The Moderating Role of Perceived Organizational Justice in the Relationship Between Corporate Governance and Employee’s Organizational Commitment: The Case of Awash Insurance Company (S.C.)
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Date
2019-06
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Addis Ababa University
Abstract
The success of an organization is essentially reliant on employee’s commitment and hence the concept has attracted many researchers in helping organizations to be productive and achieving their long-term strategies. Corporate governance is also one of a global heart-warming area of study in sustaining business in the last few decades and is a dominant concept in enhancing business performance. Although several related researches have been conducted in different parts of the world, few were in Ethiopia. This study, thus, targets to fill this gap by taking 181 random samples from employees at several branches of Awash Insurance Company (S.C.) in Addis Ababa and its locality. A theoretical foundation was compiled for the study based on the literature review. Both direct effect of Corporate Governance (CG) – employee’s Organizational Commitment (OC) relationship and interaction effect of Perceived Organizational Justice (POJ) as moderator were examined in this relationship. Moderated hierarchical regression has been applied to present how CG as independent variable and POJ as moderator influence employee’s organizational commitment. From the analyses, it was established that CG has positive and statistically significant effect i.e. p<0.05 on employee’s organizational commitment. However, POJ was not found to moderate the relationship between CG and OC significantly in hypothesized direction i.e. p>0.05. Based on the findings, it was concluded that CG is a valuable strategic direction for the Company to improve the organizational commitment of its employees. However, the role of the moderator was not statistically significant to influence the relationship between corporate governance and employee’s organizational commitment.
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Awash Insurance Company, Corporate Governance, Organizational Commitment