Organizational Justice as a Mediator of the Relationship between
Stakeholder Culture and Organizational Citizenship Behavior
University of Amsterdam – Amsterdam Business School MSc Business Administration
Strategy Track
MSc. Maren Heumann (11944501) Thesis supervisor: Dr. Flore Bridoux June 18, 2018
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Statement of originality
This document is written by Maren Heumann 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.
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Abstract
The starting point of this research is the proposition of instrumental stakeholder theory that stakeholder-oriented firms create more value than profit-oriented firms. These orientations are operationalized using a typology of three stakeholder cultures: ‘egoist’, ‘instrumentalist’ and ‘moralist’, which range from self-interested to other-regarding. In order to validate empirically the key proposition of stakeholder theory, this study investigates the relationship between these stakeholder cultures and employees’ organizational citizenship behavior (OCB). OCB, which refers to behavior that is not specified in employment contracts and that is associated with organizational effectiveness, is an important form of value-creating behavior performed by employees, who are an important stakeholder group. This research is particularly interested in OCB that is directed at the organization (OCBO). Furthermore, employees’ perceptions of distributive, procedural and interactional justice are considered as drivers of the relationship between stakeholder culture and OCBO. The researcher developed a new scale to measure stakeholder cultures. Data were collected by means of an online survey among 167 employees. The results show that a moralist stakeholder culture is positively associated with OCBO, which supports the main proposition of instrumental stakeholder theory. Moreover, the findings indicate that organizational justice functions as a mediating mechanism in the relationship between stakeholder culture and OCBO. However, it is uncertain which type of organizational justice exactly drives that relationship. This research contributes to the empirical work testing the proposition of stakeholder theory. Furthermore, this study investigates the role of organizational justice as an underlying mechanism that explains the relationship between stakeholder culture and value-creating behavior. Lastly, this research provides suggestions for future researchers to refine and improve the stakeholder culture measure.
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Table of Contents
Introduction ... 5
Literature review ... 8
Stakeholder orientation and stakeholder culture ... 8
Employee Organizational Citizenship Behavior ... 11
Organizational justice ... 14
Theoretical framework ... 17
OCB as a reciprocal reaction based on perceptions of fairness ... 17
Direct relationship between stakeholder culture and OCBO ... 21
The mediating effect of distributive justice ... 22
The mediating effect of procedural justice ... 25
The mediating effect of interactional justice ... 27
Methodology ... 30
Research design ... 30
Procedure ... 32
Sample ... 34
Stakeholder culture scale development ... 34
Measures ... 38
Results ... 41
Reliability and factor analyses ... 41
Descriptive statistics ... 43
Correlations analysis... 45
Check of assumptions ... 47
Regression analyses ... 48
Discussion ... 51
Major findings and theoretical implications ... 51
Limitations and suggestions for future research ... 55
Managerial implications ... 59
Conclusion ... 61
References ... 62
Appendix A – Sample characteristics ... 74
Appendix B – Results of quantitative pre-test of stakeholder culture scale ... 76
Appendix C – Measures ... 78
Appendix D – Results of factor analyses ... 80
Appendix E – Multilingual differences ... 86
Appendix F – Check of assumptions ... 87
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Introduction
Stakeholder theory breaks with the long-held acceptance of shareholders being the only group that matters for firm decisions and firm success (Freeman, 1984). This has far-reaching consequences for the way firms do business and how firms interact with society. Stakeholder theory deals with these challenges in two ways. Normative stakeholder theory describes what firms ought to do, departing form a moral point of view (Donaldson & Preston, 1995). In contrast, instrumental stakeholder theory is concerned with the actual behavior of firms, linking practices of stakeholder management to the achievement of firm performance goals (Donaldson & Preston, 1995; Jones, 1995). These firm performance goals can vary widely. Whereas profit-oriented firms prioritize shareholder interests, the aim of stakeholder-profit-oriented firms is to create economic value for all stakeholders (Jones, 1995).
Core to instrumental stakeholder theory is the proposition that stakeholder-oriented firms will create more value than profit-oriented firms (Jones, 1995). Theoretical work has been done on the microfoundations of stakeholder theory to better understand this relationship between stakeholder strategy and value creation (Bridoux & Stoelhorst, 2014; Bridoux & Stoelhorst, 2016). Regarding empirical research, literature from corporate social responsibility (CSR) suggests a link between CSR and value creation (Ruf, Muralidhar, Brown, Janney, & Paul, 2001; Waddock & Graves, 1997). However, there is little research empirically validating and explaining the main proposition from within stakeholder theory (Boesso & Kumar, 2016). The purpose of this study is to contribute and advance empirical work that tests and explains this proposition. To do so, it is necessary to first concretize the terms stakeholder orientation and stakeholder behavior. Stakeholder orientation refers to “the degree to which a firm understands and addresses stakeholder demands and concerns” (Ferrell & Ferrell, 2008, p. 24). Jones, Felps and Bigley (2007) introduced a typology of stakeholder cultures, where cultures differ in the extent to which they emphasize concern for others over self-interest. In
6 line with Boesso and Kumar (2016), this research argues that stakeholder culture is a compelling measurement for identifying a firm’s stakeholder orientation. Due to the scope of this study, it is necessary to determine a firm’s stakeholder culture from the point of view of one relevant stakeholder group. This stakeholder group needs to be important to firm value creation and have a certain amount of knowledge of the firm’s culture. The stakeholder group employees fits these criteria very well. First, employees are essential to value creation because they perform productive activities and provide the firm with resources closely related to firm performance (Clarkson, 1995; Freeman, 1984; Freeman, Harrison, Wicks, Parmar, & De Colle, 2010). Second, employees form the stakeholder group that most likely has fine-grained knowledge of the firm’s stakeholder culture due to their daily interaction with the firm.
Stakeholder theory encompasses a broad range of constructs when referring to stakeholder behavior. Due to their theoretical nature, these constructs are not directly fit for empirical investigation. In this research, stakeholder behavior is operationalized in terms of employees’ organizational citizenship behavior (OCB), which refers to the actions that go beyond contractual agreements and contribute to value creation (Organ, 1988a; Organ, Podsakoff, & MacKenzie, 2005). Extensive evidence shows that OCB is associated with organizational effectiveness and performance (Meyer, Stanley, Herscovitch, & Topolnytsky, 2002; Nielsen, Hrivnak, & Shaw, 2009; Organ et al., 2005; Podsakoff & MacKenzie, 1997). This research focuses on OCB that is directed at the organization (OCBO), which can be considered a reciprocal response to an organizational-level factor such as stakeholder culture. Therefore, OCBO is a well-suited measurement for value-creating employee behavior.
To summarize, this study examines the relationship between stakeholder culture and employee OCBO, representing stakeholder orientation and stakeholder behavior, respectively. Empirically testing the main proposition in instrumental stakeholder theory clearly is an integral part of this study. A further important objective is to put forward a reasonable
7 explanation of how stakeholder culture and OCBO are related. This research seeks to explain that relationship by exploring organizational justice as an underlying mechanism. Organizational justice describes people’s perceptions of fairness in organizations (Greenberg, 1987; Greenberg, 2011). As reflected in organizational justice literature (Colquitt, Conlon, Wesson, Porter, & Ng, 2001; Greenberg, 2011), the mechanism of fairness will be examined as a driver of reciprocity. This study tests whether fairness and the reciprocity it creates, explains the relationship between stakeholder culture and OCBO. In formal terms, the research question of this study is: What is the relationship between stakeholder culture and OCBO, and
is this relationship mediated by organizational justice?
This research aims to make four theoretical contributions. First, it contributes to empirical research from within stakeholder theory to test the link between stakeholder orientation and stakeholder behavior. Second, the researcher develops a stakeholder culture measure to operationalize and empirically validate the classification of stakeholder cultures as proposed by Jones et al. (2007). Third, stakeholder culture is investigated as an antecedent for OCBO. Whereas research has mainly focused on individual-level factors (e.g. Meyer et al., 2002; Organ et al., 2005), this study contributes to empirical research on organizational-level antecedents for OCBO. Fourth, this study advances the understanding of fairness as a driver in the main relationship proposed by stakeholder theory by empirically validating different forms of organizational justice as a mechanism driving and explaining this relationship.
Regarding managerial implications, this study highlights the importance of stakeholder culture on value-creating stakeholder behaviors such as OCBO. Therefore, this research aims to raise managerial interest for stakeholder culture as a less tangible factor that may have far-reaching effects on employee behavior and consequently on performance. This study seeks to provide practical suggestions for managers of how to improve firm performance via employee perceptions of stakeholder culture, organizational justice and OCBO.
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Literature review
This chapter introduces the main constructs in this research and outlines their development in the literature as well as current research findings. The first section describes a fundamental construct of instrumental stakeholder theory – stakeholder orientation, which in this research is conceptualized as a typology of stakeholder culture. Next, employee organizational citizenship behavior that is directed at the organization (OCBO) is introduced as a depiction of stakeholder behavior. The last section presents organizational justice literature and argues that distributive, procedural and interactional justice explain the relationship between stakeholder culture and employee OCBO. Gaps in the literature are identified and used as a starting point for the current study.
Stakeholder orientation and stakeholder culture
A central theme of stakeholder theory is the consideration of different stakeholder interests (Freeman, 1984; Freeman et al., 2010). Stakeholders are defined as “any group or individual who can affect of is affected by the achievement of the organization’s objectives” (Freeman, 1984, p. 46), and include customers, suppliers, employees, governments, and shareholders. Stakeholder interests often diverge from each other, giving rise to the question of how to resolve and manage tensions between them (Jones et al., 2007). Stakeholder management is considered to be crucial for value creation and thus firm success (Freeman, 1984). Therefore, the investigation of different stakeholder management approaches is very relevant.
In the literature, two approaches or orientations are often distinguished. Some firms are characterized as seeking to favor those stakeholders who can most affect value creation in order to maximize profits (i.e. wealth for shareholders), suggesting an instrumental stance towards stakeholders (Berman, Wicks, Kotha, & Jones, 1999). Other firms follow a normative approach based on moral principles, which dismisses actions that are purely advantageous, and advocates
9 the well-being of all its stakeholders (Berman et al., 1999). This dichotomy between individualistic and collectivistic focused organizations has been recognized under different names in the literature, for example ‘strategic stakeholder management orientation model’ vs. ‘intrinsic stakeholder commitment model’ (Berman et al., 1999), ‘stockholder orientation’ vs. ‘stakeholder orientation’ (Wang & Dewhirst, 1992), or ‘arms-length approach’ vs. ‘fairness approach’ (Bridoux & Stoelhorst, 2014). What it comes down to is that profit-oriented firms give primacy to the interests of their shareholders, whereas stakeholder-oriented firms take into account the interests of all their stakeholders (Jones, 1995).
This distinction is important because instrumental stakeholder theory claims that stakeholder-oriented firms create more value than profit-oriented firms (Jones, 1995). The underlying logic of so called corporate morality is that firms that avoid opportunism through contracting based on mutual trust and cooperation will reduce transaction costs and thus have a competitive advantage over firms that do not (Jones, 1995). Although this proposition is at the heart of stakeholder theory, limited research has been dedicated to the conceptualization of stakeholder orientation (Ferrell & Ferrell, 2008). An important contribution was made by Jones et al. (2007), who gave substance to the concept of stakeholder orientation by introducing an explicit typology of stakeholder cultures. Stakeholder culture is defined as “the beliefs, values, and evolved practices regarding the solution of recurring stakeholder-related problems” (Jones et al., 2007, p. 142). Thus, a firm’s stakeholder culture is a reflection of its stakeholder management approach, and guides managerial thinking and behavior in making tradeoffs among competing stakeholder demands (Jones et al., 2007).
Jones et al. (2007) define five stakeholder cultures on a continuum from individually self-interested to exclusively other-regarding: ‘agency’, ‘egoist’, ‘instrumentalist’, ‘moralist’ and ‘altruist’. The cultures at the two extremes (agency culture and altruistic culture) are less commonly found in organizations due to the competitive dynamics of most business
10 environments (Boesso & Kumar, 2016). Therefore, this research concentrates on the three central stakeholder cultures. In organizations with egoist stakeholder cultures, managers base their actions on the short-term interests of shareholders, whereas moral commitment to other stakeholder groups is limited (Jones et al., 2007). The instrumentalist stakeholder culture is also characterized by the pursuit of self-interest, but unlike organizations with egoist cultures, instrumentalist organizations focus on enhancing firm performance in the long-term. Managers in instrumentalist cultures act based on strategic morality, which means that they develop relationships with stakeholders as means to increase long-term financial benefits (Jones et al., 2007). In contrast, moralist cultures consider all stakeholders independent of the economic benefits and will only violate moral standards if firm survival is at stake (Jones et al., 2007).
The proposition that stakeholder-oriented firms create more value than profit-oriented firms, is central to instrumental stakeholder theory (Jones, 1995). However, there is little empirical evidence in the field of stakeholder theory testing this proposition. Stakeholder culture provides a promising starting point for the investigation of the relationship between stakeholder orientation and stakeholder behavior because it captures the main distinction between self-interest and concern for others (Jones et al., 2007). Based on the stakeholder culture framework of Jones et al. (2007), Boesso and Kumar (2016) empirically examined the association between stakeholder culture and managers’ prioritization of stakeholder groups as well as the managers’ responses to different stakeholder demands. Although their study contributed to empirical investigation of the stakeholder culture framework, their approach was largely exploratory (Boesso & Kumar, 2016). Moreover, their focus on managers calls for more research on other stakeholder groups and organization-level factors in stakeholder relationship management (Boesso & Kumar, 2016). Consequently, more empirical research is needed to test the main proposition of instrumental stakeholder theory.
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Employee Organizational Citizenship Behavior
Due to its theoretical nature, the main proposition of instrumental stakeholder theory is very broad. It refers to value-creating behavior of several stakeholder groups, which makes empirical investigation difficult. Therefore, the focal stakeholder group and the value-creating behavior need to be defined for this empirical research. Stakeholder groups are often divided into primary and secondary stakeholders. A primary stakeholder group is essential for a firm’s survival due to its transactions with the firm, whereas a secondary stakeholder group affects or is affected by the firm, but it is not crucial for a firm’s survival (Clarkson, 1995). With regard to the firm’s objective to create value, primary stakeholders are considered to be essential because they perform productive activities and/or provide relevant resources, thereby contributing directly to value creation (Freeman, 1984; Freeman et al., 2010; Jones, 1995).
Among primary stakeholders, employees are a particularly suitable stakeholder group to start an empirical investigation. Similar to managers, who have been focal to the empirical study by Boesso and Kumar (2016), employees are key actors for joint value creation (Aguilera, Rupp, Williams, & Ganapathi, 2007; Bridoux & Stoelhorst, 2016). They contribute most directly to value creation, both individually and through combined forces such as in projects or team production, since they are central to the firm’s operations (Markos & Sridevi, 2010; McClean & Collins, 2011). Accumulated individuals’ contributions to value creation can be considered to enhance collective value creation directly (Bridoux & Stoelhorst, 2014; Bridoux & Stoelhorst, 2016). Therefore, the focus on individual employees contributes to the empirical validation of the main proposition of instrumental stakeholder theory. Lastly, employees are close to the firm’s state of affairs and thus are likely to have first-hand experience with and fine-grained knowledge about the firm’s stakeholder culture. It therefore makes sense to start an empirical investigation into stakeholder theory with this group.
12 Jones et al. (2007) present two ways in which stakeholder culture may affect how employees assess and respond to stakeholder issues. First, stakeholder culture provides a common interpretive frame for dealing with information. Second, stakeholder culture motivates behaviors and practices that are in line with the organization’s culture (Jones et al., 2007). This study focuses on the second aspect and investigates how stakeholder culture motivates employee behavior. According to Jones et al. (2007), firms with broadly moral cultures take other stakeholders’ concerns as well as moral principles into account in their decision making. Translated into stakeholder behavior, these cultures are likely to motivate employees to consider others. In contrast, self-interested stakeholder cultures such as egoists are less likely to stimulate other-regarding behavior among employees.
A construct closely linked to other-regarding behavior is organizational citizenship behavior (OCB). This refers to the “individual behavior that is discretionary, not directly or explicitly recognized by the formal reward system, and that in the aggregate promotes the efficient and effective functioning of the organization” (Organ, 1988a, p. 4). In other words, OCBs are voluntary work-related behaviors that go beyond the contractual tasks and which are assumed to improve organizational effectiveness. Examples include helping colleagues, engaging in committees, or organizing events (Podsakoff, MacKenzie, & Bommer, 1996).
Organ (1988a) identifies five dimensions of OCB including altruism, courtesy, conscientiousness, sportsmanship, and civic virtue. Altruism includes prosocial behavior that directly helps coworkers, whereas courtesy refers to behaviors that help prevent work-related problems, such as sending reminders and consulting colleagues. Conscientiousness is associated with efforts to increase organizational efficiency, sportsmanship includes not complaining about minor inconveniences at the workplace, and civic virtue expresses involvement and participation in the organizational governance (Organ, 1988a). Other empirical and conceptual work in the field suggests a two-dimensional structure of OCB –
13 behaviors directed at the organization in general (OCBO) and behaviors directed at specific individuals within the organization (OCBI), which indirectly contribute to the organization (Williams & Anderson, 1991). Examples of OCBO are giving advance notice when unable to come to work and defending the organization from critics, whereas OCBI includes making newer employees feel welcome in the work group and helping colleagues who have been absent or have heavy workloads (Williams & Anderson, 1991). This study focuses on OCBO as a stakeholder behavior that may be motivated by stakeholder culture. This choice is motivated in the theoretical framework.
OCB is considered to be desirable stakeholder behavior because it is positively associated with organizational performance (Meyer et al., 2002; Nielsen et al., 2009; Organ et al., 2005; Podsakoff & MacKenzie, 1997). OCB influences profitability and customer satisfaction (Koys, 2001), which are in turn important outcomes for firm success. Even when antecedents have been considered, most of them involved individual-level factors (e.g. Meyer et al., 2002; Organ et al., 2005). In contrast, there is little empirical research on the organizational-level antecedents of OCB. Since organizational culture provides individuals with shared norms and values, and determines which behavior is appropriate (O'Reilly & Chatman, 1996), it is expected that stakeholder culture may have a powerful effect on the expression of desired stakeholder behaviors, as proposed by stakeholder theorists. Considering the potential benefits in terms of firm performance, it is important to understand the role of stakeholder culture as an antecedent of OCB, which has not yet been tested empirically.
To summarize, there are two gaps in the literature. First, more empirical work is needed testing the key proposition of stakeholder theory that stakeholder-oriented firms create more value than profit-oriented firms (Jones, 1995). Second, there is a lack of attention for stakeholder culture as an antecedent of employee OCB in organizational behavior research. By testing the link between stakeholder culture and OCBO, this study contributes to fill both gaps.
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Organizational justice
In addition to the need for empirical work testing the central proposition of instrumental stakeholder theory, little is known about the underlying mechanisms driving the relationship between stakeholder orientation and value creation. This section describes a trust-based approach before illustrating how fairness and reciprocity may serve as a basis to understand value creation. Finally, this section introduces research from organizational justice, which serves as a central concept in the present research.
Prior approaches to explain value creation in firms have looked at the role of trust (Mayer, Davis, & Schoorman, 1995). As Mayer et al. (1995) point out, stakeholders are believed to reveal sensitive or private information when they trust a firm. This information can contribute to value creation and in turn give the firm a competitive advantage (Barney & Hansen, 1994). Although being an important mechanism to access stakeholders’ information, trust may not be enough of a motivation for stakeholders to divulge information (Harrison, Bosse, & Phillips, 2010). Rational stakeholders would only reveal information when they expect to enjoy some of the benefits from the value that is created (Harrison et al., 2010). For example, employees may share their ideas about process optimization if they believe that the value created will be fairly distributed, which implies that the employees also benefit from the improvements (Harrison et al., 2010).
Recently, quite a few stakeholder theorists have argued that fairness, and the reciprocity it generates in stakeholders, drives value creation in what Jones et al. (2007) would identify as the moralist or altruist stakeholder cultures (Bosse, Phillips, & Harrison, 2009; Bridoux & Stoelhorst, 2014; Bridoux & Stoelhorst, 2016; Hahn, 2015; Harrison et al., 2010; Harrison & Wicks, 2013). Reciprocity in stakeholders refers to the mutual reinforcement of each other’s actions, including both positive and negative behaviors (Simon, 1966). The claim that reciprocity is a basic tendency in most human societies (Gouldner, 1960) has received some
15 empirical support (e.g., Burger, Sanchez, Imberi, & Grande, 2009; Dohmen, Falk, Huffman, & Sunde, 2009). Some scholars even classify it as a hypernorm, which is a universally accepted moral norm (Dunfee, 2006; Phillips & Johnson-Cramer, 2006). Although individuals differ in the extent to which they reciprocate, the average behavioral outcome is in line with the reciprocity assumption (Bosse et al., 2009). Consequently, human behavior is best reflected by the homo reciprocans, who is described as a conditional cooperator, in contrast to the self-interested behavior of the neoclassical homo economicus on the one hand, and selfless altruistic behavior on the other (Bowles, Boyd, Fehr, & Gintis, 1997).
Research suggests that treating stakeholders well, as in fairly, contributes to firm performance (Donaldson & Preston, 1995; Freeman, 1984; Harrison et al., 2010; Jones, 1995). This research draws on the organizational justice literature to explain how fairness and its derivative reciprocity contribute to value creation. Organizational justice refers to people’s perceptions of fairness and equity in organizations (Greenberg, 1987), and can be expressed in three forms: distributive justice, procedural justice, and interactional justice (Colquitt et al., 2001; Colquitt, 2001; Greenberg, 1987). Distributive justice refers to the individual’s perception of fairness when comparing their input/output ratio with the ratios of others in decision outcomes (Adams, 1965). Procedural justice is conceptualized as the perceived fairness of the processes to reach the outcome (Leventhal, 1980). Interactional justice reflects the perception of fairness in interpersonal treatment as decisions are made (Bies & Moag, 1986). In a later model, interactional justice is subdivided into interpersonal and informational justice (Greenberg, 1993). While interpersonal justice relates to Bies and Moag’s (1986) original definition of the quality of interpersonal treatment, informational justice refers to the adequate explanation about the way procedures are implemented or outcomes are distributed (Colquitt et al., 2001). Organizational research treats justice as a social construct because it is
16 a subjective view of justice based upon experience, rather than an objective view of justice based upon moral principles (Colquitt et al., 2001; Hosmer & Kiewitz, 2005).
Understanding these different forms of organizational justice allows for a connection between stakeholder culture and OCBO. Stakeholder cultures may differ in the extent to which they are perceived as fair, since firms with different stakeholder cultures tend to differ in their distributive and procedural decision-making, and in their interactions with stakeholders. This would result in employees holding different perceptions of fairness about their firm’s stakeholder culture, which in turn would motivate certain stakeholder behaviors. Organizational justice may therefore provide the missing link to explain why employees would engage in OCBO when experiencing a certain stakeholder culture in their dyadic relationship with the firm. Taking a fairness perspective, moralist cultures may trigger positive reciprocal behaviors in employees, which ultimately contribute to value creation. A reciprocal depiction of human behavior thus challenges the purely economic perspective, which would argue that moralist cultures waste their resources. Consequently, organizational justice may be an explanatory mechanism for the main proposition in instrumental stakeholder theory.
To conclude, the proposition of stakeholder theory that stakeholder-oriented firms are associated with higher value creation than profit-oriented firms (Jones, 1995) not only needs empirical testing, but also further theoretical explanation. Examining the relationship between stakeholder culture and OCBO, and organizational justice as a mediator of this relationship, will contribute to fill this gap by clarifying how OCBO can be stimulated, as well as revealing the underlying mechanism of OCBO in response to stakeholder culture.
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Theoretical framework
This chapter provides theoretical support for the proposed relationships in this research. In the first section, equity theory and social exchange theory are introduced to explain the relationship between perceptions of fairness and OCB. Building on social exchange theory, the multifoci
model is described to highlight the importance of the source of fairness. Recognizing that the
organization as a whole is the key source of fairness when judging stakeholder culture, it is argued that OCB that is directed at the organization (OCBO) is especially important to study in the context of stakeholder culture. In the following sections, this chapter describes the theoretical relationship between stakeholder culture and OCBO, as well as the mediating effects of distributive, procedural and interactional justice on that relationship.
OCB as a reciprocal reaction based on perceptions of fairness
There are at least two theories that can explain why employees would engage in OCB in response to fairness. Equity theory focuses on fairness of allocation perceived by people when comparing their ratio of input and output or costs and benefits with the ratio of others (Adams, 1965). If this ratio is perceived to be proportional, the distribution of outputs or benefits is considered to be fair, whereas disproportionality in terms of over- or under-rewarded contributions would result in inequity distress (Adams, 1965). According to equity theory, individuals try to restore justice by altering their contributions, outcomes, or both (Carrell & Dittrich, 1978). In this sense, OCB can be considered an input, which can be raised or lowered in response to inequity (Organ, 1988a). Organ (1988b) also argues that adjusting one’s OCB is likely to be the strategy of choice for employees because OCB is voluntary and does not affect contractual agreements. Therefore, individuals may be more inclined to reduce OCB in conditions of inequity rather than other behaviors, which are included in formal role requirements.
18 A second explanation for OCB in reaction to fairness perceptions is provided by social exchange theory (Blau, 1964; Cropanzano & Mitchell, 2005). Social exchange theory posits that employees view their relationship with the organization in terms of economic and social exchange (Blau, 1964). While economic exchange is based on the fairness of contractual demands and obligations (e.g. pay), social exchange relationships involve fairness perceptions that go beyond contractual commitments (e.g. trust) (Blau, 1964). According to Organ (1988b), employees are likely to exhibit OCB if they define their relationship with the organization as one of social exchange. This is because social exchange allows for discretionary and prosocial behaviors. When the relationship is perceived as unfair, employees are not willing to go beyond their contractual arrangements and they reinterpret the relationship as economic rather than social (Colquitt et al., 2001). In contrast, when employees are treated fairly, social exchange theory predicts that the organization’s positive actions will be met with positive reciprocating responses from the employees (Blau, 1964; Cropanzano, Anthony, Daniels, & Hall, 2017). For instance, being treated with politeness, dignity, and respect, as a part of interactional justice (Colquitt et al., 2001), favors subsequent polite and respectful behaviors as a reciprocal response (Harrison & Wicks, 2013). Repeated successful reciprocal exchanges may even transform economic exchange relationships into high-quality social exchange relationships (Cropanzano et al., 2017).
Assuming that individuals respond to behaviors of others in a reciprocal way, it becomes relevant to consider who is the source of the behavior that creates perceptions of (in)justice. Grounded in social exchange theory, the multifoci model suggests that employees direct their reciprocal behaviors to certain parties, depending on the source of the initiated action (Aguilera et al., 2007; Rupp, Ganapathi, Aguilera, & Williams, 2006; Rupp, Shao, Thornton, & Skarlicki, 2013; Rupp, 2011). There are several potential sources or foci of (in)justice in the workplace, for example the organization as a whole, the supervisor,
co-19 workers, and customers (Rupp, 2011). Employees might simultaneously hold different justice perceptions about different parties and tailor their behavior to those parties accordingly.
Prior research in this area took an agent-system perspective, which suggested that the organization (i.e. system) as a whole was responsible for procedural justice, and therefore predicted organizational outcomes such as OCBO, whereas the individual supervisor or manager (i.e. agent) was argued to be the source of interactional justice, which predicted supervisory outcomes such as OCBI (Cropanzano, Byrne, Bobocel, & Rupp, 2001; Cropanzano, Prehar, & Chen, 2002; Malatesta & Byrne, 1997; Masterson, Lewis, Goldman, & Taylor, 2000). However, other research found that employees can attribute different forms of justice (distributive, procedural and interactional) to each source of (in)justice (e.g. organization, supervisor, coworkers) (Byrne, 1999; Rupp & Cropanzano, 2002). For instance, the organization as a whole can be a source of any type of justice. In principle, the multifoci
model holds that employees can judge the distributive, procedural, and interactional justice of
any party, as long as this party is believed to be the source of the fairness that the employees received (Liao & Rupp, 2005; Rupp, Bashshur, & Liao, 2007; Rupp & Cropanzano, 2002).
In line with social exchange theory (Blau, 1964) and the multifoci model (Rupp et al., 2006; Rupp et al., 2013; Rupp & Cropanzano, 2002; Rupp, 2011), this research differentiates between OCBO and OCBI, which are directed respectively at the organization as a whole and at the individual (Williams & Anderson, 1991). By making the distinction between OCBO and OCBI, this study acknowledges the reciprocal nature of employee behavior in their relationship with different organizational stakeholders. Since this research focuses on stakeholder culture as an organization-level factor, it is highly relevant to investigate OCBO as a reciprocal behavior towards the organization. OCBO reflects a direct response to employees’ justice perceptions of their organization’s stakeholder culture. In contrast, OCBI is directed to executors of that culture (e.g. supervisors or coworkers). An issue of concern is that these
20 executors are likely to differ in the extent to which they are representative of the stakeholder culture in question. For example, employees may find themselves surrounded by supervisors or coworkers who are atypical given their organization’s stakeholder culture. Consequently, when employees judge the justice of their organization’s stakeholder culture through its executors, the variety in representativeness is expected to increase the noise in justice perceptions. This, in turn, is expected to reduce the strength of the suggested relationship between stakeholder culture and OCBI. In short, this research argues that the relationship between stakeholder culture and OCBI will be less clear than the direct relationship with OCBO. The reason is that employees judge the justice of the stakeholder culture indirectly through executors, which are likely to differ in their representativeness of the stakeholder culture. To rule out the indirect effect of representativeness, this research will concentrate on direct OCBO as a reciprocal response to stakeholder culture.
The model of this research makes three major assertions. First, this study recognizes that the organization, among other parties, is a source of employees’ justice perceptions. Second, it asserts that the justice perceptions that employees hold about their organization will affect the social exchange relationship between employee and organization. Third, it proclaims that justice perceptions and social exchange will determine the employee’s behavioral reaction towards the organization. The relationships between the research variables are illustrated in Figure 1.
Figure 1. The conceptual model illustrates the relationships between the research variables.
Stakeholder culture - Egoist - Instrumentalist - Moralist Interactional justice OCBO Procedural justice Distributive justice
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Direct relationship between stakeholder culture and OCBO
According to O’Reilly and Chatman (1996), organizational culture can be regarded as a social control system that guides members’ behavior by providing shared norms and values. Similarly, Jones et al. (2007) pose that an organization’s stakeholder culture motivates employee behavior that is in line with the respective culture. For instance, the extent to which an organization’s stakeholder culture is concerned about different stakeholder groups may stimulate employees to consider other parties as well. Although co-workers can be seen as ‘others’, they still belong to the same stakeholder group as the employee in question. Therefore, it can be argued that a stakeholder-oriented culture encourages employees to consider different stakeholder groups than their own. A different, though proximate party for employees is the organization they work for. When motivated by a stakeholder-oriented culture, employees are likely to show more concern for other parties, like their organization. A demonstration of this concern may be to engage in OCBO, which is directed at the organization (Williams & Anderson, 1991). Therefore, employees’ engagement in OCBO can be seen as a probable behavioral response to stakeholder-oriented cultures.
In line with Jones et al. (2007), moralist stakeholder cultures are more stakeholder-oriented than instrumentalist stakeholder cultures due to the way they care about and treat stakeholders. For example, moral firms show a genuine concern for all stakeholder groups, whereas instrumentalist firms care about other stakeholder groups only if this increases financial performance (Jones et al., 2007). Similarly, firms with egoist stakeholder cultures, which stress short-term profit maximization in favor of shareholders, can be characterized as being the least stakeholder-oriented compared to instrumentalist and moralist cultures (Jones et al., 2007). As a result, employees from moralist firms may engage in OCBO more often compared to instrumentalist and egoist firms because their organization’s culture is more stakeholder-oriented.
22 With regard to moralist firms, employees are likely to engage in OCBO because the organization highly encourages employees to consider other parties than their own. In other words, employees may see OCBO as an appropriate response to their organization’s stakeholder culture. Instrumentalist firms may convey the idea that other groups should be considered insofar as this contributes to realize one’s own goals. This is likely to stimulate employees of instrumentalist firms to show OCBO in observable situations in order to increase their visibility and status in the firm. This means that employees may engage in OCBO calculatingly to realize their own goals within the firm. Compared to instrumentalist firms, egoist firms do not explicitly encourage employees to take into account other stakeholder groups. Therefore, employees in egoist firms are expected to adjust their response accordingly by showing low levels of OCBO. Taken together, this study proposes that a firm’s stakeholder culture determines the extent to which employees feel motivated to engage in OCBO (Jones et al., 2007; O'Reilly & Chatman, 1996), that is moral firms encourage more OCBO in employees than instrumentalist firms, which encourage more OCBO than egoist firms.
Hypothesis 1: There is a relationship between stakeholder culture and OCBO, such that employees in moralist firms show more OCBO compared to those in instrumentalist firms, and employees in instrumentalist firms show more OCBO compared to those in egoist firms.
The mediating effect of distributive justice
The egoist stakeholder culture is characterized by “arm’s-length transacting, zero-sum bargaining, highly specified contracting, litigation of contract disputes and ambiguities, opportunistic exploitation of contracting failures, and aggressive exploitation of power imbalances” (Jones et al., 2007, p. 147). In other words, corporate economic success is prioritized above any concessions to employees or other stakeholders (Jones et al., 2007). Although the organization wants to ensure competitiveness by having a competent workforce,
23 the ideal situation for the egoist firm with regard to their workforce is that both the employee and the organization fulfill their contractual obligations – but not more or less than that. In principle, employees could perceive this as a fair distribution of inputs (e.g. work) and outputs (e.g. pay). In order to uphold the perception of a fair input/output ratio, neither the employee nor the organization may deviate from their contractual obligations. However, organizations with egoist stakeholder cultures do not shy away from violating contracts anytime this seems economically advantageous to do so (Jones et al., 2007). This may distort the perception of a fair distribution.
Like egoist firms, organizations with instrumentalist stakeholder cultures strive towards value maximization for shareholders. However, instrumentalists are more subtle in pursuing this goal and invest in long-term benefits (Jones et al., 2007). Regarding employees, this implies that instrumentalists would be more likely to invest in long-term employee retainment since experienced employees are a source of long-term value creation (Rappaport, 1999). Instrumentalist firms may see the distribution of benefits as a way to keep employees, which in turn helps to pursue their goal of long-term profitability. Therefore, it is expected that instrumentalist firms are more likely to compensate their employees fairly compared to egoist firms. As a result, employees’ perceptions of distributive justice are likely to be higher than in egoist firms.
The genuine belief that all stakeholders need to be treated fairly is essential to the moralist stakeholder culture (Jones et al., 2007). The situation of distributing benefits can certainly be seen as one in which moralist firms adhere to standards of fairness and honor contractual commitments. For example, employees are likely to receive benefits according to their contribution and needs, which is associated with distributive justice (Colquitt & Rodell, 2015). Whereas instrumentalist firms distribute benefits fairly with the intention to retain employees and contribute to long-term firm profitability, moralist firms do so because it is the
24 right thing to do. For that reason, employees in moralist firms may hold higher perceptions of distributive fairness about their organization’s culture than employees in instrumentalist firms. To summarize, the distributive justice of moralist firms is expected to be higher than that of instrumentalist firms, which is expected to be higher than that of egoist firms. This difference in perceptions of distributive fairness is expected to be reflected in the extent to which employees engage in OCBO. In a meta-analysis, it was found that distributive justice was positively related to levels of OCB (Cohen-Charash & Spector, 2001). More exactly, empirical evidence shows that this correlation is stronger for OCBO than for OCBI (Colquitt et al., 2001). According to equity theory (Adams, 1965), the relationship between distributive justice and OCBO can be explained by the proportionality of perceived inputs and outputs. When outputs are undervalued, like for employees in egoist firms, employees are less likely to engage in OCBO because doing so would further increase the disproportionality of perceived inputs and outputs. Equity theory also predicts that when outputs are overvalued, employees tend to increase inputs to restore the balance (Carrell & Dittrich, 1978). This may be the case for moralist firms, which act based on values and norms that go beyond contractual agreements. To restore balance, employees may want to increase their input, for example through behavior that goes beyond contract like OCBO.
Alternatively, engagement in OCBO due to perceptions of distributive justice may be grounded in social exchange theory (Blau, 1964) and the norm of reciprocity. Employees are more likely to define their relationship with the firm as one of social exchange when they receive a fair distribution of outputs (Blau, 1964). Likewise, the norm of reciprocity predicts that employees in moralist firms are willing to reciprocate because they perceive the output to be fair (Bosse et al., 2009; Bridoux & Stoelhorst, 2014; Bridoux & Stoelhorst, 2016; Hahn, 2015; Harrison et al., 2010; Harrison & Wicks, 2013). Reciprocal OCBO may therefore be seen as a behavioral response to uphold their social exchange relationship with the organization.
25 Employees in instrumentalist firms may engage in OCBO calculatingly in the sense that they may only show OCBO in situations where it is noticed by the firm. For example, employees may attend additional functions within the firm, but they may not demonstrate concern about the image of their organization when this cannot be observed. Employees in egoist firms are expected to be least willing to reciprocate with OCBO because their relationship with the organization is more likely to be one of economic exchange.
Hypothesis 2: The relationship between stakeholder culture and OCBO is mediated by distributive justice.
The mediating effect of procedural justice
With regard to procedural justice, being the process to reach the outcome, egoist firms will exploit contracting failures and “interpret laws in ways that favor company profitability” (Jones et al., 2007, p. 147). Consequently, employees know beforehand that processes that are not clearly specified through laws and contracts will probably be handled to their detriment. Moreover, egoist firms stimulate an economic exchange with their workforce as they just want their employees to function well in their jobs (Blau, 1964). Since egoist firms are inclined to define tasks in highly specified contracts (Jones et al., 2007), employees are not expected to meddle with procedures if not specified otherwise in their task description. Even if they wanted, it may be difficult for employees in egoist firms to express their voice during decision-making because this is not part of their contractual agreement with the organization. Due to the fact that procedures are handled to their disadvantage (Jones et al., 2007), while most likely not being able to do anything about it, employees in egoist firms are expected to have low perceptions of procedural justice.
Beyond value maximization, instrumentalist firms also care about their public image (Boesso & Kumar, 2016). Instrumentalist firms would risk attracting public attention to
26 workers participation if they were to apply the same approach to decision-making procedures as egoist firms. To prevent negative publicity, employees in instrumentalist firms will likely be given the possibility to raise their voice when decisions are made. However, the question is whether their input will be taken seriously during the decision-making process. Although they might be given the chance to speak up, employees may not feel that their organization is listening to them since decisions are ultimately made in favor of the firm (Jones et al., 2007). As a result of the possibility to express themselves during decision-making, employees’ perception of procedural justice in instrumental organizations is expected to be higher compared to egoist cultures.
Similar to distribution decisions, ethical standards will dominate economic considerations during procedures in moralist organizations, unless firm survival is at risk. Reflecting their other-regarding concerns (Jones et al., 2007), moralist firms will make an effort to take into account the concerns and views of different stakeholder groups when it comes to decision-making. Although compromises often have to be made, the input of every stakeholder group will be heard and valued. This means that decision-making procedures follow moral principles that apply to all shareholders. Upholding standards of morality and being concerned about subgroups during decision-making processes are both associated with procedural justice (Colquitt & Rodell, 2015). Compared to employees in egoist firms, who are probably not given the possibility the raise their voice, and employees in instrumentalist firms, whose input may not be taken seriously, employees in moralist firms are able to speak up and are heard. Therefore, moralist cultures are in comparison to other stakeholder cultures likely to be judged highest on procedural justice.
This difference in procedural justice perceptions may subsequently result into different levels of OCBO. Van Yperen and Snijders (2000) explain that participation in decision-making promotes reciprocal OCB. One important aspect that affects perceptions of procedural justice
27 is the extent to which employees are able to participate in decision-making (Colquitt & Rodell, 2015). Therefore, when organizations promote participation in decision-making, employees are expected to judge the procedural justice as high and reciprocate with OCBO. This argument is supported by empirical studies, which found a positive relationship between procedural justice and OCBO (Cohen-Charash & Spector, 2001; Colquitt et al., 2001; Malatesta & Byrne, 1997; Masterson et al., 2000).
This empirical evidence is also in line with social exchange theory (Blau, 1964). Employees who perceive high procedural justice in their organization are likely to define their relationship with the organization as one of social exchange. Such a social exchange relationship stimulates reciprocal social employee behavior like OCBO. According to social exchange theory (Blau, 1964), organizations with high procedural justice (i.e. moralist) are likely to establish social exchange relationship with their employees, who may reciprocate by engagement in OCBO. In contrast, employees in organizations that are perceived to have low procedural justice (i.e. egoist) are less likely to reciprocate with OCBO because employees do not characterize their relationship with the organization as one of social exchange (Blau, 1964).
Hypothesis 3: The relationship between stakeholder culture and OCBO is mediated by procedural justice.
The mediating effect of interactional justice
The relationship between an egoist firm and employees can best be characterized as distant. Egoist firms treat their employees “in ways that minimize labor costs, without falling too far short of industry norms in order to retain a competent workforce” (Jones et al., 2007, p. 147). This suggests that workforce is treated as interchangeable production input, being a means to the ends of the organization. Adherence to instructions and orders are likely to characterize the interpersonal treatment in egoist stakeholder cultures. Information about procedures will
28 probably not be explained and shared with employees because their voice is not considered a strategic input. Due to distant interpersonal treatment and low information sharing, employees may perceive an egoist culture to have low interactional justice.
Instrumentalist organizations are likely to make long-term economic considerations with regard to interpersonal treatment and information provision. The costs of treating employees badly and withholding information may be quite high because this may attract attention to employee issues, resulting in negative publicity. Since instrumentalists fear a negative public opinion (Boesso & Kumar, 2016), they are likely to treat their employees with respect and provide them with the necessary information. It should be clear that this is not based on moral standards of employee treatment as in moral firms, but solely on the concern to prevent a negative public image. Furthermore, fair interactional treatment of employees also benefits the instrumentalist organization in a different way. Since employees are a means to achieve long-term financial well-being (Rappaport, 1999), it is in the best interest of the instrumental organization to retain employees. It would therefore be detrimental if employees were to leave due to better treatment elsewhere. Taken together, the benefits of treating employees fairly and with respect are likely to outweigh the costs. Therefore, instrumentalists may strategically invest in fair employee treatment. Consequently, employees in instrumentalist firms are expected to judge their organization’s interactional justice higher than employees in egoist firms.
Firms with moralist stakeholder cultures will endorse virtues of “honesty, sincerity, truthfulness, and trustworthiness” (Jones et al., 2007, p. 145) when interacting with their workforce. These virtues shape the daily interactions between the organization and its employees in a way that they are treated fairly and with respect. Moralist organizations are likely to explain procedures thoroughly and honestly, which can be regarded as practicing values like politeness, honesty and transparency. As a result of respectful treatment and honest
29 explanations about the procedures, the interactional justice of moralist firms is likely to be perceived as high (Colquitt & Rodell, 2015). Whereas instrumentalist firms may stimulate fair interaction with strategic calculation, moralist firms genuinely believe in fair stakeholder treatment. Therefore, it is likely that interactional justice in moralist firms is perceived to be higher than in instrumentalist firms.
The differences between stakeholder cultures in interactional justice perceptions are likely to be reflected in employees’ engagement in OCBO. In fact, the agent-dominance perspective of justice perceptions proposes that interactional justice is the strongest predictor of both OCBO and OCBI (Fassina, Jones, & Uggerslev, 2008; Karriker & Williams, 2009). The relationship between interactional justice and OCBO may be explained by social exchange theory (Blau, 1964). Organizational policies, norms, values, and beliefs are likely to guide the nature of interactions within organizations. Therefore, it is reasonable that employees consider the organization as a source of interactional justice. When well-treated and provided with information, employees are likely to define their relationship with the organization as one of social exchange (Blau, 1964). According to social exchange theory, fair interpersonal treatment is likely to be met with prosocial and positive responses (Blau, 1964; Cropanzano et al., 2017). Thus, when employees perceive their relationship with the organization as one of social exchange, they are willing to reciprocate with social behaviors directed at the organization, such as OCBO.
Hypothesis 4: The relationship between stakeholder culture and OCBO is mediated by interactional justice.
30
Methodology
This chapter first describes the research design of this study, including a reflection on the advantages and disadvantages of using an online survey. The procedural part then portrays the target population, the sampling techniques and approach used to collect a sample. Moreover, the sample of this research is characterized based on demographic data. Next, this chapter provides an extensive description of the development of the stakeholder culture scale, which is the independent measure in this study. The final section reports the measures of this research, including stakeholder culture, organizational justice, OCBO, and control variables.
Research design
This study has an observational design with a cross-sectional time horizon. This means that natural events are observed at one point in time without interfering or manipulating variables. The data source of this research is primary data, as this study aims to contribute to empirical research in the field of stakeholder theory. Among primary data collection methods, questionnaires are well-suited for an explanatory research design (Saunders, Lewis, & Thornhill, 2009). In contrast to observation and interviews, questionnaires are relatively inexpensive, while being able to reach many respondents. They also allow for standardized questions and answers, which makes subsequent analysis and interpretation easier. To collect primary data for this research, an online self-administered survey is programmed in Qualtrics. Employees read the questions and select the responses that best describe their situation.
Using an online survey as the data collection tool for this research has some important advantages. First, online surveys are easy to use and can be filled in at any time that suits the respondents, resulting in short response cycles (Andrews, Nonnecke, & Preece, 2003). Furthermore, due to their fast distribution, online surveys can reach a large number of respondents within a short time, which makes them economical in costs and time (Andrews et
31 al., 2003; Kaplowitz, Hadlock, & Levine, 2004; Wright, 2005). Next, online surveys automatically transform the output into a computer readable form, which eliminates human error in manual data transfer (Kiesler & Sproull, 1986). Lastly, processing costs and transmitting time are reduced (Kiesler & Sproull, 1986).
There are also disadvantages associated with the use of online surveys. Problematic sampling issues include nonrandomness, self-selection bias and the lack of probabilistic sampling, all of which result in low representativeness of the sample (Andrews et al., 2003; Fricker & Schonlau, 2002; Lefever, Dal, & Matthiasdottir, 2007; Wright, 2005). Furthermore, the self-reported nature of online surveys includes the risk that respondents deliberately provide inaccurate information or that questions are misunderstood and interpreted in a different way (Fricker & Schonlau, 2002; Kaplowitz et al., 2004; Wright, 2005). Another disadvantage is that online surveys measure respondents’ perceptions about a focal variable rather than obtaining objective data (Bertrand & Mullainathan, 2001).
This research aims to collect a large amount of data within a short time. Therefore, the benefits in terms of costs and time, as well as the ease to distribute an online survey, make it a convenient tool for data collection. This research also tries to capture employee perceptions. The otherwise important drawback of an online survey of obtaining subjective data, therefore turns out to be an advantage in this study. Moreover, this study uses short questions to measure the variables of interest, which reduces the risk that questions are misunderstood (Sereno & Rayner, 2003). Therefore, this research argues that the advantages of using an online survey for the present study outweigh the disadvantages. It should be noted that using a self-administered survey as the only tool of data collection carries the risk of single respondent bias and common method bias (Podsakoff, MacKenzie, & Podsakoff, 2012). Single respondent bias can be avoided by asking people related to the employee (i.e. supervisor) to answer questions about the employee. However, finding pairs of respondents is likely to complicate data
32 collection. To minimize common method bias, more research tools can be used, but this comes at the expense of increases in costs and time (Andrews et al., 2003). Since time is an important factor in conducting this research, no additional data than the self-reported survey are obtained. The survey was administered in Dutch or English, depending on the respondent’s preference. Except for the stakeholder culture scale, all questions and items of the survey were translated by parallel translation into Dutch (Brislin, 1980). This means that the researcher and one bilingual Dutch/English speaker independently translated the full questionnaire from English into Dutch. Differences in meaning, grammar and syntax were discussed before agreeing on one of the two versions or modifying the translations. In addition to the focal variables of this study, the survey contained questions from a colleague of the researcher. Those measures will not be described because they fall outside the scope of the current study.
Procedure
The population of this research are employees, who work more than 24 hours per week and have worked at their organization longer than 6 months. Preferably, they also work in large organizations (>50 employees), since the stakeholder cultures of large organizations are likely to be more established and show more variety compared to those of small organizations. The requirements regarding tenure and weekly working hours ensure that employees have fine-grained knowledge about the stakeholder culture of their organization. Control questions about these requirements selected only those employees who qualified for the survey (Q1-2 in Appendix A). Other participants were instantly re-directed to the end of the survey and were thanked for their interest.
Since a sampling frame of this population was not available to the researchers, non-probability sampling techniques were used. Moreover, non-non-probability sampling is associated with higher response rates compared to probability sampling due to the personal relationship
33 between the researcher and the potential respondent. Participants were located via the social network of the researchers and in public (convenience sampling). Furthermore, the survey was posted on social media and participants were invited to distribute the survey among their coworkers and peers (snowball sampling). Among the non-probability sampling techniques, convenience sampling is most commonly used because it is easy, fast and usually the least troublesome and expensive (Lunsford & Lunsford, 1995). Non-probability sampling, however, is unlikely to capture the correct proportions of the populations because members have different chances of being selected for the survey sample (Lunsford & Lunsford, 1995). Therefore, the representativeness and generalizability of results are not guaranteed, which eventually results in lower external validity (Landers & Behrend, 2015). To collect a non-biased and representative sample of the population, random sampling techniques should be used (Lunsford & Lunsford, 1995). Due to the increases in costs and time which are associated with random sampling, this research uses non-probability sampling and reduces the risk of low external validity by approaching potential participants from diverse organizations and industries.
Once employees agreed to participate in the study, they were free to choose the time and place to fill in the survey by clicking on a link in the invitation e-mail or online post. The questionnaire started with a short introduction about how to answer the questions. It was emphasized that all answers were treated with confidentiality and anonymity. After filling in demographic data (Q1-Q10 in Appendix A), additional questions about stakeholder culture (Q11), organizational justice (Q12-14), and OCBO (Q15) were asked. There was no time limit to answer the questionnaire; generally it took about 15 minutes.
Data were collected in the Netherlands during a three-week period. Of the 287 participants who opened the survey, 211 participants completed it. This results in a completion rate of 73.5%. Incomplete responses were excluded from further analyses. It is not possible to compute a response rate due to the use of non-probability sampling techniques.
34
Sample
Data of 44 participants were removed because they did not meet the requirements regarding tenure and weekly working hours. The final sample included 167 participants, of which 130 answered the survey in Dutch and 37 in English. The sample consisted of 67.7% males. The average age was 36.91 years (SD = 12.62) and 37.1% had obtained a master’s or doctoral degree. Participants worked on average 40 hours per week in an organization of more than 250 employees (61.1%). Most participants were employees (64.1%) and worked at their current organization for 1-5 years (45.5%). The sample stretched across various industries, of which transportation and logistics was the most selected (30.5%). The majority of the participants worked for a for-profit organization (79.0%), while the others worked for a non-profit (13.8%) or hybrid organization (7.2%). More information about the demographic characteristics of the sample can be found in Appendix A.
Stakeholder culture scale development
To capture the stakeholder orientation of an organization, this research draws on the typology of stakeholder culture by Jones et al. (2007). Although this typology provides a theoretical basis to measure stakeholder orientation, there is little research about its operationalization. Pioneering work was done by Boesso and Kumar (2016), who developed a measure of the three central types of stakeholder culture – egoist, instrumentalist, and moralist – following the theoretical stakeholder culture framework by Jones et al. (2007). Their measure consisted of four forced-choice questions with each three answers (one item per stakeholder culture per question), asking respondents to choose the item that best describes their organization. The disadvantage of forced-choice question is that respondents have to choose one item in its totality, without being able to indicate the degree to which they agree. This limitation becomes even more important when taking into account that the questionnaire used only four questions
35 to categorize an organization. Categorization followed a ‘majority rule’ decision structure, which means that the response option that was selected most often for the first three items, determined whether an organization was classified as egoist, instrumentalist, or moralist (Boesso & Kumar, 2016). As a result, their four-item forced-choice questionnaire, which was scored by a ‘majority rule’, held a lot of risks with regard to misclassification.
Building on theoretical work by Jones et al. (2007) and the operationalization by Boesso and Kumar (2016), Van Schoonhoven (2017) developed a twelve-item Likert scale to measure stakeholder culture. Although the chosen question format addressed the most important drawback of the study by Boesso and Kumar (2016), the questionnaire distinguished only between moralist and instrumentalist stakeholder cultures, which were conceptualized as the opposite ends of a continuum (Van Schoonhoven, 2017). Moreover, factor analysis revealed that five of the twelve items had to be removed from further analysis due to low factor loadings and weak correlations (Van Schoonhoven, 2017). Due to the reduced amount of stakeholder cultures included, Van Schoonhoven’s (2017) measure does not cover the intended scope of this research. In conclusion, prior work by Boesso and Kumar (2016) and Van Schoonhoven (2017) to operationalize stakeholder culture is largely exploratory and has important limitations with regard to question format and construct coverage, respectively.
This research aims to incorporate the lessons learned from previous studies in a newly constructed measure for stakeholder culture, which measures the three central stakeholder cultures on a Likert scale. The scale was developed in a joint effort of the researcher, two colleagues and their supervisor during an eight-week project. The following paragraphs describe the approach, definitions, item generation and revision, and pre-tests of the scale, including the most important considerations at every stage of scale development.
Stakeholders – the central concept in this scale – first needed to be defined. Stakeholder theory distinguishes between primary and secondary stakeholders (Clarkson, 1995). Secondary
