The interactive effects of centralization on the relationship between justice and satisfaction.

The current study examines the effects of centralization on the relationship between organizational justice and job satisfaction using referent cognitions theory as a theoretical foundation. The sample consists of 489 members of the National Association of Purchasing Managers. Results indicate that the relationships between procedural, distributive, and interactional justice and job satisfaction are stronger under conditions of high centralization. Directions for future research and implications for managers are discussed.

Keywords: justice; satisfaction; centralization

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Researchers have long acknowledged the relationship between organizational justice and a variety of outcomes. These outcomes have included increased commitment, job performance, organizational citizenship behavior, job satisfaction, and decreased turnover intentions (Cohen-Charash & Spector, 2001). More recently, researchers have begun to expand their understanding of organizational justice by focusing their attention on identifying antecedents (e.g., Schminke, Ambrose, & Cropanzano, 2000) and by exploring the role of justice as a moderator (e.g., Siegel, Post, Brockner, Fishman, & Garden, 2005). For example, Schminke et al. (2000) examined elements of organizational structure as predictors of justice. They found that size, formalization, and centralization relate differently to the three types of justice: procedural, distributive, and interactional.

In recent years, decentralization has been touted as beneficial to reaching organization goals, making better use of employee skills and abilities, permitting more rapid response to environmental change, and providing greater employee development and satisfaction (Alexander, 1991; Daft, 2003). However, organizations must balance the gains and losses that come with decisions on authority delegation. With decentralization comes additional expense: more formal training for decision makers, the cost of performance and reporting systems to provide top management with information about decision effectiveness, and possible duplication of functions. In addition, many firms have managers resist due to both loss of control and the inconsistency of firm responses that come with decentralization (Poitevin, 2000).

The primary purpose of the present study is to extend the research efforts of Schminke et al. (2000) by exploring the role of centralization as a moderator in the justice--satisfaction relationship. Specifically, it is our contention that the strength of the positive relationship between justice and satisfaction (Cohen-Charash & Spector, 2001; McFarlin & Sweeney, 1992) will vary according to the level of centralization of decision making in the organization. We begin with an overview of the justice literature and a discussion of centralization. This is followed by an introduction to referent cognitions theory (RCT), which is used as the guiding theoretical framework.

Justice