Impact of Commitment to Business Ethics to Nonfinancial Business Performance

Vig, Silvija; Dumičić, Ksenija

doi:10.7906/indecs.14.2.6

Cited by 6 publications

(3 citation statements)

References 29 publications

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“…An extensive number of studies have shown the influence of management commitment on employees' performance and outcomes in various aspects (e.g. safety, service quality, employee behavior, financial performance and non-financial performance) Michael et al, 2005;Kim et al, 2009;Babakus et al, 2003;Verschoor, 1998;Vig and Dumicic, 2016). How employees perceive organizational support plays an important role in individual engagement with CSR activities (Lamm et al, 2015).…”

Section: Factors Affecting Unethical Behaviormentioning

confidence: 99%

Internal and vendor employees’ unethical behaviors in the supply chain: the case of India

Yun

Ebrahimpour

Bandyopadhyay

et al. 2019

BIJ

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Purpose The purpose of this paper is to examine the impact of a corporate ethical policy, such as a code of ethics, on the unethical behavior of internal and vendor employees in the supply chain in India. It also aims to find whether International Standards Organization (ISO) certification of vendors affects the result and any significant relationship between management commitment and unethical behavior can be supported by the findings as well. Design/methodology/approach Empirical analyses were conducted on a survey consisting of 43 questions comprising 181 valid responses. Multiple regression analysis that includes four independent variables – code of ethics, management commitment, supply chain principles and personal values taking unethical behavior as dependent variable – was used to find the significance of the relationship. Findings The implementation of a code of ethics, management commitment, supply chain principles and personal values all have a negative association with unethical behavior. Personal values, measuring a firm’s financial aspects for non-compliance to ethical behavior, have a positive association with unethical behavior. The relationships of top management commitment, personal values with internal employees’ unethical behavior are significant. The significant relationship between management commitment and unethical behavior can be supported by the findings as well. It was also found that ISO certificates and firm size as the control variables did not have any effect on the relationship between the independent variables and unethical behavior. The analysis also shows that ISO 26000 certificate, the international standard for socially responsible operations, does not impact this relationship. Research limitations/implications Measuring substantial managerial effort for corporate social responsibility (CSR) practices by asking questions like, “how committed employees think top management is to social responsibility,” may not fully measure substantial managerial effort for CSR practices. To improve the results of the current study, future research can use the CSR index or disclosure as a measure to better reflect management commitment and practice for social responsibility. Second, the current study is limited to measuring how many occurrences of unethical behavior are witnessed by employees instead of what specific unethical behavior is more often witnessed. Considering India has the second largest population in the world, 181 responses may not represent the true practices in the business environment in India for generalization. Practical implications The findings suggest that management should put more of an emphasis on improving the commitment of upper-level managers to decrease the overall unethical practices of their employees. The study finds that employees’ personal values influence their ethical behavior. Therefore, communications and training of employees at all levels should emphasis on improving personal values. Social implications Businesses should influence academics to incorporate personal value building in course curricula. The Indian CSR law should incorporate the holistic view of CSR taking care of needs of all stakeholders under the provision of the regulation. In 2015, India became the first country in the world to legislate CSR practices in corporations but it misses the opportunity to sensitize the management and employees on ethical practices as it mainly identified philanthropic expenses as mandatory CSR spending and silent on ethical business practices. Originality/value The present study contributes to the literature by bringing supply chain context to the effect of different factors on unethical behaviors and interaction of internal and vendor firms in terms of ethical practices. There are several studies on business ethics in different countries including China, but in the case of India similar studies are not much. The present study fills the gap.

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Section: Factors Affecting Unethical Behaviormentioning

confidence: 99%

Internal and vendor employees’ unethical behaviors in the supply chain: the case of India

Yun

Ebrahimpour

Bandyopadhyay

et al. 2019

BIJ

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“…A commitment to business ethics can have an impact on nonfinancial performance for an organization. Vig and Dumičić (2016) evaluated whether a commitment to business ethics had a positive influence on nonfinancial performance including HRM, client satisfaction, innovation and efficiencies in business processes. When measuring dimensions of ethical behavior against the three nonfinancial measures, motivation, rewarding policy for ethical behavior, and responding to unethical behavior provided the most increase in nonfinancial performance.…”

Section: Financial Issues and Public Demandsmentioning

confidence: 99%

Human resource management and ethical challenges: building a culture for organization success

Smith

Rohr

Panton

2018

IJPL

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Purpose Human resource professionals (HRPs) remain challenged by ethical conundrums in the workplace. Business leaders are asked to respond to demands for efficiency in an environment of distrust or skepticism amongst employees and customers. HRPs who understand ethical decision-making as well as ethical perspectives and implications of actions within the organization can create value within their organizations. The purpose of this paper is to discuss the five ethical content issues of Hosmer’s (1987) model related to the twenty-first century human resource management (HRM) themes. Design/methodology/approach As a result of a syntheses of leadership and HRM philosophies over several decades, six propositions associated with the content issues are suggested. Findings HRPs are well-positioned to encourage ethical and moral decision-making within their organizations when they are able to contribute to creation of a culture that honors duties to stakeholders and supports organizational success. Originality/value The existence of synthesized analysis regarding organizational leaders, human resource managers, ethics and culture to build organizational success is limited. Thus, this paper highlights a need for organizations and for HRPs to dedicate policies and implement practices which can support ethical sustenance in today’s organizations.

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“…As the impression that company's leave in the public eye has gotten ever more important and the demands of the stakeholders have risen, many companies have realized that they have to implement ethical business standards, most often defined by programs of business ethics, which consist of: (1) values and mission, (2) codes of ethics, (3) ethics officers, (4) ethics helpline, (5) ethics training programs, (6) communicating ethical values, (7) rewarding policy for ethical behavior, and (8) ethics audit (Vig and Dumičić, 2016). The value and mission on which a company bases its business activity make up an ideological core, or rather, identity, the so called, character of a company (Collins and Porras, 2002).…”

Section: Business Ethics As a Premise For Good Corporate Reputationmentioning

confidence: 99%

The Impact of Reputation on Corporate Financial Performance: Median Regression Approach

Vig

Dumičić²,

Klopotan

2017

Business Systems Research Journal

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Background: In recent years, reputation has become an important risk concern for companies around the world. Deloitte Global Survey highlights the reputation risk as the top strategic business risk in 2014. This is also proven by a research conducted by AON Global Risk Management Survey in 2015 and Allianz Risk Barometer Survey in 2016 which finds a loss of reputation as one of the biggest risks for business executives. Furthermore, the importance of reputation is confirmed by the fact that reputation accounts for more than 25 percent of a company's market value and the total market capitalization of the S&P500 companies. Objectives: To investigates the relationship between corporate reputation and financial performance. Methods/Approach: The survey of the paper was conducted in 2015 in Croatia. The questionnaire for assessing corporate reputation contained three reputational dimensions: products and services, corporate integrity, and organizational performance while the financial dimensions contained indicators of EVA, ROCE, ROA, ROE and the financial stability coefficient. Hierarchical regression methods were applied in the analysis. Results: This research leads to the conclusion that some dimensions of corporate reputation can be important predictors of financial performance. Conclusions: Results of the research could be a valid motivation for business executives to consider reputation risk as a critical issue of corporate business strategy.

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Impact of Commitment to Business Ethics to Nonfinancial Business Performance

Cited by 6 publications

References 29 publications

Internal and vendor employees’ unethical behaviors in the supply chain: the case of India

Internal and vendor employees’ unethical behaviors in the supply chain: the case of India

Human resource management and ethical challenges: building a culture for organization success

The Impact of Reputation on Corporate Financial Performance: Median Regression Approach

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