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The influence of organizational

culture on employees' ethical

behavior: the moderating role

of moral character

Final version

University of Amsterdam

Faculty of Economics and Business

MSc. in Business Administration – Strategy Track

Name: Sabine Silbeek

Student number: 11079533

Date of submission: 17-06-2016

First supervisor: mw. dr F.M. Bridoux

Second supervisor: dhr. dr. J.W. Stoelhorst

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Statement of originality

This document is written by Sabine Silbeek who declares to take full

responsibility for the contents of this document. I declare that the text and the

work presented in this document is original and that no sources other than those

mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision

of completion of the work, not for the contents.

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TABLE OF CONTENT

ABSTRACT ... 5

1. INTRODUCTION ... 6

2. LITERATURE REVIEW ... 8

2.1 Ethical decision-making ... 8

2.2 An important organizational characteristic: Organizational culture ... 10

2.3 Person-situation interaction ... 13

2.4 Moral character ... 14

3. CONCEPTUAL FRAMEWORK ... 17

3.1 Context ... 17

3.2 Organizational culture and ethical behavior ... 17

3.3 Clan culture ... 20

3.4 Hierarchy culture ... 22

3.5 Adhocracy culture ... 25

3.6 Market culture ... 28

3.7 Organizational culture, moral character and ethical behavior ... 31

4. METHODS ... 37 4.1 Research method ... 37 4.2 Sample ... 38 4.3 Measures ... 39 5. RESULTS ... 41 5.1 Reliability analyses ... 41 5.2 Descriptive statistics ... 44 5.3 Correlations analyses ... 46

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5.4 Normality analyses ... 49 5.5 Hypotheses testing ... 50 5.6 Additional analyses ... 58 6. DISCUSSION ... 63 6.1 Summary of results ... 63 6.2 Reflection on results ... 64

6.3 Theoretical and practical implications ... 67

6.4 Limitations and future research ... 69

7. CONCLUSION ... 73

REFERENCES ... 74

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ABSTRACT

Over the past century, there has been a dramatic increase in research on the antecedents of (un)ethical behavior of employees. While previous research is mainly focused on the effect of individual factors on ethical behavior, much less is known about how the broader concept of organizational culture influences ethical behavior. Based on the competing values framework (Quinn & Rohrbaugh; Cameron & Quinn, 2006; 2011), this study examines how organizational cultures (e.g. clan, hierarchy, adhocracy and market culture) influence employees' ethical behavior. Moreover, since few studies have investigated the interaction effects of organizational and individual characteristics on ethical behavior, this study tries to explore the interaction effects between organizational culture and individual's moral character. The six hypotheses of this study were tested by means of an online questionnaire among 282 employees in the Netherlands. The results neither provide support for the relationship between the four organization cultures and ethical behavior, nor for the moderating role of moral character. However, additional results revealed a direct, positive relationship between moral character and ethical behavior, and between moral character and clan and adhocracy cultures. Possible explanations for the non-significant results, as well as theoretical and practical implications and directions for future research are discussed.

Keywords: ethical behavior, moral character, organizational culture, ethics, ethical

decision-making, competing values framework, clan culture, hierarchy culture, adhocracy culture, market culture.

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1. INTRODUCTION

In recent years, there has been an increasing interest in the antecedents of (un)ethical behavior due to the enormous effects unethical behavior can have on a firm's reputation and performance. One of most recent examples of unethical decision-making on organizational level is Volkswagen's installation of a 'defeat device'. This software in diesel engines could detect when they were being tested for nitrogen oxide emission and change the performance accordingly to improve results. This scandal will cost Volkswagen billions of dollars and has severely damaged the carmaker's reputation. Also at lower levels, unethical behaviors of individuals can have a huge impact on the firm's reputation and performance. This unethical employee behavior can take many forms, ranging from theft to disclosure of confidential information to the misrepresentation of products and services. As a result of this behavior firms are confronted with inventory shrinkage, law suits, and fines (Crosse, 1993). Employee theft alone has cost retail outlets in US fifteen billion in 2014 (Maurer, 2015). The substantial negative yet potentially preventable costs to society and organizations resulting from individual's unethical behaviors suggest that ethical decision-making might be considered one of the most important processes to better understand, not only for the academic management field, but also for the corporate community and society (Treviño, 1986). By investigating potential factors that might influence unethical decision-making, managers could avoid the adverse impacts of unethical decisions in the future.

A large body of literature has focused on the conditions and factors that influence ethical decision-making processes (e.g. Lehnert, Park & Singh, 2015; O'Fallon & Butterfield, 2005; Tenbrunsel & Smith-Crowe, 2008; Treviño, den Nieuwenboer & Kish-Gephart, 2014; Treviño, Weaver & Reynolds, 2006). These conditions and factors relate to individual differences, issue characteristics, and the context in which the ethical decision takes place, which is the organizational context for ethical decisions made by employees. Previous

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research on the effects of organizational characteristics on ethical decision-making are mostly focused on the organization's ethical climate and culture. These constructs refer to ethics-relevant features of organization environment (Treviño, 1986; Victor & Cullen, 1988), and previous research has shown that some ethical climates (benevolent and principled ethical climates) are positively related to ethical decision-making, while another ethical climate (egoistic ethical climate) is negatively related ethical decision making (Kish-Gephart, Harrison & Treviño, 2010). Moreover, the strength of ethical cultures is positively related to ethical decision-making (Kish-Gephart et al., 2010).

Despite the extensive research on ethical climate and ethical culture, much less is known about how the broader concept of organizational culture influences the ethical decision-making. An organizational culture is a set of assumptions, values and beliefs that are reflected in both informal norms and formal systems (O'Reilly, Chatman & Caldwell, 1991; Treviño, 1986). Although we know that different organizational cultures are dissimilar on their association with morality: clan culture is associated with a high morale whereas hierarchy culture is associated with a low morale (Cameron & Quinn, 2006); it is still unknown to what extent organizational cultures (i.e. clan, adhocracy, hierarchy and market) will influence ethical decision-making. Moreover, a recent meta-analysis of Lehnert et al. (2015) found, in contrast to previous reviews, a somewhat mixed result of the effects of organizational culture on ethical decision-making. These authors argue that more research is needed to further understand the role of organizational factors in the ethical decision-making

process.

The main purpose of this research is to determine how organizational cultures influence employees' ethical decision-making. Moreover, I will explore the interaction effects between different organizational cultures and individual's moral character. An individual's moral character is its ''disposition to think, feel and behave in an ethical versus unethical

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manner'' (Cohen & Morse, 2014: 45). Hence, I use the term moral character trait to refer to a variety of individual differences. While most of the previous research has focused on the effects of individual-, organizational- or issue-contingent characteristics on ethical decision-making, there have been only few empirical investigations into the interaction effects of these characteristics (Treviño et al., 2006). Yet, the four types of organizational cultures may affect individual ethical decision-making differently, among others, because the values characterizing each of the organizational culture match better the personality of some individuals than of others. Consequently, I expect the effect of organizational cultures to be moderated by moral character.

In addressing the aforementioned gaps, this study makes the following contributions to the literature. First, this study extends the literature on organizational characteristics by investigating the effect of organizational culture, rather than ethical climate or culture, on ethical behavior. The effect of four different organizational cultures as is recently developed by Cameron & Quinn (2006; 2011) on ethical decision-making will be explored. Second, this study integrates organizational and individual characteristics in explaining individual ethical behavior in organizations. In order words, this study tries to explore the interaction effects between organizational and individual characteristics. This study goes beyond the direct effects of individual characteristics on ethical decision-making and investigates the indirect effects of moral character. The possible interdependency between persons (i.e. moral character) and situations (i.e. organizational culture) will be explored. Third, the present research will also contribute to advancing the literature on moral character.

2. LITERATURE REVIEW 2.1 Ethical decision-making

An ethical decision is ''a decision that is both legal and morally acceptable'' (Jones, 1991: 367). In contrast, an unethical decision is ''either illegal or morally unacceptable to the

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larger community'' (Jones, 1991: 367). Hence, morality and ethics are terms used to describe right and wrong conduct. In this article, I will use these terms interchangeably as if often done (e.g., Cohen & Morse, 2014; Treviño et al., 2006). Ethical or unethical decisions can be made at three different levels: individual, team or organizational level. In this study, I will focus on the individual ethical decision-making in a business context. A focus on the individual level is in line with most of the existing literature on ethical decision-making (Treviño et al., 2006). During the 1980s, Rest (1986) introduced a four-stage model of individual ethical decision-making that can easily be generalized to organizational settings (Jones, 1991). According to the model, a moral agent — ''a person who makes a moral decision even though he or she may not recognize that moral issues are at stake'' (Jones, 1991: 367) — goes through four different stages during the ethical decision-making. First, the moral agent recognizes the moral issue. Next, the individual engages in moral judgement and decides what is right or wrong. Then the moral agent resolves to place moral concerns ahead of other concerns (establish moral intent), and finally he or she takes action (Rest, 1986). In this study I focus on the fourth stage, the stage where the moral agent behaves ethically or unethically. This stage of ethical behavior has the largest impact on the organization compared to the stages of moral awareness, judgment, and intention (Kish-Gephart et al., 2010).

In the past four decades, a large number of researchers have sought to determine the impact of different individual (i.e. individual differences), issue (i.e. moral intensity characteristics such as magnitude of consequences and social consensus (Jones, 1991)) and organizational (i.e. formal ethic codes and policies, training, sanctions, ethical climates and organizational cultures) characteristics on the ethical behavior of individuals (Lehnert et al., 2015; Schwartz, 2015). Compared to the individual characteristics and issue characteristics, organizational factors are much less studied in relationship to ethical behavior (Craft, 2013), while these factors could have an important influence on individual ethical behavior at work,

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as some authors already demonstrated (e.g. Peterson, 2002; Treviño, Butterfield & McCabe, 1998; Vardi, 2001) and could be more easily managed than individual or issue characteristics.

2.2 An important organizational characteristic: Organizational culture

The overarching construct for all organizational environmental variables is 'ethical infrastructure', which is defined as the ''organizational elements that contribute to an organization's ethical effectiveness'' (Tenbrunsel, Smith-Crowe & Umphress, 2003: 286). The organizational infrastructure includes formal systems such as ethics codes and policies, communications, training, monitoring systems, sanctions and rewards, and informal systems such as ethical climates, ethical cultures, and organizational cultures (Schwartz, 2015).

Existing research recognizes the critical role played by ethical climates and cultures. On the one hand, ethical climate is the ''perception of what constitutes right behavior'' (Martin & Cullen, 2006: 177) and determines whether employees behave ethically or unethically (Kish-Gephart et al., 2010; Treviño et al., 1998; Verbeke, Ouwerkerk & Peelen, 1996). Ethical climate can be conceptualized as a type of organization work climate, such as an egoistic, benevolent, and principled climate (Victor & Cullen, 1988). According to recent research of Kish-Gephart et al. (2010), the egoistic climate is positively related to unethical intention, whereas benevolent and principled climates are negatively related to unethical intention. On the other hand, ethical culture can be defined as ''the organization's systems, procedures and practices for guiding and supporting ethical behavior'' (Kish-Gephart et al., 2010). Previous studies about ethical culture have reported that a strong ethical culture positively influences ethical decision-making (Kish-Gephart et al., 2010). As these definitions shows, the concepts of ethical climate and culture are highly related. Whereas culture is conceptualized in terms of shared and implicit values, climate expresses those perceptions shared by organizational members about what constitutes right behavior in an organization (Martin & Cullen, 2006). The concept of (organizational or ethical) culture will encompass

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that of climate, since it is not a large conceptual step from shared assumptions (culture) to shared perceptions (climate) (Ashfort, 1985). Concerning the relationship between ethical and organizational culture, we know that ethical culture of an organization can be seen as a slice of the overall organizational culture. In other words, if the organizational culture describes how things are done within the organization, the ethical culture represents how things are done in ethics-related situations (Treviño & Nelson, 2011).

While a number of studies has been carried out on ethical climate and culture, there have been few empirical investigations into the relationship between organizational or corporate culture and ethical behavior. Cultural aspects such as dominant characteristics, organizational leadership, management of employees, organization glue, strategic emphasis and criteria of success differs among organizations (Cameron & Quinn, 2006). Subsequently, different organizational cultures may influence employees' (un)ethical behavior in different ways.

2.2.1 Organizational culture. One of the factors of organizational environment that does not

have a clear relationship with ethical decision-making is organizational culture (Craft, 2013). An organizational culture is a set of assumptions, values and beliefs that are reflected in both informal norms and formal systems (O'Reilly et al., 1991; Treviño, 1986). An organizational culture can influence an individual's thoughts and feelings and guides behavior (Treviño, 1986), particularly in situations that are not governed by formal control systems (Treviño & Weaver, 2001). The organizational culture can affect these individual's actions and attitudes through a variety of mechanisms, including goal alignment and norm enforcement (Caldwell & Moberg, 2007). The attention to organizational culture in the past is rooted in the proposition that it contributes to organizational effectiveness (Denison & Mishra, 1995). Moreover, a firm's culture is one of the several attributes that differentiates firms one from another (Alchian & Demsetz, 1972) and can contributes to a sustainable competitive

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advantage if the culture is valuable, rare and imperfectly imitable (Barney, 1986). As this demonstrates, organizational culture is among the most important factors for the success of organizations.

In recent years, the number of quantitative studies focusing on organizational culture and its effect on ethical decision-making has declined (Craft, 2013). Moreover, the majority of findings has focused on the effect of organizational culture on moral awareness rather than on ethical behavior (Craft, 2013; Lehnert et al., 2015). Previous research has found that culture is pervasive in influencing organizational ethics and in adapting what is seen as right or wrong (Loe, Ferrell & Mansfield, 2000). In other words, managing the culture of the organization contributes to managing organizational ethics (Loe et al., 2000). Moreover, in his paper about the challenge of ethical behavior in organizations, Sims (1992) argues that what top managers do, and especially the culture they establish and reinforce, has a big influence in the way lower-level employees act and in the way the organization as a whole acts when facing ethical dilemmas. Hence, Sims (1992) shows that an organizational culture does affect the level of employees' ethical behavior, but he does not explain how different cultures influence the level of employees' (un)ethical behavior.

A number of other studies have investigated the effect of ethical culture of the firm on the ethical decision-making. Several studies conducted among auditors have shown that their ethical decision-making is been greatly influenced by the ethical culture of the firm (Douglas, Davidson & Schwartz, 2001; Ponemon, 1992; Windsor & Ashkanasy, 1996). Douglas et al. (2001) emphasizes the important effect of the tone of the top, which establishes the culture, on the ethical behavior of employees.

The previous paragraphs showed that some research about the effect of organizational culture on ethical behavior is already conducted. However, previous research does not explain how different organizational culture affects employees' ethical behavior. For instance, does

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some culture types (e.g. clan or hierarchy culture) have a different influence on employees' ethical behavior than another culture type (e.g. adhocracy or market culture)? In this study I want to make a contribution to the understanding of the effect of organizational cultures on ethical behavior by answering the question:

'Does organizational culture affect employees' ethical behavior?'

2.3 Person-situation interaction

This research addresses a second gap by considering the moderating effect of moral character on the relationship between organizational cultures and ethical behavior. Although the effects of individual, issue, and/or organizational factors have been studied widely (e.g. Lehnert et al., 2015; O'Fallon & Butterfield, 2005; Tenbrunsel & Smith-Crowe, 2008; Treviño et al., 2006; Treviño et al., 2014), the effects of these factors have been studied independently. Consequently, we know little so far about the interaction effects between individual, issue, and/or organizational characteristics (Treviño et al., 2006).

A search of the literature revealed only few studies that explored these interaction effects. For instance, Caldwell and Moberg (2007) found in their study of 186 first-year students a complex interaction between moral identity and organizational culture. More specifically, they argue that employees with strong moral identities are less influenced by ethical cultures than employees with low moral identity. Moreover, Treviño (1986) argued that ethical decision-making behavior can be better explained and predicted by the interaction of individual and situational variables. Furthermore, Butterfield, Treviño and Weaver (2000) demonstrated that moral awareness is influenced by issue-related factors (magnitude of consequences of the moral issue and issue framing in moral terms) and social context-related factors such as competitive context. In addition, Watson, Berkley and Papamarcos (2009) found a significant interaction between hedonism, punishment and unethical decisions. While some research has been carried out on the interaction effects, there is still little

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scientific understanding of how different individual, issue and organizational characteristics interact. In other words, there is a need to explore the influences of individual, organizational, and issue-contingent characteristics on each other and their effect on ethical decision-making (Cohen & Morse, 2014; O'Fallon & Butterfield, 2005; Lehnert et al., 2015; Treviño, 1986; Treviño et al., 2006). In this study I want to make a contribution to the understanding of the interaction effects of organizational characteristics and individual differences as is suggested by for instance Detert, Treviño and Sweitzer (2008) by answering the question:

'What is the effect of moral character on the relationship between organizational culture and individual's ethical behavior?'

2.4 Moral character

An abundance of research has investigated the effect of individual differences such as gender, age, education, personality, nationality, cognitive moral development and value orientation on ethical behavior (e.g. Bampton & Maclagan, 2009; Beekun, Hamdy, Westerman & HassabElnaby, 2008; Bierly, Kolodinsky & Charette, 2009; Cagle & Bacus, 2006; O’Fallon & Butterfield, 2011). More recently, Cohen and Morse (2014) presented the concept of 'moral character' to better understand (un)ethical work behaviors, which is ''an individual's disposition to think, feel, and behave in an ethical versus unethical manner, or as the subset of individual differences relevant to morality'' (Cohen & Morse, 2014: 45). In their tripartite model, Cohen and Morse (2014) distinguish between individual differences based on (1) motivation; (2) ability; and (3) moral identity. The ability element is related to the regulation of one's behavior, especially with reference to behaviors that may have positive short-term consequences, but negative long-term consequences (Cohen & Morse, 2014). This element seems not really relevant in this cross-sectional study, and hence will not be taken into account, since long-term consequences are out of scope. In contrast, the other two elements – motivational and moral identity – seem more appropriate considering my study.

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2.4.1 Motivational element. The motivational element includes the consideration of others'

wants and needs, and how individual's action influences others. This consideration of others captures individual differences that motivate individuals to act ethically and refrain from acting unethically (Cohen & Morse, 2014). To determine someone's consideration of others, the Honesty – Humility, or H-factor, of personality has been used. Honesty-humility represents ''the tendency to be fair and genuine in dealing with others, in the sense of cooperating with others even when one might exploit them without suffering retaliation'' (Ashton & Lee, 2007: 157). So, honesty-humility involves balancing self-interest with the interests of others. An individual who scores high on honesty–humility is honest, modest, and fair; an individual low on honesty–humility is deceitful, boastful, and greedy (Cohen & Morse, 2014). Some other traits, such as machiavellianism (O'Boyle, Forsyth, Banks & McDaniel, 2012) and moral disengagement (Cohen, Panter, Turan, Morse & Kim, 2014; Detert et al., 2008; Moore, Detert, Treviño, Baker & Mayer, 2012) are also highly related to the consideration of others, and in turn unethical choices in the workplace and various other social contexts (Cohen et al, 2014; Kish-Gephart et al., 2010; O'Boyle et al., 2012). Given the importance of the motivational element in predicting whether a person will lie, cheat, and steal, people believe that knowledge of this trait is among the most important attributes one can know about a person (Cooley, Rea, Insko, & Payne, 2013; Cottrell, Neuberg, & Li, 2007; Goodwin, Piazza & Rozin, 2014).

Previous research has demonstrated that low levels of honesty – humility are associated with unethical behaviors (Cohen, Panter, Turan, Morse & Kim, 2013; Hershfield, Cohen & Thompson, 2012; Marcus, Lee & Ashton, 2007). This association even holds regardless of whether the constructs are measured with self-reports or observer reports (Cohen et al., 2013).

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2.4.2 Moral identity element. The moral identity element relates to ''individual differences

that indicate a deep concern about being a moral person and viewing oneself accordingly'' (Cohen & Morse, 2014: 52). Individuals who have highly internalized moral identities view oneself around a set of moral trait associations. They want to be the kind of person who is caring, compassionate, fair, friendly, generous, helpful, hardworking, honest and kind (Cohen & Morse, 2014). Detert et al. (2008) found that moral identity reduces the propensity to morally disengage.

2.4.3 Interaction effects. Although most research focused on the direct relationship between

individual differences and ethical decision-making, Cohen and Morse (2014) argue that the relationship between moral character (i.e. motivation element and moral identity) and unethical behavior goes well beyond these simple direct effects. They argue that moral character influences behavior in more indirect ways as well. In other words, there is an interdependency between persons (i.e. moral character) and situations; people choose to opt in or opt out in certain situations. Beside this selection of situations, individuals also create and change situations. For instance, individuals who do not consider others do not only face more negative work environments themselves, but also create environments that bring out the worst in everyone around them (Cohen & Morse, 2014). However, research on these interactive effects of moral character is scarce (Cohen & Morse, 2014; O'Fallon & Butterfield, 2005; Lehnert et al., 2015; Treviño, 1986; Treviño et al., 2006). By investigating the moderating effect of moral character on the relationship between organizational cultures and ethical behavior the present research will thus also contribute to advancing the literature on moral character.

The proposed interactionist model (see Figure 1) posits that ethical behavior is explained by the interaction of organizational culture and moral character.

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FIGURE 1

CONCEPTUAL MODEL

3. CONCEPTUAL FRAMEWORK 3.1 Context

Although some recent studies were focused on unethical pro-organization behavior (e.g. Gino, Ayal, & Ariely, 2013; Umphress, Bingham, & Mitchell, 2010), this study focusses on unethical behavior that harms the organization or persons within the organization while benefiting the individual. A focus on organization-harm issues, in which the organization or coworkers are harmed and the individual benefits, is in line with most of the existing literature on ethical decision-making (Craft, 2013). So the moral dilemmas in this study are organization-harm issues, i.e. decisions in which the individual decision maker enjoys a benefit while the individual's employing organization suffers harm (Cullinan, Bline, Farrar, & Lowe, 2008).

3.2 Organizational culture and ethical behavior

Over the past couple of decades, researchers have proposed a variety of dimensions and attributes of organizational culture. The Competing Values Framework of Quinn and Rohrbaugh (1983) helps to integrate many of these dimensions and attributes and includes major indicators of effective organizations. This framework has been found to have both face

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and empirical validity (Cameron & Quinn, 2006; 2011). In their framework, Quinn and Rohrbaugh (1983) distinguish two major dimensions of organizational effectiveness. The first effectiveness dimension differentiates between flexibility, discretion, and dynamism at one hand, and stability, order, and control at the other hand (Quinn & Rohrbaugh, 1983). That is, some organizations are viewed as effective if they are changing, adaptive, and organic, while other organizations are viewed as effective if they are stable, predictable, and mechanistic (Cameron & Quinn, 2006). The second dimension represents the contrast between internal orientation, integration, and unity at one hand, and external orientation, differentiation, and rivalry at the other hand (Quinn & Rohrbaugh, 1983). Here again, some firms are viewed as more effective if they have harmonious internal characteristics, while other firms are viewed as more effective if they are focused on interacting or competing with others outside their boundaries (Cameron & Quinn, 2006).

Together, these two dimensions form four quadrants. Each quadrant is characterized by a distinct and competing set of effectiveness indicators. Since these indicators of effectiveness represent what people value about an organization's performance, these quadrants define the core values on the basis of which decisions are made (Cameron & Quinn, 2006). Since each quadrant represents basic assumptions, orientations, and values, the quadrants therefore also identify four organizational cultures: clan, hierarchy, market, and adhocracy culture (Cameron & Quinn, 2006). Although an organization's culture will include values found in each of these four culture types, a dominant culture type will typically emerge to form an identifiable corporate culture (Cameron & Quinn, 2006; Deshpandé, Farley, & Webster Jr, 1993).

The next paragraphs discuss these four organizational cultures and their expected relationship to ethical behavior on the basis of the work of Cameron and Quinn (Cameron & Quinn, 2006; 2011). The argumentations for the expected relationships between the different

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types of culture and employees' ethical behavior are based on three organizational or personal characteristics: (1) organizational focus, i.e. internal vs. external focus; (2) employee's commitment; and (3) collaboration or formalization in the organization. In the next paragraph I will first describe organizational focus and organizational commitment, since these two elements will be discussed in all four cultures, and then argue what elements of the organizational characteristics belong to the different cultures.

3.2.1 Organizational focus. Organizations may have an internal or external focus.

Organizations with an internal focus pay attention to the internal organization, i.e. what is important for the organization and its employees, and how they want to work. In contrast, externally-oriented organizations pay attention to what is valuable for the outside world, clients and the market (Quinn & Rohrbaugh, 1983). The internal or external orientations are also related to formal control systems. Formal control systems includes behavior and outcome control (Ouchi, 1979). Behavior control is often used in internally oriented organizations, whereas outcome control is often used in externally oriented organizations (Ouchi, 1979).

3.2.2 Organizational commitment. Organizational commitment is ''the relative strength of an

individual's identification with and involvement in a particular organization'' (Porter, Steers, Mowday & Boulian, 1974: 604). Organization commitment includes three elements: (1) ''a strong belief in and acceptance of the organization's goals and values; (2) a willingness to exert considerable effort on behalf of the organization; and (3) a definite desire to maintain organizational membership'' (Porter et al., 1974: 604). Previous research has found that the level of organizational commitment is a function of the organizational culture (e.g. Clugston, Howell, & Dorfman, 2000; Geiger, 1998; Rashid, Sambasivan, & Johari, 2003; Silverthorne, 2004) and is therefore interesting to discuss for all four culture types.

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3.3 Clan culture

A clan type organization, or the family type organization, is characterized by flexibility and an internal focus. According to Cameron and Quinn (2006; 2011), characteristics of clan type organizations are teamwork, employee participation, cohesion, corporate commitment to employees, and sense of 'we-ness'. Working in an organization with a clan culture is accompanied by working in semiautonomous work teams that receive rewards on team level, rather than on individual level. The management of a clan type organization is occupied with empowering employees and facilitating their participation, commitment, and loyalty. Working in a organization with a clan culture means working in a friendly place where people share a lot of themselves. Leaders are seen as mentors, and loyalty and tradition holds the organization together. The long-term benefit of individual development with high cohesion and morale is important in clan type organizations (Cameron & Quinn, 2006; 2011).

3.3.1 Organizational focus. Clan-oriented organizations have an internal, micro emphasis on

the well-being and development of people in the organization (Quinn & Rohrbaugh, 1983). People in organizations with this internal view and harmony see the organization as a social-technical system, in which people require consideration, appropriate information, and stability in their workplace (Quinn & Rohrbaugh, 1983). A clan-type organization is a behavior-control oriented organization; social pressure and behavior of colleagues will drive the behavior of employees. Moreover, employees will follow the norms of the organization in clan type organizations.

A study of Verbeke et al. (1996) has shown that in a behavior-control oriented organization employees make more ethical decisions than in an outcome-based oriented organization. The underlying reason for this is that in behavior-control oriented organizations there is an emphasis on how to reach goals, not only on what goal to achieve. In such

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organizations, managers can bring ethical procedures to the attention of their employees. Hence, managers in behavior-control oriented organizations can influence their employees to choose and interiorize behaviors which are both ethical and contribute to the goal (Verbeke et al., 1996). In other words, in organizations in which managers take time to communicate with employees about unethical procedures, and offer general guidance, as is the case in clan-oriented organizations, more ethical decisions are made than in organizations that are outwards oriented (Verbeke et al., 1996).

3.3.2 Organizational commitment. Individuals with a high organizational commitment are

willing to give something of them in order to contribute to the organization's well-being (Mowday, Steers & Porter, 1979). Previous research has demonstrated that employees with higher organizational commitment are less likely to engage in unethical behavior that harms the organization and benefits the decision maker (Cullinan et al., 2008). The underlying reason for this is that individuals with higher levels of organizational commitment identify more strongly with their organization and its interests and therefore want to avoid harming the organization (Cullinan et al., 2008). A study of Silverthorne (2004) demonstrated that employees in a clan culture have the highest organizational commitment compared to employees working in an organization with a hierarchy or adhocracy culture. Similarly, Hartnell, Ou & Kinicki (2011) found that employees in a clan culture are highly committed to their organization.

3.3.3 Another characteristic: collaboration. A typical characteristic of a clan culture is

teamwork. Employees in a clan type culture work in semi-autonomous work teams and are rewarded based on team performance (Cameron & Quinn, 2011). In these work teams, employees have to collaborate a lot with others. According to Treviño et al. (1998), there is a need for trust, cooperation, and teamwork to ensure that employees behave ethically. The underlying reason for this is that a focus on the interests of the coworkers of the organization,

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rather than an exclusive focus on individual self-interest, prevents employees to behave unethically. So, by supporting and encouraging teamwork, something which is done in clan cultures, organizations can – to some extent – prevent employees from behaving unethically.

To sum up, previous studies have found that employees in internal oriented organization, such as a clan-oriented organization, behave more ethically (Verbeke et al., 1996), and that high organizational commitment and high levels of collaboration, which is the case for employees in clan-oriented organizations (Hartnell et al., 2011; Treviño et al., 1998), results in more ethical behavior. This is also supported by Nill and Schibrowsky (2005), who found in their empirical study that employees are more likely to act ethically in an organization that is characterized as honest, accountable and fair. This leads to the following hypothesis:

Hypothesis 1: The more clan-oriented an organizational culture is, the higher the level of employees' ethical behavior.

3.4 Hierarchy culture

The hierarchy culture is characterized by stability and an internal focus and is in line with Weber's (1947) bureaucracy. Organizations with a hierarchy culture are characterized by a high level of formalization and standardization, i.e. standardized procedures govern what people do. Effective leaders are good coordinators and organizers, and maintaining a smooth-running organization is important. Stability, predictability, and efficiency are important long-term concerns. Formal rules and policies hold the organization together (Cameron & Quinn, 2006; 2011; Hartnell et al., 2011).

3.4.1 Organizational focus. Hierarchy-oriented organizations have, like clan-oriented

organizations, an internal, micro emphasis on the well-being and development of people in the organization (Quinn & Rohrbaugh, 1983). As explained before, this internal focus results in

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more ethical behavior of employees, because management may bring ethical procedures to the attention of their employees (Verbeke et al., 1996). I expect that employees in hierarchy-oriented organizations will behave ethically, because the internal focus will lead to a good communication of the procedures (Verbeke et al., 1996), and since the order and rules are very clear in hierarchy-oriented organizations (Deshpandé et al., 1993), it is even clearer what is expected from employees in terms of ethical behavior.

3.4.2 Another characteristic: formalization. Formalization is ''the standardization and

recoding of statements of procedures, rules, and roles'' (Pugh, Hickson, Hinings, Macdonald, Turner, & Lupton, 1963: 303). A study of Ferrell and Skinner (1988) reported that higher levels of formalization, which is the case for organizations with a hierarchy culture (Cameron & Quinn, 2011), are related to greater perceived ethical behavior. Moreover, behaviors associated with employees in a hierarchy culture include conformity and predictability (Hartnell et al., 2011; Quinn & Kimberly, 1984). Because of these associated behaviors, I expect that employees working in an organization with a hierarchy type culture will behave conform to their roles and are less likely to derogate from what is expected from them.

To sum up, organizations with a hierarchy culture have an internal focus; therefore, employees working in a hierarchy-oriented culture will behave ethically (Verbeke et al., 1996). Moreover, since organizations with a hierarchy culture are characterized by high levels of formalization (Cameron & Quinn, 2011), and high levels of formalization relates to greater perceived ethical behavior (Ferrell & Skinner, 1988), I expect employees within hierarchy-oriented culture to behave ethically. Finally, as employees in hierarchy type organizations are expected to behave ethically, I expect that employees in hierarchy cultures will meet these expectations (Hartnell et al., 2011; Quinn & Kimberly, 1984). Therefore,

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Hypothesis 2: The more hierarchy-oriented an organizational culture is, the higher the level of employees' ethical behavior.

Despite these arguments for a positive relationship between a hierarchy-oriented culture and employees' ethical behavior, I am also aware of some arguments which do not support the proposed relationship, and instead support that there is no relationship between hierarchy culture and ethical behavior. These arguments will be discussed in the following paragraphs.

3.4.3 Organizational commitment. A study of Rashid et al. (2003) conducted in Malaysian

companies demonstrated that a hierarchy culture is not correlated with any type of commitment. In other words, the type of culture will thus not influence employees' level of organizational commitment. In contrast to Rashid et al. (2003), a study of Silverthorne (2004) in Taiwan showed that a hierarchy culture is related to organizational commitment. However, a hierarchy culture has the lowest level of organizational commitment, compared to an adhocracy or clan culture. As previous studies have shown, there is ambiguity about the effect of hierarchy culture on organizational commitment. Since the results about organizational commitment in organizations with a hierarchy culture are mixed, organizational commitment may not be a major mechanism linking a hierarchy culture to ethical behavior.

3.4.4 Another characteristic: employment level. In the previous paragraphs I did not take the

effect of an employee's employment level into consideration. However, an employee's position might also influence his/her behavior and is therefore important to include. This view is supported by several researchers. For instance, O'Fallon and Butterfield (2005) conclude in their meta-analysis that employment and work experience are positively related to ethical behavior. In a similar vein, Arnold, Bernardi, Neidermeyer and Schmee (2007) showed that employment level has a significant effect on ethical behavior; however this effect is less

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strongly than national culture. Moreover, Kidwell, Stevens and Bethke (1987) pointed out that respondents who had been employed in the work force for a longer period of time had a higher ethical intension. Similarly, Weeks, Moore, McKinney and Longenecker (1999) found that individuals in the latter years of their career displayed higher ethical judgments. Despite all the positive relationships found between employment level and ethical behavior as discussed in the previous paragraph, it is important to note that other researchers did not found a significant relationship between employment level and ethical behavior (e.g. Brenner & Molander, 1977; Forte, 2004; Kohut & Corriher, 1994). In their meta-analysis, Ford and Richardson (1994) also argue that in some instances, employment levels are related to employees' ethical behavior, while in other situations ethical decision making is independent of employment level.

Since organizations with a hierarchy type culture are bureaucratic, the position of an employee might be important in determining his/her ethical behavior, as employees working on management level might tend to behave more ethically than employees working on lower levels in the organization.

To sum up, as organizational commitment in hierarchy culture seems not to be an explanation mechanism for ethical behavior, and since I expect that the employment level in hierarchy might be of a greater importance than the hierarchy culture itself, it can also be argued that hierarchy culture itself does not influence employees' ethical behavior.

3.5 Adhocracy culture

An adhocracy culture is characterized by flexibility and an external focus. The main

goal of adhocracy type organizations is to foster adaptability, flexibility, and creativity when dealing with uncertainty, ambiguity, and information overload (Cameron & Quinn, 2006; 2011). These kinds of organizations have to adapt quickly to new outside opportunities. Adhocracy type organizations are characterized by a lack of centralized power or authority

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relationships, since power flows from individual(s) to individual(s). There is an emphasis on individuality, risk taking, and anticipating on the future (Hartnell et al., 2011). So, the adhocracy culture is characterized by a dynamic, entrepreneurial, and creative workplace. The commitment to experimentation and innovation holds the organization together (Cameron & Quinn, 2006; 2011).

3.5.1 Organizational focus. Adhocracy-oriented organizations have an external, macro

emphasis on the well-being and development of the organization itself (Quinn & Rohrbaugh, 1983). In organizations with an external focus, there is an emphasis on the overall competitiveness of the organization in changing environments (Quinn & Rohrbaugh, 1983). Adhocracy cultures induce individuals to be creative and take risks (Hartnell et al., 2011) in order to be innovative. Individuals are stimulated to have an external focus and come up with some innovative ideas. So, in adhocracy type organizations, employees are encouraged to take risks and try out new ideas. This will foster innovation, but at the other hand also contains some inherent ethical issues. Employees will face questions about the nature and scope of risks they should take, and the related ethical consequences for all stakeholders (Baucus, Norton, Baucus, & Human, 2008). The external focus of adhocracy type organizations, whereby all individuals will anticipate and adapt to the environment, may foster unethical behavior, because individuals will do whatever they can in order to come up with some innovative ideas (Hartnell et al., 2011).

3.5.2 Organizational commitment. Employees in adhocracy type organizations have a

moderate level of commitment (Silverthorne, 2004). This view is also supported by Rashid et al. (2003), who argue that there are both positive and negative correlations between the organizational culture and different forms of commitment. They demonstrated that there is a positive correlation between adhocracy culture and continuance commitment (perceived cost of leaving), but a negative correlation for adhocracy culture and affective commitment (desire

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to remain). So employees in this type of organizations will remain as a necessity, and consequently emotional factors may be of lesser concern (Rashid et al., 2003).

3.5.3 Another characteristic: formalization. As already discussed in the section of the

hierarchy culture, formalization concerns the standardization of procedures, rules, and roles (Pugh et al., 1963). In adhocracy type organizations, formalization of behavior is low (Mintzberg, 1980), and employees are expected to be creative and to generate new ways of providing services to clients (Cameron & Quinn, 2006). Ferrell and Skinner (1988) showed that the degree of formalization is positively related to perceived ethical behavior. So, in organizations with high levels of formalization, the level of perceived ethical behavior will be greater. In contrast, in organizations with low levels of formalization, as is the case for adhocracy-oriented cultures (Mintzberg, 1980), the perceived ethical behavior will be lower.

To sum up, employees working in an adhocracy type organization, with low formalization (Mintzberg, 1980), might have a short-term focus, are willing to take risks and might make decisions in favor of self-interest, which all could result in unethical behavior (Ferrell & Skinner, 1988). Therefore,

Hypothesis 3: The more adhocracy-oriented an organizational culture is, the lower the level of employees' ethical behavior.

Despite these arguments for a negative relationship between a adhocracy-oriented culture and employees' ethical behavior, I am also aware of some arguments which do not support the proposed relationship, and instead support that there is no relationship between adhocracy culture and ethical behavior. These arguments will be discussed in the following paragraphs.

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3.5.4 Job autonomy. So far this section has focused on the negative relationship between

adhocracy culture and ethical behavior. However, the purpose of this paragraph is to show that there might be no obvious effect between adhocracy culture and employees' ethical behavior. The most important reason for this lack of effect is the influence of an employee's job autonomy. Job autonomy is the extent to which a job provides substantial freedom, independence, or discretion to schedule work, make decisions, or select the procedures for carrying out the work tasks (Hackman & Oldham, 1976). So employees with high job autonomy have the freedom, independence, and discretion to schedule work and decide how to perform the task, while employees with low job autonomy do not have this freedom, independence, and discretion. Job autonomy is thus an objective property of a job (Piccolo, Greenbaum, den Hartog, & Folger, 2010) and differs per job. Since job autonomy within an organization, also in organization with an adhocracy-type culture, differs, employees do not all have the same freedom to take risks and quickly adapt to new outside opportunities. As a result, not all employees in organizations with an adhocracy culture can take risks and anticipate on the future, only the employees with high job autonomy can do so. So, in adhocracy type cultures, the level of employees' ethical behavior does not per se depend on the characteristics of the culture, but will be more influenced by the job autonomy. Therefore, it can also be argued that adhocracy culture itself does not influence employees' ethical behavior.

3.6 Market culture

Organizations with a market culture are stable and have an external focus (Cameron

& Quinn, 2006; 2011). This design refers to a market form of organization, i.e. the organization functions as a market. The focus of this kind of organizations is on transactions with mainly external constituencies such as suppliers, customers, contractors, unions, and regulators. It operates through economic market mechanisms such as monetary exchange. In

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other words, the focus of the organization is to conduct transactions (e.g. exchanges, sales, contracts) with other constituencies to create competitive advantage (Cameron & Quinn, 2006; 2011). The core values underlying these market type organizations are competiveness and productivity, which are achieved through a strong emphasis on external positioning and control. Working in an organization with a market culture means working in a results-oriented workplace, where leaders are hard-driving producers and competitors (Hartnell et al., 2011). The emphasis on winning holds the organization together. Regarding the long-term concern, organizations with market cultures focus on competitive actions and achieving stretch goals and targets: outpacing the competition and market leadership are important (Cameron & Quinn, 2006; 2011; Hartnell et al., 2011).

3.6.1 Organizational focus. Market-oriented organizations have, like adhocracy-oriented

organizations, an external, macro emphasis on the well-being and development of the organization itself (Quinn & Rohrbaugh, 1983). In organizations with an external focus, there is an emphasis on the overall competitiveness of the organization in changing environments (Quinn & Rohrbaugh, 1983).

Several studies have found that working in an organization with high competition will decrease employee's ethical behavior. For instance, Hegarty and Sims (1978) demonstrated with their experiment of graduate business students that competitiveness tends to decrease ethical behavior. In addition, Staw and Szwajkowski (1975) showed, with their study on organizational level, that external pressures of competition may encourage unethical behavior. Moreover, Sethi and Sama (1998) reported that highly competitive markets create greater opportunities for unethical behavior. On managerial level, Treviño (1986) has demonstrated that managers' ethical behavior will be negatively influenced by competition. Furthermore, Robertson and Rymon (2001) found that individuals who face a high pressure are more likely to behave unethically. These views are supported by Ford and Richardson (1994), who argue

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that the level of overall business competitiveness may negatively influence an employee's ethical behavior. The ever increasing competitive pressure to concentrate on short-term earnings is one of the factors underlying competitive pressures, which in turn drives unethical behavior. Also, pressures from stakeholders may serve to undermine ethical behavior in organizations (Stead, Worrell & Stead, 1990). All these views are supported by Nill and Schibrowsky (2005) who demonstrated with an experiment that employees working in an organization with a culture embracing winning and getting the job done were more likely to behave unethically. This finding suggests that employees in market oriented cultures are less likely to behave ethically.

3.6.2 Organizational commitment. Rashid et al. (2003) found that market type organizations

are both positively and negatively related to organizational commitment. Therefore, it cannot be argued that employees in organizations with a market culture are always strongly or weakly committed to their organization. Since the results about organizational commitment in organizations with a market culture are mixed, organizational commitment may not be a major mechanism linking a market culture to ethical behavior.

3.6.3 Another characteristic: collaboration. Market cultures, which are characterized by

competition and aggressiveness, can have a harmful effect on employee attitudes by fostering distrust among employees (Hartnell et al., 2011). As a result, employees refrain from collaboration with peers or acting in favor of their organization, and pursuing their self-interest instead (Kirkman & Shapiro, 2001). Research of Tenbrunsel and Messick (2004) showed that the influence of self-interest triggers self-deception, which decreases the likelihood that an ethical frame will be adopted, and it turn leads to unethical behavior.

To sum up, due to the high competition in market type cultures (Hartnell et al., 2011; Hegarty & Sims, 1978; Robertson & Rymon, 2001) and the propensity to refrain from

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collaboration and pursuing the self-interest of employees (Kirkman & Shapiro, 2001; Tenbrunsel & Messick, 2004), I expect that employees in market-oriented cultures will behave less ethically. Therefore,

Hypothesis 4: The more market-oriented an organizational culture is, the lower the level of employees' ethical behavior.

3.7 Organizational culture, moral character and ethical behavior

Having discussed how different organizational cultures relate to ethical behavior, the final section of the theoretical framework addresses moderating effects of moral character on these relationships. As discussed above, the more clan or hierarchy-oriented an organization is, the higher the levels of employees' ethical behavior, while higher levels of market and adhocracy cultures are expected to cause lower levels of employees' ethical behavior. In this section, the two internally-oriented culture types (i.e. clan and hierarchy) and the two externally-oriented culture types (i.e. market and adhocracy) will be combined in arguing about the interaction effects of culture and moral character on ethical behavior.

An individual's moral character is ''an individual's disposition to think, feel, and behave in an ethical versus unethical manner'' (Cohen & Morse, 2014: 45). Including moral identity as a moderator in the relationship between organizational culture and ethical behavior seems important for several reasons. First, the four types of organizational cultures may influence employees' ethical behavior differently, among others, because the values belonging to each of the organizational culture types match better the personality of some employees than of others. To date, several studies have found that persons with a particular personality type will have a better fit with organizations with consistent values (e.g. Judge & Cable, 1997; Kristof-Brown & Jansen, 2007; O’Reilly et al., 1991). Moreover previous studies have investigated how congruence between employees' values and the organizational culture and its corresponding values, influence various affective outcomes such as job satisfaction,

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organizational commitment, job involvement, turnover intentions, but also the person-organization fit (e.g. Edwards & Cable, 2009; Harris & Mossholder, 1996; Meyer, Hecht, Gill, & Toplonytsky, 2010; van Vuuren, Veldkamp, de Jong, & Seydel, 2007). Recently, Gardner, Reithel, Cogliser, Walumbwa and Foley (2012) were the first who related the Big 5 personality traits to the cultures from the competing values framework (Cameron & Quinn, 2006; 2011). They demonstrated that people who score high on agreeableness and extraversion have a greater fit with clan culture, whereas more conscientious and less open persons have a better fit with a hierarchy culture. Moreover, less agreeable persons have a great fit with market culture and persons who score high on openness have a better fit with an adhocracy culture (Gardner et al., 2012). Although moral character includes other personality traits (honesty-humility and moral identity), there are some links to the Big 5 personality traits (Cohen & Morse, 2014).

Second, the behavior of employees with strong moral identities is less influenced by the organizational culture than the behavior of employees with weak moral identities. In other words, the effect of organizational culture on employees' ethical behavior is less strongly for employees with strong moral identity compared to employees with weak moral identity (Caldwell & Moberg, 2007). Similarly, Cohen et al. (2014) argue that strong moral character traits predict harmful and helpful work behaviors more strongly and robustly than do basis organizational variables, such as organizational culture.

Third, ethical behavior is better explained and predicted by the interaction effect of organizational culture and moral character, than only by the direct effect of organizational culture or moral character (Treviño, 1986).

3.7.1 Clan and hierarchy cultures. As discussed in the previous sections of chapter 3, I

expect that the more clan or hierarchy oriented an organizational culture is, the higher the level of employees' ethical behavior is (hypothesis 1). This relationship might be influenced

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by an employee's personality or moral character. Concerning self-interest or consideration of others, we see that employees with high moral character have a high consideration of others (Cohen & Morse, 2014; Cohen et al., 2014). These employees take care of the needs and interests of others. Since clan and hierarchy cultures have an internal focus (Cameron & Quinn, 2006; 2011), employees within these types of organizations are also expected to take care of one another. For instance, they will act in favor of the interest of others, for instance their manager, and probably thus behave ethically. Therefore, employees who work in a clan or hierarchy type organization, where there is already high degree of consideration of others, and who have a high moral character, will behave even more ethically.

Moreover, people with a high moral character score high on honesty-humility and moral identity. This means that these individuals can be characterized by traits such as caring, compassionate, fair, friendly, generous, helpful, hardworking, kind, honest, and humility (Ashton & Lee, 2009; Aquino & Reed, 2002). Moreover, Cohen et al. (2014) describe moral people as people that are considerate of others, good at self-regulation and value being moral. They are sincere, modest, and fair as well as disciplined, prudent, organized and good at resisting temptations and think about future consequences of their behavior (Cohen et al., 2014). I think the values of employees with high moral character will match those of the clan and hierarchy cultures, as the value drivers of a clan culture are commitment, communication and development (Cameron & Quinn, 2006; 2011), and the value drivers of a hierarchy culture are efficiency, timeliness, and consistency and uniformity. These value drivers for the clan and hierarchy cultures are related to individual values such as compassionate, helpful, hardworking and honest. As stated before, a match between values of the organization (which are embedded in an organization's culture) and the values of employees may influence various outcomes such as job satisfaction and organizational commitment (e.g. Meyer et al., 2010), but may also influence the level of ethical behavior of employees. Posner and Schmidt (1993)

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demonstrated that value congruence has a positive influence on the attitudes about the ethical practices. This view is supported by Suar and Khuntia (2010), who demonstrated that congruence in values between organization and employee, will decrease unethical practices and increase work behaviors. Moreover, if there is an alignment in values, the values may reinforce each other. If the values of the employee as well as the organizational values disapprove unethical behavior, I think that this will reinforce each other and the chance on unethical behavior within this organization will be declined.

For clan cultures there is another reason for the expected effect of moral character on the relationship between clan culture and ethical behavior. In a clan culture, the self-interest is also the clan-interest, since clan type organizations are like an extended family characterized by shared values and goals and a sense of 'we-ness' (Cameron & Quinn, 2011). Although probably most employees in clan-oriented organizations have some sense of 'we-ness', this might even be stronger for employees with high moral character, as these persons are caring, compassionate, generous and helpful (Aquino & Reed, 2002). The employees with a high moral character, who act in favor of themselves, will also act in favor of their organization.

To sum up, in clan or hierarchy type organizations is already a high degree of consideration of others, but employees with a high moral character have even a stronger consideration of others. As a result, the higher the moral character of an employee in a clan or hierarchy culture is, the more ethical this employee will behave (Cameron & Quinn, 2006; 2011; Cohen & Morse, 2014). Moreover, the values of employees with a high moral character will match the values embedded in a clan or hierarchy culture. Therefore, the higher the moral character of an employee in a clan or hierarchy culture is, the more ethical this employee will behave. Finally, the sense of 'we-ness' in clan type organizations is even higher for employees with a high moral character. Therefore,

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Hypothesis 5a: Moral character strengthens the positive relationship between a clan culture and employees' ethical behavior.

Hypothesis 5b: Moral character strengthens the positive relationship between a hierarchy culture and employees' ethical behavior.

3.7.2. Adhocracy and market cultures. In adhocracy and market-oriented organizations there

is an external focus towards the overall competitiveness of the organization, including for instance a focus on customers and competitors (Cameron & Quinn, 2006; 2011). In adhocracy type organizations, employees are expected to be creative and be able to innovate and generate new ideas (Cameron & Quinn, 2006; 2011). Consequently, employees have a lot of freedom to do what they want to do, in order to come up with creative and innovative ideas. Because of this freedom and autonomy, their moral character has a great influence on their behavior. If employees, while working on innovative ideas, believe they have to act unethically in order to come up with creative and innovative ideas, they might do so since they will be rewarded based on the number of new ideas. This example shows that the moral character of an employee in adhocracy type cultures drives his/her behavior. In market-oriented organizations there is high competition and a focus on achieving (personal) results (Cameron & Quinn, 2006; 2011). Employees have a focus on performance and goal achievement, and they might do whatever is needed to achieve their goals. Since they have a lot of freedom in acting, their moral character becomes more salient and will drive their (ethical) behavior. This is also supported by Cohen et al. (2014) who demonstrated that moral character traits predict (un)ethical behavior more strongly and robustly than other organizational variables, such as culture. Consequently, I expect that the personal identity of employees is more salient in adhocracy or market type cultures. In these situations, the organizational culture plays a less important role in explaining ethical behavior, while personality traits are a more important mechanism driving (ethical) behavior. So if the

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personal identity is more salient, employees will follow more their personality traits in decisions. If the employee has a high moral character, the employee will behave more ethically, while in case the personality of an employee is characterized by a low moral character, this employee will behave less ethically. Thus, in adhocracy and market type organizations, employees' (ethical) behavior is more driven by their personal identity and moral character than by the characteristics of their organization, such as the culture.

Concerning the feeling of 'we-ness', I assume that employees in market-oriented cultures are less sensitive to the sense of 'we-ness', because of the high internal competition (Cameron & Quinn, 2006; 2011). This means that the interest of an employee is not per se the interest of the organization. For instance, if an individual employee has a sales target that he wants to achieve because of an individual bonus and he has the opportunity to contact a new client, while another colleague has already good connections for that new client, he might contact the new client himself, despite the fact that his colleague has more chance to acquire this new client. The employee in this example behaves more to his self-interest than to the organization-interest and may behave unethically to achieve his goals within this internal competitive organization culture. However, if the employee would have a high moral character, he/she would be to some extent more sensitive to the sense of 'we-ness', and might behave more in the interest of the organization than solely in self-interest.

The values of employees with a high moral character and the values belonging to adhocracy and market culture might be misaligned. While employees with a high moral character are considered generous, helpful and honest (Aquino & Reed, 2002), the value drivers in adhocracy type organizations are innovative outputs, transformation and agility and in market-oriented cultures these are market share, goal achievement and profitability (Cameron & Quinn, 2006; 2011). These values do no optimally match, but if an employee with a high moral character works in an adhocracy or market type organization, the strong

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