Journal of Management Information and Decision Sciences (Print ISSN: 1524-7252; Online ISSN: 1532-5806)

Research Article: 2021 Vol: 24 Issue: 6

Mediating effect of organizational trust on the nexus between organizational justice and knowledge sharing: an empirical investigation

ARUOREN Emmanuel Ejiroghene, Delta State University

ODIRI Vincent I O, Delta State University

IGEMOHIA Mohammed, Delta State University

Citation Information: Aruoren, E. E., Odiri, V. I.O., & Igemohia, M. (2021). Mediating effect of organizational trust on the nexus between organizational justice and knowledge sharing: an empirical investigation. Journal of Management Information and Decision Sciences, 24(6), 1-14.

Abstract

Recently, knowledge sharing has been a hot topic of discussion among researchers and practitioner; however, it has remained elusive. Employees may not share their knowledge with colleagues when injustice and lack of trust prevails within the organizations. This research explores the mediating role organizational trust has on the relation linking organizational justice to knowledge sharing. The research population consists of 475 employees of Warri Refining and Petrochemical Company located in Delta State, Nigeria, and a sample size of 167 was obtained. Structural Equation modeling technique was use in testing the hypotheses. Results indicate that organizational trust is positive and significantly related to both knowledge sharing and organizational justice (p < 0.05). Furthermore, organizational trust fully mediates the relationship between knowledge sharing and organizational justice. The study recommends that management should ensure that justice prevail in organizational activities. Also, the enhancement of organizational trust among employees should be given attention, as this will encourage employees to share their knowledge with colleagues

Keywords

Knowledge sharing; Organizational justice; Organizational trust.

Introduction

Knowledge is an important resource for gaining a competitive advantage in the twenty-first century (Chandra, 2019; Sukier et al., 2020). Effective and efficient organizations tend to utilize the knowledge assets available in individuals and groups to produce goods and services that satisfy customers‟ needs in a dynamic business environment. However, the knowledge that resides in individuals is of little value to an organization if it is not shared among its members. Knowledge sharing is therefore a fundamental part of the knowledge management process. Thus, getting “the right information, to the right person, in the right place, and at the right time” (Jean-Paul & Shih, 2011) is the hallmark of knowledge management.

According to Mohajan (2016), knowledge can be described as the accumulation of experiences, suitable information, and skilled perception which offers a framework for estimating, and integrating new experiences and information. It can be classified as either explicit or tacit knowledge (Nonaka & Takeuchi, 1995). Haldin-Herrgard (2000) vividly described tacit and explicit knowledge in terms of an iceberg. Explicit knowledge can be compared to the visible top of the iceberg (which is only a small part of the whole iceberg). It is easy to find, recognize, and easier to share. Underneath the surface of the iceberg is the most significant, invisible, and hard to express part, called tacit knowledge. Tacit knowledge is the source of the core capability and means of gaining a competitive advantage in any organization. About eighty percent of the total knowledge in an organization is tacit, while the remaining twenty percent is explicit (Mohajan, 2016). Converting tacit knowledge to explicit knowledge is a huge challenge for most organizations; this can be achieved through knowledge sharing. Though little is known about the antecedent of knowledge sharing (Zhang and Jiang, 2015), in an atmosphere of distrust, competitiveness, and lack of fairness in organizational activities, employees may hoard knowledge.

Hameed et al. (2019) argue that a review of the literature shows that relatively few studies examined the relationship between organizational justice and knowledge sharing behavior of employees. Further, though prior studies examined the mediating effect of organizational trust on several organizational relationships (Pucetaite & Novelskaite, 2014; Singh & Malhotra, 2015; Rua & Araujo, 2016; Yu et al. 2018;), the researchers could not find any study that examined the mediating effect of organizational trust in the relationship between organizational justice and knowledge sharing. This study intends to fill this research gap. The remaining section of this paper is structured as follows: literature review, theoretical framework, hypotheses development, methodology, results, discussion, conclusion, and theoretical/practical contributions.

Literature Review

Knowledge Sharing

Knowledge is acknowledged to be an important resource that aids an organization in gaining competitive advantage in the 21st century (Asrar-ul-Haq & Anwar, 2016). However, the existence of such knowledge resources in an organization does not ensure success (Hussein et al., 2016). To guarantee success, employees must share personal knowledge, thereby converting individual knowledge to organizational knowledge (Dalkir, 2017). The management of knowledge resources within an organization is the key focus of knowledge management and knowledge sharing plays a vital role in the process (Witherspoon et al., 2013).

The main objective of knowledge sharing is the mutual exchange of knowledge among organizational members. Yesil and Dereli (2013) conceptualize knowledge sharing as the exchange and transfer of relevant information and work know-how as well as collaborating with others in finding the solution to organizational problems. It is the process of mutually exchanging knowledge that leads to the creation of new knowledge (van den Hooff & de Ridder, 2004). Further, it denotes the commutation of task-related knowledge which helps other employees in their daily activities, and thus solves organizational problems leading to the development of new knowledge (Ahmad, 2017).

Two individuals take part in the knowledge sharing process: knowledge supplier and knowledge demander (Javadpour & Samiei, 2017). According to Le and Lei (2017), the knowledge supplier refers to an individual who voluntarily supplies personal or tacit knowledge to coworkers, whereas knowledge collector refers to individuals who receive knowledge relating to his/her job from colleagues and learning from it. Both parties must willingly participate in the knowledge sharing process for its effectiveness. Previous studies have associated knowledge sharing with positive organizational outcomes such as improved performance, creativity/innovation, reduced product development cycle, and reduction in cost (Ozer & Vogel, 2015).

Organizational Justice

The perception among employees of organizational justice is an important predictor of employees’ behavioral tendencies within their organizations. The fairness of managers or supervisors in organizational activities as perceived by employees is called organizational justice. According to Greenberg (1990), organizational justice refers to the degree of fairness in organizational activities as perceived by employees. Yesil and Dereli (2013) define organizational justice as an individual’s perception of the extent of fairness in the workplace. Organizational justice has been studied and linked to several organizational variables including organizational citizenship behavior (Jafari & Bidarian, 2012); organizational commitment (Crow et al., 2012); job satisfaction (Rahman et al., 2015); organizational silence and cynicism (Erdoğdu, 2018); and organizational identification (Fuchs & Edwards, 2012).

Organizational justice is a multidimensional concept with six dimensions which include distributive justice, procedural justice, interactional justice (interpersonal and informational justice), temporal justice, and spatial justice. Distributive justice relates to an assessment by employees of the outcomes they receive from their organization. In terms of outcomes, employees usually compares their output (such as salary) and inputs (education), and then compare them to other co-workers. Fairness problems often occur when they perceive inequity or injustice (Folger & Cropanzano, 1998).

Colquitt (2001) notes that procedural justice refers to the fairness in procedures adopted by an organization in the allocation and distribution of rewards, including the opportunity given to employees‟ voice during the process. Fairness in terms of interpersonal treatment by superiors at work is referred to as interactional justice. It has two components, namely interpersonal justice and informational justice. Interpersonal justice refers to the fairness of interpersonal treatment an employee receives in an organization, whereas informational justice refers to the perceived fairness in providing thorough explanations and justifications of how and why certain decisions were made in an organization (Colquitt, 2001). According to Usmani and Jamal (2013), spatial justice refers to fairness in the distribution of space which is “socially valued”, whereas temporal justice indicates the fairness in the distribution of time to complete an organizational task.

Organizational Trust

Trust is an important variable in building social relationships in organizations. Scholars and practitioners alike have long identified organizational trust as an important antecedent of employees‟ attitudes and behavioral tendencies. A review of the literature indicates that there is no generally accepted definition of organizational trust. Mayer et al. (1995) define organizational trust as „the willingness of one party to be vulnerable to the actions of another party based on the expectation that the other party will perform a particular action important to the trust or, irrespective of the ability to monitor or control that other party‟. Trust, therefore, refers to an employee’s willingness to be prone to risk associated with another party’s failure to live up to expectations (Wahyudi et al., 2020).

According to Rousseau et al. (1996), organizational trust is a mental condition whereby an individual intentionally accepts to be vulnerable because of positive expectations involving the behavior of another. We conceptualize organizational trust as an employee’s belief that a co-worker, manager, or supervisor, and the organization at large will take actions that are beneficial to him. Organizational trust can be both horizontal and vertical. Horizontal trust refers to trust among co-workers within an organization, while vertical trust refers to trust between employees and their supervisors as well as the organization in general.

Prior researchers have identified beneficial outcomes of organizational trust. These include job satisfaction (Zhao et al., 2013), employee loyalty (Chen et al., 2011), leadership effectiveness (Tyler, 2003), cooperative behavior (Hansen et al., 2011), organizational commitment (Cho & Park, 2011).

Theoretical Framework

This study adopts social exchange theory (SET) as its theoretical framework. This theory is based on an exchange of valuable resources such as knowledge, which benefits parties involved in the exchange relationship. According to Blau (1964), individuals in an exchange relationship want to maximize the benefits and minimize the cost associated with such exchanges. Bock et al. (2005) argue that people share their knowledge when their interests outweigh the costs associated with sharing such knowledge. In analyzing knowledge sharing behavior, Davenport and Prusak (1998) outlined some of the benefits associated with such behavior to include future reciprocity, status, job security, and promotional prospects. Social exchange theory has been successful in explaining the knowledge-sharing behavior among individuals, as knowledge sharing may be considered an exchange process.

Hypotheses Development

Prior researchers have studied the extent to which organizational justice can influence employees‟ knowledge sharing behavior. Akram et al. (2017) explored the extent to which organizational justice associates with knowledge sharing. Using a sample of 245 workers in a telecommunication company in China, findings indicate that distributive, procedural, interactional, and temporal justice related positively and significantly to worker’s knowledge sharing behavior, while a negative but strong association was established between spatial justice and knowledge sharing.

In a recent study, Cugueró-Escofet et al. (2019) developed a model which related organizational justice to knowledge sharing, using a sample of 1350 employees in Spain. In this study, organizational justice was found to be positively associated with knowledge sharing. Similar results were obtained by other researchers: Ardakani (2012); Ibragimova et al. (2012); Olowodunoye (2015); David et al. (2018); Thus, we propose that:

H1: Organizational justice is positive and significantly related to knowledge sharing.

Some researchers have highlighted the association between organizational justice and organizational trust. Colquitt and Rodell (2011) using a longitudinal field research design, studied 202 employees drawn from diverse industries (retail, law, and hospitality), and found that organizational justice (especially informational justice) significantly predicted organizational trust. Bidarian and Jafari (2012) examined how organizational justice relates to organizational trust using a sample of 250 employees drawn from Islamic Azad University, Tehran. The results indicate a positive and significant association between organizational justice and organizational trust.

Bayraktar and Girgin (2017) research focused on public teachers in Istanbul province and reported that as justice perception among the teachers increased, so also is trust in their managers. Tambari (2020) empirically determined the association between organizational justice and organizational trust, using a sample of 257 bank workers in Nigeria. Findings indicate that procedural and interactional justices were positively and significantly associated with organizational trust. Thus, we propose that

H2: Organizational justice is positive and significantly related to Organizational trust.

The nexus linking organizational trust to knowledge sharing has attracted the attention of researchers within the last decade. The results of Pangil and Chan (2014) study indicate that organizational trust and knowledge sharing were positive and significantly related. Wickramasinghe and Widyaratne (2012) research focused on establishing the effect of trust, rewards, leader support on knowledge sharing in software development employees in Sri Lanka using a sample of 150 employees. A positive association was found between trust and knowledge sharing. Further, Shahhosseini and Nadi (2015) analyzed the association between organizational trust, culture and knowledge sharing among 340 teachers in Iran and found that both organizational trust and culture had a positive and significant effect on knowledge sharing. Based on these findings, we propose that

H3: Organizational trust is positive and significantly related to knowledge sharing.

Several studies have examined the mediating effects of organizational trust on organizational variables. Mukherjee and Bhattacharya (2013) research established that organizational trust fully mediated the association between distributive justice and knowledge sharing. Kuo (2013) examined the link between the variables: expected benefit as it relates to knowledge sharing, trust at the workplace, and employee knowledge-sharing behavior, using a sample of 563 respondents drawn from three technological companies. The results established the mediating effect of trust on knowledge sharing. Yu et al. (2018) using a sample of 935 employees drawn from 63 firms in China, confirmed the mediating effect of organizational trust in the association between employee organizational relationship and employee innovative behavior.

Muneer et al. (2014) examined the mediating role of organizational commitment (OC), perceived organizational support (POS), and organizational trust on knowledge sharing behavior of workers in a glass plant in Malaysia. Findings showed that OC fully mediates the relationships between perceived POS and knowledge-sharing behavior and between organizational trust and knowledge-sharing behavior. Batrancea et al. (2019) using data from 44 nations found that trust in authorities was significantly associated with tax compliance across nations.

Knowledge sharing behavior among employees is voluntary, as such discretionary in nature. It is therefore a type of organizational citizenship behavior. Ismail (2014) examined the association of organizational justice and knowledge sharing, especially the mediating effect of organizational trust using a sample of 191 employees drawn from banks in Syria. Results of the study indicate that organizational trust plays a mediating effect in relating organizational justice to organizational citizenship behavior. The researchers could not find any study that examined the mediating effect of organizational trust on the relationship linking organizational justice to knowledge sharing. Thus, we propose that:

H4: Organizational trust will mediate the relationship linking organizational justice to knowledge sharing.

From the above discussion, we present the conceptual framework in Figure 1 below, showing the proposed association between the study variables.

Figure 1 Conceptual Framework

Methodology

Research Design, Population and Sampling Procedure

This empirical study adopts a cross-sectional survey research design, with a population which consists of 475 full time employees of Warri Refining and Petrochemical Company located in Delta State, Nigeria. Yemani (1973) formula, with a margin of error of five percent was used to determine the sample size of 217. From a sample frame of 475 employees, the researchers used a simple random sampling technique to select 217 employees. These selected employees were then administered the research questionnaire, after they were assured of the confidentiality of their responses. Data collected were coded and analyzed statistically using structural equation modeling (SEM) techniques. Although, 217 questionnaires were administered, 167 completed and useful questionnaires were retrieved and used for statistical analysis. This amounted to a 77 percent responds rate.

Measurement of Variables

This study adopted scales used in previous research. 9 items adopted from Yesil and Hirlak (2013) measured knowledge sharing. Respondents indicated the extent of knowledge sharing within their organization using a scale ranging from 1(strongly disagree) to 5(strongly agree) (e.g. when I have learned something new, I tell colleagues in my department). Exploratory factor analysis resulted in 7 items being retained. Two items whose loadings were below 0.5 (Hair et al., 2010) were removed from the knowledge sharing scale resulting in a 7 item scale. Twelve items adopted from Nyhan and Marlowe (1997) measured organizational trust, and respondents were required to indicate the level of their trust in their organization using a scale ranging from 1(nearly zero) to 7 (nearly 100%) (e.g. the level of trust among the people I work with on a regular basis is ----?). Factor analysis retained 8 items whose loadings were greater than 0.5, while four items whose loadings were below 0.5 (Hair et al., 2010) were removed from the organizational trust scale. Further, organizational justice was measured by 5 items adopted from Niehoff and Moorman (1993). These items assessed distributive justice (a component of organizational justice), and respondents were requested to indicate the extent of agreement with the statements using a scale ranging from 1(strongly disagree) to 7 (strongly agree). Factor analysis retained 3 items, whose loadings were greater than 0.5 (Hair et al., 2010).

Results

Demographic Characteristics of Participants

The demographic features of the participants indicate that most of the respondents were males (155), while only 12 were females. 132 of the respondents were married with only 35 being single. The age distribution indicates that 2 were between 20-29 years; 34 (between 30-39 years); 77 (between 40-49 years); and 54 (between 50-59 years) respectively. Most of the respondents had acquired university degrees: Bachelor degree (97) and Postgraduate degree (60), only 10 had qualification below bachelors‟ degree. The majority of the respondents (140) have >11 years working experience in the organization, while 27 have <10 years of working experience.

Measurement Model

Common method variance (which is a problem in most surveys) results from variables being highly correlated, especially when all the variables in a study were collected from the same source. Podsakoff et al. (2003) recommend the usage of Harman‟s single factor test in assessing the existence of common method variance. An examination of the un-rotated factor structure indicates the extraction of 3 factors with eigenvalues greater than 1. These 3 factors extracted explained 60.5% variance collectively, and none of the factors accounted for more than 50% of the total variance. Thus, indicating the absence of common method variance.

The validity and reliability of the measuring instrument were assessed using Cronbach‟s alpha coefficient (α), composite reliability (CR), and average variance extracted (AVE) (Table 1). Cronbach alpha coefficients for each of the variables were 0.87, 0.80, and 0.83. These values exceeded the cutoff criteria of 0.7 as recommended by Lance et al. (2006). The composite reliability for the variables was 0.89, 0.95, and 0.84 which were greater than the cutoff point of 0.6 (Hair et al., 2010). Further, the average variance extracted (AVE) for the variables were 0.53, 0.71, and 0.65 which were greater than the cutoff point of 0.5 (Fornell & Larcker, 1981; Tajpour & Salamzadeh, 2019).

Table 1 Demographics Description
Demographic Category Frequency Percentage
Respondents CEOs/owners 175 70%
IT managers 75 30%
Work experience (years) 1 – 3 122 49%
4 – 6 76 30%
7 – 9 34 14%
>9 18 7%
Age of firm (years) <1 26 10%
2 – 5 112 45%
6 – 10 92 37%
>10 20 8%
Company scope Local 118 47%
National 94 38%
International 38 15%

According to Fornell and Larcker (1981), discriminant validity can be performed by comparing the square root of the AVE with the correlation coefficients of other variables. As shown in Table 2, the square root of the AVE (diagonal entries) was greater than the correlation coefficients (off-diagonal entries) of other variables. This shows discriminant validity among the study variables. The reliability and validity of the measures were assured by these results.

Table 2 Reliability and Validity
Context Construct Item Loading α CR AVE
‘Perceived usefulness’ PU1 0.8 0.84 0.87 0.75
PU2 0.77
PU3 0.8
PU4 0.71
PU5 0.73
‘Perceived ease of use’ PEOU1 0.85 0.77 0.8 0.72
PEOU2 0.77
PEOU3 0.79
Organizational context (OC) ‘Perceived cost’ COS1 0.7 0.86 0.88 0.74
COS2 0.76
COS3 0.75
‘Employee expertise’ EXP1 0.77
EXP2 0.74
EXP3 0.76
‘Top management support’ MAN1 0.75
MAN2 0.7
MAN3 0.72
Environmental context (EC) ‘Government support’ GOV1 0.79 0.81 0.83 0.78
GOV2 0.8
GOV3 0.85
‘Environmental uncertainty’ ENV1 0.76
ENV2 0.85
ENV3 0.87
‘Competitive pressure’ COP1 0.74
COP2 0.77
COP3 0.79
Technological context (TC) ‘Complexity’ COMX1 0.81 0.79 0.81 0.73
COMX2 0.78
COM3 0.85
COM4 0.77
‘Relative advantage’ ADV1 0.82
ADV2 0.86
ADV3 0.9
ADV4 0.82
ADV5 0.86
‘Compatibility’ COM1 0.82
COM2 0.8
COM3 0.77
  ‘Social-media adoption (SMA)’ SMA1 0.8 0.85 0.88 0.76
SMA2 0.76
SMA3 0.8
SMA4 0.7
SMA5 0.73

Structural Model and Hypotheses Testing

Several fit indices which includes Chi-square/Degree of freedom (ꭕ2/����); Comparative Fit Index (CFI); Tucker-Lewis Index (TLI); Root Mean Square Error of Approximation (RMSEA); Adjusted Goodness of Fit Index (ADFI) evaluated how the model fits the data set for the study. Kline (2005) recommended threshold values (ꭕ2/df < 3; CFI > 0.90; TLI > 0.95; AGFI > 0.90; and RMSEA < 0.08) were used in this study. Result of confirmatory factor analysis (CFA) shows a good model fit with ꭕ2/df = 2.103; CFI = 0.972; TLI = 0.981; AGFI = 0.932; and RMSEA = 0.041.

Structural equation modeling was used in assessing the path coefficients (Figure 1) and the testing of hypotheses. H1 proposes that organizational justice is significant and positively related to organizational trust. This hypothesis cannot be rejected because as shown in Table 3, a positive and significant relationship exists between organizational justice and organizational trust (β = 0.543, p < 0.00). The relation between knowledge sharing and organization trust was positive and significant (β = 0.319, p < 0.00). Thus, H2 cannot be rejected. H3 proposes that knowledge sharing is positive and significantly related to organizational justice. Table 3 shows a negative and insignificant relation between knowledge sharing and organizational justice (β = 0.010, p > 0.874). Thus, H3 was rejected.

Table 3 Discriminant Validity
  TC OC EC PEOU PU SMA
TC 0.85*          
OC 0.69 0.85        
EC 0.8 0.7 0.88      
PEOU 0.78 0.8 0.8 0.85    
PU 0.8 0.82 0.79 0.8 0.87  
SMA 0.74 0.8 0.77 0.76 0.82 0.88

Baron and Kenny (1986) identified a three - step process for establishing mediating effects. Step 1 must establish that organizational justice (independent variable) is significantly related to organizational trust (mediating variable). Step 2 must establish that organizational trust (mediating variable) is significantly related to knowledge sharing (dependent variable). Step 3 must establish an insignificant relation between knowledge sharing and organizational justice while controlling for organizational trust (mediating variable). Step 1 (H1), Step 2 (H2), and Sobel test (Table 4) indicate a significant relation, however step 3 was not significant (β = 0.010, p > 0.874). H4 cannot be rejected. Organizational trust fully mediated the relationship between organizational justice and knowledge sharing. Figure 2 shows the path diagram indicating the path regression coefficients of the study variables.

Table 4 Hypothesis Evaluation
  Constructs Route Constructs β (t-value) Result
H1 TC   PEOU 0.75 5.03*** Supported
H2 TC   PU 0.82 3.23*** Supported
H3 OC   PEOU 0.69 4.08** Supported
H4 OC   PU 0.75 5.69*** Supported
H5 EC   SMA 0.81 4.42*** Supported
H6 PEOU   PU 0.76 3.82*** Supported
H7 PEOU   SMA 0.79 4.90*** Supported
H8 PU   SMA 0.80 3.58*** Supported

Figure 2 Path Diagram

Discussion

This study aims at investigating the mediating effect of organizational trust on the association between organizational justice and knowledge sharing. We found a positive and significant association between organizational justice and knowledge sharing. This result aligns with the findings of Cugueró-Escofet et al. (2019) and David et al. (2018). The finding implies that within organizations, if employees perceive fairness in organizational activities, they will be more willing to share their knowledge with colleagues or co-workers. Organizational justice was also found to be positively and strongly related to organizational trust. This result concurs with the findings of Bayraktar and Girgin (2017) and Tambari (2020). This result implies that employees‟ trust in the organization depends on their perception of the level of fairness they attribute to organizational affairs.

Furthermore, organizational trust was found to mediate the relationship between organizational justice and knowledge sharing. This result aligns with Ismail (2014), who reported that the relationship between organizational justice and organizational citizenship behavior was mediated by organizational trust. This result underscores the fact that even if the perception of fairness in organizational activities is very low, a high level of organizational trust may influence employees‟ involvement in knowledge sharing among co-workers. This study contributes to knowledge by highlighting the role played by organizational trust in the knowledge sharing process.

Conclusion and Limitations

The purpose of this study was to examine whether organizational trust mediated the association between organizational justice and knowledge sharing of employees in Warri Refining and Petrochemical Company located in Delta State, Nigeria. The findings of the study showed that organizational trust fully mediated the relationship between organizational justice and knowledge sharing. This result implies that even if the perception of fairness in the organization is low; a high level of organizational trust would encourage employees to share their knowledge with colleagues. It is important to note that this study is prone to certain limitations. First, the study was cross-sectional and carried out in a single organization. Thus, the generalization of findings may be difficult. Future studies should consider testing this model in several organizations, using longitudinal research design. Further, since data were collected by the use of questionnaires, respondent bias may be problematic.

Theoretical and Practical Contributions

This study offers both theoretical as well as practical contributions. First, the result of this study has extended our understanding of knowledge sharing behavior and its antecedents. Secondly, the mediating effect of organizational trust in the relationship linking organizational justice and knowledge sharing was confirmed, thus extending the literature in this regard. Furthermore, the findings of the study provide support for the social exchange theory.

Employee’s perception of fairness and their level of trust influence the decision to share their knowledge with colleagues. Finally, in terms of managerial practice, managers should ensure fairness in organizational activities, especially as perceived by employees. Additionally, the management of organizations should develop a high level of trust among employees, as these will encourage employees to share their knowledge with co-workers.

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