Journal of the Knowledge Economy

https://doi.org/10.1007/s13132-023-01462-y

Does Organizational Virtue Crop‑Up Organizational Justice?

Accessing the Mediating Role of Moral Identity

Zahid Yousaf1,2 · Magdalena Radulescub1,2,3

Received: 17 February 2021 / Accepted: 27 July 2023

© The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2023

Abstract
The purpose of this study is to examine the relationship between moral identity
(MI), organizational virtue (OV), and organizational justice (OJ) in service firms.
Additionally, the study investigates the mediating role of MI in the link between
OV and organizational justice. Data was collected from 463 employees working in
various service sector firms. Statistical analysis was conducted using SPSS 25.0 and
structural equation modelling (SEM) to assess the relationships between the vari‑
ables. The results demonstrated the significant impact of OV on organizational jus‑
tice and MI. Furthermore, the findings revealed that MI not only directly influences
organizational justice but also acts as a mediator in the relationship between OV
and organizational justice. This study contributes to both theoretical understanding
and practical management by shedding light on the importance of OV in achieving
organizational justice. By exploring the previously unexamined interplay between
OV, organizational justice, and the mediating role of MI, this research provides
unique insights based on the live experiences of 463 service sector employees.

Keywords Organizational justice · Moral identity · Organizational virtue · Service

sector organizations

JEL Classification M12 · M21

* Magdalena Radulescub
[email protected]; [email protected]
Zahid Yousaf
[email protected]
1
Government College of Management Sciences, Higher Education Commission, Mansehra, KP,
Pakistan
2
Department of Finance, Accounting and Economics, University of Pitesti, Str. Targu din Vale,
no.1, Pitesti, Arges, Romania
3
Institute of Doctoral and Post‑Doctoral Studies, University Lucian Blaga of Sibiu, Sibiu,
Romania

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 Journal of the Knowledge Economy

Introduction

Business organizations are social stimulus where employees need an ideal envi‑
ronment to perform their activities (De Coninck & Stilwell, 2004). The work
climate established by an organization’s practices and procedures influences
employees’ perceptions of organizational goals, ethics, and values (Escriba-Carda
et al., 2017). The organizations always try to create a meticulous atmosphere for
their employees and communicate standardized behaviours through the organi‑
zational justice (Saravakos & Sirakoulis, 2014). These organization’s behaviours
and justice may reflect organization’s emphasis on the productivity ‘high pres‑
sure climate’ or on employees’ safety ‘climate for safe behaviour’ (Ramlee et al.,
2016). The motivational avenue for organizations is to provide a normative sys‑
tem, i.e. creation of organizational justice (Lotfi & Pour, 2013). Organizational
justice concept has received significant research focus in recent years, being rec‑
ognised as a crucial success factor for organizations (Sert et al., 2014).
Organizational justice is the establishment of impartiality in the standardized
norms and practices. Such practices are determined by the moral actions which
are being promoted by the moral identity that works as a self-regulatory mecha‑
nism (Rana & Solaiman, 2022). According to Ybema and Van den Bos (2010),
organizational justice describes the perceived equity in the allocation of funds,
incentives, and resources inside an organization. It represents the employees’
judgement about impartiality in the organization frame (Niehoff & Moorman,
1993). OJ prospers a favourable working environment through the implementa‑
tion of fairness in the organizational mechanism (De Coninck & Stilwell, 2004).
The three dimensions of organizational justice included are justice by distribu‑
tion, justice by procedure, and justice that is interactional. Procedural justice
emphasises the fairness of decisions, procedures, and methods, whereas distrib‑
utive justice is concerned with the perceived equality of outcome and benefits.
According to Heponiemi et al. (2013), interactional justice describes how fairly
employees interact and communicate inside an organization. Prior studies show
an OJ link with the decision-making of employees (Shao et al., 2013); employ‑
ee’s trust in colleagues, supervisors, and organization (Brown et al., 2015); and
behaviour of the organizational members (Gaudet & Tremblay, 2017). But there
is still a gap in exploring the association between OV and OJ. That is why, this
study focuses to explore the direct influence of OV on the organizational justice.
The organizational virtue in term of relationships, compassion, trust, and
meaningful work is the main factor that determines the moral identity and devel‑
oping the organizational justice (Dawson, 2018). Researchers like De Coninck
(2010) argued that organizational justice helps to implement the fair rules and
policies. However, such implementation of fair rules and practices need organiza‑
tional virtue and moral identity to develop the organizational justice, for which no
explicit research has been conducted so far. Therefore, this study aims to examine
the linkage between OV and moral identity.
The concept of oneself in relation to moral standards and values is known as
an individual’s moral identity. It reveals how highly moral values are valued and

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how much they are ingrained into an individual’s identity (Mulder & Aquino,
2013). Dual dimensions of moral identity, i.e. internalisation and symbolization,
build strong foundations for establishing OJ (Maniti et al., 2012). Previous stud‑
ies have highlighted the importance of moral identity in influencing individual
beliefs, actions, and decision-making processes in workplace environments.
Additionally, this study intends to offer light on the psychological mechanisms
particularly moral identity that affects organizational justice.
In recent years, academics have been trying to gain an understanding of the fac‑
tors that are involved in establishing organizational justice. The impact of organi‑
zational virtue on organizational justice is one of the new topics of investigation.
According to Ozen (2018), organizational virtue includes the moral excellence,
integrity, and ethical principles that a company exhibits. It shows a company’s
commitment to moral behaviour, ethical business practices, and social accountabil‑
ity (Payne et al., 2013). Although, organizational virtue is the quality of an organ‑
ization to do what is right and avoid from what is wrong, and its attributes are
related to the moral excellence (Morgan et al., 2017). Various researchers demon‑
strate numerous outcomes of organizational virtue like performance (Payne et al.,
2013), employee loyalty (Chun, 2009), organizational happiness (Ozen, 2018),
market performance (Jancenelle, 2021) etc. However, no prior studies investigated
the mediating role of moral identity in the relationship between OV and OJ. Fur‑
thermore, from the best of our information, no research has been conducted on this
empirical model and with all these variables. To overcome this research gap, this
study purposes to investigate how OJ is positively linked with organizational jus‑
tice; secondly, this research intended to examine how OV is directly linked with
organizational justice; thirdly, the research explores how moral identity supports
in the development of organizational justice; and finally, this research explores the
moral identity mediation in the association between OV and organizational justice.
The achievement of organizational justice through OV via moral identity is hardly
evidenced in previous published texts nor is it present practically. Hence, this study
explored a phenomenon which is the requirement of every organization and more
specifically for service industry.
The “Literature and Hypotheses Development” section shows the previous find‑
ings on this specific topic, and the “Methodology” section presents the methodol‑
ogy. Next section presents the data analysis and results. Finally, this research shows
discussion, conclusion, implications, limitations, and directions for future research.
Figure 1 graphically shows the Research Model of this study.

Literature and Hypotheses Development

Organizational Justice

Organizational justice (OJ) represents how the employees think about the fair‑
ness in the organization. Clark and James (1999) acknowledged that the notion of
organizational justice was invented to recognise and understand the role of the
justice and fairness in the organizational mechanism. OJ represents the employees’

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Fig. 1  Theoretical framework

perceptions of the fairness in the workplace and their reactions towards the numer‑
ous types of dealings they receive from the organization (Clark & James, 1999).
Managers think that a reciprocal relationship and perceptions of fairness will be
rewarded by the employee through loyalty, commitment, and trust (Cobb et al.,
1991). The individual features of the perceiver, main antecedent of perception upon
the OJ, are also influenced by their group influence (Li & Cropanzano, 2009), job
satisfaction, commitment and turnover (Sparkman & Brookhart, 2017) or by the
social influence (Salancik & Pfeffer, 1978), culture (western countries rely more on
OJ than others (Shao et al., 2013)), loss of trust (van den Bos, 2003) demonstrated
that a loss of trust in the authorities determines a negative impact on the perceived
procedural fairness of organizations), affective state of each person who judge
the OJ (Barsky & Kaplan, 2007; van den Bos, 2003), organizational citizenship
behaviour (Skarlicki & Latham, 1996), organizational structure (centralisation or
formalisation (Andrews & Kacmar, 2001)), or demographic and socio-cultural
factors (as age, gender, job position, educational background, organizational
tenure) (Gyekye & Haybatollahi, 2015a). It is a strong relation between indi‑
vidual perception on OJ and employees’ commitment towards an organization
(Rupp & Cropanzano, 2002).

Organizational Virtue

Virtue refers to the quality of doing what is right and avoiding what is wrong, admi‑
rable quality or attribute related to the moral excellence (Morgan et al., 2017). The
widely accepted definition of virtue by Lakota et al. (2016) is that virtue is a charac‑
ter feature that is socially appreciated, and a moral virtue is a feature that is morally
appraised. However, the virtue in business shows strivings for community-related
objectives and business sustainability by focusing on employment, security, health,
wellbeing, innovation, and flexible working practices (Allen & Lyne, 1997). The
available literature shows that virtue of ethics can be traced backed to Greek schol‑
ars (Carr, 2011). The members of the organizations with virtue have the autonomy
to adhere to a shared set of moral methods based on a collective vision and the

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collective targets (Yang et al., 2015). In this study, we followed the work of Dawson
(2018) who considered OV as a set of four major sub-dimensions: Respect and Rela‑
tionships; Compassion and Support; Trust; Forgiveness and Meaningful Work.
Other important antecedents are represented by a conductive way of institution‑
alisation (different types of organizations should support and enable organizational
virtue) and a conductive environment (environment—regulatory, market, labour,
and capital—can discriminate between companies, according to their way of behav‑
ing virtuously or not) (Carr, 2011).

Moral Identity

Moral is a one’s self-concept based on a set of moral features and has twofold
dimensions: (1) internalisation and (2) symbolization (Wu & Yang, 2018). Inter‑
nalisation, which captures the ongoing accessibility of one’s moral self-schema and
is investigative of the continuous and subjective experience of possessing a moral
identity, is a word used for describing the extent to which a set of moral characteris‑
tics is crucial to one’s self-concept (Pasion & Barbosa, 2019).
Symbolization represents the level to which every person highlights on exhibiting
those features in the form of their actions and habits revealed to the other persons
(Kumar et al., 2004). Moral identity can be influenced by a specific context, i.e. to
rise or fall its own salience; still, its soundness will suit the extent to that it is a main
segment of one’s self-concept (Urbonavičius & Adomavičiūtė, 2015).

Organizational Virtue and Organizational Justice

The virtue theory for the organizations has been viewed from different perspective
depending on the stakeholder engagement and the relevance of the virtuous conduct
(Kidd, 2011). Among these, the debate on the organizational virtue for creating OJ
has not been explored so far (Parker & Kohlmeyer, 2005). This organizational virtue
has a significant impact on the successful achievement of the long-term prosperity
and represents a valuable resource of OJ (Graham, 2000). This study argues that the
organizational justice is the fair working mechanism, and its relevancy with ethics is
possible through the organizational virtue (Yean, 2016). The virtuous organizations
are more enthusiastic to develop OJ through ‘avoiding from wrongs and doing the
right thing’. The employees working in virtuous organizations can set some stand‑
ardized moral practices through which they can build strong basis for developing
the organizational justice (Zainalipour et al., 2010). The employees of the virtuous
organizations bear virtuous character like morality intelligence and genuine knowl‑
edge. These attributes of all individual employees set standardized norms and laws
which create OJ (Graham, 2000). The organizational virtue should decide organi‑
zations’ fate for creating the legal atmosphere where employees can follow certain
rules and regulations to prosper OJ. Hence, we argue that organizational virtue is a
major determinant of OJ.
H1: Organizational virtue is positively linked with Organizational Justice.

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Organizational Virtue and Moral Identity

Organizational virtue (OV) enables the organizations to perform right actions (Jaakson
et al., 2017). According to Kerry and Murray (2018), earlier academics considered
virtues as culturally distinctive, relativistic concepts that were related to moral dog‑
matism, religious conservatism, and social conservatism. Organizations being virtu‑
ous adhere to a high level of quality of the social system and moral encouragement
in which they interact. Virtuousness in organizations internalises moral rules which
results in producing the social harmony (Kaveh & Ahangaran, 2012). Farmer (2008)
argued that according to the virtue theory, morality is the function of an organization
nature and that the entity depends on whether the individuals act in a virtuous or un-
virtuous way. An optimised and hopeful organizational behaviour is a sign of more
virtuous considerations (Szabó et al., 2018). According to Létourneau et al. (2018),
organizational virtue reflects people’s growing desire to promote positive influence
among organization’s stakeholders as well as among its members.
Payne et al. (2013) acknowledged that OV brought a significant positive up-gradation
in human impact, morality, social betterment, organizational strength, and buffer‑
ing quality. Hence, the literature supports our arguments that the moral identity is an
outcome of organizational virtue. Therefore, it is argued that organizational virtue is a
key factor that influences the morality.
H2: Organizational virtue is positively linked to moral identity.

Moral Identity and Organizational Justice

Moral reasoning acts as the deliberated mental process to proceed with the details
and facts about matters for making moral discernment (Zekri et al., 2019). Moral
reasoning works as the key source of moral motivation for individuals to point for
moral matters and may anticipate the organizational justice (Parker & Kohlmeyer,
2005). Moral identity reflects how values, goals, and virtues are most central to the
employees’ identity and whether these are treated as moral. Thus, if the moral values
are significant for each person’s character, this can increase the incentive to act in
accordance with each one’s observation of ethics (Brambilla et al., 2013). From the
moral identity viewpoint, both the moral and the self-systems should be correlated,
because they are important in modulating OJ (Elçi et al., 2015).
Nowakowski and Conlon (2005) observed that organizational justice as well
implies handling individuals in a morally approach. Therefore, ethical reasoning can
be very useful. It was among the first researchers who proved that organizational
justice research underlined the importance of instrumental and social considerations
and that moral identity did not gain much attention from previous researchers.
Moral identity being an imagination of the self in terms of moral traits indicates
responses to others’ interests, i.e. care, honesty, and compassionate etc., which are
the basis for developing OJ (Bavik & Bavik, 2015). The employees that internalise
moral traits in their identities are capable to constitute and follow a set of the insti‑
tutional norms and fairness (Mulder & Aquino, 2013). Organization justice induces
individual compliance behaviours, i.e. influenced by employees’ moral traits with the

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set of fair rules that have been established in official and familiar way (Zainalipour
et al., 2010). Moral identity is psychological illustration of one’s personality, i.e. held
inside and projected to others. The collective mental representation works as a con‑
trol device of the moral behaviours (Brambilla et al., 2013). The symbolization per‑
spective of moral identity addresses to well-established mechanisms for guiding the
tacit ethical behaviours that are the essential characteristic of every day moral func‑
tioning (Ommundsen et al., 2003). Such moral identity provides a practical context
for properly getting the employee-specific and environmental determinants link when
employees act fairly. Consequently, OJ is an outcome of the moral identity in term
of symbolization. Therefore, this study proposed that the moral identity is positively
linked to OJ. This practise helps to explain contextual variation alongside the intra-
individual consistency in the moral conduct to establish an OJ.
H3: MI is directly associated with OJ.

Mediating Role of Moral Identity

Organization with virtue avoids the wrong tasks and prefers to follow standardized
norms or correct things (Mulder & Aquino, 2013). These correct policies and moral
oriented procedures influence employees to value the moral sentiment (Mathieu &
Babiak, 2016). When the organizations are fair and they take care of their employees’
activities and spend resources to upgrade them (Sparkman & Brookhart, 2017), the
employees feel secure and react morally (Widodo & Sulistiasih, 2021). This moral‑
ity of each individual employee that can be built through the organizational virtue
sets a strategic direction to create the organizational justice (Maurer et al., 2008).
Of course, it is a matter of fact that organizational justice for overall organization
is the fair working condition perceived by the working employees. If employees are
feeling sustainable improvement in their jobs, i.e. a sub-dimension of organization
virtue, they fully support their organizations morally. This moral identity in terms
of internalisation, i.e. behave morally, and symbolization, i.e. express their moral
actions, constitutes OJ. Hence, the organizational virtue is influenced by the moral
identity in turn to achieve OJ. The above discussion leads to the subsequent hypoth‑
esis that moral identity functions as a mediator for the relationship between organi‑
zational virtue and OJ.
H4: Moral identity mediates the organizational virtue and organizational justice link.

Methodology

Sampling

This study is quantitative in nature, and questionnaire and random sampling tech‑
nique is used for data collection. The analysis unit of this research is the service sec‑
tor of Pakistan. The service sector is growing fast both in developed countries and
in emerging/developing countries. The data was collected from 5 different service

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sectors, i.e. listed on Pakistan Stock Exchange on convenience-based sampling pro‑

cedure. These 5 sectors include the following:

1. Insurance
2. Close End-Mutual Fund
3. Commercial Banks
4. Engineering
5. Oil and Gas Marketing Companies

These are the most active service sectors listed on the Pakistan Stock Exchange.
It is representative of Pakistan’s service sectors, and data collected from these com‑
panies can be generalised in the context of Pakistan’s service industry.

Data Gathering

Survey information from 463 employees in 52 Pakistani service sector businesses

was collected for the current study. Firstly, 60 businesses were randomly chosen from
the businesses listed on the Pakistan Stock Exchange. It was easy to contact those
52 companies through both professional and personal connections. Subsequently, 700
people have been included in the random sample for data collection, and 620 of them
officially agreed to participate in the survey. Employees who were willing to take part
in the survey received an information sheet that had a confidentiality commitment, a
statement outlining the purpose of the study, and details on the main study constructs.
Three rounds of data collection with a 2-month lag were conducted. First, data on the
demographic and exogenous variables, including age, education, gender, and work
experience, were obtained. In the second and third rounds, data on the mediator and
the outcome variable, respectively, were collected. Surveys were divided into three
distinct periods for two reasons: to prevent respondent fatigue and to decrease the
possibility of common technique variance through temporal split. A pilot study was
conducted on 52 employees from the above-mentioned businesses to ensure the clar‑
ity, applicability, and relevance of the research instrument before the full-range data
gathering process was launched. The questionnaire for the employees was given in
the local language, i.e. Urdu, and thereafter, the same was translated back into an
English form with the aim to ensure appropriate understanding of the subject mat‑
ter of the study with regard to key concepts. Before distributing the questionnaire to
respondents, it was reviewed by academics and specialists to ensure there were no
misunderstandings or inconsistencies.
During the three phases of data gathering, we got 540, 502, and 478 completed
responses, respectively. By putting unique code on the returned envelopes, responses
from different phases of information collection were matched. Overall, 46.7% of
responders were women and 53.3% were men. The responders had an average age of
40.76 years and 9.54 years of work experience. In terms of education, 22% of respond‑
ents had completed matriculation (10 years of schooling), 30.9% had completed

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secondary school (12 years), 22.7% had completed bachelor’s studies, and the remain‑
ing 24.4% had earned a master’s degree.

Measurement

Participants were asked to provide information on the organizational justice, moral

identity, and virtue in their organizations. Their answers were calculated using a 5-point
Likert scale, with 1 indicating ‘strongly disagree’ and 5 indicating ‘strongly agree’.

Organizational Virtue

From Dawson’s (2018) work, the organizational virtue scale was developed. Organi‑
zational virtue was assessed using a 16-item scale with 6 questions each on the dimen‑
sions of respect and relationships, 3 questions each on compassion and support, 4
questions each on trust and forgiveness, and 3 questions each on meaningful work (see
Appendix). These items yielded a Cronbach alpha score of 0.84, which was higher than
the required value of 0.70. The fit indices were as follows for the organizational vir‑
tue: 2 (100) = 269.24, 2/df = 2.69, RMSEA = .06, CFI = .95, IFI = .95, and TLI = .94,
GFI = .93.

Moral Identity

The results of the study of Aquino and Reed (2002) provided the basis for the moral
identity scale (MIS). Using this scale, we requested participants to consider a per‑
son who possess moral qualities such as being fair, polite, attentive, and sincere.
The statements include ‘These traits are an important part of who I am as a person’,
among others. The internalisation (5 items) and symbolization (5 items) are the two
key dimensions on this measure. For this scale, the Cronbach alpha value was 0.83.
The fit indicators for moral identity included the following: 2 (34) = 95.64, 2/df = 2.81,
RMSEA = .06, CFI = .97, IFI = .96, TLI = .97, and GFI = .96.

Organizational Justice

The three sub-dimensions of organizational justice—distributive justice (5 items), pro‑

cedural justice (6 items), and interactional justice (9 items)—were used to quantify it
(see Appendix). This scale was modified based on the one Karkoulian et al. (2016) used
in their research. For this scale, Cronbach’s alpha was 0.86. For organizational justice,
the following model fit indices were used: 2 (167) = 485.93; 2/df = 2.91; RMSEA = .06;
CFI = .93; IFI = .92; and TLI = .93; GFI = .91.

Control Variables

This study used control variables like gender, age, experience (measured in number
of years), and education of employees which can improve the reliability of research
model. This study, therefore, used these control variables (see Table 1).

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Analysis Results

For the purpose of examining the associated variables, we used descriptive statis‑
tics and a correlation matrix. The reliability and validity of the used variables were
examined in this study using CFA. The SEM (structural equation modelling) method
was used in this study to test the hypotheses and to show the relationships between
the independent and dependent variables. To assess and evaluate the relationship
between variables, SEM statistical technique is used. Regression analyses are less
efficient than this collection of statistical techniques.

Means, Standard Deviations and Correlations

Means, standard deviations, and correlations are presented in Table 1.

Estimation Model

An estimation model for this study was consisted of organizational virtue (OV),
moral identity (MI), and organizational justice (OJ). Using confirmatory factor anal‑
ysis (CFA), we evaluated the measurement model. These structures were signifi‑
cantly constructed with all of the components. The obtained indices demonstrated
that the estimating model and the gathered data were a good fit. The fit ratios are 2
(978) = 1754.35, 2/df = 1.79, RMSEA = .04, CFI = .93, IFI = .93, and TLI = .92.
The scales of the variables were checked for internal stability, convergent valid‑
ity, and discriminant validity. For each factor we used in the investigation, Cron‑
bach alpha (α), average variance extracted (AVE), average shared variance (ASV),
maximum shared variance (MSV), and the square values of AVE were calculated
(Table 2). The scales’ internal consistency was found to be sufficient (> .70). Addi‑
tionally, the scales indicated some appropriate discriminating and convergent validi‑
ties (AVE = .70, ASV < MSV, ASV and MSV AVE, and the squared root estimates
of AVE interconstruct associations).

Table 1  Means, standard deviations and correlations

Construct Means SD 1 2 3 4 5 6

1. Organizational virtue 3.52 .89

2. Moral identity 2.95 .95 .29**
3. Organizational justice 2.92 1.12 .20** .28**
4. Gender 1.47 .50 −.05 −.08 −.06
5. Education 2.49 1.09 .04 .02 .05 −.05
6. Age 40.76 5.95 −.03 .03 .06 −.01 −.02
7. Work experience 9.54 6.12 −.05 −.01 .04 .01 .01 .93**

n = 463, Gender: 1 = male, 2 = female

SD standard deviation
*P < .05; **P < .01 level (2-tailed)

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Table 2  Soundness and convergent viability and discriminant validities

Model 1 2 3 α CR AVE MSV ASV

1. Organizational virtue .81 .95 .96 .66 .19 .13

2. Moral identity .44 .74 .87 .93 .56 .19 .17
3. Organizational justice .27 .40 .87 .95 .96 .77 .16 .11

Structural Model (Direct and Intermediation Outcomes)

The direct effect of organizational virtue on organizational justice was first

inquired so as to evaluate the structural construct (see Table 3). The results showed
a significantly positive relationship between organizational virtue and organiza‑
tional justice (= .28, P 0.001). The structural model 1’s fit ratios were as follows:
2 (586) = 1211.68, 2/df = 2.06, RMSEA = .05, CFI = .93, IFI = .93, and TLI = .92,
showing a strong match of the structured model once with the data. As a result,
theory 1 was confirmed.
The results (see Table 4) displayed a relevant positive relation for the organi‑
zational virtue and moral identity (β = .45, 95% confidence interim did not over‑
come zero). Likewise, the results (Table 4) revealed a relevant positive correlation
between moral identity and organizational justice (β = .35, 95% confidence interim
did not overcome zero). Second, the mediating role of moral identity in the struc‑
tural model’s link between organizational virtue and organizational justice was
examined (see Table 4). The appropriate ratios demonstrated that the structural
framework 2 adequately fit to the data. The following fit ratios were calculated:
2 (978) = 1754.35, 2/df = 1.79, RMSEA = .04, CFI = .93, IFI = .93, and TLI = .92.
Finally, we used the bootstrap method in AMOS 24.0 to investigate the value for
moral identity’s mediating function for the relationship between organizational
virtue and organizational justice. Table 4 displays the values of the numbers.
According to the findings (see Table 4), there is a statistically positive relation‑
ship between organizational virtue and moral identity (r = .45, 95% confidence
interval did not exceed zero). The outcomes (Table 4) also demonstrated a signifi‑
cant indirect relationship (= .15, 95% confidence interval was below zero) between
organizational virtue and organizational justice via moral identity. As a result, argu‑
ment 4 was also confirmed.

Table 3  Direct impact and 95% Specification Estimate LL UP

confidence interims (model 1)
Standardized direct impact
Organizational virtue→organizational justice .28* .14 .19
Organizational virtue→moral identity .41* .25 .36
Moral identity→organizational justice .33* .27 .42

n = 463 (bootstrapping by specifying a sample of size 2000)

LL lower limit, UP upper limit
*Empirical 95% confidence interim does not overcome zero

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Table 4  Direct and indirect Specification Estimate LL UP

impact and 95% confidence
interims (model 2) Standardized direct impact
Organizational virtue→organizational justice .12 −.04 .29
Organizational virtue→moral identity .45* .30 .56
Moral identity organizational justice .35* .17 .52
Standardized indirect effects
Organizational Virtue→Moral .15* .07 .27
identity→Organizational justice

n = 463 (bootstrapping by specifying a sample of size 2000)

LL lower limit, UP upper limit
*Empirical 95% confidence interim does not overcome zero

Figure 2 summarises the main findings of the study from testing all four hypoth‑
eses and depicts the detailed framework for building the current model.

Discussion

The impact of organizational justice on OJ was investigated in this study. Research

has also demonstrated how MI (internalisation and symbolization) mediates the
relationship between OV and OJ. Four hypotheses that formed our research model
were validated and proved by the findings. The direct relationship between these
factors was first examined. According to H1, OV and OJ show a strong relation‑
ship. These results support with the claims made by earlier researchers that OJ is a

Fig. 2  Mediation model: moral identity as a mediator for the organizational virtue and organizational
justice link

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positive workplace where employees follow the law and the code (Graham, 2000;
Yean, 2016). This research supports the work of prior scholars that the virtuous
organizations are more enthusiastic to develop OJ through ‘avoiding from wrongs
and doing the right thing’. The employees working in virtuous organizations can
set some standardized moral practices through which they can build strong basis for
developing the organizational justice (Zainalipour et al., 2010). The employees of
the virtuous organizations bear virtuous character like morality intelligence and gen‑
uine knowledge. These attributes of all individual employees set standardized norms
and laws which create OJ (Graham, 2000).
The results from H2 demonstrated a strong positive correlation between OV and
MI. These findings confirm previous research that OV develops the employee’s abil‑
ity to represent themselves as a symbol of morality in terms of Respect and Rela‑
tionships, Compassion and Support, Trust and Forgiveness, and Meaningful Work.
The outcomes are consistent with previous studies that organizations being vir‑
tuous adhere to a high level of quality of the social system and moral encourage‑
ment in which they interact. Virtuousness in organizations internalises moral
rules which results in producing the social harmony (Kaveh & Ahangaran, 2012).
Farmer (2008) argued that according to the virtue theory, morality is the function of
an organization nature and that the entity depends on whether the individuals act in a
virtuous or un-virtuous way. An optimised and hopeful organizational behaviour is a
sign of more virtuous considerations (Szabó et al., 2018). According to Létourneau
et al. (2018), organizational virtue reflects people’s growing desire to promote posi‑
tive influence among organization’s stakeholders as well as among its members.
H3-related findings shown that MI has a significant and direct impacts on OJ.
These results correspond with those of some other researchers that corroborated that
the moral reasoning acts as the deliberated mental process to proceed with the details
and facts about matters for making moral discernment (Zekri et al., 2019). Moral
reasoning works as the key source of moral motivation for individuals to point for
moral matters and may anticipate the organizational justice (Parker & Kohlmeyer,
2005). Moral identity reflects how values, goals, and virtues are most central to the
employees’ identity and whether these are treated as moral. Thus, if the moral values
are significant for each person’s character, this can increase the incentive to act in
accordance with each one’s observation of ethics (Brambilla et al., 2013).
Finally, this study proved that MI works as mediator for the OV and OJ link, i.e.
our study hypothesis 4. Results indicated that indirect effect of OV on OJ is sig‑
nificant (internalisation and symbolization respectively). The results of a few prior
studies examined the direct relationship between these variables and suggested a
strong positive association between them in the organization frame that organiza‑
tion with virtue avoids the wrong tasks and prefers to follow standardized norms or
correct things (Mulder & Aquino, 2013). These correct policies and moral oriented
procedures influence employees to value the moral sentiment (Mathieu & Babiak,
2016). When the organizations are fair and they take care of their employees’
activities and spend resources to upgrade them (Sparkman & Brookhart, 2017),
the employees feel secure and react morally (Widodo & Sulistiasih, 2021) and
they provided an understanding of the indirect effect of MI on OJ as mediator for
the OV and OJ link. This study focuses on the primary factors of the associations

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between OV and OJ variables, extends and enriches the existing research, and has
significant theoretical and practical impacts as a result of the use of a mediator in
the empiric analysis. Hence, all the study hypotheses were proved, and results sup‑
ported our developed theory.

Conclusions and Implications

Theoretical Implications

This research contributed to the existing literature in several ways. Firstly, a com‑
prehensive research model was developed for service firms testing both the direct
and indirect impact of OV on OJ. Secondly, we investigated how OV develops MI in
terms of internalisation and symbolization. There is not even a single research which
presents such relation. Thirdly, this study examined the impact of MI on OJ, and
this is also the new area of research and addition in literature, because the existing
knowledge on this topic is meagre. Finally, the mediating role of MI for the OV and
OJ link was also demonstrated by this study and extends the scarce existing litera‑
ture on this specific topic.

Practical Implications

This study has several practical implications for organizational management.

Firstly, managers must set a high priority on developing organizational qualities like
respect, connections, compassion, help, forgiveness, and purposeful work. This can
be accomplished through incorporating these beliefs into the organization’s funda‑
mental principles, executive behaviours, and guiding principles. Second, managers
should encourage staff members to internalise the moral principles and ethics of
the company so as to establish their moral identity. This can be encouraged through
moral role modelling, moral leadership, and opportunities for moral growth and
investigation. Furthermore, it is crucial for fostering organizational justice through
fair structures and decision-making procedures. To improve employees’ sense of
fairness, it is important to emphasise transparency, consistency, and inclusivity.
These beneficial suggestions have an impact on leadership development, strategic
decision-making, and stimulating and inspiring work environment that promotes
productivity and enhances employee well-being.
There are a few limitations to that study, which might influence future research.
The data on the research elements was collected from service enterprises; however,
information from other industries may be used in future studies. However, data may
be obtained and investigated through qualitative techniques for deeper insights of
research variables. We just examined the relationship affecting both OV and OJ
using quantitative analysis. Finally, although the service firms in Pakistan were the
sole group of companies investigated for this study, the findings may be generalised
to other Western nations in the future research.

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Journal of the Knowledge Economy

Conclusion

This study sheds insight on the process of establishing exceptional workplaces

through revealing the dynamic interplay between organizational virtue (OV), moral
identity (MI), and organizational justice (OJ). Organizational management could
establish a positive and virtuous culture that encourages staff members to perform to
the best of their abilities with a special emphasis on building OV, including respect,
connections, compassion, support, trust, forgiveness, and meaningful work. The
study also focuses on the critical function of MI as a catalyst in overcoming the
gap among OV and OJ and eventually establishing a friendly and equitable work‑
place. Organizational managers have a road map for changing their workplaces into
moral excellence lighthouses where workers thrive, organizational fairness rules,
and greatness becomes the standard thanks to the insights acquired from this study.

Appendix

Questionnaire

Organizational Justice (20 items) (adapted from the work of Karkoulian et al., 2016).

Distributive Justice

My work hours are reasonable.

I feel that my salary is sufficient.
I think my workload is realistic.
The rewards that I get here are frequently really reasonable.
I consider my job’s obligations are fair.

Procedural Justice

The general manager is unbiased whilst making decisions on jobs.

Before any hiring decisions are taken, the general manager ensures that all staff con‑
cerns are heard.
The general manager collects specific and comprehensive data when making deci‑
sions about jobs.
When employees ask, the general manager explains decisions and offers further
details.
All hiring and firing decisions are administered consistently to all employees.
The general manager’s hiring decisions may be contested or appealed by employees.

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Interactional Justice

The general manager always shows me respect and care when making decisions
about my employment.
The general manager gives me dignity and respect when making judgements about
my employment.
The general manager considers my needs as an individual while making judgements
about my position.
The general manager communicates with me directly when choices are made regard‑
ing my position.
The general manager demonstrates consideration for my employee rights when mak‑
ing decisions regarding my position.
The general manager considers me when policies are made affecting my position
and goes over the implications.
The general manager provides adequate explanation when making decisions affect‑
ing my job.
The manger explains decisions made regarding my position in a way that’s under‑
standable to me.
The office manager thoroughly and clearly explains decisions made regarding my
position to me.

Moral Identity (10 Items) (adapted from the work of Aquino & Reed, 2002).
I would certainly feel good about myself if I have these qualities.
Being an individual who possesses these qualities is a significant aspect of whom I am.
My emotional health is closely related to possessing these qualities.
My participation especially in certain institutions assists to inform others about the
existence of these qualities in me.
I actively participate in events that let people know I have these qualities.
These qualities play a significant role in how I view myself.
I really want to possess these qualities.
I frequently purchase items that advertise the qualities I possess.
I often behave in manners that draw attention to these qualities.
My hobbies and other extracurricular activities make it obvious that I possess these
qualities.

Organizational Virtue (16 items) (adapted from the work of Dawson, 2018).

Respect and Relationships

We support one another’s enthusiasm.

We show each other our admiration.
We appreciate each other reciprocally.
Respect is demonstrated for each other.
We develop enduring interpersonal bonds.
We are receptive to one another.

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Compassion and Support

We support those who are struggling.

We care about our coworkers who are having difficulty.
We consider one another to be friends.

Trust and Forgiveness

Forgiveness and Faith

When blunders are made, we don’t hold one another accountable.

We make corrections without blaming other.
We believe in one another.
We accept errors.

Meaningful Work

We understand the greater goal behind our work.

We believe that the work we do has a deep purpose.
Through our work, we are elevated.

Author Contribution Z.Y.: project administration and supervision, conceptualization, methodology, data
curation, analysis; M.R.: investigation, writing, visualisation, revision, editing.

Funding Researchers Supporting Project Number (RSP-2021/87), King Saud University, Riyadh, Saudi
Arabia.

Availability of Data and Material Restrictions apply to the availability of these data to protect the identi‑
ties of the respondents of the survey, and so the data are not publicly available. The data are, however,
available from the authors upon reasonable request.

Declarations
Ethics Approval The research was conducted according to the ethics principles.

Consent to Participate Consent was obtained from the participants i.e., owner/managers/employees of the
selected service companies of Pakistan.

Consent for Publication Consent was obtained from the participants i.e., owner/managers/employees of
the selected service companies of Pakistan.

Conflict of Interest The authors declare no competing interests.

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 Journal of the Knowledge Economy

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