Linking Ethical Positions and Organizational ...

LINKING ETHICAL POSITIONS AND ORGANIZATIONAL COMMITMENT: THE MEDIATING ROLE OF JOB SATISFACTION

Linking Ethical Positions and Organizational Commitment: The Mediating Role of Job Satisfaction Jatinder Kumar Jha* and Jatin Pandey**

This paper investigates the independent effect of two dimensions (idealism and relativism) of ethical positions on organizational commitment with job satisfaction as a mediator. Ethical ideology is supposed to impact the ethical judgment of an individual in business contexts. Burgeoning business scams have urged the researchers to explore the impact of the individual differences in ethical ideology on organizational outcomes. Existing literature suggests that individuals high on idealism believe in universal moral principles and avoid choosing those options that involve harming others, but individuals high on relativism try to defy these universal moral principles and believe in relative ethical judgments. The arguments in this study are grounded on deontological and teleological theories. This study hypothesizes that idealists rely more on deontological considerations and relativists rely more on teleological considerations for ethical judgments. Social Exchange Theory has been employed to explain the effect of ethical positions of an individual on his/her organizational commitment. Data collection was done from 105 professionals employed in different sectors and in various organizations in India. Hierarchical regression was used to test the hypotheses. It was found that job satisfaction mediated the relationship between ethical positions (idealism and relativism) and organizational commitment. The results confirmed the negative relationship of idealism and the positive relationship of relativism with job satisfaction and organizational commitment. The implications for theory and practice are discussed. Key Words: Deontology, Ethical position, Job Satisfaction, Organizational Commitment, Teleology

INTRODUCTION Ethical behavior in the workplace is expected to be influenced by individual differences in moral judgment, which further depends upon the ethical position (idealism and relativism) of individuals. This has garnered the attention of many researchers and * **

Doctoral Scholar, Human Resources 29, Room no. 09, Vastrapur, E-mail: [email protected] Doctoral Scholar, Human Resources 29, Room no. 10, Vastrapur, E-mail: [email protected]

Management-Area, Indian Institute of Management Ahmedabad, Dorm New Campus, IIM Ahmedabad, Ahmedabad-380015, India. Management-Area, Indian Institute of Management Ahmedabad, Dorm New campus, IIM Ahmedabad, Ahmedabad-380015, India.

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practitioners. Past studies have shown the impact of individuals’ ideology or the personal ethical beliefs on their attitude towards ethical judgments and taking decisions (Barnett, Bass, and Brown, 1994; and Whitcomb, Erdener, and Li, 1998). Akaah and Riordan (1989), studied the ethical judgments of marketing professionals and found exhibition of unethical behavior by marketing professionals was more prevalent in organizations whose top management did not act against unethical behavior as compared to those where proper measures were taken. In other words, the role of top management and supervisors, i.e., individuals who occupy a higher position in organization significantly impact the unethical behavior of the subordinates. This study explores the ethical behavior and its impact at the individual level arising out of the difference in ethical ideology with reference to idealism and relativism. Barnett, Bass and Brown (1994), studied the effect of ideology on ethical judgments in the context of business and found that ethical judgments are influenced by individuals’ ethical ideology. Every individual tends to vary in moral judgments at the workplace and thus demonstrate different behaviors. This variation in ethical behavior of individuals at the workplace has been attributed to two main factors involved in moral judgments which are derived from deontological and teleological theories of moral philosophy (Schlenker and Forsyth, 1977). Relativism and idealism are considered as two key concepts supposedly describing the individual difference in moral philosophy (Forsyth, 1980). Relativism dimension reflects the extent to which the individual disagree with the moral rules that are seen as universal. Individuals high on relativism are likely to question the value of existing universal moral principles and ignore these rules while making ethical judgments as compared to individual low on relativism. Individuals low on relativism firmly believe in universal rules that direct their ethical behavior in all situations. They always strive for the welfare of individuals and the organization. Therefore, it can be construed that ethical decision-making and organizational ethics are influenced by individual differences (Ferrell and Gresham, 1985; and Jones, 1991). Existing literature suggested some facets of ethical ideology that differ among cultures and nations (Singhapakdi, Kraft, Vitell, and Rallapalli, 1995; and Jackson, David, Deshpande, Jones, Joseph, Lau and Piorunowska, 2000) e.g., South Africans were found to be high on idealistic and less on relativistic scores as compared to Americans (Singhapakdi, Higgs-Kleyn, and Rao, 1999). Therefore, it is crucial to include the cultural context while studying the ethical position of individuals in any country. Studies have shown that some concepts, their relationships, and the theoretical underpinnings that are widely accepted in other countries to be different in Indian samples (Pandey and Singh, 2015a and 2015c). Therefore, this study has been conducted in Indian context. Existing studies have shown that individual’s job satisfaction connected with how organizational climate is perceived by them (Pierce, Hazel, and Mion, 1996; and Johnson Volume 22

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and McIntye, 1998). Ethical climate has a significant part in the growth of work environment (Treviño, Butterfield, and McCabe, 1998) and existing studies have examined the connection amid job satisfaction and organizational ethics (Koh and El’Fred, 2001; Tsai and Huang, 2008). Research indicated that the organizational ethical climate is one among other variables that might have an influence on the ethical behavior of personnel (Sinclair, 1993). The relationship of ethical positions of an individual and organizational commitment is not yet fully explored. Every individual has a different level of idealism and relativism that creates differences in their perception of ethics and thus their ethical behavior in an organization. For instance, individual high on idealism believe in avoidance of harm to others; they believe same or universal moral values can be applied to take decisions in all business contexts or situations which may not be the right style in today’s dynamic business environment. Idealism dimension of the ethical position of an individual is rooted in the deontological approach of evaluating the various alternatives to resolve the ethical problem. Deontological evaluations are based on one’s own stand on issues of untruthfulness, deceitfulness, uprightness and fairness. Individuals, who follow deontological evaluation approach of ethical judgments believe in moral obligations (Hunt and Vitell, 1986). For instance, electronic monitoring of performance at the workplace has given rise to the debate amidst people from employee advocacy groups, politics, and business to name a few (U.S. Congress, 1987; and Sanders and Sachs, 1990). Arguments of the group favoring the electronic performance monitoring were based on the teleological consideration that emphasized on benefits of this monitoring to organizations, customers, and society. On the other hand, another group had arguments against the use of electronic performance monitoring which was based on deontological considerations of ethical judgment which characterized electronic monitoring as dehumanizing since it invades workers privacy, rases stress and deteriorates health, and declines quality of work life. Now the same ethical problem evaluated by two different groups based on two distinct ethical ideologies resulted in different ethical judgment. This is just one of those numerous ethical dilemmas faced by employees at the workplace. Individual capacity to take right decisions in these ethical dilemmas substantially affects the organizations. It is very interesting to explore how individuals’ ethical positions (idealism and relativism) which are based in two different ethical ideologies (deontological and teleological) will influence their ethical judgments and affect the various aspects of organizational outcomes. In this competitive world, it has become very difficult to retain the competent workforce, and several studies have demonstrated that job satisfaction and organizational commitment reduce the turnover intention (Hellman, 1997; and Loi, HangYue, and Foley, 2006). Organizational commitment and job satisfaction are the positive attitude of an employee for his/her organizational and job respectively, thus job satisfaction and organization commitment has been included in this study. Arguments are based on deontological theory to explain the effect of idealism and Volume 22

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teleological theory to explain the impact of relativism on their job satisfaction and organizational commitment. Individual high on either idealism or relativism will interact with ethical situations at workplace differently. It is argued that both of these dimension will lead individuals to different levels of satisfaction from the job and thus affect the organizational commitment for the organizations. Job satisfaction had been confirmed as determinants of organizational commitment (Tsai and Huang, 2008; and Huang, You, and Tsai, 2012). Therefore, drawing on similar line it is argued that job satisfaction as a mediator between ethical position and organizational commitment of an individual. There is a dearth of literature that has investigated the influence on idealism and relativism on various aspects of organizational outcomes. This study proposes to fill the lacuna.

THEORETICAL BACKGROUND AND HYPOTHESES SOCIAL EXCHANGE THEORY This theory is often used to explain the individuals’ responses towards affirmative management by others and organizations (Cropanzano and Byrne, 2000). Social exchange theory (Blau, 1964) postulates that people enter into social-exchange with the feeling of obligation for the benefits received from others which stems from an expectation that social exchange with others will give valuable returns in near future (Gouldner, 1960). Blau (1964), originated the idea of social exchange and confirmed the existence of a social exchange relationship between employees and organization. These exchanges are beyond the formal employment contract. This kind of bond midst the individual and the organization is characterized by informal terms. In this relationship, individuals reciprocate positive management by the organization by the way of task performance and demonstration of extra-role behavior. As per the Social exchange theory (Blau, 1964), individuals put their best effort to accomplish the organizational goals with an expectation that their organization will continue to respond to their efforts (Moorman and Byrne, 2005). Reciprocity thus forms the basis of social exchange (Gouldner, 1960). Hence, for maintaining the exchange relationship, each party discharges obligations to others and continues reciprocating (Molm, Schaefer, and Collett, 2007). Social-exchange theory has been employed to understand the reciprocity of ethical ideology at the workplace that influences individuals ‘job satisfaction’ which in turn influences the organizational commitment.

ETHICAL POSITIONS It has been argued that two dimensions (idealism and relativism) of ethical positions of an individual exist independently (Schlenker and Forsyth, 1977). They indicated an individual high on idealism seeks selfless or humanitarian solutions and when encountered with ethical decisions they look for ways not to cause discomfort to others, but individuals low on idealism may choose some actions that could be detrimental to others but will still consider his/her choice as ethical. Idealism is grounded in Volume 22

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“deontological” theories that explain the definite activities or behaviors of individuals and the degree to which they are inclined by universal facts and on the other hand, roots of relativism are supposedly found in “teleological” theories which explain the end results of the behaviors, explicitly the prevention of damage to others. These two dimensions thus measure the individual’s differences in moral judgment (Forsyth, 1980; and Forsyth and Berger, 1982). It has been found that there exist a positive relationship between idealism and ethical judgement of wrong doing by a colleague, this relation was negative in case of relativism (Barnett, Bass, and Brown, 1996). Effects of idealisms are comparatively stronger than the effects of relativism. Barnett, Bass, and Brown (1994), studied the collective effects of relativism and idealism, and found that the idealism provides the most vigorous influence on the ethical judgments. Scholars are of the view that “idealistic individuals insist that one must always avoid harming others” (Forsyth, Nye, and Kelley, 1988, p. 244). People high on idealism are of the view that it is potential to evade hurting others (Forsyth and Berger, 1982). This construct is similar to altruistic which is defined “as behavior that promotes the welfare of others without conscious regard for one’s own self-interest” (Hoffman, 1981, p. 124). The altruistic character of organizational citizenship have been shown by some studies (Smith, Organ, and Near, 1983). A meta-analysis study found idealism is conceptually and empirically related to the notion of empathy and relativism shares a negative relation with maintenance of a dogmatic belief system (Davis, Andersen, and Curtis, 2001).

JOB SATISFACTION Job satisfaction has been studied most frequently by many researchers (Akehurst, Comeche, and Galindo, 2009). Job satisfaction is “the pleasurable emotional state resulting from the appraisal of one’s job as achieving or facilitating the achievement of one’s job values” (Locke, 1969, p. 316). It is employees’ positive feelings for his/her job, it can be both intrinsic and extrinsic. Intrinsic satisfaction comes from growth opportunities provided by an organization whereas pay-satisfaction, or chances of promotion add to the extrinsic motivation of an employee (Schwepker, 2001). Many researchers have confirmed the relationship between satisfaction with job and ethical climate (Koh and El’Fred, 2001; and Tsai and Huang, 2008). The ethical climate of hospitals is positively related to organizational commitment, job satisfaction and organizational citizenship behavior of nurses (Huang, You and Tsai, 2012). Meta-analyses shows an association between ethical climate and the extent of satisfaction of employees with their peers, bosses, their job and its promotion opportunities (Martin and Cullen, 2006). Job satisfaction has been assumed as a determinant of organizational commitment and many studies have examined the mediating effect of job satisfaction between many variables. For instance, the mediating role of job satisfaction between ethical climate Volume 22

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and organizational commitment has been investigated (Tsai and Huang, 2008). In the Chinese context, the relationship between work values, job satisfaction, and organizational commitment has been established (Froese and Xiao, 2012). They found job satisfaction mediates the relationship between work values and organizational commitment. These existing studies encouraged us to study the mediating role of job satisfaction between ethical position and organizational commitment.

ORGANIZATIONAL COMMITMENT Organization Commitment (OC) has garnered the interest of many researchers and practitioners. OC has been frequently studied as an organizational outcome in several studies. It reflects the level of interest and the strength of connection an employee has with her/his organization (Hunt, Wood, and Chonko, 1989; and Allen and Meyer, 1997). Committed employees do not wish to leave the organization and identify with organizational goals and objectives (Hunt, Wood and Chonko, 1989). Three components of OC are suggested which are affective (emotional attachment), continuance (perceived cost related with exit from the organization) and normative commitment (alleged duty to remain in the organization) (Meyer and Allen, 1991). Existing studies have confirmed satisfaction leads to commitment (Tsai and Huang, 2008; Huang, You and Tsai, 2012; and Mowday, Porter, and Steers, 2013). Researchers assumed that employees’ orientation concerning a specific job led to an orientation towards the entire organization (Currivan, 2000). Several studies have shown that satisfaction precedes commitment (Bluedorn, 1982; and Iverson and Roy, 1994). Cullen et al. (2003), found a positive effect of ethical climate on OC. Similar outcomes were seen in a study conducted by Tsai and Huang (2008). From the literature review, it can be construed that organizational commitment and job satisfaction are important workrelated behaviors and job satisfaction also determines organizational commitment. Social exchange theory has been employed to elucidate the connection amid ethical positions and organizational commitment. Ethical Position, Job Satisfaction, and Organizational Commitment: Deontological and Teleological Ethical Considerations The arguments in this study are drawn from the deontological and teleological theories. Deontological and teleological considerations for evaluation of same option for resolving ethical problem often results in different ethical judgments. Hunt and Vasquez-Parraga (1993), suggested deontological consideration effect the person’s ethical judgment not supervisory reaction (i.e., intention to intervene) to any ethical/ unethical behavior at workplace exhibited by subordinates. Hunt and Vitell (1986), proposed “a general theory of marketing ethics” to understand how an individual makes a decision when faced ethical dilemmas. This theory asserts people resolve the ethical dilemma by evaluating various alternatives to resolve the ethical problem based on deontological (the intrinsic appropriateness or inappropriateness of the behaviors) and teleological (the results of behaviors) approach. Kant (1959), suggested categorical imperative that includes Volume 22

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“master” or super ordinate right, which guides our actions. Kant, further asserted that all rational people must follow moral philosophies without any exception or condition. Deontological ethicists posit the presence of universal moral norms for ethical judgment, e.g., Johannesen et al. (2008) argued for dignified and respectful treatment of human beings, not as means to an end and Werhane (1985), argued for the respect of inherent human rights of all human being regardless of other practical interests or benefits. Frankena (1973) suggested four criteria for making an ethical judgment which includes, avoiding, preventing, removing evil or harm and promoting good. De George (1986), argued that the public wants business, “not to cause harm to any of those affected by its actions” (p. 416). From the existing literature, it can be construed that deontological considerations consider a practice as unethical if it harms any of the organization’s stakeholders or violates their fundamental rights irrespective of the benefit that the practice otherwise generates. Deontological consideration primarily focuses on the process of reaching the end. Even if the end of an action is positive but mean harm others would be considered as unethical action based on deontological consideration. Idealists rely more on deontological considerations for making ethical judgments and believe in evading damage to others by their actions. There are fair chances of the existence of many practices that produces or creates wellbeing, but may violate the right of its stakeholders; in such case idealists would not be satisfied with such practices. Authors contents idealists will evaluate each organizational practices and policies from universal moral philosophy which is grounded on deontological theory, and this perspective may lead them to question the ethicality of such practices every time in the organization. In this competitive business environment organizations are not leaving any stone unturned so there are chances of such practices which produces good for the organization but may harm the rights some or many stakeholders. Idealists find trouble in working in such organization and feel less satisfied with their job that leads to low organizational commitment. Idealists are not flexible in their moral thoughts, and they find friction between their ethical position and top management ethical ideologies hence, lower job satisfaction and organizational commitment is expected from them. The behavior of an individual is partially influenced by the consequences of the previous behavior (Premeaux and Mondy, 1993). Sometimes an employee behaves unethically when he/she perceive his/her behavior will result in positive consequences. The actual implications of the behavior direct the individual’s future behavior. Idealist people believe in their innate moral philosophies that include norms related to lying, cheating, honesty and justice. Being idealist, they always try to avoid options, practices and following or formulating policies at the workplace that has negative consequences for the people without evaluating the probability of causing the adverse consequences and importance of the people who will get harmed. Idealist always evaluates all options based on their absolute moral principles ignoring the contextual or situational factors affecting the consequences of the decision. Even the ethical judgments of idealists are functions of both deontological and teleological approach. However, they rely more on deontological approach. In an Volume 22

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organization, these people are found cribbing about the rightness and wrongness of each decision taken by other (seniors, top management) and always suggest their way of reaching ethical judgments. They believe in general moral principles for evaluating alternatives to resolve all ethical problem which is not the right approach of resolving the ethical problem in today’s scenario. In this competitive business environment sometimes unethical decisions are encouraged by the managers if the consequence of that behavior is positive rather than negative (Bellizzi and Hite, 1989; DeConinck, 1992). Idealists ignore the consequence based criteria of evaluation that is the teleological approach, so they end up taking ethical decisions which definitely do not harm people but harm the organizational financial health. Hunt and Vasquez-Parraga (1993), found marketers depend more on evaluation through a deontological frame as opposed to teleological frame when taking judgements of ethical nature. This result supports the arguments that some people rely more on any one of these two evaluation criteria (deontological and teleological). Some organizations not only encourage ethical but also supports unethical behavior if that behavior results in positive consequences. Jansen and Von Glinow (1985) indicated many to management have established a managerial structure that prizes unethical conduct as long as the outcomes have positive implications for the firm. Organizations expect employees to demonstrate behavior at the workplace that has positive effects for the organization. Since deontological evaluation of actions leads to the negative consequences for the firm and firms discourage employment of such approach by its employees. DeConinck and Lewis (1997) found deontological considerations were more significantly influential in predicting the ethical judgment of sales professional rather than teleological; considerations. Idealists are discouraged by the organization for their ethical judgments, so they feel less satisfied with the existing practices, and policies. They are less committed towards their organization. Organization encourages those behaviors that positively affect the organization, but Idealists hesitate to exhibits such behavior since they consider some of them unethical based on deontological considerations. Idealists find problem in disbursing their duties especially in an organization where their ethical ideology mismatches with top management of an organization. They feel dissatisfied with their job and prefer to disburse responsibilities that are mentioned in the formal employment contract and restrict their extra role behavior. Idealists also find problems in working in organizations where friction between the top management ethical ideology and their personal ethical ideology is high. The social exchange between Idealists and organization is very less. Exchanges between Idealists and organizations are confined to formal employment contract, so based on social exchange theory it can be construed that Idealists are less committed to their organization, and they prefer to work with organizations where deontological considerations dominate the teleological consideration while making ethical judgments. They do their formal duties and organization pays them for the same. Even sometimes Idealists find trouble in disbursing their formal duties if the nature of the job is such that involves many ethical dilemmas, and then organization not only discourage such behavior but also Volume 22

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punish those behaviors. Hence, chances of social exchanges between organization and Idealists reduce. It is hypothesized; individual high on idealism will be less satisfied with his/her job and less committed for his/her organization. Hypothesis 1a: There will be negative association between idealism and job satisfaction. The second dimension of the ethical position that is relativism is rooted in the teleological approach of evaluation. The teleological evaluation considers: (1) the influence of the individual’s behavior on various stakeholders like customers and employers; (2) assessing the probability of happening of consequences to the stakeholders; (3) evaluation of positives and negatives of each consequence; and (4) assessing the importance of the stakeholders. Teleological theory suggests, “an act is right if and only if it or the rule under which it falls produces or is intended to produce at least as great as balance of good over evil as any available alternative, and act is wrong if and only if it does not do so” (Frankena, 1973, p. 14). This approach of evaluation is based on cost/benefits analysis of each alternative to resolve the ethical problem (Tsalikis and Fritzsche, 1989). Ethical egoism and utilitarianism are two examples of teleological philosophies. Ethical egoist individual behaves to gain in the long-term, and he/she evaluates the options based on benefits receivable from that option for self and negative consequences of that option. On the other hand, utilitarianism indicates that the individual acts in a manner so as to produce the supreme good for everybody, unlike the ethical egoist who acts to maximize his/her own gain. Utilitarianism, a sub-branch of teleological theory, suggests that benefits over the cost (evil), of a particular action, should be evaluated with reference to non-moral outcomes, in the universe as a whole which decides the attractiveness of options (Sen, 1979). The basic premises of this theory are producing the greatest balance of goods over evil and balance of goods over evils should be measured in term of nonmoral values like profits, gross national products, etc. Many organizational practices are drawn on utilitarian theory. First, many organizational practices adversely effect stakeholders that may be justified according to the utilitarian ideology of teleological theory. Second, the benefits produced by various practices of organizations are measured in terms of non-moral values like profits, employment opportunities, etc. Third, organizations formulate such practices not because these courses of action benefits them but organizations are obligated by utilitarian theory to do so as the ultimate goal of the organization is producing greatest goods over evils for the universe as a whole. Hence, if any practice that helps the organization in enhancing its performance may be considered as compulsory irrespective of its moral impression on some stakeholders encompassing employees. In today’s competitive business world, most of the organizations rely on the utilitarian approach of teleological ethical considerations for ethical judgments and formulates various practices and policies based on this consideration. Relativists feel comfortable in working with these organizations where the utilitarian approach of teleological consideration guides the formulation of various Volume 22

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practices and policies. Therefore, individuals high on relativism feel more satisfied as compared to individuals high on idealism since former group of people do not feel any friction between their ideology and organizational ethical ideologies unlike latter group of people in the organization who strongly believe in deontological considerations for ethical judgments. Relativists believe in defying uniform moral principles, unlike Idealists. Relativists rely more on teleological evaluation criteria while making ethical judgments at the workplace. The teleological approach is based on cost/benefits analysis of each option for resolving an ethical problem where ethical decisions are taken after analyzing the consequences of each option. In competitive business environment sometimes unethical decisions are encouraged by the managers if the consequence of that behavior is positive rather than negative (Bellizzi and Hite, 1989; and DeConinck, 1992). Jansen and Von Glinow (1985), indicated many top management have established a supervisory system that rewards unethical behavior as long as the results have positive consequences for the firm. It is evident from existing studies on an ethical ideology that sometimes unethical behaviors are encouraged in organizations, so individual needs to be flexible in terms of moral philosophy. Individuals high on relativism do not believe in universal moral principles and consider situational factors while making ethical decisions, and this approach to resolve the ethical problems are expected by an organization from its employees. Individuals high on relativism are rational in ethical decision making and they understand and adapt the ethical ideology of the organization which helps them in doing their job smoothly. Relativists manage the ethical situation based on teleological considerations which help them in avoiding clash between their ideology and top management ethical ideology. In any way, an individual in an organization is supposed to follow the philosophies of his/her organization decided by its top management team. Akaah and Riordan (1989), studied the ethical judgments of marketing professionals and found exhibition of unethical behavior by marketing professionals extra in organizations that had deficient actions by top-management for unethical behavior as compared to organizations where top management took appropriate actions to control such behaviors. In other words, the role of top management and supervisors have a really significant impact on the unethical behavior of the subordinates. Relativists being flexible in their ethical position (ethical ideology) conform with the ethical ideology of the organizations very easily as compare to Idealists. Hence, relativists enjoy working in such an organizations and feel satisfied with their jobs. Organization also care and support such kind of people who follow and practice its philosophies. Based on the social exchange theory, the study argues that employees also reciprocate this treatment of the organizations by enhancing performance and extra role behavior which results in higher organizational commitment. It is hypothesized that relativists are highly satisfied with their jobs and committed to the organizations. Relativists can adjust in any ethical environment since they have a flexible moral philosophy, unlike idealists. Therefore, relativists can perform their duties in any organizations with Volume 22

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different ethical ideology easily as compared to idealists. A positive relationship between relativism and; job satisfaction and organizational commitment is expected. Hypothesis 1b:

There will be positive association between relativism and job satisfaction.

Individuals high on idealism believe in uniform moral principle and demonstrate rigidity where flexibility in moral values is required. An individual high on idealism always questions about the ethicality of various practice and policies followed by the organizations specially those policies where he/she feels more moral friction with. Hence, in such situations individual high on moral values try to either take decisions based on their moral principles rather than based on organizational policies or simply decline to act in those situations where his/her ethical position of is challenged. In both cases, the organization ends up losing either business or reputation. ‘Reciprocity’ forms the basis of social exchange theory (Gouldner, 1960). Hence, organizations try to place these people in such a role where decisions are programmed, and chances of ethical encounters are less. The exchange between organization and individual is confined only to formal contract as both not satisfied with each other. In such organization, individual will not demonstrate extra role behavior, and he/she will do what is written in the employment contract. Hence, it is hypothesized that: Hypothesis 2a:

There will be negative association between idealism and organizational commitment.

Relativism refers to the degree one defines the universal moral values so individual high on relativism will have a different level of organizational commitment as compared to people high on idealism. Individuals high on relativism always exhibit ethical behavior appropriate to the situation. They are flexible in terms of their ethical positions. They act differently in different ethical situations. Since they do not believe in absolute ethical standards therefore, they feel less friction between their moral principles and organizational various policies and practices as compared to individual lower on relativism. Organization incentivized their appropriate ethical behavior, and they feel more committed for their organization. It is hypothesized: Hypothesis 2b:

There will be positive relationship between relativism and organizational commitment.

Job satisfaction had been confirmed as determinants of organizational commitment (Tsai and Huang, 2008; and Huang, You and Tsai, 2012). As it has been hypothesized in hypothesis 1a and 1b, ethical positions of individual influence differently his/her job satisfaction. For instance, individual high on idealism will be less satisfied with his/her job as compared to individual high on relativism. Existing studies have shown job satisfaction as one of the determinants of organizational commitment. Satisfied employees are found exhibiting extra-role behavior at the workplace. It is argued in this study that idealism is negatively related to job satisfaction, hence negative or Volume 22

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reduced job satisfaction will lead to reduced organizational commitment. Hypothesis 2a, proposes that idealism is negatively related to organizational commitment. Hence, it is hypothesized: Hypothesis 3a:

Job satisfaction mediates the relationship between idealism and organizational commitment.

Similarly from Hypothesis 1b, relativism is positively related to job satisfaction and from Hypothesis 2b, it is positively related to organizational commitment. Hence, it is hypothesized: Hypothesis 3b:

Job satisfaction mediates the relationship between relativism and organizational commitment.

Please see Figure 1 for the proposed model. Figure 1: Hypothesized Model

METHODOLOGY RESEARCH DESIGN AND PARTICIPANTS Questionnaires composed of established scales were administered to 150 working professionals personally and via the internet. These individuals were drawn from northern (Delhi) and southern (Bangalore) parts of India. The content validity was assured by two specialists in the field and the face validity was ensured by six individuals. Out of 150 distributed questionnaires, 105 (70 percent response rate) fully filled questionnaire. Working professionals are perticularly receptive to technology (Pandey and Singh, 2015b), and thus the response rate is good. The mean age of the respondents was 43.30 years with a standard deviation of 10.05 years. The break up with reference to education was that 2 (1.9 percent) had studied till 12 th standard only, 53 (50.5 percent) held bachelors’ degree and 50 (47.6 percent) had master’s degree. The sample had 77 (73.33 percent) males and 28 (26.67 percent) females. All of the respondents were married. Volume 22

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MEASURES The answer options in the administered questionnaire ranged from 1 meaning ‘strongly disagree’ to 7 meaning ‘strongly agree’ on a 7-point Likert scale. Three questions from the “Michigan Organizational Assessment Questionnaire” were used to measure job satisfaction (Cammann, Fichman, Jenkins, and Klesh, 1983). Sample items include “All in all, I am satisfied with my job, In general, I don’t like my job”. Cronbach’s alpha was 0.92. Organizational commitment was assessed by the six-item measure of Marsden, Kalleberg, and Cook (1993). Sample items are “I am proud to be working for this organization”. Cronbach’s alpha was 0.90. Ethics Position Questionnaire (Forsyth, 1980), to measure individual differences in moral thought. It consists of two subscales of idealism and relativism; sample items include “One should never psychologically or physically harm another person” and “What is ethical varies from one situation and society to another” respectively. Cronbach’s alpha was 0.91.

PRELIMINARY ANALYSIS Confirmatory factor analysis help establish the discriminant and convergent validity through measurement models. This was followed by regression analysis. Convergent Validity: Cronbach’s alpha and average variance extracted values are above the desired cutoff of 0.7 (Nunnally, Bernstein, and Berge, 1967) 0.5 (Fornell and Larcker, 1981) respectively. Discriminant Validity: The average variance extracted was higher than all squared correlations of first-order latent variables (Fornell and Larcker, 1981) and the factor scores weighed high on their own and low on other constructs. Common Method Effect: Harman’s single-factor test was used to measure bias through common method, which was performed before the main analyzes. Exploratory factor analysis was done for evaluation of the quantity of variance in the observed variables that can be attributed to a solitary factor (Podsakoff, MacKenzie, Lee, and Podsakoff, 2003). Exploratory factor analysis, using unrotated principal components factor analysis was done. The number of factors to be extracted were constrained to one. This single factors accounted for 46.24 percent of the total variance which is less than 50 percent. Thus, no universal factor was observed, and the presence of common method variance can be negated.

ANALYSES Organizational citizenship behavior is the dependent variable; the independent variables were relativism and idealism. Job satisfaction was examined as a mediator whereas age was taken as a control variable. Hierarchical regression was used to test the hypotheses. In the first step control variable were added as predictors followed by independent and then mediating variable in subsequent steps. To test the mediation effect regression analysis was conducted using the Baron and Kenny’s (1986) approach. Volume 22

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Three regressions were done to test each mediation relationship. First, the independent variable (idealism/ relativism) must be a significant predictor of the mediator (job satisfaction). Second, the dependent variable (organizational commitment) should be predicted by the independent variable. Third, the mediator variable should be a significant predictor of dependent variable when there is inclusion of the independent variable also (Baron and Kenny, 1986). Before going ahead for regression analysis, data was checked for conformance to regression requirements and collinearity diagnostics (VIF was found to be well below 3).

RESULTS Mean, standard deviation, and zero-order correlations for the variables in the study are presented in Table 1. Age has the largest mean value (43.30) and standard deviation (10.05), whereas organizational commitment has the smallest mean value (2.85) and relativism has the smallest standard deviation (0.32). All variables are significantly correlated with each other at p < 0.001 except age which does not correlate to any variable and idealism and relativism which were not correlated. All variables are positively correlated with each other except idealism which is negatively correlated with all other variables. Table 1: Descriptive Statistics, Correlations, Cronbach’s Alpha, Construct Reliability and Average Variance Extracted Variables

Mean

SD

1. Idealism

3.459

1.418

(0.938)

2. Relativism

6.152

0.324

–0.118***

(.850)

3. Job Satisfaction

4.241

0.979

–0.343***

0.695*** (0.922)

4. Organizational Commitment

2.846

1.231

–0.337***

0.718*** 0.914***

5. Age

43.30

10.05

1

–0.069

2

–0.069

3

0.028

4

5

(0.897) 0.017

NA

Note: N = 105 *** p < 0.001, **p < 0.01, *p < 0.05, two tailed tests. SD = Standard deviation, CR= Construct reliability, AVE= Average variance extracted, NA = Not applicable, Cronbach’s alpha in parenthesis. Source: Authors’ Calculations

To test the relationships of idealism (see Table 2) in Step 1 the regression of idealism on organizational commitment, ignoring the mediator job satisfaction, was significant and negative (b = –0.337, R2 = 0.196, p < 0.001) thus supporting hypothesis 1a. Step 2 exhibited that regression of idealism on the mediator, job satisfaction, was significant and negative (b = –0.343, R2 = 0.118, p < 0.001) thus supporting hypothesis 2a. Step 3 exhibited that the mediator (job satisfaction), controlling for idealism, was significant, (b = –0.904, R2 = 0.835, p < 0.001) predictor of organizational commitment. Step 4 showed that, in the presence of mediator (job satisfaction), idealism was not a significant predictor of organizational commitment, (b = –0.637 n.s.). It was found that job Volume 22

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satisfaction fully mediated the relationship between idealism and organizational commitment. Hypothesis 3a was thus supported. Table 2: Results of Mediation Test for Job Satisfaction on Idealism – Organization Commitment Relationship

R

2

Model 1

Model 2

Model 3

JS

OC

OC

0.118***

0.114***

0.835***

0.029 (n.s.)

0.196 (n.s.)

–0.206 (n.s.)

–0.343***

–0.337***

–0.637(n.s.)

Control Variable Age Independent Variable Idealism Mediator Variable JS

0.904***

F

6.835**

6.565**

170.751***

Note: Standardized beta weights are shown. n.s.= not significant; JS = Job Satisfaction, OC = Organizational Commitment; ***p < 0.001, **p < 0.01, *p < 0.05. Source: Authors’ Calculations

To test the relationships of relativism (see Table 3) in Step 1, the regression of relativism on organizational commitment, discounting the mediator job satisfaction, was significant and positive, (b = 0.722, R2 = 0.519, p < 0.001) thus supporting hypothesis 1b. Step 2 presented that regression of relativism on the mediator, job satisfaction, was also significant (b = 0.700, R2 = 0.489, p < 0.001) thus supporting Table 3: Results of Mediation Test for Job Satisfaction on Relativism – Organizational Commitment Relationship

R2

Model 1

Model 2

Model 3

JS

OC

OC

0.489***

0.519***

0.848***

0.076 (n.s.)

0.066 (n.s.)

0.005 (n.s.)

0.700***

0.722***

0.161**

Control Variable Age Independent Variable Relativism Mediator Variable JS F

0.802*** 48.731***

55.077**

187.563***

Note: Standardized beta weights are shown. n.s.= not significant; JS = Job Satisfaction, OC = Organizational Commitment; ***p < 0.001, **p < 0.01, *p < 0.05. Source: Authors’ Calculations Volume 22

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hypothesis 2b. Step 3 presented that the mediator (job satisfaction), when controlled for relativism, was significant (b = 0.802, R2 = 0.848, p < 0.001) predictor of organizational commitment. Step 4 showed that, in presence of mediator (job satisfaction), there was a decrease in the effect of relativism scores as a significant predictor of organizational commitment (b = 0.161, p < 0.01). Partial mediation was verified through Sobel test. Sobel statistics (z = 8.190, p < = 0.001) found that there exist a partial mediation by job satisfaction on the association amid idealism and organizational commitment. Hypothesis 3b was thus partially supported.

DISCUSSION The negative relation of idealism with job satisfaction and organizational commitment shows that individuals high on idealism tend to be rigid with their ideologies and, therefore, find it hard to cope with changing business dynamics that influence organizations. The approach of one shoe fits all leads them to evaluate their jobs negatively and hence lower job satisfaction which in turn leads to lower organizational commitment. Therefore, individuals with high individualism are suitable for dynamic jobs that require adherence to rules and regulations. They go by the book and are procedure oriented. The positive relation of relativism with job satisfaction and organizational commitment brings to light that people who are high on relativism tend to adapt to the organizational changes and judge a situation by relative standards. This allows them to see the changes in organization practices through the lenses of relative change in business environment. This leads to satisfaction and hence a sense of commitment towards the organization. Therefore, individuals with high relativism are suitable for dynamic jobs that require changing and adapting regularly. They find new ways to solve a problem and are creative.

CONCLUSION This study has examined the direct and indirect effect of two dimensions of ethical positions (idealism and relativism) of individuals on organizational commitment. Given the importance of ethical judgment in today’s business scenario and dearth of study in this area, motivated us to investigate the aforementioned relationship. The arguments in this study were based on the existing literature on idealism and relativism which were grounded in social exchange theory. It has been hypothesized that idealism has a negative effect and relativism has a positive effect on how satisfied an individual is with her/his job and her/his commitment towards the organization. Empirical analysis supported the hypothesis. The hypothesized model (Figure 1) captures the effect of both dimensions of ethical positions and outlines the mechanisms of both its direct as well as indirect impact on organizational commitment. It has been found that job satisfaction partially mediates the link amongst both dimensions of the ethical position of an individual and organizational commitment. Volume 22

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IMPLICATIONS FOR THEORY AND PRACTICE This research study brings to the forefront the deontological and teleological frames of references to study the interaction of idealism, relativism, job satisfaction and organizational commitment. Idealism shows its association with deontological theories in the evaluation of alternatives whereas relativism on the other hand shows association with teleological theories. This study has attempted to address that research gap by proposing a model (Figure 1) examining the impact of ethical position on the organizational commitment with job satisfaction as a mediator. This study contributes towards gaining a better understanding of the effect of individual ideologies on organizational commitment. Another major contribution of this study lies in the opening up of many research avenues, like studying the effect of individual ideologies on various personal and organizational outcomes. On the practical front, these findings have implications for managers on deciding the individual they need for their organization. A person-organization fit (Morley and Morley, 2007) is essential for reciprocation of satisfaction from the employee as well as employer’s side. Organizations whose culture stands on strong ethical principles inculcated through generations and have not changed since an extended period should prefer individuals with a high score on idealism whereas organizations with a fluid and adaptive culture should prefer individuals with high relativism scores. This would allow the individuals to have higher job satisfaction and thus higher commitment towards the organization.

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