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The form of organization of a firm besides establishing the inter-relationship between the differentiated units and sub-units also seeks to regulate the pattern of managerial behavior and supplements the managerial efforts to achieve the organizational objectives. The structure of organizations, however, is a necessary but not sufficient condition for successful implementation a strategy. Poor results may be as much manifest in an organizationally perfect company as success is in an ill-organized company (S.K. Bhattacharya, 1983). Discerning executives in an ill-organized company may recognize the necessity of adjustment and adapt their actions to the informal but more effective arrangements outside the formal structure. Two other dimensions of strategy implementation are thus suggested to be of equally critical significance which is, leadership and organizational climate.
The choice of leadership is closely related to the nature of strategy to be implemented. This may involve:
Changing the existing leadership at different levels.
Developing appropriate leadership styles,
Initiating career development for future executives and
Using OD techniques for change (William F.Glueck & Lawrence R. Jauch, op cit, p.363.)
QUALITY OF LEADERSHIP
The quality of leadership is a vital element of the role of executive in the implementation of ethical decisions. Chester Bernaud defined leadership as the quality of behavior of individuals whereby they guide people or their activities in organized effort (Chester I. Barnard, Organization and Management, 1958). the range of skills and abilities. Which make for effective leadership is seldom expected to be possessed by a single individual so as to take care of all aspects of the ethical process. According to Chester bernaud the 4 areas of leadership behavior consist of the determination of objectives, the manipulation of means, control of the instrumentality of action and stimulation of coordinated action (Ibid, pp.85-91.).
UNIVERSAL INNER STRUCTURE OF EFFECTIVE LEADERS
Every successful leader is set to have an inner hardcore composed of certain universal virtues. The integrated structure of these virtues centre's round the quality of selflessness based on an ideal along with its 2components of knowledge and character.
Knowledge enables a leader to take the right decisions in any given situation and the strength of character helps him to be effective, to get things done by dealing appropriately with people. Thus higher the ideal or vision, higher will be the degree of selflessness; hence greater will be the potential for effective leadership.
CHARACTERISTICS OF A GOOD LEADER
There is a large no. of virtues which may be said to constitute the character or personality of an effective leader; however, following are the 3 core qualities.
Courage- a courageous leader should have the courage to take decisions and to act and being accountable for success or failure. He doesn't lie, can set high standards of performance, and even at the cost of facing unpopularity and it is because of courage that the leader's approach to work has a distinctive direction.
Determination or willpower-the ability to persist in spite of all odds is another virtue that goes with effective leaders. Implementation of strategies, plans and programmes is often beset with numerous difficulties and failures on the part of people concerned which may be due to natural causes, inadequacies of resources or human failures. A good leader has the determination to persist in spite of obstacles and set backs in the process of implementation of plans.
Initiative- a leader's initiative is reflected in his ability to anticipate and overcome obstacles and difficulties on the basis of a sound information system. His alertness to opportunities that may be availed of to achieve the task, creating an appropriate structure and organizational culture, so as to commit full play of the initiative of leaders at all levels in regard with as an important part of ethical leadership.
Dimensions of leadership Style (Pradip N.Khandwala, 1966)
Management styles may have different orientations. These are referred to as dimensions of leadership style as manifested through the orientations. Top management of organizations may differ in their orientations reflecting any of the following dimensions of styles.
Risk taking -Willingness to make high risk, high return decisions.
Technocracy/optimization-commitment to use planning and techniques of decision making by technically qualified executives rather than seat of the pant decisions.
Organicity- flexibility and adaptability in organizational structuring.
Participation- team management involving person's other than those holding key position in decision making.
Coercion-authoritarian use of fear and domination
Decision bearing on the allocation of resources has vital significance in the process of ethical leadership. Resources may be said to consist of 4 broad categories.
Facilities and equipment
Materials, supplies and services and
Personnel (Russell L. Ackoff, A Concept of Corporate Planning, Wiley, 1970)
A LEADER IS KNOWN FOR THE FOLLOWING:
Knowledge of the job:
A leader who has full knowledge of his field of work has a strength which is always helpful in taking decisions and having necessary flexibility in responding to changes.
To be effective, the effective leaders must also have knowledge of the total system and of the internal and external environment of the organization. Knowledge and mastery of a few skills also help in time management and communication about al, knowledge in his field of work should be the basis of the developing leader's intuition- power of mind by which the underlying trust of things can be received by him without reasoning and analysis.
Knowledge of self:
Understanding one's own personality is a must for every good leader with that understanding a leader is least afflicated by his ego, greed, enemy and similar frailties. He does not raise an excusing figure to others before introspection of his own short comings. There are various means of knowing one self like quiet introspection to examine the real motives, promoting one's action, whether any action has resulted from greed may be way of examining whether one had been truthful, honest, just selfness, courageous, ethical and moral etc. to develop one's potential as a leader the first step may be to know one's weaknesses and strengths. Knowledge of self is not only a means of developing one's own abilities as a leader but also a step towards understanding others and establishing harmonious working and inter-personal relationships.
The test of effective leadership is a leader's ability to deal with in which his total personality comes into play. According to a study of Stanford research institute, 88 percentage of effective management strategy is attributable to understanding people and handling them appropriately. Indeed, the essence of leadership is reflected in how the leader handles people to get the best out of them. To be able to do so, understanding of human nature is always useful. It is well known that people are motivated to a large extent by felt a need which includes not only material needs, but also needs of esteem, accomplishments and growth. Besides human beings may be motivated to act due to a sense of dedication and serving noble causes. A great deal of effort in terms of time and attention is needed to know people develop a genuine interest in them and to care for them. A leader is known to care for his subordinated has innovariabily their unstinted following.
To know and care for people a leader must have communication skills mainly the skills of expressions and listening. The skill of expression is very well said to be vehicle to generate trust. It is not only the nature of verbal expression but more importantly the spontaneity, straight forwardness and sincerity conveyed which matters a great deal. The skills of listening involves three elements which is, hearing with attention, comprehension of what is said and remembering what has been said.
Listening attentively with understanding and sympathy helps generate trust and ethical leadership.
ETHICAL LEADERSHIP AND CORPORATE GOVERNANCE:
The concept of corporate governance is essentially an old wine in new bottle. What used to be referred as 'social responsibilities of businesses' have now been labeled as 'corporate governance'.
Good corporate governance is essentially insuring that the management meets its obligation towards- the owner, the shareholder, creditors, employees, consumers, government and society at large.
IMPORTANCE OF CORPORATE GOVERNANCE IN ETHICAL LEADERSHIP:
The need for corporate governance arises because of-
The separation of management from the ownership
The anonymity between the procedure and the ultimate consumers,
Relationship that business being part of the society owes certain responsibilities towards the society.
The management of any corporation should begin with the fundamental reality that their company necessarily produces two products:
One, the economic goods and service of the firm
And two, the social effects on the people involved in the production, distribution and consumption of those goods and services inside the company as well as in the community in which the company operates.
A responsible leader has to therefore, ensure that the business sub-serves various groups effectively and efficiently. The leader to become an effective leader have to take into account various factors that are important for the people in and around the company, only then his ethical leadership gets justified. These are as follows:
Responsibilities towards sub-ordinates: this include payments of fair wages and salaries, sympathetic treatment by the leader, absence of favoritism, provision for leave, communication network between management and employees, setting up of norms, and disputes resolution mechanism, concern for safety and provision of healthy and satisfactory working conditions.
Responsibilities towards consumers: it includes offering variety of dependable quality goods and services and services without adulteration to follow fair trade practices.
Responsibilities towards government: it requires the management to be law abiding, to pay taxes and other dues fully and honestly, not to purchase political support by unfavorable means, to contribute to stable and balanced development of the economy.
APICS CODE OF ETHICS
To maintain and improve sound business practices and foster high standards of professional conduct.
To hold in professional confidence any information gained of the business of a fellow member's company and to refrain from using such information in an unethical manner.
To seek success without taking unfair advantage or questionable acts that would comprise one's self-respect.
To neither engage in nor sanction any exploitation of one's membership, company, or profession. To encourage and cooperate in the interchange of knowledge and techniques for the mutual benefit of the profession.
To be careful with one's criticisms and liberal with one's praise; to build and not to destroy.
When a doubt arises as to the right or ethics of one's position or action, to resolve such doubt according to generally accepted standards of truth, fair dealing, and good taste.
To maintain high personal standards of moral responsibility, character, and business integrity.
LEADERS VS MANAGERS
focus on people
have a long-range view
ask what and why
have eyes on horizon
challenge status quo
focus on systems and structures
rely on control
have a short-range view
ask how and when
have eyes on bottom line
accept status quo
do things right
In organizational communication, ethics in leadership are very important. Business leaders must make decisions that will not only benefit them, but also they must think about how the other people will be affected (Stansbury 33). The best leaders make known their values and their ethics and preach them in their leadership style and actions. It consists of communicating complete and accurate information, where there is a personal, professional, ethical, or legal obligation to do so (McQueeney 165). When practicing ethics, you gain the respect and admiration of employees, with the satisfaction of knowing you did the right thing. If you never make clear what you want, and expect, then it can cause mistrust.
Being unethical in the workplace can include anything from taking personal phone calls while at your desk, telling someone the "check is in the mail", when in fact it hasn't even been written yet, and even taking office supplies home for your personal use. Most organizations create an ethical code, which is usually a list of rules that tells you what behaviors are right and what are wrong in the company.
One of the most famous examples of not having an ethical leader is in the company Enron. According to Seeger and Ulmer, which is noted in Organizational Communication: Perspectives and Trends by Michael J. Papa, Tom D. Daniels and Barry K. Spiker, this is the best way to understand ethical failures?
Enron Corporation is a gas pipeline company that turned into a huge enterprise. In 2001, the company collapsed due to scandals and bad leadership. Basically, the reason why they failed was due to a set of values that employees had to agree to, but in fact executives were demonstrating a different set of values. Due to this miscommunication of values and other important facts, the company went bankrupt.
The conclusion to the Enron case, according to Wee Heesun, is that smart CEOs will realize that an honest, transparent, and trustworthy culture can also bolster employee morale and ultimately guard shareholder value.