Moral authority and its impact on the organization's strategic directions: An empirical study in Jordanian companies listed on the Amman Stock Exchange

Abstract

How does ethical authority influence an organization's strategic direction? This research investigates this question within the context of 164 companies listed on the Amman Stock Exchange. Analysis and interpretation of the results confirm the validity of the research model and its derived hypotheses. The study reveals a stable, sequential relationship between ethical behavior and an organization's strategic direction. As ethical authority progresses from weak to moderate to strong, the organization is able to shift its strategic direction from maximizing economic goals, through a balanced portfolio of objectives, to adopting social goals. Furthermore, the study indicates relationships and influences that allow for the reliance on ethical authority to explain the nature of changes in an organization's strategic direction. Finally, the evidence suggests that the level of ethical authority in the studied companies was weak, leading them to prioritize maximizing economic goals, particularly profit, due to its appeal and direct impact on short-term success. Conversely, there was a weak inclination to adopt social goals, both within and outside the company, because these goals require costs with potentially intangible, long-term returns.