Term Paper on "Ethics in Leadership in the Business World"

Term Paper 4 pages (1530 words) Sources: 8 Style: APA

[EXCERPT] . . . .

Ethics in Leadership

There is substantial evidence of a lack of ethical behavior in the business world and if the buck stops at the top of a company, then the business leaders of the U.S.

A are responsible. Beyond Enron's outrageous breach of ethics and laws, there still are companies behaving poorly. This paper provides some resources and ideas as to how business leaders should behave, and how leaders can become educated and updated on ethical ways to conduct their day-to-day business activities, and set positive example for their employees at the same time.

Medical Laboratory Observer; Financial Executive of Oncology Management; Valor Economico; David Berg

Center for Ethics & Leadership; Dr. Bradley Agle.

T. Ryan, MSA; Development Southern Africa of Criminal Law & Criminology

Affairs;

Works Cited

Ethical behavior in business is not a new idea, but since the recent high-visibility corporate scandals involving Enron and other companies, ethical business leadership has been a topic of great concern in America. What is ethical behavior? Writing in the journal Medical Laboratory Observer, Dr. Bernard E. Statland argues that ethics is often "taken for granted" once young business majors finish their ethics courses and get out of college. However, Statland asserts that ethical behavior involves doing the "right thing" even though that decision may not be the most "cost-efficient way to solve a problem." Ethical values, Statland explains, entails telling the truth, "providing full disclosure, being impartial, and having respect for the individual and the law."

Is there a pressing need for better ethics in corporate American? Yes. Indeed, when employees are approached with questions about the honesty and ethical behavior of their business leaders, what happens? The Ethics Resource Center and the auditing firm KPMG conducted a survey (Dressendofer, 2003) of 1,500 U.S. workers and "...one-third said they had seen their bosses lying to employees, customers, vendors, and the public." Moreover, more than 75% of those interviewed say they have seen their leaders "...break the law or violate company standards in the preceding six months," Dressendofer write in Financial Executive.

And when it comes to what business leaders are saying and doing about ethics, there is no shortage if material for an alert researcher to discover. The Journal of Oncology Management recently reported the appointment of Dr. Bradley Agle - Director of the David Berg Center for Ethics and Leadership at the University of Pittsburgh - to the Board of Directors of the Oncology Nursing Society (ONS). The ONS placed Agle on their board in order to tap into Agle's reputation in the field of ethical business leadership; the ONS is developing "comprehensive conflict of interest policies" and the board realized they needed a professional like Agle.

Meantime, in addition to being the director of the David Berg Center for Ethics and Leadership, Agle is a professor who has been teaching ethics for thirty years. He was recently in Brazil attending a seminar on business ethics and was interviewed by Andrea Giardino in Sao Paulo (Valor Economico, 2008). Agle said that many people thought the damages caused seven years ago by Enron would "teach everyone a lesson." They were wrong, Agle insisted. There are still unethical procedures and strategies being conducted around the world, including the French bank scandal (at Societe Generale) that cost the U.S. An estimated $7 billion.

Agle sees a positive side to the Enron scandal in the fact that "seven years ago - when Enron scandals were uncovered - 33% of American business schools offered the subject of ethics or compliance." And today, that number has doubled and 67%; and beyond that, the number of corporate programs in the field of business ethics has grown, he adds.

Will there be more big scandals? "Unfortunately, scandals are not over," he said. He mentions the recent Citigroup scandal, in which the CEO of "...the largest financial services company in the world" was toppled. Billions in high-risk investments were lost, Agle continues, and it just illustrates how the American economy is at risk and "reveals how important it is to have leaders who are concerned with the consequences of poorly planned actions," according to Agle.

One of those business leaders who clearly does have it right when it comes to ethics in business is John T. Ryan, CEO of Mine Safety Appliance (MSA), who was given the "Excellence in Leadership Award" by the David Berg Center for Ethics and Leadership. In his acceptance speech (www.business.pitt.edu/berg/about),Ryanlaid out several key concepts (posed as questions) to his audience with reference to business leadership ethics. One, do you (as CEO) create an environment...that makes it "easier or harder for your people to achieve...objectives" without feeling the need to "cheat or be unfair?" Two, do you make it "easier or harder" for your employees to fulfill their "essential personal and family obligations?" Three, do your people know that "...honor, principles and moral obligations are more important than the bottom line?" And four, never go "contrary" to the words of the Lord's Prayer, 'Lead us not into temptation'."

In the journal Development Southern Africa the authors present examples of corporate irresponsibility (such as Freeport-McMoRan, a U.S. firm operating open pit copper and gold mines in Indonesia that has dumped tons of waste into mountains and rivers). But the authors also assert that corporate leaders should behave ethically - with "integrity and mindfulness" - and without corporate citizenship education this is not possible. The ways in which companies have, in the past, been coaxed (persuaded) to develop ethical leadership standards - and "counter the erosion in corporate ethics" - is through legislation and enforcement. "But this is not enough" (Prinsloo, et al., 2006), the article asserts. What is also needed is "education and training," and within that training should be a close examination of the "complex challenges and paradoxes business leaders face."

To achieve the education and training necessary, Prinsloo goes on, corporate leaders from companies around the world should take advantage of the global initiative offered by the European Foundation for Management Development (EFMD) and the United Nations "Global Compact." The two key questions that the UN Global Compact presents are: one, what is globally responsible leadership and "why is it a business imperative?" And two, how can "a new generation of globally responsible leaders be created?"

Meanwhile, on the subject of ethical leadership, an article in the Journal of Criminal law & Criminology (Kaptein, et al., 2006) suggests that frequent surveys are required to monitor the ethics of any given company. The leadership in corporations needs information "to manage the ethics of their organizations," Kaptein explains. Many times signs of "unethical behavior" are obvious to employees but "management either does not pay attention or does not recognize the warning signs for what they are," Kaptein goes on. And sometimes - and this, Kaptein insists, is "troubling" - employees raise concerns about an unethical matter but the company leadership tends to "look the other way, sweep it under the rug, or shoot the messenger."

Given that the authors of this article believe that not enough research has gone into the issue of "...how management can measure organizational ethics." This article asserts that leaders in business should first know what is ethical and what is unethical, and then they should inform their workers and train workers as well, starting from the top. Does each department have an "ethics hotline"? Do all departments have their own "code of conduct"? If the answer to both questions is no, then leaders has failed to do their jobs in that regard.

In the journal Foreign Affairs, journalist Klaus Schwab believes that many companies believe they have a good sense of corporate ethics because they engage in philanthropy, they have good relationships with their shareholders, and they are involved in their community. However, there is more to ethical leadership, according to… READ MORE

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