Corporate governance and organizational commitment: the mediating role of organizational culture
Main Article Content
Abstract
This study seeks to determine the impact of corporate governance dimensions (compliance with the corporate governance code, top management, control environment, transparency and disclosure, rights of shareholders and stakeholders) on the three main types of organizational commitment, (affective, continuance and normative). It also aims at examining the impact of organizational culture, as an intermediate variable, on the relationship between the two above mentioned variables. The sample of this study comprised 152 respondents working at five types of Jordanian companies. The results of the study have confirmed the positive effect of the three corporate governance dimensions (compliance with the corporate governance code, top management, and control environment) on three types of organizational commitment (affective, continuance, and normative). The results also confirmed that there is no significant effect of t transparency and disclosure and the rights of shareholders and stakeholders on affective and normative commitment.
Keywords:
Downloads
Article Details
References
Adebayo, M. Bakare, I. A. O. Yusuf, B. & Ishmael, O. (2014). Good Corporate Governance and Organisational Performance: An Empirical Analysis, International Journal of Humanities and Social Science, Vol. 4, No. 7(1), 170-178.
Agrawal, A. & Chadha, S. (2005). Corporate governance and accounting scandals, The Journal of Law and Economics, Vol 48, No. 2, 371-406. https://doi.org/10.1086/430808 DOI: https://doi.org/10.1086/430808
Alam, A. (2011). Evaluation of Allen and Meyer's Organizational Commitment Scale: A Cross-Cultural Application in Pakistan, Journal of Education and Vocational Research, Vol. 1, No. 3, pp. 80-86. https://doi.org/10.22610/jevr.v1i3.13 DOI: https://doi.org/10.22610/jevr.v1i3.13
Allen, N.J. & Meyer, J.P. (1990): The measurement and antecedents of affective, continuance and normative commitment to the company, Journal of Occupational Psychology, Vol. 63 No. 1, pp. 1-18. https://doi.org/10.1111/j.2044-8325.1990.tb00506.x DOI: https://doi.org/10.1111/j.2044-8325.1990.tb00506.x
Allen, N.J., & Meyer, J.P. (1996). Affective, continuance, and normative commitment to the organization: An examination of construct validity. Journal of Vocational Behavior, 49, 252-276. https://doi.org/10.1006/jvbe.1996.0043 DOI: https://doi.org/10.1006/jvbe.1996.0043
Altug, S. G. (2010). Business cycles: fact, fallacy, and fantasy, New Jersey: World Scientific Publishing Co. https://doi.org/10.1142/6934 DOI: https://doi.org/10.1142/6934
Aluchna, M. (2009).Applying Corporate Governance in Europe, in: Aras, G. Crowther, D. and Aras, G. (Eds). Global perspectives on corporate governance and CSR, pp 47-72, Surrey: Gower Publishing Limited.
Andreas R. (2010), Collaborative Governance, Corporate Governance, Vol. 10, No. 4, 500-511. https://doi.org/10.1108/14720701011069713
Baer, M. (2013). International Corporations as Actors in Global Governance, Cologne: Springer Fachmedien Wiesbaden. https://doi.org/10.1007/978-3-658-00406-4 DOI: https://doi.org/10.1007/978-3-658-00406-4_2
Barnes, J. Jackson,D. W. utt, M. D. & Kumar, A. (2006). The Role of Culture Strength in Shaping Sales Force Outcomes," Journal of Personal Setting and Sales Management, Vol 26, N0, 3, 255-269. https://doi.org/10.2753/PSS0885-3134260301 DOI: https://doi.org/10.2753/PSS0885-3134260301
Barns, S. (2016). Mine your data: open data, digital strategies and entrepreneurial governance by code, Urban Geography, April, Routledge, 1-18. https://doi.org/10.1080/02723638.2016.1139876 DOI: https://doi.org/10.1080/02723638.2016.1139876
Basco, S. (2018). Housing bubbles: Origins and consequences, Cham: Palgrave Macmillan. https://doi.org/10.1007/978-3-030-00587-0 DOI: https://doi.org/10.1007/978-3-030-00587-0
Bellingham, R. (2003), Ethical leadership, Amherst: HRD Press, Inc.
Bertelli, A. M. (2012). The Political Economy of Public Sector Governance, New York: Cambridge University Press. DOI: https://doi.org/10.1017/CBO9781139018982
Berthelot, S. Morris, T. & Morrill, C. (2010). Corporate governance rating and financial performance: a Canadian study, Corporate Governance, Vol 10, No, 5, 635-646. https://doi.org/10.1108/14720701011085599 DOI: https://doi.org/10.1108/14720701011085599
Cameron, K & Quinn, R. (2006). Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. San Francisco: Jossey-Bass.
Campbell, S. M. R., (2013): The applicability of commitment models in a unionized professional workplace, International Journal of Organizational Analysis, Vol. 21 Iss 4 pp. 488 – 503. https://doi.org/10.1108/IJOA-06-2012-0591 DOI: https://doi.org/10.1108/IJOA-06-2012-0591
Cho, Vincent & Huang, Xu, (2012): Professional commitment, organizational commitment, and the intention to leave for professional advancement, Information Technology & People, Vol. 25 Iss 1 pp. 31 - 54. https://doi.org/10.1108/09593841211204335 DOI: https://doi.org/10.1108/09593841211204335
Companies Control Department (2009). Jordanian corporate governance code, available at: https://ecgi.global (retrieved Jan 3, 2020).
Daley, G. A. Levy, D. G. Kaganoff, T. Augustine, C. A. Benjamin, R. Bikson, T. K. Gates, S. M. Moini, J. S. (2003). A Strategic Governance Review for Multi-organizational Systems of Education, Training, and Professional Development, Rand.
Dignam, A. & Lowry, J. (2006), Corporate governance 1: corporate governance and corporate theory'', Company Law, Core Text Series, New York: Oxford University Press.
Dimsdale, N. & Prevezer, M. (1994), Capital Markets and Corporate Governance, Oxford: Clarendon Press. https://doi.org/10.1093/acprof:oso/9780198287889.001.0001 DOI: https://doi.org/10.1093/acprof:oso/9780198287889.001.0001
Dobbin, F. & Jung, J. (2010). The misapplication of Mr. Michael Jensen: How agency theory brought down the economy and why it might again, Research in the Sociology of Organization, Vol 30B, 29-64. https://doi.org/10.1108/S0733-558X(2010)000030B006 DOI: https://doi.org/10.1108/S0733-558X(2010)000030B006
Drumaux, A. & Joyce, P. (2018). Strategic management for public governance in Europe, London: Palgrave Macmillan. https://doi.org/10.1057/978-1-137-54764-4 DOI: https://doi.org/10.1057/978-1-137-54764-4
du Plessis, J. J. Hargovan, A. & Bagaric, M. (2011). Principles of Contemporary Corporate Governance, Cambridge: Cambridge University Press.
Durnev, Artyom, and E. Han Kim. 2005. ''To Steal or Not to Steal: Firm Attributes, Legal Environment, and Valuation, 60, Journal of Finance, 1461-93. https://doi.org/10.1111/j.1540-6261.2005.00767.x DOI: https://doi.org/10.1111/j.1540-6261.2005.00767.x
Eldomiaty, T. T. and Choi. C. J. (2006). Corporate governance and strategic transparency: East Asia in the international business systems, Corporate Governance, Vol 6, No. 3, 281-295. https://doi.org/10.1108/14720700610671882 DOI: https://doi.org/10.1108/14720700610671882
Fahy, M. R. J. and Weiner, A. (2004). Beyond governance, West Sussex: John Wiley & Sons Ltd,
Finkelstein, L.S. (1995), ''What is global governance?, Global Governance, Vol. 1 No. 3, 367-72. https://doi.org/10.1163/19426720-001-03-90000007 DOI: https://doi.org/10.1163/19426720-001-03-90000007
Gilson, R. J. (2018). From Corporate Law to Corporate Governance in: Gordon, J. N. and Ringe, W-G (Eds). The Oxford Handbook of Corporate Law and Governance, pp 1-30, Oxford: Oxford University Press.
Grembergen, W. V. (2004). Strategies for Information Technology Governance, London: Idea Group Publishing. https://doi.org/10.4018/978-1-59140-140-7 DOI: https://doi.org/10.4018/978-1-59140-140-7
Hackett, R. D., Bycio, P., & Hausdorf, P. A. (1994). Further assessments of Meyer and Allen's (1991) three-component model of organizational commitment. Journal of Applied Psychology, 79, 15-23. https://doi.org/10.1037/0021-9010.79.1.15 DOI: https://doi.org/10.1037/0021-9010.79.1.15
Hair, J. F. Page, M. and Brunsveld, N. (2020). Essentials of Business Research Methods, New York: Routledge. https://doi.org/10.4324/9780429203374 DOI: https://doi.org/10.4324/9780429203374
Handley-Schachler, M. Juleff, L. and Paton, C. (2007). Corporate governance in the financial services sector. Corporate Governance, Vol. 7, NO. 5, 623-634. https://doi.org/10.1108/14720700710827202 DOI: https://doi.org/10.1108/14720700710827202
Haspeslagh, P. (2010), Corporate governance and the current crisis , Corporate Governance, Vol 10, No 4, 375-377. https://doi.org/10.1108/14720701011069614 DOI: https://doi.org/10.1108/14720701011069614
Hemphill, T. (2010). The creative capitalism: Corporate governance model: How radical an approach to modern capitalism?, International Journal of Law and Management, Vol. 52 No. 2, 110-123. https://doi.org/10.1108/17542431011029415 DOI: https://doi.org/10.1108/17542431011029415
Heneman, H. G & Judge, T. A. (2009), Staffing Organizations, New York: McGraw Hill International Edition.
Heracleous, L. 2001. Impact of Corporate Governance on Organizational Performance. McKinsey Quarterly, Vol 2 (20), 20-23.
Hertie School of Governance and OECD (2016). The Governance Report 2016, Oxford: Oxford University Press.
Hogler, R. and Gross, M. A. & Byrne, Z. S. (2009). Making governance work in academia, International Journal of Conflict Management, Vol 20, No. 1, 31-45. https://doi.org/10.1108/10444060910931594 DOI: https://doi.org/10.1108/10444060910931594
Hoopes, J. (2003). False prophets, Cambridge: Perseus Publishing.
Iqbal, A. (2010). Employee Turnover: Causes, Consequences and Retention Strategies in the Saudi Organizations, The Business Review, Cambridge, Vol. 16, No. 2, 275-281.
Jaros, S. (2007). Meyer and Allen Model of Organizational Commitment: Measurement Issues, The Icfai Journal of Organizational Behavior, Vol. VI, No. 4, 7-25.
Jensen, M. (1993). The modern industrial revolution: Exit and failure of internal control systems, Journal of Finance, Vol 48, 931-880. https://doi.org/10.1111/j.1540-6261.1993.tb04022.x DOI: https://doi.org/10.1111/j.1540-6261.1993.tb04022.x
Kamesaka, A. (2019). Governance, Risk and Financial Impact of Mega Disasters: Lessons from Japan, Singapore: Springer Nature Singapore Pte Ltd. https://doi.org/10.1007/978-981-13-9005-0 DOI: https://doi.org/10.1007/978-981-13-9005-0
Keohane, R.O. & Nye, J.S. (2000), Introduction'', in Nye, J.S. and Donahue, J.D. (Eds), Governance in a Globalizing World, pp. 1-41, Washington, DC, Brookings Institution Press,
Khanifar, H.; Hajlou , M. H., Abdolhosseini B.; Ataei, F. & Soltani H. (2013): Factors Affecting the Organizational Commitment of Employees and Customer Satisfaction, Journal of Basic and Applied Scientific Research, 2 (11), pp. 11180-11185.
Khiari, W. Karaa, A. & Omri, A. (2007). Corporate governance efficiency: an indexing approach using the stochastic frontier analysis, Corporate Governance, Vol. 7, No, 2, 148-161. https://doi.org/10.1108/14720700710739796 DOI: https://doi.org/10.1108/14720700710739796
Klapper, L.F. & Love, I. (2024), 'Corporate governance, investor protection and performance in emerging markets'', Journal of Corporate Finance, No. 10, 203-10.
Lakshana, A. & Wijekoonb, W. (2012). Corporate governance and corporate failure, Procedia Economics and Finance, Vol 2, 191 - 198. https://doi.org/10.1016/S2212-5671(12)00079-2 DOI: https://doi.org/10.1016/S2212-5671(12)00079-2
Li, J. & Harrison, J. R. (2008), Corporate governance and national culture: a multi-country study, Corporate Governance, Vol. 8, No. 5 607-621. https://doi.org/10.1108/14720700810913278 DOI: https://doi.org/10.1108/14720700810913278
Liao, S-h, Retno, W. R. Hu c, D-c & Tasman, L.(2017). The mediating effect of psychological contract in the relationships between paternalistic leadership and turnover intention for foreign workers in Taiwan, Asia Pacific Management Review, 22, 80-87. https://doi.org/10.1016/j.apmrv.2016.08.003 DOI: https://doi.org/10.1016/j.apmrv.2016.08.003
Lin, D. Kuo, H-C, and Wang, L.H, (2013),Chief executive compensation: An empirical study of Fat Cat CEOs,The International Journal of Business and Finance Research, Vol 7, No. 2, 27-42.
McNutt, P. A. & Batho, C. A. (2005).Code of ethics and employee governance, International Journal of Social Economics. Vol. 32 No. 8, 656-666. https://doi.org/10.1108/03068290510608183 DOI: https://doi.org/10.1108/03068290510608183
Meyer, J. P., Allen, N. J. & Smith, C. A. (1993). Commitment to organizations and occupation: Extensions and test of a three-component conceptualization. Journal of Applied Psychology, 78, 538-551. https://doi.org/10.1037/0021-9010.78.4.538 DOI: https://doi.org/10.1037/0021-9010.78.4.538
Monks, R. A. G. & Minow, N. (2004). Corporate governance, Malden: Blackwell Publishing Ltd.
Mosadeghrad A. M., Ferlie, E., & Rosenberg, D (2008) "A study of the relationship between job satisfaction, organizational commitment and turnover intention among hospital employees", Health Services Management Research, 21, Pp. 211- 227. https://doi.org/10.1258/hsmr.2007.007015 DOI: https://doi.org/10.1258/hsmr.2007.007015
Mostovicz, E. I. Kakabadse, K. N. and Kakabadse, A. (2011 ), Corporate governance , Corporate Governance, Vol. 11, No. 5, 613-626. https://doi.org/10.1108/14720701111177019 DOI: https://doi.org/10.1108/14720701111177019
Mrabure, K. O. & Iyoha, A. A. (2020).Corporate Governance and Protection of Stakeholders Rights and Interests, Beijing Law Review, Vol 11, 292-308. https://doi.org/10.4236/blr.2020.111020 DOI: https://doi.org/10.4236/blr.2020.111020
Muneeza, A. & Hassan, R. (2014).Shari'ah corporate governance: the need for a special governance code, Corporate Governance, Vol. 14 No. 1,120-129. https://doi.org/10.1108/CG-02-2011-0015 DOI: https://doi.org/10.1108/CG-02-2011-0015
OECD (1999), Principles of corporate governance, organization for economic co-operation and development, available at: http:thecorporatelibrary.com/docs/oecd/oecdprinciples.html (retrieved Jan 15, 2020).
OECD (2004). The OECD Principles of Corporate Governance, Paris: OECD Publications Service. https://doi.org/10.22201/fca.24488410e.2005.562 DOI: https://doi.org/10.22201/fca.24488410e.2005.562
OECD (2019), OECD Corporate Governance Factbook 2019, available at: http://www.oecd.org/corporate/corporate-governance-factbook.htm
Ortega-Parra, A. & Sastre-Castillo, M. A. (2013): Impact of perceived corporate culture on organizational commitment, Management Decision, Vol. 51 Iss 5 pp. 1071-1083. https://doi.org/10.1108/MD-08-2012-0599 DOI: https://doi.org/10.1108/MD-08-2012-0599
Osborne, S. (2010). The New Public Governance? Emerging Perspectives on the Theory and Practice of Public Governance. London: Routledge. https://doi.org/10.4324/9780203861684 DOI: https://doi.org/10.4324/9780203861684
Pattberg, P. (2005). The Institutionalization of Private Governance: How business and nonprofit organizations agree on transnational rules, Governance: An International Journal of Policy, Administration, and Institutions, Vol. 18, No. 4, 589-610. https://doi.org/10.1111/j.1468-0491.2005.00293.x DOI: https://doi.org/10.1111/j.1468-0491.2005.00293.x
Pavel, K. Stanislav,T. Petr, P. & Pavel, P. (2012).Corporate Governance Against Recommendations: The Cases of the Strong Executive and the Strong Ownership, Journal of Competitiveness, Vol. 4, Issue 3, 46-57. https://doi.org/10.7441/joc.2012.03.04 DOI: https://doi.org/10.7441/joc.2012.03.04
Pozner, J.E, Greve, H.R, & Palmer, D. (2010). Organisations Gone Wild: The Causes, Processes and Consequences of organisational misconduct. The academy of Management, Vol.4, No. 1, 53-107. https://doi.org/10.5465/19416521003654186 DOI: https://doi.org/10.5465/19416521003654186
Purwanto, S.K. (2015). The Effect of Organizational Governance on the Performance and Commitment of the Lecturers, Public Policy and Administration Research, Vol.5, No.1, 35-42.
Raipa, A. (2010). Methodological aspects of the democratization of public governance, Public Policy and Administration, 32: 7 -18.
Rampersad, H. & Hussain, S. (2014). Authentic Governance, Switzerland: Springer International Publishing. https://doi.org/10.1007/978-3-319-03113-2 DOI: https://doi.org/10.1007/978-3-319-03113-2_2
Rasche, A. (2010), Collaborative Governance, Corporate Governance, Vol. 10, No. 4, 500-511. https://doi.org/10.1108/14720701011069713 DOI: https://doi.org/10.1108/14720701011069713
Rosenau, J.N. (1992), ''Governance, order, and change in world politics'', in Rosenau, J.N. and Czempiel, E.-O. (Eds), Governance without Government: Order and Change in World Politics, pp 1-29, Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9780511521775.003 DOI: https://doi.org/10.1017/CBO9780511521775.003
Ruhanen, L. Scott, N. Ritchie, B. & Tkaczynski, A. (2010), Governance: a review and synthesis of the literature, Tourism Review, Vol. 65 Iss 4, 4-16. https://doi.org/10.1108/16605371011093836 DOI: https://doi.org/10.1108/16605371011093836
Sekaran, U. & Bougie, R. (2016). Research Methods for Business, West Sussex: John Wiley & Sons Ltd.
Shanikat, M.& Abbadi, S. S. (2011).Assessment of Corporate Governance in Jordan: An Empirical Study, Australasian Accounting, Business and Finance Journal, Volume 5, Issue 3, 93-106.
Shleifer, A. & Vishny, R. (1997) A Survey of Corporate Governance." The Journal of Finance, Vol 52, Iss 2, 737-783. https://doi.org/10.1111/j.1540-6261.1997.tb04820.x DOI: https://doi.org/10.1111/j.1540-6261.1997.tb04820.x
Singh, A. & Gupta, B., (2015): Job involvement, organizational commitment, professional commitment, and team commitment", Benchmarking: An International Journal, Vol. 22, Iss 6, 1192-1211. https://doi.org/10.1108/BIJ-01-2014-0007
Singh, A. & Gupta, B., (2015): Job involvement, organizational commitment, professional commitment, and team commitment, Benchmarking: An International Journal, Vol. 22 Iss 6, 1192-1211. https://doi.org/10.1108/BIJ-01-2014-0007 DOI: https://doi.org/10.1108/BIJ-01-2014-0007
Smith, D. (1996) "Increasing Employee Productivity, Job Satisfaction, and Organizational Commitment", Hospital Health Service Administration, 41, 160-174.
Smith, H. J. (2003). The Shareholders vs. Stakeholders Debate. MIT Sloan Management Review, Vol 44, 85-90.
Solinger, O. N.; Van Olffen, W. & Roe, R. A. (2007): Beyond the Three-Component Model of Organizational Commitment, Maastricht research school of Economics of Technology and Organizations, 1-43. https://doi.org/10.1037/0021-9010.93.1.70 DOI: https://doi.org/10.1037/0021-9010.93.1.70
Stringham, E. P. (2015). Private governance: Creating order in economic and social life, New York: Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199365166.001.0001 DOI: https://doi.org/10.1093/acprof:oso/9780199365166.001.0001
Talamo, G. (2011). Corporate governance and capital flows, Corporate Governance, Vol 11, No. 3, 228-243. https://doi.org/10.1108/14720701111138661 DOI: https://doi.org/10.1108/14720701111138661
Torfing, J. & Triantafillou, P. (2016). Enhancing public innovation by transforming public governance, New York: Cambridge University Press. https://doi.org/10.1017/CBO9781316105337 DOI: https://doi.org/10.1017/CBO9781316105337
de Villiers, C. & Dimes, R. (2021). Determinants, mechanisms and consequences of corporate governance reporting: a research framework, Journal of Management and Governance,Vol 25, 7-26. https://doi.org/10.1007/s10997-020-09530-0 DOI: https://doi.org/10.1007/s10997-020-09530-0
Weber. R. H. Grosz, M. & Weber, R. (2009). Shaping Internet Governance: Regulatory Challenges, Heidelberg: Springer. https://doi.org/10.1007/978-3-642-04620-9 DOI: https://doi.org/10.1007/978-3-642-04620-9_6
Wiewiora, A. Trigunarsyah, B. Murphy, G. & Coffey, V. (2013). Organizational culture and willingness to share knowledge: A competing values perspective in Australian context, International Journal of Project Management 31, 1163-1174. https://doi.org/10.1016/j.ijproman.2012.12.014 DOI: https://doi.org/10.1016/j.ijproman.2012.12.014
Zadek, S. (2008). Global collaborative governance: there is no alternative', Corporate Governance, Vol. 8 No. 4, pp. 374-88. https://doi.org/10.1108/14720700810899121 DOI: https://doi.org/10.1108/14720700810899121
Zoheir Ezziane, Z. & Al Shamisi, A. (2017). The Impact of IT governance compliance on enhancing organizational performance in: Haes, S. D. and Grembergen, W. V. (Eds). Strategic IT governance and alignment in business settings, pp 209-236, Hershey: IGI Global. https://doi.org/10.4018/978-1-5225-0861-8.ch008 DOI: https://doi.org/10.4018/978-1-5225-0861-8.ch008