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The Love of Money is the Root of All Evil: Pay Satisfaction and CPI as Moderators

The Love of Money is the Root of All Evil: Pay Satisfaction and CPI as Moderators. Paper Presented at Academy of Management San Antonio, TX, August 12-16, 2011 Thomas Li-Ping Tang, Ph.D. And Members of the Cross-Cultural Research Team Best Paper Proceedings of AoM 2011 (online program).

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The Love of Money is the Root of All Evil: Pay Satisfaction and CPI as Moderators

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  1. The Love of Money is the Root of All Evil: Pay Satisfaction and CPI as Moderators Paper Presented at Academy of Management San Antonio, TX, August 12-16, 2011 Thomas Li-Ping Tang, Ph.D. And Members of the Cross-Cultural Research Team Best Paper Proceedings of AoM 2011 (online program)

  2. Toto Sutarso, Middle Tennessee State University, U.S.A., Mahfooz A. Ansari,University of Lethbridge,Canada, Vivien Kim Geok Lim, National University of Singapore, Singapore, Thompson Sian Hin Teo,National University of Singapore,Singapore, Fernando Arias-Galicia, Universidad Autónoma del Estado de Morelos, Mexico, Ilya Garber, Saratov State University,Russia, Peter Vlerick, Ghent University, Belgium, Jian Liang,Shanghai Jiao Tong University, China, Adebowale Akande, International Institute of Research,South Africa, Michael W. Allen, University of Sydney, Australia, Abdulgawi Salim Alzubaidi, Sultan Qaboos University, Oman, Mark G. Borg, University of Malta, Malta, Brigitte Charles-Pauvers, University of Nantes, France, Bor-Shiuan Cheng, National Taiwan University,Taiwan, Randy K. Chiu, Hong Kong Baptist University, Hong Kong, Linzhi Du, Nankai University, China, Consuelo Garcia De La Torre,Technological Institute of Monterrey, Mexico, Rosario Correia Higgs, Polytechnic Institute of Lisbon – Portugal, Portugal, Abdul Hamid Safwat Ibrahim, Iman University, Saudi Arabia, Chin-Kang Jen, National Sun-Yat-Sen University,Taiwan, Ali Mahdi Kazem, Sultan Qaboos University, Oman, Kilsun Kim, Sogang University, South Korea,

  3. Roberto Luna-Arocas, University of Valencia, Spain, Eva Malovics, University of Szeged, Hungary, Alice S. Moreira, Federal University of Pará, Brazil, Richard T. Mpoyi, Middle Tennessee State University, the U.S.A., Anthony Ugochukwu Obiajulu Nnedum, Nnamdi Azikiwe University,Nigeria, Johnsto E. Osagie, Florida A & M University, U.S.A., AAhad M. Osman-Gani,Nanyang Technological University, Singapore, Francisco Costa Pereira, Polytechnic Institute of Lisbon – Portugal, Portugal, Ruja Pholsward, RangsitUniversity, Thailand, Horia D. Pitariu, Babes-Bolyai University, Romania, Marko Polic, University of Ljubljana, Slovenia, Elisaveta Sardzoska, University St. Cyril and Methodius,Macedonia, Petar Skobic, Middle Tennessee State University, U.S.A. Allen F. Stembridge, Andrews University, U.S.A., Theresa Li-Na Tang, AffinionGroup, Brentwood, TN, U.S.A., Marco Tombolani, University of Padua,Italy, Martina Trontelj, University of Ljubljana, Slovenia, Caroline Urbain, University of Nantes, France, Luigina Canova, University of Padua, Italy, Anna Maria Manganelli, University of Padua, Italy

  4. Recognize • Members of the Research Team Who Attend the AoM 2011, Please Stand Up • Best Paper Proceedings of AoM 2011 (Leslie A. Toombs (Ed.))

  5. Corruption • the illicit use of one’s position or power for perceived personal or collective gain • both a state and a process that reflects not only the corrupt behavior of an individual but also the dangerous, viruslike infection of a group, organization, industry, country (Ashforth, Gioia, Robinson, & Treviño, 2008; Tepper, Carr, Breaux, Geider, Hu, & Hua, 2009).

  6. Proposition: The Love of Money is the Root of All Evil • “People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. For the love of money is the root of all evil”. (1 Timothy 6: 9-10; Tang & Chiu, 2003) Proposition  Hypothesis

  7. Proposition: The Love of Money Poverty consists, not in the decrease of one’s possessions, but in the increase of one’s greed. Plato (427-347 BC) Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. (Ecclesiastes 5:10)

  8. Corruption: A multilevel real-world phenomenon • Bad Apples, Bad Cases, and Bad Barrels (Kish-Gephart, Harrison, & Treviño, 2010) • Bad Apples: Individual differences; LOM (Level 1) • Bad Cases: Context Sensitive (within Organization, experienced by people); PSQ (Level 1) • Bad Barrels: General Organizational Environment (climate/culture); CPI (Level 2) at the entity level • Unethical Choice (OD): Corrupt Intent (Dependent Var.)

  9. Theory of Planned Behavior • 1. Attitude* Behavior Intention* • 2. Subjective Norm* • 3. Perceive Control (Ajzen, 1991) • The Love of Money is the Root of All Evil • Love of Money (LOM)  Corrupt Intent

  10. Justice and Deviant BehaviorGood vs. Bad Barrels (CPI) • Stealing in the name of justice (Greenberg, 1993, 2002) • Pay satisfaction (Heneman & Judge, 2000) reflects perceptions of pay equity and distributive justice. (Cohen-Charash & Spector, 2001; Colquitt, Conlon, Wesson, Porter, & Ng, 2001;Gino & Pierce, 2009; Greenberg, 1990; Huseman, Hatfield, Miles, 1987; Moorman, 1991)

  11. CPI Is a composite index that draws on 14 expert opinion surveys Provides data for 180 countries and territories on a scale from zero to ten, 10 = low levels of perceived corruption 0 = high levels of perceived corruption < 5 = "serious" perceived levels of corruption, < 3 = "rampant" corruption

  12. The Income Pyramid Prahalad & Hammond (2002) Harvard Business Review GDP CPI (TI) 1. GDP > $20,000 CPI > 6.5 2. $20,000 > GDP > $2,000 6.4 > CPI > 3.5 3. GDP under $2,000 CPI under 3.4 High GDP  High CPI (Low Corruption)

  13. Love of Money  Corruption • Pay Satisfaction as a Moderator • CPI as a Moderator • 3-Way Interaction: Love of Money, Pay Satisfaction, CPI on Corrupt Intent • Cross-Level Analysis (Hitt, Beamish, Jackson, & Mathieu, 2007) Mplus(Muthén & Muthén, 1998-2010.

  14. Method N = 6,382 High CPI Group (n = 1,956, 8 entities): the USA, Belgium, Australia, France, Spain, Singapore, Hong Kong, & Portugal; Medium CPI Group (n = 2,763, 14 entities): Slovenia, South Korea, Taiwan, Malta, Oman, Hungary, Mexico, South Africa, Malaysia, Thailand; Brazil, Bulgaria, Peru, & Turkey; Low CPI Group (n = 1,663, 9 entities): Croatia, Russia, Romania, Macedonia, China, Egypt, the Philippines, Congo, & Nigeria.

  15. Sample • N = 6,382 • GDP = $13,800 • CPI = 5.25 • Age = 34.56 Yr. • Gender = 51% Male • Education = 15.39 Yr

  16. The Love of Money Scale Factor 1: Rich (Affective) 1. I want to be rich. 2. It would be nice to be rich. 3. Having a lot of money (being rich) is good. Factor 2: Motivator (Behavior) 4. I am motivated to work hard for money. 5. Money reinforces me to work harder. 6. I am highly motivated by money. Factor 3: Importance (Cognitive) 7. Money is good. 8. Money is important. 9. Money is valuable. (Cited in: Colquitt et al., 2011;Furnham & Argyle, 1998; Kish-Gephart et al., 2010; McShane & Von Glinow, 2008; Milkovich, Newman, & Gerhart, 2011; Rynes & Gerhart, 2000; Tang, 1992, 1993; Tang & Chiu, 2003)

  17. Corrupt IntentOrganizational Deviance(Robinson & Bennett, 1995) 1. Reveal company secrets for several million dollars 2. Accept money, gifts, and kickbacks from others 3. Sabotage the company to get even due to unfair treatment 4. Lay off managers to save the company money and increase my personal bonus 5. Abuse the company expense accounts and falsify accounting records 6. Overcharge customers to increase sales and to earn higher bonus 7. Take merchandise and/or cash home. (Cited in: Bateman & Snell, 2011; Kish-Gephart et al., 2010; Chen & Tang, 2006; Tang & Chen, 2008, Tang & Chiu, 2003;

  18. PSQ (4-factor, 18 Items) 1. Pay Level 2. Pay Raise 3. Benefit 4. Pay Administration (Heneman & Schwab, 1985; Judge & Welbourne, 1994; Williams, McDaniel, & Nguyen, 2006)

  19. Mplus Estimate S.E. Est./S.E. p-Value Within Level Corrupt Intent ON Love of Money 0.14 0.08 1.79 0.07 (p < .10) Pay Satisfaction 0.02 0.08 0.19 0.85 Residual Variances Corrupt Intent 0.31 0.03 10.01 0.00*** Between Level S1† ON CPI -0.01 0.00 -2.61 0.01** Corrupt Intent ON CPI 0.03 0.02 1.57 0.12 Intercepts Corrupt Intent 1.39 0.30 4.69 0.00*** S1 0.03 0.03 0.97 0.34 Residual Variances Corrupt Intent 0.05 0.01 3.19 0.00*** S1 0.00 0.00 2.55 0.01** • †The random slope S1 is defined by the linear regression of the dependent variable corrupt intent on the interaction effect between love of money and pay satisfaction.

  20. Dawson & Richter (2006) JAP Slope 3 > 4*

  21. Love of Money  Corrupt Intent: Magnitude (Intercept) • Highest: High Pay Satisfaction + Low CPI • Lowest: High Pay Satisfaction + High CPI

  22. Love of Money  Corrupt Intent: Intensity (Slope) • Highest: Low Pay Satisfaction + High CPI • Lowest: Low Pay Satisfaction + Low CPI

  23. LOM, CEV, CPI on CorruptionSlopes 4 < 1**, 2*, & 3***

  24. Love of Money  Corrupt Intent: Magnitude (Intercept) • Highest: Low CEV + Low CPI • Lowest: High CEV + High CPI

  25. Love of Money  Corrupt Intent: Intensity (Slope) • Highest: Low CEV + High CPI • Lowest: Low CEV + Low CPI • Same Magnitude and Intensity: Low CEV/High CPI vs. High CEV/Low CPI

  26. Conclusion • Love of Money  Corrupt Intent • High Pay Satisfaction + Low CPI  Highest Magnitude (The Matthew Effect) • Low Pay Satisfaction + High CPI  Highest Intensity (Justice) • Pay Satisfaction plays a different role in High vs. Low CPI entities

  27. Conclusion • Low CEV/High CPI = High CEV/Low CPI Magnitude/Intensity Same • High CPI: Pay Satisfaction & CEV are Important • CEOs have control over Pay Satisfaction & CEV

  28. Conclusion: The Matthew Effect • “To anyone who has, more will be given and he will grow rich; from anyone who has not, even what he has will be taken away” (Matthew 13: 12). (Merton, 1968; Tang, 1996, Tang et al., 2000) • “When cheating is one step removed from cash”, people tend to “justify” their dishonesty easily (Ariely,2008: HBR, 24).

  29. Thank YOU Very Much! • Danke Dankeshen Děkuji Dziękujemy • Grazie Hvala vam Kiitos Merci • Muchas Gracias Obrigado RingraziarLa • Takk Deg Teşekkür Ederiz Va multumesc • Vi tackas Спасибありがとう 너를 감사하십시요 • Σας ευχαριστώ תודה רבהمتشکرمधन्यवाद • ขอบคุณคุณ 謝謝谢谢 • Please contact Dr. Tang at: ttang@mtsu.edu

  30. A New Cross-Cultural Study 100 Data Sets (Groups) for Each Country 1 Manager 3 Subordinates: A, B, C Manager – Subordinate A Manager – Subordinate B Manager – Subordinate C Bor-Shiuan Chen: Paternalistic Leadership ICP, July 21, 2008, Berlin, Germany

  31. Contact Dr. Thomas Tang at ttang@mtsu.edu • 26Countries: • Belgium,* China, France, Greece, Hong Kong, Hungary, India, Indonesia, Italy, Japan, Kyrgyzstan, Malaysia, Mexico,* Nigeria, Poland, Portugal, Russia, Sudan, Singapore,* South Africa, South Korea,* Taiwan,* Thailand,* Turkey, Ukraine*, the US. • *Data Collection Completed

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