The words "ethical climates" relate to the general feel of an organization as it relates to ethics. All organizations operate with some type of ethical climate. When leaders in an organization demonstrate and demand highly ethical behavior, an organization likely feels like it has an ethical climate. When leaders and employees routinely make unethical decisions, an unethical work climate exists.
On the surface, work climate seems synonymous with the more commonly discussed organizational culture. However, consultant Donald Clark shares in his Big Dog Little Dog's leadership website that the phrase ethical climate is more short-term in orientation, while organizational culture is typically long-lasting. Ethical climates are defined as the "feel of the organization, the individual and shared perceptions and attitudes of the organization's members." Ethical climates evolve over time in organizations and are often a reflection of current leadership, and the ethical nature of leaders.
Importance of Communication
One major question employees can use to determine whether an organization has an ethical or unethical climate, notes Clark, is "How well does the leader clarify the priorities and goals of the organization? What is expected of us?" Sadly, when leaders do not clearly demonstrate and direct employees to follow suit in ethical thinking and behaviors, the result is often bad ethics. Workers need clear direction from top managers on the value of ethics and what ethical decisions are when dilemmas occur.
The ethical climate in most organizations is set by how a company makes decisions. 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. In his article, The Challenge of Ethical Behavior in Organizations in "The Journal of Business Ethics," Ronald R. Sims provides many examples of companies doing things that adversely affect the environment or break commonly held societal norms to improve profit positions. When companies put profit above ethics (for example, Enron), this establishes an unethical climate. When ethics are prioritized as important, an ethical climate emerges.
Corporate Social Responsibility
A 21st century business topic increasing in prominence is corporate social responsibility (CSR). This formalized concept of business ethics expands expectations of companies to include maintenance of community relations and better environmental responsibility, according to the As You Sow Foundation. Community relations means not only doing what is ethical, but being an active participant in the communities in which you do business. Green-friendly business operations are expected by society and consumer watch groups in 2011. This means company leaders must consider how to preserve the environment, recycle natural resources and eliminate waste, to maintain a high standards ethical climate.