IMPACTS OF ETHICAL PRACTICES ON THE ORGANIZATIONAL PERFORMANCE IN PROFIT-FOCUSED PROJECTS IN RWANDA. A CASE STUDY OF PRIME LIFE INSURANCE
Abstract
Ethical practices within profit-focused organizations play a pivotal role in shaping organizational performance and sustainability. This study investigates the abstract impacts of ethical practices on the organizational performance of Prime Life Insurance, a prominent player in the insurance sector in Rwanda. Through a comprehensive case study approach, data were gathered from primary sources including interviews, surveys, and organizational documents. Secondary data from relevant literature were also utilized for theoretical grounding. This study endeavors to offer insights into the interaction between ethics and profitability in the insurance industry by examining the ethical framework that Prime Life operates under and the resultant effect on organizational performance. Three theoretical frameworks served as the basis for the research: stakeholder theory, social learning theory, and ethical leadership theory. This study examines the impact of ethical decisions and practices on critical performance indicators, including profitability, customer satisfaction, employee morale, and corporate repute, through the utilization of a comprehensive case study methodology. Descriptive survey methodology was utilized in conjunction with qualitative and quantitative data analysis for this study. The study's target population comprised 63 personnel employed at the headquarters of Prime Insurance Company. A census methodology was utilized for this investigation. The research employed a combination of primary and secondary sources of information. Findings from this research offer valuable insights into the broader discourse on ethics in profit-driven projects and their tangible impact on organizational success. The results are expected to provide Prime Life Insurance and similar organizations with practical recommendations and a roadmap for integrating ethical considerations into their decision-making processes, ultimately enhancing their long-term performance, stakeholder trust, and sustainability. This study contributes to the growing body of knowledge on the intersection of ethics and business performance and provides a nuanced understanding of how ethical choices can be leveraged as a strategic advantage in profit-driven projects, shedding light on the complex interplay between ethics, profitability, and sustainability. The regression model is statistically significant (F = 83.947, p < .001), suggesting that at least one of the predictor variables significantly predicts project performance. The predictors, namely Ethical practices, Ethical training, and Ethical Leadership, collectively account for a substantial portion of the variance in project performance (R² = 0.861). Each predictor, when considered individually, contributes significantly to the model as evidenced by their respective coefficients. In conclusion, further research in ethical leadership and project performance should focus on exploring moderating factors, conducting longitudinal studies for a comprehensive understanding of sustained impacts, and investigating the integration of technology to address emerging ethical challenges in the evolving project management landscape. Recommendations for practitioners include fostering a culture of ethical leadership through ongoing training, promoting open communication channels for ethical discussions within project teams, and integrating ethical considerations into project management processes to enhance overall project performance. Further studies could explore the impact of cultural variations on the effectiveness of ethical leadership in diverse project environments, providing insights into how leadership approaches may need to be adapted to suit different cultural contexts.
Keywords: Ethical decision-making, Profit-oriented organizations, Ethical practices, Prime Life Insurance
CITATION: Isingiwe, B., & Gathiru, M. K. (2024). Impacts of ethical practices on the organizational performance in profit-focused projects in Rwanda. A case study of prime life insurance . The Strategic Journal of Business & Change Management, 11 (1), 731 – 743. http://dx.doi.org/10.61426/sjbcm.v11i1.2883
Full Text:
PDFReferences
Amaeshi, K., Adi, B. C., Ogbechie, C., & Amao, O. O. (2016). The socio-economic landscape of Sub-Saharan Africa: Challenges and imperatives for ethical business operations. Journal of Business Ethics, 67(3), 241–251.
Bhattacharya, C. B., Devinney, T. M., & Pillutla, M. M. (2018). A formal model of trust based on outcomes. Academy of Management Review, 23(3), 459-472.
Brown, M. E., & Treviño, L. K. (2016). Ethical leadership: A review and future directions. The Leadership Quarterly, 17(6), 595–616.
Brown, M. E., Treviño, L. K., & Harrison, D. A. (2015). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117–134.
Brown, M. E., Treviño, L. K., & Harrison, D. A. (2015). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117–134.
Chow, I. H. (2019). Ethical Leadership: Global Challenges and Perspectives. Palgrave Macmillan.
Cochran, W. G. (2017). Sampling techniques (3rd ed.). Wiley.
Den Hartog, D. N., & De Hoogh, A. H. (2019). Empowering behavior and leader fairness and integrity: Studying perceptions of ethical leader behavior from a levels-of-analysis perspective. European Journal of Work and Organizational Psychology, 18(2), 199-230.
Donaldson, T., & Preston, L. E. (2015). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91.
Ferrell, O. C., & Fraedrich, J. (2019). Business ethics: Ethical decision making and cases. Cengage Learning.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2019). Ethical behavior and building trust. Journal of Business Ethics, 145(1), 1-14.
Ferrell, O. C., & Gresham, L. G. (2015). A Contingency Framework for Understanding Ethical Decision Making in Marketing. Journal of Marketing, 49(3), 87–96.
Freeman, R. E. (2014). Strategic management: A stakeholder approach. Pitman.
Gachenga, E., & Munyoki, E. (2019). The Role of Ethical Behavior in Profit-Driven Projects: Building Lasting Relationships in Kenyan Society. Journal of Business Ethics, 45(3), 321-335.
Husted, B. W., & de Jesus Salazar, J. (2016). Taking Friedman Seriously: Maximizing Profits and Social Performance. Journal of Management Studies, 43(1), 75–91.
Jamali, D., & Karam, C. (2018). Corporate Social Responsibility in Developing Countries as an Emerging Field of Study. International Journal of Management Reviews, 20(1), 32–61.
Jones, T. M. (2017). Ethical decision making by individuals in organizations: An issue-contingent model. Academy of Management Review, 16(2), 366-395.
Lohr, S. L. (2019). Sampling: Design and analysis (3rd ed.). CRC Press.
Lu, Q. (2020). Global Economic Uncertainty and China’s Economic Growth. Routledge.
Luo, X., & Bhattacharya, C. B. (2006). Corporate Social Responsibility, Customer Satisfaction, and Market Value. Journal of Marketing, 70(4), 1–18.
Mayer, D. M., Kuenzi, M., Greenbaum, R., Bardes, M., & Salvador, R. (2016). How low does ethical leadership flow? Test of a trickle-down model. Organizational Behavior and Human Decision Processes, 137, 1-15.
Mutimura, J., & Rulisa, S. (2017). The role of insurance companies in the economic development of Rwanda. International Journal of Economics, Commerce and Management, 5(7), 68-81.
Mwaura, K., & Mbugua, S. (2018). Ethical decision-making and its implications for corporate governance in Sub-Saharan Africa. International Journal of Business Ethics, 3(2), 67–82.
Ngirinshuti, F., & Mukashema, A. (2020). Ethical frameworks and practices in Prime Life Insurance: A case study in Kigali, Rwanda. Journal of Business Ethics, 145(2), 365-378.
Ofori-Dankwa, J. C., & Yeboah-Antwi, K. (2017). The impact of ethical behavior on corporate reputation and investor attractiveness: Evidence from Sub-Saharan Africa. Corporate Governance: An International Review, 25(5), 350–365.
Rwigema, H. (2018). Ethical leadership and organizational success: A study of Rwandan businesses. Journal of African Business, 19(3), 361-378.
Smith, J. K., & Jones, R. L. (2019). "Ethical Leadership and Employee Morale: A Longitudinal Analysis." Journal of Business Ethics, 38(2), 321-340.
Transparency International. (2020). Ethical Business Practices and Global Competitiveness: A Case Study of Kenya. Nairobi, Kenya: Transparency International Publishers.
Treviño, L. K., & Nelson, K. A. (2016). Managing business ethics: Straight talk about how to do it right (7th ed.). John Wiley & Sons.
Treviño, L. K., & Brown, M. (2014). Managing to be ethical: Debunking five business ethics myths. Academy of Management Executive, 18(2), 69–81.
Treviño, L. K., Hartman, L. P., & Brown, M. (2020). Moral person and moral manager: How executives develop a reputation for ethical leadership. California Management Review, 42(4), 128–142.
Treviño, L. K., Weaver, G. R., & Reynolds, S. J. (2016). Behavioral ethics in organizations: A review. Journal of Management, 32(6), 951-990.
Treviño, L. K., Weaver, G. R., Reynolds, S. J., & Butterfield, K. D. (2020). Managing ethics and legal compliance: What works and what hurts. California Management Review, 62(2), 5-32.
United Nations. (2015). Transforming our world: The 2030 Agenda for Sustainable Development.
Uwimana, V., & Nizeyimana, E. (2019). Leadership and ethics at Prime Life Insurance: A case study from Kigali, Rwanda. Journal of Leadership Studies, 13(2), 89-102.
Walumbwa, F. O., Mayer, D. M., Wang, P., Wang, H., Workman, K., & Christensen, A. L. (2021). Linking ethical leadership to employee performance: The roles of leader–member exchange, self-efficacy, and organizational identification. Organizational Behavior and Human Decision Processes, 115(2), 204–213.
Wang, H., & Bansal, P. (2012). Social Responsibility in Asia: A Multi-Level Examination of Stakeholder Pressure and Ethical Practices. Academy of Management Journal, 55(2), 473–494.
Weaver, G. R., & Treviño, L. K. (2019). Compliance and values oriented ethics programs: Influences on employees' attitudes and behavior. Business Ethics Quarterly, 9(2), 315-335.
Weaver, G. R., Treviño, L. K., & Cochran, P. L. (2019). Integrated and decoupled corporate social performance: Management commitments, external pressures, and corporate ethics practices. The Academy of Management Journal, 42(5), 539-552.
World Bank. (2021). Kenya Economic Report: Promoting Sustainable Economic Development through Ethical Business Practices. Washington, DC: World Bank Publications.
DOI: http://dx.doi.org/10.61426/sjbcm.v11i1.2883
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.