The effect of business ethics towards firm performance: publicly listed firms on the stock exchange of Thailand
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2017
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2560
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eng
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206 leaves
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b201177
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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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National Institute of Development Administration. Library and Information Center
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Areerat Leelhaphunt (2017). The effect of business ethics towards firm performance: publicly listed firms on the stock exchange of Thailand. Retrieved from: https://repository.nida.ac.th/handle/662723737/5873.
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The effect of business ethics towards firm performance: publicly listed firms on the stock exchange of Thailand
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Abstract
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.
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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Thesis (Ph.D. (Management))--National Institute of Development Administration, 2017