Ethical Culture and Climate

Interest in ethical culture has increased since the U.S. Sentencing Commission revised its guidelines for sentencing organizational defendants in 2004. Because of concerns that organizations were developing “window dressing” ethics and compliance programs, these revised guidelines call for more attention to the ethical “culture” of the organization and the need to align formal ethics programs with this broader ethical culture.

Ethical climate and culture represent somewhat different but related ways of thinking about the environment in organizations, which can influence organizational members' ethics-related attitudes and behaviors. Like the organizational climate and culture literatures more generally, these ways of thinking [Page 777]and some combine the aspects of different dimensions. Additional construct validity work will be required to confirm the dimensionality of the ethical climate construct and the relationships between those dimensions, the proposed theory, and outcomes.

Researchers have also explored the relationship between employees' perceptions of the ethical climate and employee attitudes (e.g., organizational commitment) and behaviors (e.g., ethical conduct). Multiple studies have found employees' organizational commitment to be positively related to benevolent climates and negatively related to egoistic climates. In addition, several ethical climate dimensions have been associated with ethical/unethical conduct on the part of organizational members.

Ethical climate was also found to vary between firms. But in refining thinking about ethical climates, researchers have asked whether ethical climates might also vary within organizations by work group or department. For example, a study in a large financial services firm found that different ethical subclimates exist in different departments, consistent with the departments' primary task and the external stakeholders served.

The ethical culture approach was originally introduced by Treviño as part of an interactionist model of individual and contextual influences on ethical decisionmaking behavior in organizations. This work was later expanded to develop an understanding of ethical culture as a combination of organizational structures, systems, and practices that can influence employees' ethicsrelated attitudes and direct their ethical conduct. Ethical culture was defined as a subset of the overall organizational culture that represents the interplay of multiple formal and informal cultural systems that either work together or at cross-purposes to support ethical or unethical conduct. For example, formal systems include policies such as codes of conduct, explicit leader communications, formal decisionmaking processes, reward and performance management systems, reporting systems, authority structures, and training programs. Informal systems include informal norms of daily behavior and leader role modeling as well as organizational rituals, heroes, and stories. Member behavior is expected to be more ethical to the extent that these systems are aligned and supportive of ethical conduct.

Because ethical climate and ethical culture were both proposed to represent the ethical context of an organization, which could influence attitudes and behaviors, it became important to attempt to understand the relationship between ethical climate and ethical culture. Treviño and colleagues incorporated measures of both ethical climate and culture and investigated the relationships of these constructs to each other and to employees'attitudes and behaviors. That 1998 study found 10 ethical context factors representing three ethical culture dimensions and seven ethical climate dimensions that were found to be separate from each other. However, at the same time, many of the culture and climate dimensions were statistically related to each other, making it difficult to tease apart their separate effects on outcomes.

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