Assessing the Validity of CEV Model in Measuring Ethical Organizational Culture in Banking Sector in Sri Lanka

Abstract

Cadbury (1992) refers corporate governance, as systems, structures and processes by which business corporations are directed, controlled and monitored. The success or failure of the corporate governance will depend not only on legal requirements but also on other ethical behavioural aspects and internal governance culture in the organization.There should be an environment within the organization to have a culture and behaviour that will strengthen the implementation of good corporate governance practices. A company should have specific principles and values related to their stakeholder commitment. These values are more important than a rule based approach. Kaptein (2008) has developed the CEV model which consists of eight virtues, namely; clarity, congruency of supervisor, congruency of management, feasibility, supportability, transparency, discussability and sanctionability. The purpose of this study is to assess the validity of CEV model of Kaptein in measuring ethical organizational culture in a banking sector environment in Sri Lanka. A questionnaire was prepared based on the 58 scales of the CEV model and distributed among 50 employees of a leading private bank in Sri Lanka and out of them 40 were responded. This analysis is based on the data collected from those 40 participants. A five point Likert Scale ranging from (1) strongly disagree to (5) strongly Agree was used. Cronbach’s Alpha coefficient Analysis was used in measuring the reliability, and KMO and Bartlett’s tests were used to assess the convergent validity. CEV model has been found valid in measuring ethical organization culture with few modifications to the scales in Sri Lankan banking environment. .Since this study has been made as a pilot study using only 40 participants of a particular organization in the banking sector there are certain limitations in this study. There is an opportunity for future researchers to use more data from different type of organizations and compare them to generalize the findings.