The impact of perceived organizational cronyism on decision-making: The moderating role of ethical organizational culture
-
Received November 19, 2024;Accepted February 13, 2025;Published February 28, 2025
- Author(s)
-
DOIhttp://dx.doi.org/10.21511/ppm.23(1).2025.23
-
Article InfoVolume 23 2025, Issue #1, pp. 313-324
- TO CITE АНОТАЦІЯ
- 46 Views
-
7 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
One of the primary responsibilities of managers is to make informed decisions that promote company progress and enhance performance. Unfortunately, not all managers adhere to appropriate decision-making standards. Some managers may resort to subjective criteria instead of relying on objective performance metrics. The purpose of this study is to investigate employees’ perceptions of cronyism and how organizational cronyism influences decision-making in pharmaceutical manufacturing companies in Jordan. A quantitative approach was employed, using a structured questionnaire to gather employee responses. The questionnaires were collected from employees of the top five pharmaceutical companies, which are considered the most dynamic and competitive in the Jordanian market. A total of 452 usable questionnaires were included in the analysis. The results indicate that all three dimensions of organizational cronyism, including paternal cronyism (β = 0.295, t = 5.382, p > 0.000), in-group bias (β = 0.277, t = 3.514, p > 0.000), and reciprocal exchange of favor (β = 0.321, t = 3.866, p > 0.000), have a significant impact on decision-making. Regarding the moderating impact of ethical organizational culture, the results reveal a weak impact on the relationship between the dimensions of organizational cronyism and organizational culture. Unprejudiced decision-making can be a crucial factor in fostering an ethical culture and reducing organizational cronyism.
- Keywords
-
JEL Classification (Paper profile tab)M14, D23, D73
-
References56
-
Tables4
-
Figures2
-
- Figure 1. Research model
- Figure 2. Hypotheses testing
-
- Table 1. Demographic profile
- Table 2. Factor loadings, Cronbach’s alpha, average variance extracted (AVE), and weight of item loading
- Table 3. Discriminant validity: Fornell-Larcker criterion
- Table 4. Hypothesis testing
-
- Akca, M. (2020). An investigation of the relationship between favoritism and workplace deviance: Meditation role of negative emotions. In N. Sharma (Ed.), Analyzing workplace deviance in modern organizations (pp. 114-138). IGI Global Scientific Publishing.
- Akhwarshida, A., & Al-Adwan, A. (2017). The negative effects of wasta and cronyism on quality in Jordanian public universities: An exploratory study. The Arab Journal of Education Quality, 4(1), 30-49. (In Arabic).
- Ali, S., Shahzad, F., Hussain, I., Yongjian, P., Khan, M., & Iqbal, Z. (2022). The outcomes of organizational cronyism: A social exchange theory perspective. Frontiers in Psychology, 13, Article 805262.
- Al-Rawabdeh, M., Ababneh R., Al-Adwan, S., Nawafleh, S., & Adayleh, A. (2020). The extent of the phenomenon of wasta and favoritism in the Jordanian public sector. Queen Rania Center for Jordanian Studies and Community Service, Yarmouk University.
- Arasli, H., & Tumer, M. (2008). Nepotism, favoritism and cronyism: A study of their effects on job stress and job satisfaction in the banking industry of north Cyprus. Social Behavior and Personality: An International Journal, 36(9), 1237-1250.
- Arasli, H., Bavik, A., & Ekiz, E. (2006). The effects of nepotism on human resource management: The case of three, four and five star hotels in Northern Cyprus. International Journal of Sociology and Social Policy, 26(7/8), 295-308.
- Ardichvili, A., Jondle, D., Kowske, B., Cornachione, E., Li, J., & Thakadipuram, T. (2012). Ethical cultures in large business organizations in Brazil, Russia, India, and China. Journal of Business Ethics, 105(4), 415-428.
- Badran, M., & Akeel, A. (2022). Ethical leadership behavior and organizational cronyism among staff nurses. Egyptian Journal of Nursing and Health Sciences, 3(1), 207-224.
- Barbalet, J. (2023). Conceptualizing informal institutions: Drawing on the case of guanxi. The British Journal of Sociology, 74(1), 70-82.
- Bilal, R., Fatima, T., & Imran, K. (2020). Shutting eyes to merit! The curse of cronyism in Pakistani small and medium scale business. South Asian Journal of Human Resources Management, 7(1), 61-90.
- Begley, M., Khatri, N., & Tsang, W. (2010). Networks and cronyism: A social exchange analysis. Asia Pacific Journal of Management, 27(2), 281-297.
- Diefenbach, T. (2009). New public management in public sector organizations: The dark sides of managerialistic ‘enlightenment’. Public Administration, 87(4), 892-909.
- Choi, S. (2011). Organizational justice and employee work attitudes: The federal case. The American Review of Public Administration, 41(2), 185-204.
- Cialdini, R. B. (2001). Harnessing the science of persuasion. Harvard Business Review, 79, 72-81.
- Danilwan, Y., Dirhamsyah, & Pratama, I. (2022). The impact of the human resource practices on the organizational performance: Does ethical climate matter? Journal of Positive School Psychology, 6(2), 3067-3082.
- De Clercq, D., Fatima, T., & Jahanzeb, S. (2022). Cronies, procrastinators, and leaders: A conservation of resources perspective on employees’ responses to organizational cronyism. European Journal of Work and Organizational Psychology, 31(1), 77-88.
- Demirtas, O., & Akdogan, A. A. (2015). The effect of ethical leadership behavior on ethical climate, turnover intention, and affective commitment. Journal of Business Ethics, 130(1), 59-67.
- Dhiman, B. (2024). Cronyism and favoritism in appointing faculty in higher education system: A critical review. SSRN Electronic Journal.
- Erdem, B., & Karataş, A. (2015). The effects of cronyism on job satisfaction and intention to quit the job in hotel enterprises: The case of three, four and five star hotels in Muğla, Turkey. Manas Journal of Social Studies, 4(1), 55-74.
- Elbaz, M., Haddoud, Y., & Shehawy, M. (2018). Nepotism, employees’ competencies and firm performance in the tourism sector: A dual multivariate and qualitative comparative analysis approach. Tourism Management, 67, 3-16.
- Fatima, T., Bilal, R., Imran, K., Sarwar, A., & Shabeer, S. (2024). The hidden cost of cronyism! A nexus of knowledge hiding, moral disengagement and egoistic climate in higher educational institutions. Journal of Applied Research in Higher Education.
- Hofstede, G. (2010). Cultures and organizations: Soft wares of the minds, Revised and extended (3rd ed.). New York: McGraw-Hill.
- Huhtala, M., Tolvanen, A., Mauno, S., & Feldt, T. (2015). The associations between ethical organizational culture, burnout, and engagement: A multilevel study. Journal of Business and Psychology, 30(2), 399-414.
- Hair, J. F., Ringle, C. M., & Sarstedt, M. (2012). Partial least squares: The better approach to structural equation modeling? Long Range Plan, 45(5-6), 312-319.
- Hair, J., Hult, G., Ringle, C., & Sarstedt, M. (2014). A primer on partial least squares (PLS) structural equation modeling. New York, NY, USA: Sage Publications.
- Hair, J.F., Hult, G.T.M., Ringle, C.M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Thousand Oaks, CA: Sage Publications Inc.
- Jawahar, M., Bilal, R., Fatima, T., & Mohammed, J. (2021). Does organizational cronyism undermine social capital? Testing the mediating role of workplace ostracism and the moderating role of workplace incivility. Career Development International, 26(5), 657-677.
- Jones, T. (1991). Ethical decision making by individuals in organizations: An issue-contingent model. The Academy of Management Review, 16(2), 366-395.
- Keleş, N., Ozkan, K., & Bezirci, M. (2011). A study on the effects of nepotism, favoritism, and cronyism on organizational trust in the auditing process in family businesses in Turkey. International Business & Economics Research Journal, 10(9), 9-16.
- Khan, M. A. (2024). Linking organizational cronyism, time theft and nurse’s proactive behavior: An evidence from public sector hospitals of Pakistan. International Journal of Health Care Quality Assurance, 37(1/2), 1-23.
- Khatri, N., & Tsang, E. (2003). Antecedents and consequences of cronyism in organizations. Journal of Business Ethics, 43(4), 289-303.
- Khatri, N., & Tsang, E. (2016). Antecedents and consequences of cronyism in organizations. In N. Khatri & A.K. Ojha (Eds.), Crony Capitalism in India (pp. 9-31). London: Palgrave Macmillan.
- Kirbac, U. (2013). Image labeling and classification by semantic tag analysis (Master’s Thesis). Tampere University of Technology.
- Kteily, N., & Bruneau, E. (2017). Backlash: The politics and real-world consequences of minority group dehumanization. Personality and Social Psychology Bulletin, 43(1), 87-104.
- Lasisi, T., Constanţa, E., & Eluwole, K. (2022). Workplace favoritism and workforce sustainability: An analysis of employees’ well-being. Sustainability, 14(22), Article 14991.
- Loewe, M., Blume, J., & Speer, J. (2008). How favouritism affects the business climate: Empirical evidence from Jordan. Middle East Journal, 62(2), 259-276.
- Leguina, A. (2015). A primer on partial least squares structural equation modeling (PLS-SEM). International Journal of Research & Method in Education, 38(2), 220-221.
- Mao, Y., Liu, Y., Jiang, C., & Zhang, I. D. (2018). Why am I ostracized and how would I react? A review of workplace ostracism research. Asia Pacific Journal of Management, 35, 745-767.
- Negm, A., Sarah, A., & Ghada, Y. (2023). The effect of perceived organizational favoritism on employee frustration: An applied study on employees of the Damietta and Port Said Ports Authority. Egyptian Journal of Business Studies, 47(3), 314-347.
- Negulescu, O., & Doval, E. (2014). The quality of decision-making process related to organizations’ effectiveness. Procedia Economics and Finance, 15, 858-863.
- Ott, S. (1989). The organizational culture perspective. Chicago, Illinois: Dorsey Press.
- Pearce, L. (2015). Cronyism and nepotism are bad for everyone: The research evidence. Industrial and Organizational Psychology, 8(1), 41-44.
- Riaz, A., & Zaman, S. (2018). Impact of ethical leadership on organizational cronyism through mediating role of ethical culture and moderating role of leader member exchange. Pakistan Journal of Commerce and Social Sciences (PJCSS), 12(3), 831-850.
- Roy, A., Newman, A., Round, H., & Bhattacharya S. (2024). Ethical culture in organizations: A review and agenda for future research. Business Ethics Quarterly, 34(1), 97-138.
- Rynes, L., Gerhart, B., & Parks, L. (2005). Personnel psychology: Performance evaluation and pay for performance. Annual Review of Psychology, 56, 571-600.
- Saraç, Ö., & Batman, O. (2024). The effect of the perception of cronyism in hotels on employee motivation. Journal of Quality Assurance in Hospitality & Tourism, 25(4), 994-1027.
- Sboul, H. (2024). The Jordanian pharmaceutical industry. The First Arab-Hellenic Health Conference. Athens.
- Shaheen, S. (2017). Using organizational cronyism as an explanatory mechanism in the relationship between leader member exchange, psychological contracts and outcomes: Moderating role of culture (Ph.D. Thesis). Islamabad, Pakistan: Capital University of Science & Technology.
- Shaheen, S., Abrar, M., Saleem, S., Shabbir, R., & Zulfiqar, S. (2023). Linking organizational cronyism to deviant workplace behavior: Testing the mediating role of employee negligence in Pakistani higher education institutions. International Journal of Leadership in Education, 26(3), 427-449.
- Shamim, S., Zeng, J., Shariq, S. M., & Khan, Z. (2019). Role of big data management in enhancing big data decision-making capability and quality among Chinese firms: A dynamic capabilities view. Information & Management, 56(1), Article 103135.
- Shaw, D., Gupta, N., & Delery, J. (2005). Alternative conceptualizations of the relationship between voluntary turnover and organizational performance. Academy of Management Journal, 48(1), 50-68.
- Soleimanof, S. (2016). Cronyism and entrepreneurship: An international analysis of the influence of cronyism on country level productive and unproductive entrepreneurship (Doctoral Thesis). Oklahoma State University.
- Strauss, K., Parker, S., & O’Shea, D. (2017). When does proactivity have a cost? Motivation at work moderates the effects of proactive work behavior on employee job strain. Journal of Vocational Behavior, 100, 15-26.
- Tekiner, M., & Aydın, R. (2016). Analysis of relationship between favoritism and officer motivation: Evidence from Turkish police force. Inquiry: Sarajevo Journal of Social Sciences, 1(2), 122-123.
- Treviño, K., & Weaver, G. (2003). Managing ethics in business organizations: Social scientific perspective. Stanford University Press.
- Turhan, M. (2013). Organizational cronyism: A scale development and validation from the perspective of teachers. Journal of Business Ethics, 123(2), 295-308.
-
-
Conceptualization
Hamza Khraim
-
Data curation
Hamza Khraim
-
Formal Analysis
Hamza Khraim
-
Investigation
Hamza Khraim
-
Methodology
Hamza Khraim
-
Project administration
Hamza Khraim
-
Resources
Hamza Khraim
-
Software
Hamza Khraim
-
Supervision
Hamza Khraim
-
Validation
Hamza Khraim
-
Writing – original draft
Hamza Khraim
-
Writing – review & editing
Hamza Khraim
-
Conceptualization
-
The impact of strategic human resources planning on the organizational performance of public shareholding companies in Jordan
Shaker Al-Qudah, Abdallah Mishael Obeidat
, Hosam Shrouf , Mohammed A. Abusweilem
doi: http://dx.doi.org/10.21511/ppm.18(1).2020.19
Problems and Perspectives in Management Volume 18, 2020 Issue #1 pp. 219-230 Views: 3521 Downloads: 3448 TO CITE АНОТАЦІЯPerformance management (PM) is a common practice used by organizations to assess and manage employees’ work. Much of PM research is closely related to management practices. Corporations in the public and nonprofit sector continuously develop PM programs to ensure the sustainability of their organizations.
The study aims to analyze the impact of strategic human resources planning on the organizational performance of Jordanian public shareholding companies for senior management and functional unit managers (human resources, marketing, finance, and accounting). The researchers surveyed all the public shareholding companies registered with the Jordan Securities Commission (JSC) in 2019, wherein they found that only 60 companies applied strategic planning and human resources planning (HRP) together. Two hundred and twenty questionnaires were distributed in 52 companies surveyed, and 203 were adopted for statistical analysis. Several statistical methods were used, most notably the multiple regression analysis. The researchers found out a statistically significant impact of the strategic human resources planning (integration of HRP and strategic planning; strategic participation) on organizational performance. The results showed that adopting the strategic HRP dimensions leads to an increase in an organization’s overall productivity, employee satisfaction and reputation, as well as reduced operating costs. HR managers must understand the effectiveness of strategically designed HR practices across functions. -
Human resources staffing process and its impact on job involvement: Irbid District Electricity Company as a case study
Problems and Perspectives in Management Volume 17, 2019 Issue #2 pp. 254-266 Views: 2858 Downloads: 490 TO CITE АНОТАЦІЯThe study aimed to identify the level of practicing the human resources staffing process and the level of the employees’ job involvement in the Irbid District Electricity Company in Jordan; it also aimed to examine the impact of human resources staffing process on the employees’ job involvement. The study adopted the descriptive, analytical method, since it determines the characteristics of the phenomenon, describes its nature accurately and then determines the quality of the relationship between its variables. The study population included all the individuals in the senior and middle administrative levels by 100 individuals. To achieve the objectives of the study, the researchers prepared a questionnaire to examine the study variables. One hundred questionnaires were distributed to each manager, deputy manager, and department head in the Irbid District Electricity Company out of which the researchers retrieved 97 questionnaires valid for analysis. In order to analyze the data collected, the study relies on the Statistical Package for Social Sciences (SPSS) where the descriptive statistics for all the fields of the study were estimated. The correlation matrix was also used to determine the relationship between variables. Furthermore, multiple regressions were used to determine the impact of the independent variable on the dependent variable. The findings showed that the level of practicing the human resources staffing process and the employees’ job involvement at Irbid District Electricity Company (IDECO) was moderate. The findings of the study showed that the process of human resources staffing was positively associated with the job involvement where the Pearson coefficient was r= .851 and at level of significance of 0.00. The research data have also indicated that the human resources staffing process had a positive impact on the employees’ job involvement. The study recommended that the procedures of staffing in all organizations should focus on achieving the fit between the employee and his job through focusing on choosing employees whose knowledge, skills and abilities correspond to the requirements of vacant jobs and also through implementing different tests and selection interviews, which help choose the person whose traits fit the job requirements. The study has also indicated that the recommended organizations should also pay attention to the job design process where the focus is on designing jobs in a way that creates a challenge, and enables employees feel independence and joy during the job; in this method, the employee can be more involved and can work in an effective way.
-
Determinants of foreign portfolio investment: the case of Jordan
Investment Management and Financial Innovations Volume 15, 2018 Issue #1 pp. 328-336 Views: 2648 Downloads: 839 TO CITE АНОТАЦІЯThis study investigates the determinants of foreign portfolio investment in Jordan using series of data covering the period from 2000 to 2016. Eight independent variables were employed. They are: aggregate economic activity, inflation, interest rate differentiation, stock market performance, risk diversification, country creditworthiness, governance, and corruption. The regression results show that good and stable macroeconomic environment attracts foreign investors. In addition, foreign investors prefer to invest in the capital market which provides an opportunity of risk diversification. A country that has enough liquidity to meet its obligation, and has well-governed environment attracts more portfolio investment. The results of the study provide empirical evidence about the factors that have a significant impact on the flow of foreign portfolio investment to Jordan. These factors can be utilized when formulating polices by the specialized authorities who are seeking to attract more portfolio investment.