Abstract:
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Recently, there have been many embezzlement scandals relating to some
publicly listed firms, especially in that they were caused by the authority in the
organization. As a consequence, huge damage has been caused to people, and the
country. Moreover, ethical failure in leadership at the managerial level is still active in
order to seek short-term gains, even if it leads to a loss of future business opportunities.
In terms of supervising and leading any ethical corporate business practice, it requires
the combined factors of ethical leadership and both formal and informal organizational
control mechanisms. As such my research seeks to understand the linkage between
ethical corporate business practices and firm performances for the overall 483 publicly
listed firms on the Stock Exchange of Thailand.
The first primary objective of this study is to investigate the relationship
between managerial ethical leadership, organizational ethical culture, a corporate ethics
program and both firm performances: ROA and corporate governance reputation. In
order to achieve this objective, it utilized the quantitative study approach to explore the
three stages of effects: 1) a direct effect of how managerial ethical leadership would
affect both firm performances; 2) the mediating effect: an indirect effect of
organizational ethical culture that would mediate the relationship between managerial
ethical leadership and both firm performances; 3) the moderated mediating effect: a
conditional indirect effect of a corporate ethics program that would moderate the
relationship between managerial ethical leadership and both firm performances through
organizational ethical culture. The analysis was divided into two levels: 1) initial testing
on an individual level; and 2) hypothesis testing on the organizational level. On an
individual level, it employed Confirmatory Factor Analysis for the scale validity and
Intraclass Correlation Coefficient for the reliability analysis. On organizational level, it
employed Multiple Regression and PROCESS (Model 1, 4, and 14) for hypothesis
testing. At the end of this quantitative study, it employed Path Analysis of SEM to test
the overall conceptual model and to compare the results with PROCESS. Then, there is
some discussion on the selection of an estimator for hypothesis testing on moderated
mediation model.
For the second primary objective is to provide a recommendation for enhancing
an effective implementation of a “Code of Ethics” program for the listed firms. It
utilized the qualitative study approach and it was based on the second phase of research
design that moved from data gathering and analysis of quantitative study to capture any
significant issues regarding the implementation of a “Code of Ethics” program to be a
guideline for the data observation and an in-depth interview with the selected firm
samples. The results of this qualitative study indicated two significant areas affecting
the ineffective implementation of a code of ethics program: 1) the issues addressed in
the code of ethics, and 2) a mechanism being in place to support a code of ethics
program including communication within the organization.
The overall contribution of both studies provides both academic and practical
contributions. In the academic level its finding confirmed and contributed to the concept
of the Stewardship theory. Besides, it has also contributed in terms of the selection of
model estimator for the hypothesis testing of a moderated mediation model. On the
other hand, in the practical contributions, it contributes to the managerial implication
that the study results of each testing stage would provide some suggestion to enhance
both firm performances and to promote the implementation of a corporate code of ethics
on a regular basis. At the end of this study, there are some recommended practices for
the implementation of the code of ethics program and the proposed corporate
governance model that can be applied to other listed or unlisted firms.
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