Organizational cultures are not neutral in their ethical orientation, even when they are not openly pursuing ethical goals. Ethical culture develops over time as the shared concept of right and wrong behavior in the workplace. Research indicates that ethical cultures espouse clear ethical standards, with ethical behavior modeled by leadership and with employees who are capable of and committed to behaving ethically.

Researchers have developed ethical climate theory (ECT) and the ethical climate index (ECI) to categorize and measure the shared perceptions of the ethical work environment as reflected in an organization’s policies, practices, and procedures. Of the nine identified ECT climate categories, five are most prevalent in organizations: instrumental, caring, independence, law and code, and rules. Each explains the general expectations and values of managers and employees. For example, in a caring climate, managers may expect that their decisions will have a positive effect on the greatest number of stakeholders possible.

Organizations often progress through various categories as they move through their business life cycle. Studies of ethical climates and workplace outcomes suggest that some ECT climate categories are likely to be found in certain organizations. Industries with exacting standards, such as engineering, accounting, and law, tend to have a rules or law and code climate. Industries that thrive on competitiveness, such as financial trading, often have an instrumental climate. Eventually, we may be able to provide leaders with blueprints for designing effective ethical climates.