Unit 6 Creating an Ethical Organization Climate

Overview

In this unit, we reflect on how to create an Ethical Organizational climate. Ethical climate is part of an organization’s culture. Ethical climate describes how an organization responds to ethical issues. Management professors Bart Victor and John Cullen (Johnson 2021) argue that ethical climates can be classified according to the criteria members use to make moral choices, and the groups that members refer to, when making ethical determinations.

At a very basic and broad level, the starting point for any organization is a vision that describes where the firm wants to be, as well as its purpose and values. The vision provides the general framework in which all other activities take place: it sets the direction. These vision statements define the domain or the boundaries of an organization and describe what the organization is, and what it is not. Furthermore, a vision often describes the values and ethical principles of the organization. According to Nahavandi & Aristgueta (2015), reviewing the ethics of organizational behavior leads us to ask how managers can bring about change while still maintaining a sense of responsibility. It also provides insight as to whether efforts at organizational change can be carried out in a way that avoids coercion, manipulation, or dehumanization.

The following image helps illustrate the relationships that influence an organization - it is important then, that the organization establishes its own guidelines to ensure ethical operation within each environment:

Learning Outcomes

When you have completed this unit, you should be able to:

  • Explain the importance of responsible leadership from the perspective of its role in mobilizing people and organizations, to promote a culture of corporate social responsibility.
  • Analyze how corporate success and social responsibility are linked and leverage one another.
  • Describe some important strategies for building an ethical organizational climate.
  • Explain the dangers posed by organizational success and narcissism.
  • Identify qualities that leaders should be aware of that may signal an organization is headed for moral failure.

Topics

This unit is divided into the following topics:

  1. Ethical Climates
  2. Signs of Healthy Ethical Climates
  3. Climate-Building Tools

Activity Checklist

Here is a checklist of learning activities you will benefit from in completing this unit. You may find it useful for planning your work:

Learning Activities

  • Read & Reflect: Read Chapter 10 from your Meeting the Ethical Challenge of Leadership text.
  • Read & Reflect: This reading from the Journal of Leadership and Organizational Studies explores why it is important for organizations to establish ethical cultures.
  • Read & Reflect: Read Chapter 11 from your Responsible Leadership text.
  • Read & Reflect: This reading provides some interesting perspectives on the importance of trust and the overall performance of an organization.
  • Learning Lab: This Learning Lab will be a discussion of a Case Study that looks at Nike. After reading the article, your Facilitator will guide a discussion - please take a look at the guiding questions by visiting the Learning Lab page.

Assessment

  • Individual Assignment #2: This will be your second Individual Assignment that focuses on performing another Gibbs Analysis of the provided reading. Instructions can be found by visiting the Assessment page for this unit.

Resources

Here are the resources you will need to complete this unit.

  • Johnson, C. E. (2021). Meeting the Ethical Challenge of Leadership: Casting Light or Shadow. 7th Ed, Sage Publication Inc. - ISBN: 9781544351643 (alk. paper)
  • Maak, T.& Pless, N. M. (2006). Responsible Leadership. Routledge. - ISBN: 978-0-415-35581-0
  • Other online resources will be provided in the unit.

6.1 Ethical Climates

Unit 6 begins with a look at the elements that create ethical climates. We begin with an understanding of what ethical climate actually means. Ethical climate describes how an organization responds to ethical issues. As you hopefully understand, at this point in the course, individuals and organizations do not simply “operate ethically.” Rather, ethical behaviour, and the development of an ethical climate, is part of a process that needs to be intentional - from the highest levels of leadership, all the way to each and every follower. By establishing the moral criteria that, ultimately, represents the organization, leaders can create an ethical climate that where members of the organization have a standard to refer to when making ethical determinations.

The video below helps to explain more:

Learning Activity - Read and Reflect

We begin with our first reading from our Meeting the Ethical Challenge of Leadership: Casting Light or Shadow text. Read Chapter 10 and think about how it connects to some of the concepts and examples discussed in the video above.

Learning Activity - Read and Reflect

Next, we have an article from the Journal of Leadership and Organizational Studies that provides some context as to why establish ethical climates is important for an organization. Click on the link below:

6.2 Signs of Healthy Ethical Climates

Now that we have looked at the importance of establishing an ethical climate, we now shift our attention to identifying signs of a heathy ethical climate. The video below introduces some of the characteristics that are indicative of a healthy ethical climate.

In addition, the video will also explore the importance of establishing some structural qualities that encourage high ethical performance - important as well is that the structures do not undermine the ethical standards of members of the organization. This ties into the idea organizational citizenship….

Learning Activity - Read and Reflect

Take a moment to read through Chapter 11 in your Responsible Leadership text. Again, as you read through this chapter, try to think of experiences in your own life and how this content relates to our study in Unit 6.

6.3 Climate-Building Tools

As Unit 6, draws to an close, we finally turn our attention to some of the “tools” leaders rely on to “build” an ethical climate. The video below will outline five important strategies that are necessary to create an ethical organizational climate. From the identification of ideology, to communication and socialization processes, and finally to the engagement of ethical learning processes, it is critical that these strategies are embraces and systemically practices to ensure organizations are cultivating an ethical culture.

Learning Activity - Read and Reflect

The following article provides an interesting read about the importance of trust and its impact on the overall performance of an organization. In this section, we explored some of the traits of a healthy ethical climate. Read more about the culture that was created and the results of their efforts:

Learning Activity - Nike Case Study

The focus of our Learning Lab for this unit will be a Case Study that we will discuss as a group. Prior to arriving for this week’s Learning Lab, you are expected to read the following case-study:

During the Learning Lab, your Facilitator will be leading a discussion that investigates that following questions:

  1. How should HR departments respond to complaints like those made at Nike?
  2. What elements of an unhealthy ethical climate do you see at Nike?
  3. What additional steps should Nike take to change its culture?
  4. How should the company measure its progress in making cultural change?
  5. Do you think Nike’s culture has hindered its ability to market to women?

Be sure to arrive ready to discuss the above!

Assessment

Individual Assignment #2

Your assessment for Unit 6 will be the second of your Individual Assignments.

This assignment will focus on the content from the Johnson text (Chapters 3, 4, & 7) as well as the Kraemer* text (Chapters 3 & 4). For this assignment, once again, you will be drawing upon your own life experience and interactions. Be sure to reflect in a meaningful way of those events, individuals, and life experiences that affected you (good or bad).

To Begin…

Using the readings and your own experience, write a 3-5 page reflective paper using the following guidelines:

Reflect on situations of ethical influence based on your ethical compass, that is a time and place where and when you either exerted influence or resisted influence.

Your reflection should present the situation and analyze the variables that had an impact on your ethical behavior to submit, resist, or exert influence. In addition, you should also provide an analysis of how character (confidence and humility) were evident, or not, in the situation you describe.

This assignment will be worth 10% of your final grade.

Additional Expectations

  • Integrate several quotes from the Kraemer and Johnson texts.
  • For this assignment, “first-person” narrative will be accepted.
  • 3-5 pages in length (double spaced)

The following rubric will be used for grading.

Grading Rubric - Click to expand
Criteria Excellent Satisfactory Attempted
Description Component Clear, sufficiently detailed and easily understood description of the experience [learning resource(s) and or relevant personal or professional encounters] Adequate detail, moderately clear description of the experience [learning resource(s) and or relevant personal or professional encounters] Very limited detail, difficult to understand description of the experience [learning resource(s) and or relevant personal or professional encounters]
Reflection Component Strong effort to engage in personal reflection of the event with a focus on the student’s own perceptions, assumptions, involvement, response/reaction, behaviour and/or thinking, and considerations of underlying reasons. An attempt to engage in personal reflection of the event, and there is usually a moderate effort to discuss personal perceptions, assumptions, response/reaction, behaviour, thoughts and/or feelings. Limited description of experience or encounter, with little or no personal reflection of the event.
Application Component A strong effort is made to apply content from the course and course readings. This is evident by the integration of meaningful and relevant quotes, references, and examples. Evidence of attempts to apply content from the course and course readings are present but inconsistent. Quotes, references, and examples are evident but integration and connection could be stronger. No/Limited attempts have been made to apply content from the course and course readings OR there is no/limited integration of quotes/references, or examples.
Writing Mechanics Consistently uses correct grammar, spelling, and punctuation. Small number of minor grammatical or other writing errors. Consistent evidence of grammatical or other writing errors.

To submit your assignment, scroll to the bottom of the page and click on the “Individual Assignment #2” dropbox link.

Checking your Learning

Before you move on to the next unit, you may want to check to make sure that you are able to:

  • Explain the importance of responsible leadership from the perspective of its role in mobilizing people and organizations, to promote a culture of corporate social responsibility.
  • Analyze how corporate success and social responsibility are linked and leverage one another.
  • Describe some important strategies for building an ethical organizational climate.
  • Explain the dangers posed by organizational success and narcissism.
  • Identify qualities that leaders should be aware of that may signal an organization is headed for moral failure.