Antecedents to Continuance Organizational Commitment Among Salespersons in the Retailing Services Industry

Antecedents to Continuance Organizational Commitment Among Salespersons in the Retailing Services Industry Dr. Chien-Hung Lin, Assistant Professor, Department of Digital Commerce, Kao Fong College of Digital Contents, Taiwan ABSTRACT Salespersons play an important role in business transactions and serve as interfaces and bridges between firms and customers. This study attempts to explore the relationship between the two factors (salesperson demographics and leadership style) and continuance organizational commitment using salespersons in Taiwan s retailing services industry as the population. In order to collect primary data for this study, the research questionnaire was distributed to the sample of 783 salespersons in twenty-three retail stores. Of the 783 salespersons contacted, a total of 426 completed questionnaires were used for this study. The usable response rate was 54 percent. The results of this study indicate that employee demographics (age and organizational tenure) and leader consideration have a significant positive relationship with continuance commitment, but that leader initiating structure does not. The results also show that educational level is not significantly correlated with continuance commitment, and that the differences in marital status result in different levels of continuance commitment. Keywords: Salespersons, Continuance Organizational Commitment, Retailing Services Industry INTRODUCTION Salespersons play an important role in business transactions and serve as interfaces and bridges between firms and customers. Considering the increase in the number of the foreign retail chain stores in Taiwan, two situations are expected to arise in Taiwan s retailing services industry. First, the stores in the retail industry will vigorously compete with each other for market share in Taiwan. Second, skilled or experienced salespersons will have more opportunity to be hired by other stores. In order to cope with these pressures, retail stores need to develop approaches to reduce salesperson turnover and to increase salespersons desire to work hard for them. Many researchers have found that continuance organizational commitment is a predictor of employee turnover (Mowday et al., 1982). Employees with high continuance organizational commitment exhibit a greater desire to remain in the company (Mitchell and Larson, 1987) and to realize the company s goals (Steers, 1977). Thus, it is important to understand how to enhance salespersons continuance commitment to their organization. Employee demographics and leadership style are two important factors that can influence employees organizational commitment (Mathieu and Zajac, 1990). Understanding the relationship between these two factors and continuance organizational commitment is likely to help Taiwan s retail stores reduce salesperson turnover and obtain maximum job productivity from salespersons. However, few studies examine this relationship in terms of the Taiwan population. Therefore, the present study attempts to explore the relationship between the two factors (salesperson demographics and leadership style) and continuance organizational commitment using salespersons in Taiwan s retailing services industry as the population. This study has two research purposes. First, the study will help managers to have a better understanding of salespersons continuance commitment to their retail stores. This understanding could help managers improve human resource management in training programs. Second, the study will provide managers with managerial information that could help them improve leadership approach in a way that increases salespersons continuance organizational commitment. 206

LITERATURE REVIEW AND RESEARCH HYPOTHESES Employee demographics and leadership style are viewed as antecedents of organizational commitment (Mathier and Zajac, 1990). The present study hypothesizes that continuance organizational commitment is influenced by salesperson demographics and leadership style. Salesperson demographics consist of age, marital status, educational level, and organizational tenure. Leadership style consists of two dimensions, initiating structure and consideration. Continuance Organizational Commitment Researchers (Mayer and Schoorman, 1992; McGee and Ford, 1987) have measured organizational commitment based on the dimension of continuance organizational commitment. The continuance commitment is defined as the degree to which an employee exhibits a willingness to continue to work for the organization (Agarwal et al., 1999). Meyer and Allen (1997) found that continuance organizational commitment reflects links between the employees and the organization. In an organization, employees with continuance commitment have a strong intention to remain members in their organization (Mayer and Schoorman, 1992). Employees are likely to exhibit continuance commitment when they have achieved personal investment (such as pensions) in their employing organization (Scholl, 1981) or they have developed an emotional attachment to their organization (Meyer and Allen, 1984; McGee and Ford, 1987). Antecedents to Continuance Organizational Commitment Integrating previous studies, Mowday et al. (1982) developed a model that consists of four categories of antecedents of organizational commitment. The four categories are personal characteristics, role-related characteristics, structural characteristics, and work experiences. The categories of role-related characteristics, structural characteristics, and work experiences can be grouped together under the heading called work environment (Williams and Hazer, 1986). Therefore, the antecedents of organizational commitment, in general, are classified in two groups: employee demographics and work environment. Leadership impacts the variables that comprise work environment and it pervades all levels of the organization (Northouse, 1997; Robbins, 2000). In addition, leadership is a key element in the functioning of any organization (Mitchell and Larson, 1987). In view of the importance of leadership, leadership style is selected to represent the group of work environment. Salesperson demographics and leadership style (leader consideration and leader initiating structure) will be examined in the present study as antecedents of continuance organizational commitment. Leader consideration is defined as leader behaviors that tend to show friendship, trust, and respect for subordinates (Stogdill, 1974). Leader initiating structure is defined as leader behaviors that involve organizing work, giving structure to the work context, defining role responsibilities and scheduling work activities for subordinates (Johnston et al., 1990). Salesperson Demographics and Continuance Organizational Commitment Regarding the relationship between age and continuance commitment, Sheldon (1971) found that age is positively related to continuance commitment. Sheldon explained this positive relationship using the side-bet theory proposed by Becker (1960). This theory indicates that the more organizational resources one has accumulated and could lose by leaving the employing system, the greater the personal commitment to stay with the organization. Sheldon stated that age is an investment and that older employees have accumulated more organizational resources, such as pension benefits, than younger employees. Hrebiniak and Alutto (1972) stated that the longer the employees remain with their organization, the more the employees have invested in their organization. Hrebiniak and Alutto further pointed out that because of this investment, employees with longer organizational tenure have accumulated a great number of resources, such as experience and seniority. In accordance with Becker s side-bet theory, employees who have been with their organization longer tend to avoid losing these resources by staying with their organization and, thus, have more continuance commitment than newer employees. Hypothesis 1: There is a positive relationship between age and continuance commitment. Hypothesis 2: There is a positive relationship between organizational tenure and continuance commitment. 207

Shore et al. (1995) argued that education is negatively related to continuance commitment. Shore et al. Explained the negative relationship from the viewpoint of job opportunity. According to Abdulla and Shaw (1999), education is an investment, which can increase skills that are valued by organizations, and well-educated employees have greater opportunities to select expected jobs in other organizations than less educated employees (Lambert et al., 2001). Therefore, employees with higher educational levels have less continuance commitment than those with lower educational levels (Shore et al., 1995). Hypothesis 3: There is a negative relationship between educational level and continuance commitment. Hrebiniak and Alutto (1972) found that married employees perceive greater costs associated with inter-organizational mobility than single employees. Therefore, in terms of cost consideration, Hrebiniak and Alutto argued that married employees are less likely than single to leave their organization and thus have more continuance commitment than single employees. Chang (2002) also found that married employees exhibit stronger continuance commitment than single employees. The reason provided in Mathieu and Zajac s (1990) study is that married employees are likely to have greater financial burdens than single employees and, thus, tend to stay with their organization. Hypothesis 4: Married employees will exhibit a higher level of continuance commitment to the organization than single employees. Leadership Style and Continuance Organizational Commitment Williams and Hazer (1986) examined the antecedents and consequences of satisfaction and commitment. The result showed that leader consideration positively influence employees continuance commitment. The reason provided in Williams and Hazer s study is that leader consideration, which provides employees with attractive rewards, can enhance the degree of job satisfaction, which increases employees continuance organizational commitment. Johnston et al. (1990) found that leader consideration that provides employees with compensation packages and opportunities for promotion can enhance employees job satisfaction and thus increase employees desire to stay with their organization. Johnston et al. also found that leader consideration which offers socialization programs that give employees sufficient information about role expectations can reduce employees role ambiguity and consequently decrease employees propensity to leave the organization. Therefore, Johnston et al. concluded that leader consideration has a positive influence on employees continuance commitment to their organization. Hypothesis 5: There is a positive correlation between leader consideration and continuance commitment. Johnston et al. (1990) found that leader initiating structure that assigns employees challenging responsibilities can improve employees job satisfaction and thus increase employees desire to stay with their employing organization. Shih (2005) found that leader initiating structure that provides employees with training programs to minimize unclear job requirements can reduce employees role ambiguity and thus increase employees intentions to be a member of their organization. Chen (2001) concluded that leader initiating structure has a positive influence on employees continuance commitment to their organization. Hypothesis 6. There is a positive correlation between leader initiating structure and continuance commitment. RESEARCH CONSTRUCT Employees beliefs about their organization s values are affected by employee demographics (Robbins, 2003; Sager et al., 1998). So, this study hypothesizes that salesperson demographics play an important role in predicting continuance organizational commitment. In addition, leadership style can influence employees willingness to achieve the organization s goals (Kotter, 1996; Yao, 2006; Brain and Lewis, 2004). Therefore, leadership style can be treated as a predictor of continuance organizational commitment (Yukl,1994). The above propositions suggest a research construct that includes three variables: salesperson demographics, leadership style, and continuance organizational commitment. Salesperson demographics and leadership style are independent variables. Continuance organizational commitment is a dependent variable. The relationships between these variables can be represented schematically as follows: 208

Salesperson demographics Age Marital status Educational level Organizational tenure Continuance organizational commitment Leadership style Initiating structure Leader consideration METHODOLOGY This study used quantitative methodology to examine the relationship between salesperson demographics, leadership style, and continuance organizational commitment in Taiwan s Retailing Services Industry. Therefore, the subjects for this study were the salespersons in Taiwan s retail stores. Sample Selection and Data Collection Thirty retail stores were identified through the Directory of Taiwanese Retailers and Wholesalers for the year of 2009. After contacting these stores, twenty-three of them expressed an interest in participating in this study and were willing to offer the time and the necessary information to carry out the survey for the study. Therefore, the salespersons (783) working in the twenty-three retail stores served as the population for this study. In order to collect primary data for this study, the research questionnaire was distributed to the sample of 783 salespersons through drop-off and pick-up methods. Of the 783 salespersons contacted, 469 were returned. Of the 469 returned questionnaires, 43 were excluded because of incomplete data. Therefore, a total of 426 completed questionnaires were used for this study. The usable response rate was 54 percent. The collected data relating to the respondent demographics (age, marital status, educational level, and organizational tenure) are listed in Table 1. Table 1: Respondent demographics Age Marital status 20 years or below 68 (16%) Married 230 21~30 years 217 (51%) Single 196 31~40 years 103 (24%) 41 years or above 38 ( 9%) Educational Level Organizational Tenure High school diploma or lower 94 (22%) Less than 1 year 175 Associate degree 183 (43%) 1~3 years 119 Bachelor s degree 136 (32%) 3~5 years 81 Master s degree or higher 13 ( 3%) More than 5 years 51 (54%) (46%) (41%) (28%) (19%) (12%) Measures Continuance organizational commitment was measured with a 6-item scale developed by Mowday et al. (1979). The 6-item scale has a consistently high coefficient α, ranging from 0.82 to 0.93, based on a series of studies involving 2,563 employees in nine separate organizations (Mowday et al., 1979). Leadership style was measured using the Leadership Behavior Description Questionnaire (LBDQ)-XII, developed by Stogdill (1963). The LBDQ-XII consists of 20 items that assess two major types of leadership behaviors: initiating structure and consideration. Odd-numbered items measure the leader initiating structure. Even-numbered items measure the leader consideration. Schriescheim and Kerr (1974) reported that the internal consistency reliability of LBDQ-XII is between 0.7 and 0.8. These scales have been used in sales literature (Agarwal and Ramaswami, 1993). A demographic questionnaire designed by the researcher was used to collect information regarding the respondents background. The information included age, marital status, educational level and organizational tenure. 209

Reliability Analysis A test of internal consistency was performed on the two instruments LBDQ-XII and Continuance organizational commitment scale. The Cronbach s α coefficients for the leader consideration scale and the leader initiating structure scale were 0.75 and 0.71, respectively. The Cronbatch α coefficient for the continuance organizational commitment scale were 0.84. The Cronbatch α coefficient could explain the internal consistency of the items that make up the two instruments. Higher alphas indicate that the dimensions being measured are more homogeneous. The coefficients in this study met the traditional 0.70 level for acceptable reliability (Nunnally, 1978). Therefore, no problems relating to the quality of the collected data were foreseen. RESULTS There are 6 hypotheses in this study. These hypotheses were tested using statistical methods which included a two-group t-test and a simple regression analysis. There was a 5% significance level pre test, and therefore 5% of each test should be statistically significant by chance. The results of the hypothesis testing are presented as follows: Hypotheses 1, 2 and 3 According to Table 2, age had a significant and positive effect on continuance commitment (B=0.26, p=0.00). Increasing one standard deviation unit of age could enhance the level of continuance commitment by a standard deviation of 0.29 (Beta=0.29). In addition, Table 2 indicates that R 2 was 0.07. The R 2 statistic can measure the proportion of variation in the dependent variable (continuance commitment) explained by the independent variable (age). Therefore, although the relationship between age and continuance commitment was significant, age explained a small portion (7%) of the total variation in the level of continuance commitment. As shown in Table 3, organizational tenure had a significant and positive effect on continuance commitment (B=0.28, p=0.00). Increasing one standard deviation unit of organizational tenure could enhance the level of continuance commitment by a standard deviation of 0.39 (Beta=0.39). These findings were consistent with Hypotheses 1 and 2. Therefore, these two hypotheses were supported. Table 4 indicates that educational level had a slightly positive effect on continuance commitment (B=0.09), but the effect was not significant (p=0.07). Increasing one standard deviation unit of educational level could enhance the level of continuance commitment by a standard deviation of 0.12 (Beta=0.12). These findings did not support Hypothesis 3. Table 2: Simple Regression Analysis of Age on Continuance Commitment Multiple R=0.27 R²=0.07 Age 0.26 0.06 0.29 6.13 0.00 Table 3: Simple Regression Analysis of Organizational Tenure on Continuance Commitment Multiple R=0.38 R²=0.14 Organizational Tenure 0.28 0.05 0.39 9.12 0.00 Table 4: Simple Regression Analysis of Educational Level on Continuance Commitment Multiple R=0.15 R²=0.02 Educational Level 0.09 0.07 0.12 1.73 0.07 Hypothesis 4. This hypothesis was tested using a two-group t-test. The results of the t-test are presented in Table 5. According to Table 5, there was a significant difference in the level of continuance commitment between married salespersons and single salespersons because the t-calculated value (21.36) was greater than the t-critical value (1.96). 210

Married employees (mean=3.58) exhibited a higher level of continuance commitment to their organization than single employees (mean=2.93). These findings were consistent with Hypothesis 4. So, this hypothesis was supported. Table 5: T-test of Marital Status on Continuance Commitment Marital status N Mean Standard Deviation t Crit t Married 230 3.58 0.35 21.36 1.96 Single 196 2.93 0.31 Hypotheses 5 and 6 The results of the regression analysis, as shown in Table 6, indicate that leader consideration had a significant and positive effect on continuance commitment (B=0.29, p=0.00). Increasing one standard deviation unit of leader consideration could enhance the level of continuance commitment by a standard deviation of 0.24 (Beta=0.24). The regression results also point out that R 2 was 0.06. Therefore, although the correlation between leader consideration and continuance commitment was significant, leader consideration could explain a small portion (6%) of the total variation in the level of continuance commitment. These findings were consistent with Hypothesis 5. Therefore, this hypothesis was accepted. According to Table 7, leader initiating structure had a slightly positive effect on continuance commitment (B=0.08) but the effect was not significant (p=0.09). Increasing one standard deviation unit of leader initiating structure could lead to a slight increment of continuance commitment by a standard deviation of 0.04 (Beta=0.04) These findings were inconsistent with Hypothesis 6. Table 6: Simple Regression Analysis of Leader Consideration on Continuance Commitment Multiple R=0.25 R²=0.06 Leader consideration 0.29 0.08 0.24 5.13 0.00 Table 7: Simple Regression Analysis of Leader Initiating Structure on Continuance Commitment Multiple R=0.13 R²=0.02 Leader Initiating Structure 0.08 0.05 0.04 1.52 0.09 DISCUSSION The results of this study suggested that increase in age and organizational tenure was associated with increase in continuance commitment. These findings support previous research which indicates that positive relationships exist between the two variables (age and organizational tenure) and continuance (Sheldon, 1971; Hrebiniak and Alutto, 1972; Mowday et al., 1982). Stores in the retail industry tend to recruit new employees who are young and active. Therefore, a possible reason for this result is that when employees become older or they have remained with an organization longer, their opportunities for alternative employment become limited. Another reason could be that these employees are likely to have developed a career plan in their employing organization and, therefore, are less likely to leave the organization. The third reason could be that these employees are likely to hold desirable positions and have accumulated pension benefits from their employing organization. Because of these reasons, older employees and longer tenured employees tend to stay with their employing organization and the continuance commitment is automatically developed. Results of this study showed that educational level had a slightly positive relationship with continuance. However, the relationship was not significant. Based on this finding, this study concluded that educational level does not significantly influence the level of continuance commitment. A possible reason for the insignificant relationship is that, in the sample stores, a certain educational background will lead to a certain organizational placement. Therefore employees with different educational levels can receive different rewards which meet their expectations. Because 211

employee expectations could be met in different ways, employee educational background is not an important factor that influences employee desire to stay with or work hard for their organization. The results suggested that married employees are more committed to their organizations than are single employees. An explanation for this finding could be that married employees have big responsibilities for their families. That is, they need to support their family expenses. Therefore, married employees tend to remain with their organization to maintain a stable income and reward. The results of this study are consistent with the hypothesis that leader consideration is positively correlated with continuance commitment. That is, higher levels of consideration in leaders could lead to higher levels of continuance commitment in subordinates. A possible explanation for this finding could be that subordinates have psychological satisfaction with their organization when they work with leaders who communicate actively with them (Cullen et al., 2003; Malhotra and Mukherjee, 2004) or show concern for their will-being (Ma, 2007). Because of this psychological satisfaction, subordinates are pleased to stay with their organization and are willing to help their organization become successful (Levine, 2003). An alternative explanation could be that subordinates may feel comfortable when these leaders show flexibility in making decisions (Hislop, 2003). Such feelings could lead subordinates to exhibit positive emotional responses to their organization thus increasing their continuance organizational commitment. The results of this study suggested that there was an insignificant, but positive correlation between leader initiating structure and continuance commitment. Therefore, leader initiating structure does not significantly influence the level of continuance commitment. Becker s (1960) side-bet theory provides a possible explanation for the lack of significant correlation. The theory emphasizes that the higher the costs associated with leaving an organization, the stronger the desire an employee will exhibit toward staying with their employing organization. Therefore, one reason for the insignificant correlation could be that leaving costs (e.g. pension benefits, personal financial situation, or prestige) are more likely to influence the level of continuance commitment than leader initiating structure. CONCLUSION Implications and Recommendations The results of this study indicate that employee demographics (age and organizational tenure) have a significant positive relationship with continuance commitment, but that leader initiating structure does not. These findings imply that initiating structure is not an important factor that influences an employee s level of continuance commitment. No matter what initiating structure employees perceive, these employees exhibit a high level of continuance commitment when they become older or have been with their organization longer. The results of this study also show that leader consideration is significantly and positively correlated with continuance commitment. Therefore, one suggestion for a company to enhance employees continuance commitment is to enhance employees desire to be a member of the organization. The company leader could improve the reward and promotion policy based on employees organizational tenure. Because of rewards and promotions, employees would be willing to stay with the company and, therefore, their continuance commitment would be raised. The company leader also can arrange regular discussion meetings with these employees. Such meetings could achieve two objectives. First, the leaders could communicate the company s vision and goals to employees thus aligning employees thinking in the same way as the company. Second, the meeting could help the leaders understand what these employees think and want. Due to this understanding, the leaders could help these employees meet the employees expectations and further make the employees feel that they are part of the organization. Once these two objectives are achieved, these employees should have increased continuance commitment. The results of this study show that educational level is not significantly correlated with continuance commitment, and that the differences in marital status result in different levels of continuance commitment. These findings imply that marital status is an important factor that influences employees attitude to stay with their organization. These findings could help human resource departments put new employees or rotate existing employees into the positions most suited to them. 212

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