Ethical climate characterizes the ethical and moral atmosphere that exists within the organization. There are five major types of ethical climate: caring, independent, law and order, rules, and instrumental. Massey Energy Corporation is characterized by a mixture of the last two types.
Its environment cannot be called caring since the company does not offer support to its employees. Neither does it care about their safety and well-being. This type is typically based on fair and involved leadership, which the organization lacks. There is so effective communication between the leader and subordinates (who are intimidated if they dare report any problems).
The independence type is inapplicable in this case as Massey’s employees have no right to make decisions on their own. Outside-the-box thinking is not encouraged by the company. Miners are forced to oblige to the decisions of the CEO, even if they violate their rights.
The law-and-order ethical environment presupposes the company’s reliance on codes of behavior imposed by the outside sources (local, state, or federal laws). In the given case, the organization realizes its advantageous position in the region and therefore is not afraid of legal ramifications.
The rules type is similar to the previous one as it requires obedience to rules and policies. However, these are not actually existing laws but the procedures accepted exclusively within the company. This is what can be observed in Massey Energy. The CEO is free to modify working conditions even if changes contradict the Labor Code.
At the same time, the company’s ethical climate can be referred to as the instrumental type, which implies management based on ethical egoism. The director is free to make selfish decisions without consulting anyone if he/she believes that this will work to the organization’s or his/her personal benefit.
The combination of the last two types may trigger a variety of unethical or immoral business practices, which is exemplified by the Upper Big Branch Mine Disaster in Massey’s case.