Ethics and ethical decisions are essential to be a successful leader especially when leadership focuses on the issue of boosting organizational success. The need for effective, informed, forward-thinking, innovative, and ethical leadership in the profession is the basis for being a successful organisation (Mark Winston, 2005). Ethical principles and values provide the foundations for various modern concepts for work, business and organisations, which broaden individual and corporate priorities far beyond traditional business aims of profit and shareholder enrichment. Values have been dealt with from a number of perspectives in the management literature. Some writers have focused on the pressures of the business environment and have provided advice for improving the ethical aspects of business behaviour (Boling, 1978; Purcell, 1975). Others have discussed the teaching of ethics to present and future leaders (Barach & Nicol, 1980; Purcell, 1977).
Business ethics is basically at all times doing right things in every aspect of the workplace. Â To be ethical, one has to decide between right and wrong, determine what is for the well being of the society and operate accordingly. Â Ethics have three basic criteria that must be met obligations, moral ideas and consequences (Ruggiero, 2004). Well to me obligations and moral ideas make more sense as these can be controlled in order to keep everyone happy by doing right things. However, the consequences might not always be as desired. Though the intentions were right and justifiable one can never guarantee the outcome to be successful. Businesses have their own code of ethics and the individuals within that business have to determine whether or not they will follow that code of ethics. Ethical behaviour in business is consistent with the principles, norms, and standards of business practice that have been agreed upon by society (Trevino & Nelson, 2004). Â But like everything else in life, there is always ambiguity to what is right. At times, an individual might decide to go against the code of ethical behaviour for personal gain. This reminds me of my previous work place involving event management and marketing.
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Event management takes place in a complex background where various interests and responsibilities intersect in numerous ways and at multiple levels. In such complicated situations, not surprisingly, some of these interests and responsibilities are at odds. It was the senior HR manager of the company who decided to reject a candidate half way through the interview process where lack of work experience was quoted as the reason. However, in fact the poor unsuspecting candidate was being dumped in favour of another candidate who was well known to the manager. This, I felt was highly unethical because (Fulmer, 2004) ethical business leaders make every effort for fairness and justice within the boundaries of sound management practices ((Fulmer, 2004)). As a leader, being a role model is important to make fair and just decisions. Â Another key element in making the right decision is instilling professionalism in self and in the organization (Trevino et.al, 2007) which clearly lacked in this situation. The question that popped up in my mind was what to do in response to the manager's questionable ethical and judgemental ability in recruitment. Being his assistant and watching all his happen in front of me, I was in a dilemma whether to report this matter to the higher authorities or to simply keep quite as it would be the same manager who would be doing my appraisal. It left me wondering if these are the values that the manager has inculcated from the organisation. Some writers have focused on the pressures of the business environment and have provided advice for improving the ethical aspects of business behaviour (Boling, 1978; Purcell, 1975). Others have discussed the teaching of ethics to present and future leaders (Barach & Nicol, 1980; Purcell, 1977). There is a growing body of literature concerning empirical investigations of the ethical beliefs and behaviour of leaders (Brenner & Molander, 1977; Carroll, 1978; Krugman & Ferrell, 1981). I definitely did not want to take a risk in this situation as any attempt to challenge the ethical problems and dilemmas which an organisation faces is a difficult task to pursue (A. Mills, 200). However, all I wanted was to make the manager realise that as a role model for his juniors or rather followers he was not setting the right example but I soon figured out that being a new recruit myself, there was hardly anything I could do. From here the journey began after which I started observing people's behaviour however I was never able to come to a conclusion. Now that I have undertaken this module I have been able to distinguish between various form and issues associated with ethical leadership.
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I would stress on four serious ethical issues that were encountered at my workplace to be considered. The first being threat posed by various types of "ethical relativism," or the blurring of right from wrong (Trevino et.al, 2007). It emerges as obvious that the weakening of a sense of appropriateness or inappropriateness in favour of society poses a risk to good ethical judgment. Fear about what might give rise to an "embarrassing situation" directs us to the second issue namely, the apprehensive worry over image or reputation (Trevino,1986). Reputation is deemed important because a company living up to the image and reputation of the industry can lead to positive thinking and positive results. Although some ethical issues such as layoffs may sometimes be unavoidable, others such as discrimination and harassment can be prevented (Trevino et.al, 2007).Â This was the case with my company which would never take projects from any small business; rather bigger organisations were always preferred to deal with as it was deemed to enhance our reputation in the market. Another classic example would be of Pantaloons Ltd. not making its employees redundant during recession. Though layoffs are more common these days the company decided not to terminate its staff just to maintain their well established image in the market. The company also made a statement that it was very considerate of its employees as they are the one who make Pantaloons. This definitely brought some positive results (Deccan Herald,2008 ) for Pantaloons at the same time I could reckon that it was a tough decision to make however the organisation was more ethical and compassionate about its workers which made Pantaloons earn higher amount of respect in its employees eyes. The staffs have become extremely motivated and committed to the organisations success than ever before. The third ethical issue that the leader would face is the "loyalty disorder." This is the practice wherein questions of right or wrong are lowered to the paramount value of loyalty to the boss (Trevino, 1986). Loyalty, a venerable and crucial quality within limits, could become ardent. It could turn dangerous when a legitimate, natural loyalty to the boss deteriorates into covering up for him, hiding things from him, or not standing-up against when he is wrong. We frequently are anxious and instead of working upon what is right, we hear: "It would be embarrassing to do this and this will tarnish our image in the market." With this syndrome people are not even interested to tell the truth; whereas in case of loyalty syndrome they are not willing to tell the truth. And this is exactly what happened in my case as a follower. I knew what my senior was doing was unethical but I did not even raise my voice against it. The final ethical issue in my experience involved the drive for being successful. This is an issue where we compete among ourselves to stay on top of each other by whatever means we can weather ethical or unethical.
This was just one instance of ethical issues which was witnessed by me as a follower. There are several other such issues which are encountered in the daily life at a workplace. Next incident came across when I had moved to the next level. I had moved to the business development team and was assigned the role of leading the team. It was then that I started observing the ethical issues which to the outer world would appear miniscule, but to me were major issues. This made business ethics more apparent and made me realize the importance it plays on a daily basis. The simplest was a situation when I had to assess and give a feedback to one of the teammates who apparently happened to be my friend too. The dynamics of evaluating and critiquing staff is complex. Often managers are in a corner and need to 1). Evaluate employees honestly and accurately and 2). Produce information to their superiors that the unit or team under their supervision is excelling at what they do (Longnecker & Ludwig, 2004). These two points can come into conflict rather quickly. Aside from the teams, perspective managers will often shy away from truthful statements for a variety of other reasons: avoiding confrontation, damaging work or personal relationships, and fracturing future employment opportunities for the employee (Longnecker & Ludwig, 2004). The manager may have stellar intentions but ethically the decisions can be questionable. That was indeed a challenging situation where business ethics insisted that I treat every employee the same however the rule of friendship would put my friend above everything. I was in total dilemma as to what to do now. However I did follow my routine of treating every employee the same and assessed errors and provided training. It would have been highly unethical for me to treat someone different because of my personal relationship with them. There were times when a senior would intervene and impose their decisions on to the team or rather I was forced to implement, which needless to say were not well received.
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Based on my experience and theory I was able to identify few types in ethical issues. Over time I observed that there were issues arising out of disagreement between two parties or their interests. The government wanted us to be more responsible towards the society and execute social awareness programmes as part of our CSR, in which case our company had to bear part of the expenses for the events. The company felt that there was no necessity to indulge in these activities as it would be out of budget and termed the event as an extravaganza. However the government had a different view. In this case I would justify the decision taken by the company as in my opinion being ethical in business is to give only when you have sufficient. By rejecting the proposal the company is not becoming any less responsible towards its society than before. It is just that we are not ready for that yet. I consider the company was being ethical to its staff, its management and its stakeholders. Organizations nationwide conduct daily business based upon principles and values that govern the decisions and actions of a company (Trevino et.al, 2007). Business ethics is the behaviour that an organization conducts on a daily basis both towards organizational personnel and customers. Hence, in order to achieve that the organisation should make every effort that its employees are also following the same ethics principle and this Haynes (2001) says, can only be achieved by appropriately promoting and training every employee of the organisation.
The ethical misuse is not limited higher-level authorities' key decision makers. According to The Cheating Culture (2004), lower level managers and other employees "steal nearly £400 billion from companies every year" (Winik, 2004). Associated to organizational leadership is the anticipated division of powers between Chair of the Board and the CEO of many organisations, in a way that the associated authority and oversight are not enjoyed by only one entity. As of March 2004, three-quarters of the companies that make up the S&P 500 employ CEOs who also chair their boards. In addition, 14 percent of the boards are chaired by former CEOs of the companies (Iwata, 2004). Thus, the shortage of oversight of the organisation's performance and overall liability has been recognized as concerns linked to the lack of decentralisation of authority. It has been observed that even if the chairman's and the CEO's positions are split, most corporate boards are still run by chairmen and directors with business, social or family ties to management (Iwata, 2004). How ethical this situation is very had to justify.
There are several other ethical issues that are faced by a leader for example, from the physical environment, coercion, personal integrity, etc. A coercion issue exists when some external power tries to force a leader or manager to make a particular decision by using threats or other resources. A conflict of interest situation arises when a manager has more than one interest that, if mutually pursued, may result in injury to individuals or to the firm (Beau- champ & Bowie, 1979). The physical environment is a special case of conflict of interest in which one of the affected parties is the environment. Finally, personal integrity problems arise when decisions raise issues of principles.
As never before, there are huge organisational advantages from behaving ethically, with humanity, compassion and consideration for the world beyond the boardroom. The benefits would include enhanced competitive advantage; customers are increasingly favouring providers and suppliers who demonstrate responsibility and ethical practices, also better staff attraction and retention, builds reputation.