ETHICS AND

GOVERANCE
Topic 2
Ethical leadership is the most
important factor in creating an ethical
workplace.
Name: Hong Ping, Tan

Introduction

What is an ethical workplace? How do one define an ethical workplace? How ethical leadership comes
into place in creating an ethical workplace? Before beginning with ethical workplace and ethical
leadership, we first have to look into Ethics and Leadership.

Ethics
For many, ethics is known as the act of doing what is right. People think of what is right and wrong
when ethics is mentioned. (Resnik, 2011). This is true especially when there are no specific rules and
codes to lead us in living the right life. As humans, we tend to use our own feelings, personal
experiences, culture and knowledge to judge whether our actions and behaviours are ethical. As defined
by Business Ethics For Dummies, Ethics is the code of moral standards by which people judge the
actions and behaviour of themselves and others. (Bowie & Schneider, 2011, p. 10)

Leadership
Even with umpteen leaders, a definite definition for leadership has yet to be formed since the past till
present. An article posted by the Business News Daily in the year 2015 showed that amongst 30
business leaders in the corporate world, each came up with their own definition of leadership based on
their own experience. This concludes that leadership is not the same for everyone.
Many state that ethical workplace is a workplace that promotes honesty, integrity, fairness and trust.
What makes up an ethical workplace? This essay topic states that ethical leadership is the most
important factor in creating an ethical workplace. Thus this essay will be talking about how ethical
leadership creates an ethical workplace and the benefits of ethical leadership.

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How does Ethical Leadership create an Ethical Workplace

Ethical leadership is the practice of ethical behaviour of a leader at all times. Having an ethical
workplace begins with ethical leadership said Thornton (2013).

Leaders in the workplace have power over their subordinates.

Anyone who steps into work on their first day, automatically looks for their manager. Managers will
then delegate duties to them. This is a routine that all of us have faced in our work, be it full time or
part time. In any organisation, there will be a hierarchy for all employees to adhere to. If one is
displeased with their leaders/ managers, they can only climb up the hierarchy, surpass their manager or
leave the job. This shows that people who are higher in the hierarchy has positional power over their
subordinates.
Therefore, ethical leaders holds a position of authority over their subordinates influencing them to
behave and act ethically. An excellent ethical leader will be able to make followers/subordinates carry
out his instructions willingly. This in turn ensures an ethical workplace as everyone follows the ethical
leader without feelings of opposition.
Mayer et al. (2009) observed that the top management has the strongest influence over the ethics of an
organisation, followed by supervisory management. This further emphasizes on the power and
influence leaders have in an organisation over their employees. Ethical leaders will therefore influence
the culture of an organization in an ethical manner. However the misuse of power will create an
opposite effect and may lead to undesirable outcomes, creating an unethical workplace. Therefore
leaders should always be careful in using their positional power.

Providing Enforcement of Ethical Behaviour

To create an ethical workplace, ethical leaders may provide enforcement directly or indirectly. An
ethical leader committed in providing an ethical workplace will try their best to promote and enforce
ethical behaviours directly by coming up with activities to emphasize ethical behaviours regularly.
Ethical leaders create strict Code of Ethics (COE) for everyone in an organization to follow. Ethical
leaders enforces rewards and punishments in the execution of COE.
M.E. Brown did a researched that shows reinforcement of ethical behaviour plays an important role in
modeling effectiveness as employees pay close attention their leaders who has the authority to punish
and reward. (2006) Reinforcement of the COE will further reduce the practice of unethical behaviour
in the workforce, as it is known what should and should not be done. Ethical leaders are required to
reward employees that demonstrates good performance and punish employees with bad performances.
Therefore, the rewards would serve as an incentive to remind followers to practice and display ethical
behaviours. This will lead to the creation of an ethical workplace.
Dilenschneider once said, Search for power but never forget to share it. (2007). Ethical leaders can
also share the responsibilities of executing the COE to his employees. If responsibilities of executing
the COE are given to each and every one, employees will feel the need to perform to their best ability
because they are accountable for their own actions. Employees would be held liable for inappropriate
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behaviours as they are each assigned to execute and follow the COE. Thus, this will also motivate them
in practising ethical behaviours.

Role Modelling
Leaders are role models in an organisation. Employees will look up to ethical leaders as role models.
Ethical leaders must always remember to walk the talk and talk the walk. M.E. Brown mentioned
that Moral managers make ethics an explicit part of their leadership agenda by communicating an
ethics and values message, by visibly and intentionally role modeling ethical behaviour (2006).
Ethical leaders have to constantly and consistently practising and preaching ethical behaviour . In a
workplace, ethical leaders are always under the spotlight, therefore, their actions will strongly affect
the behaviour and attitude of employees towards the organisation. Ethical leaders who strive to walk
the talk and talk the walk will indirectly create a standard and expectation for employees behaviour.
This incidental creation of standard and expectation will lead to employees following the footsteps of
ethical leadership.
Muel Kaptein states that senior and local management are positive role models.(2010). Even with the
COE, ethical leaders must remember to practice what they preach. With consistency from the leaders,
employees are likely to conform and behave accordingly to the organizations behaviour and function
ethically. Thus, ensuring an ethical workplace. Furthermore, Ethical leaders have extra liability
on their actions as they are to account for both the employees actions and their own
actions. As a result, ethical leaders will have a strict guidelines to follow, increasing
efficiency and leaving strong ethical standards for the workplace.

Benefits of ethical leadership

Organisation commitment
One benefit of ethical leadership is that it creates organisation commitment. Employees are more
committed to continue working in the same workplace. Organisation commitment occurs when
employees identify him/herself taking pride in being a part of the organisation, with the intention to
commit to the organisation in the long-term, and is willing to do more than their job responsibility to
aid in the organizations progress.
Studies have shown that ethical leadership contributes to followers job attitudes and work outcomes,
inclusive of job satisfaction, affective commitment, and work engagement (Tanner, Brugger, Schie
and Lebherz, 2010). Ethical leadership give rise to job satisfaction and work engagement for
employees. Job satisfaction pushes employees to work harder as they take pride in their work and have
a strong sense of achievement and accomplishment upon completing their work. This will lead
employees to further engage in their work. As a result, employees are motivated to perform their best,
producing satisfying results for the organisation and therefore, choose to stay in the organisation that is
able to give them emotional contentment.
Ethical leadership also creates an environment of trust which leads to effective commitment from
employees as they develop an emotion of attachment to the organization. In a trustworthy environment,
employees tend to be more comfortable and develop less feelings of suspicious to the operations of the
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organization. This will in turn, boost the productivity of the organization as employees begin to
develop a sense of belonging and work at ease. Ethical leaders assures employees with their
consistency and strong sense of moral values, therefore employees do not have to worry about being
treated unfairly.

Ethical characteristic
Ethical leadership will slowly build up an ethical characteristic for the organisation, which may then be
used as a marketing slogan for the organization. An example would be from The Body Shop where
they are trademarked as Against Animal Testing. This may be viewed as an act of social
responsibility amongst consumers who are environmentally friendly or, who are strong believers
against animal testing. Thus, to show their support and approval, The Body Shop would attract these
groups of consumers.
Therefore, ethical characteristics can be used as an additional strategy for marketing. In the long run,
the ethical characteristic will be embedded with the organisation. The public will associate the ethical
characteristic and the organisation together, leaving a strong branding. On top of that, it may also raise
more awareness on particular issues and the organisation will get free advertising through word of
mouth from people who supports the ethical characteristics of the organisation.

Organisation characteristic behaviour

Business thrive because of ethical leadership. Embedding organisational characteristics in businesses
aids in decision making. (Kasthuri, CTP, pg 2, 2009) Organisation characteristics behaviour sets a
standard ethical expectation for the employees in the workplace. It acts like an amplifier for ethical
behaviour by portraying the organisation to be people oriented. Ethical leaders and employees will
think twice before they make any decision as they are strongly influenced by organisation
characteristics, leading to higher rate of ethical decision.
Ethical leadership creates organisation characteristic behaviour in the long run. All organisations and
consumers desire to be involved with an ethical organisation as it provides a sense of assurance and
certainty. Consumers will be willing to be engaged in the organisations products or services without
fearing for any form of disadvantage. It will ultimately create a loyal consumers base for the
organisation as they are able to develop a relationship based on trust and integrity with their
consumers. On top of that, it will contribute greatly to the organisations reputation in the market,
generating more sales and revenue.
One example will be from Johnson & Johnson where the whole organisation preaches about ethical
behaviour. They are committed to responsible marketing and promises their consumers that all of their
products follows strict guidelines. They are also transparent on the handling of products and ensure that
that their consumers receive what is the best for them instead of what is the best for the company.
Ultimately, there were branded the top brands in being ethical by Forbes in 2011.

Conclusion
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In conclusion, ethical leadership is the most important factor in creating an ethical

workplace.
In order to build an ethical workplace and improve the effectiveness of work, ethical
leadership is essential. Even with power and enforcement, nothing will be useful
unless the leader leads by example. If the leader enforces the ethical behaviour in
the workplace but does not practice it him or herself, no one will be obligated to
practice ethical behaviour. Leaders set the tone for the organisations and it is
important for them to set the right tone that will ensure the right practice of ethical
behaviour and thus creating an ethical workplace.
On top of that, without ethical leadership, the organisation may practice unethical
behaviour which may be harmful to their employees and unfavourable to the society,
public or even the environment. Ethical behaviour is the fundamental behaviour of
human values. Ethical leaders creates hope, assurance and comfort for employees,
public and the society which in turns builds a comfortable environment in the
workplace for both employers and employees. The fruits of having an ethical
workplace is that efficiency and effectiveness of the labour market will increase
inevitably. To add on, it would also increase the reputation of the organisation due to
consumers spreading word of mouth about the market.
However ethical leadership is not the only factor in creating an ethical workplace.
There are many other factors in creating the ethical workplace. This factors, along
with ethical leadership will bring about a fast moving and pleasant workplace for
people in the organisation.

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References
7 Lenses: Learning the Principles and Practices of Ethical Leadership Linda Fisher Thornton
Google Books. 2015. (Online) Available at: https://books.google.com.au/books?
id=jZz4AgAAQBAJ&printsec=frontcover&dq=linda+fisher+thornton&hl=en&sa=X&ei=Yd4oVcKLF
8X4mAXVuoD4Ag&ved=0CCUQ6AEwAA#v=onepage&q=linda%20fisher%20thornton&f=false
(Accessed 19 April 2015)
30 Ways to Define Leadership. 2015. 30 Ways to Define Leadership. (Online) Available at:
http://www.businessnewsdaily.com/3647-leadership-definition.html. (Accessed 19 April 2015)
Brand Power To The People: J&J Takes Lead In Forbes Ranking Forbes 2015. (Online) Available at:
http://www.forbes.com/sites/jenniferrooney/2011/10/05/brand-power-to-the-people-jj-takes-lead-inforbes-ranking/
Brown, M.E & Trevino, L.K 2006, Ethical leadership: A review and future directions, The
Leadership Quaterly, vol. 17, pp 595-616, viewed 19 April 2015, Sciencedirect Database
Dilenschneider, R.L. 2007, Power and Influence, Vital speeches of the day, vol. 73, no. 6, pp. 270274.
Kaptein, M 2010, Toward Effective Codes: Testing the Relationship with Unethical Behavior,
Journal of Business Ethics, vol. 99, pp. 233-251
Kasthuri, H 2009, Leading with Your SOUL, Business And Economics Accounting, vol. 90, no. 8,
pp. 44, 46-51, viewed 19 April 2015, Proquest Database
Maner, J.K. & Mead, N.L. 2010, "The essential tension between leadership and power: When leaders
sacrifice group goals for the sake of self-interest", Journal of personality and social psychology, vol.
99, no. 3, pp. 482-497. http://search.proquest.com.ezproxy.lib.rmit.edu.au/docview/745195114?
accountid=13552
Mayer, D.M, Kuenzi, M Greenbaum, R, Bardes, M & Salvador, R 2008, How low does ethical
leadership flow? Test of a trickle-down model, Organizational Behavior and Human Decision
Processes, viewed 19 April 2015, Sciencedirect Database

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Rhoades, R, Eisenberger, R & Armeli, S 2001, Affective Commitment to the Organisation: The
Contribution of Perceived Organisational Support, Journal of Applied Psychology, vol. 86, no. 5,
pp.825-835.
Tanner, C, Brgger, A, Schie, S & Lebherz, C 2010, Actions Speak Louder Than Words
The Benefits of Ethical Behaviors of Leaders, Journal of Psychology, vol. 218, no. 4, pp.225233
Vevere, V 2014, Ethical Leadership: Student Perceptions of Exercising Ethical Influence in
Organisation, European Integration Studies 2014, vol. 8

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Ethics & Governance Self-assessment rubric

Please cut and paste the following rubric and submit it as part of your
Research essay in the same word document. Put a mark (X) in each
column (ranging from Unsatisfactory to Excellent) against each of the
selection criteria and give yourself and overall grade (Fail, Pass, Credit,
Distinction, High Distinction)

Name

_________Hong Ping Tan_(S3535239)_________

Distinctio
n

Grade:

Original and clear argument

Logical and convincing discussion

Ideas and assertions substantiated

through use of high quality
reference material (key academic
perspectives/views are used to
develop arguments)

Appropriate Harvard style

referencing (in-text and list of
references)

Number and quality of references

Clear and comprehensive written
style (spelling, grammar, syntax
etc)

Excellent

Very Good

Good

Satisfactor

Unsatisfact

Key issues relating to the question

have been developed

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