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The effects of employees’ business ethical value on person–organization fit and turnover intent in the foodservice industry
International Journal of Hospitality Management 29 (2010) 538–546
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International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman
The effects of employees’ business ethical value on person–organization fit and turnover intent in the foodservice industry Hyo Sun Jung 1, Young Namkung 2, Hye Hyun Yoon * Department of Culinary Science and Arts, College of Hotel & Tourism Management, Kyung Hee University, 1 Hoeki-dong, Dongdaemon-ku, Seoul 130-701, Republic of Korea
A R T I C L E I N F O
A B S T R A C T
Keywords: Business ethical value Person–organization fit Turnover intent Foodservice industry
Given the growing importance of ethical values and social responsibilities in the workplace, the purpose of this study was to investigate interrelationships among employees’ business ethical value, person– organization fit and turnover intent in the foodservice industry. A total of 788 employees in Korea participated. The results showed a positive relationship between employees’ perceptions of business ethics and their person–organization fit. Participants expressing a high person–organization fit were less likely to leave their positions. These findings have important implications for creating and facilitating an ethical business environment in the foodservice industry. Limitations and future research directions are also discussed. ß 2009 Elsevier Ltd. All rights reserved.
1. Introduction Due to the growing concern about ethical issues in the workplace, many organizations have institutionalized ethics in the form of regulations and codes. For example, international organizations, such as OECD, UN and WTO, have enhanced their ethical environments and requirements for economic activities. Furthermore, in order to encourage companies to do good deeds the Ethics Round, international movement reinforcing business ethics has emerged. In the increasingly conscience-focused marketplaces of the 21st century, Ethics Round aims to regulate the introduction of products and services into the global market by unethical companies. Along the same line, the New York Stock Exchange (NYSE) and NASDAQ tend to list only companies that have an established formal code of ethics for their organizations (Paine et al., 2005). It seems that the phrase ‘‘good ethics is good business’’ has become a common belief (Pettijohn et al., 2008). Since Goodspaster (1983) applied the concept of personal ethics in social life to specific business management circumstances, the importance of ethical business values has been well documented. Previous studies found that companies with a high level of ethical values and social responsibility tend to be more profitable than others (Hammond and Slocum, 1996; Waddock and Smith, 2000). Hyman and Curran (2000) emphasized employees’ participation in
* Corresponding author. Tel.: +82 2 961 9403; fax: +82 2 964 2537. E-mail addresses: [email protected] (H.S. Jung), [email protected] (Y. Namkung), [email protected] (H.H. Yoon). 1 Tel.: +82 2 961 0855; fax: +82 2 964 2537. 2 Tel.: +82 2 961 2185; fax: +82 2 964 2537. 0278-4319/$ – see front matter ß 2009 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijhm.2009.08.005
creating an ethical business environment in order to enhance both employee and customer satisfaction. Furthermore, it has been widely recognized that an employee’s perception of ethical values enhances the development of person–organization fit (Laufer and Robertson, 1997; Valentine et al., 2002), and eventually lowers turnover intent (Shafer, 2002; Peterson, 2003; Jaramillo et al., 2006). The costs of carrying out social responsibilities have been understood as being offset by the profits created from improved working morale and productivity of employees (Pettijohn et al., 2008). In particular, the issue of ethics in the foodservice industry has become increasingly important, as eating out has become an integral part of our daily lives. Due to the inherent industry characteristics of inseparability and intangibility, hospitality industry management must attend to ethical issues more carefully than other industries (Stevens and Fleckenstein, 1999). Since employees in the foodservice industry directly affect customers’ health and hygiene through the foods they make and serve, companies must carry out their social responsibilities and duties faithfully (McCabe et al., 2006). Whether or not the foodservice industry emphasizes ethical practices, restaurant employees’ behavior is important due to the possibility of threatening customers’ health through unethical decision-making in terms of food stability (Walczak and Reuter, 2004). Schwepker and Hartline (2005) emphasized that unethical behavior generally occurred in order to correct or hide a mistakes or, in the case of employees in contact with customers, to promote corporate performance. Although the ethical climate of an organization significantly influences a service provider’s attitudes (Babin et al., 2000; Weeks et al., 2004) and behavior (Schneider and Bowen, 1985), little research has been conducted on the role of business
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2.2. Model development and hypotheses
Fig. 1. A proposed model of business ethical value, person–organization fit, and turnover intent.
ethical values or climates in the people-dependent foodservice industry. Business managers have long been recognized the significance of ethical values and social responsibilities in relation to maximizing profits. However, they have tended to consider business ethics an external restriction, along the lines of legal regulations or social norms, rather than voluntarily emphasizing ethical management. Therefore, the matter of business ethics has long been a concern for a number of executives who are sensitive to social pressures or ethical sensibilities. However, if an empirical report demonstrated the associations between business ethics and management performance, we expect that the findings would motivate companies with a clear sense of social responsibility to willingly engage in ethical management practices rather than viewing them as a forced response to external pressures. This would enhance business interests in ethical competitiveness. Thus, the purpose of this study is to identify the associations among business ethical value, person– organization fit and turnover intent that have not been fully explored in the foodservice literature (see Fig. 1). The present study also contributes to theoretical knowledge about ethical management. This knowledge can potentially help enhance business performance by improving business ethics in the foodservice industry. 2. Literature review and conceptual model 2.1. Business ethics in the hospitality industry While there is a lack of scholarly research on ethical values or climates in the food service industry, this issue has been a topic of interest to scholars and practitioners in the hospitality industry (Enghagen, 1990; Damitio et al., 1992). For example, Whitney (1990) demonstrated that hotel industry employees need a higher ethical consciousness compared to other industries, as well as the ability to judge ethical issues according to the principles of the organization. Enghagen and Hott (1992) found that undergraduate students in college identified environmental pollution, fixture extravagance, and employment discrimination as the most unethical situations that occur in the hospitality industry. Randall and Sheila (1996) demonstrated that a hotel manager, who works in an ethical environment, makes more proactive decisions. Subsequently, Randall (1998) found that hotel staff’s education levels and previous work experiences affected his or her ethical decision-making. Wong (1998) also suggested the need for a clearer job-related ethical policy for hotel employees in Hong Kong. Similarly, focusing on employees at a hotel in Croatia, Fox (2000) argued that unethical environments lead to additional organizational costs, thus an ethical working environment needs to be promoted.
2.2.1. Business ethical value, person–organization fit, and turnover intent An organizational environment shaped by corporate ethical values and the enforcement of a code of ethics has been regarded as a critical factor in ethical decision-making (Newstrom and Ruch, 1975; Hunt and Vitell, 1986, 1993). Focusing on the ethical dimension of corporate values, Hunt et al. (1989) defined corporate ethical value as ‘‘a composite of the individual ethical values of managers and both the formal and informal policies on ethics of the organization’’ (p. 79). In Aguilar’s (1994) study, an ethical business signified a company which deserves respect and trust from employees, customers, contracted suppliers and shareholders because they balance stakeholder’s interests and business profits in decision-making processes and business practices. Similarly, Carroll and Buchholtz (2000) demonstrated that business ethical value is critical in determining right or wrong and good or evil in terms of business management behaviors and attitudes. People tend to work for companies that enable them to best make use of their skills and competencies and which have environments that conform to their personal attributes (KristofBrown, 1996). Person–organization fit has been defined as the compatibility between individuals and organizations and is considered a critical factor in selecting where to work (KristofBrown, 1996). Likewise, person–organization fit can be based on the congruity between personal and organizational beliefs (O’Reilly et al., 1991; Netemeyer et al., 1997) or goals (Vancouver et al., 1994). Person–organization fit can be measured by estimating the extent to which a company supports the needs of its employees (Turban and Keon, 1993; Cable and Judge, 1994) or how closely the personality of an individual fits the circumstances of the company (Bowen et al., 1991). Turnover intent is a preceding factor for effectively forecasting an employee’s propensity for changing occupations, as well as a warning sign before an individual actually quits a job. Accordingly, it is generally conceptualized as a surrogate indicator of actual behavior (Brown and Peterson, 1993). Turnover intent refers to the intent of an employee to abandon his or her organizational membership and quit his or her current job (Meyer and Allen, 1984). Macy and Mirvis (1976) also defined turnover as a permanent transfer beyond organizational boundaries and distinguished it from layoffs, as well as in-house promotions or shakeups. In a broad sense, turnover intent can be understood as the extent of an individual’s turnover decisions across the boundaries of membership in a social system (Price, 1977). 2.2.2. Relationship between business ethical value and person– organization fit Organizational studies have suggested that the adoption of ethical values helps individuals recognize their organization fit (Laufer and Robertson, 1997) and influences employees’ affections for a company (Porter and Lawler, 1966; Kohlberg, 1984; Sims and Kroeck, 1994). In an empirical study, Sims and Keon (1997) demonstrated significant associations between ethical working environments and person–organization fit in a company. Valentine et al. (2002) found that more advanced ethical values lead to better person–organization fit, since employees prefer the values of ethical businesses (Vidaver, 1998; Jose and Thibodeaux, 1999). Furthermore, Hunt et al. (1989) noted that an organization is more likely to get favorable responses (e.g. higher productivity, integrity, fitness, etc.) from its employees when it embodies support for ethical management, which tends to solidify employment relationships and create an ethical culture or environment for employees. Overall, the existing literature suggested that an employee’s perception of an organization’s ethical values is an
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important antecedent for improving the fitness between individual and organization. These arguments led to the establishment of the following hypothesis: Hypothesis 1. Business ethical value is positively related to person–organization fit. 2.2.3. Relationship between business ethical value and turnover intent Previous researchers have shown that the ethical environment of an organization affects the working attitudes of employees, thus any conflicts that arise lead to high turnover intent (Sims and Kroeck, 1994; Schwepker, 1999; Mulki et al., 2006). Levy and Dubinsky (1983) suggested that ethical disharmony leads to lower organizational commitment and higher turnover intent. Sparks and Johlke (1996) noted that an employee’s recognition of an unethical organizational environment results in a natural attempt to leave his or her job. More recently, Eisenberger et al. (2002) demonstrated that an employee’s recognition of their company’s commitment to its ethical duties is associated with lower turnover intent. Peterson (2003) also suggested employees’ turnover intent rates provide a basis for judging the degree of unethical working inclinations at a company. Addressing employee satisfaction, Shafer (2002) noted that if employees recognize ethical inconsistencies due to a company’s unethical behaviors, their satisfaction levels are lower and their turnover intent rises. Jaramillo et al. (2006) found that recognizing an organization or co-worker’s unethical behaviors leads to lower job satisfaction and higher turnover intent. Pettijohn et al. (2008) also reported that employees’ recognition of business ethics and resulting behaviors has a great impact on their job satisfaction and turnover intent. In view of the existing empirical evidence, the following hypothesis was formulated: Hypothesis 2. Business ethical value is negatively related to turnover intent. 2.2.4. Relationship between person–organization fit and turnover intent Lee and Mitchell (1994) argued that person–organization fit occurs in advance of job satisfaction and job satisfaction creates turnover intent in an employee’s mind. In a subsequent study, Lee et al. (1996) demonstrated that inconsistency between organizational and individual goals leads to higher turnover intent for nurses when they are dissatisfied with their job. Likewise, the person–organization fit of employees as organizational members has positive associations with their job satisfaction, but has negative associations with their turnover intent (Bretz and Judge, 1994; Harris and Mossholder, 1996). More specifically, higher person–organization fit leads to lower turnover intent (Becker and Billings, 1993; Verquer et al., 2003; Kristof-Brown et al., 2005), while lower person–organization fit leads to higher turnover intent (Schneider, 1987; Schneider et al., 1995; Wheeler et al., 2005, 2007). In particular, insufficient (poor) person–organization fit leads to high turnover intent in a new organization (Hollenbeck, 1989). Given these findings, the following hypothesis was proposed: Hypothesis 3. Person–organization fit is negatively related to turnover intent. 3. Methodology 3.1. Sample and data collection The data used for the current study were collected from employees in three service sectors in Seoul, the capital of Korea,
in 2007. Twelve five-star hotels such as Ritz-Carlton, Hilton, Sofitel, Marriott, and Hyatt, who work in the food and beverage division, participated in this study. Top-ranked family restaurants and contract-managed foodservices were chosen in terms of sales in 2006. Once the human resources manager gave permission, employees were provided with a voluntary survey and were asked by the researcher to complete the selfadministered questionnaires. The completed questionnaires were sealed in envelopes to protect employee anonymity and collected by the researcher one week later. After eliminating incomplete questionnaires, a total of 788 questionnaires were obtained over the three-week period (response rate of 77.15%). 3.2. Instrument development A pilot test using 50 employees at hotels, family restaurants, and contract-managed foodservices, was conducted to ensure the reliability of the scales. Several modifications were made on the basis of the pilot test results. Before the questionnaire was finalized, three managers at full-service restaurants and two faculty members familiar with the topic area further reviewed the questionnaire, and slight revisions in wording were made based on their suggestions. The survey instrument for this study was composed of four parts. The first three parts pertained to business ethical value, person–organization fit, and turnover intent. To measure employees’ perceptions of business ethical value, this study adapted Hunt et al.’s (1989) and Victor and Cullen’s (1987) multi-item scales. Business ethical value items included ‘‘top managers in my organization should have higher ethical standards than they do now’’ and ‘‘in order to succeed in my company, it is often necessary to compromise one’s ethics.’’ Each business ethical value item was measured with five items using a 7-point scale: ‘‘how much do you agree or disagree with these statements?’’ (1: strongly disagree to 7: strongly agree). Person–organization fit was measured by five items on a 7point scale (1: strongly disagree to 7: strongly agree) based on Edward (1991) and Valentine et al. (2002). Person–organization fit items included ‘‘I feel that my personal values are a good fit with this organization’’ and ‘‘this organization has the same values as I do with regard to concern for others.’’ Respondent turnover intent was also measured on a 7-point scale (1: strongly disagree to 7: strongly agree), as developed by Cammann et al. (1979) and Seashore et al. (1982). The turnover intent items included ‘‘I sometimes feel compelled to quit my job in my current workplace’’ and ‘‘I am currently seriously considering leaving my current job to work at another company.’’ Table 2 lists the descriptions of measurement items for the constructs of the study. Part four contained questions about participant demographic information (e.g., age, gender, and education level) and job-related information (e.g., type of company and job status). 3.3. Data analysis Descriptive statistics were preformed to profile the respondents’ demographic and job-related questions. Following the two-step approach recommended by Anderson and Gerbing (1988), a confirmatory factor analysis (CFA) with maximum likelihood was first performed to estimate the measurement model, which determined whether the manifest variables reflected the hypothesized latent variables. Once the measure was validated, a structural equation model (SEM) was utilized to test the validity of the proposed model and hypotheses.
H.S. Jung et al. / International Journal of Hospitality Management 29 (2010) 538–546 Table 1 Profile of the sample (n = 788). Characteristic
N
Percentage
Age Younger than 20 years 21–30 years 31–40 years Older than 40 years Average
16 495 225 52
2.0 62.8 28.6 6.6 29.58 6.52
Gender Male Female
418 370
53.0 47.0
Education High school Community college degree (2 years) University degree (4 years)
56 341 391
7.1 43.3 49.6
Company type Hotel Family restaurant Contract-managed foodservice
354 276 158
44.9 35.0 20.1
Job status Part-time Full-time
219 569
27.8 72.2
4. Results 4.1. Descriptive statistics of sample The characteristics of the sample are presented in Table 1. The mean age of the participants was 29.6 years old and slightly over half of the respondents were male (53%). Most participants had a community college or university degree (92.9%). About half of the participants were employees at hotels (44.9%), followed by family restaurants (35%), and contract-managed foodservices (20.1%). The majority of them were full-time employees (72.2%). Table 2 presents the means and standard deviations of each item in relation to the constructs of interest in this study: business ethical value, person–organization fit, and turnover intent. The mean value of each item under business ethical value ranged from 4.76 to 4.83 on the 7-point scale. Respondents ranked ‘‘top managers in my organization should have higher ethical standards than they do now (4.83 1.25)’’ as the highest business ethical value
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attribute, followed by ‘‘top management in my company has let it be known in no uncertain terms that unethical behaviors will not be tolerated (4.80 1.23).’’ Respondents ranked ‘‘in order to succeed in my company, it is often necessary to compromise one’s ethics (4.76 1.19)’’ as the least well-performed business ethical value. Participants showed a moderate level of person–organization fit, ranging from 4.36 to 4.83 on the 7-point scale. In detail, respondents showed the highest value for the attribute, ‘‘I have affections and affinity for this organization (4.83 1.31).’’ On the other hand, ‘‘my organization meets my major needs well (4.36 1.28)’’ was the least well-performed person–organization fit attribute. As for turnover intent, it indicated relatively low values compared to other measurement items. Among four attributes, ‘‘I am currently seriously considering leaving my current job to work at another company (3.47 1.61)’’ was the lowest. 4.2. Measurement model Following Anderson and Gerbing’s (1988) two-step approach, a confirmatory factor analysis was first undertaken to assess the overall fit of the three-factor model, which was comprised of business ethical value, person–organization fit, and turnover intent. As shown in Table 3, the level for internal consistency in each construct was acceptable with Cronbach’s alpha estimates ranging from .90 to .91 (Nunnally, 1978). Composite reliabilities estimates, ranging from .79 to .87, were considered acceptable (Fornell and Larcker, 1981). In addition, all variance extracted estimates (business ethical value = .66; person–organization fit = .67; and turnover intent = .70) exceeded the recommended .50 threshold (Fornell and Larcker, 1981). Convergent validity was observed since all confirmatory factor loadings exceeded .70 and was significant at the alpha level of .001 (Anderson and Gerbing, 1988). Thus, these results were evidence of the convergent validity of the measures. Discriminant validity was assessed by comparing the average variance extracted (AVE) with the squared correlation between constructs. Discriminant validity was evident since the variance extracted estimates, ranging from .66 to .70, exceeded all squared correlations for each pair of constructs, ranging from .03 to .39. These results suggested that the seven-factors were distinct and unidimensional. Also, confirmatory measurement models demonstrated the soundness of measurement properties (x2(72) = 210.818, p < 0.001; x2/
Table 2 Descriptive statistics of variables. Variablea Business ethical value B1: Top managers in my organization should have higher ethical standards than they do now B2: Top management in my company has let it be known in no uncertain terms that unethical behaviors will not be tolerated B3: In order to succeed in my company, it is often necessary to compromise one’s ethics B4: If a manager in my company is discovered to have engaged in unethical behavior that results primarily in personal gain (rather than corporate gain), he or she will be promptly reprimanded B5: If a manager in my company is discovered to have engaged in unethical behavior that results primarily in corporate gain(rather than personal gain), he or she will be promptly reprimanded
Mean SD 4.83 1.25 4.80 1.23 4.76 1.19 4.80 1.24 4.78 1.26
Person–organization fit P1: I feel that my personal values are a good fit with this organization P2: My organization meets my major needs well P3: This organization has the same values as I do with regard to concern for others P4: I have affections and affinity for this organization P5: I really fit this organization
4.69 1.20 4.36 1.28 4.63 1.24 4.83 1.31 4.55 1.31
Turnover intent T1: I sometimes feel compelled to quit my job in my current workplace T2: I will quit my job at my current organization in 1 year or less T3: I am currently seriously considering leaving my current job to work at another company T4: I will quit this company if the given condition gets even a little worse than now
4.09 1.47 3.52 1.58 3.47 1.61 3.73 1.58
Note: SD = standard deviation. a All items were measured on a 7-point Likert scale from 1-strongly disagree to 7-strongly agree.
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Table 3 Reliabilities and confirmatory factor analysis properties. Construct (Cronbach’s alpha)
Standardized factor loadings
Item reliabilities
Business ethic value (.91) B1 B2 B3 B4 B5
.71 .80 .86 .86 .82
.71 .79 .80 .80 .75
Person–organization fit (.91) P1 P2 P4 P5 P6
.75 .83 .78 .88 .86
.71 .76 .74 .79 .81
Turnover intent (.90) T1 T2 T3 T4
.76 .86 .87 .84
.72 .81 .80 .79
a
Composite reliabilities
AVEa
.86
.66
.87
.67
.79
.70
Average variance extracted.
Table 4 Correlations among the latent constructs.
4.3. Structural equation modeling (SEM)
Construct
1
2
3
1. Business ethical value 2. Person–organization fit 3. Turnover intent
1 .63 .19
1 32
1
Note: All correlations are significant at p = 0.01.
df = 2.928; Goodness-of-fit index (GFI) = 0.963; Normed fit index (NFI) = 0.973; Comparative fit index (CFI) = 0.982; and root mean square error of approximation (RMSEA) = 0.049). Table 4 illustrates the intercorrelations among the three constructs in this study. An assessment of the bivariate correlations showed that the items used to measure business ethical value were positively related to the items associated with person– organization fit. Also, the items associated with turnover intent were negatively related to business ethical value and person– organization fit.
Structural equation modeling was conducted to test the validity of the proposed model and the hypotheses. Fig. 2 presents the estimated model, illustrating the direction and magnitude of the impact of the standardized path coefficients. The chi-square statistic indicated that the overall model did not fit the data well (x2(70) = 168.025, p < 0.001). Given the sensitivity of the chisquare statistics to sample size (Bentler and Bonett, 1980; Hair et al., 1998), other fit indexes were also examined. First, Normed chi-square (x2/degree of freedom) was considered to reduce the sensitivity of the chi-square statistic. The value of the Normed chisquare was 2.400, which was below the cut-off criterion of three (Hair et al., 1998) and showed that the model fit the data well. Other Goodness-of-fit indices proved that the structural model reasonably fit the data (GFI = 0.970; NFI = 0.978; CFI = 0.987; RMSEA = 0.042). The model’s fit, as indicated by these indexes, was deemed satisfactory; thus, it provided a good basis for testing the hypothesized paths. The parameter estimates of the structural
Fig. 2. Structural equation model with parameter estimates.
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Table 5 Structural parameter estimates. Hypothesized path (stated as alternative hypothesis)
Standardized path coefficients
H1: Business ethical value ! person–organization fit H2: Business ethical value ! turnover intent H3: Person–organization fit ! turnover intent Goodness-of-fit statistics
t-Value
Results
***
.67 .05 .40
14.768 0.856 7.220***
Supported Not Supported Supported
x2(78) = 168.025 (p < 0.001) x2/df = 2.400 GFI = 0.970 NFI = 0.978 CFI = 0.987 RMSEA = 0.042
Note: GFI = Goodness-of-fit index; NFI = Normed fit index; CFI = Comparative fit index; RMSEA = root mean square error of approximation. *** p < 0.001. Table 6 Mediating test (full mediator). Constrained model (POF !TI = 0)
Mediating model
b BEV ! TI
x2(df = 71) ***
b
t-Value
0.31
BEV ! TI x2(df = 70) 2 Dx (df = 1) = 56.232; p < 0.05
6.15 224.257
***
t-Value 0.86ns
0.05 168.025
p < 0.001.
model exhibited the direct effects of one construct on the other. Thereby, a significant coefficient at a certain level of alpha reveals a significant casual relationship between latent constructs. (Fig. 2, Table 5). Hypothesis 1, which hypothesized a positive relationship between business ethical value and person–organization fit, was supported (g11 = .67; t = 14.768; p < 0.001). These findings revealed that those who perceive business ethical value highly are more likely to believe in the value of individual–organization fit. On the other hand, Hypothesis 2, which predicted a negative relationship between business ethical value and turnover intent, was not supported (g21 = .05; t = 0.856). In this study, an employee’s perception of business ethical value did not have a significant, direct impact on their turnover intent. As predicted by Hypothesis 3, person–organization fit had significant, negative effects on turnover intent (b21 = .40; t = 7.220; p < 0.001). This result indicated that as employee’s level of person–organization fit increased, they were less likely to leave their company. Considering hypotheses 1 and 3, despite the non-significant direct linkage between business ethical value and an employee’s turnover intent; business ethical value indirectly influenced turnover intent through the perception of person– organization fit. 4.4. The mediating effect of person–organization fit The overall structural model showed that business ethical value had positive effects on person–organization fit, and, subsequently, person–organization fit influenced turnover intent. To further test the mediating effect of person–organization fit between business ethical value and turnover intent, structural equation modeling analyses were conducted. To test the mediating effect of person–organization fit, the structural equation was re-estimated by constraining the direct effect of person–organization fit on turnover intent (b21 = 0). Baron and Kenny’s (1986) four conditions for mediating effects were examined. The first condition was satisfied if the independent variable (business ethical value) was significantly correlated with the mediator (person–organization fit). The second condition was satisfied if the mediator (person– organization fit) was significantly correlated to the dependent variable (turnover intent). The third condition was satisfied if
the independent variable (business ethical value) was significantly correlated to the dependent variable (turnover intent). The first three conditions were met (Table 4), given the significant correlation among the three constructs. The fourth condition was also satisfied (see Table 6); the parameter estimate between business ethical value and turnover intent in the mediating model became no more significant (full mediation) than the parameter estimate (g21 = .05; t = 0.86 versus gbev to ti = .31; t = 6.15) in the constrained model. The difference in x2 value between the constrained model (x2(71) = 224.257) and the mediating model (x2(70) = 168.025) was statistically significant (Dx2(Ddf = 1) = 56.232; p < 0.05), indicating that the mediating model is a significant improvement over the constrained model. 5. Discussion Recognizing the increasing importance of ethical value for business success, this study examined how foodservice employees perceive business ethical value in relation to person–organization fit and turnover intent. This study found that business ethical value in the foodservice industry had a significant, positive effect on person–organization fit. These findings support previous work (Porter and Lawler, 1966; Kohlberg, 1984; Hunt et al., 1989; Sims and Kroeck, 1994; Laufer and Robertson, 1997), which demonstrated that the recognition of ethical values motivated individual members to achieve fitness between his or her self and the organization, thereby boosting their affections for the organization. As previous research confirmed (Sims and Keon, 1997; Vidaver, 1998; Jose and Thibodeaux, 1999; Valentine et al., 2002), an ethical work environment, which creates an employee’s perception of high business ethical value, ensures better person–organization fit. As for the link between person–organization fit and turnover intent, the influence of person–organization fit on turnover intent was significant. This finding supported earlier work (Becker and Billings, 1993; Bretz and Judge, 1994; Harris and Mossholder, 1996; Lee et al., 1996; Verquer et al., 2003; Kristof-Brown et al., 2005; Wheeler et al., 2005, 2007), which suggested that any inconsistency between individual and organization values leads to high turnover rates. Conversely, an employee’s person–organization fit reduces his or her turnover intent.
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Regarding the non-significant relationship between business ethical value and turnover intent, the results should be interpreted with caution. Although these findings did not correspond with previous work (Peterson, 2003; Jaramillo et al., 2006; Pettijohn et al., 2008), which identified the direct effects of business ethical value on turnover intent, this study found an indirect influence via perceiving person–organization fit. More specifically, the perception of business ethical value did not significantly lower the employees’ turnover intention. That is, just ensuring the recognition of ethical values may not be enough to reduce employees’ turnover intent. However, business ethical value could lower the employee’s turnover intent, if an individual recognized the fitness between his or her beliefs and the organization. These findings indicated that when an individual’s organization is unethical, his or her views strongly influence the perception of inconsistency between his or her values and the organizations. In turn, how closely the personality of an individual fits the circumstances of the company influenced the employee’s intent to leave his or her present position. This argument supported previous work done by Schwepker (2001), which demonstrated that an in-house ethical environment has positive effects on employees’ job satisfaction and organizational commitment, but is not directly associated with turnover intent. 5.1. Managerial implications This study makes clear to managers that one way to build person–organization fit and reduce turnover and is to improve the employee’s ethical perceptions of their business. This information helps foodservice managers to understand that an enhanced level of perceived ethics could translate into higher performance, and ultimately, greater profits for the firm. One important finding of this study was that person– organization fit appears to play a mediating role between perceived business ethical value and turnover intent. Since the role of person–organization fit should be obvious, foodservice managers could reduce the probability of an employee leaving the organization by ensuring their perception of business ethical value, which would elicit his or her person–organization fit. In practice, foodservice managers need to develop screen programs in order to select the applicants whose values best fit those of the organization. Moreover, the development and use of more relevant measures for person–organization fit could improve selection procedures and ultimately enhance matches between the individual and organization in terms of work climate. Another implication drawn from this research is the need for recognizing the importance of business ethics and engaging in more ethical behaviors. It is advisable that management should give more proactive support to introducing and promoting ethical business management. In addition, ethical management systems should be established in a more formulated manner from an institutional perspective, including preparing and proclaiming an in-house code of ethics, providing ethical (re)orientation for employees and staff, establishing extra divisions specializing in matters related to ethical management, assessing practices of ethical management, and so forth. For successful ethical business management, it is necessary for top management to take ethical views and express a strong will to practice them. At the same time, management must establish distinct codes of ethics and conduct that all organizational members should follow. Moreover, it is necessary for foodservice managers to recognize matters on business ethics as an impending task in business administration while preparing systematic instruments to facilitate ethical management from long-term perspectives. Creating and establishing a cultural climate in which an organization and its members are united by this ethical code is also
required. Hence, in order to facilitate ethical management in the foodservice industry, it is also required to exert in-house ethical will in parallel with the business motto of the company. Further, it can be inferred that the achievement of ethical business management and real quality ethics results in creating a better image of the foodservice industry, as well as ongoing demands based on customers’ trust in products and services, ultimately ending up with higher business profits. Since the repercussions of a firm’s unethical image are substantial (Pettijohn et al., 2008), foodservice managers should understand that ethical management practiced in the form of codes or policies, as well as ethical values immanent in the organization, leads to improving employees’ trust in the organization and their working motivations. Ethical management practices should also achieve better working fitness and lower turnover intent and ultimately positive effects on overall organizational achievements. In addition, business ethical values can contribute to guiding companies toward their justifiable roles or activities in the society. Accordingly, companies could garner trust from the market as well as their employees and shareholders. The current study may be one of only a few attempts to empirically assess the interrelationship among business ethical value, person–organization fit, and turnover intent. Thus, it might be useful to identify and prioritize the attributes of business ethics specified in the foodservice industry, which could lead to higher person–organization fit, lower turnover intent, and higher profitability. 5.2. Limitations and future research Despite its implications, several limitations of the study need to be addressed. First, the sample consists of employees at hotels in the food and beverage division, family restaurants and contractmanaged foodservices as a part of foodservice industry. Therefore, the generalizability of the results may be limited to the employees in those particular categories. In addition, the employees were selected based on their manager’s willingness to participate in this study. Therefore, managers’ encouragement to participate may have affected some responses. From a methodological stance, future studies should refine the measurement items used in this study and revalidate the findings. This study emphasized the importance of employees’ perceptions of business ethical value. However, the results did not support the proposed direct effect of business ethical value and turnover intent. Therefore, future research should assess crucial factors that act as mediating variables between business ethical value and turnover intent. Future research might also investigate personal variables, such as customer-orientation level of employees, level of commitment, sensitivity to ethical values, perceived importance of ethics, gender, and culture, which could possibly moderate the relationships among constructs. For example, how does an employee’s level of customer-orientation influence the way the employee perceives business ethical value and evaluates person–organization fit? Are employees from western cultures more likely to tolerate unethical business practices than employees from oriental cultures? Future research on these variables may help broaden our knowledge of business ethical value and its association with person–organization fit and turnover intent. This research empirically tested the applicability of ethical management mechanisms in the foodservice industry. The findings provided valuable insights as they relate to the significant association between employees’ perceptions of business ethical value and person–organization fit and employees’ perceptions of person–organization fit and turnover intent. Future studies might benefit from identifying the extent to which business ethical value
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International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman
The effects of employees’ business ethical value on person–organization fit and turnover intent in the foodservice industry Hyo Sun Jung 1, Young Namkung 2, Hye Hyun Yoon * Department of Culinary Science and Arts, College of Hotel & Tourism Management, Kyung Hee University, 1 Hoeki-dong, Dongdaemon-ku, Seoul 130-701, Republic of Korea
A R T I C L E I N F O
A B S T R A C T
Keywords: Business ethical value Person–organization fit Turnover intent Foodservice industry
Given the growing importance of ethical values and social responsibilities in the workplace, the purpose of this study was to investigate interrelationships among employees’ business ethical value, person– organization fit and turnover intent in the foodservice industry. A total of 788 employees in Korea participated. The results showed a positive relationship between employees’ perceptions of business ethics and their person–organization fit. Participants expressing a high person–organization fit were less likely to leave their positions. These findings have important implications for creating and facilitating an ethical business environment in the foodservice industry. Limitations and future research directions are also discussed. ß 2009 Elsevier Ltd. All rights reserved.
1. Introduction Due to the growing concern about ethical issues in the workplace, many organizations have institutionalized ethics in the form of regulations and codes. For example, international organizations, such as OECD, UN and WTO, have enhanced their ethical environments and requirements for economic activities. Furthermore, in order to encourage companies to do good deeds the Ethics Round, international movement reinforcing business ethics has emerged. In the increasingly conscience-focused marketplaces of the 21st century, Ethics Round aims to regulate the introduction of products and services into the global market by unethical companies. Along the same line, the New York Stock Exchange (NYSE) and NASDAQ tend to list only companies that have an established formal code of ethics for their organizations (Paine et al., 2005). It seems that the phrase ‘‘good ethics is good business’’ has become a common belief (Pettijohn et al., 2008). Since Goodspaster (1983) applied the concept of personal ethics in social life to specific business management circumstances, the importance of ethical business values has been well documented. Previous studies found that companies with a high level of ethical values and social responsibility tend to be more profitable than others (Hammond and Slocum, 1996; Waddock and Smith, 2000). Hyman and Curran (2000) emphasized employees’ participation in
* Corresponding author. Tel.: +82 2 961 9403; fax: +82 2 964 2537. E-mail addresses: [email protected] (H.S. Jung), [email protected] (Y. Namkung), [email protected] (H.H. Yoon). 1 Tel.: +82 2 961 0855; fax: +82 2 964 2537. 2 Tel.: +82 2 961 2185; fax: +82 2 964 2537. 0278-4319/$ – see front matter ß 2009 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijhm.2009.08.005
creating an ethical business environment in order to enhance both employee and customer satisfaction. Furthermore, it has been widely recognized that an employee’s perception of ethical values enhances the development of person–organization fit (Laufer and Robertson, 1997; Valentine et al., 2002), and eventually lowers turnover intent (Shafer, 2002; Peterson, 2003; Jaramillo et al., 2006). The costs of carrying out social responsibilities have been understood as being offset by the profits created from improved working morale and productivity of employees (Pettijohn et al., 2008). In particular, the issue of ethics in the foodservice industry has become increasingly important, as eating out has become an integral part of our daily lives. Due to the inherent industry characteristics of inseparability and intangibility, hospitality industry management must attend to ethical issues more carefully than other industries (Stevens and Fleckenstein, 1999). Since employees in the foodservice industry directly affect customers’ health and hygiene through the foods they make and serve, companies must carry out their social responsibilities and duties faithfully (McCabe et al., 2006). Whether or not the foodservice industry emphasizes ethical practices, restaurant employees’ behavior is important due to the possibility of threatening customers’ health through unethical decision-making in terms of food stability (Walczak and Reuter, 2004). Schwepker and Hartline (2005) emphasized that unethical behavior generally occurred in order to correct or hide a mistakes or, in the case of employees in contact with customers, to promote corporate performance. Although the ethical climate of an organization significantly influences a service provider’s attitudes (Babin et al., 2000; Weeks et al., 2004) and behavior (Schneider and Bowen, 1985), little research has been conducted on the role of business
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2.2. Model development and hypotheses
Fig. 1. A proposed model of business ethical value, person–organization fit, and turnover intent.
ethical values or climates in the people-dependent foodservice industry. Business managers have long been recognized the significance of ethical values and social responsibilities in relation to maximizing profits. However, they have tended to consider business ethics an external restriction, along the lines of legal regulations or social norms, rather than voluntarily emphasizing ethical management. Therefore, the matter of business ethics has long been a concern for a number of executives who are sensitive to social pressures or ethical sensibilities. However, if an empirical report demonstrated the associations between business ethics and management performance, we expect that the findings would motivate companies with a clear sense of social responsibility to willingly engage in ethical management practices rather than viewing them as a forced response to external pressures. This would enhance business interests in ethical competitiveness. Thus, the purpose of this study is to identify the associations among business ethical value, person– organization fit and turnover intent that have not been fully explored in the foodservice literature (see Fig. 1). The present study also contributes to theoretical knowledge about ethical management. This knowledge can potentially help enhance business performance by improving business ethics in the foodservice industry. 2. Literature review and conceptual model 2.1. Business ethics in the hospitality industry While there is a lack of scholarly research on ethical values or climates in the food service industry, this issue has been a topic of interest to scholars and practitioners in the hospitality industry (Enghagen, 1990; Damitio et al., 1992). For example, Whitney (1990) demonstrated that hotel industry employees need a higher ethical consciousness compared to other industries, as well as the ability to judge ethical issues according to the principles of the organization. Enghagen and Hott (1992) found that undergraduate students in college identified environmental pollution, fixture extravagance, and employment discrimination as the most unethical situations that occur in the hospitality industry. Randall and Sheila (1996) demonstrated that a hotel manager, who works in an ethical environment, makes more proactive decisions. Subsequently, Randall (1998) found that hotel staff’s education levels and previous work experiences affected his or her ethical decision-making. Wong (1998) also suggested the need for a clearer job-related ethical policy for hotel employees in Hong Kong. Similarly, focusing on employees at a hotel in Croatia, Fox (2000) argued that unethical environments lead to additional organizational costs, thus an ethical working environment needs to be promoted.
2.2.1. Business ethical value, person–organization fit, and turnover intent An organizational environment shaped by corporate ethical values and the enforcement of a code of ethics has been regarded as a critical factor in ethical decision-making (Newstrom and Ruch, 1975; Hunt and Vitell, 1986, 1993). Focusing on the ethical dimension of corporate values, Hunt et al. (1989) defined corporate ethical value as ‘‘a composite of the individual ethical values of managers and both the formal and informal policies on ethics of the organization’’ (p. 79). In Aguilar’s (1994) study, an ethical business signified a company which deserves respect and trust from employees, customers, contracted suppliers and shareholders because they balance stakeholder’s interests and business profits in decision-making processes and business practices. Similarly, Carroll and Buchholtz (2000) demonstrated that business ethical value is critical in determining right or wrong and good or evil in terms of business management behaviors and attitudes. People tend to work for companies that enable them to best make use of their skills and competencies and which have environments that conform to their personal attributes (KristofBrown, 1996). Person–organization fit has been defined as the compatibility between individuals and organizations and is considered a critical factor in selecting where to work (KristofBrown, 1996). Likewise, person–organization fit can be based on the congruity between personal and organizational beliefs (O’Reilly et al., 1991; Netemeyer et al., 1997) or goals (Vancouver et al., 1994). Person–organization fit can be measured by estimating the extent to which a company supports the needs of its employees (Turban and Keon, 1993; Cable and Judge, 1994) or how closely the personality of an individual fits the circumstances of the company (Bowen et al., 1991). Turnover intent is a preceding factor for effectively forecasting an employee’s propensity for changing occupations, as well as a warning sign before an individual actually quits a job. Accordingly, it is generally conceptualized as a surrogate indicator of actual behavior (Brown and Peterson, 1993). Turnover intent refers to the intent of an employee to abandon his or her organizational membership and quit his or her current job (Meyer and Allen, 1984). Macy and Mirvis (1976) also defined turnover as a permanent transfer beyond organizational boundaries and distinguished it from layoffs, as well as in-house promotions or shakeups. In a broad sense, turnover intent can be understood as the extent of an individual’s turnover decisions across the boundaries of membership in a social system (Price, 1977). 2.2.2. Relationship between business ethical value and person– organization fit Organizational studies have suggested that the adoption of ethical values helps individuals recognize their organization fit (Laufer and Robertson, 1997) and influences employees’ affections for a company (Porter and Lawler, 1966; Kohlberg, 1984; Sims and Kroeck, 1994). In an empirical study, Sims and Keon (1997) demonstrated significant associations between ethical working environments and person–organization fit in a company. Valentine et al. (2002) found that more advanced ethical values lead to better person–organization fit, since employees prefer the values of ethical businesses (Vidaver, 1998; Jose and Thibodeaux, 1999). Furthermore, Hunt et al. (1989) noted that an organization is more likely to get favorable responses (e.g. higher productivity, integrity, fitness, etc.) from its employees when it embodies support for ethical management, which tends to solidify employment relationships and create an ethical culture or environment for employees. Overall, the existing literature suggested that an employee’s perception of an organization’s ethical values is an
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important antecedent for improving the fitness between individual and organization. These arguments led to the establishment of the following hypothesis: Hypothesis 1. Business ethical value is positively related to person–organization fit. 2.2.3. Relationship between business ethical value and turnover intent Previous researchers have shown that the ethical environment of an organization affects the working attitudes of employees, thus any conflicts that arise lead to high turnover intent (Sims and Kroeck, 1994; Schwepker, 1999; Mulki et al., 2006). Levy and Dubinsky (1983) suggested that ethical disharmony leads to lower organizational commitment and higher turnover intent. Sparks and Johlke (1996) noted that an employee’s recognition of an unethical organizational environment results in a natural attempt to leave his or her job. More recently, Eisenberger et al. (2002) demonstrated that an employee’s recognition of their company’s commitment to its ethical duties is associated with lower turnover intent. Peterson (2003) also suggested employees’ turnover intent rates provide a basis for judging the degree of unethical working inclinations at a company. Addressing employee satisfaction, Shafer (2002) noted that if employees recognize ethical inconsistencies due to a company’s unethical behaviors, their satisfaction levels are lower and their turnover intent rises. Jaramillo et al. (2006) found that recognizing an organization or co-worker’s unethical behaviors leads to lower job satisfaction and higher turnover intent. Pettijohn et al. (2008) also reported that employees’ recognition of business ethics and resulting behaviors has a great impact on their job satisfaction and turnover intent. In view of the existing empirical evidence, the following hypothesis was formulated: Hypothesis 2. Business ethical value is negatively related to turnover intent. 2.2.4. Relationship between person–organization fit and turnover intent Lee and Mitchell (1994) argued that person–organization fit occurs in advance of job satisfaction and job satisfaction creates turnover intent in an employee’s mind. In a subsequent study, Lee et al. (1996) demonstrated that inconsistency between organizational and individual goals leads to higher turnover intent for nurses when they are dissatisfied with their job. Likewise, the person–organization fit of employees as organizational members has positive associations with their job satisfaction, but has negative associations with their turnover intent (Bretz and Judge, 1994; Harris and Mossholder, 1996). More specifically, higher person–organization fit leads to lower turnover intent (Becker and Billings, 1993; Verquer et al., 2003; Kristof-Brown et al., 2005), while lower person–organization fit leads to higher turnover intent (Schneider, 1987; Schneider et al., 1995; Wheeler et al., 2005, 2007). In particular, insufficient (poor) person–organization fit leads to high turnover intent in a new organization (Hollenbeck, 1989). Given these findings, the following hypothesis was proposed: Hypothesis 3. Person–organization fit is negatively related to turnover intent. 3. Methodology 3.1. Sample and data collection The data used for the current study were collected from employees in three service sectors in Seoul, the capital of Korea,
in 2007. Twelve five-star hotels such as Ritz-Carlton, Hilton, Sofitel, Marriott, and Hyatt, who work in the food and beverage division, participated in this study. Top-ranked family restaurants and contract-managed foodservices were chosen in terms of sales in 2006. Once the human resources manager gave permission, employees were provided with a voluntary survey and were asked by the researcher to complete the selfadministered questionnaires. The completed questionnaires were sealed in envelopes to protect employee anonymity and collected by the researcher one week later. After eliminating incomplete questionnaires, a total of 788 questionnaires were obtained over the three-week period (response rate of 77.15%). 3.2. Instrument development A pilot test using 50 employees at hotels, family restaurants, and contract-managed foodservices, was conducted to ensure the reliability of the scales. Several modifications were made on the basis of the pilot test results. Before the questionnaire was finalized, three managers at full-service restaurants and two faculty members familiar with the topic area further reviewed the questionnaire, and slight revisions in wording were made based on their suggestions. The survey instrument for this study was composed of four parts. The first three parts pertained to business ethical value, person–organization fit, and turnover intent. To measure employees’ perceptions of business ethical value, this study adapted Hunt et al.’s (1989) and Victor and Cullen’s (1987) multi-item scales. Business ethical value items included ‘‘top managers in my organization should have higher ethical standards than they do now’’ and ‘‘in order to succeed in my company, it is often necessary to compromise one’s ethics.’’ Each business ethical value item was measured with five items using a 7-point scale: ‘‘how much do you agree or disagree with these statements?’’ (1: strongly disagree to 7: strongly agree). Person–organization fit was measured by five items on a 7point scale (1: strongly disagree to 7: strongly agree) based on Edward (1991) and Valentine et al. (2002). Person–organization fit items included ‘‘I feel that my personal values are a good fit with this organization’’ and ‘‘this organization has the same values as I do with regard to concern for others.’’ Respondent turnover intent was also measured on a 7-point scale (1: strongly disagree to 7: strongly agree), as developed by Cammann et al. (1979) and Seashore et al. (1982). The turnover intent items included ‘‘I sometimes feel compelled to quit my job in my current workplace’’ and ‘‘I am currently seriously considering leaving my current job to work at another company.’’ Table 2 lists the descriptions of measurement items for the constructs of the study. Part four contained questions about participant demographic information (e.g., age, gender, and education level) and job-related information (e.g., type of company and job status). 3.3. Data analysis Descriptive statistics were preformed to profile the respondents’ demographic and job-related questions. Following the two-step approach recommended by Anderson and Gerbing (1988), a confirmatory factor analysis (CFA) with maximum likelihood was first performed to estimate the measurement model, which determined whether the manifest variables reflected the hypothesized latent variables. Once the measure was validated, a structural equation model (SEM) was utilized to test the validity of the proposed model and hypotheses.
H.S. Jung et al. / International Journal of Hospitality Management 29 (2010) 538–546 Table 1 Profile of the sample (n = 788). Characteristic
N
Percentage
Age Younger than 20 years 21–30 years 31–40 years Older than 40 years Average
16 495 225 52
2.0 62.8 28.6 6.6 29.58 6.52
Gender Male Female
418 370
53.0 47.0
Education High school Community college degree (2 years) University degree (4 years)
56 341 391
7.1 43.3 49.6
Company type Hotel Family restaurant Contract-managed foodservice
354 276 158
44.9 35.0 20.1
Job status Part-time Full-time
219 569
27.8 72.2
4. Results 4.1. Descriptive statistics of sample The characteristics of the sample are presented in Table 1. The mean age of the participants was 29.6 years old and slightly over half of the respondents were male (53%). Most participants had a community college or university degree (92.9%). About half of the participants were employees at hotels (44.9%), followed by family restaurants (35%), and contract-managed foodservices (20.1%). The majority of them were full-time employees (72.2%). Table 2 presents the means and standard deviations of each item in relation to the constructs of interest in this study: business ethical value, person–organization fit, and turnover intent. The mean value of each item under business ethical value ranged from 4.76 to 4.83 on the 7-point scale. Respondents ranked ‘‘top managers in my organization should have higher ethical standards than they do now (4.83 1.25)’’ as the highest business ethical value
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attribute, followed by ‘‘top management in my company has let it be known in no uncertain terms that unethical behaviors will not be tolerated (4.80 1.23).’’ Respondents ranked ‘‘in order to succeed in my company, it is often necessary to compromise one’s ethics (4.76 1.19)’’ as the least well-performed business ethical value. Participants showed a moderate level of person–organization fit, ranging from 4.36 to 4.83 on the 7-point scale. In detail, respondents showed the highest value for the attribute, ‘‘I have affections and affinity for this organization (4.83 1.31).’’ On the other hand, ‘‘my organization meets my major needs well (4.36 1.28)’’ was the least well-performed person–organization fit attribute. As for turnover intent, it indicated relatively low values compared to other measurement items. Among four attributes, ‘‘I am currently seriously considering leaving my current job to work at another company (3.47 1.61)’’ was the lowest. 4.2. Measurement model Following Anderson and Gerbing’s (1988) two-step approach, a confirmatory factor analysis was first undertaken to assess the overall fit of the three-factor model, which was comprised of business ethical value, person–organization fit, and turnover intent. As shown in Table 3, the level for internal consistency in each construct was acceptable with Cronbach’s alpha estimates ranging from .90 to .91 (Nunnally, 1978). Composite reliabilities estimates, ranging from .79 to .87, were considered acceptable (Fornell and Larcker, 1981). In addition, all variance extracted estimates (business ethical value = .66; person–organization fit = .67; and turnover intent = .70) exceeded the recommended .50 threshold (Fornell and Larcker, 1981). Convergent validity was observed since all confirmatory factor loadings exceeded .70 and was significant at the alpha level of .001 (Anderson and Gerbing, 1988). Thus, these results were evidence of the convergent validity of the measures. Discriminant validity was assessed by comparing the average variance extracted (AVE) with the squared correlation between constructs. Discriminant validity was evident since the variance extracted estimates, ranging from .66 to .70, exceeded all squared correlations for each pair of constructs, ranging from .03 to .39. These results suggested that the seven-factors were distinct and unidimensional. Also, confirmatory measurement models demonstrated the soundness of measurement properties (x2(72) = 210.818, p < 0.001; x2/
Table 2 Descriptive statistics of variables. Variablea Business ethical value B1: Top managers in my organization should have higher ethical standards than they do now B2: Top management in my company has let it be known in no uncertain terms that unethical behaviors will not be tolerated B3: In order to succeed in my company, it is often necessary to compromise one’s ethics B4: If a manager in my company is discovered to have engaged in unethical behavior that results primarily in personal gain (rather than corporate gain), he or she will be promptly reprimanded B5: If a manager in my company is discovered to have engaged in unethical behavior that results primarily in corporate gain(rather than personal gain), he or she will be promptly reprimanded
Mean SD 4.83 1.25 4.80 1.23 4.76 1.19 4.80 1.24 4.78 1.26
Person–organization fit P1: I feel that my personal values are a good fit with this organization P2: My organization meets my major needs well P3: This organization has the same values as I do with regard to concern for others P4: I have affections and affinity for this organization P5: I really fit this organization
4.69 1.20 4.36 1.28 4.63 1.24 4.83 1.31 4.55 1.31
Turnover intent T1: I sometimes feel compelled to quit my job in my current workplace T2: I will quit my job at my current organization in 1 year or less T3: I am currently seriously considering leaving my current job to work at another company T4: I will quit this company if the given condition gets even a little worse than now
4.09 1.47 3.52 1.58 3.47 1.61 3.73 1.58
Note: SD = standard deviation. a All items were measured on a 7-point Likert scale from 1-strongly disagree to 7-strongly agree.
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Table 3 Reliabilities and confirmatory factor analysis properties. Construct (Cronbach’s alpha)
Standardized factor loadings
Item reliabilities
Business ethic value (.91) B1 B2 B3 B4 B5
.71 .80 .86 .86 .82
.71 .79 .80 .80 .75
Person–organization fit (.91) P1 P2 P4 P5 P6
.75 .83 .78 .88 .86
.71 .76 .74 .79 .81
Turnover intent (.90) T1 T2 T3 T4
.76 .86 .87 .84
.72 .81 .80 .79
a
Composite reliabilities
AVEa
.86
.66
.87
.67
.79
.70
Average variance extracted.
Table 4 Correlations among the latent constructs.
4.3. Structural equation modeling (SEM)
Construct
1
2
3
1. Business ethical value 2. Person–organization fit 3. Turnover intent
1 .63 .19
1 32
1
Note: All correlations are significant at p = 0.01.
df = 2.928; Goodness-of-fit index (GFI) = 0.963; Normed fit index (NFI) = 0.973; Comparative fit index (CFI) = 0.982; and root mean square error of approximation (RMSEA) = 0.049). Table 4 illustrates the intercorrelations among the three constructs in this study. An assessment of the bivariate correlations showed that the items used to measure business ethical value were positively related to the items associated with person– organization fit. Also, the items associated with turnover intent were negatively related to business ethical value and person– organization fit.
Structural equation modeling was conducted to test the validity of the proposed model and the hypotheses. Fig. 2 presents the estimated model, illustrating the direction and magnitude of the impact of the standardized path coefficients. The chi-square statistic indicated that the overall model did not fit the data well (x2(70) = 168.025, p < 0.001). Given the sensitivity of the chisquare statistics to sample size (Bentler and Bonett, 1980; Hair et al., 1998), other fit indexes were also examined. First, Normed chi-square (x2/degree of freedom) was considered to reduce the sensitivity of the chi-square statistic. The value of the Normed chisquare was 2.400, which was below the cut-off criterion of three (Hair et al., 1998) and showed that the model fit the data well. Other Goodness-of-fit indices proved that the structural model reasonably fit the data (GFI = 0.970; NFI = 0.978; CFI = 0.987; RMSEA = 0.042). The model’s fit, as indicated by these indexes, was deemed satisfactory; thus, it provided a good basis for testing the hypothesized paths. The parameter estimates of the structural
Fig. 2. Structural equation model with parameter estimates.
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Table 5 Structural parameter estimates. Hypothesized path (stated as alternative hypothesis)
Standardized path coefficients
H1: Business ethical value ! person–organization fit H2: Business ethical value ! turnover intent H3: Person–organization fit ! turnover intent Goodness-of-fit statistics
t-Value
Results
***
.67 .05 .40
14.768 0.856 7.220***
Supported Not Supported Supported
x2(78) = 168.025 (p < 0.001) x2/df = 2.400 GFI = 0.970 NFI = 0.978 CFI = 0.987 RMSEA = 0.042
Note: GFI = Goodness-of-fit index; NFI = Normed fit index; CFI = Comparative fit index; RMSEA = root mean square error of approximation. *** p < 0.001. Table 6 Mediating test (full mediator). Constrained model (POF !TI = 0)
Mediating model
b BEV ! TI
x2(df = 71) ***
b
t-Value
0.31
BEV ! TI x2(df = 70) 2 Dx (df = 1) = 56.232; p < 0.05
6.15 224.257
***
t-Value 0.86ns
0.05 168.025
p < 0.001.
model exhibited the direct effects of one construct on the other. Thereby, a significant coefficient at a certain level of alpha reveals a significant casual relationship between latent constructs. (Fig. 2, Table 5). Hypothesis 1, which hypothesized a positive relationship between business ethical value and person–organization fit, was supported (g11 = .67; t = 14.768; p < 0.001). These findings revealed that those who perceive business ethical value highly are more likely to believe in the value of individual–organization fit. On the other hand, Hypothesis 2, which predicted a negative relationship between business ethical value and turnover intent, was not supported (g21 = .05; t = 0.856). In this study, an employee’s perception of business ethical value did not have a significant, direct impact on their turnover intent. As predicted by Hypothesis 3, person–organization fit had significant, negative effects on turnover intent (b21 = .40; t = 7.220; p < 0.001). This result indicated that as employee’s level of person–organization fit increased, they were less likely to leave their company. Considering hypotheses 1 and 3, despite the non-significant direct linkage between business ethical value and an employee’s turnover intent; business ethical value indirectly influenced turnover intent through the perception of person– organization fit. 4.4. The mediating effect of person–organization fit The overall structural model showed that business ethical value had positive effects on person–organization fit, and, subsequently, person–organization fit influenced turnover intent. To further test the mediating effect of person–organization fit between business ethical value and turnover intent, structural equation modeling analyses were conducted. To test the mediating effect of person–organization fit, the structural equation was re-estimated by constraining the direct effect of person–organization fit on turnover intent (b21 = 0). Baron and Kenny’s (1986) four conditions for mediating effects were examined. The first condition was satisfied if the independent variable (business ethical value) was significantly correlated with the mediator (person–organization fit). The second condition was satisfied if the mediator (person– organization fit) was significantly correlated to the dependent variable (turnover intent). The third condition was satisfied if
the independent variable (business ethical value) was significantly correlated to the dependent variable (turnover intent). The first three conditions were met (Table 4), given the significant correlation among the three constructs. The fourth condition was also satisfied (see Table 6); the parameter estimate between business ethical value and turnover intent in the mediating model became no more significant (full mediation) than the parameter estimate (g21 = .05; t = 0.86 versus gbev to ti = .31; t = 6.15) in the constrained model. The difference in x2 value between the constrained model (x2(71) = 224.257) and the mediating model (x2(70) = 168.025) was statistically significant (Dx2(Ddf = 1) = 56.232; p < 0.05), indicating that the mediating model is a significant improvement over the constrained model. 5. Discussion Recognizing the increasing importance of ethical value for business success, this study examined how foodservice employees perceive business ethical value in relation to person–organization fit and turnover intent. This study found that business ethical value in the foodservice industry had a significant, positive effect on person–organization fit. These findings support previous work (Porter and Lawler, 1966; Kohlberg, 1984; Hunt et al., 1989; Sims and Kroeck, 1994; Laufer and Robertson, 1997), which demonstrated that the recognition of ethical values motivated individual members to achieve fitness between his or her self and the organization, thereby boosting their affections for the organization. As previous research confirmed (Sims and Keon, 1997; Vidaver, 1998; Jose and Thibodeaux, 1999; Valentine et al., 2002), an ethical work environment, which creates an employee’s perception of high business ethical value, ensures better person–organization fit. As for the link between person–organization fit and turnover intent, the influence of person–organization fit on turnover intent was significant. This finding supported earlier work (Becker and Billings, 1993; Bretz and Judge, 1994; Harris and Mossholder, 1996; Lee et al., 1996; Verquer et al., 2003; Kristof-Brown et al., 2005; Wheeler et al., 2005, 2007), which suggested that any inconsistency between individual and organization values leads to high turnover rates. Conversely, an employee’s person–organization fit reduces his or her turnover intent.
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Regarding the non-significant relationship between business ethical value and turnover intent, the results should be interpreted with caution. Although these findings did not correspond with previous work (Peterson, 2003; Jaramillo et al., 2006; Pettijohn et al., 2008), which identified the direct effects of business ethical value on turnover intent, this study found an indirect influence via perceiving person–organization fit. More specifically, the perception of business ethical value did not significantly lower the employees’ turnover intention. That is, just ensuring the recognition of ethical values may not be enough to reduce employees’ turnover intent. However, business ethical value could lower the employee’s turnover intent, if an individual recognized the fitness between his or her beliefs and the organization. These findings indicated that when an individual’s organization is unethical, his or her views strongly influence the perception of inconsistency between his or her values and the organizations. In turn, how closely the personality of an individual fits the circumstances of the company influenced the employee’s intent to leave his or her present position. This argument supported previous work done by Schwepker (2001), which demonstrated that an in-house ethical environment has positive effects on employees’ job satisfaction and organizational commitment, but is not directly associated with turnover intent. 5.1. Managerial implications This study makes clear to managers that one way to build person–organization fit and reduce turnover and is to improve the employee’s ethical perceptions of their business. This information helps foodservice managers to understand that an enhanced level of perceived ethics could translate into higher performance, and ultimately, greater profits for the firm. One important finding of this study was that person– organization fit appears to play a mediating role between perceived business ethical value and turnover intent. Since the role of person–organization fit should be obvious, foodservice managers could reduce the probability of an employee leaving the organization by ensuring their perception of business ethical value, which would elicit his or her person–organization fit. In practice, foodservice managers need to develop screen programs in order to select the applicants whose values best fit those of the organization. Moreover, the development and use of more relevant measures for person–organization fit could improve selection procedures and ultimately enhance matches between the individual and organization in terms of work climate. Another implication drawn from this research is the need for recognizing the importance of business ethics and engaging in more ethical behaviors. It is advisable that management should give more proactive support to introducing and promoting ethical business management. In addition, ethical management systems should be established in a more formulated manner from an institutional perspective, including preparing and proclaiming an in-house code of ethics, providing ethical (re)orientation for employees and staff, establishing extra divisions specializing in matters related to ethical management, assessing practices of ethical management, and so forth. For successful ethical business management, it is necessary for top management to take ethical views and express a strong will to practice them. At the same time, management must establish distinct codes of ethics and conduct that all organizational members should follow. Moreover, it is necessary for foodservice managers to recognize matters on business ethics as an impending task in business administration while preparing systematic instruments to facilitate ethical management from long-term perspectives. Creating and establishing a cultural climate in which an organization and its members are united by this ethical code is also
required. Hence, in order to facilitate ethical management in the foodservice industry, it is also required to exert in-house ethical will in parallel with the business motto of the company. Further, it can be inferred that the achievement of ethical business management and real quality ethics results in creating a better image of the foodservice industry, as well as ongoing demands based on customers’ trust in products and services, ultimately ending up with higher business profits. Since the repercussions of a firm’s unethical image are substantial (Pettijohn et al., 2008), foodservice managers should understand that ethical management practiced in the form of codes or policies, as well as ethical values immanent in the organization, leads to improving employees’ trust in the organization and their working motivations. Ethical management practices should also achieve better working fitness and lower turnover intent and ultimately positive effects on overall organizational achievements. In addition, business ethical values can contribute to guiding companies toward their justifiable roles or activities in the society. Accordingly, companies could garner trust from the market as well as their employees and shareholders. The current study may be one of only a few attempts to empirically assess the interrelationship among business ethical value, person–organization fit, and turnover intent. Thus, it might be useful to identify and prioritize the attributes of business ethics specified in the foodservice industry, which could lead to higher person–organization fit, lower turnover intent, and higher profitability. 5.2. Limitations and future research Despite its implications, several limitations of the study need to be addressed. First, the sample consists of employees at hotels in the food and beverage division, family restaurants and contractmanaged foodservices as a part of foodservice industry. Therefore, the generalizability of the results may be limited to the employees in those particular categories. In addition, the employees were selected based on their manager’s willingness to participate in this study. Therefore, managers’ encouragement to participate may have affected some responses. From a methodological stance, future studies should refine the measurement items used in this study and revalidate the findings. This study emphasized the importance of employees’ perceptions of business ethical value. However, the results did not support the proposed direct effect of business ethical value and turnover intent. Therefore, future research should assess crucial factors that act as mediating variables between business ethical value and turnover intent. Future research might also investigate personal variables, such as customer-orientation level of employees, level of commitment, sensitivity to ethical values, perceived importance of ethics, gender, and culture, which could possibly moderate the relationships among constructs. For example, how does an employee’s level of customer-orientation influence the way the employee perceives business ethical value and evaluates person–organization fit? Are employees from western cultures more likely to tolerate unethical business practices than employees from oriental cultures? Future research on these variables may help broaden our knowledge of business ethical value and its association with person–organization fit and turnover intent. This research empirically tested the applicability of ethical management mechanisms in the foodservice industry. The findings provided valuable insights as they relate to the significant association between employees’ perceptions of business ethical value and person–organization fit and employees’ perceptions of person–organization fit and turnover intent. Future studies might benefit from identifying the extent to which business ethical value
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