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Ethical Behavior and Morality... with the Tone at the Top

In: Business and Management

Submitted By mtaj6475
Words 2465
Pages 10
Ethical Behavior and Morality in Organizations begin with “The Tone at the Top”

Executive Summary
Unethical behavior in organizations creates many intractable problems which climax in fraudulent acts. When behavior in an organization is not ethical regulations are broken, and the likelihood of legal suits increase. Fraud in Enron and Adelphia in the early 2000s led to big bankruptcy filings resulting in huge losses in investments. Employees also lost jobs as well as significant portions of their retirement savings. Most of the fraud in these companies were committed or influenced by senior management.
Executives did not demonstrate ethical leadership by sounding ethical tones at the top. The “tone at the top” has a trickle down on employees. If top management is comprised of ethical leaders, the employees are likely to behave ethically. Such leaders lead by example, and one important way to cultivate an ethical organization is to have an organizational code of ethics that is followed by all. However, these codes can only be as good as those who are responsible to enforce them. The Securities and Exchange Commission (SEC) has placed high importance in codes of ethics. In spite of the aforementioned disadvantage that is hinged on the values of unethical leaders, codes of ethics are good internal controls.
Leaders can act morally and avoid unethical behavior if they also avoid setting unrealistic goals. If daunting goals are set for employees, they are likely to commit fraud. Embracing an unethical behavior because it has produced good results is a trap that perpetuates unethical conduct. Executives should be concerned when an unethical behavior is being committed by an agent. They should know that this could drag the company’s reputation to the mud. If leaders understand how to traverse these road bumps to ethical leadership, they will be on their way to

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