Ethical Leadership

Ethical Leadership and Culture

Andras Bori

University of Phoenix

Ethical Leadership and Culture

Model Review

Ethical leadership has become an essential component of a corporation’s long-term success. According to Thoms (2008) the case studies reviewed suggest that high ethical leadership and strong moral culture lead to successful business. Thoms (2008) also concluded that high ethical standards in leadership have a healthy relationship to overall organizational morale.

Schaubroeck et al. (2012) investigated the link between ethical leadership within and across the unit and organizational levels as well in the Army. They analyzed the impact of moral leadership at various levels. The study found limited support for trickledown effect from ethical behavior from leadership at multiple levels. The study found broader support that leaders should think about influencing culture in a multi-model way where the mechanisms to establish and maintain an ethical culture are set up in a way that spreads not only in one level but cascades down multiple levels.

Leaders can develop a strong ethical culture via primary and secondary mechanisms. Primary mechanisms include what leaders pay attention to, measure and control. Primary devices have the most substantial impact on influencing follower’s beliefs, values and establishing a culture. Secondary mechanisms are less impactful and include organizational structure, storytelling and workflow design for example.

Shaubreock at al. (2012) has tested three distinct categories how moral influence transferred down and across the organization. First, they identified how ethical leaders focus on their unit to establish their expectations. Second, they investigated how ethical leadership and expectations cascade across organizational levels and third, how leaders with high ethical leadership can influence the impact their subordinates can make on their followers. Because of this observation when developing a framework for moral behaviors all of these avenues to create and maintain an ethical culture need to be considered.

Factors in the model that needs to be modified for a for-profit use

For-profit corporations have responsibilities often to shareholders, customers and a board of directors. Employees can leave at will from for-profit companies, so companies must consider employee engagement as a critical factor. At companies like Adobe Systems with about fifteen thousand employees, we have six organizational levels from a reporting hierarchy perspective, and the employees are spread out globally across many time zones. So as far as establishing a training program and framework for-profit corporations often have to ensure that there are check and balances all the way down the hierarchy and that the enforcement of the ethical code of conduct is consistent. One of the main difference is that the company is spread out all over the globe and it has to consider cultural differences when establishing a code of conduct.

As a for-profit corporation, the company faces constant scrutiny from its investors and often rewards Sr. Leaders based on the performance of the company’s stock price. As such, leaders face tremendous amount of pressure to do everything in their power to make deals and take actions that will help the stock price increase. The board of directors has to put checks and balances in place to ensure that leaders cannot cover specific events in hopes to improve the financial performance in the short term. The government also regulates the market and gives out heavy penalties for illegal activities that companies need to consider.

Ethical issues organizations face meeting long-term goals

Especially publicly traded companies, face a tremendous amount of pressure to meet Wall Street expectations on a quarterly basis. That pressure often forces businesses to trade long-term needs for short-term gains. To achieve these short-term needs companies like Enron in the past resorted to unethical activities. So, ensuring that businesses do the right things even in the face of adversity is a crucial component of long-term success.

Modified model for the large for-profit corporations to achieve a shared ethical culture created

A model for creating an ethical culture for a for-profit organization would include both primary and secondary tools to develop a shared understanding of the culture and training frequent and recurring mandatory training opportunities to ensure that everyone in the organization knows the expectations. The model would include creating a code of business conduct framework with core values for the company, workplace expectations, individual conduct, business relationships, community, compliance with the Law, as well as the consequences of violations.

First, I would recommend creating the code of conduct than implementing a training program that would ensure that everyone in the organization is at least aware of the expectations from the business. According to Yang (2013), high ethical standards in a group lead to happy workers, inside and outside the working environment.

One other element that would be part of the framework is storytelling. According to Driscoll and McKee (2007), storytelling can help an organization to elevate the culture to feel connected to a broader community and give the organization a higher purpose. Including, opportunities like all-hands meeting where leaders can share the vision, strategy, and mission of the company with a regular frequency would be part of the model as well.

One last component I would emphasize in the model is the social responsibility. I would provide an opportunity for employees at all level to participate in activities where they can give back to the community. Companies leading with an example in being responsible not just to the community but for the environment could move the world to a more ethical and accountable culture.

References

Driscoll, C., & McKee, M. (2007). Restorying a Culture of Ethical and Spiritual Values: A Role for Leader Storytelling. Journal of Business Ethics, 73(10), 205-217.

Schaubroeck, J. M., Hannah, S. T., Avolio, B. J., Kozlowski, S. W., Lord, R. G., Trevino, L. K., Dimotakis, N., & Peng, A. C. (2012). Embedding Ethical Leadership Within And Across Organization Levels. Academy of Management Journal, 55(5), 1053-1078.

Thomas, J. C. (2008). Ethical Integrity in Leadership and. SAGE Publications, 4(4), 419-442.

Toor, S., & Ofori, G. (2009). Ethical Leadership: Examining the Relationships with Full Range Leadership Model, Employee Outcomes, and Organizational Culture. Journal of Business Ethics, 90(4), 533-547.

Yang, C. (09/08/2013). Does Ethical Leadership Lead to Happy Workers? A Study. Business Ethics, 123(10), 513-525.

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