An Examination of the Influence of Ethical Climate on Ethical Behavior in Business Education

Business schools play an instrumental role in laying the foundations for ethical behavior and socially responsible actions in the business community. Drawing on social learning, information processing, and identity theories and using data collected from 318 business students, we found that ethical climate was an important predictor of ethical behavior, such that students with positive perceptions about their school¡¦s ethical environment were more likely to refrain from unethical behaviors. We further found that moral identity strengthened the effect of ethical climate to the extent that students with a high moral identity were less likely to engage in unethical behaviors. A higher institutional identity was also found to yield similar effects. In addition to offering a number of new and theoretically significant contributions about the impact of both individual (moral and institutional identity) and situational (ethical climate) factors on ethical behavior, this study suggests important pathways through which business schools may instill ethical strength and shape positive organizational ethics, a subject of considerable relevance to educators, managers, and scholars of business ethics alike. Directions for future research are also provided.