An Exploratory Studyto Test the Relationship

between Organizational Justice, Employee

1. INTRODUCTION:...................................................................................................................3
1.1 Statement of Topic & Aims and Study Background:.......................................................3
1.1.1 Problem Statement:....................................................................................................4
1.2 Scope of Study:.................................................................................................................4
1.3 Research Objectives & Research Questions:....................................................................4
1.4 Significance of Study:.......................................................................................................5
1.4.1 Theoretical Contribution:...........................................................................................5
1.4.2 Practical Contribution:...............................................................................................6
REFERENCES:...............................................................................................................................7
 1. INTRODUCTION:

1.1 Statement of Topic & Aims and Study Background:

The advent of 21st century has brought about number of financial and business scandals globally,

giving immense importance to the topic of “ethics” in business. These unethicalpractices have

not only affected the companies alone, but instead their employees and investors as well

(Trevino and Brown, 2004). The recent corporate scandals like that of Enron, WorldCom and

Tyco has given both the researchers and practitioners a reason to ponder over the question of

how important ethics in business are (Markham, 2015). Similarly, the global financial crisis of

2008 had it roots into the same ethical dilemma where organizational leaders preferred their own

interests over that of organizational members. It was a big flaw at the corporate governance level

and showed an agency problem on part of those organizational leaders (Lussier and Achua,

2015). It is important to understand that these unethical conducts cost the organizations their

long-term gains while also harming their reputation and causing unbearable damages.

In line with the same argument relating to the importance of ethical conduct, it is important to

understand what derives that employee ethical behavior. It is essentially an organizational culture

that supports the ethical behavior. According to Rawls (2009), one of the most important concern

for employees is the organizational justice. It is central to an organization’s values and at the

same time an important determinant of the employees’ ethical behavior (Skitka and Bauman

2008; Folger et al., 2005). It is this fair process in the organizations that leads on to high level of

obligation within the employees leading on to lower turnover intensions and positive and ethical
conduct. There is an integral role of ethical leadership, which helps to strengthen thisrelationship.

This study aims at exploring the same relationship as proposed by Al Halbusi, Ismail and Omar,

2019. While, utilizing the large body of literature we know that supervisor focused

organizational justice results into the work and group related positive outcomes (Olkkonen and

Lipponen, 2006)

1.1.1 Problem Statement:

As discussed, that the role of ethics has immense importance considering the current scenario in

the corporate world. It is essential to have an organizational culture that promotes justice and is

led by ethical leaders. It is only then; we can seek for employee ethical behaviors resulting into

the outcomes productive for the organizations. If such an environment is not ensured,

consequences are like the ones we have faced in recent past as well such as Enron (Markham,

2015). Hence, this research aims to answer and respond to all such challenges.

1.2 Scope of Study:

The study aims to explore how the organizational justice can provide a base for the employee

ethical behavior and in turn work-related outcomes. As discussed earlier, the ethical dilemmas, in

the recent times have put a large focus on how to ensure misconduct doesn’t happen in

organizations. The study will understand these relationships in service sector of Pakistan

1.3 Research Objectives & Research Questions:

The objective of this research lies in research questions and hypothesis statements of this study.

The basic and central objective of this research is to examine how organizational justice and
employee ethical behavior influence work-outcomes.While, examining how the role of ethical

leadership strengthens the relationship. The key research questions are:

 What is the relationship between organizational justice and work outcomes?

 What is the relationship between organizational justice and employee ethical behavior?

 What is the relationship between organizational justice and employee ethical behavior?

 What is the relationship between employee ethical behavior and work outcomes?

 Does employee ethical behavior mediate the relationship between organizational justice

and work/team outcomes?

 Does ethical leadership moderate the relationship between organizational justice and

employee ethical behavior?

1.4 Significance of Study:

1.4.1 Theoretical Contribution:

Many studies have looked at various dimensions of organizational justice and work-related

outcomes. Al Halbusi, Ismail and Omar, (2019) study is a great starting point in unpacking this

literature. The study uses a hypothetical moderation model for testing the relationship between

the three dimensions of organizational justice, and employee ethical behavior. Extending the

same, as research suggest that employees’ work-related outcomes are largely shaped by the

organizational justice and ethical leadership (Zhu, May, and Avolio, 2004). This study will aim

at filling the gap in the literature to study the moderated relationship between organizational

justice while also exploring the mediation between the organizational justice and organizational
work-related outcomes. The study may also contribute to the literature of the ethical leadership,

employee development and organizational behavior.

1.4.2 Practical Contribution:

The existing literature proves that that organizational justice has a positive and significant impact

on employees’ ethical behavior (Kim, 2009; Wittmer et al., 2010; Alomaim, 2011; Koonmee,

2008; Shah et al., 2017). The contribution from this study will not only make the organizational

leaders conscious of their ethical conduct but also help the organizations to set-up a system of

justice and fairness in order to inculcate the same values in the employees as well. This will on

one hand, respond to the challenge of ethical organizations, but will ensure the same is translated

into employee work-related outcomes if implemented. It may also help to reduce the injustices

that prevail within organizations that lead onto ill practices by the employees. In the recently

conducted survey by National Business Ethics, 500 employees participated, which showed that

52% of the employees were involved in misconduct (Ethics Resource Center 2012). This not

only affects the organization at large but the work outcomes and group outcomes as well.

Model (For reference – to be added to Hypothesis development /framework later)

Ethical
Leadership

Organizational Employee Ethical Employee work

Trevino, L. K., & Brown, M. E. (2004). Managing to be ethical: Debunking five business ethics

myths. Academy of Management Perspectives, 18(2), 69-81.

Olkkonen, M. E., & Lipponen, J. (2006). Relationships between organizational justice,

identification with organization and work unit, and group-related outcomes. Organizational

behavior and human decision processes, 100(2), 202-215.

Lussier, R. N., &Achua, C. F. (2015). Leadership: Theory, application, & skill development.

Nelson Education.

Markham, J. W. (2015). A financial history of modern US corporate scandals: From Enron to

reform. Routledge.

Folger, R. G., &Cropanzano, R. (1998). Organizational justice and human resource

management (Vol. 7). Sage.

Rawls, J. (2009). A theory of justice. Harvard university press.

Skitka, L. J., Bauman, C. W., & Mullen, E. (2008). Morality and justice: An expanded

theoretical perspective and empirical review. Advances in group processes, 25, 1-27.

Folger, R. G., &Cropanzano, R. (1998). Organizational justice and human resource

management (Vol. 7). Sage.

morality. Handbook of organizational justice, 215, 215-245.

Al Halbusi, H., Ismail, M. N. B., & Omar, S. B. (2019). A CONCEPTUAL PROPOSAL:

ETHICAL LEADERSHIP MODERATES THE EFFECT OF ORGANIZATIONAL JUSTICE

ON ETHICAL EMPLOYEE BEHAVIOR. Kuwait Chapter of the Arabian Journal of Business

and Management Review, 8(1), 10-19.

Zhu, W., May, D. R., & Avolio, B. J. (2004). The impact of ethical leadership behavior on

employee outcomes: The roles of psychological empowerment and authenticity. Journal of

Leadership & Organizational Studies, 11(1), 16-26.