The role of ethical organizational culture in preventing sickness absence and turnover in organizations

Abstract

This research examined the role of ethical organizational culture in preventing sickness absence and turnover in organizations, and also validated the Corporate Ethical Virtues (CEV) model used to study ethical organizational culture. More specifically, the research had four aims: 1) to test the factorial validity and group invariance of the 58-item CEV scale, 2) to examine the associations between ethical organizational culture and sickness absence at the individual and work unit levels, 3) to study the role of ethical organizational culture as an antecedent of managerial turnover, and 4) to examine the reasons managers gave for their turnover, and the associations between ethical culture and these reasons. Three different datasets were used. The first dataset (aim 1) consisted of four samples that together contained 3,098 Finnish participants from two organizations. The first organization operated in the private sector (consulting and engineering), and the second, a large city organization, operated in the public sector. The second dataset (aim 2) consisted of all members of the aforementioned public sector organization, which included four service areas comprising 246 smaller units (n = 2192). The third four- year three-wave dataset (aims 3 and 4) comprised 902 Finnish managers from different organizations at the study baseline in 2009. The results showed, first of all, that the factorial validity of the 58-item CEV scale was good and that it remained statistically similar, i.e. invariant, across samples. Second, a strong ethical culture was found to associate with less individual-level sickness absence. At the work unit level the same tendency was not found, implying that sickness absence is more of an individual than a shared outcome at the work unit level. Third, the results indicated that the more present were the virtues of congruency of supervisors and senior management, discussability, and sanctionability, the more likely managers were to stay in their organization. Moreover, in those organizations where the ethical culture was seen as weaker, managers gave reasons for turnover related, for example, to dissatisfaction with the job or organization, value misfit, and decreased well-being. To conclude, the findings of the present research highlighted the essential role of the ethical values embedded in an organization’s culture and business practices in both reducing sickness absence and keeping valuable managers in the organization.