Ethics Leadership And Decision Making Organizations and Public

Question: Discuss about the Ethics Leadership And Decision Making Organizations and General Public. Answer: Introduction The ethical practices in business houses have been a raging topic of discussion among the organizations and among the general public as well. When we talk about ethics and ethical working, we tend to look up to the organizational leaders for they are the node of ethical business functioning. Leaders who lead ethically are considered role models and are loved by the employees and the management alike. In order to lead ethically, a leader has to make ethics a priority and choose ethics over anything else in every decision making scenario. The leaders and managers who are ready to stop at nothing today, hardly give a second thought when it comes to making a decision when they have to choose between doing what is ethical and what is going to make money for them (Mihelic, Lipi?nik, Tekavcic, 2010). This has been addressed time and again and therefore and has been an observed phenomenon all over the world. In this essay we are going to study the ethical decision making and in corporate le adership and its effects and consequences and conduct a case analysis of the ethical decision making in the case of Volkswagen which is an automobile manufacturing organization. Volkswagen made it into the headlines world over in the October of 2015 for an unethical practice. This made the organization suffer in more ways than one and the profit that the organization had made by their unethical practices was negated by the bad publicity and the financial losses that they had to incur later on. This makes for an interesting study highlighting the reasons for unethical practices being adopted by the organization and if it benefits the organization or hurts it in the long run (Butts, 2011). We are also going to study the concept of managerial ethics and how they impact the decision making and leadership when facing an ethical dilemma. We are going to evaluate critically these concepts and how an ethical leader makes a difference with his leadership and influences the organizational operations. We will look into how the leaders can lead ethically and how a clear understanding and communication of organizational ethics can ensure organizational efficiency and employee motivation (Heres Lasthuizen, 2010). Ethical dilemma of Volkswagen The German car manufacturing organization Volkswagen was despised by all in the October of 2015 when it was found out that the engineers at Volkswagen had installed a software in their vehicles during the manufacturing process that helped the cars in passing the emission test even though their emission levels were well above the defined limits of the government. This was happening for more than seven years when the United States Environmental Protection Agency conducted a study and discovered this scam. This conspiracy by Volkswagen has resulted in eleven million vehicles I showrooms and roads with emission levels higher than the permissible limits, and millions of Euros in profit for them (Zhou, 2016). This is a clear case of merciless profiteering, exploitation, dishonesty and fraudulent practice. It is also in no way in line with the ethical norms of both society and business. The fraud here was not a moment of weakness or a hasty choice of action by the leaders at Volkswagen, it a was a planned and implemented process knowing full well about the consequences. The software was installed in the vehicles and this was known by the engineers, manufacturers and the leaders of the organization. In the year 2009, Volkswagen won the title of worlds biggest car manufacturer. This was the year when they started with this practice. According to a management professor in Macquarie university, we are mistaken if we believe that the organizations can be ethical (Caria Hermans, 2016). They run for the purpose of making money and will stop at nothing when it comes to profit making. The leaders at Volkswagen decided to take the unfair and easy way when they made this decision and although it was unethical, the only consideration at that time for them was money making. The employees were in line with the leaders and implemented the plan even though they knew of the consequences. IT is not just a failure of ethical leadership on the part of the leaders at Volkswagen, but also a failure on the part of the employees and us as a society. It shows how the organizations will choose profit making over ethical conduct every chance they get and how we have failed as a society to promote ethics and imbibe them in the business operations (The Kansas City Star, 2016). The case of Volkswagen can also be used as a study to understand how deep the effects of unethical conduct can be and how the organizations can run into trouble because of that regardless of their size, reputation and market reach. The CEO of Volkswagen Martin Winterkorn was forced to resign after this incident caught the light of the day. The entire top management was restructured and the legal course of action on them is still in process. The organization later admitted that 11 million diesel cars manufactured between 2009 and 2015 were fitted with the software and had actual emission levels much higher than permissible. The vehicle emission test results for these cars were incorrect and showed lower emission levels at the time of tests and were much higher at the time of actual operations on road. The anomaly was as high as 40 times the emission levels found at the time of testing (Lynch Santos, 2016). Volkswagen is an immensely popular automobile brand and this event led to their defamation and also lead to a feeling of mistrust among their users and followers. The trust that people lost in the organization were evident in the drop registered in the sales figures of Volkswagen and they recalled and reengineered the cars that were declared unfit to run on the roads after conduction of emission tests again. The 6.5 billion Euros that the organization managed to earn unethically were all used up and they are still struggling with the defamation and bad reputation earned due to this incident (Adams, 2015). Ethical decision making and consequences It is very important for the leaders of an organization to behave and make their decisions ethically. This instills trust among the employees towards their leader and strengthens the organizational operations. A leader in an organization has a following among his employees and subordinates and a leader following ethical conduct will ensure the same being carried out among others in the organization. A leader needs to guide the employees and he will only be able to do so if he is ethically inclined and fair in his decision making. An ethical leader is respected and is able to motivate his subordinates to work towards making the organization and the society ethical. Ethical decision making also ensures that the employees have a clear understanding of the organizational working and have a guideline when making decisions. The organizational leader is looked up to by many and has a lot of responsibilities towards the organization and the society. They have the role of a director and need to support the entire organization. Only when they are ethically inclined and have their ethics in place will they be able to do that. The case study above is an example of how the failure at the end of the leaders can be fatal for an organization (Fulmer, 2004). An organization as big as Volkswagen when lead by flawed leadership can be led to a disaster and can face disastrous repercussions. An ethical leader gives shape to the organizational working and impacts the entire organizational set up. A leader who is ethical will understand his responsibilities and will act in accordance to lead the organization in an ethically correct way. Unethical practices may seem to be beneficial and attractive in the short term, but in the long run they only lead to financial and non-financial losses for the organization. They also lead to a bad public image that is impossible to resuscitate and rise again. Organizational leaders are expected to guide and influence the employees. The employees ten d to look up to their leaders and emulate their ways of working (Mullane, 2009). They help in building and shaping the entire environment of the organization and their ethical conduct will result in ethical inclination of the entire organization. It has been proven time and again that leaders that lead ethically command higher levels of respect and contribute to a healthier working environment. Leaders tend to start this chain reaction in the system where every person looks up to and follows every other person and the entire organizational functioning becomes ethical. It not only imparts guidance to the employees when facing dilemmas and decision making, but also saves them from the moral and legal consequences of unethical conduct. Therefore, it becomes even more important for the leaders to ensure ethical organizational working. It makes the employees and the public trust them more and maintain a healthy image and relationship. The unethical way of work may seem to be attractive, alluring and tempting at first, but it results in greater trust and respect for the leaders and the organization. The ethical conduct and rules define the organization and what it stands for (Brown Mitchell, 2010). In the long run this is more rewarding and worthwhile. The leaders who are ethically correct and unfazed can make the organization a better place to work at and to work with. The leaders who are ethically correct in their decision making are revered by the employees and the society and are in demand in the current organizational scenario. They have the ability to shape the organizational functioning and make it healthier, more transparent and fair. This consequently leads to profit for the organization as everyone is willing to work for and with such an organization. They are trusted more by their employees and are looked up to by all. Thus, we can safely say that working and leading in an ethically correct manner empowers the organization and benefits them. This can hap pen if their leaders choose to lead ethically and practice fair decision making (Antonakis, 2003). Managerial ethics Managerial ethics are the set of rules that are set by the top management of the organization in order to define the right and wrong and set the ethical working standards for the organization. The managerial ethics guide the leaders during decision making and help them in leading the employees in the correct way. An ethical environment contributes to a positive work environment. It encourages and supports the employees and helps them in delivering up to their potential and sometimes even more. Any organization can imbibe ethical conduct and ways of working provided they are communicating in the correct manner. The employees also support organizations with ethical ways of working as they ensure fairness and justice. Being ethically correct may not always be easy and may sometimes even lead to making decisions that may be less profiting than the other options, but they are going to pay off in the long run. Even the employees are happier in an ethical organization knowing they will also be treated fairly and ethically always. Leaders who lead ethically have reported higher levels of trust, harmonious organizational environment and a motivated workforce. Being ethically correct is not a days task to be accomplished and checked off the list (Minja, 2011). It is about continuous choices and conscious decision making that leads to better functioning of the organization. Making an organization ethical begins from the top management and the conduct then flows downward. The responsibility of making the organization ethical largely relies with the leaders of the organization (Mehalu Ababa, 2011). This is why more emphasis is laid upon leading in an ethically correct manner. Once the leaders have formed the rules and created the norms for the organizational operations, these rules and norms are then communicated to their subordinates or team members. This entire process may take up time and resources of the organization, but its impact and consequences are going to give r esults continuously in the long run. It not only helps in the development of the organization, but also helps support and growth of its members. There are numerous organizations that are known for their ethical organizational culture and policies and are respected because of that. They have employees willing to work for them and customers who are more than happy to do business with them due to their fair practices. Contrarily, there have been numerous cases of organizations running into losses and even completely shutting down due to their unethical practices. Ethics give the organization a string backbone and act as a pillar of strength for all the decision making (Tanuja, 2017). The organizations can adopt an ethically correct way of work. Some of the measures the organizations can take to do that are given here. The first step that an organization has to take towards becoming ethically sound is setting the rules. The rules need to be set for both the leaders and the employees and they must be clear and unambiguous (Saremi Nezhad, 2014). All the organizational employees must abide by these rules and they can be varied according to organizational functions, strength, place etc. The workplace must treat all the employees equally and fairly and the dos and donts for all must be the same. They must have clear guidelines about the organizational policies, conduct, ways of work, attitudes and leadership. The organizational culture of every organization is different from every other organization. This is due to the difference in their ethics and culture (McNamara, 2016). The written and unwritten rules of the organizations vary and so does their implementation met hod. Thus, it is important that the employees understand and emulate these in their day to day working. The leaders and the employees must not think about quick success and overnight achievements, they must in fact focus on sustainable growth and ethically sound working process. The employees and the leaders, all must know how important organizational ethics are and how their adherence can lead the organization to greater heights. They must keep away from getting involved in scandals, scams and unethical practices and the leaders must lead the organization towards success in the ethical way (McNamara, 2010). Conclusion Ethical leadership, although looks very attractive from the outside, the intricacies involved in practicing ethical leadership are huge. It means choosing the right thing to do always and at every step. It may even mean standing against the odds and sometimes even against the peers for what is the correct thing to do. The leaders and managers who are ready to stop at nothing today, hardly give a second thought when it comes to making a decision when they have to choose between doing what is ethical and what is going to make money for them. This has been addressed time and again and therefore and has been an observed phenomenon all over the world. This essay is written with the intent to understand how ethics shape the course of an organization. Managerial ethics guide the leaders during decision making and help them in leading the employees in the correct way. An ethical environment contributes to a positive work environment. It encourages and supports the employees and helps them in delivering up to their potential and sometimes even more. Any organization can imbibe ethical conduct and ways of working provided they are communicated in the correct manner. Ethical decision making ensures that the employees have a clear understanding of the organizational working and have clear guidelines when making decisions. The organizational leader is looked up to by all their employees and subordinates and he has a lot of responsibilities towards the organization and the society. Leaders have to play the role of a director and need to support the entire organization with their direction and decision making. Only when they are ethically inclined and have their morals in place will they be able to do that. The case study of Volkswagen studied in this essay is an example of how the failure at the end of the leaders can be fatal for an organization. In this essay we have studied the concept of ethics and their role in leadership and organizational decision making. We did a case analysis of Volkswagen and their ethical decision making for the case highlighted in October 2015. The loophole in ethical conduct of the organization led to defamation and legal consequences for the organization. This case highlights the importance of ethical decision making and ethical leadership. We have further analysed how ethical leadership influences the entire decision making for the organization and how ethical working environment encourages the employees. We have also given recommendations on how to effectively practice ethical leadership and how the leaders can make the most out of the organization by ethically commanding and leading in a fair manner and the steps that leaders can take to make the organization ethically inclined. References Adams, C. (2015, December 02). VW scandal: ethics versus profit. Retrieved from https://economia.icaew.com/features/december-2015/ethics-versus-profit Antonakis. (2003). Ethics and Leadership Effectiveness. Retrieved from https://www.ila-net.org/members/directory/downloads/antonakis-ciulla-13.pdf Brown, M., Mitchell, M. (2010). Ethical and Unethical Leadership: Exploring New Avenues for Euture Research. Retrieved from https://media.terry.uga.edu/socrates/publications/2013/05/Brown__Mitchell_2010_Ethical_and_unethical_leadership_BEQ.pdf Butts, J. (2011). Ethics in organizations and leadership. Retrieved from https://www.jblearning.com/samples/0763749761/EthicalLeaderhip.pdf Caria, P., Hermans, M. (2016, January). The Volkswagen case; morally permissible? Retrieved from https://www.researchgate.net/publication/292722292_%27The_Volkswagen%27_case_morally_permissible Fulmer, R. (2004). The Challenge of Ethical Leadership. Organizational Dynamics, 33(3), 307317. Retrieved from https://www.kantakji.com/media/3392/w155.pdf Heres, L., Lasthuizen, K. (2010). Ethical leadership: A variform universal phenomenon. VU University Amsterdam. Retrieved from https://www.law.kuleuven.be/integriteit/egpa/egpa2010/heres-lasthuizen_ethical-leadership-a-variform.pdf Lynch, L., Santos, C. (2016, October 17). VW emissions and the 3 factors that drive ethical breakdown. Retrieved from https://ideas.darden.virginia.edu/2016/10/vw-emissions-and-the-3-factors-that-drive-ethical-breakdown/ McNamara. (2010, October 23). 10 Benefits of Managing Ethics in the Workplace. Retrieved from https://managementhelp.org/blogs/business-ethics/2010/10/23/10-benefits-of-managing-ethics-in-the-workplace/ McNamara, C. (2016). Complete Guide to Ethics Management: An Ethics Toolkit for Managers. Retrieved from https://managementhelp.org/businessethics/ethics-guide.htm Mehalu, K., Ababa, A. (2011). Social Responsibility and Managerial Ethics: A Focus on MNCs. Retrieved from https://www.druckerchallenge.org/fileadmin/user_upload/essays_pdf/kidusmehalu.pdf Mihelic, K., Lipi?nik, B., Tekavcic, M. (2010). Ethical Leadership. International Journal of Management Information Systems, 14(5), 1-12. Retrieved from https://www.cluteinstitute.com/ojs/index.php/IJMIS/article/viewFile/11/9 Minja, D. (2011). Ethical Leadership Practice: The Foundation of Political and Economic Development in Kenya. Retrieved from https://ku.ac.ke/schools/humanities/images/stories/docs/Research/MinjaDavidEthicalLeadership.pdf Mullane, S. (2009). Ethics and leadership. University of Miami. Retrieved from https://www.bus.miami.edu/_assets/files/executive-education/leadership-institute/ethics-and-leadership.pdf Saremi, H., Nezhad, B. (2014, November). Role of ethics in management of organization. International Journal on Advances in Life Sciences, 4(1). Tanuja, A. (2017). Management Ethics: Meaning, Need and Importance. Retrieved from https://www.businessmanagementideas.com/notes/management-notes/corporate-social-responsibility/management-ethics-meaning-need-and-importance/5319 The Kansas City Star. (2016, July 01). VW scandal a case study in bad corporate ethics. Retrieved from https://www.kansascity.com/opinion/editorials/article87287037.html Zhou, A. (2016). Analysis of the Volkswagen Scandal Possible Solutions for Recovery. Retrieved from https://gps.ucsd.edu/_files/faculty/gourevitch/gourevitch_cs_zhou.pdf