The Moderating Effect of Perceived Organizational Ethical Context on Employees' Ethical Issue Recognition and Ethical Judgments

When investigating the impact of organizational ethical context on individual ethical decision-making, past work has reported mixed results, with some studies indicating that a strong ethical work environment is associated with increased ethical reasoning, and other studies indicating that such an environment has little to no influence on the way ethical issues are addressed. Given these contradictory findings, we utilize multiple theoretical perspectives to assess the degree to which employees' perceptions of ethical values, ethical culture, and corporate social responsibility moderate the relationship between their ethical issue recognition and ethical judgments. Data obtained from employees of a financial services firm located primarily in the Midwestern United States supported the research hypothesis, with organizational ethical context weakening the recognition-judgment linkage. Results are compared to prior studies, and the managerial and research implications of the findings are discussed, along with the study's limitations and suggestions for future inquiry.