CHAPTER 4 Research Methods
5.6 Factor Rotation
The initial solution shows un-rotated factors. A rotation solution is required for psychologically meaningful factor names and reproducibility of factors (Abdi, 2003). The factors are therefore rotated to improve item loadings on the factors and to provide a better interpretation which reveals the presence of a simple structure with all components showing a number of strong loadings and all variables loading substantially on only one component (Hair, Anderson, Tatham, & Black, 1995; Pallant, 2009).
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The choice of the factor rotation is the most important decision in exploratory factor analysis (EFA) (Sass & Schmitt, 2010). Statistically, there two main types of factor rotations: orthogonal, when the new axes are orthogonal and are assumed not to be correlated, and oblique rotation that assumes the factors are correlated (Abdi, 2003). Orthogonal rotation assumes the uncorrelated underlying constructs is used for easier solutions interpretation and reporting in the social sciences (Abdi, 2003; Tabachnick & Fidell, 2007).
The most commonly applied method of orthogonal factor rotation in social sciences is Varimax (Malhotra, et al., 1999). Varimax factor rotation results in better cluster configurations that are easier to interpret (Browne, 2001; Sass & Schmitt, 2010; Field, 2005; Hair, Black, et al., 2010) and shows higher loadings on the factors, and the tendency towards having a general factor solution is minimised (Malhotra, et al., 1999). Further, the Varimax factor of orthogonal rotation produces a simple structure as compared to other rotations (Ford, MacCallum & Tait, 1986). In this thesis, the Varimax rotation is applied to increase the dispersion of loadings within factors, thus assisting better interpretation.
As discussed in Section 5.5.1, the selected cut-off value for item loadings is equal or greater than 0.40. Consequently, variables with smaller loadings that create difficulties for interpretation are eliminated (See Appendix E) (Gorsuch, 1983). After factor rotation, new factors were formed and labelled accordingly as shown in the summary - Table 10 (for further details see Appendix G). The new factors were labelled according to the cluster of items for better interpretation (Ford, MacCallum, & Tait, 1986; Pallant, 2009).
The new labels reflected the items in a selected cluster, and items with higher loadings were selected. Component 1 was made up of those items which addressed the perceived value of employees’ knowledge sharing, employee collaboration and trust. Component 1 was labelled ‘Knowledge Sharing’. It was clear when analysing items comprising Component 2 that this
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incorporated most of the questions relating to employees’ organisational capability. This item was labelled ‘Organisational Capability'. Component 3 incorporated items concerned with employee collaboration for knowledge sharing and was labelled ‘Collaborative Practices’.
Component 4 was labelled ‘Rewards System’ which relates to employees’ monetary
incentives from management for successful knowledge sharing. Component 5 incorporated items that addressed individual capability and was labelled ‘Individual Capability’. Component 6 incorporated most of the items relating to interpersonal trust and was labelled ‘Trust’. It is clear that Component 7 incorporated items that addressed both individual and organisational level recognition and accordingly was labelled ‘Recognition’.
The result of the rotated factor solution shows that some items were clumped together under different factors; Table 10 shows item descriptions, their corresponding LC and factor loadings after factor rotation. Figure 10 shows the revised model based on the factor rotation results.
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Table 10: Factor Rotation Summary Table
Latent constructs
items
Factor loadings
Incentives
Item 22. In my company, pay raises are determined mainly by an employees' job performance.0.656
Item 20.I am satisfied with the non- monetary rewards that I receive in exchange for the knowledge I give the organisation.
0.618
Item 21 My feelings about the non- monetary rewards I receive for sharing knowledge are excellent.
0.550
Item 19.I feel that the non-monetary rewards given by the organisation to employees for sharing
knowledge are fair.
0.589
Item 17.I am satisfied with the monetary rewards that I receive in exchange for the knowledge I give the organisation.
0.409
Item 23. My company is committed to a merit pay system.
0.526
Collaborative practices
Item 34. In my organisationemployees’ always share their experiences with colleagues from other departments.
0.725
Item 43. People in my organisation frequently collect knowledge of know-where or know-whom with other organisational members
0.492
Item 45. I often share with my colleagues the new information I acquire.
0.411
Item 53Colleagues outside of my department tell me what their skills are, when I ask them about it.
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Table 10 (continued)
Recognition
Item 25. I want to become a person with professional knowledge in the eyes of my colleagues.0.595
Item 26. I believe that knowledge sharing among teams can help establish my image as an expert.
0.549
Trust
Item 70.Our organization embeds much of its knowledge and information in structure, systems, and processes.0.598
Item 57. Management at my firm is sincere in its attempts to meet the
employees’ points of view.
0.579
Item 58. I feel quite confident that the firm will always try to treat me fairly.
0.531
Item 62. I always trust my
colleagues’ opinions due to their
competence.
0.570
Item 59. I can trust the people I work with to lend me a hand if needed.
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Table 10 (continued)
Knowledge sharing
Item 51.Colleagues within my department tell me what their skills are, when I ask them about it.0.769
Item 50. I share the information I have with colleagues within my department, when they ask
0.713
Item 49. Sharing knowledge with my colleagues is regarded as something normal in my company
0.711
Item 46.I often share with my colleagues the new working skills that I learn.
0.682
Item 47. My colleagues often share with me the new working skills that they learn.
0.650
Item 40. I frequently collect knowledge from other
organisational members based on their experience.
0.633
Item 52. I share the information I have with colleagues outside of my department, when they ask
0.624
Item 41. I frequently share knowledge based on my experience with other organisational members
0.467
Item 39. People in my organisation frequently share knowledge based on their experience
0.452
Item 48. My colleagues often share with me the new information they acquire
0.448
Item 37. Our employees share information and learn from one another.
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Table 10 (continued)
Organisational Capability
Item 66.The new products or services developed by our company always arouse imitationfrom competitors.
0.695
Item 68. Our company always develops novel skills for transforming old products into new
ones for the market
0.652
Item 69. Our organization uses patents and licenses as a way to
store knowledge.
0.531
Item 64. Our company often develops new products and services well accepted by the
market.
0.551
Item 67.Our company can often launch new products or services
faster than our competitors.
0.463
Individual capability
I t e m 7 4 . T h e k n o w l e d g e I r e c e i v e f r o m m y c o l l e a g u e s h e l p s m e a t w o r k0.620
Item 30. Employees are provided opportunities to suggest
improvements in the way things are done here.
0.536
Item 29. Employees in this organisation are asked by their superiors to participate in operations / production.
0.431
Item 73.I always develop novel skills for transforming old products into new ones for market.
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Based on the factor rotation the research model is revised, as shown in Figure 10.
Incentives Collaborative practices Recognition Trust Employees’ knowledge sharing Individual capability Organisational capability A1 A2 A3 A4 A5 A6
Figure 10: Revised research model
The revised hypotheses are as follows:
A1: Organisational incentives have a positive effect on employees’ knowledge sharing behaviour.
A2: Employees’ collaborative practices have a positive effect on employees’ knowledge
sharing behaviour.
A3: Employees’ recognition has a positive effect on employees’ knowledge sharing behaviour.
A4: Trust has a positive effect on employees’ knowledge sharing behaviour.
A5: Employees’ knowledge sharing has a positive effect on organisational capability. A6: Employees’ knowledge sharing has a positive effect on individual capability.
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