Abstract

Purpose – The purpose of this paper is to explore the effects of ethical climate types on trust in management using Victor and Cullen’s framework, which is based upon Kohlberg’s theory of moral development and Gouldner’s sociocultural theory of organizations.

Design/methodology/approach – A sample of 270 employees from 10 organizations in India was used to investigate the specific relationships between ethical climate types and trust in management. Data was collected through self-report questionnaires. Exploratory factor analysis was used to identify the different types of ethical climates existing in the organizations. . Hierarchical regression analysis was used to explore the relationship between ethical climates and trust in management.

Findings – It was found that ethical climates characterized by caring, laws and codes, and rules and procedures are significant predictors of trust in management. However, no support was obtained for any impact of ethical climates emphasizing company profit, self-interest or independence on trust in management.

Research limitations/implications – Future research should examine trust in management as a mediating or moderating variable in the relationship between ethical climates and other organizational variables such as commitment, citizenship behaviour or productivity. Additionally, research could also examine different cultural and organizational contexts in testing out these relationships. The role of other constructs such as personality of supervisors and ethical sensitivity in developing trust in management may also been investigated.

Practical implications – Organizations should try to develop climates based on caring and also emphasize adherence to laws, codes and rules and procedures to bolster trust in the management.

Originality – The findings of the study are unique and original because literature examining ethical climates and trust is scarce and this is the first study to explore how ethical climates can impact trust in management in the Indian context. In particular, the results are unique for. Contrary to expectations, no negative impact of climates of self-interest, company interest and independence on trust in management could be seen in our study. The study provides managers and organizations with ways by which they can increase levels of trust in management among the employees.

Introduction

The emerging economies of the world, particularly BRIC countries (Brazil, Russia, India and China) are attracting increasing attention. These emerging economies have a heterogeneous character at the cultural, institutional and political levels. In a globalized economy, how ethics is lived in companies based in these countries is a matter of great importance for businesses, policy makers and academicians alike. While China (e.g. Chen et al, 2004; Yen et al, 2011), Russia (e.g. Jaffe and Tsimerman, 2011) and Brazil (e.g. Duarte, , 2010) have attracted much attention in the past with regard to business ethics, it is only recently that ethics in India is attracting increased systematic attention of scholars (Berger and Herstein, 2014).