Institutionalization of organizational ethics through transformational leadership

Concerns regarding corporate ethics have grown steadily throughout the past decade. In order to remain competitive, many organizational leaders are faced with the challenge of creating an ethical environment within their organization. A model is presented showing the process and elements necessary for the institutionalization of organizational ethics. The transformational leadership style lends itself well to the creation of an ethical environment and is suggested as a means to facilitate the institutionalization of corporate ethics. Finally, the benefits of using transformational leadership are demonstrated through the components of a psychological contract, organizational commitment, and ethical culture to institutionalize organizational ethics.Dawn S. Carlson is a doctoral candidate in Organizational Behavior at the Florida State University. She teaches and conducts research in the areas of Organization Behavior, Ethics, and Human Resource Management. Dawn continues to be active in the Academy of Management and Southern Management Association. She recently presented a paper at the National Academy Meetings on Work/Nonwork Conflict.Dr. Pamela L. Perrewe is Associate Professor and Chairman of the Management Department in the College of Business at Florida State University. She teaches and conducts research in the areas of Organizational Behavior and Human Resource Management. Pam has recently co-authored a textbook entitled,Strategic Human Resource Management. She is a member of the Academy of Management, American Psychological Association, Decision Sciences Institute and the Southern Management Association (SMA). Recently, she was elected to the Board of Governors for SMA.