1. Introduction
In the past decade, globalization has exerted considerable influence over financial markets and their international growth. This has created pressure, volatility, and competition across markets [
1]. In parallel, the ensuing dynamics of decentralization, digitization, and diversity of financial markets, as well as the intensification of competitive forces, have characterized international banking and trade [
2]. Amidst financial crisis, including the 2008 downturn as well as more recent Brexit plans involving the U.K. and EU, banks and other financial institutions have become insecure and have begun re-evaluating their strategy for their corporate sustainability. In doing so, organizations have to play a positive role in their contribution towards the important factors of the society, i.e., economy, environment, and the social actors (people). Over the past two decades, scholars have paid considerable focus on the significance of sustainable change interventions. Many are considering the prospect of forging alliances with industry partners internationally through adaptive change.
Crucially, over this period, we have seen a surge in major organizational changes, such as merger and acquisitions, change in leadership, change in (HR) human resource policies, cultural changes, and the introduction of advanced technologies [
3]. At their core, what major/transformational organizational changes represent are sets of organization-wide modifications aimed at improving capability [
4]. This includes people’s commitment for sustainable changes in the face of ecology, equity, and economy [
5]. However, most transformational changes are not sustainable and tend to fail.
Often major changes are not satisfactorily understood by key actors and therefore they fail to garner enough support, both politically and socio-economically [
6,
7]. Studies conclude that as a type of significant change that influences the diversity of social actors in the marketplace, the dynamics of major changes should be sensitive to employee commitment, such that projects earn the support and are completed in a timely manner. It follows that without committed employees, major organizational changes tend to fail [
8]. Modern organizations have started paying more attention to the employees’ subjective reasons for commitment to the organization [
9]. Alongside economic and environmental dimensions, strategic management for better social dynamics has become a pivotal part of organizational sustainability [
10]. Specifically, scholars have pointed out affective commitment to change as a key driver in achieving sustainability through major changes. Affective commitment to change is defined as “a process of binding the employees’ mindset with a particular course of action deemed central for the implementation and success of change projects” [
11].
Change management scholars have discussed a host of important predictors related to commitment [
12]. Amongst these, in the context of transformational changes, a significant role is played by justice judgements [
13,
14,
15], organizational identification [
16,
17], and trust in organization [
18]. From a macro perspective, these predictors emerge when organizations attempt to cope with intensifying and threatening market conditions. Coping is mobilized by internal structural changes, including downsizing, job re-design, moderations in HR policy, the adoption of new technologies, and the crucial use of merger and acquisitions [
19]. Such internal rearrangements are known as transformational changes, with the potential to impact affective commitment to change. The current study builds on the group engagement model (GEM) [
13] which posits a framework whereby overall justice judgements and change favorableness are antecedents to affective commitment to change. This is mediated by organizational identification reflected in a study by Soenen et al. [
7].
The present study is important in several ways. In terms of theoretical contribution, it provides a new perspective by adding the constructs of
trust in organizations and
exit-based withdrawal to the debate, offered by the integrative framework of Soenen et al. [
7]. In capitalizing upon the psychology of sustainability, the repercussions for major organizational changes are studied at the micro level, i.e., ‘employee’ [
5]. Extending this, we argue that employees with better overall justice judgments and change favorableness are affectively committed to change. They also have lower exit-based withdrawal intentions when they identify themselves with the organization. Furthermore, we analyze the moderating role of trust in organization, i.e., how trust in the integrity of organization acts as a situational factor in promoting affective commitment to change and curbing exit-based withdrawal behavior of employees.
This establishes new knowledge in the field of major organizational changes. In terms of managerial practice, it offers empirical data from a developing country context, where retention of trained people is a growing issue for private sector organizations. Such data about affective commitment to change, trust, and exit-based withdrawal in a major organizational change context has not been studied. Hence, we offer useful insights for practitioners and change agents involved in transformational changes and their sustainability.
1.1. Organizational Identification, and Affective Commitment to Change
Employees who commit to change endorse a particular logic and worldview. The greater the employee’s endorsement, the higher the likelihood that concerned actions are internalized and implemented [
20]. In this process, affect can positively or negatively strengthen commitment to change, with implications for how well employees work together.
Affect associated with commitment enables identification with the organization and in certain scenarios correlates positively with performance. In the milieu of major organizational changes, little remains are known about the driving psychological forces underpinning the employees’ affective commitment [
7,
21]. Following the group engagement model (GEM), we theorize that affective commitment to change depends on a sense of justice being delivered and change favorableness—mediated by the notion of organizational identification and moderated by trust in the organization. Our review of the field supports the hypothesis that organizational identification is positively related to affective commitment to change. Historically, the notion of organizational identification has been studied for decades [
22,
23]. The concept of organizational identification is defined by Conroy et al. [
24] as “an individual’s perception of oneness with his or her organization”. Studies associate positive outcomes with organizational identification, such as reduced turnover intention [
25] and greater job satisfaction [
26].
Studies also associate negative outcomes with organizational identification, such as the tendency to over-work [
27], as well as to partake in unethical behavior [
28], and resistance to change [
29]. Though studies have linked organizational identification with affective commitment to change [
30], little attention is given to causality between these two variables [
31,
32]. The rationale we explore is that a greater organizational identification will lead to greater affective commitment to change. Both psychological processes draw the individual to the organization [
33]. Thus, a context that changes the organization is likely to influence these variables in terms of their relationship. Therefore, we propose the following hypothesis:
Hypothesis 1. Organizational identification is positively related to affective commitment to change.
1.2. Organizational Identification and Exit-Based Withdrawal
In the context of transformational change, our study adds the outcome of exit-based withdrawal following organizational identification. This stands alongside affective commitment to change (
Figure 1). Research has identified links between the two constructs. Specifically, Van Knippenberg et al. [
26] found a negative relationship between organizational identification and withdrawal from the job. However, this was conducted with an emphasis on poverty as a barrier. Prior to this, a few decades earlier, the notion of exit-based withdrawal was suggested by Hirschmann [
34] and Farrell [
35]. Exit is one of four theoretical categories underpinning diverse organizational behaviors, including turnover intention, requesting a transfer, and absenteeism, amongst others [
35,
36]. Thus, it constitutes a threat to the sustainability of major organizational changes. Exit is defined as “equivalent to voluntary separation or turnover from the job” [
35].
It is argued that greater identification with one’s workplace will lead to an attachment that would reduce the chances of exit-based withdrawal. This enables the retention of potentially valuable human capital for the purpose of competitive advantage [
33]. The notion of exit has also been applied at macro scales to organizations and their withdrawal from, for instance, a supplier [
37]. In the developing country context, Fennell and Malik [
38] examined exit and voice options for poor households as customers in the education sector and with little option to withdraw from a deteriorating public good. This suggests that in such markets the behavior of organizational actors remains susceptible to barriers, for example, inability to withdraw from a position in the context of poverty and therefore having limited alternative options [
28]. This also suggests that in studying organizational identification behavior, poverty might be a barrier for an inverse relationship with exit-based withdrawal. Specifically, an organizational actor who poorly identifies with the organization may not be able to exit because of economic hardships and social stigma. Nasir and Bashir [
39] recognize the financial pressures that Pakistani workers face. We contend that the inverse relationship between organizational identification and exit-based withdrawal may not be straightforward in the case of Pakistan and its context of poverty. We conclude the following hypothesis:
Hypothesis 2. Organizational identification is negatively related to exit-based withdrawal.
1.3. The Mediating Role of Organizational Identification
Our review and theoretical model places organizational identification at the center of the organizational actor’s behavior during major organizational changes. Studies have tested a variety of organizational behaviors in terms of the mediating power of organizational identification. De Cremer [
40] shows that procedural justice and counterproductive feelings of disappointment are mediated by identification with the organization. Umphress et al. [
28] found the mediating influence of organizational identification between transformational leadership and unethical pro-organization behavior.
Our review below found that overall justice judgements and change favorableness relate with affective commitment to change through the mediating influence of organizational identification. Soenen et al. [
7] noted that whilst literature associated with group engagement model offers different types of justice constructs—including distributive, procedural, informational, and interpersonal—comparatively less is known about overall justice judgements. This latter construct is defined as the individuals’ overall perceptions about the fairness of an entity (such as that of their organization). It includes personal experiences and knowledge of how others have been treated [
7,
41,
42,
43]. We asked whether participants in these overall justice judgements studies were from developing countries. Asking this acted as motivation for our study into the dynamics and applicability of these notions in the developing-country context, i.e., in Pakistan.
Major organizational changes often induce concerns about justice with consequences for the individual’s affective commitment to change, as well as identification with an organization. The individual who feels unjustly or justly treated tends to generate affective responses towards change projects and initiatives [
13,
44,
45]. In this regard, justice matters as it predicts affective commitment behavior [
46]. Such behavior is important because it may advance, change, or take forms of resistance to change projects, making sustainable change a challenge. This includes a loss of identity and disengagement with the merger and acquisition process [
47]. Concurrently, a sense of justice or fair treatment is also associated with the organizational identity. Individuals who perceive fair or unfair overall treatment accordingly respond by adjusting their identification with the organization as cognitive dissonance tends to set in [
48]. Attitudes of justice also tend to be affective in their drive. Consequently, the onset of identification behavior following on from justice judgements is likely affective in its consequences. That is, organizational justice judgements may lead to affective commitment to change, and this process may involve organizational identification. Thus, we hypothesize that
Hypothesis 3a. Overall justice judgements predicts affective commitment to change mediated by organizational identification.
In research circles, Soenen et al. [
7] have examined the poorly researched concept of overall justice judgements in association with organizational identification. Adding to this, we found that during major organizational changes, such as merger and acquisitions, employees riddled with identity concerns can choose to exit their organization. Research implies the role of justice at work, which is associated with the choices to stay at the organization or exit it. Dissatisfactory feelings regarding fair treatment associated with a sense of hardship can induce an employee’s intention to leave [
35]. The model by Hirschman [
34] suggests that employees, who have no voice in major organizational change projects exit the organization. Concurrently, evaluations of unjust treatment that involves dis-identification with the organization may thus culminate into exit-based withdrawal behavior, along with affective responses about change projects, processes, and discursive practices [
49]. Given Pakistan’s developing country context, economic hardships and limitations, variables of overall justice judgements, change favorableness, and organizational identification may not necessarily culminate into exit-based withdrawal. Thus, we propose the following hypothesis:
Hypothesis 3b. Overall justice judgements predict exit-based withdrawal mediated by organizational identification.
Our fourth hypothesis introduces change favorableness. Specifically, based on our review, we propose two sub-hypotheses that examine the impact of change favorableness on both affective commitments to change and exit-based withdrawal mediated by organizational identification in a change context. In addition to overall justice judgements, our study included change favorableness as an antecedent variable. The change favorableness construct is identified through the group engagement model as a positive perception of organizational change [
13]. This is predicated on the extent to which the employee feels that there is a gain or economic benefit following from change projects [
7]. Similarly, the concept of change favorableness is identified as “the degree to which individuals see themselves as better off as a result of change” [
50]. They point out that valence, the positivity or negativity associated with change, dictates the extent to which the individual takes favor with change projects. We adopt the notion of change favorableness as an attitude, manifest in behavior, which to an extent favors change.
Insofar as change favorableness involves an attitude to respond to change, the employee is moved in affective ways to commit or deny encountered projects [
51]. In developing an attitude towards change projects, the individual emotionally identifies with aspects of the project that warrant the commitment to act. This signals an emotional contagion that binds employees to either favor or to reject the change insofar as one identifies and thus commits to the environmental demands [
52]. Overall, change favorableness seems to influence affective commitments to change with a role for identification with the organization. Studies that research merger and acquisitions activity place organizational identification as a significant variable in driving attitudes about change, as well as correlating reactions such as the decision to support a change project [
26]. Therefore, we hypothesize that
Hypothesis 4a. Change favorableness predicts affective commitment to change through the mediating role of organizational identification.
Upon further research, we also considered that change favorableness as an attitude to change correlates with the individual’s decision to exit the organization. The exit-based withdrawal concept suggests that during a change, individuals can develop a power struggle with senior management, and at these crucial junctures they can be driven to exit the organization [
36,
37]. However, it also seems that this process may be mediated by the degree to which the individual identifies with the organization and thus has a sense of loyalty, which may influence the decision to stay or leave [
36]. The argument is that change favorableness, therefore, predicts exit from the organization relative to the degree to which the individual identifies with the organization. Studies have suggested that dis-identification with one’s organization and its evolving dynamic during change activity can alienate employees who feel a sense of silence and disappointment, only to subsequently leave the organization [
34]. Hence, we propose the following hypothesis:
Hypothesis 4b. Change favorableness predicts exit-based withdrawal through the mediating role of organizational identification.
Thus far, our review has demonstrated a case for a range of hypotheses that configure into a model (see
Figure 1).
1.4. The Moderating Effect of Trust
The last hypothesis we propose draws on debates that discuss the construct of trust. The notion of trust is crucial in the context of different types of organizational change projects. We locate trust as a moderator between independent variables overall justice judgements and change favorableness, and the mediating variable organizational identification. This provides a bridge to the outcome variables of affective commitment to change and exit-based withdrawal. Historically, trust is a widely researched construct that still remains contentious [
53,
54]. Thus, an explicit definition is important. Kong et al. [
55] draw on Rousseau et al. [
56] to define trust as “the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another”.
Whilst overall, links between justice and trust are scarcely researched [
57], some studies have recently investigated this. Kaltiainen et al. [
58] examined employee perceptions of justice and cognitive trust in top management during organizational change. They found that perceptions of justice positively correlate with employee feelings of trust in others. This influence was bi-directional and reciprocal. Studies also suggest that trust is crucial because it is a relational mechanism, which organizational change projects tend to disturb [
59]. As change initiatives dismantle legacy systems and routines, employees who identify with such systems can experience varying levels of trust in senior management. In this context, a sense of injustice can settle in and affect feelings of commitment.
During organizational change, an employee’s sense of justice can depend on trust in authority figures, as well as the degree to which they identify with the organization [
59,
60,
61,
62]. Positively correlating outcomes may include affective commitment to change and exit-based withdrawal; however, this case in the developing country context of Pakistan remains unknown. We have limited knowledge in this regard. For instance, Iqbal and Ahmad [
63] advanced the argument that organizational justice—a tripartite construct of distributive, interactional, and procedural justice—correlates significantly with organizational commitment through the mediating role of trust. This takes a looser viewpoint compared with our study that specifically looks at overall justice judgment studied by Soenen et al. [
7]. That is, Iqbal and Ahmad [
63] suggest a generic-level confirmation about the presence and influence of trust in relation to commitment. More broadly, in the larger spectrum of eastern countries, a study that involved hotel staff from Turkey reported the significant and positive influence of justice and trust on affective commitment [
64]. Another study that involved employees from Hong Kong reported that justice (procedural and distributive) contributed to the employee’s commitment [
65]. However, the construct of overall justice judgements remains scarcely understood.
Our second independent variable change favorableness, has been demonstrated as positive and desirable behavior that leads to greater identification with the organizations undergoing change [
13]. Hypothesis 5 hypothesizes the influence of change favorableness on affective commitment to change and exit-based withdrawal, and, along this pathway, the role of trust also attenuates the influence of change favorableness on organizational identification. In this regard, Morin et al. [
66] argue that the impact of factors including favorableness, trust in management, and justice in a change context, remain less researched. Along these lines, Stinglhamber et al. [
32] found that favorable work experiences increase employee affective commitment to organizations mediated by organizational identification. Our model adds exit-based withdrawal to this pathway. We hold that exit-based withdrawal from one’s organization during change may be correlated with the strength of identification with one’s organization. However, given the developing country context of Pakistan and economic hardships faced by employees, exit-based withdrawal may be contingent on more than just non-pecuniary considerations such as organizational identification. The employee may value trust as a safety net for securing employment prospects. Thus, we propose the following hypothesis to account for the moderating influence of trust:
Hypothesis 5. The relationships of overall justice judgements and change favorableness with affective commitment to change and exit-based withdrawal via organizational identification is moderated by trust in organization. The higher the trust, the higher the affective commitment to change will be and the lower the exit-based withdrawal behavior of employees.
Overall, the current study takes a relatively fine-grained approach by testing a meticulous model that hitherto has not been tested in a developing country context (i.e., specifically that of Pakistan). We build on the ideas of a group engagement model, Soenen et al. [
7], the psychology of sustainability [
5], as well as the arguments reviewed above, and test a new model that provides a novel perspective on employee behavior for a sustainable organizational change.
4. Discussion
The current paper focused on developing and testing the proposed hypotheses. The hypotheses were based on research conducted by Soenen et al. [
7] inspired by the group engagement model and psychology of sustainability [
5]. It centers on organizational identification in the context of workplace change conditions and commitment of employees for organizational sustainability. Specifically, in recent years, given the global context of market forces and constraints, companies have undertaken transformational change activities to consolidate their goals and secure a sustainable position in markets [
7]. At the heart of it, merger and acquisitions as a form of organizational change are crucial for seeking enhanced capability and sustaining a competitive edge in the marketplace. However, such environments can induce identity problems for individuals involved with and implementing change [
17,
82]. This may include a sense of identity loss, but conversely, also over-identification behavior [
24], both posing harms to change processes.
Overall, our study addresses Soenen et al.’s [
7] argument that “future research on major organizational changes integration may benefit from using the group engagement model as a theoretical framework”. In doing so, our hypothesized model was tested in the developing country context of Pakistan. Transformational changes in such contexts face sustainability challenges. As such, little research has been done along these lines. Studies have found that change projects tend to influence the degree to which employees identify with their organizations [
83,
84].
In line with previous studies, we found that greater identification correlated with an increased commitment to the organization. This provides some causality between organizational identification and affective commitment to change, which has been lacking in the field [
32] (Hypothesis 1), whilst the association of organizational identification and exit-based withdrawal of employees has been somewhat established [
26] (Hypothesis 2). We provide evidence in the major organizational changes in the context of Pakistan and its third-world conditions.
Concerning Hypothesis 3a,b, the data confirmed the partial mediating role of organizational identification, specifically with regard to overall justice judgements, which remain poorly established in the transformational change context [
7]. Whilst organizational identification was partially mediated between overall justice judgements and affective commitment to change (Hypothesis 3a), it did not mediate between overall justice judgements and exit-based withdrawal (Hypothesis 3b). This suggests that identifying with one’s organization during change is not enough in countering the impact of overall justice judgements on exit-based withdrawal. Disengagement is often followed by withdrawal from the job.
Results showed that organizational identification plays a partial mediation role between change favorableness and affective commitment to change (Hypothesis 4a), whereas organizational identification plays a full mediation role between change favorableness and exit-based withdrawal (Hypothesis 4b). Thus, Hypothesis 4a,b are accepted. Research supports the view that favoring change works insofar as it involves identifying with the organization’s positively communicated core values that influence exit choices [
51,
85].
Finally, the centrality of trust is suggested in Hypothesis 5. Trust moderated overall justice judgements—change favorableness in relation to affective commitment to change via organizational identification. That is, trust is significant in how people identify with the organization based on judgements of fair treatment. Higher trust levels also moderated the negative relationship of change favorableness and exit-based withdrawal via the mediating role of organizational identification. Given the latter predilections, employees are likely to favor change as fair and affectively committed with the organization. This happens only if trust exists when identifying with the changing landscape. Managerial practices aimed towards greater trust-based engagement with change and healthy communication has been found to work [
86]. Thus, this adds to the positive psychology of sustainability that, with change favorableness and overall justice judgements, it is trust that accentuates the long term stickability and commitment of employee with the changing organization.
The variable overall justice judgements under the influence of trust was not significantly related to organizational identification and exit-based withdrawal. However, it was significantly related to affective commitment to change. Likewise, change favorableness under the influence of trust in organization produced a significant direct relationship with exit-based withdrawal and no correlation with affective commitment to change. Thus, a sense of justice combined with trust in the firm, to some degree, shapes how employee sees change projects. Our study uniquely introduces the variable trust to a family of models [
7,
50,
87,
88] proposed by past studies on major organizational change dynamics.
We found that in the context of transformational changes, the effects of organizational identification and trust in organization may produce some unexpected behavior, such as positive exit-based withdrawal due to opportunities available in the market for trained employees, thus posing a threat to the sustainability of the change. As we have seen from the empirical results, though exit-based withdrawal is slightly lower than the average rate with a mean score value of 2.98 (
Table 2), the tendency to stay with the organization is still not very appreciative. That should be lower provided with the existence of overall justice judgements, change favorableness, trust in organization, and organizational identification. For the organization, it is an alarming situation, as they may be required to hire and train new human resources whilst managing to sustain a large-scale change. Hence, to achieve sustainability, organizations are required to bring forth more favorable outcomes of change for employees in terms of economic gains that can reduce their exit-based withdrawal tendency further. We anticipate this will present challenges for human resource management, particularly with respect to the turbulent and uncertain markets in Pakistan.
Following the recommendations by Soenen et al. [
7] which is based on the group engagement model, our study introduced ‘trust in organization’ and ‘exit-based withdrawal’ as two crucial variables. These latter variables have not been tested, particularly in the developing country context of Pakistan. Our study opens space for further research to test similar models, aimed at improving the sustainability of change. For practitioners in Pakistan, this means a greater focus on human resource development. One approach is to adopt the lens of the three Es of sustainability (economy, equity, and ecology [
5]), with a particular focus on inclusion and fair treatment that builds trust. Employees who trust change projects may better identify with the organization’s efforts. This adds to collective wellbeing of employees, employers, and organizations in developing countries.
This study has certain limitations—because of access issues concerning employee data, probability sampling was a big challenge, so we adopted convenience sampling as a suitable option. Alternatively, the current study, if conducted in a longitudinal timeframe, would have collected varying outcomes with respect to the changing workplace circumstances, for instance, biannual appraisals that are highly subjective. Given time constraints, data were collected in a cross-sectional timeframe that collected only current scenarios of employee behavior. Furthermore, the inclusion of multilevel data would have validated this theoretical framework from both the employer and employees’ perspective.
Without the sense of belongingness within the organization, employees cannot sustain the turbulence associated with change and are inclined towards switching to a more secure place. This is a common problem in developing countries, where vigorous evolution of organizations creates unrest amongst employees. However, if provided with favorable change outcomes for the employees, this can enhance their intrinsic motivation to stay with the same organization. This can be explored further in other sectors with special attention paid to contextual factors, i.e., salary, job security, and emotional wellbeing of employees, among other factors. Future research may investigate models based on the group engagement model, sustainable development, and psychology of sustainability at multiple levels—both micro and macro. For instance, variables including predictors with respect to leadership, stakeholders’ self-choices and individual dimensions of justice can contribute to the sustainability of organizations who underwent major organizational changes. Such studies will provide a habitat to analyze diverse employee behavioral outcomes in developed or developing country contexts. On this front, in methodological terms, a multi-level analysis has the potential to provide a holistic picture of major organizational changes and employee propensities. For practitioners and policymakers, we have opened the niche of psychological sustainability from people’s perspective. There is a dire need to care for psychological capital of employees, such as justice and equity rights in a changing organization. Only then employees will own the major change activities, and their sustainability can be ensured for both public and private organizations.
5. Conclusions
Broadly, our study shows that in the context of sustainable change, variables that reflect identity concerns, trust in organizations, affective commitment, and exit behaviors of employees constitute crucial factors that require attention. Emphasizing this, our study brings a focus on the psychology of sustainable change in the context of developing countries. Up until now, organizations in developing countries have mostly addressed the economic benefits of change, rather than the psychological concerns of employees. Hence, the employees’ perspective during change has largely been marginalized.
In other words, a change that may seem to be economically favorable right now may not be sustainable over a longer period. In particular, our study highlights trust as a major factor in retaining employees and in improving commitment, as well as a sustainable attitude predicated on the extent to which one identifies with change projects and conditions. This implies that in such situations change is not sustainable and difficult to manage. Our study also found the presence of exit behaviors, despite high levels of justice judgements, trust, organizational identification, and affective commitment to change. This provides a new direction in sustainable change research.