Ahmad Abdulkadir Arabi

A00023244

PHI 300

Louis Ngare

15th October, 2022

Summary on Ethical and unethical leadership issues, cases, and dilemmas with case studies

Plato (427-347 B.C.) and Aristotle are credited with developing ethical theory (384–322 B.C.).
The Greek term ethos, which means "customs," "behavior," or "character," is the source of the word
ethics. The principles and morals that a person or society as a whole thinks adequate, fair, or appropriate
are what ethics is all about. The Greek word ethos, which means custom or character, is where the word
ethics comes from (Fernando, 2016; Northouse, 2016) [5, 8]. This suggests that ethics is concerned with
how people act or behave in relation to norms or expectations. Ethics refers to sound moral principles that
inform people about what is good and wrong and what they should do. Following the law is not the only
aspect of ethics. This is due to the fact that while the law frequently integrates moral principles, so most
people would follow it, it can also stray from what is moral. It is possible for social norms to diverge from
ethical standards. Germany under Nazi domination is a good example, where Germans tolerated the
regime's immoral atrocities despite their immorality. The idea or creation of what people or society deem
as desirable or acceptable is known as personal values. On the other side, personal ethics is the
application of these principles. Personal ethics is another word for morality, and morality generally refers
to the values that society seeks to instill in young people as they develop.

When it comes to leadership, ethics is concerned with what leaders do, who they are in terms of
their behavior, and with their virtue. Ethical considerations are either implicit in or openly present while
making leadership decisions. "Ethical leadership" refers to the process through which a leader's decisions
and actions in a given situation are guided and informed by their moral principles and moral growth.
Since they have been proven to be effective in generating transformational leaders, different types of
training as well as training interventions by the role models can be used to promote ethical development.
To emphasize the importance of mentorship and training for trainees A management trainee's first
supervisor can have a significant impact on their future professional achievement, hence Bass (1990) [2]
suggests a number of ethical leadership standards. They consist of fairness and the ability to avoid taking
unfair advantage of others; safeguarding their own personnel from liabilities and unforeseen
repercussions such third-party lawsuit; enhancing and defending the organization's reputation; and
fulfilling the expectations of stakeholders. This is due to the fact that many stakeholders demand nothing
less from them than moral behavior, etc.

There are seven advantages to concentrating on becoming a moral leader. Improved investor
confidence, a better public image for the company, the prevention and mitigation of fines and penalties
related to criminal activity, the avoidance of employee lawsuits brought by those who were unable to
have their grievances resolved through company channels are just a few of them are increased
productivity, market orientation, and leadership due to enhanced customer care and happiness,
establishing the standard for others in the market to follow, and enhancing the organization's or
institution's profile. People behave or desire to behave ethically in business for a variety of reasons. Some
people don't want to be fired, ashamed, imprisoned, embarrassed in front of their family, or arrested.
Others don't want to be dismissed. Prentice (2014) states that ethical behavior fosters trust, and trust is
essential to economic success because it increases social capital, which is what enables economies and
societies to flourish. Acting ethically is a long-term strategy for success on both a personal and
professional level since doing good helps one feel good. As a result, Fernando (2012) cites some of the
benefits of operating ethically, such as the need to cultivate relationships of trust with the organization's
principal shareholders and stakeholders, such as clients, partners, and even investors; Utilizing finite and
non-renewable industrial resources and raw materials; overworking and even underpaying women and
children. But for sustained success According to Prentice (2014), selfishness and a focus on the short term
over the long term are frequently the motivations behind unethical behavior. term oriented, shallow and
rather than thoughtful and overall unethical conduct is not attractive and therefore is repellent to many
people in society. This means that although unethical actions my look attractive or gainful initially, the
long term effects are undesirable.

Many people have turned to unethical business methods as a result of unethical behaviors,
increasing commercial competition, and the ambition to succeed at all costs. Some businesspeople believe
that there is no room for error in the world of commerce, forcing even the most competent, educated, and
trained people to engage in unethical behavior in order to survive (Ziczuk, Cichorzewska, & Barczewski
2013). They named the following as contributing factors to unethical behavior: a dominant organizational
culture that encourages unethical behavior; a lack of business trust; a lack of supporting values or a failure
to comply; lax legal and organizational policies procedures and guidelines; inappropriate role modeling
by organizational leadership; and the setting of unfeasible operational goals. Prentice
(2014) demonstrated that even people of good character, even if they are adept at moral reasoning, may
engage in unethical conduct due to psychological flaws, social pressures, organizational stresses, and
prevailing situational factors in his research on behavioral ethics and why people act or behave
unethically. Organizations and individuals participate in a variety of unethical behaviors, some of which
are listed by Fernando (2012) price fixing, which is frequently carried out by monopolies who also
occasionally use artificial scarcity and other tactics to push price movement upward. Different pay
structures for the same work and qualifications depending on race, gender, and nationality are just a few
examples of how discriminatory compensation structures in businesses may cost a lot financially. It is
unclear whether business ethics and financial success for firms are correlated, since there are several
examples of flourishing and prosperous unethical organizations and people. The ideal balance between
investments required for corporate ethics and those themselves cannot be clearly established.

An ethical dilemma is a moral situation in which a decision must be made between two equally
undesirable options. These situations can occur for a number of reasons, including organizational goals
versus social goals, attitude, behavior, failure of personal character, and conflicting personal values.
When an organization's decision-maker must choose between two or more solutions that will have
different effects on profitability, competitiveness, and stakeholders in general, they are in a quandary. We
run into problems occasionally in life and in business activity. According to Fernando, some of these
involve disputes in court where makers and sellers attempt to twist the truth or when buyers and sellers
work together to evade paying taxes to the state (2012). In corporate settings with diverse value systems,
competitive pressures, political ideologies, moral philosophies, and cultures, the majority of ethical
decisions are made. Moral and ethical difficulties are therefore frequent in business (Fernando, 2012). In
a KPMG poll conducted in 2000 of 24,000 employees from various organizations, 74% reported seeing
legal or corporate policy and standard infractions the year before, and 50% reported seeing what they
deemed to be serious misconduct that could result in financial losses. Many people have a great incentive
to satisfy the authority, even if it means letting their moral principles go. This is also a chance for those in
positions of power to lead by example on ethical matters. In terms of overconfidence, people typically
think they are more moral than other people and typically feel confident in their morality. They frequently
make decisions without giving adequate ethical consideration due to their overconfidence, which
increases the likelihood that they would act unethically. Framing: This refers to making problems appear
to be something other than what they actually are, such as by making purely technical problems appear to
be a commercial problem. People then alter their decision-making processes, giving them the chance to
act unethically to meet the new perspective. Enron's bankruptcy is a notable example, where numerous
unethical judgments were taken since the corporation associated many problems with stock market price
rather than moral and ethical principles. Incrementalism and self-serving bias are two more.
Environmental factors, time pressure and lack of transparency are a few elements that contribute to
unethical practices. Maintaining a high degree of professional responsibility, avoiding circumstances
involving conflicts of interest, and putting aside personal interests in favor of the greater benefit of the
organization and society are a few examples of codes of ethics. Always conduct yourself and your work
with integrity, no matter what the circumstances. According to Fernando (2012), an organization created
an ethical environment by doing the following things: Encourage open dialogue between management,
employees, and other stakeholders; Communicate organizational ideals to all staff interactions; In order to
create an ethical atmosphere, employees need receive training and sensitization on ethical behavior and
conduct. Two basic approaches in resolving ethical dilemmas are namely Deontological and
Teleological; Action drives moral decision, Outcome drives moral decision respectively.

A case study was also applied (Ethical Case Study/Case Analysis); John works in the
accounting department of a large firm. While going over the books for the past several months, James
notices that someone has altered the figures to increase earnings by several thousands of dollars. He
suspects that the errors, which are in the company’s favor, are too consistent to have been honest
mistakes. He knows that he should report his findings through the company’s ethics hotline. However, he
worries that doing so will jeopardize his job security and reputation with the company. The fact that the
company provides an ethics hotline is sufficient evidence that the organization supports ethical conduct
by its employees. By failing to report this case, John is already part of the unethical conduct as he has
gone against the company policy. John demonstrates lack of personal values and ethics which demands
that he acts with integrity and uphold professional ethics. In conclusion psychological factors,
organizational and societal pressures, and a number situational factors make it difficult for people to
realize their own ethical aspirations, but we must all try to be ethical in all our undertaking as individuals
or corporates because there is evidence of long term personal and corporate gains.

Because it frequently results in significant costs for enterprises and society at large, illegal and
unethical activity and conduct should be halted and avoided by everyone. Firms have demonstrated that
they can still be profitable and successful by operating ethically, despite the fact that unethical people and
businesses continue to exist and prosper, which serves as a source of motivation for the unwanted
behavior. There may be more than one proper response or even no right one when it comes to ethical
business challenges. As a result, all parties involved should behave responsibly and sensibly to promote
moral practices.
 Work Cited

Fernando AC. Business Ethics and corporate Governance (2nd ed). India: Pearson, 2012. Retrieved from
https://www.oreilly.com/library/view/businessethics-and/ 9789332511255/

Bass BM. From Transactional to Transformational Leadership: Learning to Share the Vision, 1990.
Retrieved from http://discoverthought.com/Leadership/References_files /Bass%20leadership
%201990.pdf

Williams WR. (nd). Ethics and Law: Basic Concepts, Cases, and Dilemmas. Retried from
https://www.baruch.cuny.edu/facultyhandbook/docume nts/EthicsandLaw.doc

Zińczuk B, Cichorzewska M, Barczewski M. The analysis of unethical behavior among Employees in

enterprises – A pilot study in the automotive industry, 2013.
http://www.toknowpress.net/ISBN/978-961- 6914-02-4/papers/ML13-249.pdf

Brown ME, Trevino LK, Harrison D. Ethical leadership: A social learning perspective for construct
development and testing. Organizational Behavior and Human Decision Processes. 2005; 97:117-
134. doi:10.1016/j.obhdp.2005.03.002