Organizational Ethics: An Ethical Climate

An ethical climate is a system of emotional and moral relations created in a team. An ethical environment is understood as the prevailing psychological mood, which manifests itself in people’s behavior related to each other and a common cause. As a rule, a good spirit of workers affects the increase in labor productivity; therefore, it is a vital production indicator. A healthy ethical climate is manifested in mutual attention and respectful relations between the employees.

A team with a healthy ethical climate is intolerant of those who affect the environment with irresponsible behavior and an indifferent attitude towards others. In a group with an unfavorable environment, an employee’s personality is morally degrading. Therefore, the study and dissemination of ethical standards is an important aspect of any organization’s work. This has a beneficial effect on the atmosphere in the team and improves performance. The purpose of this paper is to discuss the basic principles of ethical behavior in organizations. The impact of the presence and absence of these principles on the company’s general condition will also be examined.

Ethical norms act as a regulator of relations in the team. They can either contribute to the organization’s success in achieving its goals or create obstacles and lead to the collapse. Kuenzi, Mayer, and Greenbaum (2019) argue that “the organization’s ethical context is one way to provide structure and guidance to employees” (p. 45). If managers do not regulate ethical relations, the regulatory process can take shape spontaneously. The system for controlling the behavior of workers in the labor collective is complicated. The employer, having hired people, must consider the entire system of regulators operating in the organization (Kia, Halvorsen, & Bartram, 2019). The most important of them are instructions, labor legislation, moral standards, traditions, beliefs of employees, religious and universal values, and others. The employer encourages employees to perform specific actions, inspires, motivates them, and, if necessary, makes them refrain from harmful actions and types of behavior.

The ethical climate in the workforce depends on many factors. These include the level of mechanization and automation, discipline and labor protection, the organization of labor and management, the creative and intellectual potential of workers, and others. The influence of the labor collective on the individual depends on the established ethical relations nature. People’s performance is affected by their mood, and the ability to create a good atmosphere is one of the most important tasks of management personnel. However, it also depends on the members of the collective, on their relationship with each other. In a team with a healthy ethical climate, all its members are usually distinguished by a friendly, companionable attitude to a new person (Mulki & Lassk, 2019). Respect, trust, and the ability to see the best in a person in such a team are the ethical norms.

A good leader serves as an example of highly professional behavior for employees; a bad one, on the contrary, is a clear indication of how not to act. The leader is involved in managing the ethical climate not only with professional actions, but also with words, appearance, authority, a culture of behavior, and personal “magnetism.” Thus, the norms and principles of the manager’s behavior are based on the basic rules of business communication ethics.

Work with biases plays an essential role in the issue of ethical climate. They can be seen in antipathy, which is based on stable erroneous generalization. Biases can be expressed both at the verbal level and at the level of sensations. They can be attributed both to the whole team and to an individual, as a member of this group. Biases contain a strong emotional component and are inextricably linked with the emotions of a negative nature. They are characterized by a thoughtless negative attitude or a set of relations with all or with the majority. This includes racism, sexism, homophobia, age discrimination, and other similar views. Bias is usually aimed at people other than the majority, and it is not easy to correct. It is “embedded” in the system of individual values, is an integral part of it, and provides a kind of protection for the individual’s position in society. Usually, if biases have ever been assimilated, they will manifest themselves for a long time, which can often adversely affect the inner state of society.

In particular, biases negatively affect the atmosphere of the work collective. Following them, people can make decisions that are ethically incorrect, which negatively influences the team’s ethical climate. Especially hard are situations when leaders have a large number of biases. Each of their decisions affects the whole team; therefore, their mistakes are reflected in the work of the company (Mulki & Lassk, 2019). In addition, guided by prejudices, they impose them on subordinates, which also gives negative results. Therefore, all members of the team must be aware of their own biases, as well as their colleagues, superiors, and subordinates.

A typical example of a bias leading to an ethical issue is sexism. In particular situations are not uncommon when a male development team does not accept a female programmer. This is because there is a widespread stereotype in society about the female mindset that is prone to the humanities. However, any person has the right and opportunity to master programming and work in this area. In this unethical situation, the team is hostile towards the new colleague: they do not want to communicate with her, share knowledge, and possibly expose her to bullying. Another widespread example is racism, which also can be observed in many working or educational environments. It may cause an unhealthy atmosphere in any team and force people to make unethical decisions, which supports the racism in the society.

Unfortunately, avoiding such situations is sometimes hard since this requires a change in social norms and prejudices established in the world. Nonetheless, competent and smart leaders could cope with the situation using one of their necessary skills: excellent communication. They could, first, discuss the unethical behavior with the subordinates, and second, by their example, show the correct attitude to a new employee. Therefore, to embody and establish an ethical climate, leaders need to work with the team regularly. Kia, Halvorsen, and Bartram (2019) assume that ethical leadership is “positively associated with customer orientated behaviour among employees” (p. 1716). It confirms the fact that a leader can positively affect the subordinates’ performance using an attitude based on strong moral principles and qualities.

Each manager uses a specific regulatory mechanism: a set of means and methods by which he or she directs, coordinates the behavior of employees. An essential role in the mechanism of regulation of behavior belongs to normative regulation. First, leaders should determine the goals that need to be achieved and then create a regulatory legal act to achieve the goals. Next, they create the conditions for the implementation of standards, including monitoring compliance with them. In this case, it is vital to choose effective measures that do not overly burden employees and do not constrain their initiative.

Norms are means of implementing principles, or a regulatory system that reflects the specific views of a group of people. The quality of ethical standards operating in the team should be the subject of concern for the leader. If immoral norms become widespread in a team, then the organization will not be able to exist effectively for a long time. Kuenzi, Mayer, and Greenbaum (2019) assume that “organizational practices are critical factors influencing the development of organizational climat” (p. 45). The quality of ethical standards in the organization’s activities also largely depends on leaders and their authority: the personal influence of a person on the team. One of the most important features of leaders in this regard is the presence in them of a core ideology. Thanks to this, leaders can always check their basic principles and pass them on to the team. Thus, this ideology will spread throughout the organization, which will help in creating a beneficial ethical climate.

The leader’s authority is also strongly influenced by the presence of a high communication culture, which is expressed in the norms of professional ethics. These include the democracy of communication between the leaders and subordinates, their accessibility, attentiveness, and the ability to create a friendly atmosphere of trust. Equally important are efficiency, clarity, and a serious manner of behavior. In any case, the outer side of the actions must correspond to the leader’s internal moral convictions and core ideology. Only under this condition can ethical standards help a manager to create the right ethical climate.

Thus, the ethical climate and stable moral standards are the most critical factors in any organization’s functioning. Thanks to them, each team member feels confident and calm in the atmosphere of the company. In such a team, people are ready to rely on each other and trust their leaders. In addition, these people are dominated by a good mood, which is beneficial for the organization’s results.


Kia, N., Halvorsen, B., & Bartram, T. (2019). Ethical leadership and employee in-role performance: The mediating roles of organisational identification, customer orientation, service climate, and ethical climate. Personnel Review, 48(7), 1716-1733.

Kuenzi, M., Mayer, D., & Greenbaum, R. (2019). Creating an ethical organizational environment: The relationship between ethical leadership, ethical organizational climate, and unethical behavior. Personnel Psychology, 73(1), 43-71.

Mulki, J., & Lassk, F. G. (2019). Joint impact of ethical climate and external work locus of control on job meaningfulness. Journal of Business Research, 99, 46-56.

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