Journal of Business Ethics (2009) 85:403–410
DOI 10.1007/s10551-008-9779-z
Impact of Emotional Intelligence,
Ethical Climate, and Behavior of Peers
on Ethical Behavior of Nurses
ABSTRACT. This study examines factors impacting
ethical behavior of 103 hospital nurses. The level of
emotional intelligence and ethical behavior of peers had a
significant impact on ethical behavior of nurses. Inde-
pendence climate had a significant impact on ethical
behavior of nurses. Other ethical climate types such as
professional, caring, rules, instrumental, and efficiency did
not impact ethical behavior of respondents. Implications
of this study for researchers and practitioners are
discussed.
KEY WORDS: hospitals, ethical behavior, nurses, emo-
tional intelligence
Introduction
In the last 5 years, the healthcare-related industries
added 1.7 million jobs to the US economy.
Employment in the rest of the private sector did not
increase in the last 5 years (Mandel, 2006). In the
healthcare sector, over 478,000 jobs have been
created in hospitals over the last 5 years. Since the
demand for healthcare needs are projected to grow
significantly in the next decade, it is evident that the
healthcare sector will continue to be the engine of
private sector job growth in the US (Mandel, 2006).
Hospitals are the largest segment of healthcare and
employ over 40% of all healthcare workers (Bureau
of Labor Statistics, 2006).
Healthcare institutions are focusing more on busi-
ness-related areas (e.g., occupancy rate, staff produc-
tivity, cost containment) to address issues such as
inadequate reimbursement from government pro-
grams, new federal regulations, drastically increasing
costs of professional liability insurance, and increased
competition (Weinstein and Nesbitt, 2007). Many

Springer 2008
Satish P. Deshpande
Jacob Joseph
argue that this heavy reliance on a business model by
healthcare administrators has made it very difficult for
doctors and nurses to function in the best interests of
their patients (Deshpande et al., 2006; Weinstein and
Nesbitt, 2007). In spite of the fact that the Joint
Commission on Accreditation of Healthcare Orga-
nizations (JCAHO) manual has clear standards on
patient rights and organizational ethics, hospitals have
been accused of performing unnecessary surgery,
charging uninsured patients more than the insured,
and signing exclusive agreements with selected doc-
tors (Appleby, 2004; Galewitz, 2006). In addition, a
recent survey conducted by the American College of
Physician Executives (ACPE) reports that nearly 54%
of the respondents believed that there was a healthcare
organization in their community that was involved in
unethical business practices (Medical News Today,
2005).
Nurses play a critical and intimate role in pro-
viding healthcare to patients and encounter ethical
issues on a daily basis (Loewy and Loewy, 2004). A
nurse typically faces over 30 different types of ethical
dilemmas daily (Raines, 2000). The 2001 American
Nurses Association Code of Ethics for Nurses sets
some standards for the ethical behavior of nurses.
While nurses are ethically responsible for promoting
patient safety and reporting errors in the healthcare
system, many are unlikely to do so (Erlen, 2007).
Nurses are more likely to discuss the offence with
the offender, and not report it to a superior, espe-
cially if it was unintentional (King, 2001). Nurses are
also less likely to report errors outside the scope of
their practice (Espin et al., 2007).
One factor that may impact the ability of nurses to
deal with these environmental issues and job stress-
ors is emotional intelligence (Landa et al., 2007).
404 Satish P. Deshpande and Jacob Joseph
McQueen (2003) strongly argues that emotional
intelligence skills can help nurses meet the demands
of modern nursing. While previous research has
found that people who could better read emotions of
others were more successful at work and social set-
tings, healthcare professionals have not embraced
this widely (Freshman and Rubino, 2002). Holian
(2006) in a study of management decision making
recommends that future researchers must examine if
ethical decision may be influenced by skills associ-
ated with emotional intelligence. Mesmer-Magnus
et al. (2008) found that emotional intelligence is a
significant predictor of perception of ethical behav-
ior of peers and self-reported ethical behavior of
undergraduate students. Unfortunately, current re-
search has not empirically investigated whether both
emotional intelligence and ethical behavior of peers
have a direct impact on ethical behavior of
employees of a firm. It is the major purpose of this
research to do so among a sample of nurses.
Literature review
Previous reviews of studies done in business ethics
have raised a number of concerns on the state of
empirical research into business ethics (Ford and
Richardson, 1994; O’Fallon and Butterfield, 2005;
Randall and Gibson, 1990). First, they have dem-
anded more studies based on a theoretical grounding
and formal hypotheses. Second, they have raised
concerns over the use of student samples due to their
easy access and the lack of appropriate samples. In
addition, reviews have called for the additional testing
of ‘‘individual, situational, and issue-related influ-
ences’’ of the ethical decision-making process
(O’Fallon and Butterfield, 2005, p. 399).
One topic that has garnered a lot of attention
among organizational psychologists in recent years
is emotional intelligence (Salovey and Grewal,
2005). This topic has also gained a lot of attention
in the popular media after the publication of Daniel
Goleman’s book, Emotional Intelligence, in 1995.
While a number of definitions of emotional intel-
ligence exist, the four-dimensional definition of
emotional intelligence proposed by Davies et al.
(1998) has been considered to be the most com-
prehensive (Law et al., 2004). The four dimensions
are appraisal and expression of emotion in oneself,
appraisal and recognition of emotion in others,
regulation of emotions in oneself, and the use of
emotions to facilitate performance. These four
dimensions also form the basis of the emotional
intelligence survey used in this study. VanRooy and
Viswesvaran (2004) in a meta-analytic investigation
found that emotional intelligence can successfully
predict performance across various employment and
nonemployment settings. It is also suggested that
people with high emotional intelligence can effec-
tively understand their own emotions and regulate
them for focused actions (Law et al., 2004). Brackett
et al. (2004) found that emotional intelligence was
significantly associated with harmful behavior among
male college students.
Very little research has been done to examine the
impact of emotional intelligence on practices of
professional nurses (Kooker et al., 2007). In a theo-
retical analysis of the value of emotional intelligence
to nursing, McQueen (2004) propose that emotional
intelligence skills can positively impact patient care
and staff welfare. Similarly, Akerjordet and Seve-
rinsson (2007) suggest that emotional intelligence
may enable nurses to cope better with stress, apply
more successful coping strategies, and improve their
quality of working life within nursing. Codier et al.
(2008) in their study of clinical staff nurses report that
the performance level of nurses was positively cor-
related with their level of emotional intelligence.
Mesmer-Magnus et al. (2008) in a study of 198
undergraduate students reported that emotional
intelligence can also help us in predicting ethical
behavior. We will examine if this relationship will
hold true among nurses working in hospitals.
Accordingly,
Hypothesis 1: Nurses who self-report a high level
of emotional intelligence are more likely to self-
report engaging in ethical behavior.
O’Fallon and Butterfield (2005) in their literature
review proposed that one area of research that shows
much promise is the impact of peer influence on
ethical behavior. Coworkers often serve as role
models for others and their actions often create norms
for the workplace. This is based on social learning
theory, which states that referent others can have a
significant impact on the behavior of individuals
(Bandura, 1977). However, it is important to note
 Impact of Emotional Intelligence, Ethical Climate, and Behavior of Peers
that researchers in the past had difficulty separating
peer effect from confounding factors. Fortunately,
controlled field experiments in labor economics has
shown a clear evidence of peer effects on work
behavior in the absence of confounding factors (Falk
and Ichino, 2006). Thus we hypothesize:
Hypothesis 2: Ethical behavior of peers will impact
ethical behavior of respondents.
A number of researchers have suggested that the
ethical climate of an organization can impact ethical
behavior of employees (Deshpande, 1996; Victor
and Cullen, 1987, 1988). Martin and Cullen (2006,
p. 177) identify the ethical climate of an organization
as ‘‘a group of prescribed climates reflecting the
organizational procedures, policies, and practices
with moral consequences.’’ Most of the empirical
work examining the ethical climate of an organization
is based on the six ethical climate types identified by
Victor and Cullen (1987). Their classification of
ethical climate types was based on previous research
on ethical theory (Fritzche and Becker, 1984; Wil-
liams, 1985), moral development (Kohlberg, 1984),
and sociocultural theories of organizations (Schnei-
der, 1983). Specifically, they were based on two
dimensions: type of criteria (benevolence, principle,
and egoism) and level of analysis (individual, organi-
zational, or cosmopolitan). Based on a sample con-
sisting of MBA students, university faculty, and
managers of a trucking firm, Victor and Cullen (1987)
proposed six distinct climate types (professionalism,
caring, rules, instrumental, efficiency, and indepen-
dence). Victor and Cullen (1987, 1988) laid a strong
foundation to support their thesis that work climates
can significantly shape ethical behavior of employees.
Deshpande (1996) developed global measures for the
six ethical climate types and used them to examine the
ethical practices of managers of a large American
nonprofit organization.
Martin and Cullen (2006) conducted a meta-
analysis of studies in ethical climate to resolve
inconsistencies in previous findings and determine
support for Victor and Cullen’s (1987, 1988) ethical
climate theory. Among other things, they found a
positive relationship between the professional and
rules climates and various organizational outcomes.
They also found a weak relationship between the
independent climate and most organizational out-
comes. One of their recommendations was that
405
organizational decision makers must consider ethical
climate perceptions to facilitate overall well-being
within their organization. Therefore we propose:
Hypothesis 3: Ethical climate types will impact eth-
ical behavior of respondents.
Study methodology
Sample and measures
The sample of this study is a part of a larger study
conducted among employees of three hospitals in
the USA. One hospital was in the Midwest USA (a
248-bed facility) while the other two were in the
Northwest USA (a 150-bed and a 341-bed facility).
Contacts within the hospitals were used to get their
address directories to distribute the surveys. Two
hundred and three employees (66.7% response rate)
returned completed surveys. The sample consisted of
different occupations including doctors, pharmacists,
technicians, nurses, and office staff. Only responses
by nurses (n = 103) were considered for this study.
Eighty-one percent of the responding nurses were
women. The average age of the respondents was
46 years. In addition, 81% of the respondents were
white. On average, a nurse had worked for the
hospital for over 10 years. Detailed demographic
information is presented in Table I.
The survey covered a variety of items including
measures of various ethical climate types, ethical
behavior of self, ethical behavior of coworkers,
emotional intelligence, and demographic measures.
Ethical behavior of self was measured using four
items: it is acceptable for me to take office supplies
TABLE I
Demographics of the sample
Variable Mean Range SD
Gender (1 = female, 0 = male) 0.81 0–1 0.40
Age (years) 46 26–66 10.01
Job experience (years) 10.13 0–35 7.67
Full-time (1 = yes, 0 = no) 0.86 0–1 0.34
Race (1 = white, 0 = nonwhite) 0.81 0–1 0.40
406 Satish P. Deshpande and Jacob Joseph
home; in order to get ahead in my career, I believe
that one has to compromise personal ethical stan-
dards; I believe that it is acceptable on occasion to
discuss aspects of cases with friends and others not
employed within their organization; and I believe
that it is okay to by-pass established protocols in
order to be more efficient or effective at work.
Ethical behavior of coworkers was measured using
four similar items: co-workers feel that it is accept-
able to take office supplies home; in order to get
ahead in their career, my co-workers believe that
one has to compromise personal ethical standards;
my co-workers believe that it is acceptable on oc-
casion to discuss aspects of cases with friends and
others not employed within their organization; and
my co-workers believe that it is okay to by-pass
established protocols in order to be more efficient or
effective at work. These items were measured using
four items that were rated on a four-point Likert
scale (4 = strongly agree, 1 = strongly disagree).
The Cronbach’s alpha for ethical behavior of self and
coworkers was 0.81 and 0.83, respectively.
Emotional intelligence was measured using a 16-
item scale developed by Law et al. (2004). These
items are: I have a good sense of why I have certain
feelings most of the time, I have good understanding
of my own emotions, I really understand what I feel,
I always know whether or not I am happy, I always
know my friends’ emotions from their behavior, I
am a good observer of others’ emotions, I am sen-
sitive to the feelings and emotions of others, I have
good understanding of the emotions of people
around me, I always set goals for myself and then try
my best to achieve them, I always tell myself I am a
competent person, I am a self-motivating person, I
would always encourage myself to try my best, I am
able to control my temper so that I can handle dif-
ficulties rationally, I am quite capable of controlling
my own emotions, I can always calm down quickly
when I am very angry, and I have good control of
my own emotions.
This scale was recently used by Mesmer-Magnus
et al. (2008) to examine tendency of undergraduate
students to engage in unethical behaviors. Cron-
bach’s alpha for this scale was 0.92.
Victor and Cullen (1987) introduced an ethical
climate framework of six climate types (profession-
alism, caring, rules, instrumental, efficiency, and
independence). We will use global measures for
these ethical climate types as proposed by Deshpande
(1996). They are: professional climate (people were
expected to comply with the law and professional
standards), caring climate (the major consideration
was what is best for everyone in the organization),
rules climate (everyone was expected to stick by
organization rules and procedures), instrumental
climate (people protected their own interest above
all else), efficiency climate (the most efficient way of
doing something was the right way in the organi-
zation), and independence climate (each person in
the firm decided for him/herself what is right
and wrong). A four-point Likert scale, with 1 rep-
resenting ‘‘strongly agree’’ and 4 representing
‘‘strongly disagree’’, was used to measure the climate
types.
Findings
Means, standard deviations, reliabilities, and Pear-
son’s zero-order correlations for all variables are
presented in Table II. The reliabilities (coefficient
alphas) of ethical behavior of self, ethical behavior of
others, and emotional intelligence are shown on the
diagonal in parentheses. Emotional intelligence,
ethical behavior of coworkers, and caring climate
were significantly correlated with ethical behavior of
self. None of the other ethical climate types signif-
icantly impacted ethical behavior of self. But sig-
nificant intercorrelations among the variables as seen
in the correlation matrix can impact the significance
of the hypothesized relationships. In addition, cor-
relations give us an estimate of the association among
the variables but do not tell us if a variable is
dependent upon the others. On the other hand,
regression analysis allows us to examine the depen-
dence of a variable on various explanatory variables.
Therefore, regression analysis will allow us to draw
more valid conclusions. The most widely used
method of estimation for the regression model is
ordinary least squares (OLS).
Thus, OLS regression analysis results as seen in
Table III provide stronger evidence on the signifi-
cance of the hypothesized relationships. Standard-
ized regression coefficients show that emotional
intelligence, ethical behavior of coworkers, and
independence climate significantly impacted ethical
behavior of self.
 Impact of Emotional Intelligence, Ethical Climate, and Behavior of Peers 407

TABLE II
Means, standard deviation, reliabilities, and Pearson’s zero-order correlations for all variables

Mean SD 1 2 3 4 5 6 7 8

1 Ethical behavior of self 3.48 0.51 (0.81)

2 Emotional intelligence 3.19 0.40 0.30** (0.92)
3 Ethical behavior of coworkers 2.96 0.67 0.44** 0.01 (0.83)
4 Professional climate 3.76 0.57 0.12 0.35** 0.02 1.00
5 Caring climate 2.72 0.90 0.20* 0.36** )0.03 0.15 1.00
6 Rules climate 3.62 0.55 0.11 0.06 0.09 0.17 0.23* 1.00
7 Instrumental climate 2.68 0.79 0.00 0.00 )0.10 )0.11 )0.12 )0.19 1.00
8 Efficiency climate 2.69 0.86 )0.02 )0.08 0.09 )0.26** )0.11 )0.04 0.14 1.00
9 Independence climate 2.14 0.94 0.08 )0.07 )0.18 )0.12 )0.05 0.02 0.19 )0.21* 1.00

**Correlation is significant at the 0.01 level (two-tailed), *Correlation is significant at the 0.05 level (two-tailed).

TABLE III Nurses need a lot of emotional energy to interact

Regression results with patients and be understanding towards those for
whom they are responsible (Amendolair, 2003). This
Variable Beta t study suggests that emotional intelligence may have a
significant impact on ethical behavior of nurses. A
Emotional intelligence 0.26 2.58** major component of a nurse’s job is to take care of
Ethical behavior of coworkers 0.48 5.26** patients. Thus, nurses with personal qualities such as
Professional climate 0.03 0.29 self-confidence, personal honesty, empathy, self-
Caring climate 0.12 1.26 management, and knowledge of personal strengths
Rules climate 0.02 0.19 and weaknesses are more likely to make ethical
Instrumental climate 0.03 0.35
decision. It is possible that training and development
Efficiency climate 0.02 0.16
efforts aimed at increasing emotional and social
Independence climate 0.19 1.99*
R2 0.33 competence can help nurses understand their own
Adjusted R2 0.27 emotions and the emotions of others. This is con-
N 103 sistent with Ancel (2006), who in a study of 263
nurses, found that in-service communication train-
**p £ 0.01, *p £ 0.05. ing significantly enhanced nurses’ empathic skills. It
would be interesting to examine if testing for soft
skills such as emotional intelligence during the
Discussion and implications selection process can have a positive impact on
ethical decision making and overall performance of
Since nurses are at the front line of healthcare ser- the nursing staff. Future research must look at the
vices and supposed to meet the psychosocial needs of impact of various facets of emotional intelligence on
patients, it is vital for both healthcare practitioners ethical behavior of nurses and other occupations.
and researchers to pay more attention to how they This study also suggests that peers can have a
make ethical decisions. Our research suggests that strong impact on the ethical behavior of employees.
both individual factors (e.g., emotional intelligence) In our study, the standardized regression weight of
and attributes of the hospital (ethical behavior of ethical behavior of coworkers was nearly twice that
peers, independence climate) may impact ethical of the next most significant factor (0.48 versus 0.26).
behavior. While the results of this study have unique Thus, a peer group with high ethical bent may
implications for healthcare providers, they also have significantly impact a nurse’s behavior at the work-
broader implications for other types of organizations place. Previous research has consistently shown that
and the field of business ethics. peers even have a greater impact than managers on
408 Satish P. Deshpande and Jacob Joseph

ethical behavior of employees (Deshpande et al., legal, some nurses may refuse to perform an abortion
2006; Zey-Ferrell et al., 1979). It is possible that one because it violates their moral beliefs. Other nurses
way to ensure ethical behavior of nurses is to take may think it is the right thing to do only when the
immediate and severe action against their coworkers pregnancy threatens the life or the health of the
who are in violation of work rules or have con- mother. Any climate that allows for moral relativism
ducted an unethical act. For example, if a hospital will result in inconsistent behavior among nurses at
takes no action against nurses who wear surgical the hospital. Future research should examine if
scrubs outside the hospital, even though it is against independence climate has a similar impact on other
the rules, it may become a part of the social norm. healthcare employees such as doctors and adminis-
Learning theory suggests that expected behavior at trators.
the workplace must be reinforced through rewards
and punishment (Sims, 1992). While hiring nurses,
Limitations and conclusions
hospitals, besides testing for emotional intelligence
(as stated earlier), may find it beneficial to pay more
This study has a number of limitations. Since the
attention to personal ethics and off-the-job behavior
work environment and ethical issues faced by
of candidates (Andrews, 2005). Psychological tests
healthcare employees are unique, it is possible that
and background checks can be effectively used for
the results of this study may not be applicable to
this purpose. Screening for factors such as machia-
non-healthcare organizations. All our measures were
vellianism, value system, and locus of control that
self-reported by the respondents which raises the
impact ethical decisions can help hospitals weed out
possibility of a self-selection bias. The respondents
those who are more likely to make unethical deci-
may also be providing socially desirable responses.
sions (O’Fallon and Butterfield, 2005). Future
Most people are reluctant to admit behaving
research needs to examine the impact of various
unethically or possessing low emotional intelligence.
human resource management practices on ethical
Past research has found low correlations between
behavior of nurses. For example, are nurses who are
self-report and ability-based measures of emotional
compensated above the market rate more ethical
intelligence (Brackett and Mayer, 2003).
than those who are paid market wages?
In spite of these limitations, this research has some
In our study, only independence climate had a
important conclusions. The level of emotional intel-
significant impact on ethical behavior. Surprisingly,
ligence significantly impacts ethical behavior of nur-
professional and rules climates were not significant in
ses. In addition, the study demonstrates that nurses are
our study. Further analysis of the data revealed that
more likely to behave ethically if they feel that their
this happened because 97% of the responding nurses
peers also behave ethically and have a work climate
reported the presence of both professional and rules
that encourages them to use their personal values at
climate respectively, while only 36% of the nurses
work. In short, our research suggests that both indi-
reported the presence of an independent climate.
vidual factors (e.g., emotional intelligence) and
The fact that responses for professional and rules
attributes of the hospital (ethical behavior of peers,
climates are heavily skewed can impact the signifi-
independence climate) impact ethical behavior.
cance of those variables in the regression analysis
(Cohen et al., 2003). This does not mean that pro-
fessional or rules climates are not prone to ethical
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Satish P. Deshpande
Department of Management,
Haworth College of Business,
Western Michigan University,
Kalamazoo, MI 49008-3808, U.S.A.
E-mail: satish.deshpande@wmich.edu
Jacob Joseph
School of Management,
University of Alaska Fairbanks,
Fairbanks, AK 99775-6080,
U.S.A.
E-mail: ffjj@uaf.edu