Small,local,and loyal: How firm attributes affect workers’ organizational commitment

Abstract

We explore how firm size and local ownership influence employees’ organizational commitment. Using a civic community perspective, we hypothesize that small and locally owned businesses engender more employee loyalty in a representative national sample of workers. That hypothesis is supported for all workers and is most clearly evident in a subsample of rural workers. Our results show that working at small businesses and locally owned businesses significantly increases an employee’s organizational commitment. Furthermore, individuals who work at small businesses that are also locally owned are found to have the highest level of organizational commitment. Our study provides insight into how structural elements of an organization, such as small businesses and locally owned businesses, are associated with an improved quality of life and a more robust civil society. Moreover, this paper highlights the need for further research on how structural attributes of businesses affect the attitudes and opinions of workers.

Keywords

business localism organizational commitment

What is it about employers and work conditions that generate worker commitment? How is it that workers remain loyal to an establishment even when there may be better opportunities nearby? As we note below, proponents of the civic community perspective would say that small, locally owned businesses are most likely to garner the commitment of workers. Deeply embedded in communities, these small firms have a local orientation and community network that bound the market for their services as well as the pool of potential employees who are often known to the owners.

In our focus groups and interviews with business owners in rural Central Texas, we have found a number of cases like that of ‘Jim’ (not his real name). Jim owns an independent family grocery store in a rural town and has 20 full and part-time employees. The store has been in his family for two generations. The nearly 100-year-old building sits along a two-lane state highway. After the focus group with small business owners in the town, ‘Jim’ took us on a tour of his store and introduced us to some of his employees. ‘Jim’ showed us a newspaper clipping from several years ago, documenting the day the wall of his store collapsed, spreading debris and materials onto the adjoining state highway and stopping traffic for hours.

That was the worst day of my life. Thankfully no one was killed. Word [of the accident] spread quick. People from all over the county came to help me out. They purchased a bunch of my perishables. My employees all came and volunteered to work with me through the night to save as much as possible. Some even took stuff home and put it in their refrigerators and freezers. It took months to get the store back to normal. Many of my employees would come by every day and ask what they could do to help. Without the help and sacrifice of my employees, the store would have closed. They took care of me in my time of need. I try to take care of them when they need help.

If the civic community approach is correct, we would expect to see a relationship between worker commitment and small business size and local ownership. Yet, there has not been a representative dataset of national scope that contains information on workers’ job commitment as well as information on local ownership and firm size. In this paper, we test these notions about commitment with national data, using both the full sample and a subset of rural workers.

A key theme in approaches to community and rural development is the capacity of residents to work together to address local community needs (Blanchard and Matthews, 2006; Lyson and Tolbert, 2004). The intellectual impetus for this perspective is often traced to seminal work by Goldschmidt (1978) and Mills and Ulmer (1946). Goldschmidt found that agricultural communities dominated by small farms were more resilient to external shocks and, in general, had higher qualities of life. Mills and Ulmer’s (1946) analysis of urban areas found that cities with relatively more smaller and locally owned businesses fared better than cities dominated by very large firms (typically national and international absentee-owned corporations).

In the contemporary civic community perspective, a civically engaged citizenry is posited to be of high importance in building an efficacious community that has the capacity to solve its own problems and buffer itself from external global forces. A key component of the engaged citizenry is an economically independent middle class comprised of entrepreneurs and business owners who operate small, local firms. In the civic community perspective, there are four bases for theorizing local entrepreneurs and business owners as important agents of development. First, in comparison to branch establishments of widespread enterprises, small and locally owned businesses are less directly dependent on globalization. Second, small and local business owners whose livelihoods depend on local clients and customers necessarily have a greater interest in the civic welfare of their communities. Third, local businesspersons see advantages in collaborating with other local leaders to plan and sustain the community-built environment (common spaces, offices, shops, cafes, services, recreation spaces). Locals have been shown to play an important role in efforts to preserve main streets, downtowns, and town squares in rural communities. In preserving central business areas and preventing them from becoming blights of shuttered buildings, local business owners counter the impacts of large, corporate retailers who typically locate on bypass highways at the edge of town (Hall and Porterfield, 2001). Fourth, small and local business owners are embedded in the community and are very likely to employ their friends, relatives, and neighbors. In tough economic times, local employers will make efforts to buffer the impacts on employees. This, in turn, has been theorized to promote employee morale and loyalty (Mitchell, 2007).

This paper focuses on that last supposition—i.e. that small, locally owned businesses engender more employee loyalty and commitment. It is a notion with important development implications. Strong ties between employers and employees mean less job turnover or churning. As discussed in more detail later in the paper, strong ties between employers and employees are a form of social capital essential to establish workplace loyalty. Both employers and employees have a basis for stronger roots in the community and correspondingly less impetus for out-migration. In this way, the civic community perspective views small, locally owned businesses as lynchpins of community attachment and sustainability.

Many of the civic community propositions have been supported in recent community-level research on nonmetropolitan America. Communities with relatively more small and locally owned businesses typically have more civic engagement venues. They have more associations, churches, and third places (gathering places like cafes and pubs). Unlike communities in which employment is concentrated in a few large absentee-owned firms, communities with more small and locally owned businesses also exhibit higher levels of socioeconomic well-being manifested in less poverty, income inequality, residential segregation, crime, chronic unemployment, and community health issues.¹

Still, some key assumptions of the civic community perspective remain untested. One important reason for this is that the community-level analyses that typify civic community research are not suited for addressing individual-level attitudes and motives. With just a few exceptions (cf. Irwin et al., 2004), individual behavior and attitudes have not been used in quantitative modeling of civic community. This has meant that attitudes, such as employee loyalty, could not be assessed. In this paper, we use data from a nationally representative public opinion survey that asks respondents about their loyalty to their employers. Moreover, respondents are also asked how large a firm they work for and whether they work for a locally owned business. With this information, we conduct an initial test of the employee loyalty and commitment proposition derived from the civic community perspective. We do so for the entire national sample and for a subset of rural residents. The following section discusses ways of linking our civic community framework with the organization commitment literature.

The organizational commitment literature

In the business and organizational literature, employee loyalty has been technically termed as “organizational commitment.” Of the various definitions, one measure of organizational commitment is the degree to which the individual identifies with and is involved in a specific workplace (Mowday et al., 1979). Meyer and Allen (1991) suggest that organizational commitment is a psychological state with three components: desire (affective commitment), a need (continuance commitment), and an obligation (normative commitment). Affective commitment refers to the emotional attachment, identity, and involvement that employees develop within their workplace. In contrast, continuance commitment is driven by a need, such as negative costs if the individual left. Normative commitment refers to the employees’ feelings of obligation to remain with the workplace (Allen and Meyer, 1990; Meyer and Allen, 1991). This paper focuses on the affective component of organizational commitment, because we see it as the most important aspect of commitment. If workers are loyal only of necessity, then we should discount that commitment. The civic community literature suggests employees’ attachment to small, local firms goes beyond employees’ needs for jobs or their sense of obligation. Workers in small, local firms have an affective commitment to their firms grounded in what Putnam (2000) labels “bonding social capital.” Mowday et al. (1982) suggest that affective components in large part constitute organizational commitment. Moreover, affective commitment is not isolated from other forms of commitment, which allows an affective focus on commitment to be a valid and important measure of organizational commitment.

Organizational commitment and social capital

Workplace settings are viewed as being especially conducive to fostering social capital (Nahapiet and Ghoshal 1998; Putnam, 2000). Social capital is formed of trust, communication, and concern for others’ well-being within interpersonal relationships (Putnam, 2000; Watson and Papamarcos, 2002). Thus, it seems plausible that small businesses and locally owned businesses are structurally organized to promote and sustain social capital development. Small and local businesses are likely to be highly invested in their employees well-being and forming inter-personal relationships.

Social capital, especially in the context of organizations, is multi-dimensional, with structural (i.e. network ties), cognitive, and relational (i.e. trust and norms) factors being especially pertinent and mutually reinforcing (Nahapiet and Ghoshal, 1998; Putnam, 2000; Watson and Papamarcos, 2002). Structural factors determine an individuals’ access to resources and congruency of individuals’ values with the organizations. Kelman (1958) argues that employees’ identification and internalization of their organization is a key factor to develop affective commitment. For example, Hodson and Sullivan (1985) found that employees at locally owned companies had higher levels of intended continuance and perceived status at their current organization than large, nationally owned companies. Employees are more likely to remain at their workplace and be committed to quality work when the employees share similar values of the workplace. Individual commitment to their workplace is an expression of employees shared values, a sense of pride, and meaning found within the work environment (Watson and Papamarcos, 2002).

With regards to the cognitive aspect of social capital, social resources within the workplace can provide higher levels of shared meaning and interpretation. Moreover, quality communication can serve to solidify ongoing relationships and provide meaning within the workplace (Berger and Luckmann, 1966; Watson and Papamarcos, 2002). Local business owners, for example, are more likely to have personal relationships with their employers as compared to a corporate firms where the managers are absent from interpersonal communication with their employees (Hodson and Sullivan, 1985). Moreover, interaction with both co-workers and supervisors is an important component in organizational commitment (Buchanan, 1974).

Turning to relational factors, trust has been identified as a key component to cooperative and productive relationships in the workplace (Jo and Joo, 2011; Nahapiet and Ghoshal, 1998; Watson and Papamarcos, 2002; Williams, 2001). Smaller firms are many times seen as less alienating, and more trustworthy than larger firms (Braverman, 1974; Coleman, 1974). Lastly, individuals who feel a sense of trust at their workplace can contribute to cooperation among workers. For employees, norms frame relationships and provide a capacity for anticipating future interactions (Doney et al., 1998). In these ways, affective commitment is promoted as a result of work experiences. Employees want to remain in work environments where they have had positive experiences and expect these positive experiences to continue (March and Simon, 1958; Vroom, 1964). Moreover, employees are motivated to maintain equitable relationships with their employers. If treated fairly in the past, employees may feel a sense of obligation to reciprocate. This can include loyalty and commitment to remain with the specific workplace.

Levels of social capital can explain the benefits of interpersonal relationships within the workforce at the individual and firm level. At the individual level, higher levels of social capital allow a worker to successfully pursue self-interests that nonetheless still align with the workplace’s goals. Quality social relationships encourage workers and firms to seek mutual welfare and economically beneficial relationships (Bourdieu, 1977; Watson and Papamarcos, 2002). At the firm level, social capital allows the organization to have a social and intellectual competitive edge (Chung and Gibbons, 1997; Nahapiet and Ghoshal, 1998).

At the individual level, smaller firms offer more intrinsic rewards to their employees, such as greater work autonomy, while larger firms tend to provide more extrinsic rewards, such as higher earnings, more fringe benefits, and more opportunities to advance within the workplace (Kalleberg and Van Buren, 1996; Mellow, 1982; Wallace and Kay, 2009). Intrinsic rewards and extrinsic rewards may have different values for certain individuals, but organizational commitment may be more heavily influenced by intrinsic rewards (Hodson and Sullivan, 1985).

At the community level, local ownership of businesses benefits from a local level embeddedness, whereas non-local businesses allow for embeddedness of networks at the national and international level (Bain, 2011). While a large body of research supports the positive effects of locally owned and small businesses on community outcomes, there is also evidence that variation in firm size affect the community in different ways. For example, both small and large firms tend to give higher relative charitable contributions to the local community than do medium-sized firms. However, motivations for giving may still be different depending on firm size. Steeped in social capital, a small firm may give back to the community because it feels a sense of closeness to the community while a large firm might be motivated to give back to the community by corporate norms that aim to sustain a visible profile as a philanthropic-driven organization (Amato and Amato, 2007).

Benefits of organizational commitment

Jo and Joo (2011) contend that higher levels of organizational commitment are associated with lower levels of withdrawal behavior and higher levels of pro-organizational behaviors. Higher levels of organizational commitment are associated with a decreased in absenteeism (Blau, 1986; Mathieu and Zajac, 1990; Mowday et al., 1982; Pierce and Dunham, 1987). Employees with higher levels of organizational commitment also are less likely to search for alternative jobs, leading to lower turnover rates and less churning (Mathieu and Zajac, 1990; Mowday et al., 1982).

In reference to pro-organizational behaviors, organizational commitment is positively associated with performance and work effort (Bartlett, 2001; Blau, 1988; Colarelli et al., 1987; DeCotiis and Summers, 1987; Watson and Papamarcos, 2002; Wiener and Vardi, 1980; Whittington et al., 2004). Additionally, work environments with strong goal orientation, which promotes higher levels of organizational commitment, also experience less conflict (Neal et al., 2000). Reducing withdrawal behavior and increasing pro-organizational behaviors are specific ways workplaces can reduce their costs and establish social and intellectual advantages (Watson and Papamarcos, 2002). Thus, there is strong evidence of positive benefits of organizational commitment for firms. But, this is where the civic community approach can inform the organizational literature. We do not find mention of community benefits in the employee commitment literature. The civic community perspective suggests a broader positive community impact as well. Decreasing withdrawal behavior and increasing pro-organizational behaviors create positive employee and employer relationships and build stocks of social capital. Furthermore, these benefits spillover into greater community social capital and contribute to local civic welfare and the economy. Our aim is to analyze relationships between firm size, local ownership, and workers’ individual organizational commitment. Our first hypothesis is that individuals who work at small businesses or at local businesses will have higher levels of organizational commitment. Our second hypothesis is that small businesses and locally owned businesses will have a combined effect (interaction), such that individuals who work at small locally owned establishments will have the highest levels of organizational commitment. Many of the most robust findings in the civic community research tradition have been observed in nonmetropolitan contexts as products of rural development projects. Accordingly, we further hypothesize that the relationships between firm size, local ownership, and employee commitment are most clearly observed among persons residing in rural communities.

Methodology

Data

We use data from the 2010 Baylor Religion Survey (BRS, wave III) for this analysis. BRS wave III is a nationally representative sample of 1714 adults that includes information on workplaces and workers’ attitudes, beliefs, and practices. The Gallup Organization conducted the survey during the fall of 2010. Sampling weights are applied to analyze the data in an effort to ensure more representative results.² To investigate the effects of small firm size and local ownership on workers’ organizational commitment nationally, we restricted the analysis to persons who are currently employed full time or part-time (n = 763). We then conduct an analysis on a subset of 146 persons who report living in a rural area.

Dependent variable: Organizational commitment

To measure level of organizational commitment, an adaptation from a previously developed organizational commitment scale was employed. Four statements were used that have been previously been measured to capture individuals’ affective/emotional attachment (Allen and Meyer, 1990; Meyer and Allen, 1984, 1991; Meyer et al., 1990; Mowday et al., 1979). Respondents were asked how much they agreed with the following statements regarding their current employer:

I really feel as if this organization’s problems are my own

I do not feel a strong sense of “belonging” to my organization

I do not feel “emotionally attached” to my organization

This organization has a great deal of personal meaning to me.

Responses could range on a four-point scale from strongly disagree (1) to strongly agree (4). Items 2 and 4 were reverse coded so that all positive responses reflected high organizational commitment. We constructed an organizational commitment scale by using a factor analysis from responses from four items regarding level of agreement the respondents had about their commitment to their current employer. The organizational commitment scale had an alpha of 0.82. The average level of organizational commitment was 11.2 units (std. dev. = 2.8), on a scale from 4 to 16.

Independent variables

The most theoretically salient variables here drawn on the civic community framework’s focus on small, local businesses. In addition to these key items, our models also include control variables from the organizational commitment literature and basic demographic factors. Any effects of the civic community items that we observed will be net of the influence of the control variables.

Civic community variables

Firm size was recoded from the original question of “About how many people work for your employer (including part-time and full-time employees at all locations)?” The number of employees at work was recoded so the interval of 1 to 49 employees was coded as a small business (code = 1). All other responses were coded as large businesses (0). This resulted in 38.9% of the respondents working for a small business.

Local ownership status was taken from the question, “Is your current employer a locally owned business?” Responses of “yes” were coded as locally owned businesses (1) and responses of no were coded as not locally owned (0). Any responses of “I’m not sure” were coded as missing and excluded from our models. About 48.0% of the respondents identified themselves as working at a locally owned business.

Control variables

Variables specifically relating to work conditions included hours worked last week and job satisfaction. As a standard control variable used in work analyses (Hollister, 2004; Kalleberg and Van Buren, 1996), respondents were asked to write in how many hours they worked last week. The average numbers of hours worked in a week was 38.6 (std. dev. = 16.7) and ranged from 0 to 92 hours. Level of job satisfaction was an essential control variable when predicting organizational commitment, as research has shown job satisfaction is one of the strongest predictors of organizational commitment (Yücel, 2012). It is also the case that any findings about the effects of small and local business in our models can be interpreted as net of job satisfaction per se. A job satisfaction scale was created from responding to the degree of agreement with the following statements: “All in all I am satisfied with my job.” Responses were strongly disagree (1), disagree (2), agree (3), and strongly agree (4). Job satisfaction values ranged from 1 to 4 with the mean job satisfaction of 3.0 units (std. dev. = 0.8).

Demographic control variables used in these models included gender, age, race, college graduate, income, and rural location. Gender was coded as male (1) and female (0). Of the survey respondents in the analysis, 54.8% were male. Those surveyed were asked to give their birthdate. Ages ranged from 19 to 88 years old, with an average age of 45.1 years (std. dev. = 13.8). Race was recoded as White, non-Hispanic (1) or non-White (0). From the question, “What is your race,” responses of White were left coded as White, and all other responses (Black or African-American, American Indian or Alaska Native, Asian, Native Hawaiian or other Pacific Islander, and some other race) were coded as non-White. An additional question asked was if the respondent was Hispanic or Latino. Respondents who marked that they were Mexican, Mexican-American, Chicano, Puerto Rican, Cuban, or other Hispanic, Latino, or Spanish origin group were categorized into the non-White category. If the respondent did not answer this question, but answered the race question, they were included in this analysis and their race was categorized solely from the race question. There were a total of 62 respondents (8.1% of the respondents) who identified themselves as White and Hispanic or Latino and were categorized as non-White. Overall, 72.2% of the respondents were categorized as White, non-Hispanic.

The respondents’ marital status was accounted for with a binary indicator of married (1) versus all other responses (living as married, separated, divorced, widowed, and never married). In our sample, 70.8% of the respondents were married. Education was coded as either college graduate (1) or non-college graduate (0). Respondents were asked, “What is the highest level of education you have completed?” Responses of college graduate and postgraduate work/degree were coded as a college graduate and responses of 8th grade or less, 9th–12th grade, high school graduate, some college, and trade/technical/vocational training were coded as non-college graduate. With using the recoded values, 45.3% of the respondents reported being a college graduate.³

Household income in the BRS is coded in intervals ranging from “$10,000 or less” to “$150,001 or more”. We recoded to the mid-points of the intervals. The open-ended interval of $150,001 or more was set at $280,102 using a Pareto estimate (Shyrock and Siegel 1975). The mean household income was $94,598 (std. dev. = $80,046).

Living in a rural location was recoded from the question, “Which of the following best describes the place where you now live?” Responses of “A rural area” were coded as rural (1) and responses of “A small city or town”, “A suburb near a large city”, or “A large city” were coded as non-rural (0). Of the respondents, 18.5% reported living in a rural area.

Analyses

In preliminary analysis, we made two-way and three-way percentage cross-tabulation of organizational commitment by firm size and local ownership. In Table 1, we first see that workers in smaller firms have higher organizational commitment scale scores than workers in larger firms. More than half (57.2%) of small firm workers score in the highest commitment category compared to 40.5% of large firm workers. The chi-square is statistically significant at the 0.001 level. There are two other statistically significant relationships in Table 1. The first of those is the two-way relationship between local ownership and organizational commitment in which 56.0% of workers in locally owned firms have high commitment scores relative to 38.7% of workers in non-locally owned firms. The three-way relationship between local ownership, firm size, and organizational commitment shows that the relationship between size and commitment is strongest among those employed in local firms (61.4% for small, local businesses and 46.7% for large, local businesses). These preliminary analyses suggest that our focus on firm size, local ownership, and organizational commitment is warranted. However, it is still important to control for other factors that might affect these relationships.

Table 1.

Percentage distribution of organizational commitment scale scores by firm size and local ownership.

	Firm size^a		Local ownership^b		Local ownership^c		Non-local ownership^d
Commitment scale	Small	Large	Local	Non-local	Small firm	Large firm	Small firm	Large firm
4–7	4.6	9.0	3.9	10.4	3.9	3.9	7.2	11.0
8–11	38.2	50.5	40.0	50.9	34.7	49.4	50.8	51.0
12–16	57.2	40.5	56.0	38.7	61.4	46.7	42.1	38.0
Total	100.0	100.0	99.9	100.0	100.0	100.0	100.1	100.0

Note: Data weighted. Source: Baylor Religion Survey, 2010.

χ²= 24.09, p < 0.001.

χ²= 31.38, p < 0.001.

χ²= 8.79, p < 0.05.

χ²= 1.10, p > 0.05.

Table 2 shows the results of OLS regression models that estimate organizational commitment scores. Model 1 is a baseline model that includes variables found to influence organizational commitment in prior studies, but omits our civic community variables. Two of the control variables show statistically significant, positive relationships with commitment to the firm. Being married increases the score by about a half a point (0.5) and a unit increase in the job satisfaction scale nets an additional 1.4 points on the firm commitment score.

Table 2.

OLS parameter estimates predicting organizational commitment.

	Model 1			Model 2			Model 3			Model 4
Variables	Parameter Est.	Std. Error	Std. Est.	Parameter Est.	Std. Error	Std. Est.	Parameter Est.	Std. Error	Std. Est.	Parameter Est.	Std. Error	Std. Est.
Intercept	6.290***	0.523		5.624***	0.508		5.739***	0.511		5.056***	1.178
Demographic Controls
Male	0.048	0.182	0.009	0.026	0.174	0.005	0.010	0.174	0.002	0.020	0.377	0.004
Age	−0.003	0.007	−0.014	−0.004	0.007	−0.021	−0.004	0.007	−0.019	−0.010	0.014	−0.050
White	0.293	0.195	0.050	0.155	0.189	0.026	0.126	0.189	0.021	1.302**	0.491	0.193
Married	0.474*	0.201	0.082	0.512**	0.193	0.089	0.513**	0.192	0.089	0.434	0.397	0.083
College graduate	−0.046	0.187	−0.009	0.135	0.181	0.026	0.144	0.180	0.027	0.518	0.431	0.095
Income (in $1,000's)	0.002	0.001	0.047	0.003*	0.001	0.072	0.002	0.001	0.064	0.004	0.003	0.097
Rural	−0.089	0.229	−0.013	−0.320	0.222	−0.047	−0.310	0.221	−0.046
Work Variables
Hours worked	0.000	0.006	0.002	0.005	0.006	0.031	0.004	0.006	0.024	0.015	0.011	0.098
Satisfaction	1.422***	0.119	0.399	1.348***	0.115	0.379	1.361***	0.115	0.383	1.292***	0.255	0.376
Civic variables
Small business				0.803***	0.203	0.149	0.291	0.325	0.054	−0.338	0.625	−0.067
Locally owned				0.873***	0.192	0.166	0.592*	0.237	0.113	−0.932	0.587	−0.185
Small × Locally owned							0.815*	0.406	0.143	2.084*	0.814	0.419
R ²	0.187			0.254			0.258			0.326
N	763			763			763			146

Note: Data weighted. Source: Baylor Religion Survey, 2010.

***

p < 0.001.

p < 0.01.

p < 0.05.

We introduce the civic community measures firm size and local ownership in Model 2 of Table 2. After controlling for demographic and job variables, household income, job satisfaction, firm size, and local ownership significantly predict organizational commitment. Working at a small business in contrast to a large firm increases average organizational commitment scores by over three-quarters of a point (0.8). Compared to employees of non-local businesses, workers at locally owned businesses exhibit a 0.9 unit increase in organizational commitment. Taken together, the two civic measures can account for as much as a 1.7 increase in the organizational commitment score. Job satisfaction has the most predictive power for organizational commitment (β = 0.38), but locally owned business (β = 0.17) and firm size (β = 0.15) hold their own in the model. Overall, 25% of the variance in organizational commitment can be explained in Model 2 which includes key measures of civic community.⁴

Model 3 focuses on the individual and joint effects of firm size and local ownership on organizational commitment. Firm size no longer has a significant direct effect in predicting organizational commitment. Working at a locally owned business continues to show a direct effect, predicting an increase in organizational commitment of 0.6 units. The joint effect of working at both a small business and a locally owned business is substantial. This model shows that organizational commitment will increase by an additional 0.8 units when both conditions hold. By setting all other variables to their means except firm size and local ownership status, we can construct a prediction equation for the typical worker in small or large businesses and either for locally owned or not locally owned businesses.⁵

Referring to Figure 1, a person who works at a large, locally owned business is predicted to have an organizational commitment score of 10.8 units. A person who works at a small, locally owned business is predicted to have an organizational commitment score of 11.6. A person, who works at a large, non-locally owned business and a person who works at a small, non-locally owned business are both predicted to have an organizational commitment score of 10.2.

Figure 1.

Interaction effects of firm size and local ownership on organizational commitment.

These results based on the full, national BRS sample show considerable promise for the civic community variables of small business size and local ownership. We hypothesized above that these variables’ effects might be most apparent in rural areas where much of the civic community research has focused thus far. Model 4 in Table 2 repeats the regression model for a subset of BRS respondents who live in rural areas. The small business × local ownership interaction stands out in this rural model. With an unstandardized effect of more than two points on the 16-point commitment scale, the interaction has the largest effect in the model (standardized regression coefficient of 0.42). This coefficient is even higher than the job satisfaction effect which dominates the non-rural models. In simpler prose, rural workers’ commitment to employers hinges more on their employing firm being small and locally owned than it does on how satisfied they are with their jobs. Refer to Figure 1 to see how organizational commitment scores differ by rural residents when all other significant variables are set to the mean. A rural resident who works a small and local business is predicted to have an organizational commitment score of 12.0 units, while all other working rural residents are predicted to have an organizational commitment score of 9.9 units.

This is compelling evidence of individual-level behavior consistent with the community-level trends studied in the civic community tradition. One negative note on the rural model is a racial difference. Rural whites are more likely to be committed to their employers than are other racial and ethnic groups. This may be a product of traditional relationships that prevail in rural communities, but it surely warrants further analysis.

The effects of the civic community variables firm size and local ownership exhibit a reasonable robustness in these models, both at the national and rural level. When we control for standard predictors of organizational commitment, the civic measures have significant, positive effects on scaled commitment scores. The interaction term (in Models 3 and 4) underscore the importance of small, locally owned businesses as key constructs in theories of civil society.

Discussion and conclusion

There could scarcely be a better time for a healthy social scientific discourse on topics such as civil society, localism, and civic engagement. The prevailing thesis is that civil society is giving way to culture wars and a rigid, red-blue pluralism. These widely accepted pessimistic views do not resonate so much among those doing research in the civic community tradition. On the ground in communities, we see signs of resilience and efforts to build collective efficacy in everyday interactions among citizens, business owners, and workers. As such, studies like this one shed light on socioeconomic mechanisms that can improve quality of life and sustain civil society.

Small, locally oriented businesses are a key construct in the civic community perspective. Much of what we know to this point about the benefits of small, local firms is necessarily the product of community-level analyses. With such data, researchers can only surmise what is going on among individual workers and their employers. The speculation has begun with the assumption that small, local businesses are more embedded in communities. The owners know (or can easily get to know) their employees and their customers. The work relationships spill over into other domains of interaction (e.g. PTA, congregations, little league, and gathering places “where everybody knows your name”). As plausible as this may be, there have been no studies that draw on large-scale survey data to study this.

The analysis presented here clearly demonstrates a positive consequence of small, local businesses from the perspective of employees: increased worker commitment. These effects hold up when we include relevant control variables and the usual predictors from the organizational commitment literature and are most evident in rural communities. Our results suggest that more research at the individual level is needed. Intriguing questions about relationships among workers, managers, and employers at work and in the community beg to be answered. Researchers on topics relative to civic community need to ensure that the “micro” is attached to the “macro.” Our results also suggest that students of organizational commitment need to consider social structure and the social organization of the workplace to enhance the specification of commitment theories. For them, the macro needs to be taken into account in studying what has been conceptualized almost exclusively as a micro phenomenon. Clearly, small, local businesses do matter.

Footnotes

Funding

Funding for this research provided by “Local Financial Institutions and The Performance of Rural Entrepreneurs and Small Business” 2010; USDA National Institute for Food and Agriculture, Agricultural and Food Research Initiative Competitive Grant Project No. TEXR-2010-04719 (Charles Tolbert, PI, co-PIs F Carson Mencken and T Lynn Riggs); and “Nascent Employers and their First Employees: Hope for Development in Rural America?” 2008. USDA National Research Initiative Project No. TEXR-2008-02636 (Charles Tolbert, PI, with Carson Mencken, co-PI).

Notes

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