Stakeholder decision making influence and stakeholder well-being in nursing homes: the case of employees and customers.

Abstract

In this thesis, I use stakeholder theory to expand on the idea of employee empowerment in organizational behavior, recognizing that employees are but one group that can be empowered by managers, and that the empowerment of certain stakeholder groups will affect not only their own well-being, but also the well-being of other stakeholder groups. Employee empowerment therefore seen within the context of stakeholder empowerment, which is defined as allowing stakeholders influence in managerial decision making. This thesis concentrates on two types of stakeholders, employees and customers, in one industry, nursing homes. The data set includes over 1200 employees and 600 customers in 36 nursing homes. This thesis contributes to stakeholder theory by considering whether the empowerment of stakeholders, particularly employees and customers, improves stakeholder well-being. It also contributes to the field of employee empowerment, and introduces the systematic study of customer empowerment in a stakeholder framework. It makes a methodological contribution by examining in detail the potential variables that confound the relationship between employee empowerment and employee job satisfaction, occupational stress and wages. It uses Hierarchical Linear Modeling, a series of control variables, and Two Stage Least Squares to address the potential validity threats. It considers non-linearity in the relationship between employee well-being and employee satisfaction, and it considers how employee empowerment fit impacts employee outcomes or customer empowerment fit affects customer outcomes. In addition, it analyzes the relationship between employee and customer empowerment and customer service performance and customer satisfaction, variables which has not been frequently studied in this literature. The results of this study show that employee empowerment improves employee well-being and customer empowerment improves customer well-being. I also find a positive effect of employee empowerment on customer well-being, and a null effect of customer empowerment on employee well-being. The findings indicate that the level of employee and customer empowerment is a more important predictor of well-being than empowerment fit, and that the relationship between employee empowerment and employee well-being is non-linear. Evidence is also presented to indicate the importance of empowering all stakeholders in the group, rather than empowering only those who seek empowerment. These results suggest that the empowerment of at least some stakeholders results in outcomes that are positive for multiple stakeholders--that stakeholder empowerment is not a zero-sum game. The results predicting job satisfaction and wages are robust, but the results predicting occupational stress are significant in the Hierarchical Linear Modeling framework, but insignificant in the Two Stage Least Squares framework. The results predicting customer service performance and customer satisfaction are robust to various specifications, but Two Stage Least Squares could not be completed due to the lack of instruments.