Both ethical climate
and ethical culture are two terms that have been used interchangeably in
organizations to describe overall ethical aspects within organizations. However, many different scholars have pointed
out differences between the two terms, as well as similarities, and have
defined the two terms in their own way. First,
I will define the terms, and then I will describe the differences and
similarities between ethical climate and ethical culture.
Definitions:
Ethical climate is defined by Trevino, Butterfield and
McCabe (1995) as a construct that “measures organizational members’ perceptions
of the extent to which the organization’s normative systems are consistent with
a number of normative ethical theories" (p. 10). As I understand this then, ethical climate
is the employees’ perceptions on how the organization works and how the
organization complies with ethical decisions overall as well as how the
organization is viewed by others.
Another definition of ethical climate is: “Ethical climate refers to an organization's culture,
environment, motives, and pressures. It is the role of senior executives to
establish, drive and reinforce ethical climate throughout an organization”
(Marwick, 1997). Therefore, Marwick is
stating that the ethical climate is also the ideas of an organization and the
culmination of other ethical aspects within an organization that gives the
company an overall value system that is ultimately cared for and looked after
by management. According to Bowditch,
Buono, and Stewart, ethical climate is also a construct that applies not necessarily
to reality but to the perceptions and evaluations of employees (2008, p.
335). Overall then, the definition of ethical climate
can be culminated to state it is a combination of an organization’s beliefs or
value systems and the alignment of those beliefs with employee perceptions and
how the company appears to people overall.
Trevino, et al defines
ethical culture as “a subset of organizational culture, representing a multidimensional
interplay among various formal and informal systems of behavior control that
are capable of promoting ethical or unethical behavior” and therefore can also
be a good predictor of employee behavior (Key, 1999). The Canadian Center of Ethics describes
ethical culture as the part of an organization’s culture “that drives beliefs,
norms, and actions” of employees (Ethics Centre CA,
2008). Therefore with these definitions
that are very close to one another, it is safe to state that the ethical
culture is defined as an integral part of organizational culture which is based
on value systems and beliefs that control and organize employees’ behaviors
through value systems and beliefs.
Differences:
With the definition of ethical culture and ethical
climate examined, the differences are apparent that, though similar (discussed
below), these two issues in management and business are separate and
distinct. Ethical culture is aimed at
controlling behaviors and includes such things as rewards, rules, and norms
within an organization whereas ethical climate is the outward and inward
appearance of an organization which relates the organization’s overall values
to employees and outsiders (Ethics & Compliance Officer Association, 2007). According to Trevino, et al, ethical culture
consists of “formal and informal control systems (e.g. rules, rewards, and norms)
that are aimed more specifically at influencing behavior”; and the ethical
climate of an organization includes “broad normative characteristics and
qualities that tell people what kind of organization this is—essentially what
the organization values” (2001, p. 308). Some major differences between ethical
climate and culture include:
|
Ethical Climate:
|
Ethical Culture:
|
|
Mainly
based on psychological theory.
|
Mainly
based on anthropological theory.
|
|
Includes
decision-making criteria; focuses on behaviors, employee attitudes and
outwardly visible organization values.
|
Includes
rewards, norms, rules, and a punishment system.
|
|
Focuses
on the overall impact of the image of the organization – the organization’s
personality.
|
Includes
informal and formal control systems that regulate and influence employee
behavior as well as teach employees how to behave.
|
Note: Table adapted from the Canadian Center
for Ethics and Corporate Policy: http://www.ethicsworld.org/corporategovernance/PDF%20links/ManageEthicsNL_Summer08_FA.pdf
Essentially, ethical culture is different from ethical
climate in that ethical culture is considered a directional tool that provides
employees with direct for their every day behaviors with reward/punishment
systems in place – the anthropological aspect of an organization. Ethical
climate is included in the organization’s ethical culture and is the overall
way employee’s and outsiders view the organization – the psychological aspect
of an organization (Ethics & Compliance Officer Association, 2007).
Similarities:
Ethical culture and ethical climate
overlap because ethical climate is a part of ethical culture (Appelbaum, Deguire,
& Lay, 2005). Through reading and
research, it seems that both of these terms are used interchangeably within
organizations but are also considered to go hand-in-hand in many ways. For instance, both ethical climate and
ethical culture influence the overall organizational culture and impact rates
of misconduct, organizational expense, employee performance, employee
commitment to an organization, employee perceptions of authority and
leadership, and employee satisfaction.
The ethical culture is created by the ethical climate and it is the
manager’s job to handle and appropriate rules, rewards, punishments, and an
overall positive image of the company to employees at all times to maintain
both the ethical culture and climate; “the attitudes, choices, and actions of
business leaders play a primary role in the creation of an organization’s
ethical culture and climate” (Ethics & Compliance Officer Association,
2007). Therefore, although ethical
culture and ethical climate are scholarly different aspects within an
organization, an overlapping occurs between the two elements; employees use the
terms interchangeably and both ethical culture and climate affect similar aspects
within the organization itself.
References:
Appelbaum, S. H., Deguire, K. J., & Lay, M.
(2005). The relationship of ethical climate to deviant
workplace behaviour. Appelbaum Consultants.
Retrieved November 9, 2012, from
www.appelbaumconsultants.com/articles/2005-06/relationship.PDF
Bowditch, J. L., Buono, A. F., & Stewart, M. M.
(2008). Chapter 5: Group Dynamics. A
Primer on Organizational Behavior
(7th ed., p. 155). Hoboken, NJ: Wiley.
Bowditch, J. L., Buono, A. F., & Stewart, M. M.
(2008). Chapter 10: Organizational Culture and Effectiveness.
A Primer on Organizational Behavior
(7th ed., pp. 325-328, 335). Hoboken,
NJ: Wiley.
Ethics Centre CA. (2008). Developing and Maintaining
an Ethical Corporate Culture. Canadian Center for Ethics and Corporate Policy.
Retrieved November 8, 2012, from http://www.ethicsworld.org/corporategovernance/PDF%20links/ManageEthicsNL_Sum mer08_FA.pdf
Ethics & Compliance Officer Association. (2007,
October 15). Ethical Culture Building: A Modern
Business Imperative. Ethics Resource
Center. Retrieved November 6, 2012, from
www.ethics.org/files/u5/ECOA-Report-FINAL.pdf
Key, S. (1999). Organizational Ethical Culture: Real
or Imagined?. Journal of Business Ethics,20(3), 218,219.
Khai, E. (2012). Hawthorne Effect (Mayo). All you need to know about management. Retrieved November 11, 2012, from http://www.12manage.com/methods_mayo_hawthorne_effect.html
Marwick, P. (1997). KPMG US -- Business Ethics. www.andrew.cmu.edu. Retrieved November 7, 2012, from http://www.andrew.cmu.edu/course/80241/guided_inquiries/articles/kpmg_bus_ethics_proc.html
Tharp, B. M. (2012). Defining “Culture” and
“Organizational Culture”: From Anthropology to the
Office. Haworth. Retrieved November
11, 2012, from www.haworth.com/en-us/knowledge/workplace-library/documents/defining-culture-and-organizationa-culture_5.pdf
Trevino, Butterfield and McCabe (1995), ‘Contextual
Influences on Ethics-Related Outcomes in Organizations:
Rethinking Ethical Climate and Ethical Culture’, paper presented at the Annual
Academy of Management Meeting, Vancouver, BC.
Trevino, Butterfield and McCabe. (2001). The Ethical
Context in Organizations: Influences on Employee
Attitudes and Behaviors. The Next Phase
of Business Ethics, 3: 301-337.
Wilkins, A. (1984). The creation of company
cultures: The role of stories and human resource systems. Human Resource
Management, 23(1), 41-60.
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