When Ethical Climate Alone Is Not Enough: The Role of Person-Organization Fit in Employee Ethical Behavior
Keywords:
Ethical Leadership, Ethical Climate, Person-Organization Fit, Employee Ethical Behavior, Islamic Microfinance
Abstract
This study examines how employee ethical behavior is shaped by ethical leadership, ethical climate, and person-organization fit within Islamic microfinance institutions in Indonesia. By integrating social learning and social exchange mechanisms, this research aims to provide a more comprehensive explanation of ethical behavior that accounts for both organizational influences and individual value alignment. Utilizing survey data collected from microfinance institutions' employees and analyzing it through Partial Least Squares Structural Equation Modeling (PLS-SEM), the results reveal distinct patterns of relationships. Ethical leadership significantly reinforces the ethical climate, affirming its central role in shaping the organization's ethical environment. However, ethical leadership does not directly influence employee ethical behavior. Furthermore, the ethical climate does not significantly affect ethical behavior, nor does it mediate the relationship between leadership and behavior. Conversely, person-organization fit emerges as a strong predictor and significantly strengthens the relationship between ethical climate and ethical behavior. These findings highlight that ethical behavior is not solely driven by formal ethical systems but is profoundly influenced by the alignment of values between the individual and the organization. This study extends prior research by demonstrating that the effectiveness of an ethical climate is contingent upon the presence of person-organization fit, thereby offering a more contextualized understanding of ethical behavior within the collectivistic and underexplored landscape of Islamic microfinance.
References
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Amalia, R., Setiawan, I., & Pratama, A. (2024). Ethical challenges in Islamic microfinance institutions: Balancing profit and social mission. Journal of Islamic Accounting and Business Research, 15(1), 45–62. https://doi.org/10.1108/JIABR-10-2023-0287
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Ascarya, & Yumanita, D. (2021). Islamic social finance and economic development. Journal of Islamic Monetary Economics and Finance, 7(3), 1–24.
Bagis, F., & Adawiyah, W. R. (2025). Divine guidance in the face of toxicity: How Islamic leadership navigates workplace stress and mental well-being in higher education institutions. MIX: Jurnal Ilmiah Manajemen, 15(2). https://doi.org/10.22441/jurnal_mix.2025.v15i2.004
Bagis, F., Adawiyah, W. R., Pramuka, B. A., Dwi, U., & Wibowo, A. (2026). HARDIPRENEURSHIP IN DISRUPTIVE TIMES: DEVELOPING AND VALIDATING A CONSTRUCT FOR MIGRANT REINTEGRATION. BAGIS et al SCIENTIFIC CULTURE, 12(1), 2061–2078. https://doi.org/10.5281/zenodo.11425251
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Bagis, F., Adawiyah, W. R., & Sudjadi, A. (2026). Examining the Role of Spiritual Leadership and Islamic Spiritual Well-Being in Mitigating Workplace Deviant Behaviour. Qubahan Academic Journal, 6(1), 395–408. https://doi.org/10.48161/qaj.v6n1a1860
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Blau, P. (1964). Exchange and Power in Social Life. Wiley.
Brown, M. E., & Mitchell, M. S. (2023). Ethical leadership: Recent advances and prospects. Annual Review of Organizational Psychology and Organizational Behavior, 10, 145–172.
Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117–134. https://doi.org/10.1016/j.obhdp.2005.03.002
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Chughtai, A., Byrne, M., & Flood, B. (2023). Ethical leadership and employee voice behavior: The mediating role of ethical climate and trust in the leader. Journal of Business Ethics, 184(1), 109–125. https://doi.org/10.1007/s10551-023-05314-4
Farhan Auladi, M., Bagis, F., & Rachmawati, E. (2026). ETHICAL LEADERSHIP IN FOSTERING EMPLOYEE ENGAGEMENT AND INNOVATION THROUGH WORKPLACE WELL-BEING. Business and Accounting Research (IJEBAR) Peer Reviewed-International Journal, 10. https://jurnal.stie-aas.ac.id/index.php/IJEBAR
Feng, J., Zhang, Y., & Liu, S. (2022). Ethical leadership and moral outcomes: A systematic review and meta-analysis. Business Ethics Quarterly, 32(2), 256–289. https://doi.org/10.1017/beq.2021.31
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2000). Business Ethics: Ethical Decision Making and Cases (4 Ed.). Houghton Mifflin Inc.
Firmansyah, A. (2025). Person–organization fit and ethical behavior: Evidence from emerging markets. International Journal of Ethics and Systems, 41(1), 22–38. https://doi.org/10.1108/IJOES-2024-0012
Guo, L., Wang, M., & Li, Y. (2023). Ethical leadership and employee behavior: A social learning perspective. Frontiers in Psychology, 14, 1040000. https://doi.org/10.3389/fpsyg.2023.1040000
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2021). Partial Least Squares Structural Equation Modeling (PLS-SEM). Sage Publications. https://doi.org/10.1007/978-3-030-80519-7
Huang, C. Y., & Lee, J. H. (2021). Person–organization fit, ethical leadership, and ethical behavior: The role of ethical climate. Management Decision, 59(9), 2134–2151. https://doi.org/10.1108/MD-06-2020-0784
Huda, N., Rini, N., Mardoni, Y., & Putra, P. (2022). Islamic business ethics and employee behavior. International Journal of Ethics and Systems, 38(4), 567–583. https://doi.org/10.1108/IJOES-10-2021-0212
Hwang, K., & Lee, D. (2021). Person–organization fit as a boundary condition: A review and future research agenda. Personnel Review, 50(3), 789–804. https://doi.org/10.1108/PR-06-2019-0323
Kristof-Brown, A., Schneider, B., & Su, R. (2023). Person-Organization Fit Theory and Research: Puzzles, Conclusions, and a Call to Action. Personnel Psychology, 76, 375–412. https://doi.org/10.1111/peps.12536
Lee, D., & Choi, Y. (2023). When do employees behave ethically? The role of moral awareness, ethical climate, and person–organization fit. Journal of Applied Psychology, 108(7), 1272–1289. https://doi.org/10.1037/apl0001083
Lee, J., Kang, S., & Kim, H. (2022). When ethical climate fails: The moderating role of job stress in ethical decision-making. Journal of Business Research, 140, 731–742. https://doi.org/10.1016/j.jbusres.2021.11.052
Li, Q. (2024). Ethical leadership, internal job satisfaction, and OCB: the moderating role of leader empathy in emerging industries. Humanities and Social Sciences Communications, 11(1). https://doi.org/10.1057/s41599-024-03367-w
Li, X., Zhang, H., & Chen, Z. (2024). Social exchange and workplace ethics: The impact of fairness and reciprocity on employee behavior. Humanities and Social Sciences Communications, 11, 3367. https://doi.org/10.1057/s41599-024-03367-w
Lu, C. S., & Lin, C. C. (2014). Pengaruh kepemimpinan etis dan iklim etis terhadap perilaku etis karyawan dalam konteks pelabuhan internasional. Journal of Business Ethics, 124(2), 209–223. https://doi.org/10.1007/s10551-013-1868-y
Mayer, D. M., & Brown, M. E. (2023). Ethical climate and employee behavior: A review of contemporary findings. Academy of Management Annals, 17(1), 123–158. https://doi.org/10.5465/annals.2020.0150
Ng, T. W. H., & Feldman, D. C. (2022). Ethical leadership and organizational outcomes: A meta-analysis of differential pathways. Human Resource Management Review, 32(3), 100905. https://doi.org/10.1016/j.hrmr.2021.100905
Otoritas Jasa Keuangan. (2024). Laporan Tahunan OJK 2024: Penguatan tata kelola dan etika dalam industri perbankan. Otoritas Jasa Keuangan.
Puspitasari, N., Rahmawati, R., & Nugroho, A. (2022). The influence of ethical leadership on employee ethical behavior in Indonesian banking: The mediating role of ethical climate. Asian Journal of Business Ethics, 11(1), 1–19. https://doi.org/10.1007/s13520-021-00140-z
Rahman, A. R. A., & Bukair, A. A. (2023). Corporate governance and ethical behavior in Islamic financial institutions. Journal of Islamic Accounting and Business Research, 14(3), 389–405. https://doi.org/10.1108/JIABR-05-2022-0132
Rini, N., Huda, N., & Putra, P. (2024). Ethical dilemmas in Islamic microfinance: Evidence from BMT in Indonesia. Journal of Islamic Monetary Economics and Finance, 10(1), 77–94. https://doi.org/10.21098/jimf.v10i1.1685
Ruiz-Palomino, P., Martínez-Canas, R., & Fontrodona, J. (2013). Ethical culture and employee outcomes: The mediating role of person-organization fit. Journal of Business Ethics, 116(1), 173–188. https://doi.org/10.1007/s10551-012-1453-9
Tsai, Y., Chen, C., & Liu, H. (2024). Ethical climate and employee ethical behavior: A moderated mediation model. Business Ethics Quarterly, 34(1), 89–110. https://doi.org/10.1017/beq.2023.21
Utami, S., & Nugroho, A. (2023). Ethical misconduct in financial institutions: The role of organizational pressure and moral disengagement. Journal of Business Ethics, 185(2), 345–360. https://doi.org/10.1007/s10551-022-05123-7
Victor, B., & Cullen, J. B. (1988). Dasar-dasar organisasi dari iklim kerja etis. Administrative Science Quarterly, 101–125. https://doi.org/10.2307/2392857
Zhang, X., & Tu, Y. (2023). Ethical leadership, trust, and ethical climate: A multilevel analysis. Journal of Business Research, 154, 113–124. https://doi.org/10.1016/j.jbusres.2022.113113
Al Halbusi, H., Williams, K. A., & Ramayah, T. (2023). Ethical leadership and employee ethical behavior: The roles of ethical climate and person–organization fit. Journal of Business Research, 156, 113456. https://doi.org/10.1016/j.jbusres.2022.113456
Al Halbusi, H., Williams, K. A., Ramayah, T., Aldieri, L., & Vinci, C. P. (2021). Linking ethical leadership and ethical climate to employees’ ethical behavior: the moderating role of person–organization fit. Personnel Review, 50(1), 159–185. https://doi.org/10.1108/PR-09-2019-0522
Amalia, R., Setiawan, I., & Pratama, A. (2024). Ethical challenges in Islamic microfinance institutions: Balancing profit and social mission. Journal of Islamic Accounting and Business Research, 15(1), 45–62. https://doi.org/10.1108/JIABR-10-2023-0287
Ascarya, A., & Yumanita, D. (2021a). The role of Islamic microfinance institutions in enhancing social welfare in Indonesia. International Journal of Islamic and Middle Eastern Finance and Management, 14(2), 234–248. https://doi.org/10.1108/IMEFM-01-2020-0023
Ascarya, & Yumanita, D. (2021). Islamic social finance and economic development. Journal of Islamic Monetary Economics and Finance, 7(3), 1–24.
Bagis, F., & Adawiyah, W. R. (2025). Divine guidance in the face of toxicity: How Islamic leadership navigates workplace stress and mental well-being in higher education institutions. MIX: Jurnal Ilmiah Manajemen, 15(2). https://doi.org/10.22441/jurnal_mix.2025.v15i2.004
Bagis, F., Adawiyah, W. R., Pramuka, B. A., Dwi, U., & Wibowo, A. (2026). HARDIPRENEURSHIP IN DISRUPTIVE TIMES: DEVELOPING AND VALIDATING A CONSTRUCT FOR MIGRANT REINTEGRATION. BAGIS et al SCIENTIFIC CULTURE, 12(1), 2061–2078. https://doi.org/10.5281/zenodo.11425251
Bagis, F., Adawiyah, W. R., Purnomo, R., & Sudjadi, A. (2024). Exploring Islamic Spiritual Well-Being: Conceptualization and Validation of a Measurement Scale. Islamic Guidance and Counseling Journal, 7(2). https://doi.org/10.25217/0020247473500
Bagis, F., Adawiyah, W. R., & Sudjadi, A. (2026). Examining the Role of Spiritual Leadership and Islamic Spiritual Well-Being in Mitigating Workplace Deviant Behaviour. Qubahan Academic Journal, 6(1), 395–408. https://doi.org/10.48161/qaj.v6n1a1860
Bagis, F., Adawiyah, W. R., Tubastuvi, N., & Dumasari. (2025). Islamic spiritual well-being in the workplace: Leadership, ethics, and the prevention of deviant behavior.
Bandura, A., & Walters, R. H. (1977). Social Learning Theory. Prentice-Hall.
Bedi, A., Alpaslan, C. M., & Green, S. (2023). The relationship between ethical leadership and workplace ethics: A meta-analytic review. Journal of Business Ethics, 187(2), 415–437. https://doi.org/10.1007/s10551-023-05291-8
Blau, P. (1964). Exchange and Power in Social Life. Wiley.
Brown, M. E., & Mitchell, M. S. (2023). Ethical leadership: Recent advances and prospects. Annual Review of Organizational Psychology and Organizational Behavior, 10, 145–172.
Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117–134. https://doi.org/10.1016/j.obhdp.2005.03.002
Cable, D. M., & Judge, T. A. (1996). Person–organization fit, job choice decisions, and organizational entry. Organizational Behavior and Human Decision Processes, 67(3), 294–311.
Chughtai, A., Byrne, M., & Flood, B. (2023). Ethical leadership and employee voice behavior: The mediating role of ethical climate and trust in the leader. Journal of Business Ethics, 184(1), 109–125. https://doi.org/10.1007/s10551-023-05314-4
Farhan Auladi, M., Bagis, F., & Rachmawati, E. (2026). ETHICAL LEADERSHIP IN FOSTERING EMPLOYEE ENGAGEMENT AND INNOVATION THROUGH WORKPLACE WELL-BEING. Business and Accounting Research (IJEBAR) Peer Reviewed-International Journal, 10. https://jurnal.stie-aas.ac.id/index.php/IJEBAR
Feng, J., Zhang, Y., & Liu, S. (2022). Ethical leadership and moral outcomes: A systematic review and meta-analysis. Business Ethics Quarterly, 32(2), 256–289. https://doi.org/10.1017/beq.2021.31
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2000). Business Ethics: Ethical Decision Making and Cases (4 Ed.). Houghton Mifflin Inc.
Firmansyah, A. (2025). Person–organization fit and ethical behavior: Evidence from emerging markets. International Journal of Ethics and Systems, 41(1), 22–38. https://doi.org/10.1108/IJOES-2024-0012
Guo, L., Wang, M., & Li, Y. (2023). Ethical leadership and employee behavior: A social learning perspective. Frontiers in Psychology, 14, 1040000. https://doi.org/10.3389/fpsyg.2023.1040000
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2021). Partial Least Squares Structural Equation Modeling (PLS-SEM). Sage Publications. https://doi.org/10.1007/978-3-030-80519-7
Huang, C. Y., & Lee, J. H. (2021). Person–organization fit, ethical leadership, and ethical behavior: The role of ethical climate. Management Decision, 59(9), 2134–2151. https://doi.org/10.1108/MD-06-2020-0784
Huda, N., Rini, N., Mardoni, Y., & Putra, P. (2022). Islamic business ethics and employee behavior. International Journal of Ethics and Systems, 38(4), 567–583. https://doi.org/10.1108/IJOES-10-2021-0212
Hwang, K., & Lee, D. (2021). Person–organization fit as a boundary condition: A review and future research agenda. Personnel Review, 50(3), 789–804. https://doi.org/10.1108/PR-06-2019-0323
Kristof-Brown, A., Schneider, B., & Su, R. (2023). Person-Organization Fit Theory and Research: Puzzles, Conclusions, and a Call to Action. Personnel Psychology, 76, 375–412. https://doi.org/10.1111/peps.12536
Lee, D., & Choi, Y. (2023). When do employees behave ethically? The role of moral awareness, ethical climate, and person–organization fit. Journal of Applied Psychology, 108(7), 1272–1289. https://doi.org/10.1037/apl0001083
Lee, J., Kang, S., & Kim, H. (2022). When ethical climate fails: The moderating role of job stress in ethical decision-making. Journal of Business Research, 140, 731–742. https://doi.org/10.1016/j.jbusres.2021.11.052
Li, Q. (2024). Ethical leadership, internal job satisfaction, and OCB: the moderating role of leader empathy in emerging industries. Humanities and Social Sciences Communications, 11(1). https://doi.org/10.1057/s41599-024-03367-w
Li, X., Zhang, H., & Chen, Z. (2024). Social exchange and workplace ethics: The impact of fairness and reciprocity on employee behavior. Humanities and Social Sciences Communications, 11, 3367. https://doi.org/10.1057/s41599-024-03367-w
Lu, C. S., & Lin, C. C. (2014). Pengaruh kepemimpinan etis dan iklim etis terhadap perilaku etis karyawan dalam konteks pelabuhan internasional. Journal of Business Ethics, 124(2), 209–223. https://doi.org/10.1007/s10551-013-1868-y
Mayer, D. M., & Brown, M. E. (2023). Ethical climate and employee behavior: A review of contemporary findings. Academy of Management Annals, 17(1), 123–158. https://doi.org/10.5465/annals.2020.0150
Ng, T. W. H., & Feldman, D. C. (2022). Ethical leadership and organizational outcomes: A meta-analysis of differential pathways. Human Resource Management Review, 32(3), 100905. https://doi.org/10.1016/j.hrmr.2021.100905
Otoritas Jasa Keuangan. (2024). Laporan Tahunan OJK 2024: Penguatan tata kelola dan etika dalam industri perbankan. Otoritas Jasa Keuangan.
Puspitasari, N., Rahmawati, R., & Nugroho, A. (2022). The influence of ethical leadership on employee ethical behavior in Indonesian banking: The mediating role of ethical climate. Asian Journal of Business Ethics, 11(1), 1–19. https://doi.org/10.1007/s13520-021-00140-z
Rahman, A. R. A., & Bukair, A. A. (2023). Corporate governance and ethical behavior in Islamic financial institutions. Journal of Islamic Accounting and Business Research, 14(3), 389–405. https://doi.org/10.1108/JIABR-05-2022-0132
Rini, N., Huda, N., & Putra, P. (2024). Ethical dilemmas in Islamic microfinance: Evidence from BMT in Indonesia. Journal of Islamic Monetary Economics and Finance, 10(1), 77–94. https://doi.org/10.21098/jimf.v10i1.1685
Ruiz-Palomino, P., Martínez-Canas, R., & Fontrodona, J. (2013). Ethical culture and employee outcomes: The mediating role of person-organization fit. Journal of Business Ethics, 116(1), 173–188. https://doi.org/10.1007/s10551-012-1453-9
Tsai, Y., Chen, C., & Liu, H. (2024). Ethical climate and employee ethical behavior: A moderated mediation model. Business Ethics Quarterly, 34(1), 89–110. https://doi.org/10.1017/beq.2023.21
Utami, S., & Nugroho, A. (2023). Ethical misconduct in financial institutions: The role of organizational pressure and moral disengagement. Journal of Business Ethics, 185(2), 345–360. https://doi.org/10.1007/s10551-022-05123-7
Victor, B., & Cullen, J. B. (1988). Dasar-dasar organisasi dari iklim kerja etis. Administrative Science Quarterly, 101–125. https://doi.org/10.2307/2392857
Zhang, X., & Tu, Y. (2023). Ethical leadership, trust, and ethical climate: A multilevel analysis. Journal of Business Research, 154, 113–124. https://doi.org/10.1016/j.jbusres.2022.113113
Published
2026-07-20
How to Cite
Aji Restu Pratama, & Fatmah Bagis. (2026). When Ethical Climate Alone Is Not Enough: The Role of Person-Organization Fit in Employee Ethical Behavior. International Journal of Education, Vocational and Social Science , 5(03), 5672-5691. https://doi.org/10.63922/ijevss.v5i03.5385
Contact Person +6282139474255
Email : ijevss@citakonsultindo.or.id / editor.ijevss@gmail.com
