Is Business Ethics The Most Important Issue To Be Discussed In Business Industry Business Essay

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According to Grell (1993) business ethics is the most important issue to be discussed in business industry, as this issue not only occur in the business industry where issue regarding to ethics are also involve in the healthcare industry, taxation or accounting firms, information technology industry, school and university as well as the public sector. Therefore, a lot of scholars have done most of the research related to business ethics like the importance of code of ethics in the working place and how it will influence the managers and employees in a working place as this study was done by scholars like (Perri, Callanan, Rotenberry and Oehlers, 2009). There are also paper that was done by (Whipple and Swords, 1992) which is mostly related to cross - culture comparison among the United State Business Students and United Kingdom Business Students and how the cultural influence their ethical judgment.

The researcher like (Pimental, Kuntz and Elenkov, 2010) also include those individual factors like (gender, age, working experience and moral value like severity), Organizational (the knowledge of the organizational norms), Ethical Environment (the social and legal policy, and individual like ethical decision maker's moral intensity) which this will influence one's decision maker performance and outcome. On the other hand, (Bartel, 1967; Ferrell and Gresham, 1985; Hunt and Vittel, 1986) has mention that culture plays an important role in influencing ethical behavior of an employee in and organization. Which this statement also supported by (Tse, Lee, Vertinsky and Wehrung, 1988) that a company has good culture environment will give a positive impact in ethical decision making among the employees and managers in an organization in term of improving a firm's ability to create a competitive strategy, able to negotiate international trade, as for the case of multinational company, the managers were able to coordinate the internal activities.

On the other hand, some of the famous model and theoretical framework also used by some of the researchers in their papers from the range of situational and the individual interaction by Trevino (1986) to the contingency framework of Ferrell and Gresham (1985) to the moral intensity of Jones (1991). For Example: the (Ford and Hensen, 1991., Jones, 1991) which it includes the variable like personal attribute of the decision maker that will influence the decision in ethical decision making and the moral intensity as the moderating effect as well. There is also the model adopted from Trevino (1986) by an empirical research from Ford and Richardson (1994) which a situation has been form for the decision maker to make decision.

According to Taylor (1975), ethics can be defined as the inquiry into the nature and grounds of morality where the term morality is taken to mean moral judgments, standards, and rules of conduct. In addition, Jones (1991) has defined that ethical decision making (EDM) as a decision that is both legal and morally acceptable to the larger community and stated that unethical decisions are illegal or morally unacceptable. Currently, Manley, Benavidez and Dunn (2007) stated that some organization's managers and employees is particularly focus on the ethical decision making and they also increasingly search for the employees that will make good ethical decisions to help them to avoid any legal dispute.

In health care industry, the healthcare leaders or managers play an important role in public or in private sector healthcare industry which mention by Maddalena (2007). As scholar knows those health care leaders like surgeon, general doctor or specialist can become the crucial leaders, mentors for some of the practitioners, and teacher to some of the medical assistant in the healthcare industry. Then, Maddalena (2007) stated that those leaders involve in medical healthcare industry often find out that their decision is really crucial to every level of individual from low management to top management in healthcare industry and their action also held to a higher standard of conduct.

According to Maddalena (2007), leaders in health care industry is facing dilemmas or pressure from different party as now the health care service is complicated as they facing the other situation like competing in managing the public, the political and professional pressure on the healthcare governing board and priority- setting on the beneficial programs and services. Therefore, this also supported by Christensen and Kohls (2003), where this kind of situation will lead them (the healthcare leaders) to take action on which kind of decision they will make by considering whether it is ethical decision like provide proper and precise planning in medication activity. Besides, they should take consideration of their organization stakeholder (like board of directors in the health industry and some representative from ministry of health in certain area) and other parties when making decision or none-ethical decision (hurried or ill - conceived decision making), in the same time as well, moral intensity for an individual is important as this will decide their fate in heading for legal action as mention by Christensen and Kohls (2003).

In taxation or accounting organization, tax professionals are the individual that involve in the ethical decision making for their organization and they also often face dilemmas when they come to the stages in tax reporting decision due to the complex taxation laws that implement on certain taxation activity which mention by Marshall, Smith and Armstrong, (2006). Then, Marshall with his colleagues yet come again with the statement which those tax professionals always face some of the pressure in their process of decision making especially from their client, government revenue authority, employers, business and financial community and professional accounting association. Therefore, the occurrence of professional responsibilities inevitability ethical and moral issue will arise when they try to solve those pressures from certain authority.

In School level, as mention by Dempster, Carter, Freakley and Perry (2004) countries like Australia, New Zealand, United Kingdom, Canada and the United States of America, principals tend to face with rapid transformation in school and teaching environment. This statement than further discussed by Dempster et al., (2004) where the rapid changes are cause by school's policy transform towards school - based management in their nation's education system which mean here rapid changes in school education system will cause the school management has to change accordingly to the new policy.

There also the changes in the social environments in the school that is operating which is mention by Dempster et al., (2004). There are two - way interaction research done by Dempster et al., (2004), which they found out that the most ethical dilemmas that face by school administrators especially principals during the time that they were conducting their responsibility and the ethical reasoning or thinking that they used to inform their school's operating decisions. By overcome the ethical dilemmas in school compound, the administrators should know how to apply one of the suitable ethical standpoints in that particular situation Dempster et al., (2004).

Ethical issues are prominent in the Information Technology industry. According to Haines and Leonard (2007) there are evidence that the widespread distribution of illegal intellectual property, privacy violations, security breaches and well - known crimes like fraud, forgery, and theft have resurfaced in new forms. As mention by (Marshall, 1999) the rapid development of (IT) has surpassed of the development of the ethical guideline for (IT) and this also will become one of a reason that the information Technology's crime occurs. In the world of (IT), those employees that work in (IT) firms remain a very high threat to security for misusing the information technology elements as mention by Haugen and Selin (1999). There is one survey has been conducted by Carr (2002) which stated that 80 percents of all computers and internet related crimes which happen in an organization is caused by the employees that work in the same particular organization with the lost of average $110,000 per corporate victim.

Finally, since the ethics issue is causing an impact for an organization, and it is important for the academic community to come up with a study that focus on finding out what lead the managers and employees behave ethically and unethically in order to give advice to managers for formulating competitive strategies to enhance the ethic knowledge and to prevent unethical behavior among the managers and employees.

PROBLEM STATEMENT

Business is a human activity and it involves the decisions that are based on the moral intensity of an individual Degeorge (2005). Given the ethical issues keep arising in the present times, the factors that influence the individual's like (managers and employees) ethical decision must be critically revisited from an ethical point of view as mention by Ulrich (2008) in his paper. Business and ethics suppose to be come together and it must be understand as mutual dependent aspects Werhane and Freeman (1999).

A set of theoretical framework need to be create in order to enhance how some of the factors will influence the managers and employees in an organizations. The papers that was done by, Ford and Richardson (1994) shows that the variables that they use as the individual factors that influence the ethical decision making is not specific as they suggest 23 variables that will influence the ethical decision making of an individual and none of the variable is fixed and the area that Ford and Richardson cover is wide.

Therefore, the purpose of this paper is to form a theoretical concept that can provide a better understanding of factors like (Personality Traits of a manager) that will influence the ethical decision making of bank employees in banking industry and this paper also include organizational climate and moral courage as the moderating effects. The independent variable that will include in this research paper is Personality Trait which adopt from Costa and McCrae (1992) which consists of (Agreeableness, Conscientiousness, Neuroticism, Extraversion and Openness to Experience) of bank employees.

Besides, most of the research paper that done on the ethical decision making was mostly focus in Western country context and some of it was done on the oriental context. For example: Holian, (2006) paper was done on the Australian context in some of the management or consultant agency. This paper was related to how the knowledge, skills, and abilities of a manger in terms of judgment of a situation, integrity among the employers and managers, the courage to make ethical decision, and the quality of humanity of a manger will influence the ethical decision making which means that the leadership is included in this study as well.

There are still shortage of research regarding to ethical decision making was done in the South - East Asian context before and this current paper was aim to study on South - East Asian Context. Organizational crisis was one of the important factors that can influence the ethical decision making of a manager in organizations. As mention by Maddalena (2007) problem solving and appropriate decision making skills is essential tools for the managers as most of the problem that encountered in the workplace is being resolved without a proper decision making framework.

There are some issues that might arise from time to time that may affect the organization's administrators or management team. Therefore, it is essential that the organizational crisis should be include in the study because in Maddalena paper, it shows that organizational crisis can bring implication on the ethical decision making of a manager by giving pressure on them on how they going to make an ethical decision to solve their organization's crisis.

As mention by (Bartel, 1967; Ferrell and Gresham, 1985; Hunt and Vittel, 1986) in theirs paper that climate plays an important role to influence an employee and a manager's ethical decision making process. Since there is a research that has been done by Singhapakdi et al., (1994), and the authors does not include any of the organizational climate in the research paper. Schein (1985) has mention that company that with strong culture is more efficiency in terms of making decision compare to the company that has weak and lack of awareness in their company's culture. Therefore, it is essential that to include organizational climate as one of the moderating effects of ethical decision - making.

According to Wortman (2006), the most recent topic of discussion within the ethical decision-making literature is courage. This statement also supported by Joseph (2000) where moral courage is one of the particular interests to include in this study because of the increasing number of pressures facing today's employees especially in banking industry. As mention by Joseph (2000), in an organization, about one in eight employees indicate that they feel pressure to compromise their organization's ethics standards, whereas, one in three have observed misconduct at work and stated that they are afraid to report such behavior because they fear that there is punishment by their management and coworkers.

There are seminar conducted by the American Management Association which most of their target audience are from all level of the management in organizations and there are prevalent discussion held among the managers which they has mention that moral courage is the factors that influence the decision making of an individual. Then this statement was supported by Harris (2003) and May, Hodges, Chan and Avolio (2003) where moral courage is the executive virtue of the employees in organization. As mention by Wortman (2006), moral courage can be measured on the relationship to the ethical decision making and it also supported by Harris (2003) and Miller (2005) where moral courage is the most promising characteristic that comes from an individual and it will influence a person's behavior or personality in making decision.

RESEARCH QUESTIONS

To what extent that the personality of Agreeableness will influence the ethical decision making of employees in banking industry?

To what extent that the personality of Conscientiousness will influence the ethical decision making of employees in banking industry?

To what extent that the personality of Neuroticism will influence the ethical decision making of employees in banking industry?

To what extent that the personality of Extraversion will influence the ethical decision making of employees in banking industry?

To what extent that the personality of Openness to Experience will influence the ethical decision making of employees in banking industry?

What is the moderator between the Big Five Personality Traits and the ethical decision - making of employees in banking industry?

RESEARCH OBJECTIVE

To determine the extent to which Agreeableness influence the ethical decision - making of banking employees.

To determine the extent to which Conscientiousness influence the ethical decision - making of banking employees.

To determine the extent to which Neuroticism influence the ethical decision - making of banking employees.

To determine the extent to which Extraversion influence the ethical decision - making of banking employees.

To determine the extent to which Openness to Experience influence the ethical decision - making of banking employees.

To investigate the moderating effect of Organizational Climate and Moral Courage on the relationship between the personality traits and ethical decision - making of banking employees.

SCOPE OF STUDY

This is a cross - sectional study that takes place in the area of Kota Kinabalu in Sabah. The reason of selecting Sabah as one of the locations to conduct this research paper is because there are rapid grows in the number of bank industry in that particular area. This study also conducts towards the bank managers around Kota Kinabalu area, and the reason of choosing the bank managers around Kota Kinabalu area is because most of the research has conducted on the respondents like professional accountants in Marshall et al., (2006) study, school principals in Dempster et al., (2004) study, inexperienced students in Haines and Leonard (2007) study, Employed Undergraduate students in Manley et al., (2007) and Glover, Bumpus, Sharp and Munchus (2002) paper. Therefore, it was such a great opportunity that the bank managers are included in this study as they will also involve in the ethical decision making as well in the organization.

As for the Dependent Variable, this paper is mainly focus in the ethical decision making of bank managers in the area of Kota Kinabalu, Sabah. According to Jones (1991) ethical decision making can be define as "a decision that is both legal and morally acceptable to the larger community" and stated that unethical decision are illegal or morally unacceptable. From the justification from introduction part, it is viable that the research on ethical decision making is viable to be conduct because it can help those managers to be aware of the ethical decision in an organization which is mention by Dempster et al., (2004).

The Independent Variable in this research papers is the personal attributes of the banking employees will be his or her gender, the age, education level, and their working experience as well. This personal attribute measured as the controlled variable in this study. The personal attribute variable is adopted from the research paper by Ford and Richardson, (1994), Glover et al., (2002), Pimentel et al., (2010) and O'Leary and Stewart (2007). PERSONALITY TRAITS

There is Moderating Variable will be including in this study as well. That is Organization's Climate. In Singhapakdi et al., (1994) paper, the culture of an organization does not include in their study. As mention by (Bartel, 1967; Ferrell and Gresham, 1985; Hunt and Vittel, 1986) in theirs paper that culture plays an important role to influence an employee and a manager's ethical decision making process and in the same time it will also influence the outcome of a decision as well. According to Smircich, (1973) the organization culture can be define as sharing of company's value, social ideals and beliefs by organization members. The organization's culture consists of working norm of the bank industry.

According to Wortman (2006), Moral Courage is a most promising characteristic of an individual that could influence the decision making process of an individual as this statement also supported by Harris (2003) and Miller (2005) where they mention that moral courage can be developed within an individual and it can begin to analyze the possible measurement of the moral courage to the relationship of the ethical decision making of employees in the banking industry. As mention by Furham (2002), moral courage has no become a major essential characteristic for every level of the employees in the organization. This because most of the time they need to help their organization to deal with constant change of the external environment that face by their organization.

IMPORTANCE OF STUDY

The benefit of this research study is that it can help the banking industry in Sabah to create a banking industry that is aware of the ethical issue that has been arise from time to time. This paper also addresses the manager on examine the influencing of the culture in a bank on the ethical decision making behavior. It is important for a bank manager in the area of Sabah to have the knowledge on how the company's culture will affects their ethical decision making behavior because the culture of a company can be the determinant of influencing the ethical decision making behavior.

Once the banking employees have a good knowledge in making good ethical decision through (understand the climate of the bank and show good leadership skills among the members in the organizations) as mention by Das and Kumar et al., (2011), this could helps the firms to improve their ability to design an effective competition strategy, negotiate international sales and coordinate internal activity which this statement also supported by Tse et al., (1988).

This paper also identify the potential and limitations of the extent personality traits of employees in banking industry with respect of the elements that has been selected and organizational climate and moral courage between the ethical decision making. Other than that, this paper also propose a theoretical framework of ethical decision making which consist of the personality traits of employees and the organizational climate and moral courage that will influence the ethical decision making among the employees in banking industry.

The criteria in the Personality Traits of the banking employees have come into different level of analysis and to measure these criteria it must be incorporates a number of factors that account for variation in the analysis and interpretation of component in the knowledge of the organization working norms, and the cultural settings of the organization. This study also formally discussed and investigated the construct of moral courage among the employees in banking industry.

SUMMARY

The main objective of this paper is to investigate to what extent that the organizational climate, the moral courage of the employees, the context personality traits of banking employees will influence their ethical decision making. Understanding of the organizational climate is very important to employees and managers because due to the rapid change and diversification of the climate, it will cause the occurrence of the ethical issues in organizations. The personality traits of banking employees are important as well, because it can become the determinants that will influence their decision making when there is an ethical issue arise. As moral courage can become the determinant that influence their behavior when making decision based on a situation, therefore, moral courage are tested in this paper to investigate the moderating effect between personality traits of employees in banking industry and ethical decision - making.

Some of the members in the company do not have a clear view of their organizational climate which their purpose that they went for the organization is to complete their task that is given by their superior. Therefore, before doing a task that is given by their superior, the awareness of ethical issues and ethical decision making is essential to have in each of the members from the top management and to every level of the organization. This is because, an organization that consists of a good managers or employees that can make good ethical decision will help the organization to build up a competitive strategies that can help to overcome the issue of ethical decision making in an organization.

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