Leadership behaviors and human agency in the valley of despair: A meta-framework for organizational change implementation

For organizational leaders, implementing change in a workplace means influencing employees to do something new or behave differently. For employees, implementing a change at work requires detaching from familiar routines and social systems, learning and practicing the change, and imagining a future in which the change is valued by the organization. As they apply their agency to implement change, employees may experience loss, uncertainty, and frustration that manifests as despair, which can jeopardize the change process and its outcomes. We assemble a meta-theoretical framework using human agency theory, the Valley of Despair model of organizational change, and Full-Range Leadership Theory to explore ways that leaders' behaviors relate to employees' agentic orientations and behaviors during the implementation phase of the organizational change process. Taking both organizational change leaders' and employees' perspectives into account, the theory derived from our meta-framework argues that leaders' behaviors can shape employees' agency and their behaviors during the implementation stage of change in two important ways: 1) certain leader behaviors are likely to prime agentic orientations that facilitate changing, and 2) certain leader behaviors may help to mitigate employees' despair, enabling the firm to derive value from employees' change implementation behaviors.     

HRM implementation by multiple HRM actors: a social exchange perspective

Abstract

In this study, we understand HRM implementation as a social process that depends on the social exchange relationships between line managers and both HRM professionals and employees. As such, we offer a fresh approach to understanding HRM implementation by concentrating on the social exchange among HRM actors. We do so by investigating to what extent these exchange relationships influence HRM implementation, as reflected in employees’ perceptions of the presence of HRM practices and their affective commitment. We collected multilevel data from two sources (line managers and employees) and in two phases in a Dutch engineering firm, and obtained fully matched manager – employee information from 75 employees and 20 line managers. Our results show that employees perceive a larger number of HRM practices when they have a good relationship with their line managers and when their line managers are motivated to implement HRM practices. Line managers, in turn, reciprocate perceived support from the HRM department with greater motivation to implement these practices. We conclude that because HRM actors engage in social interactions, HRM practices will be implemented at the organizational level because employees perceive the presence of HRM practices and then reciprocate this with affective commitment.     

Do firm characteristics affect environmental sustainability? A literature review-based assessment

Combating environmental pollution and climate change mandates strong commitment and participation of all firms across sectors. However, the environmental conduct of firms is seen to vary as per their characteristics, especially their size, ownership, and age. Current understanding of these characteristics' influence on environmental sustainability is limited, fragmented, and scattered across the literature, which this study seeks to improve and contribute to. Based on a rigorous screening of the last 25 years' literature (1996–2020), the study develops a comprehensive understanding of firm characteristics' implications for environmental sustainability, namely, environmental practices implementation, environmental drivers, environmental barriers, and associated (environmental, cost/economic, operational, and organizational) performance implications. Several meaningful and generalizable trends, conflicts, and consensus, or lack thereof, are revealed. For instance, the extent of environmental practices' implementation can be seen to be greater at large firms' (vis-à-vis small ones) and at foreign firms' (vis-à-vis local ones), though not much difference is seen between old and new firms. Also, several metafactors such as resources availability, innovation propensity, and bureaucracy and organizational inertia are identified that explain the differential influence of firm characteristics on environmental sustainability and dispel erroneous stereotypes. Finally, gaps in the literature offering avenues for future research are highlighted along with implications for research, theory, and practice. Results are expected to help policymakers and practitioners develop policies/interventions that ensure all firms, irrespective of their characteristics contribute to environmental sustainability. A comprehensive review of this kind has not been previously undertaken and constitutes the novelty of this work.     

Subcultures and sustainability practices: the impact on understanding corporate sustainability

In this paper we present findings of how employees from a single organization understand corporate sustainability. Responses from 255 survey participants indicate (1) that differences exist in how employees understand corporate sustainability and (2) that these differences can be partially explained by the presence of organizational subcultures and by differences in employee awareness of the organization's sustainability practices. In particular, findings reveal that employees from a subculture with a stronger emphasis on hierarchical and bureaucratic values emphasize an economic understanding of corporate sustainability. Implications for research and practice are discussed. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Perceived human resource system strength and employee reactions toward change: Revisiting human resource's remit as change agent

Although scholars have highlighted human resource's (HR's) important role as a change agent, we know little about the extent to which HR influences the change context to foster positive employee responses and support organizational changes. This study positions perceived HR system strength as an important internal context factor that influences employees' reactions toward change. Drawing on emotion theory and social exchange theory, we analyze the mechanisms through which employees' perceptions of HR system strength lead to positive employee responses to organizational change. Data from 704 employees in a UK police force showed that employees' perceptions of HR system strength were positively related to their ability to cope with organizational change and that this relationship was simultaneously mediated by state positive affect and perceived organizational support. Moreover, our findings demonstrated that coping with organizational change was positively related to employees' change‐supportive behavior. This study is important because it broadens the remit of HR's role as change agent and provides valuable insight into how HR positively influences employee outcomes during organizational change.     

Exploring environmental,social, and governance disclosure effects on the S&P 500 financial performance

Much of the literature measuring the relationship between environmental, social, and governance (ESG) scores and firm performance treats the score as a measure of sustainability performance. In this study, we treat a firm's ESG score as a demonstration of strategic choice in the level of transparency that results in increased firm performance as measured by Tobin's Q and return on assets. Performance differences are a result of choice moderated by the size of the firm as measured by employees and sales. We analyze 467 firms in the S&P 500 from 2009 to 2015. Applying legitimacy and stakeholder theory, we find that there is significant difference between groups with respect to disclosure and performance. The results of quartile analysis by sales, capitalization, and Tobin's Q are relevant to understand the influence that the ESG score has on financial performance. ESG influences on Tobin's Q are greatest for large firms as measured by sales, as opposed to the ESG affects on Tobin's Q and return on asset for smallest firms as measured by market capitalization.     

Corporate sustainability and financial performance: Collective reputation as moderator of the relationship between environmental performance and firm market value

Markets value superior corporate sustainability performance in part because investors use a firm's environmental performance as a signal of desirable but difficult-to-observe attributes, such as the firm's integrity capacity. Yet a signaling conflict can arise when a firm belongs to an organizational form that has a collective reputation for being unethical. In such circumstances, the firm's environmental performance may no longer credibly signal its underlying integrity capacity, leading markets to adjust downward the value they would otherwise place on the firm's environmental performance. Using longitudinal data on South Korean firms, we find that improvements in firm environmental performance lead to smaller increases in market values for firms belonging to a poorly reputed organizational form. However, firms can partially recover lost value by adopting firm features that reduce the signaling conflict, thereby restoring the notion of corporate sustainability performance driving firm market values.     

Organizational capacity for change and firm performance in a transition economy

This study explored some human resource and human systems' aspects of the competitive dynamics for firms attempting to survive and prosper within Russia, a highly volatile transition economy. Overall, this study adds to our understanding of international strategic human resource management, dynamic capabilities, and the generation of competitive advantage within transition economies.

We found that a relatively new construct derived from the dynamic capabilities and organizational change literatures, known as ‘organizational capacity for change,’ is positively associated with firm performance within a wide variety of Russian firms. Furthermore, we find that the relationship between organizational capacity for change and firm performance is stronger when there are relatively high levels of uncertainty with the task environment. Finally, we found that organizational capacity for change is an important attribute in all sizes of organizations, not just for large organizations as hypothesized.     

The moderating effect of organizational change cynicism on middle manager strategy commitment

This paper focuses on middle managers as key actors in organizational strategizing. Through an empirical study we explore some of the barriers to effective implementation of strategic change initiatives. This research is motivated by the recognition that to understand strategizing in organizations we need to appreciate both when it is successful and when it is not, but that we still know little about the latter. To develop better insights into what lies behind the actions of strategists and to present implications for HR managers concerned about increasing the chance of successful change and reducing the prevalence of organizational change cynicism (OCC), we first explore antecedents to middle managers' strategy commitment. We examine perceptions of the workplace context, including procedural justice and senior management support for the strategy and middle managers' levels of strategy relevant knowledge, incorporating participation in decision-making and information available for implementation. We then investigate the moderated effect of OCC on middle managers' strategy commitment. Our study suggests that failure of a new strategy or strategic direction is due to the inability or resistance of individual employees to commit to a strategy and adopt the necessary behaviours to accomplish an organization's strategic objective.     

OCB and external–internal social networks: effects on individual performance and adaptation to change

In this study, we develop and test a model that links one's internal and external social network structures to his or her willingness and ability to adapt in a changing work context. Using a survey data from 371 employees working in 133 different branches of a large financial firm, we find that individual behaviors that explain task performance and individual adaptation to change are affected by a number of supportive social ties (size of the support network) with which one receives support inside and, mostly, outside the workplace. The results also show that individual performance and adaptation to change are affected by the level of workers' organizational citizenship behavior. We also identify a mediating effect exerted by the informational network structure (mostly an internal network) on the relationship between the support network (mostly an external network) and individual task performance.     

How German employees of different ages conserve resources: perceived age discrimination and affective organizational commitment

The literature claims that perceived age discrimination functions as a stressor. Using conservation of resources theory, this paper examines the moderating effect of employees' age on the relationship between employees' perceived age discrimination and affective organizational commitment. We collected survey data from 1255 German employees. Results show a negative relationship between perceived age discrimination and affective organizational commitment. This relationship was stronger for older employees than for younger employees. Older employees appear to be more vulnerable to the stressor of perceived age discrimination and more motivated to conserve resources by reducing their affective organizational commitment than their younger colleagues. These findings have important implications for organizations' retention management in times of demographic change.     

Enactment of a Sustainable Vision in the Dual Context of the Tropical Biosphere and the Developing World: A Case Study of Belize Natural Energy

Nowhere is economic, cultural, and environmental sustainability more critical than in a country like Belize, where the developing world merges with the tropical biosphere. Through a single‐organization case study design, the authors provide insight into Belize's only oil‐producing company, specifically examining its sustainability practices and its enactment of an organizational vision centered on sustainability. Our global economy relies heavily on fossil fuels; such reliance requires us to understand the sustainability efforts of these companies. Determining how sustainability is enacted in these organizations forms the basis for how these practices can be replicated. Data collection included multiple interviews with employees throughout the organization, ethnographic observation, and document analysis. The results yielded an understanding of how sustainability practices are enacted in organizational communication.     

So,What Am I Supposed to Do? A Multilevel Examination of Role Clarity

Although prior research generally holds that role clarity is affected by both individual characteristics and organizational contexts, current conceptual or empirical models do not reflect the multilevel nature of these antecedents. A more complete understanding of how role clarity emanates from different organizational levels is necessary to help prevent poor job performance and other harmful consequences of ambiguous role expectations. To address this, I begin this research by investigating the effects of internal work locus of control, general self‐efficacy, and leader–member exchange on role clarity. With respect to the cross‐level effects, I focus on the roles of a manager's control style and the organization's strategy‐making pattern. Analyses of a multi‐industry, multilevel dataset collected from 724 employees and 124 managers in 25 organizations in Finland suggest that all of the individual‐level independent variables and a deliberate strategy‐making pattern improve role clarity. However, a deliberate strategy‐making pattern negatively moderates the relationship between general self‐efficacy and role clarity. Finally, even though an outcome‐based control system causes role ambiguity among employees in most functional areas, it may be an effective driver of role clarity among employees in sales jobs.     

From market failure to organisational failure

In this paper, we argue that environmental economists who have dedicated their attention to problems of market and regulatory failure have been remiss in ignoring the potential for failure in the one institution that actually manages environmental resources - the business firm. Traditionally the firm has been modelled as a unitary, rational, optimising persona ficta. There is, however, abundant empirical and theoretical evidence to suggest that the business firm is an imperfect institution in that there are systematic deviations between the environmental objectives of the firm's leaders (principals) and the actions of the firm's employees (agents) which determine environmental performance. In the paper, we draw parallels between the causes of market failure and public policy tools to correct them on one hand and the causes of organisational failure and the management tools suited to their remedy on the other. Although much of the paper is concerned with the interrelationship between public policy that promotes sustainability and business policy to fashion a sustainable enterprise, our work is relevant irrespective of the reason why a firm's principal may want to improve environmental performance. No matter what the reason, the principal must concern him- or herself with operationalising objectives in management systems. It is consistent with the precautionary principle to assume that employees will do what the firm measures and rewards, not what its principal says is important. We build a verbal model, based on the language of principal-agent theory, to analyse how different management instruments might be employed to improve the firm's environmental performance. The model is one of three decision makers in a vertical hierarchy. Each of the first two has various instruments at its disposal to influence the behaviour of the agents subordinate to it. In the end, the goal is to ensure consistency between social, economic, and personal objectives. The specific management tools we analyse, with reference to the formal modelling which has appeared in the literature, include the compensation system, quantification and monitoring of non-financial objectives, internal pricing, horizontal task restructuring, centralisation vs. decentralisation of decision making, and corporate sanctions of agents for negligence. We conclude the paper by reiterating that the corporate policy statements to the effect that the firm should respect the environment are insufficient to ensure that result. In addition, firms' principals must operationalise that goal in the systems of measurement and control which govern the behaviour of those who really matter - the employees.     

Exploring the black box in Spanish firms: the effect of the actual and perceived system on employees' commitment and organizational performance

Several studies in strategic human resource management have described a relationship between people-management practices and organizational performance. However, the mediating processes that explain such a relationship remain unexplored. This study examines how both the actual people-management system (assessed by managers) and the perceived system (assessed by employees) influence employees' commitment, and how this in turn contributes to employee and organizational outcomes. Multilevel analyses of a sample of 732 employees from 26 Spanish small and medium-sized enterprises (SMEs) supported a model in which employees' commitment mediates between the actual system and unit-level absenteeism, which in turn has an effect on productivity. Results also showed the importance of the perceived system in attempting to understand the true effect of the actual system on employees' commitment to the organization.     

Changes in employees' attitudes at work following an acquisition: a comparative study by acquisition type

The purpose of this paper is to examine how employee reaction varies in the event of an acquisition, and ultimately, to show that it depends on the acquisition context; specifically: (1) the legitimacy of the purchasing firm's identity, and (2) the extent of the organizational changes or discontinuity resulting from the acquisition. The research hypotheses considered are tested using a single questionnaire administered repeatedly over a five‐year period to the employees of 85 sites belonging initially to three different firms: ABC (the acquiring firm), EFG (the firm taken over in a friendly acquisition) and XYZ (firm absorbed in a hostile acquisition). The results mainly show that employees working at sites belonging initially to EFG have higher organizational identification scores than those at sites belonging initially to XYZ. Insecurity scores increase at all sites after the acquisition period, even for employees who originally belonged to ABC. Finally, a temporal link is seen between organizational identification, insecurity and job satisfaction.     

When do threats mobilize managers for organizational change toward sustainability? An environmental belief model

In pursuit of counteracting today's environmental problems, corporate management will have to implement organizational changes factoring in sustainability, which is why it is important to understand exactly what leads managers to initiate these changes. It has been established that managers' personal values are critical for their behavior and that threats to these values can mobilize managers to change their actions. However, when confronted with environment-related threats, managers may face value conflicts and various tensions between their aim to implement sustainable changes and their desire to fulfill business requirements of their job positions. Only recently have researchers begun to investigate the underlying beliefs that may lead managers to initiate organizational change toward sustainability. Borrowing theoretical assumptions from the domain of health psychology (from the well-established health belief model), the present conceptual article develops an environmental belief model that specifies when exactly threats lead managers to initiate organizational change. The environmental belief model proposes that environment-related threats trigger change (i) when managers believe that their firms are susceptible to these threats, (ii) the threats are considered as serious for the company, (iii) the perceived benefits of the change outperform (iv) the perceived barriers, and when there is (v) an external cue (e.g., an information campaign). All these propositions are supported with empirical findings from business contexts. Besides theoretical advancement on the role of environmental threats as precipitators of organizational change, the model provides guidance on how to frame environment-related threats that will mobilize managers for organizational change toward sustainability.     

Firm Productivity Moderated Link Between Human Capital and Compensation: The Significance of Task‐Specific Human Capital

The human capital of a firm as manifested by employee knowledge and experience represents a key resource of a firm's capabilities. Prior empirical studies have found that firms composed of high levels of human capital experience superior firm performance. Human capital theory proposes that an individual's general or firm‐specific human capital is positively related to compensation. However, empirical studies examining firm‐specific human capital's association with higher employee compensation have been inconclusive. The current study proposes that firm‐specific human capital be categorized as task‐specific and non‐task‐specific. Employees accumulate task‐specific human capital through duties conducted in their current position. Non‐task‐specific human capital represents experiences gained in prior positions to an employee's current job within the firm. Utilizing human capital data from 38,390 employees representing 76 firms in the IT sector, this study examines the association between forms of human capital and employee compensation at different levels of firm productivity. Results show that task‐specific human capital is associated with higher employee compensation. In addition, firm productivity moderates this association.     

Two Dimensions of Corporate Sustainability Assessment: Towards a Comprehensive Framework

Over the last years, many approaches have emerged that attempt to measure the contribution of firms to sustainable development, i.e. corporate sustainability. Our review of existing methodologies for the assessment of corporate sustainability reveals two major shortcomings. First, value creation as a core condition for sustainability as well as for further contributions to economic sustainability is often ignored in these assessments, suggesting that financial and non‐financial organizational processes are separable. Second, existing approaches fail to differentiate between the actual contribution of a firm to sustainability on the one hand, and governance‐related features aimed at attaining this contribution on the other. We argue that the implementation of sustainability‐oriented organizational structures and managerial instruments alone does not necessarily guarantee sustainability performance. Therefore, besides the dimension of current sustainability performance, we introduce the notion of sustainability governance as a second distinct dimension of corporate sustainability assessment. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Human resource management and the performance of Western firms in China

The study examines the relationship between human resource management and organizational performance in sixty-two manufacturing Chinese-Western joint ventures and wholly owned subsidiaries located in different parts of the People's Republic of China. A positive relation was found between firm performance and the extent to which firms used a 'high-performance' HRM system as well as the degree to which they engaged in the integration of HRM and firm strategy.