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Organizational Structure
Organizational structure, defined as the recurrent set of relationships between organization members (Donaldson, 1996, p.
57), is one of the most ubiquitous aspects of organizations (Clegg
& Hardy, 1996). Donaldson noted that structure includes but is
not limited topower and reporting relationships such as those
identified in organization charts, behaviors required of organization members by organizational rules, and patterns of decision
making (e.g., decentralization) and communication among organization members. Further, it encompasses both formal and informal
aspects of relationships between members.
Research has demonstrated that organizational structure interacts with a variety of factors to influence organizational performance. These factors include environmental change (e.g., Lawrence & Lorsch, 1967), organizational size (e.g., Pugh, Hickson,
Hinings, & Turner, 1969), organizational production technology
(e.g., Perrow, 1967; Woodward, 1965), and organizational strategy
(Chandler, 1962). Thus, structure provides a natural choice to
consider in exploring moderating effects.
The most prevalent distinction for describing fundamental differences in organizational structure is that of mechanistic and
organic structural forms (Burns & Stalker, 1961; Slevin & Covin,
1997; Stopford & Baden-Fuller, 1994). Mechanistic structures are
characterized as rigid, tight, and traditional bureaucracies. In
mechanistic settings, power is centralized, communications follow
rigid hierarchical channels, managerial styles and job descriptions
are uniform, and formal rules and regulations predominate decision making. By contrast, organic organizations are characterized
by flexible, loose, decentralized structures. Formal lines of authority are less clear, power is decentralized, communication channels
are open and more flexible, and formal rules and regulations take
a back seat to adaptability in helping employees accomplish goals
(Burns & Stalker, 1961; Khandwalla, 1977; Lawrence & Lorsch,
Maureen L. Ambrose and Marshall Schminke, Department of Management, University of Central Florida.
Correspondence concerning this article should be addressed to
Maureen L. Ambrose, Department of Management, University of Central Florida, P.O. Box 161400, Orlando, Florida 32816 1400. E-mail:
maureen.ambrose@bus.ucf.edu
295
296
tions, five rules that reflect formal aspects of procedures consistency, bias suppression, accuracy, correctability, and representativenessreceive the most weight. They concluded that
procedural justice is more relevant in mechanistic organizations
than in organic organizations.
Consistent with the argument of Ambrose and Schminke (2001)
is the assertion of Leventhal et al. (1980) that the rules that are
consistent with system goals become the standard by which fairness is evaluated. Specifically, Leventhal et al. (1980) stated that
procedures that facilitate system goals will receive greater weight.
Further, these procedures will come to be seen not simply as
functional, but as right and good . . . [justified] on moral as well
as pragmatic grounds. Procedures and distributions that are favored for practical, utilitarian reasons come to be supported by a
network of moral values that defines those procedures and distributions as fair (p. 196).
A central goal of mechanistic organizations is to eliminate the
human element from decision making (Weber, 1947) by relying
more on formal rules and procedures. Therefore, in mechanistic
organizations, formal procedures will be seen as the standard by
which fairness should be evaluated, and individuals justice concerns will focus on procedural justice.
297
relationship. In particular, they found that procedural justice affected organization-referenced outcomes (e.g., organizational
commitment, turnover intentions), whereas interactional justice
affected supervisor-referenced outcomes (e.g., supervisory organizational citizenship behaviors [OCBs]). More importantly, they
demonstrated that the procedural justice outcome relationship was
mediated by the quality of individuals social exchange relationship with the organization (operationalized by individuals perceptions of organizational support). The interactional justice outcome
relationship was mediated by the quality of individuals social
exchange relationship with their supervisor (operationalized by the
quality of leadermember exchange). Other researchers have
found similar effects for the mediating effect of social exchange
(e.g., Cropanzano, Prehar, & Chen, 2002; Konovsky & Pugh,
1994; Moorman et al., 1998).
Next, we considered the role of structure in these relationships.
Masterson et al. (2000) stated, justice perceptions are important
inputs into employees judgments of the quality of their exchange
relationships with their supervisors and organizations (p. 740).
We suggested previously that procedural justice will be more
salient in mechanistic organizations and that interactional justice
will be more salient in organic organizations. The increased attention to one type of justice or the other should affect the social
exchange relationship that develops. When procedural justice is
most salient, individuals are most likely to develop organizational
exchange relationships because they will have more information
that is relevant for this level of social exchange. Similarly, when
interactional justice is most relevant, individuals will be most
likely to form supervisory exchange relationships because they
have more information relevant to that level of exchange. Therefore, we suggest that in mechanistic organizations, a stronger
relationship will exist between procedural justice and the quality of
organizational social exchange relationships. Likewise, in organic
organizations, a stronger relationship will exist between interactional justice and quality of supervisory social exchange
relationships.
Cropanzano et al. (2001) suggested that researchers have several
choices of operationalizations for social exchange. In this study,
we used two constructs identified by Cropanzano et al. that have
also been used in previous research (Konovsky & Pugh, 1994;
Masterson et al., 2000; Moorman et al., 1998). We operationalized
organizational social exchange via perceived organizational support (POS) and supervisor social exchange with supervisory trust.
Figure 1 illustrates our two hypotheses based on these operationalizations. First, we predicted that the relationship between procedural justice and POS would be stronger in mechanistic than in
organic organizations. That is, we expected an interaction effect,
with structure moderating the relationship between procedural
justice and POS.
Hypothesis 1: The relationship between procedural justice
and POS will be stronger in mechanistic than in organic
organizational structures.
Second, we expected that the increased relevance of interactional
justice in organic organizations to be reflected in the influence of
interactional justice on the quality of supervisory social exchange.
Therefore, we expected that the relationship between interactional
justice and supervisory trust would be stronger in organic than in
mechanistic organizations. Again, this constitutes an interaction
298
Procedure
Figure 1. Organizational structure as a moderator of the relationship
between procedural and interactional justice and perceived organizational
support and supervisory trust.
effect, with structure moderating the relationship between interactional justice and supervisory trust.
Hypothesis 2: The relationship between interactional justice
and supervisory trust will be stronger in organic than in
mechanistic organizational structures.
Method
Participants
Participants were from 102 departments of 68 organizations in the
southeast United States, including financial, food service, retail, manufacturing, education, medical, entertainment, insurance, technology, and governmental organizations. Each organization was contacted through current
students and alumni of a large southeastern university. Five to seven survey
packets (described below) were hand delivered to employees in each
Measures
Organizational structure. Following Covin and Slevin (1989) and
Slevin and Covin (1997), we used Khandwallas (1976/1977) seven-item
scale, which measures the degree to which departments reflected mechanistic or organic characteristics. Participants indicated along a 7-point scale
the degree to which paired statements described the structure of their work
unit. (e.g., A strong insistence on a uniform managerial style throughout
the business unit vs. Managers operating styles allowed to range freely
from the very formal to the very informal and Tight formal control of
most operations by means of sophisticated control and information systems vs. Loose, informal control; heavy dependence on informal relationships and the norm of cooperation for getting things done.) Items were
scored such that higher values represented a more mechanistic structure
(Cronbachs coefficient .83).
Organizational structure is a shared phenomenon. Thus, aggregation of
individual-level perceptions to a group level is desirable (Rousseau, 1985).
We aggregated individual-level perceptions of structure to group-level
measures of shared perceptions of structure (Covin & Slevin, 1989;
Schminke et al., 2000). To ensure that aggregation was appropriate, we
first assessed the degree of agreement for the structure measure by calculating both the within-group interrater reliability statistic (rwg) statistic
(James, Demaree, & Wolf, 1984, 1993; George & James, 1993; Kozlowski
& Hattrup, 1992) and the intraclass correlation coefficient (ICC) for each
department (Bartko, 1976; James, 1982). The rwg statistic reflects the
degree of interrater agreement between members of a group, with 1.00
reflecting perfect agreement across all members. Across the 98 departments in our sample, rwg ranged from .59 to .99, with a mean and median
rwg of .82, suggesting that aggregation was appropriate (George, 1990).1
The ICC(2) for these ratings was .76, indicating that the departments can
be reliably differentiated on individual perceptions of structure (James,
1982). (ICC[1] for these ratings, typically considerably lower than ICC[2],
was .38, which is considered high [Bliese, 2000]. However, James [1982]
1
Nine departments had rwg values that fell below .70, which is often
considered a standard guideline for an acceptable level of agreement for
aggregation. We conducted two sets of analyses. One included all of the
respondents, and the other included only those from companies with rwg
values greater than or equal to .70. The pattern and significance of the
results is the same for both sets of analyses. In the article, we report results
on the basis of the full sample.
299
Table 1
Summary Statistics and Zero-Order Correlations
Variable
1.
2.
3.
4.
5.
6.
** p .05.
SD
3.12
3.95
3.23
3.91
3.13
3.05
0.94
0.99
1.18
0.84
1.23
1.16
.40***
.55***
.08
.52***
.35***
.40***
.08
.41***
.66***
.03
.53***
.31***
.14**
.01
.47***
*** p .01.
Results
We conducted a series of confirmatory factor analyses (CFAs)
to verify the factor structure for our measures. For each analysis,
we examined several commonly used indicators of fit: root-meansquare error of approximation (RMSEA), incremental fit index
(IFI), and comparative fit index (CFI). In general, RMSEA scores
below .08 (Browne & Cudeck, 1993) and IFI and CFI scores above
.90 (Bentler & Bonnett, 1990) indicate a good model fit. First, we
assessed the fit of a five-factor model for the distributive justice,
procedural justice, interactional justice, POS, and supervisory trust
items. Chi-square for the five-factor model was 2(692, N
479) 2617.02, p .001, and the fit indices were RMSEA .08,
IFI .87, and CFI .87. Although two of the indices are slightly
below conventional levels, one indicates acceptable fit. We also
compared the fit of the five-factor model with a single factor
model, 2(702, N 479) 8210.57, p .001; RMSEA .20,
IFI .50, and CFI .50. The five-factor produced a significant
improvement in 2 over the one-factor model, 2(3, N 479)
2
In separate analyses not reported here, we examined the correlations
between our four predictor variables, our outcome variables, and three
potential controls: age, sex, and tenure. Of these 18 correlations, only 1
(age and distributive justice) was significant (r .10, p .05). Including
these three controls in the HLM models revealed no effects for any of the
three and no changes in significance level or direction for any of the main
or interaction effects in the models.
300
Table 2
Results of Hierarchical Linear Modeling Analysis for Interaction Effects Between Procedural
Fairness and Mechanistic Structure
Dependent variable: POS
Model 1
Model 2
Independent variable
Parameter estimate
Parameter estimate
0.33 (0.06)***
0.25 (0.05)***
0.32 (0.05)***
0.21 (0.06)***
0.37 (0.06)***
0.24 (0.05)***
0.31 (0.05)***
0.20 (0.06)***
0.20 (0.08)**
0.04 (0.06)
0.09 (0.06)
2.37 (0.25)***
2.31 (0.25)***
Note. Values in parentheses indicate standard error. POS perceived organizational support.
** p .05. *** p .01.
Discussion
In this study we predicted that organizational structure would
moderate the relationship between procedural and interactional
justice and social exchange relationships. Specifically, we examined the relationship between organizational structure, organizational justice, POS, and supervisory trust. Our results support these
predictions. The most obvious implication of this research is that
context matters in organizational justice and more specifically that
organizational structure matters. Structure influences the relationship between procedural justice and POS and between interactional justice and supervisory trust. We consider each of these
findings below.
First, structure moderates the relationship between procedural
justice and POS. Our results indicate that the relationship between
procedural justice and POS is stronger (i.e., the slope of the
regression line is steeper) in mechanistic organizations than in
organic organizations. The crossover point of the regression lines
indicates that this interaction is ordinal (Aiken & West, 1991;
Lubin, 1961). That is, the crossover point occurs within a relevant
range of the x variable (in this case 1 SD above and below the
mean). Thus, Figure 2 illustrates several interesting contrasts.
First, it suggests that at high levels of procedural justice (e.g.,
when individuals report that the formal procedures are especially
fair), individuals in mechanistic organizations report higher levels
of POS than do individuals in organic organizations. However,
when the level of procedural justice is low (e.g., when formal
procedures are unfair), individuals respond more negatively in
mechanistic organizations than in organic organizations.
These results are consistent with our extension of Leventhal et
al. (1980). The type of justice that is consistent with the goals of
the system is the most influential in individuals assessment of
their relationship. Individuals appear to be more sensitive to procedural justice in an organization that is characterized by a highly
formal, rigid, and bureaucratic system and in which formal procedures are part of the daily landscape. Although procedural justice
plays a role in organic organizations, its presence or absence has a
less pronounced effect where such formality is not expected.
3
301
Table 3
Results of Hierarchical Linear Modeling Analysis for Interaction Effects Between Interactional
Fairness and Organic Structure
Dependent variable: Supervisory trust
Model 1
Model 2
Independent variable
Parameter estimate
Parameter estimate
0.09 (0.05)*
0.70 (0.04)***
0.02 (0.04)
0.06 (0.06)
0.13 (0.05)**
0.71 (0.05)***
0.02 (0.04)
0.27 (0.58)
0.18 (0.07)**
0.11 (0.05)**
0.04 (0.06)
2.96 (0.22)***
2.84 (0.25)***
Second, structure moderates the relationship between interactional justice and supervisory trust (Figure 3). In organic organizations, interactional justice is a more influential determinant of
trust. Organic organizations, with their flexibility and reliance on
informal networks and face-to-face communication, make interpersonal interactions more relevant or available or both, thus
increasing the importance of the fairness of these interactions.
When interactional justice is high, individuals in organic organizations report higher levels of supervisory trust than do individuals
in mechanistic organizations. However, when interactional justice
is low, individuals in organic organizations report lower levels of
trust than do their mechanistic counterparts. The effect of interactional justice on supervisory trust is more pronounced in organic
organizations.
The interaction between structure and procedural justice was
also significantly related to supervisory trust. The form of this
interaction is similar to that between procedural justice and POS.
The relationship between procedural justice and supervisory trust
was stronger in mechanistic organizations than in organic organizations. In mechanistic organizations, the supervisors behavior is
more likely to be constrained by rigid rules and regulations. In
such settings, it may be that the supervisor is perceived as an
extension of the organization, and thus, the fairness of organizational procedures generalizes to affect reactions to the supervisor
as well as the organization.
302
tional structure, all three types of justice are important for POS;
only the relative impact of each varies across organization type.
The main effect for structure is also interesting. This effect
suggests that mechanistic organizations are generally perceived as
less supportive than organic organizations, a finding that is consistent with previous research on organizational structure. For
example, Courtright et al. (1989) found mechanistic structures to
be associated with increasingly dysfunctional interaction patterns
between employees and managers, including higher overall levels
of disagreement, conflict, and managerial attempts to dominate
interactions. In addition, researchers suggest that rigid, mechanistic structures, such as those found in formal bureaucracies, are
likely to alienate employees (Blauner, 1964). These are attributes
that are likely to be associated with low levels of POS.
The effect of structure on POS may provide some additional
insight for existing research on organizational structure. Research
indicates that larger organizations (also characteristic of mechanistic organizations) are associated with higher absenteeism rates
and lower overall satisfaction (Indik, 1963; Rousseau, 1978;
Stevens, Philipsen, & Diederiks, 1992). It may be that POS mediates the relationship between structure and these outcomes.
It is also useful to consider our findings in the context of
previous research on organizational structure and justice, which
has suggested that structure exerts a direct effect on justice. In
particular, Schminke et al. (2000) found that two measures of
centralization were related to procedural justice and that organizational size was related to interactional justice. Although our
study does not directly address the influence of structure on justice,
the correlations in Table 1 reveal no direct relationship between
structure and any of the three forms of justice.
We cannot say with certainty why our correlational results do
not mirror those of Schminke et al. (2000), but several possibilities
exist. First, the two studies employed different measures of justice.
Schminke et al.s measures of procedural and interactional fairness
were adapted from Tyler and Schuller (1990), whereas those in the
present study were based on Colquitts (2001) more recent work.
What is possibly more important, however, are differences in
operationalization of the structure construct. Schminke at al. considered four distinct aspects of structure (two measures of centralization, formalization, and size) and hypothesized about each
aspects influence on procedural and interactional fairness. Our
measure of structure reflects a single, holistic measure of structure.
Finally, participants in the two studies differed somewhat. In the
Schminke et al. (2000) study, participants were midwestern, were
slightly older (mean age 38.6 years), had greater experience with
their organizations (mean tenure 9.1 years), and were more heavily
female (65%) than our participants. Our participants were southeastern, with an average age of 33.6 years, average tenure of 5.4
years, and were 59% male. Recent meta-analysis results (CohenCharash & Spector, 2001) have suggested that age, gender, race,
education, and tenure are not strongly related to justice perceptions. (The organizational justice literature does not speak to issues
of geographical differences.) Nevertheless, demographic factors
may interact in some way with organizational type and structure to
influence fairness perceptions.
The results have both theoretical and practical implications.
First, this research provides one of the few empirical tests of
contextual variables on justice perceptions, an area identified as
important to our understanding of organizational justice (see Lind
& Tyler, 1988, pp. 136 141). Second, the results provide support
for Leventhals (1980) and Tylers (1996) assertion that justice
criteria receive different weights in different settings. Although our
study did not assess the influence of specific justice criteria, the
differential effect of procedural justice and interactional justice on
outcomes is consistent with these assertions. Third, there has been
debate in the justice literature regarding the independence of
procedural justice and interactional justice (e.g., Bobocel & Holmvall, 2001). The differential effect of structure on procedural and
interactional justice provides additional evidence for the independence of these two constructs.
The results have practical importance as well. They suggest that
organizational interventions aimed at improving perceptions of
fairness should explicitly consider the role of organizational structure in the development of those perceptions. For example, justice
researchers have suggested organizations improve perceptions of
fairness by drafting formal polices that will be seen as fair (Folger
& Lewis, 1993; Gilliland, 1993; Grandey, 2001; Konovsky &
Brockner, 1993). Our findings suggest that this approach may be
most fruitful in mechanistic organizations. Similarly, Skarlicki and
Latham (1996, 1997) suggested that organizations should invest in
supervisor training to increase the sensitivity of interpersonal
interaction. Although our results demonstrate the importance of
interactional justice for both mechanistic and organic organizations, they also demonstrate that such training may have a more
pronounced effect in organic organizations where the organizational structure may facilitate its positive effect.
Like all studies, this one has some limitations. One potential
concern is that our results could be explained by common
method variance. Because many of the variables were taken
from a single respondent, some association might be expected
due to response style. However, our use of an aggregated
structure measure decreased our dependency on singlerespondent impressions. Further, our interaction effects were
significant, but as predicted, occurred in opposite directions for
procedural and interactional justice. Common method variance
would contribute to conformity in resulting relationships rather
than contrasting results like these.
In addition, although previous justice research has suggested our
causal ordering, it is also possible that organizational structure
affects the type of social exchange relationship that is important to
individuals and that the social exchange relationship affects the
importance of the different types of justice. In addition, the relationship between the quality of social exchange and perceptions of
fairness is most likely reciprocal. As Cropanzano et al. (2001)
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