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Understanding unethical behavior by unraveling ethical culture

Muel Kaptein
Human Relations 2011 64: 843 originally published online 8 February 2011
DOI: 10.1177/0018726710390536

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 human relations

human relations
64(6) 843–869
Understanding unethical behavior © The Author(s) 2011
Reprints and permission: sagepub.
by unraveling ethical culture co.uk/journalsPermissions.nav
DOI: 10.1177/0018726710390536
hum.sagepub.com

Muel Kaptein
RSM Erasmus University, The Netherlands

Abstract
Unethical behavior in the workplace is a widespread phenomenon. In this article a model
for the ethical culture of organizations that consists of eight dimensions is employed
to explain unethical behavior. The sample was composed of 341 triads consisting of
a manager and two direct reports. The results show that six dimensions of ethical
culture were negatively related to observed unethical behavior: ethical role modeling
of management, ethical role modeling of supervisors, capability to behave ethically,
commitment to behave ethically, openness to discuss ethical issues, and reinforcement
of ethical behavior. Two of the eight dimensions, clarity of ethical standards and
visibility of (un)ethical behavior, were not significantly related to unethical behavior.
This study demonstrates that multiple dimensions of ethical culture have to be taken
into account to reduce unethical behavior. The study opens up avenues for future
research about the significance of each dimension in specific settings, the dynamic
relationship between these dimensions, and the instruments required to improve each
dimension of ethical culture.

Keywords
ethical climate, ethical culture, ethics program, unethical behavior

Unethical behavior in the workplace, defined as behavior in and by organizations that

violates generally accepted moral norms of behavior (Jones, 1991), is a widespread
phenomenon. Research conducted by KPMG (2008) involving 5065 US managers and
employees shows that 74 percent observed unethical behavior in their organization in the
preceding 12 months. Research by the Compliance and Ethics Leadership Council (2008)

Corresponding author:
Muel Kaptein, Business-Society Department, RSM Erasmus University, PO Box 1738, Rotterdam 3000 DR,
The Netherlands.
Email: [email protected]

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844 Human Relations 64(6)

among 1752 managers and employees of large companies in five countries shows that 16
percent observed harassment, 15 percent discrimination, 11 percent theft, and 7 percent
falsification of expense claims in their organization in the preceding 12 months. Unethical
behavior in the workplace undermines and harms human relations (Treviño et al., 2006).
In view of the financial, reputational, and emotional costs of unethical behavior (Den
Nieuwenboer, 2008; Karpoff et al., 2008), organizations face the challenge of prevent-
ing, detecting, and responding to unethical behavior (Giacalone et al., 2008; Goodpaster,
2007; Kidwell and Martin, 2005).
In an attempt to understand unethical behavior in the workplace, scholars initially
focused mainly on the personal characteristics of individual transgressors, the so-called
‘bad apples approach’ (Treviño and Youngblood, 1990). In recent years, the focus has
shifted to the characteristics of the organizational context within which unethical behav-
ior occurs, the so-called ‘bad barrels approach’ (Treviño and Youngblood, 1990). The
ethical culture of an organization is regarded as an important (Ford and Richardson,
1994; Fritzsche, 1991; Key, 1999; Sims and Brinkmann, 2003; Sinclair, 1993), if not the
most important (Casey et al., 2001; Lease, 2006), component of the organizational con-
text to account for unethical behavior.
The study of Treviño et al. (1998) among 318 alumni of two business schools showed
that ethical culture is indeed related to unethical behavior in the workplace. In their sur-
vey study, they used one factor for ethical culture consisting of 14 questionnaire items:1
six items for the sanctions on ethical and unethical behavior (the extent to which ethical
behavior is rewarded and unethical behavior punished), four items for role modeling of
top management (the extent to which organizational leaders act as models of ethical
behavior), three items for the implementation of an ethics code (the extent to which an
ethics code amounts to more than mere window dressing), and one item for norms of
ethical behavior in the organization (the extent to which ethical behavior is the norm in
the organization).
An important question is whether ethical culture is a one-dimensional construct or
whether it has different dimensions that are differently related to unethical behavior. If
this is indeed the case, unethical behavior can be better explained if we unravel the spe-
cific dimensions that cause unethical behavior. It may make a difference whether unethi-
cal behavior is caused by the absence of sanctions, bad role modeling of top management,
weak implementation of an ethics code, and/or a lack of norms for ethical behavior. We
will then also be able to manage unethical behavior better by implementing tailor-made
instruments to address specific weaknesses in the ethical culture. For example, role mod-
eling of top management could be improved through training, coaching, and selection
procedures, while a lack of norms for ethical behavior could be addressed by articulating
these norms in a well-communicated ethics code (Schwartz, 2004).
The research objective of this study is therefore to establish whether unethical behav-
ior in the workplace can be explained by different dimensions of ethical culture. To this
end, the multidimensional model for ethical culture as developed by Kaptein (2008a)
will be used. Demonstrating that different dimensions of ethical culture individually
relate to unethical behavior in the workplace will make it possible to better explain and
manage unethical behavior.

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Kaptein 845

The organizational context

To study the relationship between the ethical culture of organizations and unethical
behavior of managers and employees, ethical culture has to be defined and its relation-
ship to ethical climate and ethics program clarified. Ethical climate is the other most
cited component of the informal organizational context, while ethical program represents
the ethics-relevant dimension of the formal organizational context. Figure 1 illustrates
these three components.
There is a long scientific tradition of studying the culture and climate of organizations
to explain and predict the behavior of managers and employees (Deal and Kennedy,
1982; Denison, 1996; Hofstede, 1991; Schein, 1985). In the business ethics literature,
attention to these informal components of the ethical context or control system of an
organization (Murphy, 1988) initially focused largely on ethical climate. Victor and
Cullen (1987, 1988) were the first to develop a model for the informal ethical context of
organizations. They developed a theoretical nine-factor model for ethical climate that,
based on factor analysis, was reduced to a five-factor model. Their definition of ethical
climate – ‘those aspects of work climate that determine what constitutes ethical behavior
at work’ (1988: 101) – is much cited and their model and its corresponding questionnaire
have often been used (e.g. Martin and Cullen, 2006; Peterson, 2002a, 2002b; Schminke
et al., 2005; Treviño et al., 1998; Vardi, 2001; Weber, 1995; Wimbush et al., 1997) to
demonstrate the influence of ethical climate on unethical behavior (Kish-Gephart et al.,
2010; Peterson, 2002b; Treviño et al., 1998).

Figure 1 Key components of the organizational context explaining unethical behavior of

managers and employees

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846 Human Relations 64(6)

Although Treviño (1986) was one of the first to discuss the relevance of ethical
culture, a first model of ethical culture was developed more than 10 years later by Treviño
et al. (1998). To distinguish ethical culture from ethical climate, Treviño and her
colleagues (1998) carried out a literature review of definitions of organizational culture
to define the ethical culture of an organization as those aspects of the perceived organi-
zational context that may impede unethical behavior and encourage ethical behavior.
Whereas ethical climate can be defined as the perceptions of managers and employees
about what constitutes unethical and ethical behavior in the organization (for example,
the desired level of serving client interests), ethical culture in their view can be defined
as the perception about the conditions that are in place in the organization to comply or
not comply with what constitutes unethical and ethical behavior (for example, the extent
to which the desired level of serving client interests is stimulated by conditions such as
role-modeling of managers, and rewards and punishment). In other words, ethical
climate is substantive in that it pertains to the content of ethical and unethical behavior,
whereas ethical culture is procedural in that it pertains to the conditions for ethical and
unethical behavior (see Heugens et al., 2008). The present study adopts this distinction
in keeping with its use in the business ethics literature. Nevertheless, I do acknowledge
that other definitions of, and distinctions between, culture and climate are also used.
Schein (1996: 229), for example, considers climate as artifact of culture, and defines
culture as ‘shared norms, values, and assumptions’.
In contrast to Denison’s (1996) argument that culture and climate are not ‘fundamen-
tally different and non-overlapping phenomena’ (p. 545), Treviño et al. (1998) found in
their empirical study that ethical culture and ethical climate are distinct constructs. Both
constructs were related to unethical behavior, but ethical culture explained unethical
behavior better than ethical climate because, as Treviño et al. (1998) argue, ethical cli-
mate is related to attitudes and ethical culture pertains more specifically to that which
influences behavior. Their study also indicated that ethical culture and climate were
strongly correlated with each other, leading them to the conclusion that, ‘we should not
be surprised at a finding suggesting than an organization whose leaders represent high
ethical standards and who reward ethical conduct [i.e. ethical culture] is also an organiza-
tion that values its employees, its community, and obeying the law [i.e. ethical climate]’
(Treviño and Weaver, 2003: 256).
Where ethical culture and ethical climate form part of the informal organizational
context, an ethics program is regarded as the most ethically relevant component of the
formal or tangible organizational context (Ferrell et al., 1998). Ethics programs consist
of instruments and measures like codes of ethics, training sessions, whistle blowing
policies, and monitoring systems (Treviño and Weaver, 2003). Whereas Treviño et al.
(1998) viewed formal organizational policies, rules, and statements as aspects of ethical
culture, in subsequent research Weaver and Treviño (1999) drew a distinction between
culture and programs. Weaver and Treviño (1999) found that an ethics program has a
direct effect on unethical behavior. But an ethics program may also be related to the
informal organizational context. Greenberg (2002), for example, argues that an ethics
program is designed to influence the ethical culture and climate of an organization. And
Weaver and Treviño (1999) found that an ethics program becomes more effective when
it is supported by the organizational culture (see Kish-Gephart et al., 2010).

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Kaptein 847

In the present study, we are interested in the multidimensional nature of the relationship
between ethical culture and unethical behavior. Ethical climate and ethics programs will
be included but treated as control variables, leaving it to future research to examine the
interactions between these constructs.

Hypotheses
This study uses the multidimensional model of ethical culture that has been developed by
Kaptein (2008a). This model, called the Corporate Ethical Virtues Model, is as yet the
only multidimensional model of ethical culture available.2 To identify and define desir-
able dimensions of ethical culture, Kaptein (1998) conducted a qualitative analysis of
150 diverse cases of unethical behavior by managers and employees that were caused by
a failing organizational culture. The resulting list of items was, through the use of differ-
ent samples, subjected to exploratory and confirmatory factor analyses resulting in eight
dimensions (Kaptein, 2008a). Kaptein labeled these dimensions as desirable organiza-
tional virtues: the greater the level of embeddedness of these dimensions, the higher the
ethical quality of the organizational culture and the less likely it is that unethical behavior
would occur. The overall fit of the model was good. Preliminary evidence of convergent
and discriminant validity was also found.3 This article will test the predictive validity of
the multidimensional model of ethical culture. First, eight hypotheses are developed on
the basis of the individual dimensions of ethical culture. Subsequently, the method
employed and the findings of this study are presented. The article concludes with an
overview of the implications.

Clarity of ethical standards

Clarity of ethical standards is the first cultural dimension in the model of Kaptein
(2008a) that is deemed to influence unethical behavior by managers and employees.
Clarity concerns the extent to which the ethical standards managers and employees are
expected to adhere to are concrete, comprehensive, and understandable. Clarity is rele-
vant given that vagueness and ambiguity is a potential antecedent to unethical behavior
(Bird and Waters, 1989; Jackson, 2000; Tyler and Blader, 2005). This corresponds with
rational-bureaucratic control theory, which is grounded in the assumption that managers
and employees behave unethically because they lack a clear understanding of what is
expected of them (Bacharach et al., 2002). The ethical issues that managers and employ-
ees encounter in a business environment differ from those confronted in other social
settings (Donaldson and Dunfee, 1999). As a result, general moral intuitions may not
suffice to distinguish ethical from unethical behavior. It is therefore important that an
organization does not leave managers and employees to rely on their moral intuition and
good judgment alone, but to create a culture in which the distinction between ethical
and unethical behavior is clear. Greater clarity should decrease the likelihood of manag-
ers and employees unwittingly behaving in an unethical manner. Greater clarity may
also communicate the importance of these ethical standards to managers and employees
rendering them less likely to violate these standards. Empirical research conducted by
Kaptein (1998) revealed that unethical behavior indeed often occurs owing to the

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848 Human Relations 64(6)

absence of a clear normative framework in the organization. This corresponds with

other empirical research into specific types of unethical behavior. In their laboratory
experiment with students, Hegarty and Sims (1979) found that clear ethical standards
reduced the frequency of kickbacks being paid. And a study by Schnatterly (2003) of
57 business organizations showed that the clarification of policies and procedures
reduced white-collar crime by 26 percent. Regarding the dimension of clarity, the first
hypothesis reads:

Hypothesis 1: The cultural dimension of clarity of ethical standards is negatively related to the
frequency of unethical behavior in the workplace.

Ethical role modeling of management and supervisors

The next dimension of the ethical culture of an organization that is deemed to influence
unethical behavior is role model behavior of management and supervisors (Kaptein,
2008a). Social learning theory (Bandura, 1977) sheds light on the relevance of this
dimension. This theory holds that people learn what behavior is expected by observing
the behavior of role models. Managers and supervisors are important role models within
organizations (Brown et al., 2005; Schein, 1985). Ethical standards are undermined
when managers and supervisors communicate contradictory or inconsistent signals to
subordinates. Behavior that is consistent with the ethical standards of the organization
reinforces the message of compliance with these standards. Kaptein (1998) found several
cases of unethical behavior that were stimulated by unethical role modeling of a manager
or supervisor. Research by Dineen et al. (2006) shows that behavioral integrity – a
pattern of word–deed alignment – of managers is negatively related to the tendency
among employees to engage in unethical behavior. Research by Brown and Treviño
(2006), Brown et al. (2005), Hegarty and Sims (1979), Mayer et al. (2009), and Schminke
et al. (2005) also shows that employees often imitate the ethical or unethical behavior of
their managers and supervisors.
Factor analysis by Kaptein (2008a) showed that congruency falls into two distinct cat-
egories: ethical role modeling of supervisors (the direct manager of employees within a
work group) and ethical role modeling of management (the hierarchical line of command
outside the work group of employees). On the one hand, we may expect the influence of
managers outside the work group to be weaker than that of supervisors, since the former
have less frequent contact with group members and thus less opportunity to demonstrate
role model behavior (see Mayer et al., 2009). On the other hand, we may expect managers
to have more influence on the behavior of group members than supervisors, given that
group members attribute more meaning and importance to their behavior owing to their
position higher up in the corporate hierarchy (see Treviño et al., 2003). In both cases we
expect ethical role modeling of managers and supervisors to be negatively related to uneth-
ical behavior in the workplace. This leads to our second and third hypotheses:

Hypothesis 2: The cultural dimension of ethical role modeling of managers outside the work
group is negatively related to the frequency of unethical behavior in the workplace.

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Kaptein 849

Hypothesis 3: The cultural dimension of ethical role modeling of supervisors within the work
group is negatively related to the frequency of unethical behavior in the workplace.

Capability to behave ethically

A third dimension of the ethical culture of an organization that is deemed to influence
unethical behavior is the capability to behave ethically. This dimension refers to the
extent to which managers and employees believe that they have sufficient time, budgets,
equipment, information, and authority at their disposal to fulfill their ethical responsibili-
ties. Strain theory illustrates the relevance of this dimension. This theory holds that peo-
ple resort to unethical behavior when they are unable to achieve their goals through
legitimate means (Merton, 1938). Treviño (1986) discusses the importance of this dimen-
sion in explaining unethical behavior in the workplace. She posits that people under great
time pressure are less inclined to pay attention to ethical standards than those who have
sufficient time to carry out their responsibilities. In such a high-pressure culture, manag-
ers and employees may also start to think that other matters, such as meeting financial
targets, are more important than complying with ethical standards. These factors create
conditions for rationalizing unethical behavior and increase the likelihood of unethical
behavior occurring. Kaptein (1998) has found examples of unethical behavior that were
caused by managers and employees having insufficient means at their disposal. This also
corresponds with the empirical findings of Cressey (1953), Robertson and Rymon
(2001), and Schweitzer et al. (2004). The more limited the means managers and employ-
ees have at their disposal to behave ethically, the higher the frequency of unethical
behavior. To test this assumption, we come to the following hypothesis:

Hypothesis 4: The cultural dimension of capability to behave ethically is negatively related to

the frequency of unethical behavior in the workplace.

Commitment to behave ethically

Another dimension of the ethical culture of an organization that is deemed relevant is
that of commitment of managers and employees to behave ethically (Kaptein, 2008a).
According to social bond theory, people engage in unethical behavior because they no
longer feel attached, or committed to a given community (Hirschi, 1969). Commitment
is thought to be desirable because a culture characterized by demotivation, mistrust, and
dissatisfaction can be a breeding ground for unethical behavior (Boye and Jones, 1997;
Deutsch Salamon and Robinson, 2008; Greenberg, 1997; Skarlicki et al., 1999). For
example, treatment perceived as unfair may weaken managers and employees’ commit-
ment to ethical standards and increases the risk of unethical behavior. A lack of affective
commitment to the ethical policies and standards of the organization also increases the
risk of unethical behavior. In this regard, Tyler and Blader (2005) found that when
employees are encouraged to identify with the values of their organization, they are
intrinsically motivated to comply with the ethical standards of the organization. In some
of the cases Kaptein (1998) analyzed, he found that a lack of commitment was the

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850 Human Relations 64(6)

primary cause of employees or managers engaging in unethical behavior. In the present

study, it is relevant to test whether, given the other dimensions of ethical culture, a cul-
ture of commitment among employees to behave ethically is negatively related to unethi-
cal behavior. The fifth hypothesis therefore reads:

Hypothesis 5: The cultural dimension of commitment to behave ethically is negatively related

to the frequency of unethical behavior in the workplace.

Visibility of (un)ethical behavior

The next dimension of the ethical culture of an organization that is deemed to influence
the unethical behavior by managers and employees is visibility. According to Kaptein
(2008a), visibility refers to the degree to which (un)ethical behavior and its consequences
are observable to those who can act upon it – the perpetrators as well as their colleagues,
supervisor, manager, and subordinates. Whilst the dimension of clarity is related to the
type of behavior that is expected of managers and employees (input), visibility is related
to the transparency of behavior and its consequences (output). Deterrence theory sug-
gests that for unethical behavior to be inhibited, potential perpetrators must believe that
they will be caught (Gibbs, 1975).
Many studies emphasize the importance of perceived visibility because of its potential
to expose unethical behavior and for acting as deterrent owing to the increased likelihood
of getting caught (Brass et al., 1998; Cressey, 1953; Detert et al., 2007; Hollinger and
Clark, 1982, 1983; Zey-Ferrell et al., 1979). Kaptein (1998) also found cases where a lack
of visibility was an antecedent to unethical behavior. Managers and employees who were
hardly aware of the nature or seriousness of the consequences of their behavior were
deprived of the opportunity to account for, modify, or alter their behavior. This led to situ-
ations where managers and employees only focused on the action without regard for its
consequences. It also led to situations where unethical behavior could easily be concealed
and the frequency at which it occurred could consequently increase without detection by
others within or outside the work group. The sixth hypothesis therefore reads:

Hypothesis 6: The cultural dimension of visibility of ethical behavior is negatively related to

the frequency of unethical behavior in the workplace.

Openness to discuss ethical issues

Another relevant dimension of the ethical culture of organizations to predict and prevent
unethical behavior is that of the openness managers and employees experience in their
organization to discuss ethical dilemmas and alleged unethical behavior. Communication
theory indicates that through sharing and discussing issues people learn from each other,
create and better understand their context, and are more motivated to honor agreements
(Craig, 1999). Kaptein (1998) encountered several instances of unethical behavior, which
were partly caused by an organizational culture characterized by little discussion and
debate. In such a closed culture, criticism is neither encouraged nor accepted, ideas are not
exchanged and the readiness to discuss ethical issues is limited or even absent. Bird and
Waters (1989) also posit that the persistent avoidance of moral talk – what they call moral

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Kaptein 851

muteness – reinforces an amoral organizational culture. If moral issues are not openly
spoken about, they go unnoticed and unacknowledged, which leads to higher moral stress
and a decline of the moral authority of ethical standards. Empirical data Treviño et al.
(1999) gathered from four large companies showed that the degree to which managers and
employees can openly talk about ethics is a good predictor of the frequency of unethical
behavior. Schnatterly (2003) found partial empirical support for the assertion that an
increase in the intensity of communication reduces fraudulent behavior. To conclude, we
expect that the more openness there is to discuss ethical issues, the lower the level of
unethical behavior will be. This brings us to the following hypothesis:

Hypothesis 7: The cultural dimension of openness to discuss ethical issues is negatively related
to the frequency of unethical behavior in the workplace.

Reinforcement of ethical behavior

The eighth and final dimension as distinguished by Kaptein (2008a) is labeled as rein-
forcement of ethical behavior. Reinforcement refers to the likelihood of managers and
employees being punished for behaving unethically and rewarded for behaving ethi-
cally. Reinforcement theory posits that the consequences of a decision made in the past
influence decision-making in the future. Rewards will therefore lead to repetition and
punishment to avoidance (Luthans and Kreitner, 1985). Reward and punishment are
important behavioral stimuli (Falkenberg and Herremans, 1995). According to Cressey
(1953) and Sutherland (1940, 1983), managers and employees will steer clear of unethi-
cal behavior if they expect to be punished and if the severity of punishment outweighs
the potential reward. When people are not punished for unethical behavior or even
rewarded for such behavior, the message is clear: unethical behavior is acceptable or
even desirable (Ball et al., 1994).
Kaptein (1998) found a number of examples of unethical behavior that were preceded
by similar forms of unethical behavior that were tolerated or even encouraged. This cre-
ated the impression among perpetrators that their behavior would go unpunished or even
appreciated in the organization. Kaptein also collected examples in which the failure to
reward ethical behavior led to unethical behavior. A lack of recognition of ethical behav-
ior diminishes the willingness of employees to act ethically and increases the likelihood
of resorting to unethical behavior. This finding corresponds with the research of Román
and Munuera (2005) showing that the more ethical behavior is rewarded, the less people
behave unethically. This results in the following, and final, hypothesis:

Hypothesis 8: The cultural dimension of reinforcement of ethical behavior is negatively related

to the frequency of unethical behavior in the workplace.

Method
Sample and procedure
Following the suggestions of Treviño and Weaver (2003) and Treviño et al. (2006)
for conducting this type of research, data were collected from multiple work settings.

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852 Human Relations 64(6)

To avoid the problem of common source bias (Podsakoff et al., 2003), multiple
members per work group were involved to each assess different variables. Some 554
bachelor students enrolled in a course on management skills at a Dutch university
were asked in two rounds to locate a manager who would be prepared to participate
in this study. The students who participated received a credit point for their exam.4
The students received detailed instructions on selecting and approaching a manager
and conducting this research. A two-hour lecture was devoted to explaining the set-
up of the project.
Three objectives of the research were communicated to the managers. The first
objective was to collect data for a broad study by the university on the current status of
ethics management in organizations. The second objective was to provide managers
with benchmarking information and practical suggestions for managing ethics in their
work group. The third objective was to train the analytical and consulting skills of stu-
dents. All participating managers received a set of three different surveys.5 They were
requested to complete a questionnaire about the components of an ethics program that
was in place in the work group they managed (one of the control variables). They were
also instructed to give the other questionnaires to two of their direct reports, selected on
the basis of having an understanding of and insight into the culture and behavior of the
work group. It was emphasized to the manager that useable results would only be
obtained if ‘understanding and insight’ was not confused with having a favorable view.
The first employee had to fill out a questionnaire about the ethical culture and ethical
climate of the work group (the independent variable as well as another control variable
respectively). The second employee had to fill out the questionnaire about the frequency
of observed unethical behavior in the work group (the dependent variable). ‘Work
group’ was defined as the department, unit or team consisting of all direct reports to the
participating supervisor/manager.
To reduce the likelihood of response bias (Dilman, 1978), each survey was put in
a separate envelope with a cover letter explaining the purpose of the research and
encouraging participation. Assurance of complete anonymity was given: managers
would not receive the results of their direct reports. A franked return envelope was
provided to each respondent with the address of the university and the name of the
student as addressee (so that the responses of each work group could be accurately
matched). In acknowledgement of their participation, managers received a report
about the general findings of the study accompanied by the student’s advice. Managers
subsequently sent a signed form and their business card directly to the university to
confirm that they participated in the study, that all procedures had been followed cor-
rectly, and that they had received the student’s advice. The forms were checked for
their accuracy.
The usable response was three completed surveys of 341 work groups. A total of 46.8
percent of the work groups were located at the lowest level of the organization. On aver-
age, work groups consisted of 7.6 members. In 30 percent, the size of the organization
was fewer than 26 employees, in 51.2 percent between 26 and 1000 employees and in
19.8 percent more than 1000 employees. Some 59.6 percent of the employees had been
working in the work group for one to five years.

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Kaptein 853

Independent variables
To measure the eight dimensions of ethical culture, a corresponding questionnaire Kaptein
(2008a) developed was used. The response to the 58 questions was measured through the
use of a six-point Likert-type scale ranging from 1 (strongly disagree) to 6 (strongly agree).

Dependent variables
The construct of unethical behavior in the workplace was operationalized using the mea-
sure developed by Kaptein (2008b), which is an improvement on the measure of unethical
behavior developed by Newstrom and Ruch (1975). The measure was developed in eight
steps using a variety of samples. The result was a list of 37 items of unethical behavior in
the workplace.6 Following Treviño et al. (1998), observed behavior instead of self-
reported behavior was measured in order to reduce problems of social desirability bias.
Moreover, as unethical behavior in the workplace is a low base-rate phenomenon, Brown
and Treviño (2006) suggest using observed behavior instead of self-reported behavior to
ensure that more usable data is generated and the frequency of reports is higher. A time
frame of 12 months was used, reading ‘In the past 12 months, I have personally seen or
have first-hand knowledge of employees or managers in my work group . . .’ along with a
five-point frequency scale of 1 (never), 2 (rarely), 3 (sometimes), 4 (often), and 5 ((almost)
always). A general score for observed unethical behavior was calculated by averaging the
scores for all 37 items.

Control variables
To allow for variance in unethical behavior that might be explained by factors other than ethi-
cal culture, the following demographic control variables were entered into the regression
models: hierarchical level of the work group (with two categories: 1 (managerial level) and 2
(lowest level of the organization)), job tenure of both employees (with three categories: 1 (less
than 1 year), 2 (between 1 and 5 years), and 3 (longer than 5 years), size of the organization
(with seven categories: 1 (1–5 employees), 2 (6–10), 3 (11–25), 4 (26–100), 5 (100–250),
6 (251–1000), and 7 (more than 1000)) and size of the work group (number of employees).
The latter was included because unethical behavior may occur more frequently in larger work
groups (Brown and Treviño, 2006). Two other components of the ethical context of an orga-
nization were also included as control variables: ethical climate and ethics program.

Ethical climate The Ethical Climate Questionnaire (ECQ) as developed by Victor and
Cullen (1987, 1988) and further validated by Cullen et al. (1993), was used to assess
respondents’ perception of the ethical climate of their work group. As mentioned above,
the ECQ consists of five subscales: climate of caring (seven items), climate of law and
code (four items), climate of rules (four items), instrumental climate (seven items), and
independence climate (four items). The response scale was a six-point Likert scale for
how accurately each of the items describes the ethical climate of the work group,
ranging from 1 (completely false) to 6 (completely true).

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854 Human Relations 64(6)

Ethics program For the purposes of this study, nine components of an ethics program
were distinguished (see also Treviño and Weaver, 2003). These components are: 1) a
code of ethics, 2) an ethics officer or ethics office, also called compliance office(r),
ombudsperson or ethics committee, 3) formal ethics training and other types of informa-
tion and communications, 4) a dedicated telephone system to raise ethical issues, usually
called ethics hotline or ethics helpline, 5) policies to hold management and employees
accountable for unethical behavior, 6) policies on investigating allegations of unethical
behavior, 7) policies that create incentives and rewards for ethical behavior, 8) internal
monitoring systems and ethics audits, and 9) pre-employment screenings of the ethics
and integrity of applicants. The participating managers were asked to indicate whether
these components were present in their work group, with 0 = absent and 1 = present. The
scope of an ethics program was determined by the number of different components that
were present in a particular work group (see Treviño, 2005; Weaver et al., 1999a, 1999b).

Data analyses
Given the conceptual proximity of ethical culture and ethical climate, a confirmatory
factor analysis was first performed with LISREL 8.80 to ascertain their convergent and
divergent validity. Maximum likelihood estimation procedures were used. First, it was
found that all individual items loaded on their corresponding dimension. The lowest
loading of a cultural item was λ = .53 and the average loading of all cultural items was
λ = .68. Second, the correlations between the dimensions of ethical culture and ethical
climate were not too high, with an average correlation of .23 and the highest of .48
between ethical role modeling of supervisors and climate of caring. Third, as shown in
Table 1, the model with all separate dimensions for climate, culture, and program had an
acceptable fit (χ² (1,725) = 3,544; CFI = .92; IFI = .92; NNFI = .91; SRMR = .077;
RMSEA = .055) and a better fit than all other tested models. Finally, for every possible
pairing of dimensions within culture and also within climate, and then between culture
and climate, the model fits were calculated whereby the parameter estimate was con-
strained to 1.0. In all cases the quality of the constrained model deteriorated. These four
findings provided sufficient confidence in the convergent and discriminant validity of
the model in order to continue with the correlation and regression analyses.

Results
Table 2 depicts the means, standard deviations, and intercorrelations of all measured vari-
ables. Some 15.8 percent of the work groups reported not observing any unethical behav-
ior whereas 84.2 percent reported unethical behavior. Consistent with our predictions, all
dimensions of ethical culture were significantly negatively related to the frequency of
observed unethical behavior. The bivariate correlations ranged from r = -.27 (p < .01) for
visibility of ethical behavior to r = -.44 (p < .01) for commitment to behave ethically.
These correlations were cross-source and not inflated by common-source variance.
Table 3 depicts the results of the hierarchical regression analyses for successively
entering the demographic control variables, the control variables ethics program and
ethical climate, and the independent variables of this study – the dimensions of ethical

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 Kaptein

Table 1 Goodness-of-fit indices for the models tested (N = 341)

Model Description of the model χ² d.f. χ²/d.f. CFI IFI NNFI SRMR RMSEA

1 Postulated model 3,544 1,725 2.05 .92 .92 .91 .077 .055
2 Postulated model, but with climate as 3,958 1,775 2.23 .90 .90 .89 .077 .067
one factor
3 Postulated model, but with culture as 4,671 1,802 2.59 .87 .90 .87 .087 .072
one factor
4 Postulated model, but with culture 4,995 1,824 2.74 .85 .86 .85 .084 .081
and climate each as one factor
5 Postulated model, but with culture 5,288 1,827 2.89 .84 .84 .83 .085 .087
and climate together (informal
organizational context) as one factor
6 All independent variables 5,902 1,829 3.23 .81 .81 .81 .092 .098
(organizational context) as one factor

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855
 Table 2 Means, standard deviations, and Pearson correlations of the measured variables (N = 341)
856

Variable Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

1. Observed unethical 1.2 0.21

behavior
2. Size of organization 4.4 1.9 .01
3. Hierarchical position 1.6 0.50 .01 .23**
of work group
4. Size of work group 7.6 2.8 .14** .39** -.19**
5. Tenure of employee 1 2.2 0.68 .06 .08 -.16** .16**
6. Tenure of employee 2 2.2 0.69 .16** .07 -.07 .16** .55**
7. Scope of ethics 0.44 0.33 -.04 .56** .14* .36** .09 .11*
program
8. Caring climate 4.2 0.63 -.19** -.16** .05 -.04 -.00 .03 -.08
9. Law and code climate 4.1 0.63 -.10 .10 .07 .12* -.01 .09 .11* .35**
10. Rules climate 4.1 0.63 -.19** .02 .04 .06 .04 .09 .11* .45** .55*
11. Instrumental climate 3.7 0.69 .07 .06 .15** -.05 -.02 -.12* -.05 .17** .13* .13*
12. Independence climate 4.3 0.68 -.09 -.13* .09 -.13* -.07 -.10 -.18** .44** .11* .09 .21**
13. Clarity of ethical 4.3 0.91 -.33** .06 .07 .02 .02 .06 .14** .31** .27** .33** -.05 .14**
standards
14. Ethical role modeling 4.3 1.0 -.42** .08 .07 -.02 -.02 -.05 .12* .25** .26** .27** -.03 .13* .45**
of management
15. Ethical role modeling 4.6 0.9 -.42** -.08 -.04 .02 -.01 -.04 .09 .48** .24** .35** -.08 .18** .51** .49**
of supervisors
16. Capability to behave 4.4 0.98 -.30** -.03 -.09 .01 -.06 -.11* .11* .05 .09 .07 -.25** -.01 .28** .24** .29**
ethically

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17. Commitment to 4.3 0.97 -.44** -.11* -.01 -.13* -.02 .00 .01 .33** .13* .27** -.21** .18** .44** .49** .48** .27**
behave ethically
18.Visibility of (un) 3.7 1.1 -.27** -.16** -.01 -.05 .03 .06 .02 .39** .31** .39** -.01 .10 .36** .29** .47** .19** .42**
ethical behavior
19. Openness to discuss 4.6 0.82 -.39** -.02 .05 -.07 .01 .03 .12* .32** .21** .29** -.17** .17** .48** .44** .48** .29** .48** .38**
ethical issues
20. Reinforcement of 3.7 0.91 -.32** .11* .05 .10 .01 .01 .25** .26** .35** .40** -.08 .10 .39** .32** .45** .21** .29** .32** .35**
ethical behavior
Human Relations 64(6)

* p ≤ .05; ** p ≤ .01.
Kaptein 857

Table 3 Results of hierarchical regression analysis of observed unethical behavior

Variable Observed unethical behavior

Model 1 Model 2 Model 3 Model 4

Control variables
Demographics
   Size of organization -.07 -.01 -.07 -.08
   Hierarchical position of work group .06 .07 .08 .06
   Size of work group .16** .18** .20** .14**
  Tenure of employee 1 .16* .17** .21** .14*
  Tenure of employee 2 -.03 -.03 -.04 -.03
Scope of ethics program -.11 -.10 .03
Ethical climate
   Caring -.15* -.03
   Law and code -.02 -.04
   Rules -.15* -.02
   Instrumental .15* .02
   Independence -.03* -.02
Independent variable: Ethical culture
   Clarity of ethical standards -.02
   Ethical role modeling of management -.14*
   Ethical role modeling of supervisors -.15**
   Capability to behave ethically -.11*
   Commitment to behave ethically -.16**
  Visibility of (un)ethical behavior -.01
   Openness to discuss ethical issues -.11*
   Reinforcement of ethical behavior -.12*
R2 .05 .06 .14 .34
Adjusted R2 .03 .04 .11 .31
Change in Adjusted R2 .01 .07 .20
d.f. (regression, residual) (5, 334) (6, 333) (11, 328) (19, 320)
F 3.21** 3.29** 4.64** 8.84**
Note: Standardized regressions coefficients (betas) are shown.
* p ≤ .05; ** p ≤ .01.

culture. Of the demographic control variables, size of the work group and tenure of the
employee who assessed the ethical culture and climate of the work group (employee 1)
had a significant relationship in all four regression models. Adding ethics program
(Model 2) to the demographic control variables (Model 1) increased the explanatory
power of the model (= adj. R²) from .03 to .04. In all the tested models, ethics program
showed no significant relationship at the conventional level of p < .05. Entering the five
dimensions of ethical climate as well (Model 3) increased the explanatory power of the
model to 11 percent. The dimensions of caring, rules, instrumental, and independence
were significant (respectively β = –.15, –.15, 15, and –.03, p < .05) whereas the climate
dimension of law and code was not significant.

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858 Human Relations 64(6)

Upon entering the dimensions of ethical culture (Model 4), the four dimensions of ethi-
cal climate lost their significance. However, six dimensions of ethical culture were signifi-
cant (p < .05), with the standardized partial regression coefficients (β) ranging from –.11
for capability and openness to –.16 for commitment. Clarity and visibility were not sig-
nificant. The complete model accounted for a variance in unethical behavior of 34 percent
(adj. R² = .31), implying an increase of 20 percent from Model 3 to Model 4.

Discussion
For the first time a multidimensional model of the ethical culture of an organization was
used to study its relationship with unethical behavior. To avoid common source bias, a
sample of 341 triads was collected consisting of a manager and two direct reports. The
influence of ethical culture was controlled for two other components of the organiza-
tional context: ethical climate and ethics program.
The results of the study show that the ethical culture of work groups has a negative
relationship with the frequency of observed unethical behavior within work groups. The
fully tested model explained 31 percent of observed unethical behavior, whereas ethical
culture alone explained 20 percent, which exceeds the 13 percent Treviño et al. (1998)
found. Six of the eight dimensions of ethical culture that were tested had a negative rela-
tionship with observed unethical behavior. These dimensions are: ethical role modeling of
management, ethical role modeling of supervisors, capability to behave ethically, commit-
ment to behave ethically, openness to discuss ethical issues, and reinforcement of ethical
behavior. The dimensions of clarity of ethical standards and visibility of (un)ethical
behavior were not significantly related. Therefore, the majority of the hypotheses – that is
hypotheses 2, 3, 4, 5, 7, and 8 – can be supported.
Interesting results were yielded by entering the control variables, ethics program, and
ethical climate, into the regression models. The results suggest that the scope of an ethics
program as such says very little about the frequency of observed unethical behavior in
work groups. This can be explained by the fact that the mere existence of an ethics pro-
gram does not imply that it is effective (Mitchell et al., 1996). Effectiveness is deter-
mined by the manner in which it is developed, implemented, and embedded – as well as
by the content and quality of each component (see Kaptein and Schwartz, 2008). Ethics
programs can easily be decoupled from daily routines and behaviors (Barnes, 2007; Den
Nieuwenboer, 2008; Weaver et al., 1999b). The moment of choosing to adopt and expand
an ethics program may also be at a point in time during which the frequency of unethical
behavior is relatively high. In such cases, the causal relationship between unethical
behavior and ethics program could be reversed, potentially neutralizing the empirical
findings: an ethics program may decrease unethical behavior to the level present in orga-
nizations without a program.
Regarding the control variable of ethical climate, four of its five dimensions had a sig-
nificant relationship with unethical behavior when entered without ethical culture. The
significance, however, disappeared when ethical culture was entered. This finding con-
trasts with the meta-analysis of Kish-Gephart et al. (2010), who found ethical climate to
have a more powerful effect than ethical culture. The use of a more comprehensive,
multidimensional measure for ethical culture in the present study may explain this

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Kaptein 859

discrepancy. Although the operationalization of ethical climate could possibly be improved,

the results indicate that to explain unethical behavior, ethical culture – operationalized in
procedural terms – is of greater significance than ethical climate, which is operational-
ized in terms of content. This suggests that while many business ethics theories focus
on defining the content of (un)ethical behavior (using traditional ethical theories as
utilitarianism, ethics of duties, and rights and justice; Crane and Matten, 2010), more
attention should be paid to the organizational processes that foster (un)ethical behav-
ior. In this regard the growing body of literature on ethical leadership as an important
organizational process is promising (see, for example, Brown and Treviño, 2006; Brown
et al., 2005; Mayer et al., 2009; Schminke et al., 2005; Walumbwa et al., 2008). At the
same time, this study also demonstrates that ethical leadership is just one of multiple
dimensions of the ethical culture of organizations, which signals how important it is to
include other dimensions of ethical culture in the examination of the relationship
between ethical leadership and unethical behavior.7 The finding that ethical culture is
important in explaining unethical behavior in the workplace also implies that ethical
culture cannot be disregarded in an assessment of the influence of ethical climate on
unethical behavior as well as that of the informal context of organizations on unethical
behavior, which was done by, for example, Peterson (2002a, 200b), Vardi (2001), and
Wimbush et al. (1997).

Theoretical implications and future research

This study contributes to the understanding and development of theory on the ethical
culture of organizations. Using a multidimensional model of ethical culture provides
greater knowledge and insight into the cultural elements that influence and account for
(un)ethical behavior. Based on this knowledge, better management strategies can be
devised to prevent, detect, and respond to unethical behavior in organizations.
The dimensions of ethical culture this study found to influence unethical behavior
reflect different types of organizational capacities and approaches to creating an ethical
organization. They reflect, for example, both the self-regulating capacity of an organiza-
tion (ethical role modeling, capability to behave ethically, commitment to behave
ethically, and openness to discuss ethical dilemmas) as well as its self-correcting capac-
ity (reinforcement of ethical behavior, and openness to discuss alleged unethical behav-
ior). Commitment largely concerns the intrinsic motivation to behave ethically, whereas
capability concerns the availability of resources to behave ethically. Whereas Paine
(1994) draws a distinction between a compliance and integrity approach in creating an
ethical organization, the results of this study suggest that both approaches are relevant.
The cultural dimension of reinforcement is consistent with a compliance approach,
whereas ethical role modeling, commitment, and openness, for example, correspond
with an integrity approach. Noteworthy is that those dimensions that were found not to
be significant are consistent with a compliance approach (see Tyler and Blader, 2005).
The findings of this study open up several avenues for future research, four of which
will be discussed here. A first, promising, direction for future research is related to the
nature of the relationship between ethical culture and unethical behavior. According to
Aristotle’s virtue ethics, a virtue is a mean between two undesirable extremes. The

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860 Human Relations 64(6)

dimensions of ethical culture tested in this article could be situated in this theoretical
framework. For example, clarity could be the mean between ambiguity and rigidity. An
interesting question for future research is whether the individual dimensions of ethical
culture can indeed be too firmly embedded in an organization, thus increasing the likeli-
hood of unethical behavior occurring. In such a case, the relationship between a dimen-
sion and unethical behavior would be U-shaped, leading to the question of the optimal
level of embeddedness of a given dimension (see Katz-Navon et al., 2005). A related
question would be what determines the strength of the relationship between an individual
dimension and unethical behavior. In the current study we found the regression coeffi-
cients for the six significant dimensions to be more or less the same. To better explain
and prevent unethical behavior, future research might analyze whether and how different
types of unethical behavior are differently related to the respective dimensions. For
example, unethical behavior that is caused by ignorance may be more strongly related to
(a lack of) clarity than unethical behavior that is caused by a lack of motivation, which
may be more strongly related to the dimension of commitment. Different settings may
also influence the relation between the dimensions of ethical culture and unethical
behavior. For example, in a hierarchical organization where employees are more stimu-
lated to imitate the role model behavior of management and supervisors, the cultural
dimension of ethical role modeling may be more strongly related to unethical behavior
than in a more informal and flatter organizational setting. Future research could examine
the relationship between ethical culture and specific types of unethical behaviors or spe-
cific organizational settings to demonstrate that in different settings and for different
types of unethical behavior, some dimensions of ethical culture are more relevant
than others. In this regard, an also interesting question for future research is whether the
relationship between ethical behavior and the eight dimensions of ethical culture differs
from that with unethical behavior.
Another promising direction is to study the internal dynamics of ethical culture. In
the current study, as with most other studies in this field, we examined the way in which
organizational variables individually and statically explain unethical behavior. Weick
(1979), however, posits that in the case of interdependent explanatory variables, focus-
ing on a single variable or attempting to determine unidirectional causality of variables
obscures the dynamics of organizational processes. Although Robinson and Greenberg
(1998) made a case for studying the dynamics of unethical behavior, to date, only a few
studies touched on the possibility of interacting organizational factors (e.g. Ashforth
and Anand, 2003; Brass et al., 1998; Brief et al., 2001; Fleming and Zyglidopoulos,
2008). If the dimensions of ethical culture have a positive impact on other dimensions,
it would mean that a change in one dimension could cause a change in other dimen-
sions. In the case of a circular amplifying relationship, a downward or upward spiral of
multiple dimensions is initiated. These spirals may then exponentially increase or
decrease the likelihood of unethical behavior and explain how unethical behavior could
spread through an organization like a virus. For example, decreased levels of clarity
may decrease reinforcement given that, as Bovens (1998) argues, without being prop-
erly informed, employees cannot be held fully accountable for not realizing their
responsibilities. Should managers subsequently fail to sanction employees for engaging
in such behavior, the messages they send become more mixed (Ball et al., 1994), thus

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Kaptein 861

undermining clarity. Future research could focus on theorizing and testing the dynamic
relationship between different dimensions and the way in which these relationships
explain and predict unethical behavior in the workplace.
A third promising research direction that is opened up by the present study concerns
managing and improving the ethical culture of organizations. Now that we have found
that different dimensions of ethical culture are significantly related to unethical behavior,
the question arises as to whether ethics instruments are also differently related to the
individual dimensions of ethical culture. Organizations seeking to improve their ethical
culture can deploy many different instruments, nine instruments of which were included
in the scale for ethics program in the current study. Do ethics instruments differ in their
impact on the different dimensions of ethical culture and are certain instruments more
effective than others in improving a given dimension? A code of conduct is associated
with creating clarity (Schwartz, 2004), while an ethics hotline or helpline tends to
improve transparency, and training in collective dilemma solving is oriented toward
improving openness. Furthermore, the question can also be asked as to whether ethics
instruments can have a positive influence on one or more dimensions of ethical culture
and a negative influence on other dimensions. For example, a very detailed code can
improve clarity but could at the same time diminish openness in that it might create the
impression that the information provided in the code is sufficient, rendering the discus-
sion of ethical dilemmas superfluous. Thus far, researchers have not addressed this ques-
tion. Future research could therefore contribute to fine-tuning theories on the conditions
for, and components of, an effective ethics program.
A fourth research direction is related to the further development of the measures that
were used in the present study. Although the study used established measures with ade-
quate psychometric properties, further improvement can lead to a better understanding of
the relationships between unethical behavior, ethics program, ethical climate, and ethical
culture. Regarding the measurement of unethical behavior, future research could collect
more detailed information through not only asking about the frequency of observed
unethical behavior, but also about the number and position of people involved, the extent
to which an ethical norm had been violated, as well as the damage caused to the organiza-
tion and its stakeholders. The measurement scale of ethical culture could be further
developed by splitting each question into the specific types or items of unethical behav-
ior that need to be explained or predicted. Such a specification would also rely less on
how respondents define ethics, although in the present study, respondents received a
detailed definition of ethics. The measure for ethics programs can be further developed
by not only enquiring about the prevalence of different components as was done in the
present study, but also its content, the motives for adopting it, its development, and
implementation. A more detailed measure might lead to more variation in the assessment
of existing ethics programs and to a higher explanatory value for unethical behavior than
the 1 percent found in this study. The measure for ethical climate that was used in the
present study could be expanded by questioning respondents about the strength of the
climate as Zohar and Luria (2004) did in their study on safety climates, which could yield
a stronger relationship with unethical behavior. The development of a measurement scale
for ethical climate that measures the stakeholder orientation of the organization, as
defined by Jones et al. (2007), may also result in more significant findings: the

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862 Human Relations 64(6)

dimensions of ethical climate defined by Victor and Cullen are very general, that is, for
the climate types the focus is not only whether there is, for example, a climate of caring,
law and codes, and rules, but much more to what extent these climates vary per stake-
holder group. Next to the measures used, the question is also which relationships are
studied. In this study, the focus was on the relationship between ethical culture and
observed unethical behavior. In this instance, ethical climate and ethics program were
used as control variable. However, as mentioned above and indicated in Figure 1, the
relationship between these four variables might be more complex and could also be stud-
ied by using different estimation techniques, such as structural equation modeling. Future
research may also use ethical culture as moderating variable between managers and
employees who are involved in (or considering) unethical behavior as well as between
ethical climate and unethical behavior. In this regard, ethical culture and ethical climate
could potentially play a complementary role as opposed to a competing role in explaining
unethical behavior.

Limitations
This study is unique in that it is the first to demonstrate a relationship between multiple
dimensions of ethical culture and observed unethical behavior in the workplace using
multi-source survey data and controlling for ethical climate and ethics programs.
Nevertheless, it is not without its shortcomings, two of which will be discussed here.
First, in the present study only one employee per work group was selected as infor-
mant of ethical culture. The theoretical reason for this was that, as in the studies on
ethical culture and climate of Peterson (2002b) and Treviño et al. (1998), the focus was
not on shared perceptions – which would indeed have required multiple respondents
(Schneider et al., 2002) – but on individual perceptions of the organizational context.
The practical reason for this was that managers participated voluntarily and they were
already asked not only to fill out a survey themselves, but also to get two of their
employees to cooperate. Asking more employees would have substantially increased
the risk that managers would not participate, which could not be afforded given the
need for a sizeable sample for testing the many relations. However, having had multi-
ple rates for ethical culture (as well as ethical climate and ethics program) could have
resulted in more reliable findings, which would also have enabled the measurement of
aggregate scores such as the within-group agreement index (Rwg) of James et al.
(1993). The same applies to the dependent variable of the study, the perceived fre-
quency of unethical behavior. Managers were requested to select one employee who
was aware of the behaviors of the work group and invite this employee to fill out the
questionnaire on unethical behavior. Including more respondents may have improved
the quality of the findings owing to a difference in positions, contacts, experiences,
and, by implication, their observations regarding the types and frequency of unethical
behavior in their work group.
A second limitation of this study relates to the cross-sectional nature of the data. In
addition to latent variables and spurious correlations, cross-sectional designs allow for
reverse causality. The present study used ethical culture as an independent variable and
observed unethical behavior as a dependent variable. Although there is widespread

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Kaptein 863

support for this direction of the relationship (Kish-Gephart et al., 2010; Treviño, 1986;
Treviño and Weaver, 2003), unethical behavior may very well have an influence on
ethical culture. In the absence of unethical behavior, it is more difficult for managers
and employees to indicate the level of, for example, reinforcement. Reinforcement
becomes especially visible in the way the organization handles actual unethical behav-
ior. Unethical behavior can even be essential for shaping the ethical culture of an orga-
nization (Badaracco, 1997). We must, therefore, be cautious in inferring causal, linear
relationships. Longitudinal panel designs or field experiments would be required to
establish firmer grounds for the direction of the relationship between ethical culture and
ethical behavior.

Managerial implications
In view of the cost of unethical behavior to organizations and stakeholders, it is impor-
tant to prevent or, when it does occur, to detect adequately and respond to unethical
behavior. This article demonstrates that the ethical culture of an organization is an impor-
tant factor in explaining unethical behavior of managers and employees. To reduce
unethical behavior, management first needs to understand and unravel the existing ethi-
cal culture. The model and questionnaire used in this study lends itself to be used to
assess the quality of the existing ethical culture. Including the scale of unethical behavior
in the questionnaire will not only make it possible to obtain an overview of the frequency
of perceived unethical behavior, but also, by conducting a regression analysis, the most
important dimensions of the ethical culture of the organization. Based on these results,
management can decide which dimensions of the ethical culture should be improved
(first) in order to reduce the likelihood of (most) unethical behavior.
This study showed that, in general, at least six dimensions of ethical culture are
important. To reduce the likelihood of unethical behavior, management should create an
organization in which 1) management and 2) supervisors act as ethical role models, 3)
realistic moral standards are set and sufficient means are provided to behave ethically, 4)
managers and employees are supported and committed to behave ethically, 5) adequate
opportunity is provided to discuss ethical issues and dilemmas, and 6) unethical behavior
is punished and ethical behavior is appreciated. Managing ethical culture is a multifac-
eted challenge.
The study also shows that the perceptions of managers and employees are important
in explaining and managing unethical behavior. Not only is management required to
behave ethically, but employees should also experience their behavior as such. And it is,
for example, not sufficient that unethical behavior is punished; managers and employees
should also be aware of it. Perceptions influence behavior. Therefore, to understand the
ethical organizational culture is to understand these perceptions, and to manage the ethi-
cal culture is to manage these perceptions.
In conclusion, this study offers an advanced model for assessing the ethical culture of
organizations. The results suggest that at least six distinct dimensions of ethical culture
are relevant in explaining unethical behavior in organizations. Greater insight into the
ethical culture provides opportunities to manage ethical culture better and, as a result, to
lower frequencies of unethical behavior in and by organizations.

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864 Human Relations 64(6)

Acknowledgements
The author gives many thanks to Associate Editor Samuel Aryee and the three anonymous review-
ers for their valuable comments on earlier versions of this article, as well as to Rob van Tulder,
Friedl Marincowitz, and Michel Lander for their help.

Funding
This research received no specific grant from any funding agency in the public, commercial, or
not-for-profit sectors.

Notes
1. Treviño et al. (1998) labeled this 14-item factor ‘ethical environment’. In their exploratory factor
analysis they also identified two other factors for ethical culture – code implementation and
obedience to authority. However, within the context of the present article, code implementation is
more related to the ethics program of an organization, which pertains to the formal organizational
context. In contrast to ethical culture, obedience to authority is expected to be positively related
to unethical behavior and is also much more a dimension of ethical climate as it is directly
related to the sources of what can be defined as ethical and unethical. This is demonstrated by the
authors’ operationalization of obedience to authority as ‘employees are expected to do as they are
told’ and ‘the manager is always right’.
2. To date and to the best of my knowledge, only one other measure exists for the ethical culture
of organizations. The advantage of that measure, proposed and used by Treviño et al. (1998),
is that it contains significantly fewer questions than the measure that corresponds with the
multidimensional model as proposed by Kaptein (2008a). As such, less time is required of
respondents to complete the questionnaire and it also lends itself to combining it with other
constructs in a questionnaire. However, unlike the multidimensional model of Kaptein and
its corresponding questionnaire, the measure of Treviño et al. was not developed in multiple
studies. The measure of Treviño et al. is also less comprehensive than the model of Kaptein. It
does not, for example, include items associated with the dimensions of capability, commitment,
visibility, and openness to discuss ethical issues as discussed in this article. And because it
is one-dimensional, it does not offer the possibility of the three research directions that are
proposed in the discussion section of this article.
3. The labels of the cultural dimensions have been slightly altered compared with Kaptein’s
original model in order to reflect their meaning better.
4. Participation was entirely voluntary and it was made clear to the students that those who chose
not to participate in the study would not, directly or indirectly, be penalized. In terms of overall
exam grades, students who did not participate in the project were not unfairly disadvantaged,
as the required pass rate was based on the grades without credit points.
5. The survey was administered in Dutch. The items for ethical culture and unethical behavior
were identical to the items of the survey Kaptein (2008a, 2008b) developed in Dutch.
Following the suggestions of Harkness and Schoua-Glusberg (1998), the scale for ethical
climate developed by Victor and Cullen (1988) was translated into Dutch by the author who is
a native Dutch speaker. Two bilingual scholars also independently translated the questionnaire
into Dutch after which a consensual version was produced. Blind to the original questionnaire,
a professional translator translated the Dutch questionnaire back into English. The author and
the translator then compared the text for inconsistencies with the original version to finalize
the Dutch version.
6. Kaptein (2008b) developed a five-factor model for unethical behavior in which unethical
behavior was directed towards financiers, customers, employees, suppliers, and society. In

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Kaptein 865

the current study a one-factor model is used as this would otherwise increase the to-be-tested
relationships fivefold, which would place even higher demands on the quality of the data. But
this would also require that all items of the measure for ethical culture – except clarity, which
is already split – to be split into five stakeholder dimensions. In turn, this would require almost
five times more questions, which was, given that questions regarding ethical climate were
included in the same survey for employee 1, not realistic in the current study owing to time
constraints involved in filling out the questionnaire.
7. Although ethical leadership could encompass other items than role-modeling of management
and supervisors (which is the operationalization in the CEV-model that is used in the current
study), such as the way in which management set realistic targets (available means), discuss
dilemmas and issues (openness to discuss ethical issues), and enforce unethical behavior
(reinforcement of ethical behavior), the way in which it is operationalized by Brown et al.
(2005) in their measure of ethical leadership is still one-dimensional. To suggest that it is
important to include other dimensions of ethical culture in the examination of the relationship
between ethical leadership and unethical behavior, is not to suggest that there are no good
reasons to focus just on ethical leadership (for example, when the object of the study is to
understand the complexities of the process of ethical leadership).

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Muel Kaptein, PhD, is Professor of Business Ethics and Integrity Management at the Department
of Business-Society Management at RSM Erasmus University. His research interests include the
management of ethics, the measurement of ethics, and the ethics of management. He has published
articles in Academy of Management Review, Business & Society, Journal of Business Ethics,
Journal of Management, Journal of Management Studies, Journal of Organizational Behavior,
and Organization Studies. He is author of the books Ethics Management (Springer, 1998), The
Balanced Company (Oxford University Press, 2002), The Six Principles of Managing with Integrity
(Articulate Press, 2005), and The Living Code (Greenleaf, 2008). [Email: [email protected];
Website: www.muelkaptein.com]

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