Ethical leadership is a growing concept and many large companies are promoting business ethics as their corporate social responsibility. The behavior and the individual values of the leader provide the direction to the business. Leader’s actions in term of ethical behavior and unethical behavior gives ideas to the employee and other stakeholders that what need to follow and what values are aspired in an organization. The position of the leader with moral and ethical values is most important to provide the solutions to ethical issues in a workplace. This also evident from above discussion that ethical leadership is also crucial in developing the ethical culture within an organization.
Ethics is a moral principle or value that comes within our everyday life. It is the study of standard behavior, which promotes human welfare and “the good”. Business behavior is the most important concern for business ethics because unethical behaviors may damage a business’s status and name. Ethics is not based on our feelings or following the laws. Rather, it is based on standards at which we guide our behaviors and determine what should be done and what shouldn’t.
Leadership and ethics Name Professor Course Date Some of the ethical issues that management may need to address include corporate social responsibility. This refers to the operation of a business or organization in a manner that takes into consideration the environmental and social aspects created by enterprise. It implies the commitment to create policies that include responsible practices in the undertakings of the entity. Corporate social responsibility policies serve as self-regulatory measures for the organization in monitoring and ensuring that it complies with ethical standards, regulations and societal norms. This practice takes responsibility of the organizations actions to facilitate a positive impact of the organizations
This helps the members of organization to better understand the behavior that is expected of them and act accordingly. A clearly written code is also important as it defines the overall ethical behavior of the organization. There are four reasons for having a proper code of ethics identified by scholars First is that a clear understanding of what actions can be performed under what situation will enhance the firm’s reputation by standardizing the acts Secondly better and effective practices will emerge as all members will follow the written code rather than taking random decisions Thirdly a written code will gather the employees around corporate culture by eliminating and discrediting the unwanted practices And lastly a clear set of ethical actions will positively effect all stake holder as it will be easier to understand the actions of members for all stakeholder and expectations will also be set
Business organizations expect their employees to exhibit loyalty to the organization and to advance the organization’s interests in preference to those of competitors or outside groups. The principle of reciprocity requires that, to the extent that employees act in accordance with this duty of loyalty, the organization exhibit a similar loyalty to its employees’ by giving their interests preference over those of outside parties. The presumption of innocence refers to the more general version of the ethical principle that operates within the criminal law. Because of employees’ limited resources and dependence on the employer, and because it is so difficult to prove a negative, justice requires that organizations not assume that their employees have behaved improperly in the absence of adequate evidence (Cliff & Desilets,
A company must make a competitive return for its shareholders and treat its employees fairly. A company also has wider responsibilities. It should minimize any harm to the environment and work in ways that do not damage the communities in which it operates. This is known as corporate social responsibility, CSR (Businesscasestudies.co.uk, 2015). The coursework
In summary, companies that are truly committed to best practices, or “management practices and work processes that lead to world-class, superior performance,” must not underestimate the importance of ethics in the workplace. Implementing a third-party ethics hotline is one way a company can demonstrate its commitment to ethical behavior. Some of the companies which implement ethical hotlines in their business KPMG:-they consider employees as one of the major source to uncover and mitigate fraud, they have an ethical helpline service that can help clients establish and manage a secure, efficient and reporting channel for whistle blowing for matters which are unethical and use ethics reporting mechanisms such as
Decisions taken within an organization are made by the leadership in light of the company’s culture, principles and policies. Leaders are the role models as they set the tone for the ethical stance of their individual followers, or the group they lead. As an ethical leader, they are expected to take responsibility and work to correct mistakes. They must ensure the company has an effective internal controls in place to identify unethical practices. In my opinion, big companies in their audit and compliance committees should have members who may act as ethicist to assess whether the actions of the company are consistent with the desired ethical
Later on, hush money was paid to those the company feared would "rat out" Kozlowski. Furthermore, apart from the accounting issues, it was determined that the company’s corporate governance procedures were severely flawed. The company also suffered from poor documentation, inadequate policies and procedure to prevent the misconduct of senior executives that occurred, inadequate procedures for proper corporate authorizations, inadequate approval procedures and documentation. Apart from all this, there were many ethics issues that had to be dealt with: 1. Unethical Leadership (extensive involvement of Kozlowski and other leaders in unethical and illegal activity brought Tyco down).
The similarities between the three scandal. The similarity between Olympus and Lehman Brothers is using fraudulent transaction to conceal their losses. While Olympus manipulated transactions by moving bad asset from balance sheet without recognizing losses, Lehman Brothers took advantage of accounting method for a short term borrowing of cash. Both of these two companies purposely practice illegal accounting practices in the transaction with some related parties to conceal the losses to community and potential investors. As the results, after the scandal, the share price of both company dropped rapidly and Lehman Brothers went to