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The mediating role of trust between expatriate procedural justice and employee outcomes in Chinese hotel industry
International Journal of Hospitality Management 29 (2010) 669–676
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International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman
The mediating role of trust between expatriate procedural justice and employee outcomes in Chinese hotel industry Alice H.Y. Hon a,*, Lin Lu b,1 a b
The Hong Kong Polytechnic University, School of Hotel and Tourism Management, Hung Hom Kowloon, Hong Kong Shanghai Jiao Tong University, Antai College of Economic & Management, 535 Fa Hua Zhen Rd., Shanghai 200052, China
A R T I C L E I N F O
A B S T R A C T
Keywords: Procedural justice Trust Expatriate Work outcomes Hotel
This study draws from social exchange theory to examine the roles cognitive and affective trust play in mediating the relationship between expatriate supervisors and their local employees. We differentiate the two forms of trust by proposing, on the one hand, that cognitive trust mediates the relationship between the procedural justice displayed by expatriate supervisors and job satisfaction and organizational commitment of their employees and, on the other hand, that affective trust mediates the relationship between the procedural justice displayed by expatriates and the level of employee satisfaction with and altruism toward their supervision. We then support the hypotheses by using structural equation modeling (SEM) to analyze data collected from 286 employees working with expatriate supervisors in China’s hotel industry. Implications of the findings are discussed. Crown Copyright ß 2010 Published by Elsevier Ltd. All rights reserved.
With the trend towards globalization and multinational corporations (MNCs) in the hotel industry, an increasing number of expatriate supervisors are now being assigned to oversee local employees (Magnini, 2009). The success of this expatriate supervision is believed to depend on task completion and relationships building with local employees, as these enable organizations to achieve high-levels of overall performance (Harrison and Shaffer, 2005). A number of previous studies have employed the concept of justice to explain job behavior and workplace attitudes in international joint ventures (e.g., Chen et al., 2002; Choi and Chen, 2007; Leung et al., 1996). Others, working from a social exchange perspective, have argued that justice influences performance outcomes by acting through a mediating mechanism in which trust plays a significant role (Aryee et al., 2002; Konovsky and Pugh, 1994). Expatriate supervisors tend to work in diversified workplaces where trust can help build relationships with, and improve the way they are perceived by their local employees (Leung et al., 2009). The mechanism of trust, therefore, merits further examination to determine how it functions in the relationship between expatriate supervisors and local subordinates and to interpret how gaining the trust of local employees can help an expatriate achieve success. Given the various typologies of trust and justice, we decided to focus on the two-dimensional supervisory trust and expatriate procedural justice. Derived from the concept of procedural justice (Leventhal,
* Corresponding author. Tel.: +852 2766 6543; fax: +852 2362 9362. E-mail address: [email protected] (Alice H.Y. Hon). 1 Tel.: +86 21 52301254.
1980; Thibaut and Walker, 1975), expatriate procedural justice (EPJ) is here defined as the fairness of a decision making system and the procedures that determine the policy and other work outcomes that affect a local employee’s perception of his/her expatriate supervisor. The present study makes three specific contributions to the literature. First, it focuses on the effects of the procedural justice displayed by expatriate managers. The supervisor plays an important role in determining how justice is perceived in the workplace. Their conduct can promote positive attitudes and behaviors among workers which can, in turn, benefit the supervisor and, ultimately, the organization as a whole (Bass, 1990; Yukl, 2002). Moreover, the fair treatment of workers has been found to lead to positive exchanges between employees and supervisors (Colquitt et al., 2001; Konovsky and Pugh, 1994; Whitener et al., 1998; Yang et al., 2009). Nonetheless, the question remains of the extent to which supervisory justice can impact workplace outcomes, in terms of both behavior and attitude. This question is especially critical in regards to expatriate supervision as, although perceived justice can build trust in an expatriate supervisor and reduce feelings of uncertainty among local employees, relevant information on the exchange process is incomplete and ambiguous (De Cremer and Sedikides, 2005; Van den Bos and Lind, 2002; Van den Bos and Miedema, 2000; Van den Bos et al., 2001). A review of the current literature did not provide a satisfying answer, as most studies associate employee performance with organizational justice rather than the conduct of the expatriate supervisor (e.g., Chen et al., 2002; Choi and Chen, 2007; Leung et al., 1996). Second, this study recognizes the different roles played by cognitive trust and affective trust and examines the ways in which
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they mediate between EPJ and categorized job outcomes. Trust is defined as a psychological state where an individual intentionally accepts a position of vulnerability through their positive expectations of the behavior of another person (Rousseau et al., 1998). Past studies based on social exchange theory (Blau, 1964) have found evidence of a positive relationship between trust and job outcomes (e.g., Dirks and Ferrin, 2002) and between perceived justice and trust (e.g., Colquitt et al., 2001). Other studies suggest that trust plays a mediatory role between justice and job outcomes (e.g., Aryee et al., 2002; Yang et al., 2009). In their meta-analysis of the concept of trust, Dirks and Ferrin (2002) argue that differences between cognitive and affective trust merit further research, as each may be more salient to particular exchange processes and may have a potentially greater impact on certain outcomes than the other. While cognitive trust relates to individual beliefs about supervisor reliability, dependability and competency, affective trust derives from the feeling of having trust in another person and is associated with reciprocal interpersonal relations of care (Mayer et al., 1995; McAllister, 1995). Research shows that the two-dimensional nature of trust may lead to different outcomes depending on the type of trust that forms the basis of the response (McAllister, 1995; Webber and Klimoski, 2004). Accordingly, we posit that cognitive and affective trust may correspond to different outcomes in connection with procedural justice. On the one hand, the relation between EPJ and cognitive trust can be attributed to an expatriate supervisor’s managerial abilities and appears to have a stronger impact on work-oriented outcomes, such as job satisfaction and organizational commitment. On the other hand, the relations between EPJ and affective trust that derive from employees’ interpersonal relations with a supervisor appear to stimulate expatriate-oriented outcomes, such as satisfaction with and altruism toward expatriate supervisors. We believe that the particular effects of cognitive and affective trust can be better understood through the categorization of job outcomes. Especially when examined in terms of the supervisorsubordinate relationship, the association between affective, rather than cognitive, trust and expatriate-oriented attitudes and behavior provides results that are potentially supportive of the expatriate supervisory role. To our knowledge, this has not been examined in past studies. Lastly, this study examines the above relationship in a context of international joint ventures in China’s hotel industry. This is the first paper to apply the social exchange concept via trust to the specific labor conditions which pertain in hospitality. Rapid increases in foreign investment over the past three decades have made China a valuable site for expatriate studies (e.g., Chen et al., 2002; Choi and Chen, 2007; Leung et al., 1996). Moreover, results from this study may have practical implications for firms aiming to establish international operations in China, such as in the hotel industry. In summary, the present study examines the effects of trust in mediating between EPJ and employee job outcomes. In the next section, we propose that EPJ can impact job-related outcomes through cognitive trust, and expatriate-directed outcomes through affective trust. In addition, we examine the hypotheses through a survey of expatriate supervisors and their subordinates conducted in joint venture hotels in China. 1. Theory and hypothesis development 1.1. EPJ, trust and differentiated job outcomes According to the theory of social exchange processes, the exchanges between supervisors and employees can be interpersonal and job task related (Mayer et al., 1995; McAllister, 1995). In
the supervisor-subordinate relationship, task exchanges can invoke employee beliefs about a supervisor’s reliability, dependability and competence on the job. Such beliefs may include senses of worker satisfaction and willingness to commit to a task which are not derived from interpersonal relations with the supervisor. Alternatively, interpersonal exchanges involve employees’ feelings towards a superior’s care and the concerns a supervisor demonstrates, which are characterized by a sense of security and the perceived strength of the relationship, rather than being directed at specific jobs or task-oriented outcomes. Specific effects relating to the source of justice have been welldocumented. For example, Cropanzano et al. (2001) propose treating organizations and supervisors as different objects in regard to employee perceptions of fairness. In general, justice treatments attributable to an organization appear to have a greater impact on organization-oriented variables, whereas justice treatments attributable to supervisors appear to have a greater impact on supervisor-oriented variables. Given their distinct nature, we posit that cognitive trust and affective trust play different mediatory roles in the relations between EPJ and work outcomes. Specifically, EPJ is more effectual in promoting the cognitive trust beneficial to job-related exchanges, while affective trust is more beneficial to interpersonal outcomes, such as lending support to the supervisor. We selected four work outcomes, job satisfaction, organizational commitment, satisfaction with expatriate and altruism toward expatriate, through which to examine the different mediatory roles played by cognitive and affective trust. Job satisfaction refers to a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience (Locke, 1976). Organizational commitment is defined as an individual’s attitudes toward an organization that involve a strong belief in and acceptance of organizational goals and values (Mowday et al., 1979). Satisfaction with expatriates indicates how satisfied a subordinate is with an expatriate supervisor. Altruism toward expatriates signifies how much supports supervisor receives from their subordinates, as realized by the subordinate’s willingness to offer assistance that goes beyond his/her job requirements. The first two outcomes are job-related while the latter two exemplify person-related outcomes directed toward the expatriate supervisor. The proposed theoretical model is displayed in Fig. 1. 1.2. Mediating role of cognitive trust between EPJ and job-oriented outcomes Cognitive trust is knowledge-driven. Supervisors are more likely to be perceived as trustworthy when they treat their subordinates fairly in terms of policies and procedures and this can lead to the development of a knowledge-based trust (Shapiro et al., 1992). Supervisors who are perceived to be fair are more likely to be accepted as legitimate authorities, their subordinates will interact with them more and will tend to accede to their requests and instruction (Tyler, 1990). Research shows that procedural justice is positively associated with organizational-related outcomes, such as job satisfaction, organizational commitment, and task performance (Cohen-Charash and Spector, 2001; Dirks and Ferrin, 2002). These attitudes form when employees accomplish their expected role requirements in the job task. Cognitive trust indicates that subordinates are confident in their supervisor’s ability to guide and facilitate their task efforts and that they are more likely to evaluate their work experience in a favorable manner. Thus, the effectiveness of an employee’s task-oriented behavior determines their corresponding levels of satisfaction and commitment to the organization. Having confidence in a supervisor’s accountability and reliability increases the happiness of subordinates and their commitment to the organization in relation to work performance.
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Fig. 1. Hypothesized mediation model of cognitive and affective trust.
Moreover, subordinates with a strong cognitive trust in their expatriate supervisors will show confidence in their supervisor’s knowledge, skills and competency to solve job-related problems (Mayer and Gavin, 2005). This means that subordinates will be more willing to take instructions from their supervisors, resulting in less psychological stress due to unnecessary worry and anxiety on job. As a result, cognitive trust facilitates subordinates’ confidence in the tasks assigned to them by their expatriate supervisor. This increases their levels of satisfaction in the job and means they are more likely to commit to their organization. On the basis of these arguments, cognitive trust should act as a key mediator in the process through which EPJ influences employee job satisfaction and organizational commitment. Hypothesis 1a. Cognitive trust mediates the relationship between EPJ and employee job satisfaction. Hypothesis 1b. Cognitive trust mediates the relationship between EPJ and employee organizational commitment. 1.3. Mediating role of affective trust between EPJ and supervisororiented outcomes Affective trust is related to the perception that a supervisor’s respectful treatment conveys to subordinates. The employee plays an important part in this dyadic relationship and is capable of facilitating the social exchange processes (Lind and Tyler, 1988). A subordinate’s respect for their supervisor makes them more likely to embrace guidance and direction, not only because of their supervisor’s greater power and authority, but because such respect and fair treatment is seen as a way of reinforcing positive interpersonal relations (Yang et al., 2009). In return, interpersonal connections reinforce employee feelings of respect and value and may encourage subsequent reciprocation through offering help toward supervisors and supervisor-oriented improvement in the workplace (Colquitt and Greenberg, 2003). Supportive behavior contributes to the maintenance and enhancement of the social and psychological context as individuals take ownership of their work and show a high level of satisfaction in their supervisors. Supervisory fairness has been found to relate to helping behavior and altruistic action (Colquitt et al., 2001). For example, Tepper and Taylor (2003) found that when supervisors treated their subordinates with procedural justice, a spillover effect was engendered where subordinates began to treat their coworkers and clients similarly. Affective trust signifies an interpersonal state underpinned by emotional bonds and social exchanges between supervisor and subordinate. When expatriate supervisors engage in trustworthy behavior, as measured by communication, care, and the concern they show toward local subordinates, those subordinates are more willing to return the effort and help their
expatriate supervisor to solve problems. Prior research has shown that by communicating with subordinates and including them in decision making, supervisors are able to build trust and good relationships with their subordinates (e.g., Nicholson and Goh, 1983; Lawler and Hackman, 1969). When affective trust is strong, employees are more likely to help and satisfy their expatriate supervisors. Therefore, affective trust should be a key mediator of the process through which EPJ influences employee satisfaction and creates a sense of altruism toward their expatriate supervisors. Hypothesis 2a. Affective trust mediates the relationship between EPJ and employee satisfaction with expatriate supervisors. Hypothesis 2b. Affective trust mediates the relationship between EPJ and employee altruism toward expatriate supervisors. 2. Methods 2.1. Sample and procedures We employed some research assistants from a major university in the Guangzhou area of China to contact international joint ventures and wholly owned subsidiaries of multinational corporations (MNC) in the hotel industry operating in this region. We asked them to participate in a research survey, which was described in general terms as being part of a project examining human resource management processes in MNC operations in China. Data were subsequently collected from 286 individuals in 20 well-known hotel companies in the region. The research assistants visited participating firms and met with human resource managers who worked closely with expatriate supervisors. The managers were asked to identify their colleagues in various departments who reported to expatriate supervisors or managers and to distribute anonymous questionnaires among them. The sample size in each firm ranged from 5 to 12 employees, with a mean of 6. About 54% of the participants were female; 57% were between the age of 20 and 29, 36% were between 30 and 49, and the rest were over 49. Less than half (44%) had a bachelor’s degree or higher level. The majority of the respondents were low- (67%) to middle(33%) level employees. All of the respondents had contact with expatriates at work, and all of them reported directly to an expatriate supervisor or manager. Approximately 32.5% of the surveyed individuals had worked with their expatriate managers for less than 1 year, 66.3% between 1 and 5 years, and 1.2% more than 10 years. Of the expatriate managers with whom the respondents had the most contact, 66.3% had been in China for 6 or more years and 84.3% had been with their current company for 5 years or less. In terms of national origin, 39% of the expatriate managers were from Hong Kong or Taiwan, 32.5% were from
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Europe, 26% were from North America and the rest were from other Asian countries. It should be noted that in Mainland China, managers from Hong Kong and Taiwan are, as a rule, employed on expatriate terms similar to those of their Western counterparts. Regarding the size of company, 8% had less than 100 employees, 37.4% had 101–500 employees, 39.2% had 501–1000, and 15.4% had 1001 or more. 2.2. Measures A five-point scale was used for all the study measures, ranging from 1 (strongly disagree) to 5 (strongly agree). Employees were asked to answer all the survey questions. All measures used in the current analysis were originally developed in English and we invited two bilingual professional experts to translate them into Chinese using the back-translation method. The two translators worked independently to finish English-to-Chinese and Chineseto-English translations. Then discrepancies between the English and Chinese versions were identified, discussed and revised by the two bilingual experts to assure semantic equivalence.
altruism, an aspect of organizational citizenship behavior. Sample items include ‘‘You will offer a hand to the expatriate supervisor when his or her workload is heavy,’’ and ‘‘You are willing to help the expatriate supervisor to solve work-related problems.’’ The coefficient alpha of this 4-item scale was .81. 2.2.5. Job satisfaction Employees’ overall job satisfaction was measured according to Cole’s (1979) measure of job satisfaction. Four items were in this scale and samples included ‘‘I am satisfied with my job’’ and ‘‘The current job measures up to my expectations.’’ Coefficient alpha of this scale was .73. 2.2.6. Organizational commitment Employees’ organizational commitment was measured with a shortened scale of six items adapted from Mowday et al.’s (1979) Organizational Commitment Questionnaire. This six-item scale has been validated by previous scholars in a Chinese context (Leung et al., 1996, 2009). Sample items included ‘‘I am proud to tell others I work at my organization’’ and ‘‘I really care about the fate of this organization.’’ Coefficient alpha of this scale was .79.
2.2.1. Expatriate procedural justice Prior research suggests that, on an abstract level, perceptions of justice are determined by similar principles across cultures (Morris and Leung, 2001). This study adopted a 7-item scale from Colquitt et al. (2001) that focused primarily on procedural justice. Sample items included ‘‘My expatriate supervisor allows me to express my opinion when he makes decision’’ and ‘‘My expatriate supervisor adopts a fair decision making process.’’ Coefficient alpha for this 7item scale was .77.
2.2.7. Demographic variable Respondents’ demographic information included gender, education, age, and tenure with expatriate supervisor. Gender was coded as 1 = female and 0 = male. Education was coded into three categories (1 = primary level, 2 = secondary level, 3 = university level). Age and tenure with the current expatriate supervisor were assessed in terms of years.
2.2.2. Cognitive and affective trust This study adapted McAllister’s (1995) scale with 5 items measuring cognitive trust and another 5 items for affective trust. Sample items of cognitive trust included ‘‘My expatriate supervisor is hard working and reliable’’ and ‘‘According to my expatriate supervisor’s work performance, I’m confident in his job ability.’’ Sample items of affective trust were ‘‘I’m confident that my expatriate supervisor will give me constructive suggestion when I discuss my difficulty with him’’ and ‘‘When I have difficulty, I will inform my expatriate supervisor and know that he is willing to listen.’’ The coefficient alpha of cognitive trust was .81, and that of affective trust was .83.
2.2.8. Marker variable Self-reported data raise concerns about the potential effects of common method variance (Podsakoff et al., 2003). Marker-variable partial correlational analysis was conducted to determine the presence of common method variables in the present study (Lindell and Whitney, 2001). Creative self-efficacy, defined as the belief that one has the ability to produce creative outcomes (Tierney and Farmer, 2002), served as the marker variable. The 3item measure met the criteria proposed by Lindell and Whitney (2001); it was theoretically unrelated to the other variables of interest, similar in format and number of items, novel in content, specific in definition, and possessed high reliability. A sample creative self-efficacy item (alpha = .81) was ‘‘I have confidence in my ability to solve problems creatively.’’
2.2.3. Satisfaction with expatriates Satisfaction with expatriates was measured with two items adapted from Bass (1985). Sample items were ‘‘All in all, you are satisfied with the expatriate supervisor’’, and ‘‘You are satisfied with the leadership style used by the expatriate supervisor for getting your group’s work done.’’ The coefficient alpha of this scale was .85. 2.2.4. Altruism towards expatriates Employee altruism towards expatriates was measured with a 4item scale adapted from Podsakoff et al.’s (1990) measure of
3. Results Table 1 reports the means, standard deviations, and intercorrelations of all variables. The average levels of key variables (e.g., EPJ, trust and individual attitudes and behavior) ranged from medium to relatively high, indicating a generally positive work environment in the surveyed organizations. A number of correlations among study variables were significant and in the expected direction. As expected, the two aspects of trust were related.
Table 1 Means, standard deviations, and zero-order correlations. Variable
Mean
s.d.
1
2
3
4
5
6
1. 2. 3. 4. 5. 6. 7.
3.61 3.79 3.42 3.47 3.55 3.70 3.65
.51 .62 .70 .62 .56 .69 .56
.49** .61** .32** .31** .34** .39**
.55** .24** .38** .37** .39**
.30** .39** .48** .47**
.51** .26** .28**
.42** .44**
.48**
EPJ Cognitive trust Affective trust Job satisfaction Organizational commitment Satisfaction with expatriates Altruism toward expatriates
Note: N = 286. ** p < .01.
A.H.Y. Hon, L. Lu / International Journal of Hospitality Management 29 (2010) 669–676 Table 2 Assessment of common method variance.
Table 3 Fit results for structural equation models. Original r
EPJ—cognitive trust EPJ—affective trust EPJ—job satisfaction EPJ—organizational commitment EPJ—satisfaction with expatriate EPJ—altruism toward expatriate Cognitive trust—job satisfaction Cognitive trust—organizational commitment Cognitive trust—satisfaction with expatriate Cognitive trust—altruism toward expatriate Affective trust—job satisfaction Affective trust—organizational commitment Affective trust—satisfaction with expatriate Affective trust—altruism toward expatriate
673
**
.49 .61** .32** .31** .34** .39** .24** .38** .37** .39** .30** .39** .48** .47**
Corrected r
Fit indices
**
.44 .57** .28** .26** .30** .35** .22** .31** .32** .33** .28** .37** .44** .43**
Model 1 Model 2 Model 3 **
Note: Pairwise (N = 281). ** p < .01.
Before testing the hypotheses, common method variance was assessed using the marker-variable technique. According to Lindell and Whitney (2001), the smallest observed correlation between the marker variable and any other key variable that is theoretically irrelevant is assumed to be due to a common method variance. A prescribed computational technique was used to adjust zero-order correlations by partialing out the correlation reflecting common method variance from the correlations between any two substantive variables. The correlation chosen to reflect common method variance was the one that had the smallest value between correlations of the marker variable and any key variable in this study. Correlations between creative self-efficacy, the marker variable in this study (mean = 3.53, s.d. = .68), and other key variables were uniformly low. Following Lindell and Whitney’s (2001) suggestion, this study chose the smallest positive correlation coefficient involving creative self-efficacy with EPJ (r = .11) for use in the partial correlation adjustment procedure. Partial correlation adjustments were then made on the intercorrelations between EPJ and trust, between EPJ and the four work outcomes, and between trust and the work outcomes. The original correlations and the corrected correlations after removing common method variance are reported in Table 2. The results showed that the corrected correlation coefficients were lower than the original ones; the differences were not substantive, which suggested that common method variable effects did not affect the results of this study. Next, structural equation modeling (SEM) was employed to test the hypotheses. A measurement model was estimated by a
x2
df
RMSEA
NNFI
CFI
416.19** 712.60** 701.93**
205 369 363
.06 .06 .06
.89 .91 .90
.90 .92 .91
p < .01.
confirmatory factor analysis (CFA) before structural models were tested. A full measurement model specifying seven factors resulted in significant factor loadings for all items on their respective factor and acceptable fit indices (x2 = 619.55, df = 356, p < .01; RMSEA = .06, NFI = .92, NNFI = .91, CFI = .92). Because the correlation between the two aspects of trust (r = .55) was relatively high, an alternative measurement model (i.e., six-factor model) was run with the two aspects of trust constrained to load on one latent construct. Fit indices revealed that the six-factor model did not fit as well (x2 = 829.81, df = 362, p < .01; RMSEA = .07, NFI = .86, NNFI = .84, CFI = .86) as the seven-factor model in which the two aspects of trust were specified to load on separate constructs. The chi-square difference of the two models was significant (Dx2 = 210.20, Ddf = 6, p < .001), supporting the distinctiveness of the two aspects of trust and appropriateness of the seven factor model. To test the mediating relationship between EPJ, cognitive and affective trust, and the four outcome variables, we ran a series of structural models following analytical procedures based on the mediatory logic of Baron and Kenny (1986). A full mediating relationship is established if the following criteria are met: (a) in Model 1 (direct effects) with only direct paths from EPJ to the dependent variables, the resulting path coefficients are significant, and (b) in Model 2 (full mediation) including only paths from EPJ to trust mediators and paths from trust mediators to the dependent variables, the resulting path coefficients are significant. Also examined was a partial mediation model (Model 3) similar to Model 2 except for the inclusion of direct effect paths from EPJ to the four outcome variables. Because theory suggests that cognitive and affective trust may covary, they were allowed to correlate in the structural equation analyses. Table 3 presents the model fit statistics, and Table 4 shows the path coefficients of the three models. As displayed in Table 4, for Model 1 (direct effects) the path coefficients were significant from EPJ to job satisfaction (.89, p < .01), organizational commitment (.83, p < .01), satisfaction with expatriate (.78, p < .01) and altruism toward expatriate (.71, p < .01). These results suggested
Table 4 Structural equation path coefficients. Completely standardized path coefficients and (t-values) Model 1 EPJ ! job satisfaction EPJ ! organizational commitment EPJ ! satisfaction of expatriate EPJ ! altruism toward expatriate EPJ ! cognitive trust EPJ ! affective trust Cognitive trust ! job satisfaction Cognitive trust ! organizational commitment Affective trust ! satisfaction with expatriate Affective trust ! altruism toward expatriate Cognitive trust ! satisfaction with expatriate Cognitive trust ! altruism toward expatriate Affective trust ! job satisfaction Affective trust ! organizational commitment
.89 .83 .78 .71
Model 2 **
(6.43 ) (7.16**) (6.52**) (6.71**)
Note: Model 1 = direct effects; Model 2 = full mediation; Model 3 = partial mediation. ** p < .01.
.73 .87 .79 .68 .63 .53 .18 .01 .12 .01
(6.96**) (7.85**) (8.75**) (6.91**) (6.91**) (7.43**) (.95) (.14) (.89) (.08)
Model 3 .19 .14 .11 .22 .72 .87 .28 .01 .06 .16 .00 .15 .06 .13
(.61) (.76) (.53) (.65) (6.65**) (9.23**) (1.95) (.14) (.52) (.88) (.02) (.61) (.73) (.89)
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proceeding to step 2 of mediation test (Baron and Kenny, 1986). When Model 2 (full mediation) was analyzed, the hypothesized relationships were supported. Significant path coefficients were found from EPJ to cognitive trust (.73, p < .01) and affective trust (.87, p < .01), from cognitive trust to job satisfaction (.79, p < .01) and organizational commitment (.68, p < .01), and from affective trust to satisfaction with expatriate (.63, p < .01) and altruism toward expatriate (.53, p < .01). To examine whether cognitive trust is only related to job-oriented outcomes and whether affective trust is only related to supervisor-related outcomes, direct paths were added from cognitive trust to satisfaction with expatriate and altruism toward expatriate, and affective trust to job satisfaction and organizational commitment. The results in Table 4 show that cognitive trust was only associated with joboriented outcomes, while affective trust was related to supervisororiented outcomes only. The fit indices for Model 2 reported in Table 3 (RMSEA = .06, NNFI = .91, CFI = .92) indicate that the data well fitted the model. Finally, Model 3 (partial mediation) was analyzed and none of the direct paths added were significant. As reported in Table 3, the chi-square for Model 2 (x2 = 712.60, df = 369) was larger than that of chi-square for Model 3 (x2 = 701.93, df = 363) though not significantly different (Dx2 = 10.67, Ddf = 6, ns). The addition of four hypothesized paths did not improve the fit over that of Model 2 (full mediation). Additionally, the four added paths in the partial mediation model were not significant. Given no difference in fit, the non-significant paths in the partial mediation model, and its greater parsimony, Model 2 (full mediation) was accepted as a better choice. Fig. 2 summarizes graphically the results of the hypothesis tests. The results indicated that the indirect effects of EPJ on job satisfaction (.24, t = 5.62, p < .05), organizational commitment (.17, t = 5.88, p < .05), satisfaction with expatriate (.23, t = 6.29, p < .05), and altruism toward expatriate (.15, t = 4.10, p < .05) via its effects on either cognitive trust or affective trust were significant. To further examine the causal relationship between justice and trust, an alternative model was tested which included direct paths from cognitive trust and affective trust to EPJ and direct paths from EPJ to the four outcomes. The results indicated this alternative model was also acceptable (x2 = 714.39, df = 370, p < .01; RMSEA = .06, NFI = .89, CFI = .90). However, a chi-square test indicated that the hypothesized model was not significant (Dx2 = 1.79, Ddf = 1, ns). We next tested an additional alternative model that included direct paths from EPJ to cognitive trust and affective trust, direct paths from cognitive trust to the four outcomes, and direct paths from affective trust to the four outcomes. It generated the following fit statistics: x2 = 706.15, df = 365, p < .01; RMSEA = .06, NFI = .89, CFI = .90. The chi-square difference between this alternative model and the more parsimonious hypothesized model was not significant (Dx2 = 6.45, Ddf = 4, ns), which again supported the originally hypothesized model.
4. Discussion This study examined the mediating effect of trust between justice and workplace outcomes in the expatriate-local subordinate relationship. Specifically, it aimed at examining how expatriate procedural justice influenced local employees’ job behavior and attitudes through their cognitive trust and affective trust in the expatriate supervisor. As predicted, the findings from this study made a distinction between cognitive trust and affective trust in relaying the effect of EPJ to different work outcomes. Cognitive trust was proven to mediate the relationship between EPJ and job-related outcomes, such as job satisfaction and organizational commitment. In contrast, affective trust was found to mediate the relationship between EPJ and person-directed outcomes represented by satisfaction with and altruism toward the expatriate. This study extends the existing understanding of the process of procedural justice and its consequences. Based on the social exchange theory (Blau, 1964), we argued that procedural justice displayed by the expatriate supervisors would stimulate the local subordinates to generate favorable work attitudes and behavior. Much existing research has focused on organizational justice, but in practice employees often perceive fairness from the decisions and behavior of their immediate supervisors. By introducing the exchange mechanism into the expatriate-subordinate relationship, our study revealed the validity of the justice effect at an individual level. Specifically, our findings proved that EPJ was associated with organization-level exchange through cognitive trust and with personal exchange through affective trust. This reveals the fact that fair treatment of subordinates may arouse two types of positive attitudes among the employees. They are, respectively, recognition of the supervisor’s competence and appreciation of the supervisor’s personal care. Moreover, past research has suggested that trust is important for developing and maintaining social exchange relationships between supervisors and subordinates (e.g., Aryee et al., 2002). The distinct nature of cognitive trust and affective trust merits examination of their respective effects in interpersonal relationships (Webber, 2008; Webber and Klimoski, 2004). The study revealed that cognitive trust would lead to job-related outcomes and affective trust to person-related outcomes. The empirical findings proved the validity of trust typology. In addition, despite the past studies exploring the relationship between justice, trust and performance outcomes (e.g., Aryee et al., 2002; Dirks and Ferrin, 2002), we believe that this is the first attempt to examine expatriate-specific justice and trust in the hotel sector. At workplaces where diverse cultures meet, employees are particularly sensitive to the issues of fairness and trust (e.g., Toh and Denisi, 2003). Past research has argued that fair treatment from expatriates is a valuable source of social support, assistant,
Fig. 2. The mediation model of cognitive and affective trust (Note: **p < .01).
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and friendship to local employees (Black et al., 1991; Caligiuri and Cascio, 1998). Our study affirmed this statement and further explained the mechanisms at work between expatriate supervisors and local employees. While expatriate studies in the past have mainly focused on cross-cultural adjustment of the expatriates themselves (e.g., Magnini, 2009), this study sheds some light on the ways the performance of expatriates affects local employees. 4.1. Managerial implications The empirical study was conducted in a MNC context in the Chinese hotel industry. Besides the theoretical results, it also brings about some practical implications for managers in the field. In real practice, employees often perceive fairness in terms of the decisions and behavior of their immediate supervisors. This study established a positive relationship between supervisor-specific justice and individual employees’ performance outcomes. Accordingly, we suggest that procedural justice should be taken into consideration in supervisory training programs and labor relationship building. Second, as we focused on the expatriate–subordinate relationship, our results can well be applied to expatriate performance management in relation to globalization. We believe that this study took the initiative to link expatriate job performance with the positive job outcomes of local employees. Moreover, the distinction between job-related versus persondirected behaviors and attitudes from the local employees also constitutes a meaningful framework for expatriate performance management. The procedural justice local employees perceive from their expatriate supervisors gives rise to trust directed at these expatriates. If the perceived justice evokes cognitive trust, i.e., trust of the expatriate’s competence and abilities, then the local subordinates will exhibit job-related positive attitudes. And, if the justice helps in the generation of affective trust, then the local employees will be apt to show personal favor to the expatriate. Either way, EPJ will ultimately enhance the probability of expatriate success in terms of task completion and/or relationship building with the local employees. This is a meaningful result for international managers in making managerial decisions. 4.2. Limitations and future research One limitation of this study is that the dependent variables are based on self-report scales. We used a series of structural equation analyses so that common method variance is unlikely to be a threat. Besides, the marker variable test results somewhat eased this concern. However, it would be desirable for future studies to measure the outcome variables using multiple data sources such as evaluation by the supervisor or a co-worker. A second limitation is that the cross-sectional nature of the study renders comments concerning causality speculative. It is possible that the relationships going from EPJ to trust appeared to be more valid than the opposite flow. Only a longitudinal study design incorporating EPJ and both forms of trust can disentangle the relationships concerned. Research that employs a longitudinal design is thus needed to evaluate our causal claims in the future. Third, the study used two variables each to index expatriateoriented and job-oriented reactions. Although the results are as predicted, this limitation will pace a way for future studies to employ other outcome variables, such as creative behavior and task performance, to evaluate the robustness of the specificity argument. By viewing the supervisor as a knowledgeable leader, the subordinates may be more likely embrace the supervisor’s guidance and direction, and ultimately perform better and more creative on job procedures and complete the task faster and better (Cohen-Charash and Spector, 2001; Dirks and Ferrin, 2002).
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Finally, this study was conducted in hotels located in China. China’s economic reform in the past three decades provides a good setting for observing international interactions. It leaves a question as to whether findings from this study can be applied in other cultural settings. Research has shown that in Asian cultures, individuals highly emphasize harmony and build good relationship when interacting with other organizational members and fitting in their organizations rather than challenging the environment (Brett and Okumura, 1998; Schwartz and Bardi, 2001). Accordingly, it is possible that expatriate procedural justice have different effects in Asian countries than in the United States. Therefore, in the interest of broadening management theory so that it has global (rather than only U.S.-based) relevance and effective management of (nationally) diverse workforces, it is important to understand how procedural justice initiated by expatriate supervisors influences local employee outcomes outside the United States. Thus, research in a new cultural setting can contribute to assessing the generalizability of organizational justice and social exchange theories developed in Western settings (Leung et al., 2009). Nonetheless, it is important for future research to replicate this study in different industrial and cultural contexts. There are a few approaches we would like suggest for future studies. One is to re-examine the found relationship in other work settings, for example, manufacturing or high-technology industry in other cultural settings. The other is to include indigenous cultural factors, such as guanxi and face in China, to enrich the present study model. Besides, this study sheds some light on justice and international management research for future study. For instance, we focused on EPJ because relationships between procedural justice and trust in organizational authorities have been well documented (Dirks and Ferrin, 2002). However, it would also be intriguing to consider expatriate interactional justice, given its emphasis on the crucial role of personal treatment and communication extended to employees by organizational decision makers (Bies and Moag, 1986; Leung et al., 2004, 2009). In addition, with some adjustment the empirical findings from the hotel industry in this study may also apply to other industries. For example, fair treatment of local employees may facilitate knowledge sharing between the expatriate and his/her co-workers in other industries. This study extends the application of the social exchange perspective to the MNC context in developing countries. We have shown that this perspective provides a coherent account of our findings and suggested a number of variables that deserve attention in future research. We hope that the study will simulate the further application of the social exchange perspective to international hospitality management. 5. Conclusion MNCs have set up operations in many developing countries such as China to take advantage of low labor costs and high market potential. Expatriate success is a critical factor for the globalization of the modern hotel industry. However, a high rate of expatriate failure and unsatisfactory performances reported from the field, call for studies looking specifically into this problem (Avril and Magnini, 2007). Generally, the success of expatriate counterparts largely depends on their technical competence and their effective interaction with the local employees (Avril and Magnini, 2007; Chen et al., 2002; Harrison and Shaffer, 2005). The findings from this study address this viewpoint by emphasizing the important role of trust in procedural justice-job outcome relationships. The study investigated how EPJ affects organizational-oriented outcomes (i.e., job satisfaction, organization commitment) via cognitive trust, and supervisor-oriented outcomes (i.e., satisfaction with expatriate, altruism toward expatriate) via affective trust.
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Contents lists available at ScienceDirect
International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman
The mediating role of trust between expatriate procedural justice and employee outcomes in Chinese hotel industry Alice H.Y. Hon a,*, Lin Lu b,1 a b
The Hong Kong Polytechnic University, School of Hotel and Tourism Management, Hung Hom Kowloon, Hong Kong Shanghai Jiao Tong University, Antai College of Economic & Management, 535 Fa Hua Zhen Rd., Shanghai 200052, China
A R T I C L E I N F O
A B S T R A C T
Keywords: Procedural justice Trust Expatriate Work outcomes Hotel
This study draws from social exchange theory to examine the roles cognitive and affective trust play in mediating the relationship between expatriate supervisors and their local employees. We differentiate the two forms of trust by proposing, on the one hand, that cognitive trust mediates the relationship between the procedural justice displayed by expatriate supervisors and job satisfaction and organizational commitment of their employees and, on the other hand, that affective trust mediates the relationship between the procedural justice displayed by expatriates and the level of employee satisfaction with and altruism toward their supervision. We then support the hypotheses by using structural equation modeling (SEM) to analyze data collected from 286 employees working with expatriate supervisors in China’s hotel industry. Implications of the findings are discussed. Crown Copyright ß 2010 Published by Elsevier Ltd. All rights reserved.
With the trend towards globalization and multinational corporations (MNCs) in the hotel industry, an increasing number of expatriate supervisors are now being assigned to oversee local employees (Magnini, 2009). The success of this expatriate supervision is believed to depend on task completion and relationships building with local employees, as these enable organizations to achieve high-levels of overall performance (Harrison and Shaffer, 2005). A number of previous studies have employed the concept of justice to explain job behavior and workplace attitudes in international joint ventures (e.g., Chen et al., 2002; Choi and Chen, 2007; Leung et al., 1996). Others, working from a social exchange perspective, have argued that justice influences performance outcomes by acting through a mediating mechanism in which trust plays a significant role (Aryee et al., 2002; Konovsky and Pugh, 1994). Expatriate supervisors tend to work in diversified workplaces where trust can help build relationships with, and improve the way they are perceived by their local employees (Leung et al., 2009). The mechanism of trust, therefore, merits further examination to determine how it functions in the relationship between expatriate supervisors and local subordinates and to interpret how gaining the trust of local employees can help an expatriate achieve success. Given the various typologies of trust and justice, we decided to focus on the two-dimensional supervisory trust and expatriate procedural justice. Derived from the concept of procedural justice (Leventhal,
* Corresponding author. Tel.: +852 2766 6543; fax: +852 2362 9362. E-mail address: [email protected] (Alice H.Y. Hon). 1 Tel.: +86 21 52301254.
1980; Thibaut and Walker, 1975), expatriate procedural justice (EPJ) is here defined as the fairness of a decision making system and the procedures that determine the policy and other work outcomes that affect a local employee’s perception of his/her expatriate supervisor. The present study makes three specific contributions to the literature. First, it focuses on the effects of the procedural justice displayed by expatriate managers. The supervisor plays an important role in determining how justice is perceived in the workplace. Their conduct can promote positive attitudes and behaviors among workers which can, in turn, benefit the supervisor and, ultimately, the organization as a whole (Bass, 1990; Yukl, 2002). Moreover, the fair treatment of workers has been found to lead to positive exchanges between employees and supervisors (Colquitt et al., 2001; Konovsky and Pugh, 1994; Whitener et al., 1998; Yang et al., 2009). Nonetheless, the question remains of the extent to which supervisory justice can impact workplace outcomes, in terms of both behavior and attitude. This question is especially critical in regards to expatriate supervision as, although perceived justice can build trust in an expatriate supervisor and reduce feelings of uncertainty among local employees, relevant information on the exchange process is incomplete and ambiguous (De Cremer and Sedikides, 2005; Van den Bos and Lind, 2002; Van den Bos and Miedema, 2000; Van den Bos et al., 2001). A review of the current literature did not provide a satisfying answer, as most studies associate employee performance with organizational justice rather than the conduct of the expatriate supervisor (e.g., Chen et al., 2002; Choi and Chen, 2007; Leung et al., 1996). Second, this study recognizes the different roles played by cognitive trust and affective trust and examines the ways in which
0278-4319/$ – see front matter . Crown Copyright ß 2010 Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.ijhm.2010.01.002
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they mediate between EPJ and categorized job outcomes. Trust is defined as a psychological state where an individual intentionally accepts a position of vulnerability through their positive expectations of the behavior of another person (Rousseau et al., 1998). Past studies based on social exchange theory (Blau, 1964) have found evidence of a positive relationship between trust and job outcomes (e.g., Dirks and Ferrin, 2002) and between perceived justice and trust (e.g., Colquitt et al., 2001). Other studies suggest that trust plays a mediatory role between justice and job outcomes (e.g., Aryee et al., 2002; Yang et al., 2009). In their meta-analysis of the concept of trust, Dirks and Ferrin (2002) argue that differences between cognitive and affective trust merit further research, as each may be more salient to particular exchange processes and may have a potentially greater impact on certain outcomes than the other. While cognitive trust relates to individual beliefs about supervisor reliability, dependability and competency, affective trust derives from the feeling of having trust in another person and is associated with reciprocal interpersonal relations of care (Mayer et al., 1995; McAllister, 1995). Research shows that the two-dimensional nature of trust may lead to different outcomes depending on the type of trust that forms the basis of the response (McAllister, 1995; Webber and Klimoski, 2004). Accordingly, we posit that cognitive and affective trust may correspond to different outcomes in connection with procedural justice. On the one hand, the relation between EPJ and cognitive trust can be attributed to an expatriate supervisor’s managerial abilities and appears to have a stronger impact on work-oriented outcomes, such as job satisfaction and organizational commitment. On the other hand, the relations between EPJ and affective trust that derive from employees’ interpersonal relations with a supervisor appear to stimulate expatriate-oriented outcomes, such as satisfaction with and altruism toward expatriate supervisors. We believe that the particular effects of cognitive and affective trust can be better understood through the categorization of job outcomes. Especially when examined in terms of the supervisorsubordinate relationship, the association between affective, rather than cognitive, trust and expatriate-oriented attitudes and behavior provides results that are potentially supportive of the expatriate supervisory role. To our knowledge, this has not been examined in past studies. Lastly, this study examines the above relationship in a context of international joint ventures in China’s hotel industry. This is the first paper to apply the social exchange concept via trust to the specific labor conditions which pertain in hospitality. Rapid increases in foreign investment over the past three decades have made China a valuable site for expatriate studies (e.g., Chen et al., 2002; Choi and Chen, 2007; Leung et al., 1996). Moreover, results from this study may have practical implications for firms aiming to establish international operations in China, such as in the hotel industry. In summary, the present study examines the effects of trust in mediating between EPJ and employee job outcomes. In the next section, we propose that EPJ can impact job-related outcomes through cognitive trust, and expatriate-directed outcomes through affective trust. In addition, we examine the hypotheses through a survey of expatriate supervisors and their subordinates conducted in joint venture hotels in China. 1. Theory and hypothesis development 1.1. EPJ, trust and differentiated job outcomes According to the theory of social exchange processes, the exchanges between supervisors and employees can be interpersonal and job task related (Mayer et al., 1995; McAllister, 1995). In
the supervisor-subordinate relationship, task exchanges can invoke employee beliefs about a supervisor’s reliability, dependability and competence on the job. Such beliefs may include senses of worker satisfaction and willingness to commit to a task which are not derived from interpersonal relations with the supervisor. Alternatively, interpersonal exchanges involve employees’ feelings towards a superior’s care and the concerns a supervisor demonstrates, which are characterized by a sense of security and the perceived strength of the relationship, rather than being directed at specific jobs or task-oriented outcomes. Specific effects relating to the source of justice have been welldocumented. For example, Cropanzano et al. (2001) propose treating organizations and supervisors as different objects in regard to employee perceptions of fairness. In general, justice treatments attributable to an organization appear to have a greater impact on organization-oriented variables, whereas justice treatments attributable to supervisors appear to have a greater impact on supervisor-oriented variables. Given their distinct nature, we posit that cognitive trust and affective trust play different mediatory roles in the relations between EPJ and work outcomes. Specifically, EPJ is more effectual in promoting the cognitive trust beneficial to job-related exchanges, while affective trust is more beneficial to interpersonal outcomes, such as lending support to the supervisor. We selected four work outcomes, job satisfaction, organizational commitment, satisfaction with expatriate and altruism toward expatriate, through which to examine the different mediatory roles played by cognitive and affective trust. Job satisfaction refers to a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience (Locke, 1976). Organizational commitment is defined as an individual’s attitudes toward an organization that involve a strong belief in and acceptance of organizational goals and values (Mowday et al., 1979). Satisfaction with expatriates indicates how satisfied a subordinate is with an expatriate supervisor. Altruism toward expatriates signifies how much supports supervisor receives from their subordinates, as realized by the subordinate’s willingness to offer assistance that goes beyond his/her job requirements. The first two outcomes are job-related while the latter two exemplify person-related outcomes directed toward the expatriate supervisor. The proposed theoretical model is displayed in Fig. 1. 1.2. Mediating role of cognitive trust between EPJ and job-oriented outcomes Cognitive trust is knowledge-driven. Supervisors are more likely to be perceived as trustworthy when they treat their subordinates fairly in terms of policies and procedures and this can lead to the development of a knowledge-based trust (Shapiro et al., 1992). Supervisors who are perceived to be fair are more likely to be accepted as legitimate authorities, their subordinates will interact with them more and will tend to accede to their requests and instruction (Tyler, 1990). Research shows that procedural justice is positively associated with organizational-related outcomes, such as job satisfaction, organizational commitment, and task performance (Cohen-Charash and Spector, 2001; Dirks and Ferrin, 2002). These attitudes form when employees accomplish their expected role requirements in the job task. Cognitive trust indicates that subordinates are confident in their supervisor’s ability to guide and facilitate their task efforts and that they are more likely to evaluate their work experience in a favorable manner. Thus, the effectiveness of an employee’s task-oriented behavior determines their corresponding levels of satisfaction and commitment to the organization. Having confidence in a supervisor’s accountability and reliability increases the happiness of subordinates and their commitment to the organization in relation to work performance.
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Fig. 1. Hypothesized mediation model of cognitive and affective trust.
Moreover, subordinates with a strong cognitive trust in their expatriate supervisors will show confidence in their supervisor’s knowledge, skills and competency to solve job-related problems (Mayer and Gavin, 2005). This means that subordinates will be more willing to take instructions from their supervisors, resulting in less psychological stress due to unnecessary worry and anxiety on job. As a result, cognitive trust facilitates subordinates’ confidence in the tasks assigned to them by their expatriate supervisor. This increases their levels of satisfaction in the job and means they are more likely to commit to their organization. On the basis of these arguments, cognitive trust should act as a key mediator in the process through which EPJ influences employee job satisfaction and organizational commitment. Hypothesis 1a. Cognitive trust mediates the relationship between EPJ and employee job satisfaction. Hypothesis 1b. Cognitive trust mediates the relationship between EPJ and employee organizational commitment. 1.3. Mediating role of affective trust between EPJ and supervisororiented outcomes Affective trust is related to the perception that a supervisor’s respectful treatment conveys to subordinates. The employee plays an important part in this dyadic relationship and is capable of facilitating the social exchange processes (Lind and Tyler, 1988). A subordinate’s respect for their supervisor makes them more likely to embrace guidance and direction, not only because of their supervisor’s greater power and authority, but because such respect and fair treatment is seen as a way of reinforcing positive interpersonal relations (Yang et al., 2009). In return, interpersonal connections reinforce employee feelings of respect and value and may encourage subsequent reciprocation through offering help toward supervisors and supervisor-oriented improvement in the workplace (Colquitt and Greenberg, 2003). Supportive behavior contributes to the maintenance and enhancement of the social and psychological context as individuals take ownership of their work and show a high level of satisfaction in their supervisors. Supervisory fairness has been found to relate to helping behavior and altruistic action (Colquitt et al., 2001). For example, Tepper and Taylor (2003) found that when supervisors treated their subordinates with procedural justice, a spillover effect was engendered where subordinates began to treat their coworkers and clients similarly. Affective trust signifies an interpersonal state underpinned by emotional bonds and social exchanges between supervisor and subordinate. When expatriate supervisors engage in trustworthy behavior, as measured by communication, care, and the concern they show toward local subordinates, those subordinates are more willing to return the effort and help their
expatriate supervisor to solve problems. Prior research has shown that by communicating with subordinates and including them in decision making, supervisors are able to build trust and good relationships with their subordinates (e.g., Nicholson and Goh, 1983; Lawler and Hackman, 1969). When affective trust is strong, employees are more likely to help and satisfy their expatriate supervisors. Therefore, affective trust should be a key mediator of the process through which EPJ influences employee satisfaction and creates a sense of altruism toward their expatriate supervisors. Hypothesis 2a. Affective trust mediates the relationship between EPJ and employee satisfaction with expatriate supervisors. Hypothesis 2b. Affective trust mediates the relationship between EPJ and employee altruism toward expatriate supervisors. 2. Methods 2.1. Sample and procedures We employed some research assistants from a major university in the Guangzhou area of China to contact international joint ventures and wholly owned subsidiaries of multinational corporations (MNC) in the hotel industry operating in this region. We asked them to participate in a research survey, which was described in general terms as being part of a project examining human resource management processes in MNC operations in China. Data were subsequently collected from 286 individuals in 20 well-known hotel companies in the region. The research assistants visited participating firms and met with human resource managers who worked closely with expatriate supervisors. The managers were asked to identify their colleagues in various departments who reported to expatriate supervisors or managers and to distribute anonymous questionnaires among them. The sample size in each firm ranged from 5 to 12 employees, with a mean of 6. About 54% of the participants were female; 57% were between the age of 20 and 29, 36% were between 30 and 49, and the rest were over 49. Less than half (44%) had a bachelor’s degree or higher level. The majority of the respondents were low- (67%) to middle(33%) level employees. All of the respondents had contact with expatriates at work, and all of them reported directly to an expatriate supervisor or manager. Approximately 32.5% of the surveyed individuals had worked with their expatriate managers for less than 1 year, 66.3% between 1 and 5 years, and 1.2% more than 10 years. Of the expatriate managers with whom the respondents had the most contact, 66.3% had been in China for 6 or more years and 84.3% had been with their current company for 5 years or less. In terms of national origin, 39% of the expatriate managers were from Hong Kong or Taiwan, 32.5% were from
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Europe, 26% were from North America and the rest were from other Asian countries. It should be noted that in Mainland China, managers from Hong Kong and Taiwan are, as a rule, employed on expatriate terms similar to those of their Western counterparts. Regarding the size of company, 8% had less than 100 employees, 37.4% had 101–500 employees, 39.2% had 501–1000, and 15.4% had 1001 or more. 2.2. Measures A five-point scale was used for all the study measures, ranging from 1 (strongly disagree) to 5 (strongly agree). Employees were asked to answer all the survey questions. All measures used in the current analysis were originally developed in English and we invited two bilingual professional experts to translate them into Chinese using the back-translation method. The two translators worked independently to finish English-to-Chinese and Chineseto-English translations. Then discrepancies between the English and Chinese versions were identified, discussed and revised by the two bilingual experts to assure semantic equivalence.
altruism, an aspect of organizational citizenship behavior. Sample items include ‘‘You will offer a hand to the expatriate supervisor when his or her workload is heavy,’’ and ‘‘You are willing to help the expatriate supervisor to solve work-related problems.’’ The coefficient alpha of this 4-item scale was .81. 2.2.5. Job satisfaction Employees’ overall job satisfaction was measured according to Cole’s (1979) measure of job satisfaction. Four items were in this scale and samples included ‘‘I am satisfied with my job’’ and ‘‘The current job measures up to my expectations.’’ Coefficient alpha of this scale was .73. 2.2.6. Organizational commitment Employees’ organizational commitment was measured with a shortened scale of six items adapted from Mowday et al.’s (1979) Organizational Commitment Questionnaire. This six-item scale has been validated by previous scholars in a Chinese context (Leung et al., 1996, 2009). Sample items included ‘‘I am proud to tell others I work at my organization’’ and ‘‘I really care about the fate of this organization.’’ Coefficient alpha of this scale was .79.
2.2.1. Expatriate procedural justice Prior research suggests that, on an abstract level, perceptions of justice are determined by similar principles across cultures (Morris and Leung, 2001). This study adopted a 7-item scale from Colquitt et al. (2001) that focused primarily on procedural justice. Sample items included ‘‘My expatriate supervisor allows me to express my opinion when he makes decision’’ and ‘‘My expatriate supervisor adopts a fair decision making process.’’ Coefficient alpha for this 7item scale was .77.
2.2.7. Demographic variable Respondents’ demographic information included gender, education, age, and tenure with expatriate supervisor. Gender was coded as 1 = female and 0 = male. Education was coded into three categories (1 = primary level, 2 = secondary level, 3 = university level). Age and tenure with the current expatriate supervisor were assessed in terms of years.
2.2.2. Cognitive and affective trust This study adapted McAllister’s (1995) scale with 5 items measuring cognitive trust and another 5 items for affective trust. Sample items of cognitive trust included ‘‘My expatriate supervisor is hard working and reliable’’ and ‘‘According to my expatriate supervisor’s work performance, I’m confident in his job ability.’’ Sample items of affective trust were ‘‘I’m confident that my expatriate supervisor will give me constructive suggestion when I discuss my difficulty with him’’ and ‘‘When I have difficulty, I will inform my expatriate supervisor and know that he is willing to listen.’’ The coefficient alpha of cognitive trust was .81, and that of affective trust was .83.
2.2.8. Marker variable Self-reported data raise concerns about the potential effects of common method variance (Podsakoff et al., 2003). Marker-variable partial correlational analysis was conducted to determine the presence of common method variables in the present study (Lindell and Whitney, 2001). Creative self-efficacy, defined as the belief that one has the ability to produce creative outcomes (Tierney and Farmer, 2002), served as the marker variable. The 3item measure met the criteria proposed by Lindell and Whitney (2001); it was theoretically unrelated to the other variables of interest, similar in format and number of items, novel in content, specific in definition, and possessed high reliability. A sample creative self-efficacy item (alpha = .81) was ‘‘I have confidence in my ability to solve problems creatively.’’
2.2.3. Satisfaction with expatriates Satisfaction with expatriates was measured with two items adapted from Bass (1985). Sample items were ‘‘All in all, you are satisfied with the expatriate supervisor’’, and ‘‘You are satisfied with the leadership style used by the expatriate supervisor for getting your group’s work done.’’ The coefficient alpha of this scale was .85. 2.2.4. Altruism towards expatriates Employee altruism towards expatriates was measured with a 4item scale adapted from Podsakoff et al.’s (1990) measure of
3. Results Table 1 reports the means, standard deviations, and intercorrelations of all variables. The average levels of key variables (e.g., EPJ, trust and individual attitudes and behavior) ranged from medium to relatively high, indicating a generally positive work environment in the surveyed organizations. A number of correlations among study variables were significant and in the expected direction. As expected, the two aspects of trust were related.
Table 1 Means, standard deviations, and zero-order correlations. Variable
Mean
s.d.
1
2
3
4
5
6
1. 2. 3. 4. 5. 6. 7.
3.61 3.79 3.42 3.47 3.55 3.70 3.65
.51 .62 .70 .62 .56 .69 .56
.49** .61** .32** .31** .34** .39**
.55** .24** .38** .37** .39**
.30** .39** .48** .47**
.51** .26** .28**
.42** .44**
.48**
EPJ Cognitive trust Affective trust Job satisfaction Organizational commitment Satisfaction with expatriates Altruism toward expatriates
Note: N = 286. ** p < .01.
A.H.Y. Hon, L. Lu / International Journal of Hospitality Management 29 (2010) 669–676 Table 2 Assessment of common method variance.
Table 3 Fit results for structural equation models. Original r
EPJ—cognitive trust EPJ—affective trust EPJ—job satisfaction EPJ—organizational commitment EPJ—satisfaction with expatriate EPJ—altruism toward expatriate Cognitive trust—job satisfaction Cognitive trust—organizational commitment Cognitive trust—satisfaction with expatriate Cognitive trust—altruism toward expatriate Affective trust—job satisfaction Affective trust—organizational commitment Affective trust—satisfaction with expatriate Affective trust—altruism toward expatriate
673
**
.49 .61** .32** .31** .34** .39** .24** .38** .37** .39** .30** .39** .48** .47**
Corrected r
Fit indices
**
.44 .57** .28** .26** .30** .35** .22** .31** .32** .33** .28** .37** .44** .43**
Model 1 Model 2 Model 3 **
Note: Pairwise (N = 281). ** p < .01.
Before testing the hypotheses, common method variance was assessed using the marker-variable technique. According to Lindell and Whitney (2001), the smallest observed correlation between the marker variable and any other key variable that is theoretically irrelevant is assumed to be due to a common method variance. A prescribed computational technique was used to adjust zero-order correlations by partialing out the correlation reflecting common method variance from the correlations between any two substantive variables. The correlation chosen to reflect common method variance was the one that had the smallest value between correlations of the marker variable and any key variable in this study. Correlations between creative self-efficacy, the marker variable in this study (mean = 3.53, s.d. = .68), and other key variables were uniformly low. Following Lindell and Whitney’s (2001) suggestion, this study chose the smallest positive correlation coefficient involving creative self-efficacy with EPJ (r = .11) for use in the partial correlation adjustment procedure. Partial correlation adjustments were then made on the intercorrelations between EPJ and trust, between EPJ and the four work outcomes, and between trust and the work outcomes. The original correlations and the corrected correlations after removing common method variance are reported in Table 2. The results showed that the corrected correlation coefficients were lower than the original ones; the differences were not substantive, which suggested that common method variable effects did not affect the results of this study. Next, structural equation modeling (SEM) was employed to test the hypotheses. A measurement model was estimated by a
x2
df
RMSEA
NNFI
CFI
416.19** 712.60** 701.93**
205 369 363
.06 .06 .06
.89 .91 .90
.90 .92 .91
p < .01.
confirmatory factor analysis (CFA) before structural models were tested. A full measurement model specifying seven factors resulted in significant factor loadings for all items on their respective factor and acceptable fit indices (x2 = 619.55, df = 356, p < .01; RMSEA = .06, NFI = .92, NNFI = .91, CFI = .92). Because the correlation between the two aspects of trust (r = .55) was relatively high, an alternative measurement model (i.e., six-factor model) was run with the two aspects of trust constrained to load on one latent construct. Fit indices revealed that the six-factor model did not fit as well (x2 = 829.81, df = 362, p < .01; RMSEA = .07, NFI = .86, NNFI = .84, CFI = .86) as the seven-factor model in which the two aspects of trust were specified to load on separate constructs. The chi-square difference of the two models was significant (Dx2 = 210.20, Ddf = 6, p < .001), supporting the distinctiveness of the two aspects of trust and appropriateness of the seven factor model. To test the mediating relationship between EPJ, cognitive and affective trust, and the four outcome variables, we ran a series of structural models following analytical procedures based on the mediatory logic of Baron and Kenny (1986). A full mediating relationship is established if the following criteria are met: (a) in Model 1 (direct effects) with only direct paths from EPJ to the dependent variables, the resulting path coefficients are significant, and (b) in Model 2 (full mediation) including only paths from EPJ to trust mediators and paths from trust mediators to the dependent variables, the resulting path coefficients are significant. Also examined was a partial mediation model (Model 3) similar to Model 2 except for the inclusion of direct effect paths from EPJ to the four outcome variables. Because theory suggests that cognitive and affective trust may covary, they were allowed to correlate in the structural equation analyses. Table 3 presents the model fit statistics, and Table 4 shows the path coefficients of the three models. As displayed in Table 4, for Model 1 (direct effects) the path coefficients were significant from EPJ to job satisfaction (.89, p < .01), organizational commitment (.83, p < .01), satisfaction with expatriate (.78, p < .01) and altruism toward expatriate (.71, p < .01). These results suggested
Table 4 Structural equation path coefficients. Completely standardized path coefficients and (t-values) Model 1 EPJ ! job satisfaction EPJ ! organizational commitment EPJ ! satisfaction of expatriate EPJ ! altruism toward expatriate EPJ ! cognitive trust EPJ ! affective trust Cognitive trust ! job satisfaction Cognitive trust ! organizational commitment Affective trust ! satisfaction with expatriate Affective trust ! altruism toward expatriate Cognitive trust ! satisfaction with expatriate Cognitive trust ! altruism toward expatriate Affective trust ! job satisfaction Affective trust ! organizational commitment
.89 .83 .78 .71
Model 2 **
(6.43 ) (7.16**) (6.52**) (6.71**)
Note: Model 1 = direct effects; Model 2 = full mediation; Model 3 = partial mediation. ** p < .01.
.73 .87 .79 .68 .63 .53 .18 .01 .12 .01
(6.96**) (7.85**) (8.75**) (6.91**) (6.91**) (7.43**) (.95) (.14) (.89) (.08)
Model 3 .19 .14 .11 .22 .72 .87 .28 .01 .06 .16 .00 .15 .06 .13
(.61) (.76) (.53) (.65) (6.65**) (9.23**) (1.95) (.14) (.52) (.88) (.02) (.61) (.73) (.89)
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proceeding to step 2 of mediation test (Baron and Kenny, 1986). When Model 2 (full mediation) was analyzed, the hypothesized relationships were supported. Significant path coefficients were found from EPJ to cognitive trust (.73, p < .01) and affective trust (.87, p < .01), from cognitive trust to job satisfaction (.79, p < .01) and organizational commitment (.68, p < .01), and from affective trust to satisfaction with expatriate (.63, p < .01) and altruism toward expatriate (.53, p < .01). To examine whether cognitive trust is only related to job-oriented outcomes and whether affective trust is only related to supervisor-related outcomes, direct paths were added from cognitive trust to satisfaction with expatriate and altruism toward expatriate, and affective trust to job satisfaction and organizational commitment. The results in Table 4 show that cognitive trust was only associated with joboriented outcomes, while affective trust was related to supervisororiented outcomes only. The fit indices for Model 2 reported in Table 3 (RMSEA = .06, NNFI = .91, CFI = .92) indicate that the data well fitted the model. Finally, Model 3 (partial mediation) was analyzed and none of the direct paths added were significant. As reported in Table 3, the chi-square for Model 2 (x2 = 712.60, df = 369) was larger than that of chi-square for Model 3 (x2 = 701.93, df = 363) though not significantly different (Dx2 = 10.67, Ddf = 6, ns). The addition of four hypothesized paths did not improve the fit over that of Model 2 (full mediation). Additionally, the four added paths in the partial mediation model were not significant. Given no difference in fit, the non-significant paths in the partial mediation model, and its greater parsimony, Model 2 (full mediation) was accepted as a better choice. Fig. 2 summarizes graphically the results of the hypothesis tests. The results indicated that the indirect effects of EPJ on job satisfaction (.24, t = 5.62, p < .05), organizational commitment (.17, t = 5.88, p < .05), satisfaction with expatriate (.23, t = 6.29, p < .05), and altruism toward expatriate (.15, t = 4.10, p < .05) via its effects on either cognitive trust or affective trust were significant. To further examine the causal relationship between justice and trust, an alternative model was tested which included direct paths from cognitive trust and affective trust to EPJ and direct paths from EPJ to the four outcomes. The results indicated this alternative model was also acceptable (x2 = 714.39, df = 370, p < .01; RMSEA = .06, NFI = .89, CFI = .90). However, a chi-square test indicated that the hypothesized model was not significant (Dx2 = 1.79, Ddf = 1, ns). We next tested an additional alternative model that included direct paths from EPJ to cognitive trust and affective trust, direct paths from cognitive trust to the four outcomes, and direct paths from affective trust to the four outcomes. It generated the following fit statistics: x2 = 706.15, df = 365, p < .01; RMSEA = .06, NFI = .89, CFI = .90. The chi-square difference between this alternative model and the more parsimonious hypothesized model was not significant (Dx2 = 6.45, Ddf = 4, ns), which again supported the originally hypothesized model.
4. Discussion This study examined the mediating effect of trust between justice and workplace outcomes in the expatriate-local subordinate relationship. Specifically, it aimed at examining how expatriate procedural justice influenced local employees’ job behavior and attitudes through their cognitive trust and affective trust in the expatriate supervisor. As predicted, the findings from this study made a distinction between cognitive trust and affective trust in relaying the effect of EPJ to different work outcomes. Cognitive trust was proven to mediate the relationship between EPJ and job-related outcomes, such as job satisfaction and organizational commitment. In contrast, affective trust was found to mediate the relationship between EPJ and person-directed outcomes represented by satisfaction with and altruism toward the expatriate. This study extends the existing understanding of the process of procedural justice and its consequences. Based on the social exchange theory (Blau, 1964), we argued that procedural justice displayed by the expatriate supervisors would stimulate the local subordinates to generate favorable work attitudes and behavior. Much existing research has focused on organizational justice, but in practice employees often perceive fairness from the decisions and behavior of their immediate supervisors. By introducing the exchange mechanism into the expatriate-subordinate relationship, our study revealed the validity of the justice effect at an individual level. Specifically, our findings proved that EPJ was associated with organization-level exchange through cognitive trust and with personal exchange through affective trust. This reveals the fact that fair treatment of subordinates may arouse two types of positive attitudes among the employees. They are, respectively, recognition of the supervisor’s competence and appreciation of the supervisor’s personal care. Moreover, past research has suggested that trust is important for developing and maintaining social exchange relationships between supervisors and subordinates (e.g., Aryee et al., 2002). The distinct nature of cognitive trust and affective trust merits examination of their respective effects in interpersonal relationships (Webber, 2008; Webber and Klimoski, 2004). The study revealed that cognitive trust would lead to job-related outcomes and affective trust to person-related outcomes. The empirical findings proved the validity of trust typology. In addition, despite the past studies exploring the relationship between justice, trust and performance outcomes (e.g., Aryee et al., 2002; Dirks and Ferrin, 2002), we believe that this is the first attempt to examine expatriate-specific justice and trust in the hotel sector. At workplaces where diverse cultures meet, employees are particularly sensitive to the issues of fairness and trust (e.g., Toh and Denisi, 2003). Past research has argued that fair treatment from expatriates is a valuable source of social support, assistant,
Fig. 2. The mediation model of cognitive and affective trust (Note: **p < .01).
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and friendship to local employees (Black et al., 1991; Caligiuri and Cascio, 1998). Our study affirmed this statement and further explained the mechanisms at work between expatriate supervisors and local employees. While expatriate studies in the past have mainly focused on cross-cultural adjustment of the expatriates themselves (e.g., Magnini, 2009), this study sheds some light on the ways the performance of expatriates affects local employees. 4.1. Managerial implications The empirical study was conducted in a MNC context in the Chinese hotel industry. Besides the theoretical results, it also brings about some practical implications for managers in the field. In real practice, employees often perceive fairness in terms of the decisions and behavior of their immediate supervisors. This study established a positive relationship between supervisor-specific justice and individual employees’ performance outcomes. Accordingly, we suggest that procedural justice should be taken into consideration in supervisory training programs and labor relationship building. Second, as we focused on the expatriate–subordinate relationship, our results can well be applied to expatriate performance management in relation to globalization. We believe that this study took the initiative to link expatriate job performance with the positive job outcomes of local employees. Moreover, the distinction between job-related versus persondirected behaviors and attitudes from the local employees also constitutes a meaningful framework for expatriate performance management. The procedural justice local employees perceive from their expatriate supervisors gives rise to trust directed at these expatriates. If the perceived justice evokes cognitive trust, i.e., trust of the expatriate’s competence and abilities, then the local subordinates will exhibit job-related positive attitudes. And, if the justice helps in the generation of affective trust, then the local employees will be apt to show personal favor to the expatriate. Either way, EPJ will ultimately enhance the probability of expatriate success in terms of task completion and/or relationship building with the local employees. This is a meaningful result for international managers in making managerial decisions. 4.2. Limitations and future research One limitation of this study is that the dependent variables are based on self-report scales. We used a series of structural equation analyses so that common method variance is unlikely to be a threat. Besides, the marker variable test results somewhat eased this concern. However, it would be desirable for future studies to measure the outcome variables using multiple data sources such as evaluation by the supervisor or a co-worker. A second limitation is that the cross-sectional nature of the study renders comments concerning causality speculative. It is possible that the relationships going from EPJ to trust appeared to be more valid than the opposite flow. Only a longitudinal study design incorporating EPJ and both forms of trust can disentangle the relationships concerned. Research that employs a longitudinal design is thus needed to evaluate our causal claims in the future. Third, the study used two variables each to index expatriateoriented and job-oriented reactions. Although the results are as predicted, this limitation will pace a way for future studies to employ other outcome variables, such as creative behavior and task performance, to evaluate the robustness of the specificity argument. By viewing the supervisor as a knowledgeable leader, the subordinates may be more likely embrace the supervisor’s guidance and direction, and ultimately perform better and more creative on job procedures and complete the task faster and better (Cohen-Charash and Spector, 2001; Dirks and Ferrin, 2002).
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Finally, this study was conducted in hotels located in China. China’s economic reform in the past three decades provides a good setting for observing international interactions. It leaves a question as to whether findings from this study can be applied in other cultural settings. Research has shown that in Asian cultures, individuals highly emphasize harmony and build good relationship when interacting with other organizational members and fitting in their organizations rather than challenging the environment (Brett and Okumura, 1998; Schwartz and Bardi, 2001). Accordingly, it is possible that expatriate procedural justice have different effects in Asian countries than in the United States. Therefore, in the interest of broadening management theory so that it has global (rather than only U.S.-based) relevance and effective management of (nationally) diverse workforces, it is important to understand how procedural justice initiated by expatriate supervisors influences local employee outcomes outside the United States. Thus, research in a new cultural setting can contribute to assessing the generalizability of organizational justice and social exchange theories developed in Western settings (Leung et al., 2009). Nonetheless, it is important for future research to replicate this study in different industrial and cultural contexts. There are a few approaches we would like suggest for future studies. One is to re-examine the found relationship in other work settings, for example, manufacturing or high-technology industry in other cultural settings. The other is to include indigenous cultural factors, such as guanxi and face in China, to enrich the present study model. Besides, this study sheds some light on justice and international management research for future study. For instance, we focused on EPJ because relationships between procedural justice and trust in organizational authorities have been well documented (Dirks and Ferrin, 2002). However, it would also be intriguing to consider expatriate interactional justice, given its emphasis on the crucial role of personal treatment and communication extended to employees by organizational decision makers (Bies and Moag, 1986; Leung et al., 2004, 2009). In addition, with some adjustment the empirical findings from the hotel industry in this study may also apply to other industries. For example, fair treatment of local employees may facilitate knowledge sharing between the expatriate and his/her co-workers in other industries. This study extends the application of the social exchange perspective to the MNC context in developing countries. We have shown that this perspective provides a coherent account of our findings and suggested a number of variables that deserve attention in future research. We hope that the study will simulate the further application of the social exchange perspective to international hospitality management. 5. Conclusion MNCs have set up operations in many developing countries such as China to take advantage of low labor costs and high market potential. Expatriate success is a critical factor for the globalization of the modern hotel industry. However, a high rate of expatriate failure and unsatisfactory performances reported from the field, call for studies looking specifically into this problem (Avril and Magnini, 2007). Generally, the success of expatriate counterparts largely depends on their technical competence and their effective interaction with the local employees (Avril and Magnini, 2007; Chen et al., 2002; Harrison and Shaffer, 2005). The findings from this study address this viewpoint by emphasizing the important role of trust in procedural justice-job outcome relationships. The study investigated how EPJ affects organizational-oriented outcomes (i.e., job satisfaction, organization commitment) via cognitive trust, and supervisor-oriented outcomes (i.e., satisfaction with expatriate, altruism toward expatriate) via affective trust.
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