Understanding the Ethical Context of Organizations: The Role of

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Beyond ethical climate - 1
Understanding the Ethical Context of Organizations: The Role of Ethical Climate,
Collective Moral Emotion, and Collective Ethical Efficacy on Ethical Behavior in Organizations
Anke Arnaud
Embry-Riddle Aeronautical University
Marshall Schminke
University of Central Florida
[email protected]
DRAFT MANUSCRIPT: PLEASE DO NOT CITE WITHOUT PERMISSION
KEYWORDS: Ethics, ethical climate, affective tone, moral emotion, ethical efficacy, ethical
behavior
Beyond ethical climate - 2
Understanding the Ethical Context of Organizations: The Role of Ethical Climate,
Collective Moral Emotion, and Collective Ethical Efficacy on Ethical Behavior in Organizations
ABSTRACT
Traditional approaches to understanding the ethical context of organizations often focus
on ethical work climate, which reflects the collective moral reasoning of organization members.
However, such approaches overlook other components of the ethical environment that may
influence how ethical judgments translate to ethical behavior. This study extends our
understanding of the ethical context of organizations by considering how three distinct aspects of
that context—collective moral reasoning (ethical climate), collective moral emotion, and
collective ethical efficacy—interact to influence ethical behavior. Results from 117 work units
support our hypotheses. Implications and suggestions for future research are discussed.
Beyond ethical climate - 3
Events involving broad-based ethical scandals at organizations such as AIG, Goldman
Sachs, Countrywide Financial, Fannie Mae, Lehman Brothers, and Siemens AG continue to
garner significant attention. Such ethical transgressions are not limited to the corporate world
but extend to religious, military, political, and not-for-profit settings as well. In nearly all of
these cases, post-mortem accounts point to dysfunctional ethical environments as providing the
foundation for illegal and unethical activity (Arbogast 2008, Lewis 2009, Malik 2003, Miller and
France 2002, Swartz and Watkins 2003). Collectively, these cases underscore the important role
of the ethical context of organizations, in understanding how and why unethical behavior occurs.
Research points to ethical work climate as an important component of an organization‘s
ethical context, influencing ethical decision making and behavior (Treviño et al. 1998, Victor
and Cullen 1988, Martin and Cullen 2006). However, we know little about the process by which
its influence unfolds, and the conditions under which this influence is enhanced or mitigated. In
this paper we seek to understand more about when—and how—ethical climate will translate to
ethical behavior.
Ethical work climates reflect the collective moral reasoning of organization members
(Victor and Cullen 1988). Thus, strong ethical climates provide employees a foundation for
thinking about moral issues. We argue that although organization members may reason
effectively about the right thing to do, translating reason into action depends on the moderating
effect of two additional contextual factors: collective moral emotion (in the form of collective
empathy) and collective ethical efficacy. In short, we argue that the moral reasoning reflected in
ethical climate is more likely to translate to ethical behavior if members 1) care about those
impacted by their actions (empathy) and 2) believe in their ability to successfully follow through
on their decision (efficacy). In all, we suggest ethical climate, collective moral emotion, and
collective ethical efficacy interact to create an environment more strongly related to ethical
behavior.
Our work contributes to the organizational ethics literature in several ways. We seek to
improve our understanding of the process by which ethical climate translates to ethical behavior
Beyond ethical climate - 4
by considering moderators of the relationship between ethical climate and ethical outcomes. We
draw on the social intuitionist model of moral motivation (Leffel 2008) and the affect infusion
model (Forgas 1995) in predicting that collective moral emotion provides an important
moderator of this relationship. We build on behavioral plasticity theory (Brockner 1988) and
social cognitive theory (Bandura 2001) to suggest that collective ethical efficacy also moderates
the relationship between ethical climate and ethical behavior. In all, we present a more
comprehensive approach to understanding the impact of ethical climate on ethical behavior by
exploring the simultaneous impact of multiple contextual influences on ethical conduct. In
particular, we explore the conditions under which the collective moral reasoning reflected in
ethical climates will be more—and less—likely to translate to ethical behavior.
The Ethical Context of Organizations
Ethical Work Climates
Organizational work climates reflect the shared perceptions employees hold regarding the
policies, practices, and procedures that an organization rewards, supports and expects (Schneider
and Reichers 1983). Based on the patterns of experiences and behaviors individuals encounter in
their organizations (Schneider et al. 2000), work climates influence employee decisions about
what constitutes appropriate behavior by reflecting ―the way things are done around here‖
(Reichers and Schneider 1990, p. 22). As such, work climates provide information that aids
employees in making decisions regarding desired and appropriate behavior (Schneider 1990,
Zohar and Luria 2005).
As a sub-climate of the overall organizational work climate, ethical climate reflects the
shared perceptions employees hold regarding the policies, practices, and procedures that an
organization rewards, supports and expects with regard to ethics. As such, ethical climates
provide valuable guidance to employees by reinforcing the normative systems that guide ethical
decision making and behavior (Victor and Cullen 1988, Vidaver-Cohen 1988).
Collective moral reasoning as the foundation for ethical climate. Ethical climate
influences employee behavior through its impact on ethical decision making (Gaertner 1991,
Beyond ethical climate - 5
Victor and Cullen 1988). Therefore, models of ethical climate are often grounded in the moral
reasoning processes individuals utilize when making moral judgments and decisions (e.g., Babin
et al. 2000, Cullen et al. 1993, Preble and Reichel 1988, Singhapakdi et al. 1996, Victor and
Cullen 1988).
The dominant approach to conceptualizing and measuring ethical climate is that of Victor
and Cullen (1988, see also Cullen et al. 1993). Victor and Cullen‘s framework typifies the focus
in the literature of ethical climate as reflective of collective moral reasoning. Specifically, Victor
and Cullen suggest ethical climate influences decision making by reflecting prevailing norms
regarding appropriate ethical reasoning in the organization. These norms reflect three classes of
ethical theory—egoism, benevolence, and principle—which align with Kohlberg‘s (1984) threelevel framework for classifying types of moral reasoning: preconventional (self-focused
reasoning), conventional (other-focused reasoning), and postconventional (reasoning based on
universalistic principles).
The focus of ethical climate research on the reasoning component of the ethical
environment is appropriate and accurate, so far as it goes. Organizational norms regarding
appropriate forms of moral reasoning should, and do, influence behavior. However, research
suggests reason represents only part of the process; emotion plays a critical role as well (e.g.,
Damasio 1994, Etzioni 1988, Pizarro 2000). In the next section we explore the role of emotion
as a part of the ethical context of organizations. In particular, we examine its relationship with
reasoning, and its role in activating and focusing attention and cognitive resources on particular
ethical issues and events.
Moral Emotion
Substantial research points to the relationship between reason and emotion during the
judgment and decision making process (Damasio 1994). These dual roles of reason and emotion
are recognized in the ethical decision making literature as well. Interest in the interaction
between reason and emotion reflect a longstanding philosophical debate about the foundations of
morality (Rozin et al. 1999), and reinforces historical tensions about the foundations of morality
Beyond ethical climate - 6
reflected in rational (e.g., Kant 1789/1959) versus emotional (e.g., Hume 1740/1969)
perspectives on ethics.
Evidence demonstrates reason and emotion each play important roles in the emergence of
moral judgments. For example, Greene et al. (2001) employed functional magnetic resonance
imaging (fMRI) to study differences in brain activity between subjects contemplating different
types of moral dilemmas. The researchers presented subjects with the trolley dilemma, in which
a runaway trolley car will kill five people in its path unless it is diverted. The five potential
victims may be saved only if the participant is willing to throw a switch that will send the trolley
onto an alternate track, where a single person who happens to be on the track will be killed
instead. In a second version of the dilemma, known as the footbridge dilemma, the participant
and a stranger are watching the runaway trolley from a footbridge directly above the tracks. In
this case the five lives may be saved only if the participant is willing to push the stranger off the
bridge and onto the tracks below, thus derailing the trolley and saving the five lives but in doing
so, sacrificing the life of the stranger.
Test coders evaluated the footbridge dilemma as a more personal—and thus presumably
more emotional—decision. Greene et al. (2001) hypothesized that differences in how personal
the moral dilemmas are perceived to be would engage distinct brain centers, reflecting different
degrees of emotion and reason associated with making judgments regarding the two dilemmas.
Results confirmed their predictions. In two experiments, the more personal dilemma activated
brain areas associated with emotional processing, whereas the less personal dilemma activated
areas associated with reasoning.
Substantial additional neuroscience research supports the dual role of reason and emotion
in making moral judgments (e.g., Greene et al. 2004, Koenigs et al. 2007, Moll and de OliveiraSouza 2007) and research from outside the realm of neuroscience supports this view as well.
Scholars from psychology (Krettenauer and Eichler 2006, Moore et al. 2008, Valdesolo and
DeSteno 2006, Vélez García and Ostrosky-Solís 2006), organizational studies (Gaudine and
Thorne 2001, Sekerka and Bagozzi 2007), business ethics (Connelly et al. 2004), and moral
Beyond ethical climate - 7
education (Morton et al. 2006, Walker et al. 1995) have all offered theoretical and empirical
support that reason and emotion each represent important facets of the moral judgment process.
In all, evidence indicates reason and emotion each play important roles in the formation
of moral judgments which, in turn, relate to moral behavior. Ethical climate research provides a
sound foundation for recognizing the importance of collective moral reasoning as part of the
ethical context of organizations (e.g., Victor and Cullen 1988). However, research has been
silent on the role of moral emotion.
Integrating moral emotion into our thinking about the ethical context of organizations
requires that we address three issues. First, can moral emotion be properly construed as a
collective construct? Second, does a particular moral emotion represent the most appropriate
starting point for modeling the relationship between collective moral reasoning and collective
moral emotion? Finally, what role does moral emotion play in the process by which moral
reasoning relates to moral behavior? We address each of these issues in turn.
Moral Emotion as a Collective Construct
The first issue relevant to considering moral emotion as part of the ethical context of
organizations is whether emotion may be construed as a collective construct. That is, do
collective perceptions of shared emotions exist in work units?
Research reveals emotion or affect may manifest itself as a group-level construct, and
shared emotions represent a stable characteristic of groups (e.g., Barsade et al. 2000, George
1990, George and James 1993). George (1990) provided an attraction-selection-attrition (ASA)
(Schneider 1987) rationale for the process by which collective emotion, which she termed
affective tone, emerges in a work unit.
George (1990) defines affective tone as ―consistent or homogeneous affective reactions
within a group‖ (p. 108), and proposes these collective emotions influence subsequent behavior
in the work unit. She argues that individuals with similar affective concerns will be attracted to,
selected by, and retained in a particular work environment. This ASA process, combined with
group socialization processes that aid newcomers in learning organizational and group norms,
Beyond ethical climate - 8
values, goals, and standards (Fisher 1986), will result in an identifiable affective tone in the
group. Results support George‘s predictions that shared perceptions of emotion exist within
groups, and these shared perceptions are predictive of outcomes like prosocial behavior and
absenteeism. She concludes ―it is meaningful to speak of an affective tone of the work group‖
(p. 110).
Other research also recognizes the existence of collective emotions. From early
sociological work by Durkheim (1915/1965) to more recent work by de Waal (1996) and Keltner
and Haidt (1999), scholars have pointed to collective emotion as a meaningful and useful
construct. Research shows that work group members come to develop shared emotions in the
course of executing their tasks (Barsade and Gibson 1998, Sandelands and St. Clair 1993, Smith
and Crandell 1984), and that collective emotions influence organizational outcomes. For
example, studies on emotional labor of service workers reveal the emergence of specific
affective climates that promote group and organizational objectives (Hochschild 1983, Sutton
1991). In other research, collective emotion has been shown to influence outcomes such as
communal identity (Heise and O‘Brien 1993) and group boundary identification (Frijda and
Mesquita 1994). In all, researchers have developed sound theoretical and empirical bases for the
existence of collective emotions in work units.
Empathy as a Collective Moral Emotion
The second issue relevant to our integration of moral emotion into the ethical context of
organizations is the question of which moral emotion represents the best starting point for our
model. A variety of emotions have been conceptualized as moral emotions, but those most
commonly identified include empathy, guilt, shame, and gratitude.
Empathy is defined as an emotional reaction to another person‘s situation characterized
by feelings of compassion, tenderness, and sympathy (Batson, 1991). Guilt is "an individual's
unpleasant emotional state associated with possible objections to his or her actions, inaction,
circumstances, or intentions. Guilt is an aroused form of emotional distress that is distinct from
fear and anger and based on the possibility that one may be in the wrong or that others may have
Beyond ethical climate - 9
such a perception" (Baumeister, Stilwell and Heatherton 1994, p. 245). Shame, which is related
to but distinct from guilt, is defined as ―a dejection-based, passive, or helpless emotion aroused
by self-related aversive events‖ (Ferguson and Stegge 1998, p. 20). Whereas guilt concerns
reactions to a particular event, an ashamed person ―focuses more on devaluing or condemning
the entire self, experiences the self as fundamentally flawed, feels self-conscious about the
visibility of one‘s actions, fears scorn, and thus avoids or hides from others‖ (Ferguson and
Stegge 1998, p. 20). Finally, gratitude is defined as an affective reaction to receiving help from
other people (McCollough et al. 2001).
Although any of these emotions might influence the relationship between ethical climate
and ethical behavior, we suggest empathy represents the best candidate for exploring impact of
collective moral emotion for several reasons: It is an other-focused emotion, which is relevant to
our interest in ethical behavior. It is associated with a broad range of prosocial behaviors rather
than a specific behavioral response. And it is viewed as a foundational moral emotion, one upon
which other moral emotions rest.
Empathy has been construed as a moral emotion by a broad range of scholars interested
in the relationship between emotion and moral decision making. It has been identified by
developmental psychologists (Eisenberg 1986, Hoffman 1987), social psychologists (Batson
1991), and philosophers (Blum 1994) as a necessary component of the cognitive functioning
required in making moral judgments. Pizarro (2000) argues that empathy represents ―the clearest
candidate for being a truly moral emotion‖ (p. 359). It has been singled out as the most
prototypic and the most widely discussed of the moral emotions, occurring regularly and reliably
in situations involving moral issues (Hoffman 2000).
Empathy is conceptualized as consisting of both a cognitive and an affective dimension
(Mencl and May 2009, Pizarro 2000). The cognitive dimension involves an individual‘s ability
to take the perspective of a target. The affective dimension reflects the emotional or feeling
dimension of empathy, specifically compassion and sympathy toward a target (Batson 1990,
Davis 1983). Research suggests the affective dimension is most strongly associated with moral
Beyond ethical climate - 10
behavior (Moore 1990, Pizarro and Salovey 2002) and it is this affective dimension of empathy
on which we focus.
Empathy aligns with the definition of moral emotions as those that are ―linked to the
interests or welfare either of society as a whole or at least of persons other than the judge or
agent‖ (Haidt 2003, p. 276). Mencl and May (2009), for example, identify empathy as ―the
moral emotion concerning the welfare of others‖ (p. 208) and Tangney et al. (2007) identify it as
an other-oriented emotion. Further, our ultimate interest in this work is to understand the impact
of ethical context on ethical behavior. The other-oriented focus of empathy corresponds directly
with the definition of ethical behavior, which is doing what is ―…‗right‘ and ‗proper‘ and ‗just‘
in the decisions and actions that affect other people (Hosmer 1996, p. iii).‖
Guilt, shame, and gratitude, on the other hand, represent less attractive choices than
empathy for the focal moral emotion in our model. Each of these emotions is only initiated by
specific actions on the part of others (Ferguson and Stegge 1998; McCullough et al. 2001). Each
activates relatively limited ranges of ethical action (McCullough et al. 2001). Further, guilt and
gratitude may be conceptualized as deriving from empathy, in that they rest on empathy for their
conceptual foundations (Baumeister et al. 1994, Harris 2003, Hoffman 1982, Lazarus and
Lazarus 1994). Empathy, on the other hand, is not dependent on an actor‘s specific behavior
(committing an unethical act to feel guilt or shame) or being the recipient of a benevolent act on
the part of another. Rather than serving as a reaction to one‘s own ethical violation or an ethical
act on the part of another person, it prompts ethical action and has been linked to a broad range
of prosocial responses. In all, we believe collective empathy provides the best option for
representing collective moral emotion as an antecedent to collective moral reasoning reflected in
ethical climate.
The Relationship between Ethical Climate and Collective Moral Emotion
The third issue relevant to understanding the role of moral emotion is its relationship with
ethical climate, and the collective moral reasoning it represents. An ethical work climate reflects
its members‘ collective moral norms such as behaving responsibly toward peers, the
Beyond ethical climate - 11
organization, and society in general. However, these general moral principles must be activated
before they can exert an influence on behavior. A strong sense of collective empathy—and the
reactions it engenders toward others such as compassion and sympathy—may serve as this
activating agent. Moral emotion serves this role by acting as a centralizing agent, activating and
focusing attention and cognitive resources on a particular issue or persons (Pizarro 2000). This
suggests that moral emotion interacts with moral reasoning. Two theoretical perspectives
describe the process by which moral emotion interacts with moral reasoning to produce ethical
behavior.
First, Leffel‘s (2008) social intuitionist model of moral motivation suggests moral
emotion places individuals in a state of readiness for action, for following through on their moral
principles (such as those present in ethical climate). Second, Forgas‘ (1995) affect infusion
model describes the cognitive mechanisms by which emotion interacts with reason, and by doing
so, strengthens the relationship between moral reasoning and ethical behavior.
Leffel‘s (2008) social intuitionist model of moral motivation derives from Haidt‘s (2001)
social intuitionist model (SIM) of moral judgment. Haidt argues that research on moral
judgment has been dominated by rationalist models, which assume moral judgments are
primarily the product of deliberate moral reasoning. He argues that in many cases, however,
individuals respond to ethical situations not with careful moral reasoning but rather via quick,
automatic responses based on moral intuition. Leffel extends Haidt‘s SIM model of moral
judgment to a model of moral motivation, suggesting that these moral intuitions motivate moral
behavior through their impact on moral emotion, and moral emotion strengthens (moderates) the
influence of moral reasoning.
Leffel (2008) argues that moral emotions prompt action on the part of actors. More
specifically, moral emotions place individuals into motivational and cognitive states that increase
the tendency toward prosocial reactions. Empathy in particular activates these action tendencies
toward ethical behavior.
The tendency toward action that moral emotion generates is not random. Rather, the
Beyond ethical climate - 12
motivational state that results from moral emotion prompts actions that are congruent with extant
moral principles (Batson et al 1997 in L; Leffel 2008). The principles that are enacted are those
most regularly accessible (Narvaez and Lapsley 2005; in L), such as those present in an ethical
climate.
In all, the SIM model of moral motivation suggests that moral emotions serve to energize
moral action by motivating individuals to respond to ethical events in the environment. Moral
emotion places actors in a state of readiness for action and the moral reasoning present in an
ethical climate will then propel that action.
A second theoretical perspective, the affect infusion model (AIM) (Forgas 1995, Forgas
and George 2001) also speaks to the mechanisms by which moral emotion influences the
relationship between moral reasoning and ethical behavior. Forgas (1995) defines affect infusion
as ―the process whereby affectively loaded information exerts an influence on and becomes
incorporated into the judgment process, entering into the judge‘s deliberations and eventually
coloring the judgment outcomes‖ (p. 39).2
The impact of affect may be felt in two ways, by influencing what people think and by
influencing how they think (Bless 2000, Fiedler 2000, Fiedler and Forgas 1988, Forgas and
George 2001). Because we are interested in how emotion influences the process by which moral
reasoning relates to ethical behavior, we are interested in the latter, the process by which emotion
influences how people think.
Affect influences how people think via priming processes that determine how they
encode and retrieve information and how that information is used in forming judgments. Four
mechanisms are at work: selective attention, selective encoding, selective retrieval, and
interpretation of information and situations. Selective attention refers to the process by which
affect influences what information an actor focuses on. Individuals often face large quantities of
information but tend to focus on information congruent with their affective state. Thus, an
empathic state focuses attention on information concerning the welfare of others. Further,
individuals spend more time and effort encoding these affect-congruent (in this case, empathy-
Beyond ethical climate - 13
related) information, and this selective encoding makes these details more accessible in memory
later on. Likewise, affect-congruent information is more easily recalled from memory and this
selective recall results in more affect-congruent information available for use when applying
moral reasoning principles during the judgment process. Finally, complex settings require
individuals to interpret ambiguous information. Affect-congruent information may prime the
associations and interpretations made by individuals in a complex setting. That is, emotion
serves to strengthen the relationship between moral reasoning and action by shaping what
information is encoded and retrieved from memory, and how that information is used in
reasoning through moral situations. In all, when individuals are engaged in moral reasoning, the
presence of moral emotion (collective empathy) enhances the attention, encoding, recall, and
application of empathy-related information, thus strengthening the link between moral reasoning
and ethical behavior.
Both the social intuitionist model of moral motivation (Leffel 2008) and the affect
infusion model (Forgas 1995) describe the processes by which the presence of moral emotion
that is congruent with moral reasoning will strengthen the relationship between moral reasoning
and behavior. The ethical climate of one‘s organization may support other-oriented reasoning.
But in the presence of congruent affect (the other-oriented emotion of empathy), will place
individuals in a state of readiness for action, will lead them to attend more closely to otheroriented information, encode that information more carefully, recall it more easily, and be more
likely to use it in making a moral judgment. Through these processes, collective empathy will
strengthen the relationship between an ethical climate and ethical action.
In the previous sections we established that moral emotions may appropriately be
conceptualized at the collective level, that empathy represents the best choice for representing
the collective moral reasoning of a work unit, and that collective moral emotion moderates the
relationship between moral reasoning and moral action. Thus, we hypothesize:
H1: Collective moral emotion (empathy) moderates the relationship between ethical
climate and ethical behavior such that the relationship between climate and behavior will be
Beyond ethical climate - 14
stronger when empathy is high.
Collective Ethical Efficacy as a Moderator of the Relationship between Ethical Climate and
Ethical Behavior
We now turn our attention to collective ethical efficacy and its role in influencing the
relationship between the ethical context of an organization and ethical behavior. Collective
efficacy reflects a work unit‘s shared belief in its collective ability to organize and execute
successfully the actions required to achieve desired outcomes (Bandura 1997). We argue
collective ethical efficacy interacts with moral reasoning in influencing ethical behavior. That is,
the collective moral reasoning reflected in an ethical work climate may not be sufficient to elicit
ethical behavior. Individuals must also believe they have the ability to execute successfully their
desired course of ethical action. Members of a work unit may know the right thing to do. But if
they feel confident in their collective ability to bring about the desired outcome, they are more
likely to follow through in doing it.
Two theoretical perspectives describe the process by which collective efficacy interacts
with moral reasoning to produce ethical behavior. Behavioral plasticity theory (Brockner 1988)
suggests collective efficacy buffers groups from negative environmental influences that threaten
to disrupt the link between knowing the right thing to do and actually doing it. Social cognitive
theory (Bandura 2001) describes several specific cognitive processes by which that buffering
occurs.
Behavioral plasticity theory (Brockner 1988) addresses the issue of why some actors are
more plastic—more negatively influenced by detrimental conditions in their work
environment—than others. Brockner suggested that self-esteem represents a major cause of
observed variation in plasticity, and research has generally supported this assertion. Ganster and
Schaubroeck (1991 in Pierce et al 93) found high self-esteem firefighters to be less negatively
impacted by the presence of role conflict in their jobs, and Mossholder, Bedian, and Armenakis
(1982; in Pierce) found high self-esteem nurses to be less negatively impacted by role stressors
in their jobs. Likewise, Pierce, Gardner, Dunham, and Cummings (1993) found high self-esteem
Beyond ethical climate - 15
electrical utility employees to be less negatively impacted by role ambiguity, conflict, and
overload.
Subsequently, Eden and colleagues (Eden and Aviram 1993, Eden and Kinnar 1991,
Eden and Zuk 1995) argued that tests of plasticity theory could be extended from self-esteem to
self-efficacy. That is, they theorized that like self-efficacy beliefs, like self-esteem, are capable
of buffering individuals from contextual influences on the job. Their results indicate selfefficacy does limit plasticity.
Jex and Gudanowski (1992) extended plasticity work further by considering the role of
collective efficacy as a buffer against negative environmental factors. They found that collective
efficacy buffered non-faculty university employees from the harmful impacts of a variety of
negative environmental factors including role ambiguity, overloaded work hours, and situational
constraints such as lack of supplies, work interruptions, and faulty work instructions. Similarly,
we anticipate that collective ethical efficacy will buffer organization members from the influence
of negative environmental factors that may derail the relationship between moral reasoning and
ethical action. Social cognitive theory (Bandura 2001) addresses the processes by which that
buffering may occur.
According to social cognitive theory, collective efficacy beliefs impact performance by
activating group and individual processes that reflect strategic, operational, and motivational
aspects. Strategically, collective efficacy influences decisions about what is important to the
group, what challenges to undertake, the type of future the group seeks to achieve, and the plans
and strategies the group develops to reach those achievements (Bandura 1997, 2001). With
respect to ethics in particular, higher levels of collective ethical efficacy will serve to focus
members‘ attention on ethical actions as strategically important, providing a buffer from
distractions that may lead to a focus on non-ethical issues.
Operationally, collective efficacy affects how the group manages its limited resources.
Collective efficacy may influence group decisions about where to apply resources that are
required to perform well. Stronger efficacy beliefs also foster more efficient analytic thinking,
Beyond ethical climate - 16
which enhances the problem solving process. Groups with strong collective efficacy beliefs also
tend to remain task-focused, rather than being distracted by other intrusive thinking that may
lead to stress, an emphasis on personal deficiencies, and a diversion of attention away from
assessing how best to accomplish goals (Wood and Bandura 1989). With respect to ethics,
higher levels of collective ethical efficacy will therefore lead the group to allocate sufficient
resources to address ethical issues and to stay focused on those issues with sound problemsolving practices.
Motivationally, collective efficacy affects how much effort members put into the group
activity. As a result, it influences the group‘s staying power when collective efforts fail to
produce quick results or when the group encounters forcible opposition, thus affecting the
group‘s vulnerability to discouragement. Efficacy beliefs may also influence whether members
think optimistically or pessimistically, whether they are vulnerable to stress and depression, and
whether they think in self-enhancing or self-hindering ways (Bandura 1997, 2001). Further,
collective efficacy beliefs affect goal-setting processes, in that higher levels of efficacy motivate
higher goals and stronger commitment to reaching those goals (Wood and Bandura 1989). With
respect to ethics in particular, higher levels of collective efficacy will induce members to be
more committed to ethical outcomes and to follow through with ethical decisions and engage in
ethical behaviors, even when doing so becomes difficult.
Collective efficacy beliefs therefore buffer groups from a variety of contextual factors
that have the potential to disrupt the connection between knowing what to do (moral reasoning)
and actually doing it. Collective ethical efficacy does so by activating a variety of strategic,
operational, and motivational processes that influence whether ethics are deemed important, how
resources are allocated to pursuing ethical outcomes, and the motivation and effort exerted
toward accomplishing those outcomes. As a result, under conditions of high collective ethical
efficacy, the relationship between moral reasoning and ethical outcomes will be enhanced.
Therefore, we hypothesize:
H2: Collective ethical efficacy moderates the relationship between ethical climate and
Beyond ethical climate - 17
ethical behavior such that the relationship between climate and behavior will be stronger when
collective ethical efficacy is high.
To this point we have suggested both collective moral emotion and collective ethical
efficacy moderate the relationship between collective moral reasoning (ethical climate) and
ethical behavior. In each case, we suggested that collective moral reasoning alone may not be
sufficient to prompt ethical behavior. Rather, higher levels of collective empathy and collective
efficacy beliefs each serve to strengthen the relationship between ethical climate and ethical
behavior.
Our theorizing for Hypotheses 1 and 2 raises the possibility of a three-way interaction as
well. Specifically, we expect the strongest relationship between ethical climate and ethical
behavior to occur when both collective moral emotion and collective ethical efficacy are high.
As outlined above, a strong sense of collective empathy may serve to activate the moral
reasoning present in an ethical climate. That is, members of a work unit may know the right
thing to do and be motivated to follow through if they feel a strong emotional connection toward
the target (empathy). However, they will be most likely to do when they possess strong beliefs
in their ability to do so. Therefore we hypothesize:
H3: A three-way interaction between ethical climate, collective moral emotion, and
collective ethical efficacy exists, such that the interactive effect between ethical climate and
collective moral emotion (Hypothesis 1) is stronger when collective ethical efficacy is high.
Method
Sample
We contacted potential participants with the assistance of a team of alumni and students
of a large university, utilizing a snowball sampling technique (Tepper 1995). The team
identified organizations willing to participate in a study of organizational work climate.
Members of the team served as contact persons with participating departments in each
organization.
We received agreement to participate from 117 departments across 103 organizations,
Beyond ethical climate - 18
which included a variety of product- and service-oriented firms, public and private organizations,
and for-profit as well as not-for-profit organizations. Employees in each department worked in
the same physical work environment and interacted on a consistent basis. The team member
distributed surveys to the supervisor and five employees in each department. The 648
individuals who responded to the 702 surveys distributed represented a response rate of 92.3
percent. Respondents‘ mean age was 30.4 years and 54 percent of the sample was male.
Respondents averaged 4.2 years of tenure with their organization and 3.1 years of tenure with
their department.
A contact person within each department received a packet containing surveys to be
completed by the five department members and the department supervisor. This contact person
also received specific, written instructions regarding the completion of the surveys and
procedures for returning them to the researchers. Participants had the option of returning the
survey via regular mail or through the contact person.
Procedures
Surveys completed by employees included measures of demographic characteristics,
ethical climate (collective moral reasoning), collective moral emotion, and collective ethical
efficacy. Surveys completed by supervisors included these measures plus a measure of ethical
behavior in the work unit (Treviño and Weaver 2001), although only their responses to the
ethical behavior measures are used in the analyses below.
Measures
Ethical climate. To measure the type of collective moral reasoning reflected in each
work unit‘s ethical climate, we began with the Schminke et al. (2005) 16-item version of the
Victor and Cullen (1988) ethical climate scale. Victor and Cullen‘s theory of ethical climate
rests on Kohlberg‘s (1984) framework for classifying types of moral reasoning. Kohlberg
describes three levels of moral reasoning: preconventional (self-oriented), conventional (otheroriented) and postconventional (universalistic). Research shows few individuals ever reach the
postconventional level of moral reasoning (Rest and Narvaez 1994, Treviño et al. 2006, Weber
Beyond ethical climate - 19
1990) and thus, shared climate perceptions are unlikely to develop at this level. Rather, shared
perceptions are likely to develop at the self-focused (preconventional) and other-focused
(conventional) levels at which most individuals engage in moral reasoning. We therefore
conceptualize the moral reasoning component of ethical climate as including these two
dimensions: self-focused and other-focused reasoning.
Pilot testing the 16 items on a separate sample revealed two factors that reflected the
anticipated self-focused and other-focused dimensions of collective moral reasoning.3 We
selected the five highest-loading items on each factor as measures of the self-focused (α = .89;
sample item: People around here are mostly out for themselves) and other-focused (α = .82;
sample item: People in my department are actively concerned about their peers‘ interests)
dimensions of collective moral reasoning. (All items appear in the appendix.) CFA on the
current sample indicated this two-factor model provided a good fit to the data (χ2 = 1371.77, df =
390; RMSEA=.06, CFI = .97, NNFI = .96) and a better fit than an alternative one-factor model in
which the self-focused and other-focused items were combined into a single factor (χ2 = 2599.80,
df = 399; RMSEA=.11, CFI = .94, NNFI = .93; χ2 change = 1228.03, df = 9, p<.01).
Collective moral emotion. Collective moral emotion was measured with a seven-item
scale (α = .80) based on the empathic concern dimension of Davis‘s (1980) Interpersonal
Reactivity Index. We modified Davis‘s items to reflect a department-level focus. (Sample item:
People in my department sympathize with someone who is having difficulties in their job. See
appendix for all items.) Employees indicated on a five-point scale the degree to which each item
accurately describes their department (1 = Describes my department very well, 5 = Does not
describe my department at all). Higher scores reflect higher levels of collective empathy.
Collective ethical efficacy. Collective ethical efficacy was measured with a three-item
scale (α = .87) adapted from Schwartz (1973). (Sample item: Generally people in my department
feel in control over the outcomes when making decisions that concern ethical issues. See
appendix for all items.) Employees indicated on a five-point scale the degree to which each item
accurately describes their department (1 = Describes my department very well, 5 = Does not
Beyond ethical climate - 20
describe my department at all).
Ethical behavior. Ethical behavior was measured with Treviño and Weaver‘s (2001) tenitem (α = .91) ethical behavior scale. Supervisors indicated on a five-point scale how often they
observed the various unethical behaviors in their work unit over the past year (1 = Never, 5 =
Very frequently). (Unethical behaviors include: Unauthorized personal use of company
materials or services; padding an expense account; taking longer than necessary to do a job;
misuse of on-the-job time; concealing errors; falsifying time/quality/quantity reports; calling in
sick just to take a day off; lying to supervisors; stealing from the company; and dragging out
work in order to get overtime.) Responses were coded such that higher values reflected more
ethical behavior.
Control variables. Ethical decision making has been shown to be related to age
(Kohlberg 1984), so we controlled for average age of department members. In addition, because
shared perceptions of contextual factors are absorbed over time (Schneider and Reichers 1983)
we also controlled for average tenure within the work unit.
Aggregation Analysis
Prior to aggregating individual responses into department-level variables, we assessed
whether sufficient agreement exists among department members to justify aggregation of the
measures of ethical climate and collective ethical efficacy to the unit level (James 1982,
Kozlowski and Klein 2000). We did so by calculating average deviation (ADM) scores (Burke
and Dunlap 2002) for each work unit. ADM scores have at least two advantages over alternative
means of assessing agreement such as rwg scores. Unlike rwg assessments, they do not require
that the researcher generate, a priori, the form of the null response distribution and accurately
allocate percentages to each response. And because they yield estimates of agreement in the
same units as the original scale, they provide a more direct conceptualization and assessment of
agreement (Burke et al. 1999).
The ADM index reflects the degree of interrater agreement by measuring the dispersion of
responses around the mean member response. Lower scores indicate greater agreement, and
Beyond ethical climate - 21
Burke and Dunlap identify .80 as the cutoff value for five-item scales. That is, values below .80
indicate sufficient agreement exists to render aggregation appropriate.
We calculated average deviation (ADM) scores (Burke and Dunlap 2002) for each
department, across each of the four collective variables that were assessed by employees (the two
dimensions of ethical climate, collective moral emotion, and collective ethical efficacy). The
overall mean ADM for the four variables, across all departments, was .58. The mean ADM values
for the four aggregated variables (ethical climate: self-focused collective moral reasoning, ethical
climate: other-focused collective moral reasoning, collective moral emotion, and collective
ethical efficacy) were .53, .59, .62, and .60 respectively. All of these values are below the cutoff
suggested by Burke and Dunlap (2002). In all, 93% of all departments had average ADM scores
across the five variables below the .80 cutoff. We therefore retained all departments in the
analyses (Varela et al. 2008).
Results
Correlations, means, and standard deviations for all variables are presented in Table 1.
Scale reliabilities (coefficient alpha) appear on the diagonal.
Measurement Model
We conducted a series of CFAs on the items comprising the collective perception
measures (ethical climate, collective moral emotion, and collective ethical efficacy). Table 2
shows the results of these analyses. We first tested a four-factor model that corresponds with our
conceptualization of the four collective variables as distinct from one another. This four factor
model provides a good fit to the data (χ2 = 189.93, df = 224; RMSEA=.01, CFI = .99, NNFI =
.99). Additional CFAs indicate the four factor model is a better fit than a three factor model that
collapses the two collective moral reasoning dimensions of ethical climate into a single
dimension (χ2 difference = 499.79, df = 3, p<.01), or a one factor model that collapses all items
into a single contextual dimension (χ2 difference = 587.84, df = 6, p<.01).
The final one-factor model presented in the Measurement Model section serves as the test
of the Harman one-factor CFA solution (Podsakoff et al. 2003). This single method-driven
Beyond ethical climate - 22
factor does not fit the data well, providing evidence that common method bias does not represent
a serious concern.
Hypothesis Testing
We test our hypotheses via moderated regression using OLS. Results of the regression
analyses are presented in Table 3.
Hypothesis 1. We predicted that collective moral emotion (empathy) moderates the
relationship between ethical climate and ethical behavior such that the relationship between
climate and behavior is stronger when empathy is high. Because we have two measures of
ethical climate (other-focused reasoning and self-focused reasoning) our model includes two
interaction terms that provide tests of this hypothesis. Results of this lower-order interaction test
are qualified by the result of the higher-order interaction proposed in Hypothesis 3, but the first
(other-focused reasoning x collective moral emotion) reveals a significant interaction effect in
the predicted direction, thus supporting Hypothesis 1. The second (self-focused reasoning x
collective moral emotion) was not significant. These results provide partial support for
Hypothesis 1; collective empathy strengthens the relationship between other-focused reasoning
and ethical behavior, but does not moderate the relationship between self-focused reasoning and
ethical behaviour.
Hypothesis 2. We predicted that collective ethical efficacy moderates the relationship
between ethical climate and ethical behavior such that the relationship between climate and
behavior is stronger when efficacy is high. As in Hypothesis 1, we have two measures of ethical
climate that result in two interaction terms providing tests of this hypothesis. Again, results of
this lower-order interaction test are qualified by the result of the higher-order interaction
proposed in Hypothesis 3, but the first (other-focused reasoning x collective ethical efficacy) was
not significant. The second (self-focused reasoning x collective ethical efficacy) reveals a
significant interaction in the predicted direction. These results provide partial support for
Hypothesis 2. They suggest collective ethical efficacy strengthens the relationship between selffocused reasoning and ethical behavior, but does not moderate the relationship between other-
Beyond ethical climate - 23
focused reasoning and ethical behaviour.
Hypothesis 3. Finally, we predicted a three-way interaction in which the moderating
effect of collective moral emotion on the relationship between ethical climate and ethical
behavior is enhanced by the presence of collective ethical efficacy. Results in Table 3 show
strong support for this hypothesis. Coefficients for both three-way interactions (other-focused
reasoning x moral emotion x ethical efficacy, and self-focused reasoning x moral emotion x
ethical efficacy) are significant and in the predicted direction. In both cases, higher levels of
collective efficacy strengthened the moderating effect of collective moral emotion. Figure 1
illustrates the three-way interaction for other-focused ethical climate. The interaction effect in
the bottom panel (high efficacy) is more pronounced than the interaction effect in the top panel
(low efficacy). Similarly, Figure 2 illustrates the three-way interaction for self-focused ethical
climate. The interaction effect in the bottom panel (high efficacy) is again more pronounced
than the interaction effect in the top panel (low efficacy).
In all, our results indicate ethical climate, collective moral emotion, and collective ethical
efficacy interact in influencing ethical behavior. In particular, the relationship between ethical
climate and ethical behavior is strengthened by the presence of collective empathy and collective
ethical efficacy and is at its strongest when both collective empathy and collective ethical
efficacy are high.
Discussion
Recent scandals provide evidence of the influence organization environments may have
in sanctioning or promoting unethical behavior. Existing research offers useful insights about
the impact ethical work climates exert on ethical behavior. However, our study suggests an
ethical climate—and the shared perceptions regarding appropriate moral reasoning it
represents—may not, in and of itself, be enough to ensure ethical behavior. Organization
members may know the right thing to do. But unless they also care about the targets of their
behavior (empathy) and believe they have the capacity to carry out their desired actions
(efficacy), ethical behavior is unlikely to occur. By exploring the impact of all three contextual
Beyond ethical climate - 24
factors simultaneously—and the manner in which they interact with one another—our study
provides a more comprehensive look at the impact the ethical context of organizations has on
ethical behavior.
Implications for Research
The research presented here extends work on ethical climate in several ways. It suggests
ethical climate alone may be insufficient to ensure ethical outcomes. It explores the conditions
under which ethical climate might be expected to relate more strongly to ethical outcomes. And
it introduces collective moral emotion and collective ethical efficacy into the conversation as
moderators of the relationship between ethical climate and ethical behavior. Each has
implications for research.
The relationship between ethical climate and ethical behavior. Our results highlight the
importance of adopting a more comprehensive view of how ethical climate impacts ethical
outcomes in organizational settings. Research shows ethical climate to be a consistent predictor
of employee attitudes (Deshpande, 1996; Martin & Cullen, 2006). However, its ability to predict
ethical behavior has been less robust. Meta-analytic results indicate evidence of a link between
ethical climate and ethical behavior has been modest, with a mean correlation less than .16
(Martin & Cullen, 2006). This suggests the link between ethical climate and behavior might be a
conditional one, dependent on the presence of other factors. Our model, which proposes the
presence of collective moral emotion and collective moral efficacy will enhance the relationship,
explained half-again more variance in ethical behavior (R2 = .26) than typical in previous work.
Our results therefore suggest that considering ethical climate in isolation paints an incomplete
picture. In practice, understanding ethical climate and its influence requires a broader
conceptualization of the organizational ethical context, and how those contextual factors relate to
and shape the impact of ethical climate.
Our results provide evidence that ethical climates are related to the ethical behavior of
organization members. However, they show the effect is dependent on both collective moral
emotion and collective ethical efficacy. This leads us to speculate about other factors that might
Beyond ethical climate - 25
influence the relationship between ethical climate and ethical behavior.
We anticipate constructs like moral disengagement (Bandura 1999) may moderate the
relationship between ethical climate and ethical behavior as well. Moral disengagement has been
shown to play an important part in process by which individual moral judgment are formed.
Further, it has previously been conceptualized as a collective-level variable via a process
Ashforth and Anand (2003) term normalization. Thus, it represents a potentially potent
additional contextual factor. Similarly, moral identity (Aquino and Reed 2002) has also been
shown to play an important role in the moral judgment process. Because collective identity has
been the focus of research as well, it represents another potential candidate for consideration as
an ethics-related contextual factor that might help to understand more fully the impact of ethical
climate.
Beyond these ethics-specific constructs, organization climate researchers have begun to
explore other factors that moderate the impact of organizational climates on outcomes. Leader
characteristics like justice orientation (Liao and Rupp 2005), structural characteristics like
formalization (Zohar and Luria 2005), and organizational characteristics like culture (Yang et al.
2007) have all been found to affect the strength of the relationship between work climates and
organizational outcomes and might influence the relationship between ethical climate and ethical
behavior as well.
One particularly interesting potential moderator is climate strength, the degree of
agreement between unit members with respect to their climate perceptions (Lindell and Brandt
2000). Climate strength reflects the degree of variation in individual perceptions around the
average climate score of the work unit. Research indicates climate strength plays an important
moderating role in the relationship between a variety of work climate types and outcomes. For
example, climate strength has been shown to moderate the relationship between innovation
climate and job attitudes (González-Romá et al. 2002), between procedural justice climate and
team performance and absenteeism (Colquitt et al. 2002), and between service climate and
customer satisfaction experiences (Schneider et al. 2002). However, although climate strength is
Beyond ethical climate - 26
one of the most-studied moderators of the relationship between work climate and outcomes
(Kuenzi and Schminke 2009), the theoretical process by which it influences these relationships is
still unclear, and this is an issue worthy of attention in ethics research. Further, future work
might benefit from considering not only the impact of climate strength, but the strength of other
contextual features of the ethical environment (e.g., collective moral emotion and collective
ethical efficacy) as well. However, doing so will require a more general theory of the process by
which strong agreement about collective assessments like these will strengthen the relationship
between contextual factors and outcomes.
The role of emotion. Our results also point to the importance of emotion in the process
by which ethical climate relates ethical behavior. Work climates influence behavior through
their effect on the decision making processes of employees (Schneider 1990, Zohar and Luria
2005), and ethical climate research has embraced moral reasoning as the foundation for ethical
climate and its impact on employee ethical decision making (e.g., Victor and Cullen 1988).
However, research demonstrates the importance of emotion in the decision making process as
well, and our results point to the important role collective emotion plays in this process. Our
study demonstrates collective moral emotion—in the form of empathy—exists at the work unit
level. It also suggests emotion activates the moral reasoning principles reflected in ethical
climate (especially when paired with collective ethical efficacy), thereby increasing the
likelihood that ethical behavior will emerge. Further, it shows the moderating effect of emotion
is, in turn, contingent on the presence of collective ethical efficacy. In other words, emotion
matters more when individuals also believe in their ability to execute successfully the actions
required to achieve desired ethical outcomes.
These results are consistent with work showing empathy facilitates the ethicality of
decision making at the individual level (Mencl and May 2009) and research demonstrating that
empathy enhances recognition of an ethical situation by raising moral awareness and improving
people‘s evaluation of the possible adverse effects their actions and decisions may have on others
(Vetlesen 1994). As such, our results lay the groundwork for establishing moral emotion as a
Beyond ethical climate - 27
key component of the ethical context of organizations. Doing so raises important questions
about the role that other collective emotions might play in the ethical decision making and
behavior process.
For example, scholars have explored the impact of positive emotions like excitement,
enthusiasm, and pride on a variety of organizational outcomes. Positive emotions have been
found to have an impact on positive organizational outcomes like organizational citizenship
behaviors (Joireman et al. 2006), teamwork, and prosocial behavior (e.g., Barsade and Gibson
2007). Such results suggest positive emotions, as well as moral emotions, may play a role in
shaping ethical decision making and behavior as well and thus, represent sound candidates for
exploring other emotional influences on the relationship between moral reasoning and behavior.
Our work focuses on the positive role played by collective moral emotion in activating
the moral reasoning reflected in ethical climate. However, research demonstrates emotion may
not always constitute a positive influence on ethical decision making and behavior. For example,
Ratner and Herbst (2005) found that an unfavorable outcome of a good decision (defined as one
identified as successful in the past or expected to perform better in the future) led individuals to
shift away from that decision due to negative emotional responses to the outcome. Research has
also shown that in some situations empathy in particular has the potential to bias decision
making in a negative way. For example, study by Batson et al. (1995) demonstrated the potential
for empathy to overpower fairness rules, thus leading to unfair outcomes. At the collective level,
results like these suggest collective emotion, although influential, may not always represent a
positive force in an organization. Further research is necessary to understand the conditions
under which collective emotions in general, and empathy in particular, may serve to facilitate or
hinder moral judgment and in turn, ethical action.
Our study does not explore the antecedents of any of the contextual factors represented in
our model. However, a fuller understanding of the role of collective moral emotion would
include an examination of its antecedents, and the conditions under which it is most likely to
emerge. For example, Greene et al. (2001) found people respond more emotionally when
Beyond ethical climate - 28
engaging in decision-making that involves more personal scenarios. Likewise, Pizarro (2000)
explains that emotions become more important when people are faced with uncertainty or
ambiguity. More work is needed to understand whether factors like these may influence the
strength of emotional responses in a situation and therefore, their potential for impacting the
influence of climate on outcomes.
The role of efficacy. The concept of ethical efficacy is new to the ethics literature.
Mitchell and Palmer (2010) outlined a conceptual case for its relevance in organizational studies,
and Mitchell, Palmer, and Schminke (2008) provided preliminary empirical support for the
proposition that ethical efficacy strengthens individuals‘ self-regulatory mechanisms, which may
mitigate the impact of supervisory unethical behavior on employees. Beyond this limited focus
on individual-level effects, the ethics literature is silent with respect to efficacy, as either an
individual or collective construct.
Our results point to collective ethical efficacy as playing a three-tiered role in the ethical
context of organizations. First, consistent with Hypothesis 2, efficacy strengthened the
relationship between one dimension of ethical climate and ethical behavior. Following through
on knowing the ethical course of action depends at least partially on believing in one‘s ability to
be successful in doing so.
Second, consistent with Hypothesis 3, collective ethical efficacy strengthened the positive
moderating effect of collective moral emotion on the relationship between ethical climate and
ethical behavior. Results suggest, as hypothesized, that moral emotion does act as a centralizing
agent, activating and focusing attention and cognitive resources on a particular ethical issue or
event. However, translating even this combination of moral reasoning (ethical climate) and a
congruent collective moral emotion into ethical behavior is contingent on individuals‘ belief in
their ability to follow through successfully on their intended course of action.
Third, although not hypothesized, collective ethical efficacy also exerted a significant
positive direct effect on ethical behavior. This is consistent with one aspect of social cognitive
theory (Bandura 2001), which argues that collective efficacy beliefs represent a powerful direct
Beyond ethical climate - 29
determinant of performance. Research offers some support for this direct relationship. A metaanalysis of 42 studies revealed average effect size of the relationship between collective efficacy
and group performance of .41 (Gully et al. 2002). Similarly, a study by Campion et al. (1993)
found that of 19 work group characteristics, a group‘s belief in its ability to be effective was the
strongest predictor of group performance. Our results indicate ethical efficacy may exert a
similar direct effect on ethical performance, which suggests further thinking about the complete
role collective ethical efficacy may play in influencing ethical behavior.
Implications for Practice
Our research has practical implications as well. These involve a broad recognition of the
multidimensional nature of ethical context, identifying an explicit role for emotion as part of the
ethical environment, and exploring the role of assessment in managing the ethical context.
Ethical context is multidimensional. Recognizing that ethical context consists of more
than one component (i.e. ethical climate), and that the components exert unique effects on one
another and on organizational outcomes, presents additional challenges for practitioners.
However, it also offers the opportunity to diagnose the organization‘s ethical context in a more
fine-grained—and ultimately, productive—way. Consider an organization concerned about an
unacceptable level of unethical behavior among its members. If a deficient ethical context is
suspected as a cause, any attempt to diagnose the problem using a measure that taps only the
moral reasoning foundation of climate may fail on at least two counts. First, such a measure may
be incapable of detecting deficiencies in terms of collective moral emotion or collective moral
efficacy in the organization. Second, any effects that are detected may be inappropriately
attributed to deficient collective moral reasoning. Diagnosing weaknesses in ethical context
requires the ability to assess each component independently. Doing so paves the way for
creating interventions aimed at improving specific problem areas, critical in making the most of
limited resources.
Ethical context involves emotion. In recent years, interest in emotion has proliferated
among organization scholars. Emotion has taken a center-stage position in research on a variety
Beyond ethical climate - 30
of organizational issues including leadership (Bono et al. 2007), justice (Chebat and Slusarczyk
2005), decision making (Maitlis and Ozcelik 2004), well-being (Updegraff et al. 2004), teams
(Kelley and Barsade 2001), and negotiation (van Dijk et al. 2008). Thriving research streams in
these areas have placed emotion at the center of practical discussions of how to manage
organizations and the people in them. However, emotion has largely escaped the notice of
researchers and practitioners interested in the ethical context of organizations. Our research
points to collective moral emotion as an important component of ethical context and thus, it
suggests those tasked with managing the ethical environment of organizations attend explicitly to
its presence. Fortunately, research on the role emotion plays in individual moral judgments is
plentiful. Therefore, practitioners wishing to consider the role of emotion at the collective level
have a strong empirical and theoretical base upon which to build.
Assessing the ethical context. Finally, our approach to conceptualizing the ethical context
of organizations resulted in a multidimensional instrument for assessing ethical context. This
instrument offers several potential benefits for practitioners and researchers alike, compared to
previous instruments such as that of Victor and Cullen (1988). First, it is multidimensional,
thereby tapping a broader range of the conceptual space that defines ethical context. Second, as
a 20-item scale that assesses four dimensions of ethical context (ethical climate based on selffocused moral reasoning, ethical climate based on other-focused moral reasoning, collective
moral emotion, and collective ethical efficacy), it is more parsimonious than either the 26-item
Victor and Cullen (1988) or the 36-item Cullen et al. (1993) instruments that assess ethical
climate only. Finally, it is more predictive of ethical behavior than these alternative scales. The
absolute value of correlations between our ethical context measures and ethical behavior are .33,
.19, .20, and .18 for ethical climate based on self-focused moral reasoning, ethical climate based
on other-focused moral reasoning, collective moral emotion, and collective ethical efficacy,
respectively. All of these are stronger relationships than the .16 average correlation between
ethical climate and behavior for studies utilizing the Victor and Cullen scales (Martin and Cullen
2006).
Beyond ethical climate - 31
Limitations
Our study reflects several limitations. First, all data were collected by survey. Although
we utilized two separate sources for our predictor and outcome variables (employees and
supervisors, respectively), and many key variables resulted from aggregating individual scores,
all were collected via a single method. Results of a Harman one-factor test did not suggest
common method bias represented a significant problem in our data.
Second, our data were collected in a cross-sectional fashion. Therefore, our analyses do
not provide strong test of the causal relationships implicit in our model. Rather, they can only
provide a test of statistical moderation that is supported by the theoretical foundations of the
model.
A final limitation is that results were based on self-reports. However, studies of emotion
and cognitive processes depend heavily on self-reports, and evidence generally supports their
validity (Spector 1992), especially in work involving ethics-related issues. For example, metaanalysis of integrity measures suggests that self-report measures may even be beneficial, in that
they tend to improve criterion-related validity in this type of research (Ones et al. 1993). In this
study, we assured participants anonymity and did not ask them to disclose unethical conduct they
may have personally committed, but rather to share their perceptions of the environment in
which they work. However, we still need to be alert to the fact that self-reports may be
vulnerable to self-enhancement biases.
Conclusion
The central goal of this research was to provide a more comprehensive view of how
ethical climate influences ethical behavior than currently exists in the literature. Our model does
this, and represents a more comprehensive conceptualization of ethical context of organizations,
the relationships between its components, and its impact on ethical behavior than appears in
previous work. As such, we suggest it provides a more sound theoretical footing for increasing
our understanding of the process by which ethical climates shape ethical behavior. In all, our
results provide new insights about the structure of ethical climate and the contextual factors that
Beyond ethical climate - 32
enhance or mitigate its effects. However, the results also point to a number of important
questions for researchers interested in understanding the structure and impact of the ethical
context of organizations. Further research is needed to clarify these additional issues.
Beyond ethical climate - 33
Footnotes
1
Forgas (1995) uses affect as a generic label that includes both emotions and moods. He
defines moods as ―low-intensity, diffuse, and relatively enduring affective states without a salient
antecedent cause and therefore little cognitive content (e.g. feeling good or bad)‖ and emotions
as affective states that ―are more intense, short-lived, and usually have a definite cause and clear
cognitive content‖ (p. 41). Although Forgas notes the principles underlying the AIM apply to
both types of affective states, our focus is on emotion, in particular moral emotion. Emotions
like empathy, guilt, shame, and gratitude are commonly conceptualized as having a moral
foundation (McCullough et al. 2001), whereas moods are not.]
2
The AIM suggests affect infusion will be most pronounced in situations that call for
higher levels of open, constructive processing such as that reflected in heuristic or substantive
processing. Forgas (1995, 2002) argues that complex organizational settings are likely to induce
substantive processing, paving the way for affect priming as the process by which affect will
infuse judgments. We believe issues of organizational ethics are often likely to induce
substantial processing. However, our study is not capable of detecting whether ethical issues
trigger substantive versus heuristic processing, nor whether affect-as-information or affect
priming processes are at work. Thus, we do not offer a specific prediction regarding the type of
infusion process in operation.
3
Two hundred sixty-four surveys were distributed among 173 MBA students from a
large state university who were employed full time, and 101 entrepreneurs and employees of
start-up, high tech companies, both in the Southeastern United States. The 174 individuals who
responded to the surveys represented a response rate of 66%. Fifty-eight percent of the sample
was male and had a mean age of 29 years (SD = 7.60). Respondents averaged 3.2 years of tenure
with their organizations (SD = 3.6) and 2.0 years of tenure with their departments (SD = 1.7).
Factor analysis (principal components with oblique rotation) yielded two factors with
eigenvalues greater than one. The first factor explained 46.0% of the variance and contained five
items reflecting self-focused moral reasoning (alpha = .91). Factor loadings ranged from .65 to
Beyond ethical climate - 34
.95, with no cross-loadings greater than .21. The second factor explained 11.8% of the variance
and contained seven items reflecting other-focused moral reasoning (alpha = .89). Factor
loadings ranged from .63 to .71, with no cross-loadings greater than .25.
Beyond ethical climate - 35
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Beyond ethical climate - 48
Table 1
Means, Standard Deviations, and Intercorrelationsa
Mean
s.d.
1
Ethical climate: Self-focused
reasoning
3.12
0.98
(.89)
Ethical climate: Other-focused
reasoning
2.69
0.87
-.26**
(.82)
Collective moral emotion
2.56
0.76
-.46**
.53**
(.80)
Collective ethical efficacy
2.52
0.89
-.38**
.55**
.58**
(.87)
Ethical behavior
2.25
0.78
-.33**
.19*
.20**
.18**
a
2
Scale reliabilities (Chronbach‘s α) in parentheses on the diagonal
* = p < .05; ** = p < .01
3
4
5
(.91)
Beyond ethical climate - 49
Table 2
Fit Indices for Measurement Model
Model
χ
90% C.I.
d
2
f
RMSEA
for RMSEA
CFI
NNFI
Four factor
189.83
224
.01
.01-.02
.99
.99
Three factor
499.79
227
.11
.09-.12
.95
.95
One factor
777.67
230
.16
.14-.17
.89
.88
Beyond ethical climate - 50
Table 3
Results of regression analysis for ethical behavior
Model
Constant
b
Std.
β
Error
3.10**
(.90)
.00
(.00)
.03
Mean age
-.02*
(.01)
-.22*
Ethical climate: Other-focused reasoning
-.07
(.17)
-.04
-.34**
(.13)
-.27**
Collective moral emotion
-.03
(.18)
-.02
Collective ethical efficacy
.44*
(.19)
.25*
1.32**
(.48)
.29**
Self-focused reasoning x collective moral emotion
-.14
(.26)
-.05
Other-focused reasoning x collective ethical efficacy
.36
(.36)
.11
Self-focused reasoning x collective ethical efficacy
.49*
(.25)
.21*
Collective moral emotion x collective ethical efficacy
1.66**
(.38)
.43**
Other-focused reasoning x moral emotion x ethical efficacy
1.15*
(.67)
.21*
Self-focused reasoning x moral emotion x ethical efficacy
1.59**
(.46)
.39**
Mean department tenure
Ethical climate: Self-focused reasoning
Other-focused reasoning x collective moral emotion
R2 = .26
* = p < .05; ** = p < .01; one-tailed
b = unstandardized coefficients; β = standardized coefficients
Beyond ethical climate - 51
Figure 1
Three-way interaction between other-focused ethical climate, collective emotion, and collective
ethical efficacy
5
4
3
2
1
0
5
4
3
2
1
0
5
5
4
4
3
3
2
2
1
Beyond ethical climate - 52
Figure 2
Three-way interaction between self-focused ethical climate, collective emotion, and collective
ethical efficacy
5
4
3
2
1
0
5
4
3
2
1
0
55
44
33
22
Beyond ethical climate - 53
Appendix: Scale Items
Ethical climate: Self-focused collective moral reasoning
1. In my department people‘s primary concern is their personal benefit.
2. People in my department think of their own welfare first when faced with a difficult decision.
3. People in my department are very concerned about what is best for them personally.
4. People around here protect their own interest above other considerations.
5. People around here are mostly out for themselves.
Ethical climate: Other-focused collective moral reasoning
6. What is best for everyone in the department is the major consideration.
7. In my department it is expected that you will always do what is right for society.
8. People around here have a strong sense of responsibility to society and humanity.
9. People in my department are actively concerned about their peers‘ interests.
10. The most important concern is the good of all the people in the department.
Collective moral emotion
1. People in my department sympathize with someone who is having difficulties in their job.
2. For the most part, when people around here see that someone is treated unfairly, they feel
pity for that person.
3. When people in my department see someone being treated unfairly, they sometimes don‘t
feel much pity for them. (R)
4. In my department people feel sorry for someone who is having problems.
5. Sometimes people in my department do not feel very sorry for others who are having
problems. (R)
6. Others misfortunes do not usually disturb people in my department a great deal. (R)
7. People around here feel bad for someone who is being taken advantage of.
Collective ethical efficacy
1. When necessary, people in my department take charge and do what is morally right.
2. Generally people in my department feel in control over the outcomes when making decisions
that concern ethical issues.
3. People around here are confident that they can do the right thing when faced with moral
dilemmas.
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