, pride, and challenge. The third defining characteristic of engagement has been identified as absorption, a sense of being fully concentrated and happily engrossed in one’s work, such that time passes quickly and it becomes difficult to detach oneself from work (Hakanen et al., 2008).

Consequently, engagement can be represented as a persistent, positive, effective-motivational state of fulfillment. Employees’ engagement is positively correlated with customers’ satisfaction, loyalty, productivity and profitability, and negatively correlated with employees’ turnover (Menguc et al., 2012). As employees become more engaged, they find their work more meaningful, self-fulfilling, and inspirational and, accordingly, become more dedicated, concentrated, and engrossed in their jobs. This positive and motivated state of mind should carry over to how they treat and serve customers. As such, research has shown that engagement influences not only the in-role behavior, but also the proactive behavior and the extra-role behavior, such as the organizational citizenship behavior. It seems that engaged employees have an expanded view of their job role and reach out to a broader set of activities in their jobs. This suggests that engagement can have a positive effect on how employees handle their in-role duties, including providing a superior service to the customers (Menguc et al., 2012).

Employees should be involved in the formulation of the content of the firm’s strategy. This can help the firm to ensure that the employees’ point of view is taken into consideration in the preparation of the strategy. Then, they should be able to use the strategy and be trained on how to strive consciously towards contributing to the organization’s overall strategy. Clear understating of the content of the firm’s strategy and the effectiveness of the role that each individual employee plays in the fulfillment of the firms’ strategy can persuade employees about their roles. Employees have to perceive their jobs as a resource for status enhancement. They should follow the different steps in the career path and know the criteria related to how they could move along that path to achieve the company’s goals. Thus, it can be concluded that each individual employee must play an active role in developing the career plan (Slatten, 2011).

Sieber (1974) has classified the positive benefit of multiple roles (or what he labels as “role accumulation”) into four types:

(1) Role privileges

(2) Overall status security

(3) Enrichment of the personality and ego gratification

(4) Resources for status enhancement.

The perceived role benefits point to the individual employee’s perception of career opportunities and professional visibility. Role benefit was the most important construct in creating employees’ engagement. Consequently, the employee-perceived role benefit can be regarded as a key construct or crucial aspect in relation to employees’ engagement (Slatten, 2011).

Job resources were defined as those physical, psychological, social, or organizational aspects of the job that can potentially reduce the negative effects of job demands and help to achieve work goals; they may also stimulate personal growth, learning and development, and the positive state of work engagement (Hakanen, 2008).

It must be noted that intrinsically motivated behaviors can occur without external rewards (e.g., prizes); they are engaged for their own sake, that is, for the pleasure, fun, and satisfaction derived from the participation itself, and are optimally challenging. Activities that lead the individual to experience these feelings are intrinsically rewarding and are likely to be performed again (Lim & Wang, 2009).

Autonomy is generally a requirement where work cannot be easily standardized, which is most often the case for frontline jobs in the health-care system. Job autonomy refers to the freedom and independence that people performing the tasks can exercise in determining how to execute their duties. Previous research has revealed that job autonomy could be linked to certain factors related to Employees’ engagement, such as the willingness to dedicate one’s efforts and abilities to a work task, intrinsic job motivation, and individual development (Slatten, 2011).

People are more likely to be intrinsically motivated, that is, to do an activity simply for the enjoyment they derive from it when they can freely choose to pursue an activity (autonomy/choice) and master the activity (competence) and also when they feel connected and supported by important people, such as a manager (relatedness). According to the theory of the planned behavior, people’s overt statement of intention is the strongest predictor of behavior. Hagger (2003) proposed that intention summarized a person’s general effective and cognitive orientation towards the behavior (attitude), the perceived pressure placed on them by the important people to participate in the target behavior (subjective norm), and their competence-related evaluation of their faculties and capacities towards the behavior (the perceived behavioral control). Accordingly, more selfdetermined forms of behavioral regulations (which affect more positive consequences or adaptive outcomes) are expected to enhance the stronger intentions from a person (Lim & Wang, 2009).

Strategic-driven behavior in this study refers to how the firm’s strategy serves as a guiding principle or a compass for employees in their work role, assuming that employee’s strategic-driven behavior is a driver to engagement and perceived organizational objects; specifically, the more a person perceives a match between the strategy and his or her own contribution to the strategy, the more engaged this person will be. Of course, the opposite is also possible, but, again, this study examines the positive perceptions of a perceived match.

Job autonomy here refers to the freedom and independence that people performing the tasks have in determining how to execute their duties (Zhou & Shalley, 2008). Previous research has found that job autonomy is linked to certain factors related to employees’ engagement, such as the willingness to dedicate one’s efforts and abilities to do a work task (Gagne & Deci, 2005), intrinsic job motivation (Hackman & Oldham, 1980), and individual development (Deci & Ryan, 1985). To these authors’ knowledge, there are only two previous studies that have explicitly tested the link between job autonomy and employees’ engagement. Xanthopoulou et al. (2009) have studied employees from three branches of a Greek fast-food company. In addition to other variables, the authors examined how job autonomy was linked to employees’ engagement.

It is reasonable to assume that if an individual perceives these resources as being meaningful, it can contribute to engagement in the work role. The opposite is also possible: an individual who perceives the same resources as being meaningless contributes to disengagement in the work role. Meaningless work is often associated with apathy and detachment (Thomas & Velhouse, 1990). However, this study concentrates on the more desirable or positive perceptions. Following this reasoning, this study assumes that a person’s perception of role benefits is able to augment the engagement in the work role. Consequently, employees’ perceived role benefit is positively linked to employees’ engagement.

According to Van de Ven (1986), the “foundation of strategy activity is employees’ actions”. Given the nature of engagement, it is reasonable to assume that employees’ engagement is related to the strategic behavior.

The model links employees’ engagement to the strategic behavior for two reasons. First, Miles (2000) characterizes studies of strategic behavior in services. This is paradoxical because the growth in the service sector has been so expansive that the label of a service-dominated economy is a commonplace (Tether, 2005). Because of the lack of research on the strategic behavior in the services, there has been a call for more research on strategy in the service firms. Second, this study concentrates on frontline employees with the hospitality industry as the setting. In the hospitality industry (and in service industries in general), frontline employees are of central importance for the guest experience (Onsoyen et al., 2009; Lashley, 2008).

Based on the literature review, figure 1 shows the research model and provides a summary of the variables and hypotheses guiding this study.

[Figure 1] The conceptual model

According to the conceptual model, this study proposes the following hypothesis:

[H1] Job autonomy is positively related to the perceived organizational objects.

[H2] Job autonomy is positively related to employees’ engagement.

[H3] Perceived organizational status is positively related to employees’ engagement.

[H4] Role benefit is positively related to the perceived organizational objects.

[H5] Role benefit is positively related to employees’ engagement.

[H6] Perceived organizational objects are positively related to employees’ engagement.

[H7] Perceived organizational objects are positively related to strategic-driven behavior.

[H8] Employees’ engagement is positively related to strategicdriven behavior.

3. Method

3.1. Sample

To ensure a common understanding among the researchers, workshops were held to explain the overall aim of the research project, the questionnaire, and the conceptual model. All researchers were instructed to give each respondent a brief introduction into the aim of the study and to inform all participants that their responses would be kept anonymous. The data were collected from health-care organizations. 145 questionnaires (Cochran.php with: sig=0.95, N=288) were distributed among employees, and they were asked to participate in the survey. If the respondent was willing to participate, the person would be given a questionnaire and informed about the importance of the study; they were also assured that their responses would remain anonymous. 129 questionnaires were returned and handed to the lead investigator.

Seventy-four respondents were female (57.4%), and the most frequent educational level of the respondents was Bachelors (47.3%). The mean organizational tenure was approximately 10 years (SD=1.27), and the most frequent posts of the respondents were expert (41.1%).

3.2. Measures

The questionnaire consisted of six main sections covering the six constructs in the conceptual model, as shown in Figure 1.

Table 1> Questionnaire

3.3. Reliability and validity

This study employed a structured questionnaire, with most of the questions being developed from the literature. Some questions were derived from Slatten (2011), and the others were added by the authors. The questionnaire was evaluated by experts and knowledgeable professors and managers who were familiar with working in health-care organizations. After examination, its alpha reliability was calculated as 0.90.

4. Results

[Table 2] Correlation convergent

[Table 3] Regression Coefficients

Data analysis and hypotheses testing were done in the following manner. Preliminary data were gathered via surveys, and research variables were calculated. In this study, according to the assumptions made, Spearman correlation test and multiple regressions were used to examine the relationship between variables, and Friedman test was employed to determine the priority of agents.

[Table 4] Ranks

Results from the structural model, as hypothesized, showed that:

[Table 5] Results

[H5], [H6] and [H7] were not confirmed; although the significance level for the Pearson correlation coefficient was less than the suggested level of 0.05, the significance level obtained from the regression coefficient was higher than 0.05. So the hypothesis was rejected at the 0.95 confidence level.

Thus, our proposed model can be modified as shown in [figure 2]:

[Figure 2] The proposed model

5. Conclusion

Our research has demonstrated the effect of employees’ engagement on the strategic-driven behavior, emphasizing the role of employees’ engagement in health-care service firms. Although previous service research has focused on the factors that drive employees’ performance, it seems that most of this research has been inspired by the idea of the service profit chain, focusing on the effect of employees’ satisfaction on performance. Consequently, the effect of employees’ engagement on performance has been relatively neglected or absent from empirical examination (Slatten, 2011). This study addressed this by empirically demonstrating the effect of employees’ engagement on the strategic-driven behavior in a specific work role.