It is surprising how certain countries are among the most corrupted in spite of their possession of the principles of IWE which are all against corruption or any kind of unethical behaviour. This leads to the conclusion that the principles of IWE are not implemented. Due to the strong contribution of employee behaviour in organisational success particularly in the international market, ethics have gained more importance because of the significant influence on employee behaviour and organisational outcomes (Ali & Azim, 1995; Furnham, 1990a; Valentine & Barnett, 2007). The attitudes and behaviour of people who are in close contact with God should be fundamentally compatible to religious conditions and laws (Rahman et al., 2006). Huntington (2004) suggested that religious beliefs and economic development are related. Similarly, Ali (1992) noticed the effect of work ethics on economic development and organisational commitment; once commitment is gained organisational change can be smoothly executed (Ali & Al-Owaihan, 2008). Congleton (1991) believes work ethics facilitate economic development yet some writers argue that Islam is a major obstruction to industrial and economic development in the Arab world (Abuznaid, 2006). In contrast, Rodinson (1974, p. 13) claims that values in Quran and Islamic teachings are not against ethics in socialism or capitalism. Similarly, Dennis (1982) assured that business activities have been always a central interest in the Muslim world. Additionally, Islamic law aims at achieving social justice and prohibits economic exploitation (Kamali, 2002). Implementation of IWE principles can benefit and help social and economic development in Muslim countries and Islam’s ‘‘own distinctive code of business ethics’’ (Wilson, 2006, p. 109). Rice (1999) found that failure or success of the business depends on commitment to IWE. Managers and employees in Kuwait, Saudi Arabia and UAE have scored high on IWE (Ali & Al-Owaihan, 2008).
Islamic work ethic directly and positively affects Positive Psychological Capital and its dimensions (hope, optimism, resilience and efficacy) (Uysal, 1996; Yousef, 2001) and is highly and positively correlated with individualism (Ali, 1987; 1992). There is an argument that IWE has a strong tendency whereby work is viewed as excellence in people’s life (Rizk, 2008) this is why during the first six centuries are known as the golden era of Islam (610-1258) where many sectors flourished such as agriculture, industry, trade, knowledge and construction of complex organisations thrived. Work and creativity were acknowledged and honoured (Ali, 1992, 2005; Abbas & Manton, 1998; Rodinson, 1974; Rokhman, 2010). Muslims are ordered to practice voluntarism as it is viewed as virtue for the sake of pleasing Allah (Pomeranz, 2004). Empirical work has shown that IWE is positively related to both OCB and knowledge sharing
behaviours (Kumar & Rose, 2012; Murtaza et al., 2016). Islam also emphasises knowledge sharing by collection of knowledge and disseminating it (Rice, 1999). Abbasi et al. (2011) found that IWE positively affects business performance and is positively related to OCB in telecommunication sector in Pakistan. Similarly, Imam et al. (2015) found that IWE had a positive impact on the performance of PhD faculty members. Moreover, the innovation capability of employees is positively affected by IWE (e.g., Abbasi et al., 2011; Awan & Akram, 2012; Kumar & Rose, 2010; Yesil, Sekkeli & Dogan, 2012). In the same line, IWE implies that conducting business in a spiritual environment will result in higher performance and widespread prosperity (Ali & Al-Owaihan, 2008). A significant and negative relationship of IWE with turnover intention in public sector in Pakistan has been observed (Sadozai et al., 2013). This is consistent with what Khan et al. (2013) found which is that individuals with high levels of IWE have a happy feeling toward their work (Yousef, 2000a) and are satisfied with their job (Nasr, 1985) which makes them unlikely to leave their organisations. Islamic work ethic is reported to highly and positively correlate with job satisfaction (Batool et al., 2013; Hayati & Caniago, 2012; Khan, Abbas, Gul & Raja, 2013; Marri et al., 2012; Yousef, 2000b), organisational commitment (Batool et al., 2013; Rokhman, 2010; Yousef, 2000a), and job involvement (Khan et al., 2013). Likewise, Randall and Cote (1991) and Fodor (1990) claimed that work ethic motivates employees to get highly involve in their jobs.
This indicates that as a result of the interaction between ethical leadership and IWE; social relationships and quality of work are improved, employees will be more satisfied, more likely to show more commitment, more motivated and more ready to devote all of their abilities to achieve organisational goals and consequently contribute to improving organisational performance (Abbasi et al., 2011; Ali, 2005; Abbasi & Rana 2012; Kumar & Rose, 2010; Yousef, 2000b, 2001). This is consistent with assumptions of social exchange theory which is used to justify the association between the variables. Additionally, IWE contains spiritual, economic and social components and the contribution of IWE in increasing performance and bringing social welfare and widespread prosperity is found in many empirical studies (e.g. Ali, 2005; Ali & Al-Owaihan, 2008; Yousef, 2001).
Implementation of IWE in the workplace increases the individual’s motivation, staff commitment and fulfilment. Therefore, adopting IWE principles in both public and private sectors is important and will have positive implications for productivity, efficiency and effectiveness (Ali, 1988, 1992; Al-Modafm, 2005; Rahman et al., 2006; Yousef, 2000, 2001; Yunus et al., 2011). This is supported by empirical works (Abbasi et al., 2011; Yesil, Sekkeli & Dogan, 2012). Prior work on IWE has found that the work ethic helps to clarify the objective
of the organisation and impacts on locus of control (Yousef, 2000b). A relationship between IWE and both locus of control and role ambiguity is reported by (Yousef, 2000b). Ali and al- Kazemi (2006) found a positive relationship between IWE and loyalty. Salancik (1983) argue that loyalty guarantees the flow of adaptive innovation and enriches the quality of final products, and productivity. Besides direct associations, IWE is significantly involved in many indirect associations with organisational outcomes. Organisational commitment moderated the relationship between IWE and attitudes toward organisational change (Allen & Meyer, 1990; Begley & Czajka, 1993; Yousef, 2001) and IWE affected three dimensions of organisational change (cognitive, affective, and behavioural) which help managers to manage change and employees to embrace change more easily (Yousef, 2000a).
Islamic work ethic moderates the association between JS and OC, which indicates that combining the influence of both JS and IWE is a key factor for employees to show more commitment (Yousef, 2001). Islamic work ethic moderated the relationship between JS and two dimensions of organisational justice (distributive and procedural) (Khan et al., 2013). This indicates that individuals with high IWE were more satisfied and less influenced by their perception of distributive injustice with presence of procedural justice. Ajmal and Irfan (2014) studied employees from private and public sectors in Pakistan and found that IWE moderated the association between job satisfaction and job stress and increases job satisfaction. Since IWE puts considerable emphasis on tolerance, brotherhood and patience. This study has some implications for business employees and Islamic managers or non-Muslim managers who have to deal with ethical, dilemmas, situations that offer potential benefits or gain and are unethical on daily basis (Schemerhorn, 2008, p. 36).