The Relationship of Employee Perceptions of Organizational Climate to Business-Unit Outcomes: An MPLS Approach

Journal of Service Research, Forthcoming

49 Pages Posted: 18 Jul 2006 Last revised: 19 Nov 2012

See all articles by Bruce Cooil

Bruce Cooil

Vanderbilt University - Statistics

Timothy L. Keiningham

Ipsos Loyalty - North America

Lerzan Aksoy

Koc University

Kiersten M. Maryott

Virginia Commonwealth University - School of Business

Date Written: July 15, 2008

Abstract

There has been an extensive exploration of how organizational climate is related to various business outcomes, but these studies have generally examined outcomes separately or developed univariate measures that combine outcomes. These approaches fail to (a) accommodate the multivariate character of important business results, and (b) facilitate the firm's need to achieve success on several dimensions. This research proposes a methodological approach new to the service domain to address these issues. Using data from a large, multi-national retail grocery superstore based in continental Western Europe, this study illustrates how multivariate partial least squares (MPLS) models can be used. MPLS provides three interpretable factors - Overall Organization Climate, Self Efficacy versus Leader's Efficacy and Personal Empowerment versus Management Facilitation of - climate that are important predictors of three business outcomes: employee retention, customer satisfaction, and scaled revenue. The use of the MPLS approach in other services domains is also explored.

Keywords: Employee Perceptions, Organizational Climate, Employee Turnover, Customer Satisfaction, Financial Performance, Multivariate Partial Least Squares

Suggested Citation

Cooil, Bruce and Keiningham, Timothy L. and Aksoy, Lerzan and Maryott, Kiersten M., The Relationship of Employee Perceptions of Organizational Climate to Business-Unit Outcomes: An MPLS Approach (July 15, 2008). Journal of Service Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=917238

Bruce Cooil (Contact Author)

Vanderbilt University - Statistics ( email )

Nashville, TN 37203
United States

Timothy L. Keiningham

Ipsos Loyalty - North America ( email )

Parsippany, NJ
United States

Lerzan Aksoy

Koc University ( email )

Cayir Cad. No: 5 Istinye
Sariyer 80910, Istanbul, 34450
Turkey

Kiersten M. Maryott

Virginia Commonwealth University - School of Business ( email )

Richmond, VA 23284-4000
United States

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