Societal Benefits of Good Business Leadership - Essay Example

?Societal Benefits of Good Business Leadership Introduction Without a doubt, individuals grow and accomplish their goals through living in a society and dealing with other people. The social aspect of individuals generates the need for organizations to become socially responsible or to promote the wellbeing of the entire society. The essential attribute of these organizations is the people sharing common ideals, beliefs, and goals. Through these organizations these people exert their best efforts to realize, in harmony with their ideals and beliefs, the shared goals which they think are beneficial, not only to them, but to the whole society (Flynn, 2008). Business organizations, in particular, contribute to the wellbeing of the entire society through activities aimed at promoting and preserving a self-sufficient and independent society. However, businesses will definitely fail to benefit the society without good leadership. As argued by Peter Drucker, good leadership and social responsibility are mutually dependent (Godfrey & Grasso, 2000). This essay demonstrates that good leadership reassures that businesses are being managed in ways that will benefit the whole of society. Peter Drucker states that the primary obligation of the organization is constantly to its own objective. If an attempt to generate a beneficial outcome led to the ruin of the organization trying to actualize it, it was not socially responsible, despite righteous intents. Businesses’ primary social responsibility is to generate earnings enough to answer for possible operational expenses (Maak & Pless, 2006). If the organization was not able to realize its own objectives due to mismanagement or mishandling of physical and human resources so as to accomplish social responsibility, it would harm society by failing to provide employment, products/services, and economic inputs. This argument became quite controversial among management scholars. Supporters of different movements often force business organizations to contribute to the alleviation of social problems that are completely beyond the organizations’ forte or capacity to fulfill (Maak & Pless, 2006). These pressures are exerted even if the measures demanded by these advocates, if carried out, could harm the organization, and in a certain extent could also harm society. Refusing or not being able to carry out the measures demanded these organizations are at times called ‘unethical’ (Adler & Gundersen, 2008). Hence, Drucker recommends good leadership. The objective to benefit the society obliges leaders to reflect, and to have the audacity and initiate steps where needed. A deeper analysis of business organizations would show that these entities are more than an arbitrary collection of people, although with a shared objective. Organizations are structured; people in an organization take on or are delegated different positions, functions, and responsibilities in order to realize this objective successfully (Mueller et al., 2009). Organizational structures suggest that leaders and followers exist. The leaders are ought to wield authority, provide guidelines, lay out rules, and carry out roles that are needed to realize the objectives of the organization. In thriving organizations, good leadership is beyond mere routine operational tasks like creating the organizational culture, leading employees, and allocating resources (Flynn, 2008). Good leadership is all about empowering and motivating followers to make their best efforts for the actualization of the vision that the leader has developed to realize the objectives of the organization. Among these objectives is to benefit the entire society. And the fulfillment of these objectives is largely possible through good leadership. Good Leadership is Socially Responsible/Ethical Leadership As stated by Peter Drucker, “What is most important is that management realizes that it must consider the impact of every business policy and business action upon society. It has to consider whether the action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony” (Godfrey & Grasso, 2000, p. 11). All members of the organization have the obligation to make sure that organizational goals are realized in a way that is compatible with these principles and satisfy their own interests as well as those of the society at large. Nevertheless, the major task and obligation for developing performance expectations and the appropriate direction depend largely on the leader. The vision of the leader motivates and communicates the mission of the organization; builds the groundwork for organizational processes, policies, and strategies; expresses the ideals and beliefs that create and mold the organizational culture; and develops the rationale for organizational goals (Godfrey & Grasso, 2000). Even so, it is the moral ideals and reputation of the leader that bestows integrity and power to the vision and strengthens it (Andrews, 1989). When the moral reputation of the leader is suspect, then his/her vision, regardless how sound and righteous, is seen with doubt by the followers and fails to motivate them to exert their best efforts towards its fulfillment. There is a growing awareness nowadays that leaders of business organizations have to become more responsible, not only to their shareholders but to their different stakeholders (e.g. communities, employees, consumers, etc) as well. Even though nobody will refute the fact that a business should generate profits, the obsession with being profitable to the detriment of other important factors, like the promotion of society’s wellbeing, is no longer permissible (Giampetro-Meyer, 1998). Today, profits are considered as a way to fulfill the interests of the society at large, which, consequently, requires that business leaders to be ethical. There is a growing awareness nowadays that business leaders have to be more aware of and responsive to their moral duties to the society. It is the acceptance of these duties that has encouraged a number of major corporations to create ethical guidelines, form ethics groups, develop ethics training courses, and build communication processes for employees for ethics consultations (Giampetro-Meyer, 1998). The code of ethics of an organization determines the ethical guidelines that must influence the leader’s actions and conduct in order for the leader to successfully accomplish the objective of strengthening the ethical environment of the organization. According to Wirtenberg and colleagues (2007), through their ethical conduct, business leaders establish the moral quality of the members of the organization, and thus further strengthen or weaken the moral quality of society. It is, certainly, disappointing that businesses have been the target of a great deal of criticisms. Business organizations benefit the society one way or another. Primarily, businesses provide products and/or services needed by the people, generate employment opportunities, and build channels for the growth and use of people’s capabilities, knowledge, and skills. Business organizations also improve the economy and the quality of life of the citizens (Benioff & Adler, 2006). The numerous valuable and essential developments in technology, education, and medicine have stemmed from the reinforcement or operations of business organizations. A closer analysis of business leadership would reveal that business organizations are not capable of benefitting or harming society (Benioff & Adler, 2006). As argued by Adler and Gundersen, 2008), the most notorious corporate scandals, such as WorldCom Inc, Tyco Corporation, Enron Corporation, show that ethical crimes should be totally and directly blamed on the unethical actions of the leaders of these unethical business organizations. The head of the World Economic Forum, Klaus Schwab, in an address to major global business leaders, illustrated the new leadership mission (Adler & Gundersen, 2008, p. 172): In today’s trust-starved climate, our market-driven system is under attack… large parts of the population feel that business has become detached from society, that business interests are no longer aligned with societal interests…The only way to respond to this new wave of anti-business sentiment is for business to take the lead and to reposition itself clearly and convincingly as part of society. Leadership at the crossroads of society and business focuses on a deep interest in the sustainable future of humankind and the planet. It acknowledges the fact that how humanity addresses the global economic and environmental changes at present will deeply affect the next generations. It tries to understand how leadership can redirect the power of business organizations to solve the major problems confronted by societies at present (Adler & Gundersen, 2008, pp. 172-173). It is apparent that a sustainable world relies upon the development of sustainable organizations, and sustainable organizations cannot survive without good leadership. The society will become less lenient and more critical of unethical actions. Today, society is too lenient. The challenge to business leaders is to become more aware of the consequences of their decisions and behavior to society. Business leaders of today should thoroughly reflect on the stability of values and ideals and to be more responsive to the fact that not until they act properly or ethically, even though they may generate voluminous profits, they may weaken and destabilize their organizations permanently. It is bad business to act in that manner. In the past, business leaders could in fact reasonably argue that “I’m not about minding society. I’m about running my business and making money—everyone must take care of themselves” (Thomson & Lloyd, 2011, p. 30). Society, in the near future, will not tolerate or permit business organizations to act in ways that threaten or challenge the strength of society at large. In the near future, more and more business organizations will seek individuals with a more accurate and stronger knowledge and appreciation of the responsibility of business to society. Successful businesses will not exist in a wrecked society. Therefore, business leaders have to contribute to the success of the society by making businesses beneficial to a larger number of people (Thomson & Lloyd, 2011). This challenge will call for a different leadership style. It does not merely concerns, as it was in the past decades, the growth of shareholder value. It concerns the quest for factors that generate value, and that result in the development of shareholder value. Good leaders understand and appreciate the duty of their business organizations to the society. They focus their efforts on, primarily, determining their role in within the organization and the society where they belong. They also become skilled at the dynamics of interpersonal relationships within the organization. However, the predisposition to manage has penetrated businesses. It is simpler for many business leaders to concentrate on the pressing needs to create products, offer services, or organize an activity and overlook the true objective of leadership, which is to initiate positive changes that will not only benefit the organization but also the society at large. Management principles have embodied the contemporary business organization for the most part of its contemporary history. The outcomes of good management are more material ownerships, prestige, and power (Mueller et al., 2009). The medium usually is command of the people within the organization. Unfortunately, and quite frequently, altruistic business leaders become absorbed into this managerial approach because it is what they know best. For good leaders this is false achievement. Success does not arise from possession and amassing of resources. It emanates from the change, continuous improvement, and the betterment of the people within the organization and the society at large. Good leadership contributes to societal ideals and values. Good leaders think responsibly and selflessly about their purpose as heads of their organizations. They give great importance to their various stakeholders (Benioff & Adler, 2006). They hold humane expectations for their followers and expect socially responsible outcomes from people. Undoubtedly, leadership is now viewed differently. In the past, leadership was seen as only coordination of tasks in an organization characterized by processes and structure. Now, leadership is viewed as a form of mutual relationship between businesses and the society (Flynn, 2008). The great principle of good leadership is that leaders can transform the lives of other people and the society. The framework of good leadership is a societal and personal transformation framework. People move forward in accordance to a natural rule of evolution that allows them to transform behaviorally, mentally, and physically (Maak & Pless, 2009). Whether these changes people initiate improve their personal objectives, or, even, their humanity, depend on them. Every person will benefit from these changes in accordance to his/her struggles and the composition of his/her ideals and objectives. Conclusions Good leadership involves creating the appropriate actions to generate desired outcomes, both within the organization and the society at large. It implies motivating people to take action and go the extra miles for the benefit of other people and the society. It is a dynamic obligation, growth-oriented, and socially responsible. It is about guiding, serving, and helping, not directing or commanding. Good leadership is all about service, one that requires dedication and uphill struggle. And the outcomes are beneficial—change of oneself, other people, and the larger society. References Adler, N. & Gundersen, A. (2008) International Dimensions of Organizational Behavior. Mason, OH: Cengage Learning. Andrews, K.R. (1989) Ethics in Practice: Managing the Moral Corporation. New York: Harvard Business Press. Benioff, M. & Adler, C. (2006) The Business of Changing the World: Twenty Great Leaders on Strategic Corporate Philantrophy. New York: McGraw Hill Professional. Flynn, G. (2008) Leadership and Business Ethics. Dublin, Ireland: Springer. Giampetro-Meyer, A. (1998) “Working on the Wiring: Preventing Ethical Failures in Socially Responsible Businesses”. Review of Business 20(1), 8 Godfrey, P.C. & Grasso, E.T. (2000) Working for the Common Good: Concepts and Models for Service Learning in Management. Sterling, VA: Stylus Publishing, LLC. Maak, T. & Pless, N. (2006) Responsible Leadership in Business. London: Routledge. Mueller, J. et al. (2009) “Corporate Boards: The New Corporate Leaders”. Journal of Academy of Business and Economics 9(1), 105+ Thomson, P. & Lloyd, T. (2011) Women and the New Business Leadership. London: Palgrave Macmillan. Wirtenberg, J. et al. (2007) “The Future of Organization Development: Enabling Sustainable Business Performance through People”. Organization Development Journal 25(2), 11+ Read More