Business Ethics and Organizational Culture
Introduction
Business ethics refers to the interpretation of an organization’s values to the employees and staff irrespective of any law governing the business operations. Organizational culture on the other hand refers to the day to day practices in organizational duties, which is implicated by motivated employees and ethical leaders making performance be done at self-determination and self-responsibility at all levels in an organization. The article by Abrheim (2012) focuses on developing of organizational culture through ethical leadership and practices.
Summary
The peer-reviewed journal article by Abrheim (2012) addresses leadership efficiency through leadership theories which include contingency theory (Fiedler, 1967), path-goal theory (House, 1973), situational theory (Hersey & Blanchard 1969) and leadership substitutes (Kerr & Jermier, 1978). Abrhiem (2012) also considers the current perspectives on ethical leadership by observing transactional and transformational leadership. Ethical theory is considered as being subdivided into focusing on characters of leaders and their conduct. Abrhiem (2012) also reports a research on business ethics from a field of organizational justice, where he concluded that ethical leaders are concerned about fairness and justice in an organization. Prior to the organizational culture and behavior, individuals develop morals through their interaction with situations in job context which reflects their integrity and ability to make decisions with respect to the organizational values. In finalizing his article, Abrheim (2012) addressed the organizational culture and cognitive moral development where he proposed that leaders who are interested in encouraging moral action should promote individual responsibility at every level of the organization.
Relevance of the article to business ethics
In all organizations, good performance is usually the focus through the perfect application of business ethics. As noted in this article by Abrheim (2012), corporate leaders can gain confidence and loyalty from their corporate members through performances with ethical considerations. Even though there are different leadership styles in terms of how leaders influence their followers, the research reported in the article was based on implication of ethical leadership which is based in the relationship between ethics and leadership. Here transactional leadership was considered and it focused on control strategies while seeking followers’ compliance, but this kind of leadership did not reflects ethical morals. Transformational leadership was therefore considered ethical since it involves strategies of modifying followers to achieve self-confidence and determination. This ethical leadership creates an organizational culture where employees are full of integrity and responsibility at all levels of organizational management.
From the justice research, the article suggested that organizations have two important values which include ethics and fairness, and the values can be influenced by the leaders’ conduct and characters as based on the ethical theories. The ethics research therefore viewed individuals and their beliefs in relation to the organizations’ perception, which leads to specific organizational culture. In the model of cognitive moral development, individual decision is developed which brings ethical values into practice, and similar criteria is used by managers to think when in ethical dilemma. Abrheim (2012) concluded that through ethical leadership and ethical practices by employees, self-recognition and responsibility is developed and therefore organizational culture is developed.
Conclusion
Business ethics in an organization interprets the organizational values to all employees. This instills awareness and in response, it fuels the focus towards a common goal and dedicated performance through observing of the business values. When the values are fully instilled among employees and staff, it becomes the organizational culture or behavior, implicating that the values are observed on daily bases irrespective of any supervision. To improve organizational performance, business ethics must be incorporated in the organizational culture for effective day to day performance.
References
Abrhiem, T. H. (2012). Ethical leadership: Keeping values in business cultures. Business and Management Review, 2(7): 11–19. ISSN: 2047 – 0398
Fielder, F.E. (1967). A theory of leadership effectiveness. New York: McGraw-Hill
House R.J. (1973). A path-goal theory of leadership effectiveness. In E.A. Fleishman & J.G. Hunt (Eds.), Current developments in the study of leadership. Illinois: Southern Illinois University Press
Hersey P. & Blanchard, K.H. (1969). Management of organizational behavior: Utilizing human resources. New Jersey: Prentice-Hall.
Kerr, S. & Jermier, J. (1978). Substitutes for leadership: Their meaning and measurement. Organizational Behavior and Human Performance, 22(1), 374-403.
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