Leadership and Ethics in an Organisation

INTRODUCTION

Everyday leaders make decisions in all organization operations. It is now critical in modern organizations to be able to perceive and deal with complicated business ethics (Selart & Johansen, 2010). In this report, I will be probing into the statement of whether leadership is essential to the development of the ethical decision making in modern organizations. After much research on this topic, my stand is that leadership is essential and should be part of the development of ethical decision making in modern organization but there is still more to it.

My research and readings are based on various journals, articles and books on leadership. This essay will show what is leadership and ethics in an organization, importance of ethical leadership, leadership and organization structures and the limitations of leadership.

LEADERSHIP AND ETHICS IN AN ORGANISATION

In almost every modern organization, there is a structure; members are given different roles, task and status levels in order to achieve the organization purpose efficiently and effectively. Thus implying that there will be leaders and followers. The main expected purpose of leaders is to pave the direction and use control to meet the objectives. Leadership in organization is a driving relationship between managers and their followers, and it influences the work team’s activities towards their objective and performance (Robbins et al. 2004). A good leader is one that moves followers towards the vision that their leader has framed to achieve organization goals. However, it is the leader's’ moral doctrine and virtue that gives validity and trustworthiness to their vision and preserve it (Mendonca, Manuel, Kanungo, Nath, 2007).

IMPORTANCE OF ETHICAL LEADERSHIP

Leaders in an organization are role figures to their employees. Leaders should be a key origin of ethical supervision for their followers. Ethical leaders determine their requirements and impart them to their followers (Brown & Treviño, 2006). With that being said, extremely good relationships are often specified by employee appreciation and fondness of their direct leader (Schriesheim, Castro, & Cogliser, 1999). Trevino conducted an interview and the methodical content study of the interview statistics proposed that ethical leaders are both moral managers and people (Treviño et al., 2000). As moral and ethical managers, they are clear about their expectations of their own followers. They are distinguishable examples of ethical behavior, conveying to their team on their ethical and value-based expectations, and they also have the power to use formal cultural system tools like the reward system to promote ethical behavior (Treviño & Brown, 2005). Thus, ethical leadership has been demonstrated to have a positive influence on employee outcomes and will lead to ethical decision-making.

Also, from an interview conducted by Treviño and Brown (2005), 20 organization senior executives were told to interpret the behavior and attributes of any ethical leader whom they had in some point of time in their careers worked intently with. All of them had instantly thought of a notable leader, which suggest that it is common to have ethical leadership being practiced in today’s business organizations. Also, a National Ethics Survey of Business was conducted and a bulk of the responders agree that their executive leaders and manager represent ethical behaviors.

Temptations (incentives and opportunity) will lead to ethical or unethical decision making. Avolio et al. (2004) offered that leaders uphold moral prospect to their followers by asserting candor and integrity and by imparting moral requirements and showing ethical decision making to their followers (cf.kernis, 2003). Also, Lord and Brown (2004) suggest that good leadership conduct can instill moral framework in their followers and stimulate character towards commonality than one’s self, ensuring more pro-social practices. This distinct leadership reaction can thus raise followers’ moral perspective. Beu and Buckley (2004) also came up with the idea that ethical leaders may ‘subconsciously reinterpret’ and ‘reassess’ unethical decision making in other forms that impacts their followers to morally withdraw whenever faced with ethical predicament. Hence, we believe ethical leadership is able to balance the consequence of temptation on ethical decision-making.

Based on Leigh Andrews (2013), an ethical leader is made up of these 6 traits. Firstly, trust of followers. It plays an important role in creating ethical change. Next is authenticity and suitable tone. Ethical leaders must show who they are and positive commitment to ethical considerations as it will raise workplace integrity. Strong commitment to transparency includes how decisions will be made based on important ethical challenges. The last 3 traits are engagement, general engagement and ethical engagement. It is important to be fully engaged with the followers and support the organizational culture to reduce ethics risk. Followers should also be valued, getting involved, developed and inspired by their leaders. Lastly, allowing followers to show that they want to maintain and establish an ethical environment. Disconnected followers tend to go through the idea of compromising company standards and thus making unethical decisions. All in all, we can infer that it takes a lot to be an ethical leader and one must have the candor and vast experience to lead their followers to make ethical decisions.

One notable figure that practices ethical leadership in the organization is PepsiCo’s longtime CEO, Indra Nooyi. PepsiCo is a notable world most ethical organization for years. She possesses strong ethical leadership and believes in trustworthiness and one must be credible, transparent and ethical. With an ethical leader in the company, managers and followers also played a big part to this ethical organizational culture and it will thus lead to ethical decision-making.

ETHICAL LEADERSHIP AND ORGANISATION STRUCTURES

In an organization, the decision making process is pretty straightforward. Based on Treviño & Nelson (2011), every individual is different as they come from all walks of life and they have subjective biases. Together with group and organization pressures and culture, the individual will have the ethical awareness, which leads to their ethical judgment and affects their ethical behavior and decision-making. Organizations have culture and systems include ethical formal tools to create an ethical organization.

Formal system tools can be written down and disseminated formally across the organization. Leaders have