12 Building Ethics at the Corporate Level: Managing the Ethical Climate
An Overview of Ethical Climate
An Ethical Climate Model
• Ethical climate represents what organizational members believe are the forms of ethical
reasoning or behavior and the expected standards or norms for ethical decision-making
within the company.
• To get a picture of an ethical climate you can consider questions like the following:
o What behaviors do organizational members believe are ethical in the company?
Ethical Climate Types
• Principled climates occur when the organization has norms that encourage people to make
ethical decisions based on a set of standards.
• Three types of ethical codes:
o Type 1: Inspirational–idealistic codes focus on broad virtuous themes such as “Be
honest.”
o Type 2: Regulatory codes specify how to behave in specific situations, typically
with a “do and don’t” approach.
• Independent ethical climate: has norms and values that support ethical decision-making
based on personal morality.
• Caring ethical climate: has norms and values that encourage people to make ethical
decisions based on looking out for the welfare of others.
Organizational Climates and Organizational Culture
• Organizational culture refers to the general beliefs and views of how things are done in
an organization.
• Two main components of ethical culture:
o The formal components include elements such as the mission and vision, codes of
conduct, and the socialization process that new and existing employees go through.
• Several steps managers can use to create their organizational cultures and hence their
ethical climates:
o What managers pay attention to, measure, and control.
▪ What managers pay attention to communicates to the people in the
organization the beliefs and values that dominate the leadership.
o Communicating the desired ethical climate in your organizational culture:
▪ Walk the walk.
▪ Keep people in the loop.
▪ Encourage thoughtful dissent.
▪ Communicate ethical expectations.
▪ Offer ethics training.
• Two types of ethical cultures:
o A compliance-based culture program usually emphasizes the law and prevention,
detection, and punishing violations of the relevant laws.
o A values-based culture stresses organizational values that are consistent with
ethical ideals.
What Do We Know about the Effects of Different Climate Types?
• Benefits for organizations with strong ethical culture and climate:
Thoughts on a Positive Work Climate
• The positive work climate perspective argues that work climates create emotional
reactions for employees.
• A positive work climate exists when:
o Employees perceive the workplace environment as positive, respectful, inclusive,
and psychologically safe.
Discovering Your Ethical Climate
• Two benefits to learn ethical climate norms and expectations:
o First, you can avoid making mistakes that violate local norms and more quickly fit
2. Understand group norms, standards, and values.
3. Observe the published, publicly announced values and formal philosophies such as
in the mission statement.