I strongly agree to the above statement by Rubin et al (2010). An ethical leadership may lead the organisation in a manner that respects the rights and dignity of others (Ciulla 2004). Ethical leadership enhance employee satisfaction with leaders, thus increase work output effectiveness and dedication to making extraordinary efforts as part of their performance (Brown, Trevino and Harrison 2005). However, some scholars stated otherwise and asserted that not only leaders must act ethically but employees must behave ethically to enhance positive effects on organisational effectiveness (Brown and Mitchell 2010).
Two of the most popular business ethics are Teleological and Deontological. In later years, although they have been largely substituted by many modern approaches, they form part of the tradition which newer approaches have been constructed.
Teleological approaches hold that the moral worth of actions or practices is determined by their consequences (Beauchamp and Bowie 2004). Action is judged desirable if it leads to the best possible balance of good consequences over bad consequences. In view of business ethics, it is crucial to weigh the costs of a business and social benefits before determining whether to pursue it. For instance, The Arctic National Wildlife Refuge in Alaska is under threat by fossil fuel interests (DesLauriers 2016). The oil company must weigh the economic benefits of oil drilling activities against the costs of environmental degradation in a preserve land. Teleological philosophy appears drawbacks as an approach to business ethics in measuring the benefits and costs of a course of action. How does drilling company evaluate the harm done to the region’s ecosystem?
Kantian ethics, deontological approach emphasis on “respect for person”. People have dignity and need to be respected as such (Rachels 1986). It is departs significantly from teleological that focus on consequences. In Kantian ethics, violation of ethics emerged if co-workers working for long hours, minimum wages and under unfavourable working condition. Co-workers are being treated like machines and not as conscious moral beings that have dignity. However, Kant’s ethical philosophy also has some limitations in the extent to which that his philosophy excludes moral emotions and sentiments such as sympathy and caring. Secondly, Kant’s philosophy sometimes is weak in providing correct guidance for every decision to be made.
The 4 V Model of Ethical Leadership
The 4-V Model (Figure 1) is a model that aligns the inner (values) with the outer (actions) to achieve common good (Kar 2014). Leaders need to discover and integrate their core values, exploit the vision on how the things could be distinct, discover their personal voice to articulate their vision by motivating followers and achieve the desire goals that can brings outer commitment and common good.
Figure 1: 4V’s Model in Ethical Leadership (Kar 2014)
This model can be seen on Robert Smith (Figure 2), a private-equity financier and chairman of Vista Equity. He was famous for the donation worth $20 million to National Museum of African American in 2016 (Alexander 2016). He gained respect from his employee due to his values on real talent and does not discriminate them (Gelles 2014). Robert mentioned that he wish to inspire other leaders to contribute to society. As described in 4V Model, leader must initially understand the core value, then a vision is developed on how the world could be distinctive from others, then voice out the vision in convincing manner to inspire others and at the end inculcate this morality to cultivate virtue (Center for Ethical Leadership 2016).
Example of Unethical Leadership Behaviour in Toshiba
Ethical leaders in an organisation would bring huge business impacts while unethical leaders might cause tremendous effect to the organisation (Brown and Mitchell 2010). One of the examples of unethical leadership was happened in Toshiba’s due to their accounting scandal that caused financial losses and public mortification. Toshiba’s ex-CEO, Mr. Hisao Tanaka confessed that they had overstated operating profits to about $1.2billion for past seven years (Mochizuki 2015). The fraudulent accounting was due to the culture practised in corporate as the employees forced submissive to superiors without challenging them. Consequently, Toshiba faced a fine of $60million, share value declined by as much as 40% and losses $318 million after the scandal came out (Millman and Curtis 2015). Video 1 explain clearly to the accounting scandal happened in Toshiba.
Video 1: Toshiba CEO quits over $1.2 billion accounting scandal
Example of Ethical Leadership Behaviour in Wipro
Wipro Limited was awarded for “2016 World’s Most Ethical Company” (Figure 3) for 5th consecutive year by Ethisphere Institute (Ethisphere 2016). The corporate committed in leading ethical business standards and fostering transparency at every level. For instance, Azim Premjit (Founder of Wipro) emphasised Code of Business Conduct (COBC) as a guideline that applied to all levels of employees in Wipro from top to ground (Wipro 2017). COBC strictly prohibit unfair trade practices, foreign corrupt, abolition of forced labour etc. Employees are encouraged to report suspected violations to their respective supervisor and whoever engaged in prohibited conduct will be subjected to disciplinary action including termination. This is to ensure the business is conducted in an ethical way and to earn trust from all stakeholders. Wipro has proven that performing an ethical business will pay off (Daily News & Analysis 2016).
Code of ethical needed to be incorporated in every organization ranging from top level management to the operational level employees. Managers should be embedded with code of ethics in themselves and implement the practice of ethical to their employees as part of integral component of company culture. Eventually, this will create positive work environment that would gains trust and confidence from all stakeholders.
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