Ethical workplace climate in nonprofit organizations: Conceptualization and measurement

Abstract

AbstractEthical workplace climate has been extensively researched in the for‐profit context but neglected in nonprofits. Perhaps because nonprofits promote shared values, engage with people, and implement development interventions creating public good, they are considered implicitly ethical. This assumption has been questioned in recent studies. We attempted to develop a psychometrically valid scale measuring ethical workplace climate following a sequential research design to fill this gap. We interviewed 74 employees from 30 nonprofit organizations using the critical incident technique to generate statements on ethical workplace climate. The statements generated were categorized with expert judges' help, followed by a survey of 507 nonprofit employees across India. The exploratory factor analysis (EFA) and subsequent confirmatory factor analysis (CFA) resulted in a 43‐item scale, further reduced to 26 items using stepwise regression. Results of subsequent application of EFA and CFA confirmed a four‐factor solution: self‐interest, collegiality, internal legitimacy, and stewardship. A follow‐up study of 243 members of nonprofit organizations confirmed the hypothesized relationships that ethical work climate has a significant effect on affective commitment and job engagement. Finally, we discussed our findings along theoretical contributions, implications, limitations, and future direction.