The impact of ethical climate on organisational commitment.

Abstract

Master of Business Administration. University of KwaZulu-Natal, Westville 2015.

Though there has been some research on ethical climate in both the public and the private sectors, but more particularly in retail industry, the importance of the issue is no way proportionate to the amount of research on the topic. The retail industry that is more labour intensive would benefit from conducting their organisations in a more responsible and ethical manner. This study examines the impact of an ethical climate on employee commitment which includes employee deviance and employee turnover. The study also looks at what decides employees to leave or commit to the organisation or behave in an unproductive manner while they are within the organisation.
 It is proposed that employees who work in an ethical business environment are more likely to be satisfied with their jobs and more committed to the organisation resulting in low staff turnover. A high level of an ethical climate can have a positive effect on the organisational commitment with a concomitantly negative effect on turnover intentions. Literature further supports that the perception that employees have on the ethical climate of the organisation predicts the level of commitment and turnover intentions.
 For the purpose of this study, a number of selected demographic variables (i.e. age, gender, length of service and level of management) were analysed in order to examine the extent to which they influence these relationships.
 Data was collected through the use of a survey where questionnaires were distributed via emails to strategically selected members of the organisation. A total of 113 usable survey were collected from this method. The results showed that employees’ perception of their organisational ethical climate had a less significant effect on the turnover intentions while other factors i.e. rewards and career development had a significant influence on the intentions of employees to leave their organisations.