ethics & governance essay

ETHICS AND GOVERANCE

Topic 2

Ethical leadership is the most important factor in creating an ethical

workplace.

Name: Hong Ping, Tan

Student No.: S3535239

Introduction

What is an ethical workplace? How do one define an ethical workplace? How ethical leadership comes into place in creating an ethical workplace? Before beginning with ethical workplace and ethical leadership, we first have to look into “Ethics” and “Leadership”.

Ethics

For many, ethics is known as the act of doing what is right. People think of what is right and wrong when ethics is mentioned. (Resnik, 2011). This is true especially when there are no specific rules and codes to lead us in living the ‘right’ life. As humans, we tend to use our own feelings, personal experiences, culture and knowledge to judge whether our actions and behaviours are ethical. As defined by Business Ethics For Dummies, “Ethics is the code of moral standards by which people judge the actions and behaviour of themselves and others.” (Bowie & Schneider, 2011, p. 10)

Leadership

Even with umpteen leaders, a definite definition for leadership has yet to be formed since the past till present. An article posted by the Business News Daily in the year 2015 showed that amongst 30 business leaders in the corporate world, each came up with their own definition of leadership based on their own experience. This concludes that leadership is not the same for everyone.

Many state that ethical workplace is a workplace that promotes honesty, integrity, fairness and trust. What makes up an ethical workplace? This essay topic states that ethical leadership is the most important factor in creating an ethical workplace. Thus this essay will be talking about how ethical leadership creates an ethical workplace and the benefits of ethical leadership.

1Ethics & Governance Essay, Hong Ping Tan (S3535239)

How does Ethical Leadership create an Ethical Workplace

Ethical leadership is the practice of ethical behaviour of a leader at all times. Having an ethical workplace “begins with ethical leadership” said Thornton (2013).

Leaders in the workplace have power over their subordinates.

Anyone who steps into work on their first day, automatically looks for their manager. Managers will then delegate duties to them. This is a routine that all of us have faced in our work, be it full time or part time. In any organisation, there will be a hierarchy for all employees to adhere to. If one is displeased with their leaders/ managers, they can only climb up the hierarchy, surpass their manager or leave the job. This shows that people who are higher in the hierarchy has positional power over their subordinates.

Therefore, ethical leaders holds a position of authority over their subordinates influencing them to behave and act ethically. An excellent ethical leader will be able to make followers/subordinates carry out his instructions willingly. This in turn ensures an ethical workplace as everyone follows the ethical leader without feelings of opposition.

Mayer et al. (2009) observed that the top management has the strongest influence over the ethics of an organisation, followed by supervisory management. This further emphasizes on the power and influence leaders have in an organisation over their employees. Ethical leaders will therefore influence the culture of an organization in an ethical manner. However the misuse of power will create an opposite effect and may lead to undesirable outcomes, creating an unethical workplace. Therefore leaders should always be careful in using their positional power.

Providing Enforcement of Ethical Behaviour

To create an ethical workplace, ethical leaders may provide enforcement directly or indirectly. An ethical leader committed in providing an ethical workplace will try their best to promote and enforce ethical behaviours directly by coming up with activities to emphasize ethical behaviours regularly. Ethical leaders create strict Code of Ethics (COE) for everyone in an organization to follow. Ethical leaders enforces rewards and punishments in the execution of COE.

M.E. Brown did a researched that shows reinforcement of ethical behaviour plays an important role in modeling effectiveness as employees pay close attention their leaders who has the authority to punish and reward. (2006) Reinforcement of the COE will further reduce the practice of unethical behaviour in the workforce, as it is known what should and should not be done. Ethical leaders are required to reward employees that demonstrates good performance and punish employees with bad performances. Therefore, the rewards would serve as an incentive to remind followers to practice and display ethical behaviours. This will lead to the creation of an ethical workplace.

Dilenschneider once said, “Search for power but never forget to share it.” (2007). Ethical leaders can also share the responsibilities of executing the COE to his employees. If responsibilities of executing the COE are given to each and every one, employees will feel the need to perform to their best ability because they are accountable for their own actions. Employees would be held liable for inappropriate


behaviours as they are each assigned to execute and follow the COE. Thus, this will also motivate them in practising ethical behaviours.

Role Modelling

Leaders are role models in an organisation. Employees will look up to ethical leaders as role models. Ethical leaders must always remember to “walk the talk” and “talk the walk”. M.E. Brown mentioned that “Moral managers make ethics an explicit part of their leadership agenda by communicating an ethics and values message, by visibly and intentionally role modeling ethical behaviour” (2006). Ethical leaders have to constantly and consistently practising and preaching ethical behaviour . In a workplace, ethical leaders are always under the spotlight, therefore, their actions will strongly affect the behaviour and attitude of employees towards the organisation. Ethical leaders who strive to walk the talk and talk the walk will indirectly create a standard and expectation for employees’ behaviour. This incidental creation of standard and expectation will lead to employees following the footsteps of ethical leadership.

Muel Kaptein states that senior and local management are positive role models.(2010). Even with the COE, ethical leaders must remember to practice what they preach. With consistency from the leaders, employees are likely to conform and behave accordingly to the organizations behaviour and function ethically. Thus, ensuring an ethical workplace. Furthermore, Ethical leaders have extra liability on their actions as they are to account for both the employees’ actions and their own actions. As a result, ethical leaders will have a strict guidelines to follow, increasing efficiency and leaving strong ethical standards for the workplace.

Benefits of ethical leadership

Organisation commitment

One benefit of ethical leadership is that it creates organisation commitment. Employees are more committed to continue working in the same workplace. Organisation commitment occurs when employees identify him/herself taking pride in being a part of the organisation, with the intention to commit to the organisation in the long-term, and is willing to do more than their job responsibility to aid in the organizations progress.

Studies have shown that “ethical leadership contributes to followers’ job attitudes and work outcomes”, inclusive of “job satisfaction, affective commitment, and work engagement” (Tanner, Brugger, Schie and Lebherz, 2010). Ethical leadership give rise to job satisfaction and work engagement for employees. Job satisfaction pushes employees to work harder as they take pride in their work and have a strong sense of achievement and accomplishment upon completing their work. This will lead employees to further engage in their work. As a result, employees are motivated to perform their best, producing satisfying results for the organisation and therefore, choose to stay in the organisation that is able to give them emotional contentment.

Ethical leadership also creates an environment of trust which leads to effective commitment from employees as they develop an emotion of attachment to the organization. In a trustworthy environment,


employees tend to be more comfortable and develop less feelings of suspicious to the operations of the organization. This will in turn, boost the productivity of the organization as employees begin to develop a sense of belonging and work at ease. Ethical leaders assures employees with their consistency and strong sense of moral values, therefore employees do not have to worry about being treated unfairly.

Ethical characteristic

Ethical leadership will slowly build up an ethical characteristic for the organisation, which may then be used as a marketing slogan for the organization. An example would be from “The Body Shop” where they are trademarked as “Against Animal Testing”. This may be viewed as an act of social responsibility amongst consumers who are environmentally friendly or, who are strong believers against animal testing. Thus, to show their support and approval, ‘The Body Shop’ would attract these groups of consumers.

Therefore, ethical characteristics can be used as an additional strategy for marketing. In the long run, the ethical characteristic will be embedded with the organisation. The public will associate the ethical characteristic and the organisation together, leaving a strong branding. On top of that, it may also raise more awareness on particular issues and the organisation will get free advertising through word of mouth from people who supports the ethical characteristics of the organisation.

Organisation characteristic behaviour

Business thrive because of ethical leadership. Embedding organisational characteristics in businesses aids in decision making. (Kasthuri, CTP, pg 2, 2009) Organisation characteristics behaviour sets a standard ethical expectation for the employees in the workplace. It acts like an amplifier for ethical behaviour by portraying the organisation to be people oriented. Ethical leaders and employees will think twice before they make any decision as they are strongly influenced by organisation characteristics, leading to higher rate of ethical decision.

Ethical leadership creates organisation characteristic behaviour in the long run. All organisations and consumers desire to be involved with an ethical organisation as it provides a sense of assurance and certainty. Consumers will be willing to be engaged in the organisation’s products or services without fearing for any form of disadvantage. It will ultimately create a loyal consumers base for the organisation as they are able to develop a relationship based on trust and integrity with their consumers. On top of that, it will contribute greatly to the organisation’s reputation in the market, generating more sales and revenue.

One example will be from Johnson & Johnson where the whole organisation preaches about ethical behaviour. They are committed to responsible marketing and promises their consumers that all of their products follows strict guidelines. They are also transparent on the handling of products and ensure that that their consumers receive what is the best for them instead of what is the best for the company. Ultimately, there were branded the top brands in being ethical by Forbes in 2011.


Conclusion

In conclusion, ethical leadership is the most important factor in creating an ethical workplace.

In order to build an ethical workplace and improve the effectiveness of work, ethical leadership is essential. Even with power and enforcement, nothing will be useful unless the leader leads by example. If the leader enforces the ethical behaviour in the workplace but does not practice it him or herself, no one will be obligated to practice ethical behaviour. Leaders set the tone for the organisations and it is important for them to set the right tone that will ensure the right practice of ethical behaviour and thus creating an ethical workplace.

On top of that, without ethical leadership, the organisation may practice unethical behaviour which may be harmful to their employees and unfavourable to the society, public or even the environment. Ethical behaviour is the fundamental behaviour of human values. Ethical leaders creates hope, assurance and comfort for employees, public and the society which in turns builds a comfortable environment in the workplace for both employers and employees. The fruits of having an ethical workplace is that efficiency and effectiveness of the labour market will increase inevitably. To add on, it would also increase the reputation of the organisation due to consumers spreading word of mouth about the market.

However ethical leadership is not the only factor in creating an ethical workplace. There are many other factors in creating the ethical workplace. This factors, along with ethical leadership will bring about a fast moving and pleasant workplace for people in the organisation.


References

7 Lenses: Learning the Principles and Practices of Ethical Leadership – Linda Fisher Thornton –

Google Books. 2015. (Online) Available at: https://books.google.com.au/books?

id=jZz4AgAAQBAJ&printsec=frontcover&dq=linda+fisher+thornton&hl=en&sa=X&ei=Yd4oVcKLF

8X4mAXVuoD4Ag&ved=0CCUQ6AEwAA#v=onepage&q=linda%20fisher%20thornton&f=false

(Accessed 19 April 2015)

30 Ways to Define Leadership. 2015. 30 Ways to Define Leadership. (Online) Available at:

http://www.businessnewsdaily.com/3647-leadership-definition.html. (Accessed 19 April 2015)

Brand Power To The People: J&J Takes Lead In Forbes Ranking – Forbes 2015. (Online) Available at:

http://www.forbes.com/sites/jenniferrooney/2011/10/05/brand-power-to-the-people-jj-takes-lead-in-

forbes-ranking/

Brown, M.E & Trevino, L.K 2006, ‘Ethical leadership: A review and future directions’, The

Leadership Quaterly, vol. 17, pp 595-616, viewed 19 April 2015, Sciencedirect Database

Dilenschneider, R.L. 2007, ‘Power and Influence’, Vital speeches of the day, vol. 73, no. 6, pp. 270-

274.

Kaptein, M 2010, ‘Toward Effective Codes: Testing the Relationship with Unethical Behavior’,

Journal of Business Ethics, vol. 99, pp. 233-251

Kasthuri, H 2009, ‘Leading with Your SOUL’, Business And Economics – Accounting, vol. 90, no. 8,

pp. 44, 46-51, viewed 19 April 2015, Proquest Database

Maner, J.K. & Mead, N.L. 2010, "The essential tension between leadership and power: When leaders

sacrifice group goals for the sake of self-interest", Journal of personality and social psychology, vol.

99, no. 3, pp. 482-497. http://search.proquest.com.ezproxy.lib.rmit.edu.au/docview/745195114?

accountid=13552

Mayer, D.M, Kuenzi, M Greenbaum, R, Bardes, M & Salvador, R 2008, ‘How low does ethical

leadership flow? Test of a trickle-down model’, Organizational Behavior and Human Decision

Processes, viewed 19 April 2015, Sciencedirect Database


http://search.proquest.com.ezproxy.lib.rmit.edu.au/docview/745195114?accountid=13552

http://search.proquest.com.ezproxy.lib.rmit.edu.au/docview/745195114?accountid=13552

http://www.businessnewsdaily.com/3647-leadership-definition.html

https://books.google.com.au/books?id=jZz4AgAAQBAJ&printsec=frontcover&dq=linda+fisher+thornton&hl=en&sa=X&ei=Yd4oVcKLF8X4mAXVuoD4Ag&ved=0CCUQ6AEwAA#v=onepage&q=linda%20fisher%20thornton&f=false



Rhoades, R, Eisenberger, R & Armeli, S 2001, ‘Affective Commitment to the Organisation: The

Contribution of Perceived Organisational Support’, Journal of Applied Psychology, vol. 86, no. 5,

pp.825-835.

Tanner, C, Brügger, A, Schie, S & Lebherz, C 2010, ‘Actions Speak Louder Than Words

The Benefits of Ethical Behaviors of Leaders’, Journal of Psychology, vol. 218, no. 4, pp.225–233

Vevere, V 2014, ‘Ethical Leadership: Student Perceptions of Exercising Ethical Influence in

Organisation’, European Integration Studies 2014, vol. 8


Ethics & Governance Self-assessment rubric

Please cut and paste the following rubric and submit it as part of your Research essay in the same word document. Put a mark (X) in each column (ranging from Unsatisfactory to Excellent) against each of the selection criteria and give yourself and overall grade (Fail, Pass, Credit, Distinction, High Distinction)

Name _________Hong Ping Tan_(S3535239)_________

Grade:U

nsatisfactory

Satisfactory

Good

Very Good

Excellent

Key issues relating to the question have been developed

X

Original and clear argument X

Logical and convincing discussion X

Ideas and assertions substantiated through use of high quality reference material (key academic perspectives/views are used to develop arguments)

X

Appropriate Harvard style referencing (in-text and list of references)

X

Number and quality of references X

Clear and comprehensive written style (spelling, grammar, syntax etc)

X


Distinction

ethics & governance essay

Documents