An organizational climate regarding ethics: the outcome of leader values and the practices that reflect them

In this article, we argue that the organizational climate regarding ethics - the shared perception of what is ethically correct behavior and how ethical issues should be handled within an organization is an outgrowth of the personal values and motives of organizational founders and other early organizational leaders. We begin by arguing that one common label for the climate regarding ethics construct - "ethical climate" - is inappropriate. We also argue that climate regarding ethics has an impact on organizational outcomes, including organizational outcomes that do not have explicit ethical components. We propose that this impact largely occurs through the mediating mechanisms of organizational cohesion and morale. We conclude by discussing the variety of antecedents and outcomes related to climate regarding ethics. (C) 2001 Elsevier Science Inc. All rights reserved.