Importance of Ethical Culture in Business
An ethical advertising decision where the organization truthfully and honestly portrays what it sells helps to build customer trust and market share. Business confidentiality enables customers to be sure that their private information would not be accessible to unauthorized personnel. It also creates credibility to society and gives the business a competitive advantage over other firms (Lawton et al., 2015). Therefore, companies that engage in unethical practices, for instance, failure to disclose their intended practices suffers loss of customer trust, targeted market, and loss of revenues.
Unethical Leadership on Organizational Bottom Line
There are several ways through which unethical leadership adversely affects an organization. First, managing employee, customers, and community with disrespect and inequality lower employees’ performance and attitude. Secondly, it interferes with productivity, resulting in employee high turnover rates, low working morale, and low-quality business output (Kavathatzopoulos et al., 2017). Additionally, dishonest communication, both internally and externally, creates an unconducive work environment, workplace conflicts, and poor performance. Lastly, unethical leadership breaches several legal provisions that protects the rights of employees, thereby increasing the legal risk to a business and financial losses through legal costs and settlement of damages (Kavathatzopoulos et al., 2017)
Ethics and Organizational Culture
Ethical leaders are a role model to other employees and motivate their employees in making the right decisions to achieve organizational success. Notably, organization leaders are the custodians of organization culture. Hence they play a significant role in establishing a conducive work environment (Pearson et al., 2017). They also represent the critical role of ensuring employees adhere to the business policies and culture and employees compliance.
Additionally, they engage employees through continuous education and training them on the importance of complying with ethical standards, for instance, treating employees and stakeholders with respect and honesty influences the excellent relationship in the workplace, promoting teamwork, and reduce conflicts among workers (Pearson et al., 2017). They also formulate reward policies for employees who observe the business culture and reprimand those who violate organizational regulations, for example, by instituting disciplinary measure (Pearson et al., 2017).
Kavathatzopoulos, I. (2017). Ethical leadership in business: The significance of Information and Communication Technology. In Keynote speech at Japan Society for Information and Management 75th Annual Conference (pp. 1-4). Japan Society for Information and Management.
Lawton, A., & Páez, I. (2015). Developing a framework for ethical leadership. Journal of Business Ethics, 130(3), 639-649.
Pearson, R. (2017). Business ethics as communication ethics: Public relations practice and the idea of dialogue. In Public relations theory (pp. 111-131). Routledge.