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Ethical Leadership In Modern Business

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A large number of firms have emerged as a result of globalization. All organizations want to make the most money possible, but maintaining relationships with customers and the organization's human resources is as important. Therefore, in this role, the organization must have capable leadership. However, the leadership component should not be based on unethical principles since this has a number of long-term consequences for the organization. Therefore, the primary goal of this essay is to argue for the need of ethical leadership in contemporary enterprises.
 

The term "ethics" refers to a collection of rules and principles that a person or organization acknowledges as being appropriate and respectable in their eyes. The concept of ethics asks people to evaluate themselves based on how charitable and goal-oriented they are. It's possible that a set of ethical principles will be able to tell you what's right and wrong in a certain situation (Ahmad, 2020). According to Kacerauskas (2019), the application of ethics to the context of leadership indicates that everything boils down to the behaviors of the leader.
 

Collectively, leaders may influence how others around them conduct ethically. People are more inclined to follow their example and exhibit ethical behavior if they do these things themselves. Ethical leaders may help a lot of people by setting an example of how to behave in a manner that benefits everyone. To maintain one's reputation and trustworthiness, ethical leadership is crucial. The process of becoming a leader is lengthy. A leader's reputation may be badly harmed by acting unethically and they may be expelled from the A-league right away. Misconduct may also diminish a person's feeling of value, which can have negative effects and prevent someone from realizing their full potential.
 

The primary emphasis of ethical leadership in business is on the shared values, ideals, and convictions of individuals and their businesses as a whole (Ko et al., 2018). Executives have a responsibility to maintain, model, and reflect the ethical principles of their organizations. Such managers go above and beyond simple worker supervision. As role models for others, ethical leaders take the initiative, establish high standards, and take action. Magalhaes et al. (2019) assert that ethical leaders do not give their people orders. Instead, they encourage and support their growth. Even their online personas reveal the ideals of the company and its staff.
 

The leadership of a company determines its culture and purpose. According to Redhead et al., people are more likely to work more and behave ethically when they are appropriately rewarded (2021). Building a solid set of corporate principles and open ethical standards is crucial now more than ever as interest in companies grows. For instance, Gary Hirshberg was the CEO of Stonyfield Farm in New Hampshire, the largest organic yogurt maker in the world. Under his leadership, Stonyfield Farm, whose aim is "healthy food, healthy people, and a healthy planet," pioneered the sustainability movement. The company's growth from a seven-cow enterprise in the early 1980s to one that makes more than US$350 million annually proves that it complies to the accepted business practices of today (O’Toole, 2019). Such is the relevance of ethics and business growth.
 

A growing body of research shows that ethical leadership improves employee happiness and has a beneficial impact on decreasing unethical conduct among workers (Sarwar et al., 2020). Numerous studies have looked at the connection between ethical leadership and unethical employee conduct, such as bullying and organizational deviation by employees (Henderiks et al., 2020). The findings show that when executives operate in a normatively acceptable way and make ethical practices a regular part of the firm's operations, workers are more likely to be devoted to their employment and less likely to participate in unproductive or unethical activity.
 

Individuals may be dissuaded from participating in unethical activity if the leader makes it clear that they want the workplace to be ethical. According to Aryati and colleagues, an organization's ethical climate may be defined as "the whole of what employees perceive about an organization's ethical ideals, norms, and practices" (2018). According to the findings of their study, Aryati et al. (2018) found that leaders have a significant influence on how their subordinates view the ethical atmosphere, which in turn helps to prevent employee misconduct.
 

According to several studies, ethical leadership improves both the general well-being of employees and their level of life. In addition, research has shown that having leaders who uphold ethical standards helps to cut down on unethical conduct in the company. Employees who have positive views about their employment in terms of wanting to quit, being dedicated to the company, and being happy at work are examples of ethical leadership. Employees who trust their teammates and management, like their bosses, feel hopeful about the future of the company, and have favorable views about the company's future are also examples of ethical leadership (Ko et al., 2018).
 

Additionally, ethical leadership has shown to provide results that directly benefit an organization, such as better staff engagement in organizational citizenship behaviors (OCB) and improved task performance, according to studies from the real world (Aryati et al., 2018). Men et al. (2020) 's research found a connection between ethical leadership and workers' perceptions of psychological safety. Employees are more willing to voice concerns at work because ethical leadership persuades them that taking risks in romantic relationships is harmless. They are mentally secure, which explains this. According to a research by Men et al. (2020), ethical leaders may make their workers' tasks and responsibilities simpler, hence lowering their inclination to bully others.
 

In general, leaders, and ethical leaders in particular, have a big effect on how individuals conduct and carry out their obligations. One thing is certain. The possibility of unethical activity, including as accounting fraud, misrepresenting contract conditions, and the delivery of hazardous items, is prevented and reduced by ethical leadership that is effective (Bashir & Hassan, 2020). This is due to the fact that it deters people from concentrating nearly only on the bottom line. Ethical leaders are concerned about the strategies they use to achieve their objectives in addition to concentrating on the market and generating money. Ethical leaders affect how their workers grow to understand their own responsibilities through penalizing workers who violate ethical norms, setting a positive example, and taking part in ethical dialogues with employees (Hsieh et al., 2020).
 

According to studies by Koteneva & Chelyshev, people behave imethically under high-stress circumstances (2020). Due to the emphasis on conventional business goals, leaders often feel pushed to concentrate primarily on the bottom line, which includes shareholder money, performance targets, and profitability. The result might be unethical action. Ethical leaders can control stress and tension while promoting ethical ideals, claim Greenbaum et al. (2020). Ethical leaders are more prepared for CEO roles because they can handle and manage profit-increase requirements while preserving ethical norms. Since ethical values "trickle down" to middle and lower level managers, having ethical leaders at the top of a firm would likewise be helpful and successful. Lower-level management develops ethical leadership abilities gradually, which has a long-lasting impact on how people act ethically.
 

In addition, poor management in an organizational setting is a fantastic illustration of unethical leadership. The detrimental impacts were examined in several scholarly studies. Mbandlwa et al. (2020), for instance, evaluated the association between ineffective leadership and negative outcomes from a number of angles. Positive correlations exist between these two variables, while negative correlations exist between positive follower outcomes and behaviors, such as staff well-being and individual performance.
 

Huertas-Valdivia (2019) found that although people under authoritarian and nefarious leadership did not have poor mental health, low vitality, or severe behavioral stress. Additionally, according to their research, subordinates' conduct and emotional stability may be negatively impacted in the long run by supervisors who exhibit negative personality characteristics. The concept of "toxicity," which refers to the spread of unethical leadership conduct across an organization, has been the subject of several studies. For instance, Laguda (2020) investigated the consequences of unethical leadership in organizations and discovered that it may cause unethical behavior among followers. However, unethical behavior on the part of subordinates may range from being antagonistic and confrontational with the boss to intentionally causing harm to the firm as a whole, such as via theft, sabotage, and damage to the brand.
 

Mullen et al. (2018) investigated the link between "poor" leadership and aggressive employee reactions. They also conducted a more thorough assessment of the impacts of workplace bullying. They noticed that victims of bullying had lower levels of self-esteem, leadership, peer and superior support, and mental health. However, they noted rising stress, absences from work, and tendencies to quit the organization. Malik et al. wrote an illuminating research on the effects of unethical leadership in 2022. The essay was prepared using a literature study on unethical leadership in social science research. They said that a lack of good leadership causes businesses to fail in a variety of ways, including when employees are absent or provide poor performance. Additionally, they said that poor leadership may hurt people's egos by robbing them of resources like attention and self-worth.
 

Furthermore, Malik et al. (2022) discovered that abusive supervision was linked to how followers saw their own value in the workplace, the importance of their task, and interactional fairness. Last but not least, poor leadership hurts both individuals and enterprises. For instance, this scenario can be witnessed in the modern day global giant Amazon. The firm is infamous for having poor leadership under Jeff Bezos who has been time and again been stated as a leader who constantly places great emphasis on profit and work rather than employee well-being and safety. This has led to a number of employees to be unhappy with the organisation owing to its leadership and led to several legal proceedings against the same (Mergen & Ozbilgin, 2021).
 

In conclusion, it is clear that unethical leader’s leadership styles ultimately bring down the whole organization. The report also emphasizes the critical importance of ethical leaders in the present economic environment. They provide a firm with a new point of view than traditional managers, whose main goal is to boost earnings. Through the application of ethical norms and principles that are consistent with the organization's fundamental values, ethical executives work to promote the business. Developing ethical behavior, enhancing employee welfare, increasing employees' sense of duty, and generating a sense of corporate pride and loyalty are just a few of the non-traditional business aims that ethical leadership focuses on.
 

References for Ethical Leadership in modern Business


Ahmad, T. (2020). Students reflect on the role of ethics in business management. World Journal of Entrepreneurship, Management and Sustainable Development, 16(2), 71-79. https://www.emerald.com/insight/content/doi/10.1108/WJEMSD-05-2020-112/full/html 
 
 
Aryati, A. S., Sudiro, A., Hadiwidjaja, D., & Noermijati, N. (2018). The influence of ethical leadership to deviant workplace behavior mediated by ethical climate and organizational commitment. International Journal of Law and Management. https://www.emerald.com/insight/content/doi/10.1108/IJLMA-03-2017-0053/ 
 
 
Bashir, M., & Hassan, S. (2020). The need for ethical leadership in combating corruption. International Review of Administrative Sciences, 86(4), 673-690. https://journals.sagepub.com/doi/abs/10.1177/0020852318825386 
 
 
Greenbaum, R., Bonner, J., Gray, T., & Mawritz, M. (2020). Ethical emotions: A review and research agenda for management scholarship. Journal of Organizational Behavior, 41(2), 95-114. https://onlinelibrary.wiley.com/doi/abs/10.1002/job.2367 
 
 
Hendriks, M., Burger, M., Rijsenbilt, A., Pleeging, E., & Commandeur, H. (2020). Virtuous leadership: a source of employee well-being and trust. Management Research Review. https://www.emerald.com/insight/content/doi/10.1108/MRR-07-2019-0326/full/ 
 
 
Hsieh, H. H., Hsu, H. H., Kao, K. Y., & Wang, C. C. (2020). Ethical leadership and employee unethical pro-organizational behavior: a moderated mediation model of ethical disengagement and coworker ethical behavior. Leadership & Organization Development Journal. https://www.emerald.com/insight/content/doi/10.1108/LODJ-10-2019-0464/full/html 
 
 
Huertas-Valdivia, I., Gallego-Burín, A. R., & Lloréns-Montes, F. J. (2019). Effects of different leadership styles on hospitality workers. Tourism management, 71, 402-420. https://www.sciencedirect.com/science/article/pii/S0261517718302620 
 
 
Kačerauskas, T. (2019). Ethics in business and communication: common ground or incommensurable?. https://dspace5.zcu.cz/handle/11025/33687 
 
 
Ko, C., Ma, J., Bartnik, R., Haney, M. H., & Kang, M. (2018). Ethical leadership: An integrative review and future research agenda. Ethics & Behavior, 28(2), 104-132. https://www.tandfonline.com/doi/abs/10.1080/10508422.2017.1318069 
 
 
Koteneva, A. V., & Chelyshev, P. V. (2020). Spiritual and ethical bases of psychological safety of mining-students. Eurasian Min, 2, 68-72. https://rudmet.net/media/articles/Article_EM_02_20_pp.68-72_1.pdf 
 
 
Laguda, E. (2020). Toxic leadership: managing its poisonous effects on employees and organizational outcomes. The Palgrave Handbook of Workplace Well-Being, 1-31. https://link.springer.com/content/pdf/10.1007/978-3-030-02470-3_71-1.pdf 
 
 
Magalhães, A., dos Santos, N. R., & Pais, L. (2019). Multi‐source research designs on ethical leadership: A literature review. Business and Society Review, 124(3), 345-364. https://onlinelibrary.wiley.com/doi/abs/10.1111/basr.12179 
 
 
Malik, S. A., Nawab, S., & Shafi, K. (2022). Saving the ethical self: unethical leadership and employee behaviors–a ethical cleansing perspective. European Journal of Management and Business Economics, (ahead-of-print). https://www.emerald.com/insight/content/doi/10.1108/EJMBE-03-2021-0085/full/html 
 
 
Mbandlwa, Z., Dorasamy, N., & Fagbadebo, O. (2020). Leadership challenges in the South African local government system. Journal of Critical reviews. https://openscholar.dut.ac.za/handle/10321/3455 
 
 
Men, C., Fong, P. S., Huo, W., Zhong, J., Jia, R., & Luo, J. (2020). Ethical leadership and knowledge hiding: A moderated mediation model of psychological safety and mastery climate. Journal of Business Ethics, 166(3), 461-472. https://link.springer.com/article/10.1007/s10551-018-4027-7 
 
 
Mergen, A., & Ozbilgin, M. (2021). Toxic Illusio in the Global Value Chain: The Case of Amazon. In Destructive Leadership and Management Hypocrisy. Emerald Publishing Limited. https://www.emerald.com/insight/content/doi/10.1108/978-1-80043-180-520211011 
 
 
Mullen, J., Fiset, J., & Rhéaume, A. (2018). Destructive forms of leadership: The effects of abusive supervision and incivility on employee health and safety. Leadership & Organization Development Journal. https://www.emerald.com/insight/content/doi/10.1108/LODJ-06-2018-0203/full/html 
 
 
O’Toole, J. (2019). The prospects for enlightened corporate leadership. California Management Review, 61(3), 72-92. https://journals.sagepub.com/doi/abs/10.1177/0008125619839677 
 
 
Redhead, D., Dhaliwal, N., & Cheng, J. T. (2021). Taking charge and stepping in: Individuals who punish are rewarded with prestige and dominance. Social and Personality Psychology Compass, 15(2), e12581. https://onlinelibrary.wiley.com/doi/abs/10.1111/spc3.12581 
 
 
Sarwar, H., Ishaq, M. I., Amin, A., & Ahmed, R. (2020). Ethical leadership, work engagement, employees’ well-being, and performance: a cross-cultural comparison. Journal of Sustainable Tourism, 28(12), 2008-2026. https://www.tandfonline.com/doi/abs/10.1080/09669582.2020.1788039
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