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Organizational-level perceived support enhances organizational profitability
Kyoung Yong Kim1, Robert Eisenberger2, Riki Takeuchi3
1Department of Management and Operations.
The Journal of Applied Psychology
|March 10, 2022
Summary
Organizational-level perceived support positively impacts profitability by improving workforce performance and reducing turnover. This effect is stronger in organizations with lower financial slack resources.
Area of Science:
- Organizational Psychology
- Business Management
- Human Resource Management
Background:
- Perceived organizational support (POS) is linked to outcomes, but organizational-level perceived support (OPS) effects are under-researched.
- Existing literature lacks understanding of how organization-wide employee perceptions of support influence overall organizational performance.
Purpose of the Study:
- To extend organizational support theory to the organizational level.
- To examine the influence of OPS on organizational profitability.
- To investigate the mediating roles of workforce performance and turnover, and the moderating role of financial slack resources.
Main Methods:
- Two studies were conducted with 224 and 96 organizations in South Korea.
- Statistical analyses examined the relationships between OPS, workforce performance, voluntary turnover, organizational profitability, and financial slack resources.
Main Results:
- Workforce performance and voluntary turnover mediate the link between OPS and organizational profitability.
- Organizational financial slack resources moderate the OPS-workforce performance relationship, with a stronger positive effect when slack is lower.
- Financial slack resources did not moderate the OPS-turnover relationship.
Conclusions:
- OPS is a significant driver of organizational profitability through workforce performance and turnover.
- The moderating effect of financial slack suggests strategic implications for resource management.
- Findings offer theoretical contributions to organizational support theory and practical insights for management.
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