African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4111

Full Length Research Paper

The relationship of ethical climate with intention and socially responsible investment behaviour: A structural equation model analysis

Mohammad Talha1*, Abdullah Sallehhuddin2, Shukor Masoud2 and Al Mansor Abu Said2
1Department of Accounting and MIS, King Fahd University of Petroleum and Minerals, Saudi Arabia. 2Faculty of Business and Law, Multimedia University, Malaysia.  
Email: [email protected]

  •  Accepted: 02 May 2013
  •  Published: 21 May 2013


This study examines the impact of organizational ethical climate on perceived socially responsible investment (SRI) behavior with intention to engage in SRI as a mediating variable. This study uses questionnaire to collect opinion from respondents. Questionnaires were distributed to 320 fund managers of unit trust fund companies but only 84 of them positively responded by returning the filled questionnaires. This led to a response rate of 26.25%. On a scrutiny of the returned questionnaires, it has been found that 73 are fit for further processing or the usable rate of 22.81%. Employing Structural Equation Modeling (SEM) technique, the results showed goodness of fit for the model, indicating the appropriateness of the use of instrument and measurement. The analysis found that caring ethical climate has a significant and positive direct effect on perceived SRI behavior. Besides, a caring ethical climate has a significant and positive indirect effect on perceived SRI behavior with the intention to engage in SRI. The study found a significant direct effect of intention on perceived SRI behavior. However, the study has not found any evidence to support the association of instrumental ethical climate with intention and perceived SRI behavior.


Key words: Organizational ethical climate, intention, socially responsible investment behaviour, unit trust fund managers.