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Leaders are critical components of any enterprise. Subordinates look to the leaders for guidance in certain areas of the market that seem to be difficult. As a result, a leader's ethicality is very important in deciding employee success and adherence to the laws and regulations that govern the company. Ethical leaders value all of their employees to have a pleasant working atmosphere for them. Ethical leaders should not tolerate the bullying of subordinate workers and make certain that all employees support one another at all times. The role of the leader is to act as an example to the other employees and promote the cultural beliefs that form the foundation of the business. The creation and maintenance of an ethical culture ensure the company can achieve the desired productivity and objectives.
The Transformational Leadership Theory
Leadership theories explain the characteristics of leaders that show their ethical practices. The transformational leadership approach concentrates on the relationship between the leader and the subordinates. A transformational leader interacts with the employees and incorporates their ideas into major decision-making situations. When the employees experience the implementation of their ideas in an organization, they feel motivated enough to work harder in the team. However, a leader must be cautious to avoid situations where some employees might feel secluded from the process. In such a case, the leader considers all the ideas of the employees equally without favoring any particular employees. The transformational theory describes an ethical leader as one that inspires and motivates the subordinates into better performance. A moral leader understands the capabilities of all the employees from the interaction and delegates duties to them according to their potential.
Transformational leaders are good decision makers. In a business setting, it is not ethical for a leader to make emotional decisions without a consideration of all the available facts. Such decisions might affect the business negatively leading to losses or failure of the firm (Ferrell, Fraedrich & Ferrell, 2015). Therefore, an ethical leader can control his/her emotions at all times and especially when making crucial decisions in the organization. More so, an ethical leader is a good self-manager. Self-management refers to the ability to work under minimal supervision from the shareholders. Leaders that delegate all the duties to the junior employees and use the time in performing their errands are not ethical. A good leader needs to set a perfect example for the employees. Interacting with the employees helps in passing the necessary skills to them to nurture them into future leaders.
Creation and Maintenance of Ethical Businesses
Leaders in organizations are responsible for creating and maintaining the ethical business environment. Junior employees tend to copy the actions of the leader. If a manager misbehaves, then the employees replicate his/her behavior and the trend becomes the culture of the organization. Leaders create an ethical business environment through the creation of laws and regulations that guide business operations in the organization. The rules dictate how to carry out daily business activities as well as outlining how employees relate to one another. The rules and regulations communicate to the employees the expectations of the management prompting them to adhere to the laws. Lack of a proper understanding of the rules may lead to constant conflicts in the organizations with every employee behaving in ways that seem appropriate to them without a consideration of the others.
After drafting the rules, a leader needs to ensure compliance from the employees. It is very critical for the leader to enforce the rules equally to all employees. Since the leader might not be in the business at all times, it is important to encourage the employees to report any acts of ethical violations in the firm. Some employees might face harassment from other employees but shy off from reporting. Therefore, it is important to achieve compliance by ensuring all the staff watch out for each other and report on issues of ethical violations. Any report made should be very confidential to avoid victimization of the employees by the other staff. Creation of an ethical environment requires designing of rules and regulations to guide the employees as well as a keen observation of the employees to ensure compliance with adherence to the policies.
Maintaining an ethical culture requires setting a good example for the employees (Bouau, Jesuthasan & Creelman, 2015). Employees find motivation in realizing that a leader follows the same rules set out for them. If a leader does not adhere to the same standards, the employees are very reluctant in obeying the rules. The transformational leadership theory categorically states that a good leader provides a good example to the junior employees. A leader that wishes to maintain an honest business must ensure honesty in all dealings within the organization. Similarly, a leader that advocates for fairness must be fair to all employees at all times. Setting a good example is a critical step towards maintaining an ethical culture in business. An ethical culture should make the organization stronger and not divide the workforce. In the firm, all employees are the face of the organization and ethical practices might determine the level of trust that the employees accord the business.
Apart from being a role model, a transformational leader needs to reward and punish those employees that fail to observe the policies of the organization (Day, 2014). If an employee is instrumental in keeping ethical practices in the business, then the leader should appreciate the efforts of the employee through a rewarding scheme. Rewarding an employee increases the level of motivation ensuring that the performance level remains high. However, failure to acknowledge the efforts of the employee might reduce his motivation in upholding ethical practices in the business. Similarly, maintaining ethical practices requires punishment of the employees that fail to support ethical practices. Punishment might be in the form of compulsory leave or disciplinary action. The punishment will communicate to the employees on the seriousness of the management in maintaining the ethical culture in the business.
Leaders are instrumental part of any business. The leaders set the standards, which other employees try to emulate in the organization. An ethical culture ensures good practices in the firm. Such ethical practices include honesty in business, fair treatment of all employees and lack of harassment. Ensuring the creation and maintenance of ethical practices requires a set of rules and regulations by the leader. In addition, the manager should make sure compliance of the policies through rewarding the best employees and punishment of those failing to uphold the policies. Similarly, the leader should provide a good example for the employees to ensure that they learn through demonstrations. The transformational leadership theory describes a good leader as one that interacts with the employees and motivates them towards better performance and fulfillment of the goals of an organization. Therefore, the leader must be a good role model for the efficient performance of an ethical culture.
Bouau, J., Jesuthasan, R. & Creelman, D. (2015). Lead the work: navigating a world beyond employment. Hoboken, New Jersey: Wiley.
Day, D. (2014). The Oxford handbook of leadership and organizations. New York: Oxford University Press.
Ferrell, O., Fraedrich, J. & Ferrell, L. (2015). Business ethics: ethical decision making and cases. Stamford, CT, USA: Cengage Learning.
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