Advancing Ethics in Public Organizations: The Impact of an Ethics Program on Employees’...

Advancing Ethics in Public Organizations: The Impactof an Ethics Program on Employees’ Perceptions and Behaviorsin a Regional Council

Itai Beeri • Rachel Dayan • Eran Vigoda-Gadot •

Simcha B. Werner

Received: 16 December 2010 / Accepted: 22 January 2012 / Published online: 4 February 2012

� Springer Science+Business Media B.V. 2012

Abstract Ethics in public administration has been a

subject of growing interest for both researchers and prac-

titioners interested in the future of governance. This study

examined the relationship between ethics and performance

in local governance. We tested the effects over time of an

ethics program on employees’ perceptions (awareness

of the code of ethics, ethical leadership, inclusion of

employees in ethical decision making [EDM], ethical cli-

mate [EC], organizational commitment, and quality of

work life [QWL]) and behavior (organizational citizenship

behavior) in one Israeli regional council. We conducted a

longitudinal study of 108 employees, using data from a

two-phase survey (before implementation of the ethics

program and a year after) and objective assessments of

employees’ behavior through managers’ evaluations. The

main findings show that the ethics program was very

effective, resulting in greater awareness of the code of

ethics, increased inclusion of employees in EDM, and an

improved EC. Furthermore, ethical leadership was posi-

tively related to employees’ awareness of the code of

ethics, increased inclusion of employees in EDM, an

improvement in the EC, greater organizational commit-

ment, and higher QWL. Implications and suggestions for

future studies are discussed.

Keywords Public organizations � Ethics program � Codes

of ethics � Ethical leadership � Ethical decision making �Ethical climate � Organizational commitment � Quality

of work life � Organizational citizenship behavior �Local government

Abbreviations

FSG Federal Sentencing Guidelines

USSC United States Sentencing Commission

ACE Awareness of the code of ethics

EL Ethical leadership

EDM Ethical decision making

EC Ethical climate

OC Organizational commitment

OCB Organizational citizenship behavior

QWL Quality of work life

Introduction

The negative impact of corruption and unethical behavior

on public organizations and public service are undeniable.

Unethical behavior is one of the most dangerous ills of

modern governance, with the potential to damage public

trust in government and undermine the foundations of

democracy. The need to eradicate corruption and improve

the ethical standards of elected officials and public servants

has become a major issue on the public agenda throughout

the Western world and in modernizing countries. State and

local governments, corporations, and non-governmental

organizations (NGOs) have all found themselves involved

in this process.

Increasingly during the past two decades, public and

corporate organizations have sought to reduce deviations

from ethical standards by instituting ethics programs (Dean

1992; Yizraeli and Shilo 2000). Yet despite the growing

number of such programs, research on their effects is still

in its infancy, and scholars still know little about how to

measure the programs’ success (Uhr 2005). This research

aims to help fill this gap by studying employees’

I. Beeri (&) � R. Dayan � E. Vigoda-Gadot � S. B. Werner

Division of Public Administration & Policy, School of Political

Sciences, University of Haifa, Haifa 31905, Israel

e-mail: [email protected]

123

J Bus Ethics (2013) 112:59–78

DOI 10.1007/s10551-012-1232-7

perceptions and behaviors prior to and following the

introduction of an ethics program in one public organiza-

tion—an Israeli regional council.

The historical background to the proliferation of orga-

nizational ethics programs goes back to 1991. In that year,

the United States Sentencing Commission (USSC) pro-

mulgated guidelines—formally called the Federal Sen-

tencing Guidelines for Organizations (FSGO)—to govern

sentences imposed on corporate, public, and NGOs in cases

where organizational employees or agents have, in their

official capacity, committed federal crimes (USSC 1991).

The guidelines promoted a ‘‘carrot and stick’’ policy,

imposing harsh penalties for severe cases, but allowing the

courts to ease sentences on organizations that had estab-

lished a compliance and ethics program prior to the vio-

lation. The guidelines described the components of an

effective ethics program, including (i) development of a

code of ethics suited to the organization’s needs and cir-

cumstances; (ii) effective communication of this code to

employees and agents, including a workable coaching and

training program; and (iii) oversight by a high-ranking

supervisor (Grundstein-Amado 2001; Wolf 2008; Yizraeli

2000). The guidelines were amended in 2004 to strengthen

the criteria for an effective ethics program, on the grounds

that the original formulation allowed organizations to meet

a minimum threshold rather than aiming for a high ethi-

cal standard (Kasher 2009; Zamir 2009). The amended

guidelines required that organizations put in place mech-

anisms to ensure that a high ethical standard becomes an

integral part of the organizational culture, including both

an enforcement apparatus and internal control mecha-

nisms to investigate, expose, and report criminal behavior

(USSC 2004).

In Israel, a Bill to Foster Ethics in Organizations was

proposed in Israel’s Knesset (Parliament) in 2004—spur-

red, in part, by the 2004 FSGO amendments, along with

various accounting scandals involving US corporations

(e.g., Enron in 2001 and WorldCom in 2002) and, closer to

home, by Israeli citizens’ growing dissatisfaction with

the ethics and integrity of the country’s public servants

(Vigoda-Gadot and Mizrahi 2008). The Bill drew much

substance from the FSGO and from other similar initiatives

across Europe. Like the FSGO, the Israeli Bill proposed

that ethics codes formulated and established by institutions

and organizations should be given legal standing, and

should be taken into account in cases where organizations

face criminal charges for wrongdoing. (The Bill retains its

‘‘proposed’’ status as of the end of 2011.) In the meantime,

there continues to be a disturbing rise in corruption in

government. According to the corruption perceptions index

(CPI) of Transparency International (2009), from 1996 to

2009, Israel fell in rank from 14th place to 32nd (see

Table 1; lower scores indicate that the country is consid-

ered more corrupt). Furthermore, surveys on the perfor-

mance of the public sector in Israel show that citizens

perceive the ethics and integrity of public sector personnel

as mediocre. In 2008, the Israeli public gave the public

sector an average score of 2.55 (on a scale of 1—lowest

to 5—highest) for integrity, compared to 2.64 in 2001

(Vigoda-Gadot and Mizrahi 2008). In 2009, citizens per-

ceived the ethics and integrity of local government per-

sonnel as fair to poor (2.51 on a scale of 1–5) (Beeri 2009).

Both the Israeli Bill to Foster Ethics in Organizations

and the amended FSGO operate on the reasoning that a

strong code of ethics, in the context of an organizational

culture that sets a high standard for ethical behavior, will

reduce deviations from ethical standards within the orga-

nization. As noted above, few studies have tested this

theory, and fewer still have dealt with the effect of ethics

codes and programs on other, non-ethics-related attitudes

and behaviors of employees. This study relies on surveys,

case studies, and theoretical work to propose that a well-

designed well-implemented ethics program will not only

lead to improved ethical outcomes but also will improve

other organizational outcomes as well, including measures

of employee commitment and performance.

Figure 1 presents the theoretical framework developed

for this research and used for the field study in the regional

council. The model suggests that three ‘‘ethics resour-

ces’’—namely, awareness of the code of ethics (ACE),

ethical leadership (EL), and ethical decision making

(EDM)—will be independently related to four ethical and

organizational outcomes, namely, ethical climate (EC),

organizational commitment (OC), organizational citizen-

ship behavior (OCB), and quality of work life (QWL).

These relationships are expected to be stronger after

adoption of the ethics program, compared with the pre-

adoption stage. In addition, levels of all measures are

expected to be higher after adoption of the program relative

to the pre-adoption stage.

Table 1 Corruption perceptions index for Israel 1996–2009

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Score 7.71 7.97 7.1 6.8 6.6 7.6 7.3 7 6.4 6.3 5.9 6.1 6 6.1

Rank 14 15 19 20 22 16 18 21 26 28 34 30 33 32

Source: Transparency International (2009)

60 I. Beeri et al.

123

Our discussion is developed in three stages. In the fol-

lowing, we define the constructs and describe the hypoth-

eses—i.e., the proposed relationships among the ethics

resources (EL, ACE, and EDM), ethics outcome (EC), and

organizational outcomes (OC, OCB, and QWL), and the

expected effect of an ethics program on these constructs

and relationships. Next, we describe the methodology and

findings of the field study in which we empirically test the

hypotheses by examining the perceptions and behavior of

employees in one public organization over time. (Indeed,

one of the major strengths of the study is its longitudinal

nature, which can support identification of causal rela-

tionships among the research variables.). The article con-

cludes with a discussion and suggestions for future

research.

Background and Hypotheses

Ethics Resources

Awareness of the Code of Ethics

Establishing an ethics program begins with developing a

code of ethics and ensuring that it is effectively commu-

nicated to employees and other stakeholders—i.e.,

increasing ACE. A code of ethics is the focal point of an

ethics program (Yizraeli and Shilo 2000). Such a code

serves as a statement of intent regarding the ethical

behavior of management and employees, and thereby

articulates the core of the organization’s ethics policy

(Wolf 2008). Furthermore, the code of ethics serves as a

contract of sorts between the organization and its

employees and stakeholders. As an isolated document, the

effectiveness of a code of ethics is doubtful (Cleek and

Leonard 1998). However, if it is deployed in the context of

other mechanisms for creating an ethical culture (such as

EL and EDM), it may serve as a useful management tool.

Ethical Leadership

Ethical leadership has been recognized as a key to the

success of ethics programs (Korey 2008). First and fore-

most, EL entails modeling of ethical behavior by the

organization’s senior management. Beyond this, EL in

large organizations, and in many small and medium-sized

ones as well, is often formally invested in the hands of an

appointed ethics officer (also called a compliance officer),

who is charged with implementing and enforcing the code

of ethics. The role of ethics officer and its development

over the years have been the subject of extensive studies.

Werner (1994) argues that as originally conceived, the role

of the ethics officer was to ensure that the organization

pursued its strategic goals within the context of an ethical

culture, but that the role has been expanded, and ethics

officers have been transformed into managers of ethics

resources. Today, ethics officers are charged with inte-

grating ethics into the entire operational apparatus and

developing and maintaining an ethical organizational cul-

ture. Their duties include enforcing compliance with the

organization’s rules and fiduciary duties, helping other

managers avoid inappropriate conduct, coaching employ-

ees in EDM (described in the following), developing and

implementing tools for measuring the success of the ethics

program, and communicating the organization’s ethics

policy to the public (Ethics Resource Center 2007).

Ethical Decision Making

Ethical decision making means effectively dealing with

ethical dilemmas and in keeping with a high ethical stan-

dard. In the organizational context, one of the functions of

EL is educating employees in the elements of EDM,

including identifying dilemmas that involve ethics and

values, choosing the appropriate tools to deal with these

issues, and developing independent and critical ethical

thinking (Dean 1992; Loescher 2006; Martin and Cullen

2006; Rampersad 2006; Stevens et al. 2005; Valentine and

Johnson 2005; Yizraeli and Shilo 2000).

In this article, the term ‘‘EDM’’ generally refers to the

involvement of employees in EDM. Involving employees in

EDM means that employees should be able to recognize

the ethical aspects of problems, and should be prepared to

identify alternative solutions to the problem (Trevino et al.

2006). This, in turn, requires that employees develop the

ability to critically think about solutions to problems that

frequently arise at work, taking into account the spirit of

the ethics code (Yizraeli and Shilo 2000).

Adoption of Ethics Program

Quality of Work Life (QWL)

Organizational

Commitment (OC)

Ethical Climate (EC)

Organizational Citizenship

Behavior (OCB

Ethics Resources Ethics and Organizational Outcomes

Inclusion in Ethical Decision Making (EDM)

Awareness of the Ethics Code (ACE)

Ethical Leadership (EL)

Fig. 1 Research model

Advancing Ethics in Public Organizations 61

123

Research suggests that employees more willingly com-

mit to organizational decisions and accept their conse-

quences when their input and feedback is solicited and

considered (Pelletier and Bligh 2006; Witt et al. 2000).

Furthermore, studies suggest that for employees to feel

fully involved in EDM, they should be engaged as col-

laborators in developing and implementing the organiza-

tion’s ethics code (Grundstein-Amado 2001). Giving

employees the opportunity to contribute to the organiza-

tion’s ethics policy makes it more likely that they will

internalize its values and will engage in EDM down the

line (Grundstein-Amado 2001).

Ethical and Organizational Outcomes

Ethical Climate

An EC is an organizational climate in which ethical content

is embodied in organizational policies and regulations, and

in employees’ behaviors and perceptions (Cullen and

Victor 1988). As suggested by Vardi (2001, p. 329), the EC

represents ‘‘employees’ perceptions of work procedures

and processes in the organization that have ethical con-

tent.’’ It is considered an aspect of organizational culture—

the pattern of shared values, norms and assumptions that

organizational members hold about the work environment,

and ‘‘how things are done.’’ The term ‘‘EC,’’ as employed

here, encompasses (i) the formal and informal actions and

decisions of employees and leadership directed at pro-

moting ethical professional behavior—i.e., openness,

transparency, and fidelity to the public interest and (ii)

shared beliefs and perceptions regarding the organization’s

moral priorities, decision making, norms, and behavior

(Cullen and Victor 1988; Feldheim and Wang 2004; Martin

and Cullen 2006).

The ethical resources described in the preceeding play a

large part in establishing an organization’s EC. Previous

studies have found that awareness of a code of ethics

fosters an EC and leads to a pleasant and safe working

environment (Cullen et al. 2003; Martin and Cullen 2006).

Of course, ACE means here not simply ‘‘awareness’’ in the

literal sense—as when the code of ethics is merely framed

and hung on the wall—but internalization of the values

embedded in it. When internalized in this way, ACE can

improve employees’ moral behavior and decision making

(Trevino et al. 1999) and can influence employees’ views

of and reactions toward other employees and the organi-

zation (Appelbaum et al. 2005).

Ethical leadership is considered as a key to creating an

ethical organizational climate (Feldheim and Wang 2004;

Loescher 2006), both directly and indirectly, by enhanc-

ing the other ethical resources. The importance of EL

stems from the nature of leadership itself. As argued by

Gini (1997, p. 325), ‘‘All leadership is value laden. All

leadership, whether good or bad, is moral leadership.’’ In

this regard, declarations alone are insufficient; it is by

conveying a model of normative behavior and moral

decision making that EL inspires employees to act

ethically. Through example, EL fosters values such as

honesty that create an ethical environment (Brown

et al. 2005; Cufaude 1998; Feldheim and Wang 2004;

Schwepker 2001; Sims 1992). By the same token, when

leaders behave in an immoral or inappropriate manner,

they set a negative example for employees (Korey 2008;

Werner 1982). This can involve not only direct wrong-

doing but also a range of negative behaviors. Werner

(1993) cites a number of managerial ‘‘types’’ that fail to

provide sound EL: the forgiver; the improviser; the

‘‘distant liberal,’’ with a ‘‘sit and do nothing’’ policy; and

the manager who jumps straight to punishment, without

trying instruction or warnings. Among the most egregious

failures in EL is behavior that conveys an ethical double

standard (Joseph 2001). Freeman and Stewart (2006)

suggest that leaders who adopt a modest attitude and

respond to ethical lapses appropriately show the impor-

tance of values to the organization’s success and create a

dynamic ethical discourse. Superb ethical leaders may

promote not only reactive ethics but also proactive

cooperation and the internalization of values, which come

into practice as EDM.

The rationale behind involving employees in EDM is

rooted in the idea that doing so will result in increased

organizational efficiency and greater likelihood of achiev-

ing the organization’s goals. As noted above, research

suggests that employees more willingly commit to and

accept the consequences of decisions they were involved in

(Pelletier and Bligh 2006; Witt et al. 2000). Employees

who are invited to contribute to developing the organiza-

tion’s code of ethics, and to refining and implementing it

over time, can feel confident that their choices accord with

the organization’s ethical standards. As Grundstein-Amado

(2001, p. 468) noted, only when organization members

become ‘‘active participants in the formulation … of codes

of ethics will acceptability of the code’s guidelines’’ among

them grow. Hence, including employees in EDM improves

the organization’s ability to cope with ethical dilemmas

and infuses ethics into procedures and policies, in turn

improving the organization’s EC (Grundstein-Amado

2001).

To sum up, both ACE and the inclusion of employees in

EDM rely on EL. At the same time, it is reasonable to

assume that ACE and EDM also strengthen ethical lead-

ership through a process of reinforcement. In addition, all

three ethics resources have the potential to affect the

organization’s EC. Thus, we suggest our first two

hypotheses:

62 I. Beeri et al.

123

Hypothesis 1 There will be a positive relationship

between perceptions of the three ethics resources: aware-

ness of the ethics code, ethical leadership, and ethical

decision making.

Hypothesis 2 There will be a positive relationship

between perceptions of the three ethics resources (aware-

ness of the ethics code, ethical leadership, and ethical

decision making) and the organization’s ethical climate.

Do an EC and strong ethical resources benefit organi-

zations beyond preventing Enron or WorldCom-type

scandals and keeping the firm on the right side of the law?

Unsurprisingly, there is evidence that an EC contributes to

high levels of public trust (Feldheim and Wang 2004). Yet

research suggests that organizations that foster a culture of

ethics may profit in other ways as well. Reshef (2002), for

instance, proposed that an organization with an EC is likely

to also be a learning organization, because organizational

learning relies on values and behaviors that a strong ethics

code aims to institutionalize: namely, truthful reporting,

transparency of data, honesty, responsibility, and mutual

trust. Similarly, ethics resources and an EC may enhance

desirable employee perceptions and behaviors such as

satisfaction, commitment, and extra-role behavior. The

reasoning behind this argument is that when employees

identify with the organization’s ethical values, they will

also identify with the organization and be willing to invest

effort in advancing its goals (Appelbaum et al. 2005;

Cullen et al. 2003). Given these assumptions, this study

will also explore the relationship between ethical resources

and three organizational outcomes that are not specifically

in the realm of ethics: OC, OCB, and QWL.

Organizational Commitment

Organizational commitment is commonly defined as the

degree of the employee’s identification and involvement

with the organization. Thus, an employee who is commit-

ted to the organization identifies with it, accepts its goals

and values, and is willing to devote effort on its behalf

(Ashforth and Mael 1989; Porter et al. 1974). OC can be

understood in light of the social exchange theory of Blau

(1964) and the equity theory of Adams (1965). Social

exchange theory maintains that a system of social and

economic exchange exists between the employee and the

organization, where the employee contributes time, effort,

commitment, and so on in exchange for benefits such as

wages, support, and recognition (Blau 1964). Under equity

theory (Adams 1965), employees assess the balance

between the inputs they bring to a job (time, effort, com-

mitment, etc.) against the outputs they receive from it

(remuneration, recognition, etc.) relative to the inputs and

outputs of others. When employees feel that they are

treated fairly by the organization and that the organization

maintains a just and equitable working environment, they

are likely to reciprocate with greater commitment (Baker

et al. 2006; Knippenberg and Sleebos 2006).

Considering ethical resources in light of this reasoning,

it can be argued that employees perceive ethical resources

as outputs—i.e., contributions from the employer under the

terms of the social exchange between them. Hence, when

employees perceive that the organizational management is

committed to a code of ethics, to EL, and to involving

employees in EDM, they are likely to respond with greater

commitment to the organization (Vigoda-Gadot 2006).

Specific features of ethical resources also promote

greater commitment. First, an organization whose members

are guided by a code of ethics is likely to be characterized

by a pleasant work environment, one that promotes

employee participation and involvement, and encourages a

plurality of opinions. These features have been shown to

foster trust and satisfaction, which in turn are antecedents

of OC (Feldheim and Wang 2004; Schwepker 2001;

Werner 1994). Involving employees in EDM, in particular,

enhances openness, fosters good relations between

employees and management, and improves inter-organi-

zational communication. All of these, again, have been

shown to be related to OC (Driscoll and Hoffman 2000;

Saravanamuthu 2002).

Finally, when there is correspondence between the

employee’s personal values and those of the organization,

we can expect that employees will identify with and feel

committed to the organization (Ashforth and Mael 1989;

Cullen et al. 2003). Thus, as employees internalize the

values expressed in the organization’s code of ethics—as

we would expect with high levels of ACE and EL—their

commitment to the organization and their willingness to

expend effort on its behalf are likely to grow.

In accordance with these lines of reasoning, we

hypothesize that:

Hypothesis 3 When perceptions of ethical resources

(awareness of the ethics code, ethical leadership, and ethics

in decision making) are high, employees’ organizational

commitment will be high.

Organizational Citizenship Behavior

Organizational citizenship behavior is a spontaneous

behavior in which employees, of their own free will, go

above and beyond the formal obligations of their job

requirements without expectation of reward from the

organization (Cohen and Vigoda 2000; Organ 1988; Organ

and Konovsky 1989; Sangmook 2006; Smith et al. 1983;

Vigoda 2000). Research distinguishes between two forms

of OCB. The first, altruistic OCB, is directed at other


123

people in the employee’s surroundings; it may involve

helping colleagues, managers, or clients. The second is

directed toward the organization as a whole; it can involve

such behaviors as conscientious attention to detail and

meticulous punctuality at work (Smith et al. 1983; Vigoda

2000).

As with OC, our understanding of OCB rests on social

exchange theory (Blau 1964) and equity theory (Adams

1965). As described in the preceeding, social exchange

theory maintains that a system of social and economic

exchange exists between the employee and the organiza-

tion. Employees repay the organization and its officials

with good citizenship behavior when they are satisfied with

the support and consideration of the organization and

management, the recognition of their work efforts, and the

recognition of their contribution to the success of the

organization, and that their remuneration, recognition, and

so on are fair relative to that of others, they are likely to

reciprocate with high levels of OCB (Bateman and Organ

1983; Hoff 2008; Podsakoff et al. 2000; Shohat and

Vigoda-Gadot 2006; Smith et al. 1983; Vigoda-Gadot et al.

2008).

Under this reasoning, the more the employee perceives

that the organizational leadership works under the norms

and rules of an ethics code, the higher is employees’

motivation to contribute back to the organization through

greater OCB (Baker et al. 2006; Peterson 1990; Sangmook

2006; Vigoda 2000). In addition, employees may interpret

management efforts to involve them in ethical decision

making as evidence that the organization appreciates the

value of their contributions, and therefore, will respond

with greater OCB. Thus, we hypothesize that:



in decision making) are high, employees’ organizational

citizenship behavior will be high.

Quality of Work Life

The construct known as ‘‘QWL’’ seeks to measure

employees’ job-related experience and welfare beyond

what is captured by specific concepts such as job satis-

faction and stress. While QWL has been defined in a

number of ways, the term generally refers to employees’

sense that a full range of needs are met by the conditions of

their employment (Sirgy et al. 2001; Van de Looij and

Benders 1995). Walton (1974) divided QWL into eight

categories, which combine organizational and personal

dimensions: (1) fair and adequate compensation; (2) a safe

and healthy working environment; (3) the development of

personal capabilities, expertise, and knowledge; (4)

growth, development, and employment security; (5) social

integration, identification, and self appreciation; (6) punc-

tiliousness about regulations at work; (7) equilibrium

between home and work; and (8) social meaning of the job.

Sirgy et al. (2001) identified seven sets of needs: health and

safety needs; economic and family needs; social needs;

esteem needs; actualization needs; knowledge needs; and

aesthetic needs.

Quality of work life has implications for a large set of

employee attitudes and behaviors, including OC, job sat-

isfaction, involvement in the workplace, investment of

effort at work, alienation, and intentions of leaving.

Therefore, it has a strong positive effect on the organiza-

tion’s efficiency, productivity, and quality of service

(Champion-Hughes 2001; Sirgy et al. 2001).

There is growing acceptance today that organizational

ethics is one of the most influential factors affecting QWL.

Ethical resources enhance QWL because a high quality of

ethical resources increases the satisfaction, trust, and

commitment of employees (Requena 2003; Saravanamuthu

2002; Sims 2002). A number of studies have linked aspects

of ethical resources to QWL. For instance, Koonmee et al.

(2009) found a positive relationship between QWL and

ethics, in both its explicit aspects (i.e., the formal ethics

program, the code of ethics, ethics coaching, enforcement,

and punishment) and implicit elements (organizational

culture and EL). Similarly, Saravanamuthu (2002) suggests

that involvement in EDM improves QWL. Other studies,

although not measuring QWL directly, have found asso-

ciations between ethical resources and measures that sug-

gest a high QWL. For example, Feldheim and Wang (2004)

and Schwepker (2001) found that EL promotes an open and

pluralistic work environment that increase trust and satis-

faction. The studies of Brock (2008), Davis and Rothstein

(2006), Loescher (2006), and Rampersad (2006) also sug-

gest that EL leads to greater satisfaction, commitment, and

willingness to meet management expectations. By the same

token, leadership that is clearly unethical can pollute the

work environment (Korey 2008; Loescher 2006), leading

to a decline in employees’ QWL.



in decision making) are high, employees’ quality of work

life will be high.

Ethics Programs

As noted in the preceeding, the core element of an ethics

program is a code of ethics (Yizraeli and Shilo 2000). The

code of ethics may help the organization achieve various

goals. First, outlining the organization’s values and ethical

rules helps raise employee awareness of those values and

defines the parameters of acceptable conduct. Second, an

64 I. Beeri et al.

123

ethics code raises the level of expectations about ethical

behavior within the organization: It prompts an organiza-

tional discourse about values and ethics, promotes moral

decision making, inhibits unacceptable behavior, and cre-

ates a strong basis for enforcing organizational values.

Third, it may lead employees to internalize ethical values

and accordingly act, using their independent value judg-

ments rather than blindly obeying regulations. Fourth, a

code of ethics can help clarify the organization’s objec-

tives, guide employees in solving ethical problems, and

serve as a platform for decision making (Cleek and

Leonard 1998; Dean 1992; Driscoll and Hoffman 2000;

Grundstein-Amado 2001; Medical Research Council of

Canada 2003; Pelletier and Bligh 2006; Wolf 2008; Wood

and Rimmer 2003; Yizraeli and Shilo 2000).

However, studies are equivocal about the degree to

which ethics codes, by themselves, have the power to affect

ethical outcomes and recreate the moral reality (Cleek and

Leonard 1998). That is, while ethics codes may reflect a

declared standard, this standard may differ from the actual

threshold behavior anchored in the organizational culture.

As Zamir (2009, p. 27) argued, ‘‘There can develop a social

phenomenon of conduct which contrasts with the rules of

conduct, to such an extent that it threatens the very exis-

tence of the rules.’’ When the code of conduct masks what

is in reality a lower ethical standard, then legislation, court

rulings, and mechanisms of exposure–investigation–pun-

ishment may become the sole means of rooting out

unwanted behavior. Even if this is not the case, a code of

ethics by itself may be harmful, as it raises employees’

awareness of unethical behavior but does not supply them

with the tools to effectively deal with ethical dilemmas

(Loescher 2006; Yizraeli and Shilo 2001).

A code of ethics should, therefore, be only one of the

instruments used to generate an ethical organizational

culture (Ethics Resource Center 2006). Rather, such a code

should be implemented in the context of an ethics pro-

gram—a multidisciplinary multilayered strategy designed

to transform the code from a mere statement into a living

document that becomes part of the organization’s culture

(Dean 1992). Or as Pelletier and Bligh (2006, p. 366) put it,

‘‘It is the ethics program that provides the strategies and

resources (e.g., ethics policy development, leadership

training, ethical dilemma evaluation training) that leaders

draw upon to aid in that moral facilitation.’’

An ethics program is an auxiliary managerial tool

designed to increase employees’ awareness of ethical

issues and to serve as a guide through which employees can

navigate these issues in all their complexity (Feldheim and

Wang 2004). According to the Ethics Resource Center

(2006), well-designed ethics programs have three main

features in common: they promote EL, they involve

employees in their development and implementation, and

they encourage an ethical mindset in the organizational

climate and culture. More specifically, researchers believe

that successful ethics programs help mold moral behavior,

promote ethical debate, enhance awareness of the ethics

code, encourage EDM, and raise employees’ awareness of

ethical behavior on the part of management (Cullen et al.

2003; Grundstein-Amado 2001; Joseph 2001; Trevino et al.

1999). That is, ethics programs strengthen ethics resources

where they already exist, and help develop them where

they do not, thereby improving the organization’s EC.

Ethics programs are likely to enhance not only ethical

outcomes but also OC, OCB, and QWL, following the

reasoning presented in the preceeding linking ethics

resources to these outcomes. Ethics programs increase

employees’ sense of belonging, reduce conflict, and

enhance openness and communication with management

(Pelletier and Bligh 2006; Saravanamuthu 2002; Sims

2002; Trevino et al. 1999). The programs thus strengthen

conditions likely to improve the quality of employees’

working lives and increase their commitment to the orga-

nization. Likewise, ethics programs are likely to help create

a work environment in which employees are motivated to

engage in OCB. Indeed, ‘‘OCB could be considered the

manifestation of ethical behavior in the workplace’’ (Baker

et al. 2006, p. 853).

Based on these arguments, one may assume that imple-

mentation of an ethics program will have a positive effect

on ethics resources, ethics outcomes, and other organiza-

tional outcomes. Accordingly, we hypothesize that:

Hypothesis 6 An ethics program will strengthen the

relationship between ethics resources and employees’

perceptions and behaviors. After implementation of the

ethics program, perceptions of ethical resources (awareness

of the ethics code, ethical leadership, and inclusion in

ethical decision making) will better predict ethical and

organizational outcomes (the ethical climate, organiza-

tional commitment, organizational citizenship behavior,

and the quality of work life).

Hypothesis 7 An ethics program will have a positive

effect on employees’ attitudes and behaviors. After

implementation of the ethics program, both perceptions of

the three ethics resources and the four ethical and organi-

zational outcomes will be higher than at the beginning of

the process.

Method

Procedure

Data were collected in an Israeli regional council with 192

employees located in the north of the country. The region


123

governed by the council is more than 200 km2 in size and

has a population of 23,000 people, most of whom live in

rural areas. In 2008, the council’s leadership set in motion

development of a comprehensive ethics program. Several

interrelated factors led the council to initiate the ethics

program at that time. First, since the introduction of the

Knesset Bill to Foster Ethics in Organizations in 2004, the

popularity of ethics codes and programs had been growing

among Israeli institutions and organizations; indeed, a

neighboring council, one of the largest in northern Israel,

had introduced an ethics program soon after the Bill was

proposed. Another factor was increasing media coverage of

local corruption, which both reflected and fanned the

flames of popular discontent about the issue among local

residents (Beeri 2009; Vigoda-Gadot and Mizrahi 2008).

Finally, local elections in Israel were scheduled for the end

of 2008, and initiating an ethics program at this time may

have been perceived as a positive political move by some

stakeholders. It is worth noting that no particular local

scandal or other event precipitated introduction of the

program.

This research project was developed in parallel with the

development and implementation of the ethics program.

Both the managers and employees of the council were fully

aware of the project and the methods to be used, but took

no part in developing the study and made no conditions

with regard to the questions that could be asked, which

employees could participate, and how the data would be

used. It was agreed that any data published or given to the

council at the end of the study would not reveal the iden-

tities of participating departments and personnel, and that

the name of the council would also be kept confidential.

A survey method was used. Questionnaires were dis-

tributed to employees at two points in time (T1—before

implementation of the ethics program and T2—a year after

introduction of the program). Due to the sensitivity of the

issues being studied, the questionnaires were distributed

and gathered personally by the researchers, and anonymity

was assured for employees and managers.

The Ethics Program in the Regional Council

The ethics program was initiated, developed, and supported

by the regional council leadership, i.e., the Council Head,

Chief Executive Director, and Director of Human

Resources. This support was made clear to all managers

and employees. Prior to the development but before the

implementation of the program, local elections were held

and the Council Head was replaced. The newly elected

Council Head continued the process started by his prede-

cessor. External consultants also worked on the develop-

ment and implementation of the program, which included a

number of steps and actions (see Appendix 1 for details).

The council took measures to ensure that the ethics

program would have wide support among rank-and-file

employees and managers. Early in the process, the Director

of Human Resources was appointed by the Council Head

as Ethics Commissioner. As one of the senior leaders in the

council, she was one of the key driving forces behind the

program, and was responsible for all program-related

administration and staff. Yet, as detailed in Appendix 1,

decisions about the content of the ethics code, and ethical

decisions made in light of it, remained in the hands of

wider forums. According to the Ethics Commissioner, ‘‘the

process of adopting the ethics code involved all depart-

ments. All employees and managers in all departments and

levels were partners in this process… Today, managers and

employees are aware of the management’s commitment to

the program and understand the importance of fostering

ethics… The code of ethics is a valid and living docu-

ment… Ethics has become the subject of an open dia-

logue… Employees identify ethical problems and confront

dilemmas with the assistance of managers. They talk

openly and come to see things differently, learning how to

speak and how to react in different situations… There is an

understanding that we should infuse values into every

organizational routine.’’ The researchers held numerous

meetings with the Ethics Commissioner before and during

the study, meetings that afforded them behind-the-scenes

insights into the program.

Sample

A total of 192 employees of the council, 24 of whom were

managers, participated at T1. The main questionnaire was

distributed among the 168 rank-and-file employees and

covered all the measures except OCB. Data on employees’

OCB were obtained from their managers, who filled out a

separate questionnaire for each employee. The employee

and manager data were matched using the last four digits of

the employee’s ID number (the full number is nine-digits

long). As described in the preceeding, employees were

assured that no identifying information would be shared by

the researchers with any other individual or body.

The return rate at the first stage was 92.7%. A majority,

64%, of the employees who completed the questionnaires at

T1 also took part in the second stage. The final sample, with

matching employee and manager questionnaires at both

stages, comprised 108 employees—an overall response rate

of 56%.

Most of the respondents in the final sample (64.5%) were

female. Respondents’ average age was 44.5 years (SD =

9.21); they averaged 14.3 years of education (SD = 2.48);

and average tenure in the position was 9.5 years (SD =

7.57). Almost two thirds, or 63.2%, had frequent direct

contact with the public; 31.1% had infrequent direct contact

66 I. Beeri et al.

123

with the public and 5.7% had no contact. Most of the

respondents, 92.5%, had tenure in the organization, meaning

they had passed their probation period and their employment

was regarded as permanent. Sixty-seven percent were

employed by the council full-time.

Measures

The main questionnaire collected data on six of the seven

research variables (all but OCB) and demographic data

(gender, age, tenure in the organization, education, and

status at work). A second questionnaire, for managers,

covered the items on OCB. The measurement tools are

given in Appendix 2. All questionnaire items measured

perceptions, not absolute values.

After the main questionnaire had been constructed, three

external scholars who specialized in public management

assessed the validity of the scales in accordance with our

concepts and definitions. This process improved consis-

tency and reduced overlap of items. Internal consistency

was tested for all variables in both stages. Cronbach’s a was

usually high and ranged between .70 and .88 (see Table 2).

Awareness of the Code of Ethics

The code of ethics is a formal document that delineates the

values of the organization and the ethical rules that the

organization’s management expects employees to follow

(Pelletier and Bligh 2006). We used six items adopted from

Pelletier and Bligh (2006). Respondents indicated the

degree to which they agreed with statements regarding

their ACE on a scale of 1 (completely disagree) to 5

(completely agree). A sample item: ‘‘I understand what the

organization expects of me in terms of ethical behavior.’’

Ethical Leadership

Ethical Leadership refers to the modeling and transmission

of normative ethical behavior through personal actions and

interpersonal relations, via encouragement and EDM

(Brown et al. 2005). Ten items were used, adopted from

Pelletier and Bligh (2006). Respondents were asked to

evaluate the quality of EL in the organization on a scale of

1 (completely disagree) to 5 (completely agree). A sample

item: ‘‘My immediate supervisor sets a good example of

ethical behavior.’’

Inclusion in Ethical Decision Making

Ethical decision making refers to involving employees as

collaborators in the making of ethical decisions (Dean

1992). EDM was measured by four items based on Aiken

and Hage’s (1968) questionnaire. Respondents indicated

the degree to which they were involved in EDM on a scale

of 1 (never) to 5 (always). A sample item: ‘‘How frequently

do you usually participate in making decisions on ethical

issues that are related to the promotion of professional

staff?’’ Additionally, respondents were asked to describe

how they first encountered the code of ethics, as a way to

test whether they made decisions at an early stage in the

program’s implementation.

Ethical Climate

Ethical climate refers to the degree to which ethical content

is embodied in the organization’s policies and regulations,

and in employees’ behaviors and perceptions (Cullen and

Victor 1988). EC was evaluated using eight items adopted

from Menzel (1995). Respondents indicated the degree to

which they agreed with each statement on a scale of 1

(completely disagree) to 5 (completely agree). A sample

item: ‘‘Some members of my department use their position

for personal gain’’ (reverse scored).


Organizational commitment is defined as the relative

strength of a person’s identification and involvement with

the organization, as reflected in (1) acceptance of the

organization’s goals and values; (2) willingness to invest

effort in the organization; and (3) a desire to belong to the

organization (Porter et al. 1974). Seven items based on

Mowday et al. (1979) were used. Respondents indicated the

degree to which they agreed with statements on a scale of 1


item: ‘‘I really care about the fate of this organization.’’


Organizational citizenship behavior is voluntary behavior

in which employees contribute to the organization beyond

their formal job responsibilities and without the expecta-

tion of compensation or formal recognition (Smith et al.

1983). OCB was evaluated by each employee’s direct

manager, based on previous research suggesting that this is

the most objective means of capturing employees’ actual

behavior (Organ and Konovsky 1989; Smith et al. 1983).

Managers were asked to evaluate each employee’s OCB,

using Cohen and Vigoda’s (2000) 18 items on a scale of 1

(never) to 5 (always). A sample item: ‘‘The employee helps

the supervisor in his work when he is asked to do so.’’


Quality of work life is defined as employees’ perception

that membership in the organization satisfies their various


123

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68 I. Beeri et al.

123

social, economic, and psychological needs (Sirgy et al.

2001; Walton 1974). QWL was measured using eight items

based on Sirgy et al. (2001), scored on a scale of 1


item: ‘‘I feel physically secure at my workplace.’’

Data Analysis

Three statistical procedures were conducted to test the

research hypotheses. First, to test Hypotheses 1–5, we

examined the linear relationships between the variables

using Pearson’s coefficient. Fisher’s z transformation test

was used to explore possible differences between correla-

tions. Next, to further test Hypotheses 2–5, we used hier-

archical regressions to examine the contribution of each of

the ethics resources (ACE, EL, and EDM) to each of the

outcomes (EC, OC, OCB, and QWL), while controlling for

gender, age, seniority, and education. To test Hypothesis 6,

which expected greater predictive power for the ethics

resources after implementation of the program, we put the

‘‘before’’ and ‘‘after’’ multiple regressions side by side to

look for differences between them. Finally, we tested

Hypothesis 7, which argued that all the variables would be

higher following the intervention, using a series of paired

sample t tests.

Findings

Table 2 presents the mean values, standard deviations, and

correlation coefficients for all research variables and shows

the results before and after adoption of the ethics program.

Relationships Between Ethics Resources

As is evident from Table 2, the results confirm Hypothesis

1. As predicted, all three ethics resources were significantly

correlated, both before and after implementation of the

ethics program. Before the implementation, ACE had a

moderately significant relationship with EL (r = .39,

p \ .001) and with EDM (r = .28, p \ .01). EL had a

moderately significant relationship with EDM (r = .33,

p \ .001). After the implementation, ACE again had a

moderately significant relationship with EL (r = .47,

p \ .001) and with EDM (r = .26, p \ .01), and EL again

had a moderately significant relationship with EDM

(r = .42, p \ .001). In other words, the higher respon-

dents’ perceptions of EL, the greater their ACE and their

perceptions of being involved in EDM. Fisher’s z transfor-

mation test revealed no significant differences between

pairs of ethics resources before and after adoption of the

program.

Relationships Between Ethics Resources and Ethical

and Organizational Outcomes

Significant correlations were found between the ethics

resources and three of the four outcomes, both before and

after implementation of the program (i.e., at T1 and T2).

Before the program, ACE had moderately positive rela-

tionships with OC (r = .40, p \ .001) and QWL (r = .22,

p \ .05). After the program, ACE had moderately positive

relationships with OC (r = .34, p \ .001), QWL (r = .22,

p \ .01), and also EC (r = .41, p \ .001). EL had strong

positive relationships with all three outcomes both before

and after implementation, as follows: EC (r = .59,

p \ .001), OC (r = .51, p \ .001), and QWL (r = .50,

p \ .001) at T1; and EC (r = .66, p \ .001), OC (r = .62,

p \ .001), and QWL (r = .58, p \ .001) at T2. Finally,

EDM had moderately positive relationships with all three

outcomes both before and after implementation of the

program: EC (r = .20, p \ .05), OC (r = .31, p \ .001),

and QWL (r = .28, p \ .01), and EC (r = .29, p \ .01),

OC (r = .32, p \ .001), and QWL (r = .28, p \ .01), at

T1 and T2, respectively.

In short, the correlation findings support Hypotheses 2,

3, and 5. With regard to OC and QWL (Hypotheses 3 and

5), employees who were more aware of the organization’s

ethics code, found the leadership to be more ethical and

took greater part in EDM, had greater commitment to the

organization and a better QWL, both before and after

adoption of the program. With regard to perceptions of an

EC (Hypothesis 2), this was true before and after adoption

of the program for EL and EDM, and after the program was

introduced, it was true also for ACE. Fisher’s z transfor-

mation test revealed no significant differences between

pairs of source–output correlations. The findings do not

support Hypothesis 4, as OCB was not significantly cor-

related with any of the ethics resources, either before or

after adoption of the program.

Relationships Between Before-and-After Resources

and Before-and-After Outcomes

A look at the matrix comparing before-and-after resources

and before-and-after outcomes reveals strong positive

correlations (r = .56–.72, p \ .001). The higher the ethics

resources before the program’s adoption, the greater they

are after it. Similarly, the higher the outcomes before, the

greater they are after.

A look at the matrix comparing resources before with

outcomes after the program’s adoption reveals moderate

and strong positive correlations (r = .30–.51, p \ .01).

These correlations appear similar to those between resour-

ces and outcomes after the program. As expected, none of

the resources before the program is related to OCB after the


123

program. Interestingly, Fisher’s z transformation test

reveals a difference between the two EL–QWL slopes. The

correlation between EL-after and QWL-after (r = .58,

p \ .001) is significantly stronger than the correlation

between EL-before and QWL-after (r = .37, p \ .001).

This finding may indicate that the leadership’s ethical per-

ceptions and behaviors a year after introduction of the ethics

program had a greater effect on QWL than their perceptions

and behaviors when the ethics program was initiated.

Variables that Predict Ethical Climate

To further test Hypotheses 2–5, a series of hierarchical

regression tests was conducted. Table 3 shows the contri-

butions of the demographic variables and ethics resources

to explaining perceived EC. Before adoption of the pro-

gram, employees who were female (b = -.170, p \ .05)

and/or more educated (b = .174, p \ .05) perceived a

stronger EC. After the program’s adoption, gender and

education did not predict perceived EC. However, the

greater the seniority of employees, the less they perceived a

strong EC (b = -.266, p \ .01).

Ethics resources together with the demographic variables

better predict EC than the control variables alone, both before

(F for DR2 = 22.471, p \ .001) and after (F for DR2 =

33.603, p \ .001) adoption of the program. EL made the most

substantial and the only significant contribution to predicting

EC before (b = .639, p \ .001) and after (b = .589,

p \ .001) the program’s adoption. In other words, Hypothesis

2 is partly supported by these data. The more respondents

perceived the organization’s management as engaging in EL,

the stronger their sense of an EC. However, ACE and

involvement in EDM do not relate to perceived EC.

Variables that Predict Organizational Commitment

Table 4 presents the contribution of the control variables

and ethics resources to explaining OC, as calculated

through the hierarchical regression. At T1, more educated

employees were less committed to the organization (b =

-.269, p \ .01), but at T2, education had no influence.

Regarding the ethics resources, all three significantly pre-

dicted OC at T1, as follows: ACE (b = .186, p \ .05), EL

(b = .337, p \ .001), and EDM (b = .194, p \ .05). EL—

the strongest predictor at T1—became the only predictor at

T2 (b = .560, p \ .001). Thus, these findings fully support

Hypothesis 3 before adoption of the program and partly

support it afterward. After adoption of the program, ACE

and EDM did not contribute to OC.

Variables that Predict Organizational Citizenship

Behavior

Table 5 presents the contribution of the control variables to

predicting OCB. The hierarchical regression shows that nei-

ther the control variables nor the ethics resources significantly

predicted the extent to which the employee was involved in

OCB, according to his or her manager’s report. These findings

were consistent before and after implementation of the ethics

program. Therefore, Hypothesis 4 is rejected.

Variables that Predict Quality of Work Life

The contribution of the demographic variables and ethics

resources to perceptions of QWL is presented in Table 6.

At T1, less-educated respondents (b = -.239, p \ .05)

and those with high perceptions of EL were more likely to

Table 3 Hierarchical

regression (standardized

coefficients) for ethics resources

predicting EC before and after

adoption of ethics program

(t test in parentheses)

(N = 108), * p \ .05;

** p \ .01; *** p \ .001

Before After

Step 1 Step 2 Step 1 Step 2

Control variables

Gender -.193 (-1.894) -.170 (-2.054)* -.125 (-1.269) -.137 (-1.903)

Age .083 (.624) .152 (1.446) .007 (.059) .039 (.429)

Education .079 (.744) .174 (2.062)* -.046 (-.445) .011 (.140)

Seniority -.160 (-1.160) -.162 (-1.507) -.274 (-2.082)* -.266 (-2.771)**

Ethics resources

ACE -.077 (-.892) .121 (1.564)

EL .639 (7.384)*** .589 (7.095)***

Inclusion in EDM .049 (.576) .049 (.642)

R2 .077 .463 .093 .548

Adjusted R2 .039 .423 .058 .517

F 2.030 11.561*** 2.639* 17.341***

DR2 – .385 – .455

F for DR2 – 22.471*** – 33.603***

70 I. Beeri et al.

123

feel that they had a high QWL (b = .407, p \ .001). At

T2, EL was the only significant predictor of QWL

(b = .56, p \ .001). In other words, Hypothesis 5 is partly

supported by these findings. The more the employees

perceive a high degree of EL, the higher is the perceived

quality of their work life. But the other ethics resources,

ACE and EDM, do not predict QWL.

The Effect of an Ethics Program on the Relationship

Between Ethics Resources and Ethics

and Organizational Outcomes

We hypothesized that after adoption of the ethics program,

the effect of ethics resources as predictors of ethics and

organizational outcomes would be strengthened. Tables 3,

4, 5, and 6 show that in most cases, the adjusted R2 at T2 is

greater than at T1. The predictive power of the model

increases for EC from 42.3% at T1 to 51.7% at T2; for OC

from 35.1 to 39.8%; and for QWL from 28.6 to 31.4%. In

addition, in most cases, the DR2, which reflects the exclu-

sive predictive power of ethics resources, is greater after

adoption of the program. At that point, the DR2 for EC is

45.5% compared with 38.5% before the program; for OC, it

is 38.3% compared with 29.3%; and for QWL, it is 32.6%

compared with 25%. However, in most cases, the predic-

tive power is solely attached to EL. OCB is not signifi-

cantly predicted by ethics resources. Thus, Hypothesis 6 is

partly supported. It appears that after implementation of the




predicting OC before and after

adoption of ethics program


(N = 108), * p \ .05;

** p \ .01; *** p \ .001

Before After


Control variables

Gender -.128 (-1.271) -.118 (-1.348) .010 (.101) -.009 (-.107)

Age -.085 (-.644) -.045 (-.406) -.024 (-.188) .001 (.014)

Education -.292 (-2.807)** -.269 (-3.015)** -.175 (-1.657) -.122 (-1.439)

Seniority .120 (.879) .086 (.753) .114 (.846) .126 (1.175)

Ethics resources

ACE .186 (2.042)* .052 (.605)

EL .337 (3.677)*** .560 (6.043)***

Inclusion in EDM .194 (2.159)* .074 (.868)

R2 .103 .396 .055 .438

Adjusted R2 .066 .351 .018 .398

F 2.781* 8.818*** 1.495 11.114***

DR2 – .293 – .383

F for DR2 – 15.235*** – 22.681***




predicting organizational

citizenship behavior before and

after adoption of ethics program


(N = 108), * p \ .05;

** p \ .01; *** p \ .001

Before After


Control variables

Gender -.032 (-.310) -.065 (-.594) -.084 (-.833) -.113 (-1.102)

Age -.099 (-.729) -.068 (-.493) -.118 (-.912) -.124 (-.961)

Education .128 (1.198) .127 (1.144) .153 (1.438) .163 (1.507)

Seniority -.058 (-.411) -.054 (-.382) .111 (.819) .128 (.936)

Ethics resources

ACE -.126 (-1.110) -.185 (-1.673)

EL .046 (.406) .152 (1.285)

Inclusion in EDM .090 (.803) .110 (1.009)

R2 .051 .067 .039 .084

Adjusted R2 .012 - .002 .002 .020

F 1.298 .967 1.045 1.311

DR2 – .016 – .045

F for DR2 – .549 – 1.639


123

ethics program, EL has a greater ability to predict EC, OC,

and QWL.

The Effect of an Ethics Program on Ethics Resources

and Ethics and Organizational Outcomes

The last group of analyses, paired sample t tests, compared

the levels of the three ethics resources and the four out-

comes at the two points in time when the research was

conducted. The means, standard deviations, and differences

are shown in Table 7. Looking at the ethics resources,

significant changes were found for ACE (t = 7.71,

p \ .001) and EDM (t = 2.57, p \ .01). Before the pro-

gram, the average ACE score stood at 3.50 (SD = 1.07),

whereas after the intervention, it stood at 4.15 (SD = .73).

A further look at the data reveals that after the program,

72% of respondents reported that they were more aware of

the ethics code and only 18% reported being less aware of

it, with 10% reporting the same degree of ACE before and

after. The average EDM score stood at 2.16 (SD = .97)

before the intervention and at 2.34 (SD = 1.01) after it.

After the intervention, 47% of respondents reported greater

involvement in EDM, 29% reported less, and 24% reported

the same degree of involvement in EDM as before the

program’s adoption.

Of the ethical and organizational outcomes, only EC

shows a significant change from T1 to T2 (t = 4.65,

p \ .001). The average EC score stood at 4.25 (SD = .60)

before the intervention and at 4.48 (SD = .50) after it.

After the intervention, a more positive EC was reported by

63% and a more negative EC by 25% of the respondents,

with 12% staying the same.

On the whole, then, Hypothesis 7 was partly confirmed.

Levels of ACE, EDM, and EC significantly rose after

adoption of the ethics program. In contrast, levels of EL,

OC, OCB, and QWL did not significantly change.

This is a key point, as it relates to the misperception that

implementing an ethics program can serve as a kind of

panacea for all kinds of organizational problems. The data

reveal that, to some extent, the program under study was

successfully used by the leadership and served as a useful

management tool. Yet the ethics program did not deter-

ministically lead to advancement in all the variables mea-

sured in this study. While most ethics resources improved,

Table 7 Means, standard

deviations, and differences in

ethics resources and outcomes

before and after the ethics

program, as calculated by paired

sample t tests

(N = 108), * p \ .05;

** p \ .01; *** p \ .001

Variable Before After Difference

TMean SD Mean SD

ACE 3.50 1.07 4.15 .73 7.71***

EL 3.90 .62 3.97 .58 1.19

Inclusion in EDM 2.16 .97 2.34 1.01 2.57**

EC 4.25 .60 4.48 .50 4.65***

OC 4.08 .62 4.07 .57 -.15

OCB 4.03 .47 4.08 .50 1.19

QWL 3.94 .54 4.00 .52 1.10




predicting QWL before and

after adoption of ethics code


(N = 108), * p \ .05;

** p \ .01; *** p \ .001

Before After


Control variables

Gender -.071 (-.695) -.068 (-.745) .025 (.245) .003 (.035)

Age -.140 (-1.055) -.086 (-.736) -.007 (-.052) .003 (.031)

Education -.281 (-2.670)** -.239 (-2.552)* -.181 (-1.698) -.123 (-1.355)

Seniority -.020 (-.146) -.040 (-.332) -.104 (-.764) -.076 (-.665)

Ethics resources

ACE .047 (.487) -.058 (-.625)

EL .407 (4.235)*** .566 (5.722)***

Inclusion in EDM .160 (1.695) .072 (.784)

R2 .086 .336 .033 .359

Adjusted R2 .048 .286 -.005 .314

F 2.269 6.790*** .877 7.989***

DR2 – .250 – .326

F for DR2 – 11.808*** – 16.930***

72 I. Beeri et al.

123

along with the ethics outcome that was measured (i.e., the

EC), neither EL nor the organizational outcomes studied

experienced any change. Of course, our study cannot assess

to what degree this finding is likely to be true for all ethics

programs, and to what degree it is specific to this case.

Thus, the finding leaves open the possibility that the

management of the regional council under study failed to

maximize the potential organizational gains from the ethics

program, and that there remains a broad and significant role

for organizational leadership in this area.

Discussion and Summary

As in most democratic countries, the growing awareness of

and struggle against corruption in Israel takes many forms,

including public discourse on the issue, legislation, regu-

lation, and adoption of organizational ethics programs.

Evaluating the outcomes of ethics programs poses a chal-

lenge, one which researchers have only begun to address

(e.g., Thompson 1992; Uhr 2005). In response to this

challenge, our research studies the effect of an ethics

program on employees of a regional council, and the

relationship between ethics resources on the attitudes and

behaviors of employees.

The main findings of this study emphasize the impor-

tance of an ethics program in fostering ethical norms within

an organization. The findings testify to the positive effect

of the ethics program in the organization under study. A

year after its implementation, many of the variables

showed significant increase (i.e., ACE, EDM, and the EC).

These findings accord with arguments that ethics programs

are an important means of instilling an ethical culture in

organizations, and encourage participation and involve-

ment in ethical discussions (e.g., Pelletier and Bligh 2006;

Trevino et al. 1999). Under this argument, employees who

are aware of the organization’s ethics and rules cope better

with ethical dilemmas, ‘‘do the right thing,’’ and support

values such as fairness. In light of this finding, the authors

recommend that organizations adopt a strategy aimed at

cultivating ethics, a strategy that actively raises the

awareness of ethics and encourages involvement in EDM.

Contrary to our original expectations, the level of EL in

the organization studied showed no change over time. This

finding may be explained in two ways. First, the ethics

program aimed to provide employees with better critical

tools by which to re-evaluate managers’ ethics and diag-

nose behaviors as ethical or non-ethical. It may be that as

employees’ sensitivity to ethics rose, so did their standards,

so that even if managers’ behavior improved over time in

an absolute sense, employees’ perceptions of this behavior

did not alter. Second, the findings suggest that while

respondents perceived a positive effect of the ethics

program on dimensions of ethics that characterize a large

number of employees at the bottom of the organizational

pyramid (i.e., ACE, EDM, and EC), they identified no

effect of the ethics program on the heads of the pyramid,

i.e., the leadership of the regional council. It is possible that

these perceptions are anchored in a negative, critical, and

cynical view of the organizational leadership as lacking a

clear standard of value (Werner 1993) or as working under

an ethical double standard (Joseph 2001). That is, it may be

that employees, harboring serious doubts and mistrust

toward the heads of the pyramid, perceived any declara-

tions and decisions made by the leadership as hypocritical.

Both possible explanations highlight the frustration

employees may feel when the perceived gap between

declared standards and actual behavior by an organiza-

tion’s leaders grows following adoption of an ethics pro-

gram (Loescher 2006; Yizraeli and Shilo 2001), especially

in a political environment.

Regarding non-ethics-related organizational outcomes,

in the organization under study, levels of OC, OCB, and

QWL were unchanged following implementation of the

ethics program. This finding can possibly be explained by

the fact that the second stage of the research was conducted

only a year after the beginning of the program. The authors

see this as a limitation of the study, because it takes a long

time for the ideas behind an ethics program to become an

integral part of the organization’s DNA (Loescher 2006). It

appears that the desired change had yet to be realized a

year after the beginning of the ethics program. Alterna-

tively, this finding may support the argument made by

some scholars (e.g., Cleek and Leonard 1998; Dean 1992;

Pelletier and Bligh 2006; Trevino et al. 1999) that the

effectiveness of an ethics program may depend on various

conditions, such as whether the ethics program is part of a

larger organizational strategy. In any case, the data suggest

that effectiveness of an ethics program is conditional, at

least in the short term, and especially for organizational

outcomes other than ethics outcomes.

The main findings of the regression models indicate that

EL has very substantial predictive ability for EC, OC, and

QWL. These findings support the idea suggested by various

scholars (e.g., Davis and Rothstein 2006; Feldheim and

Wang 2004; Menzel 2005; Requena 2003; Saravanamuthu

2002; Trevino et al. 1999) that leadership plays a decisive

role in fostering ethics in the organization and affects

employees’ perceptions about the workplace and their

colleagues. On the other hand, mixed and inconsistent

results were found for the relationship between the other

ethics resources (i.e., ACE and EDM), and the ethics and

organizational outcomes. These results may support claims

that a code of ethics by itself is not sufficient to affect an

organization’s EC, and that including employees in the

EDM process can produce mixed results (Fritz et al. 1999;


123

Sagie and Koslowsky 1996; Wuestewald and Steinheider

2008). Put differently, in line with various scholars (e.g.,

Trevino et al. 2006; Yizraeli and Shilo 2000), ethics

resources are interrelated and thus strengthen each other,

yet they differ in nature and in their effect on ethics and

organizational outcomes. It appears that compared with

EL, which provides a solid behavioral exemplar for

employees, ACE and EDM are relatively vague and con-

fusing. Therefore, they were found as weaker predictors of

OC and had no prediction power for EC and QWL.

In addition, there is no evidence in our research for a

relationship between ethics resources and OCB. It is pos-

sible that this can be explained by the difficulty of

matching the views of managers on this variable with those

of employees. Perhaps the distance between informal,

spontaneous, non-rewarded behavior and managers’ per-

ceptions about this behavior is significant. Thus, it could be

that questioning managers will not capture some behaviors

and involvements in OCB.

Ethics is a sensitive and difficult issue to research. In the

early stages of this research, finding an organization that

was developing an ethics program but had not yet begun

the adoption process was difficult, and some organizations

that we identified rejected our request to conduct the study.

This sensitivity gave rise to one limitation of our study.

Despite promises of anonymity, some employees were

concerned about identification and exposure, especially

when answering questions about the EC and EL, given that

we needed to take identifying information to match up

employees’ responses to managers’ OCB data. To mitigate

these concerns, we emphasized our status as independent

researchers not subordinate to the regional council. In

addition, the ID numbers were kept locked in a secure

place and destroyed after the analysis was completed.

Further limitations of our study are the short time frame

(only 1 year) and the lack of a control group. We recom-

mend that future studies continue our work and assess the

effect of the ethics program (as well as other such programs

elsewhere) 2 or 3 years after implementation to see if

further changes have taken place and if the changes are

consistent. Where possible, future studies should also

include a control group that has not been exposed to the

ethics program to avoid the effect of other inputs on the

ethics and organizational outcomes.

To conclude, this study has implications for all organi-

zations, and particularly for public sector organizations in

democratic societies, which emphasize the values of law,

ethics and morals, integrity, fairness, the prevention of

discrimination, and the delivery of high-quality services

guided by norms of equality and social justice. Organiza-

tional leaders need to know that their standards and

behaviors are what most affect the organization’s ethical

culture and employees’ behavior. Therefore, they should

make sure that they are models of ethical behavior for their

employees, even as they focus their efforts on developing

and implementing an effective ethics program.

Appendix 1: Implementation of the Ethics Program

The development of the ethics code included the following

steps and actions.

1. When the ethics program was introduced, all of the

employees and managers assembled. At this meeting,

the general outline of the ethics program was presented

to the staff.

2. All employees were given two basic lectures on

ethics by lecturers from the Academy of Quality

Government.

3. A team was formed to develop the ethics code. The

team was headed by the senior leadership of the

regional council and a consultant of ‘‘The Movement

for Quality Government in Israel.’’

4. The team held six meetings with the consultant, aimed

at analyzing possible conflicts and events underlying

ethical dilemmas. Then, the team held meetings with

various groups of employees (based on their profes-

sional profile) aimed at brainstorming about current

ethical problems, writing down the problems and

prioritizing the most important problems.

5. The team formulated the basic principles of the ethics

code, in accordance with the meetings described

earlier and the organizational vision. This process

involved ‘‘ping-pong’’ revisions among the team

members until agreement was accomplished.

6. The ethics code was presented to and approved by the

Council Head.

7. The ethics code was introduced to the elected Council

members, who held a discussion on its implications.

8. The council held a meeting with all employees and

discussed the ethics code. Then, the ethics code was

launched with a dedication ceremony.

9. The Director of Human Resources was appointed as

the Ethics Commissioner of the Council.

The adoption of the ethics code included the following

steps and actions.

10. The adoption process began with an opening meeting

in which the mayor gave his blessing.

11. A team of organizational consultants that had guided

the adoption of ethics codes in other organizations

was appointed.

12. Council meetings and forums included an open

discussion on ethics and ethical dilemmas, in accor-

dance with the ethics code.

74 I. Beeri et al.

123

13. Managers met with the consultants for training, which

included discussions of ethical issues and dilemmas

relevant to the organization. The training began with

simulations of past scenarios, i.e., reconstructing

decisions made in the past and analyzing how these

decisions could have been improved in light of the

ethics code. The training gradually moved to dis-

cussing real present-day decisions in light of the

ethics code. These meetings extended over a year,

with the consultants’ attendance at the regional

council for two to three working days every week.

14. These meetings were followed by training meetings

of managers and employees. The early meetings were

held with the attendance of a consultant.

15. Each manager personally met his or her subordinates

and gave them the printed ethics code.

16. Meetings and forums continued to discuss decision

making and how to resolve ethical dilemmas in light

of the ethics code.

Appendix 2: The Measurement Tool

Awareness of the Ethics Code

1. When a decision has ethical implications, the organi-

zation’s ethics policy guides me in my decision-mak-

ing process.

2. I have read the organization’s ethics code.

3. I understand what the organization expects of me in

terms of ethical behavior.

4. I understand the content of the ethics code.

5. When I was hired, the ethical expectations of the

organization were communicated to me.

6. Policies exist that describe how the organization

expects its employees to act.

Ethical Leadership

1. The top leadership of this organization is concerned

with ethical practice.

2. I feel comfortable consulting with my immediate

supervisor when I have to make a tough ethical

decision.

3. Top leadership places an equal value on productivity,

quality, and ethical practice.

4. Moral concerns are given top priority by the orga-

nization’s top leaders.

5. My immediate supervisor sets a good example of

ethical behavior.

6. Top leadership works quickly to resolve ethical

issues.

7. My immediate supervisor looks the other way when

employees make unethical decisions (R).

8. Top leadership provides employees with ethical

guidance when it is needed.

9. The organization’s top leadership routinely strives to

make decisions that are ethical.

10. If I reported one of my fellow employees for an ethics

violation, my immediate supervisor would support

me.

Inclusion in Ethical Decision Making

1. How frequently do you usually participate in making

decisions on ethical issues that are related to hiring

new staff?

2. How frequently do you usually participate in making

decisions on ethical issues that are related to the

promotion of professional staff?

3. How frequently do you participate in making decisions

on ethical issues that are related to the adoption of new

policies?

4. How frequently do you participate in making decisions

on ethical issues that are related to adoption of new

programs?

Ethical Climate

1. It is not unusual for members of my department to

accept small gifts for performing their duties (R).

2. Some members of my department use their position for

personal gain (R).

3. Members of my department have misused their

position to influence the hiring of their relatives and

friends in (city/county) government (R).

4. My supervisor encourages employees to act in an

ethical manner.

5. Managers in my department have high ethical

standards.

6. The people in my department demonstrate high

standards of personal integrity.

7. There are serious ethical problems in my department

(R).

8. Members of my department sometimes leak informa-

tion that benefits persons who do business with my city

(R).


1. I am willing to put in a great deal of effort beyond that

normally expected to help this organization be

successful.


123

2. I talk up this organization to my friends as a great

organization to work for.

3. I would accept almost any type of job assignment in

order to keep working for this organization.

4. I find that my values and the organization’s values are

very similar.

5. This organization really inspires the very best in me in

the way of job performance.

6. I am extremely glad that I chose this organization to work

for over others I was considering at the time I joined.

7. I really care about the fate of this organization.


The employee:

1. Helps others who have been absent.

2. Helps others who have heavy workloads.

3. Assists supervisor with his or her work (when not

asked).

4. Takes time to listen to co-workers’ problems and

worries.

5. Goes out of his or her way to help new employees.

6. Takes a personal interest in other employees.

7. Passes along information to co-workers.

8. Attendance at work is above the norm.

9. Gives advance notice when unable to come to work.

10. Takes undeserved work breaks (R).

11. Spends a great deal of time on personal phone

conversations (R).

12. Complains about insignificant things at work (R).

13. Conserves and protects organizational property.

14. Adheres to informal rules devised to maintain order.

15. Covers for co-workers.

16. Helps people outside department.

17. Makes innovative suggestions to improve

department.

18. Coasts toward the end of the day (R).


1. The organization supports and encourages personal

and professional development of employees.

2. I feel physically secure at my workplace.

3. My work positively influences my family.

4. I feel appreciated for the work I do.

5. My work enables me to fulfill my potential.

6. I feel that I learn during my work and thus can improve

it.

7. I feel that this organization respects its employees.

8. I feel that this organization acts fairly.

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