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MGMT 300- Ethical Climate

Aug 28, 2023

Ethics short paper:

Before completing this assignment, please review the attached document, Expectations for Short Papers. You must understand the expectations that are required when completing the short papers for this course. Additionally, this document provides further in-depth instructions.

Your paper must include the following:

Cover Page

Introduction (1 to 2 paragraphs maximum)

Purpose Statement (2 to 3 sentences)

Analysis (3.5 to 4 pages maximum)

What purpose does an ethical climate serve, and why is it important to an organization?

How do biases impact our moral decision-making? (Pick 2) (Please note: the biases that are required for this paper are located in the How (Un) Ethical Are You? article in Week 2’s readings.)

Provide an example of an ethical issue. Why is this issue unethical? What behaviors are occurring that are unethical?

How could the ethical issue have been avoided? In other words, what are some of the leadership actions that should have been implemented to establish an ethical climate? (Note: Think about the 5 components that help leaders “create and sustain an ethical climate,” that we examined in the week 2 discussion post. Just pick 1 from the list of 5).

Conclusion (1 to 2 paragraphs maximum)

Ethical Climate


The ethical climate is an integral part of the organization. Everyone wants to work where the business environment is ethical and ethical things are also practiced as well. If the environment is positive enough then it will motivate and make the employees comfortable at work and provide a good environment at work as well. The company climate can be seen by the leaders of the organization in how they behave with their employees and how they treat them. If in the organization all the things work properly and in good means then the fourth in the productivity of the organization can also be seen. Hence, it is particularly important to a company’s success that leaders cultivate an ethical climate as it is directly linked to the employee’s behavior. In this paper, we focus on how ethical climate has a direct correlation with the organization’s success and how leaders impact it.

The ethical concept in the organization can mean that the work done in the organization should be good and, in every decision, the involvement of all the employees should be there. The work performed in the organization should be ethical and everyone should be given fair chances and the practices in the organization as well (Kuoribo et al. 2021, p.5). The ethical climate here represents the climate of the organization and how the organization is how they deal with its employees as well.

Purpose Statement

The main purpose of the paper is to provide information related to the ethical climate of the organization. It will provide information related to the ethical issues which can take place in the organization as well. The information related to the impact of the ethical and ethical issues in the organization and the decision-making process can take place as well.


An ethical climate is very important for the organization as well as all the individuals related to the organization. It is about “doing the right thing”. Organizations portraying a highly ethical climate are respected and earn the reputation of being ethical and moral-based organizations. Its employees feel a sense of self-confidence and pride. This leads to overall self-motivation and the organization is bound to be involved in creating a very positive environment around. Also, its impact on the surroundings is very optimistic. Thereby, creating value for customers. The main purpose that the ethical climate serves is the effectiveness of the employee workforce. With the help of the ethical climate, it can be said that it motivated the employees in the work to work more effectively in the organization. If the ethical climate is positive then it brings positivity and motivation to the organization and makes the employees do the work in the most ethical and proper ways as well.

It can be said that the ethical climate is important in the organization because in an organization several people work there. If the ethical environment is there then it creates positivity in the work and more employees want to work in the place that provides positivity at work as well. The growth and, the reputation of the organization can be taken place as well (Al Halbusi et al. 2021, p.605). It helps employees and leaders in making decisions based on ethics that are transparent and accountable. Not only in making decisions ethical climate guides employees in making the right moves during tough times and doing the right thing at the time right which even earns respect from customers and fellow competitors. A good and ethical climate not only brings out the best in employees but also helps the employees to bring about a good image of it as well. It can be said that it should be there in the organization.

Biases cause to impact our moral decision-making capability negatively. This means that when we are biased about a particular subject or individual; our reasoning and decision-making skills are affected. We become emotional about decisions and mostly end up making wrong decisions. This may impact us more or less severely (Dias & Nylandsted, 2021, p.5). However, biases must be highly discouraged if we wish to achieve higher business growth. If the person is biased in the workplace or the judgment then it is clear that he will make the wrong decision and the biased one or do in favor but not the actual discussion will be made which will be good for the organization and its reputation as well. Many biases affect human tendency both consciously when the person is aware of the way he is thinking and unconsciously when the person’s behavior is influenced by that they are not completely aware of. The few biases that would affect our decision-making are stated below-

In-group favoritism– This is one of the biases that takes place in various organizations. Here group favoritism takes place in the organization where one group favors the other group (Ventovaara et al. 2021, p.1065). Due to group favoritism, the allocation of the work and the resources are not done properly. If the group favoritism is seen then it can be seen that the work was not done in the proper ways and it affects the growth of the organization as well. The business not only impacts the organization but also impacts the employee’s behavior in the organization. With favoritism, the employees will lack the interest to work in the particular organization, and due to that, the people will take the work more lightly and will not actively participate. In all, it can be said that it affects the organization’s reputation as well.

Overclaiming credit– Here the biases ness is related to taking too much of the credit related to the work which was done. It is considered to be one of the biasedness that takes place in the organization as well. Here the people do it not unfairly but they think that they have contributed more to the work or the organization than what the other people have done for the organization as well. Due to the overclaiming of the credit, conflict arises in the organization and it leads to conflict as well which leads to the creation of negativity in the organization and the organization did not work properly. The conflict and the rise of miscommunication affect the productivity of the organization as well as harm, the reputation of the organization. The business affects the decision-making process of the organization as well as the effect working habits of the people and the environment in which all the people work.

Several ethical issues take place in the organization and one such ethical which takes place in my organization is stated below-

There was an instance in my previous organization, wherein my design team had goofed up during the generation of a project’s BOM (Bill of Material). As a result, the material was not purchased and the project was delayed due to. To hide this internal mistake, the project manager informed the client that the project was delayed due to late approval by the client side. Also, he falsely stated that the material that was shortfall had a long delivery time, which it didn’t. This was a lie. The project manager tried to cover our internal errors under the client’s name. Thus, this matter was an unethical issue (Yasin, 2021, p.5). The matter according to me is an unethical issue it is because here the correct things are not updated and to hide the things the organization head is making the lie and making the other believe that it is not their mistake but it was the mistake of the other person as well.

According to me, this issue is unethical because incorrect things are been said to others and the truth has been surprised which is unethical Accordingly the truth is suppressed and the lie is been presented as the truth. Here the false blame has also been provided to the others as we know that the wrong name has been added here.

The behavior that is occurring here is unethical is the false naming and framing of someone who does not have any fault in the work (Richardson & Healy, 2019, p.1090). To remove the name himself the name of the other people is being framed here which can be considered unethical according to be as here the wrong is being surprised so that the other person was not able to know what are the things that are de done and no one can blame that person as well. From my perspective, it is wrong and unethical as well. The things that the organization should do are stated below-

Firstly, the design team must have carefully designed and determined the BOM.  Secondly, there must have been additional efforts by the Purchase head to reduce the delivery period of the material and procure it at the earliest. Thirdly, even after the first two measures would have been taken, the delay would be there, The project manager must have been honest enough with the client to state the actual reason for the delay and own the fault. The client would have been upset, but content with the approach of the project manager. “Honesty is the best policy” This would have provided that our organization believed in telling the truth and would have assured that such an incident would never reoccur

The ethical issue is one such issue that should be avoided to maintain a good environment in the organization as well. The organization should always make an effort to reduce or avoid the ethical issue that takes place within the organization. There are various ways through which the ethical issue can be avoided and they are stated below-

Firstly, one must honestly assess the needs and resources on their own. If the proper planning is done in the organization and the needs and the resources are known then the ethical issue will not take place in the organization.

Secondly, a good foundation should be established in terms of the organization. In the organization, strict rules should be there so that no unethical things will be tolerated which automatically reduces the unethical things in the organization (La Monaca et al. 2021, p.10).

Thirdly integrity and a good culture should be maintained in the organization. It can be said that if a good culture is there in the organization, then the ethical issue will automatically not be integrated into the organization.

The leaders can maintain and develop an ethical climate by the following 5 components which are as follows: –

Formal ethics policies and procedures– The ethical policies of the organization should be formal and the decision in the organization should be made accordingly unethical behavior at work will be discouraged as well (Bryndin, 2021, p.5).

Core ideology– All the organizations have some core ideology in the work which is mandatory to be maintained and followed in the work by the employees of the organization.

Integrity– Honesty and integrity are essential and integral parts of the organization and they should be maintained for the growth of the organization as well.

Structural reinforcement- The system and the structure should focus on ethical work and should always discourage unethical performances.

Process focus– focusing on process, not just the achievement of tangible individual, team, and organization goals is a way leaders maintain an ethical climate. The Wells Fargo Account fraud is an example of a situation-based factor where Wells Fargo created unrealistically high sales goals for their employees.

The one and the most important on the topmost list is the integrity of the organization. It can be said that integrity is an important aspect of the organization and integrity means doing the right things even if no one is watching. If in the organization the right things take place and the loads do the work fairly and with integrity then ultimately it will bind the team members to follow the same and growth in the organization can also take place (Hajli, 2018, p.805). Proper training and guidance should be provided to the people in the organization so that they can able to perform work properly.


Ethical Climate is important to an organization as it has a direct impact on the behavior, effectiveness, and motivation of the employees. The leaders in the organization should always communicate with the team members and try to understand them and involve them in the decision-making process of the organization as well. If the proper support and cooperation of the team members, then they will work more effectively in the organization. The other thing which the organization should look after is integrity and it should be there in the organization. The organization’s ethical climate has a great effect on the organization’s culture as it helps to maintain and do the work more properly. It can be further concluded that the leaders should make clear that the work should be done properly and the leaders should also focus on the clear goal, improvement, and resources so that it can help in the growth of the organization and also helps the organization to get the reorganization as well and the growth, as well as stability, can also take place.


Al Halbusi, H., Ruiz-Palomino, P., Morales-Sánchez, R., & Abdel Fattah, F. A. M. (2021). Managerial ethical leadership, ethical climate, and employee ethical behavior: Does moral attentiveness matter? Ethics & Behavior31(8), 604-627.

Bryndin, E. (2021). Formation of International Ethical Digital Environment with Smart Artificial Intelligence. Automation, Control and Intelligent Systems9(1), 22.

Dias, C., & Nylandsted, J. (2021). Plasma membrane integrity in health and disease: significance and therapeutic potential. Cell discovery7(1), 1-18. 

Hajli, N. (2018). Ethical environment in the online communities by information credibility: a social media perspective. Journal of Business Ethics149(4), 799-810. 

Kuoribo, E., Owusu-Manu, D. G., Yomoah, R., Debrah, C., Acheampong, A., & Edwards, D. J. (2021). Ethical and unethical behavior of built environment professionals in the Ghanaian construction industry. Journal of Engineering, Design and Technology

La Monaca, A., Murray, J. W., Liao, Z., Speidel, A., Robles-Linares, J. A., Axinte, D. A., … & Clare, A. T. (2021). Surface integrity in metal machining-Part II: Functional performance. International Journal of Machine Tools and Manufacture164, 103718.  

Richardson, M., & Healy, M. (2019). Examining the ethical environment in higher education. British Educational Research Journal45(6), 1089-1104

Ventovaara, P., Sandeberg, M. A., Räsänen, J., & Pergert, P. (2021). Ethical climate and moral distress in pediatric oncology nursing. Nursing ethics28(6), 1061-1072. 

Yasin, R. (2021). Responsible leadership and employee turnover intention. Explore the mediating roles of ethical climate and corporate image. Journal of Knowledge Management.

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