Organizational Ethical Climate: Definition, Issues & Improvement

Organizational Ethical Climate: Definition, Issues & Improvement
Coming up next: Prejudice & Ethnocentrism in Organizations

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
Your next lesson will play in 10 seconds
  • 0:42 Instrumental Ethical Climate
  • 1:28 Caring Ethical Climate
  • 2:08 Law and Order Ethical Climate
  • 2:40 Rules Ethical Climate
  • 3:18 Independence Ethical Climate
  • 4:40 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up


Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Jennifer Lombardo
Organizational ethical climate refers to the moral atmosphere of the work environment and the level of ethics practiced within a company. Instrumental, caring, law and order, rules, and independence are the five types of ethical climate that can exist in an organization.

Ethical Climate

Organizational ethical climate refers to the moral atmosphere of the work environment and the level of ethics practiced within a company. Instrumental, caring, law and order, rules, and independence are the five types of climates that can exist in an organization. Incivility, harassment, aggression, and discrimination can all produce an unethical and hostile work environment, which can create dissatisfied employees, while a positive ethical environment can make employees more productive and even happier.


Let's take a look at Ninja Corporation, which operates an instrumental type of ethical climate.

The CEO of Ninja Corporation has been known to be cutthroat within his industry. He has created an instrumental ethical climate by managing via ethical egotism. He feels that he has every right to make selfish decisions if they benefit either the company or even him personally. He even sabotaged one of his competitor's sales events so that they would take a hit in corporate morale. He then had recruiters steal away the biggest sales reps from his competition. This type of ethical climate has the highest amount of immoral and unethical business behavior due to self-interest being the driving factor in decision-making.


Ninja Corp's competitor, Martial Arts R Us, follows the opposite type of ethical standards. Martial Arts R Us believes in creating a caring ethical environment. Their CEO is concerned about employees' well-being and offers support in career development and other opportunities. This second type of ethical climate is based on excellent leadership, fairness, and goodness. Employees can thrive in this ethical type of environment as there is usually excellent communication between subordinates and superiors. One negative to a caring climate is that rules can be overlooked to help out employees or friends.

Law and Order

The law firm of Cheapo and Rip-off instills the third type of ethical climate within their organization. A law and order climate is when precise codes of conduct are followed. This type of climate relies on the laws from outside sources, like actual state or federal laws. Conservative types of companies usually cultivate this type of ethical climate because they fear legal ramifications if they do not follow numerous codes. This type of climate can tend to ignore employee issues and only be concerned about specific codes.


The next type is very similar to law and order. The rules type of ethical climate is concerned with following rules, procedures, and policies established by the organization. In comparison to the laws climate, which depends on actual outside real laws, a rules climate relies on internal professional codes or policies. Employees and managers understand that varying from the rules could cost them their job. This can stifle creativity and can also ignore legitimate issues that employees may face. In addition, problems might not be solved because certain individuals are afraid to bend the rules even slightly.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account