research article on working capital management

Working capital management and firm profitability

• Short survey paper
• Published: 09 May 2013
• Volume 24 , pages 77–87, ( 2013 )

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• Thorsten Knauer 1 &
• Arnt Wöhrmann 1  

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Managing a firm’s current assets and liabilities (working capital management) is highly relevant to the success of that firm. While the short-term liquidity effects of working capital management are straightforward to derive, it is an empirical question how it affects firm profitability. This short survey paper consolidates the empirical literature on the association between working capital management and firm profitability. This state of the art analysis provides evidence of positive effects of accounts receivable management and inventory management on profitability. However, results for the effects of accounts payable management on profitability are driven by reverse causality. Finally, this paper highlights critical aspects of prior research and points to avenues for future research.

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Knauer, T., Wöhrmann, A. Working capital management and firm profitability. J Manag Control 24 , 77–87 (2013). https://doi.org/10.1007/s00187-013-0173-3

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Published : 09 May 2013

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DOI : https://doi.org/10.1007/s00187-013-0173-3

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Qualitative Research in Financial Markets

ISSN : 1755-4179

Article publication date: 29 July 2014

The purpose of this paper is to review research on working capital management (WCM) and to identify gaps in the current body of knowledge, which justify future research directions. WCM has attracted serious research attention in the recent past, especially after the financial crisis of 2008.

Design/methodology/approach

Using systematic literature review (SLR) method, the present study reviews 126 articles from referred journal and international conferences published on WCM.

Detailed content analysis reveals that most of the research work is empirical and focuses mainly on two aspects, impact of working capital on profitability of firm and working capital practices. Major research work has concluded that WCM is essential for corporate profitability. The major issues with prior literature are lack of survey-based approach and lack of systematic theory development study, which opens all new areas for future research. The future research directions proposed in this paper may help develop a greater understanding of determinants and practices of WCM.

Practical implications

Till date, literature on classification of WCM has been almost non-existent. This paper reviews a large number of articles on WCM and provides a classification scheme in to various categories. Subsequently, various emerging trends in the field of WCM are identified to help researchers specifying gaps in the literature and direct research efforts.

Originality/value

This paper contains a comprehensive listing of publications on the WCM and their classification according to various attributes. The paper will be useful to researchers, finance professionals and others concerned with WCM to understand the importance of WCM. To the best of the authors’ knowledge, no detailed SLR on this topic has previously been published in academic journals.

• Literature review
• Survey methods
• Operating cycle
• Working capital management

Pratap Singh, H. and Kumar, S. (2014), "Working capital management: a literature review and research agenda", Qualitative Research in Financial Markets , Vol. 6 No. 2, pp. 173-197. https://doi.org/10.1108/QRFM-04-2013-0010

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Analyzing the Efficiency of Working Capital Management: a New Approach Based on DEA-Malmquist Technology

Ahmed mohamed habib.

1 Independent Accounting and Finance Researcher, Zagazig, Egypt

Nahia Mourad

2 College of Computer Information Technology, American University in the Emirates, Dubai, UAE

In this study, we analyze the efficiency of working capital management (WCME) for Gulf companies before and during the coronavirus crisis, then explore the influence of the coronavirus crisis on WCME. This study uses several techniques to achieve its goals, including the Malmquist index (MI), data envelopment analysis (DEA), and Tobit regression. The results demonstrate that most firms (approximately 84%) adopt a conservative strategy for their WCM. The WCME results revealed a statistical difference in the technological and pure efficiency scores for companies before and during the coronavirus crisis, while the results revealed no statistical difference in the technical, scale, and total factor productivity scores. Tobit’s results show that the coronavirus crisis had no significant influence on companies’ WCM performance. Finally, our results indicate that firms that are efficient in terms of WCM have higher sales returns and net income. The findings of this study have important implications for stakeholders to increase their awareness of companies’ WCM performance before and during a crisis. In addition, the results could have implications for trading strategies as investors and financiers seek to invest in companies with good WCM. The implications of WCM performance on social interests would cause decision-makers to use the best strategies and procedures to enhance WCM activities to improve their investments and image in the community in which it operates. We advance a novel contribution to the literature by analyzing and appraising the WCME for companies before and during the coronavirus crisis using a new approach based on DEA-Malmquist technology and then examining whether the coronavirus crisis has affected the WCME.

Introduction

Businesses strive to make the best use of their limited resources. Resource allocation theory states that firms choose the most cost-effective distribution and allocation of resources for various productive activities [ 1 , 2 ]. As a result, firms that strive for excellence manage their WC to achieve best practices. The WC term arose from corporate finance and was initially mentioned at the inception of the twentieth century [ 3 , 4 ]. The WC is one of the most confusing accounting concepts. The lack of clarity concerning the employment of WC may be excused by the fact that there is no analogous classification of WC in firms’ balance sheets. WCM appears to have been primarily disregarded in businesses, even though bad WC decisions are responsible for a considerable portion of business failures, and WCM is essential for corporate financial management because it directly affects a firm’s profitability [ 5 ]. This is more striking as a large share of past firm bankruptcies was created by ineffective or inadequate WCM [ 6 ]. As WC significantly influences a firm’s operational and financial security, the literature confirms that it is necessary to develop an optimal WC strategy for a firm [ 7 , 8 ]. The literature suggests three strategies for managing WC: conservative, moderate, and aggressive [ 8 – 10 ]. The conservative strategy is safe for a firm and provides a high level of liquidity as it keeps current assets at high levels compared to current liabilities. In contrast, the aggressive strategy keeps current assets at low levels compared to current liabilities. Finally, the moderate strategy is considered a sensible method as it aims to minimize the drawbacks of the aforementioned methods and maximize their benefits. Exploring the suitable linkages between the items of current assets and liabilities will help a firm to adopt a good WC strategy. Therefore, a firm should adopt and manage its WC strategy on a solid and secure basis to achieve best practices.

The literature on corporate finance recognizes the significance of short-term business decisions on firm profitability. WCM is a recurring topic on a global scale because it is critical to ensure a business’s optimal path. WC is essential during economic downturns because it acts as a liquidity buffer [ 11 , 12 ]. Additionally, WC practices benefit firm profitability by facilitating solid sales and income growth [ 13 , 11 ]. While inventory stockpiling protects businesses from price fluctuations, trade credit increases sales and strengthens customer relationships. In addition, short-term debt related to financing the WC has low interest rates and is unaffected by inflation [ 14 ]. In contrast, the PricewaterhouseCoopers (PwC) Global report notes that promoting WC could free up €1.3 trillion in cash, allowing for a 55% increase in capital investment [ 15 ]. Furthermore, the report identifies new calls for global publicly traded firms’ business performance over the last 5 years as capital expenses have decreased, cash has shifted to be more costly and tough to convert, and the WC has slightly improved. Firms must cultivate and enhance their WC practices to improve business performance. On the other hand, excessive investment in WC necessitates financing and, as a result, additional payments, which may produce negative consequences and sacrifices for stockholders [ 13 , 16 ]. Kieschnick et al. [ 17 ] argue that an increase in WC financing increases the likelihood of bankruptcy because it requires additional financing requirements and financing expenses.

Moreover, various components of WCM contribute significantly to its effectiveness. Firms must make critical decisions about how much stock to keep on hand as having a large inventory protects them from costly stockouts and manufacturing process interruptions. Customers who are given more credit are more likely to use and verify products before making a payment, which benefits the company [ 18 ]. According to de Almeida and Eid [ 19 ], WC is a critical component of operational cash flow and is used to calculate the free cash flow. Effective WCM reduces a firm’s reliance on external funding, frees up cash for additional investments, and increases its financial flexibility. Business administration is constantly striving to maintain optimal WC volume. Increased WC investment energizes the sales process and provides discounts to suppliers for prompt payments at low WC levels. Nonetheless, once a certain level of WC investment is reached, additional interest costs are incurred, eroding firm value [ 20 ].

Two approaches have been used to assess a firm’s efficiency in terms of WCM. The first approach for assessing the WCME is to use ratio analysis as a parametric method. For example, quick and current ratios have been used to assess a firm’s liquidity [ 21 ]. In addition, Zimon and Tarighi [ 8 ] explored the WCM strategies of small- and medium-sized firms in Poland using liquidity and turnover ratios, cash conversion cycle (CCC), and other ratios. This approach has been criticized for its inherently static nature as a parametric method [ 22 ]. The CCC proposed by Richards and Laughlin [ 23 ] was also criticized for being mathematically incorrect, failing to focus on the total amount of funds committed, and lacking differentiation in the weights assigned to each component of WC [ 24 ]. According to Goel and Sharma [ 24 ], other measurement ratios, such as weighted CCC, have calculation issues owing to a lack of relevant data. Accordingly, researchers have developed alternative methods for measuring the WCME to overcome the weaknesses of the traditional approach. DEA is one such measure that has been used to calculate WCME as a non-parametric method in previous studies [ 25 – 30 ].

The DEA approach is distinguished by its ability to capture relationships between multiple outputs and inputs [ 31 – 33 ]. Additionally, DEA is a non-parametric technique that does not require prior assumptions about the distribution form of data or its residuals, and does not require any previous knowledge of the variable weights [ 34 – 36 ]. In addition, DEA is distinguished by its powerful benchmark in assessing the efficiency of firms, as it focuses on the best practices of firms rather than traditional methods, such as ratios and regression analyses, which rely on measures of average and central tendencies as criteria for evaluation, as it benchmarks a firm’s performance with maximum relative performance or best practices [ 37 , 38 ]. Therefore, DEA is considered a powerful approach for the continuous improvement process as it provides critical benchmark information for inefficient firms in achieving the best practices [ 33 , 38 ].

Empirical evidence shows that WCM has garnered substantial interest in accounting and finance research. Considering the Gulf firms, WCM is vital to firms’ economic development. Gulf member states are monarchies with distinct legal structures, and their public corporations operate in distinct institutional, economic, and political environments [ 39 ]. To integrate with the global economy, they shifted their focus from an oil-based economy to a knowledge-based one [ 40 ]. Gulf firms outrank the Middle East and North Africa (MENA) regions but not other regions with comparable per capita income levels. Thus, inefficient employment of assets and WC impedes progress toward sustainable and equitable growth. Gulf firms should invest in balancing their assets and WC to alleviate this trend. In addition, the existing literature on WCM has rarely focused on this crucial phenomenon in Gulf firms. Therefore, more research is needed to analyze the WCME for firms operating in the Gulf and investigate the influence of the coronavirus crisis on WCM performance, which is considered a novel contribution to the literature. Therefore, this study analyzes the efficiency of WCM by integrating the data envelopment analysis approach and the Malmquist productivity index in the context of a unique Gulf setting. The objective of this study was to investigate data from 2018 to 2020. The DEA-Malmquist analysis is extended to capture the efficiency of WCM in terms of technical efficiency (effch), technological efficiency (techch), pure efficiency (pech), scale efficiency (sech), and total factor productivity (tfpch) before and during the coronavirus crisis. The efficiency of the WCM results revealed a statistical difference in the technological and pure efficiency scores before and during the coronavirus crisis. Tobit’s results show that the coronavirus crisis had no significant influence on Gulf firms’ WCM performance. The findings of this study have important implications for stakeholders to increase their awareness of companies’ WCM performance before and during a crisis. In addition, the results could have implications for trading strategies as investors and financiers seek to invest in companies with good WCM. The implications of WCM performance on social interests would cause decision-makers to use the best strategies and procedures to enhance WCM activities to improve their investments and image in the community in which it operates.

The motivation for the study stems from market characteristics and the economic prospects of the Gulf. Most Gulf countries experienced increased inflation during the study period, resulting in higher interest rates, influencing a firm cost of capital. The Gulf Statistics Centre recently released a report on the Gulf countries’ inflation rates, which were 3.5% in April 2021, up from 3.5% the previous year. In April 2021, Saudi Arabia had the highest inflation rate in the Gulf, at 5.3%, up from 3.1% in April 2020, followed by Kuwait (3.1%), Oman (1.6%), and Qatar (1.6%). In the United Arab Emirates and Bahrain, inflation decreased about 0.5% and 0.1%, respectively. Besides, the coronavirus epidemic, on the other hand, had a tremendous impact on the entire world, as every country, industry, and civilization were affected in some way [ 41 ]. Many activities have been restricted because of the pandemic to slow the spread of the virus. We should turn everything off to limit the negative impact. When public authorities take decisive action to address the emerging health threat of coronavirus, business leaders are faced with the challenge of channeling their WCM through the issue. Recognizing the crisis impact on the people who drive the firm’s operations is critical. That highlights the importance of a resilient leader in a fast-changing environment and working differently. Also, the author has not found any research by reviewing previous studies on WCM in the context of the coronavirus pandemic. Using MI and DEA, this study is thought to be one of the earliest attempts to analyze and appraise the WCM performance of the firms. Moreover, Gulf firms were adversely impacted by the numerous issues that arose because of the outbreak. Based on these arguments and evidence, this study investigates the following:

RQ1. Are there, on average, significant differences in firms’ WCME over the study period? RQ2. Has coronavirus crisis affected firms’ WCME over the study period?

The remainder of this paper is organized as follows. Section  2 presents a literature review and hypotheses formulation. Section  3 clarifies the data and the methodology used. Section  4 presents the empirical results. Finally, Sect.  5 presents a summary and conclusions of the study.

Literature Review and Hypotheses Formulation

WCM is a critical component of a firm’s success [ 42 , 43 ]. Furthermore, the WCM can help with risk management and increase the value of a business [ 44 ]. Furthermore, a conservative approach to WCM necessitates increased inventory and accounts receivable investment, which has the advantage of lowering supply-chain costs and price fluctuations, posing less risk to businesses [ 21 , 45 ]. Increased sales and market share generate profits [ 46 ]. Firms that take a proactive approach to WCM reduce risk exposure by reducing inventory investment and credit terms with customers [ 13 ]. Besides, a study of Indian industrial firms between 2004 and 2013 revealed continuous growth in WCME. The DEA-based approach effectively overcame the limitations associated with traditional WCME measures [ 26 , 27 ]. Furthermore, an examination of Indian industrial firms revealed a high degree of efficiency volatility among manufacturing firms, with those operating at 50 to 60% efficiency lacking liquidity management expertise [ 28 , 29 ]. According to Ukaegbu [ 47 ], there is a negative relationship between WCM and Egyptian manufacturing firm profitability. According to a study conducted in 46 countries, lowering CCC could increase business profitability and value [ 16 ]. Furthermore, publicly traded European hospitals with a low leverage ratio show that increasing WCM increases profitability [ 48 ].

Prior research in developed countries revealed various WCME and firm performance outcomes [ 49 ]. While these studies have been extensive in developed countries, they have only recently been extended to developing countries. In developing countries, the relationship between WCME and profitability has been documented using a variety of proxies. Over 10 years, Akinlo [ 50 ] investigated the relationship between WCME and non-financial sector firm profitability in Nigeria. Inventory days, average payment period accounts receivable, and WCM efficiency were all calculated by WCME. The data were analyzed using fixed effects and a pooled ordinary least squares model. Nigerian businesses’ return on assets (ROA) decreases as accounts receivable, accounts payable, and inventory turnover days increase, but increases as CCC decreases. Altaf [ 51 ] investigated the effect of WCME on the performance of the Indian hospitality sector using a two-step efficient GMM (generalized method of moments). WC financing is calculated using the short-term debt-to-working-capital ratio. The results were a non-monotonic relationship with ROA and Tobin Q. That means that a low level of short-term debt benefits the performance of the business.

Wasiuzzaman [ 49 ] calculated the WC using inventory, receivables, payables, and WC balance. According to this study, WC is negatively correlated with ROA in Malaysian manufacturing firms. The payables and hypothesized relationships were incompatible. Soukhakian and Khodakarami [ 52 ] investigated whether WCME could significantly improve the ROA and economic performance of publicly traded Iranian industrial firms. Even though CCC was negatively associated with ROA, there was no significant relationship between WCM and refined economic value added when endogeneity was considered. Wang et al. [ 46 ] investigated the corporate relationships of non-financial listed firms in Pakistan over their existence. According to the findings, an increase in WCME (as measured by the net trade cycle) decreased ROA regardless of the life cycle stage. Zimon [ 10 ] analyzed WCM in small firms in Poland using a sample of 96 commercial firms operating in the construction industry from 2015 to 2017. The results demonstrate that firms operating within purchasing groups focus on financial safety and adopt a moderate-conservative strategy. Lyngstadaas [ 53 ] investigated the link between WCM packages and financial performance using a sample of 589 firms in the USA from 2012 to 2019. The results indicate that out of the 11 effective packages in terms of WCM, six are significant. Additionally, the results confirm that the six packages systematically relate to operational and financial WC performance.

In addition, Chamberlain and Aucouturier [ 54 ] explore the influence of WCM on the performance of publicly traded companies in Europe from 2004 to 2016. The results indicate that the links between WCM, profitability, and firm value are positive and significant. This study suggests that directors should take a nuanced view of WCM’s influence on performance. Zimon [ 7 ] reviewed prior research on WCM. This study shows that higher WC levels enable firms to increase their sales volume. The study concludes that directors should base their WCM strategies on high sales volumes to enhance firms’ WCM efficiency, profitability, and financial security. Aldubhani et al. [ 55 ] explored the linkage between WCM policies and profitability of manufacturing firms in Qatar from 2015 to 2019. The results reveal that firms with a shorter duration of receivables and CCC, and a longer duration of accounts payable and inventory turnover are more profitable. Jaworski and Czerwonka [ 56 ] explored the linkage between WCM measures using a sample of 326 Polish firms from 1998 to 2016. The results revealed a significant nonlinear linkage between working capital, liquidity, and profitability. Mazanec [ 57 ] explored the influence of WCM on a firm’s performance using 3828 transport firms in the Visegrad Group in the European Union in 2019. The results indicate that cash ratio affects firm performance in all models, excluding the Polish and Czech models. In addition, small firms are at a disadvantage in terms of WCM compared to medium-sized firms in Slovakia and the Czech Republic. Zimon and Tarighi [ 8 ] examined the influence of the COVID-19 crisis on WCM using a sample of 61 Polish firms from 2015 to 2020. The results demonstrate that firms manage a moderately conservative strategy for their WCM. Additionally, the results indicated that the COVID-19 crisis did not significantly alter firms’ WCM strategies. Tarkom [ 58 ] investigates the influence of the COVID-19 crisis on firms’ WCM using a sample of 2542 US-publicly traded US firms from 2019 to 2021. The results show that firms with more investment options and government incentives operate at lower levels during cash-conversion cycles. Additionally, the results demonstrated a significant negative influence of COVID-19 on WCM. This finding suggests that the influence can be mitigated by increasing government incentives and investment opportunities. Struwig and Watson [ 59 ] critically examined the WCM research conducted during the COVID-19 crisis in South Africa. The study concludes that during a crisis, the WC examination focuses on workforce safety and demand volatility. This suggests that effective cash management and digital transformation shifts are necessary to relieve undesirable changes in supply chains. Based on these arguments and evidence, this study hypothesizes the following:

H 1 . On average, there were significant differences in firms’ WCME over the study period. H 2 . The coronavirus crisis has affected the firms’ WCME over the study period.

Data and Methodology

The sample size included 459 publicly traded companies in the following industries: communication services, consumer discretionary, consumer staples, energy, health care, industrials, materials, real estate, and utilities. These companies are located in Oman, Qatar, Saudi Arabia, Kuwait, Bahrain, and the United Arab Emirates. According to Pastor and Ruiz [ 60 ] and Portela et al. [ 61 ], negative data values would limit the capacity of the DEA model to perform the analysis. As a result, 273 firms were excluded due to negative values in some cases and a lack of data in others. As a result, the final decision-making units (DMUs) are 186 firms. The primary data sources were based on the annual reports of the selected firms. These firms’ annual reports were obtained from the standard and poor’s DataStream, the platform of Mubasher-info, and firms’ websites.

Among the numerous approaches available for assessing DMU efficiency scores, the DEA approach was chosen to evaluate the efficiency of the firms under study because of its unique characteristics. First, as Mourad et al. [ 31 ], Shahwan and Habib [ 32 ], and Tone [ 33 ] argue, DEA is a versatile and powerful technique for capturing the relationship between specific outputs and inputs. Furthermore, DEA can provide critical information for continuous improvement, assisting inefficient DMUs in achieving best practices. Second, like Cooper et al. [ 37 ] and Habib and Shahwan [ 38 ] argued, DEA stands out as a benchmark technique that focuses on the best practices of DMUs rather than traditional methods that rely on measures of central tendencies. Finally, as demonstrated by Habib and Kayani [ 36 ], Mourad et al. [ 31 ] and Tuskan and Stojanovic [ 35 ], DEA distinguishes itself as a non-parametric technique that does not require prior assumptions about the distribution form of data (or its residuals). Furthermore, DEA does not require any previous knowledge of the variable weights.

To calculate efficiency using DEA, we require a set of inputs and outputs pertinent to the analysis’s primary objective [ 36 , 37 , 62 ]. DMUs are expected to provide outputs based on their possible inputs related to the primary objective under analysis. According to prior research, e.g., Gill and Biger [ 25 ], Goel and Sharma ( 24 , 26 , 27 , and Seth et al. [ 30 ], the inputs for calculating the WCME should include those items that account for a significant portion of WC investments. Additionally, each firm invests in WC to maintain consistency and increase sales. Thus, firms that generate more sales while supporting the same WC can be considered more efficient. As a result, net sales should be chosen as an output variable. Almost all prior research has overlooked the significance of net income as a by-product of WCM. A business that generates a higher net income while investing the same WC is more efficient. Following a review of the prior literature, the current DEA-WCME model used inventory, accounts receivable, accounts payable, and cost of goods sold as inputs and net sales and net income as outputs. Finally, the radial Malmquist DEA model is obtained by solving the next linear optimization problem:

where x in s (resp. y rn s ) is the value of the i -th input (resp. r -th output) of the n -th DMU observed in period s , the λ n 1 ≤ n ≤ N are the weights corresponding to the DMUs. The DMU is considered relatively efficient in period s measured by frontier technology t if δ s X n t , Y n t = 1 ; otherwise it is inefficient. It should be noted that, e n 1 = 1 δ 1 ( X n 1 , Y n 1 ) (resp. e n 2 = 1 δ 2 ( X n 2 , Y n 2 ) ) is the constant return to scale (CCR) efficiency score for the n -th DMU in the first (resp. second) period.

Following the evaluation of the firms’ WCME using the DEA approach, the current study used the Tobit regression analysis to identify the potential statistical effect of the coronavirus on firms’ WCME. This model is a valuable tool for assessing the relationships between variables when the dependent variable contains censored data or has a range constraint [ 38 ],Verbeek 2008). The equation represents the Tobit linear regression relationship:

where  e i represents each firm’s WCME; v 1 is the coronavirus as an independent variable defined by a dummy variable. To put it another way, if the time is related to the time before the coronavirus crisis, this indicator variable equals 1, and if it is associated with the time before the coronavirus crisis, it equals 0. Furthermore, to improve the accuracy of the analyses, the study used various control variables such as size, age, and leverage. Thus, v 2 represents the firm size as defined by the natural logarithm of total assets; v 3 represents the firm age as defined by the natural logarithm of firm age from the start of the activity until the end of the current year; v 4 represents firm leverage as defined by dividing a firm’s total liabilities by shareholders’ equity; v 5 refers to the communication services sector; v 6 refers to the consumer discretionary sector; v 7 refers to the consumer staples sector; v 8 refers to the energy sector; v 9 refers to the health care sector; v 10 refers to the industrials sector; v 11 refers to the materials sector; v 12 refers to the real estate sector. β 0 is a constant; β i represents the Tobit regression coefficients; and ε i are known by the Gaussian noises or errors.

Results and Discussion

Results of the efficiency model.

Table ​ Table1, 1 , panel A, shows the Malmquist index summary for the top ten DMUs under analysis (tfpch > 1) over the study period (2018–2020) in terms of WCME changes. In terms of improvement, the KWSE:HUMANSOFT achieved the best results (2.331), followed by the SASE:9510 (2.100), the DSM:NLCS (1.960), and so on. Table ​ Table1, 1 , panel B, displays the Malmquist index summary for all DMUs under consideration during the study period (2018–2020) regarding WCME changes. According to the Malmquist index summary, technological efficiency or frontier-shift (techch) was the primary source of the increasing efficiency of the total factor productivity index of the DMUs under study, rather than technical efficiency or catch-up changes (effch). In terms of improvement (tfpch > 1), 100 DMUs out of 186 under investigation achieved the best results (tfpch > 1). Only 86 DMUs appeared to be inefficient, and they should reconsider operating processes and improve performance through necessary corrective actions to achieve best practices and improve overall factor productivity.

DEA-Malmquist index summary of firm means

All Malmquist index averages are geometric means

effch technical efficiency change, techch technological change, pech pure technical efficiency change, sech scale efficiency change, tfpch total factor productivity (TFP) change

The DEA-Malmquist index summary of annual means in terms of WCME changes over the study period is shown in Table ​ Table2, 2 , panel A. The Malmquist index increased by about 1.002 (0.2%) from the base year in the first period (2018–2019) before the coronavirus crisis. This increase is the result of an increase in technological efficiency or frontier-shift changes (techch) of about 1.083 (8.3%) multiplied by a decrease in technical efficiency or catch-up changes (effch) of about 0.926. (7.4%). Similarly, the situation has not changed significantly during the crisis; the Malmquist index for the second period (2019–2020) increased by about 1.034 (3.4%), with this increase attributed to the rise in technological efficiency changes of about 1.135 (13.5%) multiplied by a decrease in technical efficiency changes of about 0.911. (8.9%). Over the study period, the Malmquist index increased by about 1.018 (1.8%), the technological efficiency increased by approximately 1.108 (10.8%), and the technical efficiency decreased by about 0.918 (8.2%).

DEA-Malmquist index summary of annual means

* p  < 0.1; ** p  < 0.05

Table ​ Table2, 2 , panel B, shows a complementary statistical test for confirming significant differences in firm efficiency scores regarding WCM over the study period using Wilcoxon tests (via IBM-SPSS ver26). The results showed no statistical difference in technical efficiency scores at a 5% significance level before and during the coronavirus crisis. Similarly, at a 5% significance level, there was no statistical difference in scale efficiency scores and total factor productivity scores. As a result, we retain the null hypothesis that the median of differences between effch (before the crisis) and effch (during the crisis) equals 0; sech (before the crisis) and sech (during the crisis) equal 0; tfpch (before the crisis) and tfpch (during the crisis) equal 0. Furthermore, the results revealed a statistical difference in technological efficiency scores and pure efficiency scores at a 5% significance level before and during the crisis. As a result, we reject the null hypothesis that the median of differences between techch (before the crisis) and techch (during the crisis) equals 0; pech (before the crisis) and pech (during the crisis) equals 0. All previous results indicate that H1 is partially supported.

Results of the Tobit Regression Model

Following the evaluation of the firms’ WCM performance using the DEA approach, it is helpful to identify some of the factors that affect WCM performance. In this section, the following factors are investigated for their impact on performance: the coronavirus crisis, size, age, leverage, and sector classification.

Tobit regression analysis was used to investigate factors influencing WCM performance using Stata/MP ver16. Table ​ Table3 3 depicts the effect of the variables under investigation on the WCM performance of the firms over the study period. Table ​ Table3 3 shows that firm size and sector (Sec1, the communication services sector; Sec2, the consumer discretionary sector) have a significant favorable influence at the 0.10 significance level or less. Furthermore, at the 0.10 significance level or less, the leverage and the industry sector (whether Sec5, the health care sector; Sec7, the materials sector) negatively influence.

The results of Tobit regression

* p  < 0.1; ** p  < 0.05; *** p  < 0.01

The current study’s findings revealed that the coronavirus crisis had no significant influence on WCM performance. As a result, the H2 hypothesis is unsupported. This findings are consistent with Zimon and Tarighi [ 8 ] study as they reveal that the COVID-19 crisis did not significantly alter firms’ WCM strategies. In contrast, the findings are inconsistent with Tarkom [ 58 ] study, as they demonstrate a significant negative influence of the COVID-19 crisis on WCM. In contrast, the findings revealed that firm size and leverage significantly impact WCM performance. Moreover, the results showed that the sector category (whether Sec1, the communication services sector, Sec2, the consumer discretionary sector; Sec5, the health care sector; Sec7, the materials sector) have a significant influence on the WCM performance at the same time the sector category (whether Sec3, the consumer staples sector; Sec4, the energy sector; Sec6, the industrials sector; Sec8, the real estate sector) have no significant influence on the WCM performance.

Sensitivity Analysis and Model Validation

Internal and external validity can be used to analyze findings. Internal validity investigates whether the methods utilized to change the results are valid, whereas external validity explores whether could generalize the results away from the present data [ 63 , 38 , 64 ]. Sensitivity examinations are helpful for both types of evaluations. Thus, the internal validity is appraised by utilizing various variables’ combinations. Table ​ Table4, 4 , panel A, presents the results of sequentially removing different variables used from the basic model. The current study adopted the Mann–Whitney U test to examine the efficiency scores of the modified DEA-WCME models to the original efficiency scores via the basic DEA-WCME model to verify if the removal of variable occurred a significant difference in the relative efficiency scores. Besides, the correlations of Spearman rank were computed as well.

Sensitivity analysis and model validation

It is exposed in Table ​ Table4, 4 , panel A, that the accounts payable removal significantly decreased the model’s efficiency distinction by diminishing the average of firms’ efficiency scores of 0.61 to 0.51 and the rate of the efficient DMUs of 12.9 to 9.1%. Similarly, removing either input accounts receivable, cost of goods sold, or inventory significantly influenced the model results concerning the efficiency score distribution and the rate of the efficient DMUs. Moreover, the high correlations of Spearman ranks suggest that the firms’ rankings were not significantly altered through the efficiency models. It is not surprising that removing either input impacted the model results because they blend various resource kinds. Therefore, excluding each would occur significant information removal.

Finally, the current study used the consistency of the results over time to assess the external validity of the firms’ efficiency model. The firms’ efficiency model was re-applied utilizing 2018 data in this analysis and then matched the relative efficiency scores to the 2019 and 2020 results (Table ​ (Table4, 4 , panel B). The Mann–Whitney U test revealed no statistically significant variance in the efficiency score distribution for the study years 2018–2019 ( p  = 0.497), 2019–2020 ( p  = 0.944), and 2018–2020 ( p  = 0.684). The Kruskal–Wallis H test revealed no statistically significant variation in the efficiency score distribution over the study ( p  = 0.814). The correlation of Spearman rank between each year was also highly significant. As a result, the general distribution of efficiency scores and the rate of the efficient DMUs not appear to change significantly from period to period, and the firms ranked as efficient remain mostly harmonious from period to period.

Summary and Conclusion

Empirical evidence shows that WCM has garnered substantial interest in accounting and finance research. Tewolde [ 5 ] shows that inadequate WC decisions are responsible for a considerable portion of business failures, and that WCM affects a firm’s profitability. This is striking because an ineffective WCM strategy creates a large share of past firm insolvencies [ 6 ]. As WC significantly influences a firm’s operational and financial security, the literature confirms that it is necessary to develop a good strategy for a firm’s WCM [ 7 , 8 ]. Drawing on this, there are increasing concerns regarding the coronavirus crisis toward firms that adopt WCM strategies, which may harm their performance and value. Using a unique Gulf setting, this study analyzes the efficiency of WCM before and during the coronavirus crisis using an integration between the data envelopment analysis approach and the Malmquist productivity index, and then explores the influence of the crisis on WCME using Tobit regression. To the best of our knowledge, the current study is the first to develop and apply the data envelopment analysis methodology using the Malmquist productivity index to evaluate WCME. Besides, the authors advanced a novel contribution to the literature by examining whether the coronavirus crisis has affected the WCM for firms under investigation. This study is essential for regulators, management, and investors to increase their awareness of firms’ WCM performance before and during a crisis. In addition, it provides insight into how the coronavirus crisis affects firms’ WCM, which is likely to strengthen firms’ financial policy and improve their strategies. These findings are consistent with Zimon and Tarighi [ 8 ] study as they reveal that the COVID-19 crisis did not significantly alter firms’ WCM strategies. In contrast, the findings are inconsistent with Tarkom [ 58 ] study, as they demonstrate a significant negative influence of the COVID-19 crisis on WCM.

The results show that 157 firms (approximately 84%) adopt a conservative strategy as a safe strategy for their WCM, while 29 firms have adopted an aggressive strategy, suggesting that most firms strive to provide a high level of liquidity and maintain current assets at high levels compared to current liabilities. In addition, the results of the DEA-Malmquist analysis revealed that the annual means of WCME increased by approximately 0.2% before the coronavirus crisis due to technological efficiency or frontier-shift changes. The results did not change significantly during the coronavirus crisis, with only a 3.4% increase due to technological efficiency or frontier-shift changes. Furthermore, at the 5% significance level, the Wilcoxon test revealed no statistical difference in the efficiency scores of technical and scale efficiency, and total factor productivity before and during the coronavirus crisis. In contrast to previous findings, the results revealed a statistical difference in technological efficiency and pure efficiency scores at a 5% significance level. In addition, the current study’s findings showed that the coronavirus crisis and firm age have no significant influence on WCM performance. By contrast, the findings reveal that firm size and leverage substantially impact WCM performance. Furthermore, the results indicate that sector category (communication services, consumer discretionary, healthcare, and materials) significantly influences WCM performance. Finally, our results indicate that firms that are efficient in terms of WCM have higher sales returns and net income, as the sales and net income averages of firms with relative efficiency in terms of WCM are approximately 11 and 30 times higher, respectively, than inefficient firms in terms of WCM.

Given the study findings, decision-makers and WC managers of firms should develop the necessary means and schemes to ensure the best practices of WCME and address the inefficiency aspects in terms of technical efficiency and scale efficiency to ensure that a firm operates efficiently, which would likely positively reflect on the firm and the confidence of many stakeholders. These findings highlight the need to disclose WCM practices within traditional firm reports or integrated reporting, where conventional statements alone would be insufficient to appraise firm performance, especially given the current ecosystem’s rapid and consecutive development. The findings would also pique the interest of decision-makers and WC managers, who could use the DEA methodology to investigate and identify weaknesses in firm performance, and then take significant actions to optimize performance and achieve best practices.

This study has some limitations. This study focuses on 186 firms (558 firm-year observations) in the Gulf Cooperation Council (GCC), and the findings are limited to the period 2018–2020. Based on the findings of the sensitivity analysis and model validation, the findings can be generalized to other firms in GCC and Middle Eastern countries, and future research may include all non-financial sector firms for broader applicability. Managerial ability, intellectual capital, real earnings management, ESG criteria, and the likelihood of financial distress are also important elements of financial policy that are not considered in this study but can be investigated in future studies. Despite these limitations, our study contributes to the literature by providing empirical evidence that most firms adopt conservative WCM strategies. Additionally, the WCME results revealed a statistical difference in firms’ technological and pure efficiency scores before and during the coronavirus crisis. The study also shows that the coronavirus crisis had no significant influence on firms’ WCM performance. Finally, this study may have implications for many stakeholders, including decision-makers, WCM managers, financiers, investors, financial consultants, researchers, and others, in increasing their awareness of firms’ WCM performance before and during a crisis. In addition, the results could have implications for trading strategies as investors and financiers seek to invest in companies with good WCM. The implications of WCM performance on social interests would cause decision-makers to use the best strategies and procedures to enhance WCM activities to improve their investments and image in the community in which it operates.

Author Contribution

The first author conceived the project and planning; fundamental analysis; the framework and statistical models; collected data and analyzed it; wrote the abstract, introduction, literature review and hypotheses formulation, data and methodology, results and analyses, and conclusions and implications; reviewed and edited the manuscript; responding to coming reviewers’ comments. The second author conceived the project and planning; results and analyses; reviewed the manuscript.

Declarations

The authors declare no competing interests.

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Contributor Information

Ahmed Mohamed Habib, Email: moc.oohay@bibahdemha_rd .

Nahia Mourad, Email: [email protected] .

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Effective working capital management is crucial to unlocking shareholder value, says PwC Middle East

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An estimated $50bn of liquidity is trapped in working capital across listed companies in the Middle East, costing shareholders billions of dollars in financing costs alone

Lengthy working capital cycles affect the ability of businesses to respond to changing market conditions; business leaders need to do more to avoid the risk of falling behind

Data analytics, automated billing, credit risk management, cross-functional inventory planning and robust governance structures can help strengthen working capital for the longer run

Dubai, United Arab Emirates – 19 August 2024 – According to PwC Middle East’s latest report, working capital optimisation will remain a priority for business leaders in the Middle East, given the region's high cost of capital. However, more can be done to improve working capital management. 

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The effects of psychological capital, work engagement and job autonomy on job performance in platform flexible employees

• Jun Liu 1 ,
• Ruofan Xu 1 &
• Ziwei Wang 1  

Scientific Reports volume  14 , Article number:  18434 ( 2024 ) Cite this article

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The performance of platform flexible employees is a core element that contributes to the rapid growth of the sharing economy platform. It is crucial to explore strategies to improve employees' performance with the growing competition among these platforms. Only a handful of research evidence has been found evaluating platform flexible employees’ psychological capital and work engagement to improve their performance. In order to remedy the gap, we draw on self-determination theory to develop a moderated mediation model, which examines how psychological capital affects platform flexible employees’ job performance. We employed hierarchical regression analysis to test the theoretical model and carried out two rounds of surveys, resulting in 474 valid paired questionnaires. The questionnaire assessed the psychological capital, work engagement, job performance, and job autonomy of flexible platform employees. The results indicate that work engagement plays a mediating role between psychological capital affects platform flexible employees’ job performance. Moreover, job autonomy moderates the mediating effect. The findings not only contribute to the literature on employees’ psychological capital and job performance, but also broaden the research scope of self-determination theory, and provide new ideas for improving the job performance of platform flexible employees.

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Introduction.

Amid the rapid development of the sharing economy, China's employment landscape is undergoing significant transformation, giving rise to a substantial number of 'flexible employees'. These flexible employees accept orders based on their own conditions and timing on large sharing economy platforms such as Meituan and Ele.me, with their compensation being tied to the number of orders complete. According to the 2022 data released by the National Bureau of Statistics of China, the count of flexible employees reached 200 million by the end of 2021. This novel form of employment enhances the flexibility of China's labor market while simultaneously posing fresh challenges to traditional employment relationships 1 , 2 . For instance, many platform-based flexible employees have not entered formal labor contracts with their respective platform enterprises 3 , leading to an ambiguous legal status for these workers and a heightened risk of rights infringement 4 , 5 . Furthermore, the income instability experienced by these flexible platform employees contributes to elevated psychological pressure and a vague sense of work motivation, potentially resulting in job burnout and hindering the growth of the platform enterprises 1 , 4 , 6 , 7 . Therefore, significant differences exist in the psychological states, work motivations, and needs of flexible and standard employees 7 , 8 .

Given the absence of formal labor contracts, flexible platform employees often do not enjoy the same benefits and support guarantees as those with standard labor contracts, fixed working hours, and fixed workplaces. Furthermore, with the increasing number of flexible employees, factors such as their educational background and work environment may be associated with relatively lower psychological capital compared to other employees. These changes necessitate new strategies for improving the job performance of flexible platform employees.

Flexible platform employees significantly differ from traditional employees regarding legal identity, work characteristics, and the protection of rights and interests 6 , 9 . Platform enterprises in China often form contracts with workers through third-party institutions to circumvent legal risks and fulfill social insurance responsibilities, dictating the scope of work and work methods of flexible employees through algorithmic rules. Consequently, flexible employees are in a weak negotiating position, with their rights and interests inadequately protected 1 , 4 , 10 . For instance, a 2022 survey report by the Jinan Survey Team of the National Bureau of Statistics of China revealed that a mere 13.8% of employers in Jinan purchased industrial injury insurance for takeaway riders. Amid high delivery demands, only 39.0% of takeaway riders reported no accidents involving themselves or colleagues. The disparities between flexible and traditional platform employees suggest that previous research conclusions regarding the impact of employees' psychological capital on individual behavior may not be entirely applicable in the case of flexible employees. This highlights the need for further exploration in this area.

Self-determination theory is a motivational process theory that explores human behavior related to self-determination 11 , 12 . In China, platform flexible employees come from diverse backgrounds. Some engage in flexible work during their off-hours from other jobs, while others rely entirely on such employment for their livelihood. The variability in individual characteristics leads to significant differences in the motivations and needs of these flexible employees. Moreover, flexible work is characterized by a high degree of flexibility and autonomy. Therefore, this study employs self-determination theory to explore the association between psychological capital and job performance among platform flexible employees, with a particular emphasis on engagement.

Psychological capital, a positive psychological state, Individuals with higher psychological capital are more likely to be optimistic and positive, have stronger motivation, exhibit more positive behavior and outcomes, and are more inclined to endorse and assimilate external regulations. They also demonstrate a focused work ethic and are generally more likely to deliver high job performance 13 . Work engagement emerges as a critical stimulator of employee performance within this process 14 . In this study, our objective is to comprehensively examine the positive mediating influence of work engagement on the positive relationship between psychological capital and job performance among flexible platform employees. This exploration is conducted through the theoretical framework provided by self-determination theory.

Job autonomy is a fundamental characteristic of platform-based flexible employment and a significant factor in attracting individuals to such roles. This autonomy is also a typical attribute of flexible platform labor and has proven correlations with individual behavior and performance 15 . According to self-determination theory, job autonomy is critical in stimulating job performance. However, in the context of the sharing economy platform algorithm, the job autonomy of flexible employees is inevitably compromised. Strict limitations are often imposed on aspects such as working hours, the number of orders, and the timeliness and quality of service completion. For instance, food delivery platforms like Mei Tuan and Eleme mandate staff to complete orders within a specified timeframe, with the number of allowable order rejections capped at a specific upper limit. Staff members are subject to penalties and rank downgrades for poor evaluations 16 .

Such excessive restrictions may lead to a slackening off among flexible employees, subsequently inhibiting performance enhancement and impeding the development of the platform enterprises. Furthermore, employees with higher job autonomy may exhibit higher satisfaction and work engagement. However, the current discourse on the boundary role of job autonomy remains limited 17 . Consequently, this study aims to extensively explore the positive moderating role of job autonomy in the relationship between the positive impact of psychological capital and job performance of flexible platform employees, based on self-determination theory.

Our research has three contributions to the existing literature: First, while existing research predominantly focuses on standard employees who have labor contracts with an enterprise, fixed working hours and locations, and full social insurance benefits, our study extends this focus. We explore the correlation between psychological capital and work engagement among platform flexible employees, as well as the association of flexible employment with job autonomy and job performance. Against the backdrop of the rapid development of China's platform economy, this study emphasizes the importance of psychological capital for flexible employees, enriching the relevant literature on psychological capital.

Secondly, current platform companies are making efforts to explore methods to improve the job performance of flexible employees, but existing research on this issue is insufficient. This study, based on self-determination theory, explores ways to enhance the job performance of flexible employees by focusing on the development of psychological capital, fostering work engagement, and creating a climate of job autonomy. It enriches and calls for attention to the research theme of work engagement and job performance of platform flexible employees 18 , 19 .

Thirdly, we explore how job autonomy, as a boundary condition, regulates the impact of psychological capital on the work engagement and job performance of flexible platform employees. From an empirical perspective, this study illustrates the positive impact of job autonomy as a key characteristic and advantage for platform flexible employees. The interaction between work engagement and job autonomy provides theoretical and practical value for improving the job performance of flexible employees.

This study is designed to offer platform enterprises with valuable insights into the pivotal factors influencing the job performance of flexible employees. The adoption of this approach is aimed at enabling these enterprises to establish a robust foundation for the enhancement of psychological well-being and job autonomy among flexible employees. The cultivation of psychological capital is of paramount importance, as it not only facilitates individual development but also significantly contributes to the overall growth and expansion of platform enterprises. Such insights are crucial for both the strategic development and sustainable success of these organizations in the dynamic and evolving landscape of platform-based employment.

Theoretical background and hypotheses

Psychological capital of flexible platform employees and their work engagement.

Psychological capital plays a significant role in shaping individual behavior, as it possesses the capacity to enhance employees' motivation towards their work, thereby driving them to achieve their highest level of performance, leading to positive outcomes and behaviors 20 , 21 , 22 , 23 . Also, psychological capital is an optimistic psychological state individual can cultivate. It bolsters their confidence to tackle challenging tasks and aids their resilience in the face of adversity 24 , 25 . Psychological capital encompasses four dimensions: hope, optimism, resilience, and self-efficacy 20 . In addition to fostering personal growth, psychological capital also positively impacts individual’s behavior and outcomes. It can be seen in an individual's work and academic work engagement, as well as their behavior and performance in the workplace 20 , 23 , 26 , 27 , 28 .

Kahn proposed the concept of 'work engagement'. He posited that the work engagement represents how employees integrate aspects such as emotions, cognition, and abilities into their work roles during the work process 29 . It is expressed physically, cognitively, and emotionally through self-application and self-expression. Since then, the interpretation of 'work engagement' has been subject to various viewpoints. Considering the nature of the platform's high repeatability and low complexity, flexible employees within the scope of this study have their work content tied to completing orders 16 . Existing research indicates that work resources and psychological factors are closely associated with the engagement of standard employees 21 , 30 , 30 , 31 . Highly engaged employees approach their work with energy, commitment, and intense focus. They are more likely to engage in job crafting, less prone to burnout, and capable of achieving safer and more positive work outcomes 23 , 32 , 33 .

Platform flexible employees represent a unique group characterized by significant diversity in skills, educational backgrounds, and needs. Typically, these employees face lower barriers to entry in terms of job requirements, do not have formal labor contracts, and are ineligible for benefits such as social insurance. They also lack fixed working hours and locations, yet are subject to control by the algorithms of platform companies 9 , 10 , 34 , 35 Given the considerable individual differences among platform flexible employees, often constrained by educational level and income, they tend to have lower psychological capital. Their job performance is closely associated with the management algorithms set by the platform. Consequently, conclusions from previous research regarding the impact of psychological capital on job performance may not fully apply to this group.

According to self-determination theory, fulfilling three fundamental psychological needs—autonomy, competence, and relatedness—can foster individuals’ emergence of intrinsic motivation. Such individuals, imbued with robust intrinsic motivation, tend to exhibit a more positive disposition 36 , 37 . Existing research indicates that psychological capital can influence employee behaviors and outcomes from a motivational standpoint 21 , 22 . For example, Xi, based on self-determination theory, suggests that psychological capital can enhance the engagement of standard employees through motivation 38 .

Firstly, flexible platform employees endowed with high levels of psychological capital possess greater hope and conviction. They are more inclined to align with the platform's operational philosophy, reject the notion of being controlled by the platform, and find their needs for autonomy more readily met. This process is associated with a heightened sense of identification with the platform and their work, which is observed to foster a willingness to engage in work positively. Such patterns are linked with increased levels of work engagement 2 , 20 , 27 , 36 .

Secondly, flexible employees with high psychological capital exhibit a more optimistic and confident demeanor. Their favorable views extend to their industry, organization, and prospects for development. Bolstered by their self-belief, they are eager to engage in challenging tasks, concentrate on their work, and satisfy their autonomy needs through task completion. Finally, high psychological capital employees demonstrate resilience when confronted with workplace difficulties. Individuals in this context are observed to interpret obstacles and challenges as avenues for personal and professional development. This perspective aligns with the principles of self-determination theory, emphasizing the importance of motivation. These individuals demonstrate a remarkable capacity for resilience, swiftly recovering from setbacks. They approach difficulties with a constructive and committed mindset to meet the needs of ability in self-determination theory 20 , 22 . Based on this, we propose the following hypothesis:

Hypothesis 1: Psychological capital of flexible platform employees is positively related to the work engagement.

Engagement of flexible platform employees and job performance

Job performance pertains to the extent of specific goal attainment and can be stratified into individual, team, and organizational levels 39 , 40 . This study concentrates primarily on the job performance of flexible platform employees at the individual level, emphasizing all behaviors and outcomes pertinent to achieving organizational objectives during the work process. Reflecting on prior research and the work traits of flexible employees on Chinese platforms—characterized by high repetitiveness and minimal innovation 6 , 35 , 41 —we categorize job performance into task performance and contextual performance. Evaluation of task performance is conducted through an analysis of the resources or support mechanisms essential for individuals to proficiently carry out technical tasks. These tasks are integral to the technical procedures, either in a direct or indirect manner. On the other hand, contextual performance pertains to the spectrum of employee behaviors that transcend the scope of task-specific activities, thereby contributing significantly to the broader organizational objectives. Such behaviors encompass a range of activities, including the voluntary participation in informal tasks, strict adherence to designated responsibilities, active collaboration and support for colleagues, and the exhibition of a fervent commitment towards furthering the aims of the organization 42 , 43 , 44 .

Existing research suggests that the work engagement of standard employees is closely linked to their performance. Highly engaged employees tend to be more focused, less prone to cyberloafing 30 , and capable of achieving excellent job performance 30 , 45 . Work engagement is equally important for managers, as transformational leadership can enhance managers' creative performance through increased engagement 46 . Platform flexible employees often face a lack of job stability. In terms of insurance, benefits, and developmental opportunities, these employees generally have limited protections. The majority of platform flexible employees do not plan for long-term engagement in their roles. They often lack recognition for their platform work and exhibit low enthusiasm 2 , 47 , 48 . Compared to standard employees, they may have relatively lower levels of work engagement and exhibit lower work motivation. In this context, the extent to which work engagement affects job performance warrants further exploration 2 , 7 , 9 , 49 .

Grounded in self-determination theory, distinctions in the origins of individual motivation and the extent of external rule internalization permit further classifying motivational types into three categories: intrinsic, extrinsic, and motivation 18 , 36 , 50 . Identified and integrated regulation, within intrinsic and extrinsic motivation, constitute autonomous motivation. Under the aegis of autonomous motivation, individual cognition and other behaviors tend to be more proactive, facilitating the generation of positive outcomes such as innovation 51 , 52 .

Employees on flexible platforms who exhibit high levels of work engagement are more inclined to conform to the platform's rules and values, as indicated by. They perceive their work as essential and meaningful, facilitating the internalization and assimilation of external regulations, such as platform evaluation algorithms. This process leads to an increase in autonomous motivation. Enhanced task performance, characterized by increased dedication, focus, and a positive mindset, results in greater effort and time investment 27 , 39 , 53 .

Furthermore, highly engaged platform flexible employees settings are likely to demonstrate a cooperative approach. This propensity is based on the requirements of relational and interactive dynamics, as well as the fulfillment of relationship-oriented needs, fostering a willingness to assist and support colleagues 54 , 55 , such as food delivery staff serving orders in the same area, or online ride-hailing drivers transferring orders that are inconvenient for colleagues to accept or complete. Some flexible platform employees spontaneously establish mutual aid organizations to aid colleagues in resolving disputes and provide financial support in unforeseen circumstances such as traffic accidents. Through a series of helpful behaviors, the relational needs of flexible platform employees can be effectively addressed, further enhancing internal motivation, producing higher contextual performance, and fostering a virtuous cycle. Accordingly, we propose the following hypothesis:

Hypothesis 2: Work engagement of flexible platform employees positively impacts job performance.

The mediating role of work engagement

As previously mentioned, the group of platform flexible employees often exhibits lower psychological capital and insufficient work engagement. Additionally, the income of platform flexible employees is typically linked to the number of orders they complete. Platform companies assess flexible employees based on the quantity, timing, and quality of order completion through algorithmic rules, which exert a certain degree of control over these employees. Therefore, unlike standard employees, their job performance is closely related to these algorithmic rules, and the role of psychological capital and work engagement in this context remains to be further clarified 5 , 10 , 35 , 49 .

Self-Determination Theory indicates that satisfying individuals' psychological needs can foster intrinsic motivation, which is closely related to their performance and outcomes 51 , 56 , 57 . Platform flexible employees with higher psychological capital may find their needs more readily met, more easily align with platform algorithmic rules, and are likely to experience stronger autonomous motivation, leading to a positive and proactive work state.

These individuals are proactive in seeking platform-based organizations that resonate with their personal growth goals, integrating these organizations' principles into their flexible work objectives. In this context, the external environment can enhance the motivation of platform flexible employees with high psychological capital. Such integration is associated with higher levels of sustained focus and enthusiasm among employees, potentially leading to increased work engagement and enhanced job performance. Previous research indicates that psychological capital and work engagement are positively related to job performance 21 , 22 , 25 , 58 , 59

Building upon the theoretical underpinnings of Hypotheses 1 and 2, it is reasonable to postulate that the psychological capital of platform flexible employees exerts a positive influence on their job performance, with work engagement acting as a mediating factor in this dynamic. Existing research indicates that employees with high work engagement exhibit heightened job satisfaction, engage more in organizational citizenship behaviors, and demonstrate stronger organizational commitment, all of which contribute to improved job performance 32 , 33 , 60 . In this context, platform flexible employees with substantial psychological capital are more likely to be in alignment with the business objectives of platform enterprises, enhancing their professional conduct. Such employees are likely to be actively engaged in their work, exhibiting greater enthusiasm and a sense of responsibility 28 , 61 , 62 . Their active pursuit of personal work goals, underpinned by this alignment, is indicative of superior job performance 1 , 34 , 55 . Hence, work engagement functions as a pivotal intermediary, connecting the positive relationship between the psychological capital of platform flexible employees and their job performance. Therefore, the following hypotheses are proposed:

Hypothesis 3: Work engagement mediates the positive impact of psychological capital on job performance for platform flexible employees.

The moderating role of job autonomy

Job autonomy refers to the extent of freedom and independent decision-making afforded to individual employees in their work processes. Psychological capital refers to the positive psychological state that individuals exhibit during their personal growth and development. Work engagement refers to the level of employee input and enthusiasm towards their work, which is demonstrated through a sense of responsibility, enthusiasm, and professionalism. Previous research on job autonomy has primarily been based on the Job Demands-Resources theory, which considers job autonomy as a positive resource that can enhance individual states, behaviors, and outcomes 30 , 31 , 46 . Job autonomy can enhance employees' work engagement 28 , 30 , bolster work well-being 34 , 63 , significantly mitigate emotional exhaustion among flexible employees 5 , 34 , reduce cyberloafing 30 , curb job burnout 17 , 34 . Positive psychological states and job autonomy promote job satisfaction among platform flexible employees, alleviate mental stress, and lead to better work outcomes, thereby improving the job performance.

Employees exhibiting varying degrees of job autonomy often manifest different behaviors, even when individual characteristics and external environment remain consistent. According to self-determination theory, when the external environment satisfies internal needs, it can stimulate the emergence of intrinsic motivation. Conversely, if the external environment instills feelings of control or incompetence in the individual, it will diminish their intrinsic motivation 36 . Platform algorithm rules stringently govern the job performed by Chinese platform flexible employees, these rules directly impact their job autonomy and can significantly affect their motivation. Upon receiving an order, the platform initially forwards it to the lobby for flexible employees to accept. The system enforces order dispatch for longer-term orders based on real-time distance, the number of orders currently undertaken by flexible employees and their respective scores. This is evidenced in Meituan’s active order-grabbing and system dispatch orders, and Didi Chuxing’s reservation orders, order-grabbing, and real-time dispatch orders.

Sometimes, flexible employees are compelled to accept orders they prefer not to undertake. If system dispatch orders are frequently canceled within a certain period, the employee may face punitive actions such as order suspension, score reduction, or subsidy deduction. Repeated penalties could result in difficulties in receiving orders or the ramifications of only being able to receive low-quality orders. These situations can rapidly induce emotional exhaustion, decreasing employee motivation and efficiency 9 , 35 . Typically, newly established platforms impose fewer restrictions on flexible employees, their algorithms are more user-friendly, management rules are more relaxed, and job autonomy is heightened. Given similar work conditions, flexible employees prioritize orders from the new platform and allocate more significant attention. Consequently, job autonomy is intrinsically linked to the psychology and behavior of flexible platform employees.

Self-determination theory posits that the need for autonomy is one of the three fundamental psychological needs. The fulfillment of this need is associated with the development of stronger intrinsic motivation in individuals, leading them to perceive their work as interesting and meaningful 51 , 56 , 64 . Individuals with stronger motivation are likely to engage actively in their work and are more inclined to achieve favorable outcomes. Furthermore, they often prefer choosing their type of work based on personal preferences, seeking autonomy to exert control over their actions and decision-making processes. Platform flexible employees possessing a high degree of job autonomy are less likely to feel controlled. They tend to maintain an optimistic state, feeling valued and respected by the platform. This group finds it easier to identify with their work, believing they can accomplish their tasks and that the platform and its customers need their contributions 9 , 17 , 35 . Consequently, they are more likely to invest more of their cognitive resources, emotional energy, and physical effort into their work, culminating in a higher work engagement.

Conversely, in scenarios where job autonomy is limited, platform flexible employees may experience feelings of constraint, perceiving their role as subordinate. This can lead to a sense of underappreciation by the platform, with their rights and interests potentially being less safeguarded. The lack of sufficient information to address the autonomy needs outlined in self-determination theory exacerbates this issue. In such cases, employees might feel compelled to undertake undesirable tasks, driven by the need to avoid punitive measures like score reductions and fines. This coercion can impede their ability to find meaning and value in their work. When their fundamental psychological needs are not adequately met, they may encounter job burnout, exhibiting negative psychological states and behaviors, and facing increased job role complexity. As a result, these individuals may struggle to enhance work engagement, even with high levels of psychological capital. Based on these considerations, we propose the following hypothesis.

Hypothesis 4: Job autonomy positively moderates the relationship between the psychological capital and the work engagement of platform flexible employees.

Existing research based on the Job Demands-Resources model indicates that job autonomy for standard employees, as a resource, can promote work engagement 30 , 65 , enhance job performance 15 , 66 , 67 . For platform flexible employees, job autonomy serves as a positive work resource and an important source of motivation. Drawing from the above discussion, in addition to the moderating effect of job autonomy on the relationship between psychological capital and the work engagement of platform flexible employees, we further postulate that job autonomy can conditionally influence the intensity of the indirect relationship between psychological capital and job performance by satisfying psychological needs and fostering internal motivation. Specifically, the work engagement mediates the impact of the psychological capital of platform flexible employees on job performance, and this mediating role is influenced by job autonomy. Psychological capital, as a positive psychological state, can effectively engage flexible employees on the platform. It effectively motivates employees and ultimately leads to high job performance 21 , 28 , 62 . Job autonomy has the potential to meet the autonomy and competence of flexible employees in platform-based jobs, resulting in greater motivation, enhanced work engagement, and ultimately, improved job performance 61 , 63 . When platform flexible employees enjoy a higher degree of job autonomy, the indirect effect of platform flexible employees’ psychological capital on wage performance through work engagement is more substantial. On the contrary, when job autonomy is low, the indirect impact of psychological capital on job performance through the work engagement is weakened. Accordingly, we arrive at the following hypothesis:

Hypothesis 5: Job autonomy will moderate the mediating role of work engagement between psychological capital and job performance.

The research model of this paper is shown in Figure 1 :

Hypothesized research model.

Participants and procedures

This study primarily selects typical sharing economy platform enterprises operating in Beijing, Tianjin, and Jinan. We successfully established communication with the heads of five prominent Internet platform enterprises: Mei tuan-Dianping, Ele.me, Didi Chuxing, JD Logistics, and Dada Express. These corporations command a significant market share within their respective sectors. In 2020, Mei tuan takeaway emerged as a leading entity in its market, securing an impressive market share of 68.2%. Concurrently, Ele.me (referred to as 'Hungry' in some contexts) maintained a notable market presence with a share of 25.4%. These platforms are distinguished by their extensive arrangements for flexible employees, positioning them as exemplars of inclusivity and diversity in the workforce. During our investigation, we initially liaised with the regional personnel managers of these five platform enterprises, outlining our research objectives and processes. Subsequently, with the aid of the personnel managers, we randomly reached out to the leaders of 15 operational sites.

Having obtained consent from each site leader, we randomly selected 10% of platform flexible employees from each operational station's actual registered workforce to participate in the survey. They have not signed formal employment contracts with the platform and receive orders and income through the platform's app. The specific job types include food delivery workers, online ride-hailing drivers, and logistics couriers. Throughout the research process, we assured the respondents of the confidentiality and anonymity of the research. We affirmed that the collected data would be strictly used for scientific research purposes and would not disclose business secrets or personal information. We also clarified that the various response options carried no right or wrong, thus alleviating any concerns of the respondents and encouraging them to provide responses that genuinely reflect their feelings and experiences.

We employed a scale that has received recognition through its publication in esteemed academic journals 68 , 69 , 70 , 71 . To further refine our approach, we consulted with subject matter experts, including two professors in the fields of management and psychology, as well as two doctoral students. We also conducted a preliminary survey to refine the questionnaire. This process enabled us to make necessary modifications, especially in addressing any items that might be considered controversial or sensitive. For example, we revised the statement "I am proud of my career" to "Engaging in flexible work arrangements makes me proud."

We adopted the commonly used two-time stage data collection method, which can help avoid some biases. In the initial stage, we distributed 550 questionnaires to platform flexible employees to complete sections on psychological capital, work engagement, and job autonomy. One month later, In the second stage, we distributed an additional 550 questionnaires for managers to complete the section on the job performance of platform flexible employees. Managers needed more time to observe and assess the job performance of flexible employees more thoroughly. By employing this method, we can avoid the impact of environmental factors on data accuracy and reduce errors stemming from self-assessment by flexible employees. Accounting for employee turnover and role changes, we recovered 495 of these questionnaires. We assigned a unique identification number to each surveyed platform flexible employee and matched the data based on these unique identifiers. After excluding invalid questionnaires, such as those with patterned responses or unanswered questions, we ended up with 474 valid questionnaires, yielding an effective response rate of 80.9%. The percentage of individuals with a junior high school education or below was 23.63%. High school graduates accounted for 51.46% of the population, while those with a junior college education made up 18.14%. Only 4.22% of individuals had an undergraduate degree, and a mere 2.53% possessed a master's degree or higher.

Of the valid responses, 78.06% were from male participants, while 21.94% were from female participants. The majority, 64.98%, had been in flexible employment for one to four years. The proportion of respondents who were married stood at 67.09%, and those aged between 21 and 50 years represented 80.16% of the sample.

Adhering to Brislin's back-translation procedure, we selected scales from authoritative English-language journals and translated them into Chinese, ensuring the semantic equivalence of the items. This translation process involved the collaboration of a doctoral student specializing in Human Resource Management and another in Linguistics. Their translations were cross-compared and calibrated for accuracy and consistency. We employ the reverse translation technique iteratively until achieving consistency in terms of content, semantics, format, and application. At present, it is advisable to invite experts in the field of human resource management to engage in discussions and revisions of the Chinese version of the scale, with the aim of developing the initial questionnaire. Before launching the primary survey, we executed a small-scale pre-survey, deploying 50 questionnaires. Based on the feedback from this preliminary round, we refined the semantics and wording of certain items. All items in our study utilized a 5-point Likert scale(1= strongly disagree, 5= strongly agree). The specific measurement methods employed were as follows:

Psychological capital (PC)

We employed the scale devised by Luthans 70 , which primarily incorporates 14 measurement items. An example item is "I am confident I can always find complex solutions." In this study, the Cronbach's alpha coefficient of the five-level scale is 0.876.

Work engagement(WE)

We utilized the scale formulated by Schaufeli 69 , which primarily includes 17 measurement items. An example is "When I am at work, I am filled with motivation and energy." In this study, the Cronbach's alpha coefficient of the five-level scale is 0.902.

Job performance(JP)

We adopted the scale developed by Chen 68 , which mainly encompasses eight measurement items. For instance, "The quantity of my surpasses the average level." In this study, the Cronbach's alpha coefficient of the five-level scale is 0.911.

Job autonomy(JA)

We adopted the scale designed by Spreitzer 71 , which primarily consists of three measurement items. An example is "I have substantial decision-making authority in my job." In this study, the Cronbach's alpha coefficient of the five-level scale is 0.783.

Control variables

To enhance the precision of this study, we considered several control variables to mitigate potential interference with the research outcomes. Based on existing research, we selected age, gender, marital status, flexible working years, salary perception, and education level of platform flexible employees as control variables. To ensure the validity of our study results, it is imperative to address and mitigate the impact of potential confounding factors. These variables have the potential to impact the outcomes of the study. For instance, individuals who possess flexibility in their work arrangements, especially younger employees or those with longer working hours, tend to demonstrate more positive psychological and behavioral outcomes. Conversely, highly educated flexible employees prioritize job autonomy as a significant concern. Married flexible employees often exhibit a greater dependency on work income, potentially leading to increased investment in their work. Additionally, employees perceiving a higher salary perception may experience greater job satisfaction and tend to display more proactive behavior 5 , 29 , 33 , 55 , 62 .

Data analysis

We mainly conducted data testing following the following procedures: Firstly, we conducted a common method bias test. Secondly, we tested the discriminant validity of the four variables using confirmatory factor analysis. Thirdly, we conducted descriptive statistical analysis and correlation analysis. Finally, hypothesis testing was carried out through regression analysis.

Ethical approval

This study strictly adhered to the 1964 Declaration of Helsinki and was approved by the Ethics Committee of the School of Business Administration of Shandong University of Finance and Economics. We confirmed that all participants understand the purpose of our research and provided informed consent.

Common method variance (CMV)

Given that all variable data were filled out by the respondents, there might exist the potential for common method bias. We employed the Harman single-factor test method to investigate this bias. An unrotated principal component factor analysis was performed on the items of all significant variables. The results showed that four factors have eigenvalues greater than 1, accounting for 73% of the explained variance. The first factor accounted for 45% of the total variance and did not exceed 50%, suggesting no severe standard method bias. Subsequently, we adopted the common latent factor (CLF) method and added a CLF in the measurement model, which points to the measurement items of all variables. By comparing the standardized factor loadings differences between the model with CLF and the model without CLF, if the majority of the differences in factor loadings are greater than 0.1, it indicates a significant common method bias. The results showed that the differences in factor loadings between the two models were far less than 0.1 (maximum 0.062), indicating that the impact of common method bias on this study is minimal.

The results of the validity indicators suggest that the convergent validity is within an acceptable range. As indicated in Table 1 , the Cronbach's alpha coefficient (α > 0.7), construct reliability (CR > 0.7), standardized factor loadings (SFL > 0.6), and average variance extracted (AVE > 0.5) all satisfy the necessary criteria 72 , suggesting that all of our constructs meet the established standards.

Confirmatory factor analysis(CFA)

This study employed AMOS 24.0 software to examine the discriminant validity of the four main variables: psychological capital, work engagement, job performance, and job autonomy of platform flexible employees. The results of the confirmatory factor analysis for the five models are presented in Table 2 . As can be seen from Table 2 , the four-factor model exhibited the best fit compared to other competing models (χ 2 /df = 2.485, RMSEA = 0.079, NNFI = 0.902, CFI = 0.908), suggesting that the four variables at the individual level in this study possess good discriminant validity. Based on the technique proposed by Podsakoff and colleagues 73 , we added a common method factor into the four-factor model to examine changes in fit indices and to investigate common method bias. The results indicate that the five-factor model fits well (χ 2 /df = 2.127, RMSEA = 0.063, CFI = 0.915, NNFI = 0.910). The changes in the above indices are all less than 0.02, indicating that our study does not have a significant common method bias issue.

Descriptive statistics

We use SPSS 23.0 software to analyze the strength of the correlation between variables using pearson correlation coefficient. Table 3 presents the descriptive statistics of mainly variable in this study, including the mean, standard deviation, and correlation coefficients between variables. These preliminary results support our research hypotheses.

Hypothesis testing

We used Hayes' Process Macro (SPSS 23.0) to verify the main effects, mediation effects, and moderation effects through hierarchical regression. We employed Mplus 8.3 for bootstrap sampling to test the mediation effects and moderated mediation effects 30 , 74 , 75 . Firstly, we ran a control variable test and tested Hypothesis 1and Hypothesis 2. Secondly, we tested Hypothesis 3's mediation effect. Thirdly, we examined the moderation effect of Hypothesis 4. Lastly, we conducted a moderated mediation test for Hypothesis 5. The results indicated that all hypotheses were support.

Hypothesis 1 posits that psychological capital can positively influence the work engagement. As displayed in the second column of Table 4 , after controlling for variables such as gender, age, years of flexible work, education level, and salary perception, psychological capital significantly correlates with the work engagement (β=0.924, p <0.01). Therefore, Hypothesis 1 is supported.

Hypothesis 2 suggests that work engagement significantly positively impacts the job performance of flexible platform employees. The fifth column of Table 4 shows a significant positive correlation between the work engagement and job performance once all control variables are accounted for (β=0.976, p <0.01). Thus, hypothesis 2 is verified.

Hypothesis 3 suggests that work engagement mediates the relationship between psychological capital and the job performance of flexible platform employees. As illustrated in column (7) of Table 4 , when work engagement and all control variables are included, psychological capital positively influences job performance (β=0.104, p <0.05). Additionally, based on the main effect test results, the psychological capital of platform flexible employees positively impacts work engagement, and work engagement has a positive effect on job performance. To further substantiate the mediating role of work engagement in the effect of platform flexible employees' psychological capital on job performance, random bootstrap sampling was employed. The results demonstrate that the indirect effect of psychological capital on job performance via work engagement is 0.969, with a 95% confidence interval of [0.521,1.124]. These findings affirm that work engagement mediates the effect of platform flexible employees' psychological capital on job performance, thus supporting Hypothesis 3

Hypothesis 4 posits that job autonomy moderates the effect of psychological capital on work engagement. According to column (3) of Table 4 , the interaction between psychological capital and job autonomy among flexible platform employees has a significant positive effect on work engagement (β=0.102, p <0.01). Further, the simple slope diagram (Fig. 2 ) reveals that psychological capital has a stronger impact on work engagement when job autonomy is high, thereby verifying Hypothesis 4.

Moderate effect of job autonomy on psychological capital and work engagement.

To precisely test the moderated mediation effect proposed in Hypothesis 5, we employed the Bootstrapping Method to examine the mediation effect of work engagement between psychological capital and job performance of platform flexible employees under different levels of job autonomy. The specific results are presented in Table 5 . The findings indicate that under low job autonomy, the impact of psychological capital on job performance through work engagement is significant, with an effect size of 0.477, and a 95% confidence interval of [0.324,0.631]. Under high job autonomy, the indirect effect of psychological capital on job performance through work engagement is also significant, an effect size of 0.711, and a 95% confidence interval of [0.505,0.918]. This reveals that job autonomy positively moderates the mediating role of work engagement in the influence of psychological capital on job performance. Additionally, through the effect value, it can be deduced that the higher the job autonomy, the more significant the mediating effect. Based on the above analysis, Hypothesis 5 is supported.

Our study explores the mediating mechanisms and boundary conditions that are associated with the job performance of platform flexible employees in the context of their psychological capital. Through a combination of theoretical and empirical approaches, we seek to understand the relationship between the psychological capital of these employees and their job performance. Informed by Self-Determination Theory, our research examines the potential mediating role of work engagement in the association between psychological capital and job performance for platform flexible employees. Additionally, we observe that job autonomy appears to be a moderating factor in the relationship between psychological capital and work engagement in this group. Our findings indicate a notable association between psychological capital and job performance via work engagement, especially in situations characterized by high job autonomy.

Theoretical implications

Our study presents three primary theoretical contributions:

Firstly, our research unveils the mediating role of work engagement in the influence of psychological capital on the job performance of platform flexible employees. Prior studies on job performance and its determinants have primarily focused on traditional employment status 21 , 42 , 76 . Previous studies have shown that psychological capital plays a crucial role in enhancing the interpersonal relationships and work outcomes of standard employees. This includes improving the work engagement, employee attitude, and behavior of workers in various industries, such as the telecommunications and construction sectors 20 , 21 , 22 , 77 . However, as highlighted earlier, platform flexible employees experience vague legal and labor relations, along with significant changes in work methods 9 , 34 . This indicates that earlier conclusions may not entirely apply to this group, necessitating further exploration of how their work behavior and results are influenced by psychological capital. Grounded in Self-Determination Theory, our study reveals that work engagement serves as a pivotal mediator between psychological capital and the job performance of platform flexible employees, thereby enriching the discourse on psychological capital. Psychological capital components such as optimism, resilience, and self-efficacy can assist platform flexible employees in effectively handling disputes with the platform and consumers, as well as other challenges. These components help mitigate the negative impacts of occupational stigma and low social standing, foster intrinsic motivation, enabling employees to focus and engage with vitality in their work, thereby enhancing work engagement and achieving better performance.

Secondly, we illustrate that job autonomy moderates the association between psychological capital and the job performance of platform flexible employees. Having a certain degree of autonomy in work is a key characteristic distinguishing flexible employees from standard employees. Previous studies on moderating variables in the impact of psychological capital on job performance have predominantly focused on individuals' emotional attachment to the organization and the work atmosphere and environment 20 , 58 , 78 , 79 , 80 . Our findings suggest that higher job autonomy amplifies the influence of psychological capital on job performance through work engagement, thus enriching the research on boundary conditions impacting the relationship between psychological capital and job performance from the perspective of job characteristics. Our study explores not only the interplay between psychological capital and job autonomy in affecting work engagement but also the moderating role of job autonomy in the relationship between psychological capital and work engagement, as well as the indirect influence of psychological capital on job performance through work engagement. This helps clarify the conditions under which psychological capital can affect the job performance of platform flexible employees.

Thirdly, our research enriches the study of self-determination theory by focusing on platform flexible employees. Unlike traditional self-determination research, which primarily targets standard employees 81 , this study applies the theory to platform flexible employees, who operate within a new employment relationship. From a motivational perspective, the research emphasizes the importance of psychological capital, work engagement, and job autonomy of for flexible employees. By addressing how to enhance the job performance of platform flexible employees through building psychological capital, increasing work engagement, and fostering an autonomous work environment, this study extends the explanatory boundaries of self-determination theory.

Finally, our research enhances labor rights protection theory. Current research on protecting platform flexible employees' rights in China's New forms of primarily employment emphasizes the principle of fairness, a cornerstone of Chinese civil law, to protect workers' rights and support socio-economic stability 82 , 83 It tends to achieve rights protection by clarifying labor relationships and enhancing insurance systems 4 , 10 , 84 , considering more on policy and legal dimensions. From the enterprise employees' perspective, less exploration can hinder the balance between individual and corporate interests and hampers the achievement of sustainable development 5 , 34 , 85 . Our study elucidates the positive significance of psychological capital, work engagement, and job autonomy to the job performance of platform flexible employees and enterprise development. It clarifies directions for enterprises regarding workers' autonomy, work engagement, and rights protection, providing a valuable reference for advancing existing theories on workers' rights protection.

Practical implications

Our study also delivers several practical recommendations:

Firstly, the findings suggest that platform managers might benefit from recognizing the importance of nurturing the psychological capital and work engagement of their flexible workforce. Due to the relatively simple and easily replaceable nature of the work performed by platform flexible employees, many platforms control the behavior of flexible employees through algorithmic rules to urge them to complete more task orders, overlooking the negative effects of this on work quality. Although the algorithmic rules to some extent regulate the behavior and outcomes of flexible workers, platform companies have neglected more scientifically proven methods to improve their work behavior and outcomes. Over-reliance on algorithmic rules to control flexible employees can easily lead to disharmonious labor relations and hinder the development of platform companies. Providing psychological capital development, work engagement incentives, and other forms of human care for flexible workers, as well as offering an autonomous work environment, are reasonable and sustainable ways to stimulate their outcomes.

Specifically, During the recruitment process, it could be advantageous to assess the psychological capital of potential flexible employees through test questions or performance during a trial period. This approach could assist in identifying individuals with higher levels of psychological capital. Moreover, in the management and training processes, employing supportive management techniques could potentially facilitate the development of their psychological capital. These could include attending to flexible employees' physical and mental health, ensuring occupational safety, and offering adaptive training and skills development. Additionally, managers should explore strategies to enhance employee work engagement. This might entail establishing a people-first platform culture, and creating specific promotion channels for flexible employees, improving their performance. Achieving this would benefit the employees and the platform companies themselves, ultimately fostering a harmonious relationship between labor and capital.

Secondly, our study reveals that job autonomy plays a vital role in improving the job performance of flexible platform employees, offering guidance for platform businesses to refine algorithm rules and management methods, and to respect worker rights. For platform flexible employees, job autonomy emerges as a central concern, as it holds significant positive implications for individual behavior and outcomes. Therefore, it is imperative for platform enterprises to prioritize safeguarding job autonomy for flexible employees.

Specifically, the algorithm design of the platform should consider the protection of employee autonomy more carefully. This could involve revising the current assessment and evaluation methods, reducing the impact of negative evaluations and complaints on job selection, and establishing channels for appeals and relief. It would also be beneficial to lessen restrictions on order numbers, rejections, and working hours, lower penalties for independent work content selection, and foster flexible employment autonomy organizations such as trade unions and industry associations. Changing the current subordinate position of flexible employees could provide these workers with more job selection opportunities and satisfy their basic psychological needs. The government can adopt a regulatory approach to balance the relationship between platforms and flexible employees. This involves clarifying the rights and duties of platforms, intervening in the establishment of platform algorithm rules, ensuring the autonomy of flexible employees, and encouraging proactive behaviors for improved outcomes.

Finally, enhancing the job autonomy and work engagement of platform flexible employees has numerous benefits. It can increase their motivation and performance, helping them earn higher incomes. Improved performance among flexible employees also contributes to the growth and development of platform enterprises. Therefore, it is crucial for government management to clarify the nature of platform enterprises' employment practices, specifically their use of flexible employees to fulfill orders. This could involve policy and legal changes to shift away from the current third-party company labor dispatch. This would establish a clear relationship between platform enterprises and flexible employees, outline employer responsibilities, and increase social insurance obligations for flexible employees' employers. Additional supervision of flexible employment in platform enterprises could reduce employees' sense of control, improve the work environment, enhance autonomy decrease psychological burdens, and foster alignment with platform concepts, values, and flexible employment methods. These efforts would support flexible employees in achieving more positive behaviors and outcomes while promoting platform enterprise development, improving the current gap between flexible employees and the platform, and protecting rights and interests, thus driving socio-economic development.

Limitations and future research

This research carries some limitations that should be acknowledged. Firstly, the data utilized in this study predominantly rely on the subjective assessments of the platform's flexible employees or managers. Although a two-stage approach was employed to gather data, the inclusion of this methodology has contributed to mitigating common biases arising from factors such as time differences, external disturbances (e.g., systemic errors, subjective preferences, environmental changes, and emergencies). Nevertheless, the possibility of common method bias may still be present.

In future research, data on various variables could be collected through alternative methods. For instance, psychological capital and engagement questionnaires could be jointly completed by supervisors and employees, or qualitative interviews could be conducted. Analyzing objective data on job autonomy and job performance could also be beneficial, including statistics from the platform's app on minimum job requirements and performance metrics. In addition, it is possible to explore issues such as the stigmatization of work and lower social discourse power for platform flexible employees. Based on these issues, explore the impact of perceptions of decent work on the job performance of flexible workers.

Secondly, the study's participants are primarily flexible employees from five platform companies, such as Mei Tuan, Ele.me, and Didi Chuxing. While these platforms account for a substantial quantity of flexible employees, the term 'flexible employees' encapsulates a wide range of workers including, but not limited to, hourly workers, freelancers, software contractors, and self-media professionals. The distinct characteristics and individual differences across these worker types may limit the applicability of this study's conclusions. Future research should broaden the participant pool and further segregate different categories of flexible employees, this includes developing targeted strategies to ensure a more representative and diverse participant demographic. Conducting comparative analyses across these categories will provide more nuanced and precise conclusions.

Thirdly, the participants in this study are exclusively sourced from Chinese platform enterprises. Nevertheless, the disparities between Chinese and Western policies, regulations, and the job characteristics of flexible platform employees should be acknowledged. Western platform flexible employees experience fewer platform-imposed restrictions, affording them greater freedom and choice. Future research initiatives might benefit from expanding the scope of data collection to encompass a variety of industry types within Western cultural settings. This could entail conducting surveys among Chinese and American takeaway distributors in major urban centers across China, the United States, and other nations. By analyzing and contrasting these data sets, and by integrating cultural background variables into the survey instruments, researchers will be in a position to assess the applicability of current findings across different cultural contexts and determine the extent to which these conclusions are consistent or subject to variation.

Lastly, our study focuses on examine job autonomy and its associated career motivations, as well as exploring the moderating role of job autonomy in the nexus between psychological capital, work engagement, and job performance. Furthermore, this research acknowledges that flexibility, non-fixedness, diversity of job content, and skill diversification are pivotal characteristics of platform flexible employees, yet these aspects have not been fully integrated into the research framework. Future research is thus advised to begin by thoroughly examining the fundamental attributes of platform flexible employees, followed by an analysis of how various factors influence individual behavior and outcomes, with a particular emphasis on psychological needs.

This study aims to explore the mediating mechanisms and boundary conditions related to the association between psychological capital and job performance in platform flexible employees. The findings suggest a correlation between psychological capital in these employees and their job performance, potentially facilitated by increased work engagement. Job autonomy is observed to possibly play a significant role, seemingly influencing the relationship between psychological capital and work engagement among these employees. Moreover, in scenarios characterized by high job autonomy, there appears to be a notable association between the psychological capital of platform-based flexible employees and job performance, with work engagement acting as a potential mediator. These insights provide valuable perspectives for platform managers and government entities looking to understand factors associated with the performance of platform flexible employees and to develop strategies for enhancing this performance. Furthermore, these observations lay the groundwork for future research into the behaviors and outcomes of platform flexible employees.

Data availability

The original contributions presented in the study are included in the article. Further inquiries can be directed to the corresponding author.

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This research was supported by China National Arts (2020-A-05-(063)-423).

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Research: How IT Can Solve Common Problems in DEI Initiatives

• Monideepa Tarafdar
• Marta Stelmaszak

Lessons from three organizations that successfully leveraged IT to drive structural change.

The authors’ research found that three persistent problems plague DEI initiatives: They do not connect to operational or strategic goals and objectives; they do not include the rank-and-file; and they are often implemented through periodic efforts like annual diversity training that aren’t integrated into day-to-day work processes. Organizations can overcome these problems by using IT in three ways.

Diversity, equity, and inclusion (DEI) programs are under attack. Confronted by high costs, mixed outcomes , unclear organizational benefits , and a political and regulatory backlash , organizations are rolling back their initiatives. Google and Meta, for example, recently reduced investment in their DEI programs and let go of DEI staff.

• Monideepa Tarafdar is Charles J. Dockendorff Endowed Professor at the Isenberg School of Management at the University of Massachusetts Amherst.
• Marta Stelmaszak is an assistant professor of information systems at the Isenberg School of Management at the University of Massachusetts Amherst.

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The working capital of a business is its lifeblood. Used to fund day-to-day operations such as paying employees, ordering supplies and making loan payments. Find your working capital in the difference between your current liabilities and any current assets. With more working capital, your business can be more efficient and respond quickly to opportunities or challenges.

Increasing your short-term working capital can allow you to take advantage of opportunities like expanding your team, or it can help you overcome challenges like needing to replace a company vehicle. But how can you increase your working capital in time to meet your changing financial needs? What are your options for financing, and how do you know which is best for you?

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Businesses can secure financing through short-, medium- and long-term solutions. Typically, short-term financing has a repayment period of one to two years, medium-term solutions can be repaid over two to five years, and you would have 15 to 20 years to repay a long-term financing solution. Another key difference between long-term, medium-term and short-term finance solutions is how much money you can borrow. On average, longer-term options will have higher ceilings for how much money you can borrow compared to shorter-term options.

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If you prefer to do your banking locally, credit unions can be a viable option for securing financing. Credit unions are not-for-profit, so their accounts often come with fewer fees and loans have lower interest rates than when working with a commercial bank.

The Small Business Administration (SBA) is a government agency that offers financing options for small businesses. When applying for financing through the SBA, you’re not working directly with the government. Instead, vetted lenders review your qualifications to see what solutions you are eligible for. SBA loans can also include a cap on the total amount of interest you’ll pay over the lifetime of the loan. Unfortunately, it typically takes a minimum of 30 days to get cash in hand from an SBA loan.

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Working Capital Solution

Whether seizing opportunities or overcoming challenges, businesses need working capital. Small- and medium-sized businesses can find both short-term and long-term finance solutions to be prepared for whatever comes their way.

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From the NFL to rugby and hometown baseball, sport management interns enjoy wide range of work

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August 19, 2024 : By Ted Allen - Office of Communications & Public Engagement

Working with professional baseball organizations, an NFL team, NASCAR, and a variety of less traditional sports like rugby and ultramarathon, students enrolled in Liberty University’s sport management program gained a wealth of experience in a range of internship roles over the summer.

Opportunities abounded for students around the diamonds of Minor League and Major League Baseball teams.

To fulfill the prerequisite for his Sport, Event, & Tourism Management ( SETM 499 ) course, senior Graham Klause completed an internship with his favorite Major League Baseball team, the Washington (D.C.) Nationals. His duties included assisting with public safety and security around the stadium as well as prep work for the Savannah Bananas, who sold out Nationals Park in July.

“It has been a blessing to learn from my peers and work for this incredible organization,” he said. “ I have been able to learn about the importance of ballpark operations and security protocols in place at Nationals Park . Hopefully I can come back, in the same role or different role within ballpark operations and logistics.”

Klause was part of Liberty’s Washington Fellowship program, where students live and work in our nation’s capital. He said the fellowship helped him acquire his internship through a recommendation letter, and living on Capitol Hill left him with a short Metro commute to the stadium.

“It was nice being in close proximity to my actual internship, and while working in my internship, it was good to have roommates and enjoy fellowship with other believers in the city,” Klause said.

In North Carolina, senior Lauren Gebbie worked closely with the director of promotions and the entertainment team for the Durham Bulls (Triple-A affiliate of the Tampa Bay Rays), to develop theme nights and in-game activities, music, and decorations. She also served as community relations coordinator for the Bulls’ mascots, Wool E. Bull and Blue Monster, using her experience on the Sparky Squad at Liberty (providing security for Sparky). She planned videos and skits as well as on-field games to help the characters interact with fans.

In Utica, Mich., senior Andrea Marcella served as an intern with the Office of the President of the United Shore Professional Baseball League.

“It’s a stepping stone for players trying to get into the elite and professional levels,” she said. “I had a really great experience. My role was helping out game-day functions. I love the daily operations and event management interacting with fans of all ages, and it was a great environment with grandstand seating, suites, and lawn seats as well.”

And close to home, recent graduate Devin Perkins, a Marine Corps veteran and former team manager for Lady Flames Lacrosse, provided music and sound to enhance the fans’ game experience and assisted in the ticket office for the Lynchburg Hillcats (the Low-A affiliate of the Cleveland Guardians).

Tony Bertolino, who graduated in May with a B.S. in Business Administration and a minor in Sport Management , continued his yearlong internship with the Pittsburgh Steelers this summer, assisting with the preparation and execution of gameday and event operations for all Steelers and University of Pittsburgh football games and other events at Acrisure Stadium, as well as managing seasonal staff.

“Throughout my internship, I learned numerous lessons in event logistics, crowd control, and staff management at a major facility, and I am looking forward to applying those lessons as I move forward in my career,” Bertolino said.

Senior Austin Farr is serving in a managing and administering role for his internship as NASCAR’s single make platforms coordinator for the International Motor Sport Association in Daytona Beach, Fla. Farr, a former racecar driver himself, has traveled with the series to road courses in the United States and Canada. He serves as a liaison between the IMSA series, its participants, and the Original Equipment Manufacturers (OEMs), which include Ferrari, Ford, Lamborghini, Mazda, and Porche.

“It’s definitely been life-changing, doing what I’ve wanted to do since I got involved in racing 19 years ago,” he said.

Though she had never witnessed a match before starting her social media and marketing internship with the Dallas Jackals’ Major League Rugby program in May, Emily Calavan caught onto the sport quickly.

“It was a whole new animal for me,” said Calavan, who grew up watching baseball and football and swam competitively for 12 years.

She helped the marketing manager and social media coordinator create graphics and send e-mails to fans. During the games, she captured videos to post, and she also recorded videos of practices. The team won the most games in the program’s four-season history and broke attendance records at Choctaw Stadium, former home of the Texas Rangers, as it qualified for the conference finals in the 12-team league, headquartered in Dallas.

This month, Calavan started another internship with the Dream Team Sports Center, a Christian-oriented youth baseball player development organization in Mansfield, Texas, southeast of her home in Fort Worth.

In late July, Jessie Zealand, a rising junior on the Lady Flames’ Cross Country and Track & Field teams pursuing a B.S. in Hospitality Management — Conference and Event , served on IRONMAN’s event management team in support of the Speedgoat Mountain Races in the Wasatch Range of the Rocky Mountains near Salt Lake City. For the main event, a 50-kilometer race, she was based at the highest aid station along the course, Snowbird Resort’s Hidden Peak at nearly 11,000 feet.

“It was definitely a great experience, helping on their event team with whatever was needed, doing race check-in, as well as setup, and teardown of the course, working all aspects of the race,” she said, noting that she encouraged runners while retrieving their timing chips as they finished the 28K. “I really enjoy the running atmosphere and creating the experience for the runners as well. I also love running them myself, but I can’t do both.”

In September, Zealand will coordinate more than 300 volunteers serving 1,000 registered runners from around the world at the Grindstone 100 in the Alleghany Mountains around Swoope, Va. The multi-distance race festival is one of 43 UTMB World Series qualifying events for the 2025 Finals in Chamonix, France, and one of only six in North America.

Zealand’s father, Dr. Clark Zealand, a sport management professor and an avid ultramarathon runner, created and directed the Grindstone 100 in 2008. He has encouraged his students pursuing hospitality and sport management degrees to consider alternate sports for internships and potential career opportunities.

“The vast majority of students coming into our program are most interested and most familiar with mainstream sports — football, basketball, and baseball,” he said. “We try to get our students to think broadly and keep their horizons wide on what their interests may be in order to get experience and internships and then ultimately, jobs. You never know where the path leads you, where God is taking you.”

Other Liberty students gained experience locally over the summer, including Caleb Weissinger, who worked for VTRN Sports Radio in producing The Fast Lane with Ed Lane, an hour-long daily program featuring recent interviews with Flames Football Head Coach Jamie Chadwell and Director of Athletics Ian McCaw. Students Abby Coleman and Kyle Harkabus fulfilled internships with Virginia Amateur Sports in Roanoke, Va., serving as an operations/media relations & social media intern and games and sports logistics intern, respectively, for the Virginia Commonwealth Games.

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