MSc. in Business Administration 2017 / 2018 – Strategy Track Master Thesis
Doing well by doing good:
The effect of organisational stakeholder cultures on employee turnover intention, a mediating role for organisational trustworthiness?
Date of submission: 17/08/2018
Version: Final
Name: Jelle Turkenburg
Student number: 11419121
Supervisor: mw. Dr. Flore Bridoux
Statement of originality
This document is written by Student Jelle Turkenburg who declares to take
full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and
that no sources other than those mentioned in the text and its references have
been used in creating it.
The Faculty of Economics and Business is responsible solely for the
supervision of completion of the work, not for the contents.
Abstract
Instrumental stakeholder theory holds at its core that stakeholder-orientated organisations create more value over time than profit-orientated organisations. Although frequently drawn upon by practitioners and strategy theorists, hardly any empirical research examined this core value-creating proposition within instrumental stakeholder theory. Based on the three central stakeholder cultures of corporate egoist, instrumentalist, and moralist, as developed by Jones, Felps, and Bigley (2007), we examined the impact that different stakeholder orientations exert on employee turnover intention. Such employee behaviour affects the organisation’s capacity to create value and is thus relevant in empirically grounding instrumental stakeholder theory. Furthermore, we examined if organisational trustworthiness acts as a socio-cognitive mechanism to explain how different stakeholder orientations affect turnover intention.
Drawing upon social exchange theory (SET) and by means of an online questionnaire completed by 165 employees in the Netherlands, we found partial support for our hypothesised direct and mediating effects. Indeed, stakeholder cultures affect turnover intention both directly and through organisational trustworthiness, but only in comparing the stakeholder-orientated moralist stakeholder culture with the two other profit-orientated central stakeholder cultures. An additional result pointed to gender effects when comparing turnover intention between a corporate egoist culture and a moralist culture, as women held higher turnover intentions relative to men and this direct effect was found to be stronger through organisational trustworthiness for women too. Taken together, we provided for empirical work in grounding the core value-creating proposition within instrumental stakeholder theory, whilst contributed to stakeholder literature with the development of scales that measure different stakeholder orientations. The results furthermore inform managers that shaping a culture based on ethics strengthens an organisation’s ability to create value. Finally, we provided suggestions to improve our developed scales,
Table of Contents
1. Introduction ... 1
2. Literature review ... 4
2.1 Organisational culture ... 5
2.2 Stakeholder theory... 6
2.3 Organisational culture and stakeholder theory: organisational stakeholder culture ... 8
2.3.1. Corporate egoist stakeholder culture ... 9
2.3.2. Instrumentalist stakeholder culture ... 10
2.3.3. Moralist stakeholder culture ... 10
2.4 Voluntary turnover intention ... 11
2.5 Trust and organisational trustworthiness ... 12
2.6 Literature gap and research questions ... 15
3. Theoretical framework... 16
3.1 The direct relationships with employee turnover intention ... 17
3.2 The mediating effects of organisational trustworthiness ... 23
4. Research design ... 27
4.1 Method ... 27
4.2 Sample ... 29
4.3 Operationalisation of constructs ... 31
4.3.1. Independent variable: Organisational Stakeholder Culture ... 31
4.3.2. Mediating variable: Organisational trustworthiness ... 34
4.3.3. Dependent variable: Voluntary Turnover Intention ... 35
4.3.4. Control variables ... 35
5. Results ... 37
5.1 Factor analyses and reliability of scales ... 37
5.2 Descriptive statistics ... 40
5.3 Correlations... 42
5.4 Normality checks ... 45
5.5 Main effects ... 46
5.6 Mediating effects ... 49
5.7 Additional result: gender effects ... 53
6. Discussion ... 54
6.1 Interpretation of results ... 55
6.1.1 Scale development / Stakeholder Culture ... 55
6.1.2 Main effects ... 58
6.1.3 Mediating effects ... 61
6.1.4 Additional result: gender effects ... 63
6.3 Managerial implications ... 66
6.4 Limitations and avenues for future research ... 66
7. Conclusion ... 71
Reference list ... 73
Appendix I – Questionnaire design ... 83
Appendix II – Overview of measures used ... 98
Appendix III – Coding scheme dummy variables ... 107
Appendix IV – Factor analyses and reliability checks ... 116
Appendix V – Descriptive statistics ... 140
Appendix VI – Normality checks ... 143
List of tables Table 1 ... 44 Table 2 ... 48 Table 3 ... 50 Table 4 ... 51 Table 5 ... 51 Table 6 ... 52 Table 7 ... 53 Table 8 ... 101 Table 9 ... 104 Table 10 ... 107 Table 11 ... 108 Table 12 ... 109 Table 13 ... 110 Table 14 ... 110 Table 15 ... 112 Table 16 ... 113 Table 17 ... 114 Table 18 ... 115 Table 19 ... 116 Table 20 ... 117 Table 21 ... 120 Table 22 ... 122 Table 23 ... 124 Table 24 ... 126 Table 25 ... 127 Table 26 ... 129 Table 27 ... 131 Table 28 ... 132 Table 29 ... 134 Table 30 ... 135 Table 31 ... 136 Table 32 ... 137 Table 33 ... 138 Table 34 ... 139 Table 35 ... 139 Table 36 ... 140 Table 37 ... 142 Table 38 ... 147 Table 39 ... 148
List of figures Figure 1 ... 17 Figure 2 ... 116 Figure 3 ... 118 Figure 4 ... 143 Figure 5 ... 143 Figure 6 ... 144 Figure 7 ... 144 Figure 8 ... 145 Figure 9 ... 145 Figure 10 ... 146 Figure 11 ... 146 Figure 12 ... 147
1. Introduction
Organisations increasingly face higher levels of complexity and uncertainty when conducting business (Freeman, Harrison, & Wicks, 2007; Freeman, Harrison, Wicks, Parmar, & De Colle, 2010). Instrumental stakeholder theory has emerged as an influential response to such problems, stating that organisations create more value over time by adopting a stakeholder-orientation that considers all stakeholder interests rather than adhering to a profit-orientation that assigns primacy to shareholder interests (Freeman et al., 2010; Jones, 1995). However, whilst this core value-creating proposition is increasingly drawn upon by strategy theorists and practitioners, little empirical work within instrumental stakeholder theory examined the positive relationship between an organisation’s stakeholder-orientation and its ability to create value (Harrison & Freeman, 1999; Jones, 1995; Laplume, Sonpar, & Litz, 2008).
We addressed this empirical gap by studying the impact that different stakeholder orientations could exert on employee behaviour towards the organisation. Employees are crucially important to the organisation’s ability to create value, since they comprise both the organisation and its human capital, enabling sustained organisational performance (Coff, 1997; Felin & Foss, 2005). As human assets come with the possibility of voluntary departure, an organisation must ensure that it does not lose these critical human assets when creating value (Coff, 1997). Organisations deploy different management approaches to serve the interests of its stakeholders, and by understanding the impact that each of these approaches has on employee turnover behaviour, an advancement in strategy literature can be made, explaining why certain organisation create more value over time than others (Coff, 1997; Jones, 1995). Employee turnover has a strong antecedent in the conscious wilfulness to leave an organisation known as turnover intention, which was consequently used in this research in order to empirically examine the core value-creating
proposition within instrumental stakeholder theory (Griffeth, Hom, & Gaertner, 2000; Tett & Meyer, 1993).
An organisation’s culture is an important element in the decision of how to treat stakeholders so as to create value, because an organisation’s culture not only influences the actions that an organisation undertakes towards its stakeholders, but also proves to be a key mechanism by which an organisation obtains a competitive advantage with superior financial returns as a result (Barney, 1986; Bridoux & Stoelhorst, 2014). Jones et al. (2007) proposed that the stakeholder culture is a particular factor in the treatment of stakeholders, as its shared beliefs, values, and evolved practices provide organisational managers with the guidance on how to manage for stakeholder interests. Jones et al. (2007) furthermore identify five different stakeholder cultures that can be placed on a continuum of concern for others, with most organisations relating to three central cultures of the corporate egoist, instrumentalist, and moralist (Boesso & Kumar, 2016). In this study, we leveraged these three central stakeholder cultures as a means to better understanding the impact that different organisational stakeholder orientations could exert on employee turnover intention. Doing so would provide for more empirical work that grounds the core value-creating proposition in instrumental stakeholder theory.
We furthermore examined whether trust and particularly organisational trustworthiness can clarify which socio-cognitive mechanisms would drive a positive relationship between a stakeholder-orientation and value-creation. Trust is the willingness to be vulnerable to another party’s uncontrollable behaviour, based on positive expectations, and has an important antecedent in being understood and predicted by the other party’s trustworthiness (Dietz & Den Hartog, 2006; Gambetta, 1988; Mayer, Davis, & Schoorman, 1995). In light of our research, we argue that an employee develops trust in the employment relationship based on how trustworthy the employer is perceived to be in caring for the interests of the employee (Dietz & Den Hartog, 2006). Different levels of organisational trustworthiness would subsequently guide employee behaviour either
towards or away from a productive relationship with the employer, thus providing for an interesting explanatory mechanism to empirically examine why an employee exhibits different turnover intentions in response to management approaches that are more or less stakeholder-orientated (Balmer, Fukukawa, & Gray, 2007; Dietz & Den Hartog, 2006; Jones, 1995).
Hypotheses were developed based on SET and data was collected by means of an online questionnaire that was completed by 165 employees working in the Netherlands. Our results indicated partial support for our theory in that only the turnover intention comparison between a moralist culture and the two other central stakeholder cultures rendered significant direct and mediating effects. Additionally, gender effects were noted when comparing a corporate egoist with a moralist stakeholder culture, as our results indicated that women exhibited lower turnover intentions relative to men and that this direct effect through organisational trustworthiness was stronger for women too.
These findings make the following contributions to literature and practice. First, we contributed empirical work backing the core value-creating proposition in instrumental stakeholder theory, as it appears that the employers’ ability to create value is indeed positively influenced by lower turnover intentions when holding a moralist stakeholder culture rather than either of the two other central stakeholder cultures. Secondly, this research found that organisational trustworthiness explains for differences in turnover intention between the moralist and the two other central stakeholder cultures. We thereby contributed to the lack of understanding about which mechanisms would drive the relationship between a stakeholder-orientation and value-creation. At the same time, the results of our study informed managers that creating a culture based on a strong ethical foundation can positively influence employee retention and employee trust in the employment relationship, which together strengthen the value-creating ability of the organisation. Finally, we have developed new scales with which to measure different organisational stakeholder cultures. The progress and experience gained during the development
and testing of these scales can be leveraged by other researchers in future empirical work about instrumental stakeholder theory.
This thesis is structured as follows. Chapter 2 provides an overview of the relevant literature in the topics of organisational culture, stakeholder theory, organisational stakeholder culture, trust and organisational trustworthiness, and turnover intention, upon which a gap in literature is identified, and research questions are crafted. Chapter 3 describes the theoretical framework and states the hypotheses of the study. Chapter 4 elaborates on the research design for this study. Chapter 5 presents the results of the research. Chapter 6 consists of a discussion of the results and elaborates upon the research contributions, limitations, and future research directions. Chapter 7 concludes this thesis.
2. Literature review
This chapter discusses the relevant academic literature on the topics introduced above. We begin by briefly describing organisational culture and stakeholder theory, which jointly constitute the basis of organisational stakeholder culture, the independent variable in our research. We then define the dependent variable of turnover intention and establish its relationship with organisational cultures. After this, the mediating mechanism of organisational trustworthiness is introduced and related to both our independent and dependent variable. Finally, the gap in literature is described, and subsequently, research questions are formulated.
2.1 Organisational culture
Organisational culture is a concept that is used by researchers in various disciplines such as anthropology and management (Sackmann, 2011). Most authors agree that organisational culture is structured around two branches of theorising, namely the social and anthropological (Cameron & Quinn, 1999). The social branch argues that organisations have cultures whereas the anthropological one argues that organisations are cultures (Cameron & Quinn, 1999).
Schein’s (1990) concept of organisational culture is the one being the most frequently used in current-day research on organisational behaviour and focusses on the social perspective (Scott-Findlay & Estabrooks, 2006). Schein (1990) defines organisational culture as “a pattern of shared basic assumptions, invented, discovered or developed by a given group, as it learns to cope with its problems of external adaptation and internal integration” (p. 7). In his view, organisational culture is best understood by reviewing its three hierarchical levels. Deeply held assumptions that influence how an organisational member perceives, feels, and thinks about the organisation, middle layer values that govern member interaction via explicit normative, moral, and functional principles important within the organisation, and top-layer artefacts that are tangible and visible characteristics of a culture such as organisational structures (Schein, 1990).
Furthermore, Schein’s (1990) conceptualisation of organisational culture attributes importance to the notion that organisational membership behaviour is driven by the shared and upheld norms and beliefs within the culture (Robbins, 1996; Weick, 1995). The upheld norms and beliefs thereby matter for value-creation too, as they provide organisational members with principles on how to deal with environmental change and how to manage organisational stakeholders (Cameron & Quinn, 1999; Hatch, 1993). Indeed, it is an interesting concept to consider when examining the core value-creating proposition within instrumental stakeholder theory, as organisational cultures are empirically found to be a key ingredient to organisational profitability (Alvesson, 2012; Denison, 1984). These cultures may even create a firm-level
competitive advantage over others that do not have core values addressing the organisation’s management of stakeholder interests (Barney, 1986).
All in all, both literature and research suggest that organisational culture is an important influencer on membership behaviour and even impacts the organisation’s ability to create value. We now explain why stakeholders are amongst the most important cultural contingencies to consider when value is created by elaborating upon the fundamentals of stakeholder theory (Jones et al., 2007).
2.2 Stakeholder theory
A stakeholder approach to strategic management emerged as an answer to the increasing levels of environmental uncertainty in conducting business, given that previous shareholder maximisation proved to be an insufficient purpose if an organisation wishes to survive (Andriof, Waddock, Husted, & Rahman, 2002). Freeman (1984) was amongst the first to develop a strategic framework that reconceptualized the purpose of the organisation, stating that it should also attend to the interests of other groups that have a stake in the business. He named these groups “stakeholders” and defined them as “the individuals, groups, and organisations that have an interest in the processes and outcomes of the firm and upon which the firm depends for the achievement of its goals” (Harrison, Freeman, & Abreu, 2015, p. 859). His definition implied that an organisation must understand how to gain the support of its stakeholders, as they have an effect on or are affected by the organisation as it attempts to achieve its objectives (Freeman, 1984). Managing the relationships between an organisation and its stakeholders is therefore a central facet of a stakeholder approach to strategic management (Harrison et al., 2010).
Stakeholder theory is principally viewed as a moral theory that defines the obligations that an organisation has towards its stakeholders and is structured via three distinctive parts (Donaldson & Preston, 1995). The descriptive part examines what managers and an organisation
in reality do, whilst the normative part examines what an organisation should do from a moral perspective, and the instrumental part examines the consequences of managerial and organisational behaviour (Donaldson & Preston, 1995). Because of Donaldson and Preston’s (1995) influential conceptualisation and moral grounding, much of the work on stakeholder theory had previously focussed on the normative branch. A recent trend focusses, however, on the instrumental branch, including papers such as Bosse, Phillips, and Harrison (2009), Bridoux and Stoelhorst (2016), and Choi and Wang (2009).
Instrumental stakeholder theory holds at its core that an organisation is able to create more value over time when managing for the interests of all its stakeholders and treating them well, relative to a profit-orientated organisation that assigns primacy to shareholder interests (Harrison & Wicks, 2013; Harrison et al., 2010; Jones, 1995). Although frequently drawn upon by strategy theorists and practitioners, few empirical studies have examined this core value-creating proposition within instrumental stakeholder theory (Harrison et al., 2010). In particular, empirical work investigating the stakeholder behaviour in response to an organisation’s undertaken stakeholder management has received very little attention from within instrumental stakeholder theory (Bosse et al., 2009). This is surprising, given that stakeholder responses are key to understanding cooperative stakeholder behaviours in the interest of value-creation (Bridoux & Stoelhorst, 2016; Jones et al., 2007). This thesis therefore aims to address this gap in instrumental stakeholder theory by empirically examining how different approaches to stakeholder management have an impact on subsequent stakeholder behaviour, thereby affecting the value-creating ability of the organisation. One manner of categorising the different approaches to stakeholder management, is by reverting to the organisational culture upon which they are based. Organisational stakeholder culture is thus the next topic to which we turn.
2.3 Organisational culture and stakeholder theory: organisational stakeholder culture
From a stakeholder theory perspective, business revolves around how stakeholders interact in a joint effort to create and trade value (Freeman et al., 2010). In creating value, the organisation can be seen as the centre of relationships with its stakeholders, with organisational decision-making shaping the nature of these relationships and influencing value-creation by deciding on how the stakeholder is treated (Freeman, 1984; Harrison et al., 2010). Managing stakeholder relationships is, however, difficult in practice, as solutions must be found that serve the wellbeing of the broadest group of stakeholders (Reynolds, Schultz, & Hekman, 2006; Walsh, 2005).
Jones et al. (2007) argue that the manner in which each organisation manages its stakeholders comes down to balancing an ethical tension between serving corporate self-interest (i.e. serving shareholder interests) and moral principles of attending to other-regarding sentiments that serve the interests of corporate stakeholders. Managers let themselves be guided by the ethical foundations of its stakeholder culture as a means of resolving this tension (Jones et al., 2007). The organisational stakeholder culture encompasses “shared beliefs, values, and evolved practices for solving recurring stakeholder-related problems and otherwise managing relationships with stakeholders” (Jones et al., 2007, p. 142). Stakeholder culture is therefore a means by which managers justify how to understand, prioritise, and respond to ethical decision-making problems (Jones et al., 2007).
Jones et al. (2007) further argue that the extent to which an organisation embraces self- or other-regarding motives in managing stakeholder interests differ “because of variation in the extent to which its moral standards are other-regarding” (p. 150). Each organisation can subsequently be placed into five different organisational stakeholder culture categories, all residing on a continuum of concern for others (Jones et al., 2007). At the one end of the continuum is the amoral agency culture embraced by an organisation that solely attends to corporate self-interest (Jones et al., 2007). In the middle lie organisations with a limited morality culture that
demonstrate a moral concern for shareholders but not for other stakeholders (Jones et al., 2007). At the other end of the continuum are the broad morality cultures of moralist and altruist, which base their stakeholder management entirely on other-regarding motivations and adhere to moral principles in managing all stakeholders (Jones et al., 2007).
Most organisations are likely to relate to three central stakeholder cultures on the concern for others continuum (Boesso & Kumar, 2016). These central cultures consist of the corporate egoist, instrumentalist, and moralist stakeholder cultures (Boesso & Kumar, 2016). The two extremes of agency and altruistic cultures are less likely to exist given that competitive dynamics limit the possibilities for organisations to behave in these manners (Boesso & Kumar, 2016).
Each of the central stakeholder cultures is defined by four dimensions, namely an organisation’s moral orientation (self- versus other-regarding), its relevant stakeholders (shareholders vs. stakeholders), the rights of each stakeholder group (only shareholder rights vs. prima facie respect for stakeholder rights), and moral philosophies embracing either a limited or a broad morality stance (Boesso & Kumar, 2016). However, whilst each culture shares similarities in these four dimensions, several stark differences are also apparent. The next sub-sections consequently touch upon the characteristics of each central stakeholder culture in greater detail.
2.3.1. Corporate egoist stakeholder culture
An organisation with a corporate egoist stakeholder culture focusses on short-term profit maximisation and economic efficiency (Jones et al., 2007). It displays moral virtues solely in honouring its contract with its shareholders, only regarding the stakeholder interests when they directly contribute to short-term economic success or shareholder value (Jones et al., 2007). The stakeholder interests that it does consider are addressed such that it renders the best outcomes for itself, even exercising aggressive power when managing its stakeholders, and has no problems neglecting ethical standards in order to realise short-term gains (Jones et al., 2007). The best brief
description of organisational behaviour based on a corporate egoist culture is being self-interested without guile (Jones et al., 2007).
2.3.2. Instrumentalist stakeholder culture
An instrumentalist stakeholder culture displays several similarities to the corporate egoist stakeholder culture, as it is also driven by financial success, is concerned primarily with shareholder interests, and focusses on economic efficiency as the underlying goal of organisational operations (Jones et al., 2007).
A fundamental difference between the corporate egoist culture and instrumentalist culture is that the latter subscribes to a “enlightened self-interest” doctrine (Jones et al., 2007). This means that an organisation voluntarily adopts a morality that considers the interests not only of shareholders but also of those stakeholders who are important to the organisation’s long-term financial success (Jones et al., 2007). Managers in such an organisation acknowledge the importance of appearing moral, as they have some moral commitment to corporate stakeholders, but only to the extent that such an appearance is associated with strategically beneficial implications for organisational profits (Jones et al., 2007). This organisational behaviour is thereby best described as being “self-interested with guile” (Jones et al., 2007).
2.3.3. Moralist stakeholder culture
An organisation with a moralist stakeholder culture is extensively other-regarding in ethical decisions relating to stakeholder management, and such an organisation attempts to adhere to moral principles such as fairness and respect to all stakeholders, even when doing so does not appear to be in its short- or long-term self-interest (Jones et al., 2007). The overarching goal of a moralist culture is to improve the well-being of society as a whole, with only existential threats to organisational survival to violate its moral standards (Jones et al., 2007).
The framework proposed by Jones et al. (2007) provides a foundation from which to empirically examine the impact of different stakeholder management approaches, as influenced by its organisational stakeholder culture, on contingent stakeholder behaviour. Understanding this behavioural impact contributes to resolving a lack of empirical work examining the positive relationship between a stakeholder-orientation and value-creation (Jones, 1995). We specifically aim to understand the impact of different stakeholder management approaches on employee turnover intention, which is the next topic in the literature review.
2.4 Voluntary turnover intention
Employees are important to value-creation because they supply resources and produce activities critical to firm performance whilst also being considered by the literature on human capital as a vital organisational pillar for creating value (Clarkson, 1995; Coff, 1997; Freeman et al., 2010; Schneider, 2006). Human assets, however, are able to voluntarily leave the organisation, affecting the latter’s ability to create value (Coff, 1997). To examine such turnover behaviours in our research, we shall focus on turnover intention, which is amongst the best proxies for predicting actual turnover behaviour (Griffeth et al., 2000).
Turnover intention is one of the final stages before leaving an organisation and is most commonly defined as “a conscious and deliberate wilfulness to leave the organisation” (Mobely, Horner, & Hollingsworth, 1978; Tett & Meyer, 1993, p. 262). Much of the research conducted on turnover intention builds upon the notion forwarded by March and Simon (1958), who suggest that the intention to leave depends on the expectancy of receiving a beneficial outcome for the sacrifices that must be made at the current job. Expecting a net loss in current employment would subsequently influence turnover intention by first prompting a feeling of job dissatisfaction and then considering turnover consequences, culminating in turnover intention (Mobely et al., 1978).
Although employee expectations about the utility of the employment relationship is of importance to the literature on turnover, it is interesting that cross-cultural differences, as an input to evaluate how such utilities came about, have yet to be systemically explored in predicting turnover (Maertz & Griffeth, 2004; Miller, Hom, & Gomez-Meija, 2001). The research that does exist on the link between turnover intention and organisational culture, such as Huselid (1995) and Sheridan (1992), did not systematically study how differences in the ethical foundations of an organisational culture can affect turnover intention. Examining the relationship between an organisational stakeholder culture and employee turnover may be relevant to value-creation too, as turnover is found to frustrate corporate efficiency, weaken financial performance, and even affect the competitive advantage or the survival of the firm (Barney & Wright, 1988; Hausknecht, Trevor, & Howard, 2009; Park & Shaw, 2013). As such, we will use the turnover intention variable as a means of examining the impact of different organisational stakeholder management approaches on employee turnover intention, which in turn aids in explaining value-creation in instrumental stakeholder theory (Coff, 1997; Griffeth et al., 2000; Jones, 1995). Moving forward, we now turn to trust and organisational trustworthiness as a socio-cognitive mechanism that could explain why employees react differently to different approaches to stakeholder management.
2.5 Trust and organisational trustworthiness
The concept of trust is often considered an organising principle and an important instrument to coordinate employment relationships, which together are fundamental to an organisation’s existence (Bachmann, 2001; McEvily, Perrone, & Zaheer, 2003; Ouchi, 1980). Trustworthy employment relationships are essential for successful employee cooperation as they produce highly effective organisations and could even provide a source of competitive advantage over others who do not have such trustworthy employment relationships (Barney & Hansen, 1994; Nooteboom, 2002).
Trust is commonly defined as “the willingness of a party to be vulnerable to the actions of another party, based on the expectation that the other party will perform a particular action important to the trustor, irrespective of the ability to control that other party” (Mayer et al., 1995, p. 712). Conceptually, trust takes three forms, namely, trust as a believe, trust as a decision, and trust as an action, with all forms occupying a continuum of the intensity of an individual’s trust in others (Colquitt, Scott, & LePine, 2007; Dietz & Den Hartog, 2006).
Two essential conditions are required for trust to be present (Bachmann & Zaheer, 2006). The first condition is interdependence, which relates to the situation wherein the interests of one party are not met if this party does not rely upon another party (Bachmann & Zaheer, 2006). The second one is uncertainty, which entails the possibility that one can experience adverse outcomes if relying upon another party necessitates taking a “leap of faith” (Lewis & Weigert, 1985 in Bachmann & Zaheer, 2006). By combining these conditions with the definition of trust, it is commonly accepted as an explicit choice by one party to become vulnerable under conditions of interdependence and uncertainty to another party (Dietz & Den Hartog, 2006).
In this research, we follow the integrative model of trust proposed by Schoorman et al. (1995), which has received extensive empirical support (Colquitt et al., 2007). The model focusses on a party to be trusted (i.e., a trustee) and a trusting party (i.e., a trustor) (Mayer et al., 1995). The basis of their model lies in how parties process information about relevant others, and then decide how much risk to take with respect to those other parties (Mayer et al., 1995).
Mayer et al. (1995) argue that one manner of understanding why one party will trust another party is to review the relevant attributes of the trustee. This concept is referred to as trustworthiness, of which the three dominant trustee characteristics of ability, benevolence, and integrity influence to the trustor’s decision to trust the other party (Mayer et al., 1995). Academics posit that organisations as a whole can also possess such qualities of trustworthiness, given that
they can be conceptualised as a moral actor with the capability to display virtuous characteristics such as consciousness and intent (Moore, 2005).
Organisational trustworthiness can therefore comprise an interesting mechanism to help explain varying turnover intentions by employees of organisations with different stakeholder cultures, given that trustworthiness is the foundation upon which the trustor intends to act when vulnerable to the actions (i.e., the stakeholder management practises) of the trustee (Dietz & Den Hartog, 2006). Trustworthiness in itself is a quality that the other party holds and should therefore be considered separately from having trust in someone, the latter of which is in turn influenced by the other party’s trustworthiness (Dietz & Den Hartog, 2006).
Past research that combines our independent variable with our dependent variable indeed suggests a role for trust, as trust in the employer is found to comprise a manifestation of employee beliefs that the employer is to able meet the employee’s needs (Bridoux, Stofberg, & Den Hartog, 2016). Moreover, Farooq, Payad, Merunka, and Valette-Florence (2014) have established that stakeholder management practices benefitting employees positively influence organisational trustworthiness, as these practices are considered to reflect the organisation’s character in caring for, respecting, and valuing employee interests. In turn, turnover is reduced, as employees are more likely to be content with the involvement in their organisation (Hansen, Dunford, Boss, Boss, & Angermeier, 2011).
The relationship between organisational trust and turnover has also been empirically established, given that a low trust in the organisation is more likely to result in destructive conflict and consequently higher levels of employee turnover intentions (Mishra & Morrissey, 1990). Dirks and Ferrin (2002) furthermore found that employees who trust their employer are likely to demonstrate turnover intention, principally because employees are less worried about future organisational decision-making to which they may be exposed to when remaining with that particular organisation. Finally, organisational trust is also related to other antecedents predicting
turnover, with trust exerting a positive effect on job satisfaction (Rich, 1997 in Dirks & Ferrin, 2001) and job commitment (Brockner, Siegel, Daly, Tyler, & Martin, 1997).
This brief overview of the literature and research on organisational trust in relation to employee turnover intention and organisational culture, suggests that organisational trustworthiness could be a mechanism that helps explain why different stakeholder cultures result in different employee turnover intentions. In the next section, we briefly recap the literature review, identify the literature gap, and formulate research questions.
2.6 Literature gap and research questions
The literature on instrumental stakeholder theory holds that stakeholder-orientated organisations
create more value over time than profit-orientated organisations (Jones, 1995). Scholars have, however, criticised the current advancements in instrumental stakeholder theory for focussing on theory without solid empirical foundations (Bosse et al., 2009; Vlachos, Panagopolous, & Rapp, 2014). By leveraging the recent advancements by both Jones et al. (2007) and Boesso and Kumar
(2016), who categorise an organisation’s stakeholder culture on a continuum of concern for others,
the key value-creation proposition within instrumental stakeholder theory can be empirically
tested. We are specifically interested in the impact that different stakeholder cultures could have
on employee turnover intention, since employees freely join, stay with, or leave a value-creating system and are considered critical entities in enabling firm performance (Clarkson, 1995; Hill & Jones, 1992). Formally put, we aim to address the empirical gap underlying the core value-creating proposition in instrumental stakeholder theory with the following research question:
How do different organisational stakeholder cultures affect employee turnover intention?
Furthermore, we aim to unravel the socio-cognitive mechanisms behind this direct relationship, by examining whether organisational trustworthiness acts as a mediator. Literature
demonstrates that organisational trustworthiness as an organisational quality influences the employees’ decision to place trust in the organisation (Mayer et al., 1995). More specifically, trust is the foundation upon which employees explicitly base their decision to be vulnerable to the behavioural intentions of their employer, and thus constitutes to a strong predictor of actual employee behaviour (Currall & Judge, 1995; Inkpen & Currall, 1998; Mayer et al., 1995). We shall subsequently use organisational trustworthiness as a means to explain why employees behave differently to organisations that are more or less stakeholder orientated, by formally answering the following research question:
Does organisational trustworthiness mediate the different behavioural effects that organisational stakeholder cultures can have on employee turnover intention?
In the next chapter of this thesis, the theoretical framework, we shall build upon the relevant academic findings in the literature review and provide the argumentation from which we derive our hypotheses.
3. Theoretical framework
This study aims to expand instrumental stakeholder theory, by empirically examining whether stakeholder-orientated organisations create more value over time than profit-orientated organisations (Jones, 1995) We shall do so by studying how the three central stakeholder cultures affect employee turnover intention, which in turn influences the value-creating capacity of the employer (Coff, 1997). The theory that is build-upon here is SET and its norm of reciprocity, which is amongst the most influential theories for understanding and explaining workplace behaviour (Cropanzano & Mitchell, 2005; Gouldner, 1960). Specifically, the employment relationship is assumed to be a social exchange operating on the basis of the norm of reciprocity,
employee turnover intention. Furthermore, we argue that an employee bases turnover intention on whether s/he is willing to reciprocate and be vulnerable to the exchange behaviours of its employer (Mayer et al., 1995; Molm, Takahashi, & Peterson, 2000). The willingness of an employee to be vulnerable to and reciprocate the exchange behaviours of the employer can be understood by the perceived trustworthiness of the latter in fairly rewarding employee loyalty and effort (Blau, 1964; Mayer et al., 1995). As such, we explore whether organisational trustworthiness on the part of the employer can act as a mediator to explain why different organisational stakeholder cultures shall result in different turnover intentions. Figure 1 below shows the hypotheses proposed.
Figure 1 Conceptual model
3.1 The direct relationships with employee turnover intention
A common theme in SET is that employees engage in exchange relationships to achieve not only economic but also socio-emotional benefits (Cropanzano & Mitchell, 2005). It is in this context that the employment relationship is seen as an exchange between an employee and its employer, which takes either an economic or a social form (Blau, 1964). A purely economic relationship is of a transactional nature and occurs on a short-term basis in that one party assigns financially-orientated and discrete rewards to another party based on a “quid pro quo” mentality or a legally enforceable contract detailing the exact quantities to be exchanged (Blau, 1964). The social
exchange, by contrast, is distinct in that the future obligations of parties in such relationship are unspecified (Blau, 1964). Social exchange between two parties specifically entails a series of mutual but not automatically concurrent exchanges of benefits, resulting in a feeling of moral obligation to reciprocate for the benefit received (Gouldner, 1960). That is, one party provides a favour to another party with the assumption that the other party exercises its felt moral obligation by positively rewarding the favour (Blau, 1964). Social exchange theory assumes that a balance of social exchange between parties is expected but that the nature, moment, and extent of the return is not described and cannot be negotiated a priori (Blau, 1964, Molm et al., 2000). A social exchange between parties is thus best summarised as “a long-term exchange of favours that precludes accounting and is based on a diffuse obligation to reciprocate” (Ayree, Budhwar, & Chen, 2002, p. 267).
In the theoretical framework, the employment relationship is assumed to be of a social nature. This assumption is justified because an employment relationship is often characterised as the exchange of loyalty and effort for tangible benefits and social rewards, in which an employer increasingly addresses the diffuse socio-emotional needs of its employee (Roehling, Cavanaugh, Moynihan, & Boswell, 2000). The employment relationship is also of a long-term nature, given that an employee is found to maintain a job for at least a decade and is expected in such long-term relationships to make the investments necessary in order to facilitate a social exchange relationship (Auer & Cazes, 2000; Blau, 1964; O’Reilly III & Caldwell, 1981). Lastly, social exchange is more likely to take place in an employment relationship where the employee sticks around for such a longer period of time, as a more permanent nature arises in the employment relationship, in which exchanges occur based on mutual reciprocity and long-term commitments (Millward & Hopkins, 1998).
As SET assumes that an employee reacts differently based on treatment by the employer, we argue that the more an employer engages in fair social exchanges with its employees, the
stronger the moral feeling amongst the latter to reciprocate for such treatment (Blau, 1964; Gouldner, 1960; Song, Tsui, & Law, 2009). This moral obligation to reciprocate is expected to lower turnover intention, as an employee wants to return such fair employer treatment by remaining an organisational member and exhibiting organisational behaviour that is deemed favourable (Gouldner, 1960; Rousseau, 1990; Wayne, Shore, & Liden, 1997). An employee is furthermore assumed to adhere to this fair social exchange relationship because the expectation is that doing so results in beneficial returns for employee loyalty and effort (Homans, 1958).
By conceptualising employee behaviour in terms of the norm of reciprocity, our study aligns with a growing consensus in strategic management literature that suggests that employee behaviour based on pure self-interest lacks realism (Bosse et al., 2009). Instead, most people follow a “bounded self-interest” and behave based on reciprocity, seeking to maximize their own utility but to do so within the norm of fairness (Bosse et al., 2009). People are thus willing to sacrifice their own interest in order to adhere to fairness principles, rewarding those who are perceived as fair and punishing those perceived as behaving unfairly (Bosse et al., 2009). Past empirical work confirms the importance of such reciprocal behaviour based on a bounded self-interest, as perceived fairness in previous exchanges between an employee and its employer positively relates to employee job performance (Moorman, 1991) and organisational commitment (Cohen-Charash & Spector, 2001), whilst negatively relating to employee turnover intention (Daileyl & Kirk, 1992). On the contrary, the more the behaviour of an employer is perceived as abusive or exploitative, the more its employees exhibit an intention to leave (Thau, Bennett, Mitchell, & Marrs, 2009). In light of our research, we would thus assume that an employee exhibits negative reciprocal responses in the form of higher turnover intentions to employer exchange behaviour that is perceived as unfair (Bosse et al., 2009).
The fact that we have defined employee behaviour based on a bounded-self-interest, means that we also move away from previous narrow conceptualisations of value in stakeholder theory
that solely emphasises economic returns and profitability (Harrison et al., 2010). Our approach rather focusses on a broad conceptualisation that defines value as “anything that has the potential to be worth to stakeholders” (Harrison & Wicks, 2013, p. 100). For reciprocal employees, this means that economic returns remain fundamental to them, but that a fairness in the exchange with their employer has a particular merit (Harrison & Wicks, 2013). Thus, the total utility that a reciprocal employee derives from a social exchange with an employer relates especially to fairness perceptions and less to the economic returns (Bridoux & Stoelhorst, 2014).
If we apply SET and its norm of reciprocity to the direct relationship between organisational stakeholder cultures and turnover intentions, then we first argue that an employer with a corporate egoist stakeholder culture experiences the highest turnover intentions relative to employers holding the two other central stakeholder cultures. An employer with a corporate egoist culture is motivated by a short-term profit motive, focusses on highly specified contracts, and displays a self-interested moral stance when exchanging anything of value with its employees, which in turn increases the likelihood that employees perceive the social exchange to be weak in nature (Blau, 1964; Jones et al., 2007). An employee in such a social exchange relationship feels less of a moral obligation to reciprocate the stakeholder treatment received, as the employer exchanges with its employees on a self-interested basis geared to maximising short-term firm welfare (Blau, 1964; Gouldner, 1960; Jones et al., 2007). In turn, we expect an employee working for an employer with a corporate egoist culture to display a strong intention to seek alternative employment, if available, in order to realise more fairness and thus more beneficial exchange outcomes in socially exchanging loyalty and effort with another employer (Blau, 1964; Eisenberger, Fasolo, & Davis-LaMastro, 1990).
By sharp contrast, we expect that the strong social exchange relationship fostered by an employer with a moralist culture shall result in lower turnover intentions relative to the weaker social exchange relationships fostered by employers embracing the two other central stakeholder
cultures. An employer with a moralist culture strives to adhere to moral exchange principles of justice and fairness regardless of economic temptations to discard them (Jones et al., 2007). It aims to build relationships with employees, focusses on implicit arrangements with stakeholders, and is extensively other-regarding in social exchanges compared to an employer with either a corporate egoist or an instrumentalist culture, both of which aim to maximise firm welfare in either the short- or the long-term (Jones et al., 2007). Employees working for an employer with a moralist stakeholder culture thus should demonstrate a lower turnover intention than those working for an employer with either a corporate egoist or an instrumentalist stakeholder culture, as the former feels a stronger moral obligation to remain an organisational member in order to recompense for and benefit from the fair stakeholder treatment received (Blau, 1964; Eisenberger, Armeli, Rexwinkel, Lynch, & Rhoades, 2001; Jones et al., 2007).
We furthermore expect that an employer with an instrumentalist stakeholder culture experiences lower turnover intentions compared to the turnover intentions experienced by an employer with a corporate egoist stakeholder culture; but expect it to experience higher turnover intentions relative to an employer with a moralist stakeholder culture. We explain the latter comparison by arguing that the exchange between an organisation with an instrumentalist culture and its employees can be qualified as a social exchange but not as deep as the social exchange relationship between an employer with a moralist stakeholder culture and its employees. A key difference between the stakeholder management of an instrumentalist and that of a moralist culture is that the former adheres to a strategic morality in only appearing moral to the extent that it is economically beneficial to do so, whilst the latter stands by its moral principles regardless of any economic temptation to discard them (Jones et al., 2007). An employee working in an instrumentalist culture is thus more likely to believe that its employer primarily cares about fostering its own welfare (Eisenberger et al., 2001; Jones et al., 2007). This engenders a low moral obligation on the part of the employee to remain in the organisation so as to reciprocate the
treatment received compared to the obligation experienced by an employee to an employer with a moralist culture demonstrating strong ethical standards of fairness and justice in social exchanges (Blau, 1964; Eisenberger et al., 2001; Jones et al., 2001).
Finally, we expect that an employee working for an employer with an instrumentalist culture to exhibit lower turnover intentions than to an employee working for an employer with a corporate egoist culture, as the former exchange relationship is more likely to be socially stronger. An employee working for an employer with an instrumentalist culture feels a greater moral obligation to reciprocate stakeholder treatment that appears to treat employees with fairness and respect compared to the low moral obligation felt to reciprocate the stakeholder treatment by an employer with a corporate egoist culture that is primarily driven by a short-term maximisation of profits (Blau, 1964; Eisenberger et al., 2001; Jones et al., 2007). An employee working for an employer with an instrumentalist culture should consequently exhibit lower turnover intentions, than an employee working for an employer with a corporate egoist culture (Blau, 1964; Eisenberger et al., 2001; Jones et al., 2007).
We thus arrive at three different hypotheses regarding the impact that different stakeholder cultures can have on employee turnover intention:
H1a. Employees working for an organisation with a corporate egoist stakeholder culture exhibit the highest turnover intentions relative to those of employees working for organisations with either an instrumentalist or a moralist stakeholder culture
H1b. Employees working for an organisation with an instrumentalist stakeholder culture exhibit lower turnover intentions relative to those of employees working for an organisation with a corporate egoist stakeholder culture, but exhibit higher turnover intentions relative to those of employees working for an organisation with a moralist stakeholder culture.
H1c. Employees working for an organisation with a moralist stakeholder culture exhibit the lowest turnover intentions relative to those of employees working for organisations with either a corporate egoist or an instrumentalist stakeholder culture.
3.2 The mediating effects of organisational trustworthiness
In the section above, we explained the impact that three central organisational stakeholder cultures may exert on employee turnover intention. We now continue by proposing that the trustworthiness of an employer acts as a mechanism to explain why different stakeholder cultures result in varying turnover intention rates.
In SET, two parties exchange with one another in order to receive mutually beneficial outcomes (Blau, 1964). A social exchange between employee and employer is, however, subject to risk and uncertainty, as the unspecified and unquantified moral obligation to reciprocate and the absence of any formal contract governing a social exchange result in neither party knowing if, when, and to what extent they will receive a fair amount of returns from the benefits supplied (Blau, 1968; Molm et al., 2000). Trust is therefore critical in establishing and maintaining a social exchange between parties, as a donor providing benefits must trust that the other party will fairly reciprocate over time (Blau, 1964; Molm et al., 2000). Indeed, the more a party fairly reciprocates benefits, the more trustworthy that party is perceived to be for the fair reciprocation of future obligations (Blau, 1964).
Trust is defined as the willingness to be vulnerable to another party’s behaviour based on positive expectations, and has an important antecedent in being understood as and predicted by the trustworthiness quality upheld of the other party (Mayer et al., 1995). In the context of our research, we argue that varying turnover intentions can be explained by the perceived trustworthiness of the employer in fairly treating its employees (Rhoades & Eisenberger, 2002). Higher trustworthiness of an employer is theoretically expected and empirically found to relate to
lower turnover intentions, for in such a situation, an employee has experienced and continues to expect low levels of vulnerability when exchanging anything of value with its employer (Blau, 1964; Eisenberger et al., 2001; Mayer et al., 1995). Employers that have met their reciprocal obligation and promote social exchanges via long-term investments also reduce employee concerns over future employer opportunism, in turn lowering intentions to seek alternative employment (Hom & Griffeth, 1995; Molm et al., 2000; Song et al., 2009).
We expect the weak social exchange promoted by an employer with a corporate egoist culture to result in low trustworthiness perceptions and therefore low expectations for the employer to fairly reward employee effort and loyalty (Dietz & Den Hartog, 2006; Jones et al., 2007; Molm et al., 2000). We specifically argue for the integrity dimension of organisational trustworthiness that the motivation of an employer with a corporate egoist culture to maximise short-term profits drives a strong perception amongst its employees that the employer is less likely to adhere to norms of fairness and justice in social exchanges (Jones et al., 2007; Mayer et al., 1995). The low benevolence and ability attributes of an employer with a corporate egoist culture, which only exhibits concern, care, and interest in shareholder wealth, are also thought to engender a strong feeling amongst employees that they will not be fairly recompensed for loyalty and effort (Jones et al., 2007; Mayer et al., 1995). As a consequence of these low trustworthiness dimensions in such an employer, we reason that its employees exhibit a low willingness to be vulnerable to the amoral exchange behaviour of its employer and thereby exhibit a strong intention to seek alternative employment, if available, in order to attain more fair and beneficial social exchange outcomes (Blau, 1964; Eisenberger et al., 1990; Rhoades & Eisenberger, 2002).
By contrast, we predict that the strong social exchange relationship promoted by an employer with a moralist stakeholder culture drives a perception amongst its employees that the employer is trustworthy in fairly exercising its moral obligation to reciprocate (Dietz & Den Hartog, 2006; Jones et al., 2007; Molm et al., 2000). Specifically, the motive of an employer with
a moralist culture to always adhere to moral principles when exchanging with its employees results in high levels of perceived organisational integrity (Jones et al., 2007; Mayer et al., 1995; Molm et al., 2000). The fully other-regarding exchange behaviour of an employer with a moralist culture also results in strong employee perceptions of organisational benevolence and competence in that the former cares for its welfare (Jones et al., 2007; Mayer et al., 1995; Molm et al., 2000). We expect that the high levels of organisational trustworthiness held by an employer with a moralist culture to result in low turnover intentions, as employees are strongly willing to be vulnerable to the exchange behaviour of the employer and want to reciprocate for the fair organisational treatment received (Blau, 1964; Dietz & Den Hartog, 2006; Molm et al., 2000).
For an organisation with an instrumentalist culture, we reason that its organisational trustworthiness occupies middle ground between those of employers with either a corporate egoist or a moralist culture. First, it is expected that employees working for an employer with an instrumentalist culture to infer higher levels of organisational trustworthiness relative to the trustworthiness perceptions held by those working for an employer with a corporate egoist culture, resulting in lower turnover intentions. This difference in employer trustworthiness is due to the fact that employees working for an employer with an instrumentalist culture perceive a stronger social exchange relationship relative to that experienced by employees working for an employer with a corporate egoist culture (Blau, 1964; Jones et al., 2007). Indeed, the employer with an instrumentalist culture sets itself apart from an employer with a corporate egoist culture by practising a strategic morality that considers the interests of its employees when it is beneficial for the long-term firm performance (Clarkson, 1995; Jones et al., 2007). The appearance of being moral during social exchanges with its employees subsequently results in higher levels of organisational integrity for an employer with an instrumentalist culture, as its employees perceive fairer rewards for the loyalty and effort provided than they would for an employer with a corporate egoist culture that exchanges with its employees in such way that it fosters the short-term profit
of the firm (Jones et al., 2007; Mayer et al., 1995; Molm et al., 2000). An employer with an instrumentalist culture also provides for more social benefits to its employees as long as these actions are in the interests of the organisation, and thus would demonstrate more benevolence and ability to take care for the interests of the employees than does an employer with a corporate egoist culture that primarily attends to shareholder interests (Jones et al., 2007; Mayer et al., 1995; Molm et al., 2000). Employees working for an employer with an instrumentalist culture are thus more likely to remain an organisational member than to those working in a corporate egoist culture, as the former employee group has a higher willingness to reciprocate and to be vulnerable to an employer that they consider more trustworthy in social exchanges (Mayer et al., 1995; Molm et al., 2000).
Finally, we expect that the stronger social exchange relationship promoted by an employer with a moralist culture results in greater perceived trustworthiness in fairly reciprocating employee benefits received compared to the weaker social exchange promoted by (and therefore lower organisational trustworthiness levels held by) an employer with an instrumentalist culture (Blau, 1964; Jones et al., 2007; Mayer et al., 1995). An employer with a moralist culture holds a stronger organisational integrity in striving to adhere to moral standards when socially exchanging with its employees, relative to an employer with an instrumentalist culture that constantly balances moral considerations against long-term financial implications for the firm in social exchange relationships (Blau, 1964; Jones et al., 2007). Furthermore, the benevolence and competence attributes that show a genuine care for employees are perceived to be stronger by those working for an employer with a moralist culture, as it is not focused on maximising long-term firm welfare but rather on advancing the welfare for society at large (Mayer et al., 1995; Jones et at al., 2007). Given that an employer with a moralist culture is perceived to be more trustworthy than one with an instrumentalist culture in fairly rewarding employee effort and loyalty, we expect that those
working for the former employer to exhibit a turnover intention (Jones et al., 2007; Mayer et al., 1995; Molm et al., 2000).
In summary, we argue that varying turnover intentions can be explained by how trustworthy the employer is perceived to be in fairly rewarding the loyalty and effort of its employees (Rhoades & Eisenberger, 2002). Organisational trustworthiness therefore aids in explaining the impact that different stakeholder cultures could have on employee turnover intention. Formally put, we arrive at the following hypothesis:
H2. Organisational trustworthiness mediates the relationships proposed in hypothesis 1a, b, and c.
We now continue with presenting the research design used to test our hypotheses.
4. Research design
This chapter elaborates upon the research design used for our study. First, the method used to obtain and analyse our data is described. An outline for our sample is then provided, followed by the last section in which we describe the operationalisation of our model variables.
4.1 Method
To answer the two main questions and test the stated hypotheses, we have adopted a positivistic research philosophy (Saunders & Lewis, 2016). We conducted our explanatory study on the basis of a survey strategy and an overall quantitative design, a combination commonly employed in deductively examining the relationships between variables (Saunders & Lewis, 2016). The quantitative data gathered was then analysed using descriptive and statistical techniques with an ultimate goal of examining the hypothesised relationships.
Following the survey research strategy, we selected an online questionnaire as a means with which to collect our data. An online questionnaire is associated with a variety of advantages. For example, it provides more control over the research process, enables the possibility of generating standardised results, and provides the opportunity to collect data economically (Saunders & Lewis, 2016). Our questionnaire was of an anonymous and self-completed nature, which came with the benefit that respondents were less likely to answer questions in a way so as to please the initiator (Dillman, Smyth, & Christian, 2014). Our research furthermore followed a cross-sectional time horizon, because of the limited amount of time available (Saunders & Lewis, 2016).
We acknowledge that there are also several disadvantages to using online questionnaires as the data collection method in addition to the advantages mentioned before. Common method bias is amongst the most significant problems, given that we collected information on the independent and dependent variable from the same respondent at one point in time (Podsakoff, Mackenzie, Lee, & Podsakoff, 2003). This could result in common response variance due to measuring our variables all at once, rather than only having variance as a result of the predispositions of our respondents (Podsakoff et al., 2003). Furthermore, online questionnaires are associated with the disadvantage of lower response rates, given the impersonal nature of the data collection method (Evans & Mathur, 2005). A final limitation relates to a self-selected bias in our sample, as we were only able to reach out to those employees working in the Netherlands who had access to the physical or online domains in which we had distributed the questionnaire (Duffy, Smith, Terhanian, & Bremer, 2005).
The questionnaire was designed with one other master’s student. We had in common the variable of organisational stakeholder culture, which was used as the basis for the creation of our questionnaire. Several other variables were incorporated in the questionnaire that belonged to the other master’s student but that are not presented here because of their irrelevance to this study.
We designed the questionnaire in English and subsequently translated it into Dutch, with our thesis supervisor validating our translations. Having the questionnaire available in two languages enabled us to gather responses from both the Dutch and the international segments of the workforce in the Netherlands.
The questionnaire was predominantly distributed through a hyperlink made available to potential respondents on several social-media platforms such as LinkedIn and Facebook, whilst we also contacted our existing friends, acquaintances, family members, and colleagues in our professional and personal network for distribution purposes. This hyperlink brought potential respondents to the online questionnaire tool Qualtrics, which was used in designing this questionnaire. After the initial distribution attempts, we sent a reminder to those who did not respond after two weeks, as well as posting several appeals to participate on our personal social media platforms throughout the data collection period. Furthermore, we undertook several visits to Amsterdam Airport Schiphol and approached as many employees as possible in order to increase the number of respondents.
The final questionnaire had eighteen questions and took an average of 13 minutes to complete. The English version of the questionnaire is included in Appendix I.
4.2 Sample
The target population for this study was the labour force in the Netherlands. Given that we were unable to approach the entire target population, we attempted to raise the external validity of our sample by seeking variation in, amongst other things, employer characteristics and sectors of employment. We excluded those respondents working fewer than twenty hours per week and/or respondents having a tenure fewer than six months, in order to select only those respondents who were able to make accurate inferences about their organisational culture and its stakeholder management practices (Mayer et al., 1995; Muliawan, Green, & Robb, 2009).
A combination of snowball and convenience-based techniques was used in gathering our sample, as we expected gaining access to employees working for various companies located all across the Netherlands to be a challenge. These non-probability sampling techniques are associated with the advantage of effectively addressing the limited time available to conduct the research (Saunders & Lewis, 2016). A disadvantage of non-probability sampling, however, is that not every employee has an equal chance of being selected, which limits the representability of our sample to the target population (Saunders & Lewis, 2016). Random sampling would enhance the representability of our sample, but because of our inability to obtain the sampling frame within the time and financial constraints, we nevertheless decided to deploy a non-probability sampling technique (Saunders & Lewis, 2016).
We aimed to obtain a sample size of at least 200 responses for three particular reasons. First, literature finds that a sample size of 200 would most probably generate a sample with external validity after cleaning the data (Sue & Ritter, 2011). Secondly, the G*Power tool concluded that a sample of 191 respondents was satisfactory on the basis of a significance level of .05 and aiming for an effect size of .1 for linear multiple regressions. Finally, because it is difficult to infer the response rates coming from those who saw the online request to participate but ultimately decided to not respond to it, we decided to aim for a sample size in line with the previous two arguments provided (Nulty, 2008).
The questionnaire was ultimately available from April 17, 2018 until May 16, 2018. A total of 291 participants opened the questionnaire, of which 169 respondents, or 56 %, completed it. Over 35 respondents were not able to complete the questionnaire because they either had a tenure of less than six months or worked for fewer than 24 hours per week for their employer. After deleting four respondents who had missing values, we obtained a sample of 165 employees to be further examined in the results section of this thesis.
