J Bus Ethics DOI 10.

1007/s10551-011-1128-y

Antecedents of Organizational Commitment in a Chinese Construction Company

Weihui Fu Satish P. Deshpande

Received: 9 May 2011 / Accepted: 21 November 2011 Springer Science+Business Media B.V. 2011

Abstract This study examines the impact of various ethical climate types and job satisfaction on organizational commitment of 144 employees working at a Chinese private construction company. Both caring and independence climate types had a signicant positive impact on organizational commitment. Instrumental climate had a signicant negative impact on organizational commitment. Other climate types (professional, rules, and efciency) had no signicant impact on organizational commitment. Overall job satisfaction had a signicant positive impact on organizational commitment. Overclaiming was signicantly correlated with organizational commitment, caring climate, rules climate, and job satisfaction. Keywords China Ethical climate Job satisfaction Organizational commitment Private construction company

Introduction Much has been written about Chinas rapid economic growth and its critical role in an increasingly integrated global economy (Krueger 2009). Chinas average annual growth rate of 9.5% over the last three decades had made it

W. Fu School of Economics and Management, University of Science and Technology Beijing, Beijing, China e-mail: tinafu1107@yahoo.cn S. P. Deshpande (&) Department of Management, Haworth College of Business, Western Michigan University, 1903 W. Michigan Ave., Mailstop 5429, Kalamazoo, MI 49008-5429, USA e-mail: satish.deshpande@wmich.edu

the second largest economy in the world. At current growth rates, China is likely to overtake the United States in the next two decades and become the largest economy in the world. Chinas focus on industrialization and urbanization has been a boon to its domestic construction industry (Sridharan 2007). Even the world wide 20082009 recession had little impact on the construction industry in China largely due to the RMB 4 trillion stimulus package implemented by the Chinese government to fuel growth in this sector. The growth in the construction section in China is not expected to decline in the near future (Clapper 2011). Thus, it is not surprising that this high growth sector has been drawing a lot of attention from construction rms in the US, Europe, and Japan who are facing a declining or at market in their home countries. With Chinas entry into the WTO, it is much easier for international rms to penetrate the Chinese construction market today. As China moves toward a market economy, privateowned enterprises (POEs) have been in a better position to adapt to the needs of the marketplace. Currently the number of private enterprises in China exceeds 8.4 million. In the last 5 years, the number of POEs has increased at an annual rate of 14.3% (Wang 2011). This sector has become a major player in foreign-trade market and makes substantial contribution to Chinas tax revenue, export volumes, and urban employment (IMD 2009). Unfortunately like other sectors of the Chinese economy, the construction industry also faces a shortage of key talent (Sridharan 2007). It is not surprising that recruiting and retaining key talent is one of the major operational problems facing both domestic and foreign rms in China (Lane and Pollner 2008; Hudson 2010). These issues can be more critical in a construction company. Construction work is very labor intensive. Besides attracting key talent, rms have to make sure that they can retain key talent for

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long periods of time. The ability of a rm to retain and foster long-term commitment of high quality human capital can be a major source of competitive advantage for a construction company (Leininger 2008; Youzheng and Ming 2008). Hrebeniak and Alutto (1972) look at commitment as reluctance of an individual to change organizations for modest individual gain. Steers (1997, p. 46) described organizational commitment as the relative strength of an individuals identication with and involvement in a particular organization. Firms with highly committed employees provide greater shareholder returns (Leininger 2008). Meyer et al. (2002) in their meta-analysis found that organizational commitment and withdrawal cognition were strongly linked. In addition, they voiced their concern about the lack of studies on organizational commitment in counties beyond North America. Due to difference in economic, political, and social environment, Western theories on organizational commitment may not apply to non-Western countries. For example, in China guanxi or interpersonal network of reciprocal bonds has a major impact on organization behavior, relationships, and business ethics (Lin 2011, p. 441). It has been suggested that many work outcomes in China are inuenced by guanxi (Chen and Francesco 2011). It is not unusual for employees in China to use personal relationships to achieve instrumental ends. Thus, it is not surprising that previous research reports that many practices considered corrupt by Westerners may be considered appropriate in China (Chua et al. 2007). Since the publication of Meyer et al.s (2002) metaanalysis, we have seen a gradual increase in research on organizational commitment in countries outside North America such as Taiwan (Tsai and Huang 2008), Singapore (Koh and Boo 2004), Turkey (Cetin 2006; Turker 2009), Pakistan (Malik et al. 2010), Portugal (Rego et al. 2010), and Oman (Azeem 2010). The purpose of this study is to study organizational commitment in a Chinese POE. Specically, the objective of this research is to examine the impact of different ethical climates, job satisfaction, and various demographic variables on organizational commitment of employees working for a privately owned Chinese construction company. Previous research has shown that different ethical climate types impact organizational commitment. Filipova (2011) in a sample of nurses in Midwestern United States found that a caring ethical climate had a signicantly positive inuence on organizational commitment, whereas an instrumental climate was negatively associated with organizational commitment. Erben and Guneser (2008) found a strong relationship between ethical climate and affective commitment and a moderate relationship between ethical climate and continuance commitment in a sample of 142 Turkish employees. Schwepker (2001) suggests that

salespersons perception of positive ethical climate can signicantly impact organizational commitment. Sims and Kroeck (1994) report that ethical climate impacts person organization t. In a subsequent research (Sims and Keon 1997), they found that turnover intentions were lower when subjects expressed a match between their preferences for an ethical climate and their present ethical climate. Research indicates that stronger enforcements of ethical rules and codes were positively related to organizational commitment (Schwepker 2001). Cullen et al. (2003) found that benevolence ethical climate of had a positive impact on organizational commitment, while egoistic climate is negatively related to commitment. Tsai and Huang (2008) found that Taiwanese hospitals can increase organizational commitment among nurses by inuencing an organizations ethical climate. In addition, Shafer and Wang (2010) also report that weak ethical culture can result in decreased commitment in a sample of Chinese accountants. Most of the current research on ethical climate of rms is based on climate types identied by Victor and Cullen (1987, 1988). They used ethical theory research (Fritzche and Becker 1984; Williams 1985), moral development research (Kohlberg 1984), and sociocultural theories of organizations (Schneider 1983) to identify six ethical climates that could exist within an organization. Professional, rules, and independence climates were developed from principle dimension. Caring climate belongs to benevolence dimension and instrumental and efciency climates are developed from egoism dimension. Thus, based on the literature review we propose the following hypotheses: H1 Professional climate has a signicant positive impact on organizational commitment of Chinese employees. H2 Caring climate has a signicant positive impact on organizational commitment of Chinese employees. H3 Rules climate has a signicant positive impact on organizational commitment of Chinese employees. H4 Instrumental climate has a signicant negative impact on organizational commitment of Chinese employees. H5 Efciency climate has a signicant negative impact on organizational commitment of Chinese employees. H6 Independence climate has a signicant positive impact on organizational commitment of Chinese employees. Previous meta-analysis research has shown that job satisfaction is a signicant predictor of organizational commitment (Meyer et al. 2002). Cheung et al. (2009, p. 78) dene job satisfaction as a persons pleasurable state that stems from ones own appraisal of ones job or job experience. Filipova (2011) found that job satisfaction was negatively related to employees intent to leave in a

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survey of 656 nurses in the Midwestern United States. Azeem (2010) found that supervision and pay satisfaction signicantly inuenced organizational commitment of service industry employees. Malik et al. (2010) found that various facets of job satisfaction like satisfaction with work, supervision, pay, and co-worker were signicantly correlated with organizational commitment of faculty members in Pakistan. Valentine et al. (2011) found that employees with a higher job satisfaction are less likely to leave an organization. Tang and Chiu (2003) found a positive relationship between pay satisfaction and organizational commitment in Hong Kong. We expect that job satisfaction will have a signicant positive impact on organizational commitment of Chinese employees in our study. Thus, we hypothesize: H7 Job satisfaction has a signicant positive impact on organizational commitment of Chinese employees. This study also included demographic variables like age, gender, and type of job. Previous research suggests that social desirability bias may impact the result in research in business ethics and organizational commitment (Bernardi et al. 2003; Bernardi and Guptill 2008). Accordingly, we used an overclaiming scale to control the impact of social desirability bias.

Study Methodology Sample Characteristics The data for this study was part of a survey done by the rst author at a private construction rm in the Jiangsu province of mainland China. Data collection was completed in October 2010. The survey for this study was initially prepared in English. It was subsequently translated into Chinese by the rst author. In order that there is no distortion in the translation, the survey was translated back to English by three professionals and compared with the original English version of the paper. 200 surveys were distributed and 152 were returned. We were left with a sample of 144 respondents after dropping surveys with missing values. This resulted in a useable response rate of 72%. Measures Items in the survey included measures of organizational commitment, ethical climate, job satisfaction, overclaiming, and demographics. Four items were used to measure organizational commitment (Hrebeniak and Alutto 1972). They were Would you leave your present organization if another organization offered you: an increase in pay; more freedom to be professionally creative; more status; and to

work with friendlier people? These four items were rated on a seven-point Likert scale (7 = denitely no, 1 = definitely yes). High scores indicate strong organizational commitment while low scores imply weak organizational commitment. The Cronbachs alpha for organizational commitment was 0.868. Ethical climate was measured using six climate types proposed by Victor and Cullen (1987). We used global measures of the six ethical climate types (Deshpande 1996; Deshpande et al. 2011). They are professional climate (people are expected to comply with the law and professional standards in my organization), caring climate (our major consideration is what is best for everyone in the organization), rules climate (it is important to follow rules and procedures in this organization), instrumental climate (in this organization, people protect their own interest above all else), efciency climate (the most efcient way is the right way in this organization), independence climate (each person in this organization decides for themselves what is right and wrong). A seven-point Likert scale was used to measure the climate types (7 = mostly true and 1 = mostly false). Thus, a high score shows the presence of a climate type and a low score shows the absence of a climate type. Job satisfaction was measured using 20 items. These items were developed by Cellucci and Devriess (1978) and used by previous researchers in business ethics (Deshpande 1996; Vitell and Davis 1990). These items were: My organization pays better than competitors; My pay is adequate considering the responsibilities I have; I am underpaid for what I do (R); My fringe benets are generous; I do not like the basis on which my organization promotes people (R); Promotions are infrequent in my organization (R); If I do a good job, I am likely to get promoted; I am satised with my rate of advancement; The people I work with do not give enough support (R); When I ask people to do things the job gets done; I enjoy working with people here; I work with responsible people here; The managers I work for back me up; The managers I work for are top notch; Management does not treat me fairly (R); My superiors do not listen to me (R); My job is interesting; I feel good about the amount of responsibility in my job; I would rather be doing another job (R); and I get little sense of accomplishment from doing my job (R). These items were rated on a seven-point Likert scale (7 = mostly true; 1 = mostly false). Job satisfaction score was arrived at by calculating the average of the items after reverse coding items with R. The Cronbachs alpha for job satisfaction was 0.854. Overclaiming scales were used to control for social desirability bias in our survey. The protocol used in our study was rst proposed by Randall and Fernandes (1991). Respondents were asked to rate their degree of familiarity

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with items within four categories (movies, products, TV shows, and designer labels) on a three-point Likert scale (1 = not at all familiar, 3 = very familiar). Each category has a fake item which is nonexistent. Overclaiming score were arrived at by calculating the average score of fake items. High scores indicate that respondents report that they were aware of items that actually did not exist. Cronbachs alpha for this scale was 0.723. Other control variables were demographic variables like age, gender (1 = male, 2 = female), and type of job (1 = worker, 2 = clerical 3 = technical, 4 = ofce manager, 5 = executive).

Results The mean and standard deviation of all the variables used in this study are shown in Table 1. An average respondent
Table 1 Descriptive information of all variables Variables Organizational commitment Professional Caring Rules Instrumental Efciency Independence Job satisfaction Age Gender Type of job Overclaiming n = 144 Mean 4.17 6.13 5.29 6.13 3.06 3.63 2.49 4.72 26.51 1.38 1.79 2.61 SD 1.57 1.59 1.71 1.56 2.03 2.15 1.81 0.79 7.34 0.49 0.68 0.46

was 27-year old worker. About 62% of subjects were males. In addition, over 52% of the respondents were workers. While professional and rules were the most reported ethical climate types, independence was the least reported ethical climate. Pearsons zero-order correlations and reliabilities are shown in Table 2. The reliabilities (coefcient alphas) of organizational commitment, job satisfaction, and overclaiming are shown in parentheses on the diagonal of Table 2. All of them had a satisfactory reliability (alpha [ 0.70). Professional climate, caring climate, rules climate, instrumental climate, job satisfaction, and overclaiming were signicantly correlated with organizational commitment of respondents. A number of these variables also had signicant inter-correlations. Unfortunately, zeroorder correlations do not show causations or control for the impact of other variables in the study. In order to overcome these limitations, a regression analysis was done to examine the impact of various factors on organizational commitment. Table 3 shows ordinary least square (OLS) regression analysis results for our study. Standardized regression coefcients show that caring climate had a signicantly positive impact on organizational commitment; so H2 was supported. Instrumental climate had a signicantly negative impact on commitment; so H4 was also supported. Independence climate also had a signicantly positive impact on organizational commitment; so H6 was supported. Since professional, rules, and efciency climates did not signicantly impact organizational commitment; H1, H3, and H5 were not supported. The results also show that job satisfaction had a signicant positive impact on organizational commitment; so H7 was supported. None of the demographic variables nor overclaiming scale

Table 2 Zero-order Correlations among the variables 1 1. Organizational commitment 2. Professional 3. Caring 4. Rules 5. Instrumental 6. Efciency 7. Independence 8. Job satisfaction 9. Age 10. Gender 11. Type of job 12. Overclaiming (0.87) 0.22 0.45 0.25 -0.21 -0.13 0.03 0.48 0.09 0.02 0.12 0.16 1 0.40 0.60 0.09 0.10 0.03 0.22 0.14 -0.22 0.07 0.10 1 0.46 -0.02 -0.14 -0.15 0.54 0.30 -0.17 0.17 0.19 1 0.10 0.02 0.00 0.33 0.21 -0.02 0.13 0.17 1 0.42 0.33 -0.28 0.05 -0.12 -0.06 -0.12 1 0.45 -0.25 -0.17 -0.02 -0.08 -0.02 1 0.25 -0.09 0.06 0.00 -0.09 (0.85) 0.20 -0.12 0.01 0.24 1 -0.19 0.13 0.07 1 -0.08 -0.08 1 -0.08 (0.72) 2 3 4 5 6 7 8 9 10 11 12

Correlations of 0.22 and greater or -0.22 or less are signicant at p \ 0.01 (two-tailed); correlation between 0.16 and 0.22 and -0.22 and -0.16 are signicant at p \ 0.05 (two-tailed). Listwise n = 144

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Antecedents of Organizational Commitment Table 3 Regression results Variable Professional Caring Rules Instrumental Efciency Independence Job satisfaction Age Gender Type of job Overclaiming F R2 Adjusted R2 N Beta 0.07 0.31*** -0.02 -0.16* -0.06 0.23** 0.31*** -0.05 0.09 0.02 0.04 6.49*** 0.35 0.30 144 t 0.76 3.34 -0.20 -1.87 -0.74 2.79 3.35 -0.59 1.17 0.31 0.52

*** p B 0.01; ** p B 0.05; * p B 0.10

signicantly impacted organizational commitment of respondents in our regression model.

Discussion and Conclusions Factors such as globalization, low-cost production facilities, and access to cheap labor have resulted in massive foreign investments by Western rms in China. Over the last three decades, this has allowed China to move from an agrarian economy to the manufacturing hub of the world. However, this radical transformation has created some unique concerns for employers in China. Today, the ight of human capital and poor retention of local staff is the biggest challenge faced by both domestic and foreign employers in China (Hudson 2010). This has made organizational commitment a major issue for employers given that it has been shown to directly impact employee retention, employee turnover and intent to leave (Schwepker 2001; Steers 1997). This study makes four important contributions to help us understand and address organizational commitment in China. First, it shows how ethical climate and job satisfaction can positively impact organizational commitment in China. Second, it employs a comprehensive measure of ethical climate. Instead of one global measure (e.g., Schwepker 2001), we examine the impact of six different types of ethical climate on organizational commitment by Chinese employees. Third, this study was done in a private construction company in China. Past studies in China have mostly focused on serviceoriented rms, student samples, and state-owned enterprises or joint ventures. Finally, we also show that the lack of control

for social desirability bias in international samples and business ethics studies may affect the validity of the results. Among the six ethical climate types examined in our study, only caring, instrumental, and independence climates signicantly impact organizational commitment. Interestingly, Lin (2011) in their study of antecedents of guanxi report that among the various ethical climate types, only caring, instrumental, and independence climates stress the development and growth of guanxi in an organization. This suggests that the Chinese philosophy of guanxi or networking is dominant in the private sector too. Caring climate had the most impact on organizational commitment of respondents in our study. A caring climate is utilitarian based in which the rm has a sincere interest in the well being of others in the organization. Our results suggest that employees feel more committed to their rm and feel a sense of shared values with an employer who shows concern for them. While independence was the least reported climate in our study, it also had a signicant positive impact on organizational commitment. In an independence climate, employees act on their own set of moral beliefs and conviction. Such a climate allows employees to develop their own ethical standards without being inuenced by others. This makes them more committed to their organizations. Our results also found that instrumental climate has a negative impact on organizational commitment of respondents in our study. Thus, employees who work for a Chinese rm that allow them to protect their own interests and/or do what is necessary to further the company without paying attention to the consequences of their actions are less likely to be committed to their organization. Self-interest behaviors in such an environment may include lying, cheating, and other dysfunctional behaviors (Martin and Cullen 2006). Since an instrumental climate encourages employees to look out for their own self-interests, such a climate may it easier for employees to quit their jobs if they cannot get what they want at their current workplace. The most widely reported climate by Chinese respondents was the rules climate. This climate type that ensures that employees follow rules and procedures had no signicant impact on organizational commitment. Previous business ethics research has found that factors such as business such as forms of institutionalization of ethics (Vitell and Singhapakdi 2008), ethical optimism (Koh and Boo 2004) and corporate ethical values (Valentine et al. 2011) also has a signicant impact on commitment. Future research in Chinese rms must examine these issues. Future research in China should examine whether other aspects of business ethics (e.g., ethical behavior, ethical codes, corporate social desirability, and ethical values) have a signicant impact on organizational commitment of Chinese employees.

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Consistent with previous studies, job satisfaction had a signicantly positive impact on organizational commitment of Chinese employees (Schwepker 2001; Mulki et al. 2008). In our study, job satisfaction was signicantly correlated with age. Employee surveys in China suggest that people in different age groups are motivated differently (Kelly Services 2010). It has been shown that while baby boomers are more motivated by pay levels and benet coverage, generation Y (ages 1829) in China think training opportunities are relatively more important than compensation. Also, the younger generation is said to be more individualistic and thus respond better to individual merit-based plans. It has also been suggested that there is a decline in group-focused Confucian values among the younger generation (Ralston et al. 1999). Correlation results show that younger employees are not only less satised; they also are less likely to perceive a caring environment within the organization. Thus, Chinese rms have to come up with specic steps to address the needs of their younger workforce. Some strategies suggested by previous research to increase job satisfaction of all Chinese employees include creating a participative environment, involve employees in decision making, design interdependent jobs, and team-related interventions (Scott et al. 2003). While overclaiming did not signicantly impact our overall results in our regression model, it was interesting to note that overclaiming was signicantly correlated with organizational commitment, caring climate, rules climate, and job satisfaction. It is possible that respondents did not want to provide true responses on these variables as it would make their employer look bad. However, whatever the reason, these correlations suggest that the values on these variables may be inated and the respondents were providing socially desirable responses on these factors. This conrms assertion by researchers that social desirability response bias can overstate culturally desirable responses (Bernardi and Guptill 2008). Clearly future researchers in business ethics and international research need to understand that they need to control for social desirability bias even in studies when respondents were not asked to identify themselves on the survey. Although this study helps us better understand organizational commitment in private companies in China, it still has a number of limitations. As work environment (e.g., promotion rules, wage system, and ethical issues) in POEs may be different from other companies, it is possible that the results of this study may not be applicable to multinational rms, state-owned companies, joint ventures, or even private companies of other industries. The company in which this study was done is heavily generation Y dominated, so the results may be different in rms that have a larger number of old employees. In spite of these

limitations, this research has important conclusions for researchers and human resource managers of different rms in China.

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