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Journal of Personal Selling & Sales Management

ISSN: 0885-3134 (Print) 1557-7813 (Online) Journal homepage: http://www.tandfonline.com/loi/rpss20

The Effect of Perceived Ethical Climate on the


Search for Sales Force Excellence

William A. Weeks, Terry W. Loe, Lawrence B. Chonko & Kirk Wakefield

To cite this article: William A. Weeks, Terry W. Loe, Lawrence B. Chonko & Kirk Wakefield (2004)
The Effect of Perceived Ethical Climate on the Search for Sales Force Excellence, Journal of
Personal Selling & Sales Management, 24:3, 199-214

To link to this article: http://dx.doi.org/10.1080/08853134.2004.10749031

Published online: 23 Sep 2013.

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Download by: [Universiti Teknologi Malaysia] Date: 10 May 2016, At: 20:53
THE EFFECT OF PERCEIVED ETHICAL CLIMATE ON THE SEARCH FOR
SALES FORCE EXCELLENCE
William A. Weeks, Terry W. Loe, Lawrence B. Chonko, and Kirk Wakefield

This study investigates the relationship of perceived ethical climate to individual commitment to quality, organizational
commitment, and performance among business-to-business salespeople from two companies. The results indicate a firm’s
ethical climate has an effect on its sales force. Salesperson’s perceptions of a positive organization ethical climate are
positively related with their individual commitment to quality and organizational commitment. Although ethical climate
does not have a direct effect on performance, it does have an indirect effect on performance when using individual
commitment to quality and organizational commitment as intervening variables. Furthermore, the findings suggest an
association exists between individual commitment to quality and performance. Implications and directions for future
research are discussed.
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Unethical behavior continues to occur and receive attention Concern about ethical behavior and the desire to better
throughout the business community. The public’s increasingly understand ethical decision-making has led to the develop-
negative perceptions regarding business ethics in recent years ment of many models, frameworks, and research efforts in
can be attributed, in part at least, to the scandals regarding marketing (e.g., Aquino 1998; Bass, Barnett, and Brown 1998;
companies such as Enron (Capell, Edmondson, and Fairlamb Chonko 1995; Ferrell and Gresham 1985; Ferrell, Gresham,
2003), accusations such as those concerning Tyco (Warner and Fraedrick 1989; Hunt and Vitell 1990; Singhapakdi and
2003), and increases in personal misconduct (Clark 2003). Vitell 1991a; Sividas et al. 2003; Wobtruba 1990). These ef-
Investigations of business ethics by both business practitioners forts generally include individual influences and organizational
and academics are increasing (cf. Sivadas et al. 2003). Evi- factors such as codes of conduct, reward systems, norms, and
dence of industry’s interest in ethics is seen in the establish- organizational climate (Barnett and Vaicys 2000).
ment and continued growth of the Ethics Officers Association Schneider and Rentsch (1988) describe climate as the way
(EOA), which is dedicated to promoting ethical business prac- firms operationalize routine behaviors and the actions that
tices. The Direct Selling Association’s recent study (Chonko, are supported and rewarded by the organization. Climate may
Wotruba, and Loe 2002) is another example of industry con- vary within firms due to differences in individuals, work
cern about business ethics. The focus on ethics is also seen in groups, employment histories, and individuals’ positions (Vic-
higher education through ethics research and increased offer- tor and Cullen 1988). A firm, work group, or subunit may be
ings for ethics-related classes (Shaw 1996). comprised of many different types of climates (Schneider
1975). Victor and Cullen (1988) indicate the ethical dimen-
sion of organizational climate is a multidimensional construct,
which they term the “ethical work climate.” Ethical climate
represents “the prevailing perceptions of typical organizational
practices and procedures that have ethical content” (Victor
William A. Weeks (DBA, Indiana University), Professor of Market- and Cullen 1988, p. 101). Whereas ethical climate is, by defi-
ing and Director of the Center for Professional Selling, Hankamer nition, a macro-level construct, the perception of ethical cli-
School of Business, Baylor University, Bill_Weeks@baylor.edu. mate is relevant to subsequent individual behaviors at the
Terry W. Loe (Ph.D., University of Memphis), Associate Professor micro-level (Wyld and Jones 1997). The focus of this paper is
of Marketing and Director of the Center for Professional Selling, on an individual’s perceptions of organizational ethical cli-
Coles College of Business, Kennesaw State University, tloe@coles2 mate, which is consistent with the study of organizational
.kennesaw.edu climate at the micro-level (Barnett and Vaicys 2000; Victor
Lawrence B. Chonko (Ph.D., University of Houston), Professor of and Cullen 1988) and its effect on other factors.
Marketing, Department of Marketing, Hankamer School of Busi- Bruce (1994) suggests that when employees engage in un-
ness, Baylor University, Larry_Chonko@baylor.edu. ethical behavior, they tend to have less time to be productive.
Kirk Wakefield (Ph.D., Saint Louis University), Associate Professor Such observations have stimulated research in the area of eth-
of Marketing and Chair, Department of Marketing, Baylor Univer- ics and the effect of ethical/unethical behavior on key outcomes/
sity, Kirk_Wakefield@baylor.edu. attitudes. For example, while studying business-to-business

Journal of Personal Selling & Sales Management, vol. XXIV, no. 3 (summer 2004), pp. 199–214.
© 2005 PSE National Educational Foundation. All rights reserved.
ISSN 0885-3134 / 2005 $9.50 + 0.00.
200 Journal of Personal Selling & Sales Management

salespeople, Babin, Boles, and Robin (2000) find ethical cli- Figure 1
mate to be significantly associated with role stress, job satisfac- Hypothesized Model of Relationships Between
tion, and organizational commitment. Schwepker (2001) finds Ethical Climate, Individual Commitment to Quality,
similar relationships between ethical climate and job satisfac- Organizational Commitment, and Performance
tion and organizational commitment. Babin, Boles, and Robin
(2000) call for future research that has a more thorough focus
on the conceptual deliberation of potential relationships be-
tween ethical climate and a larger number of organizational
constructs.
The primary objectives of this paper are threefold. First,
we follow the advice of Babin, Boles, and Robin (2000) and
build on Schwepker’s (2001) work with business-to-business
salespeople and investigate the relationship between ethical
climate and other organizational constructs, namely, indi-
vidual commitment to quality and job performance. In the
process, we will also investigate the association that Babin,
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Boles, and Robin (2000) and Schwepker (2001) find between


ethical climate and organizational commitment. Second, al-
though previous research (e.g., Bashaw and Grant 1994;
Mathieu and Zajac 1990) has produced inclusive findings, studies that have explored ethical climate’s effect on ethical
we will explore the potential relationship between organiza- judgment and behavioral intentions (Barnett and Vaicys
tional commitment and performance. Third, it may be pru- 2000), the relationship between unethical behavior and ethi-
dent to recognize that there are other forms of commitment cal climate (Peterson 2002), and ethical climate’s effect on
that can be studied, such as work commitment, Protestant organizational commitment (Cullen, Parboteeah, and Victor
work ethic, career salience, job involvement/work as a central 2003).
life interest, organization commitment, and union commit- As with any employee, a salesperson’s ethical work climate
ment (Morrow 1983). Recognizing there are different types is distinguished from other climate elements such as employ-
of commitment, the current study investigates whether there ees’ perceptions of control, organizational structure, and the
is a relationship between individual commitment to quality nature of reward systems (Victor and Cullen 1987). For ex-
and performance. The proposed relationships that are exam- ample, a poor ethical climate may exist when salespeople feel
ined in this research are presented in Figure 1. compelled to perform or endorse behaviors that are perceived
as opposing standards of ethical conduct. Similarly, the exist-
ence of peers who are perceived by salespeople as unscrupu-
THEORETICAL BACKGROUND AND
lous in carrying out responsibilities indicates a poor ethical
HYPOTHESES
work climate (Robin and Reidenbach 1987). Therefore, a
Ethical Climate salesperson’s perceptions of the ethical climate are shaped by
confrontations with ethical dilemmas of their own or those
An organization’s ethical climate can be characterized in terms experienced by others. An ethical dilemma may involve a vio-
of five dimensions: caring, law and code, rules, instrumental, lation of an implicit or explicit trust, the observation of oth-
and independence (Victor and Cullen 1987; 1988). These ers’ morally questionable behavior, a general observation of
five dimensions are derived from ethical criteria (principle— actions and treatment of customers and other employees, and
accepted or professional rules of conduct; benevolence—a from perceptions of organizational priorities (Babin, Boles,
display of the desire to do good; and egoism—the doctrine and Robin 2000). How the salesperson perceives these di-
that self-interest is the basis of all behavior) and the locus of lemmas and the behaviors undertaken in response to ethic-
analysis (cosmopolitan—the world; local—the firm; and in- laden situations will affect how the salesperson views the ethical
dividual—the person). A firm’s ethical climate drives both its climate of an organization.
ethical values and the behaviors expected, and have been shown
to influence the ethical behavior of employees (Verbeke, Ethical Climate and Individual Commitment to
Ouwerkerk, and Peelen 1996; Wimbush and Shepard 1994). Quality
The definition of ethical climate by Victor and Cullen (1987;
1988) and Cullen and Victor (1993) remains the most fully The importance of service quality is well documented (Berry
developed to date (Fritzche 2000). This is reflected in recent and Parasuraman 1997; Hartline and Ferrell 1996;
Summer 2004 201

Parasuraman, Zeithaml, and Berry 1994; Shepherd 1999; in an exploratory study, Loe (1996) finds a significant rela-
Wimbush, Shepard, and Markham 1997). Berry et al. con- tionship between these two constructs. Further, Martin
clude, “[e]xcellent service is a profit strategy because it results Marietta Corporation conclude that their integrity-based eth-
in more new customers, more business with existing custom- ics program, which includes quality responsibility, has served
ers, fewer lost customers, more insulation from price compe- as an early warning system for quality concerns. This organi-
tition and fewer mistakes requiring the reperformance of zation also attributes their award of U.S. government defense
services” (1994, p. 32). contracts, which account for 75 percent of the company’s rev-
Considerable research regarding the concept of quality, and enues, to their integrity and quality focus (Paine 1994). There-
particularly service quality, has focused on measurement is- fore, based on the subsequent discussion, the following
sues (Babakus and Boller 1992; Carman 1990; Cronin and hypothesis is offered:
Taylor 1992; Parasuramen, Zeithaml, and Berry 1994; Teas
H1: Organizational ethical climate is positively related to
1993). Some of this research has attempted to measure man-
individual commitment to quality.
agement commitment to service quality along with its out-
comes. Management commitment to service quality (MCSQ)
has been defined as “encompassing the conscious choice of Ethical Climate and Organizational
quality initiatives as operational and strategic options for the Commitment
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firm and engaging in activities such as providing visible qual-


ity leadership and resources for the adoption and implemen- Although several definitions of organizational commitment
tation of quality initiatives” (Ahmed and Parasuraman 1994, exist, a common theme is that committed individuals believe
p. 85). Another stream of research has investigated potential in and accept organizational values and goals, are willing to
consequences of quality—that is, customer satisfaction, pur- provide considerable effort on their behalf, and are willing to
chase intentions (Cronin and Taylor 1992), and firm perfor- remain with their organizations (Mowday, Steers, and Porter
mance. However, there is limited research regarding the 1979). Organizational commitment gained attention in the
antecedents of quality in general, and even less concerning 1970s and 1980s as a key aspect of the relationship between
antecedents of individual commitment to quality. Through individuals and organizations (Mowday, Porter, and Steers
managerial activities such as MCSQ, which reflects an 1982). Research suggests low levels of organizational com-
organization’s corporate climate, it has the potential to effec- mitment may be dysfunctional to both the individual and
tively influence employee behaviors in ways that improve ser- the organization, whereas high levels may have positive ef-
vice quality (Hartline and Ferrell 1996). fects (i.e., higher performance, greater satisfaction, lower turn-
The role of climate has been discussed by Klein and Sorra over) (Mathieu and Zajac 1990). Several authors have called
(1996), who find the effective implementation of innovations for identifying antecedents of organizational commitment if
is a function of the strength of an organization’s climate for managers wish to positively influence employee commitment
the implementation of that innovation. Borrowing on their (Morris and Sherman 1981; Randall 1987).
work, one might draw a similar parallel regarding the rela- A conceptual argument can be made regarding why we
tionship between ethical climate and an individual’s commit- might expect to find a relationship between ethical climate
ment to quality. An organization that espouses the general and organizational commitment. Individuals who perceive
proposition that “good ethics is good business” might pride that their organizations are trying to improve the ethical cli-
itself in offering high-quality products and services to their mate should exhibit stronger commitment to that organiza-
customers. This may be reflected in the organization’s formal tion, especially if the employee’s ethical values are congruent
policies, personnel training, praise from supervisors for em- with those of the organization. Salespeople are often in the
phasizing a commitment to quality, financial incentives for field with little direction as to the action to take when faced
such behavior, and customer service and support programs. with an ethical dilemma, and, subsequently, seek direction in
These policies and processes are related to beliefs concerning ethical situations (Dubinsky et al. 1992). When salespeople
the employee’s role in providing quality offerings and, there- are provided direction via a strong ethical climate, it would
fore, are a manifestation of managerial attitudes and actions seem they would be more likely to be committed to the orga-
regarding various stakeholder interests. Also, these policies nization and less likely to leave for another job opportunity.
and processes may be considered manifestations of moral de- Perceived ethical climate helps an organization member
cision-making that are closely aligned to an ethical climate answer questions such as “What issues have relevant ethical
that can affect service behavior—or quality in general content?” “What are the appropriate decision criteria that
(Wimbush and Shepard 1994). should be used?” “What is the desirable alternative in the
Whereas limited research has directly focused on the ethi- organization’s view?” and “What should I do?” Hence, the
cal climate–individual commitment to quality relationship, perceived ethical climate assists the individual in determining
202 Journal of Personal Selling & Sales Management

issues that are ethically relevant, and aids the individual in ciations. When such individuals recognize similar values and
determining what criteria should be used, evaluated, and how standards in their organization, they are more likely to de-
to resolve the ethical issues (Kelley, Skinner, and Ferrell 1989; velop commitment for the organization.
Singhapakdi and Vitell 1991a, 1991b). Ostroff (1993) shows a strong association between climate
An argument might also be made that if higher levels of dimensions and organizational commitment. However, an
ethical climate are perceived by salespeople, they are more ethical dimension of climate was not examined. In an investi-
likely to agree with and accept the values communicated by gation of 1,246 marketing professionals (researchers and man-
management and the organization. Thus, salespeople should agers), Hunt, Wood, and Chonko (1989) find corporate
be more committed to the organization because of the values ethical values to be significant substantive predictors of orga-
exhibited that are considered to be more ethical. nizational commitment. The measure of corporate ethical
Ethical climate is, perhaps, one of the more manageable values capture employees’ perceptions of managers’ ethical
factors that can be used to influence ethical behavior in an behaviors and those employees’ concerns about issues of eth-
organization. Management can develop and communicate ics in the organization, as well as the extent to which employ-
codes of ethical conduct to provide direction regarding ac- ees perceive ethical (unethical) behavior was rewarded
ceptable and unacceptable behavior. Furthermore, management (punished) in their firm (Hunt, Wood, and Chonko 1989).
can create and implement corporate policies such as the estab- Similarly, a study of procurement executives discovered a posi-
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lishment of measurement and compensation processes that tive relationship between a rules-based dimension of ethical
encourage ethical behavior. Reward and punishment are also climate and organizational commitment (Kelley and Dorsch
relevant to creating an ethical climate, as management can in- 1991). Also, in a study of hospital employees, Sims and Kroeck
fluence behavior through their administration of rewards and (1994) find when their preferred ethical work climate and
punishment (Posner and Schmidt 1987; Trevino 1986). Based their actual ethical work climate match, they are likely to be
on this work, several conclusions are evident. A lack of rel- more committed to the organization. Finally, a study of one
evant codes of ethics and corporate policies can lead to greater type of boundary spanner—152 salespeople from a variety of
difficulty for employees to answer the above ethical questions industries—discovered that creating an ethical climate may
and potentially lead to drawing incorrect conclusions regard- provide benefits such as greater job satisfaction, stronger or-
ing their organization’s ethical climate and could result in re- ganizational commitment, and, subsequently, lower turnover
ducing their organizational commitment. Moreover, when intentions (Schwepker 2001).
employees perceive their peers are able to get by with unethi- One contrarian viewpoint is the possibility that organiza-
cal behavior without management intervention, again organi- tional commitment might blind some employees to the ethi-
zational commitment can be negatively affected. Conversely, cal problems in their organizations (Schwepker 2001). In such
when employees perceive his or her peers to be recognized and cases, an individual might feel committed and therefore per-
rewarded for ethical behavior, one can expect it might give the ceive the organization to be highly ethical. Hunt, Wood, and
impression that their organization has an ethical climate and Chonko (1989), however, argue that an employee’s level of
positively influence organizational commitment. commitment to the organization is not likely to blind the
Cullen and Victor (1993) provide another argument for a employee to the presence of ethical problems in the organi-
relationship between ethical climate and organizational com- zation. Thus, employees who perceive their organizations as
mitment. They argue that, to the extent that people prefer more ethical will more likely exhibit stronger commitment
certain types of normative climates, individuals should be more to the organization. Therefore, the following hypothesis is
committed to organizations within these types of ethical cli- suggested:
mates. For example, perceived benevolent climates are reflected
in an organization having sincere interest for the well-being H2: Organizational ethical climate is positively related to
of others. Characteristics inherent in a benevolent climate are an individual’s organizational commitment.
cooperation, mutual personal attraction, and positive feel-
ings about tasks, which may produce a positive affective tone Ethical Climate and Performance
among its members (Wech et al. 1998). This dimension of
climate is known to elicit higher levels of perceived organiza- The literature is replete with investigations of the determi-
tional commitment from its members (Cullen, Parboteeah, nants of salesperson performance. Two decades ago, in a meta-
and Victor 2003). analysis, Churchill et al. (1985) assigned over 100 empirical
Cullen, Parboteeah, and Victor also identify principled cli- studies concerning determinants of sales performance to one
mates. Individuals in professional fields (e.g., CPAs) often of six factors: (1) aptitude, (2) skill level, (3) motivation,
come to an organization bringing with them professional (4) role perceptions, (5) personal characteristics, and (6) or-
norms and values that are supported by their respective asso- ganizational or environmental variables. They concluded the
Summer 2004 203

average study accounted for less than 10 percent of the ob- tices have consistently been found to be more profitable than
served variation in sales performance, and it tended to be job unethical ones. For example, in a 20-year study, Knowles
specific. Two decades later, the search for efficiency, produc- (1992) finds that Fortune 500 firms with written standards
tivity, and success of sales teams continues to be an important of conduct financially outperformed other firms. In a study
research issue. concerning value congruence of managers, Posner and
Churchill et al. (2000) suggest that within the organiza- Schmidt (1993) find successful managers were more ethical
tional environment there are five categories of variables that than unsuccessful managers. In another study, Bruce concludes
have an effect on individual sales performance: (1) goals, ob- “in this country alone, the costs (of unethical behavior) to
jectives, and culture; (2) personnel; (3) financial resources; employers in lost time, reduced productivity and spillover
(4) production capabilities; and (5) research and development. effects on other employees is now thought to be over 195
Whereas the focus in the current study is on both short-term billion dollars per year” (1990, p. 1). Werner Grosshans, di-
and long-term performance, an argument can be made that rector of policy of the U.S. General Accounting Office notes,
efficiency and effectiveness of salespeople may be influenced “High ethical standards and high quality work are not only
negatively if their work climate includes cues that indicate the key to success for an individual manager but most assur-
prevalent unethical actions. Conversely, a work climate em- edly they are the cornerstone of a successful organization”
bodied with high moral standards, trust, and responsibility (1989, p. 62).
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should support the efficiency and effectiveness of salespeople It should be kept in mind that corporate performance is
and nurture the overall well-being of employees. Hyman (1990) the sum of individual employee’s performance. Hunt, Wood,
made a similar argument for marketers in general. A well-de- and Chonko (1989) conclude corporate ethical values (given
fined mission, together with top management’s values and their relationship to commitment and commitment’s long-
beliefs, leads to the development of a strong corporate culture. established relationship to improved performance) might be
Cultures shape the attitudes and actions of employees and a key ingredient for success. Finally, in a study of one organi-
assist in determining the appropriate plans, policies, and pro- zation, Weeks and Nantel (1992) find preliminary evidence
cedures that are implemented by managers (Churchill et al. that a well communicated code of ethics may be related to
2000). If an organization’s management espouses the busi- ethical sales force behavior, and it appears a sales force em-
ness mantra “do the right thing” and strives to have an ethical ployed in such an environment can be profiled as being rela-
corporate climate, a subcategory of the organization’s culture, tively high in job performance. Accordingly, the following
it should be reflected in the creation and implementation of hypothesis is suggested:
policies, processes, reward systems, and hiring practices that
H3: Organizational ethical climate is positively related to
are consistent with doing the right thing for internal and ex-
individual performance.
ternal customers. An organization that espouses an ethical
climate might emphasize high levels of customer service,
implement performance evaluation systems that measure and Individual Commitment to Quality and Performance
reward high customer satisfaction scores, and recruit and se-
lect salespeople who enjoy building strong customer relation- In order for a firm to deliver a quality offering, its employees
ships. It is conceivable that individuals who do not hold similar should exhibit an individual commitment to quality, which
values regarding ethical business practices might self-select could be expected to be associated with higher levels of per-
themselves out of their respective jobs. Those salespeople who formance. As noted by Grosshans (1989), high-quality work
perceive a strong ethical climate and hold similar values might is most assuredly a cornerstone of a successful organization.
demonstrate higher levels of performance due to “doing the Also, George (1990) and Gronroos (1983) provide a theoreti-
right thing” in customer relationships. cal argument that MCSQ, highly related to individual com-
As Bruce (1994) points out, the issues of productivity and mitment to quality, is one of the most important determinants
ethics will be important in the foreseeable future. To date, to good service delivery to customers. Hartline and Ferrell
limited research has been conducted that has looked at the (1996) find that MCSQ is positively related to perceived ser-
relationship between performance and ethical climate. Babin, vice quality by customers. Salespeople are integral to provid-
Boles, and Robin (2000) suggest future research related to ing service given their boundary-spanning role, and
ethical climate should integrate such measures as performance. high-quality service delivery can be argued to be important to
Prior to this work, Kelley and Dorsch (1991) propose that salesperson performance. For example, research has demon-
subsequent research efforts focus on individual job perfor- strated the strategic benefits of quality in contributing to per-
mance as it relates to ethical climate. formance outcomes such as market share and return on
Encouraging ethical behavior is both philosophically and investment (cf. Phillips, Chang, and Buzzell 1983). Moreover,
financially important (Bruce 1994). Ethical business prac- the General Accounting Office argue in their “Management
204 Journal of Personal Selling & Sales Management

Practices—U.S. Companies Improve Performance Through A few studies have looked at the relationship between or-
Quality Efforts” report that there is a cause and effect relation- ganizational commitment and performance in the sales con-
ship between total quality management practices and corpo- text. Bashaw and Grant (1994) report results that generally
rate performance (Garvin 1991). Therefore, the following support the expected relationships between three types of work
hypothesis is suggested: commitment and sales performance. Leong, Randall, and Cote
(1994) discover a weak correlation between organizational
H4: Individual commitment to quality is positively related
commitment and performance, whereas MacKenzie,
to sales performance.
Podsakoff, and Ahearne (1998) find that in- and extra-role
performance are intertwined with in-role performance serv-
Organizational Commitment and Performance ing as an antecedent of organizational commitment.
Although some positive results have been found between
Interest in improving organizational efficiency has stimulated organizational commitment and performance, much prior re-
a large body of research on organizational commitment. Again, search has been inconclusive regarding this relationship. With
organizational commitment can be viewed as an individual’s the inconclusive findings to date, we suggest that further study
identification with, and involvement in, a particular organi- is needed regarding the organizational commitment–perfor-
zation (Mowday, Steers, and Porter 1979). A common as- mance relationship and, in particular, in the sales context.
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sumption is that organizational commitment can influence Therefore, we offer the following research question:
almost any behavior that is beneficial to the organization such
as attendance, retention, and performance (Mathieu and Zajac RQ1: To what degree does commitment to quality add to
1990; Meyer and Allen 1997; Mowday, Porter, and Steers understanding the relationship between organizational
1982; Randall 1990). It seems reasonable to expect that if an commitment and sales performance?
individual feels a close attachment to his or her organization
that he or she will give full effort in their job responsibilities, METHOD
hopefully being reflected in a higher performance level. Fur-
thermore, an individual who is committed to his or her orga- Sample and Data Collection
nization would most likely stay with the firm longer, and as Data were collected from two firms with sales forces operat-
he or she gains experience and tenure, would be expected to ing in the United States. One firm manufactures and sells
produce a higher performance level. (direct as well as through distributors) countertop and floor-
Studies regarding the relationship between organizational ing products, and the second firm is a distributor of elec-
commitment and performance have found some evidence that tronic products direct to other businesses, as well as through
organizational commitment is positively correlated with in- distributors. These firms employ business-to-business sales-
dividual performance (Mowday, Porter, and Dubin 1974; people, and have similar channels of distribution. Two hun-
Steers 1977). Meyer et al. (1989) examine first-level manag- dred forty-four surveys were distributed during a national sales
ers and their district managers in a large food service organi- meeting at one firm and training meetings at the other com-
zation and find positive correlations between affective pany. A total of 199 surveys were returned, for a response rate
commitment and four performance measures. However, of 82 percent, 100 percent from the first firm and 71 percent
Mathieu and Zajac (1990), in a review of previous research from the second, as indicated in Table 1. One hundred fifty-
and 48 meta-analyses, conclude organizational commitment three (84 + 69) surveys were deemed usable for analysis after
has relatively little direct influence on performance in most eliminating surveys from sales managers, specification repre-
instances. In a more recent meta-analytic study, Riketta (2002) sentatives, and service personnel. These participants were
finds the corrected mean correlation between attitudinal or- eliminated as the primary focus is on individuals who are
ganizational commitment and job performance is 0.20. He involved in the sales process. Company affiliation was used
uses two forms of performance: in-role performance, which as a control variable in the subsequent analysis to take into
is defined as behavior required by a formal job description, consideration company effect. Characteristics of the sample
and extra-role performance, which is defined as behavior that by company are provided in Table 1.
is voluntary, beneficial to the organization and goes beyond
formal job requirements (i.e., extra hours and altruistic be-
havior). The correlation was marginally significantly stron- Measures
ger for extra-role performance compared to in-role Ethical Climate
performance. Since extra-role performance is voluntary, one
could argue that it should depend on intrinsic motivational Our measure of perceived ethical climate (EC) is based on
factors to a greater extent than does in-role behavior. work by Schwepker, Ferrell, and Ingram (1997), which con-
Summer 2004 205

sists of seven five-point Likert-type statements previously used Table 1


to measure the presence and enforcement of codes of ethics, Characteristics of Sample (in Percent)
top management actions related to ethics, and corporate poli-
Company 1 2
cies on ethics (Ferrell and Skinner 1988; Hunt, Chonko, and
Wilcox 1984; Singhapakdi and Vitell 1991a; Vitell and Davis Years with Current Company
1990) (see the Appendix). Comparable to other studies (Loe 1. 1 year or Less 37 17
1996; Schwepker, Ferrell, and Ingram 1997), this scale was 2. 2 to 5 years 51 38
found to be reliable (α = 0.93). 3. 6 to 10 years 7 13
4. 11 or more years 5 32
Years in the Industry
Individual Commitment to Quality 1. 1 year or less 8 3
2. 2 to 5 years 20 17
Individual commitment to quality (ICQ) was measured as 3. 6 to 10 years 37 29
the salesperson’s affective desire to improve his or her territory’s 4. 11 or more years 35 51
service quality, which is an adaptation of Hartline and Ferrell’s Age
(1996) scale. Hartline and Ferrell (1996) introduced their scale 1. 29 years or less 26 10
2. 30 to 39 years 45 51
when they selected nine items from Mowday, Steers, and
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3. 40 to 49 years 22 22
Porter’s (1979) organizational commitment scale. Because this 4. 50 to 59 years 5 17
scale was originally designed to measure affective commit- 5. 60 years and older 2 —
ment to an organization, Hartline and Ferrell (1996) reword Gender
the items to reflect a manager’s affective commitment to ser- 1. Male 92 87
2. Female 8 13
vice quality. Although this scale was originally targeted at man-
Income
agers, it was deemed suitable in its present form for employees, 1. $20,000–$29,000 10 2
in general, and salespeople, in particular, because of its ge- 2. $30,000–$39,000 38 9
neric content. Hence, both Hartline and Ferrell (1996) and 3. $40,000–$49,000 18 22
the current study measure individual respondent’s own com- 4. $50,000–$59,000 16 29
mitment to service quality. The salespeople were asked to in- 5. $60,000–$69,000 7 20
6, $70,000–$79,000 5 12
dicate their agreement with each item through a five-point 7. $80,000–$89,000 2 6
scale ranging from “strongly disagree” to “strongly agree.” The 8. $90,000–$99,000 — —
nine-item scale was found to be reliable (α = 0.90), as did 9. $100,000 or more 4 —
previous studies (Hartline and Ferrell 1996; Loe 1996). Education
1. Less than high school 2 —
2. High school 11 8
Organizational Commitment 3. Some college 39 25
4. Four-year college 35 44
Organizational commitment (OC) was operationalized by 5. Graduate school 13 23
using a four-item, three-point Likert-type scale that captures Response Rate 100 71
a salesperson’s psychological bonds to the organization and
strength of intentions to remain with the organization. The
salespeople were asked to indicate their agreement with each use with salespeople in these previous studies, and the design
item ranging from “no, definitely would not leave” to “uncer- to measure the same construct, it was deemed appropriate for
tain about leaving” to “yes, definitely would leave.” The origi- this particular study. The scale reliability (α = 0.86) is com-
nal scale was developed by Hrebiniak and Alutto (1972). parable to other studies employing similar scales (Dubinsky
Dubinsky and Hartley (1986) introduce the four-item ver- and Hartley 1986; Hampton, Dubinsky, and Skinner 1996).
sion. Hampton, Dubinsky, and Skinner (1996) and Hunt,
Wood, and Chonko (1989) also use the shorter version in a Job Performance
study with salespeople. The original scale was developed to
measure retail salespeople’s commitment to the retail organi- Salesperson performance was measured by using a self-report
zation (Still 1983). Hunt, Chonko, and Wood (1985) also approach. Self-report methods have been frequently used in
use the scale to determine commitment of marketers in gen- sales management studies (cf. Behrman and Perreault 1982,
eral. This scale is based on the definition of organizational 1984; Chonko, Tanner, and Weeks 1993; Churchill, Ford,
commitment as a “strong desire to remain a member of the and Walker 1974; Tyagi 1985; Weeks and Nantel 1992; Weeks
particular organization, given opportunities to change jobs” and Stevens 1997). In this study, each salesperson provided
(Hunt, Chonko, and Wood 1985, p. 116). Due to the scale’s by percentage how he or she compared himself or herself with
206 Journal of Personal Selling & Sales Management

Table 2 Figure 2
Confirmatory Factor Analysis Structural Model

Construct

Commitment to Ethical Organizational


Quality Climate Commitment

Q1 0.628
Q2 0.584
Q3 0.875
Q4 0.841
Q5 0.702
Q6 0.812
Q7 0.816
Q8 0.621
EC1 0.744
EC2 0.855
EC3 0.911
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χ2145 = 182.76, p = 0.02, GFI = 0.89, AGFI = 0.86, RMR = 0.04


EC4 0.851
EC5 0.892 Note: Paths show standardized regression weight (t-values).
EC6 0.627
OC1 0.668
OC2 0.738
OC3 0.657 sure individual commitment to quality. Consequently, the
OC4 0.606 remaining eight items in this scale are used for this analysis.
Confirmatory factor analysis indicates that the measure-
Notes: χ2129 = 154.09, p = 0.065, GFI = 0.901, AGFI = 0.869,
ment model produces acceptable fit to the data (χ2129 = 154.09,
RMR = 0.046.
p = 0.065, GFI [goodness-of-fit index] = 0.901), thus pro-
viding evidence of discriminant and convergent validity. The
standardized factor loadings (see Table 2) confirm that the
their peers for their annual performance. Prior to analysis, scale items appropriately load only on the respective latent
the self-report performance measure was standardized in ac- constructs.
cordance with the distribution of scores within each sales-
person’s company. Structural Model

RESULTS The proposed structural model including the hypothesized


relationships among the constructs provides acceptable fit to
To account for the possibility that the proposed relationship the data ( χ2145 = 182.76, p = 0.02, GFI = 0.89). Figure 2
might differ between the two companies in the sample, a reports the standardized coefficients and associated t-values
stacked group structural equation modeling (SEM) analysis for each of the hypothesized paths. As expected (H1), organi-
was conducted. The results revealed no significant differ- zational ethical climate has a strong influence on individual
ences in any of the hypothesized relationships between the commitment to quality (0.492, t = 4.88, p < 0.001). Simi-
two companies. larly, ethical climate significantly influences organizational
commitment (0.225, t = 2.28, p < 0.025), supporting H2.
Confirmatory Factor Analysis Counter to expectations (H3), the firm’s ethical climate does
not have a significant direct effect on individual performance
SEM was used to test the hypothesized relationships. We first (0.023, t = 0.237, n.s.). However, ethical climate does pro-
examined the measurement model including the measures of duce substantive indirect effects on individual performance
ethical climate, individual commitment to quality, and orga- through individual commitment to quality and organizational
nizational commitment. An initial confirmatory factor analysis commitment (see Table 3).
revealed that one item from Hartline and Ferrell’s (1996) nine- As hypothesized (H4), an individual salesperson’s commit-
item scale was unacceptable. This item (“The way I feel about ment to quality has a significant influence on the salesperson’s
quality is very similar to the way my organization feels about performance (0.180, t = 1.82, p < 0.05). Organizational com-
quality”) was highly correlated with other items in the mea- mitment positively affects the individual salesperson’s perfor-
surement model, indicating that it does not uniquely mea- mance (0.202, t = 2.12, p < 0.025), supporting RQ1. In this
Summer 2004 207

Table 3
Direct and Indirect Effects on Individual Performance

Individual Performance
(SMC = 17.5 percent)

Standardized Effects

Individual Factors Total Effect Direct Effect Indirect Effect

Ethical Climate 0.135 –0.003 0.138


Individual Commitment to Quality 0.213 0.213* —
Organizational Commitment 0.153 0.153* —
Individual Factors (controls)
Tenure 0.257 0.134 0.123
Compensation 0.225 0.225* —

* significant at p < 0.05; as would be expected, individuals with longer tenure earn higher levels of compensation (0.54, t = 5.24, p < 0.01).
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data, individual commitment to quality and organizational DISCUSSION


commitment are not correlated (–0.104, t = –1.01, n.s.).
Contribution

Controlling for Individual Factors The current study extends Schwepker’s (2001) work, as well
as provides support for the relationship he reports between
In order to account for other individual factors that might ethical climate and organizational commitment. More spe-
explain an individual salesperson’s performance, we calculated cifically, the current study indicates that additional benefits
the relative effects of career factors—tenure (years in current of enhanced individual commitment to quality, increased or-
position, years in career, years employed with the current com- ganizational commitment, and high performance levels might
pany) and compensation. For modeling purposes, years in cur- be gained by establishing higher levels of ethical climate. Fur-
rent position, years in career, and years with the company were thermore, our preliminary evidence suggests individual com-
treated as indicators forming the tenure construct. As would mitment to quality has a positive effect on performance.
be expected, the length of tenure is positively correlated with The current study adds to the literature by demonstrating
levels of compensation (r = 0.546, t = 5.24, p < 0.01). how ethical climate is related to an individual salesperson’s
Table 3 reflects the results of including the salesperson’s commitment to quality. Thus, our findings support the prior
tenure and compensation in the structural model. Overall, research of Loe (1996), who solicited feedback from the ex-
the organizational and individual variables explain 17.5 per- ecutives, managers, frontline employees, and salespeople
cent of the variance in the individual performance levels re- within one organization to examine the relationship between
ported by salespeople. The individual’s reported level of ethical climate and individual commitment to quality. To the
compensation positively influences the individual salesperson’s best of our knowledge, with the exception of Loe’s (1996)
performance (0.225, t = 2.30, p < 0.025). Hence, not surpris- study, no research looks at the relationship between ethical
ingly, individuals who make more money tend to be better climate and individual commitment to quality. In the cur-
performing salespeople. Although tenure does not have a sig- rent study, we have extended Loe’s research by focusing strictly
nificant direct effect on individual performance (0.134, t = on salespeople.
1.11, n.s.), the total indirect and direct effects of tenure on With the exception of Babin, Boles, and Robin (2000)
performance is relatively strong (0.257). Importantly, even and Schwepker (2001), no other studies examine the rela-
when accounting for the effects of tenure and compensation tionship between ethical climate and organizational commit-
in explaining salesperson performance, individual commit- ment in the sales context. Other studies have focused on the
ment to quality and organizational commitment remain sig- aforementioned relationship for researchers, hospital employ-
nificant predictors (p < 0.05) of individual performance. ees, purchasing executives, and managers (Hunt, Wood, and
Further, indirectly, the firm’s ethical climate contributes to Chonko 1989; Kelley and Dorsch 1991; Sims and Kroeck
individual performance levels (0.135) is comparable to the 1994). The current study builds on past research by examin-
direct effects of organizational commitment (0.153). ing the relationship between ethical climate and organizational
208 Journal of Personal Selling & Sales Management

commitment in the business-to-business environment among result in them taking their business elsewhere and undermin-
salespeople, and illustrates the relevance for organizations to ing their willingness to provide you access to other depart-
establish the proper ethical climate in order to improve ments within the company. The above approach is suitable
salesperson’s commitment to the firm and desired business for an organization that believes in “taking the high road”
outcomes. and has an ethical corporate climate.
Bruce (1994) and Babin, Boles, and Robin (2000) call for Finding a significant relationship between individual com-
research that explores potential antecedents of sales perfor- mitment to quality and performance corroborates findings
mance. In response to this call, the current study investigated in previous research. Other studies (cf. Phillips, Chang, and
the relationship between ethical climate and performance. Buzzell 1983) conclude firms that emphasize strategies that
Although this study does not find a direct relationship be- focus on quality often experience greater market share and
tween ethical climate and performance, an indirect relation- return on investment. Furthermore, Grosshans (1989) sug-
ship between these constructs when using individual gests quality work is a cornerstone of a successful organiza-
commitment to quality and organizational climate as inter- tion. Cronin and Taylor (1992) find service quality positively
vening variables is revealed. These findings are encouraging, influences customer satisfaction, which in turn positively in-
as Churchill et al. (1985) report in their meta-analysis that fluences purchase decisions and performance.
the studied variables account for less than 10 percent of the Findings from the current study also illustrate the poten-
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observed variation in sales performance. Therefore, any find- tial importance of ethical climate in the sales context, as ethi-
ings revolving around an increase in performance is extremely cal climate appears to indirectly influence performance
important. According to the preliminary findings in the cur- through organizational commitment. Such intervening rela-
rent study, we now recognize that if we can implement strat- tionships might explain why the results of previous research
egies that enhance our salespeople’s commitment to quality, do not reflect a direct relationship between ethical climate
and to their organization, it might translate into higher per- and performance.
formance levels. Ethics research is conducive to the possibility of socially
desirable responses. This study attempted to guard against
such responses by guaranteeing anonymity. The surveys were
Managerial Implications and Limitations either collected personally by the researchers or were mailed
directly to the researchers. Furthermore, the generalizability
As previously noted, an organization’s ethical climate influ- of the current study’s findings is limited by the two-firm
ences the ethics of its employees (Verbeke, Ouwerkerk, and sample, the size of the sample, and the gender mix.
Peelen 1996; Wimbush and Shepard 1994). Creating an ethi- Using a self-report performance measure and, in particu-
cal climate by establishing and enforcing codes of ethics, poli- lar, a one-item measure also is a limitation of this study. For
cies and directives that specify, discourage, monitor, and example, Jaramillo, Carrillat, and Locander (2003) find that
correct unethical behavior has often been considered as a bottom performers overestimate their performance, whereas
method to curb unethical behavior within organizations. top salespeople underestimate their job performance, which
Schwepker (2001) finds that creating such a climate has ad- is referred to as better-than-average effect and below-average
ditional benefits such as creating greater job satisfaction, stron- effect, respectively. Yet, when using supervisory ratings of sub-
ger organizational commitment, and lower turnover intentions ordinates, rater leniency has been found to occur, which is the
for at least one type of boundary spanner, salespeople. tendency to rate employees at the top of job performance scales
A clear trend in U.S. business strategies is to concentrate (e.g., Kane et al. 1995). Also, in a comparative study of sev-
on growing existing business relationships, especially the 20 eral types of performance measures (i.e., self-report, one-item
percent of the accounts that are generating 80 percent of the versus ten-item, objective company measures), Chonko et al.
revenue, and relying less on establishing new accounts since (2000) determine that for the self-report measures, there is a
this is typically a more profitable strategy to follow. Pursuing significantly positive correlation between the one-item and
a long-term relationship with accounts offers the opportu- ten-item scales. Therefore, the use of a one-item scale appears
nity to sell one’s current product line to different departments to be more parsimonious, whereas the use of a ten-item scale
within the same company and sell new product lines to the does not provide much additional insight. Furthermore, they
current buyer. Such a strategy encourages the selling organi- find that for the various performance measures, most of the
zation to follow through on all promises while operating at correlations (33 of 45; 73 percent) were below 0.20, indicat-
the highest ethical level. Some firms have even implemented ing very little common variance among the performance mea-
a “promise less and deliver more” strategy in order to foster sures. They conclude that the preponderance of low
better customer relationships. Following a lesser strategy will correlations among the performance measures indicates that
become obvious to existing customers and, in the short run, the different performance measures may be measuring differ-
Summer 2004 209

ent phenomena, illustrating the challenge in determining the der pressure to compete. Size of an organization may also serve
best performance measure to use for sales force studies. as an intervening variable, hypothesizing that smaller firms
are less ethical because they have to compete against larger,
Future Research more powerful players and feel they have to use unethical tac-
tics to compete. Finally, ethical conflict should be considered
A replication of the current study with a larger sample with as a mediator in ethical climate–individual commitment to
greater female representation across different cultures and with quality, ethical climate–organizational commitment, and ethi-
foreign-based salespeople may be fruitful in order to deter- cal climate–performance relationships.
mine if the relationships found in this study exist in other This research has demonstrated a positive individual com-
societies. The answer to this and other questions could prove mitment to quality–performance relationship, but, as de-
to be invaluable in the continuing quest for a sustained com- scribed in the literature, performance is multidimensional (e.g.,
petitive advantage in the international arena. Trust between Chonko et al. 2000). Research focused on understanding the
partners in the international marketplace is imperative for effect of individual commitment to quality on other job out-
success, as ethical issues will arise due to differences in cul- comes is needed. Further, research investigating the organiza-
ture. Research in global settings would provide information tional communications and empowerment (e.g., Flynn,
that would assist managers in determining whether they can Schroeder, and Sakakibara 1994), teamwork (e.g., Kanji and
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use the same managerial strategies with sales teams in other Asher 1995), and training/education (e.g., Woodruff 1995–
cultures or if culture-specific approaches are necessary. 96) is also suggested. If salespeople feel empowered and in-
Using a sample with a greater gender variance might pro- formed, will they increase their individual commitment to
vide insight regarding the need for different management ap- quality and performance? Does the pooling of expertise and
proaches. Investigating gender issues continues to be an resources increase individual commitment to quality and per-
important research focus, which is reflected in topics being formance? What training/education is needed to increase in-
covered such as gender-based barriers to senior management dividual commitment to quality and performance?
(Oakley and Lynch 2000), gender differences of Russian man-
agers regarding ethical conduct (Deshpande, Joseph, and CONCLUSION
Maximov 2000), gender differences of business professionals
concerning ethical beliefs (Peterson, Rhoads, and Vaught The current study’s findings suggest ethical climate has either
2001), differences in management response to unethical sales direct or indirect relationships with several important sales
force behavior based on gender and weight of the salesperson force outcomes. Consequently, managers should strive to cre-
(Bellizzi and Hasty 2001), gender differences in rating of fe- ate and maintain an ethical climate within their organiza-
male sales managers in China (Liu, Comer, and Dubinsky tions. Such activity would be considered consistent with the
2001), comparison of female and male sales managers con- common wisdom that top management sets the ethical tone
cerning their behavior-based control approaches (Piercy, Cra- for an organization (e.g., Chonko and Hunt 1985). Compa-
vens, and Lane 2001), gender difference of salespeople in nies should be careful not to rely totally on individual integ-
Turkey concerning ethical perceptions (Ergeneli and Arikan rity to guide behavior (Boling 1978). Corporate management
2002), and gender comparison of U.S. and Indian individuals has an ongoing challenge to encourage high ethical standards
regarding cognitive moral development (Kracher, Chatterjee, throughout the organization. Given salespeople experience
and Lundquist 2002). Another example of the current impor- opportunities that threaten ethical performance, management
tance of gender issues is reflected in the 2002 special issues of must assume that ethical issues will arise. If a firm expects to
the Journal of Business Ethics. maintain a high level of ethical climate, guidance must be
Finally, it would be interesting to test potential intervening given through the development of a thorough written corpo-
variables in the model—that is, customer satisfaction (between rate code of ethics.
individual commitment to quality and performance)—to de- Conveying moral values are most forceful and the message
termine if hypothesized relationships are affected. Are custom- of ethical performance most eloquent when communicated
ers likely to see the effect of salesperson individual commitment by consistent ethical example and leadership at the highest
to quality in how their services are delivered? Also, one might levels of the firm. However, education and training sessions
consider using perceived stress at work as a mediating variable may be necessary to demonstrate the real-life aspect of ethical
in the relationship between ethical climate and individual com- decision-making. The message of ethical behavior may need
mitment to quality, ethical climate, and performance. For ex- to be supplemented with educational materials or approaches
ample, if successful salespeople have less stress than unsuccessful that reflect the circumstances and pressures inherent in real-
salespeople, then possibly successful salespeople may be more life sales roles. Furthermore, training regarding moral reason-
ethical than unsuccessful salespeople who are constantly un- ing may prove beneficial.
210 Journal of Personal Selling & Sales Management

Loe and Weeks (2000) find one’s moral reasoning (cogni- Bellizzi, Joseph, and Ronald W. Hasty (2001), “The Effects of a
tive moral development, CMD) can be influenced through Stated Organizational Policy on Inconsistent Disciplinary
ethics training. The four components proposed by Rest (1986) Action Based On Salesperson Gender and Weight,” Journal
and developed into a framework for teaching ethical decision- of Personal Selling & Sales Management, 21, 3 (Summer),
189–199.
making by Wotruba (1993) seem to provide a foundation upon
Berry, Leonard L., and A. Parsuraman (1997), “Listening to the
which a firm can build an effective ethics training program. Customer—The Concept of a Service-Quality Information
Loe and Weeks (2000) also find that CMD ethics training System,” Sloan Management Review, 38 (Spring): 65–76.
methods that employ sales role-play and sales-specific sce- ———, ———, Valarie Zeithaml, and Dennis Adsit (1994),
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——— (1994), “Ethical People Are Productive People,” Public
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Production and Management Review, 17 (3), 241–252.


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214 Journal of Personal Selling & Sales Management

APPENDIX
Questionnaire Scales
Ethical Climate: The following questions ask for your opinions regarding ethical issues within your organization. Please answer
these questions using the following scale:

1 2 3 4 5 6 7
Strongly Strongly
disagree agree

EC1: My company has a formal, written code of ethics.


EC2: My company strictly enforces a code of ethics.
EC3: My company has policies with regard to ethical behavior.
EC4: My company strictly enforces policies regarding ethical behavior.
EC5: Top management in my company has let it be known, in no uncertain terms, that unethical behavior will not be tolerated.
EC6: If a salesperson in my company is discovered to have engaged in unethical behavior that results primarily in personal gain
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(rather than corporate gain), he or she will be promptly reprimanded.


EC7: If a salesperson in my company is discovered to have engaged in unethical behavior that results in primarily corporate gain
(rather than personal gain), he or she will be promptly reprimanded.

Quality: The following questions ask how you feel and what you think about quality, in general, and service quality, in particu-
lar. Please remember that all of your answers are confidential. Please answer these questions using the following scale:
1 2 3 4 5
Strongly Strongly
disagree agree
Q1: I feel strongly about improving the quality of my organization’s services.
Q2: I enjoy discussing quality-related issues with people in my organization.
Q3: I gain a sense of personal accomplishment in providing quality services to my customers.
Q4: I completely understand the importance of providing high-quality services to our customers.
Q5: I often discuss quality-related issues with people outside of my organization.
Q6: Providing high-quality services to our customers should be the number one priority of my organization.
Q7: I am willing to put in a great deal of effort beyond that normally expected in order to help my organization deliver high-
quality services to our customers.
Q8: The way I feel about quality is very similar to the way my organization feels about quality.
Q9: I really care about the quality of my organization’s services.
Q10: The quality of service that I deliver to my customers is very high.

Organizational Commitment: Assume you are offered a position within another organization. Would you leave your present
organization under any of the following conditions?

1 2 3
No, Uncertain Yes,
definitely would about leaving definitely
not leave would leave
OC1: For a slight increase in pay.
OC2: For slightly more freedom to be personally creative.
OC3: For slightly more status.
OC4: To work with people who are a little friendlier.

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