What is the research question posed by the study? 2. What is the theory used? Explain the theory. Search and read beyond th

Journal of Business Research 66 (2013) 1124–1133

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Journal of Business Research

Influences of organizational investments in social capital on service employee commitment and performance☆

Alexander E. Ellinger a,1, Carolyn (Casey) Findley Musgrove b,⁎, Andrea D. Ellinger c,2, Daniel G. Bachrach d,3, Ayşe Banu Elmadağ Baş e,4, Yu-Lin Wang f,5 a Marketing, University of Alabama, 105 Alston Hall, Box 870225,Tuscaloosa, AL 35487-0025, United States b Marketing, Indiana University Southeast, 4201 Grant Line Road, New Albany, IN 47150, United States c Human Resource Development, University of Texas at Tyler 3900 University Boulevard, Tyler, TX 75799, United States d Management, University of Alabama, 105 Alston Hall, Box 870225, Tuscaloosa, AL 35487-0025, United States e Marketing, Istanbul Technical University, İşletme Mühendisliği Bölümü, Maçka 80680 İstanbul, Turkey f Management, National Cheng Kung University, No.1, University Road, Tainan City, Taiwan 701

☆ The authors thank Katherine Lemon of Boston Colle ty of Alabama, and Michael Musgrove of Indiana Univers ful and helpful comments on previous drafts of this ma ⁎ Corresponding author. Tel.: +1 812 941 2052.

E-mail addresses: [email protected] (A.E. Ellinger) (C.(C.)F. Musgrove), [email protected] (A.D. E (D.G. Bachrach), [email protected] (A.B. Elmadağ Baş (Y.-L. Wang).

1 Tel.: +1 205 348 8941. 2 Tel.: +1 903 566 7310. 3 Tel.: +1 205 348 8947. 4 Tel.: +90 212 293 1300×2051. 5 Tel.: +886 62757575×53325.

0148-2963/$ – see front matter © 2012 Elsevier Inc. All doi:10.1016/j.jbusres.2012.03.008

a b s t r a c t

a r t i c l e i n f o

Article history: Received November 2012 Accepted April 2013 Available online 2 April 2012

Keywords: Social capital Commitment to service quality Commitment to the firm Job performance Organizational citizenship behavior Service employee

Improving customers' service experiences by identifying ways to develop organizational cultures that better motivate and engage service employees is an important issue for service organizations and a top priority in services research. However, extant services research focuses far more on managing customer relationships than on the dynamics of effectively supporting and developing the service personnel who interact with cus- tomers. This study assesses the influence of an organizational human resource developmental initiative on service employees. The authors utilize social capital theory and the theory of reasoned action to propose and test a model that examines relationships between organizational investments in social capital and ser- vice employees' work-related attitudes, norms, and behaviors. Results from a field study of 407 customer- facing employees from multiple service organizations suggest that making organizational investments in social capital favorably influences service employees' commitment, job performance, and organizational cit- izenship behavior.

© 2012 Elsevier Inc. All rights reserved.

1. Introduction

For service employees to provide great service to customers, they must be satisfied, motivated, and able to do their jobs without organi- zational obstacles (Bowen, 1996; Bowen & Lawler, 1992). Bowen (1996) contends that managerial behaviors critically shape organiza- tional culture and that in world-class service operations managers le- verage intangible aspects of employee coaching and development to help service employees better serve customers. Recent examples in the popular press include overviews of the innovative approaches

ge, Timothy Butler of Universi- ity Southeast for their insight- nuscript.

, [email protected] llinger), [email protected] ), [email protected]

rights reserved.

that Customer Service Champs organizations employ to support and develop service employees (McGregor, 2009) and Lowe's strategic emphasis on building employee engagement and business-related learning through social media communications (Bingham & Galagan, 2009). However, the influence of human resource develop- mental approaches as a means of creating and managing employee commitment to service quality remains relatively under-examined in the services literature (Rust, 2004). Rather, extant services research focuses far more on managing customer relationships than on the dy- namics of effectively supporting and developing the service personnel who interact with customers (Bowen, 1996, 2010; Johlke & Duhan, 2000). Given the influence that service employees have on organiza- tional success, a top priority for services research is to better under- stand how to establish and leverage organizational cultures that effectively support and develop service employees (Marketing Science Institute, 2010; Ostrom et al., 2010).

The notion of leveraging human resource developmental initia- tives to improve employee commitment to service quality is consis- tent with the concept of internal marketing. A key premise of internal marketing is that to provide superior service experiences for external customers, organizations must first ensure that the needs of their internal employee customers are effectively met as ser- vice employees' ability to satisfy customers largely depends on the

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support and guidance that they receive from their supervisors and or- ganizations (Bowen, 1996; George, 1990). Previous research shows that when firms devote managerial effort and resources to support the needs of service employees, the employees provide exceptional levels of service to both customers and fellow employees (Berry, 2002). For superior service quality to emerge, managers must influ- ence service employees' attitudes and behaviors with cultural arti- facts, patterns of behavior and management practices (Schwepker & Hartline, 2005; Singh, 2000). Internal marketing helps organizations impart the focus of an organization's internal climate to service em- ployees by reinforcing deep layers of culture. Creating organizational cultures that encourage employee commitment to the provision of superior service quality is imperative for service organizations (Bowen & Ostroff, 2004). Customer satisfaction and financial success often accompany positive organizational cultures (Bowen, 2010).

The current research draws upon social capital theory and the the- ory of reasoned action to propose and test a model that examines relationships between a human resource developmental initiative— organizational investments in social capital (OISC)—and service em- ployees' work-related attitudes, norms, and behaviors. The study responds to multiple calls for more insight into factors that improve service employee commitment to service quality and job perfor- mance and addresses several other gaps in the literature. First, as mentioned, the influence of human resource developmental initia- tives as a means of creating and managing commitment to service quality is relatively under-examined in services research. Second, de- spite calls for research that examines how building social capital ben- efits organizations (e.g., Pastoriza, Ariño, & Ricart, 2008), with the exception of Merlo, Bell, Menguc, and Whitwell's (2006) study, cur- rent research devotes little attention to the issue of leveraging social capital to generate work-related returns in service industries. Third, this work responds to Batt's (2002) call for research to identify medi- ating employee variables that better explain the link between mana- gerial practices and service employee performance by assessing the influence of OISC as a managerial practice. Fourth, the examination of the association between OISC and organizational citizenship be- havior responds to MacKenzie, Podsakoff, and Ahearne's (1998) call for research that investigates antecedents of extra-role performance.

The next sections review relevant literature, present an overview of the conceptual model and the theoretical bases, and propose study hypotheses. The following sections describe the study method and results. The final sections discuss the study findings, their contri- butions to services theory, implications for practicing managers, and offer some directions for future research.

1.1. Social capital

Social capital is a set of informal values and norms and subjectively-felt obligations that group members share, which are in- strumental in shaping the relationships that make organizations work effectively (Adler & Kwon, 2002; Coleman, 1988; Fukuyama, 1995; Nahapiet & Ghoshal, 1999). The essence of social capital theory is that interpersonal relationships are the underlying drivers of measur- able performance outcomes, and that fostering stronger connections within social networks by creating environments that promote trust, rapport and goodwill yields positive outcomes (Adler & Kwon, 2002; Maurer & Ebers, 2006). Researchers assess cognitive, structural and relational aspects of social capital in multiple contexts including national (Fukuyama, 1995), strategic (Hitt & Ireland, 2002), organiza- tional (Cohen & Prusak, 2001), and retail store level (Merlo et al., 2006). As the need to identify developmental approaches to improve employee commitment and performance becomes more apparent, re- searchers increasingly examine aspects of social capital (Adler & Kwon, 2002; Arregle, Hitt, Sirmon, & Very, 2007).

Several research studies suggest that organizations can effectively create and retain positive social and human capital through

managerial and human resource practices that emphasize and facili- tate social networks. Thus, research indicates that social capital af- fects career development and positive work-related outcomes (Leana & van Buren, 1999), and plays an important role in the crea- tion of workplaces that are conducive to employee development and retention (Coleman, 1988; Dess & Shaw, 2001). Luthans and Youssef (2004) argue that organizations should therefore place more emphasis on the development of latent resources, such as social, human, and psychological capital, to develop and maintain a compet- itive advantage. Batt (2002) also contends that building firm-specific human capital results in employee attachment and enhanced produc- tivity. Shub and Stonebraker (2009) suggest that relationship-based managerial strategies that focus on organizational structure, culture, and empowerment generate employee loyalty and promote long- term relationships between the firm and its employees. Finally, in the current context, a recent empirical study indicates that retail or- ganizations can create an internal culture that supports and encour- ages service employees by focusing on open communication, shared vision, and trust, which accompany building social capital (Merlo et al., 2006).

1.2. Investing in social capital

The organization is, in practice, an abstract entity. Since employee interactions and exchanges with the organization take place vis-a-vis its critical members (Settoon, Bennett, & Liden, 1996; Wayne, Shore, & Liden, 1997), supervisors assume a central role in human resource developmental initiatives. Researchers often link effective manager– employee communication to more positive work-related attitudes and behaviors like job satisfaction and performance (e.g., Gilmore & Carson, 1996; Johlke & Duhan, 2000). One such approach is the devel- opment of a favorable service climate or the surface layer of a deeply embedded culture. Although firms utilize many different approaches for creating favorable internal cultures, an essential part of promoting a positive service climate is developing an organizational culture for employee well-being that focuses on meeting employees' needs through quality human resource practices (Bowen, 1996). The idea that managers build mutually beneficial relationships with em- ployees to promote a positive service climate is consistent with re- search on psychological contracts (Hui, Lee, & Rousseau, 2004; Rousseau, 1995) that suggests supervisors are key representatives of the organization and have direct shaping effects on subordinates' or- ganizational experiences, and with Cohen and Prusak's (2001) con- ceptualization of making organizational investments in social capital.

Cohen and Prusak (2001) characterize social capital as a rare and endangered resource that enhances workplace environments and propose that investing in social capital is a key initiative for managers who focus on enhancing firm competitiveness. They base their con- ceptualization of making organizational investments in social capital on the premise that managerial behavioral norms and interpersonal connections represent incremental, daily investments in social capi- tal. Cohen and Prusak contend that “every managerial decision and action represents an opportunity for a social capital investment or loss (Cohen and Prusak, 2001, p.3).” However, making organizational investments in social capital requires the devotion of significant man- agerial time and effort to enable and promote appropriate behavioral norms and values.

As firms increasingly leverage human capital for competitive ad- vantage, the notion of investing in social capital as an organizational resource that improves work-related performance is becoming more prevalent in the literature. Drawing on the resource-based view, Hitt and Ireland (2002) propose that investing in organizational members' social capital is equivalent to developing a strategic re- source. The stream of largely prescriptive research addressing the value of building organizational social capital suggests that this ap- proach may represent a useful developmental strategy for enhancing

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workplace environments by promoting internal cultures that improve service employee commitment to the firm and to service quality. Yet, the requisite norms and values for effecting such changes to internal organizational culture require deeper understanding (Merlo et al., 2006). Ellinger, Elmadağ, Ellinger, Wang, and Bachrach (2011) devel- op and validate a measure of OISC, as well as provide an initial nomo- logical network. The current research examines the process by which OISC results in beneficial outcomes for service organizations.

2. Theory

Two theories form the basis for the hypotheses in the proposed model: social capital theory and the theory of reasoned action. As the above section describes, the core theme of social capital research focuses on networks of informal social relations that contribute to or- ganizational effectiveness by providing access to information, knowl- edge and other resources (Adler & Kwon, 2002; Nahapiet & Ghoshal, 1999). However, social network research distinguishes between the presence of a tie that provides access to the kinds of actual and poten- tial resources that actors possess and the nature of those resources themselves. The current research applies social capital theory to pro- pose that managerial behaviors consistent with making organization- al investments in social capital are the resources that flow across the ties that the social network analogy expresses.

The theory of reasoned action (Fishbein & Ajzen, 1975) proposes that behaviors ultimately result from attitudes and subjective norms, through mediation by behavioral intentions. Implicit in this theory is that various factors catalyze the process leading from atti- tudes and subjective norms to behavior. However, consistent with subsequent extensions and modifications of the theory of reasoned action (e.g., Bagozzi, Baumgartner, & Yi, 1989; Bentler & Speckart, 1981; Bonfield, 1974; Zuckerman & Reis, 1978), the proposed model excludes the mediating influence of behavioral intentions and focuses

Fig. 1. Concept

on the direct influences of employee attitudes and subjective norms on work-related behavior.

The rationale for excluding behavioral intentions from the pro- posed model is that research suggests that employing service em- ployees' perceptions of their actual behavior as the dependent variable is preferable to employing behavioral intentions as a proxy for or predictor of actual behaviors (Chan, 2009). As is well documen- ted, behavioral intentions do not perfectly predict behaviors (Chandon, Morwitz, & Reinartz, 2005). In fact, a meta-analysis of studies that use the theory of reasoned action by Sheppard, Hartwick, and Warshaw (1988) results in only a .53 correlation be- tween behavioral intentions and behaviors. Furthermore, Manski's (1990) assessment of the relationship between stated intentions and subsequent behavior concludes that researchers should not ex- pect systematic associations between intentions and actual behaviors because of observed divergence. Therefore, the current research fo- cuses on service employee behaviors as outcomes in the model, rath- er than their intentions to engage in those behaviors.

Fig. 1 presents a model that proposes that OISC act as a catalyst for the formation of an employee attitude, commitment to the firm, and an employee subjective norm, commitment to service quality. Consis- tent with prior literature (Peccei & Rosenthal, 1997), the model con- ceptualizes commitment to service quality as a subjective employee norm rather than an attitude because, while commitment to the firm is a global attitude driven by the firm's treatment of its em- ployees (McCaul, Hinsz, & McCaul, 1995), research suggests that ser- vice firms strive to hire customer-oriented employees (e.g., Donavan, Brown, & Mowen, 2004; Lytle & Timmerman, 2006). Thus, many ser- vice organizations view commitment to service quality as an expected and standard employee norm rather than a cultivated em- ployee attitude. As the theory of reasoned action predicts, the model proposes that commitment to the firm and commitment to service quality drive service employee behaviors (job performance and orga- nizational citizenship behavior). Further, as indicated by social capital

ual model.

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theory, the model also predicts that OISC directly affects these two employee behaviors. Finally, consistent with established literature (e.g., Podsakoff, Ahearne, & MacKenzie, 1997), the proposed model predicts that job performance influences organizational citizenship behavior. This study examines each of the constructs in the model within the domain of service employees' perceptions.

2.1. Commitment to the firm

A key premise of social capital theory is that positive outcomes result from the development of social capital. When organizations make in- vestments in social capital by encouraging managers to create support- ive and trusting internal cultures, service employees should feel a greater sense of commitment to the firm. Commitment to the firm is the desire to maintain a long-term association with the employing orga- nization (Mowday, Steers, & Porter, 1979). Commitment to the firm, or organizational commitment, is a global attitude that employees have toward their firm (McCaul et al., 1995). Various researchers in the rela- tionship marketing literature forward the established notion that trust is a major antecedent of commitment (e.g., Palmatier, Dant, Grewal, & Evans, 2006). Enabling trust is an essential part of OISC because organi- zations invest in social capital through effective communication and the development of a trusting culture (Merlo et al., 2006). Furthermore, investing in social capital creates an atmosphere of trust, mutual under- standing, and commitment that benefits the organization (Cohen & Prusak, 2001). Therefore:

H1. Organizational investments in social capital are positively related to commitment to the firm.

2.2. Commitment to service quality

Social capital theory and services research both suggest that man- agers create and reinforce positive cultural norms by communicating effectively with service employees. Communicating norms, expecta- tions, and requisite knowledge to service employees is extremely im- portant for the adoption of organizational values (Kelley, 1992). One of the benefits of social capital is that strong social norms and compli- ance with behavioral expectations develop (Adler & Kwon, 2002). Thus, employees within a particular organizational culture experi- ence pressure from others to conform to group expectations and codes of conduct, ultimately internalizing and making a commitment to group values (Jaworski, 1988; Schwepker & Hartline, 2005). One such norm is a commitment to service quality, which involves en- gagement in continuous improvement and the exertion of effort for the benefit of customers (Peccei & Rosenthal, 1997). Research studies in diverse organizational contexts indicate that employee develop- ment initiatives and managerial behaviors influence employees' com- mitment to service quality. For example, previous research links quality circles (Dale & Lees, 1986) and total quality management ini- tiatives (Lashley, 2001) to increased commitment to service quality throughout the organization. Schwepker and Hartline (2005) also find that management of the firm's ethical climate through dialogue results in higher employee commitment to service quality. Therefore:

H2. Organizational investments in social capital are positively related to commitment to service quality.

2.3. Behavioral outcomes

Job performance and organizational citizenship behavior are the two behavioral outcome variables of interest in this study. Job per- formance is contractually obligated, work-related activity (Babin & Boles, 1996). Organizational citizenship behavior is conduct that en- hances the social and psychological context that supports task per- formance (Organ, 1997). The conceptual framework indicates that

OISC directly influences these employee behaviors. Furthermore, the model suggests that the attitude of commitment to the firm and the subjective norm of commitment to service quality partially mediate the relationship between OISC and these outcomes. The fol- lowing hypotheses are consistent with both social capital theory, which predicts that social capital results in positive work-related outcomes, and with the theory of reasoned action, which predicts that attitudes and norms drive behaviors.

Operationally, OISC reflect managerial behaviors that serve to en- hance employees' work-related experiences. The intention of these investments is to boost employee perceptions of interactional fairness and organizational support. Well-established associations between human resource developmental initiatives and employee perfor- mance are found in the management and human resources literature (e.g., Batt, 2002; Huselid, 1995; Shub & Stonebraker, 2009). Bienstock, DeMoranville, and Smith (2003) show that management's treatment of service employees influences organizational citizenship behavior. In their study, Bienstock et al. (2003) associate social rights (man- agers treating service employees equitably), civil rights (managers re- warding service employees for hard work and merit), and political rights (solicitation of opinions and clear communication about prob- lems and issues) with increased levels of organizational citizenship behavior. Considerable conceptual overlap exists between the mana- gerial behaviors that Bienstock et al. (2003) describe and the notion of managers developing relationships with employees that make or- ganizations work effectively that is inherent in OISC. Accordingly:

H3. Organizational investments in social capital are positively related to a) job performance and b) organizational citizenship behavior.

Consistent with the theory of reasoned action, the conceptual model also proposes that a service employee attitude mediates the in- fluence of OISC on work-related behavior. Hundreds of studies exam- ine the effect of the attitude of commitment to the firm, or organizational commitment, on job performance. Two recent meta- analyses review support an association between these variables (Rikatta, 2002; Wright & Bonnett, 2002). In a service context, Malhotra and Mukherjee (2004) find that affective commitment to the firm has a positive relationship with the quality of service that employees offer customers. Thus, service employees who are com- mitted to their firm are more likely to want the firm to do well and are therefore more likely to strive to perform their jobs better.

Similarly, when service employees are committed to the firm, they often help the firm by being good organizational citizens and helping their co-workers. Service providers who are strongly committed to their organizations often have the will to work beyond required duties (Elmadağ, Ellinger, & Franke, 2008; Lee, Nam, Park, & Kyung, 2006). As part of a larger study on front-line service employees, MacKenzie et al. (1998) show that commitment to the firm increases organiza- tional citizenship behavior. Thus, based on existing literature and consistent with the theory of reasoned action's prediction that atti- tudes lead to behaviors:

H4. Commitment to the firm is positively related to a) job perfor- mance and b) organizational citizenship behavior.

As the theory of reasoned action predicts, subjective norms also influence employee behaviors. Therefore, when commitment to ser- vice quality is the norm within an internal culture, service employees should exhibit their observance of that norm by performing their jobs well and by helping fellow employees through organizational citizen- ship behaviors. Evidence for these relationships can be found in the extant literature. Elmadağ et al. (2008) find that employee commit- ment to service quality predicts job performance and organizational citizenship behavior. Additionally, in a recent study, key respondent managers report that employee commitment to service quality highly correlates with organizational citizenship behavior (Bienstock &

Table 1 Item means, standard deviations, and standardized factor loadings.

Std

Item Mean SD loading

Organizational investments in social capital 1. Managers are fair and provide equitable opportunities. 5.0 1.67 .84 2. Managers frequently offer encouragement to employees 5.0 1.70 .82 3. Managers are good role models and set a positive tone. 4.9 1.71 .84 4. Managers are consistent and direct in their communications with employees.

4.9 1.61 .81

5. Management shows respect for employees. 5.2 1.58 .92 6. Promises made to employees are kept. 5.1 1.68 .83 7. Managers and employees spend quality time together. 4.3 1.76 .69

Commitment to the firm 1. I feel my future is closely linked to that of this company. 5.5 1.69 .83 2. I feel very committed to this company. 5.7 1.63 .93 3. I have similar values with those of this company. 5.6 1.54 .90 4. I am proud to tell others I am a part of this company. 5.9 1.47 .89 5. I really care about the fate of this company. 5.9 1.54 .84

Commitment to service quality 1. I feel strongly about improving the quality of the company's services.

6.0 1.35 .86

2. I enjoy discussing quality related issues with people in the company.

5.8 1.34 .80

3. I gain a sense of personal accomplishment in providing quality services to customers.

6.2 1.22 .93

4. I think providing high quality services to customers should be the number one priority of the company.

6.2 1.27 .84

5. I really care about the quality of the company's services. 6.3 1.24 .94

Job performance 1. I get positive feedback from customers. 5.6 1.36 .70 2. I satisfy my customers' service expectations. 5.8 1.22 .82 3. I manage my work time effectively. 5.6 1.27 .70 4. I know what my customers expect. 6.0 1.18 .88 5. I am good at my job. 6.1 1.12 .86

Organizational citizenship behavior 1. Take on extra responsibilities in order to help coworkers when things get demanding at work

5.2 1.46 .86

2. Help coworkers who are running behind in their work activities.

5.2 1.36 .92

3. Assist coworkers with heavy work-loads even though it is not part of their job.

5.2 1.42 .94

4. Help coworkers with difficult assignments, even when assistance is not directly requested.

5.1 1.43 .89

5. Help coworkers with work when they have been absent. 5.2 1.47 .83 6. Go out of their way to help coworkers with work-related problems.

5.1 1.45 .86

Note: CFA, N=407, χ2 (331)=862.13 (pb .01), NNFI=.98, SRMR=.049, CFI=.99, RMSEA=.063.

1128 A.E. Ellinger et al. / Journal of Business Research 66 (2013) 1124–1133

DeMoranville, 2006). Therefore, the conceptual model also proposes that:

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