Acta Universitatis Danubius. Administratio, Vol 6, No 2 (2014)

Effect of Organizational Justice and Job Satisfaction on Organizational Effectiveness with the Moderating Role of Strategic Commitment

Atif KAFAYAT¹, Muhammad Arslan Ali ²

Abstract: In this era of highly competitive business environment every organization strives to be successful, and for that an organization pays great emphasis on organizational justice and job satisfaction of its employees in order to be effective and successful. This study investigates the impacts of organizational justice and Job Satisfaction on organizational effectiveness with moderating variable of strategic commitment. The organizational justice is subdivided into three types: Distributive Justice, Procedural justice, Interactional justice while job satisfaction is also divided into three dimensions as well: Working Condition, Job security and Autonomy. This study is an effort to contribute in the body of knowledge and helpful for organizations to improve their effectiveness. The data for this study is collected from Telecommunication sector of Pakistan via questionnaire.

Keywords: organizational justice; Job Satisfaction; strategic commitment; organizational effectiveness

1. Introduction

Organizational justice can be understood as the equality and fairness with employees in organization (Byrne, 2001). Significant amount of research has been done on organizational justice during last 4 decades. Concept of organizational justice focuses on how people are treated in the organization and it can be sub-categorize into three parts namely they are procedural, distributive and Interactional justice (Muchinsky, 2008). Job satisfaction in an important and critical factor to attract and retain well qualified personal. Concerns about satisfaction of employees is just as if not more essential in the sector of knowledge base in business sector, particularly in professionals and service base organization such as hospitals where the long term retention and training issues are of important nature. Settled and satisfied employees serve more efficiently than as compare to the new one they are all more productive and committed to their organization and settled in their job (Seo & Price, 2004).

Commitment can be defined as a relationship which is going on, is so important for both the parties especially in dyad relation that maximum efforts are made for the preservation of that relationship. Before going for in-depth understanding of commitment researcher should know that why it is important, some organizational researchers have found that organizational commitment is of importance as its outcomes are job performance which in turn leads to organizational effectiveness. (Kraus, 2006; Mintzberg & Lempel, 1999)

1.1 Identification of Gap

Previous researches were carried out on to find the direct relationship of Justice practiced in the organization and the level of Job satisfaction among employees on organization effectiveness. Researcher carried out this research with moderating effect of strategic commitment that what is the impact of this as moderating variable. This study expands the investigation of organizational justice in order to observe three types of organizational justice and their impact organizational effectiveness. Concept of organizational justice focuses on how people are treated in the organization and it can be sub-categorize into two parts namely they are procedural and distributive justice (Muchinsky, 2008). Interactional justice can be understood as the quality of treatment or interpersonal interaction employees gets during the execution of procedures (Bies, 1986). Researcher used Job satisfaction and its three dimensions to check the impact. The current study suggests that there is positive relationship between organizational justice and strategic commitment among the employee of organization. Similarly the current study confirmed that procedural justice and interactional justice positively effects the organizational commitment. This study proved that perceived procedural justice and interactional justice has direct relationship with in the organizational effectiveness (Mumin Dayan, 2008).

1.2 Objectives of the Study

1. to highlight the multidimensional aspects of organizational justice, job satisfaction, Strategic commitment and Organizational effectiveness;

2. to study the effect of organizational justice and job satisfaction on organizational effectiveness;

3. to study the role of strategic commitment as moderator in organizational justice, job satisfaction and organizational effectiveness relationship.

1.3. Theoretical Framework

Table 1 Variables

IV=Independent Variable MV=Mediating Variable DV=Dependent Variable

1.4. Hypothesis

H 1: Organizational justice has positive impact on Organizational effectiveness.

H 2: Job satisfaction has positive impact on Organizational effectiveness.

H 3: Strategic commitment moderates the relation between Organizational Justice and Organizational effectiveness.

H 4: Strategic commitment is moderating the relationship between Job Satisfaction and Organizational Effectiveness

2. Research Methodology

2.1. Data

Data collected from the telecom industry of Pakistan from their offices located in Rawalpindi and Islamabad. Telecom companies of Pakistan are selected as the sample for this research. Major telecom companies including Mobilink, Ufone and Telenor were the sample.

2.2. Questionnaire

Instrument that is used as a data collection tool was questionnaire. A likert scale of five steps is used in the questionnaire, in which 5; Strongly Agree, 4; Agree, 3; Neutral, 2; Disagree and 1; strongly disagree. The questionnaire was adapted so that the researchers can gather the information on the research topic Questionnaire consisted of 45 close ended. Total 200 questionnaires were completely and positively filled

2.3. Total Variables

Table 2. Total variables

2.4. Data Analysis Techniques

For proper data processing, entry and to find the results as output SPSS is the tool which is used in this research.

2.4.1. Regression

Regression analysis helps in the identification of changes occurs in dependent variable due to the variation in any dependent variable. This analysis also helps to determine the relationship of dependent variable with one or more dependent variables also it also tells the relationship between the variables.

2.4.2. Correlation

This test determines the strength between independent and dependent variables. It also tells how strongly the variables are paired with each other.

2.4.3. Baron and Kenny

Moderation between the variables measured by Baron and Kenny. There are many more methods of measuring the moderation but researchers use Baron and Kenny method.

4. Data Analysis, Results and Discussion

Table 3. Demographic Analysis

Table 4. Descriptive Statistic

Table 5. Reliability Analysis

cronbach alpha coefficient value for seven variables is above 0.6 while the overall reliability of 45 items is .907. so model is fit for research.

4.1. Correlation

Table 6. Co relational matrix

4.2. Regression analysis

Table 3. Coefficient matrix

N=200 R= .617 R Square = .380 Adjusted R Square= .374 F = 60.803(p<0.05)

The above table shows the regression analysis; R tells the level of correlation which is according to study results is .617 which indicates that independent variables are 61.7% correlated to the dependent variable. Similarly from above table the value of R² explains that how much change or variation is occurring in DV by the IVs for the sample size of 201. As the value of R² is .380 this means that 38% variation is occurring in DV to the variations in IVs. Another factor is adjusted R² which is R² that is adjusted for the population for this reason its value is less than R². It tells the variation occurring in DV due to the population. As the value of adjusted R2 is .374 this indicates that there is 37.4% variation in DV for population.

The value of Durbin Watson tells about the model fitness. For determining the model fitness the value of Durbin Watson should lie between 1.5 to 2.5 ranges. Current study value is 1.860 another factor to consider for determining the model fitness is F test significance value. This value should be less than 0.05 which is in case is 0.00 while value of F is 60.803. Hence the results show that model is fit and there is a relationship between IVs and DVs.

4.9. Hypothesis Testing

4.9.1. Baron and Kenny Step one IV-DV

Table 8. Model Summery Step One

Hypothesis 1: Organizational justice has positive impact on Organizational effectiveness. (Confirmed)

B is the regression coefficient. It tells the change bought in DV when one unit of IV is changed. As per the table # the value of B is .297. Which indicates that if organizational Justice is increased by one unit it bring 29.7% change in organizational effectiveness. The value of t is 4.234 which are greater than 2 and the significance value is below the required range of .05 so researcher confirm this hypothesis that interactional justice has positive impact on organizational effectiveness.

4.9.2. Baron and Kenny step two (02). IV-MV

Table 9. Model summery step two

Hypothesis 2: Job satisfaction has positive impact on Organizational effectiveness. (Confirmed)

Similarly from the table# it can be seen that the Value of B is .482 which means that job Satisfaction bring 48.2% change in organizational effectiveness if it is increased by one unit. Value of t is 7.132 which mean that if company is emphasizing on job satisfaction it have a significant impact on organizational effectiveness. The significance value is also less than .05 so researcher confirms the hypothesis that interactional justice has positive impact on organizational effectiveness.

4.9.3. Baron and Kenny path three (03) MV-DV

Table 4. Model Summery Step Three

Hypothesis 3: Strategic commitment moderates the relation between Organizational Justice and Organizational effectiveness. (Confirmed)

Above table clearly shows that MV has significant relationship with DV as significance value is less than .05 and value of t is above 2.

4.9.4. Baron and Kenny Step 4 IV-MV-DV

Table 5. Model Summery For Moderation 1

In this case the strategic commitment is moderating the relationship between organizational justice and organizational effectiveness. It means that if one unit of sc is increased it moderate the relationship by 7%. The value of t is 6.828 and significance is below .05 so researcher confirms the hypothesis that strategic commitment is moderating the relationship between organizational Justice and Organizational effectiveness.

Table 6. Model Summery For Moderation 2

In this case strategic commitment is moderating the relationship between Job Satisfaction and strategic commitment. According to study results one unit increase in strategic commitment it moderate the relationship by 7%. The value of t is 7.483 and significance is below .05 which confirms hypothesis i.e. that strategic is moderating the relation between the job satisfaction and organizational effectiveness.

Hypothesis 4: Strategic commitment is moderating the relationship between Job Satisfaction and Organizational Effectiveness. (Confirmed)

Above table clearly shows that MV has significant relationship with DV as significance value is more than .05 and value of t is above 2.

5. Conclusion and Recommendation

Enhanced organizational effectiveness is the phenomenon that is exhibited after providing organizational justice and satisfaction in job. This study was based organizational justice and job satisfaction influencing organizational effectiveness. The researchers has there emphasize on providing organizational justice and Job satisfaction on telecom sector of Islamabad. Results of the study clearly indicate that organizational justice and job satisfaction has significant impact on organizational effectiveness.

This study has is helpful for the management of telecom sector for enhancing the organizational effectiveness by focusing on organizational justice and satisfaction in job. As in current study it has been proved that organizational justice and jib satisfaction have significant positive impact for increasing the organizational effectiveness. As it is clear from the study results that score of organizational justice and job satisfaction is low so telecom sector should pay more emphasize on these factors to get good performance from the employees which ultimately increase the organizational effectiveness. These two factors not only result in the long term commitment from the employees but it also increase the satisfaction level of employees which eventually help the management of the company for improving the effectiveness of the organization . It is also evident from the study that commitment of employee is also very important factor when organizational effectiveness is considered. As when employees think that they are treated with justice in the organization and they are satisfied with the job they create a relationship with the company and they are willing to go the extra effort for the company. Both organizational justice and job satisfaction are very significant factors from the employee’s point of view. They are really affected by these factors. Research might deliver sufficient path for the human resource departments of the telecom sector to link their activities with organizational effectiveness.

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