Impact of Commitment to Business Ethics to Nonfinancial Business Performance

Abstract

The article investigates the relationship between commitment to business ethics and nonfinancial business performance. Data of commitment to business ethics and nonfinancial business performance were collected from 100 participants through a questionnaire survey. The survey was conducted in 2015 in Croatian large and medium sized companies. The questionnaire for assessing commitment to business ethics contained nine different dimensions while the nonfinancial business performance contained three dimensions: client satisfaction, human resource management plus innovativeness and efficiency of business processes. Multiple regression methods were applied in the analysis. The empirical results of three multiple linear regression models show that certain dimension of commitment to business ethics had a positive influence on the nonfinancial performance of the companies. Motivation and rewarding policy for ethical behavior and responding to unethical behavior, as a dimension of commitment to business ethics, has distinctive effects on all three nonfinancial performance dimensions. It was also found that selecting suppliers based on the standards of ethics and compliance has a positive and strong influence on client satisfaction while using ethical criteria in the performance and efficiency evaluation of employees has a positive and significant influence on innovativeness and efficiency of business processes. This research leads to the conclusion that some dimensions of commitment to business ethics can be important predictors of nonfinancial business performance. Therefore, results of the research could be considered as valid motivation for further improvement of commitment to ethics in the business environment.