Effects Of Organizational Ethics On Employee Performance

Project and Seminar Material for Business Administration and Management BAM

Chapter One

Introduction

1.1 Background to the Study

Worldwide, changes are taking place tremendously. One change is affecting all organisations around the world including the Nigerian banking sector, most especially, Guaranty Trust Bank. Some scholars have opined 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 workplace 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).

Presently, in Nigeria today, work ethics has been an interesting subject in management and business in general, due to its benefits in evaluating employees’ behaviour and performance and it is so critical to organisation 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, no single organisation is safe from corporate scandals (Samir et al; 2015), in years malpractices have been observed in organisations which go beyond legal and ethical context. Different cases have been reported in various countries worldwide in regard to the workplace ethics and organisational 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).

However, 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 particularly in Nigeria in leaderships (Agbude & Etete, 2013). Developing countries for instance Nigeria faced corporate failures on banking sector in 1997, twenty six 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, for the past years 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. Reports of scandals, questionable business and political behaviour in many organizations are extremely increasing their rate. Anand et al. (2004) stipulated that organizational scandals involving multinationals like Enron, WorldCom, Global Crossing, Parmalat and how they height attention to the urgent need for corporate governance, corporate social responsibility and organizational ethics. However, ethics programs are done to stimulate ethical conducts in organizations and assist employees to act in a morally responsible way, McDonald (1999). This research work will there investigate the effects of organizational ethics on employee performance by using Guaranty Trust Bank, Calabar, Cross River State, Nigeria as a case study.

1.2 Statement of the Problem

For quite some time now banking sector has been seen as one of the sectors that hires workers every now and the and this is as a result of expansion of their customers base and this leads them to wanting to hire workers day in day out. In the process of hiring workers, they have their laid down rules and regulations, which everyone in the organisation must abide with. This, they call, organizational ethics. Several studies have shown that organization with illegal records have not only been forced to pay for investigations and fines but have also suffered significant stock price decline and report, on average, lower profitability rates than their law-abiding counterparts. In fact, many have experienced sharp sales drops, higher equity costs and severe damage to their reputation among customers and other stakeholders.

These necessitated the undertaking of different measures that were instituted to oversee and control organizations’ good governance, work ethics and performance. However, little change in attitudes, social structures and power relations has been observed taking place from time to time (Heilman & Ndumbaro, 2002). The design of workplace ethics identified to be imperative to organisation to regulate acts and practices of workers while at work to reduce unethical issues that affect the organisation 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 workplace ethics it is, to the performance of any organisation, be it public or private organisations. However, this study context aimed investigating the effects of organizational ethics on employee performance by using Guaranty Trust Bank, Calabar, Cross River State, Nigeria as a case study.

1.3 Research Objectives

The study has both general objective and specific objectives. The general objective or main objective of this study is to examine the effects of organizational ethics on employee performance by using Guaranty Trust Bank, Calabar, Cross River State, Nigeria as a case study.

The specific objectives are:

To assess the relationship between workplace ethics and employees’ commitment to work at Guaranty Trust Bank
To examine employees adherence towards ethical conducts as a parameter for organization performance
To examine the awareness of employees ethical conducts on the organization performance

1.4 Research Questions

The following are some of the questions which this study intends to answer:

What is the relationship between organizational ethics and employees’ commitment to work at Guaranty Trust Bank?
What the level of employees’ adherence towards ethical conducts as a parameter for organization performance?
What is the level of the awareness of employees ethical conducts on the organization performance?

1.5 Research Hypotheses

The following shall be the research hypotheses to be tested in this study:

There is a significant relationship between organizational ethics and employees’ commitment
There is a significant influence of organizational ethics and employee performance

1.6 Significance of the Study

This study is of the essence and useful to the government, stakeholders, managers and non-profit organisations in Nigeria in establishing the influence of organizational ethics and its contribution towards organization performance. It gives the measures and recommendations which will impact positively performance of employees and organisation in general if well capitalised. It provides also challenges for other researchers to carry out similar research on organizational ethics and add to their existing knowledge. It also offers inputs to policymakers.

1.7 Scope of the Study

This research focused mainly on the effect of organisational ethics employee performance by using Guaranty Trust Bank, Calabar, Cross River State, Nigeria as a case study. This study will be therefore carried out in four Guaranty Trust Bank, branches in Calabar, Cross River State, Nigeria.

1.8 Limitation of the Study

Due to limited time and financial constraints, this research will consider only four Guaranty Trust Bank, branches in Calabar where research gap was identified. It will be also impossible to obtain data from all the employees of the above chosen organizations; thus, the study will only take sample of few employees who will be able to give required information from each of those organizations which will be best represent the entire population of the study. The researcher will also be faced with the problem in obtaining reliable data, in some case there will be no access to secondary data as will be treated as a confidential, in search of data researcher will have to use also online resources such as organisations’ websites and google search engine.

1.9 Definition of Terms

The following terms were used in the course of this study:

Organisational ethics:

Organisational ethics can be described as a set of values, which include the right attitude, correct behaviour, respect for others and effective communication in the workplace.

Employee performance:

Job related activities expected of a worker and how well those activities were executed. Many business personnel directors assess the employee performance of each staff member on an annual or quarterly basis in order to help them identify suggested areas for improvement.

Ethics:

The origin of word ‘ethics’ is Greek ethos, meaning ‘character’, so that an ethical person is one who has character. Plato and Aristotle stated that ethics is as ‘what we ought to do’. Thus it requires judgement and reasoning in decision making that raise questions regarding what is right, wrong, good or bad conduct, fair or just

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Frequently Asked Questions

Does ethical behaviour affect the performance of an organization?

Findings revealed that ethical behaviour has effects on the performance of an organization and that good ethical behaviour has a positive correlation with organizational performance. Suitable policy recommendations were offered which decision makers in business organizations and government functionaries will find highly useful.

What are the benefits of business ethics to an organization?

But the benefit of the organization is to make everyone commits with it according to a list or compact that will be clarified the business ethics from the organization perspective. So it is obligated to all of the employees so there will be punishment to the one who disobey it.

How do organizations deal with ethical issues challenging them?

Most organizations have come up with codes of ethics in dealing with ethical issues challenging them. Code of ethics is the set of moral principles used by an organization to steer the conduct of the organization, and employees in all their business activities both internally and externally.

Should every person have the ethics of business?

Although that every person should have the ethics of business, the organization’s administration has to put controls and punishment to make the employees commit the business ethics. You may find one of the employees who believes in business ethics and others do not care.

Why are ethics important in business?

It is understandably one of the given facts in the private healthcare sector that business and money play a dominant role … Maintaining our medical ethics seem to have become more and more compromised, and it is on us, the providers, to explore ways …

How to manage ethical issues in business?

In order to manage the ethical issues in business that arise in your organization, you first need to develop a thorough understanding of what those issues can look like.

How to deal with ethical dilemmas in the workplace?

Ethical dilemmas in the workplace can be more effectively dealt with if managers follow a few simple steps: Identify the ethical issues. Ethical issues exist, in a broad sense, whenever one’s actions affect others.

What are examples of ethical issues in business governance?

Although ethical issues in business governance might not always break laws, business governance problems break trust within an organization and cause future issues within a company hierarchy. Examples can include falsifying reports to deceive stakeholders and managers abusing positions of power when dealing with lower-level employees.

How do you identify ethical issues in the workplace?

Identify the ethical issues. Ethical issues exist, in a broad sense, whenever one’s actions affect others. In the workplace, a manager’s decisions might affect employees, customers, suppliers, creditors and shareholders. These are the stakeholders of an organization. Identify alternative courses of action.

Why are ethics important to businesses?

Your business can offer a great service or innovative product, but with questionable ethics, it might not even matter. Good business ethics are important to businesses for several reasons. Ethics Improves Your Business Reputation Business ethics help ensure a good reputation for your company.

Are your employees prepared to handle ethics issues?

According to the 2018 Global Business Ethics survey, employees are more likely to apply ethical reasoning when their company clearly demonstrates why business ethics is important. Ninety-nine percent of U.S. employees who experience a strong ethics culture said they’re prepared to handle ethical issues.

What are some of the most common business ethics?

The following are some of the more common business ethics. 1. Personal responsibility Each person who works for a business, whether on the executive level or the entry-level, will be expected to show personal responsibility.

Is your company’s ethics program Good Enough?

While corporate ethics programs have become common, the quality varies. According to the 2018 Global Business Ethics Survey (GBES), less than one in four U.S. workers think their company has a “well-implemented” ethics program.