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The impact of situational factors on ethical choice

The impact of situational factors on ethical choice The purpose of this paper is to use Ferrell and Gresham (1985) contingency model to examine the impact of situational factors on decision-making behaviour related to ethical issues of Islamic banking practitioners.Design/methodology/approachA total of 262 samples are collected from Islamic banking practitioners in the United Arab Emirates (UAE) and data analysis is conducted using structural equation modelling (SEM) with a confirmatory approach.FindingsThe empirical findings indicate that decision-making behaviour related to ethical issues of Islamic banking practitioners is significantly influenced in the process of interacting with persons who are part of the organisation, and these influences are determined by the intra-organisational distance and legitimate authority between the individuals and the focal person. Further, it is also empirically verified that decision-making behaviour related to ethical issues of Islamic banking practitioners is significantly influenced by the presence and/or absence of the opportunity factors such as corporate policies, professional codes of ethics and rewards/punishment system that prevails in the organisation.Research limitations/implicationsCoverage of respondents in this study limited to single country, and the scope is limited to the model that adopted in the study.Practical implicationsIt is recommended that respective authorities should have proper control over situational factors (i.e. significant others and opportunity factors) in organisations by encouraging ethical actions so that individuals are learned and influenced by each other and reviewing and improving existing corporate policies, professional codes of ethics and rewards/punishment system that limit the barrier and provide recompenses to the individuals in the organisation.Originality/valueWhile the literature has presented the connection between ethics and Islamic banking, they failed to address ethical decision-making in Islamic financial institutions (IFIs). Hence, the empirical findings provide insights towards understanding organisational decision-making behaviour that to enhance governance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Islamic Accounting and Business Research Emerald Publishing

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References (67)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1759-0817
DOI
10.1108/jiabr-03-2018-0048
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to use Ferrell and Gresham (1985) contingency model to examine the impact of situational factors on decision-making behaviour related to ethical issues of Islamic banking practitioners.Design/methodology/approachA total of 262 samples are collected from Islamic banking practitioners in the United Arab Emirates (UAE) and data analysis is conducted using structural equation modelling (SEM) with a confirmatory approach.FindingsThe empirical findings indicate that decision-making behaviour related to ethical issues of Islamic banking practitioners is significantly influenced in the process of interacting with persons who are part of the organisation, and these influences are determined by the intra-organisational distance and legitimate authority between the individuals and the focal person. Further, it is also empirically verified that decision-making behaviour related to ethical issues of Islamic banking practitioners is significantly influenced by the presence and/or absence of the opportunity factors such as corporate policies, professional codes of ethics and rewards/punishment system that prevails in the organisation.Research limitations/implicationsCoverage of respondents in this study limited to single country, and the scope is limited to the model that adopted in the study.Practical implicationsIt is recommended that respective authorities should have proper control over situational factors (i.e. significant others and opportunity factors) in organisations by encouraging ethical actions so that individuals are learned and influenced by each other and reviewing and improving existing corporate policies, professional codes of ethics and rewards/punishment system that limit the barrier and provide recompenses to the individuals in the organisation.Originality/valueWhile the literature has presented the connection between ethics and Islamic banking, they failed to address ethical decision-making in Islamic financial institutions (IFIs). Hence, the empirical findings provide insights towards understanding organisational decision-making behaviour that to enhance governance.

Journal

Journal of Islamic Accounting and Business ResearchEmerald Publishing

Published: May 21, 2020

Keywords: United Arab Emirates; Islamic banks; Structural equation modelling; Situational factors; Decision-making behaviour related to ethical issues

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