How power influences prospective employees’ willingness to associate with the firm under trade-offs between morality and competence

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How power influences prospective employees’ willingness to

associate with the firm under trade-offs between morality

and competence

Master Thesis Name: Yinuo Wang

Student number: 11376880 Thesis supervisor: Flore Bridoux Date: 14 August 2017

Program: MSc Business Administration, Strategy Track

Institution: Faculty of Economics and Business, University of Amsterdam

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Statement of originality

This document is written by Yinuo Wang (student number 11376880) 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

When conducting cooperate investment, managers would try to balance

investments in company financial performance and morality performance to achieve ideal results. But in reality it is very difficult to do so due to limited financial

resources and time constrains, therefore, companies often face trade-offs between morality and competence. This study used a vignette-based lab experiment to explore how stakeholders, especially prospective employees, perceive the trade-offs and how their willingness to associate with the firm are affected. Furthermore, this study investigated whether power has moderating effect on this relationship and whether moral identity has influence on power’s effect. Empirical results show that there is indeed a strong interaction between prospective employees’ willingness to associate with the firm and the trade-offs between morality and competence. However, there is no strong evidence that power has moderating effect on this relationship, nor did this study find a moderating effect of moral identity on power’s moderating effect. This research contributed to the stakeholder management and CSR literature by providing empirical support to study the trade-offs between competence and morality and its importance to stakeholder management, filling the gap of power’s moderating effect on stakeholders’ willingness to associate with an organization when facing the trade-offs and by adding evidence on whether power’s effect on people is also

moderated by different variables such as moral identity. This research also contributed to practice by showing managers the importance to focus on the company trade-offs

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when associating with prospective employees and how power and moral identity of prospective employees might affect their willingness to join the firm in face of the trade-offs between morality and competence.

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1. Introduction

People are generally attracted to companies that are competent and moral, which implies that they have good performance and conduct business ethically as measured by corporate social responsibility (CSR) (van Prooijen & Ellemers, 2015). CSR is often conceptualized as the activities or policies that organizations choose to participate in order to effect positive social change and environment sustainability (Rupp et al, 2006). Existing studies have shown that companies’ engagement in corporate social responsibility (CSR) has a positive effect on increasing their attractiveness towards prospective employees (Bridoux et al, 2016; Turban &

Greening, 1997). By conducting CSR companies increase stakeholders’ trust in them and thus raise their willingness to associate with the firm (Bridoux et al, 2016).

However, in reality competence and morality do no necessarily go together within one company. When companies invest in CSR or activities that can improve firm performance they usually cannot invest as much in the other, therefore they face the necessity to make trade-offs between morality and competence (van Prooijen & Ellemers, 2015). Some organizations put success as prime concern and do not care much about social responsibility, while other organizations are willing to sacrifice financial gains to a certain extent to fulfil their moral goals. This implies that prospective employees also need to make a trade-off between competence and

morality when choosing a company to associate with (van Prooijen & Ellemers, 2015). Some people might value corporate ethical behavior more than their employer’s

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competence, others might prefer to associate with firms of higher performance. But what factors drive prospective employees’ decisions about this trade-off?

Prospective employees’ decision on the trade-off can be affected by many

different factors such as personality traits, company culture, social comparison, power and etc. This paper investigates prospective employees’ feeling of power. Adam D. Galinsky defined power as: “the capacity to influence other people, it emerges from control over valuable resources and the ability to administer rewards and

punishments” (Galinsky et al, 2006, p1068). Power can affect people’s behavior by moderating their goal orientation (Chen, 2000), ability of perceiving emotions (Anderson & Berdahl, 2002), it can either elevate or corrupt individual behavior (Lammers et al, 2015). Thus powerful people might have different preferences over competence and morality than powerless ones. Yet research on how power affects prospective employees’ decision over the trade-offs has not been conducted so far.

Furthermore, when experimenting on the effect of power, scholars have paid attention to how personality traits may influence this effect (Chen et al, 2001). Therefore, this paper adds moral identity as a moderator of power. Moral identity refers to a disposition towards valuing morality and people’s willingness of viewing themselves as a moral person (Taya R. Cohen & Morse, 2014). It is linked to specific moral traits and also reflects what a moral person is likely to behave, think or feel (Aquino & Reed , 2002). Moral identity has two dimensions, namely symbolization, which reflects the public theme of the definition, and internalization which reflects the

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private sector of moral identity. This paper adopts the internalization dimension of moral identity. People with high levels of moral identity prefers ethical behavior, they want to identify themselves with positive personality traits such as generous, caring, honest and kind. In contrast, people who report low levels of these personality traits see morality as irrelevant or in contrast to their self-concept, which often leads to unethical conduct. Therefore, when facing a trade-off between competence and morality and primed with power, people with high levels of moral identity could react differently from those with low levels of moral identity. To sum up, this research empirically tests how power affect the way prospective employees see the trade-off between competence and morality. In addition, whether power affect people with high moral identity differently from those who has low moral identity is also tested.

In doing so this research contributes to the stakeholder management and CSR literature in several ways. First of all, it provides further empirical support to study the trade-offs between competence and morality and its importance to stakeholder

management, the results of this study shows that there is a significant interaction between prospective employees’ willingness to associate with the firm and the trade-offs between morality and competence. Second, it filled the gap of power’s moderating effect on stakeholders’ willingness to associate with an organization when facing the trade-offs, this study shows that power has no significant moderating effect on this relationship. Third, by testing the factor “moral identity” this research add evidence on the claim that power’s effect on people is also moderated by different

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variables, the experiment data results shows that internalization dimension of moral identity has no significant moderating effect on power’s moderating effect, however, whether symbolic dimension of moral identity has such influence is to be further investigated by future research. This paper will research power as the moderator in prospective employees’ willingness to associate with the firm, a vignette-based experiment has been used to test how power influences people’s decision regarding the trade-off between morality and competence.

2. Literature review

This chapter introduces the current research literature that is relevant to the topic of this paper.

2.1 The effect of CSR on organizations’ attractiveness

Existing studies have shown that companies’ engagement in corporate social responsibility (CSR) has positive effect on their attractiveness towards prospective employees (Bridoux et al, 2016; van Prooijen & Ellemers, 2014; Rupp et al, 2006).

According to Rupp (2006), CSR is typically defined as activities, decisions, or policies that firms engage in to effect positive social change and environment sustainability, usually by developing its corporate culture and social consciousness. Such ethical responsibilities “embrace a range of norms, standards, or expectations of behavior that reflect a concern for what consumers, employees, shareholders, the community, and other stakeholders regard as fair, right, just, or in keeping with

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are many different interpretations in defining CSR, but they all have one common concern: morality.

Morality is defined as the evaluation of the “actions or character of a person that are made with respect to a set of virtues held to be obligatory by a culture or

subculture” (Haidt, 2001, p. 817). It is stated by van Prooijen and Ellemers (2014) that when forming impressions of a certain organization, people put moral judgments in a central place, they are more willing to approach or associate with the organization if the group is perceived as ‘moral’. Turban and Greening (1997 & 2000) also

concluded that company CSR builds up positive company reputation and increase company’s attractiveness. CSR sends a positive signal to prospective employees about what would it be like to work for them, such as an enhanced self-concept, which encourages them to pursue jobs in such companies. Therefore, companies often use CSR to attract quality workforce. Stakeholders in the organization generally

contribute to and react to the company’s CSR, which means that organization’s engagement in social responsibility activities affects -often positively- stakeholders’ perception of fairness and trust, which, in turn, influence their subsequent attitudes and behaviors in a way that benefits the firm (Rupp et al, 2006; Bridoux et al, 2016). According to Rupp et al (2006), when the firm is perceived of CSR to prospective employees and also current employees, it will exert positive effects such as increased firm attractiveness, job satisfaction, organizational commitment, job performance and etc.

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2.2 The Trade-off between morality and competence

The positive effect of CSR is also argued in van Prooijen and Ellemers’ (2015) work. They state that people are attracted to organizations that can offer them a positive social identity. Therefore, theoretically, any feature or behavior that can distinguish the organization in a positive way from others can help attract individuals, and by engaging in social responsibility firms can indeed distinguish themselves from those who do not and elevate their stakeholders’ social image.

However, morality is not the only thing prospective employees care for. They also value joining a company that is competent. A company can be perceived as competent if it has the ability to enact its intentions such as reputation and

performance (Aaker et al, 2010). According to Aaker et al (2010), competence has a strong influence on stakeholders’ willingness to associate with the firm, they are generally attracted to a competent firm. Ideally an organization would show positive features of both high performance and high morality to attract highly qualified prospective employees (van Prooijen & Ellemers, 2015). But in reality, especially in the short term, firms only have limited resources and may not be able to score very highly on CSR as well as investing in being highly competent.

For example, Bridoux et al (2016) proposed that the effect of CSR on

stakeholders’ behavior is not as simple as assumed in some studies. They stated that trust mediates stakeholders’ intention to associate with the firm, and other-orientation strengthens this mediating effect. They found that organization’s engagement in CSR

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has more positive effect on people with higher level of other-orientation value than on people with lower level of this personal trait. In the light of these arguments and results, it is important to study organizations’ trade-offs between morality and

competence, especially its influence on stakeholders’ willingness to associate with the firm.

In fact, van Prooijen and Ellemers (2015) put these two features in a situation where investing in ethical business activities means being less successful in corporate performance. The leverage of competence and morality presents a trade-off situation to organizations. In the face of this trade-off, some organizations value financial success over their responsibility for society well-being while others are willing to compromise certain level of financial gain to fulfil moral goals.

Prospective employees also need to evaluate this trade-off relationship when deciding whether to associate with a specific firm or not. Besides the material gain employees can get from associating with the firm, their social identity can also be affected by the organization’s reputation of being socially responsible or not. Highly competent companies can offer ideal financial returns for their employees while companies with positive social identity can also contribute to their employees’ self-image (JP Gond et al, 2010). In van Prooijen and Ellemers’s (2015) research, the first study shows that people generally attach more importance to morality than to the competence of the organization. But is it the same in a work context? Their following studies show that people in work context also see morality as an important indicator

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when choosing an organization to associate with, it is shown that morality have greater attractiveness to prospective employees than competence.

However, prospective employees’ decision on the trade-off is likely to be more complicated than argued in van Prooijen and Ellemers (2015). According to Bridoux et al (2016), personal traits moderate stakeholders’ reactions to firms’ behavior. Their research focused on one particular personality trait - other-orientation- and how if affects people’s decision in the face of trade-offs between self-and other-oriented CSR. Other-orientation indicates the degree to which they care about others’ welfare and outcomes as well as for their own outcomes (Bridoux et al, 2016). When facing this trade-off, people higher on other-orientation might value an organization’s ethical behavior over competence performance. In addition, trust can be seen as a mechanism mediating the relationship between the trade-off relationship and firms’ attractiveness to prospective employees. Firms’ ethical behavior increases prospective employees’ trust in the organization, and when firms are perceived as highly trustworthy they tend to have increased employees’ commitment and job pursuit intention.

To sum up, research regarding trade-offs indicates that 1) morality has a significant impact on prospective employees’ willingness to associate with the firm and 2) this relationship is moderated by personality traits. However, this research on trade-offs between morality and competence is very limited. In general, research on the trade-offs between morality and competence is very limited. In this paper, I will

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extend this literature by investigating power as the moderator of how prospective employees see this relationship and conduct further research on this topic. 2.3 Power and how it influences individuals’ decision on the trade-off

Powerful people may react differently from powerless people in face of a trade-off between morality and competence. However, the pervasive, complex

processes of power is often disguised in society. According to JRP French et al (1959), there are various distinctions of different types of power, each of them has different influence on human behavior and it is important to learn their effects. This paper uses a general concept of power, previous work by Adam D. Galinsky (Galinsky et al, 2006) defined power as: “the capacity to influence other people, it emerges from control over valuable resources and the ability to administer rewards and

punishments” (Galinsky et al, 2006, p 1068). Power influence people in ways that it 1) alters individual dependence, 2) increases the amount of attention they get, 3) affects their goal orientation (Galinsky et al, 2006).

People can have different behavior when feeling powerful. People with greater sense of power feel more positive and tend to express their thoughts therefore have greater influence on the organization, while less powerful people are more likely to focus on negative perceptions and inhibit their feelings (Anderson and Berdahl, 2002). In Galinsky et al’s (2006) work, the negative impact of power is addressed. It is

indicated that people are generally more independent and goal-oriented when feeling powerful, they are less competent in taking others’ perspective, which leads to them

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being more self-interested. This suggests that powerful prospective employees would value competence more and morality less than powerless prospective employees, which means they have higher expectations of material benefits from associating with the firm.

However, this might not always be true for everybody. Power does not

necessarily lead to self-interest for all prospective employees, the effect of it can be divergent. According to the studies of Lammers et al (2015), the effect of power on employees can be twofold, it can either morally corrupt or morally elevate individuals depending on two factors: behavioral disinhibition and self-focus. The authors argue that power fosters corruption by disinhibiting people’s immoral desires, but can also encourage ethical behavior by amplifying moral impulses. Furthermore, power leads people to focus more on themselves, relative to others. Thus, those with power are more likely to engage in self-beneficial behavior, but those who lack power are more prone to engage in other-beneficial unethical behavior.

This argument is filling the gaps of Galinsky et al’s (2006) work by stating that power can have different effects on different types of people. According to some personality traits, we thus expect personality trait to influence how perspective employees who feel powerful see trade-offs between morality and competence. For example, according to Serena Chen et al (2000), power affects people differently because they mentally associate power with different social responsibility goals unconsciously. They show that the people they classify as communals associate power

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with social oriented goals and are more attracted by morality, while exchangers link power with self-interested goals and are more attracted by competence. The present research will investigate moral identity as a personality trait that is likely to affect the moderating effect of power.

2.4 How moral identity moderates power

According to Taya R. Cohen and Morse (2014), moral identity refers to a disposition towards valuing morality as important and central to one’s self-concept. People with high levels of moral identity tend to associate themselves with moral traits and prefer to think of themselves as generous, caring, hardworking and etc. Additionally, Aquino & Reed (2002) addressed in their work that besides from the linkage to moral traits, moral identity also reflects a mental image of what a moral person is likely to behave and think. Thus, high levels of this personality trait often leads to ethical conduct. In contrast, people with low levels of moral identity view morality as irrelevant or even opposite to their self-concept, which can lead to unethical behavior (Taya R. Cohen & Morse, 2014).

As addressed in Aquino and Reed ’s (2002) work, there are two dimensions of moral identity concerning the public and private sector of the definition, namely symbolization and internalization. The internalization dimension is interpreted as related to self-importance of the moral characteristics, which means that the person perceive himself as possessed with moral characteristics and conduct moral behavior because of it. The symbolization dimension is more concerned with a general social

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sense of moral self, it is correlated with the self-presentational and public side of morality, which means that a person cares more about whether his/her actions

symbolize moral characteristics for the public opinion. Their work empirically shows that although there are some overlaps in the symbolization and internalization

dimension, they are related to different types of outcomes. Internalization oriented moral identity is more strongly related to voluntary participation activities than symbolization oriented moral identity. Therefore, in this research the internalization dimension of moral identity is adopted to study whether moral identity has a

moderating effect on the influence of power on prospective employees’ choices. The assumption is when facing trade-offs between morality and competence, people with different levels of moral identity might react differently. Prospective employees who feel powerful and have high levels of moral identity might be more influenced by morality when choosing to associate with a firm in face of trade-offs between morality and competence, while prospective employees who feel powerful and have moral identity might be less influenced by morality and more by

competence when choosing a firm to associate with under the same trade-offs. 2.5 Research gap and research questions

Current research on power have studied how it influences individuals, whether it can morally elevate or corrupt people. However, the research on the effect of power on stakeholders are very limited. This paper expands on previous studies by

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employees’, willingness to associate with the firm that trades off morality and competence.

Furthermore, several previous research used experiment to test their hypotheses, but when choosing participants, they did not distinguish them in terms of moral identity. As explained above, moral identity could influence individuals and might alter their way of seeing the trade-off. To address this gap, this paper examines the effect of power on prospective employees’ willingness to associate with the firm that trades off morality and competence, and the internalization dimension of moral identity will be measured to see if it has moderating effect of power. I expect that power would have a greater impact on people with low levels of moral identity than people with high levels of moral identity.

This research can be conceptualized as depicted in figure 1.

Figure 1: conceptual model

Trade-off between morality and competence Prospective employees’ willingness to associate with the

firm

Power Moral

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To sum up, the research questions are as following: Does power moderate prospective employees’ willingness to associate with the firm in the face of the trade-offs between morality and competence? Does moral identity moderate the moderating effect on power?

3. Theoretical framework

This chapter introduces the hypotheses.

Van Prooijen and Ellemers (2015) stated that, ideally companies would want a balanced situation where they score highly on morality as well as competence, in reality companies have limited resources thus it is fairly difficult to invest equally in both. Heavy investment in CSR would enhance the company’s reputation thus make the company more attractive to prospective employees, but it would also take resources that could have been used to build up the company’s competence. Vice versa, when a company focuses on better performance and develop competences, there would be less resources allocated to CSR activities. This leverage of morality and competence presents a trade-off situation to the firm (van Prooijen and Ellemers, 2015). When prospective employees choose a firm to associate with, they value both company’s competence and morality performance (Aaker et al, 2010), their

association with the firm can bring them both material gains and impact on their social identity. Companies with good performance on competence can provide prospective employees with ideal financial returns while companies with positive morality image can lift their self-image (JP Gond et al, 2010). Thus they face

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trade-offs between morality and competence when deciding which firm they want to associate with.

According to van Prooijen and Ellemers (2015), people generally value morality more than competence when facing this trade-off, they are more willing to associate with the firm that is perceived as ‘moral’. Moral companies can offer them a positive social identity and can show them the positive sides of working with such

organizations (Rupp et al, 2006). It is also stated by Turban and Greening (1997 & 2000) that company CSR is key to attracting quality workforce. It builds up company’s reputation and signals positive images to prospective employees.

Summing up the above-mentioned, it can be expected that there a relationship concerning the trade-offs between company’s competence and morality and

prospective employees’ willingness to associate with the firm: when facing trade-off between competence and morality, prospective employees are more attracted by a company that possesses high morality than high competence:

H1: Trade-offs between morality and competence affect prospective employees’ willingness to associate with the firm. Prospective employees’

willingness to associate with the firm will be higher in the face of high

morality and low competence rather than low morality and high competence.

The relationship between the trade-offs and prospective employees’ willingness to associate with the firm is not that simple and straightforward, it can be affected by many factors, one of which is personality trait (Bridoux et al, 2016). It Is stated in

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their study that personality traits moderate stakeholders’ reactions towards firms’ behavior, they affect stakeholders’ decision in face of the trade-offs. This paper chooses to investigate one certain personality trait – power – and its impact on how prospective employees evaluate the trade-offs.

As argued above, power affects people in ways that alters individual dependence, gave people more attention, and moderates their goal orientation (Galinsky et al, 2006). Thus, when feeling powerful, people might have different behaviors than when they feel powerless. The impact of power can be twofold, it can lead people to

negative pathways such as becoming more self-focused and less competent in perceiving other people’s feelings (Galinsky et al, 2006), but it can also morally lift individuals and encourage ethical behavior (Lammers et al, 2015). The effect of power was also discussed by Anderson and Berdahl (2002), they emphasized more on the positive side of power, it is argued in their work that powerful people generally feel more positive and have greater impact on the organization they are in, while powerless people show more negative perceptions and are more likely to withhold their opinions. Furthermore, Lammers et al (2015) also argued that power generally leads to people being more self-focused, therefore, powerful people are more likely to conduct self-beneficial behavior while powerless people are more likely to behave in other-beneficial way.

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The effect of power also can be different on different people, but it can be expected to have a significant impact on people’s behavior. This paper takes the perspective of power increases self-focus (Galinsky et al, 2006; Lammers et al, 2015) and assumes that powerful people are more self-focused thus feel less strong about morality, meaning that when people feel powerful and facing the trade-offs between morality and competence, they are not so much as attracted by firms with high

morality as addressed in H1. As discussed above, although prospective employees are expected to value company’s morality more than competence when facing the

trade-offs, when feeling powerful, they will not be more willing to associate with companies that signal moral image than companies that are relatively competent when facing the trade-offs. Therefore, this paper presents a second hypothesis:

H2: Power moderates the effect of trade-offs between morality and

competence on prospective employees’ willingness to associate with the firm;

The more powerful prospective employees feel, the less strong the positive

relationship between a trade-off with high morality and low competence compared to low morality-high competence and their willing ness to associate

with the firm.

As mentioned above, the effect of power on people is complicated thus can be moderated by many factors. This paper is highly interested to find out if moral identity plays a role in the moderating effect of power. Taya R. Cohen and Morse

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(2014) defined moral identity as a disposition towards valuing morality as important and central to one’s self-concept. People with different levels of moral identity have different tendencies of behavior, people with high levels of moral identity would associate themselves with moral characteristics thus are more likely to conduct ethical behavior (Taya R. Cohen & Morse, 2014).

However, according to Aquino and Reed (2002), there are two different dimension of moral identity. The internalization dimension of moral identity focus on how people perceive themselves to be moral and they conduct ethical behaviors because of this self-interpretation, while the symbolic dimension is about how moral people are in the eyes of the public, it is more concerned with signalling an ethical self image (Aquino and Reed , 2002). This paper adopts the internalization

dimension of moral identity since it is more interested to find out how the perception of moral identity drives prospective employee’s actual behavior (Aquino & Reed , 2002).

Since people with high levels of moral identity perceived themselves as generous, caring, hardworking and etc., they are assumed to behave more morally than those who have lower levels of moral identity. The second hypothesis proposes that when facing the trade-offs between morality and competence, powerful people are less likely than powerless ones to choose a company with high morality and low

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If one person perceives himself/herself as of high level moral identity, is means moral behavior is of high-level importance to himself/herself and he/she will intend to behave in ethical ways. Therefore, the moderating effect of power would be even less obvious to observe since people with high levels of moral identity is more likely to conduct ethical behaviors regardless of power. Therefore, this paper includes a third hypothesis regarding moral identity’s moderating effect on power’s moderating effect:

H3: Moral identity moderates the moderating effect of power on the

relationship between trade-offs and prospective employees’ willingness to

associate with the firm. The more central moral identity is to prospective

employees, the less strong the effects of power proposed in H2.

Figure 2 shows the conceptual model including the hypotheses.

Figure 2: conceptual model including hypothesis

Trade-off between morality and competence Prospective employees’ willingness to associate with the

firm Power Moral identity H1 H2 H3

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4. Experimental design and procedure

4.1 Research design

Prospective employees’ willingness to associate with the firm in face of the trade-offs between morality and competence are studied using a vignette lab experimental design involving 205 participants in the lab. Participants were randomly presented with one of the two scenarios where the trade-off between morality and competence was manipulated ((1) high morality and low competence or (2) low morality and high competence) and participants’ willingness to associate with the firm described in the vignette was measured just after reading the vignette. The moderators, general sense of power and moral identity, were measured subsequently. A vignette experiment design is frequently used in CSR related academic studies and stakeholder’s response when facing trade-offs (Bridoux et al, 2016). The study took place in the laboratory of the Amsterdam Business School as part of an experimental session that included another study. Participants were paid a show-up fee of 7 Euro (as well as a pay-for-performance fee linked to the other study).

4.2 Sample

The total number of 205 participants consist of students of both genders, they are from different regions of the world (mainly from Western and Asia), different levels of studies (BSc and MSc) and different fields of studies (mainly study business economics, social science and communications). To ensure the results of the experiment are robust we select our participants from a university level and put them in the shoes of a prospective employees, the perspective of a prospective employee

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can better fit into this study since they face, or soon will face, the choice of associating with firms. We chose students from a university level because they are expected to enter a profession field after graduation and can better fit the profile of prospective employees.

4.3 Operationalization of variables

4.3.1 independent variable: the trade-off between morality and competence In reality firms have limited resources and may not score very high on moral activities as well as investing in being highly competent, therefore, prospective employees face the trade- offs between morality and competence when choosing an organization to associate with.

Our vignette presents two scenarios regarding a hypothetical company ABC, ABC operates in a consumer electronics market as a manufacturer, its main products includes television sets, DVD players and digital cameras. ABC is hiring new talent and the company is operating in an industry that the participants are interested in. The first scenario portraits company ABC as high on morality and low on competence, while the second scenario portraits the company ABC as low on morality and high on competence. The morality and competence level are presented in the experiment by quoting a reputable research organization who recently investigated companies in consumer electronic industry to enhance credibility. The descriptive quotations from the research organization regarding morality and competence are as below:

High morality: the report shows that company ABC is very principled in ways

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transparent in the company’s annual report. The company acts by the principles of right or wrong and its behavior shows a strong sense of justice.

Low morality: the report shows that company ABC is not very principled in ways

that it distributes dishonest campaigns from time to time, do not always honor its promises to employees and is not very transparent in their annual report. The company does not put the principles of right or wrong as the primary guidance of their actions and its behavior does not show a strong sense of justice.

High competence: the report shows that company ABC has very good business

performance and is very effective. The company has excellent leaders on managerial level, has profound knowledge regarding the industry, and is very good at producing as well as marketing its products.

The agency predicted a very bright commercial future for company ABC.

Low competence: the report shows that company ABC does not have a very good business performance and is relatively ineffective. The company leaders are not as experienced, it does not have profound enough knowledge regarding the industry and is not very good at producing as well as marketing its products. The agency predicts a commercial struggle in the future years of company ABC.

4.3.2 Dependent variable: willingness to associate with the firm

Prospective employees’ willingness to associate with the firm is measured with a four-item scale from Greening and Turban (2000). The participants and informed to imagine themselves as already or almost graduate from the university and is looking

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for a job. After reading the scenario they have been randomly assigned to, the participants are asked to choose if they want to apply for a job in company ABC, how much effort would they put in the job pursue. This is measured by a 7-point scale answer (Sirdeshmukh et al., 2002) to 4 survey questions as following: 1) I would put in a great deal of effort to work for ABC; 2) I would be interested in pursuing a job application with ABC; 3) I am likely to send my resume (CV) to ABC; 4) I am likely to accept a job offer from ABC. In order to keep the results tightly related to prospective employees’ reaction to the trade-offs, participants are asked whether they are interested in working in the consumer electronics industry for reference.

4.3.3 Moderators

This research uses the sense of power as the moderator under the definition by Adam D. Galinsky: “the capacity to influence other people, it emerges from control over valuable resources and the ability to administer rewards and punishments” (Galinsky et al, 2006, p 1068).

The generalized sense of power is manipulated by a 7-scale answer (Sirdeshmukh et al., 2002) to a survey question list where 1 = strongly disagree and 5 = strongly agree. The measurement of moral identity is conducted in the same way. The survey questions for measuring general sense of power are: 1) I can get people to listen to what I say; 2) My wishes do not carry much weight; 3) I can get others to do what I want; 4) Even if I voice them, my views have little sway (influence) 5) I think I have a great deal of power; 6) My ideas and opinions are often ignored; 7) Even when I try,

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I am not able to get my way; 8) If I want to, I get to make the decisions. The survey questions for moral identity are: 1) It would make me feel good to be a person who has these characteristics; 2) Being someone who has these characteristics is an important part of who I am; 3) I would be ashamed to be a person who has these characteristics; 4) Having these characteristics is not really important to me; 5) I strongly desire to have these characteristics. The scale of these survey questions took reference from Aquino and Reed ’s (2002) , and in their study the Cronbach’s alpha for Internalization moral identity was 0.83, the same scale also applies for the measure of general sense of power in this study.

4.3.4 Control variables:

The research experiment set a few control variables for participants including age, nationality, gender, levels of study, interest in working for a consumer goods company, employment status and their filed of study. These control variables Control variables were added to ensure minimum effect from variables other than the independent variable, dependent variable and the moderators. This study controlled participants’ interest in working in consumer goods industry because according to Sen and Bhattacharya (2001), participants’ interest in a certain group moderates their reaction towards the company’s CSR performance.

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5. Data analysis

This chapter reports the results of the statistical analysis performed using IBM SPSS Statistics.

5.1 Results

We collected 205 completed experiments questionnaires. Among all participants, 62% are female; 68.3% are western; 60.5% studies Business Economics, 9.3% studies social science and 7.8% studies Communications; 47.3% is enrolled in BSc program and 43.9% is pursuing a MSc degree; only 6.8% has already found a job; the average age of the participants are 22.51 with small deviation (SD = 3.532).

We conducted reliability test on all variables measured by 7-scale survey questions (moral identity, general sense of power and the willingness to associate with the firm). The Cronbach’s Alpha results of moral identity is 0.724, which indicates the scale for this variable is highly reliable. The Cronbach’s Alpha results for the variables general sense of power and willingness to join is 0.842 and 0.938, which shows the measurement is reliably for analysis. The manipulations were successful, t-test was conducted on two questions (I think there are companies like this in real life; I had no difficulty imagining myself in the situation) to check the realism of vignettes, the results showed no significant variance across vignettes thus high vignettes credibility.

5.2 Descriptive statistics

Table 1 shows the descriptive statistics and correlations. Normality tests were conducted on four variables: the scenario of high morality low competence,

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prospective employees’ willingness to join, internalization of moral identity and general sense of power. The Skewness and Kurtosis results show that they are in the range of normal distribution.

Among the variables tested, the scenario of high morality and low competence shows a strong positive correlation with prospective employees’ willingness to join (F=0.388, p<0.01), and general sense of power shows a negative correlation with the high morality and low competence trade-off (F=-0.210, P<0.01), which can be a potential indicator that prospective employees have higher preference towards companies that perform better in ethical activities in the face of the trade-off, and that power might reduce prospective employees’ willingness to associate with a firm with high morality and low competence. And among the participants, females show higher moral identity than males do. And prospective employees’ willingness to associate with the firm is strongly correlated with if they are interested in the consumer goods industry (F=0.348, P<0.01), so it is very useful to put their interest in the relative industry as a control variable to see if the trade-off between morality and competence indeed has a relationship with prospective employees’ willingness to join. This can exclude the case where the participants are not interested in working in the industry at all, regardless of the company’s morality and competence performance.

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Table 1 descriptive statistics and correlations

Variables N Min Max Mean SD Skewness Kurtosis

1 ScEmpHL 205 0 1 0.50 0.501 -0.010 -2.020 2 GSOPAv 205 1250 7000 3.06585 0.874523 1.376 3.675 3 WTJAv 205 1 7 4.0122 1.59229 -0.169 -0.971 4 MIIntAv 205 320000000 700000000 5.88780488 0.800549787 -0.880 0.594 5 Western 205 0 1 0.68 0.466 6 Asian 205 0 1 0.24 0.430 7 BusinessEco 205 0 1 0.60 0.490 8 SocScience 205 0 1 0.09 0.291 9 Comm 205 0 1 0.08 0.269 10 Age 205 19 51 22.51 3532 11 Female 205 0 1 0.62 0.487 12 BSc 205 0 1 0.47 0.501 13 MSc 205 0 1 0.44 0.497 14 FoundJob 205 0 1 0.07 0.253 15 InterestInCGComp 205 1 7 4.30 1816

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32 Table 1 descriptive statistics and correlations Variables 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 ScEmpHL 2 GSOPAv -0.210** 3 WTJAv 0.388** -0.092 4 MIIntAv 0.041 0.005 -0.038 5 Western 0.077 -.0.033 0.092 0.093 6 Asian -0.116 0.078 0.108 -0.102 -0.834** 7 BusinessEco -0.026 -0.035 0.060 0.091 -0.315** 0.320** 8 SocScience -0.086 0.080 -0.087 -0.086 0.145* -0.103 -0.395** 9 Comm -0.001 -0.064 -0.057 -0.196** 0.042 -0.123 -0.360** 0.093 10 Age -0.034 0.089 0.029 0.004 0.009 0.021 -0.079 -0.060 -0.001 11 Female -0.056 0.003 -0.051 0.182** -0.102 0.118 0.004 -0.027 0.003 0.101 12 BSc 0.064 0.061 -0.049 -0.060 0.016 -0.083 0.007 -0.033 0.088 -0.386** -0.123 13 MSc -0.004 -0.086 0.033 0.068 0.096 -0.045 0.051 0.022 -0.074 0.378** 0.147* -0.838** 14 FoundJob -0.156* 0.027 -0.057 -0.030 -0.148* 0.116 0.061 -0.020 0.065 0.197** 0.013 -0.179* 0.072 15 InterestInCGComp -0.020 0.010 0.348** 0.053 -0.212** 0.245** 0.375** -0.201** 0.053 -0.095 0.079 0.001 0.028 0.094 *p < 0.05; **p < 0.01, two-tailed test.

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5.3 Hypothesis tests

To test the hypotheses, this study conducted hierarchical regression analysis where we entered the control variables first as Model 1 (F=3.648, F Change=3.648, P<0.01), and then in the second step (Model 2) we entered the independent variable, which is the trade-off between morality and competence (F=7.516, F Change=41.618, P<0.01). Next general sense of power and moral identity were put in the regression as Model 3 to see if power and moral identity have moderating effect on prospective employees’ willingness to associate with the firm in face of the trade-off between morality and competence (F=6.565, F Change=0.903, P>0.01). Three new variables were computed for this regression as Model 4, first is the interaction of the scenario and general sense of power (ScPo), second is the interaction of scenario and moral identity (ScMo), the third one is the interaction of scenario, moral identity and general sense of power (ScMoPo). The fourth step is to enter ScPo into the regression (F=6.113, F Change=0.184, P>0.01). Lastly, ScMo and ScMoPo were added to the as Model 5 (F=5.487, F Change=0.858, P>0.01). Table 2 shows the linear regression results as well as multicollinearity diagnostics results. Multicollinearity diagnostics are conducted for each model, among which model 4 and 5 contains variables with VIF higher than 6, therefore, these two models exhibit multicollinearity problems.

The first hypothesis (H1) indicates that there is a relationship between the trade-offs of morality and competence and prospective employees’ willingness to associate with the firm. It predicts that prospective employees’ willingness to associate with the firm will be higher in the face of high morality and low competence.

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The linear analysis results support this hypothesis (F=0.00), meaning that in this scenario set there is significant relationship between the trade-off and prospective employees’ willingness to associate with the firm.

The second hypothesis predicts that power has a moderating effect on prospective employees’ willingness to associate with the firm in the face of the trade-offs between morality and competence. It further expects that the more powerful prospective employees feel, the less strong the positive relationship between a trade-off with high morality and low competence compared to low morality-high competence and their willing ness to associate with the firm. According to the step 3 linear results, the interaction between power and the scenario dummy is not significant, which indicates that there is no moderation of power on the relationship between the trade-off and prospective employees’ willingness to associate.

This study further investigates power’s moderating effect on the relationship by running PROCESS regression by Andrew F Hayes, according to the results (P>0.01) there is no significant moderating effect of power on the relationship between prospective employees’ willingness to associate with the firm and the trade-off between morality and competence. To sum up, the second hypothesis is not supported by the empirical data analysis results.

The third hypothesis predicts that moral identity moderates the moderating effect on the relationship between trade-offs and prospective employees’ willingness to associate with the firm. The more central moral identity is to prospective employees,

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the less strong the effects of power proposed in H2. According to the linear analysis results, there is no significant interactions among the scenario, moral identity and general sense of power. To further investigate in this hypothesis this study conducted a three-way moderation analysis using PROCESS by by Andrew F Hayes, the results did not show supportive information regarding this hypothesis (P>0.01), meaning that there is no indicator that moral identity moderates the moderating effect of power on the relationship.

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Table 2 Linear regression and multicollinearity diagnotics result

Variables R R Square Adjusted R Square R Square Change F F Change Sig. F Change VIF

Model 1 0.415 0.172 0.125 0.172 3,648 3,648 0.000 InterestInCGComp 1,278 BSc 3,899 Comm 1,355 Female 1,051 FoundJob 1,131 SocScience 1,320 Western 3,467 Age 1,280 BusinessEco 1,920 Asian 3,548 MSc 3,909 Model 2 0.565 0.320 0.277 0.147 7,516 41,618 0.000 InterestInCGComp 1,279 BSc 3,916 Comm 1,358 Female 1,054 FoundJob 1,149 SocScience 1,336 Western 3,475 Age 1,280 BusinessEco 1,926 Asian 3,572 MSc 3,926 ScEmpHL 1,058 Model 3 0.571 0.326 0.276 0.006 6,565 0.903 0.407 InterestInCGComp 1,287 BSc 3,933 Comm 1,424 Female 1,098 FoundJob 1,149 SocScience 1,352 Western 3,480 Age 1,304 BusinessEco 1,932 Asian 3,627 MSc 3,936 ScEmpHL 1,103 GSOPAv 1,095 MIIntAv 1,132

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Table 2 Linear regression and multicollinearity diagnotics result

Variables R R Square Adjusted R Square R Square Change F F Change Sig. F Change VIF

Model 4 0.572 0.327 0.273 0.001 6,113 0.184 0.669 InterestInCGComp 1,288 BSc 3,935 Comm 1,427 Female 1,105 FoundJob 1,206 SocScience 1,355 Western 3,482 Age 1,305 BusinessEco 1,932 Asian 3,636 MSc 3,951 ScEmpHL 16,351 GSOPAv 1,758 MIIntAv 1,152 ScPo 15,380 Model 5 0.577 0.333 0.272 0.006 5,487 0.858 0.425 InterestInCGComp 1,298 BSc 3,936 Comm 1,453 Female 1,109 FoundJob 1,220 SocScience 1,366 Western 3,630 Age 1,337 BusinessEco 1,939 Asian 3,909 MSc 3,975 ScEmpHL 635,130 GSOPAv 1,778 MIIntAv 2,309 ScPo 563,825 ScMo 606,781 ScMoPo 526,881

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Table 3 PROCESS Matrix results

Coefficient SE t R R Square F p Model 1 0.3900 0.1521 12.4977 0.0000 GSOPAv -0.0011 0.1237 -0.0092 0.9927 ScEmpHL 1.2334 0.2078 5.9355 0.0000 ScEmpHL X GSOPAv 0.1301 0.2477 0.5253 0.6000 Model 2 0.3997 0.1598 52,767 0.0000 GSOPAv 0.0305 0.1349 0.2260 0.8214 ScEmpHL 1.2398 0.2135 5.8062 0.0000 ScEmpHL X GSOPAv 0.1157 0.2698 0.4290 0.6684 MIIntAv -0.1019 0.1445 -0.7051 0.4816 ScEmpHL X MIIntAv 0.2749 0.2892 0.9505 0.3430 GSOPAv X MIIntAv -0.567 0.1641 -0.3457 0.7300

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6. Discussion

6.1 Contributions to the scientific literature

This study explores the relationship between prospective employees’ willingness to associate with the firm and company’s trade-offs between morality and competence, and the moderating effect of power as well as moral identity regarding this

relationship. The results of the study show that prospective employees’ willingness to associate with the firm are significantly affected by the trade-off between morality and competence, however, the empirical results did not show that when prospective employees feel powerful and face the trade-offs between morality and competence they react differently than when they feel less powerful. This shows that studying the trade-offs between morality and competence is of great importance to stakeholder management. The paper extends existing literature regarding the trade-offs and stakeholder management by studying 1) the moderating effect of power and 2) the moderating effect of moral identity on the moderating effect of power.

In doing so this research contributes to the stakeholder management and CSR literature in several ways. First of all, it provides further empirical support to study the trade-offs between competence and morality and its importance to stakeholder

management. The literature on CSR and the trade-offs has long argued that there is a relationship between stakeholders’ reactions and the trade-offs between morality and competence (van Prooijen and Ellemers, 2015). In their study they highlighted that people generally attach more importance on morality than competence. This study

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extends existing literature and specifically studies one type of stakeholders- prospective employees- and their how the react when facing the trade-offs. The empirical results of the vignette experiment show that there is indeed a relationship between the two variables, it empirically supports that prospective employees, when facing the trade-offs, are more willing to associate with the firm of high morality and low competence than low morality and high competence.

Second, it filled the gap of power’s moderating effect on stakeholders’

willingness to associate with an organization when facing the trade-offs. According to Galinsky et al (2006, p1068), power affects people’s behavior, Anderson and Berdahl (2002) also discussed power’s influence on people. However, the effect of power is addressed by existing literature as two-fold, there is no specific conclusion on this matter (Anderson and Berdahl, 2002; Galinsky et al, 2006; Lammers et al, 2015; Serena Chen et al, 2000). This study adds ‘the general sense of power’ as a moderator and studies its effect on prospective employees in the face of trade-offs. It can further investigate whether power has a more positive or negative impact on such

circumstances. However, the empirical results did not show that power plays an important moderating role in prospective employees’ willingness to associate with the firm in face of the trade-off, powerful prospective employees were not found to have tendency towards associating with firms that score higher in morality than powerless ones. The results’ deviation from the hypothesis could be due to the constrains of the

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experiment, or that power’s effect on people are indeed two-fold, therefore, it is difficult to observe a strong positive or negative correlation in the relationship.

Third, by testing the factor “moral identity” this research add evidence on the claim that power’s effect on people is also moderated by different variables. This study takes the internalization dimension of moral identity since it can better reflect how moral values drive people’s actual behavior (Aquino & Reed , 2002).

According to the three-way moderating test result, internalization dimension of moral identity did not show a significant moderating effect on power’s moderating effect. Moreover, in order to look further on the interactions among these variables, this study also tested the direct moderating effect of moral identity on prospective employees’ willingness to associate with the firm and the trade-offs they face. The results show that there is no significant moderating effect. However, whether the symbolization of moral identity has moderating effect on the relationship is to be further investigated by future studies.

6.2 Managerial implications

By exploring the relationship between prospective employees’ willingness to associate with the firm in face of the trade-offs between morality and competence, this study provides useful guidance for managers who face the trade-offs between

morality and competence regarding associations with prospective employees, the empirical results show that there is a strong interaction between the trade-offs and prospective employees’ willingness to join the firm. Managers should focus on the

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development of both company CSR and financial achievement as well as the

trade-offs between them since the trade-offs of the company have indeed great impact on prospective employees’ willingness to associate with the firm.The moderation testing of power and moral identity can provide reference for managers in recruiting processes, it shows how personality traits such as power and moral identity might have impact on prospective employees’ decision.

7. Limitations

This paper used hypothetical vignettes to create scenarios and manipulate the firm’s trade-offs between morality and competence. Participants were guided into conducting a one-hour experiment session. While in reality, real prospective

employees might encounter such decisions in different times and in different orders, the timing and order of information can have impact on prospective employees’ decisions on the trade-off. Future research can investigate in whether the timing and order of information indeed have such impact.

Our vignette experiment was set as in a consumer goods company, people seeking professional opportunities in different industries might have different reactions in face of the trade-offs between morality and competence. Also, the information was informed to prospective employee by press, other source of

information might have different impact on stakeholders’ reaction. Furthermore, the participants were invited within a university scope, ranging from bachelor students, master students to PhD students, this can also limit the results in term of the fact that

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not all prospective employees are currently enrolled in the university. Prospective employees in different situations and with difference experiences might also have different insights in this matter. Regarding the selection of participants, more than 68% of the participants were from western countries, this unbalanced distribution of nationality might bias the study result, because people from different regions and culture background might perceive morality and competence differently.

Another limitation is that in this study, general sense of power is measured instead of the real power one has, there might be a difference between how powerful one feels and how much power that person truly has. One suggestion for future studies is that they can try to measure the gap between how powerful the person feels and how much power that person indeed has by conducting a vignette experiment, where the target participant is requested to fill in the same survey questions as in this study, and later let the participant engage in a group decision, how powerful this person truly is can be measured by to what extend the decision is affected by him/her. Similarly, this study tests participants’ intentions of choice in face of the trade-offs between morality and competence instead of their actual behavior, one can behave differently than they intend to do.

In conclusion, this study shows that there is indeed a correlation between prospective employees’ willingness to associate with the firm and the trade-off between morality and competence. It assumed that power might have a moderating effect on the relationship in terms that prospective employees might be more willing

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to associate with high morality firms. But the experiment result did not support this hypothesis, therefore it drives the result that power has no significant impact on this relationship. Furthermore, this study tested whether moral identity plays a moderating role in the moderating effect of power, the results shows no such

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How power influences prospective employees’ willingness to associate with the firm under trade-offs between morality and competence