Anethical leader stimulates growth within a company. Since these leaders are in aposition of power they must ensure their decisions and actions influence othersthrough ethical behavior. They must also lead by example in order for theiremployees to behave a certain way, raise organizational culture, increaseemployee’s values, and encourage trustworthiness. According to the article “Most really difficult moral decisions made byleaders are risky, because they have imperfect or incomplete information andlack control over all of the variables that will affect outcomes” (Ciulla,2003). Ethical leaders must be self-aware and must already know how theirdecisions affect other people. They must put their self-serving interests asideand think of the outcomes that will benefit their employees and the company. Itis important to already have formed an understanding of core values.
Those samevalues we’ve learned over time in our previous personal and professionaldecisions. I don’t believe difficult moral decisions are risky because leaderslack control over all variables that will affect outcomes. This is because Ibelieve all ethical leaders should not only have strong core values but mustalso have a vision.
We all have a sense of what is morally right and wrong. Whenleaders are put in a position to make a risky decision, a vision puts outcomesinto perspective. A company’s reputation could also be at stake if a leaderdoesn’t make ethical decisions. Leaders could also see a decrease in employee’sloyalty and morale.
The code of ethics should be a used as a guideline onethical behavior within a company. But setting high ethical standards couldincrease the possibility of employee’s following your lead. Employees will workhard to meet organizational goals, adhere to policies, and will increase thequality of their work. Increased ethical culture among senior leaders,frontline managers, and employees enhances quality products and services. Thiscreates an overall reputation within not only the financial market but also thecommunity. As we’ve seen in current events within the United States, unethicalresponses to controversial topics from business leaders can lead to employeesand consumers to boycott businesses and their products. This can quickly leadsto the downfall of a business. Some businesses never recover from the financialdamage their unethical decisions or unethical public responses they’ve made.
“Once a leader develops an innerethical maturity, how does he or she influence followers to pursue ethicalliving?” (Monahan, 2012). Ethical leaders are distinguishedfor having qualities such as trustworthiness, openness, people orientations,justice, supportiveness, mutual respect, collective motivation, altruism,balanced decision making, fair treatment and clear vision (Zhu et al., 2004;Brown et al., 2005; Resick et al., 2006; Brown & Trevino, 2006). Whensubordinates recognize that leader is caring for followers’ best interest, theyreciprocate by exerting more efforts and innovation in work (Yidong &Xinxin, 2013).
Moreover, ethical leaders via demonstrating qualities such ashonesty, collective motivation, openness, altruism, justice, trustworthinessand fair decision making (Brown et al., 2005; Resick et al., 2006; Brown &Trevino, 2006) can change employee perception of work and work context, hencemotivating subordinates to exert more efforts in work and practice innovativework behavior. Additionally, ethical leaders by supporting two-waycommunication and listening to their subordinates encourage followers toexpress their concerns and opinions, stimulating employees to generate newideas for improving work processes and procedures (Martins & Terblanche,2003). In the second stage of innovative work behavior (i.e., idea promotion)ethical leaders contribute via exhibiting traits of altruism and honesty(Gardner et al.
, 2005), making employees feel more psychological safety tospeak up for promoting their ideas and to share knowledge with coworkers.Furthermore, ethical leaders play substantial role for implementation of newideas, work processes and procedures (third stage of innovative work behavior).