Perception of What the Ethical Climate is and What it Should be: The Role of Gender, Academic Status, and Ethical Education

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ABSTRACT. This study examined ethical attitudes
and perceptions of 691 undergraduate seniors and
freshmen in a college of business. Gender was found
to be correlated to perceptions of “what the ethical
climate should be” with female subjects showing sig-
nificantly more favorable attitude towards ethical
behaviors than males. Further, Seniors had a more
cynical view of the current ethical climate than
freshmen. Freshmen were significantly more likely
than seniors to believe that good business ethics is
positively related to successful business outcomes.
Ethical education was significantly correlated to both
perceptions of “current ethical climate” as well as
“what the ethical climate should be”. Students who
had been exposed to ethical issues in a course were
more likely to believe both, that ethical behavior is,
and should be, positively associated with successful
business outcomes. 
An examination of organizational literature in the
context of ethics inevitably reveals the complex
nature of interrelationships among bottom line
profits, business ethics, and the welfare of society
at large (Mitroff, 1983). Making decisions and
shaping policies in an organization often requires
choosing among competing values. Compromises
and trade-offs must be made because of conflicts
between organizational goals such as making a
profit or increasing the wealth of the shareholders
and the general principle of doing good to (or
the least harm to) society (Mayer, 1988).
Traditionally, it has been believed that busi-
nesses must respond to the changing values and
needs of consumers so that it might be possible
for such organizations to operate realistically in
terms of maintaining an economic value while
making a profit. More recently, it has become
evident that businesses must also function within
social, ethical and legally accepted principles in
our society in order to create both loyalty and a
higher quality of work life for its employees
(Sheppard 
 
et al., 1992). However, there is no
strong evidence to date in the literature that
acting in a socially responsible fashion is related
to financial performance of the company
(McGuire 
et al., 1988). Still, the interest in ethical
attitudes of business students (Borkowski and
Ugras, 1992) as well as managerial ethics and
ethical training programs in organizations (Dalton
et al., 1994) has been growing in recent years.
Perhaps the value of managerial ethics and
socially responsible organizations transcends the
fascination with a purely bottom line orientation.
Nevertheless, unethical conduct may become
a major component of managerial failure in the
Perception of What the Ethical 
Climate is and What it Should be: 
The Role of Gender, Academic 
Status, and Ethical Education
Journal of Business Ethics