The Role of Risk Climate and Ethical Self-interest Climate in Predicting Unethical Pro-Organisational Behaviour

27 Pages Posted: 25 Jul 2019

See all articles by Elizabeth A. Sheedy

Elizabeth A. Sheedy

Macquarie University Department of Applied Finance; Financial Research Network (FIRN); Macquarie University, Macquarie Business School

Patrick Garcia

Macquarie University - Department of Marketing and Management

Denise Jepsen

Macquarie University

Date Written: July 22, 2019

Abstract

Risk climate (sometimes referred to as risk culture) has become an increasingly important focus since the 2007-2009 financial crisis. Despite efforts to inculcate risk climate, unethical pro-organisational behaviour (UPB) such as misconduct toward customers continues to occur. This study investigates whether four risk climate factors (avoidance, valued, proactive and manager) can, on their own, reduce UPB misconduct. Surveying employees in three financial institutions we found that only one of the risk climate factors (avoidance) was consistently associated with UPB. On the other hand, ethical self-interest climate (ESI) significantly increased UPB in all samples. In multi-climate analysis we found that risk climate factors interacted with ESI climate to predict UPB. That is, when ESI was low, three factors of risk climate – avoidance, proactive and manager – significantly predicted UPB. UPB was least likely when ESI was low, avoidance risk climate was low, proactive risk climate was high and manager risk climate was high. These findings suggest leaders should consider addressing both ESI and risk climate to reduce UPB.

Keywords: ethical climate, financial services, risk climate, risk culture, misconduct, multiple climates, unethical pro-organisational, behaviour

Suggested Citation

Sheedy, Elizabeth A. and Garcia, Patrick and Jepsen, Denise, The Role of Risk Climate and Ethical Self-interest Climate in Predicting Unethical Pro-Organisational Behaviour (July 22, 2019). Macquarie Business School Research Paper. Available at SSRN: https://ssrn.com/abstract=3425675 or http://dx.doi.org/10.2139/ssrn.3425675

Elizabeth A. Sheedy (Contact Author)

Macquarie University Department of Applied Finance ( email )

Room 739, 4 Eastern Road
Macquarie University
North Ryde, NSW 2109
Australia
61-2-9850 7755 (Phone)
61-2-9850 7281 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Patrick Garcia

Macquarie University - Department of Marketing and Management

Australia

Denise Jepsen

Macquarie University ( email )

New South Wales 2109
Australia
419977317 (Phone)

HOME PAGE: http://www.businessandeconomics.mq.edu.au/contact_the_faculty/all_fbe_staff/denise_jepsen

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