Effect of Pressure on Construction Company Compliance Attitudes: Moderating Role of Organizational Ethical Climate

Abstract

Increasingly demanding project requirements, stringent regulatory environments, and the urgent need to create a positive industry climate all exert great pressure on construction companies. Compared with other factors, some pressures have been proven to have a significant positive or negative impact on company compliance. Thus, while previous studies have identified the causes of rule violations in the construction industry, whether the specific pressures faced by these companies as representatives of project-based organizations drive them to violate the rules remains to be further investigated. In response, this study investigated the effects of three types of pressure—project, regulatory, and reputational—on the compliance attitudes of construction companies. The study also explored the moderating effects of three organizational ethical climates (OECs)—caring, law and code, and instrumental OECs—within these relationships. The results of a partial least-squares structural equation model (PLS-SEM) analysis of data provided by 209 construction practitioners indicate that project pressure negatively affects construction company compliance attitudes and that instrumental OEC strengthens this relationship. In addition, regulatory pressure has a positive effect on compliance attitudes, and this relationship is positively moderated by law and code OEC. Moreover, reputational pressure positively affects compliance attitudes, and this relationship becomes more pronounced with increasing levels of caring OEC. This study offers a novel perspective on pressure in the construction sector which helps explain why construction companies violate the rules and which provides new insights for future compliance governance systems. The authors also offer suggestions for construction companies for addressing possible motivations for rule violations that stem from pressure by establishing appropriate OECs.