Ethical Climate In Organizational Culture

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ETHICAL CLIMATE Every organization can be identified by its unique culture. According to Needle (2004) organizational culture is the values, beliefs and principles of organizational members as a the result of the environmental factors the organization operates in. These factors include the history, the nature of markets they work in and the impact on the management according to the targets they have to achieve, working conditions of the employees and how that is reflected on their behaviors, the strategy and the local culture of the region they operate in. In major organizations we can find different types of cultures depending on the regions they are present in, and the nature of different departments and the individualities of management…show more content…
567). There are two components that form ethical climate within an organization that need to be studied to identify the ethical structure within an organization. The first is the formal component which is set by the organization such as the code of ethics, rules, regulations, processes, evaluation system, reward any punishment procedures. The second is the informal organization which is derived from the culture, rituals, stories and norms, (Webber, 2007). For an organization in order to be highly ethical they need to align both formal and informal components to back each other, (Webber, 2007). According to Victor and Cullen (1987; 1988), who are considered the godfathers of ethical climate theories. Ethical climate can be defined as the common insights of the organization employees about what is considered to be the right behavior and attitudes within the organization, and the way the organization tackles the ethical issues (Cullen, Victor & Stephens,…show more content…
3) Principled: The principled or deontology criterion, is based on that the main concern of the individual is the governing laws and the principals of right and wrong. The locus of analysis dimension is concerned with the external reference the individual examines while taking an ethical decision. It is categorized in three referrals structures 1) Individual: The person here is governed by the their own values and moral principles. 2) Local: The person here is concerned by the local rules and regulations of the organization and it might be reflected by the pressure of the group. 3) Cosmopolitan: The person here is governed by universal rules. Doing what is good in general is the motive. Putting the above 6 types concepts together in a 3X3 matrix leave us with nine types of ethical climates can be present in an organization, in theory. The below table shows the matrix between the ethical criterion dimension and the locus of analysis dimension, naming the nice types. Table 2.1. Theoretical ethical climates

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