An inverstigation into the impact of business ethics on corporate performance in the Zimbabwean banking sector

Abstract

Previous researches have proven that there exists a positive link between business ethics and corporate performance, but there seem to be a dearth of literature relating to the Zimbabwean banking sector. Hence, the main purpose of the study was to assess the impact of business ethics on corporate performance in the Zimbabwe banking sector focusing on FBC bank and Metbank. Specifically, the study aimed to establish the impact of reliability, social corporate responsibility, honesty, compliance and transparency on corporate performance in the Zimbabwean banking sector. The study was purely quantitative and adopted the positivism research philosophy. Explanatory research design and a deductive research approach were adopted. The study population comprised of employees and managers of targeted commercial banks operating in Harare. Convenience sampling was used to select a sample size of 136 respondents. A self-administered survey questionnaire was used to collect data and data was analyzed using descriptive and inferential statistics. Multiple linear regression was used to establish the impact of business ethics on performance of banks in Zimbabwe. The study attained a successful response rate of 86%. The study established a positive significant relationship between business ethics (honesty, compliance and transparency) and bank performance whilst reliability and social corporate responsibility were found to have negative insignificant influence on corporate performance of the banks in Zimbabwe. Thus, the study reached the conclusion that transparency, compliance and honesty positively and significantly influences corporate performance in the Zimbabwean banking sector. Therefore, recommended management of banks to train employees in order to increase competence with regards to ethical issues. The study suggested for further studies to be done using secondary data so as to have a true reflection of the effect of business ethics on performance using real- world evidence.