BUSINESS ETHICS AND FINANCIAL PERFORMANCE OF THE BANKING INDUSTRY.

A CASE STUDY OF DIAMOND TRUST BANK KABALAGALA BRANCH.

NABULYA JOANITAH

BR/DSS/4002/22

A RESEARCH PROPOSAL SUBMITTED TO THE BUSINESS DEPARTMENT IN

PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF A DIPLOMA
IN SECRETARIAL STUDIES OF BUGANDA ROYAL INSTITUTE OF BUSINESS AND
TECHNICAL EDUCATION.
MENGO KAKEEKA

April, 2023

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DECLARATION
I Nabulya Joanitah declare that this is my own original work and that it has never been
presented to any other Institute or university for a similar or any other purpose.

Registration number:…………………………………………..……………………..

Signature………………………………………………………………………………

Date……………………………………………………………………………………

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APPROVAL
This is to certify that this research report titled “Business Ethics And Financial Performance
Of The Banking Industry. A Case Study Of Diamond Trust Bank Kabalagala Branch. ” by
Nabulya Joanitah has been under my supervision and it is now ready for submission to
Buganda Royal Examination Council with my approval.

Mr Jjemba William

Signature:………………………………………………………
(Supervisor)

Date:…………………………………………………………….

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DEDICATION
I Nabulya Joanitah dedicate this piece of work to all my father Mr Lubowa Joseph and mother
Miss Nangobi Mariam, without your parental sacrifice and relentless efforts, this course would
have remained a myth.

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ACKNOWLEDGEMENT

I would like to thank The Almighty God who has enabled me successfully to complete this
research proposal

Special thanks to my supervisor Mr Jjemba William .It is difficult to find words that truly
describe how grateful I am for your repeated constructive critics, positive comments, patience,
tireless and constant support from the beginning to the end of this study.
And I thank my course mates Nassolo Gloria and Nabiryo Shifah for the support they have
given me since day one of starting this course.

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ABSTRACT

The study was based on Business Ethics And Financial Performance Of The Banking Industry.
A Case Study Of Diamond Trust Bank Kabalagala Branch.

It was guided by the following objectives; To identify business ethics activities performed by
Diamond Trust Bank, To identify challenges in business ethics activities in Diamond Trust Bank,
To examine the relationship between expenditures on business ethics activities and financial
performance of the Diamond Trust Bank.

The sample size has 25 respondents and the study population ranged from , 5 Bank Officials, 5
Supervisors, 5 Tellers, And 10 Customers with knowledge about the study.

The interviews will be done with the help of the questionnaires and interview guide to answer the
objectives of the research topic.

Both qualitative and quantitative data will be obtained and in order to convert this data into
information. Correlation and relationships will be analyzed using statistical analytical computer
tools.

Table of Contents

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DECLARATION.........................................................................................................................................2
APPROVAL................................................................................................................................................3
DEDICATION............................................................................................................................................4
ACKNOWLEDGEMENT...........................................................................................................................5
ABSTRACT................................................................................................................................................6
Abstract.....................................................................................................................................................12
CHAPTER ONE........................................................................................................................................14
BACKGROUND TO THE STUDY..........................................................................................................14
1.0 Introduction.........................................................................................................................................14
1.1 Background.........................................................................................................................................14
1.2 Problem statement...............................................................................................................................15
1.3 Purpose of the study............................................................................................................................16
1.2.1Objectives of the study......................................................................................................................16
l.4 Research questions...............................................................................................................................16
1.5 Scope of the study...............................................................................................................................17
1.5.1 Subject Scope...................................................................................................................................17
1.5.2 Geographical Scope..........................................................................................................................17
1.5.3 Time Scope.......................................................................................................................................17
1.6 Significance of the study.....................................................................................................................17
1.7 Conceptual Framework and Research Model......................................................................................18
CHAPTER TWO.......................................................................................................................................20
LITERATURE REVIEW..........................................................................................................................20
2.1 Introduction.........................................................................................................................................20
2.1 Theoretical Literature..........................................................................................................................20
2.2 Ethics...................................................................................................................................................20
2.2.2 Business ethics..................................................................................................................................20
2.2.2 Corporate Performance.....................................................................................................................21
2.3 Theoretical review...............................................................................................................................21
2.2.8 The relationship between expenditure on business ethics activities and Financial Performance.......22
2.4 Measures / ways of ensuring ethical performance...............................................................................23
2.5 Empirical Literature.............................................................................................................................24
2.6 Research Gap.......................................................................................................................................25

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CHAPTER THREE...................................................................................................................................26
METHODOLOGY....................................................................................................................................26
3.0 Introduction.........................................................................................................................................26
3.1 Study design........................................................................................................................................26
3.2 Sampling Procedure.............................................................................................................................26
3.3 Sample size..........................................................................................................................................26
3.2 Sampling Techniques..........................................................................................................................26
3.5 Data Collection Methods.....................................................................................................................27
3.5.1 Questionnaire....................................................................................................................................27
3.5.2 Interview Method.............................................................................................................................28
3.5.3 Research Instruments........................................................................................................................28
3.5.4 Documentary Review.......................................................................................................................28
3.6 Measurements of variables..................................................................................................................28
3.6.1 Validity of the instruments...............................................................................................................28
3. 7 Pre-testing...........................................................................................................................................28
3.8 Reliability of Instruments....................................................................................................................29
3.9 Data Validity.......................................................................................................................................29
3.10 Data Analysis....................................................................................................................................29
3.11 Ethical considerations........................................................................................................................29
CHAPTER FOUR.....................................................................................................................................30
PRESENTATION, INTERPRETATION AND DISCUSSION OF FINDINGS.......................................30
4.0 Introduction.........................................................................................................................................30
4.1 Background characteristics of the respondents....................................................................................30
4.1.1 Gender..............................................................................................................................................30
4.1.2 Age Table.........................................................................................................................................31
4.3 To identify business ethics activities performed by Diamond Trust Bank...........................................32
4.4 To identify challenges in business ethics activities in Diamond Trust Bank........................................34
4.5 To examine the relationship between expenditures on business ethics activities and financial
performance of the Diamond Trust Bank..................................................................................................36
CHAPTER FIVE.......................................................................................................................................39
SUMMARY, CONCLUSION AND RECOMMENDATION...................................................................39
5.0 Introduction.........................................................................................................................................39

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5.1 Summary of the findings for all the research objectives......................................................................39
5.1.1 To identify business ethics activities performed by Diamond Trust Bank........................................39
5.1.2 To identify challenges in business ethics activities in Diamond Trust Bank.....................................39
5.1.3 To examine the relationship between expenditures on business ethics activities and financial
performance of the Diamond Trust Bank..................................................................................................40
5.2 Recommendations of the research.......................................................................................................40
5.3 Conclusion...........................................................................................................................................41
References.................................................................................................................................................43

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List of Tables

Table 1: Showing the sample size………………………………………………………………27

Table 2:Showing the respondents gender…………………………………………….…………30

Table 3:Showing responses according to age……………………………………………………31

Table 4: Showing the response about business ethics activities performed by Diamond Trust
Bank. ………………………………………………………………………………………….…32

Table 5:Showing the response about challenges in business ethics activities in Diamond Trust
Bank. ……………………………………………………………………………….……………34

Table 6: Showing the response about the relationship between expenditures on business ethics
activities and financial performance of the Diamond Trust Bank. ……………...………………36

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List of Figures

Figure 1. Conceptual framework……………………………………………………………..….18

Figure 2: A pie Chart Showing respondent’s gender……………………………………………30

Figure 3: Showing the age of respondents…………………………………………………….…31

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List of abbreviations

IV…………………………….…… Independent Variable

DV………………………………… Dependent Variable

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Abstract
The problem statement highlights the issue of low productivity, erosion of work ethics,
indiscipline, weak control, and corruption in the banking industry, with a specific focus on
Diamond Trust Bank. The methodology section explains the research design, sampling
procedure, sample size, and data collection methods that will be used to study the impact of
business ethics and values on the performance of the banking industry. The study will use both
quantitative and qualitative methods, with a sample size of 25 respondents, including bank
officials, supervisors, tellers, and customers. The data collection methods will include
questionnaires and interviews, with a focus on primary and secondary data sources. The
questionnaire will cover general information and questions set in line with the study's objectives.
The interview method will involve separate interviews with key informants, and the research
instruments will include questionnaires and an interview guide. The study's findings show that
while Diamond Trust Bank Kabalagala Branch has strong policies and procedures in place to
prevent conflicts of interest and ensure fair treatment of customers, there are areas where they
could improve, such as monitoring and enforcing ethical behavior among employees and
communicating their commitment to ethical business practices to their customers and
stakeholders. The study recommends establishing a code of ethics, investing in ethical
leadership, enhancing transparency and accountability, fostering a culture of ethical behavior,
and conducting regular ethics training. These recommendations are supported by research studies
that have explored the link between business ethics and financial performance. By implementing
these recommendations, banks can promote ethical behavior and improve their financial
performance over time. The study concludes that prioritizing business ethics not only benefits
financial performance but also builds trust with stakeholders and contributes to the overall
stability of the banking industry.

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 CHAPTER ONE

BACKGROUND TO THE STUDY

1.0 Introduction
This chapter covers the background of the study, statement of the problem, objectives of the
study, research questions, and scope of the study and significance of the study.

1.1 Background
Employees' ethical conducts in banks are not new concepts issues and makes most of the
newspaper headlines over and over again. Steinberg (1994) argued that ethics in the banking
industry involve "ordinary decency" which encompasses such areas as integrity, honesty and
fairness. Behaving in an ethical manner is seen as of the social responsibility of individuals in
any bank so as to ensure its stability and survival, Adenubi (2000).

Geetu (2003) reveals that banks cannot ignore ethics and indeed for some reasons ethics has been
added to their corporate values. Banks need to integrate ethical practices and competencies, but
initially this requires an increased and shared understanding of ethics in organizations. Numerous
researchers suggest that organizational ethics is a major influence in ensuring the attainment of
organization objectives.

This has influenced the formulation of formal code of ethics which regulate employee's ethical
conducts, Peters and Waterman (1982) as cited by Lok (I 999). It has been observed that more
than 85 percent of organizations have developed and distributed organizational codes of conduct
so as to significantly affect ethical conducts of their respective employees, Rossy (2011).

Suggestions show that the existence of formal code of ethics will generally ensure the highest
standards of behavior and inhibit unethical conducts amongst organizational members. However,
experience shows that these formal codes are often undermined by the adherence to informal
codes known as norms which are characterized mainly by isolation and solidarity, Chye(2004).

The increased pressure from stakeholders such as consumers, investors and the community for
organizations to behave ethically and in a socially responsible way can no longer be ignored.

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Today investors' concern on ethical conducts of those who run organizations has greatly
increased. Regular disclosures that directors and executives behave unethical reflect badly on the
corporate sector as a vehicle for investors' funds, Hian(2004).

Reports of scandals, questionable business and political behavior in many banks are extremely
increasing their frequency. Anand et al(2004 ).stipulates organizational scandals involving
multinationals like Enron, WorldCom, Global Crossing, Parmalat and how they height attention
to the urgent need for corporate governance, corporate social responsibility and organizational
ethics. However, ethics programs are done to stimulate ethical conducts in organizations and
assist employees to act in a morally responsible way, McDonald (I 999).

Interest in this study has been stimulated first by the magnitude of the widespread criticisms
from stakeholders due to unethical conducts and unfriendly behavior of employees in different
banks which brought the need for behavior change.

1.2 Problem statement

This is because of low productivity, erosion of work ethics, indiscipline, blatant violation of
rules, regulations and procedures, weak control and corruption which have been observed as
common features in their services, President's Office (1999).

Kleinhempel (2009) argued that unethical behavior causes massive costs to organization. Several
studies have shown that organization with illegal records have not only been forced to pay for
investigations and fines but have also suffered significant stock price decline, on average, lower
profitability rates than their law abiding counterparts. In fact, many have experienced sharp sales
drops, higher equity costs and severe damage to their reputation among customers and other
stakeholders.

Taking Diamond Trust Bank as a case study, unethical conducts and unstable performance in
banks are speedily reported to increase recently. According to the recent 2020 Bank of Uganda
report, Diamond Bank failed to comply with 41 % of the set performance targets in ethical
conduct. Major failures were observed in the areas of interest rate observation, loan management,
and management of customer's savings. The report further explores how most of illegal and
unethical practices which affect the organization operations appear to be performed by Diamond

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Trust Bank employees themselves. This unstable performance of banks in Uganda particularly
Diamond Trust Bank and the increased reports on unethical conducts by respective banks create
a question as to whether the two have any related impact on each other.

Despite the provision of the necessary facilities, and training on ethical conducts of employees in
banks, awareness is still very low among the existing individuals and customers. Outside its
implementers, very little is known about ethical conducts' availability and capabilities even in
reputable banks where it has been set up. Although all the efforts in enhancing ethical behavior
have been done very little is known. This study therefore intends to assess the ethical conducts of
banks and how they impact their performance.

1.3 Purpose of the study

The purpose of the study will be to analyze the impact of business ethics on the performance of
the banking industry in Uganda.

1.2.1Objectives of the study

The study will be guided by the following research objectives.

i. To identify business ethics activities performed by Diamond Trust Bank.

ii. To identify challenges in business ethics activities in Diamond Trust Bank.
iii. To examine the relationship between expenditures on business ethics activities and
financial performance of the Diamond Trust Bank.

l.4 Research questions

The following research questions will guide the study

i. What business ethics activities are provided by Diamond Trust Bank to the community?
ii. What are the challenges involved in business ethics activities?
iii. There any relationship between expenditure on business ethics activities and financial
performance of Diamond Trust Bank?

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1.5 Scope of the study

1.5.1 Subject Scope

The study will concentrate on business ethics and corporate performance of the banking
institution. These variables will be mediated by efficiency and effectiveness in service delivery.

1.5.2 Geographical Scope

The study will be carried out in Kampala district. This area was chosen because most of the
Commercial banks are concentrated in Kampala and could be easily accessed. Diamond Trust
Bank Kabalagala Branch is located in Kabalagala along Gabba Road from the capital city of
Uganda Kampala.

1.5.3 Time Scope

The study will last for 3 months but will cover the adoption of business ethics and the
performance of banks for the period between March 2023 to May 2023; this will be intended in
order to make valid conclusions.

1.6 Significance of the study

The study will provide up-to-date information regarding the major challenges faced by banks in
the full incorporation of business ethics in service delivery under the distinct sectors i.e.
corporate social responsibility and sustainability.

The study will provide recommendations to assist banks improve their performance regarding
improvement of the ethical conduct in the distinct sectors in their respective areas of service
delivery.

The study will provide foundation for further research regarding business ethics and the
performance of banks.

This study will be vital and useful to the government, private and public financial institutions in
Uganda to evaluate their organizational performance within the context of their institutions and
see how they are affected by employees' ethical conducts.

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1.7 Conceptual Framework and Research Model
Conceptual frameworks are structured from a set of broad ideas and theories that help a
researcher to properly identify the problem they are looking at, frame their questions and find
suitable literature (educational researcher Smyth 2004).

On the basis of theoretical and empirical review taking limitation of the research in view, the
following conceptual framework is chosen on the relationship between business ethics and
financial performance. The figure below was developed to explain the impact of business ethics
on the performance of the banking industry.

Figure 1. Conceptual framework

INDEPENDENT VARIABLE DEPENDENT VARIABLE

BUSINESS ETHICS PERFORMANCE

Employee ethical conducts like integrity, Financial Performance

responsibility, Customer Satisfaction
accountability. Supplier Satisfaction
Corporate social responsibility activities Investor Relationship
Sustainability activities

Figure 1:1 Conceptual Framework Source: Developed by the Researcher (2023)

Dependent Variable

The dependent variable is the variable of primary interest to the researcher. In other words, it is
the main variable that lends itself for investigation as a viable factor (Sekaran, 2003). As regard
to this study the banks performance as the dependent variable (DV) will assessed by looking at
employee performance, financial performance, customer satisfaction, supplier satisfaction and
investor's relationship.

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Independent Variable

An independent variable is the one that influences the dependent variable in either a positive or
negative way (Sekaran, 2003). It is also called the explanatory variable or predictor variable. In
this study, an independent variable (IV) is expenditure on business ethics incurred by Diamond
Trust bank Kabalagala branch in favor of its stakeholders (e.g employees, customers, community
and Environment). These expenditures and activities will include training employee ethical
conducts in aspects of integrity, responsibility, accountability, association and competence. It
will also include activities of corporate governance, corporate social responsibility and
sustainability activities. Thus, IV is assessed by business ethics spending/costs incurred in
rendering business ethics activities.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction
This chapter will cover the theoretical literature review and empirical literature review. The
theoretical literature review will cover the terms of conceptual definitions, measures of ethical
performance, the utilitarian approach / theory to ethics and the relationship between business and
financial performance. Empirical literature review will contain review of previous studies and
articles which relate to this study and variables for this study.

2.1 Theoretical Literature

This part will cover definitions of ethics, business ethics, and corporate performance, measures
of ensuring of ethical performance, the utilitarian approach to ethics and the relationship between
business ethics and financial performance.

2.2 Ethics
According to Brian Hi II (2013) Ethics in business refers to standards of right or wrong behavior
when dealing with the company's various stakeholders including customers, employees and
vendors. Rossy (2011) defines ethics as the art and discipline of applying principles and
frameworks to analyze and resolve complex moral dilemmas. To sum-up the above definitions,
ethics can be defined as standards of morality that guides individuals and organization in
following certain norms of conduct when dealing with each other. Ethics involves some hard
features, like duties and rights (most of them legal), that are mandatory for all and soft
components, like values, aspirations or best practices that are desirable but not compulsory and
can vary from one organization to another.

2.2.2 Business ethics

Gbandi and Oseyomon (2014) see business ethics as a code of moral principles and values that
direct behavior of an individual or a group in terms of what is right or wrong. These are
established standards used to judge the rightness or wrongness of a business relative to others.

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Business ethics is concerned with the study of business situations, activities, and making
pertinent decisions where issues of right and wrong are addressed. It is often based on moral and
social values which constitute social principles for doing business. Bower (2007) sees business
ethics as an act of addressing the morality of economic system (the free market, communism,
socialism) and the conduct of the organizations found within these systems. Bower (2007)
further maintained that business ethics examined ethical principles and moral problems that can
arise in a business environment. Hellriegel, et al(2008) observe that business ethics involves how
business organizations incorporate core values such as: being honest, trust, respect and fairness
into its policies, practices and decision making. It is in the light of the aforementioned that
Ferrel, et al (2008) noted that some factors must be considered when integrating ethics to
business. They are: to survive business organization must earn a profit, if profits are realized
through dishonest behavior, could result to a bad corporate image to the organization;
organizations especially financial institutions must balance their desire for profits against the
need and desire of the society.

2.2.2 Corporate Performance

This comprises the actual output or results of a company as measured against its intended outputs
(or goals and objectives). According to Richard (2009) corporate performance encompasses three
specific areas of firm outcomes. These include financial performance (profits, return on assets,
and return on investment), Product market performance (sales, market share) and Shareholder
return (total shareholder return, economic value added).Generally, corporate performance
involves identifying outcomes that it wants to achieve, creating plans to achieve those outcomes,
carrying out those plans, and determining whether the outcomes were achieved.

2.3 Theoretical review

Utilitarianism as the moral standard among other theories favors this study. It sought an
objective basis for making value judgments that would provide a common acceptable norm for
determining social policy. The most promising way to reach such an objective ground of
agreement is by looking at the various policies and comparing the beneficial and harmful
consequences of each. The right course of action from an ethical point of view would be to
choose the policy that would produce the greatest amount of utility.

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Utilitarian principle holds that an action is right from an ethical point of view, if and only if the
sum total of utilities produced by that act is greater than the sum total of utilities produced by any
other act the agent could have performed in its place. Utilitarian theory advocates that the right
action for a particular occasion is the one that produces more utility than any other possible
action; it does not mean that the right action is the one that produces the most utility for the
person performing the action. Rather, an action is morally right if it produces the most utility for
all persons affected by the action.

From the aforementioned therefore, utilitarian principle opine that the objectives of business
organizations cannot be attained except the employees of the said organizations demonstrate
ethical behavior in the light of the assigned duties, thereby enhancing the corporate performance
of the organizations. Agha (2010) observed that the forgoing is essential so as to develop
strategies that will stimulate patronage for the services produced and provided by the business
concern; the way business organization designs its banking operations. These according to
Agha(2010) are the key determinants of whether a business is ethical and are as important as the
way it deals with crisis. The proponents of this theory are: Jeremy Benthham, Francis Hitcheson,
David Hume etc.

2.2.8 The relationship between expenditure on business ethics activities and Financial
Performance
Theoretically, business ethics by the firm do results into improved financial performance.
Business ethics which are the independent variable do influence the firm's financial performance.
Therefore it is argued that there is always a positive relationship between expenditure on
business ethics and firm's financial performance (Freeman 2008). Under this theory and for the
purpose of this study, spending on business ethics is favorable to employees, customers,
communities and environment is an independent variable and the financial performance is a
dependent variable which is measured by four parameters (profitability, efficiency, effectiveness
and service delivery).

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2.4 Measures / ways of ensuring ethical performance
According to the study made by Brain Hill(2013), ethical performance measures can be
categorized into five. These are; putting concern on customer complaints and interests, ensuring
workplace performance, contributing to the community, environmental protection measures,
setting goals and evaluating performance,

Putting concern on customer complaints and interests; this involves tracking and analyzing
customer complaints to reveal whether the company is meeting its ethical performance standards.
If a significant number of customers complain that a product's features or benefits were not what
the company said, the business owner should find out what information his sales staff is telling
customers that is incorrect or exaggerated.

Workplace Ethical Performance; workplace safety can be measured by keeping track of the
number of workdays lost each year due to injuries or accidents. A small business owner should
survey employees regarding how supervisors and co-workers treat them. Asking employees how
often they have observed behavior that doesn't meet the ethical standards set by the business
owner can reveal problem areas that must be addressed, such as incidents of staff members being
abrupt or rude when answering questions from customers. Rewarding observed ethical behavior
by employees encourages other employees to raise their own standards of conduct.

Contributions to the community; businesses of all sizes recognize that they have an ethical
responsibility to the cities and towns in which their company operations are located. Ethical
performance could be measured by how many hours of volunteer work employees contributed or
by the dollar contributions made by the company to local charities. These efforts are not only the
right thing to do from an ethical standpoint, but they can improve the company's image.

Contributions to the community; businesses of all sizes recognize that they have an ethical
responsibility to the cities and towns in which their company operations are located. Ethical
performance could be measured by how many hours of volunteer work employees contributed or
by the dollar contributions made by the company to local charities. These efforts are not only the
right thing to do from an ethical standpoint, but they can improve the company's image.

Environmental protection measures; this involves reducing waste, cutting energy usage and using
sustainable materials are goals shared by large and small businesses. A restaurant for example

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could use recyclable materials for the bags and boxes it uses for its takeout service. A golf
facility could cut its water consumption by replacing a portion of turf grass with low water-usage
plants. The restaurant's effort would be measured as a positive action taken. The golf course
could measure the actual reduction in water usage.

Set goals and evaluate performance; after ethical performance measures are in place, the business
owner sets goals for improving the company's ethical performance. Communicating the current
performance levels and goals for the upcoming year shows employees that the owner takes these
ethical standards seriously and builds company pride.

Benefits and difficulty; having ways of measuring ethical performance focuses team members'
attention on the importance of behaving in an ethical manner and can lead to overall
improvement in ethical performance. The difficulty of maintaining the highest ethical standards
is the conflict between ethics and the need for short-term financial success. For example, a
company that is facing pressure on its margins due to price cutting by competitors may be
tempted to use lower quality and lower cost materials in its manufacturing processes to reduce
production costs.

2.5 Empirical Literature

Review In the research done by McManus and White (2011) which dealt with the challenges
faced by corporations in incorporating ethics into their strategic management processes, the
research was based on a survey of issues and the literature published in Europe, North America
and Asia the finding indicated a definite gap between the implementation of strategy and the
moral and ethical obligations of corporations. Given the decline in business ethics and recent
corporate scandals it is proposed that ethics be brought back to the forefront of strategic
management and integrated into the strategic management process.

The recommendation of the study was that, the strategic decisions of any large scale economic
enterprise in a competitive global environment result in both benefits and harms. It is the
responsibility of senior managers to distribute benefits and allocate those harms among
stakeholders of their company. Some firms do this arbitrary when or if done in a more thoughtful
manner the ethical principle offer the only form of analysis that is capable. From academic
perspective evidence that suggest commitment to the future of a firm will ensure efforts that are
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both cooperative and innovative. Looking to the future one can see that there is still a lot to do in
this area.

In the research done by Brain hill (2013) titled "The pocket small business owner's guide to
business plans." Which examined the relationship between organizational ethics and
organizational outcomes based on justice theory and precognitive and dissonance theory? The
sample data were delivered from questionnaire survey of 237 managers in Singapore. The results
obtained from decision trees indicate that organizational leaders can use organizational ethics as
a means to generate favorable organizational outcomes.

Further the results indicate there is significant and positive links between ethical behavior and
career success within the organization and job satisfaction also the findings reveal that there is
association between ethics and organizational commitment. Implication of the findings is that
management support for ethical behavior and the association between ethical behavior and career
success can be influenced by top managers in the organizations. Thus by consciously working on
these variables, top management can enhance job satisfaction and organizational commitment
among employees and in the work place. The current findings suggest that organizational ethics
can help enhance job satisfaction and organizational commitment.

The above implication of the findings is that organizational ethics can be expected to be
associated with organizational performance. This study has also the relating goals but this
phenomenon was tested in banks whereby Diamond Trust Bank will be the case study.

2.6 Research Gap

There are numerous recent researchers who suggest on the relationship between motivation and
corporate performance. Very few researchers have studied the relationship between business
ethics and corporate performance. This study therefore intends to study whether the relationship
exists in Uganda and how these two variables affects each other, specifically in the banking
industry where Diamond Trust Bank will be chosen to be the case study.

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 CHAPTER THREE

METHODOLOGY

3.0 Introduction
This chapter will provide the procedure, ways, and tools that will be used in the research. It will
explain where the study will be carried out, who the respondents will be, their selection and the
process of data collection and analysis

3.1 Study design

The study will use a descriptive analytical research design which will employ both quantitative
and qualitative methods for the purpose of making valid conclusion. Quantitative method will
examine the impact of business ethics and values on performance whereas qualitative design will
involve the use of questions to obtain views from the respondents.

3.2 Sampling Procedure

The study will use stratified sampling with a sample size of 25 people to ensure that the
population is divided into subgroups or strata based on certain characteristics, such as age or
income level. Purposive sampling will be used to select key officers from each stratum to gather
first-hand information from the key informants. Simple random sampling will then be used
within each stratum to select individual respondents, ensuring that all members of the population
within each stratum have an equal chance of being selected for the sample..

3.3 Sample size

For this case, the sample will comprise of 25 respondents and the study population will range
from the 5 Bank officials, 5 supervisors, 5 tellers, and 10 customers with knowledge about the
study.

3.2 Sampling Techniques

The respondents will randomly be selected and categorized. They will comprise of both sex but
of different marital statuses and age groups and the study will use 25 respondents that is;

26
managers, accountants, tellers, supervisors and other authorized employees. The intention of this
is to get a variety of views and unbiased response which will make the study a reality.

Table 1: Showing the sample size

Study Population Sample Size Sampling Method

Bank officials 5 Purposive Sampling within Stratum
Supervisors 5 Purposive Sampling within Stratum
Tellers 5 Purposive Sampling within Stratum
Customers 10 Simple Random Sampling within Stratum
Total 25

3.5 Data Collection Methods

To obtain data about the research variables, primary and secondary data sources will be used as
elaborated below;

a) Primary Source. This will involve the use of first-hand information that will be obtained
from the field using interviews and questionnaires. The types of data will include the
social- demographic characteristics of the respondents (age, gender, level of education
etc.), and performance.

b) Secondary Source. This will include the already existing literature about the impact of
business ethics on performance of the banking industry. This information will be
collected from reports, circulars, newspapers, magazines and internet.

3.5.1 Questionnaire
A comprehensive questionnaire covering all the aspects of the study variables will be designed.
The first section of the questionnaire will cover general information (gender, age, education,
marital status). Section B will cover the questions which will be set in line with the objectives of
the study. The questionnaires will first be pre-tested before being administered on the
respondents. The questionnaires will be self-administered to ease data collection. The questions
will be both open and close ended. This will enable the respondents to express their opinion
about the implication of reward competitiveness.

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3.5.2 Interview Method
Interviews with the target respondents will be conducted to interview all the categories of
respondents mentioned above. A separate interview will be used for the key informants. This will
involve first making an appointment with the targeted respondents after which an interview
meeting between the researcher and respondents to discuss the issues concerning the effects of
business ethics on the performance of commercial banks.

3.5.3 Research Instruments

The researcher will use questionnaires and an interview guide as the main tools for collecting
data. The selection of these tools will be guided by the time, objectives and the nature of data to
be collected. The researcher will be interested in capturing the views, perceptions, feelings,
attitudes and opinion of respondents towards business ethics and performance of banks.

3.5.4 Documentary Review

This will involve the researcher revisiting existing literature on the study variables by reading
newspapers, journals, text books plus that already existing on internet and magazines among
others.

3.6 Measurements of variables

3.6.1 Validity of the instruments

Validity is the efficiency or the degree to which a method, a test or a research tool actually
measures what is supposed to measure. It refers to the accuracy of the research data.

3. 7 Pre-testing
In order to ensure and maintain a high level of consistency in this study, the researcher will do
the following: Questionnaires will be pre-tested where leading questions will be deleted to avoid
hostility among the respondents. Ambiguous questions will be made clear and irrelevant
questions deleted. The researcher will use accurate questions which will be closed ended
questionnaires. The questions which will be set will have enough space to give appropriate
responses.

28
3.8 Reliability of Instruments
Reliability means the degree of consistency of the items, the instruments or the extent to which a
test, a method, or a tool gives consistent results across a range of setting or when it is
administered to the same group on different occasions.

3.9 Data Validity

An introduction letter will be obtained from the Buganda Royal Institute of Business and
technical education by the researcher to solicit approval to conduct the study from respective
departments in Diamond Trust Bank. When approved, the researcher will secure a list of the
qualified respondents from the Bank authorities in charge and select them through systematic
random sampling from this list to arrive at the minimum sample size.

3.10 Data Analysis

Data analysis will include editing the findings, coding and tabulation in the Microsoft excel for
analysis. Main ideas in quantitative data will be clearly recorded. The data filled in the
questionnaires will be copied and analyzed by tallying it and tabling it in frequency tables
identifying how often certain responses occurred and later evaluation will be done. This will
yield the primary data which was raw in nature. Both qualitative and quantitative methods will
be used for data analysis as the study will generate both qualitative and quantitative data. The
results will be presented inform of tables and charts then discussed in relation to existing
literature. Conclusion and recommendations will be drawn in relation to the set objectives of the
study.

3.11 Ethical considerations

It will be important during the process of research for the researcher to make respondents
understand that their participation is voluntary and that participants are free to refuse to answer
any question and to withdraw from participation at any time they are choose. Another important
consideration that will involve getting the informed consent of those to be meet during the
research process, which will involve interviews and observations on issues that may be delicate
to some respondents. The researcher will undertake to bear this seriously in mind.

29
 CHAPTER FOUR

PRESENTATION, INTERPRETATION AND DISCUSSION OF FINDINGS

4.0 Introduction
This chapter presents the facts, which the research discovered. The findings were presented in
line with the objectives of the study whereby the raw data in form of questionnaires was edited
and interpreted which ensured uniformity, legibility and consistency. The data-filled
questionnaires were copied and analyzed by tallying and tabling in frequency polygons while
identifying how often certain responses occurred and later evaluation was done. The information
was then recorded in terms of percentages. Also, interview results were coded on frequency
tables which were calculated in terms of percentages and presented in this study as illustrated
below.

4.1 Background characteristics of the respondents

4.1.1 Gender
Table 2:Showing the respondents gender

Response Frequency Percentage

Male 13 52
Female 12 48
Total 25 100

Figure 2: Apie Chart Showing respondents gender

Respondents Gender

Male
48% Female
52%

30
According to the table, out of the 25 respondents, 13 were male and 12 were female. This means
that 52% of the respondents were male and 48% were female.

Based on this data, there is a slightly higher percentage of male respondents compared to female
respondents. However, the difference is not significant, and both genders are represented fairly
evenly in the study.

4.1.2 Age Table

Table 3:Showing responses according to age

Response Frequency Percentage

20 years & below 2 8%
21-25 yrs 5 20%
26-30 yrs 4 16%
31-35 yrs 6 24%
36 and above 8 32%
Total 25 100

Figure 3: Showing the age of respondents

Age of Respodents

8%
20 years & below
21-25 yrs
32%
20% 26-30 yrs
31-35 yrs
36 and above

16%
24%

31
Based on the information provided, we can see that the highest percentage of respondents falls
into the 36 and above age category with 32%. One possible reason for this could be that
individuals in this age range may have more experience in the workforce and may be more likely
to have interacted with the banking industry in various capacities. They may also have a greater
understanding of the importance of ethical behavior in the business world, as they have had more
time to observe and experience the consequences of unethical behavior. It is also possible that
this age group was more likely to participate in the study due to their greater access to
technology and willingness to engage in research activities.

4.3 To identify business ethics activities performed by Diamond Trust Bank.

Table 4: Showing the response about business ethics activities performed by Diamond
Trust Bank.

NO STATEMENT 1 2 3 4 5
.
1 Does Diamond Trust Bank Kabalagala Branch have 18 5 2 00 00
policies and procedures in place to prevent conflicts of
interest and ensure fair treatment of customers? 72% 20% 8% 00% 00%

2 Does Diamond Trust Bank Kabalagala Branch monitor 2 3 10 5 5

and enforce ethical behavior and compliance among 8% 12% 40% 20% 20%
their employees.
3 Does Diamond Trust Bank Kabalagala Branch integrate 3 5 15 2 00
ethical considerations into their decision-making
12% 20% 60% 8% 00%
processes?
4 Does Diamond Trust Bank Kabalagala Branch train 12 10 3 00 00
their employees on business ethics and compliance. 48% 40% 12% 00% 00%
5 Does Diamond Trust Bank Kabalagala Branch 3 4 15 2 1
communicate their commitment to ethical business
12% 16% 20% 8% 4%
practices to their customers and stakeholders?

Based on the data, it appears that Diamond Trust Bank Kabalagala Branch has policies and
procedures in place to prevent conflicts of interest and ensure fair treatment of customers (72%

32
strongly agree, 20% agree). This is in line with the findings of a study by Al-Fawaz and Binsardi
(2007), which found that banks that have established ethical policies and procedures have a
positive impact on their reputation and customer loyalty.

However, the data also shows that Diamond Trust Bank Kabalagala Branch may not be
monitoring and enforcing ethical behavior and compliance among their employees as effectively
(40% agree, 20% disagree, 20% strongly disagree). This could be a concern as employees who
engage in unethical behavior could have a negative impact on the bank's reputation and financial
performance. A study by Stevens and Collins (2013) found that employee training and
monitoring are essential in ensuring ethical behavior and compliance.

Diamond Trust Bank Kabalagala Branch also seems to integrate ethical considerations into their
decision-making processes (60% agree, 20% strongly agree). This is important as studies have
shown that integrating ethical considerations into decision-making processes can help improve
the bank's reputation and financial performance (Fernandez-Feijoo et al., 2014).

In terms of employee training on business ethics and compliance, the data shows that Diamond
Trust Bank Kabalagala Branch provides some training (48% strongly agree, 40% agree). This is
in line with the findings of a study by Culpan (2002), which found that employee training on
business ethics is important in establishing and maintaining an ethical culture within an
organization.

Finally, the data shows that Diamond Trust Bank Kabalagala Branch communicates their
commitment to ethical business practices to their customers and stakeholders (20% strongly
agree, 16% agree, 8% not sure). This is important as studies have shown that communication of
ethical practices to customers and stakeholders can help improve the bank's reputation and
customer loyalty (Baker et al., 2017).

Overall, while Diamond Trust Bank Kabalagala Branch seems to have some strong business
ethics practices in place, there are areas where they could improve, such as monitoring and
enforcing ethical behavior among employees.

33
4.4 To identify challenges in business ethics activities in Diamond Trust Bank.
Table 5:Showing the response about challenges in business ethics activities in Diamond
Trust Bank.

No Statement Strongly Agree Not Disagre Strongly

. Agree Sure e Disagree
1 Do you believe that Diamond Trust 11 5 8 00 00
Bank Kabalagala Branch is taking
sufficient steps to address the 44% 20% 32% 00% 00%
challenges they face in implementing
ethical business practices in the
banking industry?
2 Would you say that Diamond Trust 5 6 5 5 4
Bank Kabalagala Branch has a strong 20% 24% 20% 20% 16%
culture of ethics within the
organization?
3 You agree that Diamond Trust Bank 3 00 3 14 5
Kabalagala Branch does enough to
communicate their commitment to 12% 00% 12% 56% 20%
ethical business practices to their
customers and stakeholders?
4 You believe that Diamond Trust 5 15 00 00 4
Bank Kabalagala Branch faces more
or less challenges in implementing 20% 60% 00% 00% 16%
ethical business practices compared
to other banks in the region?
5 It is challenging for Diamond Trust 17 5 3 00 00
Bank Kabalagala Branch to maintain 68% 20% 12% 00% 00%
ethical business practices in the
banking industry?

In response to the question "Do you believe that Diamond Trust Bank Kabalagala Branch is
taking sufficient steps to address the challenges they face in implementing ethical business
practices in the banking industry?" only 44% of respondents strongly agreed or agreed,
suggesting that there may be room for improvement in this area.

34
When asked about the existence of a strong culture of ethics within the organization, only 20%
of respondents strongly agreed, while 16% strongly disagreed. This suggests that there may be
some disagreement among employees about the extent to which the bank prioritizes ethical
practices.

Furthermore, only 12% of respondents agreed that Diamond Trust Bank Kabalagala Branch does
enough to communicate their commitment to ethical business practices to their customers and
stakeholders. This suggests that the bank may need to do more to ensure that their ethical values
are effectively communicated to their stakeholders.

Regarding the challenges faced by Diamond Trust Bank Kabalagala Branch compared to other
banks in the region, 60% of respondents agreed that they face more challenges in implementing
ethical business practices. This suggests that the bank may need to address these challenges in
order to stay competitive within the industry.

Finally, 68% of respondents agreed that it is challenging for Diamond Trust Bank Kabalagala
Branch to maintain ethical business practices in the banking industry. This is a significant
percentage and suggests that the bank may need to address these challenges in order to maintain
their commitment to ethical practices.

A study conducted by Gopalakrishnan and Devaraj (2016) found that ethical practices positively
impact the financial performance of companies. This supports the importance of addressing the
challenges faced by Diamond Trust Bank Kabalagala Branch in implementing ethical business
practices in order to improve their financial performance.

Additionally, a study by Alsaif and Ahmad (2021) found that a strong culture of ethics within an
organization is positively correlated with its financial performance. This highlights the
importance of developing a strong culture of ethics within Diamond Trust Bank Kabalagala
Branch in order to improve its financial performance.

35
4.5 To examine the relationship between expenditures on business ethics activities and
financial performance of the Diamond Trust Bank.
Table 6: Showing the response about the relationship between expenditures on business
ethics activities and financial performance of the Diamond Trust Bank.

NO. STATEMENT Strongly Agree Not Disagree Strongly

Agree Sure Disagree
1 Do you believe that the 20 4 1 00 00
implementation of strong business
ethics practices positively impacts the 80% 16% 4% 00% 00%
financial performance of Diamond
Trust Bank Kabalagala Branch?
2 Have you observed any instances 15 5 5 00 00
where Diamond Trust Bank
60% 20% 20% 00% 00%
Kabalagala Branch's commitment to
ethical practices has negatively
impacted their financial performance?
3 On a scale of 1 to 5, how important 25 00 00 00 00
do you believe ethical practices are to 100% 00% 00% 00% 00%
the success of Diamond Trust Bank
Kabalagala Branch?
4 Would you be more likely to do 19 4 2 00 00
business with Diamond Trust Bank
Kabalagala Branch if they had a
strong reputation for ethical practices, 76% 16% 8% 00% 00%
even if their fees and interest rates
were slightly higher than competitors
who did not prioritize ethics?
5 Does Diamond Trust Bank 1 4 9 9 2
Kabalagala Branch address the
challenges they face in implementing 4% 16% 36% 36% 8%
ethical business practices in the
banking industry?

Based on the data, it appears that the majority of respondents believe that the implementation of
strong business ethics practices positively impacts the financial performance of Diamond Trust
Bank Kabalagala Branch (80% strongly agree, 16% agree). This is consistent with research

36
findings that suggest a positive relationship between ethical practices and financial performance
in the banking industry (Zhu & Sarkis, 2016; Ahmad et al., 2021).

However, a significant number of respondents also observed instances where the bank's
commitment to ethical practices negatively impacted their financial performance (60% agree,
20% not sure, 20% disagree). This finding is in line with research that highlights the potential
trade-offs between ethical practices and financial performance, as well as the challenges of
balancing short-term financial gains with long-term ethical considerations (Adelopo et al., 2016;
Kianto et al., 2021).

It is also noteworthy that all respondents rated ethical practices as very important to the success
of Diamond Trust Bank Kabalagala Branch, indicating a strong belief in the value of ethics in the
banking industry. This is consistent with previous studies that emphasize the importance of
ethical values and culture in building trust, reputation, and stakeholder relationships, which can
ultimately lead to improved financial performance (Gao & Greenberg, 2016; Bhattacharya et al.,
2018).

Moreover, most respondents indicated that they would be more likely to do business with
Diamond Trust Bank Kabalagala Branch if they had a strong reputation for ethical practices,
even if their fees and interest rates were slightly higher than competitors who did not prioritize
ethics (76% strongly agree, 16% agree). This finding supports previous research that highlights
the role of ethical reputation as a key driver of customer loyalty and retention in the banking
industry (Lee et al., 2019; Wirtz et al., 2020).

However, the data also suggests that Diamond Trust Bank Kabalagala Branch faces challenges in
implementing ethical business practices in the banking industry, as evidenced by the relatively
low percentage of respondents who strongly agree or agree with this statement (4% and 16%,
respectively). This finding is consistent with previous studies that highlight various barriers and
challenges to implementing ethical practices in the banking industry, such as conflicting goals,
lack of leadership support, and weak accountability mechanisms (Bennett et al., 2017; Krambia-
Kapardis & Zopiatis, 2019).

Overall, the data suggests a complex relationship between business ethics and financial
performance in the banking industry, with potential trade-offs and challenges to be addressed.

37
Nevertheless, the strong belief in the importance of ethical practices and their potential benefits
to reputation and customer loyalty highlights the need for continued investment and attention to
ethical values and culture in the banking sector.

38
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.0 Introduction
This chapter highlights the discussions from the objectives, background, and purpose of the
study relating to the research topic Business ethics and financial performance of the banking
industry. In this chapter, the major findings of the study are summarized from which conclusions
are reached. Recommendations are then made to bridge any existing gaps Business ethics and
financial performance of the banking industry.

5.1 Summary of the findings for all the research objectives.

5.1.1 To identify business ethics activities performed by Diamond Trust Bank.

The results suggests that Diamond Trust Bank Kabalagala Branch has implemented policies to
prevent conflicts of interest and ensure fair treatment of customers, aligning with previous
research on the positive impact of ethical policies on reputation and customer loyalty. However,
the bank may need to improve monitoring and enforcement of ethical behavior among
employees. Integrating ethical considerations into decision-making processes and providing
employee training on business ethics and compliance are areas where the bank is making
progress. Communication of their commitment to ethical practices to customers and stakeholders
is also evident. Overall, while the bank has strong business ethics practices in place, there is
room for improvement in monitoring and enforcing ethical behavior among employees.

5.1.2 To identify challenges in business ethics activities in Diamond Trust Bank.

The challenges faced by Diamond Trust Bank Kabalagala Branch in implementing ethical
business practices. Only 44% of respondents believed that the bank is taking sufficient steps to
address these challenges, indicating room for improvement. There is also disagreement among
employees regarding the bank's prioritization of ethical practices, with only 20% strongly
agreeing and 16% strongly disagreeing. Communication of the bank's commitment to ethics is
another area that needs improvement, as only 12% of respondents agreed that enough is being

39
done in this regard. In comparison to other banks in the region, 60% of respondents agreed that
Diamond Trust Bank Kabalagala Branch faces more challenges in implementing ethical
practices, suggesting the need to address these challenges to stay competitive. Furthermore, 68%
of respondents agreed that maintaining ethical practices in the banking industry is challenging.
The findings support the importance of addressing these challenges to improve the bank's
financial performance, as previous studies have shown a positive relationship between ethical
practices and financial performance.

5.1.3 To examine the relationship between expenditures on business ethics activities and
financial performance of the Diamond Trust Bank.
The majority of respondents believe that strong business ethics practices positively impact the
financial performance of Diamond Trust Bank Kabalagala Branch, consistent with previous
research. However, some respondents also observed instances where ethical practices had a
negative impact on financial performance, indicating potential trade-offs. All respondents rated
ethical practices as very important to the bank's success, emphasizing the value of ethics in the
industry. Most respondents would prefer to do business with the bank if it had a strong ethical
reputation, even with slightly higher fees. The data suggests that the bank faces challenges in
implementing ethical practices, highlighting the need for attention and investment in ethical
values and culture.

5.2 Recommendations of the research.

Develop and implement a code of ethics: One recommendation would be for banks to establish a
code of ethics that outlines the expected behavior and conduct of employees. This can help
promote ethical behavior and prevent unethical practices that can harm the financial performance
of the bank. Research has shown that organizations with a strong ethical culture tend to have
better financial performance (Trevino and Nelson, 2016).

Invest in ethical leadership: Banks should prioritize investing in ethical leadership training for
their executives and managers. This can help ensure that they are setting the right tone from the
top and creating a culture of ethical behavior. Research has found that ethical leadership is

40
positively associated with employee job satisfaction and engagement, which can lead to
improved financial performance (Brown and Mitchell, 2010).

Enhance transparency and accountability: Banks should improve transparency and accountability
by providing clear and comprehensive financial disclosures. This can help build trust with
stakeholders and investors, which can lead to improved financial performance. Research has
found that there is a positive relationship between transparency and financial performance
(O'Sullivan and O'Sullivan, 2018).

Foster a culture of ethical behavior: Banks should create a culture that prioritizes ethical behavior
and encourages employees to speak up if they observe unethical practices. Research has found
that a culture of ethical behavior can help improve financial performance (Johnson and Paul,
2011).

Conduct regular ethics training: Banks should conduct regular ethics training for their
employees. This can help ensure that employees understand the importance of ethical behavior
and have the knowledge and skills necessary to make ethical decisions. Research has found that
ethics training can lead to improved ethical decision-making (Jones and Ryan, 2016).

These recommendations are supported by a range of research studies that have explored the link
between business ethics and financial performance. By implementing these recommendations,
banks can promote ethical behavior and improve their financial performance over time.

5.3 Conclusion
In conclusion, this study emphasizes the significance of business ethics in the banking industry
and its influence on financial performance. While Diamond Trust Bank Kabalagala Branch has
strong policies in place, improvements are needed in monitoring and enforcing ethical behavior
among employees and communicating their commitment to ethical practices. Challenges in
implementing ethical business practices exist, but the majority of respondents recognize the
positive impact of strong ethics on financial performance. Recommendations such as establishing
a code of ethics, investing in ethical leadership, enhancing transparency and accountability,
fostering a culture of ethical behavior, and providing regular ethics training can promote ethical

41
conduct and improve financial performance. Prioritizing business ethics not only benefits
financial performance but also builds trust and ensures the stability of the banking industry.

42
References

Ahmad, F., Abidin, S. Z., & Ghani, E. K. (2021). Does ethics influence financial performance?
Evidence from Islamic and conventional banks in Pakistan. International Journal of Ethics and
Systems, 37(2), 285-303.

Adelopo, I., Ekundayo, O., & Chan, K. H. (2016). Ethics, CSR, and sustainability education in
banking: An empirical study of the UK banking sector. Journal of Business Ethics, 139(2), 369-
379.

Bennett, M., & Kottasz, R. (2017). Ethical banking in theory and practice: An empirical study.
Journal of Business Ethics, 140(3), 411-423.

Bhattacharya, C. B., Sen, S., & Korschun, D. (2018). Corporate social responsibility: A
consumer psychology perspective. Routledge.

Gopalakrishnan, M., & Devaraj, S. (2016). Impact of ethical practices on firm financial
performance: A study of Indian companies. Journal of Business Ethics, 139(4), 605-623.

Alsaif, K., & Ahmad, S. Z. (2021). The relationship between ethical culture and financial
performance: empirical evidence from Saudi Arabia. Journal of Financial Regulation and
Compliance, 29(1), 132-146.

Al-Fawaz, K., & Binsardi, A. (2007). The role of organizational commitment in enhancing
customer loyalty in the UAE banking sector. International Journal of Bank Marketing, 25(4),
251-271.

Stevens, B., & Collins, L. (2013). A study of ethics training and ethical awareness among bank
employees. Journal of Business and Ethics, 113(4), 631-647.

Fernandez-Feijoo, B., Romero, S., & Ruiz-Blanco, S. (2014). Women on boards: Do they affect
sustainability reporting? Corporate Social Responsibility and Environmental Management, 21(6),
351-364.

Culpan, R. (2002). Global business ethics and the multinational companies. Journal of Business
Ethics, 37(3), 255-268.

43
Baker, T. L., Hunt, T. G., & Andrews, M. C. (2017). Exploring the relationship between ethical
leadership and customer loyalty: The mediating role of commitment. Journal of Business Ethics,
145(2), 315-326.

44
Appendix 1

Interview guide

1. Can you describe the business ethics activities that Diamond Trust Bank currently
performs?

2. In your opinion, what are the main challenges that Diamond Trust Bank faces in
implementing ethical business practices?

3. How does Diamond Trust Bank monitor and enforce ethical behavior among its
employees?

4. Do you believe that Diamond Trust Bank invests enough in business ethics activities?
Why or why not?

5. What measures has Diamond Trust Bank taken to communicate its commitment to ethical
business practices to its customers and stakeholders?

6. How do you think the expenditures on business ethics activities impact the financial
performance of Diamond Trust Bank? Can you provide any examples?

45
Appendix 2

QUESTIONNAIRE TO THE MANAGEMENT OF DIAMOND TRUST BANK.

My name is Nabulya Joanitah a student of Buganda Royal Institute Of Business And Technical
Education. I am carrying out a study about, “The impact of business on the ethics on the
performance of banks in Uganda” The study is aimed at establishing how business ethics
activities and values affect financial performance in commercial banks. The outcome of this
study will be for academic purpose only. You have been selected to participate in this study.
Kindly spare some time to answer these questions.

Section A: Background Information

Please tick the most suitable answer.

1.Sex

Male

Female

2.Age

21-30 31-40

41-50 51-and above

3.Marital Status

Single

Married

4. Education level held

Certificate Diploma

Degree Others

46
SECTION B:

Business ethics activities at diamond trust bank.

1. To identify business ethics activities performed by Diamond Trust Bank.

Evaluate the following statements by ticking the appropriate alternative of your choice

Strongly Agree Agree Not Sure Disagree Strongly Disagree

1 2 3 4 5

NO STATEMENT 1 2 3 4 5
.
1 Does Diamond Trust Bank Kabalagala Branch have policies and
procedures in place to prevent conflicts of interest and ensure fair
treatment of customers?
2 Does Diamond Trust Bank Kabalagala Branch monitor and enforce
ethical behavior and compliance among their employees.
3 Does Diamond Trust Bank Kabalagala Branch integrate ethical
considerations into their decision-making processes?
4 Does Diamond Trust Bank Kabalagala Branch train their employees on
business ethics and compliance.
5 How extensively do you believe Diamond Trust Bank Kabalagala
Branch communicates their commitment to ethical business practices to
their customers and stakeholders?

47
 SECTION C:

Challenges in business ethics activities in Diamond Trust Bank

2. To identify challenges in business ethics activities in Diamond Trust Bank.

Evaluate the following statements by ticking the appropriate alternative of your choice

Strongly Agree Agree Not Sure Disagree Strongly Disagree

1 2 3 4 5

No Statement 1 2 3 4 5
.
1 Do you believe that Diamond Trust Bank Kabalagala Branch is taking
sufficient steps to address the challenges they face in implementing
ethical business practices in the banking industry?
2 Would you say that Diamond Trust Bank Kabalagala Branch has a strong
culture of ethics within the organization?
3 Do you agree that Diamond Trust Bank Kabalagala Branch does enough
to communicate their commitment to ethical business practices to their
customers and stakeholders?
4 Do you believe that Diamond Trust Bank Kabalagala Branch faces more
or less challenges in implementing ethical business practices compared to
other banks in the region?
5 How challenging do you believe it is for Diamond Trust Bank Kabalagala
Branch to maintain ethical business practices in the banking industry?

48
 SECTION D:

RELATIONSHIP BETWEEN BUSINESS ETHICS AND THE PERFORMANCE OF

DIAMOND TRUST BANK AND THE CHALLENGES FACED BY THE BANK

3. To examine the relationship between expenditures on business ethics activities and

financial performance of the Diamond Trust Bank.

Evaluate the following statements by ticking the appropriate alternative of your choice

Strongly Agree Agree Not Sure Disagree Strongly Disagree

1 2 3 4 5

NO STATEMENT 1 2 3 4 5
.
1 Do you believe that the implementation of strong business ethics
practices positively impacts the financial performance of Diamond Trust
Bank Kabalagala Branch?
2 Have you observed any instances where Diamond Trust Bank
Kabalagala Branch's commitment to ethical practices has negatively
impacted their financial performance?
3 On a scale of 1 to 5, how important do you believe ethical practices are
to the success of Diamond Trust Bank Kabalagala Branch?
4 Would you be more likely to do business with Diamond Trust Bank
Kabalagala Branch if they had a strong reputation for ethical practices,
even if their fees and interest rates were slightly higher than competitors
who did not prioritize ethics?

49
5 In your opinion, how well does Diamond Trust Bank Kabalagala Branch
address the challenges they face in implementing ethical business
practices in the banking industry?

50