The Factors Affecting Organizational Cit

International Journal of Management Sciences
Vol. 1, No. 5, 2013, 178-192

The Factors Affecting Organizational Citizenship Behavior in
Banking Industry
Teoh Wee Jim1, Bernard Hi1, Lee Kah Shing1, Ong Siew Lin1, Siti Yasmin1, Sofiah Kadar
Khan1
Abstract
Organ (1988) defined organization citizenship behavior (OCB) as the individual’s behavior that is
discretionary not directly or explicitly recognized by the formal reward system and that in the aggregate
promotes the effective functioning of the organization. There has been numerous studies performed on
organization citizenship behavior and antecedents of this behavior were explored since this behavior
contributes to the effective functioning of an organization. The positive contribution of OCB to
organizational performance is widely accepted by literature(Podsakoff and MacKenzie,1994,1997;Podsakoff
et al.,2000). This behavior have been described by the service literature as being essential; for achieving
superior returns.The service industry has been a major contributor to the growth and development of the
Malaysian economy (Central Bank of Malaysia, 2007;Deparment of Statistics Malaysia,2010; Malaysian
Industrial Development Authority,2010). According to Warrier(2010), the services sector is estimated to
contribute 70 percent of GDP to Malaysia’s economy by 2020.There has been a significant correlation in
literature between the relationships of competency, quality of work life, leader member exchange(LMX) and
organization citizenship behavior. The research intends to explore on how this variables encourage the

exhibition of OCB among the service personnel in the banking industry. The relevant hypotheses have been
developed and further testing on its relationship will be conducted in order to investigate its impact on
organizational citizenship behavior.
Keywords: Organization Citizenship Behaviour, Competency, Quality of Work Life, Leader Member
Exchange
1. Introduction
Organizational behavior provides knowledge to managers on the understanding or employees behavior
for the purpose of eliciting cooperation from them in order to achieve organization’s objective. One of the
contributing behavior which is rather discretionary but proven empirically to increase organizational
functioning is organization citizenship behavior (OCB). It refers to various forms of cooperation and
helpfulness to others that support the organization’s social and psychological context.OCB’s importance is
getting widespread attention from organizations in various industries. The services sector has been a major
contributor to the growth and development of the Malaysian economy (Central Bank of Malaysia, 2007;
Department of Statistics Malaysia, 2010; Malaysian Industrial Development Authority, 2010). According to
Warrier (2010), the services sector is estimated to contribute 70 percent of GDP to Malaysia’s economy by
2020. The development of the services sector had contributed greatly to the diversification of the economy of
Malaysia (Public Bank Berhad, 2005).Malaysia’s banking sector is expected to remain robust with a
competitive and challenging environment. Hence, they need to compete among the local and international
banks in Malaysia. According to Mavridis (2004), the banking industry sector which is often being
characterized as a highly knowledge based industry has been given less attention by researchers and this is

the gap this research would like to address.The banking industry is a service industry where the performance
1

Universiti Tunku Abdul Rahman, Malaysia

© 2013 Research Academy of Social Sciences
http://www.rassweb.com

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International Journal of Management Sciences

is evaluated based on the number of customers it’s able to retain. This can be achieved by providing superior
customer service. Hence, the front service employees play a major role in achieving this. Begum (2005)
highlighted that people are employees who represent a key facilitator in implementation of relationship
banking strategy.According to Organ (1988), organization citizenship behavior (OCB) has a variety of forms
including altruism, courtesy, sportsmanship, civic virtue and conscientiousness. Since organization
citizenship behaviors are less likely to be formally rewarded than are required job behaviors, they are
presumably performed by intrinsic motivation mechanism according to Chompokum (2004). The purpose of
this study is to provide a better understanding of the importance of OCB and the factors that affect OCB in

the organization. This study intends to explore what could elicit OCB among the banking employees in
order to improve organization functioning. There are three variables in this study which has been identified
and explored further to investigate its effect on organization citizenship behavior. The variables identified are
leader-member exchange (LMX), empowerment and competency. There will be further empirical test
conducted in future to find the correlation between this variables and organization citizenship behavior.
2. Literature Review
Organization Citizenship Behavior
Organ (1988) defined organization citizenship behavior (OCB) as non-mandatory behavior of an
individual, which the formal reward systems do not directly or clearly recognize and that in sum contributes
to the organization’s effective functioning. Organ explained what he meant by non-mandatory, as the
behavior that is not the written requirement of the role or the job description, that is, the specified terms of
the individual’s employment contract with the individual. Organ (1998) further elaborated that OCBs exist in
various forms, including altruism, courtesy, sportsmanship, civic virtue and conscientiousness. The positive
contribution of OCB to organizational performance is widely accepted by literature (Podsakoff and
MacKenzie, 1994, 1997; Podsakoff et al., 2000). Indeed these behaviors have been described by the service
literature as being essential to obtain superior returns. MacKensie, Podsakoff, and Praine (1999) stated
several dimensions of OCB such as, ‘helping’ behaviors by employees (e.g. supportive actions to assist
others and going beyond the requirements of the job); ‘sportsmanship’ (tolerating the work environment
without excessive complaining); and ‘civic duty’ (constructive involvement in the processes of the
organization beyond the requirement of the job). 6The vast majority of OCB research has focused on the

effects of OCB on individual and organizational performance. Many researchers focused on the effects of
OCB on individual and organizational performance and found that OCB leads an organization to positive
consequences (Waltz & Niehoff, 1996; Podsakoff & Mackenzie, 1997; Barbuto, Brown, Wilhite, & Wheeler,
2001; Hodson, 2002; Cardona, Lawrence, & Bentler, 2004; Appelbaum, Asmar, Chehayeb, Konidas,
Duszara, &Duminica, 2003). Brief has supported Organ’s position regarding the importance for effectiveness
of those behaviors, which he labeled as organizational citizenship behavior (George & Brief, 1992). 9OCB is
desirable from the organizational point of view because such behavior is thought to increase the available
resources and decrease the need for costly mechanism of control (Organ, 1988; Podsakoff& Mackenzie,
1997).
Leader- Member Exchange (LMX)
Leader-member exchange (LMX) theory made significant contributions to leadership theory because of
its unique characteristic of exploring different levels of relationships between a leader and his or her
immediate subordinates (Yukl& Van Fleet, 1992). LMX represents the quality of the relationship between
leader and subordinate (Schriesheim, Castro, &Cogliser, 1999), as operationalized by a supervisorsubordinate working relationship scale that assessed the overall working relationship between employees and
their immediate supervisor (Graen&Uhl- Bien, 1995); recently, social exchange theory has been explored to
investigate the role of LMX in organizational citizenship behaviour (OCB). This involves extra-role
behaviours that are not typically described by employees’ job descriptions or are not formally rewarded
(Liden&Maslyn, 1998; Setton, Bennett, &Liden, 1996; Wayne, Shore, &Liden, 1997).Despite some findings
that LMX is positively related to OCB from the social exchange perspective, there is still the argument that
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such findings are overstated (House &Aditya, 1997). Researchers have tried to examine a theoretical linkage
between LMX and OCB, because LMX has been considered as one of the relational motives of OCB (Hui et
al., 1999).
Employees select and then engage in different organizational citizenship behaviours (Van Dyne et al.,
1995). Social exchange theory suggests that employees are motivated to engage in extra-role behaviours
when they perceive that their employment relationship is based upon a fair social exchange (Tumley et al.,
2003).The influence of LMX on employees’ emotions such as envy although several researchers have argued
that there might be possible negative emotions such as workplace envy resulting from differentiated
treatment in LMX (Deluga, 1994; McClane, 1991; Vecchio, 1995; Yukl& Van Fleet, 1992). Whereas interest
in negative discrete emotions such as anger, anxiety, depression or shame has been growing, the study of
such emotions is still in the premature stage in organizational behavior (Ashforth& Lee, 1990; Barsade,
Brief, &Spataro, 2003; George, 1990). This begins to satisfy this void. Research has found an approximately
20% increase in performance and a 50% increase in satisfaction for high LMX subordinates over their low
LMX counterparts (Mayfield & Mayfield, 1998
Empowerment
David Clutterbuck (1995) defines empowerment in terms of encouraging and allowing individuals to
take personal responsibility to improve the way they do their jobs and contribute to the organizational goals.

The creation of a culture encourages people at all levels to help them gain confidence and skills so that they
can make a difference. John Newstrom & Keith Davis (2002) defined empowerment as any process that
provides greater autonomy to the employees by sharing of relevant information and the provision of control
over factors affecting job. Organization empowerment creates structures and opportunities for people to take
more control over their tasks in the employing institution. While, the individual empowerment forms to
relates to an increased sense of self-efficacy (Conger &Kanugo, 1988 as cited in Kiberu, 2009).Many studies
(Morrison, 1996; Nihoff& Moorman, 1993; Bearn, 2000) have concluded different outcomes to relate
empowerment with organizational citizenship behaviour (OCB). Leadership empowerment has showed
positive relationship between organizational citizenship behaviour and team performance based on study in
India (Bearn, 2000). The research studies on the impacts of leadership empowerment behaviours and
organizational citizenship behaviour on sale team performance in India. Cardona, Lawrence and Bentler
(2004), found that, social exchange relationship influence OCB. It based on the criteria that involve them in
the organizational decision making process and empowering the staff. According to Somech and Bogler,
employees are likely to feel like part of the organization and show greater responsibilities on their roles at
work (OCBs) when they have empowered and participate in the process of decision making or setting ideas
in the organization. The study found a positive relationship between employee OCB and participation
(empowering and involving employees in decision making). According to Greasley et al, (2004), it is
inevitable for employees to exhibit extra role behaviour once the organization goes out of its way and
involves employees in decision making and increases on their participation.
Competency

Competency refer to the skills and knowledge that needed by the employees to perform a job (Beardwell
& Holden, 2001). Competency consists of customer awareness, team work, commitment and contribution,
productivity and so on. According to Boyatzis in 1982 (as cited in Kagaari & Munene, 2007) defines that
competency as a characteristic of a person which results in their effective or superior performance. In a study
conducted by McClelland (1973) it highlighted that competency as an element of performance which is
linked with life outcomes. Competencies can be used as different approaches to forecasting human
performance compared to traditional trait and intelligence techniques. Competencies through this may
associate to broad psychological or behavioral attributes which are linked to extraordinary job and life
success.In Podasoff (2000) (as cited in Katarangi, 2010) claimed that the failure for the managers to reward
employees’ behaviors by showing their satisfaction or appreciation to their employee who has perform well
will affect the decreasing of effectiveness of organization performance and OCBs in the workplace.Besides
that, Lock wood et al in 2000 (as cited in Katarangi, 2010) claimed that competencies help to facilitate
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employees to complete the tasks that are assigned by managerThe concept of competency is defined as
utilized knowledge and skills, performance and Another study by Tremblay (2000) indicated that there are a
strong positive impact on the mobilization of discretionary behaviors which is influenced by the perception
of a high level of autonomy, influence on the work and the possibility of using competencies.

3. Methodology
Conceptual Model and Propositions
The focus of the present paper is to build a proposition to investigate the impact of leader member
exchange (LMX), empowerment, competency towards organization citizenship behavior (OCB). According
to Livingstone (2007), there is a relationship between competence, commitment, empowerment and
organization citizenship behavior (OCB). The available findings suggest that there could be a relationship
between leader member exchange (LMX), empowerment, competency towards organization citizenship
behavior so the following proposition is made.
Propositions Development
(The propositions developed below are summarized and illustrated in Figure 1)
Leader
Member
Exchange

OCB
Empowerment

Competency

Figure 1: Factors affecting the exhibition of organization citizenship behavior

The focus of this paper is to build a researchable proposition investigating the effect of leader-member
exchange, empowerment and competency on organization citizenship behavior. According to Schriesheim,
Castro and Cogliser (1999), leader-member exchange represents the quality of the relationship between
leader and subordinate. A study conducted by House & Aditya (1997) reported that leader-member exchange
is positively related to organization citizenship behavior from the social exchange perspective.Lord and
Brown( 2001) revealed that leadership works best when there is a match between the identity level of
followers and the focus of leaders, as people of similar behavior tend to be attracted to each other A study
conducted by Lo,Ramayah & Jerome ( 2006) reported that more conscientiousness employees are more
likely to display OCB as a output from job satisfaction that they gained. Since employees are motivated as a
result of high quality LMX they gain more job satisfaction. This study further explored due to the high
quality of social exchange developed between superiors and subordinates it has motivated employees to
exhibit OCB.
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H1o

:

There is no significant relationship between Leader-Member exchange and
Organization Citizenship Behavior

H1a

:

There is a significant relationship between Leader-Member exchange and
Organization Citizenship Behavior

Tremblay (2000) reported that perception of a high level of autonomy and influence on the work and the
possibility of using competencies has a strong significant positive influence on organization citizenship
behavior. Garavan and McGuire (2001) stated that competencies can be liberating and empowering, arguing
that if employees are provided with a broad degree of self-control and self-regulation, they will work towards
higher organizational behavior.
H2o

:

There is no significant relationship between competency and

Organization

H2a

:

Citizenship Behavior

There is a significant relationship between competency and
Organization

Citizenship Behavior

David Clutterbuck(1995) defines empowerment in terms of encouraging and allowing individuals to
take personal responsibility to improve the way they do their jobs and contribute to the organizational goals.
According to Somech and Bogler (2004), there is a positive relationship between employee OCB and
participation. Another study conducted by Thayer (2008) reported that a positive psychological climate is
able to cultivate a positive emotional response from employees and further elaborated that when a positive
psychological climate is present it is able to increase employee’s engagement and also citizenship behavior
among its employees.
H3o

:

There is no significant relationship between empowerment and
Organization

H3a

:

Citizenship Behavior

There is a significant relationship between empowerment and
Organization

Citizenship Behavior

Proposed Framework
Figure 1
Leader
Member
Exchange

OCB
Empowerment

Competency

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Sampling and Data Collection
The study was done only in Ipoh, Malaysia There were 170 questionnaires which were distributed and
150 questionnaires were returned, for a response rate of 88.2%.
Measures
In Section A of the questionnaire is about respondent’s demographic information (gender, age,
education level, length of service and position) whereby, Section B the independent variables leader-member
exchange, empowerment , competency and the dependent variable organization citizenship behavior were
tested respectively. In Table 3.3, it summarizes the origin source of measurement for this study, where it was
adopted from and the number of items constructed for the purpose of this research.
Table 3.3: The Origin Source of Measurement
Constructs
Adopted From
Leader-Member Exchange
Soldner, 2009
Empowerment
Katarangi,2008
Competency
Abdel Khalek, 2007
Organization Citizenship Behavior Soldner,2009

No. of Items
10
22
35
16

4. Results and Discussion
In this research, the data are to be coded and analyzed using SPSS (Statistical Package for Social
Science). The result of this data analysis will then be interpreted. There are three types of analysis in this
study which is descriptive, reliability and inferential analysis
Demographic Analysis
Table 4:1Demographic Characteristics of Respondents
Gender
Frequency
Percentage
Male
64
42.7
Female
86
57.3
Total
150
Age
21 - 30
31- 40
41-50
Above 50
Total

41
58
45
6
150

27.3
38.7
30
4

Education Level
SPM
Diploma
Degree
Masters
Others
Total

49
52
23
11
15
150

32.7
34.7
15.3
7.3
10

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T. W. Jim et al.

Length of Service
Less than 1 year
1 - 3 years
4-5
years
6- 10 years
10 years and above
Total

20
38

13.3
25.3

7
28
57
150

4.7
18.7
38

Position
Management Level
Supervisory Level
Staff
Total

34
43
73
150

22.7
28.7
48.7

Table 4.1 above provides the demographic summary of the respondents. In terms of gender the
respondents were mainly female which consists of 86(57.3%) females and 64(42.7%) males. The age
between 31 – 40 is the highest which is 58(38.7%) followed by 41-50 which is 45(30.0%) then 21-30 which
is 41(27.3%) and above 50 is 6(4.0%). The education level among the respondents indicate that there are
49(32.7%) SPM holders, Diploma is 52( 34.7%), Degree is 23 (15.3%), Masters is 11 (7.3%) and others 15(
10.0%). The length of service among the respondents highlighted that most of them have worked 10 years
and above which is 57(38.0%), less than one year is 20( 13.3%),1 to 3 years is 38 (25.3%), between 4 to 5
years 7(4.7%), 6 to 10 years is 28(18.7%). Finally the position of the respondents indicated that most of them
were staff level which 73(48.7%), supervisory level is 43(28.7%) and management level is 34(22.7%).
Reliability Analysis
Table 4.2 Internal Reliability Test
Constructs
Leader Member Exchange
Empowerment
Competency
Organization Citizenship Behavior

Cronbach’s Alpha
Coefficient
0.931
0.875
0.951
0.937

Number of
Items
10
22
35
16

In Table 4.2 ten items were chosen to test the reliability of Leader-Member Exchange and the
Cronbach’s Alpha is 0.931 and respectively for empowerment 22 items were chosen and the Cronbach’s
Alpha is 0.875 , Competency has 35 items and Cronbach’s Alpha is 0.951 and finally Cronbach’s Alpha for
Organization Citizenship Behavior with 16 items is 0.937. As a conclusion, the internal reliabilities of all the
three measures were above 0.8, meeting the minimum threshold recommended by Nunally et al.,(1978)
which indicated that all the items in each measure were internally consistent and are considered acceptable
and reliable. As a results, we conclude that all if the constructs are reliable for further analysis.

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Inferential Analysis
Pearson Correlation Analysis
Table 4.3: Pearson Correlation Analysis
LMX
LMX

Pearson Correlation

1

.746

Sig. (2-tailed)
N
EMP

COMP

150

Pearson Correlation

**

Sig. (2-tailed)

.000

N

150

Pearson Correlation
Sig. (2-tailed)
N

OCB

.746

Pearson Correlation
Sig. (2-tailed)

.809

**

.000
150
.713

EMP

**

.000

**

COMP
.809

**

OCB
.713**

.000

.000

.000

150

150

150

1

.769

150
.769

.782

**

.782**

.000

.000

150

150

1

.819**

150

.000
150

.819**

1

**

.000
150

**

.000

.000

N
150
150
**. Correlation is significant at the 0.01 level (2-tailed).

150

150

Table 4.3 shows the correlations between the variables are significant at p