Leadership and Ethics in an Organisation

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been seen playing a significant role in disseminating ethical standards and practicing rewards and punishments to bolster relevant behavior (Treviño, Hartman, & Brown, 2000). Ethical codes and conduct and training programs affect ethical behavior of followers and ethical leaders have to be the primary origin of ethical direction as a result of the authority role they assume and will in turn affect ethical decision making.

However, even with well-written codes of conduct present, if the leaders are unethical, the code of ethics is totally ineffective and the need of an ethical leader is more. One example can be from the Worldcom case, which has a commanding code of conduct, being involved in financial scandals that produced the biggest bankruptcy in U.S. Worldcom leaders were conceived by the temptations of achieving financial goals rather than taking a step back and consider the basis or right and wrong (Moberg & Romar, 2003). The board of directors supported unethical behaviors and gave low rate perks for big loans to the senior management in the company. This shows that if leaders do not act on and enforce the ethical structure of formal tools, it is useless.

LIMITATIONS OF LEADERSHIP

As mentioned above, leaders are ethical role models and have influence on their followers and in organization cultures and systems lead by ethical leadership helps individuals make ethical decision-making in organizations. However, despite the theories and research, which has demonstrated the effectiveness of ethical leadership leading to ethical decision-making, there are still bound for limitations.

Strong culture and climates in some organizations have can produce unethical actions. In this kind of setting, it is uncertain how much a manager type leader commits to adjusting the situation. To me, I feel that only a top executive leader can have the authority to modify such an unethical culture. We can look into the example of Douglas Durand, a senior regional director who had worked for a company for 20 years. He was someone that possesses tough ethical culture and held ethics and social responsibility sincerely. He then joined a Pharmaceutical company as a vice president of sales and instantly identified a different culture of which bribery and unaccountability and frauds were common. He then tried to change the culture by introducing reward system to encourage ethical behaviors but was instantly shot down by senior management. He decided to leave the company and soon after the company was convicted of unethical practices and had to pay a record $875 million fine. From this, even at a reasonably high level of management in the company, he was incapable of trying to modify a culture that fixated completely on the bottom line and encouraged unethical behaviors and decisions (Treviño & Nelson, 2004).

Ethical leaders might not have the ability to instill the right virtue and influence on an individual, as some of them are just less likely to be impacted in comparison to others. Based on Trevino and Brown (2004), followers at an equitable measure of cognitive moral development will perform in correspondence with internal adhered equitable measure of cognitive moral development. One good example is the CEO of Olympus, Michael Woodford, had learnt that his organization has been ridiculously acquiring expensive companies, which are irrelevant to its core business and uncovering unauthorized payments to third parties. He then raised this issue with the head of internal audit and key directors of the board and was soon after fired when he went to the public press about this matter (Millar and Poole, 2010). Michael responded ethically even though the directors of the board made unethical decisions. This shows how leadership is not able to have much influence upon the employee. Michael Woodford subjectively derives the eventuality of announcing the unethical behavior of the company senior management.

From these 2 limitations above, it is clear that the senior management have inconsistency in their ethical behavior perception. Leaders/supervisors render messages about the importance of ethical conduct and make them present through daily encounters with followers and by creating everyday expectations. As leaders/supervisors establishes connection and vital directives from the top management, the positive influence of ethical behaviors, decision-making and conduct will be most forceful. In the event leaders differ from these messages, their followers will be thrown into a dilemma of difficult choices. Douglas Durand and Michael Woodford, though high management executives did not gain the support of from their higher ups and were put down to do the ethical thing. Hence, we can rightly concur that ethical leadership is only adequate and effective when the entire organization commits to it. Segon and Booth (2007) concurred that as shareholders are becoming more associated with the moral management of the organization, ethical leaders have to work cooperatively and responsively with their followers to assure that justice and fairness are manifested and integrated into day-to-day activities of the organization.

CONCLUSION

I have performed various research and they have supported my stand that leadership is definitely essential and should be part of the development of ethical decision making in modern organization. Most of the articles, journals and books I have researched on indicate the need of having an ethical leader in an organization.

Also, comparing to formal organization system, it is important that ethical leadership is preventing unethical behaviors in comparison to organization code of conducts. Adding on from the above limitations, we conclude that ethical management in organizations must have a mutual vision and dedicated that is effectively imparted and shaped by higher executives, managers and followers on a daily basis.

All in all, to deem one as an ‘ethical leader’, one should have must-have factors like integrity and trustworthiness. Though it is challenging to find the ‘perfect ethical leader’ which possess all qualities as mentioned above, these leaders would be able to establish and maintain conduct and ethical decision making into the organization which in turn, brings forth benefits to any company.

I would like to conclude with the words on Don Liu, General counsel and secretary for Xeros, a company recognized worldwide to have leading ethical business standards. “Since our earliest days, Xerox has been known for ethical behavior and integrity, and with this we have earned the greatest qualities a business can aspire to achieve”. This is how trust can be obtained, through the actions of employees around