The Relationship Between Informal Controls, Ethical Work Climates, and Organizational Performance

Sebastian Goebel () and Barbara E. Weißenberger ()
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Sebastian Goebel: Justus Liebig University Giessen
Barbara E. Weißenberger: Heinrich Heine University Düsseldorf

Journal of Business Ethics, 2017, vol. 141, issue 3, No 6, 505-528

Abstract: Abstract Due to the frequent occurrence of ethical transgressions and unethical employee behaviors, there has lately been an increasing interest in the ethical foundations of contemporary organizations. However, large-scale comprehensive analyses of organizational ethics are still comparatively limited. Our study contributes to both management control and business ethics literature by empirically examining potential antecedents as well as resulting effects of ethical work climates on organizational-level outcomes. Based on a cross-sectional survey among 295 large- and medium-sized companies, we find that more informal means of control constitute important elements of a broader organizational control context that are strongly related to the emergence of coherent ethical work climates with an increased awareness of ethical issues. Moreover, our results show that the relationship between ethical work climates and organizational performance can be considered as rather indirect as it is fully mediated by increased mutual trust among employees. Overall, our study thus supports the particular importance of ethical work climates and identifies appropriate means to encourage ethical conduct.

Keywords: Informal controls; Ethical work climates; Mutual trust; Organizational performance; Structural equation modeling (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (17)

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DOI: 10.1007/s10551-015-2700-7

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