Organizational Cronyism: A Scale Development and Validationfrom the Perspective of Teachers

Muhammed Turhan

Received: 20 March 2013 / Accepted: 9 July 2013

� Springer Science+Business Media Dordrecht 2013

Abstract Organizational cronyism refers to favoring

some employees within an organization based on non-

performance-related factors. Although it is highly likely to

encounter many attitudes and behaviors meeting this

description within public and private institutions, there are

limited studies on this issue. Thus, the purpose of this study

is to develop a valid and reliable scale to assess the per-

ception of cronyism among organizational members. To

this end, an item pool was formed based on current liter-

ature as well the views of teachers and expert recommen-

dations. The validity–reliability of the scale was tested via

two sample groups. As a result of the study, a scale with 3

dimensions and 15 items as well as psychometric qualities

was developed to assess employee perceptions of crony-

ism. The scale dimensions comprise: in-group bias, pater-

nal cronyism, and reciprocal exchange of favor in

accordance with the way the method was addressed in the

literature. The analyses of nomological validity of the scale

showed that perception of cronyism is an important pre-

dictor of trust in managers.

Keywords Cronyism � Favoritism � In-group bias �Paternalism � Particularism

Introduction

Exploitation of public organizations by political figures in

order to provide employment for their supporters or foster

their positions is colloquially termed ‘‘String-pulling.’’

Such problems are well known in many countries while

recruiting and promoting civil servants (Martins 2010;

Ozsemerci 2003). In addition, exercising privilege over

others is a common ethical problem, both in public and

private institutions. Domination by personal relations

rather than objective criteria in management and inspection

was regarded as the main reason for the widely known

Eastern Asia financial crisis of 1997 and the Enron Scandal

in the USA (Khatri and Tsang 2003). The common point in

these types of favoritism is prioritization of informal rela-

tions (rather than formal ones), groupings, and reciprocal

personal expectations. The concept of cronyism refers to

the practices resulting in social networking structures that

favor certain groups over others. Organizational cronyism

refers to a manager favoring employees based on non-

performance-related factors or reciprocal exchange of

favor.

Since organizations are social institutions, they are not

objective and apolitical (Clegg and Hardy 1999). There-

fore, it is highly likely to encounter the differential treat-

ments toward subordinates such as cronyism within

organizations (Begley et al. 2010). There may be important

organizational and personal outputs stemming from supe-

riors practicing cronyism and favoring some subordinates.

Although there is a lack of empirical evidence, cronyism

has the potential to negatively impact job satisfaction,

organizational commitment and performance (Khatri and

Tsang 2003). Previous studies (Khatri and Tsang 2003;

Khatri et al. 2006; Begley et al. 2010) made important

contributions to defining cronyism and determining its

scope. However, there is a lack of empirical studies of

cronyism, despite its prevalence within organizational life.

Based on this need, this study presents a scale to assess

organizational cronyism in relations between superiors and

subordinates.

M. Turhan (&)

Department of Educational Sciences, Faculty of Education,

Fırat University, 23119 Elazıg, Turkey

e-mail: mturhan@firat.edu.tr

123

J Bus Ethics

DOI 10.1007/s10551-013-1839-3

What is Cronyism?

The word cronyism derives from the Greek word ‘‘khronios’’

to become ‘‘crony’’ in English. Essentially, it refers to ‘‘long

standing,’’ which we encounter in current dictionaries as

friend of long-standing and a friend or companion (Oxford

Dictionary of English 2010; Dictionary of Word Origins

1990; Collins English Dictionary and Thesaurus 2000).

During the 1840s, cronyism was used to mean ability and

eagerness to establish friendships. However, the first polit-

ical usage of the concept of cronyism occurred in 1952 in the

USA, when the Truman administration was accused of

appointing employees within the official postal administra-

tion, based on friendly relations rather than qualifications. A

New York Times journalist defined this act as cronyism,

which led to the loss of the previous meaning of the word.

Cronyism later began to be perceived as friendship-based

types of favoring (Dunar 1984; Khatri and Tsang 2003).

This phenomenon, termed ‘‘favoritism’’ or ‘‘string-

pulling’’ in colloquial speech, is expressed as ‘‘nepotism’’

and ‘‘cronyism’’ in the political science literature (Aktan

1992). Favoritism is a concept covering the phenomenon of

cronyism. Oktay (1983) defines favoritism as ‘‘prioritizing

such specific criteria as being from the same school, region,

etc., supporting the same political party, and pushing aside

universal criteria regulating management works in public

bureaucracy and the relations of public organizations with

society.’’ Cronyism is defined as favoritism resulting from

personal relations and social networks.

Although the term cronyism is frequently used within

the political science literature, the practices within the

scope of cronyism may also occur in organizations regar-

ded as political arenas (Drory and Romm 1990). From this

perspective, organizational cronyism may be defined as

managerial favoring of certain subordinates based on non-

performance-related factors and using the power to their

advantage.

Cronyism as a Social Exchange

The theory of social exchange explains that there is motive

either for ‘‘winning a prize or avoiding a punishment’’

behind human behaviors. Accordingly, all relations are

based on the principles of ‘‘give and take’’ (Kelly and

Thibaut 1978). However, this exchange may not always be

balanced and equal. Our feelings regarding relations with a

person depend on: (a) our perceptions of the balance

between what we give and receive from the relationship,

(b) our perceptions of relationship type which we assume

that we deserve, and (c) our perceptions regarding our

opportunities to establish a better relation with other people

(Homans 1961; Cook and Emerson 1978).

Mendras (2008) advocates that the entire social life is

only about giving and receiving. Social encounters and

interactions such as power, property, things, politeness,

etc., take place between parties on the basis of receiving

something in return and displaying a behavior equal to

another one. Giving and receiving an object is significant

within social life and leads to social intimacy. These

exchange relations have been organized by all societies and

civilizations throughout history. They have survived until

today as social patterns required for reconstruction of

social life. It is possible to say that this type of exchange is

observed in the organization of modern social networks.

For example, there is a confidential or open contract

between an employee and his institution when beginning

work. According to this contract, the employee shall use

his knowledge, skills, and/or power for the organization

and receive payment and other incentives in return. This

type of exchange stems rather from the formal aspect of the

organization. However, formal organization alone is

insufficient to explain in-group relations and group norms.

There are two dimensions of organizations: formal and

informal. Detecting and confirming influences of informal

organization over employee is based on neo-classical

organizational theory, whose foundations were laid with

the Hawthorne studies conducted by Elton Mayo (1945).

The finding that employee behaviors are influenced by

group norms and informal relations within the organization

makes it mandatory to take into account informal organi-

zation as well as formal organization. Prendergast and

Topel (1996) state that relations among seniors (superiors)

and subordinates, which constitute an important part of

their daily lives; and the fact that organizations are social

institutions; are not adequately emphasized. When phe-

nomena of power and policy are considered together, group

norms and social networks form the basis of favoring

relations within the organization.

Informal organization is a social structure with infor-

mal leaders, norms, values, emotions, and communication

patterns. As revealed in Howthorne studies, as soon as

employees of an organization gather, friendships and

informal groups occur. Such informal cliques can be seen

in interaction patterns both in and out of work. Informal

groups share values and norms. This sharing is necessary

for the cohesion of the group. With regard to organiza-

tional culture, the shared values and norms consist of the

natural, specific, and human dimensions of the organiza-

tion. People acting in accordance with these values and

norms are awarded, and when people do not obey they are

either excluded or punished (Hoy and Miskel 2004).

However, in organizations which have poor cultural

health, values and norms are not adopted by all members

of the organization and organizational norms and values

can be replaced by personal interests. In such a case, as

M. Turhan

123

Johns (1992) stated, informal relationships can turn into a

tool to gain strength.

Social exchange theory provides a useful framework by

which to understand favoring relations stemming from

informal aspects of the organization. Even in social terms

(authority relations and policies in organizations), there is

always a matter of reciprocity and settling accounts. If you

have a superior position and are granting something to one

of your subordinates, that person should be grateful to you

and, therefore, feel the need to return the favor in some

way. In other words, this person is favored by you and

approves your superiority. The inverse of this relationship

is also possible: If you are giving something to a superior,

you are expecting something in return by initiating the

favoring relations (Mendras 2008). This idea corresponds

with the norm of reciprocity. In social psychology, the

norm of reciprocity is defined as a social rule directing

people to reciprocate favors (Gouldner 1960; Cialdini and

Goldstein 2004). Therefore, when someone does another a

favor or protects their interests, that person is under an

obligation. Thus, an expectation of reciprocity develops,

which forms the basis of cronyistic relations between the

two parties.

Khatri et al. (2006) define cronyism as ‘‘a reciprocal

exchange transaction where party A shows favor to party B

based on shared membership in a social network at the

expense of party C’s equal or superior claim to the valued

resource.’’ As it is possible to deduce from this definition,

cronyism is a special form of social exchange.

Cronyism is an exchange. However, the most important

issue is what is received and what is given within this

process. The things exchanged need to be valuable for both

parties in order for the exchange to be sustainable. Thus,

the relations within the scope of cronyism may differ

across cultures and organizations. While the focus of cro-

nyism is the continuance of informal group membership in

some cultures, in others it may take the form of patronage

relations or personal benefits and expectations.

Cultural Antecedents of Cronyism and Their Effects

on the Organization

Khatri and Tsang (2003) present a useful model to determine

premises, causes, and results of cronyism. According to this

model, two important cultural premises serving as a source

for cronyism are particularism and paternalism. To Khatri

and Tsang, cronyism and negative impacts are more com-

monly encountered in cultures where these two features are

prevalent. Figure 1 shows cronyism model in organizations.

In this section, cultural antecedents (particularism and

paternalism) and immediate antecedents (in-group bias and

personal loyalty) of cronyism are discussed.

Particularism and In-Group Bias

Hofstede (2010) classifies cultures as either ‘‘collectivist’’

or ‘‘individualist.’’ In collectivist cultures, children are

brought up with a greater sense of group importance—a

sense of ‘‘we.’’ Child rearing is not only a responsibility for

parents, but for other relatives and those close to the

family, like grandparents, uncles, aunts, maids, and so on.

When children grow up, they learn to see themselves as a

part of an in-group in the society. An in-group is different

from the out-groups, which include other people in the

society. Certainly, this is not just the case for familial

relationships. In schools, workplaces, or any social envi-

ronment, a person tends to include people who seem closer

to him or her in the in-group, while placing others in the

out-group. Thus, a practical and psychological mutual

dependency develops between the person and the in-group.

In contrast to collectivist societies, the sense of ‘‘I’’ is

common in individualist societies. Most children are born

into a nuclear family rarely meet other relatives, as they

tend to live in other places. In time, children of such

families will develop a sense of ‘‘I.’’ The sense of ‘‘I’’ is the

identity of the person, and leads one to classify other

people according to their personal characteristics rather

than group membership. In such societies, the objective of

education is to teach children how to be independent.

The distinction between in-groups and out-groups is

very important in collectivist cultures and has wide-ranging

implications beyond the formal relationships between

employer and employee. The main role of individualist

societies entails treating everyone alike—this is known as

‘‘universalism’’ in sociology jargon. For example, treating

an employee or customer in a different way than others is

regarded as bad business practice and unethical behavior.

However, in collectivist societies, the opposite is true, and

the distinction between ‘‘our group,’’ and another’s shapes

Particularism Strong in-group bias

Paternalism

CronyismFavoritism based on relationship and loyalty

Individual outcomesJob satisfactionOrganizational commitmentIngratiation

Organizational outcomesPerformanceMoraleInertia

Unreserved personal loyalty

Fig. 1 A model of cronyism in

organizations (Khatri and Tsang

2003)

Organizational Cronyism

123

the main thought patterns of people. For this reason, when

someone treats those friends or employees that he or she

finds closer to themselves better than others, this is regar-

ded as a natural, ethical behavior and sound business

practice. Sociologists call this behavior ‘‘particularism’’

(Hofstede 2010). Particularism is marked by the prioritiz-

ing of the informal and subjective over the formal and

objective in organizational relationships. In other words,

the factors which determine the relationships within the

organization are informal relationships and cohesion of

employees, rather than structural and formal features of the

organization. In collectivist societies, the cohesion between

people can depend on many different criteria (gender,

having the same political view, being member of the same

trade union, being relatives, having graduated from the

same school, being countrymen, being friends, etc.) and

can be viewed as favoritism regardless of the status of a

person within the formal structure of the organization.

According to Melchior and Melchior (2001), the pre-

vailing thoughts associated with particularism have the

potential to change ethical principles guiding managerial

structure and to threaten the bureaucratic structure designed

to protect managerial structure. Because of this, the situa-

tion in particularism is just opposite of the bureaucratic

organization theory of Weber, by which he defined uni-

versalistic organization practices. A bureaucracy follows

impersonal merit-based staffing policies. On the other hand,

particularistic personnel policies are interested in who they

are rather than merits of employees (Pearce et al. 2000). In

other words, in the management of organizations, the

commitment to organizational norms is less important than

the responsibilities related to personal relationships.

Trompenaars and Hampden-Turner (1997) define a

universalist society as one which is rule-based. In these

societies, each and every person should obey rules as a

citizen and no one has any privilege or exception. On the

other hand, in particularistic societies rules are imple-

mented on the basis of fulfilling duties as a friend, sibling,

spouse, or someone close rather than just a citizen. For this

reason, personally close relationships result in exceptions

in the implementation of rules.

A study conducted by Pearce et al. (2000) on samples in

the USA and Hungary has yielded significant results in terms

of revealing how social and cultural differences affect

organizational management. According to the results of the

study, particularistic and universalistic personnel practices

differ by the structure and political features of the society. In

the modernist political system of the United States, person-

nel practices are found to be more universalistic compared to

the neotraditional system in Hungary. According to Pearce

(1991), some managers in Hungarian companies can use the

criteria that determine the performances of the personnel in

favor of certain employees subjectively.

To Aytac (2010), the most important elements in

forming favoring relations in a society are commitments

and social networking structures. These commitments and

structures may be displayed implicitly and explicitly within

rational and legal institutions. For example, nepotism/cro-

nyism types such as favoring actions based on family,

kindred, and acquaintances, largely transform modern

relations. A study by Aydogan (2012) regarding universi-

ties found that favoring may occur for various reasons,

including shared political views, religion, and ideology,

studying in the same school, being related, being fellow

townsmen, being from the opposite sex, and having the

same race. These kinds of informal commitments are

considered elements that increase the functionality of the

organization on one hand, but form the causes of negative

organizational outputs by producing inequality and

unfairness on the other hand.

According to leader–member exchange theory, it would

be more appropriate to deal with the influence of leadership

on employees individually rather than as a group influence.

In other words, followers are not equally influenced by

leader actions (Boies and Howell 2006). In addition, most

leadership theories assume that a manager behaves the

same to all individuals within an employee group. In

practice, leaders behave differently to different followers

and develop different types of relations with them (Graen

and Uhl-Bien 1995). Leaders may treat some individuals as

in-group and others as out-group members. This distinction

may result from various characteristics of subordinates in

relation to performance- as well as non-performance-rela-

ted factors.

Classifying employees as in-group and out-group may

result in favoring people belonging to one’s own in-group

(Tajfel et al. 1971; Khatri and Tsang 2003). In the leader–

member exchange model, in-group members are highly

trusted, supported, and rewarded. On the other hand, out-

group members make less use of these elements. Out-group

members are managed within the boundaries of the contract

made with the institution, and receive no real leader support

(Lenunberg 2010). Managers have the tendency to adopt

more human-relation-oriented behaviors toward in-group

subordinates while out-group subordinates are treated as

task-oriented (Cheng 1999). Low exchange relationships

(out-groups) involve purely contractual manager–subordi-

nate relationships in which both parties follow rules and

procedures while high exchange relationships (in-groups)

involve non-contractual social exchanges that exceed formal

role requirements (Kim and Organ 1982; Jones 2009).

Developing two different kinds of attitudes as in-group and

out-group may lead managers toward cronyism. The leader

may share more than leadership with in-group members, and,

therefore, act to the benefit of in-group members and to the

detriment of out-group members.

M. Turhan

123

In-group bias refers to favoring of certain members by

groups which are formed spontaneously within the orga-

nization, and developing biased attitudes toward them.

Relations within these groups are totally independent of the

official and formal structures of the organization. In other

words, these groups are formed regardless of hierarchical

structure of the organization, and the position of either a

manager or a subordinate within this group may be dif-

ferent from their position within the organizational hier-

archy. Khatri and Tsang (2003) claim that reciprocal

relations between managers and subordinates in terms of

cronyism tend to be guided by personal ties rather than by

official responsibilities. These kinds of informal relations

may invalidate organizational schemes. In addition, mem-

bers of organization share more than friendship to realize

individual targets that they cannot meet via formal chan-

nels. Thus, each individual has the tendency to prioritize

benefits of other individuals within their own group.

Humans feel themselves closer to those who are similar

to them in terms of appearance, speech, opinions, nation-

ality, political views, group membership, etc. This is

because people need a sense of group-belonging, and,

therefore, establish and protect permanent, positive, and

significant inter-personal relations, at least at a certain level

(Baumeister and Leary 1995). Members of an organization

make contributions to organizational processes through

their knowledge and qualifications, and interact with other

employees through the characteristics that they possess

inherently or which they have acquired as a result of

environmental influences. In this interaction, employees

who are similar to each other in various ways create

informal groups. Power struggles between informal groups

may result in the emergence of cronyistic relations within

the organization. Members of an informal group that is

close to an organizational leader might be favored at the

expense of usurping the rights of others.

Leader–Member Exchange (LMX) theory assumes that

intimate relations between seniors and subordinates are

always on behalf of the organization. However, there may

be negative results of these close relations, although this

depends on the cultural characteristics of a society (Khatri

2011). For example, Zhang et al. (2006) and Gomez et al.

(2000) indicated that, within vertical collectivistic cultures,

performance assessments tend to assign greater importance

to relations among employees of an organization than to

their real performance.

Paternalism and Personal Loyalty

Paternalism is a common cultural feature of traditional

eastern societies. This feature manifests itself in all areas,

from inter-family relationships to state–citizen relation-

ships. A study conducted by Aycan in 10 countries

revealed that paternalistic features are mostly observed in

India, Pakistan, China, and Turkey (Aycan 2001; Erben

and Guneser 2008). One of the primary things that children

learn in traditional societies is to obey family elders.

During education, children treat their teachers with a high

level of respect, even to the point that they are afraid of

teachers (e.g., when a teacher enters the classroom, stu-

dents stand up). The manifestation of paternalism in

organizations is to obey managers and be loyal to them.

(Hofstede 2010). Paternalism is related to power and loy-

alty. From the organizational perspective, paternalism

refers to the preferences of superiors for subordinates who

are connected and loyal to them at the expense of others,

and to treating such subordinates differently. The employee

displays unreserved loyalty to the manager, and the man-

ager disproportionately protects the employee’s interests.

Culture is one of the most influential elements in

determining the prevalence and type of cronyism in orga-

nizations (Khatri and Tsang 2003; Khatri et al. 2006;

Begley et al. 2010). This is because cultures can maintain

appropriate conditions for the emergence of cronyism. For

instance, cultures with high power distance are convenient

environments for people to adopt cronyistic attitudes in

order to achieve or maintain power. According to Hofstede

(2001), power distance is related to social acceptance of

unequal power distribution. This inequality may be asso-

ciated with prestige, wealth, and power. From the per-

spective of organizations, it is the acceptance level of

unequal distribution of power by positionally less powerful

members of an organization.

To Clegg and Hardy (1999), organizational structures

and systems are not objective and apolitical. There is a

hegemonic and dominant structure in the nature of orga-

nizations. Therefore, possessing and using organizational

power is a political issue. Imbalance of power between

subordinates and seniors prepares a convenient environ-

ment for organizational policy to function using power.

This situation, as indicated by Greenberg and Baron

(2000), may lead to organizational corruption in a moral

sense.

The nature of cronyistic relationships can be analyzed

within the scope of organizational power and policy. For

example, the favoritism demonstrated toward some

employees by managers is related to the policy system,

which is one of the power systems defined by Mintzberg

(1983). From this point of view, cronyism is in the scope of

informal and illegitimate power as stated by Hoy and Mi-

skel (2004) as well. Since cronyism is based on informal

and personal relationships rather than formal and organi-

zational ones and it can turn into a tool used by employees

to get power. The definition of cronyism offered by James

(2006) also corresponds to this point of view. To James

(2006), cronyism is a subtype of negative collective politics

Organizational Cronyism

123

and it is created by a group of people who work together in

order to develop and sustain an informal system through

which they can derive personal benefits by circumventing

formal rules and procedures.

Clustering in organizational environment initiates power

struggle in some way or another. In this respect, power can

be regarded as a source allowing favoritism. Moreover,

favoritism becomes an instrument to increase power by

those who hold power. In organizational relations, man-

agers possess sources of power and maintain their relations

through the authority they derive from these sources. This

situation may sometimes lead managers to use present

sources according to not only confirmed principles and

rules but also their estimation, especially on behalf of

people they trust, or regard as similar and loyal to them-

selves (Asunakutlu 2010). This act, naturally, may result in

favoritism—specifically cronyism.

Those in high positions feel the need for subordinates

with strong loyalty, who will accept their decisions

unconditionally (Khatri and Tsang 2003; Cheng 1999;

Hofstede 2010). Thus, a cronyistic relation may emerge,

with subordinates paying loyalty to seniors and receiving

protection in return. There is a greater chance of encoun-

tering such relations in cultures with high power distance.

In these cultures, subordinates are not eager to participate

in decision-making. Instead, they expect to be told what

needs to be done by their seniors, or else await a decision

by those in high positions. Managers do not include their

subordinates into decision-making processes because this is

regarded as an indicator of weakness. People are mostly

fond of helpful and autocratic managers (Tripathi 1990).

The duty of subordinates is to unconditionally obey, and to

behave in accordance with the demands of the manager. In

return, a helpful manager rewards them. What matters is

loyalty to the manager rather than loyalty to the institution.

Previous studies have revealed that managers are expected

to display behaviors such as protection, help, defense, and

affection in collectivist cultures, and that these kinds of

paternal expectations are more influential than individual

outcomes of employees (e.g., job satisfaction) (Pellegrini

and Scandura 2006; Sinha and Sinha 1995). As for sub-

ordinates, they obey managers in return for protection,

defense, and favoritism. Therefore, loyalty of subordinates

to the manager is prioritized rather than their abilities and

performance.

Construct of Organizational Cronyism

The biggest challenge in developing a scale for organiza-

tional cronyism is to define the concept and detect its scope.

The present study is the first attempt in the literature to

specifically measure this construct. Therefore, specification

of the construct is necessary for this study. The main

objective of this study is to discuss organizational cronyism

from the perspective of employees (teachers) and develop a

scale in this framework. For the reason, the study focuses on

cronyistic relationships between the manager and employee

and employees’ perceptions of these relationships.

Khatri and Tsang (2003) regarded cronyism as a broad

social phenomenon, however, classified it according to

vertical and horizontal cronyism in organizations. Hori-

zontal cronyism refers to relationships based on favoritism

between employees at the same level (friends, colleagues,

etc.); vertical cronyism refers to the relationships between

managers and employees. The scale developed in this study

is related to vertical cronyism. Khatri and Tsang (2003) have

defined vertical cronyism as ‘‘favoritism shown by the

superior to his or her subordinate (e.g., promotion, bonus,

pay raise, or better job assignment) based on non-perfor-

mance (e.g., relationship of subordinate with the superior),

rather than performance criteria (e.g., objective perfor-

mance, competence, or qualifications of the subordinate), in

exchange for the latter’s personal loyalty.’’ According to this

definition, cronyism is related to the unfair use of organi-

zational power and authority. Cronyism is personal, as it is

based on unfair treatment of the manager depending on

factors unrelated to performance. However, cronyism is also

organizational, as the power and authority used in these

types of treatments derive from the organizational structure.

Defining cronyism simply as favoritism narrows its

meaning. Instead, it is better to explain cronyism by

exploring what makes it different from other related con-

cepts. In literature, the concept favoritism is examined

under three different types: nepotism, cronyism, and

political favoritism. Nepotism is a type of favoritism based

on affinity relationships rather than merits. For example,

while appointing someone to a position, if affinity rela-

tionships are taken into account rather than educational

background, performance, skills, etc., this is an example of

nepotism. Studies revealed that such practices are observed

more in family companies (Millgram et al. 1999; Spranger

et al. 2012). Political favoritism or patronage refers to

practice whereby the political party in power discharges

managers in public institutions and employs supporters of

the party in their positions. Thus, this type of favoritism is

more related to a political partisanship and conflict of

interests (Weingrod 1968). Cronyism refers to a much

broader social phenomenon compared to two other types.

This is because in cronyism, relationships are dynamic and

can be based on various grounds. In the basis of such a

relationship, there can be various social variations, such as

friendship, political views, citizenship, personal loyalty,

ethnic origin, relationships based on self-interests, etc.

The focal point of this study is employees’ perception of

cronyism. For example, when a manager takes different

M. Turhan

123

factors, like friendship, personal loyalty, etc., into account

rather than performance while appointing someone to a

position or awarding employees, the other employees in the

organization think that it is not fair. The relationship between

the manager and favored employees might disturb other

employees. Such behaviors on the part of the manager will

damage other employees’ sense of justice and adversely

affect the perception of the objectiveness and fairness of the

manager and the organization. According to Hoy and Tarter

(2004), the manager’s behaviors are important for employ-

ees’ sense of justice. A manager who is equitable, sensitive,

respectful, consistent, free of self-interest, honest, and ethical

will create a perception of fair and balanced treatment. On the

contrary, favoritism, giving preference to personal interests

rather than organizational interest and unfair treatment will

adversely affect the perception of the organization. In this

respect, cronyistic relationships between managers and

subordinates can damage the sense of organizational justice.

Therefore, the issue should be dealt with as a whole and the

views of those who witness such practices should be taken as

the basis for measuring organizational cronyism.

The issues related to cronyistic relationships are not

limited to rewards, promotions, salary increases, or perfor-

mance assessments. In important issues which are never-

theless regarded as basic, such as providing better working

conditions, giving permission more easily, inclusion in

decision-making processes, unfair treatment while resolving

conflicts, relationships based on cronyism between manag-

ers and employees can develop. For example, in studies

conducted by Blase and Blase (2003, 2006), it has been

revealed that principals are able to favor some teachers by

giving them the best classes and students, making positive

assessments about them, electing them for committee

membership, or appreciating them. For this reason, in par-

allel with the purpose of this study, organizational cronyism

is defined as ‘‘Any privileged, favored treatment by the

manager toward certain employees based on factors (per-

sonal relationships, personal loyalty etc.) not being related to

performance criteria or formal procedures from the per-

spective of employees.’’ As the purpose of the developed

scale is to determine employees’ perception of such treat-

ments, the construct is termed Perceived Organizational

Cronyism (POC).

Development of the Scale

Item Generation

Items were generated using two sources. The first one is

relevant literature, while the second is interview forms

completed by teachers. The domestic and international

literature was reviewed regarding the sociological and

psychological basis of cronyism. Then, an interview form

comprising two questions was implemented with 33

teachers, each working in separate schools. The first

question was, ‘‘At any point throughout your career, have

you ever witnessed favoritism toward certain school staff

to the detriment of others?’’ (Yes/No). The second question

was, ‘‘If yes, please describe the attitudes and behaviors

that you encountered regarding favoritism.’’

Of the 33 teachers, 31 stated that they encountered

favoritism. In the second question, they defined the

favoring attitudes and behaviors that they encountered.

The attitudes and behaviors defined by teachers were

analyzed, and 14 favoring behaviors were detected in

total. These behaviors were written as thesis statements,

taking into account related literature, to create the pool of

14 items. For example, one teacher defined the behavior

with the following words ‘‘The school manager did not

grant me a full-day off for my Master’s degree, although I

registered for the degree and certified it. However, he

granted some other teachers a full-day off for their Mas-

ter’s one year later.’’ This and similar views were com-

bined to form the item, ‘‘Our manager treats employees

with whom he has a closer personal connection with more

tolerance.’’

Pooled items were assessed by means of two focus-

group interviews conducted with teachers. The purposes of

these interviews were to add new pooled items, detect the

dimensions of organizational cronyism, assess item

expressions, and identify ambiguous items. Each focus-

group interview lasted for approximately 1 h. One of the

interviews included six teachers while the other included

eight teachers. Teachers were asked to discuss the 14

pooled items derived from the interview responses. In

addition, teachers were encouraged to produce new items

and give their opinions about the dimensions of the scale.

As a result of the focus-group interviews, four new items

were added to the item pool and three items were modified

slightly in their expressions.

The expanded item pool with 18 items was given to three

experts from the department of educational management and

two experts from sociology to receive their views regarding

content validity and item expressions. These experts have

authored many published papers regarding similar topics.

Based on these expert views, minor modifications were made

in the content of four items. Thus, a survey form named as the

Perceived Organisational Cronyism (POC) with 18 items

was developed and, scored via a 5-point Likert-type scale

with choices of ‘‘Strongly agree,’’ ‘‘Agree,’’ ‘‘Somewhat

agree,’’ ‘‘Disagree,’’ and ‘‘Strongly disagree.’’

Organizational Cronyism

123

First Study

Sample and Data Collection

POC scale with 18 items, which was produced from a lit-

erature review, interview forms, focus-group interviews,

and expert views, was distributed to 296 teachers working

in primary schools in the center of Elazıg, Turkey and 277

valid and complete responses were included for analysis.

Of these teachers, 162 were male and 115 were female;

ages ranged between 26 and 48 (mean = 34.8).

Factor and Item Analyses

Prior to exploratory factor analysis to determine the

structural validity of the POC scale, the items were

examined for their appropriateness for factor analysis. The

Kaiser–Meyer–Olkin (KMO) coefficient was calculated

and the Bartlett test of sphericity was used. The KMO

coefficient of the scale was 0.951 and the Bartlett result

was significant (v2 = 2873.48; df = 105; p = 0.00),

which indicates that the data were appropriate for factor

analysis (Field 2005).

Exploratory factor analysis was conducted using varimax

rotation. The results showed that the scale comprised three

factors with eigenvalues greater than 1. Items with factor

loadings of 0.50 or above within one factor and unloaded

items within two factors were reserved for further analyses,

and the remainder were excluded from the scale (Hair et al.

1998). According to these criteria, two items with factor

loads of less than 0.50, and an item loaded under two factors,

were removed. The final factor analysis showed that the

three factors in the scale explained 69.77 % of total variance.

The eigenvalues and explanatory powers of the three factors

were 5.28 (explained 35.21 % of total variance), 3.34

(22.27 %), and 1.84 (12.28 %), respectively. Table 1 shows

the results of final exploratory factor analysis.

The first factor of the POC scale consists of 6 items with

load values between 0.740 and 0.827 (a = 0.90). The second

dimension consists of five items with factor load values

between 0.581 and 0.777 (a = 0.87). The third dimension

consists of four items with factor loads between 0.638 and

0.804 (a = 0.74). These three factors were named after the

content of the sub-items, related literature, and the model

proposed by Khatri and Tsang (2003). Accordingly, since the

items within the first factor are related to bias based on

informal relations and group memberships between manag-

ers and subordinates, this factor was termed ‘‘in-group bias.’’

Items under the second factor are related to favoring loyal

subordinates, and, therefore, this factor was named ‘‘paternal

cronyism.’’ The third factor is termed ‘‘reciprocal exchange

of favor,’’ since the sub-items are related to reciprocal

exchange of behaviors between managers and subordinates.

Second Study

Sample and Data Collection

The purpose of the second study was to test the fitness of

the structure put forward in the exploratory factor analysis.

To this end, the POC scale was implemented with teachers

working in 23 secondary schools in the center of Elazıg,

Turkey. In order to have more reliable data, questionnaires

were administered individually in the school environment.

Of 682 teachers working in 23 schools, 253 completed the

scale voluntarily. Since 35 of questionnaires that were

received had missing data, only 218 were regarded as valid

and included in analyses. Response rate was 37 %. Of the

respondents, 125 (57.3 %) were male and 93 (42.7 %)

were female. In terms of school type, 32 (14.7 %) work in

vocational high schools, 41 (18.8 %) work in science high

school, and the remaining 145 teachers (66.5 %) work in

general and Anatolian high schools. Respondent ages range

between 24 and 53 (mean = 36.7).

Confirmatory Factor Analysis

The data obtained from the 218 valid surveys were analyzed,

and the validity and reliability of the scale were investigated.

Tabachnick and Fidell (2001) recommend that sample size

should be a minimum 200 in order to use multivariate sta-

tistical techniques. In addition, Jackson (2003) and Kline

(2005) state that the ratio of cases to free parameters should

be 10:1 in order to conduct a confirmatory factor analysis.

The sample size of the study is, therefore, sufficient

according to both the recommendation of Tabachnick and

Fidell (2001) (N [ 200) and the criteria set by Jackson

(2003) and Kline (2005) (15 9 10 = 150 \ 218).

Table 2 presents the standardized loadings and model fit

indexes of the items of the three-factor structure.

Table 2 shows that all standardized loadings of items

exceed 0.50. The factor load values of all except three

items exceed 0.70. In addition, the fit indexes indicate that

the three-factor structure displays an acceptable fit

(Table 2).

A composite reliability index was used to determine the

reliability of measures. As seen in Table 3, the composite

reliability index exceeds the minimum recommended level

of 0.60 (Bagozzi and Yi 1988). Average variance extracted

(AVE) values are greater than the recommended level of

0.50 (Hair et al. 1998). Discriminant validity was tested by

comparing the AVE values of each structure and the var-

iance shared by the structure and all other variables. In all

comparisons, AVE exceeded all combinations of the shared

variance (Table 3).

A one-factor model, second-order factor model, three-

factor model, and modified three-factor model were tested

M. Turhan

123

by means of maximum likelihood estimation. Table 4

presents the goodness of fit indexes of each model.

As seen in Table 4, all models have good fit values.

However, the best fit was shown by the three-factor model

and second-order factor model (v2 (87) = 176.97,

GFI = 0.90, RMSEA = 0.06, RMR = 0.04, NFI = 0.92,

CFI = 0.96, NNFI = 0.95). Since the cronyism scale is

newly developed, modification indexes (MI) were investi-

gated in order to better examine the items in the factor

structure. It was seen that some modifications would

increase the goodness of fit indices. Examination of the

MIs demonstrated that the highest MIs were between items

4 and 5 (MI = 8.93), and between items 7 and 9

(MI = 8.84). Thus, within-factor error covariance between

the 4th and 5th items was included in the calculation.

Likewise, within-factor error covariance between the 7th

and 9th items was added, and the measurement model was

modified accordingly. As seen in Table 4, the modified

second-order factor model displayed a strong goodness of

fit index (Fig. 2). According to Barnes and Moon (2006),

the knowledge criterion of Akaike can be used to compare

non-nested models. Accordingly, since the modified three-

factor model gives a lower AIC value (227.25), it displays

a better fit than the original three-factor model (242.97).

Nomological Validity

Cronyism is an unfair practice. Therefore, a lower level of

trust in managers is expected within organizations with a

high perceived level of cronyism. Many studies have

reported a strong relationship between perception of

Table 1 Factor loads of scale items

Item description Factor loadings

Factor 1 Factor 2 Factor 3

Our manager treats employees with whom he has a closer personal

connection with more tolerance

0.821

In our institution, individuals’ performance rather than their personal

relations with the manager are taken into account when employees

are rewardeda

0.818

When resolving conflicts, our manager protects employees with whom

(s)he has a closer personal connection

0.776

In our institution, employees who have a closer relationship with the

manager are given activities that have financial or career-related

benefits

0.768

The views of employees who have a close relationship with the

manager are prioritized while making decisions in our institution

0.768

Faults of employees who are personally close to the manager are

ignored in our institution

0.736

The interests of people who show unconditional loyalty to our

manager are protected more than others in our institution

0.799

Our managers treat those who do not criticize their decisions with

greater tolerance

0.710

Loyalty to the manager is the most important criterion in assessing

staff within our institution

0.673

Our manager ignores the faults of subordinates who are loyal 0.607

In our institution, loyalty to the institution is more important than

loyalty to the manager

0.580

Manager–employee relations in our institution are based on

institutional benefits rather than personal benefitsa0.796

When employees support our manager on a certain issue, they expect

to be rewarded

0.791

Our managers reward employees who present behaviors that support

their interests.

0.650

Manager–employee relations in our institution depend on reciprocal

personal benefits

0.571

Eigenvalue 5.28 3.34 1.84

Percent variance explained (%) 35.21 22.27 12.28

a Items in italic are reverse-scored

Organizational Cronyism

123

organizational justice and trust (e.g., Hoy and Tarter 2004;

Wong et al. 2006). To testify the psychometric character-

istics of the POC scale, the effect of cronyism on trust,

which is one of the variables to which cronyism is theo-

retically related, was tested. All dimensions of the scale

need to predict the trust in managers oppositely in order for

the scale to have nomological validity (Table 5 shows the

results of multiple regression analysis, displaying the

relationships between the dimensions of the POC scale and

trust in managers).

As seen in Table 5, the dimensions of the POC scale are

significant predictors of trust in managers. The R2 value of

the model is quite high (0.537). The ‘‘in-group bias’’ is the

most significant predictor of trust in managers, followed by

paternal cronyism and reciprocal exchange of favor,

respectively. These results are consistent with the structure

obtained through exploratory and confirmatory factor

analyses. In other words, it was concluded that the scale

had an adequate nomological validity.

Table 2 Standardized factor

loadings and fit indices

GFI goodness of fit index,

RMSEA root mean square error

of approximation, SRMR

standardized root mean square

residual, NFI normed fit ındex,

CFI comparative fit index;

NNFI non-normed fit indexa Items in italic are reverse-

scored

Item description Std. loadings

In-group bias

Our manager treats employees with whom he has a closer personal

connection with more tolerance

0.77

In our institution, individuals’ performance rather than their

personal relations with the manager are taken into account when

employees are rewardeda

0.63

When resolving conflicts, our manager protects employees with

whom (s)he has a closer personal connection

0.87

In our institution, employees who have a closer relationship with the

manager are given activities that have financial or career-related

benefits

0.81

The views of employees who have a close relationship with the

manager are prioritized while making decisions in our institution

0.82

Faults of employees who are personally close to the manager are

ignored in our institution

0.88

Paternal cronyism

The interests of people who show unconditional loyalty to our

manager are protected more than others in our institution

0.88

Our managers treat those who do not criticize their decisions with

greater tolerance

0.73

Loyalty to the manager is the most important criterion in assessing

staff within our institution

0.68

Our manager ignores the faults of subordinates who are loyal 0.84

In our institution, loyalty to the institution is more important than

loyalty to the manager

0.75

Reciprocal exchange of favor

Manager–employee relations in our institution are based on

institutional benefits rather than personal benefitsa0.69

When employees support our manager on a certain issue, they

expect to be rewarded

0.66

Our managers reward employees who present behaviors that support

their interests

0.83

Manager–employee relations in our institution depend on reciprocal

personal benefits

0.76

v2(87) = 176.97; p \ 0.01; GFI = 0.90, RMSEA = 0.06; SRMR = 0.04; NFI = 0.92; CFI = 0.96;

NNFI = 0.95

Table 3 Means, standard deviations, scale reliability, AVE, and

correlations

Means s.d. AVEa 1 2 3

1. In-group bias 2.40 0.80 0.64 0.87b 0.51 0.32

2. Paternal cronyism 2.21 0.74 0.60 0.72 0.82 0.43

3. Reciprocal exchange

of favor

2.13 0.69 0.54 0.57 0.66 0.72

a Average variance extractedb Scale composite reliability (reported in bold along the diagonal).

Correlations are showed in the lower half of the matrix. Shared

variances are reported in the upper half of the matrix. All correlations

are significant at p \ 0.01

M. Turhan

123

Discussion

Although many studies have been conducted on ethics in

the field of management and leadership, there is a limited

number of studies about the common and important prob-

lem of cronyism and its effects (Khatri and Tsang 2003).

Previous studies have contributed to the definition of cro-

nyism and its reflection in the field of management.

However, there are few empirical studies about cronyism

within organizations and the individual and organizational

outcomes. Therefore, there is a need for empirical studies

to improve knowledge of cronyism and its effects. Based

on this need, a scale was developed to measure perceptions

of cronyism among members of an organization. The

present study introduces the multidimensional 15-item

POC scale.

In this study, the concept of organizational cronyism

was defined as managers favoring people or groups to

whom they feel closer for whatever reason, and dispro-

portionally protecting their interests. There are many fields

in organizational life where this situation may be experi-

enced. This is because an organization is an environment

where imbalances of power and informal and mutual

relationships, based on self-interest, are experienced both

structurally and behaviorally. Therefore, this study dealt

with the concept of cronyism within the concept of social

exchange theory, leader–member exchange theory, and

organizational power and policy.

One of the significant contributions of this study is that it

determined that employees’ perception of cronyism as a

multidimensional structure. Exploratory factor analysis

demonstrated that the POC scale had a three-factor structure,

in accordance with the literature. In describing the factors

leading to perceptions of cronyism, the three dimensions of

the scale were termed: ‘‘in-group bias,’’ referring to mana-

gerial bias based on informal relations with subordinates;

‘‘paternal cronyism,’’ referring to managers favoring loyal

Table 4 Goodness of fit indices of models pertaining to factor structure of POC scale

Model v2 v2/df Dv2 GFI RMSEA SRMR NFI CFI NNFI AIC

One-factor 197.84 2.27 0.88 0.07 0.04 0.91 0.95 0.94 263.84

Second-order factor (Model 1) 176.97 2.03 0.90 0.06 0.04 0.92 0.96 0.95 242.97

Three factor (Model 2) 176.97 2.03 0.90 0.06 0.04 0.92 0.96 0.95 242.97

Difference between Model 1 and Model 2 0

Modified three factor (Model 3) (Fig. 2) 157.25 1.85 0.91 0.06 0.04 0.93 0.96 0.96 227.25

Difference between Model 2 and Model 3 19.72**

Used model fit indices – B3 0.90–0.95 B0.08 B0.08 0.90–0.95 C0.95 C0.95

Reference Sumer (2000), MacCallum and Hong (1997), MacCallum et al. (1996), Bentler (1990), MacCallum

and Hong (1997), Hu and Bentler (1999)

GFI goodness of fit ındex, RMSEA root mean square error of approximation, SRMR standardized root mean square residual, NFI normed fit

ındex, CFI comparative fit index; NNFI non-normed fit index, AIC Akaike’s information criterion

** p \ 0.01

IB

C1 e1

,77C2 e2

,55

C3 e3,87

C4 e4,80

C5 e5

,80

C6 e6

,89

PC

C7 e7,88

C8 e8,73

C9 e9,70

C10 e10,84

C11 e11

,74

REF

C12 e12,69

C13 e13,65

C14

C15

e14,83

e15

,77

,57

,72

,66

,24

,25

Fig. 2 A diagram for modified three-factor model (Model 3)

Table 5 Relationships between scale dimensions and trust in

managers

Dimensions of POC

scale

B SE b t p R2

In-group bias -0.59 0.08 -0.43* -7.06 0.00 0.537

Paternal cronyism -0.27 0.06 -0.21* -4.19 0.00

Reciprocal

exchange of favor

-0.22 0.07 -0.16* -2.96 0.00

Dependent variable: The trust in manager (1. ‘‘In general, the

employees at our school trust in the manager’’; 2. ‘‘In general, our

manager treats everyone impartially’’) (a = 0.81)

* p \ 0.01

Organizational Cronyism

123

subordinates; and ‘‘reciprocal exchange of favor,’’ referring

to the expectation of mutual favor between manager and

subordinates. An employee’s perception of cronyism may

differ in terms of the three dimensions. Previous studies

(Khatri et al. 2006; Yan and Bei 2009; Hong 2011) showed

that the causes and effects of cronyism may vary depending

on culture and organizational context.

The ‘‘In-group Bias’’ dimension of the POC scale con-

sists of 6 items, including: ‘‘Our manager treats employees

with whom he has a closer personal connection with more

tolerance’’; ‘‘When resolving conflicts, our manager pro-

tects employees with whom (s)he has a closer personal

connection.’’ The high score indicates strong perceptions of

in-group bias. The ‘‘Paternal Cronyism’’ dimension of the

scale consists of 5 items, including: ‘‘The interests of

people who show unconditional loyalty to our manager are

protected more than others in our institution’’; ‘‘Loyalty to

the manager is the most important criterion in assessing

staff within our institution.’’ The high score indicates a

strong perception that managers favor subordinates who

show loyalty and obey unconditionally. The third dimen-

sion of the scale is ‘‘reciprocal exchange of favor,’’

including: ‘‘When employees support our manager on a

certain issue, they expect to be rewarded’’; ‘‘Manager–

employee relations in our institution depend on reciprocal

personal benefits.’’ The high score indicates an intense

perception that subordinate–superior relations within the

organization are shaped by cronyism based on the expec-

tation of receiving something in return.

Confirmatory factor analyses revealed that the three-

factor structure of the scale yielded the best goodness of fit

values. However, it was seen that the goodness of fit

indices of the single-factor structure also provided an

acceptable level of fit. Thus, the developed POC scale may

be used also unidimensionally in order to determine per-

ceptions of cronyism among employees of an organization.

The present study showed that perceived organiza-

tional cronyism was a significant predictor of trust in

managers. The findings indicate a strongly inverse rela-

tionship between perceived in-group bias and trust in

managers, followed by paternal cronyism and reciprocal

exchange of favor. The more strongly employees believe

that their manager treats subordinates unequally and

favors some employees, the less trust they have in their

manager. This finding reveals that perceptions of crony-

ism negatively affect employees’ sense of justice, because

cronyism is an unfair practice. Previous studies reported

that trust and justice are closely related (Hoy and Tarter

2004; Wong et al. 2006). In this regard, managers should

pay strict attention to the principle of justice in their

professional relations, and avoid attitudes and behaviors

associated with cronyism in order to gain the trust of

their subordinates.

Each of the three dimensions of the scale addresses a

different premise of cronyism. It is likely that in-group bias

is experienced more within cultures that have intense social

networks and informal relations. Paternal cronyism may be

experienced more in cultures with a high power distance,

where superiors expect obedience and subordinates expect

protection. Based on the classification by Singelis et al.

(1995), these kinds of cronyism may be expected to be

observed mostly in vertical and collectivist cultures (e.g.,

Asian countries). As mentioned by Khatri (2011), these

cultures have a more appropriate culture for cronyism;

because in these cultures employees have respect and

affection at high level toward their managers. The rela-

tionships between managers and employees are based on

fear and affection. Managers are closely interested in the

lives of their employees, both in and out of work. However,

this relationship does not turn into an informal friendship.

Instead, relationships are formal and are kept at arm’s-

length. This kind of a relationship can result in an exchange

similar to the one between father and sons or daughters. In

other words, while the employee respects and obeys the

manager, the manager protects and guides the employee.

On the other hand, reciprocal exchange of favor seems to

be more likely within individualistic cultures (e.g., Western

countries). Further study would be necessary in order to

empirically confirm such deductions.

Limitations and Future Studies

The present study is significant in that it has developed a

scale determining behaviors within the context of cronyism

within an organization. However, both the first study and

the second study were conducted in educational institu-

tions. The dimensions and scope of cronyism may differ

between employment sectors and sample groups. In this

sense, the developed scale may need to be adapted to dif-

ferent sectors. In addition, there is a limited number of

studies on the phenomenon of favoritism, both within

schools and in other organizations. The literature contains

some studies about favoritism and nepotism in general

(Millgram et al. 1999; Spranger et al. 2012; Asunakutlu

and Avcı 2010; Bute 2011a; Keles et al. 2011; Bute 2011b;

Aydogan 2012). However, further studies are required to

analyze the phenomenon of cronyism and its effects on the

behaviors of employees within public and private institu-

tions. Thus, descriptive and correlational studies of this

issue may make important contributions to the literature.

The intensity of biased attitudes and behaviors within an

organization may have many individual and organizational

outcomes. It is more than probable that biased practices

will impair the sense of justice; reduce trust in managers,

other colleagues, and the organization; and have important

M. Turhan

123

organizational implications. Furthermore, individual

effects such as lower organizational commitment,

increased burnout and stress level, and reduced job satis-

faction may be expected. Therefore, there is a need for

further research to determine the individual and organiza-

tional results and effects of cronyism, and to develop

strategies for addressing similar practices within organi-

zations. Future studies may focus on the causes of crony-

ism as well as its effects on individuals and organizations.

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