Moderating Role of Culture.

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Title

Using Organizational Cronyism as an Explanatory Mechanism in the Relationship Between Leader Member Exchange, Psychological Contracts and Outcomes; Moderating Role of Culture.

Abstract

Organizational cronyism gained pretty much attention by academic researchers due to its widespread consequences at workplace. It refers to bestowing of privileges to friends, colleagues and associates based on relationships, friendships and associations. There is a lot of evidence on existence of cronyism at workplace, but there are few empirical studies on this prevalent construct. The current study is an attempt to empirically and theoretically investigate organizational cronyism at workplace, particularly in non-western context.

This study examines organizational cronyism as an explanatory mechanism to explain the link between leader member exchange, breach of psychological contract and relational contract. Accordingly, the mediating role of breach of psychological contract in the relationship between organizational cronyism and negative work outcomes, i.e. deviant work place behavior, cynicism and negligent behavior is tested. Along with negative work outcomes the positive work outcomes of organizational cronyism, i.e. organizational citizenship behavior, organizational commitment and ingratiation with underlying mechanism of relational contract is also tested. In addition positive and negative behavioral and attitudinal outcomes associated directly with breach of psychological contract, e.g. deviant work place behavior, cynicism and negligent behavior, and relational contracts, e.g. organizational citizenship behavior, organizational commitment and ingratiation are also examined. The moderating role of collectivism is also a salient feature of the study. Therefore, the moderating role of collectivism in the relationship between LMX and organizational cronyism is also investigated.

Data were collected using a self-administered questionnaire. Population of the study were employees working in various public sector organizations in Pakistan. Convenience sampling technique has been used to obtain data. Data were collected in four time lags, total 600 questionnaires were floated 420 were received back. Few questionnaires were discarded due to incomplete information hence, 370 were utilized in current study. Data were analyzed by using SPSS and Amos.

Results indicate that Leader Member Exchange (LMX) is associated with various outcomes through organizational cronyism such as breach of psychological contract and relational contract. Similarly organizational cronyism explains the underlying mechanism between breach of psychological contracts and relational contract which in turn explains their mediating role for various behavioral and attitudinal outcomes. Moreover, as par statistical results breach of psychological contract mediates the relationship between organizational cronyism and deviant work place behavior as well as cynicism. In addition, the mediating role of relational contract in the relationship between organizational cronyism and organizational citizenship behavior as well as with organizational commitment is not established. But relational contract mediates the relationship between organizational cronyism and ingratiation.

Not all hypotheses received support and contrary to expectation certain hypotheses were rejected. The facilitating role of collectivism is also not established.

Theoretical and practical implications along with limitations and future research directions are also discussed.

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