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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

COPY RIGHT © 2013 Institute of Interdisciplinary Business Research

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What shapes Ethical Behavior of Sales Team?

A case study of banking sector of Pakistan

Ayesha Adnan

Dr. Noreen Saher

Hafsa Naureen

Sadaf Qureshi

Naheed Yousaf Khan

International Islamic University, Islamabad

Abstract

Ethical behavior of the employees is an important concern for the organizations in the current era of aggressive

competition. There are different factors that contribute to the development of ethical behavior. The purpose of

this paper is to find out the impact of these factors on ethical behavior of sales force in banking sector of

Pakistan. The research is conducted in banking sector of Pakistan and data was collected from 350 participants

through self administered questionnaires. The research results have revealed two main conclusions: first,

leader‟s characteristics, organizational characteristics and sales force characteristics have positive impact on the

ethical behavior: second, authentic leadership style and job security is negatively related with ethical behavior

development.

Key words: Ethical behavior, Pakistan, job insecurity, team‟s cooperation, authentic leadership.

1. Introduction

The main theme of this research paper relates to the basic ethical model presented by Shelby D. Hunt and Scott

J. Vitell (2006). This model is one of the pioneer models in ethical decision making process and still considered

to be one of the important models. The model incorporates environmental factors (industry and organizational

environment), the recognition of an ethical problem, deontological norms, formation of intentions; and actual

behaviour. Model suggests that although these components are interrelated but still this can lead to the unethical

decision making or unethical behavior followed by the employee.

Leadership style and organizational culture have been studied in this research to fill the gap identified by John

and colleagues (2009) in their research paper. They worked on sales manager‟s characteristics like idealism,

relativism, outcome control and behavior control in the research. It was identified that leadership style,

manager‟s ethical training, managers ethical behavior and Machiavellianism are some of the important factors

that can be useful predictors to find out the sales team ethical behavior and can be incorporated in the future

research. Similarly the researchers identified perception of sales manager competence and assertiveness as

important factors to be considered in future research. Other then technical expertise, job insecurity and team

cooperation act as predictors of sales team ethical behaviour. Finally, another gap identified is the organizational

culture. The article is the combination of few variables already discussed by John and colleagues (2009) (e.g.

moral philosophies, job insecurity, team cooperation) and few variable suggested by them for the future research

(e.g. leadership style and organizational culture).

Financial sector is flourishing in Pakistan at a very rapid pace. Among the service sector, banking sector is one

of the most flourishing financial sectors in service industry of Pakistan. State bank is the regulatory body that

regularizes the processes of the banks. The financial sector in Pakistan consists of the micro finance banks,

Commercial banks, non-banking finance companies, development finance institutions (DFIs), modarabas, stock

exchange and insurance companies.

The focus of research will be sales force of the commercial banks only as Raheel and colleagues (2011) say that

the research in the field of banking sector in Pakistan is very important because banks are service providers and

anxiety exists among the employees of banking sector. Also it is identified that the overall performance of the

banks is dependent upon the employee‟s devotion. If employees are devoted towards their work, the overall

performance of the banks will also increase. The competitive environment in Pakistan has also affected the

working of the commercial banks. To cope up with the current situations the banks have formulated many

different strategies which require ample effort from the employees. Ishrat Hussain in one of his speech in 2005

shed the light on the effective implementation of the ethical standards and employee‟s ethical behaviour for the

effectiveness of the industry. He emphasised that the culture of sifarish, favoritism, discrimination, reciprocity

should be eliminated from the culture and official culture should be based upon the equality and fairness for

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everyone. In line with the importance of this phenomenon, researchers took interest and reasonable amount of

literature is available. Though how leaders‟ characteristics contribute to ethical behavior of sales team is not

directly focused. Our study addresses to this glitch and contribute to research. The data was collected through

self administered questionnaires. In this paper, we will start with the review of relevant literature, develop our

theoretical and research framework and then explain our research and analysis methods. In the subsequent

paragraphs, research results and discussion will be presented. The last section will comprise of conclusion,

research limitation, research implication and future research directions.

2. Literature Review

Ethics has been defined as the moral concerns of being right or wrong. Considering the organizations, ethics

play a very important role in its performance. All the decisions made in the organizations are by the individuals

or the group of individuals, the way they give importance to the moral judgments‟ will certainly reflects in the

organizational decision making process. There is a consensus that for the better and effective organizational

performance, ethical decision making is very important and ethics should be taken seriously in the organizations

(Linda 1986, Charles 2008). Ethics are not important for one department only, but a key of success for all the

departments like finance, human resource, marketing, sales etc. and helps out the organization in better

organizational performance, cost savings, better brand image, improved employee commitment and loyalty.

The question arises here that what shapes the ethical behavior? John and colleagues (2009) points out that

leader‟s characteristics (Idealism, relativism, outcome control and behavior control of a leader) and sales team‟s

characteristics (technical expertise, job insecurity and team cooperation) are important factors of sales team

ethical behaviour. Marketing is considered to be the most problematic function of the organization that raises the

question of ethical issues like false advertising, sales through pressurizing the customer etc., so to cover up this

issue the leaders should follow the deontological approach in marketing ethics (Jacques & William, 1996).

2.1. Defining Ethics

It is of immense importance to define ethics and its effectiveness in different context in order to move ahead in

this research. The dictionary definition of ethics says that the moral correctness of a specified conduct or moral

principles that govern the individual or team behavior. Literature suggests that there exist three types of ethics,

social ethics i.e.; i) the values of one group is different from the values of the other group, ii) transcendental

ethics, which is based on the absolute values of right and wrong and lastly iii) tactical ethics, which is obeying

rules and laws in order to avoid punishments (Geetu, & Carolann, 2003).

Organization needs to take remedial steps in order to formulate and implement the ethical standards. Proper

ethical standards can range from severe criminal activity to breaking any law or rule. These ethical standards

should be relevant to the employees work and should also be reinforcing (Robert, 2006).

2.2. Ethics and Sales Force

Robert (2006) expresses in the research that ethics has gained much attention after the famous ethical scandals

like of Enron, WorldCom, Global Crossing and Arthur Anderson etc. The profession of sales is not being

considered as a profession by many people who had a bad experience while performing certain transactions with

unethical sales person. There may be they had a bad experience through telemarketing etc. The profession of

sales is not new; it is as old as mankind. Similarly the issue of ethics is also related with the sales profession. As

the main focus of the research is on the ethical behavior of the sales employees, this portion will highlight the

role played by the sales force in the effectiveness of the business. The ethical behavior of the sales team is

directly related with the effective performance of the organization. Salespeople have the direct interaction with

the customers which in turn builds up the customer‟s satisfaction and trust towards the organization. Joseph and

colleagues (2003) in their research identifies that among the unethical behavior of the employees, unethical

selling behavior is considered as the important unethical behavior. Mostly the sales people mislead the

customers or show the inappropriate conduct just because that would make greater sales revenue.

Sales related jobs are considered to have more ethical issues as compared to other jobs. The reason which may

relate to this stance is the sales based jobs are mostly commission based and total number of sales done. The

more the individual is able to sale out the product, the more commission will be given to the individual and this

makes the employee to sell out the product even by following the unethical behaviour. This in turn causes the

employee to indulge in more unethical activities and practices. So in order to increase sales, the team or the

individual may lie or falsely communicate about the product characteristics to the employee. Bellizzi (2003)

finds out that leaders have more lenient and comfortable attitude towards the individuals who are better

performers in sales and have harsh and rude attitude towards low performers not involved in unethical selling.

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Sales force ethical behavior is of immense importance as they are exposed to more unethical pressures as

compare to other employees as they are considered to be revenue generators for the organization (Sergio & Jose,

2005). According to Tansu (2001) to measure the sales employee performance, we can look at the total volume

of the sales done by them. Sales representatives have the direct link and communication with the clients. It‟s the

foremost duty of the customer representative to listen to the client and solve out their problem with the utmost

honesty. There are chances that the sales employees who follow ethical practices and standards set by the

organizations are considered to be more committed with their jobs as compared to the employees who do not

follow the ethical practices while performing their task (Randi and Galen, 1994).

The sample taken for this research belongs to the sales department of the banking sector, and the employment

conditions in Pakistan are not favorable, hence the employees working on truly commission or highly related to

the revenue generation may get involved in many unethical activities. Few of the unethical practices in baking

sector of Pakistan are:

1. To ask the client to get registered for the credit card just to increase the commission for the sales

representative, and tell the client to not activate it if he do not want to use it.

2. Not letting the client know about the true hidden charges associated with some loan or investments.

3. Manipulation of the customer needs.

4. Miscommunication about the products features.

Literature suggests that the competition based upon the prices in the financial sector is considered to be difficult

in the current era. So the main focus is competition focused on the customer relationship. For banks it is very

important to maintain the highly effective relationship with the clients in order to lead in the industry. For this

purpose the sales people hold the strategic position in the organizations (Laith, 2012).

The sales representatives want to build a good impression and image as they have to build the direct relationship

with the customers, retailers and suppliers (Russell & colleagues, 1999). To build the good image in the eyes of

others, it is necessary that the sales employees do not deviate from ethical practices. Nigel and colleagues (1998)

suggests that outcome is not the only predictor of the salesperson performance, but behavior of salesperson

should also be evaluated. It is of utmost importance to understand that sales force is the asset for any

organization. The leaders should understand that standard of performance of the salespeople is how well they

perform because that is closely linked to performance of the organization (Emin & colleagues, 1994).

Murphy (2004) says that when there is the expectation of group members to act ethically then the individual also

behaves ethically as s/he feels the pressure to from the team to do so. According to Katz and Kahn (1966) (as

mentioned in John and colleagues, 2009, p. 915) “When a sales team has low ethical standards, it does not have

a strong ethical ideology driving norms of ethical behavior, and hence the latter fail to make explicit that

unethical sales activity is inappropriate for members of the sales team”. The ethical conduct of the employee is

higher where the ethical behavior is encouraged and rewarded by the leader and norms (Linda & colleagues,

1998). Patricia and colleagues (2001) suggests that in order to reduce the unethical behavior of the employees,

the managers or leaders of the team shall take the corrective actions against the unethical practices.

H 1: The higher the ethical standards of the sales team, the lower the probability to engage in unethical

behavior.

2.3. Sales Leader’s Characteristics

Role of leader and personal moral philosophies are two main characteristics of leader discussed as under which

shape the ethical behavior of the employee.

2.3.1. Role of Leader in Shaping Ethical Behavior of Sales Employee

Leadership is considered as important factor to have an impact on effectiveness and efficiency of the

organization. Effective leadership helps to develop the morale of the employees, builds the effective work

environment, motivates and guides the employees towards goal achievement, and helps to create the confidence

in employees. Leadership is to influence the employees working under him (Thomas & colleagues, 2005).

Russell and colleagues (1999) point out that the manager‟s practices are followed by the employees. The way

the manager will act, the employees will follow that. If managers want to incorporate ethical standards in the

employee, they need to act accordingly. Dean and Alan (2004) highlight in their research many winning

managerial skills like self-awareness, self regulation, self motivation, and effective communication, these skills

help out the employees to work effectively and to achieve the targeted goals of the organization.

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The traditional view suggests that the activities related to sales leadership are performed by sales executives

present at top-level and to some extent by the field sales managers (Thomas et al., 2005). The main aim of the

leader of sales team is to perform in such a way that it helps out the organization in revenue generation (Mary,

2003). Team leader should be able to perform in an effective way and should have the capability to extract best

out of his employees. In order to do that leader must act as a role model. Being a leader is a tough job. Because

team members do not have the same ethical ideology as of the leader, they possess their own moral values that

are based on their religion, family back ground, culture etc. Being a leader, it‟s your task to manage them

according to the rules and regulations of organization. Firstly, their action will reflect the image of the leader as

well as of the organization. Secondly as discussed earlier leader is a role model for the employees, and

employees look forward for formal or informal clues towards him. It is the duty of the leader to communicate

and train the employees about the ethical standards of organization. Importance of the ethics and consequences

in case of violation of these ethics should be made clear by the leader to the employees.

In an article published in human resource management international digest in 2011, it is been argued that if once

the leader is involved in unethical behaviour, even though the perception about him is good or true, there is no

way to get out of it. As the employees look at the leaders for what they do, if the leader will consider any

unethical activity as fair, employees will do the same. It has been suggested that the task of the leader is not only

to monitor the activities but to coach the employees towards the right direction. Tansu (2001) in his research

listed 3 antecedents that influence the behavior and performance of the salespeople. It includes sales manager

activities, salesperson‟s characteristics and sales organizations design. Eleonora and Niki (2006) identifies in

research that there is lack of evidence of ethics and ethical behaviour in leaders and managers. If leaders are not

following the ethical standards, or their behaviour is not in accordance to moral values, then there are fewer

chances that employees will follow the ethical standards too.

In this research paper the role of authentic leader will be discussed with the reference to employee ethical

behavior. The authentic leaders are the ones who live their life by values, they empower the employees, they

lead through values, develop the trust among the employees and make the promises and then deliver according

to the promises, have courage, lead from the heart, and are team builders. Carol and Greta (2009) in the research

suggests that authentic leadership helps to build trust in the organizations, transparent relationship, enhance

employee commitment, and have more moral intentions. Milorad (2005) highlights that the leader is one who

guides people towards the goal, self awareness and self determination, leaders are important determinants of the

sustained positive behavior.

“Authors revealed that authentic leaders must behave consistently with their moral principles and respect the

rights of all stakeholders. Authenticity seems to be closely linked with truth and transparency” (Dion, 2012,

p.4). “An authentic leader must achieve authenticity, as defined above, through self-awareness, self-acceptance,

and authentic actions and relationships. However, authentic leadership extends beyond the authenticity of the

leader as a person to encompass authentic relations with followers and associates. These relationships are

characterized by: a) transparency, openness, and trust, b) guidance toward worthy objectives, and c) an emphasis

on follower development” (William, 2005, p. 345).

May and colleagues (2003, p. 253) assert that “authentic leaders [. . .] see themselves as the „moral standard

bearer‟ for their organizations, demonstrating consistently high standards of ethical conduct”. Authentic

leadership is considered to be the basic construct of creating trust, making employees to act more positively,

able to have greater impact on employee performance and add value to the decisions (Susan & Fred, 2006).

Character of the leader is important factor in the performance. The character in this respect caters to the moral

excellence and authentic leaders are one who shows consistency among their ethical values and actions (James

& colleagues, 2006).

H2: Leader’s authenticity helps the employees to adopt more ethical behavior in the organization.

There are many important factors associated with the leader that helps to shape the ethical behavior of the

employees. In this research 2 main characteristics have been discussed:

2.3.2. Personal Moral Philosophy

The theories presented in marketing ethics considers the moral philosophies as one of the important factor that

effect the ethical decision making process by the individual (Anusorn, 2000). Personal moral philosophies have

been divided into two sub categories i.e. idealism and relativism. According to Mario (2008) personal moral

philosophies have a great influence on the individual‟s ethical intentions, what are the perceived ethical issue

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and its sensitivity, on the ethical verdict and on the social responsibility of the organization. Moral philosophies

are considered to be either rule oriented or consequences oriented (Donelson, 1992).

Relativism and idealism are two different approaches to the personal moral philosophies. Ethical relativism is

the concept that relates to the individual‟s belief. According to dictionary meaning, Ethical relativism is defined

as nothing is right or wrong. It depends on the individual‟s values based upon the cultural context of the

individual. What is right for one individual may not be the same for other; even what is considered to be correct

in one culture is not necessarily considered as correct in the other culture. There are no moral philosophies that

are considered to be true for everybody, in every cultural context and at all the times.

Forsyth (1980) defines relativism as "the extent to which an individual rejects universal moral rules" (p. 175). It

states that nothing is considered to be true for everybody, there does not exist anything absolutely moral and

nothing is morally right or wrong. It is the context in which one defines the practice or behaviour as right or

wrong. This is also assumed that our values changes over the specific period of time. The concept behind

relativism is that what is correct and incorrect can vary from one social group to another and it can be verified

through consensus. If majority from a group considers it as right then that behavior or practice is ethical, or if

consensus suggests some practice or behavior as wrong then in that social group it will be considered it as

unethical (David, 2008).

The main idea presented in this research is to find out the impact of the level of relativism of the leader on the

sales force ethical behavior. John & colleagues, (2008) highlight that if the leader is high on the relativism, he

will not make harsh judgments on the ethical behavior of the employees or will not question them on their

activities because he believes that what is true for him is true for others as well. And if he is low on relativism

philosophy then there are chances that he would question the activities and behavior of the employees because

in his opinion they would have acted unethically.

Forsyth (1980) defines idealism as the degree to which the individuals "assume that desirable consequences can,

with the 'right' action, always be obtained" (p. 176). Forsyth (1992) argue that if someone wants to achieve

something desirable, the positive actions can help him to do that without harming the others. So the leaders who

are rated higher on idealism are considered to be more ethical and expect that the employees working under him

should also act ethical and should follow those practices which do not affect others. Similarly the leader, who is

rated low on idealism, will definitely not show more concern towards the ethical practices of the employees.

Singhapakdi & colleagues (1999) in the research find out that for better ethical working of the leaders and the

organizations should focus on more idealistic approach and less relativistic approach; and Anusorn (2000)

suggests that if the leaders are able to act high on idealism and low on relativism, it will lead them towards

enforcing the ethical standards in the organizations in the true sense.

H3: The greater the extent to which sales leaders’ personal moral philosophy is relativistic, the lower the

ethical standards of their sales teams.

H4: The greater the extent to which sales leaders’ personal moral philosophy is idealistic, the greater the

ethical standards of their sales teams.

2.4. Organizational Culture

There are many ways in which organizational culture is defined. All the major definitions of culture highlights

that the culture of the organization is the shared set of values, norms and beliefs that are practiced in the certain

organization. “A subset of organizational culture, representing a multidimensional interplay among various

“formal” and “informal” systems of behavioral control” is the definition given by (Trevino & colleagues, 1998,

p. 451). Randall & colleagues (1990) define organizational culture as a set of shared values, beliefs,

assumptions, patterns of relationships and behaviour and it has a deep impact on the employee behaviour.

According to Uttal‟s findings as quoted in Randall & colleagues (1990), “Culture refers to a system of shared

values (what is important) and beliefs (how things work) that interact with a company's people, organizational

structures, and control systems to produce behavioural norms” (P. 157). According to Randall & colleagues

(1999) organizational culture has the direct impact on the employee behaviour. Adler (1986) and Triandis

(1996) define the culture as the same set of attitude, values, beliefs and behavior which are shared by

employees.

Robert (2008) defined three types of culture: first, bureaucratic cultures: that has a hierarchical structure with

well defined rules and regulations, responsibilities and is the operations are well controls in such organizations;

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second, innovative cultures are more focused on results, are more creative and innovative, organizations are risk

takers and that make the work environment more pressurized challenging for the employees. Lastly, supportive

culture in the organizations is where there is the healthy environment of trust and relationships exists;

collaboration and personal freedom to perform is encouraged in such cultures.

2.4.1. Organizational Culture and Employee Behaviour

Every organization has its own set of values, beliefs and norms that are followed by the employees. The culture

affects the employee behaviour positively or negatively depending upon how the culture is being implemented

in the organization. It is important for the leaders to develop and maintain the ethical culture within the

organization so to make the employee work accordingly (Thomas & colleagues, 2006).

Mark (2001) finds out that the employees were less involved in unethical activities of the organization in which

there is a proper implementation of code of conduct, as compared to the employees of the organizations that do

not have a proper code of ethics implemented in the organizations. William (2010) also highlights that the

employees perceive that the ethical culture of the organization has deep impact on the organizational

commitment and ethical decisions done by the employees.

Unethical behaviour mostly occurs in the organizations where unethical conduct is not questioned or given due

importance. This may also happen where the reward or punishment is not related to the employee behaviour. So

in order to avoid such situations, it is important for the leaders to control such behaviour or culture that leads to

the deviant behaviour. The organization must promote transparency in implementation of code of ethics in the

organization so that the employees should not indulge themselves in unethical behaviour.

Stephen and Tom (2007) contend that the culture has a deep impact on the ethical practices. People from

different cultures show different ethical behaviors. Stephen and colleagues (2007) argue that when the employee

work behavior is not aligned with the organizational norms, it will affect the working of the organization like

decision making processes, and financial well being of the organization. Patricia and colleagues (2001)

highlights the impact of organizational culture on the ethical behavior of the employees. James (1994) figures

out that if the organizations have proper ethical climate then it would lead towards more ethical behavior among

employees and that would ultimately lead to the positive performance of the organization, and if the ethical

climate is just instrumental then that would lead to the unethical behavior of the employees that would

ultimately lead to the negative performance of the organizations. Arzu (2008) identifies that “Person‟s

perception of ethical standards and subsequent conduct is influenced by institutional factors (e.g. ethics

legislation), personal factors (e.g. moral development), and organizational factors (e.g. code of ethics)” (p. 779).

The organization will face the downfall of the organizational culture, when the employees feel unhappy with the

current organizational culture and due to this there comes deviance in the behavior of employees. This behavior

can be unethical and in return will affect the organizational performance. The organization must implement

proper code of conduct so that the employees do not adopt unethical behavior. To have the positive impact of

the code of conduct, it should be properly formulated, implemented and communicated to the employee. If the

upper management wanted to reduce unethical behavior among employees, it should be made clear that their

behavior will affect the front line sales managers, performance evaluations and reward structures (Bass &

colleagues, 1998).

H5: the better organizational norms and values are defined more ethical behavior will.

2.5. Sales Team-Specific Factors

Along with the organizational and leader‟s specific characteristics, few of the sales team factors also shape the

ethical/unethical behavior of the employees.

2.5.1. Job Insecurity

Employees feel more insecure of their present job due to the rapid change in businesses because of the

globalization. The companies are moving towards the mergers, acquisitions, alliances or even going through

heavy downsizing due to the economic recession which in turn increases the level of stress among the

employees (Susan et al., 1989). All these conditions make employees feel more insecure towards their job and

this may affect their performance. In past, there were many job opportunities available to the employees so they

could easily switch their job. But now due to the recession and less job opportunities it has become more

difficult for the employees to switch jobs. The employment conditions in Pakistan do not favor job switching.

The jobs are not readily available in the market, so the employee feel threaten and do not want to lose their

current job.

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Due to job insecurity, employees feel threatened about their financial security, personal and career growth etc.

According to the Employee Job Survey Report (2010), job security is considered to be at the top most priorities

ranked by the employees and ranked number two by the human resource professionals.

Job insecurity has found to have an impact on the employees attitude. “Job insecurity has been defined as an

essential and involuntary change regarding the future existence of the present job or of significant job features,

such as deterioration of working conditions, waning career opportunities, and declining salary development”(

Johnny & Magnus, 2003, p. 217). Leonard and Zehava (1984) define job insecurity as “powerlessness to

maintain desired continuity in a threatened job situation” (p. 438). Job insecurity is the continuation of job in

stressful state of mind where employees feel insecure or threatened from the current job. It may be defined as

the probability that the employee feels insecure about the job. There could be many reasons for the job

insecurity including downsizing by the employer, bad employee performance, prevailing business conditions

(like mergers, acquisitions etc.) and the employee‟s personal skills.

Psychological contract exists among the organization and employees. This contract helps them to understand

that what is expected from each other. If the organization and the employee are unable to maintain

psychological contract among each other, there will exist the state of ambiguity and that will lead to stressful

state of mind for both the employee and the employer. Johnny and Magnus (2003) suggest that role ambiguity

and role conflict create perceptions of job insecurity because that threatens the working of the employee, so job

insecurity has found to be the important stressor and empirically there have been support for the job insecurity

and employee attitude. According to Doha-Shin and Joel (2007) job insecurity is the cause of employee

demonization. Susan & colleagues (1989) point out that the organization and the employees have the

relationship of commitment, contentment, confidence, and trust. If employees and the organization is unable to

maintain such relationship then this condition will lead to the job insecurity and that will cause sabotage in the

attitude of employee. This attitude and behaviour can be unethical and can harm the organizational goodwill.

Hartley and colleagues (1991) highlight that there exists the negative relationship between job insecurity and

employee job attitude. Hellgren & Sverke (2002) points out that job satisfaction and involvement, physical and

mental health, organizational commitment and trust, performance and turnover intentions are some of the

attitudes that may be affected by the job insecurity. Inmaculada and colleagues (2010), Jack and Brotheridge

(2007), Johnny and colleagues (1999) also strengthen the belief that job insecurity has the negative correlations

with employee behaviour like job satisfaction, organization commitment, attitude and well being etc. Ayalla and

Zehava (1998) concluded from different researches that job insecurity has the adverse relationship with

employee attitude.

H5: The more job insecurity of sales teams, the lower their ethical standards will be.

2.5.2. Cooperation

Yilmaz and Hunt (2001) explain cooperation as “the willful contribution of individuals or groups to the

successful completion of tasks” (p. 335). Employee cooperation is gaining enormous significance in the

organizations. Cooperation is the main ingredient to make the organizations more successful and effective. It

helps the employees to move in one direction for the achievement of organizational goals. Cooperation also

supports the employee positive attitude towards organization and tasks which he has to perform.

Rachid and Dominic (2006) state that cooperation among employees is very important factor for the success of

organization. Cooperation is most widely considered phenomenon in the organization. The employees should be

encouraged for win-win situation in the organization, when the employee‟s shows cooperation, it makes easier

for them to accomplish the goals. This will help the employees to overcome conflict and as a result organization

grows and there will be moral and healthy competition.

Similarly René and Petru (2010) highlights in their research that cooperation is a good predictor to distinguish

between the successful and unsuccessful organizations but on the same time some employees use other

employees in the team to move forward towards their personal success. Employee cooperation is of many types

like information sharing, showing organizational citizenship behavior, building teams etc. in this research

information sharing is considered at the main characteristics of cooperation and considered for the study. It is

considered that cooperation among sales team is much required for the successful completion of the task.

Employees are just like the part of machine working together to get the end result. And information sharing is

the lubricant added to this machine. Sales people play a vital role in the organizational success. They have

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important information about customers, suppliers and competitors that can help the organization to improve its

processes of doing businesses. This also helps the organization to adapt the changes for the improvement of the

organizational working. It is important for the organization to let these sales people participate in the decision

making process, to get useful information for the organizational growth (Philip & colleagues, 2000).

According to John and colleagues (2009) Information sharing can help to lower down the adverse anxiety on

ethical standards.

H6: The more the sales team cooperate (through sharing information internally) the higher their ethical

standards will be.

Theoretical model:

3. METHODOLOGY

3.1. Population and Sample

The main idea of this research revolves around the factors shaping the ethical behaviour of the sales force. As

discussed earlier, banks are the most flourishing industry of the financial sector, so the sample selected for this

research is the leaders and the sales force of the banking sector of Pakistan. The employees working in the banks

are considered to be the asset and the revenue generators for the organization, so to identify the factors to

modify their ethical behaviour has been the key interest in this research.

Formal questionnaires were designed and circulated to the employees and leaders by following the convenience

sampling methodology due to time constraint. The analysis of this research follows the quantitative approach

which will be followed by correlation and regression for the result analysis. The total sample size of the research

is 102 leaders and 2 employees working under each leader. Of the total 350 distributed Questionnaires, 306

Questionnaires were found useable at a response rate of 87 percent.

SALES FORCE ETHICAL

BEHAVIOR

ORGANIZATIONAL

CHARACTERISTICS

ORGANIZATIONAL

CULTURE

MANAGERAIL

CHARACTERISTICS

IDEALISM

RELATIVISM

LEADERSHIP STYLE

(Authentic Leadership)

Probability that the

employee will act

unethical in ethical

situations

SALES FORCE

CHARACTERISTICS

TEAM COOPERATION

JOB INSECURITY

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3.2. Scales and Measures

All measures were obtained from a “self-report” questionnaire. A response scale anchored by 1, “strongly

disagree,” and 5, “strongly agree,” was used, and high variable scores denote high levels of the construct in

question.

3.3. Sales Leader’s Characteristics

Sales leader‟s characteristics that affect the employee ethical behaviour were measured by using two moral

philosophies.

3.3.1. Sales Manager Relativism

Sales manager relativism was measured by scales developed by Forsyth (1980). The scale measure the extent to

which sales managers believe that what is ethical varies from situation to situation. Respondents are asked to

indicate their level of agreement toward each statement, from 1= strongly disagree to 5 = strongly agree. The

cronbach‟s alpha for this variable is .922.

3.3.2. Sales Manager Idealism

Sales manager idealism scale measures how strongly sales managers believe that ethical actions always leads to

positive results and unethical behaviours harm others, developed by Forsyth (1980). The cronbach‟s alpha for

this variable is .898.

3.4. Sales Team Characteristics

Sales team characteristics that effect the ethical behaviour of the employee was measured by using two

dimensions.

3.4.1. Sales Team Job Insecurity

A 3-item measure of sales team job insecurity is used in research developed by Probst, (2003b). It measures the

extent to which sales managers believe that sales team members perceive their jobs are secure ore in danger. The


3.4.2. Sales Team Cooperation

Sales team cooperation was measured using 3 items scale extracted from Yilmaz and Hunt‟s (2001) sales

cooperation scale. It shows the extent to which sales team members share information among each other. The


3.5. Sales Team Ethical Standards

To measure sales managers‟ perceptions of sales team ethical standards, Hunt, Wood, and Chonko (1989)

measure of ethical values is used for this research. The cronbach‟s alpha for this variable is .846.

3.6. Corporate Ethics Scales

Corporate ethics scale was also measured by using 5 item scale developed by Hunt, Wood and Chonko (1989).

The scale measures the extent to which organization culture supports the ethical behaviour in their employees

and the information organization provide its sales force about the importance of ethical behaviours. The


3.7. Leadership Style Scale

Authentic leadership was measured by using 8 item scale developed by Avolio, Gardner and Walumbwa

(2008). This scale is used to measure the extent to which the leadership style is authentic for the employees. The


4. Results

Table 1 represents the KMO value which is equal to .682 and Bartlett‟s test significance as .000. This indicates

that the questionnaire is reliable for the analysis. Similarly the following table shows the factor comparison

analysis of the questionnaire.

Table 2 Represents the factor analysis of the variables and their items.

Table 3 shows the combined correlations between the variables which are Managerial characteristics, sales team

ethical standards and sales team characteristics. The result concludes that a highly significant but a negative

value between the variables suggests that the relationship between them is negative. ** shows the high

significance level at 0.01 level of significance.

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Table 4 shows the dimension wise Mean, SD and correlation of managerial characteristics having three

dimensions which are sales Relativism (SR), sales Idealism (SI) and Leadership Style (LS). The correlations of

all variables are highly significant but have negative correlation which shows that the variables are negatively

related. ** shows the high significance level at 0.01 level of Significance and * shows the significance at 0.05

level of significance.

Table 5 shows the dimension wise Mean, SD and correlation of sales force Characteristics having two

dimensions which are Job insecurity (JI) and team Corporation (TC). The correlations of all variables are highly

significant but have negative correlation which depicts that the variables have negative relation between them.

** shows the high significance level at 0.01 level of Significance and * shows the significance at 0.05 level of

significance.

Table 6 and Table 7 show the regression analysis of the variables. With the help of R and adjusted R2

the

hypothesis are tested individually. The first hypothesis which states that the higher the ethical standards of sales

team then the probability that the sales team member will engage in unethical behavior is lower in ethical

situations is accepted as the value of beta is 0.442. This relationship between the two variables is highly

significant. This indicates that first hypothesis is accepted. If the sales team poses the high ethical standards, the

employees as individuals will act more ethically. As working in a team, the individuals have more influence on

other team members, so in order to work together for achieving the certain goal, the employees will act more

ethically.

The second hypothesis indicates that leaders‟ authenticity helps the employees to adopt more ethical behavior

in the organization. The results after testing this hypothesis indicate that the relationship between leadership

style and sales team ethical standards is negatively significant as value of beta is negative which is 0.120 as

presented in Table 5. Therefore, our second hypothesis is rejected. In Pakistani context, it is proved from the

result that authentic leadership is not influencing the sales team ethical behavior. The reason for this negative

relationship is due to in-group collectivism found in Pakistani culture. Because of this in group collectivism

employees develop different relations with their leaders. The employees from the in-group circle of the leader

have the advantage of developing a stronger relationship with their leader than those employees who are not part

of in- group. Therefore the employees from in-group circle will consider the leader as role model and will

follow him. The employees from the out group will not be able to develop the strong relationship with the

leader. To be the part of in group the employees may involve in unethical activities in order to increase the sales

revenue so to impress the leader.

The third hypothesis states that the more the leader is relativistic; the lower is the ethical standards of the sales

team. The results show that the third hypothesis is supported as the beta value is -0.480. Which means the

relation between sales relativism and sales team ethical standards is negative. The value is significant enough to

support the second hypothesis .When the level of relativism is high the leader will believe that the culture and

norms followed by the people differ widely. Hence if the leader considers the fact as true that the norms are

different for everybody, then there are chances that the employees will not follow the same norms as of the

leader. This can create the difference between the ethical standards of the leader and the employees which can

move the employee towards the unethical behavior.

Ethical relativism deals with the level of morality being relative among cultures. Since the norms and values are

different for every culture therefore the ethical relativism states that what is morally right and easily accepted in

one society may not be accepted and practiced the same way in other society. There are no universal norms and

values practices across the globe. So this belief also relates to the impact of the leader‟s belief on the employee

ethical behavior. If the leader belief is that there are no universal norms applicable to all at all times, then there

are strong cases where the leader will neglect unethical behavior of the employees.

The fourth hypothesis, the more the leader is idealistic; the higher is the ethical standards of the sales team is

also supported as indicated by value 0.243. The relation between sales idealism and sales team ethical standards

is positively significant which means that higher the sales leader is on idealism, high will be the sales team

ethical behaviour. The data collected for this research clearly indicates that the leaders in Pakistani culture also

value that the behaviour of the employee should not harm or hurt the feelings of other colleagues, and clients.

The clients in banks or in any other service industry in Pakistan are given a huge importance, due respect and

care. The leaders do not want that the clients should be treated unethically or harshly. This will influence the

practices of the employees which will lead them towards more ethical behavior.

Fifth Hypothesis that the better organizational norms and values are defined more ethical behavior will be is also

accepted as concluded from the results. The results indicate that beta having value of 0.128 show the fifth

hypothesis is also supported as the corporate ethical standards have positively significant relationship with sales

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team ethical behaviour. This means that ethical culture promotes and increase ethical behaviour in sales team.

The research shows that the banks in Pakistan follow a code of conduct strictly. The banks have corporate

ethical standards which are not only documented but also implemented which have to be followed by the bank

employees. The employees know that in case of rule violation there could be strict actions taken against them,

and that can directly affect the appraisal of the employees. Therefore, our fifth hypothesis is also accepted that

the proper corporate ethical standards lead to better ethical behaviour of the employees.

Our sixth hypothesis, the more job insecurity of sales teams, the lower their ethical standards will be. The

hypothesis is also supported as indicated by value -.319. The relationship between job Insecurity and sales team

ethical standards is negative but significant. This means that higher the job insecurity lower will be the ethical

behaviour of sales team. As indicated through the data, that the job security of the employees is directly related

with the performance of the employee. In banks the sales people are mostly concerned with the commission

based sales or target oriented performance in Pakistan. So the employees need to reach the targets given to them

in order to earn more commission and to have more job security. In case where they feel the lack of assurance in

achieving the targets, they use unethical behaviour. The unethical behaviour may include miscommunication

about the product features, manipulating the client‟s needs etc. Therefore hypothesis fifth is accepted that is the

employees are insecure about their jobs, there are more chances that they will indulge in unethical behaviour.

Seventh hypothesis is also supported as shown by value 0.133. The relationship between Team Corporation and

ethical behaviour is positively significant which means that high will be Team Corporation more will be ethical

behaviour in sales team. The data shows that if the team has cooperation among the employees, they share more

information with each other, they have more trust among them, and the employees will act more ethically.

Hence hypothesis seventh is also accepted that if team cooperation is present, the employees will act more

ethically.

5. Discussions

This study investigates the relationship between Sales leader, organizational characteristics, and sales team

determinants of salesperson ethical behaviour. It is an extended research. Previous researches have been

conducted in different countries but this study is conducted in Pakistani context, moreover this research is

focused on the banking sector.

5.1. Managerial Characteristics and Sales Force Ethical Behaviour

The results for managerial characteristics and sales ethical behaviour reveal that there is highly significant

relationship between these two phenomena. The relationship is negative which is indicated with the help of

negative correlation.

The results of the study also provided evidence that authentic leadership style has negative effect on sales team

ethical behaviour. In Pakistani banking sector the authentic leadership style is not supported enough to promote

ethical behaviour in sales team. According to Dion (2012), William (2005) and May and colleagues (2003)

relation between the leader and the employee should be transparent and trustworthy; the leader should be

consistent and moral standard bearer. In the context of banking sector of Pakistan this is due to in-group and out

group collectivism phenomenon that the leaders are not been able to develop the trust among the employees.

The employees, who are close to their leaders gain the trust and act more ethically as compare to out groups

employees. So hypothesis 2 is rejected that authentic leadership style helps in developing the ethical behaviour

of the employee. Other than this stance, there could be many other reasons for the individual to get involve in

unethical behaviour like job insecurity, moral philosophies of leader, organizational culture etc.

Leader‟s moral philosophies also has a profound impact on shaping the employee ethical behavior. Mario

(2008), John and colleagues (2008) also says that the moral philosophies have an influence on the ethical

behavior of the individual. It has been concluded in this research as well that the moral philosophies affect the

individual ethical behavior. Hypothesis 3 and 4 has accepted showing that higher the leader is relativistic, lower

the ethical standards of the team. Similarly higher the leader is idealistic, greater the ethical standards of the

sales team.

5.2 Organizational Characteristics and Sales Force Ethical Behaviour

Organizational characteristics have a great impact sales team ethical behaviour, the study also indicated that

employees in such organization produce productive results which have defined their norms and values clearly to

its employees. Culture plays a significant role in employee‟s performance. When employees know that

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performing unethical behaviour in their organizational culture can lead to job insecurity, they behave ethical and

according to the code of conduct of the organization. This is also supported in current study that the banking

sector of Pakistan has proper code of conduct. Rules and regulations according to the cultural norms and values

and which have to be strictly followed by the bank employees. Customer care and relationship is maintained to

have a better outcome. The idealistic leadership style ensures that customers are treated ethically. Organizational

culture plays the vital role in developing the employee behavior. Mark (2001), William (2010), Stephen and

Tom (2007) suggests that the organizational culture has the impact on the ethical decision making, and ethical

behavior. This research also showed that if organization prevail ethical culture, employee‟s behavior turns out to

be more ethical. The accepted hypothesis 5 also purposed that the more define ethical norms and values, more

the employee will behave ethical.

5.3 Sales Team Characteristics and Sales Team Ethical Behaviour

The relationship between sales team characteristics and sales team ethical behavior indicated from the result of

this study that the sales team ethical behavior will also depend on the characteristics of the sales team which are

i. team corporation and ii.job insecurity. The result of the study shows that the relation is highly significant but

negatively correlated. If the level of job insecurity increases, the level of ethical behavior of employees will

decline. The employees who feel insecure about the job did not hesitate to behave unethical to survive and save

the job.

This research also shows that the job insecurity or to gain the leader‟s trust the employee will involve in

unethical behavior. Hartley and colleagues (1991), Hellgren and Sverke (2002), Inmaculada and colleagues

(2010), Jack and Brotheridge (2007), Johnny and colleagues (1999) strengthen the belief in different researches

that job insecurity has the negative correlations with employee behavior like employee involvement,

organizational commitment, physical and mental health etc. It helps to supports the hypothesis 6, that greater the

job insecurity, lower the ethical standards of the employees. Team cooperation has been researched in this

article. As Daniel and colleagues (1998) say that the team members are affected by the decision made by others

in a team and Philip and colleagues (2000) find out that information sharing as considered a factor in team

cooperation affects the ethical standards of the team. So it has been proven in this research too that if the sales

team members cooperated among each other, the greater will be the ethical standards of the team.

6. Conclusion and Implications

The findings of this study also have some implications. The results indicates the empirical and theoretical

research considering the effect of sales team ethical behavior and other determinants of this ethical behavior, as

there are small amount of researches in this domain. As expected, the study discovers the importance and impact

the finding of this study has some implications. The results present the theoretical and empirical research

regarding the effect of the Islamic work ethic, as there have been few researches in this regard. As expected, the

study revealed the importance of managerial characteristics, organizational characteristics and sales team

characteristics on sales team ethical behavior. Therefore this study also provides a foundation for further

research in the sales team ethical behavior.

Practical implications for this study offer attention-grabbing strategy for the managers of banking sector in

Pakistan in formulating ethical standards for their Human resource. As it is important and foremost part of any

organization. Besides this, to have better culture, high performance and cooperation of teams‟ managers need to

incorporate ethical standards in the organizations. For this mangers ensure checks and balances for every

employee and place importance on the application of ethical standards in the workplace.

There are various limitations to this study which needs to be well thought out. Firstly the sample size from

organizations and participants is small and for future study there should large sample size which includes more

institutions to get better results and findings. Secondly, the generalization of results and findings of the current

study present can be debatable because of the nature of the sample. Thirdly, there are limited variables used in

this study which can also have an effect on findings. For future study it is better to include other leadership

styles, organizational characteristics and sales team characteristics in relation to have more realistic findings. In

future the study should be carried out in other sectors and the results should be comparing with banking sector,

this will provide information as to which sector follows what kind of leadership style and various characteristics.

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Annexure

Table 1: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling

Adequacy. .682

Bartlett's Test of

Sphericity

Approx. Chi-Square 3415.032

Df 820

Sig. .000

Table 2: Factor Analysis

Items Extraction

Relativism .673

Relativism .804

Relativism .755

Relativism .733

Relativism .761

Idealism .621

Idealism .772

Idealism .858

Idealism .754

Idealism .794

job insecurity .736

job insecurity .725

job insecurity .747

team corporation .730



ethical standards .681












ethics scale .762

ethics scale .764

ethics scale .815

ethics scale .736

ethics scale .787

leadership style .743








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SD= Standard deviation, JI= Job insecurity, TC= Team Corporation

Table 3: Means, Standard Deviations and Correlation of variables

No Variables 2 3 Mean SD

1 MC -0.304** 0.495** 3.669 0.627

2 STES -0.188 2.905 0.622

3 STC 3.735 0.606

**Correlation is Significant at the 0.01 level (2- tailed)

Table 4: Dimensions of managerial characteristics


1 SR -0.612** 0.263* 3.602 0.955

2 SI

-0.221* 3.982 0.805

3 LS 3.515 0.868

**. Correlation is Significant at the 0.01 level (2- tailed)

*. Correlation is significant at the 0.05 level (2-tailed)

SD= Standard deviation, SR= Sales Relativism, SI= Sales Idealism, LS= Leadership Style

Table 5: Sales Force Characteristics dimensions


1 JI

-0.456** 3.810 0.928

2 TC 0.234**

3.660 0.833

**Correlation is Significant at the 0.01 level (2- tailed)

SD= Standard deviation, MC= Managerial Characteristics, SES= Sales Team ethical Standards

STC=Sales team Characteristics

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VOL 5, NO 1

Table 6: The Results of Regression Analysis

Variables

Dependent Variable

Sales Team Ethical standards

Independent

MC

LR

LI

LS

R Adj R2 ∆R

2 Β Sig

0.281

0.680

0.287

0.153

0.079

0.462

0.082

0.023

0.070

0.457

0.073

0.014

-0.309**

-0.480**

0.243***

-0.120*

0.004

0.000

0.003

0.126

CES

0.133

0.018

0.008

.128**

0.182

STC

JI

TC

0.220

0.433

0.162

0.049

0.188

0.026

0.039

0.180

0.016

-0.248**

-0.319**

0.133***

0.026

0.000

0.104

* β is significant at ρ < 0.05 level ** β is significant at ρ < 0.01 level.

Table 7: Result of regression analysis of employee ethical behavior

Independent

Variable:

Employee

ethical

standards

0.485 0.235 0.228 0.442 0.000

* p <.05

** P < .01

*** p <.001

MC= Managerial Characteristics, SES= Sales Team ethical Standards, STC=Sales team

Characteristics, LR= Leader Relativism, LI= Leader Idealism, LS= Leadership Style I= Job insecurity,

TC= Team Corporation, CES= Corporate Ethic Scale

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