Concept Of Ethical Organization

Concept of Ethical organization.

Ethics are the principles and values an individual uses to govern his activities and decisions. In an organization, a code of ethics is a set of principles that guide the organization in its programs, policies and decisions for the business. The ethical philosophy an organization uses to conduct business can affect the reputation, productivity and bottom line of the business.

Leadership is defined as a process whereby an individual influences a group of individuals to achieve a common goal (Northouse, 2007). Theoretically, there are three basic ways to explain how people become leaders: the trait leadership theory, the great event theory and the process leadership theory (Bass, 1990). Trait theory is a situation

Ethical leaders help give meaning to their employees‟ work and ensure that organizational decisions are based on sound moral values(Piccolo, Greenbaum, Den Hartog, & Folger, 2010).Ethical leaders are always making efforts to incorporate moral principles in their beliefs, values and behaviour; they are committed to higher purpose, prudence, pride, patience, and persistence (Khuntia &Suar, 2004).In conceptualizing of ethical leadership, Trevino, Hartman &Brown (2000)present a matrix comprising unethical leadership weak moral person, weak moral manager, hypocritical leadership weak moral person, strong moral manager, ethical leader strong moral person, strong moral manager, and ethically silent or neutral leadership (weak/strong moral person, weak moral manager). In a similar fashion, Trevino &Brown (2004) propose an executive must be perceived as both a “moral person” and a “moral manager to have a reputation of ethical leadership. “A “moral person” is related to good character; the leader is honest and trustworthy, show concern for employee welfare and is seen as approachable. Whereas, a “moral manager,” is one who leads others on the ethical dimension, allow employee to know what is expected, and holds them accountable. Moral managers set ethical standards, communicate ethics messages, use the position of leadership to promote ethical conduct at work and use rewards and punishments to guide ethical behaviour in the organization. An ethical leader clearly led his organization on ethics and values. People knew what they could expect of him, and they knew what he expected of them from an ethics perspective. Examples of ethical leaders are Arthur Andersen, James Burke, CEO of Johnson & Johnson during the early