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What shapes Ethical Behavior of Sales Team?
A case study of banking sector of Pakistan
Ayesha Adnan
Dr. Noreen Saher
Hafsa Naureen
Sadaf Qureshi
Naheed Yousaf Khan
International Islamic University, Islamabad
Abstract
Ethical behavior of the employees is an important concern for the organizations in the current era of aggressive
competition. There are different factors that contribute to the development of ethical behavior. The purpose of
this paper is to find out the impact of these factors on ethical behavior of sales force in banking sector of
Pakistan. The research is conducted in banking sector of Pakistan and data was collected from 350 participants
through self administered questionnaires. The research results have revealed two main conclusions: first,
leader‟s characteristics, organizational characteristics and sales force characteristics have positive impact on the
ethical behavior: second, authentic leadership style and job security is negatively related with ethical behavior
development.
Key words: Ethical behavior, Pakistan, job insecurity, team‟s cooperation, authentic leadership.
1. Introduction
The main theme of this research paper relates to the basic ethical model presented by Shelby D. Hunt and Scott
J. Vitell (2006). This model is one of the pioneer models in ethical decision making process and still considered
to be one of the important models. The model incorporates environmental factors (industry and organizational
environment), the recognition of an ethical problem, deontological norms, formation of intentions; and actual
behaviour. Model suggests that although these components are interrelated but still this can lead to the unethical
decision making or unethical behavior followed by the employee.
Leadership style and organizational culture have been studied in this research to fill the gap identified by John
and colleagues (2009) in their research paper. They worked on sales manager‟s characteristics like idealism,
relativism, outcome control and behavior control in the research. It was identified that leadership style,
manager‟s ethical training, managers ethical behavior and Machiavellianism are some of the important factors
that can be useful predictors to find out the sales team ethical behavior and can be incorporated in the future
research. Similarly the researchers identified perception of sales manager competence and assertiveness as
important factors to be considered in future research. Other then technical expertise, job insecurity and team
cooperation act as predictors of sales team ethical behaviour. Finally, another gap identified is the organizational
culture. The article is the combination of few variables already discussed by John and colleagues (2009) (e.g.
moral philosophies, job insecurity, team cooperation) and few variable suggested by them for the future research
(e.g. leadership style and organizational culture).
Financial sector is flourishing in Pakistan at a very rapid pace. Among the service sector, banking sector is one
of the most flourishing financial sectors in service industry of Pakistan. State bank is the regulatory body that
regularizes the processes of the banks. The financial sector in Pakistan consists of the micro finance banks,
Commercial banks, non-banking finance companies, development finance institutions (DFIs), modarabas, stock
exchange and insurance companies.
The focus of research will be sales force of the commercial banks only as Raheel and colleagues (2011) say that
the research in the field of banking sector in Pakistan is very important because banks are service providers and
anxiety exists among the employees of banking sector. Also it is identified that the overall performance of the
banks is dependent upon the employee‟s devotion. If employees are devoted towards their work, the overall
performance of the banks will also increase. The competitive environment in Pakistan has also affected the
working of the commercial banks. To cope up with the current situations the banks have formulated many
different strategies which require ample effort from the employees. Ishrat Hussain in one of his speech in 2005
shed the light on the effective implementation of the ethical standards and employee‟s ethical behaviour for the
effectiveness of the industry. He emphasised that the culture of sifarish, favoritism, discrimination, reciprocity
should be eliminated from the culture and official culture should be based upon the equality and fairness for
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everyone. In line with the importance of this phenomenon, researchers took interest and reasonable amount of
literature is available. Though how leaders‟ characteristics contribute to ethical behavior of sales team is not
directly focused. Our study addresses to this glitch and contribute to research. The data was collected through
self administered questionnaires. In this paper, we will start with the review of relevant literature, develop our
theoretical and research framework and then explain our research and analysis methods. In the subsequent
paragraphs, research results and discussion will be presented. The last section will comprise of conclusion,
research limitation, research implication and future research directions.
2. Literature Review
Ethics has been defined as the moral concerns of being right or wrong. Considering the organizations, ethics
play a very important role in its performance. All the decisions made in the organizations are by the individuals
or the group of individuals, the way they give importance to the moral judgments‟ will certainly reflects in the
organizational decision making process. There is a consensus that for the better and effective organizational
performance, ethical decision making is very important and ethics should be taken seriously in the organizations
(Linda 1986, Charles 2008). Ethics are not important for one department only, but a key of success for all the
departments like finance, human resource, marketing, sales etc. and helps out the organization in better
organizational performance, cost savings, better brand image, improved employee commitment and loyalty.
The question arises here that what shapes the ethical behavior? John and colleagues (2009) points out that
leader‟s characteristics (Idealism, relativism, outcome control and behavior control of a leader) and sales team‟s
characteristics (technical expertise, job insecurity and team cooperation) are important factors of sales team
ethical behaviour. Marketing is considered to be the most problematic function of the organization that raises the
question of ethical issues like false advertising, sales through pressurizing the customer etc., so to cover up this
issue the leaders should follow the deontological approach in marketing ethics (Jacques & William, 1996).
2.1. Defining Ethics
It is of immense importance to define ethics and its effectiveness in different context in order to move ahead in
this research. The dictionary definition of ethics says that the moral correctness of a specified conduct or moral
principles that govern the individual or team behavior. Literature suggests that there exist three types of ethics,
social ethics i.e.; i) the values of one group is different from the values of the other group, ii) transcendental
ethics, which is based on the absolute values of right and wrong and lastly iii) tactical ethics, which is obeying
rules and laws in order to avoid punishments (Geetu, & Carolann, 2003).
Organization needs to take remedial steps in order to formulate and implement the ethical standards. Proper
ethical standards can range from severe criminal activity to breaking any law or rule. These ethical standards
should be relevant to the employees work and should also be reinforcing (Robert, 2006).
2.2. Ethics and Sales Force
Robert (2006) expresses in the research that ethics has gained much attention after the famous ethical scandals
like of Enron, WorldCom, Global Crossing and Arthur Anderson etc. The profession of sales is not being
considered as a profession by many people who had a bad experience while performing certain transactions with
unethical sales person. There may be they had a bad experience through telemarketing etc. The profession of
sales is not new; it is as old as mankind. Similarly the issue of ethics is also related with the sales profession. As
the main focus of the research is on the ethical behavior of the sales employees, this portion will highlight the
role played by the sales force in the effectiveness of the business. The ethical behavior of the sales team is
directly related with the effective performance of the organization. Salespeople have the direct interaction with
the customers which in turn builds up the customer‟s satisfaction and trust towards the organization. Joseph and
colleagues (2003) in their research identifies that among the unethical behavior of the employees, unethical
selling behavior is considered as the important unethical behavior. Mostly the sales people mislead the
customers or show the inappropriate conduct just because that would make greater sales revenue.
Sales related jobs are considered to have more ethical issues as compared to other jobs. The reason which may
relate to this stance is the sales based jobs are mostly commission based and total number of sales done. The
more the individual is able to sale out the product, the more commission will be given to the individual and this
makes the employee to sell out the product even by following the unethical behaviour. This in turn causes the
employee to indulge in more unethical activities and practices. So in order to increase sales, the team or the
individual may lie or falsely communicate about the product characteristics to the employee. Bellizzi (2003)
finds out that leaders have more lenient and comfortable attitude towards the individuals who are better
performers in sales and have harsh and rude attitude towards low performers not involved in unethical selling.
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Sales force ethical behavior is of immense importance as they are exposed to more unethical pressures as
compare to other employees as they are considered to be revenue generators for the organization (Sergio & Jose,
2005). According to Tansu (2001) to measure the sales employee performance, we can look at the total volume
of the sales done by them. Sales representatives have the direct link and communication with the clients. It‟s the
foremost duty of the customer representative to listen to the client and solve out their problem with the utmost
honesty. There are chances that the sales employees who follow ethical practices and standards set by the
organizations are considered to be more committed with their jobs as compared to the employees who do not
follow the ethical practices while performing their task (Randi and Galen, 1994).
The sample taken for this research belongs to the sales department of the banking sector, and the employment
conditions in Pakistan are not favorable, hence the employees working on truly commission or highly related to
the revenue generation may get involved in many unethical activities. Few of the unethical practices in baking
sector of Pakistan are:
1. To ask the client to get registered for the credit card just to increase the commission for the sales
representative, and tell the client to not activate it if he do not want to use it.
2. Not letting the client know about the true hidden charges associated with some loan or investments.
3. Manipulation of the customer needs.
4. Miscommunication about the products features.
Literature suggests that the competition based upon the prices in the financial sector is considered to be difficult
in the current era. So the main focus is competition focused on the customer relationship. For banks it is very
important to maintain the highly effective relationship with the clients in order to lead in the industry. For this
purpose the sales people hold the strategic position in the organizations (Laith, 2012).
The sales representatives want to build a good impression and image as they have to build the direct relationship
with the customers, retailers and suppliers (Russell & colleagues, 1999). To build the good image in the eyes of
others, it is necessary that the sales employees do not deviate from ethical practices. Nigel and colleagues (1998)
suggests that outcome is not the only predictor of the salesperson performance, but behavior of salesperson
should also be evaluated. It is of utmost importance to understand that sales force is the asset for any
organization. The leaders should understand that standard of performance of the salespeople is how well they
perform because that is closely linked to performance of the organization (Emin & colleagues, 1994).
Murphy (2004) says that when there is the expectation of group members to act ethically then the individual also
behaves ethically as s/he feels the pressure to from the team to do so. According to Katz and Kahn (1966) (as
mentioned in John and colleagues, 2009, p. 915) “When a sales team has low ethical standards, it does not have
a strong ethical ideology driving norms of ethical behavior, and hence the latter fail to make explicit that
unethical sales activity is inappropriate for members of the sales team”. The ethical conduct of the employee is
higher where the ethical behavior is encouraged and rewarded by the leader and norms (Linda & colleagues,
1998). Patricia and colleagues (2001) suggests that in order to reduce the unethical behavior of the employees,
the managers or leaders of the team shall take the corrective actions against the unethical practices.
H 1: The higher the ethical standards of the sales team, the lower the probability to engage in unethical
behavior.
2.3. Sales Leader’s Characteristics
Role of leader and personal moral philosophies are two main characteristics of leader discussed as under which
shape the ethical behavior of the employee.
2.3.1. Role of Leader in Shaping Ethical Behavior of Sales Employee
Leadership is considered as important factor to have an impact on effectiveness and efficiency of the
organization. Effective leadership helps to develop the morale of the employees, builds the effective work
environment, motivates and guides the employees towards goal achievement, and helps to create the confidence
in employees. Leadership is to influence the employees working under him (Thomas & colleagues, 2005).
Russell and colleagues (1999) point out that the manager‟s practices are followed by the employees. The way
the manager will act, the employees will follow that. If managers want to incorporate ethical standards in the
employee, they need to act accordingly. Dean and Alan (2004) highlight in their research many winning
managerial skills like self-awareness, self regulation, self motivation, and effective communication, these skills
help out the employees to work effectively and to achieve the targeted goals of the organization.
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The traditional view suggests that the activities related to sales leadership are performed by sales executives
present at top-level and to some extent by the field sales managers (Thomas et al., 2005). The main aim of the
leader of sales team is to perform in such a way that it helps out the organization in revenue generation (Mary,
2003). Team leader should be able to perform in an effective way and should have the capability to extract best
out of his employees. In order to do that leader must act as a role model. Being a leader is a tough job. Because
team members do not have the same ethical ideology as of the leader, they possess their own moral values that
are based on their religion, family back ground, culture etc. Being a leader, it‟s your task to manage them
according to the rules and regulations of organization. Firstly, their action will reflect the image of the leader as
well as of the organization. Secondly as discussed earlier leader is a role model for the employees, and
employees look forward for formal or informal clues towards him. It is the duty of the leader to communicate
and train the employees about the ethical standards of organization. Importance of the ethics and consequences
in case of violation of these ethics should be made clear by the leader to the employees.
In an article published in human resource management international digest in 2011, it is been argued that if once
the leader is involved in unethical behaviour, even though the perception about him is good or true, there is no
way to get out of it. As the employees look at the leaders for what they do, if the leader will consider any
unethical activity as fair, employees will do the same. It has been suggested that the task of the leader is not only
to monitor the activities but to coach the employees towards the right direction. Tansu (2001) in his research
listed 3 antecedents that influence the behavior and performance of the salespeople. It includes sales manager
activities, salesperson‟s characteristics and sales organizations design. Eleonora and Niki (2006) identifies in
research that there is lack of evidence of ethics and ethical behaviour in leaders and managers. If leaders are not
following the ethical standards, or their behaviour is not in accordance to moral values, then there are fewer
chances that employees will follow the ethical standards too.
In this research paper the role of authentic leader will be discussed with the reference to employee ethical
behavior. The authentic leaders are the ones who live their life by values, they empower the employees, they
lead through values, develop the trust among the employees and make the promises and then deliver according
to the promises, have courage, lead from the heart, and are team builders. Carol and Greta (2009) in the research
suggests that authentic leadership helps to build trust in the organizations, transparent relationship, enhance
employee commitment, and have more moral intentions. Milorad (2005) highlights that the leader is one who
guides people towards the goal, self awareness and self determination, leaders are important determinants of the
sustained positive behavior.
“Authors revealed that authentic leaders must behave consistently with their moral principles and respect the
rights of all stakeholders. Authenticity seems to be closely linked with truth and transparency” (Dion, 2012,
p.4). “An authentic leader must achieve authenticity, as defined above, through self-awareness, self-acceptance,
and authentic actions and relationships. However, authentic leadership extends beyond the authenticity of the
leader as a person to encompass authentic relations with followers and associates. These relationships are
characterized by: a) transparency, openness, and trust, b) guidance toward worthy objectives, and c) an emphasis
on follower development” (William, 2005, p. 345).
May and colleagues (2003, p. 253) assert that “authentic leaders [. . .] see themselves as the „moral standard
bearer‟ for their organizations, demonstrating consistently high standards of ethical conduct”. Authentic
leadership is considered to be the basic construct of creating trust, making employees to act more positively,
able to have greater impact on employee performance and add value to the decisions (Susan & Fred, 2006).
Character of the leader is important factor in the performance. The character in this respect caters to the moral
excellence and authentic leaders are one who shows consistency among their ethical values and actions (James
& colleagues, 2006).
H2: Leader’s authenticity helps the employees to adopt more ethical behavior in the organization.
There are many important factors associated with the leader that helps to shape the ethical behavior of the
employees. In this research 2 main characteristics have been discussed:
2.3.2. Personal Moral Philosophy
The theories presented in marketing ethics considers the moral philosophies as one of the important factor that
effect the ethical decision making process by the individual (Anusorn, 2000). Personal moral philosophies have
been divided into two sub categories i.e. idealism and relativism. According to Mario (2008) personal moral
philosophies have a great influence on the individual‟s ethical intentions, what are the perceived ethical issue
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and its sensitivity, on the ethical verdict and on the social responsibility of the organization. Moral philosophies
are considered to be either rule oriented or consequences oriented (Donelson, 1992).
Relativism and idealism are two different approaches to the personal moral philosophies. Ethical relativism is
the concept that relates to the individual‟s belief. According to dictionary meaning, Ethical relativism is defined
as nothing is right or wrong. It depends on the individual‟s values based upon the cultural context of the
individual. What is right for one individual may not be the same for other; even what is considered to be correct
in one culture is not necessarily considered as correct in the other culture. There are no moral philosophies that
are considered to be true for everybody, in every cultural context and at all the times.
Forsyth (1980) defines relativism as "the extent to which an individual rejects universal moral rules" (p. 175). It
states that nothing is considered to be true for everybody, there does not exist anything absolutely moral and
nothing is morally right or wrong. It is the context in which one defines the practice or behaviour as right or
wrong. This is also assumed that our values changes over the specific period of time. The concept behind
relativism is that what is correct and incorrect can vary from one social group to another and it can be verified
through consensus. If majority from a group considers it as right then that behavior or practice is ethical, or if
consensus suggests some practice or behavior as wrong then in that social group it will be considered it as
unethical (David, 2008).
The main idea presented in this research is to find out the impact of the level of relativism of the leader on the
sales force ethical behavior. John & colleagues, (2008) highlight that if the leader is high on the relativism, he
will not make harsh judgments on the ethical behavior of the employees or will not question them on their
activities because he believes that what is true for him is true for others as well. And if he is low on relativism
philosophy then there are chances that he would question the activities and behavior of the employees because
in his opinion they would have acted unethically.
Forsyth (1980) defines idealism as the degree to which the individuals "assume that desirable consequences can,
with the 'right' action, always be obtained" (p. 176). Forsyth (1992) argue that if someone wants to achieve
something desirable, the positive actions can help him to do that without harming the others. So the leaders who
are rated higher on idealism are considered to be more ethical and expect that the employees working under him
should also act ethical and should follow those practices which do not affect others. Similarly the leader, who is
rated low on idealism, will definitely not show more concern towards the ethical practices of the employees.
Singhapakdi & colleagues (1999) in the research find out that for better ethical working of the leaders and the
organizations should focus on more idealistic approach and less relativistic approach; and Anusorn (2000)
suggests that if the leaders are able to act high on idealism and low on relativism, it will lead them towards
enforcing the ethical standards in the organizations in the true sense.
H3: The greater the extent to which sales leaders’ personal moral philosophy is relativistic, the lower the
ethical standards of their sales teams.
H4: The greater the extent to which sales leaders’ personal moral philosophy is idealistic, the greater the
ethical standards of their sales teams.
2.4. Organizational Culture
There are many ways in which organizational culture is defined. All the major definitions of culture highlights
that the culture of the organization is the shared set of values, norms and beliefs that are practiced in the certain
organization. “A subset of organizational culture, representing a multidimensional interplay among various
“formal” and “informal” systems of behavioral control” is the definition given by (Trevino & colleagues, 1998,
p. 451). Randall & colleagues (1990) define organizational culture as a set of shared values, beliefs,
assumptions, patterns of relationships and behaviour and it has a deep impact on the employee behaviour.
According to Uttal‟s findings as quoted in Randall & colleagues (1990), “Culture refers to a system of shared
values (what is important) and beliefs (how things work) that interact with a company's people, organizational
structures, and control systems to produce behavioural norms” (P. 157). According to Randall & colleagues
(1999) organizational culture has the direct impact on the employee behaviour. Adler (1986) and Triandis
(1996) define the culture as the same set of attitude, values, beliefs and behavior which are shared by
employees.
Robert (2008) defined three types of culture: first, bureaucratic cultures: that has a hierarchical structure with
well defined rules and regulations, responsibilities and is the operations are well controls in such organizations;
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second, innovative cultures are more focused on results, are more creative and innovative, organizations are risk
takers and that make the work environment more pressurized challenging for the employees. Lastly, supportive
culture in the organizations is where there is the healthy environment of trust and relationships exists;
collaboration and personal freedom to perform is encouraged in such cultures.
2.4.1. Organizational Culture and Employee Behaviour
Every organization has its own set of values, beliefs and norms that are followed by the employees. The culture
affects the employee behaviour positively or negatively depending upon how the culture is being implemented
in the organization. It is important for the leaders to develop and maintain the ethical culture within the
organization so to make the employee work accordingly (Thomas & colleagues, 2006).
Mark (2001) finds out that the employees were less involved in unethical activities of the organization in which
there is a proper implementation of code of conduct, as compared to the employees of the organizations that do
not have a proper code of ethics implemented in the organizations. William (2010) also highlights that the
employees perceive that the ethical culture of the organization has deep impact on the organizational
commitment and ethical decisions done by the employees.
Unethical behaviour mostly occurs in the organizations where unethical conduct is not questioned or given due
importance. This may also happen where the reward or punishment is not related to the employee behaviour. So
in order to avoid such situations, it is important for the leaders to control such behaviour or culture that leads to
the deviant behaviour. The organization must promote transparency in implementation of code of ethics in the
organization so that the employees should not indulge themselves in unethical behaviour.
Stephen and Tom (2007) contend that the culture has a deep impact on the ethical practices. People from
different cultures show different ethical behaviors. Stephen and colleagues (2007) argue that when the employee
work behavior is not aligned with the organizational norms, it will affect the working of the organization like
decision making processes, and financial well being of the organization. Patricia and colleagues (2001)
highlights the impact of organizational culture on the ethical behavior of the employees. James (1994) figures
out that if the organizations have proper ethical climate then it would lead towards more ethical behavior among
employees and that would ultimately lead to the positive performance of the organization, and if the ethical
climate is just instrumental then that would lead to the unethical behavior of the employees that would
ultimately lead to the negative performance of the organizations. Arzu (2008) identifies that “Person‟s
perception of ethical standards and subsequent conduct is influenced by institutional factors (e.g. ethics
legislation), personal factors (e.g. moral development), and organizational factors (e.g. code of ethics)” (p. 779).
The organization will face the downfall of the organizational culture, when the employees feel unhappy with the
current organizational culture and due to this there comes deviance in the behavior of employees. This behavior
can be unethical and in return will affect the organizational performance. The organization must implement
proper code of conduct so that the employees do not adopt unethical behavior. To have the positive impact of
the code of conduct, it should be properly formulated, implemented and communicated to the employee. If the
upper management wanted to reduce unethical behavior among employees, it should be made clear that their
behavior will affect the front line sales managers, performance evaluations and reward structures (Bass &
colleagues, 1998).
H5: the better organizational norms and values are defined more ethical behavior will.
2.5. Sales Team-Specific Factors
Along with the organizational and leader‟s specific characteristics, few of the sales team factors also shape the
ethical/unethical behavior of the employees.
2.5.1. Job Insecurity
Employees feel more insecure of their present job due to the rapid change in businesses because of the
globalization. The companies are moving towards the mergers, acquisitions, alliances or even going through
heavy downsizing due to the economic recession which in turn increases the level of stress among the
employees (Susan et al., 1989). All these conditions make employees feel more insecure towards their job and
this may affect their performance. In past, there were many job opportunities available to the employees so they
could easily switch their job. But now due to the recession and less job opportunities it has become more
difficult for the employees to switch jobs. The employment conditions in Pakistan do not favor job switching.
The jobs are not readily available in the market, so the employee feel threaten and do not want to lose their
current job.
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Due to job insecurity, employees feel threatened about their financial security, personal and career growth etc.
According to the Employee Job Survey Report (2010), job security is considered to be at the top most priorities
ranked by the employees and ranked number two by the human resource professionals.
Job insecurity has found to have an impact on the employees attitude. “Job insecurity has been defined as an
essential and involuntary change regarding the future existence of the present job or of significant job features,
such as deterioration of working conditions, waning career opportunities, and declining salary development”(
Johnny & Magnus, 2003, p. 217). Leonard and Zehava (1984) define job insecurity as “powerlessness to
maintain desired continuity in a threatened job situation” (p. 438). Job insecurity is the continuation of job in
stressful state of mind where employees feel insecure or threatened from the current job. It may be defined as
the probability that the employee feels insecure about the job. There could be many reasons for the job
insecurity including downsizing by the employer, bad employee performance, prevailing business conditions
(like mergers, acquisitions etc.) and the employee‟s personal skills.
Psychological contract exists among the organization and employees. This contract helps them to understand
that what is expected from each other. If the organization and the employee are unable to maintain
psychological contract among each other, there will exist the state of ambiguity and that will lead to stressful
state of mind for both the employee and the employer. Johnny and Magnus (2003) suggest that role ambiguity
and role conflict create perceptions of job insecurity because that threatens the working of the employee, so job
insecurity has found to be the important stressor and empirically there have been support for the job insecurity
and employee attitude. According to Doha-Shin and Joel (2007) job insecurity is the cause of employee
demonization. Susan & colleagues (1989) point out that the organization and the employees have the
relationship of commitment, contentment, confidence, and trust. If employees and the organization is unable to
maintain such relationship then this condition will lead to the job insecurity and that will cause sabotage in the
attitude of employee. This attitude and behaviour can be unethical and can harm the organizational goodwill.
Hartley and colleagues (1991) highlight that there exists the negative relationship between job insecurity and
employee job attitude. Hellgren & Sverke (2002) points out that job satisfaction and involvement, physical and
mental health, organizational commitment and trust, performance and turnover intentions are some of the
attitudes that may be affected by the job insecurity. Inmaculada and colleagues (2010), Jack and Brotheridge
(2007), Johnny and colleagues (1999) also strengthen the belief that job insecurity has the negative correlations
with employee behaviour like job satisfaction, organization commitment, attitude and well being etc. Ayalla and
Zehava (1998) concluded from different researches that job insecurity has the adverse relationship with
employee attitude.
H5: The more job insecurity of sales teams, the lower their ethical standards will be.
2.5.2. Cooperation
Yilmaz and Hunt (2001) explain cooperation as “the willful contribution of individuals or groups to the
successful completion of tasks” (p. 335). Employee cooperation is gaining enormous significance in the
organizations. Cooperation is the main ingredient to make the organizations more successful and effective. It
helps the employees to move in one direction for the achievement of organizational goals. Cooperation also
supports the employee positive attitude towards organization and tasks which he has to perform.
Rachid and Dominic (2006) state that cooperation among employees is very important factor for the success of
organization. Cooperation is most widely considered phenomenon in the organization. The employees should be
encouraged for win-win situation in the organization, when the employee‟s shows cooperation, it makes easier
for them to accomplish the goals. This will help the employees to overcome conflict and as a result organization
grows and there will be moral and healthy competition.
Similarly René and Petru (2010) highlights in their research that cooperation is a good predictor to distinguish
between the successful and unsuccessful organizations but on the same time some employees use other
employees in the team to move forward towards their personal success. Employee cooperation is of many types
like information sharing, showing organizational citizenship behavior, building teams etc. in this research
information sharing is considered at the main characteristics of cooperation and considered for the study. It is
considered that cooperation among sales team is much required for the successful completion of the task.
Employees are just like the part of machine working together to get the end result. And information sharing is
the lubricant added to this machine. Sales people play a vital role in the organizational success. They have
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important information about customers, suppliers and competitors that can help the organization to improve its
processes of doing businesses. This also helps the organization to adapt the changes for the improvement of the
organizational working. It is important for the organization to let these sales people participate in the decision
making process, to get useful information for the organizational growth (Philip & colleagues, 2000).
According to John and colleagues (2009) Information sharing can help to lower down the adverse anxiety on
ethical standards.
H6: The more the sales team cooperate (through sharing information internally) the higher their ethical
standards will be.
Theoretical model:
3. METHODOLOGY
3.1. Population and Sample
The main idea of this research revolves around the factors shaping the ethical behaviour of the sales force. As
discussed earlier, banks are the most flourishing industry of the financial sector, so the sample selected for this
research is the leaders and the sales force of the banking sector of Pakistan. The employees working in the banks
are considered to be the asset and the revenue generators for the organization, so to identify the factors to
modify their ethical behaviour has been the key interest in this research.
Formal questionnaires were designed and circulated to the employees and leaders by following the convenience
sampling methodology due to time constraint. The analysis of this research follows the quantitative approach
which will be followed by correlation and regression for the result analysis. The total sample size of the research
is 102 leaders and 2 employees working under each leader. Of the total 350 distributed Questionnaires, 306
Questionnaires were found useable at a response rate of 87 percent.
SALES FORCE ETHICAL
BEHAVIOR
ORGANIZATIONAL
CHARACTERISTICS
ORGANIZATIONAL
CULTURE
MANAGERAIL
CHARACTERISTICS
IDEALISM
RELATIVISM
LEADERSHIP STYLE
(Authentic Leadership)
Probability that the
employee will act
unethical in ethical
situations
SALES FORCE
CHARACTERISTICS
TEAM COOPERATION
JOB INSECURITY
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3.2. Scales and Measures
All measures were obtained from a “self-report” questionnaire. A response scale anchored by 1, “strongly
disagree,” and 5, “strongly agree,” was used, and high variable scores denote high levels of the construct in
question.
3.3. Sales Leader’s Characteristics
Sales leader‟s characteristics that affect the employee ethical behaviour were measured by using two moral
philosophies.
3.3.1. Sales Manager Relativism
Sales manager relativism was measured by scales developed by Forsyth (1980). The scale measure the extent to
which sales managers believe that what is ethical varies from situation to situation. Respondents are asked to
indicate their level of agreement toward each statement, from 1= strongly disagree to 5 = strongly agree. The
cronbach‟s alpha for this variable is .922.
3.3.2. Sales Manager Idealism
Sales manager idealism scale measures how strongly sales managers believe that ethical actions always leads to
positive results and unethical behaviours harm others, developed by Forsyth (1980). The cronbach‟s alpha for
this variable is .898.
3.4. Sales Team Characteristics
Sales team characteristics that effect the ethical behaviour of the employee was measured by using two
dimensions.
3.4.1. Sales Team Job Insecurity
A 3-item measure of sales team job insecurity is used in research developed by Probst, (2003b). It measures the
extent to which sales managers believe that sales team members perceive their jobs are secure ore in danger. The
cronbach‟s alpha for this variable is .877.
3.4.2. Sales Team Cooperation
Sales team cooperation was measured using 3 items scale extracted from Yilmaz and Hunt‟s (2001) sales
cooperation scale. It shows the extent to which sales team members share information among each other. The
cronbach‟s alpha for this variable is .774.
3.5. Sales Team Ethical Standards
To measure sales managers‟ perceptions of sales team ethical standards, Hunt, Wood, and Chonko (1989)
measure of ethical values is used for this research. The cronbach‟s alpha for this variable is .846.
3.6. Corporate Ethics Scales
Corporate ethics scale was also measured by using 5 item scale developed by Hunt, Wood and Chonko (1989).
The scale measures the extent to which organization culture supports the ethical behaviour in their employees
and the information organization provide its sales force about the importance of ethical behaviours. The
cronbach‟s alpha for this variable is .513.
3.7. Leadership Style Scale
Authentic leadership was measured by using 8 item scale developed by Avolio, Gardner and Walumbwa
(2008). This scale is used to measure the extent to which the leadership style is authentic for the employees. The
cronbach‟s alpha for this variable is .938.
4. Results
Table 1 represents the KMO value which is equal to .682 and Bartlett‟s test significance as .000. This indicates
that the questionnaire is reliable for the analysis. Similarly the following table shows the factor comparison
analysis of the questionnaire.
Table 2 Represents the factor analysis of the variables and their items.
Table 3 shows the combined correlations between the variables which are Managerial characteristics, sales team
ethical standards and sales team characteristics. The result concludes that a highly significant but a negative
value between the variables suggests that the relationship between them is negative. ** shows the high
significance level at 0.01 level of significance.
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Table 4 shows the dimension wise Mean, SD and correlation of managerial characteristics having three
dimensions which are sales Relativism (SR), sales Idealism (SI) and Leadership Style (LS). The correlations of
all variables are highly significant but have negative correlation which shows that the variables are negatively
related. ** shows the high significance level at 0.01 level of Significance and * shows the significance at 0.05
level of significance.
Table 5 shows the dimension wise Mean, SD and correlation of sales force Characteristics having two
dimensions which are Job insecurity (JI) and team Corporation (TC). The correlations of all variables are highly
significant but have negative correlation which depicts that the variables have negative relation between them.
** shows the high significance level at 0.01 level of Significance and * shows the significance at 0.05 level of
significance.
Table 6 and Table 7 show the regression analysis of the variables. With the help of R and adjusted R2
the
hypothesis are tested individually. The first hypothesis which states that the higher the ethical standards of sales
team then the probability that the sales team member will engage in unethical behavior is lower in ethical
situations is accepted as the value of beta is 0.442. This relationship between the two variables is highly
significant. This indicates that first hypothesis is accepted. If the sales team poses the high ethical standards, the
employees as individuals will act more ethically. As working in a team, the individuals have more influence on
other team members, so in order to work together for achieving the certain goal, the employees will act more
ethically.
The second hypothesis indicates that leaders‟ authenticity helps the employees to adopt more ethical behavior
in the organization. The results after testing this hypothesis indicate that the relationship between leadership
style and sales team ethical standards is negatively significant as value of beta is negative which is 0.120 as
presented in Table 5. Therefore, our second hypothesis is rejected. In Pakistani context, it is proved from the
result that authentic leadership is not influencing the sales team ethical behavior. The reason for this negative
relationship is due to in-group collectivism found in Pakistani culture. Because of this in group collectivism
employees develop different relations with their leaders. The employees from the in-group circle of the leader
have the advantage of developing a stronger relationship with their leader than those employees who are not part
of in- group. Therefore the employees from in-group circle will consider the leader as role model and will
follow him. The employees from the out group will not be able to develop the strong relationship with the
leader. To be the part of in group the employees may involve in unethical activities in order to increase the sales
revenue so to impress the leader.
The third hypothesis states that the more the leader is relativistic; the lower is the ethical standards of the sales
team. The results show that the third hypothesis is supported as the beta value is -0.480. Which means the
relation between sales relativism and sales team ethical standards is negative. The value is significant enough to
support the second hypothesis .When the level of relativism is high the leader will believe that the culture and
norms followed by the people differ widely. Hence if the leader considers the fact as true that the norms are
different for everybody, then there are chances that the employees will not follow the same norms as of the
leader. This can create the difference between the ethical standards of the leader and the employees which can
move the employee towards the unethical behavior.
Ethical relativism deals with the level of morality being relative among cultures. Since the norms and values are
different for every culture therefore the ethical relativism states that what is morally right and easily accepted in
one society may not be accepted and practiced the same way in other society. There are no universal norms and
values practices across the globe. So this belief also relates to the impact of the leader‟s belief on the employee
ethical behavior. If the leader belief is that there are no universal norms applicable to all at all times, then there
are strong cases where the leader will neglect unethical behavior of the employees.
The fourth hypothesis, the more the leader is idealistic; the higher is the ethical standards of the sales team is
also supported as indicated by value 0.243. The relation between sales idealism and sales team ethical standards
is positively significant which means that higher the sales leader is on idealism, high will be the sales team
ethical behaviour. The data collected for this research clearly indicates that the leaders in Pakistani culture also
value that the behaviour of the employee should not harm or hurt the feelings of other colleagues, and clients.
The clients in banks or in any other service industry in Pakistan are given a huge importance, due respect and
care. The leaders do not want that the clients should be treated unethically or harshly. This will influence the
practices of the employees which will lead them towards more ethical behavior.
Fifth Hypothesis that the better organizational norms and values are defined more ethical behavior will be is also
accepted as concluded from the results. The results indicate that beta having value of 0.128 show the fifth
hypothesis is also supported as the corporate ethical standards have positively significant relationship with sales
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team ethical behaviour. This means that ethical culture promotes and increase ethical behaviour in sales team.
The research shows that the banks in Pakistan follow a code of conduct strictly. The banks have corporate
ethical standards which are not only documented but also implemented which have to be followed by the bank
employees. The employees know that in case of rule violation there could be strict actions taken against them,
and that can directly affect the appraisal of the employees. Therefore, our fifth hypothesis is also accepted that
the proper corporate ethical standards lead to better ethical behaviour of the employees.
Our sixth hypothesis, the more job insecurity of sales teams, the lower their ethical standards will be. The
hypothesis is also supported as indicated by value -.319. The relationship between job Insecurity and sales team
ethical standards is negative but significant. This means that higher the job insecurity lower will be the ethical
behaviour of sales team. As indicated through the data, that the job security of the employees is directly related
with the performance of the employee. In banks the sales people are mostly concerned with the commission
based sales or target oriented performance in Pakistan. So the employees need to reach the targets given to them
in order to earn more commission and to have more job security. In case where they feel the lack of assurance in
achieving the targets, they use unethical behaviour. The unethical behaviour may include miscommunication
about the product features, manipulating the client‟s needs etc. Therefore hypothesis fifth is accepted that is the
employees are insecure about their jobs, there are more chances that they will indulge in unethical behaviour.
Seventh hypothesis is also supported as shown by value 0.133. The relationship between Team Corporation and
ethical behaviour is positively significant which means that high will be Team Corporation more will be ethical
behaviour in sales team. The data shows that if the team has cooperation among the employees, they share more
information with each other, they have more trust among them, and the employees will act more ethically.
Hence hypothesis seventh is also accepted that if team cooperation is present, the employees will act more
ethically.
5. Discussions
This study investigates the relationship between Sales leader, organizational characteristics, and sales team
determinants of salesperson ethical behaviour. It is an extended research. Previous researches have been
conducted in different countries but this study is conducted in Pakistani context, moreover this research is
focused on the banking sector.
5.1. Managerial Characteristics and Sales Force Ethical Behaviour
The results for managerial characteristics and sales ethical behaviour reveal that there is highly significant
relationship between these two phenomena. The relationship is negative which is indicated with the help of
negative correlation.
The results of the study also provided evidence that authentic leadership style has negative effect on sales team
ethical behaviour. In Pakistani banking sector the authentic leadership style is not supported enough to promote
ethical behaviour in sales team. According to Dion (2012), William (2005) and May and colleagues (2003)
relation between the leader and the employee should be transparent and trustworthy; the leader should be
consistent and moral standard bearer. In the context of banking sector of Pakistan this is due to in-group and out
group collectivism phenomenon that the leaders are not been able to develop the trust among the employees.
The employees, who are close to their leaders gain the trust and act more ethically as compare to out groups
employees. So hypothesis 2 is rejected that authentic leadership style helps in developing the ethical behaviour
of the employee. Other than this stance, there could be many other reasons for the individual to get involve in
unethical behaviour like job insecurity, moral philosophies of leader, organizational culture etc.
Leader‟s moral philosophies also has a profound impact on shaping the employee ethical behavior. Mario
(2008), John and colleagues (2008) also says that the moral philosophies have an influence on the ethical
behavior of the individual. It has been concluded in this research as well that the moral philosophies affect the
individual ethical behavior. Hypothesis 3 and 4 has accepted showing that higher the leader is relativistic, lower
the ethical standards of the team. Similarly higher the leader is idealistic, greater the ethical standards of the
sales team.
5.2 Organizational Characteristics and Sales Force Ethical Behaviour
Organizational characteristics have a great impact sales team ethical behaviour, the study also indicated that
employees in such organization produce productive results which have defined their norms and values clearly to
its employees. Culture plays a significant role in employee‟s performance. When employees know that
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performing unethical behaviour in their organizational culture can lead to job insecurity, they behave ethical and
according to the code of conduct of the organization. This is also supported in current study that the banking
sector of Pakistan has proper code of conduct. Rules and regulations according to the cultural norms and values
and which have to be strictly followed by the bank employees. Customer care and relationship is maintained to
have a better outcome. The idealistic leadership style ensures that customers are treated ethically. Organizational
culture plays the vital role in developing the employee behavior. Mark (2001), William (2010), Stephen and
Tom (2007) suggests that the organizational culture has the impact on the ethical decision making, and ethical
behavior. This research also showed that if organization prevail ethical culture, employee‟s behavior turns out to
be more ethical. The accepted hypothesis 5 also purposed that the more define ethical norms and values, more
the employee will behave ethical.
5.3 Sales Team Characteristics and Sales Team Ethical Behaviour
The relationship between sales team characteristics and sales team ethical behavior indicated from the result of
this study that the sales team ethical behavior will also depend on the characteristics of the sales team which are
i. team corporation and ii.job insecurity. The result of the study shows that the relation is highly significant but
negatively correlated. If the level of job insecurity increases, the level of ethical behavior of employees will
decline. The employees who feel insecure about the job did not hesitate to behave unethical to survive and save
the job.
This research also shows that the job insecurity or to gain the leader‟s trust the employee will involve in
unethical behavior. Hartley and colleagues (1991), Hellgren and Sverke (2002), Inmaculada and colleagues
(2010), Jack and Brotheridge (2007), Johnny and colleagues (1999) strengthen the belief in different researches
that job insecurity has the negative correlations with employee behavior like employee involvement,
organizational commitment, physical and mental health etc. It helps to supports the hypothesis 6, that greater the
job insecurity, lower the ethical standards of the employees. Team cooperation has been researched in this
article. As Daniel and colleagues (1998) say that the team members are affected by the decision made by others
in a team and Philip and colleagues (2000) find out that information sharing as considered a factor in team
cooperation affects the ethical standards of the team. So it has been proven in this research too that if the sales
team members cooperated among each other, the greater will be the ethical standards of the team.
6. Conclusion and Implications
The findings of this study also have some implications. The results indicates the empirical and theoretical
research considering the effect of sales team ethical behavior and other determinants of this ethical behavior, as
there are small amount of researches in this domain. As expected, the study discovers the importance and impact
the finding of this study has some implications. The results present the theoretical and empirical research
regarding the effect of the Islamic work ethic, as there have been few researches in this regard. As expected, the
study revealed the importance of managerial characteristics, organizational characteristics and sales team
characteristics on sales team ethical behavior. Therefore this study also provides a foundation for further
research in the sales team ethical behavior.
Practical implications for this study offer attention-grabbing strategy for the managers of banking sector in
Pakistan in formulating ethical standards for their Human resource. As it is important and foremost part of any
organization. Besides this, to have better culture, high performance and cooperation of teams‟ managers need to
incorporate ethical standards in the organizations. For this mangers ensure checks and balances for every
employee and place importance on the application of ethical standards in the workplace.
There are various limitations to this study which needs to be well thought out. Firstly the sample size from
organizations and participants is small and for future study there should large sample size which includes more
institutions to get better results and findings. Secondly, the generalization of results and findings of the current
study present can be debatable because of the nature of the sample. Thirdly, there are limited variables used in
this study which can also have an effect on findings. For future study it is better to include other leadership
styles, organizational characteristics and sales team characteristics in relation to have more realistic findings. In
future the study should be carried out in other sectors and the results should be comparing with banking sector,
this will provide information as to which sector follows what kind of leadership style and various characteristics.
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Annexure
Table 1: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy. .682
Bartlett's Test of
Sphericity
Approx. Chi-Square 3415.032
Df 820
Sig. .000
Table 2: Factor Analysis
Items Extraction
Relativism .673
Relativism .804
Relativism .755
Relativism .733
Relativism .761
Idealism .621
Idealism .772
Idealism .858
Idealism .754
Idealism .794
job insecurity .736
job insecurity .725
job insecurity .747
team corporation .730
team corporation .736
team corporation .754
ethical standards .681
ethical standards .763
ethical standards .709
ethical standards .817
ethical standards .680
ethical standards .656
ethical standards .847
ethical standards .789
ethical standards .721
ethical standards .645
ethical standards .697
ethical standards .728
ethics scale .762
ethics scale .764
ethics scale .815
ethics scale .736
ethics scale .787
leadership style .743
leadership style .822
leadership style .686
leadership style .782
leadership style .751
leadership style .663
leadership style .800
leadership style .793
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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
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MAY 2013
VOL 5, NO 1
SD= Standard deviation, JI= Job insecurity, TC= Team Corporation
Table 3: Means, Standard Deviations and Correlation of variables
No Variables 2 3 Mean SD
1 MC -0.304** 0.495** 3.669 0.627
2 STES -0.188 2.905 0.622
3 STC 3.735 0.606
**Correlation is Significant at the 0.01 level (2- tailed)
Table 4: Dimensions of managerial characteristics
No Variables 2 3 Mean SD
1 SR -0.612** 0.263* 3.602 0.955
2 SI
-0.221* 3.982 0.805
3 LS 3.515 0.868
**. Correlation is Significant at the 0.01 level (2- tailed)
*. Correlation is significant at the 0.05 level (2-tailed)
SD= Standard deviation, SR= Sales Relativism, SI= Sales Idealism, LS= Leadership Style
Table 5: Sales Force Characteristics dimensions
No Variables 1 2 Mean SD
1 JI
-0.456** 3.810 0.928
2 TC 0.234**
3.660 0.833
**Correlation is Significant at the 0.01 level (2- tailed)
SD= Standard deviation, MC= Managerial Characteristics, SES= Sales Team ethical Standards
STC=Sales team Characteristics
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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
COPY RIGHT © 2013 Institute of Interdisciplinary Business Research
442
MAY 2013
VOL 5, NO 1
Table 6: The Results of Regression Analysis
Variables
Dependent Variable
Sales Team Ethical standards
Independent
MC
LR
LI
LS
R Adj R2 ∆R
2 Β Sig
0.281
0.680
0.287
0.153
0.079
0.462
0.082
0.023
0.070
0.457
0.073
0.014
-0.309**
-0.480**
0.243***
-0.120*
0.004
0.000
0.003
0.126
CES
0.133
0.018
0.008
.128**
0.182
STC
JI
TC
0.220
0.433
0.162
0.049
0.188
0.026
0.039
0.180
0.016
-0.248**
-0.319**
0.133***
0.026
0.000
0.104
* β is significant at ρ < 0.05 level ** β is significant at ρ < 0.01 level.
Table 7: Result of regression analysis of employee ethical behavior
Independent
Variable:
Employee
ethical
standards
0.485 0.235 0.228 0.442 0.000
* p <.05
** P < .01
*** p <.001
MC= Managerial Characteristics, SES= Sales Team ethical Standards, STC=Sales team
Characteristics, LR= Leader Relativism, LI= Leader Idealism, LS= Leadership Style I= Job insecurity,
TC= Team Corporation, CES= Corporate Ethic Scale