Ethical Climate and its Relationship to Ethical Behavior and Ethical Mechanisms

Business ethics is widely perceived as a global issue, and ethical climate is considered to be a significant factor affecting employees' behavior. This study explores organizational ethical climate by: firstly, illustrating the theoretical and empirical basis, discussing the relationship between ethical climate and ethical behavior, as well as examining the relevant organizational ethical mechanisms regarding forming ethical climate; the implications for future research concerning ethical climate are introduced. This study applies multilevel analysis; samples are from Taiwanese financial consulting firms due to the significance concerning ethics in this industry. The results suggest that a ”rules, law and code” ethical climate has a significant influence on employees' ethical behavior because of institutionalized coercion, while other ethical climate dimensions affect certain limited ethical behaviors. Moreover, organizations with a code of ethics and enforcement systems will influence the formation of rules, law and code ethical climate.