etica y KM

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Exploring the Influence of Organizational

Ethical Climate on KnowledgeManagement

Fan-Chuan TsengYen-Jung Fan

ABSTRACT. In recent years, knowledge management

has been utilized as an essential strategy to foster the crea-

tion of organizational intellectual capital. Organizational

intellectual capital can be derived both individually and

collectively in the process to create, store, share, acquire,

and apply personal and organizational knowledge. How-

ever, some organizations only focus on the development of

public good, despite the concerns arising from individuals

self-interest or possible risks. The different concern of

individual and collective perspectives toward knowledge

management inevitably leads to ethical conflicts and ethical

culture in the organization (Jarvenpaa et al., J Manage Inf

Syst 14(4):2964, 1998; Ruppel and Harrington, IEEE

Trans Prof Commun 44(1):3752, 2000). The purpose of

this study is to examine the ethical climate within the

organization and its possible influence on members

evaluation, satisfaction, engagement, and job perfor-mance with respect to knowledge management practice.

The research results reveal that several types of organi-

zational ethical climate coexist in the organization and

have different degrees of influence on employees atti-

tude as well as participation in knowledge management

activities. In this article, we argue the importance of

organizational ethical climate and highlight the impli-

cations of such a climate for facilitating knowledge

management.

KEY WORDS: knowledge management, organizational

culture, organizational ethical climate, knowledge man-agement attitude, knowledge management satisfaction,

job performance

Introduction

Since the 1990s, the development of the knowledge

economy has emerged as an important strategy for

organizations to increase their performance and

profits. Traditionally, organizations have paid con-

siderable attention to physical assets such as natural

resources, mechanical facilities, labor as well as

financial capital, and have evaluated countable rev-enues that are potentially achievable. Unlike the

inevitable exhaustion of physical resources, knowl-

edge is viewed as an intangible capital that can

be created, shared, acquired, reused, and applied

among people. The knowledge management strat-

egies within an organization accelerate collective

learning, increase competitiveness to the rapid

market changes, and create greater customer satis-

faction (Davenport and Prusak, 1998). In order to

maximize innovation benefits and competitive

advantages, increasing numbers of organizations

address to exploit and retain their collective intel-

lectual capital as well as to foster collaborative

working and learning between organizational

members (Alavi and Leidner, 2001).

Knowledge is derived essentially from an indi-

viduals tacit ideas, insights, expertise, and skills; it is

further demonstrated in the form of explicit and

codified knowledge. The initiative of organizational

knowledge management mainly focuses on the

facilitation of knowledge exchange with others as

well as the development of common knowledge

within the organization. Thus, knowledge is usuallyconsidered to be public property, owned and

maintained by the organization (Wasko and Faraj,

2000). Although some studies have advocated that a

knowledge management system (KMS) can increase

the competitiveness of organizations by facilitat-

ing the storage, retrieval, and application of knowl-

edge, the notion of information technology (IT)

itself falls easily into the myth of technology-deter-

minism (Dixon, 2000; Pfeffer and Sutton, 1999).

Journal of Business Ethics (2011) 101:325342 Springer 2011

DOI 10.1007/s10551-010-0725-5
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Much emphasis has been placed on system features,

and the performance of knowledge management is

expected to be accomplished automatically by the

adoption of KMS. However, the success of knowl-

edge management depends on interpersonal inter-action and relationship quality (Szulanski, 1996),

rather than technology alone.

In addition to the perspective that collective

knowledge is the simple collection of the private

knowledge of individuals, knowledge is also

embedded in social practice (Brown and Duguid,

2001; Nahapiet and Ghoshal, 1998). Alavi et al.

(20052006) propose that a KMS could be viewed as

an organizations cultural artifact, which might be

affected by existing organizational values or may

reshape a new set of values relating to knowledgemanagement. Since people are embedded in an

organization, a natural knowledge-sharing culture

with trust and collaboration encourages members to

share their knowledge more willingly (McDermott

and ODell, 2001). Several impediments to organi-

zational knowledge management have been pointed

out, including knowledge hoarding due to the nat-

ure of knowledge private asset or public property,

possible leaking and economic loss of valued

knowledge, apprehension over the failure in public,

fear of criticism from others, security and privacy

considerations, and Not-Invented-Here syndromein a hostile environment (Ardichvili et al., 2003;

Michailova and Husted, 2003). Consequently, KMS

implementation is not built into the organizational

culture enough to reinforce members knowledge

management participation and becomes an expen-

sive and useless information junkyard (McDermott,

1999), where knowledge management can neither

effectively facilitate collaboration nor leverage

knowledge application among organizational mem-

bers. Moreover, Duncan (1986) and McCann and

Buckner (2004) emphasize that the ethical issueswithin an organization are essential for knowledge

management initiatives to minimize ownership

conflicts as well as to reinforce the norms of

knowledge creation, sharing, and retention.

Organizational culture has been identified in the

form of basic assumptions, values, and artifacts

(Schein, 1985), which underlie organizational struc-

tures, practices, polices, and procedures (Reichers and

Schneider, 1990). While climate refers to organiza-

tional members perceptions, behavior patterns are

shaped by the common values, beliefs, and norms

within the organization (Tesluk et al., 1997). Due to

the abstraction of culture, organizational climate is a

more practical way of representing individuals feel-

ings about a particular organizations value, authoritysystem, and motivation policies. Through the process

of interpersonal interaction and vicarious observation,

climate affects organizational members to learn

appropriate and acceptable behaviors. Tesluk et al.

(1997) argue that climate is a multidimensional con-

struct in which particular climate dimensions need to

be examined for their association with organizational

behavior. In the realm of knowledge management,

Bock et al. (2005) also find that several dimensions

of organizational climate, including fairness, affilia-

tion, and innovativeness, have significant effects onknowledge-sharing behaviors. However, the rela-

tionship between organizational ethical climate and

knowledge management practice is seldom discussed.

Our study follows the above-mentioned arguments

about the association between knowledge manage-

ment and organizational culture, and then further

adopts the perspective of organizational ethical cli-

mate to explore its influence on knowledge practices.

More discussion about organizational ethical climate

theory and knowledge management activities, as well

as the subsequent relationship between organizational

members evaluation of knowledge management andtheir job performance, will be presented in the fol-

lowing section.

Theoretical background and research model

development

Organizational ethical climate and knowledge management

The concept of ethics has been discussed and utilized

to examine individuals moral life, decision-makingstrategies, and behavior in the daily lives, regarding

the responsibility and accountability of actions taken

in particular situations (McDaniel, 2004). Ethics is

not merely a philosophical abstract theory, but also a

critical guideline in the personal or collective prac-

tice. For example, Aristotle ethics concerns about

the quality of best life in terms of the individuals

noble, beneficial, and pleasant virtues embedded in

the social context and in service to the community

(Boadie, 1994; Solomon, 2004). Ethics is principally

326 Fan-Chuan Tseng and Yen-Jung Fan
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examined from two perspectives deontology and

teleology (Kohlberg, 1981). Deontology refers to

the evaluation of the inherent good or bad of the

action itself, rather than the value or consequences it

brings (Clark and Dawson, 1996), constituting thejudgment that ones behavior is right or obligatory.

Conversely, teleology evaluates the consequences of

human behavior and assesses the value of meeting

personal interests or social/economic obligations

(OBoyle and Dawson, 1992). The function of tel-

eology is concerned with that ethical good or right is

also necessary for the self (Bergman, 2004). Gener-

ally, organizational members are guided with respect

to what is right or wrong, acceptable or unaccept-

able through collective ethical norms. The fact that

people know everyone should behave ethically notonly implies the abidance of accepted rules and

standards within the organization, but also reinforces

an individuals reputation, trustworthiness, and long-

term relationships with others. According to Aris-

totle, Solomon (2004) argues that organizational

ethics is not the antagonism between personal profits

and social responsibility. Instead, it presupposes the

shared knowledge, experience, and values with

public as well as private purposes. These ethical

issues increasingly influence organizational members

moral concerns and behavior, which have been re-

garded as an accelerator for improving organizationalperformance. Several studies have argued that the

organizational ethical climate influences the way

organizational members should appraise and behave,

and is composed of peoples ethical judgments,

perceptions, and behavior (e.g., Barnett and Vaicys,

2000; McDaniel, 2004; Wimbush et al., 1997).

Being congruent with managerial needs, ethical

work climate can establish an organizations psy-

chological environment and increase employees job

performance as well as their satisfaction.

Victor and Cullen (1987) propose the concept oforganizational ethical climate to reflect one dimen-

sion of work climate, indicating an individuals

perception and acceptance of an organizations

practice and procedures. Victor and Cullens theory

of organizational ethical climate generates nine types

of ethical climate, including self-interest, company

profit, efficiency, friendship, team interest, social

responsibility, personal morality, company rules/

procedures, and laws/professional codes. These types

have been designed to recognize organizational

ethical norms that are directly related to the sup-

porting of ethical behavior. Based on Kohlbergs

(1981) theory, three types of ethical standards

affecting peoples behavior may be found: self-

interest, benevolence, and principle, which reflect,respectively, the aspects of ones own interests, social

approval, and conformity to universal principles in

three levels. At the pre-conventional level, egoism is

characterized by an individuals concern for his self-

interest or personal profit so as to avoid punishment

or to gain reward. At the conventional level,

benevolence refers to the consideration for social

approval (e.g., the good neighbor or good com-

munity member) and joint interests resulting from

authority, fixed rules, or social order (Coldwell

et al., 2008; Gross, 1995; Victor and Cullen, 1988).Finally, at the post-conventional level, principle re-

gards the personal beliefs in procedural rules or

professional codes based on social justice and obli-

gation (Damico, 1982). Besides, the three levels of

analysis in organizational ethical climate are further

concerned about the referent group, ranging from

the individual to the social system, which can

influence individual or collective ethical decisions

(Victor and Cullen, 1987).

Since organizational members and their activities

are embedded in the social system, connection with

the reference groups can assist in the establishing ofgroup identification, the gaining of information,

and the making of judgments that meet an organiza-

tions expectations (Alavi and McCormick, 2004;

Michailova and Hutchings, 2006). Organizational

ethical climate reflects shared beliefs and values, it can

shape and guide organizational members behavior in

the determination of right and wrong at work

(Schneider, 1983; Smircich, 1983). Wimbush et al.

(1997), along with Barnett and Vaicys (2000), prove

that organizational ethical climate is positively related

to peoples ethical judgment, intention, and behaviorin their organizations as they uphold their concern for

ethical procedures and follow ethical practices.

Although knowledge management can leverage and

support organizational effectiveness, it is not antici-

patedto replace the organizationalmembers who offer

their ideas and innovations in their everyday practices

(Tiwana, 2000). Several studies have argued that

organizational knowledge management is closely

related to organizational culture, which is rooted in

the organizations core values and reflected in terms of

327Organizational Ethical Climate and Knowledge Management
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missions and objectives. For example, Janz and

Prasarnphanich (2003) demonstrate that risk,

warmth, and support are important aspects of culture

that serve to enhance organizational learning. As

such, organizational culture could be a key driver ininfluencing how people perceive and engage in

knowledge management as well as how they expect

others to behave in related activities. Similarly,

Ruppel and Harrington (2000) identify the concerns

for employees personal best interests or the fear of

sharing knowledge with others as part of an orga-

nizations ethical culture. Their study results dem-

onstrate that ethical culture is the most significant

antecedent of knowledge management behavior

within an organization, without which cultural val-

ues concerning individual power and competitionwill lead to knowledge hoarding (DeLong and

Fahey, 2000).

Jones (1991) argues that a feedback loop arises

from both deontological and teleological evalua-

tions, leads to ethical judgments, moral behavior,

and the returns to environment and personal expe-

riences. An ethical decision-making model presented

by Dubinsky and Loken (1989) also suggests that

attitude toward ethical or unethical behavior affects

ones intention to engage in ethical or unethical

behavior. Moreover, drawing from the psychologi-

cal concept of attitude a perceptual evaluation ofperformance and behavior as positively or negatively

valued (Ajzen, 2001) Bock and Kim (2002), as well

as Kuo and Young (2008a, b), have proved that an

individuals attitude toward knowledge sharing sig-

nificantly leads to their intention to participate in

knowledge-sharing activities. On the basis of the

above-mentioned relationships among organiza-

tional ethical climate, individuals ethical judgment,

behavior, and knowledge management activities, we

develop the following three hypotheses:

H1: Organizational ethical climate will signifi-

cantly influence an individuals engagement in

knowledge management.H2: Organizational ethical climate will significantly

influence an individuals attitude toward

knowledge management.H3: An individuals attitude toward organizational

knowledge management will positively influ-

ence his or her engagement in knowledge

management.

The individuals satisfaction and benefits of knowledge

management engagement in organizations

Satisfaction has been identified as an important

measure for evaluating a particular product or ser-vice, widely used in consumer behavior (e.g., Cro-

nin Jr. et al., 2000; Haslam, 2000; Nunamaker et al.,

20012002) and information system effectiveness

research (e.g., DeLone and McLean, 1992; Palvia,

1996; Wixom and Todd, 2005). Although knowl-

edge management strategies are implemented in the

organization, much knowledge still remains uncod-

ified and present only in individuals minds.

The facilitation of individuals satisfaction with

knowledge management becomes a critical cognitive

dimension for evaluating the state of organiza-tional knowledge management (Ong and Lai,

2007). Becerra-Fernandez and Sabherwal (2001) also

emphasize the importance of individuals perceived

knowledge satisfaction, rather than the objective

assessment of knowledge effectiveness. Yu et al.

(2007) prove that the level of knowledge manage-

ment activity has a positive effect on organizational

members knowledge satisfaction. In the KM success

model proposed by Kulkarni et al. (20062007), it

has been identified that the extent to which an

individual recognizes the usefulness of knowledge

management can reinforce their satisfaction withaccessibility and adequacy of needed knowledge.

Accordingly, we argue that more useful knowledge

management activities in working practice contrib-

utes to greater levels of satisfaction with knowledge

management among individuals. We propose the

following hypothesis:

H4: An individuals engagement in knowledge

management will positively influence his or

her satisfaction with knowledge management.

Numerous studies have discussed the strategicbenefits of knowledge management, which is

adopted as a useful approach to identifying, lever-

aging, and creating the collective knowledge in an

organization. Successful knowledge management is

expected to increase organizational competition,

productivity, innovativeness, and responsiveness

(Alavi and Leidner, 2001; Davenport and Prusak,

1998). The evaluation of knowledge management

performance implies the valuing and measuring of

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organizational learning and capabilities to align indi-

vidual and organizational practices, as well as to meet

the shareholders needs (Lee et al., 2005). Gilbert and

Gordey-Hayes (1996) recognize that knowledge

management and organizational learning lead to theachievement of successful technological innovation.

The most significant outcomes of knowledge man-

agement usually include the organizations advanced

competence to innovate new products/services,

improved coordination of individuals or different

units, enhanced employee skills, better decision

making, and rapid responses to potential market

opportunities (Anantatmula, 2007; Gold et al., 2001).

Therefore, we hypothesize that:

H5: An individuals engagement in knowledge


her job performance.

Moreover, knowledge management initiatives

promote user satisfaction through better product

or service quality, and then contribute to organiza-

tional performance as well as to business revenue

(Anantatmula, 2007). Similarly, Yu et al. (2007)

conceptualize the positive relationship between user

satisfaction and organizational performance, includ-

ing the enhanced ability to innovate new market

products, effective coordination among employees aswell as rapid responsiveness to market change.

Employees satisfaction with their knowledge, skills,

and experience can affect their job capabilities and

further lead to business success (Bontis and Serenko,

2007). Bontis and Fitz-enz (2002) also argue that an

individuals satisfaction is a critical antecedent of

knowledge management outcomes. In other words,

organizational performance can be positively influ-

enced by the organizational members perceptions of

their knowledge management activities. Although

several studies identify a variety of constructs that

influence an individuals attitude and evaluation ofjob satisfaction and job performance (e.g., Mulki

et al., 2008), few studies focus on peoples satisfac-

tion with knowledge management practice or ex-

plore its potential effect on job performance. Thus,

our study proposes the following hypothesis:

H6: An individuals satisfaction with knowledge


her job performance.

To synthesize these contentions and hypotheses, we

propose the following research model as detailed in

Figure 1.

Research methodology

For this study, we adopt a survey methodology tocollect and analyze empirical data. Table I presents

the operational definition and its references for the

research model.

The measurement items are developed on the basis

of the literature discussed above. For organizational

ethical climate, 36 items proposed by Cullen and

Victor (1993) are utilized and analyzed into different

types. Based on Ajzens theory (1988, 2001),

four items of organizational knowledge management

attitude are developed to measure individuals per-

ception of organizational knowledge management as

good, beneficial, pleasant, and valuable. With regardto knowledge management engagement, many

researchers have argued for various dimensions of

knowledge management processes. For example,

Alavi et al. (20052006) indicate that knowledge

management is largely considered a process involving

the four basic activities of creating, storing/retrieving,

transferring, and applying. Shin et al. (2001), along

with de Jager (1999), also focus on the significance

of various processes of knowledge management,

including creation, identification, collection, storage,

distribution, and application. Generalizing from thesestudies, we identify the four basic dimensions of

acquisition, collection, application, and sharing of

knowledge. In addition, we follow Becerra-Fernan-

dez and Sabherwal (2001) to examine satisfaction

with organizational knowledge management, includ-

ing the availability of knowledge for tasks, knowledge

sharing among individuals, effectiveness improve-

ment and so on. Finally, job performance is measured

in terms of the aspects of work effectiveness,

Organizationalethical climate

KM satisfaction

H4

Job performance

H5

KM processengagement

H1

KM attitude

H3

H6H2

Figure 1. Research model.

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efficiency, and quality (Anantatmula, 2007; Gold

et al., 2001). The survey is measured on a 5-point

Likert scale ranging from strongly disagree (=1) to

strongly agree (=5). The instrument was initially

conducted through a pilot test recruiting 58

employees to examine the construct reliability and

content validity for the ease of understanding, logicalconsistencies, and context fitness. All the measure-

ment items demonstrated the appropriateness for their

designated construct, and we further adopted them

into formal empirical data collection and assessment.

Data analysis and results

The subjects of this study were in-service employees

who volunteered for participation on a convenience

sample basis. Three hundred and forty-eight surveyresponses were received, with 51 being discarded

owing to their incomplete answers. The remaining

297 questionnaires were subjected to further exam-

ination and analysis.

Dimensions of organizational ethical climate

Empirical studies distinguish several dimensions of

organizational ethical climate by using a factor

analysis technique, including caring, law/code, rules,

instrument, independence, and so on (Cullen and

Victor, 1993; Victor and Cullen, 1987, 1988).

However, these findings are incongruent with each

other. For example, five dimensions extracted by

Malloy and Agarwals (2003) study in the not-

for-profit context are individual caring, Machiavel-lianism, independence, social caring, and law and

code. Peterson (2002) suggests the original nine-type

model provides a better fit for organizational ethical

climate and demonstrates that types of ethical climate

have stronger relationships with individual ethical

behavior. For this reason, the present researchers

initially adopt Victor and Cullens nine ethical cli-

mate types and subsequently identify them as the

dimensions of ethical climate in the study data.

With reference to Peterson (2002), the CFA is a

more rigorous and appropriate procedure for testingthe theoretical nine-type model. The CFA results

demonstrate that not all nine organizational ethical

climates exist in this study. After removing the items

with factor loading less than 0.5, three ethical cli-

mate dimensions self-interest, social responsibility,

and law/professional codes are retained as the

major ethical climate dimensions for further exami-

nation of the study hypotheses. The remaining

items, and their means, standard deviations, as well as

factor loadings are summarized in Appendix 1.

TABLE I

Operational definitions of constructs

Construct Operational definition Sources

Organizational ethical cli-

mate

An individuals perception of ethical proce-

dures, policies, and behaviors in the organi-

zation

Victor and Cullen (1987, 1988),

Cullen and Victor (1993)

Knowledge management

attitude

An individuals psychological evaluation of

organizational knowledge management in

terms of the values of beneficial, pleasant,

good, and enjoyable attributes

Ajzen (1988)


engagement

An individuals perception of the degree to

which they are involved in an organizations

KM-related activities

Kulkarni et al. (20062007)


satisfaction

An individuals perceptual evaluation of

knowledge outcomes regarding the adequacyand accessibility of knowledge for the tasks

Becerra-Fernandez and Sabherwal

(2001), Kulkarni et al. (20062007)

Job performance An individuals perception of the improve-

ment of job quality, productivity, effective-

ness, effortlessness, and so on

Kulkarni et al. (20062007), Bontis

and Serenko (2007)

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Measurement reliability and validity

The assessment of measurement reliability and

validity of other constructs is subsequently per-

formed. As indicated in Table II, the reliability isaccepted, because the Cronbachs alpha value of each

construct exceeds 0.6 (Robinson et al., 1991). All

items are calculated using composite reliability (CR)

to determine the internal consistency, which exceeds

the generally recommended threshold value of 0.7

(Nunnally and Bernstein, 1994). The convergent

validity is also accepted with the factor loadings of

each item greater than 0.5 (Steenkamp and Van

Trijp, 1991). Because two constructs, knowledge

management engagement and job performance, are

derived separately from four subconstructs, to rep-resent the multidimensional relationships, we follow

Edwards suggestion of performing a second-order

CFA as well (Edwards, 2001). In addition, the dis-

criminant validity is evaluated at the square roots of

average variance extracted (AVE) and compared with

the correlations between constructs (Chin, 1998). In

Table III, good discriminant validity is proved be-

cause the diagonal scores the square roots of the

AVE are all greater than the correlations between

pairs of constructs.

Model estimation and hypothesis testing

After examining the validity and reliability of the

research construct, we use partial least squares (PLS)

structural equation analysis to test the researchhypotheses. PLS is widely used in IS research be-

cause of the minimal demands it makes on sample

size and measurement scales. Moreover, PLS not

only can be used for theory confirmation, it can also

be utilized to suggest exploratory propositions for

later testing (Chin, 1998; Gefen et al., 2000). The

hypothesized relationships in the research model are

estimated by SmartPLS 2.0 (Ringle et al., 2005).

According to the previous identification of three

types of organizational ethical climate self-interest,

social responsibility, and law/professional codes, weexamine their specific relationships with the con-

structs of knowledge management engagement

(H1a, H1b, and H1c) and knowledge management

attitudes (H2a, H2b, and H2c). All paths are signif-

icant except for the links between self-interest and

knowledge management engagement (H1a, b =

-0.05), as well as self-interest and attitude toward

knowledge management (H2a, b = 0.09). The re-

sults demonstrate that an individuals concern for

self-interest does not have a significant effect on his

TABLE II

Assessment of internal consistency and convergent validity

Construct Cronbachs alpha Composite reliability Average variance extracted

Self-interest 0.66 0.79 0.56

Social responsibility 0.72 0.83 0.54

Law and professional codes 0.77 0.85 0.59

Knowledge management attitude 0.87 0.91 0.71

Knowledge management engagement* 0.86 0.90 0.70

Knowledge acquisition 0.85 0.88 0.52Knowledge storage 0.90 0.93 0.72

Knowledge application 0.93 0.95 0.75

Knowledge sharing 0.91 0.94 0.79

Knowledge management satisfaction 0.93 0.94 0.60

Job performance* 0.82 0.89 0.74

Efficiency 0.69 0.83 0.61

Effectiveness 0.68 0.82 0.60

Quality 0.80 0.86 0.60

*Two constructs knowledge management engagement and job performance are second-order factors after conducting

the hierarchical factor analysis.

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or her evaluation and participation in organizational

knowledge management. Overall, an individuals

perceptions of social responsibility and law/profes-

sional codes both make significant impacts on his or

her knowledge management behavior and attitude(H1b, H1c, H2b, and H2c). The positive relation-

ship between knowledge management attitude and

knowledge management engagement (H3) further

contributes to ones satisfaction with organizational

knowledge management (H4). Finally, the results

demonstrate that job performance can be signifi-

cantly enhanced by an individuals knowledge

management engagement (H5) as well as their sat-

isfaction with knowledge management (H6). All of

the statistical estimates are summarized in Table IV.

Differences across ethical climate orientations

In this study, three ethical climate dimensions,

including self-interest, social responsibility, and law/

professional codes, are identified. The finding is con-

sistent with the view that two or more types of ethical

climate can coexist in an organization (Coldwell et al.,

2008; Leung, 2008; Victor and Cullen, 1987). In order

to identify the homogenous groups of organizational

ethical climates, we adopted a hierarchical clustering

method in this study to group the subjects with similarorganizational ethical climates. After the agglomera-

tion schedule shows a two-cluster solution is optimal, a

K-Means cluster analysis is used to divide the whole

sample into two clusters (Hair et al., 1998). One

hundred and fifty-seven samples are classified into

cluster 1, being the higher level of all three ethical

climate dimensions. Conversely, the remaining one

hundred and forty individuals are classified as cluster 2,

being the lower level of all three ethical climate

dimensions. The means and standard deviations of the

two clusters are shown in Table V.A one-way multivariate analysis of variance

(MANOVA) was further adopted to evaluate the

differences between the two clusters on the four

KM-related constructs. Wilks lambda MANOVA

omnibus test was significant F(4, 292) = 18.698,

p = 0.00, and the null hypothesis that the KM-related

construct did not differ was rejected. Table VI dem-

onstrates the significant differences between the two

clusters, indicating that the high-organizational ethi-

cal climate cluster has more positive KM attitude, KM

TABLEIII

Assessmentofdiscriminantva

lidity

Constructs

Mean

SD

Self-interest

Social

resp

onsibility

Lawand

professionalcodes

Know

ledge

manag

ement

attitude

Know

ledge

management

engagement

Know

ledge

management

satisfaction

Job

performance

Self-interest

2.96

1.10

0.74

Socialresponsibility

3.64

0.77

0.12

0.74

Lawandprofessionalcodes

3.66

0.78

0.15

0.50

0.77

Know

ledgemanagementattitude

3.92

0.67

0.15

0.37

0.39

0.85

Know

ledgemanagementengagem

ent3.61

1.05

0.03

0.37

0.32

0.35

0.84

Know

ledgemanagementsatisfaction

3.61

0.77

0.09

0.40

0.44

0.44

0.62

0.78

Jobperformance

3.59

0.73

0.05

0.22

0.25

0.43

0.53

0.48

0.86

DiagonalelementsrepresentthesquarerootofAVEforeachconstruc

t;offdiagonalelementsarecorrelatio

nsamongconstructs.

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engagement, KM satisfaction, and job performance

compared to the low-organizational ethical climate

cluster. Additionally, the results reveal that the vari-

ance of four KM-related constructs accounting for

organizational ethical climate was 11.9% (KM atti-

tude), 11.6% (KM engagement), 14.3% (KM satis-

faction), and 4.9% (job performance).

Discussion

Since knowledge is usually regarded as private

property, employees are probably afraid to lose their

valued intellectual capital and advantages in the

organization if they share their knowledge with

other organizational members (Aedichvili et al.,

TABLE IV

Path assessment and hypothesis tests

Dependent construct (R2) Independent construct Path coefficient t Value Result

KM engagement (0.20) Self-interest -0.05 0.66 H1a Not supported

Social responsibility 0.24 4.20 H1b supported

Law/professional codes 0.12 1.74 H1c supported

KM attitude 0.22 3.81 H3 supported

KM attitude (0.20) Self-interest 0.09 1.34 H2a Not supported

Social responsibility 0.23 4.22 H2b supported

Law/professional codes 0.27 4.22 H2c supported

KM satisfaction (0.38) KM engagement 0.62 14.70 H4 supported

Job performance (0.32) KM engagement 0.38 6.10 H5 supported

KM satisfaction 0.24 3.33 H6 supported

TABLE V

Means and standard deviations for the two clusters

Constructs of ethical climates Cluster F values Significance of F

1 (N = 157) 2 (N = 140)

Mean SD Mean SD

Self-interest 3.47 0.62 2.92 0.69 53.24 0.00

Social responsibility 3.96 0.44 3.27 0.44 182.41 0.00

Law/professional codes 4.01 0.44 3.26 0.49 189.29 0.00

TABLE VI

MANOVA test across two OEC clusters

KM-related constructs Cluster F values Significance of F

1 (N = 157) 2 (N = 140)

Mean SD Mean SD

KM engagement 3.84 0.61 3.38 0.54 39.77 0.00

KM attitude 4.10 0.52 3.72 0.51 40.90 0.00

KM satisfaction 3.82 0.54 3.37 0.54 50.33 0.00Job performance 3.70 0.44 3.48 0.47 16.33 0.00



10/19

2003; Detert and Edmondson, 2007). Thus, there

may be an irreconcilable conflict between the pri-

vate intellectual asset and collective knowledge in an

organization. Interestingly, the research results

indicate that three ethical levels egoism, benevo-lence, and universal principle all exist in our

study. The hypotheses tested in this study are all

supported, with the exception of the impact of

peoples self-interest on their knowledge manage-

ment engagement and attitude in the organization.

Practically, social responsibility highlights the indi-

viduals understanding of what is beneficial to the

customers and the public. Law and professional

codes reflect the universal principles to which

individuals conform within the professional organi-

zation, regardless of their personal preferences(Coldwell et al., 2008; Victor and Cullen, 1988).

Wasko and Faraj (2000) argue that people are willing

to engage in knowledge management because of

their sense of moral obligation, rather than ones

personal self-interest or expectation of reward.

Obedience to organizational laws and professional

standards implies consensus among members with

respect to what is acceptable within the organization.

In Kohlbergs cognitive view of judgment on an

action as right or obligatory, an ethical behavior is

promoted with the common objectives in the

organization. Employees recognize how they oughtto behave and how their decisions or actions may

affect others (McDaniel, 2004). Therefore, organi-

zational ethical climate in terms of benevolence and

principle can be developed to shape a cooperative

relationship among the members, which will meet

the shared expectations concerning the social ap-

proval as well as the organizational benefits (Blau,

1964; Thibaut and Kelley, 1986). Organizational

members common agreement on knowledge as a

public good formulates an ethical judgment in the

determination of right and wrong behavior, facili-tating cooperation among members, and enhancing

their perception of organizational knowledge man-

agement attitude and behavior (Haslam, 2000,

p. 385).

In the realm of organizational behavior, personal

value and rational consideration represent a superior

level of moral development, emerging in accord

with ones self-chosen ethical principle, apart

from organizational normative authority (Damico,

1982, p. 432). Thus, organizational members are not

bound to create shared benefits unless they can

subordinate their personal interests to collective

objectives and core values (Janz and Prasarnphanich,

2003; Leana and van Buren III, 1999). Interestingly,

two clusters are identified in this article to examinethe effect of individuals evaluation of ethical cli-

mates on knowledge management. The three

dimensions of organizational ethical climate self-

interests, social responsibility, and law/professional

codes in cluster 1 are all shown to be higher than

in cluster 2. The results demonstrate that the stron-

ger the organizational ethical climate, the more

positive attitude and participation in organizational

knowledge management that arises. Meanwhile, job

performance can be enhanced due to subsequent

improvement in knowledge management satisfactionamong employees. This supports our assumption

that knowledge management is influenced in a

pronounced manner when individuals have stronger

ethical climate perceptions. As a combination of

organizational common knowledge and personal

intellectual property, this finding also reveals that the

organizational ethical climate does not constitute a

prohibition against an individuals concern for

self-interest, and vice versa. It may be seen to be

consistent with Jarvenpaa and Staples (2001) con-

tention that the perceptions of self-ownership and

organizational collective ownership knowledge canco-exist and develop positive relationships within an

organization.

Our research results support the view that indi-

viduals positive attitudes toward organizational

knowledge management, indeed, can enhance their

motivation to engage in organizational knowledge

management activities. As more participation is

activated by organizational members with more

positive perceptual evaluation of organizational

knowledge management, higher levels of satisfaction

will become an important factor in enhancingindividuals job skills, effectiveness, and decision-

making strategies. In sum, our research identifies the

existence of organizational ethical climates, which

helps individuals define who they might be and what

they ought to do. It is normative and morally

persuasive (Chan and Garrick, 2003) for people to

engage in organizational knowledge management

activities as part of their work ethics. Accordingly,

we believe that with the appropriate organizational

ethical climates, knowledge management, taken as

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an organizational strategy and the achievement of

shareholders values, will not only contribute to the

job performance enhancement of an individual, but

will lead to further improvement in the organiza-

tions collective effectiveness.

Conclusion and implication

The purpose of this study is to explore how

organizational ethical climates affect individuals

perceptual values as well as their actions toward

knowledge management. In this study, three ethical

climate dimensions, namely self-interest, social

responsibility, and law/professional codes, are iden-

tified. These three ethical climate dimensions meetVictor and Cullens (1987) ethical climate criteria:

egoism, benevolence, and principle, which are de-

rived from the pre-conventional, conventional, and

post-conventional orientations of moral develop-

ment proposed by Kohlberg (1981). It is also con-

sistent with Aristotles perspective that an individual

is a member of the larger community and strives to

pursue individual virtue by accomplishing personal

self-interest and the greater public good (Solomon,

2004). Ethical action is supported by individuals

obedience of the moral principles and also conse-

quence of ones moral identity with the self (Berg-man, 2004). The results of this research indicate that

the concern for self-interest does exist but does not

significantly affect the individuals evaluation of and

behavior toward knowledge management. In this

study, one possible explanation for this may be the

stronger influence of social responsibility and law/

professional codes on organizational knowledge

management, which would lie in the cultural

dimension-collectivism. Given the concept of col-

lectivism, individuals with common interests and

values appear to take collective and mutually bene-ficial actions (Earley and Gibson, 1998). Further-

more, in-group norms and public recognition are

more important than individual rewards in consid-

eration of the groups accepted rules and standards of

behavior. With the extension of ones self-concern

to group cohesiveness, organizational members are

expected to establish concordance with relevant

groups, including managers, consumers, business

partners, and other employees (Paul et al., 2006).

According to Triandis et al. (1990), the orientation

of collectivism reinforces organizational members

willingness to help other people by sharing what

they have owned. Organizational members can re-

ceive others assistance when they need advice or

solutions for various matters or problems. Thus,KM-related behavior is encouraged and achieved

because the members sense of identity and obliga-

tion merge together. With professional standards,

group norms and emotional values being attached to

the organization, individuals expect to share their

ideas, information, and perspectives in a concern-

for-others manner, rather than in a self-interested

way (Brickson, 2000). This study suggests that the

concept of collectivism deserves further exploration

and discussion.

The study essentially facilitates the development oftheoretical and practical designs that provide organi-

zations and individuals with an understanding of how

organizational ethical climate engenders and affects

organizational members knowledge management

participation. In terms of theoretical contribution,

although many researchers have suggested the influ-

ence of organizational culture or climate on knowl-

edge management practice, there has been far less

research conducted from the ethical climate per-

spective. To address this issue, several constructs and

hypothesized relationships are designated in our re-

search model. The results of this study may assist inexploration of the claim discussed above. In terms of

the practical application of this research, organization

managers should be aware that any knowledge man-

agement strategy or KMS adoption does not guar-

antee the success of knowledge management. Since

knowledge management practice is implemented in

the social context, it is essential to understand the

influence of different organizational ethical standards

and levels of referent groups, organizational members

perceptual evaluation of knowledge management

practice and the subsequent outcomes.Although we pay considerable attention to the

research design and data analysis, there still remain

several limitations in this research. First, the process

of individuals moral reasoning and ethical concern

for organizational knowledge management is not

discussed comprehensively in this article. Not only

the obligatory acceptance of principles in organiza-

tions, but individual s ethical decision making also

exerts the influence on ones perception and judg-

ment on the ethical behavior. As Jones (1991) and

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12/19

Gross (1995) note in the review of Kohlberg and

Rests ethical models, ethical judgments and partic-

ipation of collective action are moderated by indi-

vidual factors ego strength, tendency of field

dependence, and locus of control as well as situ-ational factors including job context, organizational

culture, and work incentives. In our study, organi-

zational ethical climate is considered as the norms

and collective value of the group, instead of the

individual characteristics. However, the function of

individual ethical reasoning process and personal

characteristics has been emphasized in several stud-

ies. The connection between psychological factors

and moral judgments deserves more attention for the

future study. Second, it is a cross-sectional quanti-

tative study to understand employees perception of

organizational ethical climate, which does not col-

lect more specific and sufficient opinions about

organizational knowledge management. Future re-

search may benefit from conducting a longitudinal

qualitative approach to ascertain more critical ante-cedents in determination of knowledge management

activities. Third, the research data were collected by

convenience sampling technique. It will be necessary

to adopt more rigid sampling methods, like simple

random sampling or systematic sampling, so as to

generalize the research results. In addition, the re-

search subjects come from various industry domains.

It would perhaps be more useful for future studies to

focus on one specific industry to understand the

main features of organizational knowledge manage-

ment in that particular industry.

Summary of measurement and scale properties

Original item Measurement Mean SD Factor loading

Self-interest

SI1 In this company, people are, by and large,

pursuing their own interests

2.76 1.04 0.59

SI2 There is no room for ones own personal

morals or ethics in this company

3.07 0.90 0.77

SI3 In this company, people protect their own

interest above other considerations

3.81 0.79 0.86

Social responsibility

SR1 It is expected that you will always do what is

right for the customer and public

3.87 0.69 0.66

SR2 People in this company have a strong sense of

responsibility to the outside community

3.56 0.76 0.74

SR3 People in this company are actively con-

cerned about the customers, and the publics

interest

3.51 0.79 0.81

SR4 The effect of decisions on the customer and

the public is a primary concern in this com-

pany

3.61 0.77 0.74

Law and professional codes

LA1 The first consideration is whether a decision

violates any law

3.76 0.84 0.73

LA2 People are expected to comply with the law

and professional standards over and above

other considerations

3.57 0.80 0.80

Appendix 1

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13/19

APPENDIX

continued


LA3 In this company, people are expected strictly

to follow legal or professional standards

3.76 0.71 0.77

LA4 In this company, the law or ethical code of

their profession is the major consideration

3.54 0.75 0.78

Knowledge management attitude

A1 I think participation in organizational

knowledge management is good

3.99 0.63 0.87


knowledge management is beneficial

4.02 0.60 0.88


knowledge management is valuable

4.00 0.62 0.88

A4 I think participation in organizationalknowledge management is pleasant 3.67 0.76 0.75

Knowledge management engagement: knowledge acquisition

C1 I acquire the knowledge that I need by

referring to internal documents or data files in

my organization

3.59 0.90 0.81


referring to work manuals or regulations

3.42 0.96 0.79


attending conferences or reviewing confer-

ence notes

3.44 0.92 0.70


attending professional lectures or undergoing

educational training

3.36 0.99 0.76

C5 I acquire the knowledge that I need by using

professional databases or web sites

3.74 0.95 0.69

C6 I acquire the knowledge that I need by asking

my colleagues or supervisors

3.77 0.84 0.65

C7 I acquire the knowledge that I need by asking

professionals in other related domains

3.47 0.94 0.67

Knowledge storage

C8 I keep records of working knowledge in a

written format

3.71 1.01 0.84

C9 I keep records of working knowledge as

standardized procedures

3.41 1.15 0.85

C10 I keep records of working knowledge in theinformation system

3.48 1.13 0.88

C11 I often update the work-related profile for

further use

3.42 1.08 0.84

C12 I store the work-related rules or regulations

in a written format or information system

3.42 1.12 0.82

Knowledge application

C13 I use knowledge to deal with work effectively 3.62 0.90 0.88

C14 I use knowledge to solve problems 3.69 0.91 0.91

C15 I use knowledge to improve efficiency 3.66 0.89 0.91



14/19

APPENDIX

continued


C16 I use knowledge to enhance my professional

capabilities

3.69 0.91 0.92

C17 I use knowledge to develop new products or

services

3.30 1.08 0.79

C18 I use knowledge to satisfy customers needs 3.46 1.09 0.80

Knowledge sharing

C19 I am prepared to transfer my knowledge or

experience to others

3.86 0.82 0.89

C20 When discussing with my colleagues, I pro-

vide my opinions as much as I can

3.74 0.9 0.86

C21 When colleagues encounter problems, I try

my best to respond and provide the necessaryinformation, documents, or techniques to

them

3.96 0.74 0.91

C22 I am willing to provide the opportunities for

inexperienced colleagues to learn and try

4.01 0.78 0.89

Knowledge management satisfaction

D1 Im satisfied with the availability of knowl-

edge for my tasks

3.71 0.74 0.75

D2 The available knowledge improves my

effectiveness in performing tasks

3.78 0.74 0.73

D3 Im satisfied with the management of

knowledge I need

3.58 0.77 0.78

D4 Im satisfied with the knowledge available for

the tasks under my direction

3.70 0.67 0.81

D5 Im satisfied with knowledge sharing among

individuals under my direction

3.79 0.70 0.78

D6 The available knowledge improves the

effectiveness of my directing

3.69 0.71 0.76


knowledge under my direction

3.51 0.74 0.82

D8 Im satisfied with the knowledge available for

various tasks across my organization

3.50 0.78 0.79

D9 Im satisfied with knowledge sharing among

various directorates in my organization

3.45 0.84 0.75

D10 The available knowledge improves the

organizations overall effectiveness

3.55 0.79 0.77


knowledge in my organization

3.44 0.82 0.79

Job performance: efficiency

E1 The amount of work I finish exceeds the

expectations of my boss

3.54 0.70 0.77

E2 I am able to finish the work that my boss

requires of me before the deadline

3.87 0.61 0.78

E3 I can reduce the time needed to complete a

routine task

3.63 0.73 0.80



15/19

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Fan-Chuan Tseng

Department of Business and Management,National University of Tainan,

No. 33, Sec. 2, Shu-Lin St., Tainan,

Taiwan, ROC

E-mail: [email protected]

Yen-Jung Fan

Department of Information Management,

Chang Jung Christian University,

Tainan County, Taiwan, ROC



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