Organizational learning cultureand customer satisfaction

The mediating role of normative commitmentTalat Islam

Faculty of Management, Universiti Teknologi Malaysia, Johor, Malaysia

Norliya Ahmad KassimInformation Management, Universiti Teknologi Mara,

Puncak Perdana Campus, Shah Alam, Malaysia

Ghulam AliUniversity of Sargodha, Sargodha, Pakistan, and

Misbah SadiqFaculty of Management, Universiti Teknologi Malaysia, Johor, Malaysia

AbstractPurpose – The aim of this study is to develop a theoretical framework with which to investigate theinter-relationships between organizational learning culture, normative commitment and customersatisfaction through the use of empirical investigation across the service sector.Design/methodology/approach – A questionnaire-based survey was given to 297 Malaysianemployees in different service organizations.Findings – First, instruments were checked regarding its uni-dimensionality by applyingconfirmatory factor analysis and then structural equation modeling (SEM) was applied to test themodel. SEM confirms that organizational learning culture not only directly influences customersatisfaction, but also has an indirect influence through normative commitment.Research limitations/implications – The study selected samples from Malaysia, the results mightbe different if samples are taken from a geographically different area.Practical implications – The study has theoretical and practical implications for Human Resourcesmanagers to enhance employees’ organizational commitment and customer satisfaction.Originality/value – The study highlights the importance of organizational learning culture inenhancing an employee’s commitment towards their organizations and customer satisfaction.

Keywords Customer satisfaction, Organizational learning culture, Normative commitment,Malaysian service sector

Paper type Research paper

IntroductionDelivering high-quality services and keeping customers’ satisfied have becomeessential in the current economic conditions for organizations to survive. Employeeshave to meet customers in varying manners to influence their perceptions of servicequality, especially in case of service organizations. Therefore, Human Resources (HR)practices, capabilities, skills and methods aiming to enhance an employee’s level of jobsatisfaction and commitment have become a critical issue for service organizations

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/0969-6474.htm

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Received 23 July 2014Revised 15 September 20143 October 2014Accepted 9 October 2014

The Learning OrganizationVol. 21 No. 6, 2014pp. 392-404© Emerald Group Publishing Limited0969-6474DOI 10.1108/TLO-07-2014-0040

(Pantouvakis and Bouranta, 2013). In addition the skills, capabilities and level ofcommitment have a consequently positive influence on an employee’s behavior andattitude during these moments of truth (Islam et al., 2013). In a rapidly changingenvironment, an organization’s success does not entirely depend on its workers’capabilities and skills, rather it relies on their ability to perk themselves up on acontinuous basis (Somerville and McConnell-Imbriotis, 2004). This notion sparked theconcept of organizational learning culture (OLC). According to Cunningham andGerrard (2000), OLC help an organization to continuously improve by adapting tochanging environments by enhancing its capacity to improve performance and applyself-transformation (Senge, 1990). Therefore, it is essential for all organizations to havean ability to adjust themselves to any unforeseen changes in the environment. Learningculture in an organization not only enhances an employee’s performance, but also theperformance of the organization. Previous studies have identified the role of OLC inenhancing an employee’s attitudes, i.e. job satisfaction and organizational commitment(Joo, 2010; Islam et al., 2014a, 2014b; Jo and Joo, 2011; Islam et al., 2013). However, theliterature on the relationship between OLC and employee attitudes is not enough tomake generalizations because these constructs have mostly been investigated indeveloped countries (Joo, 2010; Jo and Joo, 2011). On the other hand, there exists apowerful link between OLC and job satisfaction. If this link continues to surface, itenhances an employee’s level of commitment with their organization (Jo and Joo, 2011)providing or enhancing learning opportunities in the workplace. Egan et al. (2004, p. 298)also proposed that:

[…] continued efforts exploring the dynamics associated with interactions betweenorganizational learning culture and employee satisfaction, learning, and performance areessential for the ongoing development of research and practice unique to HRD.

Many of the studies have focused on examining the impact of OLC on an organization’sfinancial performance (Correa et al., 2007), but how OLC impacts an organization’snon-financial performance (i.e. customer satisfaction) needs to be examined(Pantouvakis and Bouranta, 2013). It has been supported that “non-financial measuresare better predictors of long-term financial performance than current financialmeasures; they help refocus managers on the long-term aspects of their actions” (Bankeret al., 2000, p. 65).

The current study aims to add to the existing literature by examining data fromsupermarkets. In addition, the present study is aimed toward providing new insightsregarding the mediating role of normative commitment between the relationship of OLCand customer satisfaction. Islam et al. (2013) noted organizational commitment performsthe role of mediation between OLC and turnover intention. However, none of the studieshas found organizational normative commitment to be a mediator between OLC andcustomers satisfaction. This model justifies two theories, i.e. “theory of social exchange”and “organizational support theory”. Theory of social exchange was introduced by Blau(1964) which states that there exists exchange relation between parties, when one partyreceives something valuable it tries to return to the giver with more or equal value.Theory of organizational support was introduced by Eisenberger et al. (1986) on thebasis of “social exchange theory” and this theory states that when employees feel thattheir organization is supporting them (with continuous learning in this study) they showmore positive attitudes and behaviors towards the organization. Similarly, when

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employees perceive a supportive and learning culture they reciprocate in terms of theircommitment and they offer higher-quality services (Pantouvakis and Bouranta, 2013).

Hypotheses developmentThe notion “learning as an important organizational process” was introduced byArgyris and Schön (1978); however, the philosophy of “organizational learning” wascreated back in the 1930s. Later, Senge (1990) introduced the idea of a learningorganization in his famous book “The Fifth Discipline” and since then both terms havebecome the topic of choice for researchers (Rebelo and Gomes, 2008). For a long time,researches have used the term organizational learning and learning organizationinterchangeably despite their different meanings. For instance, organizational learningis the individual’s collaborative learning process, while a learning organization is anorganization which promotes continuous learning among individuals (Song et al., 2009).Wang (2005) emphasized the study of learning organizations in a cultural context andnamed it Organizational Learning Culture (OLC).

OLC is an organizational culture that integrates learning organization (Pantouvakisand Bouranta, 2013). According to Bates and Khasawneh (2005), learning organizationenhances and supports the acquisition, distribution and sharing of learning. In addition,it not only supports continuous learning but also applies it for organizationalimprovement. Barney (1986) commented that the importance of learning culture is vitalfor organizations as it not only clarifies the ways to accomplish an organizations statedoutcomes, but also operates its business activities. Therefore, learning culture enhancesan employee’s positive job-related outcomes. A number of researchers in the past haveidentified organizational leaning cultures role in enhancing an employee’s positivejob-related outcomes, i.e. job satisfaction (Pantouvakis and Bouranta, 2013; Chang andLee, 2007), organizational citizenship behavior (Islam et al., 2014a; Jo and Joo, 2011) andorganizational commitment (Islam et al., 2013; Atak and Erturgut, 2010).

According to Allen and Meyer (1996), organizational commitment is an employee’sfeelings for his/her organization. Mowday et al. (1982) further commented that anemployee’s commitment with the organization is his/her mental connection with theorganization and is related to their behavioral investment. Therefore, understanding anemployee’s commitment is more important now than ever before, as it is now presentlyrecognized that commitment is both less thematic and a constant measureableparameter compared to satisfaction in knowledge-based economy (Mowday et al., 1982).Allen and Meyer (1996) introduced affective, normative and continuance commitment asdimensions of organizational commitment and suggest the construct should be studieddimensionally as each of its dimensions has different association with variables. Basedon this information, Islam et al. (2014b) conducted a study to examine OLC andpsychological empowerment as antecedents of employees job-related attitudes on 412Malay–Chinese Malaysian banking employees and found that OLC enhance employees’level of affective commitment (emotional attachment), filling the gap of the servicesector as was suggested by Joo (2010), but how OLC enhances employees normativecommitment is still in need of examination (Islam et al., 2013, 2014b). Normativecommitment is an employee’s moral obligation to be with the organization (Allen andMeyer, 1996). According to social exchange theory, when employees feel that theirorganization is giving something of value they consider it their obligation to respond tothe organization positively (Blau, 1964). Similarly, when employees understand learning

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culture, they reciprocate their obligation to remain with the organization (Islam et al.,2014a, 2014b). Thus, when organization supports its employees with the provision ofcontinuous learning opportunities, they exhibit more commitment with theirorganization:

H1. OLC will be positively associated with normative commitment.

Considerable attention has been paid by researchers in examining the impact of OLC ona firm’s financial position in the field of marketing, management, strategy andaccounting. Ellinger et al. (2002) noted the following seven dimensions of OLC:

(1) continuous learning;(2) strategic management;(3) inquiry and dialogue;(4) embedded system;(5) team learning;(6) connection to environment; and(7) empowerment positively impacting both the objective and perpetual measures

of an organization’s performance.

In a similar way, Yang (2003) commented that these seven dimensions of OLCsignificantly and positively influence organizational outcomes. Moreover, theperformance of learning organization was found to be much stronger as compared to itsrivals in the financial markets (Goh and Ryan, 2008). However, hardly a single study hasbeen conducted in the past to examine the impact of OLC on customer satisfaction.According to Pantouvakis and Bouranta (2013), OLC supports an employee’sdevelopment and provides continuous learning resulting in a positive response by theemployees leading towards the needs of customers. This long-term superiorperformance directly influences customer satisfaction:

H2. OLC will be positively associated with customer satisfaction.

It is believed that “A happy employee is a happy guest”. Therefore, employers andmanagers prefer more satisfied and committed employees. Recent studies haveidentified that job satisfaction enhances an employee’s level of organizationalcommitment and committed employees respond esthetically towards their customersregarding service quality (Pantouvakis and Bouranta, 2013; Kim et al., 2012). In a similarvein Singh (2000) opined that highly committed employees are more likely to deliverhigh-quality service. Malhotra and Mukherjee (2004) also noted that high employeeorganizational commitment consequently increased customer satisfaction. However,hardly a single study has identified the influence of normative commitment on thecustomers’ satisfaction. The current study believes that an employee’s feeling of moralobligation consequently creates better service quality (i.e. customer satisfaction):

H3. Normative commitment will be positively associated with customersatisfaction.

In addition, the study also aimed towards examining the indirect effect of OLC oncustomer satisfaction through normative commitment. In a similar vein, Pantouvakisand Bouranta (2013) noted that job satisfaction performed the role of mediation between

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OLC and customer satisfaction. In contrast, if OLC, normative commitment andcustomers’ satisfaction are correlated (Pantouvakis and Bouranta, 2013; Kim et al., 2012;Islam et al., 2014a) then it might be assumed that:

H4. OLC indirectly influences customer satisfaction through normativecommitment.

MethodsThe current section highlights the data collection procedure and discussion.

Sample and sampling techniqueThe present study was concentrated on the employees of service industries. For thispurpose, a multi-stage sampling technique was applied. In the first stage, four majorservice companies working in western Malaysia were selected. In the second stage,customer care service departments were selected, and in the final stage, aquestionnaire-based survey was used to conduct the responses. After first obtainingpermission from supervisors, a total of 350 questionnaires were distributed amongemployees, resulting in 297 responses (response rate � 85 per cent).

Respondents were also evaluated on the basis of certain demographic characteristics(i.e. gender, age, qualification, nature of job, duration of current tenure and total jobtenure). The responses revealed that most employees in western Malaysian customercare centers were female (71 per cent), aged in their 30s (54 per cent) and had permanentjobs (79 per cent). Of the total, 51 per cent of the respondents held a four-year bachelor’sdegree. The length of time they had worked with their current organization was evenlydistributed across the categories, i.e. less than one year (17 per cent), between one andtwo years (27 per cent), between two and three years (19 per cent), between three and fiveyears (18 per cent) and over five years (19 per cent). Overall, job experience wascalculated as: less than one year (19 per cent), between one and two years (17 per cent),between two and three years (20 per cent), between three and five years (26 per cent) andover five years (18 per cent).

MeasurementsAlmost all the scales regarding the constructs used in this study were developed andwell-used in Europe and other developed countries. The same scale was adapted for usein Malaysia. Questionnaires were measured on a five-point Likert scale ranging from 1(strongly disagree) to 5 (strongly agree).

Watkins and Marsick (1997) developed a scale for OLC, and later Yang et al. (2004)shortened the scale to seven items. This study used the same seven-item scale includingan item for each dimension with the highest factor loading (i.e. continuous learning,team learning, dialogue and inquiry, empowerment, system connection, embeddedsystem and strategic leadership) as this study was related to the employees’ perceptionsregarding learning culture. This shortened version of the scale by Yang et al. (2004) wasused to study OLC as a single construct and the reported coefficient values for the sevendimensions ranged from 0.68 to 0.83. A sample statement includes “In my organization,people are rewarded for learning”.

Allen and Meyer (1990) developed an eight-item scale to measure employee’snormative commitment. Later, Meyer and Allen (1997) reduced the eight items to five.The present study used the same scale. A sample statement included “I owe a great deal

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to my organization”. To measure customer satisfaction Lam et al.’s (2004) five-iteminstrument was used. Recently, using the same scale Pantouvakis and Bouranta (2013)noted the values of factor loading to be between 0.74-0.87. A sample statement included“Overall, customers are very satisfied with their relationship with this organization”.

Results and discussionAssessing the uni-dimensionality and correlationUni-dimensionality not only calculates reliability, but also demonstrates the loading ofeach item used to measure the construct (Hair et al., 2006). One of the major reasons toaccept the uni-dimensional model is its ability to predict discriminant and convergentvalidity (Kline, 2005). There are two methods to assess the uni-dimensionality of aninstrument, i.e. confirmatory factor analysis (CFA) and exploratory factor analysis(EFA). According to Anderson and Gerbing (1988), in the absence of a theoreticalbackground, EFA is the best approach, while in the presence of a theoretical support,CFA should be applied. In the light of this argument, the study used the CFA approach.

Table I presents the values regarding an item’s factor loading, composite reliabilityand average variance extracted (AVE) for each construct. To check the reliability of thescale, Cronbach’s alpha values was examined (Cronbach, 1951) with a standard cut-offlimit of 0.70. Furthermore, discriminant validity was examined with Kline’s (2005)cut-off value of 0.85 as the correlation between variables and composite reliability (CR),while convergent validity was analyzed through AVE. The results in Table I identified

Table I.Confirmatory factor

analysis

Item Factor loading Cronbach’s alpha CR AVE

Organizational learning culture (OLC)OLC1 0.72 0.75 0.65 0.69OLC2 0.82OLC3 0.78OLC4 0.76OLC5 0.84OLC6 0.81OLC7 0.89

Customers satisfaction (CS)CS1 0.71 0.78 0.63 0.59CS 2 0.79CS 3 0.77CS 4 0.87CS 5 0.83

Normative commitment (NC)NC1 0.79 0.81 0.67 0.64NC2 0.84NC3 0.78NC4 0.82NC5 0.86

Notes: OLC � organizational learning culture; NC � normative commitment; CS � customersatisfaction; CR � composite reliability; AVE � average variance extracted

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that the instrument had both convergent and discriminant validity as the vales of CRand AVE are well above 0.60 and 0.50 (Hair et al., 2006).To examine the model fitness, the standard values that were introduced by Hair et al.(2006) were used. For example:

• the higher the value of the comparative fit index (CFI), the higher will be the fit ofthe model;

• values of the normed fit index (NFI), goodness-of-fit index (GFI), adjustedgoodness-of-fit index (AGFI) and the non-normed fit index (NNFI) should be equalto or greater than 0.90;

• the value of the root mean square error of approximation (RMSEA) should be lessthan or equal to 0.08; and

• the value of �2df should be less than 3.

The values of model fitness were found to be: �2 � 259.654, d/f � 102, �2df � 2.55NNFI � 0.932, GFI � 0.964, AGFI � 0.947, NFI � 0.964, CFI � 0.973, RMSEA � 0.038.All the noted values are well above the standard values.

Table II shows the correlations among all the variables along with their mean andstandard deviations. The values of the table indicate that all the variables had meanvalues near to agreement, i.e. 3.58, 3.57 and 3.68, respectively, for OLC, normativecommitment and customer satisfaction. On the other hand, OLC was found to bepositively associated with normative commitment and customer satisfaction (r � 0.24and 0.53, respectively). Similarly, normative commitment was also found to bepositively associated with customer satisfaction (r � 0.48).

Structural equation modelingTo determine whether the theoretical relationships specified at the conceptualizationphase are supported by the data, Structural equation modeling (SEM) assessmentanalysis was applied (Diamantopoulos and Siguaw, 2000). The hypotheses areexamined through investigating the path coefficients. All the research hypotheses weresupported, showing statistically significant path coefficients (t � 1.98, p � 0.01).

Path analysis regarding the hypothesized model is presented in Figure 1. The modelindicates good fitness from all aspects, i.e. �2 � 262.564, d/f � 116, �2 df � 2.263NNFI � 0.947, GFI � 0.971, AGFI � 0.945, NFI � 0.953, CFI � 0.983, RMSEA � 0.041.

The study developed and tested a model regarding the mediating effects ofnormative commitment between OLC and customer satisfaction. The values shown inTable III indicate positive and significant path between OLC-NC (pathcoefficient � 0.39, p � 0.002), supporting suggested H1. The path between OLC-CS was

Table II.Mean, standard deviationand correlation analysis

Variables Mean SD OLC NC CS

OLC 3.58 0.55 –NC 3.57 0.65 0.24** –CS 3.68 0.60 0.53** 0.48** –

Notes: SD � standard deviation; OLC � organizational learning culture; NC � normativecommitment; CS � customer satisfaction; **p � 0.001

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found to be positive and significant (path coefficient � 0.69, p � 0.000), supportingsuggested H2. Similarly, the path between NC-CS was also found to be positive andsignificant (path coefficient � 0.36, p � 0.000), which supports suggested H3.Furthermore, to examine the mediating effect, the method of direct and indirect pathswas applied (Hair et al., 2010). Results identify that the indirect path (i.e. 0.14) was foundto be less compared to the direct path (i.e. 0.69), but significant. Therefore, normativecommitment was found to enhance the relationship between OLC and normativecommitment. This result supports suggested H4.

Thus, it might be concluded that when employees of an organization are exposed toa culture where they can learn on a continual basis they exhibit more normativecommitment towards their organization that ultimately enables them to meet customerdemands for satisfaction. According to the recent study of Islam et al. (2013), anemployee’s feelings towards learning culture enhanced their level of commitmenttowards their organization. Furthermore, the study found normative commitmentperformed the role of partial mediator between OLC and customer satisfaction. Anidentical study conducted by Pantouvakis and Bouranta (2013) concluded jobsatisfaction performs the role of mediator between OLC and customer satisfaction. Thisresult can further be supported with Blau’s (1964) social exchange theory and

Figure 1.Path analysis for

hypothesized model

Table III.Path analysis outcomes

for OLC-NC-CS

Path Standard reg p Effect

OLC-NC 0.39 0.002 Direct Indirect Total MediationNC-CS 0.36 0.000 0.69** 0.14** 0.83 PartialOLC-CS 0.69 0.000

Notes: OLC � organizational learning culture; NC � normative commitment; CS � customersatisfaction; **p � 0.001; *p � 0.05

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Eisenberger et al. (1986) theory of organizational support which states that, whenemployee perceive something of value from one party (i.e. OLC in this study) theyreciprocate with positive job-related outcomes (i.e. normative commitment in thisstudy). Furthermore, committed employees more eagerly deliver high-quality servicesto the customers (Singh, 2000), resulting in higher customer satisfaction (Malhotra andMukherjee, 2004).

Conclusion and implicationsThe aim of the present study was to investigate the direct and indirect impact of OLC oncustomer satisfaction and it has both theoretical and practical implications. One of thetheoretical implications is that the construct of OLC is a valid construct in the servicesector. In addition, this study emphasized the importance of OLC in enhancing employeenormative commitment and customer satisfaction. Results support the mediating effectof normative commitment between OLC and customer satisfaction. This study gave anew applicable model to the service sector as it was tested in four service organizationsin Malaysia. Specifically, the study found that the ability of a service industry to satisfyits customers is directly and indirectly associated, through employee normativecommitment, with its continuous ability to effectively and efficiently respond toenvironmental stimuli. The findings of the study are in line with earlier studies thatexamined step by step the relationship between OLC, normative commitment andcustomer satisfaction. Researchers have identified that organizations that targetemployee learning on a continuous basis have more committed employees (Hsu, 2009;Islam et al., 2014a, 2014b).

According to Singh (2000), perceived employee commitment had a positive effect ontheir perceived service quality because it is difficult for non-committed employees todeliver high service quality. The mediating role of organizational commitment betweenOLC and knowledge sharing (Jo and Joo, 2011) and the mediating role of organizationalcommitment between OLC and turnover intention (Islam et al., 2013) has also beensupported. However, the current study reveals a direct and indirect impact from OLCand normative commitment on customer satisfaction. This finding yields a qualitativeindicator of factors that contribute towards customer satisfaction. According to Ecclesand Philip (1992) qualitative indicators are more essential compared to quantitativeindicators in the rapidly changing business environment as it reduces the speed offeedback.

HR managers of the service industry should focus on the recruitment process,selecting not only employees with experience and suitable skills but also individualspassionate to become better through learning (Pantouvakis and Bouranta, 2013).Employees eager to learn are a valuable asset for the organization because theycontinuously make efforts to improve their competencies to benefit the organization. Onthe other hand, benefit from an employee’s learning organizations should create anenvironment that supports and promotes learning (Islam et al., 2014a, 2014b). Thus, HRmanagers should focus on the employees’ long-term development by giving themopportunities to grow and add to their knowledge. Furthermore, employees should notbe punished for their mistakes but instead consider it as part of the learning process.Employee learning has become essential, especially for service organizations because ofthe rapidly changing environment. Therefore, to be proactive rather than reactive theyneed to have learning employees with better decision-making and communication skills.

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To meet customer complaints, missed opportunities and delays, there should be propercommunication channels. Effective communication channels not only help managers tomaintain healthy human relations in the organization, but also encourage suggestionsand ideas from subordinates. The development of “feedback loops” for employees andcustomers reveal new ideas to the organization and uncovers problems (Pantouvakisand Bouranta, 2013).

Enhancing employee organizational commitment has become essential for HRmanagers because of its ability to produce positive outcomes for the organization.Previous studies focused on the importance of organizational level efforts (i.e. OLC) inenhancing an employee’s emotional attachment (i.e. affective commitment) towardstheir organization (Islam et al., 2013; Jo and Joo, 2011). Similar to previous studies, thisstudy found that organizational level efforts also enhance an employee’s normativecommitment. Therefore, HR managers should establish a learning environment inthe organization. By improving and developing new practices, managers could enhanceemployee commitment at both the group and organizational levels. HR managers can besupported by human resource development professionals through relevant practices.

Despite having both theoretical and practical implications, the study is not free oflimitations. First, the present study was conducted at a single point of time(cross-sectional). It may be worthwhile to study the proposed model over time(longitudinal) to take into account the dynamics of employee and consumer perceptions.Second, the majority of the respondents in the present study were female which mightcreate a gender-based bias in the results; therefore, future researchers should conductthe analysis by taking an equal number of male and female respondents. Third, thepresent study considered employees response in terms of customer satisfaction. Futurestudies should consider both employee and customers response to customer satisfactionas Johnson (1995) suggests that employee and customers together can better respond tothe customers’ level of satisfaction. Finally, one factor (OLC) is not enough to develop anemployee’s level of organizational commitment. Other factors like organizationalsupport and organizational justice are also required. Quite simply, enhancingcommitment requires the incorporation of cultural management, organizationalstrategy, leadership development and job design.

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About the authorsTalat Islam (Dr) has completed his PhD from the Faculty of Management, Universiti TeknologiMalaysia, Johor Campus, Malaysia. His areas of interest are organizational behavior, learningorganization, management and human resource management. Talat Islam is the correspondingauthor and can be contacted at: talatislam@yahoo.com

Norliya Ahmad Kassim (Dr) is working as a Professor at the Faculty of InformationManagement, Universiti Teknologi Mara, Puncak Perdana Campus, Shah Alam, Malaysia. Herareas of interest are knowledge management, learning organization and information literacy.

Ghulam Ali (Dr) is working as an Assistant Professor at the University of Sargodha, Sargodha,Pakistan. His area of interest is management.

Misbah Sadiq is a PhD Scholar at the Faculty of Management, Universiti Teknologi Malaysia,Johor Campus, Malaysia. Her area of interest is Management.

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