To become an ethical leader, it requires commitment and examination of one’s behaviour, values and willingness to accept the responsibility of the effects of one’s actions on others. Ethical leaders are required to take responsibility for the effects of their action on customers, suppliers, stakeholders and mainly the employees.
Individuals are likely to pay attention and learn from attractive role models. In addition, supervisors who have the power to deal with ethical rewards and discipline, unethical behaviour hence employees are influenced by such supervisors and engage in the desired behaviour, influence employees. When leaders behave in an ethical manner, communicate the importance of ethics and use punishment and reward for ethical and unethical behaviours, a group norm is formed and hence employees will not indulge in unethical behaviour.
Ethical leadership influences interpersonal dynamic groups. Ethical leaders exhibit normatively appropriate conduct through their actions and interpersonal relationships with employees in work units (Brown et al., 2005). The importance of two-way communication is stressed so that apart from them providing their own view, they can also listen to other’s views and get along with them. Ethical leaders also reflect to their employees that their primary concern is the employee’s interests in an organisation. The leaders influence the individuals who are encouraged by this behaviour to behave in a similar manner with rest of the individuals in the group. Researchers have found that when employees observed displays of virtuous interpersonal behaviour in their work groups, such as sharing, loyalty, advocacy, or caring, higher levels of liking, commitment, participation, trust, and collaboration may result (Koys, 2001; Walz & Niehoff, 2000). This may in-turn result in organisational effectiveness.
On the other hand, unethical leadership may also be effective for an organisation to a certain extent. Unethical behaviour involves acts that are illegal and/or are morally inappropriate to larger society (Jones 1991). Unethical leadership surpasses the leader’s own behaviour. In order to accomplish organisational goals, corrupt and unethical acts can be encouraged by the leader within the organisation. For instance, Clement’s (2006) review of corporate scandals in Fortune 100 corporations concluded that actions implemented by executives, boards of directors, and government officials were the primary cause of such indiscretions. Leaders may promote unethical behaviour among their subordinates without engaging themselves, and they do so by way of rewards. Unethical behaviour comprises of short-term gains, which overtake the traditional values such as honesty and accountability.
As per my learning and understanding regarding this topic, ethical leadership is the critical role that a leader plays for ensuring the values of an organization. The more we explore how ethics and effectiveness are inseparably interwove, the better understanding we will have of leadership. Beyond the traditional aims of an organization such as profits, in the current business situation, ethical principles provide the foundation of various concepts in many businesses and organisations. Ethical leadership provides ethical behaviour in an organisation, creates credibility and respect between the employees and towards the organisation. An ethical leader can lead the business to achieve success and also good ethical approach can enhance the profitability of a business. Ethics is the moral judgement of right or wrong by a person. The decisions taken within an organisation may be by an individual or group, but whoever takes these decisions is influenced by the culture of the company.
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