Implementation of codes of ethics within construction organizations in Hong Kong : towards an improved ethical behaviour

Abstract

Corporate code of ethics is described as effective instrument for influencing people's behaviour within an organization and it has become common tool in today's business world. Studies show that codes of ethics exist in organizations. The adoption of ethical codes, is borne out of the business scandals witnessed in the 1970s and 1980s such that companies now use ethical codes as symbols to communicate their commitment, regarding ethical practices, to their stakeholders. However, despite the prevalence of ethical codes in organizations, corrupt and unethical practices are still predominant. Thus, beyond the adoption of codes of ethics for moderating behaviours, it is essential to change the dynamism of ethics management within an organization through an appropriate implementation process. Although efforts have been made to implement codes of ethics in construction organizations, there are factors hindering effective implementation of the codes. Also, corporate management of some organizations adopted a laissez-faire approach in implementing their corporate codes due to a lack of an optimized approach for embedding them within construction companies. This study aims to develop an approach for implementing and assessing corporate codes of ethics within the construction companies in Hong Kong, towards an ethical organization. The following objectives are set out to achieve the main aim: (1) to identify and assess factors hindering effective code implementation in construction organizations, (2) to identify and assess factors enabling proper implementation of codes of ethics towards effective impact of codes on employees' ethical behaviour, (3) to develop and establish a Process Approach Assessment Method (PAAM) that will provide a strong impetus towards the implementation of corporate codes of ethics within organizational processes and routines, (4) to measure the implementation of the ethical codes within construction companies using a PAAM model and validate the model by case study. A mixed-method research was employed, combining both qualitative and quantitative research approaches. Data were collected through questionnaire survey, interviews, and case study. Twenty two factors hindering effective implementation of codes of ethics were identified through a comprehensive literature review. The findings indicate that 'too much focus on profit making' was perceived by the respondents as the highest ranked barriers to code implementation. Using factor analysis, the factors were grouped into three major barriers, namely: 'managerial and organizational barriers', 'planning and monitoring barriers' and 'value and interest barriers'. The major barrier to ethical codes implementation in relation to construction organizations is 'planning and monitoring barriers'. A Process Approach Assessment Method (PAAM) model was developed with the inclusion of 30 indicators, which represented enabling factors for ethical codes implementation as identified from the literature review. The factors were prioritized by ranking them based on their mean scores and relative importance index (RII). 'Protecting anyone who exposes alleged wrongdoing' ranked highest, while 'the use of ethics ombudsman' ranked lowest. However, at variant degree though, it was found that all the factors are relevant and important to ethical codes implementation within construction organizations in Hong Kong. Using the backdrop of Nijhof et al. (2003), the indicators were grouped into six processes of ethical codes implementation (Identification and Removing Barriers IRB, Coding, Internalization, Enacting value, Monitoring, Accountability), and 5 organizational enablers in line with European Foundation for Quality Management (EFQM) excellence model (i.e. Leadership, Policy and Strategy, Employees/People, Partnership and Resources, Primary Process, and the results). The model was empirically validated using Partial Least Square-Structural Equation Modeling (PLS-SEM). The results showed that the model has an excellent predictive power and a very reliable model representation. A fuzzy synthetic evaluation (FSE) approach was employed to measure the extent of ethical codes implementation processes within construction organizations in Hong Kong. The results showed that the fuzzy approach is suitable for the measurement purpose with a support for the PAAM model because it enables intersubjective assessment of ethical codes implementation. The overall level of ethical code implementation in construction organizations in Hong Kong is considerably high but certain processes require further improvement. The study also utilized RADAR analysis to evaluate the significance of organizational enablers that influence ethical codes implementation. The findings confirm that leadership enabler is the most significant in construction organizations in Hong Kong. The results from the interviews also revealed that ethical standard within construction organizations in Hong Kong is comparatively high due to good ethical leadership. Similar results (with some differences) were obtained from the case study where ethical code implementation was found to be very high with process of coding receiving most attention. Leadership enabler was also the most significant in the case study organization. Overall, this study sheds more light on the importance of improving the use of codes of ethics in construction organization. It challenges the paucity of research in this direction by bridging the research gap identified in the study. The model proposed can be used to guide ethical codes implementation, and as a tool for self-assessment to improve the use of codes of ethics within construction organizations. Furthermore, the model can enable practitioners to focus on strategic governance of the codes of ethics within their organizations.