Good/bad apples and good barrels: the interactive effect of religiosity and ethics institutionalization on ethical decision-making

Despite the increasing interest in ethics institutionalization in organizations, the current understanding of its direct and contextual effect on ethical decision-making is limited. To address this knowledge gap, the current study, building on the Hunt & Vitell theory of ethical decision making and interactionist perspective, provides new insights on the influence of religiosity, an individual-level construct, and ethics institutionalization, an organizational-level construct, stimulating further research and discussion in this under-explored area. To accomplish this goal, using a census approach, it conducts a time-lagged survey to solicit responses from members of the Management Association of Pakistan, a professional and representative body of management professionals. The data was analyzed using partial least square-structural equation modeling (PLS-SEM). The results indicate that ethical judgment positively mediates the relationship between intrinsic religiosity and ethical intention. Additionally, implicit ethics institutionalization moderates the direct relationship between extrinsic religiosity and ethical judgment and the indirect relationship between extrinsic religiosity and ethical intention (via ethical judgment). This study broadens the comprehension of the interplay between religiosity, ethics institutionalization, and ethical decision-making within a management context. As such, the findings of this research inform the salience of the contextual influence of how ethics are institutionalized.