A Critical Analysis: Formal Ethics Training in Organizations

This essay critically examines the effectiveness of formal ethics training programs within organizations. It begins by establishing the growing importance of ethics training in fostering ethical decision-making and organizational culture, while acknowledging the debate surrounding its potential superficiality. The paper reviews existing literature and research, exploring the impact of ethics training on employee behavior, the importance of integrating ethics into organizational values, and the role of senior management as ethical role models. The essay highlights studies that demonstrate the positive effects of ethics training in reducing unethical behavior and promoting ethical decision-making, while also addressing the need for cultural adaptation to ensure long-term effectiveness. The essay further emphasizes the significance of ethics training in the context of globalization and technological advancements, arguing for the transformation of training programs to meet evolving employee needs and legal requirements. Ultimately, the paper concludes that formal ethics training is not merely cosmetic, but a crucial element in developing ethical organizational cultures, improving corporate governance, and enhancing financial performance.

Running Head: IS FORMAL ETHICS TRAINING IN ORGANIZATIONS COSMETIC?
IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
Is Formal Ethics Training in Organizations Merely Cosmetic?
Introduction
Ethics training has gained lot of importance since past few decades. Today, most business
organizations conduct ethics training programs with an aim of inculcating ethical decision
making in the organization culture (Valentine & Fleischman, 2004). An ethical culture works as
a roadmap for effective employee conduct, and other than ethics training organizations should
also develop programs and policies that would ensure permeation of ethical guidance in the
organizational culture (Valentine & Fleischman, 2004). Ethics training has seen various changes
since last decade. Globalization and technological advancements have also contributed in
sophistication of the ethics programs. Ethics training programs are formed keeping in mind the
decision-making theories and empirical researches which indicate the benefits of such training
programs (LeClair & Ferrell, 2000). Although, many research studies suggest that ethics training
programs are effective in improving ethical-decision making of the employees and their conduct.
However, it is argued that such ethics training program are merely cosmetic (Warren, Gaspar, &
Laufer, 2014). The paper aims at studying the effectiveness of ethics training programs by
conducting a literature review. A critical review of the available literature suggest that, ethics
training programs induce ethical thinking, provided the organization implements policies that
facilitate permeation of ethical concepts in organizational culture. Based on the literature review
and research findings, the paper argues that ethics training is not cosmetic, and that for long-term
effectiveness of the ethics training, organizations must work towards internalization of ethics
into the organization value system, through cultural adaptation of ethics.

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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
Effectiveness of Ethics Training
Organizations adopt formal ethics training programs with a view of reducing unethical behavior.
The ethics training program is designed to influence the behavior of employees. Warren, Laufer
and Gaspar (2014) conducted a two-year study that assessed the influence of single ethics
training session on the ethical behavior of employees (Warren, Gaspar, & Laufer, 2014). The
study found after first year of training session, employees showed positive effects, and by the
second year also they showed signs of ethical behavior, however, after the second year the boost
seemed to dissipated, which suggests that, mere ethics trainings are not enough, and cultural
adaptation is required. Hence, to inculcate ethical behavior organizations must induce ethics in
organizational culture (Warren, Gaspar, & Laufer, 2014).
A recent study conducted by Muel Kaptein (2014), examines the effects of ethics training
programs in organizations. The research study also focuses on the components of the ethics
program which induce less unethical behavior in organizations (Kaptein, 2014). The findings of
the study suggest that organizations with ethics program face less unethical behavior than
organizations with no ethics program (Kaptein, 2014). In this study Kaptein (2014) describes
some important functions of ethics training program for the training to be effective (Kaptein,
2014). Firstly, the ethics training program must present a clear idea about the unethical behaviour
(Kaptein, 2014). More importantly, the ethics program requires the senior management to be the
role model and demonstrate ethical behavior. A successful ethics training program will provide
resources for employees to behave ethically and foster a commitment among employees to
behave ethically (Kaptein, 2014). A major function of the ethics training program is to reinforce
ethical behavior among employees. Hence, based on the findings of the study it is evident that

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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
formal ethics training programs are effective in reducing unethical behavior and inducing ethical
organizational culture.
Similarly, LeClair and Ferrel (2000) restate findings of Joe Murphy (1998) and suggest that an
ethics training program which only says correct and ethical things, and only designs a code of
ethical conduct, and impressive lectures from senior management and company lawyers, cannot
be effective unless it does something substantive to prevent unethical behaviour, and deviations
from ethical decisions making (LeClair & Ferrell, 2000). The research study argues that ethical
training can be effective provided organizations induce an ethical culture (LeClair & Ferrell,
2000). The authors base their arguments on the basis of theories behind ethical decision making
models, like that of Hunt and Vitell (1986) which suggests that ethical culture is an important
component for ethical decision making, and that organizational culture is largely influenced by
appropriate ethics training.
Need for Effective Ethics Training
Globalization and technological changes have changed the way organizations operate and even
think, because, today innovation and creativity is key components for organizations to compete
and sustain in the competitive markets. LeClair & Ferrel emphasize the increasing pressures
which require the organizations to undertake initiatives to develop and implement ethics training
programs. The study highlights the results of a study undertaken by the society of Chartered Life
Underwriters and Chartered Financial Consultants, which states that, around 50% of US
employees have accepted committing an unethical behavior related to technology (LeClair &
Ferrell, 2000).

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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
Globalization and technological advancements have changed the traditional work environment
and techniques, and currently employees and organizations strive to do more work faster and
independently, and hence, there is greater risk of unethical behavior and illegal acts (Kaptein,
2009). Hence, today the characteristics of emerging professionals include perceived right of the
professionals to make better choices which take into consideration both means and ends, and
include a perceived obligation to provide service which gives very less importance to self-
interest (Moore, 2005). Hence, to cope up with the changing demands of the globalization and
technology related employee needs organizations are forced to rethink the training programs and
redesign them to meet the demands (Kaptein & Dalen, 2000). Hence, corporate training
programs needs to be transformed from undervalued disciplines to fully integrated training
programs (LeClair & Ferrell, 2000). Moreover, the strict actions taken by legal entities against
unethical and discriminative behaviors in organizations has also pressurized organizations to
include effective ethical training programs that enable employees to engage in ethical-decision
making, and ethical behavior. Hence, there is a need for organizations to undertake formal ethics
training sessions and ensure effectiveness of the training programs (LeClair & Ferrell, 2000).
Importance of Ethics Training
In a recent international conference on Engaged Management Scholarship conducted in
Baltimore (2015), paper presented by Rochelle Price (2015) asserts that ethical behavior the
organization can be dramatically increased by conducting formal ethics training, and solidifying
corporate culture and leadership (Abrhiem, 2012). Hence, it is evident that effective ethical
training fosters ethical organizational culture.

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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
Similar findings are observed in a study that investigates interrelation between culture and ethics
training (Graham, 2013). The study suggests that organizations face greater ethical problems
during financial crisis, and formal ethics training can play a major role in inducing ethical
behavior and promote ethical decision-making among employees (Graham, 2013). However, the
study also suggests that ethical behavior is largely related to ethical climate and ethical culture of
the organization. Formulating a static code of ethics will fetch nothing, and hence, organizations
must supplement code of ethics with initiatives like regular trainings and creating an ethical
organizational culture (Graham, 2013). Hence, it is evident that ethics training will inculcate an
ethical organizational culture and stimulate ethical-decision making practices among employees
and managers.
It is evident that employees can involve into unethical behaviors during financial crisis, but
organizations must understand that good business practice is important than financial bottom line
(Graham, 2013). Ethical behavior leads to better corporate governance. Ethical corporate
governance results into positive financial performance. Hence, it is evident that ethical training
can foster ethical behavior and help organizations to improve financial positions (Graham, 2013).
A review of the literature and empirical studies suggest that, formal ethics training is not merely
a cosmetic, but it enables organizations to induce ethical organizational culture (Valentine &
Fleischman, 2004) (Warren, Gaspar, & Laufer, 2014). The research studies have suggested that
formal ethics training are effective in reducing unethical behavior (Kaptein, 2014), and that the
organizations with formal ethics training and better ethics program face less frequent unethical
behaviors than organizations without ethical training (Simha & Cullen, 2012). It is evident that
with the changing business organizations and technologies there is a need for employees to
engage in ethical decision making and effective formal ethics training programs will enable

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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
organizations to develop ethical organizational culture and promote ethical decision making.
Many research studies have argued about the effectiveness of the ethics training programs and
have claimed that formal ethics training are effective for short-term and in order to make ethics
training programs effective, organizations must develop ethical organization culture and achieve
internalization of ethics into the organization value system (Warren, Gaspar, & Laufer, 2014)
(Graham, 2013) (LeClair & Ferrell, 2000). The empirical research in the field of ethics training
also suggest that, ethics training and ethical organizational culture are interrelated, and
organizations must work towards developing better ethics programs to reduce unethical behavior
and induce ethics (Kaptein, 2009). Formal ethics training will stimulate better corporate
governance and enable organizations to reduce the cost of unethical behavior and improve
financial position. Thus, based on research studies, it can be argued that, formal ethics training is
not merely cosmetic.
If Formal Ethics Training is Cosmetic
In absence of an effective ethics training program, organizations will face more frequent
unethical behavior and decision making. The organizations will face the costs of such behavior
and it will be reflected in their financial performance.
A study conducted by Jin, Drozdenko and Deloughy (2013) asserts that financial organizations
that induce ethical decision-making and have fostered ethical organizational culture, achieve
higher profits (Jin, Drozdenko, & Deloughy, 2013). Also, Chan and Cheung (2011) by
investigating the financial performance of organizations concluded that positive financial
performance can be achieved as a result of better corporate governance (Chan & Cheung, 2011).
The study also highlights that corporate governance and ethical sensitivity are interrelated. The

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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
research studies suggest those organizations that engage in unethical practices and behavior
dramatically increases the operational, marketing and other costs to organizations (Nelson,
Weeks, & Campfield, 2008). The organizations facing ethical conflicts suffer direct, indirect and
long-terms cost (Graham, 2013). A major issue facing the effects of unethical behavior is the
stress arising from ethical conflicts, which highly affects the morale of the employees, which
finally leads to increased employee turnover, and burnout. Hence, lack of ethics training and
ethical behavior will enable organizations to face the cost and hassles of frequent recruitment.
Research studies also suggest that unethical climate and behavior and lack of ethical culture lead
to lower job satisfaction among employees and also hinder the employee organizational
commitment. Moreover, ethical behavior and culture is also directly related to empowerment and
motivation of employees (Singh, 2011). Thus, unethical organizational practices will affect the
overall governance of the organization, and the organization will face several short-term and
long-term costs. Hence, if ethics training programs were cosmetic, they would not be effective in
fostering ethical organizational culture and better corporate governance. Hence, merely cosmetic
ethics training programs will affect the financial performance and organizations will face various
employee attitude and productivity issues, which will lead to lower productivity and lower
profits. The findings from research studies emphasize that merely cosmetic ethics training
program will add to the various other costs to organization.
Conclusion
The paper concludes that formal ethics training is not merely cosmetic, but has tremendous
effects on business organizations. The findings from the review of literature are utilized to
support the argument and conclusion. The findings suggest that effective formal ethics training

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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
programs will enable organizations to develop ethical organizational culture and promote ethical
decision making. Ethical organizations lead to better corporate governance which enables
organizations to improve their financial performance and encourages employees’ organizational
commitment. However, had it been that, ethics training programs were merely cosmetic, they
would have added to the various costs to organization which would reflect lower financial
performance and productivity. Hence, the paper suggests that, organizations today, must engage
in designing and implementing effective ethics training programs.
References
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IS FORMAL ETHICS TRAINING IN ORGANIZATIONS MERELY COSMETIC?
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