Ethical Behaviour
Ethical Behaviour
Federal
University of Technology, Owerri, (FUTO).
BY
KEHINDE, OLADELE JOSEPH (Ph.D)
Lecturer, Department of Business Studies,
E-mail: [email protected]
Tel: +234-08137446490
Abstract
Many modern organizations are today faced with numerous challenges such as illegal
and unethical business practices in a number of business transactions. Most
organizations have come up with codes of ethics in dealing with ethical issues
challenging them. Code of ethics is the set of moral principles used by an organization to
steer the conduct of the organization, and employees in all their business activities both
internally and externally. The paper uses a quantitative method with two hypotheses
stated in the null form. Results were analyzed with the aid of appropriate test statistics.
Findings revealed that ethical behaviour has effects on the performance of an
organization and that good ethical behaviour has a positive correlation with
organizational performance. Suitable policy recommendations were offered which
decision makers in business organizations and government functionaries will find highly
useful.
Key words: Ethics; Behaviour; Service; Organization; performance.
INTRODUCTION
Over the years, the term ethics in organizational performance has long been associated
with management scholars and business leaders around the world. There is a broad
agreement around the world that as a matter of corporate policy, every organization
strives to be committed in a manner that is ethically transparent. Steinberg (1994)
argued that ethics in the world of organization’s business involve “ordinary decency”
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Organizations In Lagos Nigeria.Journal of Research in National Development. Volume 8 No.1. Federal
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Morals spring virtually from every decision, thus organization stability and survival
depends on the consistency of quality of ethical decision made by managers. Managers
are challenged and encouraged to have obligation on organization performance and
society at large, to support and the assist the society to imbibe the ethical culture in
which there was the interest of is everyone [Oladunni, 2000].
In recent times, most organizations have come up with codes of ethics in dealing with
ethical issues challenging them. Code of ethics as defined by the national institute of the
management is a set of moral principle used by organization to steer conduct of the
organization itself and the employee, in all their business activities, both internally and
externally. According to cole, (1996), he stated that codes are opposed to
straightforward policy have advantage of providing explicit guidance on key moral
issues that might arise during the course of organization activities.
Many modern organizations are faced with numerous challenges such as illegal and
unethical behaviour in a number of business transactions. Managers are also faced with
the challenge of evaluating the effect of this critical behaviour on the performance of
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such organizations. Again, many business managers operate their activities today,
without keen interest of bothering whether their actions are right or wrong and the extent
of employees understanding of the term ethics while the level of compliance is highly
infinitesimal, (Oladunni 2002).The way Nigerian society cares little about the source of
wealth tend to make some of these business operators to begin to wonder about the
necessity of ethics in an organization.
The objectives of this research among others are to:[a]critically x-ray the effects of
ethical behaviors on organizational performance.[b]establish whether ethical behaviour
has any relationship with organizational performance.[c]show-case the necessity of
good ethics to the success and eventual institutionalization of an organization.
The research uses a quantitative method with two null hypotheses, which states thus: (i)
Ethical behavior has no effect on organizational performance (ii) There is no relationship
between employees ethical behavior and organizational performance. The significance
of this study is multi-faceted as it helps in identifying the essence of ethnical behaviour
on organizational performance, as this will enhance employees’ performance as things
are done correctly in a coordinated member. Moreover, newly established firms and
organizations will actually know the place of proper ethical behaviour in the continued
existence of such an organization. The research of this nature is very important to
developing nations like Nigeria that already has a high level of known corruption and
sharp business practices, which have permeated all facets of Nigeria’s national life.
LITERATURE REVIEW
Today, many African Nations are faced with the crisis that is making the competitive
strength of the business organization more challenging. This crisis involves people in
business, customer, and at the peak of unethical behaviour and especially more
worrisome is the unethical behaviour among employees at all level of the organization.
For example, a recent study found that employees theft ranges from stealing company’s
product to using company’s service without authorization, such as making personal long
distance calls at work (thereby “stealing” both the call and their productive time
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Organizations In Lagos Nigeria.Journal of Research in National Development. Volume 8 No.1. Federal
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Akinbayo, 2000). Others on the other hand forge checks and commit other type of fraud.
All this acts represent theft, Stephen (2000).
Moreover, we easily hear today of illegal and unethical behaviour in many business
organizations, such practices as we know occur throughout the world. This therefore
reminds us of the challenges that organizations face as the first quarter of this
millennium advances with its hydra-headed challenges. There is a great concern of the
quality of ethical conduct in all types of organization all over the world in which Nigeria is
no exemption. Kolade (1999).
Today, it is indeed no news about the poor attitude of Nigerian workers to work. Kolade
[1999] in his remark, made at the quarterly luncheon of the institute of personnel
management of Nigeria, Lagos branch in August 1984,reiterates attitude of the Nigerian
worker to work. He noted the often-expressed view that Nigerians generally have a poor
attitude to work, like most other general statements. Also, Oladunni [2002] once
observed that it is believed in Nigeria that people have poor attitude to work or do not
like to work, which result in the low productivity in some organizations. This is rooted in
the McGregor theory X approach. When people are forced to do things like Nigerians
experience during military era, people tend to put in their best and thus behave well.
MEANING OF ETHICS
The terms ‘moral’ and ‘ethical’ are often used equivalent to ‘good’ or ‘bad’ and as
opposed to ‘immoral’ and ‘unethical’ Frankene, (1993). Ethics is defined by Miner (1998)
as a philosophy of human conduct; reflecting prevailing values especially those a moral
nature. According to Kiston, (1996) ethics are moral principles that explain what is right
or wrong, good or bad and what is appropriate or inappropriate in various setting.
Bucholz [2003], in his work on business ethics, sees ethics as the guiding values;
principles and standards that help people determine how things ought to be done.
Ethics is a set of standard of right and wrong established by a particular group and
imposed on members of that group as a means of regulating and setting limit on
behavior, Judith (2003). Ethics are defined as the system of rules that governs the
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Organizations In Lagos Nigeria.Journal of Research in National Development. Volume 8 No.1. Federal
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ordering of values. This idea makes it possible to prescribe a code of behavior for both
work and one’s personal life. Robert Cardy (2005).
To sum-up the above definitions, one can therefore define ethics as standard of morality
that guides individual and organization in following certain norms of conduct when
dealing with each other. It can be said to be the moral evaluation of decision and action
as right and wrong on the basis of commonly accepted principles or behavior. More so,
it is applied of society relationship.
One answer to the question of why individuals knowingly commit unethical actions is
based on the idea that organizations often reward behaviors that violate ethical
standards. Consider, for example, many business executives and top government
officials deal in bribes and payoffs, despite the negative publicity and ambiguity of some
laws, and how good corporate citizens who blow the whistle on organizational
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wrongdoing may fear being punished for their actions. Jansen and Von Glinow (1985)
explain that organizations tend to develop counter norms, accepted organizational
practices, which are contrary to prevailing ethnical standards.
Many other organizational counter norms that promote morally and ethnically
questionable practices. Because these practices are commonly rewarded and accepted
suggest that organization may be operating within a world that dictates its own set of
accepted rules. This reasoning suggests another answer to the question of why
organizations knowingly act unethically namely, because managerial values exists that
undermine integrity. In an analysis of executive integrity, Wolfe [1999] explains that
mangers have developed some ways of thinking (of which they may be quite unaware)
that foster unethical behavior.
Within the literature on corporate illegality, the predominant view is that pressure and
need force organizational members to behave unethically and develop corresponding
rationalizations; however, according to recent research this explanation only accounts
for illegal acts in some cases; Baucus and Near, (1999). In their data, poor
organizational performance and low organizational slack (the access that remains once
a firm has paid its various internal and external constituencies to maintain cooperation)
were not associated with illegal behavior, and wrongdoing frequently occurred in
munificent environments.
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Ethnical behaviour is acting in ways that are consistent with one’ personal values and
the commonly held values of the organization and society,[Nielsen,1999a].Unethical
behaviour by employees can affect individuals, work teams, and even the organization
(Arlow,2000,). Organizations thus depend on individuals to act ethically. Several years
ago, a company launched a program to integrate its ethical standards into everyday
business conduct (Wagel, 1987). It developed a booklet of ethical standards, distributed
it to all employees, and undertook a massive training effort to express to all employees
the importance of ethical behaviour.
As regards ethical climate of an organization, it is the shared set of undertakings about what correct
behavior is and how ethical issues will be handled. This climate sets the tone for decision making at all
levels and in all circumstances. Some of the factors that may be emphasized in different ethical climate
of organizations according to Hunt [1991]; Robbins [2001]; are: personal self interest; company profit;
operating efficiency; individual friendships; team interest; social responsibility; personal morality;
Rules and standard procedures; Laws and professional codes e.t.c.
The ethical climate of different organizations can emphasize different things. When the ethical climate
is not clear and positive, ethical dilemmas will often result in unethical behavior. In such instances, an
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Organizations In Lagos Nigeria.Journal of Research in National Development. Volume 8 No.1. Federal
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organization’s culture also can predispose its members to behave unethically. For example, recent
research has found a relationship between organizations with a history of violating the law and
continued illegal behavior. (Baucus and Near, (1991). Thus, some organizations have a culture that
reinforces illegal activity. In addition, some firms are known to selectively recruit and promote
employees who have personal values consistent with illegal behavior; firms also may socialize
employees to engage in illegal acts as a part of their normal. Job duties, pressure, opportunity and
predisposition can all be due to unethical activities, however, organizations must still take a proactive
stance to promote ethical climate. Churchill et al. (2000) suggest that within the organizational
environment there are five categories of variable that have an effect on individual performance: (1)
goals, objectives, and culture; (2) personnel; (3) financial resources; (4) production capabilities; and (5)
research and development. Whereas the focus in the current study is on both short-term and long-term
performances, an argument can be made that efficiency and effectiveness of employees may be
influenced negatively if their work climate includes a cue that indicates prevalent unethical actions.
This study was conducted among three service firms. During the study, sixty-six
questionnaires were distributed among three leading advertising agencies in Lagos in
equal proportion. After the questionnaires were harvested, sixty- four were returned.
However, four of the returned questionnaires were rejected because they were not
properly filled. So, this research is based on the returned sixty questionnaires that were
properly filled. Findings from the analyzed questionnaires were highly revealing and
educating as it shows the effect that good ethical behaviour will have on organizational
performance. Findings also reveal the level /kind of relationship that exist between
employees’ ethical behaviour and organizational performance.
In the testing of hypotheses, Pearson correlation was used to test the second
hypothesis while the chi-square was used to test the first hypothesis as it involves
counting the number of response for options provided in the questionnaires.
Table 1.
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Table 2.
Using Chi-Square
X2 = ∑ (O – E)
________
E
X 2 = 23.7%
Decision Rule
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Therefore, null hypothesis (H0) is rejected and the alternative hypothesis (H1) is
accepted. This shows that ethical behavior has an effect on organizational performance.
Test Statistics
HYPOTHESIS TWO
Table 3. Correlation
EB OP
EB Pearson Correlation 1 .610(**)
sig. (2tailed) .000
N 60 60
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Organizations In Lagos Nigeria.Journal of Research in National Development. Volume 8 No.1. Federal
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C.O.D=r^2x100
= (0.610)^2x100
=0.3721x100 =37%
The correlation of r=0.610, mean 37% shared variable between ethical behavior and
organizational performance. This implies that ethical behavior helps to explain to explain
% of the variance in the respondent’s scores on the organizational performance scale.
DECISION
CONCLUSION
It must be emphasized that the challenge of ethical behaviour must be met by organizations if
they are truly concerned about survival uprightness, integrity, and competitiveness. What is
needed in today’s complicated times is for more organization to step forward and operate with
strong, positive and ethical cultures. Organizations must ensure that their employees know how
to deal with ethical issues in their everyday work lives. As a result, when the ethical climate is
clear and positive, everyone will know what is expected of him or her when the inevitable ethical
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dilemmas occur. This will definitely give employees the confidence to be on the lookout for
unwanted unethical behaviour and act with the understanding that what they are doing is correct
and will be supported by top management of the organization.
Research in ethical behaviour strongly supports the conclusion that of ethical behaviour is
desired; the performance measurement, appraisal and reward systems must be modified to
account for ethical behaviour.
Organizations must strive to provide more ethics training to strengthen their employees’
personal ethical framework. That is, organizations must devote more resources to ethics
training programs to help its members clarify their ethical frameworks and practice self-
discipline when making ethical decisions in difficult circumstance.
There is the need for organizations to help their employees in dealings with ethical
challenged by adhering to the following steps.
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blends his versatile industry experience in advertising with marketing theory. He has published a
number of research findings in both local and foreign journals as well as conference proceedings
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