THE IMPACT OF MANAGERS’ MORAL DEVELOPMENT LEVEL ONORGANIZATION’S PERFORMANCE AND ITS RESPONSIVENESS TO SOCIETY Jeeda Rabah Business Thesis Under the guidance of DR. RABIH ZARIF JINAN UNIVERSITY TRIPOLI - LEBANON November, 2012 Masters Thesis Presentation
Outline• Research Questions• Research Objectives• Methodology – Literature Review and theoretical framework – Research Design (field Study)• Results and Interpretations• Conclusions
Research Questions• The research strived to find answers to the following inquiries: – Whether the stage of moral development of managers has a direct impact on the overall organizational performance and on the responsiveness of this organization to society and its welfare. – whether the individuals’ moral development is somehow correlated to the management culture of a given organization. – The weight that should be given to the stage of moral development of individuals in employment.
Research Objectives• The research main objectives were: – to find out a correlation between Individuals’ stage of moral development and their behavior at work place and to test that against organization’s structural variables, work environment and organization’s culture – to test moral development stages characteristics against responsiveness and responsibility toward society, – to induce weighing ethical subjects as critical in organizations, and – to help evaluate the importance of the need of assessing individuals’ stage of development as a criteria in employment.
Methodology• Theoretical Framework – The research employed moral development* stages theory of Kohlberg which argued that moral reasoning, which is the basis of ethical behavior, belongs to one of six distinct stages of morality development; each stage is more adequate in responding to moral dilemmas than its predecessors. – Universality of Values were stressed, and the Philosophy of Emanuel Kant regarding ethics as well as his deontological approach* was assumed. Definitions: Moral Development: the level of independency of individual’s moral judgment from outside influences and the degree of this moral judgment’s internalization. Moral Reasoning: It is the process in which people try to do the right American Psychologist thing when faced with dilemmas based on weighing the morality of Lawrence Kohlberg their action and weighing that against its consequences. Kant’s deontological approach states that: a morality of an action is October, 1927 – January, 1987 judged based on the action’s adherence to principles where judgments of right and wrong are determined by the motives of the person who acts, not based on the consequences of the person’s actions.
The literature Review encompassed the following related topics as well: – Organizational structural variables and human aspect at work place as determinants of a sought organizational ethical culture; so as to explain the commitment that is required by managers today to face challenges in being socially responsible and ethical in an organization that is focused both on means as well as outcomes. – Organization’s accountability toward society and environment, as well as social responsibility concept and international social and quality standards. – The effect of community values on local management and leadership styles. – Contrasting ethical systems and moral philosophies with certain individual characteristics and implications with regard to certain community cultures, as well as identifying the research’s community population in that same regard.
•Research Design – The research design was devised so as to find out from a cross-section of executives of business registered establishments, their moral development stages in comparison to their organizational performance and their responsiveness to society both on the short and long run frame. – It has also compared the sample’s consideration to ethical subjects with regard to the effect of situational factors on individuals compared to their stage of moral development. Masters Thesis Presentation
Research Hypothesis’ Variables and Conceptual Model Independent Variables: – Executives Moral Development stages Dependent Variables: – organizational performance and responsibility toward society Intervening Variables: – time frame of short run and long run effect of moral stage on performance and responsibility toward society Extraneous variables: – positive and/or negative situational factors which are those that may increase or decrease the magnitude of the relationship between independent and dependent variables.
According to the research hypothesis, the model conceptualizedthat:• majority of adults are at stage four, where they are limited to obeying rules and behave ethically accordingly. Stages of moral development cells were highlighted with regard to the probable size of population individuals in each stage.• Moral Development stages affect the organization’s responsiveness and thus responsibility toward society in regard that the greater the moral development stage, the greater is the altitude of responsibility toward environmental issues and society’s well fair.• Moral Development stages affect the organizational performance slightly on the short run and vastly on the long run.• magnitude of the situational factors effect on individuals’ decreases as the stage of moral development increases. (Research’s theory)
Study Design• Research’s study design was cross-sectional in nature,• designed to find out from a cross-section of executives of business registered establishments, their moral development stages in comparison to their organizational performance and its responsiveness to societyResearch Population and Sample• Random sample (SRS)was chosen by referring to information published by Central Administration of Statistics (CAS) – Lebanon,• Cluster Sampling was utilized after that, where each cluster represented establishments divided according to their common activity.• 860 clustered establishments was the preliminary sample size.• Referring to the Ministry of Commerce and the Directory of Exports and Industrial Firms in Lebanon, also referring to a directory of registered companies in Lebanon, the list of participants’ names, districts, and e-mails were identified and 5000 establishments were contacted.
Research Tools and Measurement Procedures• A constructed e-mailed questionnaire* instrument with closed ended questions was employed, aiming to collect primary data so as to put to test: – the stage of moral development for each manager or subordinate, – to display effect of structural variables on the individual behaviors of these managers, – to observe whether their attitudes and/or entrenched organizational culture have a subsequent effect on the individual and organizations performance and its responsibility toward society, – to validate weather their moral development stage is immune enough to minimize effect of situational factors. *The questionnaire was partly derived from and based on the Defining Issue Test DIT-2 (James Rest).
Research Tools and Measurement Procedures Validity• Instrument questions have utilized an attitudinal scale and succeeded in obtaining an overall indicator that was able to measure and test: – managers’ stage of moral development; – the relationship between managers’ stage of moral development and their organization’s performance; – testing organizational variables in contrast to the extent of organization’s responsiveness and responsibility toward society. Instrument tool details and scaling• Part I: Includes demographic conditions’ information as part of the external or the general environment. (age, gender, language, and level of education) * Answers were quantitatively categorized for this part and are integrated to SPSS for statistical analysis.• Part II: Includes Information obtained regarding professional career and organization. * Answers were assigned numerical values (higher positive statement will bear the highest number of the possibilities of a question and so on.• Part III (DIT2 cases): Responses obtained here were analyzed so as to reveal respondents’ schemas of moral reasoning according to Kohlberg’s theory of moral development. * Responses and ratings of cases’ issues were scaled following the DIT2 test where items were considered as distillations of themes found in Kohlberg interview data.
Results and Interpretations Schemas and Correlation of Variables 83 (n) responses OP RtS SF ES could be obtained Index Index Index Index M Index reflecting low level Mean 71.88755 75.98967 71.28514 79.669 65.38791 of participation N 83 83 83 83 83 from sample population, howeve Std. 13.13050 14.82343 12.29527 16.5314 6.76007 Deviation r, answers could obtain an average correlation that was found acceptable and tolerable. Masters Thesis Presentation
Correlation of Research’s main VariablesNumbers show:• general positive correlation between Morality (M) M Index OP Index RtS Index SF Index ES Indexindex and organizational performance (OP), M Index Pearson 1 .273* .378** .397**responsiveness to society (RtS), positive situational Correlationfactors (SF) and considering ethical subjects (ES). Sig. (2-tailed) .013 .000 .000•Organizational performance significance level is0.013 0.05, therefore (OP) correlation with (M) OP Pearson .273* 1 .333** .268*index is 0.273 and it is significant at 0.05 level but Index Correlationnot on 0.01 level. Sig. (2-tailed) .013 .002 .014•A positive correlation (.378) between morality andresponsiveness to society is approved with a RtS Pearson .378** .333** 1 .419**significance of 0.000 on 0.01 level. Index Correlation•A positive correlation of (.397) is computed Sig. (2-tailed) .000 .002 .000between morality index and positive situationalfactors with significance on the 0.01 level. SF Index Pearson .397** .268* .419** 1 Correlation•A positive correlation with no significance can befound between weight given to considering ethical Sig. (2-tailed) .000 .014 .000subjects in business and morality index. ES Index Pearson .203 .252* .516** .309**•A positive correlation between considering ethical Correlationsubjects (ES) and (OP), (RtS), and (SF) with asignificance on the 0.05, 0.01, and 0.01 levels Sig. (2-tailed) .065 .022 .000 .004consecutively.
Correlation of Research’s main Variables with regardto the extraneous variable (Situational Factors) Situational factors Correl./M index (N) M/OP Corr. M/RtS Corr. Given two extents of General Correl. for morality indexes at three Bad lower M index 18 0.1925399 -0.041063 levels of situational factors, Situational Factors numbers show: General Correl. for higher M index 8 0.37116194 0.21192274 •a positive correlation between morality and organizational General Correl. for lower M index 23 -0.0978804 0.31078565 Average performance indexes at higher Situational morality index, Factors General Correl. for 13 0.40111328 0.33405113 higher M index •no significant correlation at lower morality indexes. General Correl. for 10 -0.1162528 0.344534 Good lower M index Situational Factors General Correl. for 11 0.23196424 0.40029682 higher M index
Given different situational factors at different morality indexes, numbers show, and according to the following figure:• a slight ascending to constant 0.5 correlation coefficient numbers between (M) and (OP) ( 0.371, 0.401, 0.232) at an improved 0.4 situational factors, given higher morality indexes. 0.3• a slight ascending to constant Correl M/OP "High correlation coefficient numbers Morality Indexes" 0.2 between(M) and (RtS) Correl M/Rts "High (.212, .334, .400) at an improved Morality indexes" situational factors, given higher 0.1 Correl M/OP "Low Morality Indexes" morality indexes. Correl M/RtS "Low• insignificance (no clear linear relation) Morality Indexes" 0 between mentioned variables at lower Situational morality indexes. Factors• in spite of the insignificance at lower -0.1 morality indexes, responsiveness to society showed improving rates at -0.2 better situational factors in comparison to organizational performance indicators.
Correlation of Research’s Organization is business- registered since: OP Index RtS Index SF Index ES Index M Indexmain Variables with regard OP Index Pearson Cor. Sig. (2-tailed) 1 .278 .358 .095 .758 .463 .111 -.095 .757to the intervening variable Less than 5 yrs RtS Index Pearson Cor. Sig. (2-tailed) .278 .358 1 .263 .385 .462 .112 -.136 .657of time frame effect N=13 SF Index Pearson Cor. Sig. (2-tailed) .095 .758 .263 .385 1 .081 .794 .672* .012 M Index Pearson Cor. -.095 -.136 .672* -.091 1Numbers show: Sig. (2-tailed) .757 .657 .012 .768•Significance at level 0.01 between OP Index Pearson Cor. 1 .511* .366 .283 .402 Sig. (2-tailed) .021 .113 .226 .079morality and resp. to society variable only RtS Index Pearson Cor. .511* 1 .615** .764** .318for organizations registered for more than 5 - < 10 yrs Sig. (2-tailed) .021 .004 .000 .17220 years, where no significance obtained N=20 SF Index Pearson Cor. .366 .615** 1 .375 .455* Sig. (2-tailed) .113 .004 .103 .044on shorter time frames. M Index Pearson Cor. .402 .318 .455* .005 1•Significance at 0.05 level between Sig. (2-tailed) .079 .172 .044 .984 .599* .575* .551*morality and org. performance was OP Index Pearson Cor. 1 .402 Sig. (2-tailed) .014 .020 .123 .027obtained for organizations registered for RtS Index Pearson Cor. .599* 1 .477 .575* .273more than 10 years and less than 20 years 10 - < 20 yrs Sig. (2-tailed) .014 .062 .020 .306and no significance could be obtained for N=15 SF Index Pearson Cor. .575* .477 1 .014 -.109 Sig. (2-tailed) .020 .062 .958 .687other time frames. M Index Pearson Cor. .551* .273 -.109 .447 1•Situational factors impact showed Sig. (2-tailed) .027 .306 .687 .083decreasing significance in contrast to OP Index Pearson Cor. 1 .100 .114 .066 .180 Sig. (2-tailed) .575 .522 .709 .309Morality at the following time frames (less RtS Index Pearson Cor. .100 1 .254 .277 .474**than 5 yrs, 5 - < 10 yrs) and a negative More than 20 Sig. (2-tailed) .575 .147 .113 .005correlation at a time frame of 10 - < 20 yrs Yrs N=34 SF Index Pearson Cor. .114 .254 1 .466** .496**with no significance Sig. (2-tailed) .522 .147 .005 .003 M Index Pearson Cor. .180 .474** .496** .252 1 Sig. (2-tailed) .309 .005 .003 .150
ConclusionSummary of conclusions:• Stage of managers’ moral development has a direct impact and a positive correlation on the overall organizational performance and on the responsiveness of this organization to society and its welfare.• Individuals’ moral development is correlated to the management culture of a given organization, where it interacts for both parties by shaping the general ethical behavior. Yet the more the ethicality of an executive, the less is the effect situational factors take part in affecting the relationship between his behavioral sensitivity toward these factors and the positive relationship that exists between his morality and organizational performance as well as this organization’s responsiveness toward society.• Results have provided an evidence on how morality affects organizational performance and consequently societies’ welfare especially on long run frame. Accordingly, it has called for an important correction action and stressed the need to assess individuals’ stage of development as a criterion in employment.• the research has presented an issue of concern and offered a win-win situation that matters beyond individual’s own interests and instead, served to attain greatest good for greatest number of community
“if capitalism is to be respected, and so sustain itself for global prosperity, it must be both responsible and moral” Caux Round TableTHE IMPACT OF MANAGERS’MORAL DEVELOPMENTLEVEL ON ORGANIZATION’S Thank youPERFORMANCE AND ITSRESPONSIVENESS TOSOCIETYSubmitted by:Jeeda Rabah