peer review

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PREDICTING BUSINESS ETHICS WITH ORGANIZATIONAL

COMMITMENT AND JOB SATISFACTION

Ana KLIKOVAC

Zagreb School of Economics and Management, Croatia

[email protected]

Katarina SOKIĆ

Algebra University College, Zagreb, Croatia

[email protected]

Abstract Examining the personal characteristics that affect ethical behavior is crucial since corporate

citizenship behavior includes business ethics as one of its fundamental components. The main

goal of the current study is to examine relations between organizational commitment, work

satisfaction, and business ethics, as well as gender differences in these variables. Data were

collected using the business ethics scale, organizational commitment scale, and work

satisfaction scale from a sample of 243 workers (164 males, 79 women) at Metal Product Ltd.

from Zagreb, which produces electrical equipment. As expected, both men and women

demonstrated positive associations between organizational commitment and business ethics

scales. Moreover, only women demonstrated positive relationships between the business ethics

and work satisfaction. Organizational commitment positively correlated with job satisfaction

in men but not women. Regression analysis results showed unique predicted relationships

between the organizational commitment scale and business ethics in both men and women, as

was expected. The relationship between job satisfaction and business ethics varied by gender;

job satisfaction strongly predicted business ethics only in women while not in men. 29% of the

overall score variation in men's business ethics and 24% in women's business ethics were

exclusively explained by organizational commitment and work satisfaction. According to the

study's findings, there are some gender differences in the relationships between organizational

commitment and work satisfaction as well as in the relationships between business ethics and

organizational commitment. Overall, the findings point to the importance of organizational

commitment and job satisfaction in the explanation of business ethics.

Keywords: business ethics, organizational commitment, job satisfaction, gender differences

JEL classification: M10, M12

Introduction

Ethics, values, integrity, and responsibility are essential in today's workplace, believing that

strong ethical standards are necessary for excellent business. It is widely acknowledged that

high ethics can positively impact an organization's economic performance (Shaltegger &

Burritt, 2018). Painter-Morland & Bos (2011) emphasize the role of a code of ethics for the

stability and reputation of companies, as “establishing and maintaining an ‘ethical culture’ by

communicating core corporate values is intended to minimize the risk of reputational damage,

associated erosion of confidence and loss of business.” Moriarity (2002) identified key focus

points that shape individuals’ actions and their characters: (1) business ethics which puts the

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focus on the actions and character of individual people engaged in business, and (2) laws and

policies. The role of laws and regulations in shaping human behavior and ethics can have two

effects. One is to forbid the action that is considered morally permissible. The other is to allow

(when not explicitly forbidden by the law) actions that are considered morally wrong. Lee &

Berleur (1994) examined the implementation of the code in relation to person’s honesty and

have concluded that “codes, like laws, tend to keep the honest persons honest and have little

impact on those who chose to ignore their precepts or who have never been exposed to their

tenets. Moriarity (2002) discusses the difference between ethics and morality. According to a

summary of the relevant literature on ethics, he explains that “ethics is often understood to have

two components: morality, which is concerned with how we relate to others, and prudence,

which is concerned with how we relate to ourselves. Sometimes morality is understood to be

personal, while ethics is understood to be interpersonal or social.

Employee commitment is based on loyalty, identification with the organization, compatibility

with its principles, and other factors. One such factor is whether employees feel appropriately

compensated for their labor (Blanken &Schrieber, 2005). Satisfaction with the organization

should be immediately impacted by compatibility with values or character. The most important

finding for modern business and the application of ethics was made by Cameron et al. (2004),

who established a statistically significant link between perceived ethics and organizational

outcomes. Contrary to popular belief, which holds that applying ethics results in undesirable

compromises, these findings demonstrate that ethics positively impacts economic outcomes.

Business ethics are associated with working attitudes and values, employee behavior at work,

performance, distinct personality traits, demographic factors, and educational attainment (e.g.,

Fakunjoju, 2018; Zabel et al., 2016). Companies may have a variety of values that are clearly

marketing-related, such as those that govern the calibre of goods and services, the language

used in advertisements, the choice of distribution methods, and how clients are handled.

Corporate ethical values, however, serve as the foundation for all of these particular values.

Several studies document gender differencies in managers' and aspiring corporate leaders'

ethical perceptions. This research stream's overall finding is that men are much more likely than

women to act unethically, while women are significantly more likely than men to perceive

certain dubious behaviors as unethical (see McCabe et al., 2006). However, other studies,

indicate that there are no variations in corporate ethics between men and women based on

gender (e.g., Roxas, & Stoneback, 2004). Given these inconsistent results, more research is

required to determine how other contextual and individual factors, such as socialization, job

satisfaction, loyalty to the company, motivation, gender equality, etc., affect business ethics.

Business ethics and organizational commitment

One of the main work-related mindsets that demonstrates how closely an individual identifies

and feels a connection to the organization is organizational commitment (Mowday, Steers &

Porter, 1979). Numerous studies demonstrate that unique job features, such as job demands,

business problems, competencies, range of abilities and skills, and task interdependence, are

important determinants of organizational loyalty (Judge & Kammeyer-Mueller, 2012).

Communication, management style, and organizational justice are the main organizational

determinants of this attitude toward work. On the employee side, personality qualities,

particularly conscientiousness, extraversion, and neuroticism, have a significant impact.

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According to Shanker and Bin Sayed's (2015) investigation into the connection between

emotional intelligence and organizational commitment, affective loyalty to the organization is

significantly predicted by emotional intelligence, including its components such as self-

awareness, focus on problem-solving, assertiveness, empathy, self-confidence, and managing

others. Employee despair and poor management practices may cause firms where employees

express their desire to leave. Only the imagined duty to stay in such a circumstance ties the

person to the company.

The Eagly & Chaiken (1993) model (E&C model), one of the most popular models of

organizational commitment, demonstrates that while the influence of organizational loyalty on

behavior is indirect (i.e. mediated), relevant routine behaviors (for example, certain habits) can

directly influence certain behaviors—even if the person does not develop an attitude toward

that behavior. This implies that organizational commitment to particular activities can be

reduced in the presence of strong habits. Generally, habits both directly and indirectly

contribute to the explanation of a person's behavior; that is, they are mediated by the attitude

toward the conduct and the associated intention.

This model's most significant contribution is the contrast between attitudes toward goals and

behaviour. As a result, attitudes toward conduct and intentions mediate the relationship between

attitudes toward goals and actual behavior. Both internal organizational elements and personal

characteristics are predictors of organizational commitment. According to research, job

features, such as job demands, job challenges, necessary competence, range of competencies

and skills, and task interdependence, are the most significant determinants (Judge &

Kammeyer-Mueller, 2012). When it comes to the company, what matters most is how managers

treat their staff, including their communication, empathy, professionalism, ability to work with

others, and sense of fairness. Trust, reciprocity, sharing of duties and responsibilities, and task

execution are crucial among coworkers. The size of the organization is something that is not to

that extent, and centralization is crucial. Conscientiousness, extraversion, and neuroticism have

a strong relationship with loyalty, just like job satisfaction does. Despite being conscientious,

work ethics, benevolence, and a thorough evaluation of skills and competency are all connected.

There hasn't been enough scientific research on the relationship between organizational

commitment and business ethics.

Hunt et al. (1989) findings strongly support the relationship between organizational

commitment and business ethics. A recent study (Lee &Vo, 2022) examined how the corporate

ethics of audit firms and the code of ethics affect the moral judgment of auditors in Vietnam.

The study's findings show that the code of ethics for professional accountants significantly

affects the auditors' ethical judgment. The results, however, only weakly support the idea that

the corporate ethics of audit firms influence the auditors' ethical judgment.

Lee (2020) investigated leaders and other company members interact to achieve business

sustainability performance as well as how both positive and bad employee behaviors might

affect these relationships. According to the study's findings, employee actions have a significant

impact on a company's sustainability performance. Employee actions can either promote greater

corporate citizenship behavior or reduce counterproductive work behavior, depending on

contextual or/and relational circumstances.

These results show how important it is to have strong relationships with direct managers as well

as ethical workplace condition.

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Business ethics and job satisfaction

Job satisfaction refers to an employee's affective attitude about their work, which comprises a

range of attitudes regarding various parts of their employment that have an impact on their

interaction with the business (Spector, 1997).

Job satisfaction is correlated with positive affectivity toward one's work, whereas negative

affectivity toward one's work is associated with lower levels of job satisfaction. Hertzberg's

two-factor theory of motivation (Herzberg, Mausner, & Snyderman, 1964) distinguishes

between hygiene elements and motivators when explaining job satisfaction. Because there is

little chance that employees will have an impact on these characteristics, hygienists offer a

possible source of unhappiness (e.g. salary, working conditions, job security, administration,

technical supervision, and benefits). In contrast, because they are associated with results that

the employee can control and self-actualization, motivators can be a source of potential job

happiness. These internal, intrinsic elements are associated with job satisfaction and have a

favorable impact on employee motivation. Achievement, acclaim, demanding work,

commercial success, career advancement, personal development, and well-being are some

motivators.

Locke's value theory (Locke, 1976) is another theory that explains job satisfaction. According

to this theory, the main elements of job satisfaction are values (also known as "subjective

demands of the mind"), value significance (importance of values for an individual), and value

perception (evaluation of the current situation and values). According to this view, a person can

alter the components of his or her job that he or she finds unsatisfactory.

Situational and dispositional factors might have an impact on job satisfaction (Judge & Klinger,

2007). Situational determinants for job satisfaction include things like the difficulty of the job,

the importance of the task, and feedback, whereas affectivity—that is, positive and negative

emotions and personality traits—are the most significant dispositional factors. According to

research, the top personality traits to predict job satisfaction are neuroticism, conscientiousness,

and extraversion (Judge & Kammeyer-Mueller, 2012). Work outcomes and organizational

behaviors including turnover, absenteeism, leaving the company, and job performance are all

correlated with job satisfaction. Job performance is most strongly correlated with job

satisfaction, particularly in more complicated jobs, according to meta-analytic research (e.g.,

Judge et al., 2001). Among Croatian scientists, one research (Jerneić & Kutleša, 2012) showed

that low job satisfaction significantly predicts the intention to leave the organization.

Significant differences in employee outcomes and workplace behavior are influenced by job

satisfaction. Less satisfied employees are more inclined to either explore alternative chances

and positions or find ways to reduce their involvement at work (Coomber & Barriball, 2007).

In the first situation, there is a voluntary exit or turnover; in the second, there is workplace

laziness and steadily rising absenteeism, or absence from work. Those who don't show up for

work are expressing their displeasure with their jobs, attempting to escape the unpleasant

aspects of their jobs, harming the company, and decreasing their productivity and contribution.

One of the first published studies (Vitell & Davis, 1990) examined the relationship between

business ethics and job satisfaction in a sample of experts in information system management

whose organizational positions ranged from programmer to head of information systems.

Several aspects of job satisfaction were examined: income satisfaction, promotions

satisfaction, coworker satisfaction, supervisor satisfaction, and work satisfaction. Findings

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showed that when top management emphasizes ethical behavior and is positive about the

connection between ethics and success, participants were more satisfied with the various

aspects of their jobs.

In a recent study, Al-Nashash et al. (2018) investigated how strong work ethics affected job

satisfaction among Jordanian bank employees. The study showed a positive relationship

between work ethics and job satisfaction. These results show that work ethic is one of the critical

characteristics to improving employee job satisfaction and other organisational outcomes.

Moreover, raising employee work satisfaction raises organizational commitment, reduces labor

turnover, and boosts productivity. Findings SEM analysis (Attar et. al., 2017) show that moral

leadership behavior has a beneficial impact on employees' job satisfaction. The findings from

this study support the theoretical idea that job satisfaction increases when ethical leadership

behavior is perceived to be more effective.

Current study: objectives and hypotheses

This study's main goal was to examine the relationship between organizational commitment,

job satisfaction, and business ethics among Metal Product Ltd. personnel as well as the gender

differences in these variables.

Based on the findings of the aforementioned studies (Al-Nashash et al., 2018; Attar et al., 2017;

Hunt et al., 1989; Lee, 2020; Lee & Vo, 2022; Vitell and Davis, 1990) and in light of the

presented theoretical knowledge the following hypotheses were created:

H1: Business ethics will be positively related to organizational commitment.

H2: Business ethics will be positively related to job satisfaction.

H3: Organizational commitment will be positively associated with job satisfaction.

H4: The associations between business ethics and organizational commitment and job

satisfaction differed across gender.

Methodology of research

Participants and procedure

The study sample consisted of 243 employees (164 men, 79 women) of Metal Product Ltd. for

the production of electrical equipment in Zagreb, Croatia. The Business ethics scale, the

Organizational commitment scale, and the Job satisfaction scale were all given to participants

in an anonymous manner. As the head of the internal audit at Metal Product Ltd., the first author

of this study conducted the research. During working hours, employees were requested to

anonymously complete a battery of self-report exercises; they were not paid for taking part.

Table 1 presents the participant's demographic profile.

Table 1: Demographic profile of the participants

Demographic factors Number of employees Percentage

Gender

Men 164 67%

Women 79 33%

Years of business experience

Less than 1 year 52 21%

1 to 5 years 80 33%

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Demographic factors Number of employees Percentage

5 to 10 years 67 28%

More than 10 years 44 18%

Source: authors.

Measures

Business ethics scale

Business ethics was measured using 11 items specially created for this study. These questions

were based on similar self-reported lists of ethical attitudes, like those of Ruch & Newstrom

(1975). The questionnaire includes questions about moral conduct. On a scale of 1 (strongly

disagree) to 5, participants indicated how much they agreed or disagreed with the statements

(strongly agree). The sum of the ratings for the linked items is divided by the total number of

items on the scale to determine the final score. This scale's internal psychometric properties

were adequate (α =.83). Scale of organizational commitment.

Organizational commitment scale

The organizational commitment scale, which was developed for the objectives of this research

based on a three-component measurement, was used to measure organizational commitment

(Allen & Meyer, 1991). The Organizational Commitment Scale has 15 items with ratings on a

3-point Likert scale, with 1 being disagreed and 3 beings agree, and it has strong internal

consistency (α = 94).

Job satisfaction scale

For the purpose of this study, we developed a scale to measure job satisfaction that takes into

account the compensation, nature of the work, coworkers, and relationships with superiors

(managers). Similar inventories of one's own creative activities, like the Work Satisfaction

Survey, served as the basis for this measure (Spector, 1997). Participants rate their level of

satisfaction with specific aspects of their jobs on a 5-point Likert-type scale (from not satisfied

to extremely satisfied). The sum of the ratings on related items was used to compute the scale's

scores. The Work Satisfaction Scale has shown strong internal reliability coefficients in this

study ( α = 72).

Data analyses

Two different analytical methods were applied in the current study. Firstly, the bivariate

associations between business ethics, organizational commitment, and job satisfaction were

measured using zero-order correlations (Pearson's r). Also, we performed regression analyses

in which the organizational commitment and job satisfaction scale scores were entered as

predictors of criteria variables comprising the business ethics scale in order to evaluate for

particular connections of scores on each research variable. Given that the study variables

differed by gender, hierarchical regression analyses were conducted, with age included as a

control variable in each case at Step 1, organizational commitment, and job satisfaction scale

scores in Step 2, and age also included as a control variable in each case at Step 2.

In order to test for potential gender differences in the relationships between business ethics,

organizational commitment, and job satisfaction, analyses were run with the inclusion of gender

x organizational commitment and gender x job satisfaction interaction terms. Although the rise

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in R2 at Step 3 was substantial for organizational commitment and job satisfaction, it did not

show any gender differences in the association between business ethics and job satisfaction.

Results

Descriptive statistics

Table 2 displays the descriptive information from each questionnaire (means, standard

deviations, range, skewness, and kurtosis), gender differences in mean scores, and values for

internal consistency. Every scale that was employed showed a sufficient range and internal

psychometric properties. All of the used scales' Cronbach's alphas were higher than.70

(business ethics scale: α = .83; organizational commitment scale: α = .94; job satisfaction scale:

α = .72), showing sufficient internal consistency. The scales' skewness and kurtosis fell within

the normal distribution's suggested range (between -2 and +2). (Gravetter & Wallnau, 2014).

The mean levels of organizational commitment, job satisfaction, and business ethics were

compared between men and women using the T-test. The findings of the T-Test revealed gender

differences in corporate ethics and organizational commitment, as shown in Table 2. When it

came to job satisfaction, women outperformed men but this difference is not statistically

significant.

Table 2: Internal consistency values for the total sample (N = 243), as well as descriptive

statistics for all scales in both men (n = 164) and women (n = 79)

Men Women Range

M SD M SD t Min. Max α Sk Ku

Business ethics

scale

24.19 7.89 20.66 5.77 3.42** 11 53 .83 .95 1.67

Organizational

commitment scale

19.10 6.68 16.75 3.72 3.17** 15 45 .94 1.92 1.45

Job satisfaction

scale

14.65 2.82 15.06 2.37 -1.11 4 20 .72 -.53 .46

Note: Internal reliability coefficients (α). Sk = Skewness, Ku=Kurtosis. **p (two-tailed) < .01.

Source: authors.

Correlation analyses

Simple bivariate (zero-order) correlations between the variables that were measured are shown

in Table 3. According to these correlations, men and women both demonstrated positive

associations between the organizational commitment scale and the business ethics scale (r =.55,

p < .001; r =.46, p < .001), supporting our hypotheses (H1).

The business ethics scale exhibited positive associations with the job satisfaction scale only in

women (r =.21, p < .05), but not in males, providing partial support for hypothesis 2.

The organizational commitment scale is, as anticipated, strongly correlated with job satisfaction

in men but not in women (r =.24, p < .01), which partially supports our hypothesis 3.

These correlation analysis results lead us to the conclusion that there are gender differences in

the relationships between organizational commitment and job satisfaction as well as the

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relationships between business ethics and organizational commitment, which is consistent with

our prediction (H4).

Table 3: Bivariate correlations between measured variables in Men (n = 164) and Women (n

= 79)

Men Women

Scale 1. 2. 3. 1. 2. 3.

1. Business ethics scale 1 .55*** .12 1 .46*** .21*

2. Organizational commitment scale 1 .24** 1 .17

3. Job satisfaction scale 1 1

Note: Values in the table are zero-order Pearson correlations calculated separately by gender.

*p < .05, **p < .01, ***p < .001 (two-tailed tests).

Source: authors.

Prediction of business ethics scores from organizational commitment and job satisfaction

The standardized beta coefficients (β) from regression studies are shown in Table 4, and they

illustrate the distinctive role that organizational commitment and job satisfaction scale play in

the prediction of business ethics. In regard to the study hypotheses, the results of study

examining associations between study variables, whether in similar or different directions, are

given below. According to the bivariate correlations provided in Table 3, which are consistent

with Hypothesis 1, organizational commitment strongly predicted business ethics for both men

and women (β = .54, p < .001 in men sample; β =.45, p < .01 in women sample).

The relationship between job satisfaction and business ethics was different depending on

gender: only women (β =.29, p < .05) and not men (β =.07, p =.39) demonstrated a significant

relationship between job satisfaction and business ethics. This finding partially supported

Hypothesis 2. In terms of percentage, organizational commitment and job satisfaction together

explained 29% of the overall score variance in men's business ethics and 24% of the total score

variance in women's business ethics (see Table 4).

Table 4: Multiple regressions predicting business ethics from organizational commitment and

job satisfaction in Men (n = 164) and Women (n = 79)

Business ethics

Predictors Men Women

β t p β t p

Organizational commitment .54*** 7.23 .000 .45** 3.25 .002

Job satisfaction .07 .87 .390 .29* 2.09 .043

R .55*** .53**

R2 .30*** .28**

Adj. R2 .29*** .24**

Note: Standardized regression coefficients (β). R = coefficient of determination. R2 = squared multiple R. Adj. R2

= Adjusted R Square.

*p < .05, **p < .01, ***p < .001.

Source: authors.

Discussion and conclusion

Investigating relations and gender differences in organizational commitment, work happiness,

and business ethics among employees of Metal Product Ltd. was the main goal of this study.

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Overall, the results supported the assumptions and showed that organizational commitment and

job satisfaction were both related to business ethics.

However, these relations are partly gender-based. As anticipated, business ethics is positively

correlated with organizational commitment in both men and women on a bivariate level. Also,

as expected, we find a link between women's employment satisfaction and business ethics. This

association was not statistically significant for men.

Organizational commitment, contrary to what was expected, has a positive relationship with

job satisfaction in males but not in women. These findings supported earlier research by

demonstrating that relationships between organizational commitment and work satisfaction and

between business ethics and job satisfaction partially depend on gender (e.g., McCabe et.al.,

2006; Robin & Babin,1997). It is possible that these results are related to the fact that the mean

values on the business ethics and organizational commitment scale were significantly higher in

men. According to Harðardóttir et.al. (2019), additional studies are required to evaluate these

associations with sample employees from different companies. The research should be

performed on a bigger sample of women because our sample of women is smaller than the

sample of men, which is another important consideration.

Our hypotheses are only partially supported by the results of the multiple regression analyses.

As predicted, organizational commitment was found to be unique positive predictor in

explaining business ethics in both men and women. This finding is consistent with how

organizational commitment is conceptualized as an adaptable aspect of organizational

citizenship behavior (Organ, 1988). Altruism, courtesies, diligence, and civic virtue are

examples of this kind of organizational behavior (Blakely, Andrews & Moorman, 2005).

Altruism may also be relevant to ethical behavior, in that it includes elements such as being

sympathetic, benevolent, kind-hearted, and willing to promote’ others' welfare at the expense

of one’s own. According to Organ(1988), the dimension of altruism is defined as behavior

aimed at helping a specific colleague in performing a work task or solving a problem related to

work organization.

Also, in line with predictions, job satisfaction was found to be unique positive predictor in

explaining business ethics in women but not in men. This finding is in line with the view that

factors influencing job satisfaction are situational and dispositional (Judge & Klinger, 2007).

The situational factors include, for example, the complexity of the job, the significance of the

task, and feedback, while the most important dispositional factors of job satisfaction include

affectivity, i.e., positive and negative emotions and personality traits. Research shows that

neuroticism, conscientiousness, and extraversion are the best predictors of job satisfaction

(Judge & Kammeyer-Mueller, 2012).

In conclusion, the current research's findings add to the body of data showing that

organizational citizenship behavior, which includes business ethics, organizational

commitment, and job happiness, is a complex construct.

While interpreting the results of this study, some limitations need to be considered. One is that

the study sample consisted of employees of a single company rather than employees of different

companies or some other sample from the working population. Future studies should be

conducted on a larger sample, primarily on a larger sample of women, so that we can better

gender differences in the relationships between the study variables. In addition, the reliability

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and validity of the used scales, which were modeled for the purposes of this research, should

be additionally examined including testing factor structure invariance of the used scales across

gender.

The next important limitation relates to our dependence solely on self-report measures, which

would have exaggerated observed relationships between business ethics, organizational

commitment, and job satisfaction ratings.

Notwithstanding these limitations, the current study revealed unique predictive relations for

organizational commitment and job satisfaction with the business ethics and differential

associations in men and women, thereby providing new insights into the overlap and

distinctiveness among them.

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