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Rekindling organizational loyalty: The role of career mobility

1997, Journal of Career Development

Given the systematic positive links between employees' loyalty to their organizations and organizational performance, be it manifested in lower turnover (Blau, 1986) or increased ability to meet strategic goals (Oswald, Mossholder, & Harris, 1994), the issue of changing ...

Rekindling Organizational Loyalty: The Role of Career Mobility Linda K. Stroh Anne H. Reilly Loyola University Chicago Given the systematic positive links between employees' loyalty to their organizations and organizational performance, be it manifested in lower turnover (Blau, 1986) or increased ability to meet strategic goals (Oswald, Mossholder, & Harris, 1994), the issue of changing organization loyalty is important. Organization loyalty is a measure of one's identification with, and involvement in, their organization (Rousseau, 1990). Most companies are concerned with employees' organization loyalty because they want employees to assume responsibility for their work and to perform their tasks with a high degree of reliability (Bailyn, 1993). Research indicates that individuals with high levels of commitment to their organizations are highly identified with the companies they work for (Blau, 1986; Nouri, 1994; Caldwell, Chatman, & O'Reilly, 1990; Randall, 1990; Romzek, 1989). Not surprisingly, loyal individuals are also the most desired employees (Oswald, Mossholder, & Harris, 1994; Mintzberg, 1990; Blau, 1986). According to Blau (1986), managers who are loyal to their organizations are motivated to work hard and to stay with their organizations. Other research supports Blau's (1986) claims (e.g., Angle & Perry, 1981, Kanungo, 1982; Porter, Crampon, & Smith, 1976). Some researchers even suggest that a manager's commitment to an organization is related to whether the organization reaches its strategic goals (Oswald, Mossholder, & Harris, 1994; Kim & Mauborgne, 1993; Liou & Nyhan, 1994; Angle & Perry, 1981; Schein, 1970; Steers, 1975). The authors would like to thank Dr. Jeanne M. Brett, Northwestern University, and Ms. Erica Fox for their contributions to this manuscript. Address correspondence to Linda K. Stroh, Institute of Human Resources & Industrial Relations, Loyola University Chicago, 25 East Pearson, Chicago, IL 60611. Journal of Career Development, Vol. 24(1), Fall 1997 C 1997 Human Sciences Press, Inc. 39 Journal of Career Development 40 However, many recent popular press articles would lead us to believe that workers are no as longer loyal to their organizations as they were in the past. Hirsch even claims that managers have never felt more alienated (Hirsch, 1993). Is loyalty to one's organization indeed dead? Are there any trends associated with the change? One purpose of this study was to determine whether organization loyalty has declined. In addition, the study examined whether those managers who left their organizations and followed a free agent model, unlike those who "stayed put," enhanced their careers. Study Hypotheses Given the research on organization loyalty and the assumptions being put forth in the popular press, four hypotheses emerged. Hypothesis 1: Organization loyalty has declined over time. The Self-Directed Career Hirsch (1993) claimed that, given the ruthless downsizing and discarding of many talented managers throughout the 1980s and 1990s, managers in the 1990s should be less committed to their organizations and more committed to their careers. Hirsch predicted in 1987 that successful managers of the '90s, like free agents in baseball, would begin more systematically to manage their own careers. In later research, Hirsch (1993) noted that the ruthless downsizing of the past decade has forced managers to rely less on their organizations' internal labor markets and increasingly more on the external labor market to fulfill their career goals and increase their career opportunities. Hall (1986, 1990), too, has been a proponent of increasing one's loyalty to one's career. He called for managers to become more "protean." The mark of a protean manager, Hall said, is one who is self-directed and willing to change organizations and jobs to fulfill his or her career desires and needs. Such a protean career strategy should create rewards related to personal satisfaction. Hypothesis 2: Managers whose careers model those of free agents by changing organizations fare better (in terms of career opportunity). Linda K. Stroh and Anne H. Reilly 41 Linking Free Agency and Loyalty Hypothesis 2 enables us to suggest an alternative to Hypothesis 1, reflecting the complexity of loyalty to one's organization. Because those managers who proactively manage their own careers may find they are advancing more quickly and more adequately fulfilling their career aspirations, compared to managers who are passive in letting their organizations manage their careers for them, organization loyalty may be rekindled (Hall & Richter, 1990; Hall, 1986; Hirsch, 1987; Stroh, Brett, & Reilly 1994). Further, those individuals moving into organizational cultures more suited to their protean careers may feel more loyal to their new organizations than they were to the organizations they worked in before. Thus, corporate loyalty may not be "dead" but transferred from one organization to another. Hypothesis 3: Managers whose careers model those of free agents by changing organizations are more loyal to their new organizations than they were to their former employers. Differences Between Male and Female Free Agents The number of women in the ranks of management has obviously grown rapidly in recent years, and organizations have been hardpressed to know how to respond to the changes (Davidson & Cooper, 1992; Fondas, 1993). Consequently, any examination of recent changes in organization loyalty and career patterns must investigate the potential differences in career paths between men and women (Schein, 1994; Burke & McKeen, 1994). The relevant question related to this study is whether modeling a free agent career and changing organizations benefits women to the same degree that it benefits men. Structural discrimination theory would suggest it does not. According to structural discrimination theory, women are discriminated against in organizational policy and practices in ways that limit their career mobility (Morrison, 1992). Organizational politics and practices exclude women and limit their advancement in the organizational hierarchy (Burke and McKeen, 1992). Work by Gutek, Cohen, and Konrad (1990) and by Rosen and Korabik (1991) noted that women often leave organizations because of systemic discrimination embedded in organizational policies, practices, and culture. Some researchers have even encouraged women to use the external labor market—that is, to leave their organizations—to create a greater Journal of Career Development 42 sense of equity between themselves and their male counterparts (Stroh, Brett & Reilly, 1992). As Davidson and Burke (1994) reminded us, organizations are merely microcosms of the broader society, which is patriarchal and one in which men, in general, have historically dominated and had more power and better access to resources. Hypothesis 4: Female managers who follow the free agent career model by leaving their organizations do not fare as well (in terms of career opportunities) as male managers who follow this model. Methods Sample The sample for this study was composed of a longitudinal sample of 542 male and 144 female managers (n = 686). The first survey data collection was in 1989. We then followed up on the 1989 study participants in a 1991 survey. The original 1989 sample of managers were randomly selected from lists (provided by each 20 companies) of the names and addresses of all the managers who were relocated in 1987 and 1988. The sample therefore consisted of managers whose organizations considered them to be upwardly mobile. Surveys were sent to 50 randomly selected managers from each firm (response rate of 67%; n = 670). In an effort to increase the number of women, dual career couples and singles in the sample (since the "traditional" male-headed household family-type are most often relocatees), in addition to the initial random sample, we also randomly selected as many as 50 additional managers from each company list who fit the following profile: members of dual-income families (spouses worked outside the home) or single males or single females. A total of 359 additional managers were added to the 1989 sample from this list. The final 1989 sample consisted of 1,029 randomly selected managers from 20 Fortune 500 corporations (670 from original random sample, plus 359 from oversampling technique). All of the 1989 survey respondents were sent a follow-up survey in 1991. Seventy of these managers were unreachable because they had relocated and not provided a new address. The response rate among the managers we were able to reach was 72% (n = 686). Most man- Linda K. Stroh and Anne H. Reilly 43 agers in this study had masters degrees and were an average of 37 years old. The 20 companies in this study represented eight industries: pharmaceutical and hospital supplies, communications, consumer products (food), professional and financial services, retailing, hotel management, chemicals, and manufacturing. The companies in this study represent those firms who have gone through significant organization turbulence and reorganization (see Stroh, Brett & Reilly, 1994) similar to that currently experienced in the Fortune 500. Therefore, these managers should continue to be representative of managers working in Fortune 500 firms in the later 1990s. Measures Organization loyalty. Organization loyalty was measured using four items from Patchen (1965): "If I had to choose all over again, I would take a job with this company"; "I would recommend this company to a friend as a good place to work"; "I would be willing to spend the rest of my career working for this company"; "I feel a sense of pride working for this company." A five-choice Likert response scale was used, with anchors ranging from "strongly agree" to "strongly disagree." The coefficient alpha was .89 in 1989 and .88 in 1991. The Patchen scale is conceptually closer to a continuance commitment measure than to an affective measure (Meyer & Allen, 1984). The measure focuses on the tendency to continue to engage in current employment. It does not focus on the perceived costs of leaving one's organization. Stayers I Leavers. This variable was a dummy variable created to identify employees who were with their organizations between 1989 and 1991 versus those who left within that time period. This measure was therefore used as a surrogate for a free agent career model. The variable was coded 1 = stay and 2 = leave. Career loyalty. This variable was measured using a scale developed by Stroh, Brett, and Reilly (1996) that has been shown to be a good measure of loyalty to one's career. The scale consists of two items: "I would willingly change companies for a career advancement" and "My loyalty is to my own career, not to any particular company." A five- 44 Journal of Career Development point response scale is provided, ranging from "strongly agree" to "strongly disagree." Correlation for these variables was .50 (p > .01) in 1989 and .51 (p < .01) in 1991. This measure was designed to identify those employees who were most closely following a free agent career model. Those scoring high on this scale were presumed to be more like free agents than those who scored low. Career opportunity. Career opportunity was measured using a single item: "My future with this company looks bright." A five-point response scale was provided, ranging from "strongly agree" to "strongly disagree." This measure was designed to assess respondents' perceptions that career opportunities existed within their organizations. Influence of organizational politics on career. This construct was measured by the question "How much do organizational politics influence your career opportunities?" The five-point response scale ranged from "not at all" to "a great deal." This measure was designed to assess whether managers are free agents within their organizations. Those scoring highest on this scale are presumed to be less in control of their careers than those who score lower. Sex. This variable was coded 0 = men, 1 = women. years with current company. An open-ended question was used to determine the number of years respondents had been with their current companies. The resulting continuous variable was used in the regression equation as a control variable. Years in workforce. This variable was measured by asking "What year did you enter the workforce?" and subtracting 1991 from that year. Industry. The industry variable was dummy coded; 0 = manufacturing and 1 = all other industries. Analysis Correlational analysis was performed to determine zero-order correlations between the variables (available upon request), and T-test analysis was performed to determine significant differences in means within the sample. OLS regression analysis was used to assess the predictors of organizational loyalty. Linda K. Stroh and Anne H. Reilly 45 Results Are Employees Less Loyal? Similar to prior research, as Table 1 shows, we found that, in general, managers were less loyal to their organizations in 1991 than they were in 1989 (1989 mean = 15.93; 1991 mean = 15.35, p < .01). This finding shows support for Hypothesis 1 and for the conclusion put forth in the popular press that loyalty to one's organization seems to be diminishing. Do Those Who Follow a Free Agent Career Model Fare Better? Although our data suggest that employees today are less loyal, the data reveal some interesting within-group differences. The managers who followed the free agent model by changing organizations were more loyal to their new employers than they were to their former ones (see Table 2). They also perceived their new organizations to have greater job opportunities than their former organizations and they believed that their careers were less determined by organizational politics than they were when they worked for their former employers. By contrast, those managers who stayed with their employers were less loyal in 1991 than in 1989 and thought they had fewer opportunities (see Table 3). The data also suggest that the managers who left their employers in 1989 may have recognized the value of adopting a protean career approach (Hall & Mirvis, 1995). Those managers who left their organizations in 1989 were more loyal to their careers at that time than the managers who stayed on (mean/leavers = 6.94; mean/stayers = 5.86; see Tables 2 and 3). These findings suggest that those managers who were more loyal to their careers than to their organizations were more likely to leave their organizations in 1989 in part because they thought their companies offered only limited career opportunities (mean/leavers = 3.23; mean/stayers = 3.83). The data also indicate that many of the managers who left their employers in 1989 recognized that there were better career opportunities outside their industries. Thus, 70% of those who left were in different industries in 1991 than they were in 1989. This finding suggests that these managers were not only acting as free agents, but were showing signs of pursuing the protean career model discussed by Hall (1986). They recognized opportunities in different industries Journal of Career Development 46 Table 1 Mean Values of Attitudes Over Time Variable Organization Loyalty Career Loyalty Career Opportunity Career Influenced by Political Environment 1989 Sample Mean (n = 686) 1991 Sample Mean (n = 686) value 15.93 6.01 3.75 15.35 6.49 3.54 -4.50** 6.33** -5.06** 4.04 3.74 -6.34** t Table 2 Mean Values of Leavers' Attitudes Over Time Variable Organization Loyalty Career Loyalty Career Opportunity Career Influenced by Political Environment 1989 Sample Mean (n = 95) 1991 Sample Mean (n=95) 14.17 6.94 3.23 15.28 7.09 3.78 2.06** 4.17 3.80 -2.69** t value .54 4.10** Table 3 Mean Values of Stayers' Attitudes Over Time Variable Organization Loyalty Career Loyalty Career Opportunity Career Influenced by Political Environment 1989 Sample Mean (n=591) 1991 Sample Mean (n = 591) t value 16.20 5.86 3.83 15.35 6.40 3.51 -7.11** 6.88** -8.10** 4.18 4.08 -2.07* Linda K. Stroh and Anne H. Reilly 47 and were not reluctant to make significant shifts in their jobs. Thus, both Hypotheses 2 and 3 are supported. Are There Differences Between the Men and Women Who Follow the Free Agent Model? There were few significant differences in the responses of the male and female managers overall in either 1989 or 1991. In both years, there were no significant differences in organization loyalty, career loyalty, or perceptions of opportunity. In both years, however, female managers were more likely than male managers to feel more affected by organizational politics (see Table 4). These data show little support for Hypothesis 4. Some of the differences between the male stayers and leavers and between the female stayers and leavers are also worth noting. Changes in male leavers over time. Those male managers who left their organizations showed no significant differences in their loyalty to their new organizations. However, these men did perceive their new organizations to offer greater career opportunities than their former employers and perceived their new organizations to be less political. Their career loyalty rose significantly between 1989 and 1991. Changes in female leavers over time. Unlike the men who left their organizations, the women who left were significantly more loyal to their new organizations than they were to their former employers. And, unlike the men who left, the women showed no differences in career loyalty between 1989 and 1991. Similar to the men, however, the women who left perceived their new environments to be less political than those they worked in 1989. Changes in male stayers over time. The men who stayed were significantly less loyal to their organizations in 1991 than they were in 1989. Unlike the men who left, however, those who stayed thought that their organizations offered fewer career opportunities in 1991 than in 1989. There were no significant differences between these groups in their perceptions of the political environment in 1989 and 1991. Changes in female stayers over time. The women who left their organizations indicated that they were significantly more loyal to their Linda K. Stroh and Anne H. Reilly 49 Table 5 Predictors of Organization Commitment Variables BETA 1989 Organization Loyalty 1991 Career Loyalty Stayer/Leaver Sex Control Variables Years Current Company Years Work Force Industry Dummy Variables Dl D2 D3 D4 D5 D6 D7 Summary Statistics Multiple R Adjusted R2 F .39** -.34** .14** .02 -.01 -.05 .16** .05 .04 .02 -.07 -.04 .00 .59 .33 26.90** new employers than the women who stayed with their companies. In fact, by 1991, those who stayed became more loyal to their careers over time. Also by 1991, those who stayed thought their employers offered them fewer opportunities than they did in 1989, whereas the women who left felt their opportunities had been expanded. While the women who stayed also perceived their organizations to be more political, this was not a significant finding. Predictors of Organization Loyalty One of the questions that emerged from our research was whether the results of the T-tests are upheld when modeling predictors of organization loyalty. The OLS regression analysis was used to address this question. The results in Table 5 suggest that for the most part the T-tests are upheld. A manager's loyalty to her or his organization in 1989 was a so Journal of Career Development strong predictor of loyalty in 1991. Further, controlling for loyalty in 1989, years with current company, years in the workforce, and industry worked in, loyalty to one's career (Beta = -.34, p < .01) and whether a manager stayed or left his or her 1989 employer (Beta = .14, p < .01) predicted loyalty to his or her organization. Those managers who were more loyal to their careers were less loyal to their organizations than those managers who were less committed to their careers. Those who left their 1989 employers were also more loyal to their new organizations than those who remained with their 1989 employers. Gender was not a predictor of organization loyalty. Discussion How do these data relate to the four hypotheses established at the beginning of this study? Is organization loyalty dead? These data suggest, in some instances, yes! But for those managers who are following a free agent career model, the answer may be no. Our findings show that, counter to reports in the popular press, some managers in 1991 profess more loyalty to their organizations than they did in 1989. In particular, the women we studied were more loyal in 1991 than they were two years earlier. Therefore, these findings are counter-intuitive to those predicted by Hirsch (1993) and the popular press. Hirsch (1987) claimed that the recent downsizing and dismantling of American corporations has had a negative effect on those who were downsized out and those who were left behind—even those who were not directly effected by these changes would no longer feel loyalty to their organizations. Hirsch is correct. Companies can no longer count on automatic loyalty from their managers. Our findings suggest, however, that many of those who have pursued jobs with new companies do feel loyal to their new organizations. One of our study participants commented, "The biggest question for me is 'How does the company treat you?'" Do managers who follow the free agent career model fare better than those who do not? The answer is yes. Our data show that those managers who left their organizations in 1989 benefited from doing so by increasing their career opportunities and by moving into companies where their careers were less influenced by organizational politics. These findings support the work of Hall and Moss (1995) and Hirsch (1987, 1993). As Hall suggested, those who are most prepared to recognize the career limitations within an organization and who Linda K. Stroh and Anne H. Reilly 51 take a protean attitude toward their careers fare better than those who do not have such an attitude. The message here is that managers in the 1990s must develop more flexible attitudes toward their careers if they hope to obtain greater career opportunities. Much of the research cited at the beginning of this paper enumerates the benefits to an organization of having loyal managers, including an increase in organizational stability, lower turnover, and managers' willingness to take responsibility. In light of this earlier research, our findings indicate some cause for concern, insofar as the managers who remained with their organizations in 1989 were less loyal two years later. One could logically assume that those managers who were still with their organizations in 1991 will be more likely to leave in the future and/or less willing to take on new responsibilities for the organization. The data suggest that, to both attract and retain talented managers, organizations must foster work cultures that are less political and in which a high priority is placed on meeting employees' career needs. Mirvis (1993) and Useem (1993) suggested that, in response to the upswing in the use of the free agent model, organizations must make an effort to create new and more challenging jobs for their managers. As one of our study participants commented, "Loyalty to the company has to be fostered by the company." The findings related to male-female differences are consistent with the literature suggesting that women who leave organizations may not only be attempting to replicate their previous salaries but are also looking at the total employment package, including whether the new work environment is more "female friendly" and less political (Kush & Stroh, 1994). A recent Fortune cover story entitled "Executive Women Confront Midlife Crisis", reported that the issue is "ultimately not about retreat but about redefinition. In great numbers, women executives emerge from this period making decisive midcourse corrections. Many have simply wearied of the male-dominated game and seek to do business more on their own terms. They change not only their jobs, but their ideas of success as well (Morris, 1995, p. 62)." Consequently, organizations seeking to attract and retain female managers must attend to such variables as the degree of organizational politics and the availability of career opportunities. This study, like most, has several limitations. In this case, the data may be generalizable only to managers in Fortune 500 corporations. According to Hall and Moss (1995), it is only those working in Fortune 500 corporations who even have a long-term psychological con- Journal of Career Development 52 tract with their employer. These authors further claim that the change in the contract in the past several years has occurred primarily in large Fortune 500 corporations. If this is true, these findings may not apply to managers in smaller, or privately-held organizations. Also like many studies, some questions are left unanswered. 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