CHAPTER 1: INTRODUCTION
The foundational aspects of business ethics are predicated on how effectively a leader can enable significant change in their organizations while still retaining the most valuable aspects of its culture, people, processes and systems. The intent of this paper is to analyze how leadership set the foundation for ongoing ethical compliance at a minimum and can over time become a catalyst for organizations to embrace ethnicity as a core value set, becoming part of its identity (Bass, Avolio, 1993). The ability of a leader to create a culture of compliance and ethnicity however is not easily achieved; studies indicate that there is a high degree of emotional intelligence (EI) required in order to accomplishing this (Marques, 2007). Debating if transformational leadership is innate or a learned skill misses the point of how to create a highly ethical organizational culture that is self-motivated to excel on this dimension (Yukl, 1989).
In this study, a professional evaluation of top leaders and educators of local and international settings will be conducted to initiate the ground rules of successful leadership and to define the connection between ethical leadership and best practice. Moreover, the study will reveal how values and characters count in ethical-decision making. Finally, the paper will spotlight on the impact culture and how successful leader can create and maintain an ethical environment to ensure best practice.
Background of Study
The ethnicity of any corporate culture is formed over time, often affected by the decisions, approaches to defining it through actions and statements by senior management, and the level of tolerance for unethical behavior as well. In many ways the ethnicity of any organization is predicated on the relative level of rigidity or elasticity of ethical values, vision, mission and leadership levels of commitment (Yukl, 1989). For any organization then the greatest predictor of their success or failure is going to be passed on the leadership’s belief in ethnicity being a valuable destination to pursue and its value as a foundational value for the entire organization to pursue (Kochan, 2006). It is then the level of commitment to leadership and the pursuit of excellence in ethnicity that most differentiates one organization from another. The compass and catalyst of any organizations’ ethnicity is to a large extent defined by not only the CEO but the senior management team and their belief in the value of pursuing this aspect of an organization’s culture.
It has often been said that a manager is what one does and a leader is who one is (Avolio, Yammarino, 2002). In terms of the ethnicity of any organization and its relationship to leadership, the foundations of transformational leadership form a very solid foundation for driving ongoing change for the better on the dimension of ethnicity. The four dominant behavioral elements of transformational leadership are specifically the building blocks of a highly ethical organizational structure (Avolio, Yammarino, 2002). The first of these four elements are idealized influence, which is defined as the ability of a transformational leader to create a very high level of trust with subordinates through charismatic leadership based on emotional intelligence (EI). Transformational leaders have the ability to read potentially questionable ethical dilemmas quickly and accurately, and respond accordingly without sacrificing credibility or letting the company lapse into ethical conflict (Gilley, Dixon, Gilley, 2008). This aspect of leadership is what motivates subordinates to continually follow direction and seek to minimize the potential for unethical decision to be made in the first place.
The second aspect of transformational leadership that is critically important for any leader to have a very strong level of inspirational motivation (Avolio, Yammarino, 2002). This aspect of transformational leadership is critically important for leaders to set high expectations and get their subordinates, and in the case of CEOs, the entire company, to believe in their accomplishment. This is especially critical from an ethical leadership standpoint, as the norm has often become allowing small errors in ethics to be tolerated instead of questioned (Avolio, Yammarino, 2002). A strong transformational leader will be able to attain this level of performance by concentrating on their own behaviors as well, sending a clear message of what is appropriate in terms of ethical conduct (Marques, 2007).
The third factor, intellectual stimulation, has to do with how effectively a leader can challenge their subordinates to continually pursue challenging objectives even when the tasks associated with them are difficult. An example of this is when an organization must create a highly effective compliance program, and the amount of time and rigor associated with it takes employees away from their primary jobs. An effective leader will be able to create enough interest in the program to continually show the value of compliance. The leaders in situations comparable to this also show very clearly how the financial rewards of being ethical, namely doing well is especially effective in illustrating how valuable ethnicity is. The intellectual stimulation aspect of this specific area of ethnicity as a corporate value emanate from also quantifying the value of being strong at Corporate Social Responsibility (CSR) for example, and the many benefits this aspect or attribute has to corporate performance. The ability of a leader to create intellectual stimulation also leads to a much higher level of credibility and trust as well (Gilley, Dixon, Gilley, 2008).
The fourth factor that transformational leaders rely on for creating a culture of ethnicity is individualized consideration (Yukl, 1989). This is the ability to explain and show to each member of an organization what their value is and why their contribution is critical to the success of any initiative (Kochan, 2006). This is crucial in any organization’s direction on ethnicity and compliance, as change management is the most critical success factor there is in making large-scale changes to the culture of a company (Avolio, Yammarino, 2002). The ability to create a culture rich with individualized consideration will also serve as a very powerful catalyst for ongoing self-regulation on ethical challenges as well. The individualized consideration best practices continually show how leaders, when setting an example, often see their subordinates surpasses it in their own performance (Bass, Avolio, 1993).
The ability of any organization to create a culture of strong ethnicity and compliance is driven by the leader’s innate and learned strengths along the four dimensions of transformational leadership shown in this analysis (Niti Singh, Krishnan, 2008). To the extent a leader models these values and also shows self-sacrifice in pursuit of an objective (Niti Singh, Krishnan, 2008) is the extent of ethical compliance in the short-run and ethnicity becoming a foundational element of the organizational culture over the long-term. All of these factors support and strengthen a culture to embrace ethnicity and make it strength.