The impact of situational factors on ethical choice: a survey of Islamic banking practitioners in UAE

Abstract

The purpose of this paper is to use Ferrell and Gresham (1985) contingency model to examine the impact of situational factors on decision-making behaviour related to ethical issues of Islamic banking practitioners. A total of 262 samples are collected from Islamic banking practitioners in the United Arab Emirates (UAE) and data analysis is conducted using structural equation modelling (SEM) with a confirmatory approach. The empirical findings indicate that decision-making behaviour related to ethical issues of Islamic banking practitioners is significantly influenced in the process of interacting with persons who are part of the organisation, and these influences are determined by the intra-organisational distance and legitimate authority between the individuals and the focal person. Further, it is also empirically verified that decision-making behaviour related to ethical issues of Islamic banking practitioners is significantly influenced by the presence and/or absence of the opportunity factors such as corporate policies, professional codes of ethics and rewards/punishment system that prevails in the organisation.