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This study is situated within organizational behavior and strategic management, examining how employee unethical behavior influences business performance in fragile economic contexts, focusing on South Sudan’s insurance sector. It is grounded in the Fraud Diamond Theory, the Market Orientation Theory, and the Stakeholder Theory, which explain unethical conduct, market driven performance, and stakeholder accountability. Limited empirical evidence exists on unethical behavior and performance in post conflict environments, particularly within insurance markets. This study addressed how organizational ethical governance moderates the relationship between employee unethical behavior and business performance in South Sudan.
A descriptive mixed methods design was adopted to capture both quantitative and qualitative insights. Quantitative data were collected from 606 employees using structured questionnaires, while qualitative data were obtained from 20 key informants through semi structured interviews. Purposive and stratified sampling techniques ensured representation across organizational levels. Data were analyzed using descriptive statistics, Pearson correlation, and hierarchical regression for quantitative data, and thematic analysis for qualitative data, enabling triangulation and enhancing validity and reliability. the Fraud Diamond Theory to a fragile post conflict insurance context and integrating it with Market Orientation and Stakeholder theories to provide a novel framework linking ethical conduct to performance outcomes. It offers empirical evidence on the moderating role of organizational ethical governance in developing economies. The findings highlight the need for strengthened governance systems, ethical leadership, and internal controls, and suggest future research should adopt longitudinal and comparative approaches across sectors.
The findings revealed a high prevalence of employee unethical behavior, particularly in fraudulent claims handling and bribery, alongside moderate business performance, with stronger
operational efficiency and customer trust but weaker financial resilience and brand reputation. Correlation analysis indicated significant negative relationships between unethical behavior and
performance, including fraudulent claims (r = −0.712**), confidentiality breaches (r = −0.703**), bribery and corruption (r = −0.689**), data manipulation (r = −0.681**), and absenteeism (r = −0.664**), all significant at (p < 0.01). Hierarchical regression results showed that organizational ethical governance significantly moderates this relationship, increasing explanatory power from (R² = 0.094) to (R² = 0.184). The study contributes to knowledge by extending the Fraud Diamond Theory to a fragile post conflict insurance context and integrating it with Market Orientation and Stakeholder theories to provide a novel framework linking ethical conduct to performance outcomes. It offers empirical evidence on the moderating role of organizational ethical governance in developing economies. The findings highlight the need for strengthened governance systems, ethical leadership, and internal controls, and suggest future research should adopt longitudinal and comparative approaches across sectors.