Ethics and law essay writing analysis: Ethical leadership
All leadership is accountable for influencing followers to act upon an action, complete a task, or behave in an explicit manner. Effective leaders influence course of action, encourage change in subordinate’s attitudes and values, enhance followers’ self-efficacy beliefs, and cultivate the internalization of the leaders’ vision by utilizing strategies of empowerment. It is alleged that the nurturing aspect of leaders can elevate organizational cultures and employee values to high levels of ethical apprehension. Ethical leadership requires ethical leaders and if leaders are ethical, they can make certain that ethical practices are performed right through the organization (Watts, 2008).
Intend of this essay is to talk about the ethical leadership and its relevance to leadership integrity. In support, importance of good corporate governance in commercial and contemporary organizational settings also has been discussed in depth. Further, essay talks about the theoretical and practical approaches to business ethics and corporate governance by presenting peer reviewed journal articles.
In organizational communication, ethics in leadership is very crucial and has a significant role to play. Business leaders must make decisions that will not only promote them, but also they must consider how the other people will be affected. The best leaders make well-known their values and their ethics and discourse them in their leadership approach and actions. It comprises communicating inclusive and precise information, where there is a personal, professional, ethical, or legal responsibility to do so (Dirks & Ferrin, 2002). On the other hand, as far as leadership integrity is concerned, it is about motivating and influencing people to perform and fulfill the unit’s mission. Furthermore, working towards this general goal builds unit consistency, trust, and a sagacity of self-esteem. A good leader fosters these eminences but a breakdown of integrity poisons the business, wipes out trust between people, and breaks down unit cohesion. While leadership qualities are different, truthfulness is merely a yes-or-no question (Brown, Trevino, Harrison, 2005).
In this context, over the last two decades, corporate governance has engrossed a great deal of public interest because of its evident importance for the economic health of organizations and society in broad-spectrum. The corporate governance framework specifies the distribution of rights and responsibilities among different members in the organization, such as the board, managers, shareholders and other stakeholders. Consequently, it spells out the rules and procedures for making decisions in corporate affairs. By doing this, it also proposes the structure through which the corporation goals and objectives are well-established and the means of accomplishing those objectives and supervising performance (Judge, 2012). It can be observed that corporate governance includes the relationship of an organization to its shareholders and to community; the promotion of fairness, precision and accountability; reference to mechanisms that are used to “govern” managers and to make sure that the actions taken are regular with the interests of key stakeholder groups (McQueeny, 2006). The main points of interest in corporate governance hence include issues of transparency and responsibility, the legal and authoritarian environment, risk management measures, information flows and the responsibility of senior management and the board of directors (International charter, 2012).
On the basis of discussion, it can be articulated that defining business ethics is talking about leadership integrity because leaders with integrity are genuine and reliable, have some essence and character, and also are good finishers. They generally follow the business ethics most importantly in their work and for the benefit of the organization (Hansen, 2004). Harshbarger and Holden pointed out that while many of the governance issues that corporations face are not new, the atmosphere in which they deal with them is more challenging than ever. Accordingly there a number of aspects that has brought ethical issues into sharper spotlight, including globalization, technology and growing competition (Harshbarger & Holden, 2004).
Furthermore, Van Beek and Solomon also observed that that ability to deliver a professional service will essentially take place in an environment in which there is a rising tendency towards individuality while society wholly becomes more global. The new realities of corporate governance reveal that no entity or agent is resistant from deceptive practices and in this way have modified the way organizations operate (Van, Beek & Solomon, 2004). Some of the authors found that what helped corporate governance most is evenness between policies and actions as well as the aspects of the organization’s ethical climate such as ethical leadership. Integrity, fair conducts of employees and moreover open discussion of ethics (Trevino al, 2011).
On the other hand, what upsets the most is an ethical culture that highlights self-interest and unquestioning compliance to authority, and the perception that legal compliance programs exist only to protect top management from blame.
Moreover, Hartman noticed out that executives understand that trust, integrity, and fairness in relation to the business ethics and corporate governance. They are learning that all the leadership integrity and business ethics do matter and crucial to the bottom line (Hartman, 2002). At the core of the current debate over corporate governance is the main problem whether managers of organizations should provide the interests of all stakeholders such employees, creditors, suppliers, customers, community, shareholders. Following this, two different models of corporate governance can be recognized and presented. Firs model is based on the maximization of shareholder value and the model of social responsibility (Arjoon & Gopaul, 2003). Second natural law ethical theory offers a structure to deal with the moral aspect of human action, serves as a guide to those directly responsible for corporate governance. It judges whether specific corporate actions are familiar with legal compliances, and proposes the grounds for a moral analysis of existing laws and practices related to corporate governance.
Furthermore talking about the corporate governance, business ethics and their approaches, two main traditional approaches; institutional and functional can be studied and discussed here in support. An institutional approach to corporate governance encompasses monitoring the existing institutions to note how they can produce the services they propose more efficiently. This approach therefore looks at each of the key areas and also makes a point to be noted that these areas could be developed in order to improve governance usually (Monks & Minow, 2011).
Alternatively, functional approach considers at how different institutional management can function in different modes. This specific approach takes the general view that there are different techniques to concentrate on same governance concerns. Besides, there are a number of vital factors strengthening the current growth in the subject of corporate governance. Some of the factors are the international economy, expansion of corporations, deregulation and globalization, shareholder activism, corporate scandals and financial crisis (Mallin, 2010).
Additionally coming back to business ethics and its practical approaches, ethics in business has been a progressively more contentious and vital topic of discussion over the last decade. Debate continues about whether ethics should be a component of business, but also includes how business can execute ethical theory in day-to-day business functions. In this case, most discussions focus on either traditional ethical philosophy, which proposes little of practical value for the business community, or psychological theories of ethical interpretation, which have been revealed to be flawed and incomplete. The theory presented here is called the Developmental Self-Valuing Theory (Smith, 2008).
In this theory, individuals first learn ethical values from corporations with others who are considerable in their times. Secondly, self-regulation is cultured through a practice of self-examination, self-judgment and self-reaction. Thirdly, the individual must believe that he can perform and behave ethically. Situational constraints and stimulus, as well as positive and negative outcomes for particular behaviors, will also affect the level of ethical performance. Each of these constituents is examined and combined to achieve a practical process for developing the level of ethics in corporate activity through selection, training and situational augmentation (Coldwell, 2005).
In addition, when business ethics is referred, it talks about substance, sincerity, integrity, and consistency. On the other hand, all these features are accepted by a good leader. It is noted that to be a good leader, he/she must have something more than the image of integrity. In sum, a great deal depends upon transparency, honesty, and the integrity and manner in which organizations conduct their business functions (William, 1990).
Therefore, the organizations must seek for profit in order to survive and expand, nevertheless, the detection of profits must stay within ethical bounds. Apart from this, the achievement of a set of ethical values broadly shared by all the enterprise members must certainly be based on the senior management’s obligation to those values. In parallel, this must be escorted by the existence of an official corporate ethics program and model. It comprises of official drawing up of a code of ethics that must coherent the corporation’s ethical expectations (Trevino, Brown & Hartman, 2003).
Afterward, creation of ethical committees, whose task will consist in building up ethical policies, evaluating employee’s actions and investigating ethical violations. It also involves the continuance of ethics communications systems that entail employees to report abuses and get some action or behavior guidelines. Lastly, development of ethical training within the organization, helping staff to acknowledge and act in response to ethical issues is also a feature of code of corporate governance and business ethics (Schwartz, 2004).
Here, the corporate governance dispute is to make certain a high degree of analogy between organizations’s directing beliefs and members’ daily beliefs such as altering rules and feelings about everyday behavior. Furthermore, managers should be able to influence a corporation to change and agree to the new ethical culture. But not only that, it is also a point to be remember that it is not possible to bring about significant changes in the culture of a firm in the nonexistence of the ethical aspect of high level managers (Potts & Matuszewski, 2004) .
As a result, dimensions of leadership integrity can be described to understand its relevance to business ethics. First is leadership process integrity capacity which is known as moral coherence. Then leadership judgment integrity capacity known as moral soundness, developmental integrity capacity as a moral maturity and lastly leadership system integrity capacity known as moral wholeness are the key dimensions of leadership integrity capacity (Reilly, 2006).
One of the cases of Kenya can be presented here to understand the practices of corporate governance and business ethics. Hynes noticed that the Kenyan government is trying to develop ethics and governance in open and private corporations in an attempt to exert a pull on foreign direct investment (FDI). This means that there is requirement for further study on corporate governance in the said country. Secondly, Resick perceived that governance to be the most significantly required area of modification for Kenyan public universities. Governance has an effect on a wide range of stakeholders. Poor governance frameworks have been related with disrupted university life. Thirdly, the corporate governance practices used in urbanized countries are not openly pertinent in developing economies because of political, economic, technological and cultural differences (Resick, 2006). This denotes that there is a necessity to develop models of corporate governance that are regarded as the conditions in each developing country and that are not directly borrowed from developed countries.
Furthermore, ethical corporate governance is considered as the processes and policies that an organization has in place to address issues concerning how it is managed and conducts day to day business. It is also critical to remember that enterprises exist prime to create a product or service, which is used to engender profit. Nonetheless that purpose must be balanced with controls that ensure a corporation pursues profit without crossing over the line into the sphere of unethical behavior (Stansbury, 2009).
Hence, On the basis of the overall discussion, it can be concluded that failure in corporate governance is a real menace to the future prospect of every corporation. With effective corporate governance based on main values of integrity and trust firms will have competitive advantage in magnetizing and retaining talent and in turn producing positive responses in the marketplace. Effective corporate governance can be attained by approaching a set of principles, code of conducts and the best practices. In other words, ethical compliance mechanisms contribute to constancy and expansion since it encourages confidence; management, leadership, and administration are necessarily ethical tasks. Ethics is actually a vital ingredient for any business’ success and it will further continue to serve as the outline for success in the twenty first century.
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