organisational ethical climate's relationships

1. N a t i o n a l U n i v e r s i t y o f
M o d e r n L a n g u a g e s
M B A - 7 ( E v e n i n g )
4 / 2 4 / 2 0 1 3
Mamoona Sarwar
Submitted to: Mam Benish
Madem,
I am very much obliged that you give me opportunity
to conduct research and thankful to you for your
guideline. I have chosen my topic which is ―ethical
climate‘s relationship to job satisfaction,
organizational commitment, and turnover‘‘ Detailed
information about my research is within the research
proposal for your assistance. I am looking forward for
your acceptance so that I can continue my research.
Ethical climate‘s relationship with job
satisfaction, organizational commitment,
and turnover

2. Abstract:
This study will examine ethical climate‘s relationship to job satisfaction, organizational
commitment, and turnover intention among salespeople. however salespeople are believed to
be physically, psychologically, and socially separated from the organization, but this study
will found out that is there any connection of job satisfaction, commitment and turnover
intention with ethical climate. A cross-sectional sample of business-to-business salespeople
in twin cities will be used. 20 Sales and Marketing companies in that area that employed
salespeople will be chosen as the sampling frame. Correlation will check the ethical climate‘s
relationship to job satisfaction, organizational commitment, and turnover intention, to check
the relationship intensity of studied variables regression will be used. The research can be
very useful to the management to understand the effect of ethical climate on salespeople and
which variable is highly affected by ethical climate. This research will tries to determine
patterns while comparing organizations involved in ethical climate against those which are
not.

3. Introduction:
Climate refers to the ways organizations operationalize routine behaviors and the actions that are
expected, supported and satisfied (Schneider and Rentsch, 1988). Ethical climate has been
defined as ‗‗the existing perceptions of typical organizational practices and procedures that have
ethical content (Victor and Cullen, 1988, p.101).‘‘ in addition, an organization, subunit and work
group may consist of many different types of climates—including an ethical climate (Schneider,
1975). . The ethical components of environment are comprised of the behavioral norms and
values that provide insight into the organization's point of view on various ethical situations
(Hunt et al., 1989; Sims, 1991; Trevino et al., 1998; Valentine and Barnett, 2002). Many of these
characteristics stem from top management's ethical beliefs and become institutionalized within
the organization so that employees are positively affected both attitudinally and behaviorally by
these perspectives (Hunt et al., 1989; James, 2000; Sims, 1991; Trevino et al., 1998;
Viswesvaran et al., 1998; Vitell and Davis, 1990). Nowadays organizations hold climates that
run everywhere from very ethical to very unethical. An international survey of 4000 business
employees found that 25% of those responding believed that their companies ignore ethical
conduct to meet business objectives, and nearly 17% stated that their company openly
encourages misconduct to meet business objectives. (Goodell,1994).
Significance:
Organizational commitment and job satisfaction have received significant attention in studies of
the work place. This is due to the general identification that these variables can be the major
determinants of organisational performance and effectiveness (Angle, 1981; Riketta, 2002).
Some studies have reported strong correlations of organizational commitment and job
satisfaction with turnover (Benkhoff, 1997). Employees are less committed & look for other
opportunities when they are dissatisfied at work, If opportunities are not available, they may
emotionally or mentally ―withdraw‖ from the organization. A closer look at these studies,
however, finds that while the relationships between organizational ethical values and role
conflict, satisfaction, and performance have been investigated in a sales setting (i.e., Weeks and
Nantel, 1992; Schwepker et al., 1997), the relationships between Organizational ethical values,
and organizational commitment, and turnover have not. Moreover, the one study that examined
the relationship between ethics and satisfaction in the sales force examined only one company in
one industry (i.e., Weeks and Nantel, 1992).
Scope:
The present study will examine the relationship between the organization‘s ethical climates (an
expression of its ethical values), job satisfaction, organizational commitment, and turnover
intention among salespeople. If ethical climate have positive relationship with job satisfaction,
organizational commitment, and turnover intention among salespeople then an ethical climate,
organizations may be able to reduce undesirable turnover via greater organizational commitment,
and remove undesirable salespeople
Limitation:
This study is not without limitations this study assessed salespeople‘s perceptions of
their firm‘s environment, not their individual ethics.

4. Literature Review:
Ethical climate has been defined as ‗‗the prevailing perceptions of typical organizational
practices and procedures that have ethical content (Victor and Cullen, 1988, p. 101).‘‘ Top
management appears to play a critical role in the formation and perpetuation of a firm‘s ethical
climate (Deal and Kennedy, 1982; Schein, 1985). The literature suggests that the climate for
unethical conduct is present when a firm does not enact and enforce codes of ethics, policies, and
directives that specify, discourage, monitor, and correct unethical behavior (Ferrell and Gresham,
1985). Higher levels of ethical behavior have been found in firms where codes of ethics are in
place and enforced (Ferrell and Skinner, 1988). When codes become an active part of an
employee‘s working knowledge, they are more likely to affect the individual‘s ethical decision
making (Hegarty and Sims, 1979). Additionally, codes that are effectively communicated
(i.e.,understood) are likely to result in greater ethical behavior (Weeks and Nantel, 1992).
Organizational culture can influence how people set personal and professional goals, perform
tasks and manage resources to accomplish them. Organizational culture affects the way in which
people knowingly and unknowingly think, make decisions and in the end the way in which they
perceive, feel and act (Hansen and Wernerfelt, 1989; Schein, 1990). Deal and Kennedy (1982)
and Peters and Waterman (1982) have suggested that organizational culture can exert great
influence in organizations particularly in areas such as performance and commitment.
Lastly, reward and punishment are used to create an ethical climate. Supervisors can influence
behavior through their administration of rewards and punishment (Trevino, 1986; Posner and
Schmidt, 1987). For instance, Podsakoff (1982) found that appropriately distributed discipline
can result in a correction of behavior. Actual discipline, or even the threat of punishment, may
indirectly influence the decision to behave ethically via its effects on one‘s perceptions of likely
consequences for unethical behavior and the desirability of those consequences. However, the
absence of punishment may provide an opportunity for unethical behavior Locke (1969, p. 316)
defines job satisfaction as ‗‗the pleasurable emotional state resulting from the appraisal of one‘s
job as achieving or facilitating the achievement of one‘s job values.‘ Several studies from a
variety of occupations indicate that individuals‘ job satisfaction is related to their perceptions of
aspects of the firm‘s organizational climate (Kaczka and Kirk, 1968; Friedlander and
Margulies,1969; Schneider, 1972; Schneider and Snyder, 1975;Pritchard and Karasick, 1973;
Downey et al., 1974;Churchill et al., 1976; Ostroff, 1993; Pierce et al.,1996; Johnson and
McIntye 1998).
Recent evidence suggests that elements of an organization‘s climate are significantly related to
organizational commitment. Examining the relationship between 12 climate dimensions and
various job-related outcomes, Ostroff (1993) found the strongest associations between climate
dimensions and organizational commitment. Intention to leave appears to be the immediate
precursor to actually quitting. It is consistent with Fishbein‘s (1967) model of attitudes,
intentions, and behavior and its use is commonly endorsed in the literature as a predictor of
turnover (Mobley, 1982). A literature review by Bluedorn (1982) cited 23 studies which reported
finding significant positive relationships between leaving intentions and actual leaving behavior.
Given that ethical climate has been found to influence ethical behavior, it can be used to provide
direction for ethical selling (i.e., provides sales force with ethical codes and policies to follow
and consequences for not doing so). At the same time, this ethical climate may conflict with
attitudes and behaviors of unethical salespeople. Person–organization fit theory suggests that
individuals who do not perceive a fit between themselves and the organization are more likely to
quit (e.g., Downey et al., 1975; Apasu, 1986; Caldwell and O‘Reilly, 1990; De- George, 1990).

5. Consequently, unethical salespeople operating in an ethical organization should experience a
‗‗misfit‘‘ and be more willing to leave the organization. The unethical salesperson provides no
benefits to the customer- oriented organization and their departure is desirable. In essence, an
ethical climate may encourage desirable (ethical) salespeople to stay and undesirable (unethical)
salespeople to leave.

6. Theoretical framework:
H1 (+) H4 (+)
H2 (+)
H3 (-)
H5 (-)
Organizational
Ethical climate
Job satisfaction
Organizational
commitment
Turnover Intention

7. HYPOTHESIS:
H1:
There is a positive relationship between organization‘s ethical climate and their job satisfaction.
H2:
There is a positive relationship between organization‘s ethical climate and their organizational
commitment
H3:
There is a negative relationship between organization‘s ethical climate and their turnover
intention.
H4:
The greater the salespeople‘s job satisfaction, the greater their organizational commitment
H5:
The greater the salespeople‘s organizational commitment, the less their expected turnover
intention.

8. Methodology:
1. Population
As far as population is concerned I have selected Sales & marketing pharmaceuticals companies
of Islamabad and Rawalpindi as sector, Industry will be private as title shows too nature is Sales
persons, For Segmentation both Male and female will be considered. Age factor is also included
here, from 20-35 years old.
2. Sample
A cross-sectional sample of business-to-business salespeople in twin cities will be used. 20 Sales
and Marketing companies in that area that employed salespeople will be chosen as the sampling
frame.
3. Instruments
Instrument which I am going to use for survey of my research will questionnaire type, for rating
liker Scale will be used.
4. Statistical tools
Correlation will be use to check the ethical climate‘s relationship to job satisfaction,
organizational commitment, and turnover intention, to check the relationship intensity of studied
variable I will regression.

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