The Role of a Leader in an Ethical Organization

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“Greed is good. Greed is right. Greed works.” (Gordo Gecko). Taking this particular belief system into consideration, it is evident that from an economic perspective, acting according to self-interest within a corporate environment, in turn significantly benefits the public. Enron however is a picture-perfect example of excessive greed not bringing about the above stated benefits to employees and society. Immoral behaviour and unethical leadership ultimately resulted in ethical scandals, major financial losses and the colossal downfall of a highly successful company. This situation could have been prevented through the right decisions being made by top management to lead the firm with ethical values integrated into their systems. This role of the leader in an organisation is further explored in this piece.

Before looking at the role of the leader in detail, it must first be established what an ethically lead organisation looks like. Ethical corporate legitimacy is achieved when the actions of individuals, namely leaders and employees, and relational dynamics are in line with the goals of the firm (Woermann, 2011). The behaviour of individuals in an ethical firm will be congruent with the rules of the organisation, whether spoken about or not. This is how goals of the firm are met. Every employee should have a clear understanding of what the morally correct behaviour in a firm should look like. This includes moral values such as honesty, integrity and behaviour which considers long term benefits for the firm that are not only financial, but ethical as well. Relationships should exist within the organisation that promotes openness and willingness to share information, negative or positive, so that a culture of communication is established. Leaders are also clear on the fact that they are role models to the rest of the firms employees, thus they are sure to practice a policy of constantly delivering on promises. They understand that there must be consistency...
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