The role of ethics institutionalization in influencing quality of work life and job satisfaction a study in vietnamese petroleum industry

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Pham Nhu Huynh

THE ROLE OF ETHICS INSTITUTIONALIZATION IN
INFLUENCING QUALITY OF WORK LIFE AND JOB
SATISFACTION.
A STUDY IN VIETNAMESE PETROLEUM INDUSTRY

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2017


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Pham Nhu Huynh

THE ROLE OF ETHICS INSTITUTIONALIZATION IN
INFLUENCING QUALITY OF WORK LIFE AND JOB
SATISFACTION.
A STUDY IN VIETNAMESE PETROLEUM INDUSTRY

ID: 22130032
MASTER OF BUSINESS (Honours)

SUPERVISOR: DR. NGUYEN THI NGUYET QUE

Ho Chi Minh City – Year 2017


Acknowledgement
I would like to express my sincere thankfulness to my supervisor, Dr. Nguyen Thi
Nguyet Que, who made me believe in myself and gave me the possibility to complete
the thesis. Her guidance helped me in all the time of research and writing this thesis. I
am sure that this thesis would not have been possible without her support.
I would like to express my gratitude to all staffs in ISB who supported necessary
materials and helped submit my papers.
My sincere thanks also go to friends and colleagues who participated in the pilot study
that led to the development of the final survey questionnaire and their support over the
time when I was busy to conduct the research.
Especially, I would like to give my special thanks my family for supporting me
spiritually throughout my life.

Pham Nhu Huynh
February 2017

i


Abstract
Purpose – This research aims to explore the role of ethics institutionalization in
influencing quality of work life and job satisfaction – A study in Vietnamese
Petroleum Industry.
Methodoldy/Sample – A total of 280 questionnaires were distributed out at many oil
and gas companies in Vietnam. As the method is directly interviewing combining with
online surveying, all of respondents who working at petroleum companies (e.g., staffs,

team leaders, line managers and top managers), thus, data collecting also was primary
sources. The hypothesized relationships were tested using structure modeling.
Findings – This research found that a positive relationship between implicit ethics
institutionalization and quality of work life. The results also indicate that implicit
ethics institutionalization and quality of work life have positive impacts on the job
satisfaction of employees.
Key words – Ethics institutionalization, quality of work life, job satisfaction.

ii


Contents
Acknowledgement ................................................................................................................................... i
Abstract

..................................................................................................................................... ii

Contents

.................................................................................................................................... iii

List of figures

..................................................................................................................................... v

List of tables

.................................................................................................................................... vi

List of abbreviations ............................................................................................................................. vii

CHAPTER 1.

INTRODUCTION ...................................................................................................... 1

1.1.

Research background .............................................................................................................. 1

1.2.

Research problem.................................................................................................................... 3

1.3.

Research objectives ................................................................................................................. 7

1.4.

Research scope ........................................................................................................................ 7

1.5.

Research significance.............................................................................................................. 7

1.6.

Research structure ................................................................................................................... 8

CHAPTER 2.

LITERATURE REVIEW ........................................................................................... 9

2.1.

Job satisfaction ........................................................................................................................ 9

2.2.

Quality of work life ............................................................................................................... 10

2.3.

Ethics institutionalization and Quality of work life .............................................................. 14

2.4.

Ethics institutionalization & Job satisfaction ........................................................................ 17

2.5.

Research model and hypothesis ............................................................................................ 19

CHAPTER 3.
3.1.

RESEARCH METHODOLOGY .............................................................................. 20

The research design............................................................................................................... 20

3.1.1.

Pilot study ..................................................................................................................... 20

3.1.2.

Main survey method...................................................................................................... 21

3.2.

Measurement scale building.................................................................................................. 23

3.3.

Sample size and sample method ........................................................................................... 26

3.4.

Data analysis method ............................................................................................................ 27

CHAPTER 4.

DATA ANALYSIS AND RESULTS ....................................................................... 30

4.1.

Data collection ...................................................................................................................... 30

4.2.

Respondents’ demographic ................................................................................................... 30

4.3.

Reliability analysis ................................................................................................................ 32

4.4.

Exploratory factor analysis (EFA) ........................................................................................ 34

4.5.

Confirmatory factor analysis (CFA) ..................................................................................... 35

4.5.1.

Model fit........................................................................................................................ 35

iii


4.5.2.

Reliability and validity check ....................................................................................... 38

4.6.

Structure equation modeling (SEM) ..................................................................................... 40

4.7.

Summary ............................................................................................................................... 43

CHAPTER 5.

CONCLUSION ......................................................................................................... 44

5.1.

Conclusions and discuss of the findings ............................................................................... 44

5.2.

Managerial implications........................................................................................................ 46

5.3.

Limitations and future research............................................................................................. 48

REFERENCES ................................................................................................................................... 49
APPENDICES ................................................................................................................................... 55
Appendix 1 – Guidelines for in-depth interview............................................................................... 55
Appendix 2 – Questionnaire (English version) ................................................................................. 59
Appendix 3 – Questionnaire (Vietnamese version) .......................................................................... 63
Appendix 4 – Frequencies Table ...................................................................................................... 67
Appendix 5 – Reliability results........................................................................................................ 69
Appendix 6 – EFA results ................................................................................................................. 73
Appendix 7 – CFA results................................................................................................................. 75
Appendix 8 – SEM results ................................................................................................................ 77

iv

List of figures
Figure 2.1 – Conceptual model---------------------------------------------------------------------------------------19
Figure 3.1 – Research process ----------------------------------------------------------------------------------------22
Figure 4.1 – Confirmatory factor analysis model -----------------------------------------------------------------37
Figure 4.2 – SEM of research model --------------------------------------------------------------------------------41
Figure 4.3 – Final research model -----------------------------------------------------------------------------------42

v


List of tables
Table 3.1 – Measurement scale --------------------------------------------------------------------------------------24
Table 3.2 – Key indices ------------------------------------------------------------------------------------------------29
Table 4.1 – Sources of data collection ------------------------------------------------------------------------------30
Table 4.2 – Description of sample -----------------------------------------------------------------------------------31
Table 4.3 – Reliability test results -----------------------------------------------------------------------------------32
Table 4.4 – The list of deleted items --------------------------------------------------------------------------------33
Table 4.5 – KMO and Bartlett's Test --------------------------------------------------------------------------------34
Table 4.6 – Pattern Matrix --------------------------------------------------------------------------------------------34
Table 4.7 – Standardized Regression Weights --------------------------------------------------------------------36
Table 4.8 – Confirmatory factor analysis results -----------------------------------------------------------------38
Table 4.9 – Construct correlations, AVE & CR ------------------------------------------------------------------39
Table 4.10 – Fitness of conceptualized model --------------------------------------------------------------------40
Table 4.11 – Final results of hypotheses testing result ----------------------------------------------------------42
Table 4.12 – Final results of relationship checking of model’s constructs ----------------------------------43
Table 4.13 – Modified scales -----------------------------------------------------------------------------------------43

vi

List of abbreviations

No. Abbreviation

Meaning

1

AVE

Average Variance Extracted

2

CFA

Confirmatory factor analysis

3

CR

Composite Reliability

4

EEI

Explicit ethics institutionalization

5

EFA

Exploratory factor analysis

6

GDP

Gross domestic product

7

KNOC

Korean National Oil Corporation

8

IEI

Implicit ethics institutionalization

9

JS

Job satisfaction

10

PetroVietnam

Vietnam Nation Oil and Gas Group

11

PVD-DD

PetroVietnam Drilling Division

12

PVEP POC

PetroVietnam Domestic Exploration Production Operating Company Limited

13

PVD TECH

Petroleum Trading & Drilling Technical Services Company

14

QWL

Quality of work life

15

SEM

Structural equation modeling

vii


CHAPTER 1.
1.1.

INTRODUCTION

Research background
Each organization has its own assets which contains two main components –

labor and capital. Capital is so important to the achievement of the business, while
labor is the vital factor for creating profits to it. The labor does everything daily and
the whole existing time of the organization. The reality of working life today is that
employees are frequently trying to control their work and personal lives.
In the context of integration into the world economy, along with the
introduction of many domestic petroleum companies and foreign petroleum
companies have made the competition attract high-quality human resources to be
more intense. Therefore, the vital importance which leaders should perform are to
retain current employees because the stability of personnel will help organization save
time, costs of recruitment, training. According to Tett and Meyet (1993), job
satisfaction is negatively associated with turnover intention. Job satisfaction was

associated with decreased intentions to leave a company (Hom & Griffeth, as cited in
Valentine et al., 2011; Jaramillo, Mulki & Solomon 2006). Thus, besides the ways to
improve business efficiency, management efficiency, cost savings, etc. the methods to
improve the job satisfaction of employees are the concern of all organization.
The job is considered an important part of human life since the majority of their
lives is devoted to the organization. Many people believe that the work represents
their value in society. Therefore, the quality of life will depend on the quality of work
life which they have been at the workplaces. Improving the quality of work life will
contribute to bring good quality of life for each individual.
Quality of work life including the life aspects related to the work such as
wages, working hours, work environment, benefits, career prospects, the human
relationship, the balance between work and life. These aspects contribute to the
satisfaction and motivation of employees. According to Efraty, Sirgy and Claiborne
(1991), high quality of work life results in an increase in job satisfaction and
performance of employees, and at the same time, cause a decrease in both alienation
and turnover intention. From that, employees are willing to contribute to an
1


organization where quality of work life exists because they feel that their work fulfills
their needs (Cascio, as cited in Koonmee, Singhapakdi, Virakul, and Lee, 2010).
Recent studies have shown that quality of work life is not the unique factor
affecting to job satisfaction of employees, the institutionalization of ethics is also
considered the important factor influencing to employees’ job satisfaction. According
to Sims and Kroeck (1994), ethical working environment is an important factor in the
person-organization study. That is, employees usually choose to work in organizations
whose ethical preferences fit their own. And so, employees who work for
organizations that institutionalize ethics would tend to be more satisfied with their
jobs (Singhapakdi & Vitell, 2007). And finally, Valentine, Godkin, Fleischman, and
Kidwell (2011) indicated that corporate ethical values and job satisfaction were

associated with decreased turnover intention.
Therefore, it is necessary to study the association between institutionalization
of ethics, quality of work life and job satisfaction. Because of in parallel to the
importance of ethics institutionalization, both quality of work life and job satisfaction
have been important topics in human resource and organizational development
(Leopold, as cited in Koonmee et al., 2010).
The oil and gas company is a type of specific enterprise, operating in the field
of petroleum exploration and production. Its operation and business are conducted
through laborers. The works at the oil and gas company is considered to be extremely
stressful, contain many risks, frequently long working hours, working fully stretched
in harsh environments and often facing danger, be able to occur injury or even
dangerous to life. Such as explosives, gas eruption, falling into the sea, labor accidents
due to work with heavy machinery, etc. although safety regulations are very closely
on the rig. To work well in the petroleum sector, employees need more skills such as
analysis, synthesis, teamwork and have good health. Besides, the petroleum sector is
the operation field related to exploration and production of natural resources therefore
the intelligence is pre-requisite for the employees working there. In addition, soft
skills are such as presentation, conflict resolution, establishing good relations with
colleagues; fast processing unexpected problems occur, etc. those are the important
skills which staffs need to equip themselve. Therefore, when there is an employee
2


meeting the above requirements, any petroleum company which wishes to maintain
existing staff and make them meet the job satisfaction to engage with the organization
in the long-term, especially employees with high technical qualifications. The research
of Al Muftah and Lafi (2011) related to petroleum industry in Qatar supports that
quality of work life is positively and significantly related to employees’ job
satisfaction. Regarding the importance of ethics and quality of work life and the effect
of them on job consequences such a job satisfaction of employee and spirit of team

work, Chamesghali and Salimiare (2014) considered the relationship between ethics
institutionalization, quality of work life and job-related outcomes in the form of case
study of employee of national Iranian oil product distribution company.
Nowadays, the common problem of the petroleum company is to improve the
job satisfaction of employees, creating incentives for employees to work effectively
and engage long-term with the organization. Therefore, the determination of the
degree of influence of the ethics institutionalization and the quality of work life to the
job satisfaction of petroleum employees is a necessary matter.
1.2.

Research problem
For the last decade, organizations have increased effort to institutionalize

ethics, partly because such efforts positively affect employee behavior. In addition,
given increasing ethical problems in business, many organizations have tried to
control

these

problems

by

institutionalizing

ethics.

Therefore,

ethics

institutionalization is not only a process developed through continual ethical operation
but also an important topic in business ethics research and ethics become
institutionalized by “the persistence of specific behaviors associated with an
organization and its employees behaving ethically” (Sims, 1991, p. 494).
According

to

Purcell

and

Weber

(1979),

mechanism

for

ethics

institutionalization within an organization is the utilization of a code of ethics. This
code describes the general value system of the organization, defines the purpose of the
organization, and provides guidelines for decision-making consistent with these
principles. Ethics institutionalization is a part of the organizational environment, and it
is also an important determinant of the decision-making processes of employees in
situations involving ethical issues (Hunt & Vitell, 1986; Ferrell & Gresham, 1985).
3

Sims (1991) also discusses the important of institutionalizing organizational ethics and
emphasizes the importance of an ethically oriented culture to ethics institutionalization
within organizations.
In recent years, the ethics institutionalization is also an important responsibility
for organizations in order to effectively counteract the frequent occurrences of
unethical and illegal behavior within organizations. An organization can utilize
different methods to create an ethical work culture for employees, especially ethical
practices can be a powerful tool for enhancing an organization. One of methods is to
institutionalize ethics in business organizations and Koonmee, Singhapakdi, Virakul,
and Lee (2010) emphasized that ethics, quality of work life and job-related outcomes
are identified as progressive indicators related to the function and sustainability of
business organizations.
Much research has expected that people in organizations with a high degree of
institutionalization of ethics will be more satisfied with their jobs. Such as,
Singhapakdi and Vitell (2007, p. 287) argue, “organizations that institutionalize ethics
appear to value integrity and trust and, as a result, often treat their employees more
fairly in terms of compensation, performance evaluation, promotion and conflict
resolution”. Accordingly, organizations that institutionalize ethics pay attention to the
quality of their employees work life will get the advantages of having more committed
workforce and more commitment of workforce.
Much research has documented that institutionalization of ethics is an
important factor affecting various aspects of employees’ job-related outcomes. Such
as, Vitell and Davis (1990) found a direct link between job satisfaction and ethical
behavior, the organizational culture is a key component when looking at ethical
behavior. Turban and Greening (1996) investigated the affecting of ethics programs
and perceived corporate social responsibility positively on individual work attitudes,
namely job satisfaction. Vitell and Singhapakdi (2008) investigated the impact of
ethics institutionalization on job-related outcomes (job satisfaction, esprit de corps,

and organizational commitment) for marketing professionals and revealed that
implicit institutionalization is a significant determinant of job satisfaction, but explicit
institutionalization is not. Kang (2010) investigated the relationship between job
4


satisfaction and ethical conflict, ethical conflicts causes and consequences of job
dissatisfaction and came to the conclusion that many employees confirm the existence
of ethical conflict in their workplace. Valentine, Godkin, Fleischman, and Kidwell
(2011) examined the degree to which perceived corporate ethical values work in
concert with group creativity to influence both job satisfaction and turnover intention,
and indicated that corporate ethical values is associated with increased job
satisfaction.
Much research also has documented that institutionalization of ethics is studied
in various countries with different fields. Such as, Koonmee et al. (2010) investigated
the relationship between institutionalization of ethics, quality of work life and
employee job-related outcomes and concluded that implicit institutionalized ethics has
a positive relationship with quality of work life; implicit institutionalized ethics and
quality of work life have positive impacts on Thailand staff working results (job
satisfaction, team working and organizational commitment). Furthermore, based on
the previous research, Marta, Singhapakdi, Lee, Sirgy, Koonmee, and Virakul (2013)
examined the perception of institutionalization of ethics and quality of work life for
Thailand marketing managers versus American marketing managers, the results
showed that the impact of institutionalization of ethics on the quality of work life for
Thai managers is more than American managers because Thailand culture is
collective, while American culture is individual.
In addition, Torlak, Tiltay, Ozkara, and Dogan (2014) analyzed the relationship
between institutionalization of ethics and quality of work life by mid-level managers
working in the private sector in Turkey and came to the conclusion that implicit
institutionalization of ethics is positively related to both higher and lower needs that

determine quality of work life. Lee, Yu, Sirgy, and Singhapakdi (2015) investigated
the effect of ethics institutionalization on employee’s work life experiences (job
satisfaction, organizational commitment, spirit de corps, quality of work life) and
overall life satisfaction (life satisfaction, employee happiness), data were collected
through a survey of marketing managers in Italy, and came to the conclusion that
implicit institutionalization of ethics has a positive effect on not only employees’
quality of work life but also job satisfaction.
5


The research of Al Muftah and Lafi (2011) related to petroleum industry in
Qatar supports that the physical, psychological and social factors’ centrality have a
significant relationship with quality of work life which indirectly impact employees’
satisfaction. The finding indicated that quality of work life is positively and
significantly related to employees’ job satisfaction. Regarding the importance of
ethics and quality of work life and the effect of them on optimized performance of an
organization and job consequences such a job satisfaction of employee and spirit of
team work, Chamesghali and Salimiare (2014) considered the relationship between
ethics institutionalization, quality of work life and job-related outcomes in the form of
case study of employee of national Iranian oil product distribution company.
Reichert, Webb, and Thomas (2000) examined the relationships between
ethical and industry type. Industries, such as computers, electronics, scientific and
photo graphics sectors, that are involved with high precision products and industries;
such as mining, crude oil, and petroleum refining, that utilize natural resources are
more inclined to have a formal written a code of ethics and social responsibility.
Institutionalization of ethics is gaining more and more importance in business
life day by day (Torlak et al., 2014). Moreover, the importance of understanding more
about the institutionalization of organizational ethics should be apparent because it is
really good strategy for a company to concern about and adapt institutionalization of
ethics (Purcell & Weber, 1979). However, there are very few studies about this subject

in samples of Vietnam culture. Particularly, there have been very few studies on the
relationships between ethics institutionalization and quality of work life, and between
ethics institutionalization and job satisfaction (Koonmee et al, 2010).
From above discussions, it is necessary to study the association between
institutionalization of ethics, quality of work life and job satisfaction. Because of in
parallel to the importance of ethics institutionalization, both quality of work life and
job satisfaction have been important topics in human resource and organizational
development (Leopold, as cited in Koonmee et al., 2010). Thus, the main issue of this
study is to understand the relationship between institutionalization of ethics, the
perception of the quality of work life and job satisfaction of employees in Vietnamese
Petroleum Industry in particular and in Vietnam business organization in general.
6


1.3.

Research objectives
The main focus of the study is to empirically examine a model that focuses on

the effects of ethics institutionalization on employees’ quality of work life and job
satisfaction. Furthermore, the study also examines the mediating effect of quality of
work life on employees’ job satisfaction.
Specifically, the study aims to investigate the following relationship:
1. The relationship between quality of work life and job satisfaction.
2. The relationship between ethics institutionalization and quality of work life.
3. The relationship between ethics institutionalization and job satisfaction.
1.4.

Research scope
This research focuses on investigating the impact of implicit and explicit ethics

institutionalization on employees’ quality of work life and job satisfaction, as well as
the mediating effect of quality of work life on job satisfaction of employees in
Vietnamese petroleum industry.
Almost the oil and gas companies have located in Ho Chi Minh City, Hanoi
City and Vung Tau City. Moreover, basing on the advantages of communication with
the oil and gas company’s authorities, this research may conveniently conduct the
survey questionnaire via paper and online in these cities.
1.5.

Research significance
This research contributes to the understanding of ethics, quality of work life

and job satisfaction and especially the important role of institutionalizing ethics, the
extent to which its impact on employees’ quality of work life and job satisfaction
within the context of Vietnamese business organizations in generally and within
Vietnamese petroleum industry in particularly.
The findings provide a significant opportunity for managers perceives that
some aspects of employees’ quality of work life can have a positive predictive impact
on their job satisfaction. Based on this finding, it is very important for business
organizational management to design work requirements, build appropriate policy in
order to improve employees’ quality of work life, as well as, so that employees can
enhance job satisfaction in organization, have a balanced life at work and with family.
7


1.6.

Research structure
This thesis contains five chapters, including introduction, literature review,

research methodology, data analysis and results, and conclusion. Specifically:
Chapter 1: Introduction
This chapter presents research background of the study, as well as, research
problems, research objectives, research scopes, research significance and research
structure.
Chapter 2: Literature Review
This chapter provides the literature review and previous studies, defines clearly
the constructs (implicit ethics institutionalization, explicit ethics institutionalization,
quality of work life and job satisfaction), and then the research model of the study and
the hypothesis are also discussed.
Chapter 3: Research Methodology
This chapter describes the method to conduct the study, including the research
design, measurement scale building and the main survey. The processes of doing the
study are also presented.
Chapter 4: Data Analysis and Results
All of data collected from the survey are analyzed. The final model of the study
is built based on the results of those analyses. Depending on output results from the
analyzing, the relationship of those factors as mentioned in the study model will be
examined.
Chapter 5: Conclusion
In this chapter summarizes the main results of this study and give some
conclusions for managerial implement as well as limitation for further research.

8


CHAPTER 2.

LITERATURE REVIEW

This chapter gives a specific view about the important constructs of the study,
presents a discussion of job satisfaction, quality of work life and institutionalization of
ethics. This is followed by the development of hypothesis and construction of a
conceptual model. Five hypotheses are also proposed after being argued based on
previous researches.
2.1.

Job satisfaction
An employee’s overall job satisfaction is composed of several aspects such as

satisfaction with compensation, satisfaction with top management, satisfaction with
promotions and satisfaction with coworkers.
According to Spector (1988), job satisfaction is important from two
perspectives: first, from the human aspect, employees should be treated fairly and be
respected. Second, behavioral aspects, attention to job satisfaction could direct the
behavior of employees, so that it would affect the performance and organizational
responsibilities and lead to positive and negative behavior from them.
Thus, job satisfaction is the essential component for employee motivation and
encouragement towards better performance. Many previous researches have defined
job satisfaction over the years. For instance, Hoppok and Spielgler (1938) defines job
satisfaction as the integrated set of psychological, physiological and environmental
conditions that encourage employees to admit that they are satisfied or happy with
their jobs. Locke (as cited in Valentine et al., 2011, p. 6) defines job satisfaction as “a
pleasurable or positive emotional state due to appraisal of one’s job experience”.
Accordingly, once a person feels satisfied, they are willing to participate in work
positively and this leads to improve their quality of work life. In addition, job
satisfaction is also the one attitude that is related to an organization’s ethical context,
particularly where there is strong belief that the organization and its leaders truly
promote the ethical conduct (Vitell & Davis, 1990).

Much research also has documented that job satisfaction is studied in various
relationship within an organization. Such as, the relationship between job satisfaction
and turnover intention has been evaluated extensively in the organizational literature,
and the result generally shows that job satisfaction was associated with decreased
9


intentions to leave a company (Hom & Griffeth, as cited in Valentine et al., 2011;
Jaramillo, Mulki & Solomon 2006); another finding indicates that job satisfaction is
negatively associated with turnover intention (Tett & Meyet, 1993). Finally, Valentine
et al. (2011) indicated that corporate ethical values and job satisfaction were
associated with decreased turnover intention.
Much research also has documented that job satisfaction is studied in the
human aspect. For instance, the motivational factors, such as the nature of work, the
sense of achievement, the recognition, the responsibility, and opportunities, that helps
employees to find their worth with respect to value given to them by organization
(Baah & Amoako, 2011). Further, this can increase motivational level of employees
which will ultimately raise internal happiness of employees and the internal happiness
will cause satisfaction. Thus, the role of employees at workplace is emphasized as
there is an influence of various elements on an employee within the organization
(Raziq & Maulabakhsh, 2015).
The recent research emphasizes that job satisfaction is a pleasurable or positive
emotional state and also the most controversial concepts in organizations. Based on
the foundational and theoretical efforts, it is very important not only towards
employees but also at all levels of management and organizational human resource
(Etebarian & Yazdi, 2016). Besides, job satisfaction in an important factor in
increasing productivity, sense of belonging towards workplace, increase quantity and
quality of work, good human relation at work, raise morale, create interest in the work
and reduce stress. In contrary, declining in job satisfaction leads to excessive
absenteeism, low efficiency, displacement and transfer of employees.

Based on the above literature, it is necessary to study the importance of job
satisfaction of employees within organizations, especially examining the factors
affecting on the job satisfaction.
2.2.

Quality of work life
In recent years, many business organizations fail to understand the importance

of working environment for employees’ job satisfaction and thus face a lot of
difficulties during their work (Aiken, Clarke & Cloane, 2002). Employee is an
essential component in the process of achieving the mission and vision of a business
10


organization. Employees should meet the performance criteria set by the organization
to ensure the quality of their work. In order to meet the standards of the organization,
employees need a working environment that allows them to work freely without
problems that may restrain their working performance.
In addition, Lawler (as cited in Narehan, Hairunnisa, Norfadzillah &
Freziamella, 2014) refers that quality of work life have relationship to job
characteristics and working environment because the whole quality of work life in the
organization goals is to improve employee’s well-being and support from
productivity. Thus, the objective of this research is to analyze the impact of working
environment as well as quality of work life on employees’ job satisfaction.
In over the years, the quality of work life is defined by many researches in the
various aspects. For instance, Shamir and Solomon (1985) define quality of work life
as a comprehensive construct that includes well-being related to the extent to which
work experiences are rewarding, fulfilling, and reduce stress. Beukema (as cited in
Narehan et al., 2014) refers quality of work life as the extent to which employees are
able to configure their jobs in accordance with their options, interests and needs in the

organization. Walker’s (as cited in Koonmee et al., 2010) definition, quality of work
life involves promoting a work environment favorable to the satisfaction of
employees' needs. And then, Quality of work life is defined as “employee satisfaction
with a variety of needs through resources, activities, and outcomes stemming from
participation in the workplace” (Sirgy, Efraty, Siegel & Lee, 2001, p. 242).
The construct of quality of work life has been defined as the relating to job
characteristics and working environment (Lawler, as cited in Narehan et al., 2014),
employee’s well-being (Shamir & Solomon, 1985), the options, interests and needs of
employees (Beukema, as cited in Narehan et al., 2014), and the satisfaction of
employees’ needs (Walker, as cited in Koonmee et al., 2010). To facilitate the
discussion that relates quality of work life with job satisfaction, this study will adopt
the need satisfaction approach to quality of work life (Sirgy et al., 2001). That is,
quality of work life is defined as employee satisfaction with a variety of needs through
resources, activities, and outcomes stemming from participation in workplaces.
11


Based on need-hierarchy theory (Maslow, as cited in Koonmee et al., 2010),
Sirgy et al. (2001, p. 241) propose that quality of work life is measured in terms of
employees' needs. Specifically, seven dimensions of needs are suggested:
a) Health and safety needs (protection from ill health and injury at work and
outside of work, and enhancement of good health);
b) Economic and family needs (pay, job security, and other family needs);
c) Social needs (collegiality at work and leisure time off work);
d) Esteem needs (recognition and appreciation of work within and outside the
organization);
e) Actualization needs (realization of one's potential within the organization
and as a professional);
f) Knowledge needs (learning to enhance job and professional skills); and
g) Aesthetic needs (creativity at work as well as personal creativity and

general aesthetics).
According to their research into different dimensions of need-based quality of
work life, Koonmee et al. (2010) and Marta et al. (2013) categorize quality of wok life
into two major categories: lower and higher order needs.
Lower-order quality of work life: Lower-order quality of work life is the organizational
programs designed to meet the needs related to security, health, family and economic.
Higher-order quality of work life: Higher-order quality of work life is the organizational
programs designed to meet the needs related to community, self-esteem, self-actualization,
knowledge and aesthetics.

Why the quality of work life is important? Some studies have shown that
quality of work life could affect employees’ behavioral responses such as
organizational identification, job satisfaction, job involvement, job effort, job
performance, and turnover intention (Etebarian & Yazdi, 2016). Walton (as cited in
Narehan et al., 2014) emphasizes that quality of work life was an important approach
to save human and environment values which have been ignored due to technological
advancement of the economic growth and productivity. Once the employees
experience enjoyment in working at an organization, they would feel satisfied and
influence their commitment in their daily tasks. High quality of work life results in an
12


increase in job satisfaction and performance of employees, and at the same time, cause
a decrease in both alienation and turnover intention (Efraty, Sirgy & Claiborne, 1991).
Furthermore, the quality of work life also has the significant impact to the
society. A happy employee will experience the positive feeling and this feeling is
carried to their family and the society. Thus, since today’s life demand is quite
stressful, quality work life is important as it contributes to the environment as well as
family structure by offering ways to fulfill individuals’ responsibilities (Bagtasos,
2011).

The mainstream research on quality of work life has been linked to employees'
job-related outcomes such as productivity, job satisfaction, and employees'
commitment. For example, the research findings from Lau and May (1998) suggest
that companies with high quality of work life can also have high customer satisfaction
which, in turn, will provide higher growth and profitability to the companies.
Greenhaus, Bedeian, and Mossholder (1987) suggested that quality of work life is
related to employees’ satisfaction and work related behaviors. Cascio (as cited in
Koonmee et al., 2010) argues that employees are willing to contribute to an
organization where quality of work life exists because they feel that their work fulfills
their needs.
Moreover, quality of work life involves the opportunity to make decisions
about employees' job and the design of their workplaces. Consistently, the recent
study reveal that quality of work life generally has a positive influence on job
satisfaction, organizational commitment, and esprit de corps (Lee, Singhapakdi &
Sirgy, 2007). In another study by Koonmee et al. (2010), quality of work life mediates
the relationship between institutionalization of ethics in firms with job-related
outcome.
These studies indicate that, once quality of work life programs are presented in
a business organization, employees will feel satisfied towards their job. And so, the
job satisfaction has a significant relationship with the quality work life.
In fact, some experts have raised the quality of work life as a hierarchy of
concepts including life satisfaction (on the top of the hierarchy), job satisfaction (in
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the middle of the hierarchy) and satisfaction from certain aspects such as pay
satisfaction, colleagues, and supervisors (Champoux, 1981).
A large number of employees in the oil & gas companies in Qatar are playing a
significant role for economic growth. Based on this context, Al Muftah and Lafi
(2011) focus on identifying the factors that associated with employees’ satisfaction

and their quality of work life. More specifically the study is held to identify the
relationship between quality of work life and employees’ satisfactions. This is
especially true as quality of work life is less emphasized in Asia as compared to North
America and European countries (Bagtasos, 2011; Wyatt & Wah, 2001). Looking
back at Vietnam, Vietnam is also a country in Asia, Vietnam is also developing oil
and gas industry, so it is necessary to have a study on the relationship between quality
of work life and job satisfaction.
Based on the above discussions, this study aims to expect the quality of work
life to have a positive influence on job satisfaction. Thus, the hypothesis is proposed
as the following below:

Hypothesis 1 (H1): Quality of work life is positively related to job satisfaction.

2.3.

Ethics institutionalization and Quality of work life
In recent years, due to increasing ethical problems, many business

organizations have established ethics programs to help improve ethical behavior and
to help prevent ethical problems among their employees (Valentine & Fleischman,
2008).
Ethics in this research refers to the rules or standards governing the conduct of
individuals or the members of a profession (Morris, as cited in Koonmee et al., 2010).
Andrews (1989, p. 99) defines the institutionalization of ethics as “actions
needed to map a high road to economic and ethical performance and to mount
guardrails to keep corporate wayfarers on track”.
Goodman and Dean (as cited in Sims, 1991) referred an institutionalized act as
a behavior that is performed by two more individuals, persists over time, and exists as
a part of the daily functioning of the organization.
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Singhapakdi and Vitell (2007, p. 284) defined the institutionalization of ethics
as “the degree to which an organization explicitly and implicitly incorporates ethics
into its decision-making processes”.
To make possible the discussion that relates institutionalization of ethics with
quality of work life, this study will adapt “institutionalization of ethics” as the degree
to which an organization explicitly and implicitly incorporates ethics into its decisionmaking processes, a definition by Singhapakdi and Vitell (2007).
According to Brenner (1992), there are two categories of ethics programs in
organizations — either explicitly created or implicitly inherited. Based on his
research, the explicit components include codes of ethics, policy manuals, ethics
seminars, internal control systems, and ethics staff. The implicit components include
corporate culture, incentive systems, valued behaviors, promotion policies, and
management behavior.
Following Brenner's (1992) explicit and implicit categorization, Singhapakdi
and Vitell (2007, p. 285) explain that:
Implicit institutionalization ethics means that ethical behavior is implied, or not directly
expressed, and is understood to be crucial.
Explicit institutionalization of ethics means that ethical behavior is formally expressed
without vagueness.

According to Sims (1991), institutionalization of ethics should be examined in
terms of specific behaviors or acts and it may vary in terms of its persistence, the
number of people in the organization behaving according to its ethics, and the degree
to which it exists as part of the organization.
When organizations create an environment that makes their employees behave
and act persistently according to their ethical values and policies, those organizations
are considered to have institutionalized their ethics (Koonmee et al., 2010).
Thus, since ethical problem is increasing in the business organization, ethics
institutionalization is important as it is one of the most effective methods for business

organizations to overcome the ethical problems they have faced in over years.
Ethics and the quality of work life are closely related to each other. Studies
show that ethics positively influence the quality of work life and employees’ job
15


performance (Shaw, as cited in Torlak et al., 2014). Besides, acting in accordance with
ethical values and policies in an organization, and creating an organizational
environment promoting them, also has a positive influence on the quality of work life
(Ferrell, Fraedric & Ferrell, as cited in Koonmee et al., 2010).
The purpose of a study by Lee et al. (2015) is to examine the effects of ethics
institutionalization on employee experiences in work life and overall life satisfaction.
The results indicate that implicit ethics institutionalization does indeed have a positive
predictive effect on job satisfaction, esprit de corps, organizational commitment and
quality of work life.
Koonmee et al. (2010) examines the relationship between institutionalization of
ethics, quality of work life and job-related outcomes and concludes that implicit ethics
institutionalization has a positive association with quality of work life.
Also, in a study on ethics institutionalization and the quality of work life, Marta
et al. (2013) compare American and Thai marketing managers and find that Thai
businesses

organizations have

a

higher

tendency towards

implicit

ethics

institutionalization than American business organizations. Especially, they have found
no significant differences in levels of explicit ethics institutionalization. However,
Singhapakdi, Sirgy, Lee and Vitell (2010) have documented that explicit ethics
institutionalization has a positive effect on implicit ethics institutionalization and,
therefore, this could have a positive effect on the quality of work life.
In summary, the above evidences suggest that institutionalization of ethics
could be closely associated with the quality of work life (Marta et al., 2013; Koonmee
et al., 2010; Singhapakdi et al., 2010; Vitell & Singhapakdi, 2008).
Based on the above arguments, this study aims to expect the ethics
institutionalization to have a positive influence on quality of work life. Thus, the
hypothesis is proposed as the following below:
Hypothesis 2a (H2a): Implicit ethics institutionalization is positively related to
quality of work life.

Hypothesis 3a (H3a): Explicit ethics institutionalization is positively related to
quality of work life.
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