Impact of Managerial Values on Moral Judgment, Ethical Work ...
Transcript of Impact of Managerial Values on Moral Judgment, Ethical Work ...
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Impact of Managerial Values on Moral Judgment, Ethical Work Climate and
Business Consequences: A Case of Sri Lankan Manufacturing Entrepreneurs
G D V Rupika Senadheera- Senior Lecturer/ PhD Student University of Sri Jayewardenepura
In the contemporary business world, entrepreneurs occupy the strategic centre as movers and
shakers of intellectual and material wealth. They shape and color their respective societies with
the way they utilize the intellectual and material wealth. They channel the intellectual and
material wealth through different streams of production in an effort to attain prosperity. Hence,
business activities of an entrepreneur are viewed in terms of interactions that take place between
a business and the society within which it function. At a theoretical basis, it is surmised that
when the entrepreneurs prosper the society within which they function too prosper. Similarly,
entrepreneurship in general is viewed in a positive light as a beacon of stability and certainty in a
world plagued with uncertainty and instability. They are expected to sustain their respective
societies by generating jobs, fueling innovations, fostering development, demarcating a cogent
social gradation. Hence fundamentally they are given the difficult task making the world a better
place to live. Yet, all these expectations are piled upon the assumption that entrepreneurial
prosperity coincides with societal prosperity. Recent large scale corporate debacles such as
Enron testify to the fallibility of this assumption. Such cases of corporate fraud indicate a
possibility of entrepreneurship being rather ignoble in their operations so as to glean out a
parasitical existence. This duality of entrepreneurship reflects a core contention common to all
entrepreneurs- the struggle between social wellbeing and organizational wellbeing. Within this
struggle, values of entrepreneurs become the most crucial determinant that dictates the ethical
commitment of an organization to the social wellbeing.
Yet some scholars disagree with the associations made between businesses and ethics. They
consider ethics as an exclusively private matter and regards businesses as basically profit
oriented ventures. Milton Friedman, a staunch ally of this view, states that business organizations
are responsible solely to maximize profits for the benefit of their owners. In 1960s saw the
emergence of social responsibility movement which made business ethics an integral part of
entrepreneurship and other business ventures. In this contemporary business era the concept of
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profit motive is diminishing and the importance of the term social wellbeing is increasing and it
has become a dominant factor and a key determinant of organizational success throughout the
business world. As far as organizations are concerned, they have limited resources to gain
competitive advantages. Business ethics helps to gain competitive advantage, business
profitability and organizational success as it covers all levels of business activity including the
obligations and responsibilities of businesses to customers, employees, other businesses,
government, general public and the environment. Hence, firms can incorporate business ethics
in all their business tasks in order to improve attitudes towards work, solve problems through a
humane approach and gain competitive edge and business success.
According to a research conducted by Wu (1999), majority of Asian firms consider corruption
as one of the major obstacles of business development- a substantial percentage of these firms
are engaged in bribery in a regular basis. Recognition of and managing ethics in workplace
holds remarkable benefits for leaders, managers and owners of organizations. This will also give
them the ability to deal with complex conflicts in the organization, to improve team work and
gain higher productivity and assure employee growth. Further it will help to manage and
continue values; promote public image and direct workplace towards the “right things” to do
(McNamara, 2008,).
At present, the notion of gaining a competitive edge has become a major preoccupation of
businesses and they have come to realize that a concurrent and equal emphasis on social as well
as financial aspects of a business is required to gain the coveted competitive edge. Therefore,
with this paradigm shift, the society began to re-analyze the critical issues such as how far the
existing business organizations are capable of resolving unsolved problems of the society,
whether they are capable of serving or fulfilling community interests and whether bring
satisfaction to their community at large. Under these circumstances extant operational guidelines
are not adequate to overcome the challenges and conflicts that arise in modern business context.
Furthermore, it is said that economic and legal framework of any country alone is not enough to
address these emerging issues in society. Hence it is clear that all encompassing ethical approach
that goes beyond existing legal and economic framework is needed to address these emerging
issues in the society. Ethics, in both conscious and subconscious levels, determines the
parameters of right and wrong. It decides what is moral and what is immoral within a specific
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socio-cultural context. It does not reach finality at any point of time, past or present, as it
continues to evolve along the temporal and situational lines.
All these considerations seem to suggest that entrepreneurs have the power to facilitate the
national growth or disrupt the development because entrepreneurs are the individuals who utilize
the resources to solve basic economic problems. It is clear that entrepreneurial behavior is a
principal indicator of the development of the country. Simply, entrepreneurial community
behavior is the manifestation of their actions, decisions, perceptions and values. A scrutiny of
philosophical paradigms, empirical findings and research context revealed that business ethics,
ethical work climate and practice and ethical behavior are the dominant attributes that determine
entrepreneurial success. Further literatures have shown that ethics is a relative concept that is
specific to individual, culture, context, country and time. Finally all these findings lead to the
realization that, managing ethical behavior is not only one of the most challenging issues
confronting business organizations today but also a critical social problem.
Considering these arguments it is prudent to facilitate studies in different context not
withstanding theoretical over simplications. Hence, although there are research findings which
reveal the relationships that exist between ethics and different disciplines, conducting a study of
this nature in Sri Lankan context is valuable. This study will either confirm or contradict
previous research findings as it deals with a unique context.
Research Questions
1) Does the notion of managerial values coexist with moral judgment?
2) Does the notion of managerial values coexist with managerial practices and ethical work
climate?
3) Does the notion of moral judgment and managerial practices & ethical work climate
collectively impact business consequences?
4) Does the established entrepreneurial ethical business context coexist with business
consequence?
5) Do demographic variables influence the relationship between managerial values,
managerial practice& ethical work climate and moral judgment?
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Hence, this paper aims to identify the impact of managerial values on moral judgment, ethical
work climate and business consequences in the context of manufacturing entrepreneurs in Sri
Lanka. Considering the status of Sri Lanka as a growing and internationalizing economy,
investigation of this relationship in Sri Lankan context is important. This paper contains four
sections. Section one focuses on the importance of values and ethics, background and purpose of
the study. The related literature is revealed in the second section. Third section illustrates the
research methodology including sampling, data collection and data analysis used in the study.
Results, conclusion and their implications are presented in the fourth section.
Hypotheses
H1 A statistically significant relationship exists between managerial values and positive
business consequences.
H2 A statistically significant relationship exists between managerial values and idealism and
negative relationship between managerial values and relativism.
H3 A statistically significant relationship exists between managerial values and self
centered moral climate.
H4 A statistically significant relationship exists between managerial values and deontological
moral climate.
H5 A statistically significant relationship exists between managerial values and universal
moral climate.
H6 Demographic variables of decision makers have a positive influence over values.
Literature Review
The literature survey reveals that ethics and values have been explored in different disciplines.
Ethics is a theme common to both natural sciences and social sciences. Application of ethics is
universal in a multidisciplinary sense. Organizations are the strategic center of the society
irrespective of their motives. Application of ethics in the field of business and their incorporation
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into entrepreneurship has given rise to many a research by noted scholars. Values and beliefs of
entrepreneurs’ have a direct impact on the business operations and it is said that the survival of
entrepreneurial business firms and their success depend on the degree to which an organization
learns to recognize emerging social issues, re-analyze their role and analyze its impact on the
business performances. Thus, to guarantee the business excellence the entrepreneurial actions
should focus on ethics such as what is right and what is wrong. The attention given to business
ethics by scholars underpins the importance of ethical behavior to maintain an undisrupted civil
society. Longenecker et al. (1988) pointed out “entrepreneurial ethics is embedded within the
main characteristics of entrepreneur; that is independence of action or individualism. Moreover,
their need of achievement leads them to focus on personal gains” and he also stated that ethical
standards of entrepreneurs are different from those of managers in large corporations.
Furthermore, ethics is fundamental, essential and of innermost importance to managing a
business successfully. Nevertheless, according to Hisrich,(1998), Hannafey,(2003) the body of
research on entrepreneurial ethics is relatively limited considering its overall importance to the
global economy. Also, relatively few empirical studies have been devoted to analyze the issues
related to entrepreneurship and those studies are not adequate considering the ethical
consequences of their own decisions and ethical ideologies they possess.
Morris et al., (2002) pointed out that as a new venture expands both entrepreneurial and ethical
context change. David Voge (1992) pointed out that there is evidence that business ethics are not
universally similar, but vary according country with their historical background (cited in Clerk,
R and Aram,J. 1997). In 1981 Webber explained institutionalizing as the primary task of ethics
within an organization and he define ethics as a process that should formally and explicitly be
incorporated to daily business life making it a regular and normal part of business.
Another group of scholars have addressed the issue what influence ethics have on entrepreneurs
(Longenecker,et al.,1988, Moon, et al.; 2000, Nielsen, 1989, Rest, et al., 1985; Roman,et al.,
2005 ), how their ethical behavior affect long term success of ventures (Wu,2002; Yves, 2005),
what are the ethical dilemmas entrepreneurs facing and how entrepreneurs overcome them (
Hannafey, 2003; Vyakarnam, et al.,1997).
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The strongest empirical evidence has shown that the entrepreneurial attributes such as
psychological attributes, socio-demographic attributes are the best determinants of
entrepreneurial behavior and performance (Akktaruddin, 1999, Andres and Michael, 2000). This
is further proved by a number of researchers who explained their significance over business
decisions (Longenecker, et al. 1988). Entrepreneurs encounter unique challenges, operate in
stressful business environments and often struggle to achieve success.
There are not many researches available in Sri Lanka in the area of entrepreneurship and
business ethics is also a relatively new research field in Sri Lankan context. However, these
fields are not new in the international research context. Nevertheless, the socio-cultural context
of Sri Lanka differs from western countries in the world. Entrepreneurship plays a vital role in
the society and it is highly culture bound and shaped by the socio-cultural factors of the country.
The possibility of achieving industrial development through the application of western
ideologies in developing countries has been challenged for many years. (Nanayakkara 1984,
Alawattage 1998, Wickramasinghe and Hopper 2000). Rathnasiri (1999) asserts that the
functionalist, rational and positivist frame work of the western paradigm does not enable an
understanding from a socio-cultural perspective. Gamage et al.,(2003), Wickramasinghe and
Hopper (2000), Alawattege (1998) emphasize that it is difficult to evaluate and understand
cultural factors through the “lenses” of other cultures. Therefore, ethics being unique in every
context including Sri Lanka cannot be evaluated or viewed through western standpoints.
Western style management education and training have not made an appreciable contribution to
organizational success in Sri Lanka. Nanayakkara (1999) asserts that as a result, “the process of
management in our organizations in almost every vital sector of the economy is increasingly
proving its inability to convert input resource in to useful output efficiently”.
In addition, other existing entrepreneurship research studies in the Sri Lankan context have been
focused on; Internationalization of Sri Lankan Entrepreneurship: A case of Sri Lankan immigrant
entrepreneurs in Japan (Karunarathna, H D, 2009); the issues entrepreneurial motivation and
need for achievement; and theory surprise and reality: exploring the world of the Sri Lankan
Entrepreneur ( Gamage, H R et al.,2003); The entrepreneurial process and economic success in a
constrained environment (Kodithuwakku, S.,2002) characteristics of Sri Lankan entrepreneurs
and how valid is the Schumpeterian Model? (Perera, T et al., 1999);collectivistic achievement
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orientation of Sinhala entrepreneurs (Bddhadasa, S., 1992); the need for affiliation as a
moderator in the behavior of entrepreneurs (Perera, T., 1996).
Values are viewed as motivating individuals to act (Roe, R .A 1999). Hisrich (1998) believes that
entrepreneurs tackle problems and take decisions with strict adherence their personal values.
Further, he explained the similarity between ethics of entrepreneurs and managers. Individually
or collectively they take decisions based on value judgments.
Values are ingrained and solidified assumptions on relative merits of things, actions and
individuals. They dictate individual assumptions on what is right and what is wrong. Man is a
social being with a collective sense of existence. Family, friends, culture, religion are some of
the essential ingredients of the social existence. Every social group cherishes a unique value
profile. Meaning in life is gleaned out of values. Schwartz, 1992 explained that there may be a
conflict and compatibilities likely arise when people pursue values simultaneously ex. Pursuit of
achievement values may conflict with pursuit of benevolence values. Schwartz ,1992 identifies
ten human values viz. power ,achievement ,hedonism, stimulation, self direction, univerlism,
benovelence, tradition respect, conformity and security (cited in Schwartz, 1994). Given the
significant role played by values in dictating choices and decisions, identifying the values of
individual business managers may be useful for understanding the basis of managerial decisions
and ethical judgments.
Hofstead defines values as “a broad tendency to prefer certain status of affaires over others”.
Rockeach, 1973 defined values as “an enduring belief that a specific mode of conduct or end
state of existence is personally or socially preferable to an opposite or converse mode of conduct
or end state of existence”. Schwartz, 1994 defines values as desirable trans situational goals
varying in importance , that serve as guiding principles in the life of a person or social entity.
Hence, values represent interest of social entity, judge and justify actions, direct or guide human
actions and social groups.
In the literature, values are put into different classifications: general values, work values and
work activities values. According to Schwartz, values represent, in the form of conscious goals,
responses to three universal requirements with which all individuals and societies must cope:
need of individuals as biological organism, requisites of coordinated social interaction and
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requirements for the smooth functioning and survival of all groups. Sagie (1993) noted that
religiosity to be a factor that determines how young people perceive their work obligations.
Thus culture, religion, social group also influence to determine values. Values are also viewed
as objects in the world that people work for ( Saunders, G & Wenzel, L ,2008, Roe, R.A. (1999).
Values always guide actions. In essence, values are cognition representations of personal needs
and the appropriate means for satisfying them. They are central to and in the background of all
human behavior ( Rokeach,1979, Schwartz, 1990).Within business entities three different forms
of values may be identified. These are strategic values, work values and ethical values (Rossouw
& Van Vuuren, 2006 cited in Roe, R.A. (1999). Strategic values aim to achieve corporate level
objectives and they are incorporated with organizational vision and mission. Work values in an
entity are those priorities to which the entity’s employees should adhere e.g. punctuality, Quality
etc. Ethical values help to establish good relations and interactions with various stakeholders.
Values are considered to be relatively stable over time (Roe, R.A. (1999, Saunders, G & Wenzel,
L ,2008,). and they are related with the personality traits like attitudes, evaluations, judgments,
decisions and commitments. However, values differ among individuals.
The term business ethics does not have a universal definition. Since the birth of the social
responsibility movement in the 1960s, business ethics has been put under the wing of
management sciences. Different people have defined ethics to suit their own set of values which
vary according to time, place, culture and religion. Trevino and Nelson (1999) define ethics as
“the principles, norms and standards of governing an individual or a group”. Timmons, (1994)
stated that “high ethical standards were the single most important factor in long term success of
the business organizations (cited in Longenecker, J. G. et al.). David Vogel (1992) pointed out
that business ethics are culture specific concepts and they are not universally similar. (,cited in
Clarkee, R &Aram ,J 1997; Becker and fritzche;1987). Abdullah H and valentine, B. (2009)
defined business ethics as “the study of business activities, decisions and situations where the
right and wrong are addressed”. According to Travino and Nelson (1999), ethics is a “moral
perspective that asks you to judge your conduct in term of what’s right and wrong, what’s
decent, what’s good, what’s honest, what’s honorable. The reason to be ethical is simply that it’s
the right things to do.” The interest in business ethics leads organizations to be concerned with
what is good or bad and what is right or wrong in business practices and operations. In other
words, business ethics refer to the ability of firms to pay attention to moral judgments, practices,
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and commitments in making business decisions (Hung, L,C. ,Kung,F.,& Cheng,L.C., 2011).
Thus, ethics is a reflection on individual choices, traits and sensibilities as informed by the
society.
Research on entrepreneurship have specified a set of values as highly prevalent among
entrepreneurs They include achievement, advancement, economic rewards, autonomy, social
relations, prestige, personal development, authority, social recognition, honesty, commitment,
hard work, self confidence etc. Individuals with a strong need for achievements wants to solve
problems themselves, set targets, and strive for these targets through their own efforts. Hence,
individuals with a strong need to achieve likely to succeed as entrepreneurs. Any development
strategy based on n-Ach concept will probably benefit from a significant revision which aligns it
with values and belief that influence behavior in the Sri Lanka social and cultural context (
Gamage,R., Cameron,D. Woods, E. 2003).
According to Longenecker, J.G. et al. entrepreneurial ethical perceptions on different situations
differ from that of others greatly and at times they can be rigorous enforcers of ethics while at
others they are rather tolerant. Individual characteristics are a factor determining ethical behavior
and an individual’s character develops slowly as a result of upbringing and the accumulation of
values that are transmitted by genes, school, family, friends and religion.
The next argument was built around in relation to ethics is whether the ethics is an individual
issue or organizational issues .Various studies have discussed a number of variables that affect
ethical perception and behavior of an individual and mainly, uncertainty, achievement oriented,
autonomy, independence, locus of control are the main attributes that embedded with
entrepreneurship. Lin and Ding (2003) have stated that ethical judgment is situation-specific.
Many studies have identified, age ( Volkema, 2004; Stead, Worrell, Stead, J. G. 1990); and level
of education (Deshpande,1997; Kantor and Weisberg.2002; Doyle,O. Z.,2009) as prominent
factors in determining ethical perception of an individual. Peterson et al. 2001 have professed
that business people become “more ethical” with age and Terpstra, Rozell and Robinson 1993;
have also emphasized that people tend to become more ethical as they mature. Existing literature
explain the relationships between gender and ethics (Deshpande, 1997, Stead, Worrell Stead,
1990; Doyle,O. Z.,2009) and level of education and ethical behavior (Levy and Sharma, 1994:
Doyle,O. Z.,2009). Dawson, 1997; states that females are more ethical than men and Levy and
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Sharma 1994 state that a high level of education has a positive impact over the ethical behavior
of an individual. Another important factor in ethical behavior is the presence of a formal code of
ethics. They are probably the most visible sign of the organization’s ethical philosophy of an
organization. Simultaneously the entrepreneurial context is not static; it evolves s over time. In
consequence, the ethical standards of the entrepreneur typically have a direct impact over the
survival and success of the firm ( Morris, M.H, et al., 2002). A considerable amount of attention
has been paid by researchers to study ethics. David Vogel (1992) pointed out business ethics are
culture specific concepts and they are not universally similar One of the most researched areas
concerning ethics and entrepreneurs focuses on the ethical issues and situations encountered by
entrepreneurs (Cited in Longenecker et al. (1988)
Ethics position theory presumes that moral actions and evaluations are the outward expression of
a person’s integrated conceptual system of personal ethics, or ethical position (Forsyth,
1980.1992, cited in Forsyth & O’Boyle, 2010). According to this theory, individuals resolve their
moral issues and make ethical judgments with the aid of two general dimensions: relativism and
idealism. The relativist paradigm explains that individuals who are highly relativist think of the
possibility of formulating universal principles, and they avoid moral rules. Their personal moral
philosophy is based on skepticism. Highly relativist individuals feel that moral actions depend on
the nature of the situation and the individuals involved so that when judging others, they weigh
the situation more than the ethical principles that was violated. Thus individuals scoring high in
relativism tend to reject the notion of an overriding moral code ( Banett et al., 1994). Being
quite the opposite, individuals who are low in relativism believe that actions are consistent with
moral principles, norms, or laws (Forsyth, 1992; Cited in Forsyth and Boyle, 2010). The idealist
paradigm is based on the relative importance of minimizing harmful, injurious outcomes. It
indicates a concern for others. Highly idealist individuals “assume that desirable consequences
can, with the ‘right’ action, always be obtained” i.e morally “right” behavior leads to good or
positive consequences (Forsyth, 1980.1992, cited in Forsyth & O’Boyle, 2010). A highly
idealistic individual feels that harming others is always avoidable and will not act in a manner
that leads to negative consequences. A low idealistic individual believes that although harm will
sometimes bring negative consequences it is necessary at times to produce good results
(Forsyth & O’Boyle, 2010; Valentine S et al., 2001;Barnett et al. 1994). Forsyth, (1980)
developed the Ethical Position Questionnaire (EPQ) to measure both relativism and idealism.
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The ethical relativism scale consists of twenty items. The first ten items focus on measuring
idealism and next ten items measure relativism.
In general, empirical studies suggest that individuals possess different ethical ideologies because
they face different ethical issues.( (Forsyth & O’Boyle, 2010; Barnett et al. 1994). C P Lin and
C G Ding (2003) have explained that the individual ideologies and judgments about the ethics of
peer reporting may be associated in various ways. First, differences in ethical ideology may
affect an individual‘s way of processing information about problems involving wrong doings of
peers. Second, degree of sensitivity to wrong doings may differ among individuals with different
ideologies.
Individual sensitivity is influenced by the ethical issues. The factor of individual difference that
has received the most research support is “cognitive moral development”. This framework is
developed by Lawrence Kohlberg in the 1960. Cognitive moral development model helps to
explain why different people make different evaluations when facing same ethical issues. It
conceives that an individual’s level of “moral development’ affect their recognition of ethical
issues, judgment, behavioral intensions, and behaviors. This sequence is parallel to Rest’s
sequential model of moral behavior.
The concept of ethical climate is pioneered by Victor and Cullen (1987). It represents a vivid
picture of ethical decision making and actions within an organization based on philosophical and
sociological theories. Since its introduction many researchers have applied this concept and
examined the relationship between ethical climate and a variety of outcomes. Organizational
ethical climates vary both within and across organizations due to differences in individuals,
workgroups, employment histories, and rank of the employees (Victor and Cullen, 1988, cited in
M. Elci and L. Alpkan, 2009; Martin and Cullen, 2006,). Responsibility of building an ethical
climate rests on the hands of top management and it is a shared set of beliefs on what is a correct
behavior and how ethical issues will be handled. Victor and Cullen (1987, 1988; cited in Martin
and Cullen, 2006) define organizational ethical climate as “shared perceptions of what ethically
correct behavior is and how ethical issues should be handled”(cited in M. Elci and L. Alpkan,
2009 and Martin and Cullen, 2006) . Richers and Schneider (1990) defined ethical climate as
shared perceptions on procedures, policies, and practice, both formal and informal (cited in
Martin and Cullen, 2006). An ethical climate is a type of work climate that is best understood as
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a group of perspective climates reflecting the organizational procedures, policies, and practices
with regard to moral consequences ( Martin and Cullen, 2006). Organizational work climates
have been studied since the 1950s (Wimbush and Shepard,1994; cited in Martin and Cullen,
2006).
The Victor and Cullen frame work refers to egoism, benevolence (utilitarianism), and principle
(deontology) dimensions.
Egoism focuses on maximizing one’s own interest. Benevolence focuses on maximizing joint
interests, while principle focuses on adherence to ethical norms or principles. (Martin and
Cullen, 2006; Cited in Shafer, W.e., and Wang,Z. 2010; M. Elci and L. Alpkan, 2009 ). These
are the embedded guidelines by which ethical decisions are framed. Research shows that one
dominant criterion will emerge in an organization and ultimately define the organizations ethical
climate (Martin and Cullen, 2006).
Furthermore, Victor and Cullen (1987) conceptually cross-classified the three bases of moral
judgment with the three loci of analysis on a matrix with nine cells. This concept originates in
sociological theory ( Merton,1968; cited in Martin and Cullen, 2006) Each of nine cells presents
an ethical criterion that is expected to guide decision making in firms (Martin and Cullen, 2006).
They have demonstrated these different climates under three loci of analysis namely; individual
level (mainly focus on self as moral reasoning), local (focus on organization itself)) and
cosmopolitan (focus on community or society at large) (Martin and Cullen, 2006).
Methodology
A cross section of manufacturing business organizations representing its various branches such
as food and beverages, garments and wearing apparels, chemical and pharmaceuticals, leather
products, building materials, fabricated and metal products were used as the sample of the study.
Experience of more than five years in the field was a prerequisite for all members of the sample.
Although they do not own the business, mangers too greatly contribute to the decision making
process of an organization. Hence, values of managers as well as of owners exert a considerable
influence on the ethical outlook of an organization which prompted the researcher to include
both owners and managers in the sample. In selecting sample members, emphasis was given to
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organizations with more than hundred employees and organizations that evolved from micro
level to middle or large scale were also preferred.
A semi structured questionnaire and focus in-depth interviews were employed for the study.
Quantitative methods were used to prove statistically significant relationships between
managerial values, moral judgment, and ethical work climate and business consequences.
Qualitative methods yielded qualitative values which were used to substantiate and triangulate
the quantitative findings. To measure the degree of idealism and relativism, Forsyth’s Ethical
Position Questionnaire (EPQ) (1980) was employed. To measure the ethical climate, victor and
Cullen’s Ethical Climate Questionnaire (ECQ) (1990) was used. A Likerts scale ranging from
strongly disagree (1) to strongly agree (5) was used in the questionnaire.
The main independent variable used in the research is values. Values of mangers as well as
founders were used in the study and these were divided into personal values and entrepreneurial
values. As personal values honesty, care, trust, friendly, open and fair. Need for achievement,
innovation, risk bearing, and self confidence were used as entrepreneurial values. Moral
judgment was identified in terms of relativism and idealism. Ethical work climate was
categorized in term of self centered moral climate (egoism), deontological moral climate and
universal moral climate. To analyze the collected data, parametric technique was used as require
by their nature. To analyze data SPSS 16 was employed. Each relationship will be tested at 95
confidence level. Furthermore, to seek relationships, P value was considered. If the calculated
value (P) is less than 0.05, the relationship between two variables is considered to be significant.
Results, Discussion and Conclusion
Seventy five percent of response rate was recorded in the study. Majority of the sample consisted
of males (83.6%) aged between 30 to 40 years (43.8%). 23.3 percent of respondents were of the
age group between 41 to 50 years. More than half of respondents had at least gained a degree
level qualification. 27.3% of respondents had gone through a professional education program.
Only 16.4% respondents had stopped their formal education after school education. 47.9 percent
were born in rural areas and other 50.7 percent were from urban areas. Only 27.4 percent of
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respondents had been exposed to some sort of formal training in relation to diversity issues,
sensitivity or ethics. Overwhelming majority (72.6%) did not have such an exposure.
The validity requirements for all the variables were met and Cronbach’s Alpha co-efficient were
calculated of all variables. The values were: Deontology .868, Honesty,.764 Trust .472, Friendly
.839, Open .775, Fair .816, Idealism .7, Relativism .7, Power distance .786, Egoism
.761,Utilitarianism .909. Number of calculations including mean comparison, factor analysis and
correlation were used in the study. Managerial values are a construct of person specific values
viz. honesty, trust, open, fair and friendly. Entrepreneurial values include need for achievement,
innovation, self confidence and risk bearing. Using the statistical method idealism (0.671) and
relativism (.74) are grouped as moral judgment. When Need for achievement is considered it has
insignificant relationship (.279) but it shares significant relationship with (.02, P<0.05) moral
judgment. However the detailed analysis indicated a significant relationship with idealism (.011,
P<0.05) but by contrast there was an insignificant relationship (.46) with relativism. These
findings indicate that, among manufacturing entrepreneurs in Sri Lanka, there exist a universal
set of preconceived ideals that act as guidelines. It can be surmised that socio cultural
environment of Sri Lanka favors and nurtures such a set of ideals. When the relationship between
self centered morality (egoism) and need for achievement was considered, there was no
relationship (P> .05) between the two. But the data indicate that there is a significant relationship
between need for achievement and harmonious morality and between need for achievement and
universal morality. The managerial value self confidence is considered to have an insignificant
relationship with moral judgment including relativism and idealism but by contrast a significant
relationship exist between self centered morality, universal morality and deontological morality
climate. The managerial value innovation is implied to have a significant relationship with self
centered morality, universal morality and deontological morality climate, however it shows
insignificant relationship with moral judgment both relativism and idealism. The entrepreneurial
value risk bearing share a significant co-relationship with value judgment. Although risk bearing
share a significant co-relationship with value judgment at a holistic level, it maintains significant
relationship with idealism (.005). when ethical climate is taken into consideration with risk
bearing shows a significant relationship with deontological and universal moral climate. It does
not share a significant relationship with self centered morality.
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The research findings do not support the hypothesis H1 in that there is no relationship between
managerial values and business consequences (P=0.641>.05) and H 6 that demographic variables
are not influence over values. When H2 is concerned, statistics support the statement as there is a
statistically significant positive relationship between managerial values and idealism (.05) and
there is an insignificant relationship between managerial values and relativism (P=0.851>.05).
The H3 is also supported by the data as there exist a statistically significant relationship between
managerial values and self centered moral climate (P<0.05). The findings do also support H4 in
that between deontological moral climate and managerial values there seems to be a significant
relationship (P<.05). A statistically significant relationship is found between managerial values
and universal moral climate which ascertains the validity of H5.
Conclusion
All these results indicate that within the Sri Lankan manufacturing context, entrepreneurs clearly
distinguish two spheres: personal and business. In other words within one individual there exists
two beings: a social being and a business being. This demarcation is made on the basis of what
values one utilizes on different contexts. At the personal sphere, Sri Lankan entrepreneurs seem
to be bound by strong value and moral basis which drive them to be considerate of others
wellbeing and be abided by social and legal bounds. But at the business sphere, they seem to
come under the grip of yet another, rather different, set of values that motivate them to further
their gains. Following the same thread of argument, they seem to be more willing to innovate and
take risks in the business sphere rather than in the personal sphere. At the business sphere, all
attempts at innovation and risky ventures are governed by a set of rules and regulation and the
consequences of the actions are borne collectively by the entire organization. At personal sphere
nothing but personal assumptions govern such actions and consequences are specifically borne
by decision taker. Hence, the relative reluctance to do things differently by themselves.
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