PSYCHOLOGICAL CONTRACT AND ORGANIZATIONAL COMMITMENT - INSTRUMENTS FOR INSTITUTIONALIZING ORGANIZATIONAL ETHICS

The institutionalization of ethics is an important task for today's organizations if they are to effectively counteract the increasingly frequent occurrences of unethical and often illegal behavior. The purpose of this article is to demonstrate how organizations can enhance the institutionalization of ethics by managing both the psychological contract and institutional commitment between their employees and organizations. However, it must be stressed that this mechanism is only one way of incorporating ethics into firm's culture. Integration of ethics involves a total approach which includes: commitment of top management to institutional ethical reform, establishing code of ethics, formation of ethics committee, offering of continuing ethical education through seminars and workshops, and especially integrating ethics into firm's strategic planning.