1. Explain the importance and role of ethical leadership
Business foundations for comprehensive strategic knowledge studies Assignment#4
Shawn young
Professor John enamait
June 26, 2016
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2. Table of contents Topic Page(s) Number Introduction 3 Ethics 4 - 5
Importance of Business Ethics
Leadership’s role in ethical decision-making
Ethics in a global economy
Social responsibility
Stakeholder relationships
Leadership traits and characteristics
Conclusion
References
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3. introduction A rationalism of serving any living being
With a consistent ethics and morality of an
Unquestionable nature in any sphere of
Activity is only PROFESSIONALISM
Anujsomany1
The above poem by Anujsomany in many ways appears to capture the idea of ethical leadership and its importance in a global economy. Similarly, Choi et al (2015:356) quoted D.G. Winter (1992) as having stated: “Ethical leaders manage the firm with ethical values based on a moral foundation that can promote social interest, rather than just on maximization of the firm’s profit.” In both instances above, there seems to be a predilection towards something that is required and nearly mandated. Thus, it is with those notions that this power point presentation will demonstrate the importance of ethics and ethical leadership in the XYZ Company. A discussion and application of the importance of business ethics, leadership’s role in ethical decision-making, ethics in a global economy, social responsibility, stakeholder leadership traits and characteristics will be offered.
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1 Poem On Ethics And Morality By Anujsomany (n.d.) Retrieved On June 25, 2016 From
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4. ethics
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5. Ethics Cont.
The Dilbert video presentation on ethics while entertaining and comical; also points out the myriad ways that a company needs to have a genuine policy and application of ethical principles.
This video presentation demonstrates more than anything the importance of managerial or executive leadership having an understanding and appreciation for the meaning of ethics in a company.
Sparks and Pan (2010) state that currently the literature is without a single accepted definition of ethical judgement; moreover, the literature overall is fragmented on those that exist.
However, Lewis (1985:382) proposed the following definition: “'business ethics' is moral rules, standards, codes, or principles which provide guidelines for right and truthful behavior in specific situations.”
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6. Importance of Business Ethics
The importance of business ethics should not be underestimated. There has been and there are numerous attempts to embody ethics into both domestic and international edicts; which the nonadherence of them may put a company at risk of ruin reputation. For example, CorpWatch an agency which monitors ethical compliance has called for greater accountability from organizations which are non-compliant (Cavanagh, 2004). Additionally, the following prescripts, Cavanagh (2004) states are a few attempts at the same:
Kyoto Treaty on Global Warming Agreement -- Where nations and business firms have pledged to reduce their carbon dioxide emission;. The agreement calls for penalties if reduction goals are not met; it established systems where nations earn trade credits for emissions reduction and investing in energy efficient projects; and it established a fund to help developing nations.
OECD Anti-Bribery Agreement -- In 1997 many nations signed an agreement that required each nation to pass domestic legislation that made bribery of foreign officials a crime.
Global Infant Formula—An agreement where false advertising claims about infant formula being better for an infant than breast milk would be prohibited; many nations signed on to this agreement.
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7. Importance of Business Ethics Cont.
 North American Free Trade Agreement (NAFTA)—Created the largest free trade zone; and included prohibitions against violations of intellectual property.
The Caux Round Table (CRT)--Founded in 1986 and designed by senior executives of firms from Japan, Europe, the United States, Mexico, Thailand, Lebanon and many other countries; it offered benchmarks for a firm in developing, updating or improving code of business behavior.
Additionally, as Solanti and Maupetit (2013:282) stated: “business ethics should be at the center of any road-map for the global economy.”
Moreover, they offer that integrity, honesty, objectivity, mutual respect, fairness, professional competence, due care, and confidentiality should be corner stones of an ethical code (Enderle, 2000; Solanti and Maupetit, 2013).
Lastly, the benefit of adherence to a business code of ethics lies with employee commitment, loyalty, performance, and perception of the firm (Choi et al, 2015; Lewis,1985; Forsyth, & O’Boyle Jr., 2011; “Peregrine”).
Therefore, adherence to the above efforts of the global economic community to embed ethics into economic transactions and would bode well for the XYZ company as efforts are underway to expand into the international arena.
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8. Leadership’s role in ethical decision-making (Diagram I)
Development of Code of Conduct and Policies
Ethical Training
Disseminate info in varied fashions firms commitment to ethical values and behavior
Role Model Ethical Behavior
Leadership’s Responsibility to Foster
An Ethical
Organizational
Climate
Evaluate Current Ethical Organizational Climate
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9. Leadership’s role in ethical decision-making Cont.
Diagram I on the previous page (8) has been adapted from information contained in the following sources: Peregrine Training Module, Choi et al, (2015), and Rottig and Heischmidt. (2007).
The diagram demonstrates that leaderships’ role in ethical decision-making is paramount. Additionally, it is an ongoing process so the arrows demonstrate a continuous process.
The responsibility lies with leadership to initiate and keep the process ongoing. Instructively, Stilz (2015:35) provides in regards to establishing an ethical organizational culture there must be present a “tone from the top” that is both “sustainable and unambiguous”.
The following Action Steps in abbreviated form are to be initiated: 1) Assessment; 2) Code of Conduct/Policies; 3) Training; 4) Communicate Firm’s Position; 5) Leadership Role Model; and 6) Maintain Ethical Culture.
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10. Leadership’s role in ethical decision-making Cont.
Therefore, Diagram I illustrates the relationship between leadership of the xyz Company and ethical decision-making. So, let the leaders ring the bell and set the tone.
Ethical Leadership, Choi et al. (2014:354) state has been defined as: “The demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision making.”
Hoyt and Price (2015) posit that their research confirms prior findings that social behavior in groups is distinctly influenced by the leader; and the leader role can moderate the effect of self-construal on ethical decision making. In other words, for the XYZ Company to have ethical behavior (i.e. decision-making) on part of its employee’s it must begin with leadership.
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11. Ethics in a global economy
The Peregrine Training Module provides that ethics may vary from culture to culture. In a most profound way, when looking at discrimination is a pointed example, in many Middle Eastern Cultures women currently are prohibited from taking on roles in business.
The following are three examples of ethical challenge or differences between cultures that XYZ Company may encounter: 1) Bribery aka Facilitating Payment; 2) Price Discrimination – a) Price Gouging and b) Price Dumping; and 3) Pollution and Natural Environment.
Through adherence to the below indicated edicts the XYZ Company can address the above indicated ethical challenges or differences: 1) U.S. Foreign Corrupt Act & OECD Anti-Bribery Agreement; 2) General Agreement on Tariffs and Trade (GATT) 3) ; and NAFTA & Kyoto Treaty
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12. Social responsibility
Social responsibility has been defined as “…situations where the firms goes beyond compliance and engages in actions that appear to further some social good, beyond the interest of the firm and that which is required by law” (McWilliams et al, 2006).
 Some companies integrate social responsibility into their governance structure and strategy (Goela & Ramanathan, 2014).
Additionally, Goela and Ramanathan (2014) hold that corporations have an obligation of ‘reciprocity’ with the community and environment that it draws its resources and operates.
Undertaking socially responsible initiatives will create a truly win-win situation for the XYZ company. The company will appeal to socially conscious consumer and employees, resulting in employee commitment and consumer loyalty.
There is evidence that social responsibility is associated with increased profits and in some instances it was reported as having a direct relationship to profits (Goela & Ramanathan, 2014).
Thorpe, (2013) stated that social responsibility reflects the concepts of people, planet, and profits that contribute to the value or have positive impact on a business.
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13. Stakeholder relationships
A prerequisite to understanding stakeholder relationships and its connection to the XYZ Company is to understand that there are two types of stakeholder’s relationships: 1) primary stakeholder – whose association with a corporation is necessary for its survival; and 2) secondary stakeholder –are not essential for a corporation’s survival (“Peregrine”).
The XYZ Company will be reliant on primary stakeholder who consist of employees, customers, investors, shareholders, government, communities that provide the necessary infrastructure for the business to both exist and operate.
Among the most poignant ways that stakeholder relationships may impact ethical decision-making is that of the media. A reputation ruining news account of the corporation may be insurmountable or very difficult to overcome (“Peregrine”).
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14. Leadership traits and characteristics
Traits and characteristics that ethical leaders may possess, include, but are not limited to the following: passion, internal locus of control, emotional intelligence, assertiveness, self-confidence, humility, trustworthiness, sense of humor, enthusiasm, optimism, warmth, flexibility, tenacity, drive and achievement motive, analytical skills, creativity, and insight into people and situations (“Peregrine”).
Mason et al (2012) report with respect to leadership that belief in one’s ability as a leader is essential; perspective taking enables leaders to articulate a vision that appeals to followers, stimulate interest, and commitment.
Jacquart and Antonakis (2015) offer that charismatic leaders are inspiring, and able to articulate an ideological vision that engenders a sense of identity with the collectivity; to emulate what followers seek, create emotional links with their followers, and state moral convictions that can be easily identified with.
Mason et al. (2012:176) state: “Transformational leaders inspire followers to perform beyond expectations by developing, intellectually stimulating, and inspiring followers to transcend their own self-interests for a higher collective purpose, mission, or vision.”
The above describe the level of leadership that the XYZ Company needs to over come the current ethical debacle and move forward in a positive direction.
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15. conclusion
In conclusion, this writer contends that the current ethical challenges of the XYZ Company can be sufficiently addressed as indicated above. A prerequisite would be to undertake an extensive assessment and evaluation of the XYZ Company’s practices, standing, and processes regarding ethical conduct. Then upon an analysis of that data or information address all areas with a concerted plan. Among the ancillary issues that should be included is to assure that it is communicated and upheld by all leadership the importance of adherence to ethical standards. Additionally, through ethical training assure that all staff understand both the global context of ethics as well as its relationship to all company stakeholders. Lastly, the XYZ company must assure that it is aligned in a positive way with all relevant stakeholders with respect to social responsibility and its impact on the company’s reputation. These actions it is proposed will result in a positive turnaround for the XYZ company regarding ethical conduct and compliance.
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16. References
Cavanagh, G.F. (2004). Global Business Ethics Regulations, Code, or Self-Restraint. Business Ethics Quarterly, 14(4), Retrieved on June 20, 216 from
Choi, S.B., Ullah-Ebrahim, S.M., & Kwak-Jun, W. (2015). Ethical Leadership and Followers’ Attitudes toward Corporate Social Responsibility: The Role of Perceived Ethical Work Climate. Social Behavior and Personality, 43(3), Retrieved on June 21, 2015 from
Enderle, G. (2000). Whose Ethos for Public Goods in The Global Economy? An Exploration in International Business Ethics. Business Ethics Quarterly, 10(1), Retrieved on June 20, 2016 from cdn.com.proxy1.ncu.edu/S /1-s2.0-S main.pdf?
Forysth, D.R., & O’Boyle Jr., E. H .(2011). Rules, standards, and ethics: Relativism predicts cross-national differences in the codification of moral standards. International Business Review 20, Retrieved on June 21, 2016 from
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17. References Cont.
Forysth, D.R., & O’Boyle Jr., E. H .(2011). Rules, standards, and ethics: Relativism predicts cross- national differences in the codification of moral standards. International Business Review 20, Retrieved on June 21, 2016 from
Goela, M., & Ramanathan, P.E. (2014). Business Ethics and Corporate Social Responsibility – Is there a dividing line? Procedia Economics and Finance, 11, 49 – 59. Retrieved on June 21, 2016 from
 Hoyt, C.L., & Price, T.L. (2015). Ethical Decision Making and Leadership: Merging Social Role and Self- Construal Perspectives. Journal of Business Ethics, 126:531–539. Retrieved on June 21, 2016 from
 Jacquart, P., & Antonakis, J. (2015). When Does Charisma Matter for Top-Level Leaders? Effect of Attributional Ambiguity. Academy of Management Journal, 58(4), Retrieved on June 21, 2016 from
 Lewis, P.V. (1985). Defining ‘Business Ethics’: Like Nailing Jello to a Wall. Journal of Business Ethics, 4(5), Retrieved on June 19, 2016 from
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18. References Cont.
Mason, C., Griffin, M., & Parker, S. (2014). Transformational leadership development. Retrieved on May 2, 2016 from
 McWilliams, A., Siegel, D.S., Wright, P.M. (2006) Corporate Social Responsibility: International Perspectives. Retrieved May 16, 2016 from
 Peregrine Academic Services Retrieved on June 21, 2016 from bWU9ZGVmYXVsdA==#
 Sparks, J., & Pan, Y. (2010). Ethical Judgements in Business Ethics Research: Definition, and Research Agenda. Journal of Business Ethics, 91(3), Retrieved on June 19, 2016 from
 Stilz, E. (2015). Global Ethos, Law, and Economy. Journal of International Business Ethics, 8(2), Retrieved on June 20, 2016 from
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19. References Cont.
Thorpe, D. (2013). Why CSR? The benefits of corporate social responsibility will move you to act. Forbes. Retrieved April 9, from responsibility-will-move-you-to-act2/
 Rottig, R. & Heischmidt, K.A. (2007). The Importance of Ethical Training for the Improvement of Ethical Decision-Making: Evidence from Germany and the United States. Journal of Teaching in International Business, Vol. 18(4), Retrieved on June 21, 2016 from
 Solanti, B. & Maupetit, C. (2013). Importance of Core Values of Ethics, Integrity and Accountability in the European Corporate Governance Codes. Retrieved on June 21, 2016 from
 McWilliams, A., Siegel, D.S., & Wright, P.W. (2006). Corporate Social Responsibility: International Perspectives. Retrieved on June 21, 2016 from
 Vassen, E. (n.d.) Dilbert Video: Dilbert on Ethics for e-CPE. Retrieved on June 23, fromhttps://
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