Business Ethics And Organizational Performance In The Goal Attainment Of Business

Project and Seminar Material for Business Administration and Management BAM

Business Ethics And Organizational Performance In The Goal Attainment Of Business


Abstract


This study intended to examine business ethics and organizational performance in the goal attainment of business in Akwa Ibom state. The descriptive research design was employed and research tools were questionnaire both open and close form and semi structured interviews. 90 respondents who are employees of selected non profit organizations responded to administered tools, and also secondary data used were mainly organization ethical standards. Data were supported by descriptive statistics and each item was based on a 5-Point-Likert scale and were quantatively analysed using SPSS version 16, where by Pearson correlation coefficient was used to relate variables of the study. The results were then presented in form of tables, bar and pie charts and percentages. The study showed that there was a correlation between business ethics and organization performance and it concluded that organization performance is a result of integration of variables where business ethics happen to be one of those. The findings obtained made a case that organization performance is function of variables and not only business ethics. Finally, conclusion and recommendations were proffered on how business ethics can be strengthened and other ways of improving organization performance.


Table of Contents


Chapter One

Introduction

  • 1.1. Background of the study
  • 1.2. Statement of the problem
  • 1.3. Significance of the study
  • 1.4. General Objective
  • 1.5. Specific Objectives
  • 1.6. Research Questions
  • 1.7. Research Hypothesis
  • 1.8. Scope and Limitations of study
  • 1.9. Conceptual Framework
  • 1.10. Ethical Consideration

Chapter Two

Review of Related Literature

  • 2.0. Introduction
  • 2.1. Definition of Key Concepts
  • 2.1.1. Ethics
  • 2.1.2. Work place Ethics
  • 2.1.3. Organization Performance
  • 2.1.4. Non profit organization
  • 2.2. Theoretical Literature review
  • 2.2.1. Principle of Aristotle’s Virtue Ethics
  • 2.2.2. Principle of Utilitarianism
  • 2.2.3. Principle of Deontology
  • 2.2.4. The Employees’ Perceptions towards Business ethics
  • 2.2.5. The Business ethics and Employees’ Commitment to work
  • 2.2.6. What Influences Employee’s decisions and Behaviour at the Workplace
  • 2.3. Empirical Literature review
  • 2.4. Research Gap

Chapter Three

Research Methodology

  • 3.0. Introduction
  • 3.1. Research Approaches
  • 3.2. Research Design
  • 3.3. Study Area
  • 3.4. Study Population
  • 3.5. Population Sample
  • 3.6. Sampling Procedure
  • 3.7. Methods of Data Collection
  • 3.8. Validity and Reliability of Data
  • 3.8.1. Administration of data
  • 3.9. Data Analysis
  • 3.10. Review of Guidelines Manuals

Chapter Four

Data Presentation, Discussion and Analysis

  • 4.0. Introduction
  • 4.1. Data Presentation
  • 4.2. Results, Analysis and Discussion
  • 4.2.1. Demographics of respondents
  • 4.2.2. Cross tabulation analysis and Interpretation
  • 4.2.2.1. Working Experience of respondents
  • 4.2.2.2. Type of Non profit organization (NPO) of respondents
  • 4.2.3. Frequency analysis and Discussion
  • 4.2.3.1. Employees’ perceptions towards business ethics
  • 4.2.3.2. Business ethics and employees’ commitment to work
  • 4.2.3.3. What Influences Employee’s decision and Behaviour
  • 4.2.3.4. Discussion
  • 4.2.4. Measure of Relationship
  • 4.2.4.1. Discussion

Chapter Five

Conclusion and Recommendations

  • 5.0. Introduction
  • 5.1. Summary of the Findings
  • 5.1.1. Employees’ perceptions on Work place ethics
  • 5.1.2. Business ethics and Employees’ commitment to work
  • 5.1.3. Influencers of Employee’s decisions and Behaviour at the Workplace
  • 5.2. Conclusion
  • 5.3. Recommendations
  • 5.3.1. Implication of the Results
  • 5.3.2. Areas for Further Studies
  • References
  • Appendices
  • Questionnaire

Chapter One


Introduction

1.1. Background of the study

Worldwide, changes are taking place tremendously. One change is affecting all countries around the world including Nigeria. Some scholars urge that the only thing that is permanent in life is change. No situation is permanent in life. Thus, the Nigerian work environment has become liable to change, considering the dynamic and complex issues that are faced daily. The emerging trend in work that is beginning to serve as a mark of merit or critical edge is the level of business ethics that is dwelling within an organization. In the face of the emerging world economy, an organization that is involved in a proper framework for good governance must practice work ethics and incorporate good values as part of its organizational culture if it must achieve higher performance (Omisore et al, 2015).
In a present world, work ethics has been an interesting subject in management and business in general, due to its importance in evaluating employees’ behaviour and performance and it is so critical to organization performance (Kapp and Parboteeah 2008, Schminke et al. 2005). Companies and institutions all over the world, both public and private maintain codes of corporate governance for managing ethical performance (Rossouw, 2005).

Despite its importance still no single organization is safe from corporate scandals (Samir et al; 2015), in years malpractices have been observed in organizations which go beyond legal and ethical context. Different cases have been reported in various countries worldwide in regard to the business ethics and organization performance. In the United States of America (USA) for example, a case study of ENRON recorded the high risk of accounting practice which is an element of unethical practices, and other cases of World Com and Tyco (Komari & Fariastuti, 2013).
It has been argued that non observance or non existence of some set of ethical values have been a contributory factor to the Africa predicaments in leaderships in most African states (Agbude & Etete, 2013). Developing countries for instance Nigeria faced corporate failures on banking sector in 1997, 26 commercial banks failed due to financial irregularities such as AfriBank Plc and Bank PHB (Bello S.M, 2012).

Kenyan, Mauritian, and South African codes take the lead in venturing deeper into what the governing of ethical performance entails beyond developing a code of ethics. The most comprehensive recommendations on the governance of ethics are to be found in the second King Report on Corporate Governance for South Africa (IoD of South Africa, 2002).

Nigeria since 1994 has been in battle with evolved corruption which spiralled out as a result of unethical practices in the offices involving public and private workers and leaders, and that affected performance of institutions (Heilman & Ndumbaro 2002). According to Bisimba & Peter, 2015, LHRC & ZLSC, 2015 and LHRC, 2016 different scandals witnessed as a result of malpractices in the offices such as the case of Radar bought from UK’s BAE Systems, the EPA scandal, the David Jairo scandal, Tegeta Escrow and the Richmond(Dowans) saga.

Recently, The government of Nigeria suspended TRA Commissioner General and five other senior officials including his deputy reason being missing 349 containers valued at 80bn/- that were not accounted for in tax revenue which the state ordered investigations (Kazoka, 2015, Mbashiru, 2015). The government of Nigeria also fired a home affairs minister who accused of entering the chambers of parliament under the influence of alcohol (Faith Karimi, 2016). These and more depicts noticeable deterioration of morals in the society of Nigeria in general, of which remained a challenge even to the Ethics Secretariat in implementation of the Public Leadership Code of Ethics (PLCE) where by the complaints against the breach of the PLCEA increased from 74 in the FY 2009/10 to 114 in the FY 2012/13 (Ethics Secretariat, Annual performance report 2012/13).

The above considerations show that business ethics have a big role to play in the organization setting to drive the performance of the organization, though there are matters to be dealt with critically to make it vital.


1.2. Statement of the problem

The experience of last twenty years of Nigeria being in battle with erupted corruptions and frauds in various forms resulted by unethical practices in offices affected institutions’ public images and distorted morals among workers and leaders (Bisimba & Peter (2015), LHRC & ZLSC (2015)). These necessitated the undertaking of different measures that were instituted to oversee and control organizations’ good governance, work ethics and performance including formation of PCB, Ethics secretariat and CHRGG. However, little change in attitudes, social structures and power relations has been observed taking place from time to time. (Heilman & Ndumbaro, 2002).

To date Nigeria is still making more efforts to fight against unethical practises in offices for instance the establishment of Nigeria Public Servant Act 2005 and the 2003 Public Servants’ Codes of Ethics. The design of business ethics identified to be imperative to organization to regulate acts and practices of workers while at work to reduce unethical issues that affect the organization performance such as bribery, corruption, fraud, facilitation payments, discrimination, harassment or bullying and other misconduct at workplace (Webley, Basran, Hayward & Harris, 2011 cited in Bello S.M, 2012).

Different scholars argued how important business ethics it is, to the performance of public organizations, such as study done at DAWASCO by Msanzi (2013) in Dar es salaam region. However, this study context aimed at establishing the influence of business ethics on the performance of a nonprofit organization in Uyo in Nigeria.


1.3. Significance of the study

This study is of the essence and useful to the government and nonprofit organizations (NPOs) in Nigeria in establishing the influence of business ethics and its contribution towards organization performance. It gives the measures and recommendations which will impact positively performance of employees and organization in general if well capitalised. It provides also challenges for other researchers to carry out similar research on business ethics and add to their existing knowledge. It also offers inputs to policy makers. Finally the study is a part of the requirements for the award of the MBA Degree offered by Mount Meru University.


1.4. General Objective

The general objective of the study was to examine the business ethics and organizational performance in the goal attainment of business.


1.5. Specific Objectives

In this study the specific objectives were:

  1. To explore employees’ perceptions towards business ethics in non profit organization.
  2. To assess the relationship between business ethics and employees’ commitment to work in non profit organization.
  3. To determine what influences employee’s decisions and behaviour in non profit organization.

1.6. Research Questions

In this study the research questions were;

  1. What are the employees’ perceptions towards business ethics in non profit organization?
  2. What are the relationship between business ethics and employees’ commitment to work in non profit organization?
  3. What influences employee’s decisions and behaviour at the workplace?

1.7. Research Hypothesis

This study used alternative hypothesis where by researcher predicted that, there was a correlation between business ethics and organization performance.

  • Ho. There is no relationship between work ethics and organization performance.
  • H1. There is relationship between work ethics and organization peformance.

1.8. Scope and Limitations of study

Since the study on ethics is wide, this research focused mainly on the influence of business ethics on organization performance in non profit organizations. But due to limited time and financial constraints, this research considered only seven NPOs operating in Uyo in Akwa Ibom state where research gap was identified. It was also impossible to obtain data from all the employees of the above chosen organizations; thus, the study only took sample of few employees who were able to give required information from each of those organizations which best represented the entire population of the study. The researcher also faced problem in obtaining reliable data, in some case there was no access to secondary data as were treated as a confidential, in search of data researcher had to use also online resources such as organizations’ websites and google search engine.

Another problem was that some of the respondents were not ready to cooperate especially in filling questionnaires; they feared that their informations would be disclosed to other people, thus researcher based on those who returned questionnaires that were sufficient to accomplish the purpose of this study.


1.9. Conceptual Framework

The conceptual framework in this research provided a basis for understanding the influence of business ethics on orgnisation performance.

1.9.1. Independent Variable

The independent variable that the study takes in account is the work place ethics which includes honesty, fairness, respect, caring and objectivity. The presences of such qualities influence the performance of an organization its proper implementation in the workplace is expected to lead to transparency and accountability, effectives, efficiency, quality of service delivery, development and goal achievement in organization.

1.9.2. Intervining Variables

Furthermore, the intervining variables include government policy, donors’ conditions, individual values or prior experiences. The supportive government policy, donors’ conditions and individual values and past experiences that support good ethical practice will enhance business ethics and improve organization performance and the opposite is also true.

1.9.3. Dependent Variable

The dependent variable on the other hand includes effectivess, efficiency, quality of service delivery, transparency and accountability, development and goal achievement. Business ethics is expected to enhance employees and employers to be honest, objective, respectful, fair, caring.

These inturn will lead to transparency and accountability, effieciency, effectiveness, improve quality of serivce delivery, development and goal achievement in the organization.

Independent Variable Dependent Variable

Source: Developed by the Researcher (2016)


1.10. Ethical Consideration

Ethics are self-regulatory guidelines for making decisions and defining professions. By establishing ethical codes, professional organizations maintain the integrity of the profession, define the expected conduct of members and protect the welfare of subjects and clients (Shamoo and Resnik, 2009). In this study, ethical issues were accorded with high priority and information was obtained from respondents. In this regard, participants’ consent was obtained by making prior consultations informing them on the relevance and the need for the study. Second, the researcher observed the right of the respondents to privacy and confidentiality of the information they provided. Last, the researcher ensured that neither the names nor personal identities were associated with the information the respondents gave. Also, letters of permission were sought from the Mount Meru University to the seven (7) non profit organizations in Uyo in Akwa Ibom state.


Chapter Five


Conclusion and Recommendations

5.0. Introduction

This chapter provides a summary of findings; conclusion of all works performed in this thesis report and experienced elements as recommendation for others who will be concerned in undertaking a similar research title and the society in general.


5.1. Summary of the Findings

This research made an effort to determine the relationship between business ethics to organization performance particular NPOs in Akwa Ibom state. The finding show that there is a weak positive correlation between business ethics and organization performance, that means business ethics influences organization performance. The summary of the findings were as follows;

5.1.1.Employees’ perceptions on Work place ethics

The information obtained from the data gathered reveal that only 53 percent strongly agreed that business ethics can help to improve organization performance, and 46 percent agreed on that, while 1 percent neither agreed nor disagreed. On the other hand during interview respondents (99 percent) admitted that business ethics contribute towards organization performance.

Majority of respondents as shown in result of data collected believe in business ethics that it can influence organization performance and only 1 percent of them said that they don’t think so. Considering majority who responded positively organization should enhance awareness of the business ethics for the better performance of organization.

5.1.2.Business ethics and Employees’ commitment to work.

From the data it shows that 31 percent strong agreed that if efforts are made to ensure that all employees fully implement ethical standards at work, indeed employees’ commitment to work shall produce better results than now and, 56 percent agreed on that. On the other hand 11 percent were neither agreed nor disagreed, while 2 percent disagreed on that.

This implies that a total number of respondents suggested that, efforts should made by respective non profit organization to ensure that employees fully implement ethical standards to increase commitment to work that in return shall produce better results. Apart from the circumstances revealed, respondents suggested the strategies to be taken in order to improve business ethics.

The results show that business ethics is aligned with the organization performance. Only that for future performance strategic goals and mechanisms on strengthening business ethics need to be laid down and ensure all employees are aware of that.

5.1.3.Influencers of Employee’s decisions and Behaviour at the Workplace.

The findings show that 13 percent of respondents strongly agreed that organization provides various training on ethical standards awareness and 53 percent of employees (48 respondents) agreed on that. On the other part 12 percent were not able to describe it at all and 18 percent disagreed while other 4 percent strongly disagreed on that.

This suggests that, such knowledge and skills on wokplace ethics have not been widely enhanced in the organization.

From interviewed respondents show that some (29 percent) were not able to describe organization ethical standards, and 42% they were ignorant of ethical standards, perceived it wrongly that they don’t like it, this shows that the management has not well implement ethical standards among employees. It is necessary to enhance and review ethical skills and knowledge for better organization performance.

On the basis of the results and discussion, it is recommended that non profit organization should put more efforts in ethical awareness training and seminars and implementation of ethical standards so that business ethics can be cultivated among the employees from the initial stages of their work and these can help to shape employees’ behaviour and decisions.


5.2. Conclusion

Business ethics once is stronger; honest, respect among employees, fairness, caring and objectivity will manifest to the highest extent, nonprofit organization will be able to access much more donor funding and have good reputation in the public and that will strengthen bond with country government. This in turn has good impact even to the performance of organization as far as effectiveness, efficiency, quality service delivery, transparency and accountability, goal achievement and development are concerned; these good qualities will be obvious. The experience in consideration of previous studies shows that organization with poor performance one of the factor letting organization to that condition is weaker business ethics or negative business ethics, and this sometime managers and leaders of organization are partially if not totally responsible for that (Msanze 2013).

The business ethics is the crucial part for the success of the organization to achieve its goals and objectives. The study revealed that organization has great challenge concerning with ethical issues, not all in organization really like the idea of having ethical standards that controls employees’ morals at workplace, that’s why in those selected nonprofit organizations, ethical standards were in place but not all interested on it or think that it influences performance of organization.

The study therefore, concludes that organization performance is a result of integration of several variables and that business ethics happen to be one of those though not the major role. Thus employees are argued to be supportive and agree to participate in ethical awareness training, seminars and meetings. They may at some point become involved in these disciplines in terms of intellectual and affective contribution, though, requires a higher level of personal involvement. The study of business ethics contributes in one way or another for better organization performance and is vital in achieving and maintaining viable success and sustainability of the nonprofit organization (Msanze 2013).


5.3. Recommendations

In enhancing business ethics, set below are recommendations taking into consideration respondents’ views and opinions. One, Leaders and senior managers should demonstrate ethical leadership at workplace.

Not only that but also introducing business ethics restoration committees that can be under HR department of organization in the workplace. The committees will be responsible for assessing and monitoring employees’ adherence to business ethics by the means of checking and reviewing the compliance to organizational ethical standards, appraising employees’ performance as agreed in contracts and compliance to job descriptions, at the same time receiving allegations on frauds, misconduct between employees, and any other ethical issues that are reported in various means and take constructive actions and where necessary provide disciplinary actions. This will create awareness among employees on the keenness to work entitled to them, hence will built in employees’ commitment to work which will then impact positively the performance of the organization. In addition to that for the benefit of nation, business ethics restoration centres functioning like ideal committee above can be opened all over the country and operate independently for major purpose of restoring business ethics for better organization performance.

There is a need also for responsible training institutions to enhance and emphasize on training on ethical conducts so that the graduate professionals can acquire adequate knowledge, skills on ethics and hence appreciate and adhered to business ethics.

It is recommended that, other stakeholders in the development industry such as government, religious, donor community and public institutions dealing with services delivery to the community and serves the public interest should also take a front role in ensuring adequate initiatives are in place to enhance business ethics. More to this, government should insist on publishing of NPOs investigation reports publicly that discovered misappropriation of donor funds and take actions against those who implemented those projects without adhering to agreed terms of government, donors and community including deregistration so that it can be example for other NPOs to change for better.

Consequently it is recommended that the responsible authorities and non profit organizations should invest in improve working condition as a part of influencing employees to adhere to ethical standards. This is because in acquiring an epic work performance, the employer has to consider also two sides of the coin. One featuring himself/herself and the other employees. While employees are subject to observing business ethics, the force to such adherence is coherent to employer’s role for creating a conducive work environment. The employee in some instance will only be geared to act in tandem with the ethical standards if motivated to do so, and such motivation is derived from satisfation that comes from conducive work environment set by employer.

5.3.1. Implication of the Results

As far as study is concerned researcher realized that organization performance can largely be illustrated basing on factors that are not ethical factors such as staff relationships, delegation and team buildings, strong senior/HR management, collaboration of likeminded organizations, networking and partnerships, employees’ capacity building, technical training, meetings and workshops. This is because the field of business ethics is rapidly developing core competencies, ethical standards and quality indicators for ethics case consultation. Organization policies have potential to influence culture and practices of entire non profit organization, with momentous consequences for country and specifically community they serve.

Nevertheless, ethical standards can be rendered ineffective if designed inadequately. Firstly ethical standards should cover set of issues such as conflicts of interest, gifts, hospitality, use of organization assets, elaborating kinds of frauds, actions on various employees’ misconducts. Further more ethical standards might be compliance-based, simply consisting of a set of rules that employees are expected to adhere to, rather than values-based and providing guidance on how to handle ethical dilemmas. Lastly the ethical standards might address employee behaviour at workplace but not director behaviour, and therefore exclude the most decision makers in the orgnaisation (Msanze 2013).

Best practise is that nonprofit organization should engage all employees, from top managers (CEO) down, in initial and periodical update ethical standards training sessions that review internal and external guidelines and standards. Training efforts should include hiring compliance consultants, online tutorials with compulsory tests, and global case studies (Msanze 2013).

5.3.2. Areas for Further Studies

While this study demonstrated contribution of business ethics in organization performance, still it does have its limitations. Firstly study has been conducted in NPOs and was limited to Akwa Ibom state only; hence the findings and conclusions drawn from research are representative of the NPO context only, it is recommended in future to include more than one region and the similar study to be done in other fields as well for instance extractive industries, universities, hospitals, banks, ministries, agencies, TVs, mobile companies, churches, police force, country army, TRA, Airports Authority, Ports Authority, tourism companies, agriculture based companies, manufacturing and production companies around Nigeria. Secondly it would be a fruitful research contribution to compare the private and public sectors. Lastly, this study also recommends further research to incorporate other moderating variables such as the legal and regulatory environment and organizational characteristics.


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