Journal of Business Ethics (2011) 101:325342 DOI 10.

1007/s10551-010-0725-5

Springer 2011

Exploring the Inuence of Organizational Ethical Climate on Knowledge Management

Fan-Chuan Tseng Yen-Jung Fan

ABSTRACT. In recent years, knowledge management has been utilized as an essential strategy to foster the creation 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. However, 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 inuence on members evaluation, satisfaction, engagement, and job performance with respect to knowledge management practice. The research results reveal that several types of organizational ethical climate coexist in the organization and have different degrees of inuence on employees attitude as well as participation in knowledge management activities. In this article, we argue the importance of organizational ethical climate and highlight the implications of such a climate for facilitating knowledge management. KEY WORDS: knowledge management, organizational culture, organizational ethical climate, knowledge management 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

prots. Traditionally, organizations have paid considerable attention to physical assets such as natural resources, mechanical facilities, labor as well as nancial capital, and have evaluated countable revenues that are potentially achievable. Unlike the inevitable exhaustion of physical resources, knowledge is viewed as an intangible capital that can be created, shared, acquired, reused, and applied among people. The knowledge management strategies within an organization accelerate collective learning, increase competitiveness to the rapid market changes, and create greater customer satisfaction (Davenport and Prusak, 1998). In order to maximize innovation benets and competitive advantages, increasing numbers of organizations address to exploit and retain their collective intellectual capital as well as to foster collaborative working and learning between organizational members (Alavi and Leidner, 2001). Knowledge is derived essentially from an individuals tacit ideas, insights, expertise, and skills; it is further demonstrated in the form of explicit and codied 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 usually considered 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 facilitating the storage, retrieval, and application of knowledge, the notion of information technology (IT) itself falls easily into the myth of technology-determinism (Dixon, 2000; Pfeffer and Sutton, 1999).

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Fan-Chuan Tseng and Yen-Jung Fan 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 feelings about a particular organizations value, authority system, 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 construct 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 nd that several dimensions of organizational climate, including fairness, afliation, and innovativeness, have signicant effects on knowledge-sharing behaviors. However, the relationship between organizational ethical climate and knowledge management practice is seldom discussed. Our study follows the above-mentioned arguments about the association between knowledge management and organizational culture, and then further adopts the perspective of organizational ethical climate to explore its inuence 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 and their job performance, will be presented in the following section.

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 knowledge management depends on interpersonal interaction 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 knowledge management. 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 organizational knowledge management have been pointed out, including knowledge hoarding due to the nature 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 syndrome in 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 expensive and useless information junkyard (McDermott, 1999), where knowledge management can neither effectively facilitate collaboration nor leverage knowledge application among organizational members. Moreover, Duncan (1986) and McCann and Buckner (2004) emphasize that the ethical issues within an organization are essential for knowledge management initiatives to minimize ownership conicts as well as to reinforce the norms of knowledge creation, sharing, and retention. Organizational culture has been identied in the form of basic assumptions, values, and artifacts (Schein, 1985), which underlie organizational structures, practices, polices, and procedures (Reichers and Schneider, 1990). While climate refers to organizational members perceptions, behavior patterns are

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-making strategies, 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 practice. For example, Aristotle ethics concerns about the quality of best life in terms of the individuals noble, benecial, and pleasant virtues embedded in the social context and in service to the community (Boadie, 1994; Solomon, 2004). Ethics is principally

Organizational Ethical Climate and Knowledge Management 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 the judgment 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 teleology is concerned with that ethical good or right is also necessary for the self (Bergman, 2004). Generally, organizational members are guided with respect to what is right or wrong, acceptable or unacceptable through collective ethical norms. The fact that people know everyone should behave ethically not only implies the abidance of accepted rules and standards within the organization, but also reinforces an individuals reputation, trustworthiness, and longterm relationships with others. According to Aristotle, Solomon (2004) argues that organizational ethics is not the antagonism between personal prots and social responsibility. Instead, it presupposes the shared knowledge, experience, and values with public as well as private purposes. These ethical issues increasingly inuence organizational members moral concerns and behavior, which have been regarded as an accelerator for improving organizational performance. Several studies have argued that the organizational ethical climate inuences 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 psychological environment and increase employees job performance as well as their satisfaction. Victor and Cullen (1987) propose the concept of organizational ethical climate to reect one dimension 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 prot, efciency, friendship, team interest, social responsibility, personal morality, company rules/ procedures, and laws/professional codes. These types have been designed to recognize organizational

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ethical norms that are directly related to the supporting of ethical behavior. Based on Kohlbergs (1981) theory, three types of ethical standards affecting peoples behavior may be found: selfinterest, benevolence, and principle, which reect, 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 selfinterest or personal prot 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 community member) and joint interests resulting from authority, xed rules, or social order (Coldwell et al., 2008; Gross, 1995; Victor and Cullen, 1988). Finally, at the post-conventional level, principle regards the personal beliefs in procedural rules or professional codes based on social justice and obligation (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 inuence 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 of group identication, the gaining of information, and the making of judgments that meet an organizations expectations (Alavi and McCormick, 2004; Michailova and Hutchings, 2006). Organizational ethical climate reects 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 behavior in 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 anticipated to replace the organizational members 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 reected in terms of

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Fan-Chuan Tseng and Yen-Jung Fan The individuals satisfaction and benets of knowledge management engagement in organizations Satisfaction has been identied as an important measure for evaluating a particular product or service, widely used in consumer behavior (e.g., Cronin 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 knowledge management strategies are implemented in the organization, much knowledge still remains uncodied and present only in individuals minds. The facilitation of individuals satisfaction with knowledge management becomes a critical cognitive dimension for evaluating the state of organizational 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 management activity has a positive effect on organizational members knowledge satisfaction. In the KM success model proposed by Kulkarni et al. (20062007), it has been identied that the extent to which an individual recognizes the usefulness of knowledge management can reinforce their satisfaction with accessibility and adequacy of needed knowledge. Accordingly, we argue that more useful knowledge management activities in working practice contributes to greater levels of satisfaction with knowledge management among individuals. We propose the following hypothesis:
H4:

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 in inuencing 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 organizations ethical culture. Their study results demonstrate that ethical culture is the most signicant antecedent of knowledge management behavior within an organization, without which cultural values concerning individual power and competition will lead to knowledge hoarding (DeLong and Fahey, 2000). Jones (1991) argues that a feedback loop arises from both deontological and teleological evaluations, leads to ethical judgments, moral behavior, and the returns to environment and personal experiences. 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 psychological concept of attitude a perceptual evaluation of performance 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 signicantly leads to their intention to participate in knowledge-sharing activities. On the basis of the above-mentioned relationships among organizational ethical climate, individuals ethical judgment, behavior, and knowledge management activities, we develop the following three hypotheses: Organizational ethical climate will signicantly inuence an individuals engagement in knowledge management. H2: Organizational ethical climate will signicantly inuence an individuals attitude toward knowledge management. H3: An individuals attitude toward organizational knowledge management will positively inuence his or her engagement in knowledge management.
H1:

An individuals engagement in knowledge management will positively inuence his or her satisfaction with knowledge management.

Numerous studies have discussed the strategic benets of knowledge management, which is adopted as a useful approach to identifying, leveraging, 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

Organizational Ethical Climate and Knowledge Management organizational learning and capabilities to align individual 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 the achievement of successful technological innovation. The most signicant outcomes of knowledge management 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:
Organizational ethical climate
H1
H2

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KM satisfaction
H4

KM process engagement
H3

H6

H5

KM attitude

Job performance

Figure 1. Research model.

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 to collect and analyze empirical data. Table I presents the operational denition 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 perception of organizational knowledge management as good, benecial, pleasant, and valuable. With regard to 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 signicance of various processes of knowledge management, including creation, identication, collection, storage, distribution, and application. Generalizing from these studies, we identify the four basic dimensions of acquisition, collection, application, and sharing of knowledge. In addition, we follow Becerra-Fernandez and Sabherwal (2001) to examine satisfaction with organizational knowledge management, including the availability of knowledge for tasks, knowledge sharing among individuals, effectiveness improvement and so on. Finally, job performance is measured in terms of the aspects of work effectiveness,

An individuals engagement in knowledge management will positively inuence his or her job performance.

Moreover, knowledge management initiatives promote user satisfaction through better product or service quality, and then contribute to organizational performance as well as to business revenue (Anantatmula, 2007). Similarly, Yu et al. (2007) conceptualize the positive relationship between user satisfaction and organizational performance, including the enhanced ability to innovate new market products, effective coordination among employees as well 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 inuenced by the organizational members perceptions of their knowledge management activities. Although several studies identify a variety of constructs that inuence an individuals attitude and evaluation of job satisfaction and job performance (e.g., Mulki et al., 2008), few studies focus on peoples satisfaction with knowledge management practice or explore its potential effect on job performance. Thus, our study proposes the following hypothesis:
H6:

An individuals satisfaction with knowledge management will positively inuence his or her job performance.

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Fan-Chuan Tseng and Yen-Jung Fan

TABLE I Operational denitions of constructs

Construct Organizational ethical climate Knowledge management attitude

Operational denition An individuals perception of ethical procedures, policies, and behaviors in the organization An individuals psychological evaluation of organizational knowledge management in terms of the values of benecial, pleasant, good, and enjoyable attributes An individuals perception of the degree to which they are involved in an organizations KM-related activities An individuals perceptual evaluation of knowledge outcomes regarding the adequacy and accessibility of knowledge for the tasks An individuals perception of the improvement of job quality, productivity, effectiveness, effortlessness, and so on

Sources Victor and Cullen (1987, 1988), Cullen and Victor (1993) Ajzen (1988)

Knowledge management engagement Knowledge management satisfaction Job performance

Kulkarni et al. (20062007)

Becerra-Fernandez and Sabherwal (2001), Kulkarni et al. (20062007) Kulkarni et al. (20062007), Bontis and Serenko (2007)

efciency, 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, logical consistencies, and context tness. All the measurement 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 survey responses were received, with 51 being discarded owing to their incomplete answers. The remaining 297 questionnaires were subjected to further examination 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 ndings are incongruent with each other. For example, ve dimensions extracted by Malloy and Agarwals (2003) study in the notfor-prot context are individual caring, Machiavellianism, independence, social caring, and law and code. Peterson (2002) suggests the original nine-type model provides a better t 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 climate 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 testing the 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 climate dimensions self-interest, social responsibility, and law/professional codes are retained as the major ethical climate dimensions for further examination of the study hypotheses. The remaining items, and their means, standard deviations, as well as factor loadings are summarized in Appendix 1.

Organizational Ethical Climate and Knowledge Management Measurement reliability and validity The assessment of measurement reliability and validity of other constructs is subsequently performed. As indicated in Table II, the reliability is accepted, 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 represent the multidimensional relationships, we follow Edwards suggestion of performing a second-order CFA as well (Edwards, 2001). In addition, the discriminant 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 because the diagonal scores the square roots of the AVE are all greater than the correlations between pairs of constructs. Model estimation and hypothesis testing

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After examining the validity and reliability of the research construct, we use partial least squares (PLS) structural equation analysis to test the research hypotheses. PLS is widely used in IS research because of the minimal demands it makes on sample size and measurement scales. Moreover, PLS not only can be used for theory conrmation, 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 identication of three types of organizational ethical climate self-interest, social responsibility, and law/professional codes, we examine their specic relationships with the constructs of knowledge management engagement (H1a, H1b, and H1c) and knowledge management attitudes (H2a, H2b, and H2c). All paths are significant 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 results demonstrate that an individuals concern for self-interest does not have a signicant effect on his

TABLE II Assessment of internal consistency and convergent validity Construct Self-interest Social responsibility Law and professional codes Knowledge management attitude Knowledge management engagement* Knowledge acquisition Knowledge storage Knowledge application Knowledge sharing Knowledge management satisfaction Job performance* Efciency Effectiveness Quality Cronbachs alpha 0.66 0.72 0.77 0.87 0.86 0.85 0.90 0.93 0.91 0.93 0.82 0.69 0.68 0.80 Composite reliability 0.79 0.83 0.85 0.91 0.90 0.88 0.93 0.95 0.94 0.94 0.89 0.83 0.82 0.86 Average variance extracted 0.56 0.54 0.59 0.71 0.70 0.52 0.72 0.75 0.79 0.60 0.74 0.61 0.60 0.60

*Two constructs knowledge management engagement and job performance are second-order factors after conducting the hierarchical factor analysis.

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Job Social Law and Knowledge Knowledge Knowledge responsibility professional codes management management management performance attitude engagement satisfaction

Fan-Chuan Tseng and Yen-Jung Fan or her evaluation and participation in organizational knowledge management. Overall, an individuals perceptions of social responsibility and law/professional codes both make signicant impacts on his or her knowledge management behavior and attitude (H1b, H1c, H2b, and H2c). The positive relationship 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 signicantly enhanced by an individuals knowledge management engagement (H5) as well as their satisfaction with knowledge management (H6). All of the statistical estimates are summarized in Table IV.

0.78 0.48 Diagonal elements represent the square root of AVE for each construct; off diagonal elements are correlations among constructs. 0.85 0.35 0.44 0.43 0.84 0.62 0.53

0.86

Differences across ethical climate orientations In this study, three ethical climate dimensions, including self-interest, social responsibility, and law/ professional codes, are identied. The nding is consistent 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 similar organizational ethical climates. After the agglomeration 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 fty-seven samples are classied into cluster 1, being the higher level of all three ethical climate dimensions. Conversely, the remaining one hundred and forty individuals are classied 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 signicant F(4, 292) = 18.698, p = 0.00, and the null hypothesis that the KM-related construct did not differ was rejected. Table VI demonstrates the signicant differences between the two clusters, indicating that the high-organizational ethical climate cluster has more positive KM attitude, KM

Assessment of discriminant validity

TABLE III

Self-interest

Mean

Self-interest Social responsibility Law and professional codes Knowledge management attitude Knowledge management engagement Knowledge management satisfaction Job performance

Constructs

2.96 3.64 3.66 3.92 3.61 3.61 3.59

1.10 0.77 0.78 0.67 1.05 0.77 0.73

SD

0.74 0.12 0.15 0.15 0.03 0.09 0.05

0.74 0.50 0.37 0.37 0.40 0.22

0.77 0.39 0.32 0.44 0.25

Organizational Ethical Climate and Knowledge Management

TABLE IV Path assessment and hypothesis tests Dependent construct (R2) KM engagement (0.20) Independent construct Self-interest Social responsibility Law/professional codes KM attitude Self-interest Social responsibility Law/professional codes KM engagement KM engagement KM satisfaction Path coefcient -0.05 0.24 0.12 0.22 0.09 0.23 0.27 0.62 0.38 0.24 t Value 0.66 4.20 1.74 3.81 1.34 4.22 4.22 14.70 6.10 3.33 Result

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KM attitude (0.20)

KM satisfaction (0.38) Job performance (0.32)

H1a Not supported H1b supported H1c supported H3 supported H2a Not supported H2b supported H2c supported H4 supported H5 supported H6 supported

TABLE V Means and standard deviations for the two clusters Constructs of ethical climates 1 (N = 157) Mean Self-interest Social responsibility Law/professional codes 3.47 3.96 4.01 SD 0.62 0.44 0.44 Cluster 2 (N = 140) Mean 2.92 3.27 3.26 SD 0.69 0.44 0.49 53.24 182.41 189.29 0.00 0.00 0.00 F values Signicance of F

TABLE VI MANOVA test across two OEC clusters KM-related constructs 1 (N = 157) Mean KM engagement KM attitude KM satisfaction Job performance 3.84 4.10 3.82 3.70 SD 0.61 0.52 0.54 0.44 Cluster 2 (N = 140) Mean 3.38 3.72 3.37 3.48 SD 0.54 0.51 0.54 0.47 39.77 40.90 50.33 16.33 0.00 0.00 0.00 0.00 F values Signicance of F

engagement, KM satisfaction, and job performance compared to the low-organizational ethical climate cluster. Additionally, the results reveal that the variance of four KM-related constructs accounting for organizational ethical climate was 11.9% (KM attitude), 11.6% (KM engagement), 14.3% (KM satisfaction), 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.,

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Fan-Chuan Tseng and Yen-Jung Fan bound to create shared benets 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 identied in this article to examine the effect of individuals evaluation of ethical climates on knowledge management. The three dimensions of organizational ethical climate selfinterests, social responsibility, and law/professional codes in cluster 1 are all shown to be higher than in cluster 2. The results demonstrate that the stronger 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 satisfaction among employees. This supports our assumption that knowledge management is inuenced in a pronounced manner when individuals have stronger ethical climate perceptions. As a combination of organizational common knowledge and personal intellectual property, this nding 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) contention that the perceptions of self-ownership and organizational collective ownership knowledge can co-exist and develop positive relationships within an organization. Our research results support the view that individuals 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 enhancing individuals job skills, effectiveness, and decisionmaking strategies. In sum, our research identies the existence of organizational ethical climates, which helps individuals dene 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

2003; Detert and Edmondson, 2007). Thus, there may be an irreconcilable conict between the private intellectual asset and collective knowledge in an organization. Interestingly, the research results indicate that three ethical levels egoism, benevolence, 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 management engagement and attitude in the organization. Practically, social responsibility highlights the individuals understanding of what is benecial to the customers and the public. Law and professional codes reect the universal principles to which individuals conform within the professional organization, 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 ought to behave and how their decisions or actions may affect others (McDaniel, 2004). Therefore, organizational 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 approval as well as the organizational benets (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, facilitating cooperation among members, and enhancing their perception of organizational knowledge management 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

Organizational Ethical Climate and Knowledge Management 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 organizations collective effectiveness.

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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 identied. These three ethical climate dimensions meet Victor and Cullens (1987) ethical climate criteria: egoism, benevolence, and principle, which are derived from the pre-conventional, conventional, and post-conventional orientations of moral development proposed by Kohlberg (1981). It is also consistent 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 consequence of ones moral identity with the self (Bergman, 2004). The results of this research indicate that the concern for self-interest does exist but does not signicantly affect the individuals evaluation of and behavior toward knowledge management. In this study, one possible explanation for this may be the stronger inuence of social responsibility and law/ professional codes on organizational knowledge management, which would lie in the cultural dimension-collectivism. Given the concept of collectivism, individuals with common interests and values appear to take collective and mutually benecial actions (Earley and Gibson, 1998). Furthermore, in-group norms and public recognition are more important than individual rewards in consideration 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 receive 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 obligation 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 concernfor-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 of theoretical and practical designs that provide organizations 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 inuence of organizational culture or climate on knowledge management practice, there has been far less research conducted from the ethical climate perspective. To address this issue, several constructs and hypothesized relationships are designated in our research model. The results of this study may assist in exploration of the claim discussed above. In terms of the practical application of this research, organization managers should be aware that any knowledge management strategy or KMS adoption does not guarantee the success of knowledge management. Since knowledge management practice is implemented in the social context, it is essential to understand the inuence 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 organizations, but individual s ethical decision making also exerts the inuence on ones perception and judgment on the ethical behavior. As Jones (1991) and

336

Fan-Chuan Tseng and Yen-Jung Fan organizational ethical climate, which does not collect more specic and sufcient opinions about organizational knowledge management. Future research may benet from conducting a longitudinal qualitative approach to ascertain more critical antecedents 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 research subjects come from various industry domains. It would perhaps be more useful for future studies to focus on one specic industry to understand the main features of organizational knowledge management in that particular industry.

Gross (1995) note in the review of Kohlberg and Rests ethical models, ethical judgments and participation of collective action are moderated by individual factors ego strength, tendency of eld dependence, and locus of control as well as situational factors including job context, organizational culture, and work incentives. In our study, organizational 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 studies. The connection between psychological factors and moral judgments deserves more attention for the future study. Second, it is a cross-sectional quantitative study to understand employees perception of

Appendix 1
Summary of measurement and scale properties Original item Self-interest SI1 SI2 SI3 Social responsibility SR1 Measurement Mean SD Factor loading

In this company, people are, by and large, pursuing their own interests There is no room for ones own personal morals or ethics in this company In this company, people protect their own interest above other considerations

2.76 3.07 3.81

1.04 0.90 0.79

0.59 0.77 0.86

It is expected that you will always do what is right for the customer and public SR2 People in this company have a strong sense of responsibility to the outside community SR3 People in this company are actively concerned about the customers, and the publics interest SR4 The effect of decisions on the customer and the public is a primary concern in this company Law and professional codes LA1 The rst consideration is whether a decision violates any law LA2 People are expected to comply with the law and professional standards over and above other considerations

3.87 3.56 3.51

0.69 0.76 0.79

0.66 0.74 0.81

3.61

0.77

0.74

3.76 3.57

0.84 0.80

0.73 0.80

Organizational Ethical Climate and Knowledge Management

APPENDIX continued Original item LA3 Measurement Mean 3.76 3.54 SD 0.71 0.75

337

Factor loading 0.77 0.78

In this company, people are expected strictly to follow legal or professional standards LA4 In this company, the law or ethical code of their profession is the major consideration Knowledge management attitude A1 I think participation in organizational knowledge management is good A2 I think participation in organizational knowledge management is benecial A3 I think participation in organizational knowledge management is valuable A4 I think participation in organizational knowledge management is pleasant Knowledge management engagement: knowledge acquisition C1 I acquire the knowledge that I need by referring to internal documents or data les in my organization C2 I acquire the knowledge that I need by referring to work manuals or regulations C3 I acquire the knowledge that I need by attending conferences or reviewing conference notes C4 I acquire the knowledge that I need by attending professional lectures or undergoing educational training C5 I acquire the knowledge that I need by using professional databases or web sites C6 I acquire the knowledge that I need by asking my colleagues or supervisors C7 I acquire the knowledge that I need by asking professionals in other related domains Knowledge storage C8 I keep records of working knowledge in a written format C9 I keep records of working knowledge as standardized procedures C10 I keep records of working knowledge in the information system C11 I often update the work-related prole for further use C12 I store the work-related rules or regulations in a written format or information system Knowledge application C13 I use knowledge to deal with work effectively C14 I use knowledge to solve problems C15 I use knowledge to improve efciency

3.99 4.02 4.00 3.67

0.63 0.60 0.62 0.76

0.87 0.88 0.88 0.75

3.59

0.90

0.81

3.42 3.44

0.96 0.92

0.79 0.70

3.36

0.99

0.76

3.74 3.77 3.47

0.95 0.84 0.94

0.69 0.65 0.67

3.71 3.41 3.48 3.42 3.42

1.01 1.15 1.13 1.08 1.12

0.84 0.85 0.88 0.84 0.82

3.62 3.69 3.66

0.90 0.91 0.89

0.88 0.91 0.91

338

Fan-Chuan Tseng and Yen-Jung Fan

APPENDIX continued

Original item C16 C17 C18 Knowledge sharing C19

Measurement I use knowledge to enhance my professional capabilities I use knowledge to develop new products or services I use knowledge to satisfy customers needs

Mean 3.69 3.30 3.46 3.86 3.74 3.96

SD 0.91 1.08 1.09 0.82 0.9 0.74

Factor loading 0.92 0.79 0.80 0.89 0.86 0.91

I am prepared to transfer my knowledge or experience to others C20 When discussing with my colleagues, I provide my opinions as much as I can C21 When colleagues encounter problems, I try my best to respond and provide the necessary information, documents, or techniques to them C22 I am willing to provide the opportunities for inexperienced colleagues to learn and try Knowledge management satisfaction D1 Im satised with the availability of knowledge for my tasks D2 The available knowledge improves my effectiveness in performing tasks D3 Im satised with the management of knowledge I need D4 Im satised with the knowledge available for the tasks under my direction D5 Im satised with knowledge sharing among individuals under my direction D6 The available knowledge improves the effectiveness of my directing D7 Im satised with the management of knowledge under my direction D8 Im satised with the knowledge available for various tasks across my organization D9 Im satised with knowledge sharing among various directorates in my organization D10 The available knowledge improves the organizations overall effectiveness D11 Im satised with the management of knowledge in my organization Job performance: efciency E1 The amount of work I nish exceeds the expectations of my boss E2 I am able to nish the work that my boss requires of me before the deadline E3 I can reduce the time needed to complete a routine task

4.01

0.78

0.89

3.71 3.78 3.58 3.70 3.79 3.69 3.51 3.50 3.45 3.55 3.44

0.74 0.74 0.77 0.67 0.70 0.71 0.74 0.78 0.84 0.79 0.82

0.75 0.73 0.78 0.81 0.78 0.76 0.82 0.79 0.75 0.77 0.79

3.54 3.87 3.63

0.70 0.61 0.73

0.77 0.78 0.80

Organizational Ethical Climate and Knowledge Management

APPENDIX continued Original item Measurement Mean SD

339

Factor loading

Job performance: effectiveness E4 My work performance always exceeds the objective that my boss sets E5 I can make creative and useful suggestions for the organization E6 I always satisfy the customers needs Job performance: quality E7 I have never been late in my work or caused any harm due to personal carelessness E8 I have never received any complaints about bad performance E9 My boss has always been satised with my work performance E10 I cooperate well with my colleagues, and have their respect and support E11 I interact well with colleagues in other departments, and have their trust and respect

3.70 3.33 3.64 3.36 3.39 3.53 3.68 3.80

0.70 0.78 0.68 0.80 0.80 0.65 0.68 0.65

0.86 0.62 0.83 0.66 0.73 0.82 0.76 0.77

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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: misfctseng@gmail.com Yen-Jung Fan Department of Information Management, Chang Jung Christian University, Tainan County, Taiwan, ROC

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