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The purpose of this article is to perform a literature review of the existing body of empirically‐based studies relating to the causes and implications of how the ethical climate of a company ultimately affects the incidence of workplace deviance.

The article examines the issue of ethical contexts and climates within organizations, as measured by the Ethical Climate Questionnaire developed in 1987 by Victor and Cullen , and their implications in the daily work lives of participants. The causes of unethical behaviour, including the presence of counter norms, the environment in which a firm operates, and organizational commitment, as well as the manifestation of this behaviour in the form of workplace deviance, are reviewed. Finally, current trends in preventing workplace deviance are investigated, including promoting a strong culture of ethics, and the use of “toxic handlers”, individuals who take it upon themselves to handle the frustrations of fellow employees.

Clearly, unethical and deviant behaviour problems are of great concern to organizations, which must take steps to solve them, at the same time as fostering strong positive ethical cultures. Feels that further studies are needed using more definitive and qualitative measurements to learn more about these behaviours.

This article would be useful to those who wish to obtain an overview of the current literature, specifically readers who do not specialize in the subject area.

The field of behavioral business ethics has come a long way since its inception nearly five decades ago. Pioneered in part in response to a number of high-profile corporate scandals, the early field of business ethics was thought by many to be a fad that would recede along with the salience of the scandals of the day. Yet, this could not have been further from the truth. The need for behavioral business ethics research remains ever-present, as evidenced by the sustained number of scandals and unethical behavior within and by organizations. Moreover, research in this area has burgeoned. In the 1980s, only 54 articles had been published on this topic (Tenbrunsel & Smith-Crowe, 2008); today, a similar search yields over 3,000 “hits.” In light of the area’s growth, we suggest the need to take a look back at the seminal work that sparked social scientific work in the field. In particular, this chapter has two main objectives. First, we provide a review of select foundational work. In so doing, we identify some of the key trends that characterized early knowledge development in the field. Second, we draw on this historical context to consider how past trends relate to current work and speak to future research opportunities.

Indian banking sector is facing a number of challenges, and increasing number of corporate frauds and employee turnover are among the top list. Literature reveals that gaining insights about ethical climate may provide a possible solution and relief from the challenges being faced. This paper aims to contribute to the understanding of the prevalent various ethical climate types in the Indian banking industry. Furthermore, it presents interesting results by investigating the effect of five theorized ethical climate types on organizational commitment along with its three components in the banking sector.

This empirical research encompasses a descriptive research design. Sample uses 266 respondents from four prime banks of the Indian banking industry.

Statistical analyses unveiled that all five conceptualized ethical climate types are prevalent in the Indian banking industry. However, the perception of employees for caring climate was the highest among all others. In contrast to the results reported by Western studies, this research reveals a strong negative impact of instrumental climate on affective commitment. Furthermore, it has been seen that instrumental climate is a significant predictor for the three components of commitment (affective, continuance and normative). However, it fails to predict the overall organizational commitment construct. Likewise, opposed to findings of Western countries, law and code, rules and independent climate types have shown significant relationship and impact on organizational commitment for Indian banking sector employees. It has been found that different commitment components are predicted by a diverse mix of climate types in India.

Findings highlight varying strength of relationship and predictive ability of different ethical climate types with commitment. This helps in elucidating that managers and top executives should focus on building an ethical work environment to warrant high-level commitment among employees. Congruence between employee, manager and organizations’ perception of ethics is a pre-requisite for maintaining a long-term relationship among the parties. This study will enable understanding the role of ethical climate in reducing corporate frauds and employee turnover.

This research addresses a significant gap in literature by exploring the relationship between ethical climate and organizational commitment. The study uses data from the Indian banking industry which contributes to expanding knowledge of the relationship in the Indian context.

There is reason to believe that an ethically minded approach to hiring and the development of an ethical context should be associated with incremental decreases in employees’ perceptions of ethical conflict. It is also likely that the selection of ethical employees, and the reduced ethical conflict that follows, are positively related to employees’ positive work attitudes. The purpose of this paper is to test these relationships.

Using a self-report questionnaire, information was collected from 187 employees working for a medium-sized financial services organization with offices located primarily in the Midwestern USA.

Results of structural equation modeling indicated that employees’ perceptions of ethics-related selection were negatively related to perceived ethical conflict, and that reduced ethical conflict and enhanced ethics-related selection were associated with an increased positive work attitude, which was comprised of job satisfaction, an intention to stay, and organizational commitment.

The results cannot prove causal association between the constructs, and the use of one focal firm limits generalizability.

Organizational leaders and HR professionals should develop ethics-based hiring practices to reduce ethical conflict and strengthen a company's ethical context.

This investigation is relevant because strong relationships among ethics-related hiring, ethical conflict, and positive work attitudes would suggest that companies must use ethical selection criteria and maintain an ethical culture/climate that meets or exceeds employees’ expectations about ethics. Furthermore, this study adds to the relatively few published works exploring the relationship between ethical conflict and work attitudes.

Why is it that highly trained and seasoned executives fail? On the surface, this doesn’t make sense because they are very successful; yet research in the organization sciences provides no shortage of evidence to prove just that. From the classic Mann Gulch fire disaster of Weick’s famous collapse of sensemaking study, to studies of myopia of learning, escalation of commitment, threat-rigidity, dominant logic, the architecture of simplicity, the Icarus Paradox, to core competencies turning into core rigidities, and navigating new competitive markets using “old” cognitive maps, and many more such examples point to a ubiquitous phenomenon where highly trained and experienced professionals find themselves “stuck” in the heat of battle, unable to move and progress. On the one hand, for some, there is a desperate need for change, but are unable to do so, due to their trained incapacities. On the other hand, some simply cannot see the need for change, and continue with their “business as usual” mentality. For both, their visions of the world shrink, they have a tendency to cling onto their past habitual practices and oversimplify the complexity of the situation. In moments like these: DROP YOUR TOOLS and UNLEARN! This book chapter introduces a framework (grounded in clinical psychology) that has had consistent success in helping seasoned executives and key decision-makers open up the alternatives whenever they find themselves stuck with complexity.

The purpose of this study is to examine how an organization's ethical climate positively relates to its financial performance by considering an organization's innovation, a support for innovation and performance evaluation.

Data were collected from employees and managers of 41 subsidiaries of a conglomerate in South Korea through survey questionnaires.

The results indicate that an organization's ethical climate is positively related to financial performance, and its positive relationship is mediated by an organization's innovation. The result also shows that a support for innovation has the moderating effect, such that the positive influence of an organization's ethical climate on its innovation increases when a support for innovation is high. However, this study fails to find the moderating effect of performance evaluation.

There might be the issue of generalizability, because the sample of this study is on the sample of a conglomerate in South Korea. Future research with different types of organizations in other nations is needed.

This study indicates that an organization's ethical climate can be a critical predictor of its innovation as well as financial performance. In this regard, organizations should pay attention to employees' perceptions of the organization's ethical climate.

This study explains the mechanisms on how an organization's ethical climate is related to its financial performance, and provides implications for organizations strivings for ethics in developing countries such as South Korea.