The ethical climate of an organization is inextricably linked with the organizational climate of the organization. Although only a subset of organizational climate, the ethical climate sets the standard for ethical decision making and ethical activity within the organization. Although only one of a number of factors that function to set the climate of the organization. Ethics, as practiced by the leaders of the organization, drives the essential nature of the organization and how it functions. If ethics is an afterthought in an organization, then much of the decision making and business-activity of the organization will almost certainly be devoid of ethical standards, and will almost certainly cross legal and regulatory boundaries. Organizational climate is really nothing more than the organizational culture that exists at a specific point in time, and ethical climate is a portion of this organizational climate.
According to a theory originally put forth by Victor and Cullen in 1987, an organization’s ethical climate is linked to and determined by two factors directly related to the moral reasoning exercised by members of the organization and its workforce. Ethical climate within the organization is a product of ethical criteria used in the decision making that transpires within the organization, and the judgmental perspective employed. Ethical criteria is dependent on the type or level of moral reasoning in use. According to Victor and Cullen, this could include criteria based on what is considered best for the individual (Egoism), what is “good” (Benevolence), or based on a specific standard (Principle). The other primary factor involved in determining the ethical climate of an organization, or workplace, is based on the perspective from which ethical judgments are made. According to Victor and Cullen, these perspectives were either based on the individual making decisions only based on self-interest (Individual), a localized perspective emanating from the multiple individuals involved in the decision making (Local), or a more broad-based perspective encompassing the organization and beyond (Cosmopolitan).
From these factors, Victor and Cullen produced a matrix to employ in determining the ethical climate of an organization. This matrix includes the various levels of moral reasoning as applied across the various perspectives, or loci of analysis. Within this matrix, the ethical criteria for moral reasoning are listed along the y-axis and the various loci of analysis are listed along the x-axis. Using this matrix one could plot the intersection of Egoism with a Local locus and find that profit might be the primary basis for the ethical climate within the organization. Similarly, when a Principled ethical criteria is intersected with the Cosmopolitan locus, we would expect to find an ethical climate where laws and professional codes are valued.
The ability to assess an organizations climate can be important, and assessing the ethical portion of this climate may be extremely valuable as well. Organizational and ethical climate is really a view of an organization’s culture at fixed point in time. Looking at and assessing the climate may provide the basis for a process to change the culture over time. Victor and Cullen’s Matrix is a very useful and relatively simple tool that can prove valuable when assessing the ethical climate of an organization.
PSY 533 (2018). Lesson 13 Course Materials. Retrieved from www.psu.instructure.com/courses
Victor, B., & Cullen, J. B. (1987). A Theory and Measure of Ethical Climate in Organizations. Research in Corporate Social Performance and Policy, 9, 51-71.
Victor, B., & Cullen, J. B. (1988). The Organizational Bases of Ethical Work Climates. Administrative Science Quarterly, 33, 101-125.