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Job insecurity has become an important issue for western organizations in the last decade due to uncertain economic conditions, global competition, and the advancement of information technology. In this study, we integrate social exchange theory and rational choice theory to explain employees’ responses to job insecurity in the Chinese context. We distinguish short-term transactional exchange from long-term relational exchange, and argue that joint ventures (JVs) and state-owned enterprises (SOEs) are characterized by different kinds of employee-organization exchange. An integrated theoretical framework is developed to explain why workers in these organizations respond differently to job insecurity. A total of 548 supervisor-subordinate dyads in a JV and a SOE in China are used to test the hypotheses derived from our framework. The results of hierarchical regression analysis indicate that the effects of job insecurity on organizational citizenship behavior (OCB) and job performance depend on both organizational types and employees’ trust in their organization.
Wong et al. (Tue,) studied this question.