Sinéad Corcoran; Emile Louis Thimot; Olena Tkachenko , pp. 44. MAM/Sektionen för Management, 2012.
Subcontracting is an option available to modern organizations that aim to enhance their competitive position via the use of externally employed resources. While organizations try to become more productive and cost efficient in their outsourcing efforts the question of a possible impact of cultural and employment differences on organizational support, employee commitment and subsequently organizational performance remain suitable.
This thesis investigates the impact of cultural distance and subcontractor distance on perceived organizational support. Perceived organizational support is considered amongst the key factors in the social exchange between employees and their employer and directly impacts employee commitment, attitudes and organizational performance. This research investigates how organizational supports provided by an engineering company in Denmark and its vendor are perceived by the two groups of culturally and contractually diverse employees. Both sets of employees were surveyed and the results were compared against stated hypotheses.
Data for this research was collected through a questionnaire survey from a sample of subcontracted foreign employees and host employees. Several semi structured interviews were also conducted with the host organization employees and subcontracted foreign employees in order to ensure a quality verification of the data received from the survey.
The findings of the study suggest that there is no direct link between perceived organizational support and cultural distance as the results of the subcontracted foreign employees are equivalent to those received from their Danish counterparts. Surprisingly, perceived organizational support of subcontracted employees rated higher towards the host organization than towards the vendor organization, their immediate employer. The current research provides supporting evidence that subcontracted foreign employees have dual commitment to both organizations, with higher level of commitment to the host organization. The proposed hypotheses were not confirmed. The results suggest that cultural distance has no significant impact on perceived organizational support for both the host and vendor organization employees.
The study extends our understanding of organizational commitment that organizations can obtain from their contingent employees and the empirical findings provide us with a better understanding of the methods that can be used to achieve organizational goals.
In summary, although organizations have to be mindful of possible challenges that outsourcing arrangements may bring due to cultural and contractual differences, there is no direct evidence of cultural distance impacting on employee attitude and commitment in this scenario. Organizational support provided by organizations will be perceived and appreciated regardless of cultural differences and employment status of its permanent and contingent employees.