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Keywords:

  • competitive advantage;
  • ethical climate;
  • HR systems;
  • resource-based view

We know very little about how ethical climates are built and the potential role of a firm's HR system in facilitating the development of this resource. The resource-based view (RBV) of the firm suggests that human resource systems directly influence a firm's performance through the development of resources that are deeply woven in a firm's history and culture. How this occurs though has not been thoroughly considered in the research literature. Drawing on the theoretical insights from the resource-based view of the firm, this article explores how HR systems can foster the development and maintenance of five types of ethical climates. In so doing, this article improves our conceptual understanding of why ethical climates may be seen as having strategic value for firms and how HR systems may influence that value. In addition, it contributes to theory by extending the domain of the resource-based view of the firm by exploring its integration with the varied types of ethical climates. © 2014 Wiley Periodicals, Inc.