Areas of Research on Ethical Culture

Recruiting and selecting for culture. Evidence suggests ethical culture may be
an important factor affecting an organization’s workforce. It’s positively related
with employee job satisfaction, affective commitment, intention to stay, and an
employee’s willingness to recommend the organization to others (Ruiz-
Palomino, Martínez-Cañas & Fontrodona, 2013). Organizations that support
ethical practices also experience higher work engagement and lower employee
burnout (Huhtala, Tolvanen, Mauno & Feldt, 2015)—both significant factors
that enable organizations to retain a committed and motivated workforce
(Huhtala & Feldt, 2016).
When organizations use a defined ethical-hiring standard (specific ethical
practices and aims which hiring managers are responsible for upholding),
employers are more likely to recruit and hire ethical candidates (Villegas,
Lloyd, Tritt & Vengrouskie, 2019). Better individual fit to an organization’s
ethical values, known as ethical citizenship, appears to enhance or unlock the
influence of ethical culture on intentions and behavior (Ruiz-Palomino &
Martínez-Cañas, 2014).
Studies examining modified recruitment techniques, such as those that
incorporate ethical-hiring practices, suggest that these methods are effective in
shaping organizational culture. Research by Villegas and colleagues (2019)
identified six behaviors that organizations can practice to hire more ethically:
 Honestly self-reflect to recognize organizational behaviors that are
less than desirable and/or unethical
 Construct core organizational values and guiding principles
 Institute ethical systems/procedures throughout the
organization that affect all areas of operation, including human-
resource management and hiring practices. This would also
include strategies like diversity training, and internal principles that
avoid discrimination and bias in hiring.
 Demonstrate adherence and embodiment of the organization’s
ethical values through corporate and managerial actions
 Ensure that all applicants have a clear understanding of the ethical
expectations of the firm
 Hire and onboard the most ethically qualified candidate who has
the skillset needed to excel in the vacant position
Formal ethics programs and their effectiveness. Ethics programs vary
significantly in content, quality, and effectiveness. Traditional programs focus
on organizational compliance rather than reducing unethical behavior (Gebler,
2006). While some ethics programs may strengthen an employee’s perceptions
of ethical values, effects diminish over time and do little to deliver the
sustained, positive impacts necessary to create an ethical organizational culture.
These include lower observed unethical behavior, increased intentions to behave
ethically, increased perceptions of organizational efficacy in managing ethics
(Warren, Gaspar & Laufer, 2014).
Ethics programs that incorporate multiple components—such as a code of
ethics, ethics training, an ethics hotline, and an ethics officer—and are
administered to all employees at all levels of the organization, appear to be most
successful (Schwartz, 2013; Ardichvili, Mitchell & Jondle, 2009). Furthermore,
organizations that establish measures to detect and prevent wrongdoing and
encourage corrective action appear to be the most successful in implementing
ethics programs (Kaptein, 2011).
However, there is a lack of consensus about how to define and measure the
efficacy of ethics programs. Studies that examine this are typically specific to
the organizational needs and strategies determined by its leaders. Periodic
surveys aligned to various ethical frameworks, or set of codes that an individual
uses to guide his or her behavior, appear to be the most common method to
obtain information about changes in an organization’s ethics (Kaptein et al.,
2005). While there are many theoretical frameworks for evaluating the efficacy
of ethics programs, there is a lack of rigorous research to support any
generalizability beyond the immediate population under study (Brown &
Treviiño, 2002).
Organizational Ethics Training. Ethics training is commonly cited as a
primary method for increasing employees’ ethical decision making and conduct.
However, little is known about how ethics training enhances other components
of an organization’s ethical environment. Workers employed in organizations
that have formalized ethics training programs have more positive perceptions of
their companies’ ethical culture (i.e., how well their company is equipped to
provide an ethical culture) than do individuals employed in organizations that
do not (Weber, 2015; Valentine & Fleischman, 2004).
Evidence for effectiveness of ethics training is limited to improvements in the
thoughts and perceptions of trainees (Waples et al., 2009; Watts et al., 2017)
rather than ethical behavior. Ethics training may be more effective when
focused on specific topics rather than general (Medeiros et al., 2017), and when
it does have an impact the gains may not last (Warren et al., 2014). Existing
research has been hampered by limitations in measuring behavioral outcomes
effectively and by the implementation of less effective training methods. Weber
(2015) lists several additional ethics training concerns:
 The need for expanding ethics training, possibly using outside
experts, up and down the organization
 The current reliance on short, infrequent, sessions, or limiting
training to orientation
 The emergence of online or technology-enhanced training and the
use of the lecture method without other, educationally proven
techniques
 The minimal assessment of ethics training using weak tools or
metrics, if assessment is conducted at all
 A new employee demographic [generational, racial, and other
shifts] that will further challenge the impact of ethics training as an
effective means in promoting ethical behavior or deterring unethical
behavior.
Impacts of Ethical Culture. An organization’s ethical culture appears to be
positively associated with improved ethical behavior among workers, improved
overall firm performance, and organizational innovativeness. (See our research
page on when and why ethics pays). Additionally, job satisfaction and
organizational commitment are related to employees’ attitudes about their
company ethical culture, as well as the alignment between an organization’s
perceived and stated values (Huhtala & Feldt, 2016; Ortega-Parra & Sastre-
Castillo, 2013; Valentine & Fleischman, 2004).
Role of Ethical Leaders. Research findings suggest a strong relationship
between ethical leadership, ethical organizational climate, and unethical
behavior (Kuenzi, Mayer & Greenbaum, 2020). Ethical leadership appears to be
a significant influence on an organization’s subordinate leader behavior, even
when the organization has a complex hierarchy (Schaubroeck et al., 2012).
Several characteristics of executives have been found to be most attributed to
ethical business cultures: Mission-and Values-Driven, Stakeholder Balance,
Leadership Effectiveness, Process Integrity, and Long-term
Perspective (Ardichvili, Mitchell, & Jondle, 2009).
Embodied values. Strong ethical cultures, those that actually deter unethical
and illegal activity, may depend on the extent to which core ethical values have
been infused throughout an organization, are evident in formal programs, and
demonstrate ethical leadership with an appropriate “tone at the top” (Schwartz,
2013). But organizations differ substantially in their efforts to see that those
policies or codes actually are put into practice (Weaver, Treviño & Cochran,
1999).
Understanding ethics in organizations. Research suggests that using
standardized, validated cultural assessment measures can assist in formulating
policies to strengthen ethical culture (Treviño, Haidt & Filabi, 2017). However,
the fact that currently available approaches frequently use samples that do not
represent working adults limits them. Their designs also often fail to capture the
contextual complexity that defines the day‐to‐day realities of organizational life
(Mitchell, Reynolds, & Treviño, 2020).
Ethical Climate. Ethical climate is a related area of research that refers to the
broad climates that either support or do not support ethics. Culture and climate
both impact behavior in an organization. Culture is a product of the relationship
history in an organization while climate is a function of how people perceive
those relationships in the present. Climate is narrow, about the shared
perceptions of the people in a group or organization. Culture goes deeper to
include the immediate environment and what people believe and value, which
includes how people feel about the organization and the beliefs, values, and
assumptions that form the group’s identity and set the standards of behavior.
(James et al., 1978; Cooke & Rousseau, 1988). Simply stated, culture refers to
“the way we do things around here” while climate refers to the feel of the
environment.
There is disagreement on how to accurately examine ethical climate. For
example, the ethical climate questionnaire was originally developed to measure
nine climates but most research has supported the existence of three to five
climate types. In this case, the perception that the organization has a
“benevolence climate,” meaning a climate that supports multiple stakeholders
inside and outside the organization, is associated with positive employee
attitudes and behaviors. By contrast, perceptions that the organization has a
“self-interest climate,” where it’s every person for him or herself, are associated
with negative attitudes and behaviors (Trevino & Nelson, 2011).