Department of Management
Imo State University
Owerri, Nigeria

Department of Purchasing and Supply
Federal Polytechnic
Nekede, Owerri, Nigeria

In recent years, ethical climate (EC) has emerged as one of the major approaches used in describing the ethical characteristics of workplace environment. Maintaining and establishing good ethical climate is important in all organizations. However, it is especially important in the banking industry ‘where business transactions are based on confidence and trust. The purpose of this study is to examine the effect of ethical climate on organizational performance with particular reference to commercial banks in Owerri municipal council, Imo State, Nigeria. A sample size of one hundred (100) respondents was drawn from five (5) banks in Owerri. The main data collection techniques were survey and interviews. A 5-point Likert scale questionnaire was designed and distributed to respondents. Five (5) research questions and five (5) hypotheses were formulated. The questions were tested using the means procedures while the hypotheses were tested using Z-test techniques. The findings indicate that there are five accepted ethical climate types – instrumental, caring, law and code, rules and independence. They have different effects on organizational performance. Ethical climates based on instrumental and independence criteria have negative and significant effect on organizational performance. Ethical climate based on caring, law and code, and rules criteria have positive and significant effect on organizational performance. It is recommended that banks should adopt ethical climates based on caring, law and code, and rule criteria to enable them improve their organizational performance in terms of financial performance, product market performance and shareholder return. 


International Journal of Labour and Organizational Psychology Vol.10 No. 1&2
© 2016 by The Development Universal Consortia. All Rights Reserved