72 JPAIR Multidisciplinary Research Volume 48 • March 2022 Organizational Commitment and Effectiveness of a Holding Company for a Conglomerate in Cebu City KRYSTEL MAY R. BALONIAS http://orcid.org/0000-0002-3355-7417 baloniaskrystelmay@gmail.com Cebu Institute of Technology- University Cebu City, Philippines MARK ANTHONY N. POLINAR http://orcid.org/0000-0002-5690-9999 mpolinar22@gmail.com Cebu Institute of Technology- University Cebu City, Philippines ALEXANDER FRANCO A. DELANTAR http://orcid.org/0000-0003-1833-5899 alexander.franco.delantar@gmail.com Cebu Institute of Technology- University Cebu City, Philippines Originality: 99% • Grammarly: 98% • Plagiarism: 1% ABSTRACT The paper aimed to examine rank-and-file employees’ organizational commitment and the effectiveness of a holding company by assessing the level of agreement of the dimensions and variables. A quantitative technique engaging a descriptive research  method  was used in the study. The study applied Slovin’s Vol. 48 · March 2022 DOI: https://doi.org/10.7719/jpair.v48i1.404 Print ISSN 2012-3981 Online ISSN 2244-0445 This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. mailto:baloniaskrystelmay@gmail.com http://orcid.org/0000-0002-5690-9999 mailto:mpolinar22@gmail.com http://orcid.org/ mailto:alexander.franco.delantar@gmail.com http://creativecommons.org/licenses/by-nc/4.0/ http://creativecommons.org/licenses/by-nc/4.0/ 73 International Peer Reviewed Journal formula, with 92 rank-and-file employees responding, and the data collected were analyzed using weighted mean and descriptive equivalents. The findings revealed that normative commitment has the most dominant dimensions perceived by the rank-and-file employees constituting the overall mean of organizational commitment with a descriptive match of ‘agree.’  Additionally, teamwork and direct manager gained the top two highest average weighted mean with a descriptive equivalent of ‘agree,’ resulting in the core variables that constitute organizational effectiveness. The researchers concluded that normative commitment that has had the most direct impact on the holding company’s organizational commitment had stimulated teamwork and a leadership style that has operated as a cultural scaffold for building  strong competitive advantage and effectiveness. Over and above that, the study suggested that nurturing and sustaining activities that will bring to light the employees’ shared vision and goals aligned with the organization will help buoy the level of the organization’s moderate level into a high level of organizational commitment and effectiveness. Keywords — organizational commitment, organizational effectiveness, holding company conglomerate, quantitative study, Cebu City, Philippines INTRODUCTION Changes in the business environment happen all the time. Aside from external factors that affect a firm’s position in the market, the internal aspect of an organization matters. Organizational commitment and effectiveness of a company will be challenged, ranging from downsizing, re-engineering, or restructuring, to an explosion of information and an increase in the diversity of the workforce (Alrowwad et al., 2019). Organizational commitment and effectiveness define the company’s ability to boost positive and healthy relationships with employees and effectively achieve its organizational goals and objectives. The inputs that the employees receive from the organization that is intimately linked to the results of the relationship between both parties, as well as the emotional bond between the goals and values of the organization and the employee, are the factors that form the organizational commitment (Buchanan, 1974). Moreover, measuring the level of organizational commitment through three dimensions and critical variables of organizational effectiveness plays a vital role in assessing the strategic viewpoint of the organization in building a healthy employee-employer relationship and continue being effective and efficient in achieving organizational goals. Human resources are critical to the success of any organization, as it is positioned as one of the main functions within the organization where working 74 JPAIR Multidisciplinary Research Volume 48 • March 2022 conditions, worker welfare, and job satisfaction are valued, which mainly helps maintain high levels of organizational commitment. (Tiwari & Singh, 2014; Kurtessis et al., 2017). Attracting and retaining the best people is the focal point of every organization, yet this is easier said than done. Friedman (2020) of Forbes argued that finding and landing high-quality talents is one of the top issues that human resources faced in 2020. The author further argued that 51% of the participants indicated that their organization faced an “extreme challenge” in recruiting and hiring high-quality candidates. On the other hand, it has also been established that retention comes after recruitment. According to Kataike (2013), high employee retention in an organization can result from the opportunities given to employees that develop professionalism that will lead to higher and long-term loyalty to the company. It somehow conceptualizes how pointless it can be to recruit high-quality team members if t firm cannot keep them for long. Many studies, such as Pepra- Mensah et al. (2015) and Hom et al. (2017), have shown that at the organizational level, it depends on the job satisfaction level that influences employee turnover. Nevertheless, it is increasingly argued and has been found by Jhons and Harding (2001) that organizational commitment can have an even more significant influence on turnover intention than the latter. Organizational commitment is a stage in which employees identify which organization relates to their goals and desires to remain and show their potential in organizational development (Eslami & Gharakhani, 2012). This has been a valuable employee variable because a highly committed subordinate always identifies with the objectives and values of the enterprise, craving to be with the entity, and is amenable to going over and beyond their required job tasks (Ramshida & Manikandan, 2013). Therefore, a committed employee is an organizational competitive advantage. On the contrary, some studies have shown that various components of organizational commitment have different implications for an organization. Genevičiūtė-Janonienė and Endriulaitienė (2014) found that continuance commitment was a significant predictor of a higher level of resistance to change, cynicism, and emotional exhaustion. This means that commitment is based on an employee’s investments, and the lack of employment alternatives takes lots of the employee’s emotional resources to work in the organization continually. When an employee has few alternatives, he fears losing employment and feels trapped in the organization (Vandenberghe et al., 2007). Thus, a strong sense of being “trapped” is stressful for the employee (Meyer et al., 2002). However, the researchers further clarified that its findings have certain limitations and are encouraging to explore the consequences of different components of commitment on purpose to display a more comprehensive effect of organizational commitment to employees’ well- being and effectiveness. 75 International Peer Reviewed Journal To prolong the organization’s existence, aside from developing organizational commitment, it needs to adopt innovations in its work practices to make its processes efficient and effective and successfully attain organizational objectives both in the present and future. Rajasekar (2014) stated that human resources management plays a vital role in effectively implementing strategic plans. To be an effective organization, management should focus on human resources, help them develop their skills, provide them with job security and support them in their decisions (Vinitwatanakhun, 1998). Therefore, human resources can help contribute to an effective organization by building the right workforce to help a company meet its goals by creating a high-performance culture that invites goal-oriented individuals. To enhance organizational effectiveness, senior management teams strive for better leadership, direction, communication, adaptability, interaction, and a positive environment to improve the organization’s effectiveness (Heilman & Kennedy-Phillips, 2011). With this, they also can implement effective performance and talent management processes to help organizations measure how successful their employees are in contributing to their mission. The outcomes of measuring organizational effectiveness will differ according to the context or domain in which organizations operate, and there can be no universally agreed-upon set of indicators (Yilmaz & Ergun, 2008). Hence, researchers conceptualized and measured the success of an organization in different ways since effectiveness is such a broad concept that made this difficult to measure. A criterion was proposed to measure effectiveness, including overall success, market share, profitability, growth rate, and innovation. (Mwai et al., 2018). There may be different and several ways, approaches, models, or criteria to be considered in measuring an organization’s effectiveness, but one way to assess the effectiveness of the people is to determine how they are aligned against the organization’s priorities. Organizational commitment is considered a vital work behavior that potentially influences organizational effectiveness (Shiva & Suar, 2010). The basis behind this idea is that organizational commitment enhances the employees’ desire to remain in the organization, improves their performance, and stimulates their utmost efforts to accomplish the goals of the organization, which are all considered necessary for the effectiveness of organizations (Srithongrung, 2011). Hence, even if developing organizational commitment and effectiveness becomes a challenge, it will also be beneficial, especially for more giant corporations that need good leadership and committed individuals. Kenny (2012) noted that managers have more challenges managing and controlling resources when an organization becomes more diverse. Managing diversified or holding companies under the same leadership has an economic advantage, but the lack of solid leadership and influential organizational culture causes diversified companies to 76 JPAIR Multidisciplinary Research Volume 48 • March 2022 fail (Lien & Li, 2013). This statement concludes that organizational commitment and effectiveness are essential to organizational performance and a source of sustainable competitive advantage in a diversified organization. The literature above illustrates that organizational commitment and effectiveness are critical disciplines that a company should adopt to maintain a positive employee-employer relationship and achieve its goals and objectives. From this standpoint, the principal researcher of this paper, currently employed as a Corporate Governance Associate in Finance at a holding company, wanted to investigate organizational commitment and effectiveness to see if there was a need to improve either employee commitment or organizational effectiveness in achieving objectives and goals. To solve deficiencies in the organization and contribute to the body of knowledge in both areas, the study created recommendations and endorsed them to management. OBJECTIVES OF THE STUDY The paper’s focal point was to scrutinize rank-and-file employees’ organizational commitment and effectiveness in a holding company for a conglomerate in Cebu City, Philippines. The preset elements that constituted the basis of the assessment were prioritized, and recommendations were devised to refine these employees’ organizational commitment and the firm’s effectiveness in achieving organizational objectives. The study aimed to (1) determine the level of agreement of rank-and-file employees on organizational commitment in terms of Affective Organizational Commitment, Continuance of Organizational Commitment, and Normative Organizational Commitment, (2) determine the level of agreement of rank- and-file employees on the organizational effectiveness in terms of role clarity, Working Conditions, Performance Management, Strategy, Direct Manager, Communication, Decision-making, Remuneration, and teamwork, and (3) to evaluate the recommendations developed to strengthen the bond of the employees to their employer and the firm’s effectiveness in achieving its organizational objectives. METHODOLOGY Research Design The study used a quantitative technique and a descriptive research methodology to determine the level of agreement among rank-and-file employees in Cebu City, Philippines, on the organizational commitment and effectiveness of a holding company for a conglomerate. 77 International Peer Reviewed Journal Research Site The study was conducted in one of Cebu City’s holding firms, which owns many enterprises in various industries such as hotels, restaurants, supermarkets, retail, logistics, and others. This holding company was chosen to be the research site because the researcher is currently connected to the said holding company, wherein the conduct of the research survey will not be toilsome. Additionally, the researcher already has a background in the company and determines the different positions of every employee, ensuring accuracy in the survey process. Respondents The responders are regular employees exposed to the holding company’s back-end operations in shared services. Using Slovin’s formula, the research draws 92 respondents from 120 rank-and-file employees out of 147 main population, including the seniority levels and top management. The researchers employed a margin of error of 5% and a confidence level of 95% in their formula. The study’s primary respondents were the study’s primary respondents: accounting staff, audit personnel, office workers, purchasing clerks, customer service representatives, and administrative staff. Instrumentation The researchers used survey questionnaires because they appear to be an excellent way to obtain vital information from respondents. Part one of the survey question, which deals with organizational commitment, was adapted entirely from Meyer and Allen’s (1991) study, which consists of three dimensions: affective commitment, continuance commitment, and normative commitment. The researchers adopted Genos’ organizational effectiveness survey question bank, which serves as a second component in the study, which deals with organizational effectiveness. Genos also offers world-class examinations and development programs in organizational performance, emotional intelligence, and employee motivation. Furthermore, the researchers selected to focus on only five items for each of the nine organizational success variables: role clarity, working environment, performance management, strategy, direct manager, communication, decision-making, remuneration, and teamwork. Data Collection The data was tallied, evaluated, and analyzed using the weighted mean and its descriptive equivalent after all responses from the respondents were retrieved. The level of agreement on organizational commitment and effectiveness is shown in Table 1. The scale rating spans from 4 to 1, with 4 representing strong agreement and 1 representing extreme disagreement. 78 JPAIR Multidisciplinary Research Volume 48 • March 2022 For organizational commitment, four represent that respondents strongly agree that they are committed to the organization, and one speaks that respondents strongly disagree that they are committed as an employee to the organization. For organizational effectiveness, the scale rating of 4 constitutes respondents who viewed the organization as very effective in achieving its goals and objectives. One exhibits that respondents perceive the organization as ineffective in achieving its goals and objectives. Table 1. The scale of the Level Agreement of Organizational Commitment and Effectiveness Scale Rating Scale Range Interpretation 4 3.28 - 4.0 Strongly Agree 3 2.52 - 3.27 Agree 2 1.76 - 2.51 Disagree 1 1.00 - 1.75 Strongly Disagree RESULTS AND DISCUSSION Table 2 reveals the summary of the dimensions of organizational commitment with their respective weighted mean and descriptive equivalent. Table 2. Summary of the Organizational Commitment Dimensions of Rank- and-File Employees of a Holding Company Organizational Commitment Dimensions Average Weighted Mean Descriptive Equivalent Normative 2.86 Agree Continuance 2.82 Agree Affective 2.62 Agree Overall Mean 2.76 Agree The table above unveils the organizational commitment dimensions: affective, continuance, and normative. Also, the table presents their average weighted mean, descriptive equivalents, and the overall mean. In a general sense, the overall mean of 2.76 indicates that rank-and-file employees agreed that they are committed to the organization. The result is composed of the different levels of organizational commitment dimensions and gained different outcomes. It indicates that rank-and-file employees in a holding company have agreed and shown a moderate level of 79 International Peer Reviewed Journal organizational commitment, which can signify that these employees are obliged to stay and remain loyal to the organization. The dominant component perceived by the respondents was the normative commitment, which means employees are viewed to have a good level of obligation to continue employment in the organization. It was concluded in a study that normative commitment develops when the employee internalizes a set of rules that refer to proper conduct and creates a feeling of obligation towards the organization, feeling that he must return certain benefits that he received from it (Meyer & Allen, 1991). In other words, respondents have personally benefited from the company and invested so much knowledge and skills that it makes them positively obligated to remain and continue working with it. This somehow gives an advantage with strengthening employee retention, which employees remain even when the organization faces hostile circumstances. Moreover, as Wiener (1982) puts it, “they believe it is the right and moral thing to do.” This builds a stabilizing force that can sustain employee behavior on course even if organizational conditions change. Conversely, continuance commitment came in second in the study, indicating that respondents know the benefits of ongoing engagement and the costs of leaving their current employer. According to Dixit and Bhati (2012), when an employee is mindful of the benefits of being in an organization, then the employee is continually committed. Therefore, an employee that mainly considers the cost of leaving the organization and the scarcity of jobs with the same level of benefits will choose to remain in the organization. It makes workers with high continuance commitment work hard to ensure that the organization’s goals and objectives are achieved (Gilbert & Konya, 2020). They became more involved in achieving the organizational missions and visions by improving their job performance (Irefin & Mechanic, 2014). This makes the organization beneficial at some point. Lastly, the affective commitment, which has the least of the respondent’s concerns compared to the other dominants, has also shown that employees were perceived as emotionally dedicated to the organization. With the given result, it is translated as when professionals work, like in a conglomerate company, they tend to feel conflicting goals and are compelled to choose one loyalty over another (Setyowati et al., 2017). Employees may have a devotion to the organization, which could include some of its goals, but for reasons that are not entirely related to the achievement of goals articulated by the management. Furthermore, given the different results of the mentioned dimensions, it shows no far different from each other. Generally, a holding company may consist of a large organization with different culture, but the level of organizational commitment remains competitive. 80 JPAIR Multidisciplinary Research Volume 48 • March 2022 Table 3 outlines the nine key variables of organizational effectiveness with their respective weighted mean and descriptive equivalent. Table 3. Summary of the Organizational Effectiveness Key Variables of Rank- and-File Employees of a Holding Company Organizational Effectiveness Key Variables Average Weighted Mean Descriptive Equivalent Teamwork 3.24 Agree Direct Manager 3.21 Agree Strategy 3.19 Agree Working Conditions 3.18 Agree Role Clarity 3.17 Agree Communication 3.16 Agree Remuneration 3.14 Agree Performance Management 3.13 Agree Decision-making 3.10 Agree Overall Mean 3.17 Agree Table 3 shows the outline of the result that covers nine key variables of organizational effectiveness. Also, this table highlighted the key variables, average weighted mean to each variable, descriptive equivalent, and the overall mean. Taken as a whole, the overall mean of 3.17 with a descriptive equivalent of ‘agree’ means that respondents discern that the organization where they are currently affiliated is effectively hitting its organizational goals and objectives. It is concluded that individuals with high affective commitment are supposed to deliver high organizational effectiveness (Budihardjo, 2013). The findings in the above table resulted positively, giving the exact descriptive equivalent with the level of organizational commitment resulting in table 2. This is an indicator of the reflectance of organizational commitment, and such a moderate level of presentation denotes a positive attitude regarding the employees of their holding organization. In addition, organizational effectiveness was found to be moderate as well. This advocates that the Holding company is paying great attention to employee effectiveness schemes. The result further shows that a holding company can survive and flourish over the long term. On top of that, effectiveness is a broad concept and is difficult to measure in organizations (Daft, 2003); that is why to assess its level, it takes into consideration a range set of variables wherein it evaluates the extent to which the multiple goals of the organization are attained. These nine key variables are the identified areas in the respective organization that 81 International Peer Reviewed Journal need evaluation in assessing effectiveness and efficiency. Teamwork and direct manager have the highest weighted mean of 3.24 and 3.21, respectively, among all critical organizational effectiveness indicators. As evaluated, teamwork is the most influential variable respondents perceived of the holding company, implying that teamwork is vital in achieving its organizational goals and objectives. In organizations where teamwork is effectively implemented, adopting effective management practices such as employees’ innovation, providing confidence, engaging in organizational performance-enhancing activities, managing by objectives, and so on can come to the forefront (Zincirkiran et al., 2015). Tripathy (2018) found that teamwork is gaining in popularity and importance in every business, large or small and that the structure encourages improved problem-solving techniques, decision-making, and task completion. Furthermore, the conclusion is consistent with the findings of Boakye (2015) and Khawam et al. (2017). Using the correlation technique, the former discovered that teamwork positively correlates with organizational performance. In contrast, the latter discovered that teamwork is essential, especially in a workplace with cultural diversity, leading to the recommendation that firms should have an open and supportive environment to refine the effectiveness of a work team. Therefore, the holding organization’s set-up of having mixed employees under different subsidiary companies engaged in shared services in one place has not hindered the organization’s effectiveness; instead, it developed teamwork that brings employees together, making their work processes effective and efficient. What comes next is the direct manager’s role, found to be the second key variable that creates effectiveness in the group. The leader’s perceived effectiveness is a criterion expressed through evaluations related to their leaders and aims to reveal how the leader affects an organization (Prati et al., 2003). With this, a study found that managers routinely combine their control and trustworthiness- promotion actions, combining result controls with displays of credibility, behavior controls with demonstrations of competency, and clan controls with demonstrations of consideration (Sihag & Rijsdijk, 2019). Conversely, managers are hesitant to deliver genuine comments and have honest dialogues with employees, according to Pulakos (2009), for fear of retaliation or ruining relationships with the same people they rely on to get work done. According to the author, employees believe their bosses are inadequate at addressing their performance and teaching them how to improve their skills. Thus, it clearly shows that direct managers should release their leadership skills to be effectively direct and influence their subordinates, as well as their activities towards achieving the organization’s goals and objectives. The same can be said about the remainder of the significant characteristics that rank-and-file employees believed were crucial 82 JPAIR Multidisciplinary Research Volume 48 • March 2022 for the organization to achieve its goals and objectives, which all positively impact the dependent variable of this study, organizational effectiveness. Overall, the rank-and-file employees who took part in the study assessed the nine critical determinants of organizational performance to a modest extent, indicating that all major characteristics were viewed as indicators that the company was effectively fulfilling its goals and objectives. Furthermore, a company that adopts the principle of organizational effectiveness and measures the nine critical variables would create high-quality results while wasting as little time and resources as feasible. CONCLUSIONS Increasing organizational commitment and effectiveness has become the main desire of every organization as this serves as a pathway towards heightening employee-employer relationships and pulling off organizational goals and objectives. In this regard, the main motive of this study was to assess the level of organizational commitment and effectiveness of a multi-industry company with different business units by using its dimensions and key variables as a criterion. The findings showed that respondents were moderately committed to the organization, with an overall mean of 2.76, indicating that rank-and-file employees are committed to the organization to some extent, in that they feel a sense of organizational commitment, they buy into the company’s heart and future vision (both personal and professional), they recognize the firm’s goals, they feel like they fit in, and they are well-respected and remunerated for the work they do. Normative commitment, being the dominant component, proves that employees in the holding company gave so much value to the organization. This value differs from the “want” and “needs” feelings of affective and continuous commitment. Simply put, a commitment seems more of a characteristic or value that employees could acquire in the holding company where they were formed and inspires them to keep their commitments. Results have also shown that committed employees perceive their organization to be effective and put their strenuous efforts in that direction, which revealed that the commitment of these employees was necessary for improving the organization’s effectiveness. What constitutes the 3.17 overall mean of the holding company’s effectiveness is the excellent leadership and the teamwork that proves you need good leadership to ensure everyone on your team is going in the same direction and teamwork that acts as the vehicle in working towards that same goal. Thus, an actual test of your leadership abilities is how well you lead a diverse team of individuals and influence their behavior to produce results. 83 International Peer Reviewed Journal Above all, the study’s findings provide evidence that the rank-and-file employees of the holding company were committed to the firm and perceived that the firm is effectively and efficiently accomplishing its objectives and goals, given it has both resulted in the same moderate level of both commitment and effectiveness. It is further concluded that the dimension of normative commitment has had the most direct impact on the holding company’s organizational effectiveness; as a result, it has established a good teamwork and leadership style that has led them to build a competitive advantage. However, the researchers want to elucidate that the findings have certain limitations, specifically due to the lack of previous research studies focusing on the holding company’s employee’s organizational commitment and effectiveness. With this, researchers are encouraging future researchers to scrutinize the different areas and components of commitment and effectiveness in the same setting to have a better understanding and additional findings to lead to a more comprehensive conclusion, considering that holding companies are now emerging and growing in the business industry. RECOMMENDATIONS The researchers propose the following to address the research agendas to strengthen the bond between employees and employers and to help organizations achieve their goals and objectives: In line with the concept that “individuals with high affective commitment are supposed to deliver high organizational effectiveness (Budihardjo, 2013)”, the holding company should focus on cultivating this bond to achieve a high level of organizational commitment and effectiveness. Management should innovate platforms and activities such as finding common grounds to help form a personal connection with its employees. This will encourage team bonding, making employees feel connected to the organization more than their role. Additionally, the holding company should be transparent enough to deliver its vision, mission, and goals that outline its values so that employees can ensure it matches their values. Decision-making, the last variable that constitutes organizational effectiveness, must be given attention by the holding company. The company must simplify and clarify decision rights across the organization by clearly communicating who is responsible for making which decisions, what decisions must be made, and how the decision-making process should work. Performance Management, as well as the second to the last, must be improved to create and maintain a more productive and efficient work environment where 84 JPAIR Multidisciplinary Research Volume 48 • March 2022 employees can fulfill their full potential. Generally, it can be “set, track, and check in on goals,” creating a culture of feedback or simple recognition for the efforts provided by the employee. This will help strengthen the driving force towards achieving the organization’s goals and objectives. 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