Institutionalization of Ethics
An organization can institutionalize its ethics in two basic forms: explicit forms and implicit forms .An
example of institutional ethics refers to the extent to which organizations explicitly and implicitly
incorporate ethics into the decision-making. Explicit institutional ethics means that ethical behavior is
formally expressed clearly. Examples of institutionalizing explicit ethics include codes of ethics, policy
guidelines, ethical training materials, and ethical committees. It is different from implicit institutional
ethics which means that ethical behavior is implied, or not directly expressed but is much understood.
Through implicit institutional ethics, organizations try to create an environment that encourages ethical
behavior. Examples of implicit institutional ethics are leadership ethics, ethical climate, incentive
systems, and performance evaluation systems.
Institutionalization of ethics is considered capable of resolving ethical issues in organizational
environments both explicitly and implicitly to assist management in decision making. Based on research
conducted by Singhapakdi, Sirgy, Lee and Vitell, (2010) the Explicit Ethics Institutionalization has a
significant positive influence on the Implicit Ethics Institutionalization, not the other way around.
Organizational Commitment
According to Robbins (2003), organizational commitment is if an employee identifies the goals of a
particular organization, and wishes to maintain membership in the organization. Luthans (1995) explains
that organizational commitment is defined as (1) a strong desire for someone to become a member of
the organization, (2) a willingness to exert every effort for the organization, and (3) the trust and
acceptance of organizational values and goals. In other words, organizational commitment is an attitude
that shows employees “loyalty” and an ongoing process of how organizational members express their
sympathy for the organization’s failure and success.
Elements of ethics such as justice in the workplace, attention and concern for employees, trust in
employees, and organizational reputation are factors in work that have the greatest influence on
employee commitment to the organization (Ferrell et al., 2002).
Furthermore, according to Valentine and Barnett (2003) shows that someone in an organization that has
strong ethical values can increase organizational commitment.
Organizational Citizenship Behavior
The term OCB, first created by Bateman and Organ (1983), is rooted in the work of Katz (1964), who
studied innovative and spontaneous behavior outside the prescription of roles and distinguished
between high and low performers. Barnard (1938) marks an effective organization as a system where
individuals work together to achieve organizational goals. Organizational effectiveness depends on
employee contributions to the organization. OCB’s proposition is based on social exchange theory (Blau,
1964).
Expanding previous work on OCB, Katz and Kahn (1966) introduced the concept of extra-role
cooperative behavior, which states that effective organizations must generate innovative behavior.
An organization can institutionalize its ethics in two basic forms: explicit forms and implicit forms .An
example of institutional ethics refers to the extent to which organizations explicitly and implicitly
incorporate ethics into the decision-making. Explicit institutional ethics means that ethical behavior is
formally expressed clearly. Examples of institutionalizing explicit ethics include codes of ethics, policy
guidelines, ethical training materials, and ethical committees. It is different from implicit institutional
ethics which means that ethical behavior is implied, or not directly expressed but is much understood.
Through implicit institutional ethics, organizations try to create an environment that encourages ethical
behavior. Examples of implicit institutional ethics are leadership ethics, ethical climate, incentive
systems, and performance evaluation systems.
Institutionalization of ethics is considered capable of resolving ethical issues in organizational
environments both explicitly and implicitly to assist management in decision making. Based on research
conducted by Singhapakdi, Sirgy, Lee and Vitell, (2010) the Explicit Ethics Institutionalization has a
significant positive influence on the Implicit Ethics Institutionalization, not the other way around.
Organizational Commitment
According to Robbins (2003), organizational commitment is if an employee identifies the goals of a
particular organization, and wishes to maintain membership in the organization. Luthans (1995) explains
that organizational commitment is defined as (1) a strong desire for someone to become a member of
the organization, (2) a willingness to exert every effort for the organization, and (3) the trust and
acceptance of organizational values and goals. In other words, organizational commitment is an attitude
that shows employees “loyalty” and an ongoing process of how organizational members express their
sympathy for the organization’s failure and success.
Elements of ethics such as justice in the workplace, attention and concern for employees, trust in
employees, and organizational reputation are factors in work that have the greatest influence on
employee commitment to the organization (Ferrell et al., 2002).
Furthermore, according to Valentine and Barnett (2003) shows that someone in an organization that has
strong ethical values can increase organizational commitment.
Organizational Citizenship Behavior
The term OCB, first created by Bateman and Organ (1983), is rooted in the work of Katz (1964), who
studied innovative and spontaneous behavior outside the prescription of roles and distinguished
between high and low performers. Barnard (1938) marks an effective organization as a system where
individuals work together to achieve organizational goals. Organizational effectiveness depends on
employee contributions to the organization. OCB’s proposition is based on social exchange theory (Blau,
1964).
Expanding previous work on OCB, Katz and Kahn (1966) introduced the concept of extra-role
cooperative behavior, which states that effective organizations must generate innovative behavior.
