ethical climate paper prelim findings
TRANSCRIPT
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Preliminary Results: A Study of the Relationship of Ethical Work Climate and
Organizational Culture In Public Organizations
By
Rod Erakovich, Visiting Assistant Professor of Management at Texas Wesleyan University and
Ph.D. Candidate, University of Texas at Arlington
Dr. Raymon Bruce, Professor, Troy State University
Dr. Sherman Wyman, Professor and Director, Center for International Research, Education and
Development, University of Texas at Arlington
Paper prepared for presentation at the American Society for Public Administration NationalConference, Phoenix, Arizona - March 23-26, 2002
March 26, 2002
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Abstract
Organizational culture is hypothesized as playing a critical role in the development of multipleethical climates. The question examined in this paper is what are the critical organizational
cultural factors found in public organizations that account for differences in ethical climates.
Researchers have developed a typology of ethical climates in organizations. Ethical climateconstructs now give us the possibility to measure and identify specific organizational ethical
climate characteristics. The question now becomes which elements of the organizational cultureproduce certain types of climates and in turn, the associated behavior that reflects the ethical
climates.
This paper will provide preliminary results of public organization surveys that proberelationships between organizational culture and ethical climate. Organizational managers will
be surveyed to collect both quantitative and qualitative perceptions.
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Relationship of Ethical Work Climate and Organizational Culture in Public Organizations
Introduction
Public administration ethics has grown dramatically from 1930 to the present.
Citizenship, democracy, virtue ethics, the organizational context, ethics education, philosophical
theory and perspectives and moral development are themes that have risen to view and become
intertwined in the blossoming discussions. Contained within Waldos list (1974) are two themes
present and considered in any ethical dilemma faced by a public servant: the individual and the
organization. The question examined here is what critical organizational cultural factors are
accounting for differences in the multiple organizational ethical climates in an organization.
Organization theory hypothesizes that organizational culture plays a critical role in the
development of multiple organizational ethical climates. (Trevino 1986, Ferrell et al 1989). This
paper discusses structural and normative approaches to ethical controls and reports on the
preliminary results of public organization surveys that probe the relationships between
organizational culture and ethical climate.
Statement of the Problem
In analyzing organizational members behavior, the organizational culture perspective is
gaining importance as organizations become more complex, decentralized and fragmented
(Mausolff 1996, Grosenick and Gibson 2001, Ott 1998). Understanding and analyzing the
influence of key organizational cultural elements, such as leadership, structure, support,
cohesion, innovation and ethical practices, are essential to understanding organizational culture.
Up to this point, the relationship between organizational culture and ethical climate has been
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hypothesized but not empirically validated. Cultural influences change the character and identity
of an organization. In this manner the organizational climate, a social force that constrains
individual behavior, can be permanently changed. Perceptions and behavior of organizational
members can be altered. However, unless the underlying shared assumptions and values in
organizational culture are changed, the climate will revert back to the old climate as soon as the
pressure from organizational leaders or citizens, for example, are removed (Ott 1998).
Organizational culture is the basic assumptions and beliefs that are shared by members
of the organization (Schein 1985). Organizational climates are distinct, however, from the
organizational culture. (Cullen, Victor and Bronson 1993). Orga nizational climates are the
psychological environments in which behavior of individuals occur (Ott 1998). Individual
norms operate in the organizational climate and evolve into institutional systems that are well
known by organizational members. An organizational ethical climate is the collection of shared
perceptions on what ethically correct behavior is and how ethical issues should be handled
(Victor and Cullen 1987). The linkage between the organizational culture and the organizational
ethical climates in public administration organizations is the central focus of this study.
Ultimately, the behavior of individuals produces an organizations ethical climates
(Victor and Cullen 1987). Once in an organization, employees learn through formal and informal
socialization processes what is correct to contribute to this organizational ethical climate (Cooper
1998, Victor and Cullen 1987), and they react to it collectively (Ott 1998). The organizational
culture, characterized by shared assumptions, beliefs and values helps to shape and guide this
behavior (Schein, 1985, Ott, 1989 1998, Victor and Cullen 1987).
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No matter how broad the concept of ethics may be, how open organizations are to ethical
influences and how many ethical problems an organization and its leadership experiences, the
key question remains how to manage ethical conduct effectively in public organizations . The
exercise of discretion in performance of duties, conduct and management in public organizations
increases the emphasis on controlling ethical conduct.
The objective of this study is to demonstrate relationships between public organizational
culture and public organizational ethical climates. It has already been determined that in
organizations where there is a higher level of moral development represented in ethical climates,
decisions are more ethical (Fritzsche 2000; Sims and Keon 1999). In addition, there is a lower
level of intentional organizational misbehavior (Vardi 2001), a higher development in the
person-organization fit (Sims and Keon 1999), a stronger communication system exists (Bartels
et al 1998), and a statistically significant difference among organizations on ethical dimensions
(Wimbush et al 1997).
However, two main shortcomings exist in these investigations. First, all are conducted in
for-profit or not-for-profit organizations and not in the public sector. The conduct of public
organizations and the development of the public organizational ethical work climate are based on
the importance of democratic values and public interest, not issues of profit and shareholder
interest found in the private sector. Second, none of the studies reviewed determine which
organizational cultural variables have the greatest effect on the ethical climates. Grosenick and
Gibson (2001) found theorists are just beginning to examine the organizational culture and its
effect on managing public organizations. What is lacking are empirical studies. A review of
business administration literature shows ethical climates and behaviors examined, but not
linkages between organizational ethical climates and the organizational culture.
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Comparing Public and Private Organizations
This distinction between public and private organizations is important in this study of
public organizational ethical climates. Bozeman in Rainey (1991) uses two dimensions, political
authority and economic authority to draw a distinction. These dimensions are continuums rather
than dichotomies, and thus move from private organizations with maximum economic authority
and little political authority, to public organizations that have maximum political authority and
little economic authority. Gawthrop in Denhardt (1993) suggests that the purpose of public
organizations and public management is the facilitation of integration and convergence of social
values. Gortner, Mahler and Nicholson (1997) define public organizations as organizations
created to be agents of some unit of government.
Denhardt (1993) suggests that public organizations should be concerned with the pursuit
of publicly defined social values as the most important goal. Organizations that are agents of
some governmental unit operate in a landscape different from their private sector counterparts.
This landscape concerns organizational goals involving public trust, equality and equity, fairness
and due process and operating in the public interest. This provides the value distinction from
private organizations and their pursuit of economic goals. Harmon and Mayer in Denhardt
(1993) argue that the greatest impact on studying organizations is on what clarifies the moral
dimension of the organization and understanding what is valued and what should be valued.
This research clearly defines and relies upon the distinction between private and public
organizations. The law creates public organizations to implement policy and administer the law.
Where managers in private organizations act unless a law or rule prescribes otherwise,
compliance with laws in public organizations is mandatory. Public managers ability to plan,
organize, lead and control is possible only if authority is granted. The political process often
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controls changes attempted by public managers. In countless ways, the structure, control and
resources provided to public organizations is fragmented. This fragmentation process and
ultimate priority on abiding by laws and the political process create emphasis on internal
structures and processes. This power and political organizational theory overlaps into the
organizational culture and climates.
The organizational culture is a system of organizational symbols, beliefs, values and
shared assumptions and "is a social force that controls patterns of organizational behavior by
shaping members' cognition and perceptions of meanings and realities" (Ott 1989) and is an
anthropological construct. In public organizations, the focus is to be on a values based ethic that
considers the public interest through the implementation of policy and law. This affect varies
between public organizations based on their mission and structure. It is therefore logical to posit
that differing organizational ethical climates are to some extent a product of different
organizational cultures.
Public Trust as the Foundation of Public Organization Cultures
Public trust is an important part of the social fabric of any nation - one of its most
precious national resources. Uncaring public officials and employees can tear away at this social
fabric by ignoring the public's trust. There is a threshold of public trust, below which, a regime
can no longer be effective. Alternatively, such regimes typically rely on a kind of Taliban
tyranny. At the same time, when the public develops complete and blind trust in the
government's organizations, it can lead to a totalitarian organizational culture such as Nazi
Germany.
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In a democracy, any public organization culture is fundamentally grounded in public
trust. The relationship between public trust and a democratic public organization's culture is a
complex and dynamic relationship. This entrustment comes from (1) the public that elects the
political officials; (2) the elected officials and their appointees to public office; and (3) the
government employees who work to accomplish the public organization's mission of service
delivery to the public community. People in government are expected to act in a fair and ethical
manner concerning the public resources and powers that have been given them to administer for
the public good.
Clearly, changes in the public's trust in government affect the public organization's
culture most directly by the people they elect to public office. In turn, ethical climates are
impacted by any ensuing changes in the organization's culture brought by the elected leadership.
Arguably, the resulting changes that elected leaders have on organizational culture can be
expected to have cascading effects on employees' ethical conduct of their duties. How these
elected officials behave sets the tone for the ethical climate within the organization for its
employees. Conversely, unfair and unethical performance of duties on the part of elected or
appointed officials can have a profound effect on the public's trust of their government.
Conceptual Framework
The external and internal environments of public organizations are key elements in
creating ethical climates that foster public trust and is illustrated in the ecological landscape of
public organizations in figure 1. This portion of this research will examine structural and
normative approaches to public administration ethics, the organizational ethical climate and
organizational work culture.
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Leadership
ETHICAL CONTROLS
Support
Cohe
sion
I nnovat i on
Structu
re
NORMATIVE
Moral Development Values Decision making
STRUCTURAL
Codes of Ethics/Conduct Legislation Inspector Generals
Publ
icTr
ust
Globaliza
tion
Reinventi
ng
Governm
ent
DecentralizedPublic
Organizations
Privatization
Socioeconomicissues
Ethical Climate
Figure 1. Landscape of Public Administration
Organizational Ethical Environment
Structural and Normative Approaches to Ethics
Public organizations employ structural and normative approaches to build organizational
ethical climates as shown in
figure 1. The structural
approach focuses on formal-
legal arrangements,
primarily regulatory and
legal prescriptions through
which government seeks to
channel and control
behavior. The normative
approach examines how
ethical values are made operational in organizations.
Structural Perspective
The intellectual origins of the structural framework were captured in the Weberian model
of democracies that articulated rational principles. Weber advocated an ideal type of bureaucracy
that organized and institutionalized individuals in organizations (Gortner Mahler Nicholson
1997, Denhardt 1993). Weber recognized the need for instrumental rationality, or getting things
done efficiently, through a hierarchical system of rules.
Other structural sources include the Wilsonian dichotomy of public administration and
politics, and from the Goodnow and Willoughby studies of comparative administration and the
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application of rationalism (Pugh 1991). This movement was designed to replace the market
system model of political decision-making.
By creating a systematic process in a bureaucratic structural framework, continuity and
consistency of purpose is believed to be ensured. These bureaucracies provide structures that
produce calculability of results (Denhardt 1993). Early theorists provided a methodology by
which these content values are assessed against established rational goals and objectives using
utilitarian principles as the criteria for action. For example, Simon (1947) explicated a process of
vertical value integration that should take place in the organizational context.
Clear are the values of efficiency and effectiveness in the structural perspective in
movements toward decentralized public administration systems. These values are present in the
recent U.S. approach to Reinventing Government and worldwide application of new public
administration that touts entrepreneurship and privatization in government. Also seen are values
of efficiency and effectiveness in decentralized discretion and systems of personal initiatives,
voluntary cooperation, joint ventures and committee work (Cleveland 2000).
Although much scholarly literature suggests that ethical codes are useful in fostering
ethical behavior, there is no demonstrated relationship between codes, administrative behavior
and public confidence and trust in government (Thompson 1995). The strengths of codes include
setting clear standards of behavior consistent with social needs, accountability, operationalization
of concepts, increased transparency of government and due process.
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Normative Perspective
Less precise than the structural perspective, a normative view of public administration
ethics relies on the values of citizenship, public interest and social equity. The methodology of a
normative approach to ethics is deductive reasoning from a deontological perspective. In such an
approach, reasoning from a general to a specific sense about the determination of rightness or
wrongness of an action by existing rules, societal principles, values and personal beliefs. In
essence, a public administrator searches for some principle that guides his or her decision-
making or provides justification for his or her decision (Whittmer 1994). This approach provides
a framework to guide and justify managerial decision-making. It employs values inherent in the
society, political system and governance in which the individual resides. Various individual and
environmental forces influence ethical behavior.
In summary, the basis of a structural ethical control perspective is on external controls
through codes, laws and regulations and the normative perspective is on values of rightness and
wrongness. Concern over the possible inadequacy of relying solely on formal and legal remedies
has sparked an interest in a normative dimension of ethical management in global discussions
(Gilman and Lewis 1996).
Organizational Culture
The essence of an organization's culture lies in the patterns of underlying assumptions,
beliefs and values (Schein 1992), not overt behavior. Schein (1985, 1992) and Ott (1989) define
organizational culture as a pattern of shared basic assumptions that are learned by organization
members in solving its problems of external adaptation and internalized integration. These
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shared assumptions have worked well enough to be considered valid and, therefore, are taught to
new members as the correct way to think and feel in relation to these problems.
Within an organization, different organizational cultures may be found in different
operating departments (Van Maanen and Barley 1984, Louis 1981 in Schein 1992; Ott, 1989). It
is important to assess the culture in different operating units within organizations. Assumptions
about the organizational culture based on the organization as a whole are inappropriate.
Culture in an organization appears at different levels, or the degree to which the cultural
phenomenon is visible. Ott (1989) and Schein (1985, 1992) have created similar theoretical
typologies of the elements of the organizational culture. Otts (1989) paradigm of organizational
cultural elements includes:
Level 1A. The visible artifacts including ceremonies, physical arrangements,
symbols and traditions.
Level 1B. Patterns of behavior such as patterns of interaction and ritualized
practices.
Level 2. Shared beliefs and values, level of consensus and organizational ethic.
Level 3. Underlying assumptions about identity, mind set, philosophy, spirit and
organizational scripts.
Ott concludes that level 2 elements are central to understanding culture. He states that:
"... ethics, values and morals provide the justification for what people do in
organizations, and it would not be possible to understand the most visible levels
... without knowing the beliefs and values that drive them."
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Organizational Culture and Organizational Ethical Climate
As has been suggested earlier, concepts of organizational culture and climates determine
ethical behavior. The ethical climates in an organization provide members with shared
behavioral perceptions of ethically correct actions and provide insights into the shared values.
The primary focus of ethical climates is on the manner in which organizational members behave
and decide in respond to ethical dilemmas in the workplace (Victor and Cullen 1987; Berman
1999; Key 1999). Thus the ethical work climates, psychological constructs, are a manifestation
of the organizational culture.
An organizational ethical climate is a normative construct of the shared behavioral
perceptions of policies, procedures, systems and behaviors in an organization that direct
organizational members ethical actions and decisions (Agarwal and Malloy 1999, Wyld and
Jones, 1997, Key 1999). These cumulative collections of shared practices and behavioral
perceptions are observable and influence organizational members in the ethical decision making
processes. When an organizational member is faced with an ethical issue and considers what the
organization expectation is, his or her ethical climate provides the basis for the perception of
acceptable and ethical behavior.
Victor and Cullen (1987) developed a typology of organizational ethical climates and
theorize that these climates can be placed in "maps" which distinguish what is really happening
in organizations. Victor and Cullen found that organizational ethical climates evolve along
dimensions or level of criteria similar to Kohlberg's ethical standards and ethical theories.
Kohlberg (1981) found that individuals develop morally on how things should be resolved and
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follows a multi-stage sequence. They progress from an egoistic view to a principled concern for
universal rights and even humanity as a whole.
Types of organizational ethical climates, then, may influence types of ethical conflicts
and the process by which they are resolved. In addition to the level of criteria, the level of ethical
analysis can range from the individual to the broadest of social systems. Kohlberg found that as
moral development increases the shift in ethical concern moves from individual to the social
system and support for the criteria is found in theories of organizational roles. Merton (1957)
makes a distinction between a local and cosmopolitan role and from internal to external sources
of role definition.
Organizational Ethical Climate Dimensions
Ethical climate is defined as the "the shared perceptions of what is ethically correct
behavior and how ethical issues should be handled" (Victor and Cullen 1987). They propose an
ethical climate typology with two major dimensions and each climate with three positions as
shown in table 1.
Table 1. Organizational Ethical Climates
Levels of Ethical Analysis
Individual Local Cosmopolitan
Egoism Self-interestOrganizational
interestEfficiency
Benevolence Friendship Team interestStakeholder
orientation
Levels
of
Ethical
CriteriaPrinciple
Personal
morality
Organizational rules
and procedures
Laws and
professional codesVictor and Cullen (1987)
The dimension ethical criterion refers to three major classes of ethical theory that are
included in Kohlbergs theory of moral development and consist of egoism, benevolence and
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principle. The dimension level of ethical analysis identifies sources of moral reasoning used for
applying ethical criteria to organizational decisions. The individual level of analysis identifies
the sources of ethical reasoning within the individual. The local level of analysis identifies
sources of ethical reasoning at the level of the organization. The cosmopolitan level locates the
reference for ethical reasoning outside the organization. Together, the ethical criterion dimension
and the level of analysis dimension define nine ethical climate types. Victor and Cullen
developed an Ethical Climate Questionnaire in which each climate type was described by a
number of question items (e.g. in this company, people are expected to follow their own personal
and moral beliefs to measure personal morality climate) that was scored on a six-point scale.
The nine types developed in the typology of Victor and Cullen is adapted to the public
sector and to the purposes of this research. Further research has shown Victor and Cullen's
typology is a valid and reliable indicator of organizational ethical climates (Cullen, Victor and
Bronson 1993; Wyld and Jones 1997; Wimbish, Shepard and Markham 1997; Sims and Keon
1997, 1999; Bartels, Harrick, Martel and Strickland 1998). However, this ethical climate
typology has not been empirically applied to public organizational culture.
Additional work by Key (1999), Wimbush, Shepard and Markham (1997) and Wyld and
Jones (1997) eventually led to five climate dimensions that show distinction among groups. Five
organizational ethical climate dimensions were also developed in research done by Agarwal and
Malloy (1999). Based on these studies, the organizational ethical climate dimensions chosen for
this research are (1) individual interest climate, (2) organizational interest climate, (3) principled
interest climate, (4) principled organizational climate and (5) principled cosmopolitan climate.
These are shown in Table 2. Each climate dimension is coded (e.g., EI for Individual Interest, EC
for Organizational Interest, etc.) for ease of reference.
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Table 2. Organizational Ethical Climates Used in this Research
Levels of Ethical Analysis
Individual Local Cosmopolitan
EgoismIndividual Interest
(EI)Organizational Interest (EC)
Levels of
EthicalCriteria
PrincipledPrincipled Interest
(PI)
Principled
Organizational (PL)
Principled
Cosmopolitan(PC)
These dimensions can be arranged hierarchically from a self-interest standard to a
concern for universal rights and humanity using a deontological approach. When considering
types of criteria and levels of analysis in organizations, an ordering of these dimensions would be
from an egoistic/individual criterion (individual interest climate) to a principled/cosmopolitan
criterion (principled cosmopolitan climate). Thus, this research hypothesizes:
H1: In public organizations, there are statistically significant differences among these
five ethical climates.
These dimensions now give us the possibility to measure and identify specific
organizational ethical climate characteristics. The question now becomes which variables of
organizational culture are associated with these dimensions.
Organizational Culture Variables
A literature review revealed 125 recognized elements of an organizational culture. Not all
parts of an organizations culture are relevant to any given issue (Schein 1992). Attempting to
study an entire culture would be impractical for this research. The independent variables used to
show relationships with the ethical climates are leadership, cohesion, support, innovation and
structure. They are variables that have been previously researched and measured. A description
of reliability and validity of variable data for the organizational culture and ethical work climate
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used in this research is included in appendix A. The description of each culture variable
employed follows. Included with each description is the hypothesized relationship with ethical
climates.
Leadership. An important element in creating an ethical environment in any organization
is leadership (Gortner, 1991, Hitt 1990 and Cooper 1998). The leadership guidance system of the
organization establishes the organizational ethical climate for employees criteria to think and
act, especially in times of crisis (Gortner 1991, 1995).
Leadership research has focused on the isolation of two dimensions of leadership
behavior: consideration or supportive and initiating or structural. A work atmosphere of mutual
trust, respect for subordinates ideas and consideration of subordinates feelings characterize
leaders who score high on the consideration dimension. This research argues that supportive
leaders will create ethical climates that are more cosmopolitan.
H2: In public organizations, greater levels of a supportive style of leadership are
positively associated with higher levels of ethical criteria in the organizational ethical
climate.
Structure. The organizational cultural variable structure is defined as the organizations
procedures, specific chain of command, flow of work and orientation toward responsibility and
attempt to acquire power (Aiken, Michael and Jerald Hage 1966; Odom, Boxx Dunn 1990).
Aiken, Michael and Hage's research (1966) found that the greater degree of formalization in an
organization, the greater the likelihood of alienation toward the organization. Such alienation
manifests itself as dissatisfaction with work and disturbed social relations. This type of alienation
then results in issues of disbursement of responsibility. This research hypothesizes that
organizations that are less formal will create more cosmopolitan ethical climates.
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H3: In public organizations, greater levels of informal organizational structure are
positively associated with higher levels of ethical criteria in the organizational ethical
climate.
Support. Organizational support is defined as a workplace that helps an employee when
needed without questioning a persons ability. It includes the degree to which employees are
encouraged to be creative and innovative, employee perceptions of participation in the decision
making process, clear organizational goals and performance expectations and the degree to
which rewards are based on employee performance in contrast to seniority, favoritism or other
non-performance criteria (House and Gary Dessler 1974; Van der Post, de Coning, et al 1997).
Thus, it is hypothesized that organizations with higher levels of support will create higher
principled and cosmopolitan organizational ethical climates.
H4: In public organizations, greater levels of organizational support are positively
associated with higher levels of ethical criteria in the organizational ethical climate.
Cohesion. Cohesion is defined in this research as the closeness or commonness of
attitude, behavior and performance within the organization (Odom, Boxx and Dunn 1990).
Included in this variable are work trust and collaboration. Trust is defined as maintaining
confidentiality of information shared by others and not misusing it, a sense of assurance that
others will help when needed and will honor mutual obligations and commitments. Collaboration
is defined as giving help to and asking for help from others; team spirit; working together
(individuals and groups) to solve problems (Pareek 1994). Organizations that create greater
levels of cohesion and trust will move toward higher levels of ethical climatic reasoning.
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H5: In public organizations, greater levels of organizational cohesion are positively
associated with higher levels of ethical criteria in the organizational ethical climate.
Innovation. Innovation is defined as ..an organizational work culture that is creative,
results oriented and challenging (Odom, Boxx and Dunn 1990). Included are principles based
on the eight attributes of excellence and innovation found in Peters and Waterman (1990).
Higher levels of innovation in an organization create an organizational ethical climate at a more
principled and cosmopolitan level of reasoning.
H6: In public organizations, greater levels of organizational innovation are positively
associated with higher levels of ethical criteria in the organizational ethical climate.
Organizational Ethical Climate Variables
Used in this survey is a modified ethical dimension instrument developed by Victor and
Cullen (1987, 1988) that emphasizes the description of climates rather than the feeling about the
workplace. Their research explored (1) the level of analysis (individual, local or cosmopolitan)
and (2) the level of criteria (principle, utilitarian or egoistic). Moreover, further work by Agarwal
and Malloy (1999) proposed five dimensions of ethical climates.
Victor, Cullen (1987, 1988) and Agarwal, and Malloy (1999) suggest a higher level of
organizational ethical analysis involves more than self- interest, more than organizational interest,
more than principles, but a reasoning that involves principles from a mixed global point of
reference. This mixed global reference is called cosmopolitan. For purposes of this research,
these climates have been labeled individual interest, principled interest, organizational interest,
principled organizational and principled cosmopolitan. As with Kohlberg, conceptually these
dimensions can be arranged hierarchically from a self-interest standard to a concern for universal
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rights and humanity. When considering types of criteria and levels of analysis in organizations,
an ordering of these dimensions would be from an egoistic/individual criterion (individual
interest climate) to a principled/cosmopolitan criterion (principled cosmopolitan climate). (See
Figure 2.)
Figure 2. Ordering of Ethical Climates
Lower Order Ethical Reasoning Individual Interest Climate (EI)
Organizational Interest Climate(EC)
Principled Organizational Climate
(PL)Higher Order Ethical Reasoning
Principled Cosmopolitan Climate(PC)
Research Design
This research is designed to support generalizability of the findings and support
relationships between organizational cultural variables and five ethical climates. The discussion
involves the unit of analysis, sampling frame and instrument created to support this research.
Unit of Analysis
The unit of analysis for this study is public organizations. For the purpose of this study,
an organization is defined as, a section, agency, department, or separate institution where
employees work and are supervised by individuals in manageria l positions. Victor and Cullen
(1988) suggest that with tenure, the climate becomes internalized and managers become
integrated into their organizational climates and cultures. Public organizational managers and
supervisors who been in their position of leadership for more than one year and with the
organization for more than two years will be sampled using a survey instrument.
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Using leaders to assess the organizational ethical climate and organizational culture
constructs has precedence in other studies. Ruppel and Harrington (2000) studied information
technology managers' in 1100 companies, examining the relationship between communication,
trust and organizational ethical climate, commitment and innovation. Upchurch and Ruhland
(1996), in their study of organizational ethical climates, surveyed top managers and focused on
measures of the organizational bases of an organization's work climate. Cohen (1995) suggests
that managerial perceptions are interpretations of the organization's ethical climate. It seems
reasonable that managers would be in the best position to describe organizational practices and
values that are reflected in the organizational ethical climate and organizational culture and can
act as objective observers. For this reason, it is necessary for the questionnaire to query the
observers description of what is happening and not evaluate their perception of organizational
expectations.
A controversy associated with organizational research is the individualistic fallacy
(Nachmais 2000), or inferring about an organization from data gathered from individuals. This
study attempts to prevent blind aggregation of individual results to measure organizational level
constructs and the use of data gathered from organizational members. Using organizational
members would provide data that is collected with bias because the members may lack the
unique knowledge or experience to assess the constructs on an organizational basis. This
research supports the theory that shared properties of the organizational climate and
organizational culture emerges from the organizational members and characterizes the
organizational as a whole (Klein and Kozlowski 2000). These organizational characteristics are a
property of the organization as a whole as defined in this research and dictated by the
organizations structure and function. As suggested by Klein and Kozlowski (2000), this research
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Table 3. Reliability Using Cronbach Alpha
Construct Alpha F Probability
Leadership
Instrumentality .7893 1.9293 .1358
Supportive .7314 2.9126 .0116**Structure .7039 28.310 .0000*
Support .8682 3.4323 .0007*
Cohesion .7980 3.7622 .0005*
Innovation .8920 6.7389 .0000*Ethics Climate
Individual Interest .5180 15.039 .0000*
Organizational Interest .5361 14.373 .0000*Principled Interest .4344 4.2437 .0550
Principled Organization .5056 12.654 .0024*Principled Cosmopolitan .7405 4.9556 .0041*
* Significance at the .00 level ** Significance at the .01 level
defines the level of measurement by the unit-level construct, and the measurements as a global
measure to characterize the organization.
Sampling Frame
This research will require a large sample of managers to characterize the variability
between organizations. This means a sample drawn from organizations and units within
organizations. An appropriate sampling design will ensure sufficient organizations to test this
research model. However, the sampling frame of public organizations reduces the number of
qualified organizations. To ensure an adequate availability of organizations, a convenience and
opportunistic sampling plan is being used. As of this writing, surveys have been sent to over
2,600 Senior Executive Service managers in the federal government, 75 managers in a fire
department, 77 managers and supervisors for a mid-sized city, and 86 managers and supervisors
in the Dallas Region of a large Texas state agency.
Instrument
An instrument was
developed to measure
quantitatively the
organizational ethical
climates and
organizational
cultural variables.
Independent experts
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in organizational culture and ethical climate reviewed the instrument for construct validity.
A reliability and multicollinearity test of the instrument was conducted and the results are
shown in table 3. The Organizational Culture and Ethical Climate Survey of Public Managers
was administered via the World Wide Web through a University of Virginia service known as
SurveySuite. The test survey was sent to 75 public managers meeting tenure requirements for
this research. Using the data provided by the respondents and SPSS statistical software, the
reliability estimates using Cronbach Alpha scores ranged from .4344 to .8920. Scaling of
questions was necessary to arrive at a suitable Cronbach alpha score consistent with an F score
and significant probability that maintains unequal means within each construct. Those constructs
that have probability at a low significant level are at the highest possible based on the available
data.
The multicollinearity of the items within each section of the instrument was reviewed
using the Variance Inflation Factor (VIF). A cutoff VIF score of 5.000 is used to reduce
multicollinearity issues. The elimination of items to reduce multicollinearity did not affect the
validity of the construct or the reliability of the items.
The instrument was sent to respondents using the internet and electronic mail that offers
opportunities to conduct research that have previously not been available (Solomon 2001,
Selwyn and Robson 1998, Coomber 1997). Advantages to using electronic surveys are easy
access to world wide samples, access to hard to reach populations, low administrative costs, and
concepts of race, gender, age and sexuality do not apply thereby eliminating some bias.
Moreover, respondents can reply when they feel comfortable, it is non-coercive and the survey is
easier to accomplish and send. Shortcomings include population and sampling bias, low response
rates and anonymity of the respondents.
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The main disadvantage of electronic surveys found by Solomon (2001), Selwyn and
Robson (1998) and Coomber (1997) is a potential bias due to the sampled individuals not having
or choosing not to access the internet. Studies have indicated widespread disparities in Internet
access and usage among ethnic and socioeconomic groups (Selwyn and Robson 1998). This
survey is for managers in public organizations. This group must use the internet and email daily
to accomplish their responsibilities. It is therefore argued that the bias cautioned against by
Selwyn and Robson (1998) is not a threat to sampling validity in this instance due to the nature
of the sampling population.
Findings
The online survey instrument was sent to public managers in the federal government, a
mid-sized city, a fire department and a Texas state department in a non-probability convenience
and opportunistic sampling plan. In an effort to alleviate the confidentiality fears with the
managers concerning the ethics questions, a cover email was sent explaining confidentiality of
the responses. The city manager and a Texas state department executive were briefed on the
conduct of the survey and potential results. Approval to survey managers in the mid-sized cities
and state department was granted. As of this writing, 141 responses have been received for an
overall response rate of 4.7 percent. Respondents have expressed concerns of a high degree of
sensitivity to a study examining the organizations ethics.
The 16 ethical work climate items describing the five ethical work climates in the survey
instrument were factor analyzed using Principal Component Analysis and a Varimax rotation
method, the identical method used to support the findings of Victor and Cullen (1987, 1988,
Ruppel and Harrington 2000, and Agarwal and Mallow (1999). The factor analysis of the ethical
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climate descriptors yielded five components. Table 4 shows the factor loading for the five
emergent climates and the items describing the climates in the survey questionnaire. Each
questionnaire item is identified by the ethical work climate construct identification previously
discussed. Items that loaded on a component with a score higher than .50 and not loading at .50
on another component were selected for that construct. An exception occurs with one item in
component five being selected for that component with a load factor of .358 and not a higher
positive load factor on any other component.
Table 4. Factor Analysis Rotated Component Matrix
1 2 3 4 5
Employees interpretthe law (PC) .685
Laws and ethical codesare key (PC) .767
Employees followsstandards exactly (PC) .727 .
Employees do what is right
for public (PC) .767
First consideration isthe law (PI) .623
Follow rules at all times (PI) .695
Success is going by rules (PI) .805Employees protect their
Interests but not above all (PI) .680
Consider what is best
for employees (EC) .559
Employees look out for eachother (EC) .588
Most important is what isbest for employees (EC) .681
Room for personal ethicsIn this organization (EC) .711
Cost control is majorconcern (PL) .816
Most efficient not always
right method (PL) .687
Do what benefits yourself (EI) .358
Further organization interests (EI) .845Principled component analysis with Varimax rotation.
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Table 5. Correlation Matrix
EI PI EC PL PC
IndividualInterest (EI) 1.0000
PrincipledInterest (PI) .1921 1.0000
OrganizationalInterest (EC) .2049 .0456 1.0000
PrincipledOrganization(PL) .0670 .0392 .3510 1.0000
Principled
Cosmopolitan (PC)-.0274 -.0515 .4602 .6022 1.0000
In some instances, the items loaded differently than those originally planned. For
example, the question Employees interpret the law and then comply with it originally was
coded for the Individual Interest climate dimension and loaded on a Principled Cosmopolitan
dimension in this factor analysis. A review of the questionnaire used in this research with
comparisons to Victor and Cullen (1987, 1988) questionnaire provide the basis for labeling each
ethical climate construct from the factor-loading component. A concern of multicollinearity of
constructs arises with the changed items from the original scheme. Table 5 illustrates a moderate
correlation of the ethical climates and gives preliminary indication that each construct remains a
separate item.
This research hypothesized that
distinct ethical climates do exist in
public organizations. A preliminary
review of the data using frequency
distribution and the 75th
percentile of
the mean of each climate factor
resulted in 86 percent of the
respondents selecting one ethical climate for their organizations. If no climate was
selected using the 75th percentile, they were coded with the mean closest to that
percentile. If the respondent indicated multiple ethical climates based on this percentile,
the highest mean was used. The results shown in figure 3 are preliminary results and
illustrated differences between the five climates. One sample t-tests of each climate
showed a high degree of significance that each ethical climate mean differs from the
population mean. These finding provides partial support for hypothesis H1: In public
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Principled Cosmopoli
Principled Organizat
Organizational Inter
Principled Interest
Individual Interest
40
30
20
10
30
14
24
37
26
Figure 3. Number of Organizations
Selecting a Specific Ethical Climate
organizations, there are statistically significant differences among these five ethical
climates.
This study design is to test the
proposition of a positive relationship
between culture variables and higher
levels of cosmopolitan ethical
climates. Table 6 shows the results of
backward multiple regression analyses
performed with each climate as the
Table 6. Results of Backward Regression Models
Hypothesis
Supported
Variable
Entered
B
Coefficients Significance F-value
Significance
F-value
Adjusted
R-
Squared
Individual Interest Ethical Climate (EI)
H2Supportive
Leadership-.330 .034 2.674 .073 .025
H4 Cohesion .455 .030
Principled Interest Ethical Climate (PI)H2
Structure
Leadership2.57 .122 2.128 .123 .017
H3 Support -.282 .041
Organizational Interest Ethical Climate(EC)
H4 Cohesion .305 .006 43.723 .000 .491
H5 Innovation .397 .000
H6 Structure 1.02 .180
Principled Organizational Ethical Climate (PL)
H2Structure
Leadership.297 .008 13.943 .000 .163
H6 Structure .319 .004
Principled Cosmopolitan Ethical Climate (PC)
H2 StructureLeadership
.263 .011 28.475 .000 .384
H5 Innovation .284 .001
H6 Structure .299 .008
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dependent variable and culture dimensions as independent variables. Culture variables that
significantly support each climate are shown in table 6.
The use of backward regression analysis enters all independent variables into the
equation and then sequentially removes them based on partial correlation with the dependent
variable. In addition, a variable is dropped if it would cause the tolerance of another variable in
the model to drop below a partial correlation criteria of .0001. This model shows preliminary
results of relationships between the culture variable and each ethical climate. The hypothesis
supported is also listed.
These preliminary results show mixed support for the hypotheses that culture variables
will show increasing positive support for higher levels of ethical climates. Structural or task
oriented leadership shows greater support for principled levels of ethical climates than supportive
or relational leadership. Supportive leadership is related to the individual interest ethical climate.
These results support the leadership variable hypothesis that relationship type leadership tasks
support more cosmopolitan ethical analysis. The independent cultural variable cohesion supports
egoistic level of ethical criteria and individual analysis. However, it is not significant in
supporting principled ethical climates. Innovation is shown to support ethical climates at the
organizational and cosmopolitan levels of ethical analysis. Innovation does not significantly
support an individual level of ethical analysis. Finally, the cultural variable structure supports
higher levels of ethical analysis and levels of criteria as hypothesized.
In summary, these preliminary findings support individual ethical climates within public
organizations. The correlation of ethical climates shows modest support for individuality of each
climate. This is further supported by 86 percent of these climates recognized by each respondent
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when considered at the 75th percentile ranking of the mean of the climate. Finally, regression
models show support for the positive relationships between cultural variables and higher levels
of ethical criteria in each of the remaining hypotheses 2-6.
Conclusion
This research establishes that ethical climates exist in public organizations as shown in
Table 2. Furthermore, these climates are distinctive and separate constructs. There is further
preliminary evidence to support that culture variables examined have a positive relationship with
these climates. As the climates move toward a more principled level of ethical criteria, the
relationship from culture variables is stronger.
The positive support for levels of ethical criteria versus levels of ethical analysis is
possibly implied from the distinction between private and public organizations. These
preliminary findings support normative ethical controls in collaboration with structural controls
to create a more principled ethical analysis. These principled ethical climates guide and provide
justification for ethical decisions and action. The control of these climates rests in the
organizational culture.
For example, the ability to create innovation and a supportive structure within the
workforce can have positive and strong emphasis on organizational and cosmopolitan ethical
climates. This in turn provides values for shared assumptions of positive ethical behavior in a
normative approach.
However, where public managers attempt to display artifacts, behaviors and voice beliefs
that support trust and collaboration within the workforce, external control such as that imposed
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by elected officials and professional associations may focus on more structural matters, such as
codes and rules. This incongruence between structural and normative ethical approaches reverts
to the underlying cultural assumptions and organizational scripts and challenges a cohesive
cultural value shift. Even more controlled is innovation within public organizations. Defined as a
culture that is creative, innovation must operate against various structural controls built on
punitive measures that reduce risk taking. Creativity in a structural approach is only allowed
within the constraints created by laws and policies.
This lack of control of instituting normative approaches by public managers presents
limitations to public management. Argawal and Malloy (1999) argues that organizations may
need to focus on establishing and maintaining an internal formal culture in order to foster
congruency within the organization. The focus should entail establishing a normative approach
to ethical control that is congruent with structural approaches in existence. This inward focus
needs to be balanced with an outward view toward responsibilities in the organizations external
environment.
This study is limited by a number of factors. First, it presents only preliminary results
from limited data. Additional quantitative data is needed to employ a complete statistical analysis
of five ethical climates. Second, quantitative findings should be analyzed against qualitative
research. Organizational culture is a historical and anthropological construct and its analysis is
supported by qualitative research means. Third, moderating variables were not employed.
Further research to determine their influence on the relationship of ethical climates and
organizational culture constructs is needed.
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Note: The questionnaire used in this research is an online instrument. Attaching it is
prohibitive because of its length. The authors are willing to share the questionnaire. Please email
Rod Erakovich [email protected] if you desire to review it.
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Appendix A
RELIABILITY AND VALIDITY OF VARIABLE DATA INSTRUMENTS
Organizational Culture
Leadership
The leadership guidance system of the organizations top levels establishes the ethical climate
for level employees criteria to think and act, especially in times of crisis (Gortner 1991). Whenleaders are adept at maintaining close adherence to goals and values in their decision-making
processes, it is easier for employees to recognize and deal with ethical issues (Barnard 1938).
This cultural survey uses the Perceived Leadership Behavioral Scales developed by House andDessler (1974). This instrument focuses on the subordinate's perception of their leaders. Two
aspects of leadership in the House and Dessler instrument are used: instrumental leadership and
supportive leadership. Grounded in the path-goal theory of leadership (House and Dessler 1974),instrumental leadership refers to a leader's behavior directed at clarifying expectations, assigningtasks and specifying procedures to be followed. Supportive leadership is characterized asconsiderate of the needs of the subordinate. It is also referred to as leadership consideration
(House and Dessler 1974).
The development of these survey items is described in the section on Support. Used in this
culture survey is a slightly modified wording formatting to better fit the instrument to publicorganizations and the use of a seven-point Likert scale. House and Dessler used a five-pointformat: always, often, occasionally, seldom and never.
The sixteen items used from the instrument created by House and Dessler measure thesubordinate's perception of a leaders orientation toward instrumentality and subordinate support.
Structure
In this study, the organizational cultural variable structure is defined as an organizationsprocedures, specific chain of command, flow of work and orientation toward responsibility and
attempt to acquire power (Aiken, Michael and Jerald Hage 1966; Odom, Boxx Dunn 1990). Theculture survey uses the Haigen and Aiken Formalization Inventory (1966) and the variables of
(1) job codification, (2) rule observation, (3) rule manual, (4) job descriptions and (5) specificityof job descriptions. These variables are consistent with the report and findings of Odom, Boxxand Dunn (1990) where they identified structural variables as procedural, orderly, established,
cautious and power-oriented.
Aiken, Michael and Hage's research (1966) found that the greater degree of formalization in anorganization, the greater the likelihood of alienation toward the organization. Such alienationmanifests itself as dissatisfaction with work and social relations being disturbed. This type ofalienation then results in issues of power and disbursement of responsibility.
All fifteen items of the Hage and Aiken Formalization Inventory (1966) were used. Questionswere edited to reflect a written survey format. Responses were expanded from four choices
(definitely true, more true than false, more false than true and definitely false) to the sevenchoices listed in this culture survey.
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Support
Another grouping of organizational characteristics is titled support, and defined as a workplace
that helps an employee when needed without questioning a persons ability. It includes suchvariables as the degree to which employees are encouraged to be creative and innovative,
employee perceptions of participation in the decision making process, clear organizational goals
and performance expectations and the degree to which rewards are based on employeeperformance in contrast to seniority, favoritism or other non-performance criteria (House and
Gary Dessler 1974; Van der Post, de Coning, et al 1997). These variables were extracted fromthe Perceived Leadership Behavior Scales (House and Dessler 1974) and the work done by van
der Post, de Coning et al (1997).
In this culture survey, nineteen items are included that measure organizational support. The firstfourteen items were taken from van der Post, de Coning et al (1997), where their research
contained reviews of the literature to identify 114 dimensions of organizational culture, acreation of 225 items that were evaluated by a panel of human resource managers and a resultant
questionnaire that contained 169 statements reflecting the dimensions previously identified. Over400 managers and employees in eight different organizations completed this survey. The itemswere scaled to 97 items with an overall reliability coefficient between .788 and .932 (van der
Post, de Coning et al 1997).
The data relating to the 97 items were factor analyzed, which yielded fifteen factors with Eigen
values greater than 1.0. The factors derived from the factor analysis are constructs in which thetheoretical construct is operationalized. The factors used in this survey include dispositiontoward change, employee participation, goal clarity and reward orientation. Coefficient alphas
for these constructs ranged from .855 to .932.
To add to the cultural survey variable of support, items were taken from the Perceived
Leadership Scales developed by House and Dessler (1974). Five items were included thatmeasure participative leadership. Working with a pool of 35 items generated from an extensive
literature review, principal factor analysis revealed three factors of instrumental leadership,supportive leadership and participative leadership. Participative leadership showed internalconsistency of .68.
Further studies of the Perceived leadership Scales done by Teas and Kohli and reported byHouse and Dessler (1974) reported coefficient alpha estimates of between .64 and .84 for all thedimensions of leadership, with participative leadership dimension reporting a coefficient alpha
estimate of .82.
All of the items used in the culture survey were edited to reflect public and non-profit
organizational uses and to use the seven point Likert scale.
Cohesion
Cohesion is defined in the survey as the closeness or commonness of attitude, behavior and
performance within the work group (Odom, Boxx and Dunn 1990). Included in the survey arework trust and collaboration. Trust is defined as "maintaining confidentiality of information
shared by others and not misusing it; a sense of assurance that others will help when needed andwill honor mutual obligations and commitments. Collaboration is defined as giving help to andasking for help from others; team spirit; working together (individuals and groups) to solve
problems (Pareek 1994).
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These survey items for these values are taken from an ethos survey titled OCTAPACE Profile(Pareek 1994). The organizational culture survey contained ten items that have been edited to fit
the organizations to be surveys. Pareek's survey contained fragments that were developed intostatements to which the respondents could apply the seven-point scale. One question, "trust
begets trust," was changed to read, "In this organization, trust creates trust."
Split-half reliability of the OCTAPACE on a sample of 135 college and university teachers wasfound to be .81 (Mathur 1991). Validity was indirectly tested by "comparing the scores from
three departments ranked by two judges for their effectiveness and these showed no significantdifferences between the first and second department rankings and the second and third
department ranking" (Pareek 1992). The significant different between the first and thirddepartment rankings reflected only on collaboration (.04 significance level).
Innovation
Innovation, in this research, is defined as ..an organizational work climate that is creative,results oriented and challenging (Odom, Boxx and Dunn 1990). Variables included
measurements in the Scale to Measure Excellence in Business (EXCEL) (Sharma, Netemeyer
and Mahajan 1990 in Beardon, Richard G. Netemeyer and Mary F. Mobley 1993) fromprinciples based on the eight attributes of excellence and innovation found in Peters and
Waterman (1990). These variables are (1) bias for action, (2) close to the customer, (3) autonomyand entrepreneurship, (4) productive through people, (5) active shared values among various
organizational levels, (6) simple and lean management, (7) loose-tight properties and (8)focusing on what is known or done best (sticking to the knitting).
Of the sixteen items in the EXCEL, two were eliminated from this survey that referenced
"product line" and "concentrate in product areas," items that cannot be altered to reflect public ornon-profit organizational values. These items measured focusing on what is known or done best
(sticking to the knitting). Although an important variable in organizational culture, it is notrelevant to this study.
The remaining fourteen items are included with some editing modification to reflect private,
public and non-profit organizations structure and procedures.
The EXCEL was developed using recommended scaling procedures. Over 200 items were
developed. Expert panels and two samples were used to "purify and finalize" the scales (Sharma,Netemeyer and Mahajan 1990 in Beardon, Richard G. Netemeyer and Mary F. Mobley 1993).Coefficient alphas for the sixteen-item survey ranged from .89 to .90. This procedure indicates a
level of agreement that the statements measure their attributes.
Ethical Climate
A work climate in an organization focuses on the values and beliefs that are known and
perceived by groups and individual members. Thus an ethical climate is the shared perceptionsof what are ethically correct behavior and the proper process for handling ethical issues (Victor
and Cullen 1987). Used in this survey is an Ethical Dimension item developed by Victor andCullen (1987) that emphasized the description of climates rather than the feeling about the
workplace. Their research explored (1) the dimensionality of the level of analysis (individual,local or cosmopolitan) and (2) the type of criteria (principle, utilitarian or egoistic). These twodimensions describe a 3 X 3 matrix of nine theoretical possible climates: (1) self-interest, (2)
company interest, (3) efficiency, (4) friendship, (5) team play, (6) social responsibility, (7)
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personal morality, (8) rules and procedures and (9) the law or professional code. Factor analysisidentified six emergent types of ethical climates that include (professionalism, (2) caring, (3)
rules, (4) instrumental, (5) efficiency and (6) independence. Various groups were sampled todetermine reliability and validity of the factored dimensions. Reliability alphas ranged from .65
to .81. Discriminant function coefficients ranged from -.01 to .92 Victor and Cullen 1992). It
appears this instrument can sufficiently identify difference among groups as to their ethicalclimate.
This instrument uses 18 items as descriptors of ethical climates on a seven-point Likert scale(completely false, mostly false, somewhat false, somewhat true, mostly true, completely true).
Several items were eliminated that appeared redundant and did not focus on an ethical climate asneeded in this research.
To aid in fitting this organizational survey and the seven-point Likert scale, editing of several
statements did occur without changing the theoretical construct within each dimension.
Control Variables
The following questions are asked to aid in data analysis:
1. years employed in organization2. years in position as a leader3. Size of the organization.
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