Moral Leadership and Its Significance to Contemporary Organisations - Coursework Example

LEADERSHIP ESSAY By Name Course Instructor Institution City/State Date Moral Leadership and Its Significance to Contemporary Organisations Introduction Moral leadership according to Rhode (2006, p. 55) is the act of doing what is right based on cultural as well as societal values and beliefs concerning tolerable behaviour. As stated by Djelic and Vranceanu (2007, p. 196), moral leaders possess a strong knowledge of their personal values, and as a result, they hold themselves responsible for these values. As it will be evidenced in the essay, moral leaders exhibit a high integrity level that stresses their honesty, which facilitate their followers to agree to the vision of the leader. Essentially, moral leadership connotes making decisions, which valued the dignity and rights of others. In this regard, moral leaders take into account the needs as well as viewpoints of everyone interested in the outcomes of the decision, and as a result, this type of leaders utilise their individual power so as to assure others of their choices appropriateness. In the contemporary organisations, moral leadership concept has been subdivided into moral intelligence and moral responsibility and courage, and both play a crucial role in retaining worker trust both in the organization and the leader, in addition to their levels of performance, commitment, and morale (Lennick & Kiel, 2011, p. 15). Even through there is much theoretical literature on moral leadership concept; only a few literature have concentrated on analysing the beliefs and experience of moral leaders in the contemporary organisation. Moral leaders differentiate themselves through service decisions that have long-term benefit, which in the short-term may appear unpopular, inconvenient, and even unbeneficial. Thus, the purpose of this study is to explain moral leadership and its significance to contemporary organisations. Discussion Leadership approaches in management have resulted in leadership perspectives with moral leadership being the regularly emphasised leadership approaches in the contemporary organisations. Unlike other leadership approaches, Treviño and Brown (2005, p. 70) posit that moral leadership relies heavily on power/authority. In contemporary setting, moral leadership can be defined as the process of developing and creating moral principles as well as values and leading the workers to act consistently with moral values (Caldwell, 2012, p. 1). Therefore, organisation leaders, with the inability to perform leadership behaviours that are ethically focused can lead the organisation to moral pollution process. According to Caldwell (2012, p. 1) moral pollution connotes the loss of moral in this kind of situations moral leadership is more needed. The problem that leaders in contemporary organisations face is to develop employee commitment, restore stakeholder trust, as well as build organizations capable of maintaining long-standing competitive advantage (Caldwell, 2012, p. 1). Therefore, these days, great leadership integrates with both competence as well as the character, however, corporate values has to include quality and excellence together with honesty and integrity. Building systems of organisations, which support and reinforce core moral values and which can attain exceptional performance have to be rooted in operational principles. Moral leadership capable of honouring a commitment to high-quality standards is a must in the contemporary global business environment that is amazingly competitive. However, ethical leadership includes not just evading polluting the working environment or biasing features of the product to customers, but also nurturing behaviours that are tolerable and morally upright. Businesses are these days operating in a global financial environment, which is more complex and bound by changes. Annually, novel markets, technologies, as well as competitors appear increasingly, and the developing opportunities as well as threats are not easy to predict. Additionally, the contemporary business world is functioning in an exceedingly multifaceted and co-dependent world wherein success of the business is a crucial relationship quality with customers, strategic partners, as well as other stakeholders. Give that the future development is very hard to envisage, Kopilović et al. (2011, p.60) suggest that the change speed will continue growing together with their interdependence as well as complexity. To create an agile company, that is to say, an organization that expects and responds to changing conditions of the business through harmonisation of highly productive external and internal relations, then moral leadership is imperative. Moral leadership according to Becker (2009, p.14) is not limited to individuals only, but also embraces corporations and business organizations. For this reason, moral leadership best qualities are of no use except if they are entrenched in a company structure that is supportive. To be precise, moral leadership does not just interrelate with hierarchical structures, corporate cultures, and internal environments; it as well impacts their development. In contemporary organisation, leaders are the most noticeable representatives of the organisation, and so they are moral agents with their individual arrays of objectives as well as values. Chief Executive Officers rise and fall, but the company remain there for the long term. As indicated by Becker (2009, p.15), corporations are morally at same par with natural people enjoying all duties, rights, and privileges that are normally enjoyed by the moral individuals. Companies in United Kingdom and France can also be prosecuted and brought before the law courts as individuals; thus, connoting they have a moral inclination. In Germany, protests for criminal law against companies have tremendously increased while Franz-Hermann Brüner, the head of European Anti-Fraud Office had suggested the blacklisting of companies that were corrupt. All this indicates that most companies in the contemporary business world are suffering from lack of moral leadership. For a company to get a moral licence so as to operate, Becker (2009, p.15) posits that the company leadership and also employees must be committed to moral standards. Organizational leadership ethics for this reason has to be viewed as a functioning factor, rather than just a cost factor. Internally, numerous company-broad approaches that seek to make moral leadership acceptable and effective have turned out to be accessible. They consist of core value or mission statements, codes of ethics, programs for ethical training as well as ethics office for reporting ethical grievances. Therefore, moral leadership is important in helping determine the corporate mission, define responsibilities to different constituencies, as well as set rules for the practices and policies of the organisation. Whereas in a number of cases immoral managers’ behaviour can result in character mistakes, regularly in self-centredness as well as greed, in other cases it is expedited by inconsistent guidelines or non-existence of guidelines. Becker (2009, p.15) study point out that majority of ethics infringements by mid-level managers gesture loyalty conflicts ensuing from unsatisfying, unclear, or absolute distorted value statements as well as individual behaviour of the leaders. According to Lynn Sharp Paine, an ethicist at Harvard business she had met an entrepreneur who openly told her that ‘being a liar’ is his main job: this is because after a large global enterprise company purchased his company, his first report as regional manager that was plainly truthful received much unfriendly response making him start fabricating reports (Paine, 2003, p.40). Basically, the manager can easily be condemned for dishonesty as well as false reporting, yet, the leadership of the company inspired a dishonesty climate and lacked unambiguous and clear values. As pointed out by Rothlin and Haghirian (2013, p.15), the company’s inconsiderateness to the demeaning behaviour of its workers generated an immoral setting that would destabilise not just its reputation but as well its productivity. Moral leadership is significantly important for contemporary organisations in defining the principles and values of the company, and in reducing value ambiguities. Moral leaders are important because they measure to make certain the development of judgment that is morally sound and sensible in their followers and across the organisation. By means of compliance standards, exemplary behaviour, as well as workers’ ethics training, moral leaders make sure that moral approach becomes a crucial element of the organisation’s strategy as well as performance. Enron will be utilised as a case study for moral leadership: its business interests consisted of selling natural gas, electricity, in addition to other energy products while services entailed risk management and network bandwidth. In the 1990s, Enron experienced remarkable growth since the company used to recruit best graduates from best business schools and the organisational culture was oriented towards success with top performers being rewarded. The company according to Johnson (2003, p.56) did not concentrate on long-term value; rather it focussed on short-term financial goals. Besides that, the leaders were greed and always made poor judgments and while the business started growing and experiencing success, persons within the company started competing against each other, with greed turning out to be a share of the company culture. The company managers delivered for bigger things, so they were highly motivated to earn more in a short time. As a result, mistrust increased between competing organisations and persons, leading to secret agreements in the company. Consequently, this created a platform for the concealing losses of the company in non-existing offshore ventures as well as the profits inflation. This as a result made Enron appear more profitable, generated a descending twisting that needed the company’s leaders to increase misleading bookkeeping practices, so that the company continue to look profitable whereas it was getting losses. In 2001, Kenneth Lay the then chief executive officer traded millions of personal stock shares by guaranteeing shareholders and workers that Enron was an outstanding opportunity for investment. The top management did not stop their immoral behaviour of hyping how the company was successful, and even though the executives of the company had promised shareholders a $120 per share on the stocks it only managed a $90 per share. Sherron Watkins exhibited some moral leadership when as an executive explained to Kenneth Lay about the improper accounting activities within Enrol together with non-existing offshore ventures that Enron was paying for. When Watkins was ignored by the CEO he publicised the Enron financial scam that was taking place within the company, which ultimately resulted in the failure of the company. In this case, the ethical lapses were attributed to greed, poor judgment, fraud and deception, and lack of moral courage. Besides that lack of moral leadership resulted in conflict of interests as well as lack of accountability (Johnson, 2003, p.46). Normally, company or people believe that success is defined by the level of profit that one gets, making them unable to deal with morality. However, high profit does not symbolise a successful business, rather success is defined by the ability of the company to make morally sound decisions and still remain profitable. Given that media is turning out to be a more concern in modern business environment, they care less about business achievement; rather they are focusing on business morality. Moral leadership in the contemporary business environment is important because it makes people can feel treated equally, and enables one share his/her idea or opinion freely without fear of intimidation, which beneficial to both the company productivity and reputation. Besides that, moral leadership is at all times attempting to utilise a feeling that is respectful to the employees, considering that respect results in a work environment that is morally sound and less challenging. Evidently, moral leadership is nowadays of critical significance, bearing in mind the business are operating in an environment where the consumer watch groups the public, and government regulations demand for morality. Conclusion In conclusion, it has been argued that moral leadership is significant in contemporary organisations for protecting the reputation of the organisation. In this case, ethics exhibited by leaders reflects on themselves and their organizations. Therefore, behaving ethically helps in preserving the legitimacy of the organisation as it utilises social resources so as to realize its objectives. As argued in the essay, the individual leaders’ character impacts their willingness as well as ability to act on ethical principles. Moral leadership, as stated in Enron case study if improperly utilised may be cunning and unhelpful in an organisation environment. Still, there are various elements of moral leadership, which are crucial for successful organisation management. Organisation leaders have to be insightful practitioners attached to the attitudes as well as values that they bring to their leadership role. By means of moral leadership, leaders can develop an environment for open communications, risk taking, new social norms, as well as collaboration. Therefore, a successful leader should be able to influence values and attitudes of his followers, and so a moral leader should be able to arouse moral influence. References Becker, G.K., 2009. Moral Leadership In Business. Journal of International Business Ethics , vol. 2, no. 1, pp.7-21. Caldwell, C., 2012. Moral Leadership: A Transformative Model for Tomorrow's Leaders. New York: Business Expert Press. Djelic, M.-L. & Vranceanu, R., 2007. Moral Foundations of Management Knowledge. Northampton, Massachusetts: Edward Elgar Publishing. Johnson, C., 2003. Enron’s Ethical Collapse: Lessons for Leadership Educators. Journal of Leadership Education, vol. 2, no. 1, pp.45-56. Kopilović, R., Radosavljevic, D. & Mihailović, B., 2011. Leadership In Modern Organizations. International journal of economics and law, vol. 1, no. 3, pp.60-69. Lennick, D. & Kiel, F., 2011. Moral Intelligence 2.0: Enhancing Business Performance and Leadership Success in Turbulent Times. Upper Saddle River, New Jersey: Moral Intelligence 2.0: Enhancing Business Performance and Leadership Success in Turbulent Times. Paine, L.S., 2003. Value shift: why companies must merge social and financial imperatives to achieve superior performance. New York: McGraw-Hill. Rhode, D.L., 2006. Moral Leadership: The Theory and Practice of Power, Judgment and Policy. New York: John Wiley & Sons. Rothlin, S. & Haghirian, P., 2013. Dimensions of Teaching Business Ethics in Asia. New York: Springer Science & Business Media. Treviño, L.K. & Brown, M.E., 2005. The Role of Leaders in Influencing Unethical Behavior in the Workplace. In Kidwell, R.E. & Martin, C.L. Managing Organizational Deviance. New Jersey: SAGE Publications, Inc. pp.69-96. Read More