Influence of Formalization on the Organizational Commitment and Work Alienation of Salespeople and Industrial Buyers

Influence of Formalization on the Organizational Commitment and Work Alienation ofSalespeople and Industrial BuyersAuthor(s): Ronald E. Michaels, William L. Cron, Alan J. Dubinsky and Erich A. JoachimsthalerSource: Journal of Marketing Research, Vol. 25, No. 4 (Nov., 1988), pp. 376-383Published by: American Marketing AssociationStable URL: http://www.jstor.org/stable/3172948 .

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RONALD E. MICHAELS, WILLIAM L. CRON, ALAN J. DUBINSKY, and ERICH A. JOACHIMSTHALER*

A model is investigated in which organizational formalization influences work alienation through role ambiguity, role conflict, and organizational commitment.

Interrelationships are tested with data obtained from industrial salespeople and industrial buyers. Higher levels of formalization are found to be associated with greater

organizational commitment and less work alienation.

Influence of Formalization on the

Organizational Commitment and Work

Alienation of Salespeople and Industrial

Buyers

Coordination of decisions and actions is critical for maintaining long-term relationships between organizations. Researchers suggest that developing detailed

guidelines of appropriate operating procedures enhances coordination (Chonko 1986; Michaels, Day, and Joach- imsthaler 1987). This type of bureaucratic structuring is referred to as "organizational formalization," a key structural property of interorganizational relationships (Aldrich 1976)-but what about the reactions of the

boundary-spanning personnel involved in these relationships? Clearly defined operating directives may reduce their role ambiguity and they may react favorably. Con-

versely, formalization may increase role conflict by lim-

iting their latitude to negotiate mutually beneficial re-

lationships or to manage the buying and selling interface (Spekman and Johnston 1986). Whether organizational formalization has a favorable or unfavorable influence on job attitudes is the primary focus of our study.

The attitudes and role perceptions of two boundary- spanning marketing exchange professionals, salespeople and industrial buyers, are examined. The attitudes investigated are organizational commitment and work alienation. Organizational commitment has received some attention in the marketing literature (e.g., Hunt, Chonko, and Wood 1985), but published research in marketing on work alienation is lacking. Both constructs have received much research attention in organizational behavior and have been shown to be associated with job turnover, absenteeism, and performance in nonmarketing contexts (e.g., Wiener and Vardi 1980). Moreover, these attitudes are important from a broader social perspective. Research suggests that one-half of the working popula- tion is alienated from their work and/or their organizations (Gould and Werbel 1983).

BACKGROUND AND MODEL

The hypothesized relationships among the variables in the study are shown in Figure 1. The model suggests that formalization reduces role ambiguity but increases role conflict. These two opposing forces create a complex combination of effects that include three sets of relationships hypothesized to decrease work alienation and two sets of relationships hypothesized to increase work

*Ronald E. Michaels is Associate Professor, School of Business, University of Kansas. William L. Cron is Associate Professor, Edwin L. Cox School of Business, Southern Methodist University. Alan J.

Dubinsky is Professor, College of Business, St. Cloud State Univer- sity. Erich A. Joachimsthaler is Assistant Professor, School of Busi- ness, University of Houston.

The research was supported by the General Research Fund of the

University of Kansas and by the Edwin L. Cox Bureau of Business Research of Southern Methodist University. The authors thank the National Association of Purchasing Management for its support of the

project and Charles Futrell, John Slocum, Dennis Organ, Philip Pod- sakoff, and four anonymous JMR reviewers for their helpful com- ments. The ideas and opinions expressed herein are solely those of the authors.

376

Journal of Marketing Research Vol. XXV (November 1988), 376-83



INFLUENCE OF FORMALIZATION 377

alienation. These "compensatory" effects (Organ and Greene 1981) are depicted at the bottom of Figure 1. A discussion of the major constructs and rationales for the hypothesized relationships follows.

Organizational Formalization

Organizational formalization is the extent to which work activities are defined formally by administrative rules, policies, and procedures (Ford and Slocum 1977). The sales management literature (e.g., Chonko 1986; Ste- phenson, Cron, and Frazier 1979) is replete with sug- gestions for increased formalization (e.g., computerized customer information systems, computer-generated daily work activity programs, pricing flexibility programs, "canned" sales presentations).

There may be limitations, however, to the usefulness of formalization. For example, Ruekert, Walker, and Roering (1985) suggest it is appropriate when tasks are short and repetitive, performance is easily measured, and the task environment is stable. Formalization has been

found to have deleterious effects on the work attitudes of engineers (Greene 1978) and on managers' use of research information in making decisions (Deshpande 1982).

Role Stress

Role stress consists of role ambiguity and role conflict. Role ambiguity is the degree to which clear information is lacking about (1) expectations associated with a role, (2) methods for fulfilling known role expectations, and/or (3) the consequences of role performance (Kahn et al. 1964). Role conflict is the degree of incom- patibility among role expectations (Kahn et al. 1964) and can include many forms (intersender, intrasender, person-role, interrole, and role overload). The importance of these role perceptions and their concomitant dysfunctional psychological consequences has been recognized in the sales and purchasing literatures (e.g., Behrman and Perreault 1984; Clopton 1984).

The model in Figure 1 posits that organizational formalization directly influences role ambiguity and role

Figure 1 HYPOTHESIZED PATHS AND COMPENSATORY PROCESS

Role (+) Ambiguity

(RA) H)

Organizational Work Formalization (+) Commitment Alienation

(FO) (OC) () (AL)

Role (+)

Conflict (+)

(RC)

Hypothesized Compensatory Process Paths that decrease alienation:

+ (1) FO - RA -- AL

(2) FO- +RA--

OC .- AL

(3) FO + OC--l+ AL

Paths that increase alienation:

(1) FOL -0RC + AL

(2) FO• RC OC AL



378 JOURNAL OF MARKETING RESEARCH, NOVEMBER 1988

conflict. The presence of explicit rules, policies, and procedures is expected to clarify role expectations and thus reduce role ambiguity. Studies performed in various professions have found predominantly a negative relationship between formalization and role ambiguity (Jack- son and Schuler 1985).

Study results pertaining to the relationship between formalization and overall role conflict are mixed. Some researchers have found a negative relationship (e.g., Ni- cholson and Goh 1983; Podsakoff, Williams, and Todor 1986), but others have found a positive relationship (e.g., Michaels, Day, and Joachimsthaler 1987; Organ and Greene 1981).

Organizational formalization is hypothesized to have a positive relationship with role conflict in selling and purchasing work contexts. One commonality among the studies finding a positive relationship has been the work context; the samples consisted of professionals in positions requiring creative problem solving. Both selling and buying positions require creativity in reacting to the de- mands and opportunities communicated by counterparts. A highly formalized environment may inhibit the flexibility these boundary spanners need and may impair conflict resolution between the boundary spanner and members of his or her role set (Hage, Aiken, and Marrett 1971), thus increasing the potential for role conflict.

Organizational Commitment

Organizational commitment is defined in terms of the strength of an individual's identification with and involvement in an organization (Porter et al. 1974). A high level of organizational commitment is characterized by a (1) strong belief in the organization's goals and values, (2) willingness to exert considerable effort on behalf of the organization, and (3) strong desire to maintain mem- bership in the organization (Morrow 1983). These be- liefs and desires are developed in a process that involves "evaluating the investments and costs" of remaining with a specific organization (Stevens, Beyer, and Trice 1978).

Formalization is hypothesized to influence organizational commitment directly and positively. This hypothesis has both conceptual (Stevens, Beyer, and Trice 1978) and empirical support (Greene 1978; Morris and Steers 1980). Its rationale is based on three arguments. First, in making goals and objectives more explicit, formalization enables the individual to make more objective decisions about whether to "internalize" the goals and objectives of the organization as his or her own (Morris and Steers 1980). Second, operationally useful rules and procedures may enhance employee perceptions of the organization's dependability, a characteristic that Buch- anan (1974) has shown to be related positively to organizational commitment. Third, organizational factors (e.g., structural variables) have consistently contributed more to the variance in organizational commitment than personal characteristics (e.g., Morris and Sherman 1981).

Role ambiguity and role conflict are hypothesized to be related negatively to organizational commitment. If

an individual forms commitment bonds by evaluating personal "investments" in the organization versus "re- turns" gained from the organization, having to tolerate an organizational workplace laden with role ambiguity and/or conflict would represent real personal "costs." Research findings support this argument (e.g., Morris and Koch 1979).

Work Alienation

Work alienation is defined as the degree to which an individual identifies psychologically with a specific type of work (Kanungo 1982). Specifically, work alienation is a generalized cognitive state of psychological sepa- ration from work resulting from the perception that work itself is unable to satisfy salient personal needs and expectations. It reflects a situation in which an individual cares little about work, approaches work with little en- ergy, and works primarily for extrinsic rewards (Moch 1980).

Work alienation is hypothesized to be related negatively to organizational commitment. That is, individuals who are committed to an organization are more likely to identify psychologically with and be involved with their work (O'Reilly and Chatman 1986). Intercorrelations between organizational commitment and work alienation in nonmarketing contexts have ranged from -.30 to -.56 (Morrow 1983; Rabinowitz and Hall 1981). Though the nature of this relationship has not been established clearly through longitudinal investigation, it is argued that a person committed to an organization has internalized the goals of the organization. As a result, work directed to- ward the achievement of those goals should be perceived as important and conducive to increased involvement- that is, less alienation.

As shown in Figure 1, a positive relationship between both role stressors and work alienation is hypothesized. The relationships have been observed in nonmarketing contexts (e.g., Morris and Koch 1979). This hypothesis is consistent with the predominant finding that both role stressors are associated with dysfunctional job attitudes and outcomes (Jackson and Schuler 1985). Seemingly, the occurrence of role stress will influence work alienation directly because of the psychological distraction and discomfort associated with such conditions.

METHOD

Samples The salesperson sample. With the cooperation of a

manufacturer of industrial building materials, self-administered questionnaires were distributed to 255 full- line salespeople. Usable questionnaires were returned by 215 salespeople for an effective response rate of 84.3%. Mean respondent age is 43.9 years, mean job tenure 12.9 years, mean organization tenure 15.2 years, and mean sales experience 18.1 years.

These salespeople do some prospecting, but they are primarily responsible for building market share within




present channels of distribution. This task environment has some of the characteristics suggested to be amenable to formalization (e.g., stability and repetitive problem- solving).

The industrial buyer sample. A randomly selected sample of 554 members of the National Association of Purchasing Management constituted the industrial buyer sample. Respondents, both purchasing managers and buyers, predominantly work in small to medium-sized organizations and typically are responsible for buying specific commodity classifications and supervising other purchasing employees.

Data were collected by self-administered mail ques- tionnaire. Of the 335 questionnaires returned, 330 (59.6%) were usable. Mean respondent age is 42.2 years, mean job tenure 5.7 years, mean organization tenure 10.6 years, and mean purchasing experience 12.5 years.

Measures

Though published scales with favorable psychometric evaluations were used, 22 personal interviews were con- ducted with sales managers and industrial buying professionals to ensure each scale item's applicability to selling or purchasing contexts.1 Formalization was measured on a 7-item scale developed by Aiken and Hage (1966), role ambiguity and role conflict on 9- and 11-item scales, respectively, from Rizzo, House, and Lirtzman (1970), organizational commitment on a 15-item scale from Mowday, Steers, and Porter (1979), and work alienation on a 5-item scale from Miller (1967). The Rizzo, House, and Lirtzman scale is a composite measure that taps four types of role conflict (intersender, intrasender, person- role, role overload). In Table 1 are summary statistics and zero-order intercorrelations for the variables in the model. All intercorrelations among the five variables are significant beyond the .001 level.

Data Analysis Procedures

First, a "full effects" model incorporating all hypothesized model interrelationships was analyzed for each sample. Second, a "trimmed model" was analyzed for each sample and examined for significant reductions in explanatory power (Pedhazur 1982). The assumptions underlying path analysis (linearity, additivity, interval- level measurement, uncorrelated residuals) did not appear to be troublesome given the large sample sizes, the theoretical basis for the model, and an inspection of scat- terplots of residuals.

RESULTS

Hypothesized Model Linkages In Table 2 are the path coefficients for the full and

trimmed models. In both samples, only the coefficients for

formalization--commitment and role

conflict--work

Table 1 ZERO-ORDER CORRELATIONSa AND DESCRIPTIVE STATISTICS FOR THE VARIABLES IN THE MODEL

FO RA RC OC AL

Formalization (FO) - -.52 -.24 .27 -.21 Role ambiguity (RA) -.57 - .61 -.58 .44 Role conflict (RC) -.25 .63 - -.49 .33 Organizational

commitment (OC) .32 -.47 -.48 - -.53 Work alienation (AL) -.36 .47 .42 -.61 Sales sample (n = 215)

Mean 38.0 21.7 38.9 82.4 11.6 S.D. 5.3 8.8 12.8 12.9 5.1 Range 15-49 9-49 11-68 41-104 5-29 Items 7 9 11 15 5 Alpha .50 .85 .88 .90 .80

Buyer sample (n = 330) Mean 30.2 25.9 40.7 78.4 11.1 S.D. 8.2 10.3 12.5 15.6 4.9 Range 10-49 9-59 11-73 22-105 5-29 Items 7 9 11 15 5 Alpha .69 .85 .85 .90 .75

All items are scored from 1 = low to 7 = high. The intercorrelations below the diagonal are for the salesperson sample. Those above the diagonal are for the industrial buyer sample.

aAll intercorrelations are significant beyond the p < .001 level (one- tailed).

alienation are not significant. When these paths are elim- inated and the resulting trimmed models analyzed, the explanatory power of the predictors is not affected sig- nificantly.

The overall results indicate that, as expected, higher levels of organizational formalization are associated with lower levels of role ambiguity among both salespeople and buyers. Unexpectedly, higher levels of organizational formalization are associated with lower levels of role conflict in both selling and buying contexts.

Support is found for the other hypothesized relationships. Greater organizational commitment is associated with lower levels of work alienation. Higher levels of role conflict and ambiguity are associated with lower levels of organizational commitment. Higher levels of role ambiguity are associated with higher levels of work alienation. This pattern of results is identical in the two samples.

The Compensatory Process

The next phase of the analysis was to investigate the overall effect of organizational formalization on work alienation. Table 3 reports the results of this analysis. The effect in both samples is to reduce work alienation (-.24, -.22). Moreover, the decomposition of total effects provides no support for the hypothesized "compensatory process." In both samples the relationship between formalization and role conflict is negative, not positive as posited by Organ and Greene (1981). With- out a positive relationship, there is no compensatory process.

'A complete listing of scale items is available from the authors upon request.



0

Table 2 REGRESSION ANALYSIS RESULTS

Full Model Trimmed model

Standardized coefficients R2 Total sample Subgroups

Dependent Explanatory Total Subgroups Total Standardized F-Value0 variable variable sample Low exper. High exper. Buyers Managers sample Subgroups coefficient R2 Exper. Position

Industrial buyer sample (n = 328) RA FO -.52*** -.52*** -.55*** -.58*** -.51*** -.52***

Constant 5.07 5.09 5.09 5.30 5.00 .27*** .27***, .30***, .34***, .26*** 5.07 .27*** .81 .03 RC FO -.24*** -.23** -.23** -.30** -.23*** -.24***

Constant 4.72 4.79 4.52 5.07 4.59 .06*** .05**, .05**, .09**, .05*** 4.72 .06*** .04 .46 OC FO -.01 -.04 .02 -.18 .04

RA -.45*** -.43*** -.42*** -.54*** -.42*** RC -.23*** -.25** -.21* -.24* -.21** -.23*** Constant 7.20 7.25 7.05 8.03 6.90 .36*** .34***, .35***, .41"**, .35*** 7.13 .36*** .08 .16

AL RA .20** .22** .13 .01 .31*** .20*** RC .01 .00 .00 .13 -.06 OC -.42"** -.41*** -.42*** -.50"** -.35*** -.42*** Constant 3.78 3.89 3.71 4.44 3.30 .31*** .32***, .26***, .34***, .31"** 3.80 .31*** 1.39 1.47

Salesperson sample (n = 202) RA FO -.56*** -.56*** -.58*** n.a.b n.a. -.56***

Constant 6.42 6.66 6.21 - - .32*** .31***, .34***, n.a. n.a. 6.42 .32*** .23 na. RC FO -.25*** -.27** -.24* n.a. n.a. -

Constant 5.65 5.67 5.70 - - .06*** .08**, .06*, n.a. n.a. 5.65 .06*** .001 na. OC FO .13 .14 .12 n.a. n.a.

RA -.19* -.14 -.26* n.a. n.a. -

RC - .33*** -.39*** -.25* n.a. n.a. -

Constant 5.96 6.05 5.89 - - .28*** .31***, .28***, n.a. n.a. 6.90 .27*** 1.01 n.a. AL RA .21** .21* .26** n.a. n.a.

RC .07 .06 .05 n.a. n.a. OC -.47*** -.44*** -.47*** n.a. n.a. -

Constant 4.66 4.19 4.72 - - .41*** .38***, .44***, n.a. n.a. 4.88 .40*** 1.14 n.a.

aNone of the Chow (1960) tests are significant at p - .10. bn.a. = not applicable/available. *p - .05. **!p .01. ***p s .001.




Table 3 DECOMPOSITION OF THE HYPOTHESIZED EFFECTS

(COMPARISONS ACROSS CONTEXTS)a

Industrial Industrial salespeople buyers

Paths hypothesized to decrease work alienation (1) FO - RA - AL -.13 -.10 (2) FO - RA - OC - AL -.07 -.10 (3) FO - OC - ALb .00 .00 (4) Subtotal (1 + 2 + 3) -.20 -.20

Paths hypothesized to increase work alienation (5) FO - RC - ALc .00 .00 (6) FO - RC - OC - AL -.04 -.02 (7) Subtotal (5 + 6) -.04 -.02 Total effects (4 + 7) -.24 -.22

"Trimmed model coefficients are used in this table. bFO -* OC is not significant. cRC -* AL is not significant.

An Extension: Subgroups Analysis

Organizational commitment has been found to be relatively low for lower level marketing personnel (Hunt, Chonko, and Wood 1985). Likewise, more experienced employees may not benefit from greater formalization as much as their less experienced counterparts. Indeed, efforts to formalize the organization may be viewed by senior people as meddlesome management intervention or a lack of confidence in their ability to perform the job satisfactorily. Hence model interrelationships were investigated for personnel with high and low job experience, as determined by splitting each sample at the me- dian value for years of experience. Hierarchical position also was investigated in the purchasing sample by di- viding the sample into "purchasing managers" and "buyers." Table 2 shows the path coefficients for the total samples and each subgroup within the two samples. The F-statistics (right columns) obtained by calculating Chow (1960) tests for the subgroups also are listed. The tests confirm the equivalence of the regression coefficients across both the experience and position subgroups.

DISCUSSION

One of the key findings of our study is that greater organizational formalization is associated with lower levels of both types of role stress. Apparently, more explicit management guidance may be beneficial for boundary- spanning marketing exchange professionals. Further, close control of employee behavior does not seem to alienate marketers from their work or reduce their commitment to the organization. In both samples, formalization in- fluenced organizational commitment indirectly through its effects on role ambiguity and role conflict.

Our findings are somewhat inconsistent with the ste- reotypic notion of a salesperson who is independent and protective of his or her personal freedom on the job. Even among "veteran" salespeople in our sample, there is no indication of a negative reaction to a formalized work

environment. Caution should be exercised in generaliz- ing these findings because the salespeople are from a single organization that competes in a relatively stable environment and are compensated largely by a straight salary plan. However, these findings are consistent with those of Churchill, Ford, and Walker (1976), who found salespeople were dissatisfied with their supervisors because they were not receiving enough guidance.

Though some marketers appear to have relatively low organizational commitment (Still 1983), the salespeople and industrial buyers in these two samples are found to be more committed than are samples of professionals and nonprofessionals in other occupations (Mowday, Steers, and Porter 1979; Podsakoff, Williams, and Todor 1986). However, the respondents in our study report moderate levels of work alienation; for example, less than samples of pharmacy technicians and public service employees but more than senior scientists and engineers (Organ and Greene 1981).

Some limitations of the study should be noted. Cau- tion should be exercised in inferring causality from the model tested. The cross-sectional nature of the data makes this inference tenuous. Second, as in every research study investigating model interrelationships, model specifica- tion is a major concern. We relied on available theory, prior empirical findings, and the stated purpose of the study to guide the process of selecting variables and specifying their interrelationships. Model misspecifica- tion is still possible, especially due to omission of other antecendents to organizational commitment (Hunt, Chonko, and Wood 1985). Though the functional ho- mogeneity of the sales and buying samples controlled for some potentially mediating task characteristics, other personal or organizational variables may affect the relationships.

From a methodological perspective, a potential concern may be that the measures are all self-reported; con- sequently, the relationships tested may be susceptible to the influence of common methods variance. Efforts were made to minimize the problem: thorough pretests of the instrument, selection of measures that minimize item overlap, and design of the instrument to incorporate scale "reordering" (Podsakoff and Organ 1986). Finally, non- response bias cannot be ruled out as a possible expla- nation of the findings in the industrial buyer sample. Though the response rate was high, we cannot demonstrate empirically that the survey respondents were sim- ilar to nonrespondents.

The results and limitations of our study suggest sev- eral areas for future research on organizational formalization. Work alienation is an underresearched topic in marketing (as well as in organizational behavior) and its relationship to organizational commitment should be a fruitful area for future research. Moreover, the formalization->role conflict relationship needs more empirical work because of inconsistency in reported findings about this relationship. It also might be useful for researchers to investigate the relationships posited in this model by



382 JOURNAL OF MARKETING RESEARCH, NOVEMBER 1988

considering the different types of role conflict. Future research efforts could investigate both selling

and buying work contexts concurrently and thus facilitate integration of research on these "relationship management" functions. Our study should be replicated with other samples of marketing and buying professionals (e.g., marketing researchers, product/brand managers, retail buyers, public relations professionals). In addition, marketers in higher levels of responsibility should be sampled to determine whether organizational controls have the same influence on their attitudes as that found in our study.

Other competitive environments could be sampled, particularly high growth, complex, and unstable environments. In such environments greater formalization may have differential effects on employees. Research could examine the effectiveness of specific control mecha- nisms in stimulating desired actions and in generating positive work attitudes.

Systematic investigation of personal variables (e.g., age, sex, job tenure) and situational variables (e.g., leader behaviors, climate) should be undertaken to determine their possible influences on the model interrelationships. Finally, future empirical efforts could utilize longitudinal designs to overcome the cross-sectional shortcom- ings of the current work.

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Documents

Influence of Formalization on the Organizational Commitment and Work Alienation of Salespeople and Industrial Buyers