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This chapter presents the research framework for this study, which use turnover intention as the dependent variable; role stress and job satisfaction as the independent variables and organizational commitment as the mediating variable. Research hypotheses that are derived from the framework are also being discussed here. Lastly, the methods and procedures employed to collect data for this research study are also included in this section.
3.1 Research Framework
The research framework for this study is depicted in Figure 3.1, which is modified from the research framework used by Muliawan et al (2009) in their study on the turnover intentions of information systems auditors in Australia. Variables studied are turnover intentions, organizational commitment, role stress, and job satisfaction as discussed extensively in Chapter 2. This chapter aims to integrate the variables into a conceptual model, which will be tested in order to understand the relationship of role stress and job satisfaction towards turnover intentions, using organizational commitment as the mediating variable.
Figure 3.1: Research Framework of the relationship of role stress, job satisfaction and organizational commitment towards turnover intentions amongst auditors in Sabah.
Based from the research framework in Figure 3.1, seven main hypotheses were being developed for this study.
H1: There is a relationship between role stress and organizational commitment amongst auditors in Sabah.
H1a: There is a relationship between role ambiguity and organizational commitment amongst auditors in Sabah.
H1b: There is a relationship between role conflict and organizational commitment amongst auditors in Sabah.
H2: There is a relationship between job satisfaction and organizational commitment amongst auditors in Sabah.
H3: There is a relationship between organizational commitment and turnover intentions amongst auditors in Sabah.
H4: There is a relationship between role stress and turnover intentions amongst auditors in Sabah.
H4a: There is a relationship between role ambiguity and turnover intentions amongst auditors in Sabah.
H4b: There is a relationship between role conflict and turnover intentions amongst auditors in Sabah.
H5: There is a relationship between job satisfaction and turnover intentions amongst auditors in Sabah.
H6: Organizational commitment mediates the relationship between role stress and turnover intentions amongst auditors in Sabah.
H6a: Organizational commitment mediates the relationship between role ambiguity and turnover intentions amongst auditors in Sabah.
H6b: Organizational commitment mediates the relationship between role conflict and turnover intentions amongst auditors in Sabah.
H7: Organizational commitment mediates the relationship between job satisfaction and turnover intentions amongst auditors in Sabah.
3.3 Research Design
This study adopted the cross-sectional study in which data was gathered from respondents just once. The research used quantitative method and data is collected via surveys through questionnaires as this is the best method to collect accurate and less biased data (Sekaran and Bougie, 2010).
Unit of Analysis
The Unit of analysis in this study is individuals in the audit firms registered with the Malaysia Institute of Accountants (MIA), as this study attempts to examine the relationship of role stress, job satisfaction and organizational commitment towards individual perceptions of turnover intentions.
Worldwide, it is observed that the audit services of large companies are provided by an oligopoly of the largest four international firms, namely PricewaterhouseCoopers, Ernst and Young, Deloitte and KPMG. Nik Mohd Hasyudeen Yusoff, the executive chairman of the Audit Oversight Board (AOB) commented that these 'Big Four' and two others, BDO and Crowe Horwath, collectively audited 73% of the public interest entities (PIEs) in Malaysia, while their listed clients accounted for 93% of the total market capitalisation of the companies on Bursa Malaysia. Hence, it can be concluded that these big audit firms have major contribution to the corporate world and therefore it is important to examine their auditors' perception on the turnover as compared to the smaller audit firms due to the significant impact on the audit industry. For example: high turnover in the large audit firms might result in low audit quality due to the loss of productivity. This will directly affects the job performance, and causes major disstraction to the corporate world especially with the public listed companies as they struggle to meet the deadline as set by the regulation board such as Bursa. Besides, large audit firms invest substantially on auditors' training and development, as compared to the smaller firms. For example, Ernst & Young provides annual traning for it's auditors, in respect of their ranking in the firm. The training course ranges from 7 to 14 days that focuses on the updated technical standards and also on the development of employees' soft skill.
Based on the above reasons, this study focused on individuals employed as auditors in the audit firms as identified above that having its presence in Sabah, namely KPMG, Deloitte, Ernst & Young and Howarth. The reason for choosing this group of individuals is because the auditors employed in the chosen organizations are routinely subjected to higher workload, responsibilities and often time having more expectations made on them, which may put these individuals at the greater potential of having the intention to quit from the company.
It is not easy or practical to survey every single auditor in Sabah to examine the relationship of role stress, job satisfaction and organizational commitment on his/her turnover intention. Moreover, factors could be different from one individual to another due to the audit firm's structure. Therefore, the sampling design targeted to focus on a target group of respondents and establish the most effective methods to conduct this research. The following section explains the location of study and population, sampling technique and sampling size.
Location of study and population
As at 1st July 2010, there were 84 audit firms registered with MIA Sabah, with 64 located in Kota Kinabalu, 10 firms in Sandakan, 9 firms in Tawau and 1 in Lahad Datu (these count excludes branches) (MIA, 2010). The focal point of this study is auditors in Sabah employed by the four large audit firms namely KPMG, Deloitte, Ernst & Young and Howarth. The rationale for choosing these large audit firms are due to three reasons. Firstly, large audit firms invest more heavily on the employees' training as they have more resources in term of manpower, knowledge and finance. In other words, large audit firms experience significant loss as compared to the small-scale audit firm when an auditor resigns. Secondly, these companies dominate the audit industry in Malaysia and serve the utmost important corporate clients. Therefore, the level of service quality provided by these companies are significant as compared to the smaller-audit firms that provide audit service to the small medium enterprises. Lastly, these companies have branches all over Sabah, and henceforth provides a better coverage and it is more practical to administrate the questionnaires targeting to auditors from other towns such as Sandakan and Tawau with the help from Kota Kinabalu branch, the headquarters. Thus, the study of auditors' turnover intentions in the large audit firms becomes the focus point in this study. It is estimated that there are approximate 210 auditors from the chosen four organizations.
From the estimated total population of 700, purposive sampling was used, specifically judgment sampling. Purposive sampling is a form of non-probability sampling design as the elements in the population does not have any probabilities attached to their being chosen as sample subjects and that information is obtained from specific target group of people who can provide the desired information (Sekaran and Bougie, 2010).
According to Sekaran and Bougie (2010), judgement sampling should be used when the choice of subjects in the best position to provide the information required are placed advantageously and also special efforts were made to locate and gain access to these individuals who have the requisite information. Therefore, this sampling technique is the only useful one for achieving this research's objectives. (Moreover, this form of sampling technique curtails the generalizability of the results as the sample of experts is conveniently available for the study which is discussed further in the following section. This is a negative statement showing the disadvantage of using purposive sampling
3.5.3 Sampling Size
The sampling size chosen for this study were auditors in Sabah currently employed by KPMG, Ernst & Young, Deloitte and Howarth. The samples include both external and internal auditors, with the position ranging from executive to partner level. Trainee and interns are not included due to their short time spend in the company.
According to the formula developed by Krejcie and Morgan (1970) found in the works of Chua (2006), for a population of 210 auditors from the selected four organizations, at a 95% level of confidence, it is estimated that the sample size needs to be at approximate 136 numbers to be optimally representative. Due to the purpose of measuring the representatives of the population in the short time span given, the judgment sampling technique was used to gather the data whereby data were collected from members of the population who are selected on the basis of expertise in the subject that is being investigated.
3.6 Instrument Design
Instrument used for this study is quantitative method data collection. Self-administered questionnaire instruments are used to collect data on the studied variables from the audit environment. The questionnaire used is adapted from Muliawan et al (2009) study, which used 5 point likert scale to measure the level of role stress, organizational commitment and turnover intention. Questionnaire on job satisfaction is taken from Fisher (1995) study on the voluntary turnover amongst the external auditors, with used the 7 point likert scale to measure each of the questions statement. To ensure consistency, the researcher used 5 point likert scale throughout the whole questionnaire based on two main reasons. Firstly, studies show there is little difference in reliability in using 5 or 7 point scales. Dawes (2008) further reported that 5-point scale and 7-point scale produced almost identical results in terms of mean scores and variation about the mean. Secondly, using a pilot study conducted among auditors, with group A assigned to answer questionnaire with 5 point scale, and group B assigned to answer questionniare with 7 point scale, the later commented that 7 point scales are bit difficult and more time consuming for respondents to handle.
In total, the questionnaire adapted in this study covers 36 items (exclude questions on sample's profile). All questions were close-end that could be answered within 10 minutes. The questionnaires will be in English only as it is assumed that all auditors had completed their first degree, which is the minimum education requirement at the entry level.
3.6.1 Organization of Questionnaire
The structure of the questionnaire consists of two parts: Part 1 on sample's demographic profile and Part 2 on the studied variables. Part 2 is further divided into four sub-sections, with Section A assess on sample's level of Role Ambiguity and Role Conflict, Section B on the Job Satisfaction, Section C on Organization Commitment and lastly Section F on Turnover Intention.
Part 1: Demographic Profile
In this section, samples were asked to provide their demographic information namely their gender, predominant audit background, current position in the company, number of years experience as an auditor, and to determine if the sample is a holding any professional qualification.
Part 2: Section A - Role Ambiguity and Role Conflict
Both role ambiguity and role conflict are measured using four-item scale, which assessed by questions A1-A4 (for role ambiguity) and questions A5-A8 (for role conflict) respectively. These questionnaires were adapted from Rizzo et al (1970), and used by Muliawan et al (2009) in their study on turnover intention among the information system auditors in Australia. The Cronbach's alpha was reported at 0.91 for role ambiguity and 0.70 for role conflict, respectively. According to Lee (1996), these items adapted has been subject to extensive validation and are widely used for measuring role relates stress (Tubre and Collins, 2000). For the purpose of this study, 5-point Likert scale is used to rate the questions statement ranging from 1 (Strongly Disagree) to 5 (Strongly Agree) to generate more accurate results rating. Below are the questions adapted from Muliawan et al (2009) study:
Part 2: Section B - Job Satisfaction
The overall job satisfaction will be measured using the 20 item short version of the Minnesota Satisfaction Questionnaire (MSQ) (Weiss et al, 1967). MSQ is selected to assess the job satisfaction in this study as the past researchers (Fisher, 1995; Chenhall and Brownell, 1988; Frucot and Shearon, 1991) observed that MSQ has been used extensively in the accounting literature and thus provides a good fit in this study. Besides, Dunham et al (1977) also reported favorable empirical evidence concerning the MSQ's convergent and discriminant validity. The MSQ used is this study provides three job satisfaction scales, namely the intrinsic, extrinsic and overall job satisfaction. The overall measure of job satisfaction is obtained by summing the scores on each of the 20 individual scale items. These 20 item scored Cronbach's alpha of 0.87. Samples are requested to indicate their level of satisfaction on each of the questions statement from B1 to B20, using a 5-point Likert scale.
Part 2: Section C - Organization Commitment
Organizational commitment is measured using four item short version of the Organizational Commitment Questionnaire developed by Porter et al (1974), with Cronbach's alpha reported at 0.72 (Muliawan et al, 2009). Aranya and Ferris (1984) commented that this questionnaire has been widely used to study organizational commitment. The four items selected for this study fit into the definition chosen by the researcher, which cover three facets of the organizational commitments as suggested by Porter et al (1974), which are (1) a strong belief in and acceptance of the company's goals and values; (2) a willingness to put more effort on behalf of the company; and (3) a definite desire to stay with the company. Below are the questions adapted from Muliawan et al (2009) study, using 5-point Likert scale to rate the questions statement ranging from 1 (Strongly Disagree) to 5 (Strongly Agree).
Part 2: Section D - Turnover Intention
Turnover intention is measured using four items adapted from Mobley et al (1978) and Lee (1996), with Cronbach's alpha reported at 0.92 (Muliawan et al, 2009). Ajzen and Fishbein (1980) advised that results for analyzing the intention antecedent to behavior is more reliable if measured within a reasonable time frame. Prior studies on turnover have used different time periods ranging from six months (Quarles, 1994) to one year (Aranya and Ferris, 1984; Shore et al, 1990). For the purpose of this study, samples were asked to consider their likely actions relates to turnover intentions in the six months from the date of survey.
Below are the questions adapted from Muliawan et al (2009) study, using 5-point Likert scale to rate the questions statement. Question number 3 (represents by D3) is a reverse-coded item.
3.6.3 Survey Implementation (Field Test)
A pilot test is was conducted before the questionnaires were sent out. Five employees of Ernst & Young, Kota Kinabalu branch is were selected to participate in the pilot test. The purpose of having the pilot test is to ensure the clarify (clarity) of the questionnaire statement and to improve the questionnaire should any weaknesses be found.
Demographic Profile of the Field Test Sample
What did you find out?
Normally pilot test will require 40 respondents. With 40 respondents, you can test the reliability of the instrument.
Five employees usually refer to field test. You won't be able to test the reliability of the instrument.
Actually, you can test the instrument on 40 respondents first. If the instrument is reliable, the results can be used as part of the main test. That means, the results of the 40 can be included in the final study. If the instrument is not reliable, you would have to make changes and test again.
Data Collection Method
3.8 Data Analysis Method
Before the start of analyzing the data collected, factors analysis and cronbach's alpha analysis are carried out to check on the consistency and reliability of the questionnaire measures. Factors analysis is a data reduction technique employed to reduce a large number of variables to a smaller set, which summarize the essential information contained in the variables (Coakes et al, 2009). Cronbach's Alpha analysis was carried out to determine the reliability of the questionnaire measures. This reliability coefficient indicates how well the items in a set are positively correlated to one another.
Data collected were analyzed using the Statistical Package for the Social Sciences (SPSS) software. The data is tested for its normality and linearity. Descriptive statistics analysis is performed to provide an insight on the characteristics of the respondents', such as gender distribution and the maximum, minimum, means on the number of years the respondent has as an auditor.
Correlation analysis is conducted to examine the strength and direction of the linear relationship between two variables. Finally, regression analysis is conducted to test the hypotheses, and to determine the role of the mediator in the relationship between the independent variables and the dependent variable.