Excerpt
Table of Contents
1. Introduction
1.1 Problem Definition and Objective
1.2 Course of Investigation
2. Derivation and Definition of Organizational Commitment
3. Main Concepts of Organizational Commitment
3.1 One-Dimensional Model
3.2 Three-Component Model by Meyer & Allen
3.2.1 Affective Commitment
3.2.2. Continuance Commitment
3.2.3. Normative Commitment
4. Organizational Commitment and Employee Behavior6
4.1. Consequences of Organizational Commitment for Employee Behavior
5. Organizational Commitment and Business Success
5.1. Consequences of Organizational Commitment for Business Success
5.1.1. Cost Saving through Reduced Fluctuation
5.1.2. Long-Term Talent and Knowledge Management
5.1.3. Assisting the Brand
5.1.4. Assisting the Business Culture and Job Satisfaction
6. Limitations
7. Summary and Conclusion
References
1. Introduction
Considering the demographic change, the organizational change, which among others is characterized by globalization as well as more flexible forms of employment, and the increasing importance of high professional qualifications, the preservation of employees, especially of executives and young talents, has become of enhanced relevance for organizations. In coherence with the preservation of employees, organizational commitment is highlighted in scientific research as the extent of identification of an employee with an organization and its consequences on his motivation and loyalty towards that organization (Berthel & Becker, 2010, p. 233).
1.1. Problem Definition and Objective
Especially in difficult and economic uncertain times organizations are increasingly dependent on the dedication and loyalty of its employees, as they portray a substantial success factor of the organization (Pepels, 2002, p. 130). Organizational commitment could therefore be a new key element for long-term corporate success focusing on sustainability. The focus of this paper lies on answering, if that statement is valid with the aim to identify if organizational commitment can have consequences for employee behavior and corporate success and, if so, how these consequences look like.
1.2. Course of Investigation
The basis of this review constitutes organizational commitment, which is why initially the derivation and definition of organizational commitment is mediated. Afterwards, the two main models of commitment are presented in their historical development, resulting in the latest and most popular model of organizational commitment, namely the ThreeComponent Model (TCM) by Meyer & Allen. Based on the TCM, the linkage between organizational commitment and employee behavior, which has been recognized and empirically proven so far, will be presented. In a next step these findings will be discussed in relation to corporate success and its economic relevant consequences.
2. Derivation and Definition of Organizational Commitment
Organizational Commitment is a construct, which gains steadily increasing awareness since the 1950’s, particularly in the Anglo-American research area. Central aspect is the term ‘commitment’, which has a variety of meanings like obligation, bond or dedication (Bryant, 2010, p. 21). First studies of sociology and social psychology investigated the question why spouses or people in a relationship commit to each other and stay faithful (partner commitment). These studies are the origin of commitment-research. Organizational psychology transferred that question to employees and their commitment to organizations or employers, namely organizational commitment (Stenglin, 2008, p. 8). In this context, Mowday, Porter & Steers (1982, p. 27) defined commitment as “the relative strength of an individual’s identification with and involvement in a particular organization”. This psychological attachment, which is described as commitment, is conceived as the central factor of influence in regard to an employee’s decision whether or not to stay with an employer. Furthermore, studies are conducted about the employees “commitment to organizational change” and the “organizational goal commitment” (Bryant, 2010, p. 22). Commitment also obtains notable interest as an explaining instrument in the area of marketing, especially for customer relationship management as well as brand compliant behavior, namely brand behavior (Esch & Strödter, 2009, p. 143; Stenglin, 2008, p. 5).
3. Main Concepts of Organizational Commitment
Until the early 1990’s organizational commitment research strictly differentiated between two types of commitment: behavioral commitment and attitudinal commitment (Steers & Porter, 1983; Reichers, 1985; Meyer & Allen, 1997, p. 8). Since then the perception of commitment as a multi-dimensional construct, particularly based on the research of Meyer & Allen (1991) gained wide acceptance. In regard to the number of dimensions of organizational commitment there has not been reached a unified perception to date though. However, two- and three-dimensional interpretations of the construct are paramount today. In the following the one-dimensional model will be presented first and in a second step, the three-dimensional model by Meyer & Allen, the TCM, which is most widely spread and was examined and proven empirically multiple times so far (Stenglin, 2008, p. 12; Meifert, 2008, p. 44), will be illustrated.
3.1 One-Dimensional Model
In the popular literature organizational commitment is explained through two theoretical approaches: the behavioral and the attitudinal perspective (Meyer & Allen, 1997, p. 8).
The behavioral perspective focuses on the commitment of an employee to his employer based on his behavior in the past. That behavior leads to gains or profits in the so-called “side bets”, meaning that the employee has advantages through the parameters of his employment contract. As the employee might lose those advantages if he quits that employment contract, the advantages are an exit barrier, and therefore lead to a corresponding commitment (Becker, 1960). The idea of these side-bets will be described in more detail later in this review (see 3.2.2.).
The attitudinal perspective focuses on the process, in which the employee identifies himself with the values and objectives of the organization. In contrast to the behavioral perspective side bets have no relevance, but instead the identification itself becomes the key motive (Porter, Steers, Mowday & Boulian, 1974; Porter et al., 1976; Meifert, 2008, p. 41). The most known advocates of the one-dimensional model are Porter, Steers and Mowday (1982), who were able to derive positive effects of organizational commitment for organizations, like increases in occupational performance, reduces in absenteeism and increased interest of commitment by employees, based on this model (Meifert, 2008, p. 42).
3.2 Three-Component Model by Meyer & Allen
In 1990 Meyer & Allen introduced their TCM, which today is considered as the most validated multi-dimensional model of organizational commitment (Mathieu & Zajac, 1990; Mayer & Schoorman, 1992, 1998; Cohen, 2003). By compiling that commitment can be distinguished into an affective, a continuance and a normative commitment-component, Meyer & Allen combined the considerations of behavioral and attitudinal approaches into one new model that integrates different streams of commitment (Becker, 1960; Marsh & Mannari, 1977; Scholl, 1981; Wiener, 1982). Meyer & Allen define the three factors as “components instead of types” as all three components can exist equally or with gradual differences in the working relationship of an employee (Meyer & Allen, 1997, p. 11). In detail, the TCM joins the behavioral and attitudinal approach as well as the psychological state of the relationship between employee and organization, which reflects “a desire [affective commitment] , a need [continuance commitment] , and an obligation [normative commitment] to remain with an organization” (Meyer & Allen, 1991). Since the TCM is three-dimensional, the different components can be present simultaneously while they are causing different outcomes at the same time. Therefore the three components will be examined successively in the following sections.
It is also essential to mention that organizational commitment implies that employees focalize on the overall organization as a reference object. However, Meyer & Allen already emphasized that employees, especially in large organizations, are presumably not differentiating between the overall organization, the top-management, local executives and the working team, which makes it generally difficult to influence commitment as an individual mindset exogenous (Meifert, 2008, p. 218).
3.2.1 Affective Commitment
Meyer & Allen's definition of affective commitment derives from former definitions of affective commitment, especially “the relative strength of an individual’s identification with and involvement in a particular organization” (Mowday et al. 1979, p. 226), and Kanter’s definition of cohesion commitment, “the attachment of an individual’s fund of affectivity and emotion to the group” (1968, p. 507).
Meyer & Allen (1990, p. 14) define affective commitment as “the employees’ emotional attachment to, identification with, and involvement in the organization” meaning that employees with strong affective commitment stay with an organization because they want to. Therefore affective commitment describes the relationship between values and desires and reflects “a general tendency to perform a range of behaviors in favor of the organization” (Solinger et al., 2007, p. 76). The measurement of affective commitment, which is anteceded by personal, structural and job-related characteristics as well as work related experiences (Mowday et al., 1982), ensues by the Organization Commitment Questionnaire (OCQ), which was developed by Porter and has been applied in various studies.
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