Why Being Ethical Is Essential For A Sustainable Organization Case Study

With the rapid changes of the global market environment, organization faces a lot of challenges in dominating or even surviving throughout the industry. To maintain organization sustainability, an effective leadership and management skills are both needed as the essential elements.There are plenty of factors which help to maintain a sustainable organization. From Abraham Zaleznik’s leadership prospective, a “good” leader is needed for a sustainable organization, which can help communicating along the organization directly. Meanwhile, leader requires influencing their thoughts and actions to the subordinates, where this can ensure all subordinates sharing the same value, vision and goals. With more cohesion, subordinates are willing to help
Why being ethical is essential for a sustainable organization? As unethical practices usually focusing on short-term performance, example likes the Enron. Enron was an American energy and communication company, was awarded “America’s Most Innovative Company” for 6 consecutive years by Fortune magazine. Kenneth Lay, the Chairman of Enron, who had applied an unethical practice. He worked together with the accountants, attorneys and the top executives formed a subsidiaries where looked like a partnerships, so as to sell its assets, and creating a false earnings. He used offshore entities to avoid tax payment and cover up the truth of inflating assets and profits. The organization presented a contorted financial statement to the public, creating an illusion that Enron was a profitable organization, as to boost up the stock price. Unethical practices became a culture within the organization. Many employees of Enron were eroded by the unrestrained pursuit of profits. They reported the anticipated revenues as the actual earnings as to attain higher bonuses. Also, they were encouraged to exaggerate the estimated profits gained. Kenneth had demonstrated a negative influence of the unethical leaders and culture among the organization. Anyone dares to question about the unethical practices at Enron would be reassigned or even fired. The truth will come to light sooner or later, Enron was being discovered for all those
An ethical leader is a crucial factor of a sustainable organization. Ethical leadership encourages applying ethical behaviors and efforts to stop the unethical practices. Leaders are having the responsibility to ensuring standards of moral and personal integrity. Hence, they ensure their values and ethics are correctly clarified and carried out within the organization. Demonstrating and preaching to the followers with the ethical leadership