Building Sustainable Public Sector Performance through Ethical Culture: The Sequential Mediating Roles of ESG Compliance
DOI:
https://doi.org/10.70670/sra.v4i2.2325Keywords:
The Ethics Matter in Public Sector Because Ethical Leadership, Ethical Culture and Ethical Climate, Esg Compliance Drive The Public Sector Performance and Sustainability As Per Ethics Climate Theory and Pls-Sem Techniques.Abstract
Public sector organizations are under increasing pressure to ensure sustainability, transparency and accountability, and to increase organizational performance. The research method used in this study was a quantitative research method with a cross sectional approach. The subjects of this study were employees of public sector institutions. An instrument with a 5-point Likert scale was employed to measure Ethical Leadership, Ethical Culture, Ethical Climate, ESG Compliance and Public Sector Performance. Data Analysis was done with Partial Least Squares Structural Equation Modeling (PLS-SEM) software developed by SmartPLS 4. Prior to hypothesis testing, a structural model assessment, discriminant validity testing and reliability and validity testing were performed. The findings showed that Ethical Leadership had quite a significant influence on the Ethical Climate (sineerift model, beta=0.510, P-value< 0.001), and of course it was also found that Ethical Culture influenced the Ethical Climate with a significant value in both (sineerift model, beta=0.411, P-value< 0.001). Ethical Climate had a significant positive effect on ESG Compliance (β = 0.822, p < 0.001), while ESG Compliance had a significant positive effect on Public Sector Performance (β = 0.825, p < 0.001). The model accounted for 76.8% of the variance in the Ethical Climate, 67.5% of the variance in the ESG Compliance, and 68.1% of the variance in the Public Sector Performance. Furthermore, the mediation analysis supported for the presence of indirect and sequential indirect effects between the constructs of the study. This research builds upon the Ethical Climate Theory, and it integrates ethical leadership, ethical culture, ethical climate, ESG compliance and public sector performance in one research framework. The results do provide proof of the role of ethical climate and ESG compliance as two key "mediating" factors by which ethical organizational values are acted upon to produce sustainable governance outcomes.
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