The Impact of Ethical Climate Types on Facets of Job Satisfaction: An Empirical Investigation

Satish P. Deshpande

ABSTRACT. This study examines the impact of ethical climate types (professionalism, caring, rules, instrumental, efficiency, and independence) on various facets of job satisfaction (pay, promotions, co-workers, supervisors, and work itself) in a large non-profit organization. Professionalism was the most reported and efficiency was the least reported ethical climate type in the organization. Among various facets of job satisfaction, respondents were most satisfied with their work and least satisfied with their pay. None of the climate types significantly influenced satisfaction with pay. A professional climate significantly influenced satisfaction with promotions, supervisors, and work. It also significantly influenced overall job satisfaction. Those respondents who believed that their organization had caring climate were more satisfied with their supervisors. An instrumental climate had a significant negative influence on overall job satisfaction and satisfaction with promotions, co-workers, and supervisors. Rules, efficiency, and independence climate types did not significantly affect any facets of job satisfaction.

Introduction
Recent reviews of the ethics literature indicate that while researchers are taking active steps to
Satish Deshpande is an Associate Professor of Management at Haworth College of Business, Western Michigan University. He teaches human resource management courses. His current research interests include business ethics, managerial decision-making, and applied psychology in human resource issues. His publications include articles in the Academy of Management Journal, Compensation and Benefits Review, Human Relations, Journal of Small Business Management, and Organizational Behavior and Human Decision Processes.

understand ethical issues facing U.S. organizations, most of the research has been theoretical (Ford and Richardson, 1994; Murphy et al., 1992; Tyson, 1992). Subsequently, several authors have indicated a need for quality empirical research in business ethics (e.g., Ford and Richardson, 1994; Randall and Gibson, 1990). Some researchers have even identified various promising avenues for empirical research in business ethics (e.g., Dierkes and Zimmerman, 1994; Robertson, 1993). Recently Vitell and Davis (1990) suggested that managers may be able to enhance job satisfaction and maintain an ethical environment if presented with an evidence of a strong link between ethical climate of a firm and various facets of job satisfaction. They subsequently investigated the impact of ethical behavior on job satisfaction in a sample of 61 Management Information System (MIS) professionals. Among other things, Vitell and Davis (1990) found that MIS professional were less satisfied when unethical behavior was c o m m o n within the firm and more satisfied when the top management was perceived as supporting ethical behavior. Ethical climate and ethical behavior are two distinct concepts. The ethical climate of an organization is defined by the shared perception of how ethical issues should be addressed and what is ethically correct behavior. In fact current research suggests that one important factor that may influence ethical behavior o f employees is the ethical climate of an organization (Sinclair, 1993). Recently, Victor and Cullen (1990) investigated the different types of ethical climate within an organization. Their study used previous work done in ethical theory (Fritzche and Becker, 1984; Williams, 1985), moral develop-

Journal of Business Ethics 15: 655-660, 1996. 1996 Kluwer Academic Publishers. Printed in the Netherlands.

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instrumental, efficiency, and independence). Each type was measured using a four-point Likeret scale, with 1 representing "mostly false" and 4 representing "mostly true". Therefore, a low score shows the absence of a climate and a high score shows the presence o f a climate. The respondents were asked to respond to these questions in terms of how the climate of their organization actually is and not how they would like the climate to be. The items comprising these scales appear in Appendix 1. According to Table I, most of the respondents identified the presence of a professional climate (mean = 3.79). This was followed by rules climate (mean = 3.14), instrumental climate (mean = 2.73), caring climate (mean = 2.66), independence climate (mean = 2.26), and efficiency climate (mean = 2.06). In an analysis not shown here, the intercorrelations among various climate types ranged from -0.35 to 0.40. This is consistent with previous research which has shown that more than one climate type can exist at the workplace. TABLE I Dimensions of ethical climate Climate Mean Standard deviation 0.49 0.85 0.89 0.98 0.73 0.84

ment (Kohlberg, 1967, 1984), and sociocultural theories o f organizations (Schneider, 1983) to develop 36 moral climate descriptions. These moral climate descriptions were based on the type o f criteria (caring, principled, or instrumental) and the level o f analysis (individual, organizational, or humanity). A factor analysis of these moral climate descriptions resulted in six climate types (professionalism, caring, rules, instrumental, efficiency, and independence). We will use these climate types to measure the impact of ethical climate on job satisfaction. This study was conducted in a large non-profit organization. Non-profit organizations have virtually been ignored in the ethics literature. This is surprising given the evidence that a large number of non-profit organizations have come under a lot of scrutiny in the popular press for unethical and questionable activities (Sebastian, 1992; The Washington Post, 1992). Specifically, this study will examine: a. the ethical climate types, b. different facets of job satisfaction, and c. the influence of different ethical climate types on facets of job satisfaction and overall job satisfaction.

The study

Sample characteristics
The sample for this study consisted of a national sample of 252 middle level managers of a large non-profit charitable organization. The subjects were participants of a management development program sponsored by their organization. 206 managers responded to the survey (response rate of 82 percent). An average subject was a 37 years old female with 11 years of work experience.

1. 2. 3. 4. 5. 6.

Professionalism Caring Rules Instrumental ENciency Independence

3.79 2.66 3.14 2.73 2.06 2.26

A four point Likert-scale was used (1 = mostly false, . . . . 4 = Mostly true)

Job satisfaction
The second issue we wanted to examine was the different facets o f job satisfaction. Satisfaction with pay, satisfaction with promotion, satisfaction with co-workers, satisfaction with supervisors, and satisfaction with work itself were measured using four items for each facet. Items used to measure these facets were combined to form a

Ethical climate
We will first examine the presence of various ethical climate types in the non-profit organization. Victor and Cullen (1990) have identified six climate types (professionalism, caring, rules,

Ethical Climate and Job Satisfaction

measure o f overall j o b satisfaction. This scale has been used by various researchers in various fields including business ethics (Vitell and Davis, 1990). Each item was measured using a four-point Likert scale, with 4 representing "strongly agree", and 1 representing "strongly disagree". Thus a low score indicates high dissatisfaction and a high score indicates high satisfaction. Table II presents the mean, standard deviation, and the coefficient alpha for overall j o b satisfaction and each facet o f j o b satisfaction. A m o n g the various facets o f j o b satisfaction, respondents o f this study were most satisfied with

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their w o r k (mean = 3.20). This was followed by satisfaction with coworkers (mean = 2.97), satisfaction with supervisors (mean = 2.96), satisfaction with promotions (mean = 2.50), and satisfaction with pay (mean = 2.49). The coefficient alpha for these measures ranged from 0.72 to 0.84.

Ethical climate and job satisfaction

T h e third purpose o f this paper was to examine the influence o f different ethical climate types on various facets o f j o b satisfaction. Table III presents correlation and regression results. But it w o u l d be premature to draw conclusions from the correlations results. This is because (as stated earlier) many o f the predictors are intercorrelated (range - 0 . 3 5 to 0.40). Ordinary least square (OLS) regression procedure provides a stronger test o f the impact o f ethical climate types on facets o f j o b satisfaction. Regression analysis indicated that none o f the climate types significantly influenced satisfaction with pay. A professional climate significantly influenced overall j o b satisfaction and satisfaction with promotions, supervisors, and work. Those respondents w h o believed that their organization had caring climate were more satisfied with their supervisors. An instrumental climate had a significant

TABLE II Means, standard deviation, and coefficient alpha of different facets of job satisfaction Variable Mean Standard Coefficient deviation alpha 2.4943 2.4957 2.9698 2.9641 3.1983 2.8200 0.5932 0.5399 0.5158 0.5918 0.5088 0.3607 0.73 0.72 0.78 0.84 0.76 0.84

Pay Satisfaction Promotion Satisfaction Co-worker Satisfaction Supervisor Satisfaction Work Satisfaction Overall Job Satisfaction

A four point Liker-scale was used (1 = Strongly disagree . . . . . 4 = Strongly agree)

TABLE Ill Correlation and regression for facets of job satisfaction Pay Satisfaction Corr. Beta 1. 2. 3. 4. 5. 6. Professionalism Caring Rules Instrumental Efficiency Independence Promotion Satisfaction Corr. Beta Co-Worker Satisfaction Corr. Beta Supervisor Satisfaction Corr. Beta Work Satisfaction Corr. Beta Overall Job Satisfaction Corr. Beta

0.14 O.14 0.32* 0.27* 0.29* 0.12 0.34* 0.22* 0.30* 0.20* 0.42* 0.29* 0.33* 0.16 0.37* 0.20* 0.20 0.04 0.36* 0.17 0.10 0.07 0.19" 0.02 0.01 -0.08 0.14 -0.01 0.33* 0.17 0.16" -0.02 0.17 0.02 0.23* 0.00 -0.02 -0.00 -0.27* -0.22* -0.36* -0.22* -0.38*-0.28* -0.25* -0.18 -0.39* -0.26* -0.01 -0.02 0.12 0.04 0.09 -0.01 0.01 -0.08 0.22* 0.12 0.13 0.05 0.13 -0.16 -0.00 -0.08 0.02 -0.06 0.05-0.08 0.08 -0.01 0.04 0.01 0.03 0.83 190.00 0.15 5.36* 186.00 0.22 8.87* 194.00 0.24 9.88* 192.00 0.13 4.66* 196.00 0.28 11.04* 174.00

Ik2 F N * p _< 0.01 (2-tailed)

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policies that ensure that employees comply with legal and professional standards may ensure such a climate. This study also indicates that those who believe that their organization had caring climate are more satisfied with their supervisors. An organization can ensure a caring environment by ensuring that its major consideration is what is best for everyone in the company. Training programs that emphasize utilitarian reasoning can ensure a caring environment. An instrumental climate is present in those organizations where people protect their own interests above all else. This study suggests that an instrumental climate has a significant negative influence on satisfaction with promotions, coworkers, supervisors, and overall job satisfaction. Strategies that organizations can use to control such a climate include ethics audits and the use of moral character as a selection and promotion criteria. One important conclusion of the study is that a climate based on efficiency, independence, or rules has no impact on any facet of job satisfaction. Thus creating a work environment that emphasizes cost control or letting people decide for themselves what is right and wrong does not influence job satisfaction. A climate that ensures that all employees strictly obey company rules, procedures, and policy also has no effect on job satisfaction. Future research should replicate this study in other firms. Successful strategies to enforce various culture types in firms can also be examined. Another interesting area of future research could be the moderating role of ethical behavior in the relationship between ethical climate and factors like job satisfaction and organizational commitment.

negative influence on satisfaction with promotions, co-workers, supervisors, and overall job satisfaction. Rules, efficiency and independence climate types did not significantly affect any facets of job satisfaction.

Implications and conclusions

This study has many implications. The results of this study indicate that an organization can have various types of ethical climate. Professionalism was the most reported and efficiency was the least reported ethical climate type in the non-profit organization. A m o n g various facets of job satisfaction, responding managers were most satisfied with their work and least satisfied with their pay. This study provides support to the thesis that managers may be able to enhance job satisfaction by influencing an organization's ethical climate. Further, this study also suggests that the various ethical climate types have a dissimilar impact on different facets of job satisfaction. O n e conclusion of this study is that except for satisfaction with pay, an organization can influence all facets of job satisfaction of its employees by manipulating the ethical climate. This is consistent with previous research which has shown that satisfaction with pay is not affected by ethical actions of top managers and the extent o f unethical behavior in the firm (Vitell and Davis, 1990). This suggests that pay satisfaction is independent of any factors related to ethics. O n e implication of this study was that managers can influence overall job satisfaction and satisfaction with promotions, supervisors, and work by ensuring that the organization has a professional climate. A code of ethics and company

Ethical Climate and Job Satisfaction

659 1. The people I work with do not give me enough support.* 2. W h e n I ask people to do things, the job gets done. 3. I enjoy working with the people here. 4. I work with responsible people. 1. The managers I work for back me up. 2. The managers I work for are "top notch." 3. My superiors don't listen to me.* 4. My management doesn't treat me fairly. 1. My job is interesting. 2. I feel good about the amount of responsibility in my job. 3. I would rather be doing another job.* 4. I get little sense of accomplishment from doing my job.*

Appendix 1
Items used to measure ethical climate types
Type a. Professionalism Item People are expected to comply with the law and professional standards. Our major consideration is what is best for everyone in the organization. Every one is expected to stick by organization rules and procedures. In this organization, people protect their own interest above all else. The most efficient way is the right way in this organization. Each person in this organization decides for themselves what is right and wrong

3. Satisfaction with co-workers

b. Caring

4. Satisfaction with Supervisors

c. Rules

d. Instrumental

e. Efficiency f. Independence

5. Satisfaction with Work Itself

* these items are reverse coded

Appendix 2 References
List of satisfaction items
Type Item 1. My organization pays better than competitors. 2. My pay is adequate, considering the responsibilities I have. 3. I am underpaid for what I do.* 4. My fringe benefits are generous. 1. I do not like the basis on which my with Promotions organization promotes people.* 2. Promotions are infrequent in my organization.* 3. If I do a good job, I am likely to get promoted. 4. I am satisfied with my rate of advancement. Dierkes, M. and K. Zimmerman: 1994, 'The Institutional Dimension of Business Ethics: An Agenda for Reflection Research and Action', Journal of Business Ethics 13, 533-541. Ford, C. R. and D. W. Richardson: 1994, 'Ethical Decision Making: A Review of the Empirical Literature', Journal of Business Ethics 13, 205221. Fritzche, D. J. and H. Becket: 1984, 'Linking Management Behavior to Ethical Philosophy', Academy of ManagementJournal 27, 166-175. Kohlberg, L.: 1967, 'Moral and Religious Education and the Public Schools: A Developmental View', in T. Sizer (ed.), Religion and Public Education (Houghton Mifflin, Boston), pp. 164183. Kohlberg, L: 1984, The Philosophy of Moral Development (Harper & Row, New York). Murphy, P. R., J. E. Smith and J. M. Daley: 1992, 'Executive Attitudes, Organizational Size, and Ethical Issues: Perspectives on a Service Industry', Journal of Business Ethics 11, 11-19.

1. Satisfaction
with pay

2. Satisfaction with promotions

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United Way's Breach of Trust: 1992, The Washington Post, p. A27. Vitell, S. J. and D. L. Davis: 1990, 'Ethical Beliefs of MIS Professionals: The Frequency and Opportunity for Unethical Behavior', Journal of Business Ethics 9, 63-70. Victor, B. and J. B. Cullen: 1990, 'A Theory and Measure of Ethical Climate in Organizations', in W. C. Frederick and L. E. Preston (eds.), Business Ethics: Research issues and empiricalstudies (JAI Press Inc., Greenwich, CT), pp. 77-97. Williams, B.: 1985, Ethics and the limits of philosophy (Harvard University Press, Cambridge, MA).

Randall, D. M. and A. M. Gibson: 1990, 'Methodology in Business Ethics Research: A Review and Critical Assessment', Journal of Business Ethics 9(6), 457-472. Robertson, D. C.: 1993, 'Empiricism in Business Ethics: Suggested Research Directions', Journal of Business Ethics 12, 585-599. Sebastian, P.: 1992, 'Non-profit Group Seek Ethics Standard', The Wall StreetJournal, p. 7A. Sinclair, A.: 1993, 'Approaches to Organizational Culture and Ethics', Journal of Business Ethics 12, 63-73. Schneider, B.: 1983, 'Work Climates: An Interactionist Perspective', in N. W. Feimer and E. S. Geller (eds.), Environmental Psychology: Directions and Perspectives (Praeger, New York), pp. 106128. Tyson, T.: 1992, 'Does Believing that Everyone Else is Less Ethical have an Impact on Work Behavior?', Journal of Business Ethics 11, 707-17.

Department of Management, Haworth College of Business, Western Michigan University, Kalamazoo, MI 49008-3806, U.S.A.