Leadership & Business Ethics

Leaders should encourage ethical actions among their employees.

Leaders serve many crucial functions in the workplace, not least of which is encouraging an atmosphere of ethical action. Employees look to leaders to set the tone of business, so it is important for them to stress the importance of ethical decision making and honesty. It is in a leader's best interest to cultivate an ethical work team, as this will create an open atmosphere of collaboration and help to avoid costly scandals.

Ethical Problems in the Workplace

Ethical breaches happen frequently in the workplace. As John R. Schermerhorn writes in "Management," roughly half of employees see unethical behavior in the office, but fail to report it, and just under 50 percent admit to committing questionable actions themselves. Common abuses include lying, harassment, using office supplies and time for personal gain, discrimination and sharing sensitive business procedures and techniques with others.

Importance of Leadership

An ethical corporate culture, backed by strong leadership, can curb such unethical behavior. A leader should foster an atmosphere of honesty and teamwork, as it is harder for employees to hide secrets from one another in this kind of environment, and people feel more comfortable speaking out when they do not feel uncomfortable with a decision or action by a coworker. Leading by example--by making ethical choices and encouraging others to do so even at the expense of company gains or a quick, easy solution--shows that a leader and, by extension, the organization, is serious about ethics and accountability.

Problematic Leadership

At the same time, an unethical leader can be poisonous to a responsible corporate culture. A manager who stresses profit or performance above all else can push employees to act unethically, even if they are uncomfortable with the situation, out of fear of losing their jobs or not being seen as a "team player." Such leaders can also discourage whistle blowing. This is problematic because the longer unethical behavior continues, the steeper the eventual price usually is.

Ethics Training

Ethics training is one way to avoid ethical issues with managers and employees. By providing both with an ethical background, responsible decision making processes and a better understanding of the consequences of unethical actions, companies are giving their leaders and workers the tools to make the right decisions, even when the choice isn't an easy one.

Benefits

There are many benefits to breeding an ethical corporate culture. By encouraging managers to run responsible departments, companies are lessening the chance their reputations and bottom lines will be impacted by fraud, lawsuits and accounting irregularities that only mask deep fundamental deficiencies.

References

• "Management"; John R. Schermerhorn; John Wiley & Sons, 2008