Ethical climate in organisation refers to the way in which an organisation typically handles issues such as responsibility, accountability, communication, regulations, equity, trust, and the welfare of stakeholders. Ethical climate defines what is correct behavior and how ethical issues should be handled within organizations. The ethical climate of a business organization can make the difference between a successful venture and an unsuccessful one. Ethical Climate has been measured by the Ethical Climate Questionnaire developed by Victor and Cullen (1988). ECQ is the most common measure in ethical climate research, as well. Even businesses with a strong ethical culture may find employee attitudes, behaviors and patterns of … In a 2007 article published in Financial Executive, contributing writer Cynthia Waller Vallario suggests that there may be a connection between how a business is perceived and its internal ethical climate. From the cultural vantage point, an organization is a tribe. Ethical climate is a related area of research that refers to employees’ perceptions of the organization in terms of broad climates that either support or do not support ethics. As tribal members gather, they develop their own language, stories, beliefs, assumptions, ceremonies, and power structures. Body: Explain that Ethical climate is the culture of an organization as it pertains to questions of right and wrong. For this reason, it plays a key role in organizational life. Hence, an ethical climate is usually about standards of behaviour in the workplace as well as with customers and partners. We relied on the social identity approach to compare the effects of two specific ethical climates – an ethical climate of self-interest vs. friendship – on employees’ reactions. W … Ways to Improve an Organization's Ethical Climate. Most ethical dilemmas in profit-seeking organizations come down to situations in which making money is in conflict with doing what is perceived as ethically right. Ethical climate determines what members believe is right or wrong and shapes their ethical decision-making and behavior. The ethical climate in most organizations is set by how a company makes decisions. o Victor and Cullen argue that climates can be classified according to five types of criteria used by members of an organization when making ethical decisions Why do you think the ethical climate of an organization is so important? These elements combine to form a unique perspective on Organizations need shared values, which are more defining of the group than any kind of shared bylaws, rules, or processes. Ethical climate results from both a firm’s history and its leadership. An ethical climate refers to a part of a companys culture that centers on doing right or wrong. 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