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Georgia State University Georgia State University Marketing Dissertations Department of Marketing The Mediating Role of Ethical Decision Making in the Relationship between Job Characteristics
Georgia State University Georgia State University Marketing Dissertations Department of Marketing The Mediating Role of Ethical Decision Making in the Relationship between Job Characteristics and Job Outcomes: An Examination of Business-to- Business Salespeople G. Alexander Hamwi Follow this and additional works at: Recommended Citation Hamwi, G. Alexander, The Mediating Role of Ethical Decision Making in the Relationship between Job Characteristics and Job Outcomes: An Examination of Business-to-Business Salespeople. Dissertation, Georgia State University, This Dissertation is brought to you for free and open access by the Department of Marketing at Georgia State University. It has been accepted for inclusion in Marketing Dissertations by an authorized administrator of Georgia State University. For more information, please contact PERMISSION TO BORROW In presenting this dissertation as a partial fulfillment of the requirements for an advanced degree from Georgia State University, I agree that the Library of the University shall make it available for inspection and circulation in accordance with its regulations governing materials of this type. I agree that permission to quote from, to copy from, or publish this dissertation may be granted by the author or, in his/her absence, the professor under whose direction it was written or, in his absence, by the Dean of the Robinson College of Business. Such quoting, copying, or publishing must be solely for the scholarly purposes and does not involve potential financial gain. It is understood that any copying from or publication of this dissertation which involves potential gain will not be allowed without written permission of the author. G. Alexander Hamwi i NOTICE TO BORROWERS All dissertations deposited in the Georgia State University Library must be used only in accordance with the stipulations prescribed by the author in the preceding statement. The author of this dissertation is: G. Alexander Hamwi 1744 North Farm Road 203 Strafford, MO The director of this dissertation is: James S. Boles Department of Marketing J. Mack Robinson College of Business Georgia State University P.O. Box 3991 Atlanta, GA ii The Mediating Role of Ethical Decision Making in the Relationship between Job Characteristics and Job Outcomes: An Examination of Business-to-Business Salespeople BY Georg Alexander Hamwi A Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree Of Doctor of Philosophy In the Robinson College of Business Of Georgia State University GEORGIA STATE UNIVERSITY ROBINSON COLLEGE OF BUSINESS 2009 iii Copyright by Georg Alexander Hamwi 2009 iv ACCEPTANCE This dissertation was prepared under the direction of the G. Alexander Hamwi s Dissertation Committee. It has been approved and accepted by all members of that committee, and it has been accepted in partial fulfillment of the requirements for the degree of Doctoral of Philosophy in Business Administration in the Robinson College of Business of Georgia State University. H. Fenwick Huss, Ph.D. Dean Robinson College of Business DISSERTATION COMMITTEE James S. Boles, Ph.D. Danny N. Bellenger, Ph.D. Naveen Donthu, Ph.D. Donald R. Robin, Ph.D. v Table of Contents Introduction 1 Ethical Decision Making 3 Perceived Organizational Support 6 Perceived Organizational Support and Ethical Decision Making 12 Sales Force Control System 14 Sales Force Control System and Ethical Decision Making 17 Salesperson Ethical Values 20 Salesperson Ethical Values and Ethical Decision Making 21 Affective Organizational Commitment 23 Ethical Decision Making and Affective Organizational Commitment 25 Salesperson Performance 27 Ethical Decision making and Salesperson Performance 29 Theory of Planned Behavior 31 Study Design 33 Structural Model 34 Sample 34 Measures 35 Measurement Model 35 Hypothesized Structural Model 37 Discussion 38 Alternative Structural Model 39 Data Driven Model 41 Experiment 42 Conclusions 44 Limitations 45 Future Research 47 Perceived Supervisor Support 47 Perceived Co-Worker Support 51 Ethical Climate 53 Demographics 60 Additional Analyses 62 References 64 Appendix A: Survey Items and Sources 88 Appendix B: Ethical Scenarios 96 vi List of Figures Figure 1: Hypothesized Structural Model 77 Figure 2: Theory of Planned Behavior 78 Figure 3: Hypothesized Structural Model Results 79 Figure 4: Alternative Structural Model 80 Figure 5: Alternative Structural Model Results 81 Figure 6: Second Alternative Structural Model 82 Figure 7: Second Alternative Structural Model Results 83 Figure 8: Types of Ethical Climates 84 List of Tables Table 1: Construct Correlations and Reliabilities 85 Table 2: Experiment Scenario Breakdown 86 Table 3: Experiment Results 87 vii ABSTRACT The Mediating Role of Ethical Decision Making in the Relationship between Job Characteristics and Job Outcomes: An Examination of Business-to-Business Salespeople BY Georg Alexander Hamwi July 30 th, 2009 Committee Chair: Major Academic Unit: James S. Boles Department of Marketing The purpose of this research is to examine how the ethical decision making of a salesperson is influenced by job characteristics, and how ethical decision making then influences job outcomes. This research is important because the field of ethics draws from diverse disciplines that have minimal agreement with each other. While calls have been made for a uniform standard of ethics, a better decision may be for each discipline to look internally to determine both what ethics is and how it functions in relation to other variables on in each disciplines unique field. This study examines first how the exogenous job characteristic variables of perceived organizational support, sales force control system and ethical values of the salesperson affect ethical decision making. Perceived organizational support and the behavioral-based sales force control system are hypothesized to positively influence ethical decision making. The link between perceived organizational support and ethical decision making has been observed in the field of accounting, and sales research has found that perceived organizational support leads to organizational citizenship behavior, which contains ethical decision making under its umbrella. Behavior-based sales force control systems are predicted to lead to ethical decision making because this type of control system has been shown to both lead to increased affective organizational commitment and reduce the benefits of acting unethically. The ethical values of the salesperson are predicted to moderate the relationships between the independent variables and ethical decision making. Ethical values and the independent variables in the study are influenced by similar antecedent constructs. The study also examines how ethical decision making influences the endogenous job outcomes variables of affective organizational commitment and salesperson performance. Ethical decision making is hypothesized to positively influence both performance and commitment. Ethical climates have been found to increase commitment, and performance is considered a key outcome of ethical decision making. Azjen s (1985) theory of planned behavior ties the hypotheses together. viii The Mediating Role of Ethical Decision Making in the Relationship between Job Characteristics and Job Outcomes: An Examination of Business-to-Business Salespeople G. Alexander Hamwi Dissertation ix INTRODUCTION In 2007, Home Depot fired four purchasing agents for their role in a kickback scheme. The vendors received kickbacks totaling over $1 million in exchange for purchasing products from certain foreign vendors. In the subsequent public media backlash, Home Depot claimed that what the purchasing agents did was not in line with company ethics, poor business conduct and a violation against our ethical standards. When salespeople give kickbacks to employees it corrupts fair competition and honest business. The unique perspective of all the fallout associated with this incident is that there was no public scrutiny of the salespeople who gave the kickbacks. It is generally understood among most sales professionals that kickbacks are considered unethical (Weitz et al. 2007). However, no mention of the salespeople, their companies or their actions can be readily found in the record of public media. It is almost as if they have been given a pass on the entire situation. The lack of a backlash is interesting. Internally, to sales researchers, ethics has been a major issue for some time (Dean 1997). However, has the general public reached the desensitization level where unethical behavior from salespeople is not only accepted but expected? As ethics has evolved as a profession, it has drawn from a diverse group of disciplines. The problem may be that each discipline has its own way of describing and defining business ethics (Dean 1997). There is minimal agreement among theses disciplines. There are few strong guidelines to govern ethical decision making in business practice. While Dean (1997) calls for uniformed standards as a solution to the problem, a better solution may be for each discipline to discover what causes unethical behavior, and by that rationale how to diminish and possibly eliminate its effects. 1 Sales is a unique environment compared to other business disciplines. Salespeople are more frequently in a position to both commit and get away with unethical behavior (Weitz et al. 2007). Salespeople have little to no supervision, and frequently do business away from the eyes of the senior members of their organization. This research attempts to unearth what factors cause unethical decision making in salespeople. The hypothesized structural model, shown in Figure 1, predicts that a salesperson s perceived organizational support and the control system under which they work have an effect on the salesperson s ethical decision making. Ethical decision making is then hypothesized to influence both a salesperson s commitment to their organization and their performance in their job. Moderating effects of the salesperson s personal ethical values are investigated as well. This research also attempts to answer a call by Piercy et al. (1999) to do research on performance with multiple input variables. According to Challagalla and Shervani (1996), examining the results of a single antecedent variable on performance can be misleading. Effects on exogenous variables tend to be mediated by other variables. Past research has shown direct links between performance and exogenous variables such as perceived organizational support (Rhoades and Eisenberger 2002) and sales force control systems (Piercy et al The model proposed in this research positions ethical decision making as a mediator of salesperson performance and its antecedents. The rest of this paper is structured as follows: first, there will be an extensive review of the literature, then the plan of action for gathering and analyzing the data will be discussed. Finally, the current instrument to be used will be attached in the Appendix. Ethical Decision Making 2 An ethical decision is defined as a decision that is acceptable to a larger community based on its adherence to moral standards of behavior (Jones 1991). Utilitarian decision making implies that an ethical decision is one that achieves the greatest good for the greatest number of people (Robertson and Anderson 1993). In order to make an ethical decision, one must first recognize that the issue at hand is of moral relevance (Jones 1991). Once recognition of a moral issue has occurred, one must decide which course of action is the most ethically sound. Once this moral judgment has been made, one must make a conscious decision to place ethical values above all other personal values and intents. Once an ethical intent has been formed, only then can the person take action that can be considered ethical behavior. Deciding which course of action to take involves its own four stages process. According to Robertson and Anderson (1993), first, one forecasts the consequences each actionable option will have on the various stakeholder groups involved. Second, one estimates the probability of these outcomes occurring. Third, one evaluates the desirability and/or undesirability of each potential outcome. Finally, one must determine which stakeholder groups are most important. Relevant stakeholders in the ethical decision making of salespeople tend to include the salesperson, the selling firm, the sales manager, the buyer and fellow members of the sales force (Lu et al. 1999). There are many factors that can influence this four step process: social, cultural, economic and organizational factors (Hunt and Vitell 1986); locus of control and job characteristics (Trevino 1986); and even demographic issues (Reynolds 2006). This is because ethical decision making is essentially a function of the interaction between a person and the organizational environment (Verbeke et al. 1996). This interaction changes on a per situation basis, and can even change within situations over time. While a variety of models of ethical decision making have been proposed (Etzioni 1990; Hunt and Vasquez-Parraga 1993), the 3 majority of research has determined that ethical decision making is utilitarian in nature where salespeople are concerned (Verbeke et al. 1996). In their study of Midwest technology salespeople, Dubinsky et al. (1992) found significant within-group variance on what salespeople view as an ethical situation. The major question in the field is, How are ethical decisions made? More specifically, what factors influence ethical decision making? Trevino (1986) proposed an interactionist model of ethical decision making that views ethical decisions as an interaction of the personal characteristics of the person (or people) making the ethical decision and the situation in which the ethical decision occurs. Ferrell and Gresham (1985) developed a contingency framework that proffered a three-way interaction between personal factors of the person or persons involved, the influence of significant others in the organization and the degree of ease with which one could act unethically without detection and the associated consequences. Hunt and Vitell (1986) suggested an interaction between the degree to which an individual or group focused on the intent of their behavior and the degree to which that same individual or group focused on the outcome of their behavior. The problem with these other models is a severe lack of empirical support, both in a general sense and more specifically in the context of sales (Ford and Richardson 1994). Most of the research in these areas has been non-empirical in nature. This lack of empirically grounded research has, substantially impeded the development of the field, (Ford and Richardson 1994, pg. 205). According to Ferrell et al. (2005), four general interrelated factors derived from the above-mentioned models, as well as other research, influence ethical decision making: 1) the importance of the ethical decision, 2) characteristics of the individual, 3) organizational factors and 4) opportunity. However, as far as sales force ethics is concerned, the work of Seevers et al. 4 (2007) shows that only two of these factors play a role in influencing ethical decision making: individual characteristics and organizational characteristics. The main takeaway of this discovery is that the unwritten code of universal moral principles that are believed to apply to everyone do not apply to decision-making in sales. It is purely a subjective enterprise (Sivadas et al. 2003). One previously examined individual factor was gender (Dubinsky and Levy 1985). Dubinsky and Levy (1985) used a questionnaire to determine if gender had any effect on the ethical decision making of the retail salespeople at a Midwest company. Results of their study were insignificant. However, Bellizi and Hite (1989) found that gender does influence ethical decision making in sales managers and executives. Dubinsky and Ingram (1984) examined whether or not the type of education salespeople possessed affect the way in which they made ethical decisions. Results were again insignificant. Dubinsky and Ingram (1984) found the same results when they examined if length and/or amount of education played a role. Dubinsky and Gwin (1981) found that type of employment does play a role, as purchasing managers were seen to be considerably less ethical than sales managers and considerably more likely to participate in questionable business practices. These findings were reinforced by Henthorne et al. (1992) study of retail salespeople. Their research found that retail sales managers were much more aware of whether or not a situation involved ethical decisions than the retail salespeople they managed. Dubinsky and Ingram (1984) also examined whether or not the role stress variables (role conflict and role ambiguity) had any bearing on ethical decision making. Results were insignificant. Tansey et al. (1994) found that a salesperson s moral philosophy does affect their ethical decision making. Verbeke et al. (1996) found that the personality trait of Machiavellianism also affects ethical decision making. Hegarty and Sims (1978) found that 5 when unethical decisions, specifically giving kickbacks, led to increased profit, decisions were significantly more unethical that in a non-reward condition. One can infer that when salespeople act unethically, it is because some kind of payoff is expected, be it financial or otherwise. On the organizational side, Dubinsky and Loken (1989) used the Theory of Reasoned Action to examine the role actors within the organization play in influencing the ethical decision making of a salesperson. Results showed that both direct supervisors and top management influenced ethical decision making, while fellow members of the sales force did not. Dubinsky and Loken also found that subjective norms and attitudes were good predictors of how salespeople would respond in ethical situations. Weeks and Nantel (1992) found that a clearly written code of ethics caused a significant decrease in unethical decision making. Dubinsky and Ingram (1984) found that the degree of competitiveness found both in the culture of a particular sales force and the culture of the organization as a whole played no role in influencing ethical decision making. Trevino (1986) found that the more experience people have with ethical decisions, the more likely they are to act ethically. Perceived Organizational Support Throughout their work careers, employees look to both the organization for which they work and the individuals within that organization for feedback on a variety of topics such as performance, adherence to social norms of behavior and the general social climate and culture of the organization (Rosen et al. 2006). According to Eisenberger et al. (1986), employees form global beliefs concerning the extent to which the organization feels their contribution is valuable and cares about their well-being. This perception of support by ones organization is influenced by the frequency, extremity and perceived sincerity of praise and approval the organization gives the employee (Blau 1964). This is the same attributional process that people generally use to 6 infer the commitment to and support of others in social relationships. Other forms of non-verbal praise and approval such as increased pay, promotions, job enrichment and policy influence act as a reinforcing mechanism for the employee s perception of organizational support (Brinberg and Castell 1982). Perceived organizational support is also affected by the various ways an organization treats and deals with their employees. This treatment then leads the employee to attempt to determine the motives underlying the organization s behavior (Eisenberger et al. 1986). Being treated favorably will contribute more to an employee s
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