Received: 6 June 2017 Revised: 11 January 2018 Accepted: 26 January 2018

DOI: 10.1002/csr.1510

RESEARCH ARTICLE

The effect of ethical climate and employees' organizational

citizenship behavior on U.S. fashion retail organizations'
sustainability performance
Stacy H.N. Lee1 | Jung Ha‐Brookshire2

1
Institute of Textile and Clothing, Hong Kong
Polytechnic University, Room QT715, Q Core,
7/F, Hung Hom, Kowloon, Hong Kong
2
Department of Textile and Apparel
Management, University of Missouri, 137
Stanley Hall, Columbia, MO 65211, USA
Correspondence
Stacy H.N. Lee, Ph. D. Research Assistant
Professor, Institute of Textile and Clothing,
Hong Kong Polytechnic University
Email: stacy.hn.lee@polyu.edu.hk
Abstract
To support businesses' efforts to improve sustainability performance, the role of
employees should not be neglected, as organizational citizenship behavior (OCB) can
improve the effectiveness and flexibility of a business as a whole. Given the potential
impact of OCB on organizations' performance, this study investigated how the role of
employees' OCB can help to achieve the triple bottom line of sustainability‐financial,
social and environmental performance. Using U.S. fashion retail employees as the sam-
pling framework, a total of 278 datasets were used to test the hypothesized relation-
ship. The results showed that the ethical climate of an organization indeed positively
affects employees' OCB, consistent with previous studies in non‐fashion retail organi-
zations. Regardless of the size of the organization, the role of employees on the
organization's overall sustainability performance was found to be highly important.
These findings suggest that businesses should consider ethical climate to enhance sus-
tainability through employees' OCB.

KEY W ORDS

corporate social responsiblity, ethical climate, organizational citizenship behavior, sustainability

performance

1 | I N T RO D U CT I O N
In an effort to support businesses' efforts to improve sustainability
performance, several organizational behavior researchers have
focused on the role of employees' organizational citizenship behavior
(OCB) and organizational climate in achieving sustainability. From a
human and social capital theory perspective, employees are consid-
ered the key to any business's economic productivity and positive
performance (Tan, 2014). OCB helps to improve the effectiveness
and flexibility of a business as a whole because employees with high
levels of OCB more strongly support their organization and its goals,
even when such support is not explicitly demanded (Mohammad,
Habib, & Alias, 2011). Podsakoff, Ahearne, and MacKenzie (1997)
found that there was strong empirical evidence linking OCB and
individual and organizational performance. This is particularly impor-
tant for fashion retail executives to note due to the high level of
scrutiny that the industry has received for social and environmental
damage it has caused to the globally‐fragmented supply chain (Woo
& Jin, 2016). Within retail organizations, employees hold a variety
of career positions beyond sales (44%), such as finance, planning,
merchandising, digital marketing, or technology, for both brick‐and‐
mortar and online retailers.
Given the potential impact of OCB on organizations' performance,
researchers have been interested in discovering whether or not ethical
climate is a key antecedent of OCB as a context‐based variable (Cullen,
Parboteeah, & Victor, 2003; Tsai & Huang, 2008). The collective effect
of employees' perceptions of a company's ethics generates a work
environment with shared ethical work norms, which impacts
individuals' attitudes toward their organization, and thus influences
their ethical decision‐making process (Cullen et al., 2003). Depending
on the organization's size, the different levels of psychological distance
between employees and the organization can affect employees'

Corp Soc Resp Env Ma. 2018;1–9. wileyonlinelibrary.com/journal/csr Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment 1
2 LEE AND HA‐BROOKSHIRE
perceptions toward the work environment and OCB (Pearce &
Herbik, 2004). Organizational management researchers argue that
developing OCB within each individual organization's context should
be a focal point for any organization's success, especially if the organi-
zation wants to achieve its sustainability goals (Park & Shaw, 2013).
Despite previous research on the positive role of OCB and ethical
climate on organizations' sustainability performance, the specific
relationship between these concepts has not been tested on the U.S.
fashion retail industry. This industry is often underscored by negative
publicity and accusations that some brands are manufactured in
conditions which compromise social sustainability (Goworek, Fisher,
Cooper, Wooward, & Hiller, 2012). Researchers warn that fashion
retail businesses' unethical, socially irresponsible practices can be
costly, not only in terms of financial expenditures, but also in non‐mon-
etary ways, such incurring a negative reputation, lack of employee
engagement, and pressure from competing businesses (Kanwar, Singh,
& Kodwani, 2012). Therefore, this research aimed to investigate the
impact of ethical climate on U.S. fashion retail employees' OCB and
the consequences for organizations' sustainability performance
in hopes of offering insights into how critical employees' behavior
is in achieving sustainability in the fashion business.
2 | L I T E R A T U R E R E V I E W A N D HY P O T H E S I S
D E V E L O P M E NT
2.1 Organizational Citizenship Behavior and Social
| employees feel that they are treated fairly and ethically present with
Exchange Theory
OCB is defined as “individual behavior that is discretionary, not directly
or explicitly recognized by the formal reward system and that in the
aggregate promotes the effective functioning of the organization”
(Organ, 1990, p. 4). Throughout the organizational citizenship litera-
ture, social exchange theory is discussed as the fundamental theoreti-
cal framework for connecting employee attitudes and OCB, which
emerges from “feelings of personal obligations, gratitude, and trust”
(Blau, 1964, p. 94). This relationship is also discussed in the group‐
value literature which explains that employees are guided to return
benefits to maintain the social exchange relationship with their
employers (Cropanzano & Mitchell, 2005). Similar to an economic
exchange in which expenditure and return are relatively equal, the
nature of social exchange assumes that employees will perform
extra‐role tasks in exchange for the long‐term benefit they may receive
within their formal roles. Cropanzano and Mitchell (2005) view this
type of social exchange as a relationship‐focused transaction. There-
fore, employees' OCB seeks to maintain the balance in a social
exchange between employees and the organization, and OCB is
directly intended to benefit not only the employees themselves but
also the organization as a whole (Mohammad et al., 2011).
2.2 | Ethical Climate and Organizational Citizenship
Behavior
Ethical climate has been emphasized in the literature as one of the key
antecedents of OCB, and such behavior can enhance the overall nature
of the workplace (Valentine, Godkin, Fleischman, Kidwell, & Page,
2011). Although previous research argues that attitudinal variables,
such as employee satisfaction and organizational commitment, are
potential antecedents of OCB, researchers also argue that OCB is
related to context‐based factors, such as ethical climate and coopera-
tive norms, which may lead to increased citizenship behaviors (Valen-
tine et al., 2011). When employees perceive an ethical climate exists
within their working environment, they are likely to promote positive
organizational performance among one another and thus develop
greater OCB (Newman, Nielsen, & Miao, 2015). Victor and Cullen
(1988) define ethical climate as “employees' shared perceptions of
what is ethically correct behavior and how ethical issues should be
handled” (pp.51–52). Ethical practices not only comply with legal stan-
dards of conduct, but also conform to the general ethical values of the
community at large (Valentine et al., 2011). These norms also affect
institutional behavioral systems, which become shared perceptions of
organizational signals and ethical decision‐making behaviors among
employees (Martin & Cullen, 2006). Rather than weighing transitory
feelings about an individual's immediate work situation or employer,
it is imperative to assess the degree to which enduring attitudes are
formed by the environment and thus stimulate successful business
outcomes over time (Valentine et al., 2011).
Several ethical climate studies have investigated the relationship
between employees' perceptions of ethical climate and their own atti-
tudes and behaviors (Tsai & Huang, 2008). Particularly, Ensher, Grant‐
Vallone, and Donaldson (2001) argue that environments in which
higher OCB. On the other hand, if employees perceive that an uneth-
ical climate exists, these particular employees may find it difficult to
engage in OCB as compared to those who do not have this perception
(Ensher et al., 2001). According to Barnett and Schubert (2002), the
ethical climate within an organization could develop employees' posi-
tive perceptions about the relational agreement between themselves
and their employers, which leads to strong OCB. Likewise, the devel-
opment of a strong corporate ethical climate was found to be a central
factor in preventing low OCB among employees (Ahmed & Machold,
2004). Therefore, the following hypothesis was proposed:
Hypothesis 1. The presence of an ethical climate in an
organization positively influences U.S. fashion retail
employees' organizational citizenship behavior.
2.3 | OCB and Perceived Organizational
Sustainability Performance
Formally introduced in the 1950s in the field of economics, human
capital is defined as “productive wealth embodied in labor, skills and
knowledge” which includes any stock of knowledge or the innate or
acquired characteristics a person possesses that contributes to his
or her economic productivity and organizational performance (Tan,
2014). From this perspective, when employees leave an organization,
that organization may incur additional costs, not only from the loss
of accumulated human capital, but also from the loss of investment
costs in employees, such as expenditures related to training and
education, costs related to improving productivity, or both (Kang &
LEE AND HA‐BROOKSHIRE
Shivdasani, 1995). Similarly, social capital theory accentuates that
employees are “a resource reflecting the character of social relations
within the organization, realized through members' levels of collective
goal orientation and shared trust” (Leana & Van Buren, 1999, p. 540).
Accordingly, Seibert, Kraimer, and Liden (2001) suggest that social
capital may be created when the relationship among people changes
in ways that facilitate instrumental action. Thus, human and social cap-
ital theories contributed to the development of organizational research
in many industries, and suggested that OCB may influence organiza-
tional performance (Shaw, Gupta, & Delery, 2005).
Lourenco, Branco, Curto, and Eugenio (2012) define corporate
sustainability performance as “measuring the extent to which a firm
embraces environmental integrity, social equity and economic prosper-
ity into its operations, and ultimately the impact they exert on the firm
and society” (p.417). This definition is consistent with the triple bottom
lines of organizational sustainability performance—financial, social, and
environmental performance. Corporate sustainability performance can
positively impact an organization's reputation, its relationships with
stakeholders, and even employee productivity (Lourenco et al., 2012).
An organization's sustainability performance is an important measure
to consider because many of today's organizations are under pressure
to report their sustainability efforts (Hubbard, 2009; Lozano, 2015).
Today's emphasis on sustainable development forces firms to re‐eval-
uate their business‐as‐usual approaches, and to measure organiza-
tional performance based on three principles—environmental
integrity, social equity, and economic prosperity. This is because orga-
nizational performance in one area can have an effect on the other two
areas in today's market environment (Garcia‐Rodriguez, Garciz‐
Rodriguez, Castilla‐Gutierrez, & Major, 2013; Hubbard, 2009).
The first dimension, financial performance, refers to the general
measure of a firm's overall financial health over a given period of time
(Investopia.com, n.d.). Without a positive financial performance, an
organization may not be able to continue its business operations. There-
fore, numerous researchers have used financial performance as a key
measurement in assessing an organization's performance (Lourenco
et al., 2012). The second dimension, social performance, is a “company's
responsibilities to multiple stakeholders, such as employees and the
community at large, in addition to its traditional responsibilities to eco-
nomic shareholders” (Chen & Delmas, 2011, p.789). Chen and Delmas
suggest social performance commonly measures “soft” indicators
related to management practices, such as labor rights protection and
transparency in social and environmental performance reporting.
The third dimension, environmental performance, is defined as “the
results of an organization's management of its environmental aspects or
the totality of a firm's behavior toward the natural environment (i.e. its
level of total resource consumption and emissions)” (Bhattacharyya &
Cummings, 2015, p.310). Environmental performance can be divided
into three aspects: (a) environmental impact, such as toxicity, emissions,
and energy use; (b) regulatory compliance, such as noncompliant status,
violation fees, and number of audits; and (c) organizational processes,
such as environmental accounting, audits, reporting, and environmental
management systems (Delmas & Blass, 2010, p.246–247). Ramus and
Steger (2000) assert that employees' perceptions of ethical climate
and organizational support, along with the operationalization of such
qualities between organizations and their employees, could contribute
3
to improving companies' environmental performance and the develop-
ment of a sense of eco‐initiative in employees.
With these triple bottom lines in mind, Eccles, Ioannou, and
Serafeim (2012) found that organizations with high levels of sustain-
ability performance exhibited low volatility, and achieved higher rates
of return, as compared to those with low levels of sustainability per-
formance. It may be that companies with high levels of sustainability
performance provide more benefits to employees, attract better
human capital, and encourage product and process innovations to
remain competitive, given the additional environmental and social
constraints (Eccles et al., 2012). It has been well‐documented in
previous literature that one of the most important outcomes of
OCB is improved organizational performance (Nielsen, Hrivnak, &
Shaw, 2016). That is, when employees exceed their job requirements,
they tend to be more helpful and cooperative and to perform
better, leading to improved performance for the team or group. Niel-
sen et al. (2016) also found a strong positive relationship between
OCB and organizational performance, including along triple bottom
lines. However, the relationship between OCB and the three bottom
lines of organizational sustainability performance have not been
empirically tested in the U.S. fashion retail business setting. There-
fore, the following hypothesis was made:
Hypothesis 2. U.S. fashion retail employees' organiza-
tional citizenship behavior positively affects their perception
of an organization's sustainability performance, including its
(a) financial, (b) social, and (c) environmental performance.
2.4 | Organization Size as a Moderator
According to the U.S. National Retail Federation (2016), approximately
98.6% of all retail businesses in the United States employ fewer than
50 people. The average number of employees per establishment in
apparel stores was estimated at 13 employees between 2001 and
2010 (U.S. Bureau of Labor Statistics, 2016). Brammer and Millington
(2006) indicate that organization size replicates and embodies a
diverse range of organizational attributes. In other words, organization
size can have a significant influence on corporate environmental
culture and community (Adams & Hardwick, 1998). For example, larger
organizations are likely to present with more bureaucratic and special-
ized administrative structures than smaller ones, which might make it
difficult for large organizations to establish a new organizational
climate, or they might require more time to change a previously
established climate (Donaldson, 2001). If more bureaucratic and
administrative structures exist within the organizations, OCB might
thus be less encouraged (Brammer & Millington, 2006).
In this light, some scholars argue that organizations with fewer
employees may be more conducive to developing higher levels of
OCB (Pearce & Herbik, 2004). These scholars posit that, in smaller
organizations, there is less psychological distance between individuals,
which may encourage a higher level of OCB in employees. Previous
scholars also found that, in large organizations, employees tend to feel
a greater psychological distance between each other, causing them to
participate and cooperate less in corporate culture than employees in
smaller organizations (Shin, 2012). Thus, an organization's size
4 LEE AND HA‐BROOKSHIRE
may affect its ethical climate and overall climate strength, which may
influence employees' citizenship behavior and therefore, company
performance (Pearce & Herbik, 2004). However, these relationships
have not been empirically tested in the U.S. fashion retail setting.
Therefore, the following hypothesis was proposed:
Hypothesis 3. In the U.S. fashion retail industry, a
business's size affects the relationship between ethical
climate, organizational citizenship behavior, and the
organization's sustainability according to its financial
(H3a), social (H3b), and environmental (H3c) performance.
3 | METHOD
3.1 | Survey Research and Instruments
For the purposes of this research, we employed a nationwide survey
limited to businesses in the U.S. The survey consisted of five parts,
and each item was measured on a 5‐point Likert scale ranging from
(1) strongly disagree to (5) strongly agree. Ethical climate standards
were adopted from Huang, You, and Tsai (2012), which used a 14‐item
scale (Cronbach's α = .52 to .82). OCB was measured on a scale that
was adapted from a 4‐item scale (Cronbach alpha = .66) used by Huang
et al. (2012) and a 4‐item scale (Cronbach α = .84) from Shin (2012).
By taking into account environmental, social, and economic
prosperity (Lourenco et al., 2012), organizational sustainability perfor-
mance was measured according to three dimensions: financial, social
and environmental performance. A three‐item scale measuring finan-
cial performance was adopted from Choi and Yu (2014) (Cronbach's
α = .95). Due to a lack of existing reliable scales for organizational,
social, and environmental performance, this study developed a new
scale for social and organizational performance using the exploratory
study of Eccles et al. (2012) which suggests items that could project
organizations' social and environmental performance. First, the items
recommended by Eccles et al. were screened to identify which were
relevant in assessing each social and environmental performance
dimension. Second, three experts in organizational management
research reviewed the items for content validity. Third, the items were
empirically tested in a pilot study (which is described in the next
section). Overall, the items were deemed valid and reliable and thus
were used in our large scale survey.
Lastly, employee demographic information was collected, such as
job title, gender, age, and educational background, to assist in provid-
ing further contextual descriptions of employees in the U.S. fashion
retail industry.
3.2 | Sampling and Data Collection
In order to meet our research objectives, purposive sampling was
administered to select because this method is more useful in studying
a small subset of a larger population through which it may be easier to
make generalizations about the study sample. At least 12 participants
are required to estimate average values and variability for larger subse-
quent studies; therefore a pilot study was conducted to test the
feasibility, equipment, and methods of this study (Leon, Davis, &
Kraemer, 2011). Twelve participants who fit into the study's sample
framework completed the pilot study, and reported no difficulties or
issues relating to the measurement items.
To recruit appropriate participants, a Qualtrics representative
undertook various recruitment processes among panel companies,
and five screening questions were added to ensure participants were
current employees in the fashion retail industry, and met the study's
criteria, including (1) age (18 years or older), (2) full‐time employee
status, (3) a minimum of one year at the current organization (1 year
or longer), (4) employment in an organization with the minimum num-
ber of employees (more than two), and (5) appropriate nature of the
business of the current employer. Questions 2, 3, and 4 were asked
to ensure sufficient time exposure to their current employers to be
able to assess the organization's long‐term ethical climate. For screen-
ing question 5, the following definition of the fashion retail industry
was shared with the participants: “an industry that engages in retail
merchandise related to fashion clothing, fashion accessories and fash-
ion shoes, and ultimately markets to target consumers.” To proceed to
the survey questions, the participants were required to respond to all
five screening questions in the affirmative. A total of 309 responses
were completed over a period of approximately two weeks in 2016
and used for further data analysis.
Prior to testing the hypotheses, basic assumptions were checked,
such as missing data, outliers, multicollinearity, and normality. Outliers
were evaluated for response patterns that recorded either all “1” or “5”
on all 40 measurement items, and therefore 3 datasets were excluded
from further analysis. Twenty‐eight responses were detected as multi-
variate outliers exceeding the critical value (>73.40) of Mahalanobis
distance (Kline, 2011) and were excluded from further analysis. No
multicollinearity was found. Overall, non‐normality did not hinder this
data analysis, and was determined as the measured variable in the
model. As a result, 278 responses were analyzed in the next step. This
two‐step approach was employed to conduct empirical data analysis
using structural equation modeling (Kline, 2011).
4 | RESULTS
4.1 | Demographics
Sample characteristics are summarized in Table 1. Participants were
young, in general, with 93 participants in the range of 18 to 44 years
of age (69%). The sample was comprised of 145 females (52.2%) and
133 males (47.8%). In terms of job responsibilities, 114 of the partici-
pants had work relating to sales (41%), followed by 81 in store
management (29.1%), and 51 in buying or merchandising (18.3%).
This result delineates that retail positions do not necessarily involve
sales positions, as 44% of retail employees were reported as holding
other positions, such as finance, planning, merchandising, digital mar-
keting and technology (Davis, 2014). Participants worked in companies
of varying sizes: 116 worked in companies having between 2 and 50
employees (41.7%); 82 between 51 and 500 employees (39.6%); and
52 in organizations with over 501 employees (18.7%). Based on
categories defined by the U.S. Small Business Administration (Cho &
Jin, 2015), the sample was first divided into small‐ and medium‐sized
LEE AND HA‐BROOKSHIRE 5

TABLE 1 Demographic (n = 278)

N (%) N (%)
Age 18–24 93 (33.5%) Company owned by Private 182 (65.5%)
25–44 98 (35.3%) Publicly 73 (26.3%)
45–65 83 (29.9%) Don't know 23 (8.3%)
66 or older 4 (1.4%)
Gender Male 133 (47.8%) Individual income in 2015 $25,000 or less 28 (10.1%)
Female 145 (52.2%) $25,001 – $50,000 102 (36.7%)
$50,001 – $75,000 74 (26.6%)
$75,001 – $100,000 39 (14.0%)
$100,001 or above 35 (12.6%)
Education High school or less 68 (24.5%) Number of employees Between 2 and 10 41 (14.7%)
Some college 70 (25.2%) Between 11 and 50 75 (27.0%)
Associate/Bachelor 82 (29.5) Between 51 and 250 82 (29.5%)
Master/ Professional 51 (18.3%) Between 251 and 500 28 (10.2%)
Doctorate 7 (2.5%) Over 501 52 (18.7%)
Marital status Married 133 (47.8%) Job responsibility Sales 114 (41%)
Widowed 4 (1.4%) Store management 81 (29.1%)
Divorced 26 (9.4%) Buying/ Merchandising 51 (18.3%)
Separated 2 (0.7%) Human resources 16 (5.8%)
Never Married 113 (40.6%) Other 16 (5.8%)
Ethnicity American Indian/ 1 (0.4%) Most populated living area (>9)** California 30 (10.8%)
Alaskan Native Florida 18 (6.5%)
Asian 17 (6.1%) Georgia 11 (4.0%)
Black/African American 29 (10.4%) Illinois 10 (3.6%)
ispanic/Latino 38 (13.7%) Indiana 10 (3.6%)
Native Hawaiian/ 4 (1.4%) New York 31 (11.2%)
Pacific Islander Ohio 10 (3.6%)
White 185 (66.5%) Pennsylvania 15 (5.4%)
Other 4 (1.4%) Texas 10 (3.6%)
Virginia 12 (4.2%)

Note:
**= States with more than 9 participants.

(the number of employees <500) organizations, followed by large
organizations (the number of employees: > 500). Detail information is
included in Table 1.
4.2 | Measurement Model
Prior to examining hypothesized relationships, the original measure-
ment model of variables in the hypothesized structural model was con-
densed and specified over several iterations to reduce standardized
residuals and obtain acceptable model fit by using Amos 23 (Kline,
2011). In consideration of modification indices, covariance relation-
ships were added, and items were deleted one at a time. Through this
process, ten items were removed due to low factor loadings and
high correlation. The measurement model of all latent variables in
the hypothesized structural model had a value of 229.888 (d.f. = 138;
p‐value < .001), a corresponding CFI of .97, a TLI of .96, an RMSEA
of .05, and an SRMR of .04 at acceptable levels of model fit. The
loadings for all the factors were high, all above .60, and corresponding
est./s.e. values were statistically significant as shown in Table 2.
The convergent and discriminant validity of the measurement
model was checked with the average variance extracted (AVE). First,
overall AVEs of all latent constructs within the measurement model
satisfied the criteria of the convergent validity, as the AVE of each
latent construct was evaluated with a cutoff criterion of .50 or higher
(Fornell & Larcker, 1981). Second, discriminant validity was evaluated
with AVE estimates and the correlation matrix as shown in Table 3.
All values of the square root of the AVE of paired constructs
exceeded the correlation estimates between these constructs, which
satisfied the discriminant validity of the measurement model (Fornell
& Larcker, 1981). The reliability of the measurement model exhibited
acceptable reliability with Cronbach's α values over .70 (Kline, 2011).
Cronbach's α values ranged from .81 (social performance) to .87
(financial performance) while composite reliability ranged from .80
(social performance) to .95 (OCB). Consequently, by evaluating all
model fit indices, reliability, and validity, the measurement model
was confirmed.
4.2.1 | Common Method Variance
Due to the nature of self‐reported data, it is important to evaluate
common method variance (CMV) as it may present with a false internal
consistency, and/or cause systematic measurement errors that either
inflate or deflate the observed relationships between constructs
(Chang, van Witteloostuijin, & Eden, 2010). To capture the common
variance among all observed variables, a common latent factor test
was performed by comparing the degree of freedom and chi‐square
differences between unconstrained (X2 =208.2, d.f. = 136 p‐value <
.000) and constrained (X2 =290.1, d.f. = 156 p‐value < .000) in the
common latent factor models. Based on the result of △X2 =81.9 and
d.f. = 20 (p‐value < .000), common method variance was detected.
To prevent CMV from either deflating or inflating the results, the com-
mon latent factor was retained for further analysis (Chang et al., 2010).
Then, the measurement model was tested again, and reported a value
of 159.47 (d.f. = 119; p‐value < .001), a corresponding CFI of .99, a TLI
of .98, an RMSEA of .03, and an SRMR of .03 at acceptable levels of
model fit.
6 LEE AND HA‐BROOKSHIRE
TABLE 2 Results for the Confirmatory Factor Analysis (n = 278)
Factor and Measurement Item
(1) strongly disagree to (5) strongly agree
Ethical climate (Cronbach's α = .83, CR = .84, AVE = .73)
The most important concern is the good of all
the people in my company as a whole.
My major concern is always what is best for
the other person.
In my company, the law or ethical code of
the profession is the major consideration.
In my company, everyone is expected to strictly
follow company policies or professional standards.
Successful people in my company go by the book.
People in my company strictly obey company policies.
Organizational citizenship behavior
(Cronbach's α = .86, CR = .95, AVE = .90)
I go out of way to help new employees in my company.
I help other colleagues who have heavy
workloads in my company.
I help other colleagues who have been
absent in my company.
I attend functions that are not required but
that help my company's image overall.
I make suggestions to improve my company.
I volunteer for tasks that are not required
to help my company in general.
Financial performance (Cronbach's α = .87,
CR = .87, AVE = .70)
I am aware that my company has competitive
advantages in its sales and profit growth.
I am aware that our company has a competitive
advantage in cost saving and efficiency.
I am aware that our company has a competitive
advantage in its brand value.
Social performance (Cronbach's α = .81,
CR = .80, AVE = .67)
I am aware that my company has a policy
to strive to be a good corporate citizen.
I am aware that my company has a policy to
respect business ethics.
Environmental performance (Cronbach's α = .86,
CR = .87, AVE = .69)
I am aware that my company has an initiative
to reduce, reuse, and recycle.
I am aware that my company has an initiative
to reduce the negative environmental impact of
its products.
I am aware that my company has a policy to improve
its energy efficiency.
Note. CR = Composite reliability. AVE = Average variance extracted.
β = Standardized estimates.
4.3 | Structural Model
The structural model reported its goodness‐of‐model‐fit indices to be
2
X = 207.45 (d.f. = 125, p‐value < .000), CFI = .97; and TLI = .96;
RMSEA = .05, and SRMR = .04, suggesting the acceptable levels of
model fit as shown in Figure 1. Hypothesis 1 predicted a positive rela-
tionship between ethical climate and OCB. The result supporting this
hypothesis was statistically significant (H1: X2 = .78; p‐value < .001).
Hypothesis 2a through 2c investigated whether or not OCB could
TABLE 3 Mean, Standard Deviations and Correlations
β Mean SD Correlations
1 Ethical Climate 3.81 .46 .85
2 Organizational Citizenship 3.10 .56 .84 .95
Behavior
.81
3 Financial Performance 3.46 .60 .69 .72 .83
.62 4 Social Performance 3.71 .61 .76 .71 .78 .82
5 Environmental Performance 3.39 .68 .65 .62 .70 .71 .83
.77
Note. The diagonal values in bold represent the square root of the AVE of
each construct, and off‐diagonal elements are the correlations between
.70
constructs. *ρ < .05, ** ρ < .001.
.80
.77 positively influence the triple bottom lines of organizational sustain-
ability performance. Hypothesis 2a posited a positive influence of
OCB on financial performance (H2a: X2 = .62; p‐value < .01). Hypoth-
.78 esis 2b assessed the positive influence of OCB on social performance.
.85 This relationship was shown as statistically significant (H2b: X2 = .72;
p‐value < .01). Hypothesis 2c examined the positive influence of
.74
OCB on environmental performance. The result indicated that this
.70
relationship was statistically significant (H2c: X2 = .50; p‐value < .05).
.73 4.3.1 | Measurement Invariance Analysis
.70 To test the effect of an organization's size, the sample was first divided
into small, medium (the number of employees <500), and large (the
number of employees: > 500) organizations (Cho & Jin, 2015). Prior to
.85 examining each organization according to size, measurement invariance
was tested to assure that the same constructs were being assessed in
.87 each group (Chen, Sousa, & West, 2005). First, configural invariance
across groups was tested with fit indices of X2 of 413.9 (d.f. = 272;
.78
p‐value < .001), a corresponding CFI of .96, a TLI of .94, an RMSEA of
.04, and an SRMR of .04 at acceptable levels of model fit. This suggested
that the measurement model across organizational size was equilibrant
.84 in configural invariance. Second, to examine metric invariance, a
chi‐square difference test was conducted on organization size.
.80
The chi‐square difference between configural invariance and metric
invariance resulted in △X2= 45.95 and △d.f. = 40, p‐value = .24, indicat-
ing no difference between groups. Consequently, this implied that the
.86 effects of the measurement model were the same in an organization
the size of an SME (n = 226), and a large corporation (n = 52). This indi-
.76
cated that both categories could proceed to multiple group analysis.
.87
4.4 | Multi‐group Analysis
Multiple group analysis was employed to examine whether the
structural relationships differed across respondents according to the
size of their company. Hypothesis paths 2a, 2b, and 2c were included
for multiple group analysis, as those paths yielded significant results
in SEM. The fit of the unconstrained model (free model) was assessed,
and the indices demonstrated an acceptable fit, X2 = 408.372 (d.f. =
281, p‐value < .000), CFI = .96; and TLI = .95; RMSEA = .04, and
SRMR = .04. To test hypotheses 3a, 3b, and 3c, a chi‐square difference
test was conducted where it freely estimated four models, only
constraining one path, between ethical climate and OCB, to be equal
across groups. However, the test yielded a statistically insignificant
result,△X2 = 6.21 and △d.f. = 6, p‐value = .40, indicating no difference
LEE AND HA‐BROOKSHIRE
FIGURE 1 Hypotheses Testing for the Structural Model
between SMEs and large organizations. Thus, hypotheses 3a, 3b, and
3c were not supported in this study.
4.5 | Discussion and Implications
To achieve sustainability, it is critical to encourage positive attitudes
and behaviors among employees, because employees are the key to
the success of an organization (Leana & Van Buren, 1999). Through
conducting a nationwide survey using U.S. fashion retail employees
as the sampling framework, our study revealed that the ethical climate
of an organization indeed positively affects employees' OCB,
consistent with previous studies in non‐fashion retail organizations
(Ahmed & Machold, 2004). Also, our results demonstrated the
significant positive impact of OCB on U.S. fashion retail businesses'
sustainability performance. However, the size of the organization
was not found to be an influential moderator.
This study has several key implications. First, we found that the
development of a strong corporate ethical climate is central to achiev-
ing positive OCB among U.S. fashion retail employees. Our findings
showed that the more employees perceive an ethical climate within
an organization, the stronger employees' OCBs are toward other
colleagues as well as members of other organizations. Similarly, Checco
(2008) argues that one of ways to develop ethical climate could be to
hire the right employees and educate them so organizations can culti-
vate a strong ethical climate from within. Second, U.S. fashion retail
employees' OCB produces better outcomes in the triple bottom lines
of organizational performance. It signifies that good employees with
citizenship behavior support their organizations, which, in turn,
increases those organizations' performance. If fashion retail businesses
aspire to improve their financial, social, and environmental perfor-
mance, our analysis suggests that they should consider taking
measures to develop OCB among employees. This would assist in
reducing the pressures and burdens associated with improving social
and environmental performance for many fashion retail organizations.
Third, our study is one of the few to investigate the three dimen-
sions of organizational sustainability performance. Because
7
sustainability has begun to encompass the triple bottom lines—social,
financial, and environmental—our study therefore included environ-
mental performance to measure a more complete framework for the
sustainability performance of organizations. To tackle social and
environmental performance, sustainable solutions at every stage of
the supply chain, from designers and producers to retailers are impor-
tant to develop (Forum for the Future, n.d.). Based on interviews and
research with key people from across the fashion supply chain, a report
from the Forum for the Future (n.d.) suggests that it is not only vital to
encourage sustainable consumption, but also to make more responsible
ethical decisions related to environmental issues in production. By
adding the environmental aspect of performance, financial and social
performance will be enhanced, supporting the triple bottom line theory
of sustainability. Our study's findings clearly show this relationship
empirically.
Fourth, we found that the relationship among ethical climate,
OCB, and organizational sustainability performance within U.S. fashion
retail businesses does not differ according to the size of the organiza-
tion. Regardless of the organization's size, U.S. fashion retail
businesses could improve their overall sustainability performance
through increasing their employees' OCB. Our findings highlight the
importance of employees' OCB, and that these behaviors are derived
from an overall ethical climate within the organization. Therefore,
regardless of the organization's size, fashion retail executives may
want to focus on establishing and promoting measures to improve
the ethical climate within their organizations that would help
employees build OCB.
There are several limitations to this study, which may lead to
future research opportunities. First, our research focused exclusively
on U.S. fashion retail employees. However, the results of this study
may be valuable in a global context as it is one of the few to explore
OCB in the fashion retail industry. In other parts of the fashion supply
chain operating in other countries or in wholesale businesses that pri-
marily deal with manufacturers in other countries, different findings
may result in terms of OCB or the three dimensions of organizational
sustainability performance. Therefore, it is suggested that future
8 LEE AND HA‐BROOKSHIRE
research could explore how different cultures develop OCB, as well as
examining the impact of ethical climate on outcomes related to the tri-
ple bottom lines of organizational sustainability performance. Second,
we employed a purposive sampling technique, and it cannot be
assumed that this study is representative of the entire population of
U.S. fashion retail employees. To accommodate timely data collection,
a research firm recruited panels from among their contacts to partici-
pate in the survey. Thus, it may be difficult to generalize this study's
findings to apply to the whole population of U.S. fashion retail
employees. Hence, future research could be conducted using a larger
number of participants, in addition to utilizing a randomized sampling
technique. Moreover, as our study was one of the few to examine
organizational sustainability performance, there was a lack of compar-
ative data to draw upon. Although we conducted a pre‐test for the
design of the full‐scale experiment, future research is needed to
explore the confines of the measurement scales used.
FUND ING INF ORMATION
No financial support for the research, authorship, and/or publication of
this article.
ORCID
Stacy H.N. Lee http://orcid.org/0000-0003-0823-4250
Jung Ha‐Brookshire http://orcid.org/0000-0002-2639-3709
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How to cite this article: Lee SHN, Ha‐Brookshire J. The effect
of ethical climate and employees' organizational citizenship
behavior on U.S. fashion retail organizations' sustainability per-
formance. Corp Soc Resp Env Ma. 2018;1–9. https://doi.org/
10.1002/csr.1510