How Does Corporate Ethics Contribute to Firm Financial Performance?

Abstract

Despite the increasing significance of corporate ethics, few studies have explored the intermediate mechanisms that explain the relationship between corporate ethics and firm financial performance. Drawing on institutional theory and strategic human resource management literature, the authors hypothesize that the internal collective processes based on employees’ collective organizational commitment and organizational citizenship behavior (OCB) mediate the ethics–performance relationship at the organizational level. The authors’ hypotheses are tested using data collected from 3,821 employees from 130 Korean companies and the respective companies’ financial performance data. The results indicate that collective organizational commitment and interpersonal OCB are meaningful intervening processes that connect corporate ethics to firm financial performance. To complement prior studies that identify a firm’s reputation and external relations as mediators between corporate ethics and performance, the present study highlights the need to examine microprocesses occurring within the organization to account for the ethics–firm performance relationship. Moreover, the present demonstration of collective organizational commitment and OCB as meaningful predictors of a firm’s objective performance indicates the significance of these employee processes in explaining organizational-level outcomes.

Heritage tourism, CSR and the role of employee environmental behaviour

“…Individual factors which have been studied include attitudes and beliefs (Jones, 2010;Chun, Shin, Choi & Kim, 2013;Manika, Wells, Gregory-Smith & Gentry, 2014), norms (Scherbaum, Popovich & Finlinson, 2008;Carrico & Riemer, 2011), self-efficacy (Smith & O'Sullivan, 2012), habit (Siero et al, 1996), motivation (Lee, De Young & Marans, 1995;Tudor, Barr & Gilg, 2008), knowledge (Siero et al, 1984) and socio-demographics (Wehrmeyer & McNeil, 2000). The most comprehensive study of employee environmental behaviour within the tourism literature focused on individual (individual environmental beliefs, personal environmental norms, self-reported environmental behaviour) and organisational variables (green organisational climate) as well as demographics to explain employee behaviour (Chou, 2014).…”

“…laws, standards) and organisational (macro research on boards and management groups) aspects, while ignoring those aspects at the individual or micro level, such as the role of internal stakeholders (e.g. employees; Hansen, Dunford, Boss, Boss & Andermeier, 2011;Aguinas & Glavas, 2012;Chun, Shin, Choi & Kim, 2013). While tourism CSR research has explored the micro level in connection to tourists' opinions, the role of employee behaviours is largely unknown with only a few exceptions (Deery et al, 2007;Chou, 2014).…”

An environmental social marketing intervention among employees: assessing attitude and behaviour change

“…Overall, the CSR literature suggests that the perception of an organisation's commitment to CSR is important in determining both the attitude and behaviours of employees. Within the CSR, business ethics and employee environmental behaviour literatures, organisational commitment has also been used to predict employee engagement (Aguinis & Glavas, 2012;Chun et al, 2013). In addition, in studies exploring person-organisation fit, it is shown that the degree of similarity/dissimilarity between individual employee's values, beliefs and attitudes and those of the organisation has an effect on: 1) employee's commitment and employee-company identification (Turker, 2009;Kim et al, 2010); 2) how the organisation's behaviour is perceived by the employee; and 3) how much they identify with the organisation and judge the importance of their practices (Kim et al, 2010).…”

Impacto en las redes sociales de las Grandes Empresas Españolas: Reputación Corporativa, Integridad y Comportamiento Ético

“…Por ejemplo, Víc-tor y Cullen (1998) entienden las siguientes dimensiones de la ética empresarial: atenciones, leyes y códigos, reglas, instrumentación e independencia; por su parte, Treviño et al (1998) presentan 10 dimensiones, que son: el entorno ético, el enfoque en los trabajadores, la atención a la ciudadanía, la obediencia a la autoridad, la implementación de códigos, (Chun et al 2013).…”

“…Sin embargo, el interés que despierta el estudio de la ética en la empresa, casi desde sus comienzos, -años 50 del pasado siglo-ha venido marcada por el interés en conocer la relación entre la ética y el beneficio. Esa relación es, para la mayoría de los autores, positiva en el ámbito empresarial (Orlitzky, Schmidt y Rynes, 2003;Waddock y Graves, 1997;Chun, Shin, Choi y Kim, 2013), mientras que para otros resulta negativa (Bowie, 1998). Estos últimos afirman que la ética y el beneficio están inversamente relacionadas.…”