Introducing and implementing corporate sustainability poses many challenges to business organizations. In this longitudinal, inductive study, we focus on how such challenges are handled in a Dutch bank that is developing its sustainability policies. We examine why there is such a high degree of tension and conflict within the organization and identify how the development of these policies is affected by the interplay between subcultures and institutional logics. We show how different subcultures affect the enactment of logics by infusing the (...) rational and mindful behavior coming from logics with (sub)cultural values, beliefs, and assumptions. In turn, conflicting logics amplify subcultural characteristics between groups by shaping different behavior and practices. Together, this leads to a magnification of subcultural differences while, at the same time, logics are increasingly being perceived as incompatible. (shrink)

So far, the field of business ethics lacks validated measures for assessing virtues at the organizational level. The aim of this study is to investigate the measurement invariance of a shortened Corporate Ethical Virtues scale. In this manner, we contribute to validating an instrument that is both psychometrically sound and efficient to use. We conducted two survey studies of two independent groups (managers and school psychologists). Confirmatory factor analysis supported the eight‐factor model of the scale, and we found it to (...) be invariant in two different occupational groups. The managers gave higher appraisals of ethical culture than the psychologists did in seven out of the eight dimensions. We found that despite the contextual differences, the shortened scale measures the eight dimensions of organizational ethical virtues, as intended. Thus, the use of this more compact scale can be recommended for future studies, which will hopefully stimulate more research on ethical culture in various work contexts. (shrink)

ABSTRACT:U.S. Organizational Sentencing Guidelines provide firms with incentives to develop formal ethics programs to promote ethical organizational cultures and thereby decrease corporate offenses. Yet critics argue such programs are cosmetic. Here we studied bank employees before and after the introduction of formal ethics training—an important component of formal ethics programs—to examine the effects of training on ethical organizational culture. Two years after a single training session, we find sustained, positive effects on indicators of an ethical organizational culture (observed unethical behavior, (...) intentions to behave ethically, perceptions of organizational efficacy in managing ethics, and the firm’s normative structure). While espoused organizational values also rose in importance post-training, the boost dissipated after the second year which suggests perceptions of values are not driving sustained behavioral improvements. This finding conflicts with past theory which asserts that enduring behavioral improvements arise from the inculcation of organizational values. Implications for future research are discussed. (shrink)

This two country study examines the effect of corporate ethical values and enforcement of a code of ethics on perceptions of the role of ethics in the overall success of the firm. Additionally, the impact of organizational commitment and of individual variables such as ethical idealism and relativism was examined. The rationale for examining the perceived importance of the role of ethics in this manner is to determine the extent to which the organization itself can influence employee perceptions regarding ethics (...) and social responsibility. Results indicate that all of the variables tested, except relativism, impacted upon one’s perceptions of the importance of ethics and social responsibility. Perceptions of the importance of ethics and social responsibility also varied depending upon country of residence with the U.S. sample having somewhat higher perceptions concerning the importance of ethics and social responsibility than their counterparts in Spain. Furthermore, when comparing the two samples, the U.S. sample had significantly higher corporate ethical values, greater enforcement of ethical codes, less organizational commitment and both lower idealism and relativism. (shrink)

This paper investigates the effect of the countervailing forces within organizations of formal systems that direct employees toward ethical acts and informal systems that direct employees toward fraudulent behavior. We study the effect of these forces on deception, a key component of fraud. The results provide support for an interactive effect of these formal and informal systems. The effectiveness of formal systems is greater when there is a strong informal “push” to do wrong; conversely, in the absence of a strong (...) push to do wrong, the strength of formal systems has little impact on fraudulent behavior. These results help to explain why the implementation of formal systems within organizations has been met with mixed results and identifies when formal systems designed to promote ethical behavior will be most efficacious. (shrink)

A corporate culture strengthened by ethical values and other positive business practices likely yields more favorable employee work responses. Thus, the purpose of this study was to assess the degree to which perceived corporate ethical values work in concert with group creativity to influence both job satisfaction and turnover intention. Using a self-report questionnaire, information was collected from 781 healthcare and administrative employees working at a multi-campus education-based healthcare organization. Additional survey data was collected from a comparative convenience sample of (...) 127 sales and marketing employees working for a variety of firms operating in the south-central United States. The results indicated that group creativity and corporate ethical values were positively related, and that both variables were associated with increased job satisfaction. Conversely, corporate ethical values and job satisfaction were associated with decreased turnover intention. Sales managers should create work cultures that precipitate increased ethical values and group creativity, and suggestions about how they may institutionalize these factors are provided. (shrink)

The purpose of this study was to assess the relationships among ethical context, organizational commitment, and person-organization fit using a sample of 304 young working adults. Results indicated that corporate ethical values signifying different cultural aspects of an ethical context were positively related to both organizational commitment and person-organization fit. Organizational commitment was also positively related to person-organization fit. The findings suggest that the development and promotion of an ethical context might enhance employees' workplace experiences, and companies should consider adopting (...) ethical policies that support principled conduct, punish unethical actions, and increase individual perceptions of an ethical company environment. (shrink)

This paper examines the relationship between organizational ethical culture in two large international CPA firms, auditors'' personal values and the ethical orientation that those values dictate, and judgments in ethical dilemmas typical of those that accountants face. Using an experimental task consisting of multiple judgments designed to vary in "moral intensity" (Jones, 1991), and unique as well as tried-and-true approaches to variable measurements, this study examined the judgments of more than three hundred participants in our study. ANCOVA and path analysis (...) results indicate that: (1) Ethical judgments in situations of high moral intensity are affected by personal values and by environmental variables, such as the professional code of conduct (direct and indirect effects) and previous ethics instruction (direct effect only). (2) Corporate ethical culture, and a relatively strong firm rules-orientation, affect auditors'' idealism but not relativism, and therefore indirectly affect ethical judgments. Jones'' (1991) moral intensity argument is supported: differences in the characteristics of specific judgment tasks apparently result in different decision processes. (shrink)

The aim of the present longitudinal study was to quantitatively examine whether an ethical organizational culture predicts turnover among managers. To complement the quantitative results, a further important aim was to examine the self-reported reasons behind manager turnover, and the associations of ethical organizational culture with these reasons. The participants were Finnish managers working in technical and commercial fields. Logistic regression analyses indicated that, of the eight virtues investigated, congruency of supervisors, congruency of senior management, discussability, and sanctionability were negatively (...) related to manager turnover. The results also revealed that the turnover group is not homogeneous, and that there are several different reasons for leaving. The reasons given for turnover were grouped into five different categories: lay-off, career challenges, dissatisfaction with the job or organization, organizational change, and decreased well-being/motivation. ANCOVA analyses showed that those managers who stayed in their organization perceived their ethical culture to be stronger than those in turnover groups, and especially compared to groups 3 and 5. The results acquired through different methods complemented and confirmed each other, showing that by nurturing ethical virtues an organization can decrease job changes and encourage managers and supervisors to want to remain in their organization. (shrink)

This study compares the ethical decision-making processes of Turkish, Thai, and American businesspeople, considering perceived moral intensity (PMI), corporate ethical values (CEV), and perceived importance of ethics (PIE). PMI describes the ethical decision making at the individual level, CEV assesses the influences of the organization’s ethical culture on the decisions of the individual, and PIE reveals what the businesspeople believe about the relationships among business, ethics, and long-run profitability. The survey respondents are professional marketers and businesspeople currently enrolled in or (...) graduated from MBA programs in Turkey (n = 416), Thailand (n = 605), and US (n = 446). The ANOVA results reveal that American businesspeople are more likely to perceive the unethical marketing behaviors as more serious than their counterparts in Turkey and Thailand. American and Turkish organizations are found to have higher CEV than Thai organizations. On the other hand, Thai and American businesspeople perceived ethics to be more important for business success than Turkish businesspeople. The understanding of the differences and similarities in ethical perceptions of the businesspeople from various countries is valuable for a successful and harmonious working together when engaging in global marketing activities. This study is thus believed to be useful for people who plan to invest or manage businesses in these countries, and many of the implications are thought to be valuable in international business arena. (shrink)

This study examined the impact of perceived ethical culture of the firm and selected demographic variables on auditors’ ethical evaluation of, and intention to engage in, various time pressure-induced dysfunctional behaviours. Four audit cases and questionnaires were distributed to experienced pre-manager level auditors in Ireland and the U.S. The findings revealed that while perceived unethical pressure to engage in dysfunctional behaviours and unethical tone at the top were significant in forming an ethical evaluation, only perceived unethical pressure had an impact (...) on intention to engage in the behaviours. Country was also found to have a significant impact, with U.S. respondents reporting higher ethical evaluations and lower intentions to engage in unethical acts than Irish respondents. Implications of the findings and areas for future research are discussed. (shrink)

Moral imagination is a process that involves a thorough consideration of the ethical elements of a decision. We sought to explore what might distinguish moral imagination from other ethical approaches within a complex business simulation. Using a three-component model of moral imagination, we sought to discover whether organization cultures with a salient ethics theme activate moral imagination. Finding an effect, we sought an answer to whether some individuals were more prone to being influenced in this way by ethical cultures. We (...) found that employees with strong moral identities are less influenced by such cultures than employees whose sense of self is not defined in moral terms. (shrink)

The main aim of the present study was to examine whether an ethical organizational culture is associated with sickness absence in a Finnish public sector organization at both the individual and work unit levels. The underlying assumption was that employees working for organizations that are characterized by a strong ethical organizational culture report less sickness absence. The sample consisted of 2192 employees from one public sector city organization that included 246 different work units. Ethical organizational culture was measured with the (...) Corporate Ethical Virtues scale covering eight sub-dimensions. Sickness absence was inquired by asking the participants to report how many days they had been absent from work because of their own sickness over the past year. Multilevel structural equation modelling showed that, at the individual level, perceptions of a strong ethical organizational culture were associated with less sickness absences after controlling for the background factors. This link was not found at the work-unit level. The findings indicate that an ethical organizational culture plays a significant role in enhancing employee well-being measured as sickness absence. It seems that especially supervisor’s ethical role modeling and possibilities to discuss about ethical issues are important factors in preventing sickness absence in the organizations. (shrink)

Organizations are faced with the question, not only whether to adopt an ethics program, but also which components to adopt when. This study shows that unethical behavior occurs less frequently in organizations that have an ethics program than in organizations that do not have an ethics program. Nine components of ethics programs were identified and examined. The results show that there is a direct relationship between the number of components adopted and the frequency of observed unethical behavior. No relationship was (...) found between pre-employment screening and unethical behavior, while the strongest relationship was discerned between accountability policies and unethical behavior. The study further reveals that the best sequence for adopting components of an ethics program is a code of ethics, ethics training and communication, accountability policies, monitoring and auditing, and investigation and correction policies—all of which are directly related to less unethical behavior—followed by an ethics office, ethics report line, and incentive policies—all of which are indirectly related to less unethical behavior. With the exception of pre-employment screening, this sequence corresponds closely to the pattern of adoption of organizations in the U.S. (shrink)

A growing body of research suggests that follower perceptions of ethical leadership are associated with beneficial follower outcomes. However, some empirical researchers have found contradictory results. In this study, we use social learning and social exchange theories to test the relationship between ethical leadership and follower work outcomes. Our results suggest that ethical leadership is related positively to numerous follower outcomes such as perceptions of leader interactional fairness and follower ethical behavior. Furthermore, we explore how ethical leadership relates to and (...) is different from other leadership styles such as transformational and transactional leadership. Results suggest that ethical leadership is positively associated with transformational leadership and the contingent reward dimension of transactional leadership. With respect to the moderators, our results show mixed evidence for publication bias. Finally, geographical locations of study samples moderated some of the relationships between ethical leadership and follower outcomes, and employee samples from public sector organizations showed stronger mean corrected correlations for ethical leadership–follower outcome relationships. (shrink)

Empirical analyses of the ethics of corporations with the aim to improve the state of corporate ethics are rare. This paper develops an integrated, normative model of corporate ethics by conceptualizing the ethical quality of organizations and by relating this contextual quality to various expressions of immoral behavior. This so-called Ethics Qualities Model for organizations, which contains 21 ethical qualities, allows one to assess the ethical content of institutional groups of individuals. A proper conceptualization is highly relevant both for the (...) empirical corroboration of business ethics theories and for managerial purposes, such as judging individual and group performance or informing external stakeholders. The empirical applicability of the model is illustrated by an explorative case study of a large, globally operating financial institution. This case-study demonstrates that the corporate ethical qualities differ with respect to their perceived optimality as well as to their estimated impact on (un)ethical conduct. The various results provide managers with many clues to understand their organization and to take effective measures to improve the ethical content of their organization. (shrink)

This study focuses on comparison of perceptions of ethical business cultures in large business organizations from four largest emerging economies, commonly referred to as the BRICs (Brazil, Russia, India, and China), and from the US. The data were collected from more than 13,000 managers and employees of business organizations in five countries. The study found significant differences among BRIC countries, with respondents from India and Brazil providing more favorable assessments of ethical cultures of their organizations than respondents from China and (...) Russia. Overall, highest mean scores were provided by respondents from India, the US, and Brazil. There were significant similarities in ratings between the US and Brazil. (shrink)

The paper explores the interrelations between ethical organisational culture and organisational innovativeness in two different socio-cultural contexts, Finland and Lithuania. According to the Global Innovation Index 2013, Finland ranked 6th and Lithuania 40th in terms of the national capacity to produce innovations. Prior research by Riivari and Lämsä and Riivari et al. argues the importance of the ethical dimension of organisational culture in fostering the organisational capacity to innovate. In this paper, a different context is taken to test hypothesised differences (...) between the two multidimensional phenomena. The paper discusses the findings of 2 surveys in Finnish and Lithuanian public organisations. Data analysis shows that ethical organisational culture affects organisational innovativeness, in particular process and behaviour innovativeness in both organisations. The findings suggest that some ethical virtues such as congruency of management, discussability and clarity can be explained by an institutional rather than socio-cultural context. However, the effect of transparency and sanctionability in the Finnish organisation and congruency of supervisors, supportability and feasibility in the Lithuanian organisation rests on peculiarities of a socio-cultural context. (shrink)

The ethics of organizations has received much attention in recent years. This raises the question of whether the ethics of organizations has also improved. In 1999, 2004, and 2008, a survey was conducted of 12,196 U.S. managers and employees. The results show that the ethical culture of organizations improved in the period between 1999 and 2004. Between 2004 and 2008 unethical behavior and its consequences declined and the scope of ethics programs expanded while ethical culture showed no significant improvement during (...) the same period. The article concludes with a discussion of the implications of these findings for future research and practice. (shrink)

Corporate ethical values (CEVs) can be viewed outside the realm of organizational training, standard operating procedures, reward and punishment systems, formal statements, and as more representative of the real nature of the organization (Organ, 1988). Past researchers have empirically demonstrated the direct influence of CEVs on job performance. This study argues that employees' perception of organizational fairness will create perceptual distortion of CEVs. The results of the study indicate that perceived fairness moderates the influence of CEVs on two seminal outcomes, (...) namely, job performance and commitment. The study offers prescriptive and descriptive insights to both academe and industry to understand the influence of CEVs and fairness on the performance outcomes of employees. (shrink)

A multidimensional measure of ethical culture was examined for its relationship to person–organization fit, ethical intent and organizational citizenship behavior, using a sample of 525 employees from the financial industry in Spain. As hypothesized, relative to studies using unidimensional assessments, our measure of EC was more strongly related to ethical intent and organizational citizenship. Also, significant differences were found in the degree to which each the EC dimensions related to both ethical intent and OCB. Finally, in a first for the (...) literature, we demonstrated the important role of overall P–O fit in connection with EC, ethical intent, and organizational citizenship. Specifically, as hypothesized, P–O fit moderated positively the association between EC and ethical intent, but mediated the EC–OCB relationship. (shrink)

Abstract:This field survey focused on two constructs that have been developed to represent the ethical context in organizations: ethical climate and ethical culture. We first examined issues of convergence and divergence between these constructs through factor analysis and correlational analysis. Results suggested that the two constructs are measuring somewhat different, but strongly related dimensions of the ethical context. We then investigated the relationships between the emergent ethical context factors and an ethics-related attitude (organizational commitment) and behavior (observed unethical conduct) for (...) respondents who work in organizations with and without ethics codes. Regression results indicated that an ethical culture-based dimension was more strongly associated with observed unethical conduct in code organizations while climate-based dimensions were more strongly associated with observed unethical conduct in non-code organizations. Ethical culture and ethical climate-based factors influenced organizational commitment similarly in both types of organizations. Normative implications of the study are discussed, as are implications for future theorizing, research and management practice. (shrink)

In response to the lack of empirical studies examining the internal disclosure behavior in the Chinese context, this study tested a whistleblowing -decision-making process among employees in the Chinese banking industry. For would-be whistleblowers, positive affect and organizational ethical culture were hypothesized to enhance the expected efficacy of their whistleblowing intention, by providing collective norms concerning legitimate, management-sanctioned behavior. Questionnaire surveys were collected from 364 employees in 10 banks in the Hangzhou City, China. By and large, the findings supported the (...) hypotheses. Issues of whistleblowing in the Chinese context and implications were discussed. (shrink)

In this article, we examine the relationship between ethical organisational culture and organisational innovativeness. A quantitative empirical analysis is based on a survey of a total of 719 respondents from all levels of three Finnish organisations, both general staff and managers. The organisations belong to both the private and public sectors. The results of this study show that organisations’ ethical culture is associated with their organisational innovativeness, and that different dimensions of ethical culture are associated with different dimensions of organisational (...) innovativeness. The ethical culture of the organisation had a specific role in process and behavioural innovativeness. It was found that congruency of management was the single dimension with the highest effect on organisational innovativeness overall and specifically on process and behavioural innovativeness. These findings suggest that when organisations are aiming for specific outcomes, such as organisational innovativeness, they need to be aware of what dimensions of ethical culture are particularly relevant. (shrink)

This research illustrates dangers inherent in the gap created when organizations decouple ethics program adoption from implementation. Using a sample of 182 professionals in the pharmaceutical and financial services industries, we examine the relationship between structural decoupling of formal ethics programs and individual-level perceptions and behavior. Findings strongly support the hypothesized relationships between decoupling and organizational members’ legitimacy perceptions of the ethics program, psychological contract breach, organizational cynicism, and unethical behavior.

The present study had two major aims: first, to examine the construct validity of the Finnish 58-item Corporate Ethical Virtues scale (CEV; Kaptein in J Org Behav 29:923–947, 2008) and second, to examine whether the associations between managers’ perceptions of ethical organisational culture and their occupational well-being (emotional exhaustion and work engagement) are indirectly linked by ethical strain, i.e. the tension which arises from the difference in the ethical values of the individual and the organisation he or she works for. (...) The sample consisted of 902 managers from different organisations, in middle and upper management levels, aged 25–68 years. The results of the confirmatory factor analysis (CFA) provided support to the hypothesised eight-factor structure of the CEV scale; i.e. the scale contained the factors of clarity, congruency of supervisors, congruency of senior management, feasibility, supportability, transparency, discussability and sanctionability. In addition, it emerged from the CFAs that the high intercorrelations of these factors can be explained by the second-order factor of ethical culture. The managers’ perceptions of the ethical culture prevailing in their organisations were associated with their occupational well-being both directly (high-work engagement) and indirectly via a low level of ethical strain (low-emotional exhaustion). Thus, the findings indicated that the ethical culture of organisations plays a major role in managers’ occupational well-being. (shrink)

Putting measures in place to prevent wrongdoing in organizations is important, but detecting and correcting wrongdoing are also vital. Employees who detect wrongdoing should, therefore, be encouraged to respond in a manner that supports corrective action. This article examines the influence of the ethical culture of organizations on employee responses to observed wrongdoing. Different dimensions of ethical culture are related to different types of intended responses. The findings show that several dimensions of ethical culture were negatively related to intended inaction (...) and external whistleblowing and positively related to intended confrontation, reporting to management, and calling an ethics hotline. (shrink)

Organizations are increasingly embedded with consultants and other non-employees who have the opportunity to engage in wrongdoing. However, research exploring the reporting intentions of employees regarding the discovery of wrongdoing by consultants is scant. It is important to examine reporting intentions in this setting given the enhanced presence of consultants in organizations and the fact that wrongdoing by consultants changes a key characteristic of the wrongdoing. Using an experimental approach, the current paper reports the results of a study examining employees' (...) reporting intentions subsequent to their discovery of wrongdoing by a consultant. The results of the study indicate that perceptions about the seriousness of a wrongdoing, personal costs and personal responsibility related to reporting a wrongdoing, and moral-equity judgments are significantly associated with reporting intentions for a normal reporting channel. Only perceptions of seriousness and personal costs are significantly associated for an anonymous reporting channel. Lastly, while personal costs for the anonymous reporting channel were lower than the normal reporting channel, reporting intentions were similar across the two channels. (shrink)

In this study, we propose and test a model of the effects of organizational ethical culture and organizational architecture on the perceived unethical behavior of employees towards customers. This study also examines the relationship between organizational ethical culture and moral acceptability judgment, hypothesizing that moral acceptability judgment is an important stage in the ethical decision-making process. Based on a field study in one of the largest financial institutions in Europe, we found that organizational ethical culture was significantly related to the (...) perceived frequency of unethical behavior towards customers and to the moral acceptability judgment of this type of unethical behavior. No support was found for the claim that features of organizational architecture are associated with the perceived frequency of unethical behavior towards customers. This is the first study to document the differential effects of organizational architecture and organizational ethical culture on perceived unethical behavior of employees towards customers, in wholesale banking. Implications for managers and future research are discussed. (shrink)

The spread of unethical behavior in organizations has mainly been studied in terms of processes occurring in a general social context, rather than in terms of actors’ reactions in the context of their specific social relationships. This paper introduces a dynamic social network analysis framework in which this spread is conceptualized as the result of the reactions of perpetrators, victims, and observers to an initial act of unethical behavior. This theoretical framework shows that the social relationships of the actors involved (...) in an initial act impact in multiple ways the likelihood that unethical behavior spreads. It reveals furthermore that social relationships may change in the wake of unethical behavior, such that indirect negative consequences can arise for organizations. The proposed framework provides a basis for the development of a formal stochastic actor-oriented model of network dynamics which would enable simulations of the spread of unethical behavior. (shrink)

One of the main objectives of an ethics program is to improve the ethical culture of an organization. To date, empirical research treats at least one of these concepts as a one-dimensional construct. This paper demonstrates that by conceptualizing both constructs as multi-dimensional, a more in-depth understanding of the relationship between the two concepts can be achieved. Through the employment of the Corporate Ethical Virtues Model, eight dimensions of ethical culture are distinguished. Nine components of an ethics program are identified. (...) To assess the relationship between ethics programs and ethical culture, a survey was conducted of 4,056 members of the U. S. working population. The results show that the relationships between the components of an ethics program and the dimensions of ethical culture differ in strength, nature, and significance. Implications for research and practice are discussed. (shrink)

The aims of this study were to investigate what kinds of personal work goals managers have and whether ethical organisational culture is related to these goals. The sample consisted of 811 Finnish managers from different organisations, in middle and upper management levels, aged 25–68 years. Eight work-related goal content categories were found based on the managers self-reported goals: (1) organisational goals (35.4 %), (2) competence goals (26.1 %), (3) well-being goals (12.1 %), (4) career-ending goals (7.3 %), (5) progression goals (...) (6.8 %), (6) prestige/influence goals (4.2 %), (7) job change goals (4.2 %) and (8) employment contract goals (3.9 %). Ethical organisational culture operated as a context for personal goal setting: Those managers who evaluated their organisational culture as more ethical were more likely to report organisational goals (e.g. goals toward the success or performance of the organisation). However, if managers gave lower ratings regarding ethical culture, then they named job change and career-ending goals in more cases. Therefore, investing into ethical virtues of the organisational culture can promote managers’ personal work goals, which also benefit the organisation. (shrink)

Our study contributes by providing new insights into the relationship between the individual levels of the antecedents and how the intention of whistleblowing is moderated by perceived organizational support, team norms, and perceived moral intensity. In this paper, we argue that the intention of both internal and external whistleblowing depends on the individual-level antecedents [attitudes toward whistleblowing, perceived behavioral control, independence commitment, personal responsibility for reporting, and personal cost of reporting ] and is moderated by POS, TNs, and PMI. The (...) findings confirm our predictions. Data were collected using an online survey on 256 Indonesian public accountants who worked in the audit firm affiliated with the Big 4 and non-Big 4. The results support the argument that all the antecedents of individual levels can improve the auditors’ intention to blow the whistle. The nature of the relationship is more complex than analysis by adding moderating variables using the Partial Least Squares-Structural Equation Modeling approach. We found that POS, TNs, and PMI can partially improve the relationship between the individual-level antecedents and whistleblowing intentions. These findings indicate that the POS, TNs, and PMI are a mechanism or that attribute is important in controlling behavior. (shrink)

ABSTRACT:U.S. Organizational Sentencing Guidelines provide firms with incentives to develop formal ethics programs to promote ethical organizational cultures and thereby decrease corporate offenses. Yet critics argue such programs are cosmetic. Here we studied bank employees before and after the introduction of formal ethics training—an important component of formal ethics programs—to examine the effects of training on ethical organizational culture. Two years after a single training session, we find sustained, positive effects on indicators of an ethical organizational culture (observed unethical behavior, (...) intentions to behave ethically, perceptions of organizational efficacy in managing ethics, and the firm’s normative structure). While espoused organizational values also rose in importance post-training, the boost dissipated after the second year which suggests perceptions of values are not driving sustained behavioral improvements. This finding conflicts with past theory which asserts that enduring behavioral improvements arise from the inculcation of organizational values. Implications for future research are discussed. (shrink)