12 Building Ethics at the Corporate Level: Managing the Ethical Climate
An Overview of Ethical Climate
An Ethical Climate Model
• Work climates represent the shared perceptions of procedures, policies, and practices, both
formal and informal, of the organization.
• 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
• 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.
▪ This communicates to the people in the organization “what really counts.”
o Deliberate role modeling, teaching, and coaching.
o Observed criteria for allocation of rewards and status.
o Observed criteria for recruitment and selection.
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,
What Do We Know about the Effects of Different Climate Types?
• Benefits for organizations with strong ethical culture and climate:
o Higher commitment
o Job satisfaction
o Employee performance
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,
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
• Several steps to understand the organizational ethical climate:
1. Observe behavior language, customs, and traditions.
2. Understand group norms, standards, and values.