Ethic – Case Study Example

Article Summary The article shows the importance of having ethical leadership in organizations and the ethical theories used to determine whether one is acting ethically (right) or unethically (wrong). Ethics is defined as “the discipline dealing with what is good and bad and with moral duty and obligation” (Derr, 2012, p. 66: Cited in Ethics, 2011). Successful business in this case is dependent on the ethical conduct of the upper management which is in turn dependent on the institutional setting and changes according to country and culture. Ethical conduct is also influenced by intelligence and virtues. Companies that do not act ethically or are not socially responsible risk lawsuits such as was the case for Wal-Mart while those which are ethical build company image and reputation thus attracting talent. Two leadership styles that reflect ethical leadership are transformational and transactional styles and are characterized by values such as honesty, loyalty, fairness, trust, respect, and integrity.
Critical Analysis
The author begins by introducing us to the controversial world of ethics. Many people and theorists have different perspectives as to what can really be considered right or wrong especially based on the relativity of what is considered right or wrong in different societies and cultures and also conflicting situations that sometimes call us to forget our morals or laws for the sake of good of many. One controversial aspect brought about by the author is whether ethics is result of virtues or intelligence and the answer to this depends on the theory one adopts to justify his/her actions. These theories are based on ethical principles such as beneficence, least harm, and justice. For consequentialists, an act is right or wrong depending on its outcome while for deontologists; it is the act itself and not the outcome that determines ethical behavior. For utilitarianism, whatever brings happiness or the greatest good for the greatest number is right regardless of the action itself. For others, whatever results in the least harm is desirable. This thus means that the end justifies the means and may be controversial especially when the means is not considered right. This is why others use virtue to determine ethical behavior and these must be exercised at all times regardless of the situation. Author also argues that ethical behavior can be justified by existing laws or rules or by social contracts. This then creates difficulties for leaders in judging what decisions are ethical or not. However, the author argues that leaders should set the ethical climate to be emulated in entire organization as employees mostly emulate upper management. He argues that ethical influence on lower levels can be overcome by high regard on upper management. This may be so but the author forgets how influential the lower management who deal with employees on daily basis are and the personal dispositions of employees. It also contradicts what he says about bad treatment by leaders shaping work attitudes of employees. The author also considers the benefits and drawbacks of companies which are not socially responsible and gives examples of unethical companies. In a nutshell, the author has done well in explaining the need for ethical leadership in organizations.
The implication is that leaders have to use their moral reasoning to make ethical judgments as there is no clear cut way of determining what is right or wrong. However, while doing this they should consider what society or culture considers to be ethical, the expected outcomes, and the laws or rules in place to guide behavior. If the government sets rules for companies to operate under, then an ethical leader must ensure compliance or be ready to face the law. It also implies that ethical leaders should go beyond what the law stipulates to be ethically successful and to avoid problems such as in the case of Groupon Company.
Derr, Cammi L (2012). Ethics and Leadership. Journal of Leadership, Accountability and Ethics. Vol 9(6).