EFFECTS OF ORGANIZATIONAL ETHICS ON EMPLOYEE PERFORMANCE
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Worldwide, changes are taking place tremendously. One change is affecting all organisations around the world including the Nigerian banking sector, most especially,
Guaranty Trust Bank. Some scholars have opined that the only thing that is permanent in life is change. No situation is permanent in life. Thus, the Nigerian work environment has become liable to change, considering the dynamic and
complex issues that are faced daily. The emerging trend in work that is beginning to serve as a mark of merit or
critical edge is the level of workplace ethics that is dwelling within an organization. In the face of the emerging world
economy, an organization that is involved in a proper framework for good governance must practice work ethics and
incorporate good values as part of its organizational culture if it must achieve higher performance (Omisore et al,
2015).Presently, in Nigeria today, work ethics has been an interesting subject in management and business in general, due
to its benefits in evaluating employees’ behaviour and performance and it is so critical to organisation performance
(Kapp and Parboteeah 2008, Schminke et al. 2005). Companies and institutions all over the world, both public and
private maintain codes of corporate governance for managing ethical performance (Rossouw, 2005). Despite its
importance, no single organisation is safe from corporate scandals (Samir et al; 2015), in years malpractices have
been observed in organisations which go beyond legal and ethical context. Different cases have been reported in
various countries worldwide in regard to the workplace ethics and organisational performance. In the United States of
America (USA) for example, a case study of ENRON recorded the high risk of accounting practice which is an
element of unethical practices, and other cases of World Com and Tyco (Komari & Fariastuti, 2013).
However, it has been argued that non observance or non existence of some set of ethical values have been a
contributory factor to the Africa predicaments particularly in Nigeria in leaderships (Agbude & Etete, 2013).
Developing countries for instance Nigeria faced corporate failures on banking sector in 1997, twenty six commercial
banks failed due to financial irregularities such as AfriBank Plc and Bank PHB (Bello S.M, 2012). Kenyan, Mauritian,
and South African codes take the lead in venturing deeper into what the governing of ethical performance entails
beyond developing a code of ethics. The most comprehensive recommendations on the governance of ethics are to
be found in the second King Report on Corporate Governance for South Africa (IoD of South Africa, 2002). Nigeria,
for the past years has been in battle with evolved corruption which spiralled out as a result of unethical practices in
the offices involving public and private workers and leaders, and that affected performance of institutions (Heilman & Ndumbaro 2002).
According to Bisimba & Peter, 2015, LHRC & ZLSC, 2015 and LHRC, 2016 different scandals witnessed as a result
of malpractices in the offices such as the case of Radar bought from UK’s BAE Systems, the EPA scandal, the David
Jairo scandal, Tegeta Escrow and the Richmond (Dowans) saga. Reports of scandals, questionable business and
political behaviour in many organizations are extremely increasing their rate. Anand et al. (2004) stipulated that
organizational scandals involving multinationals like Enron, WorldCom, Global Crossing, Parmalat and how they
height attention to the urgent need for corporate governance, corporate social responsibility and organizational ethics.
However, ethics programs are done to stimulate ethical conducts in organizations and assist employees to act in a
morally responsible way, McDonald (1999). This research work will there investigate the effects of organizational
ethics on employee performance by using Guaranty Trust Bank, Calabar, Cross River State, Nigeria as a case study.
1.2 Statement of the Problem
For quite some time now banking sector has been seen as one of the sectors that hires workers every now and the
and this is as a result of expansion of their customers base and this leads them to wanting to hire workers day in day
out. In the process of hiring workers, they have their laid down rules and regulations, which everyone in the
organisation must abide with. This, they call, organizational ethics. Several studies have shown that organization with
illegal records have not only been forced to pay for investigations and fines but have also suffered significant stock price decline and report, on average, lower profitability rates than their law-abiding counterparts. In fact, many have
experienced sharp sales drops, higher equity costs and severe damage to their reputation among customers and
other stakeholders.
These necessitated the undertaking of different measures that were instituted to oversee and control organizations’
good governance, work ethics and performance. However, little change in attitudes, social structures and power
relations has been observed taking place from time to time (Heilman & Ndumbaro, 2002). The design of workplace
ethics identified to be imperative to organisation to regulate acts and practices of workers while at work to reduce
unethical issues that affect the organisation performance such as bribery, corruption, fraud, facilitation payments,
discrimination, harassment or bullying and other misconduct at workplace (Webley, Basran, Hayward & Harris, 2011
cited in Bello S.M, 2012).
Different scholars argued how important workplace ethics it is, to the performance of any organisation, be it public or
private organisations. However, this study context aimed investigating the effects of organizational ethics on
employee performance by using Guaranty Trust Bank, Calabar, Cross River State, Nigeria as a case study.
1.3 Research Objectives
The study has both general objective and specific objectives. The general objective or main objective of this study is
to examine the effects of organizational ethics on employee performance by using Guaranty Trust Bank, Calabar,
Cross River State, Nigeria as a case study. The specific objectives are:
i) To assess the relationship between workplace ethics and employees’ commitment to work at Guaranty Trust
Bank
ii) To examine employees adherence towards ethical conducts as a parameter for organization performance
iii) To examine the awareness of employees ethical conducts on the organization performance
1.4 Research Questions
The following are some of the questions which this study intends to answer:
i) What is the relationship between organizational ethics and employees’ commitment to work at Guaranty
Trust Bank?
ii) What the level of employees’ adherence towards ethical conducts as a parameter for organization
performance?
iii) What is the level of the awareness of employees ethical conducts on the organization performance?
1.5 Research Hypotheses
The following shall be the research hypotheses to be tested in this study:
i) There is a significant relationship between organizational ethics and employees’ commitment
ii) There is a significant influence of organizational ethics and employee performance
1.6 Significance of the Study
This study is of the essence and useful to the government, stakeholders, managers and non-profit organisations in
Nigeria in establishing the influence of organizational ethics and its contribution towards organization performance. It
gives the measures and recommendations which will impact positively performance of employees and organisation in
general if well capitalised. It provides also challenges for other researchers to carry out similar research on
organizational ethics and add to their existing knowledge. It also offers inputs to policymakers.
1.7 Scope of the Study
This research focused mainly on the effect of organisational ethics employee performance by using Guaranty Trust
Bank, Calabar, Cross River State, Nigeria as a case study. This study will be therefore carried out in four Guaranty Trust Bank, branches in Calabar, Cross River State, Nigeria.
EFFECTS OF ORGANIZATIONAL ETHICS ON EMPLOYEE PERFORMANCE