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  • Author: Paul Preenen; Peter Oeij; Steven Dhondt; Karolus Kraan; Emma Jansen;
  • Publication date: 26 January 2016
  • Date added: 26 January 2016

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Rating: Why job autonomy matters for young companies’ performance: Company maturity as a moderator between job autonomy and company performance

Why job autonomy matters for young companies’ performance: Company maturity as a moderator between job autonomy and company performance

2016 – In this article in World Review of Entrepreneurship, Management and Sustainable Development, Paul Preenen, Peter Oeij, Steven Dhondt,  Karolus Kraan, and Emma Jansen investigated the impact of job autonomy on company-level outcomes. Specifically they measured the relationship between employees' job autonomy and company performance growth (revenue, profit) and the moderating effect of company maturity in this relationship. They concluded that job autonomy is positively related to company performance growth but only for young companies that are less than six years old.

It has been widely shown that job autonomy has a positive impact on individual-level employee outcomes, but research on company-level outcomes is scarce.  The authors argue that because job autonomy enhances employee job satisfaction, and commits to their companies. It may also have a positive impact on company performance. Furthermore, some studies have found that a higher job autonomy in workers reduces absenteeism and employee turnover, which could save companies valuable resources spend on replacing employees, and may enhance revenue and profit. Because of aforementioned reasons the authors hypothesized that “Job autonomy is positively related to both growth of company revenue, and company profit.”.

The authors further argued that the positive effect of job autonomy for growth of company revenue and profit is stronger for younger companies, defined as companies that are less than six years old, than for older ones. Younger companies are very likely to go bankrupt in their first few formative years, and must learn to adapt very quickly to their environment. The authors argue that the control in how to perform and arrange their work is especially important for workers who still need to find their way while working in highly demanding situations, such as a starting company that must survive. The authors therefore hypothesized that “The positive relationship between job autonomy and company revenue, and company profit will be stronger for younger companies (<= 5 years) than older companies (6+ years)”. 

Methods and results

Questionnaire data from owners, directors, or HR managers was used to measure employees’ job autonomy, as well as the organizational age, revenue, and profit of the company they worked for. In their analyses, the authors controlled for organizational factors, as well as employee characteristics and job challenge. Their results showed that job autonomy was positively related to organizational revenue and profit, but only for young companies. 

Conclusion

The authors conclude that young companies should invest in the job autonomy of their employees as this may help them to better adapt to the environment and consequently grow. Future research on job autonomy needs to account for company maturity to better understand the effects of job autonomy on organizational outcomes.  

Reference

Preenen, P. T. Y., Oeij, P. R. A., Dhondt, S., Karolus O., Kraan, K., & Jansen, E. (2016). Why job autonomy matters for young companies' performance: company maturity as a moderator between job autonomy and company performance. World Review of Entrepreneurship, Management and Sustainable Development, 12(1), 74-100.

The article can be found following this link:

http://www.inderscienceonline.com/doi/abs/10.1504/WREMSD.2016.073425?journalCode=wremsd