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Research suggests that code of ethics can be an effective management tool under the right circumstances.A study by Ford and Richardson investigated the correlation between codes of ethics and misconduct, concluding that there were fewer incidents within organisations that adopted formal ethics codes (Cleek & Leonard 1998).Formal ethics codes outline the values and expectations of an organisation and assist in ensuring that employees have a clear understanding of what is considered ethical conduct (Brooks 1989).
The purpose of ethics in business is to direct business men and women to abide by a code of conduct that facilitates, if not encourages, public confidence in their products and services.
But what is considered ethical behavior may depend on the factors that define and affect ethical behavior.
Mayer Corporate indiscretion, wrongdoing, and corruption are perpetually the subject of media attention as well-known companies such as Enron, Tyco, World Com, and most recently the News of the World, have been found guilty of unlawful behavior; and the U. economic crisis has in part been blamed on unethical actions from Wall Street.
These corporate scandals and current financial woes have brought renewed interest to business ethics—namely, understanding the factors that promote ethical behavior in organizations.
This essay will argue that leadership is an integral factor in the development of ethical decision making in modern organisations.
Literature proposes that organisational culture has a strong correlation with ethical behavior within an organisation, suggesting that situational factors such as workplace culture and environments are responsible for influencing behavior (Jones, TM & Ryan, LV 1998).fundamental principles and organisational framework for ethical behavior.Increasing regulations and public pressure have virtually made it a requirement that large organisations ensure such programs are utilized, with 58% of firms worldwide implementing formal ethic codes in attempts to reduce illegal or unethical behavior (Adam & Rachman-Moore 2004).How Leadership Impacts Organisational Culture Leadership has shown to be an effective management tool in fostering a positive workplace culture, showing to have a direct impact on ethical decision making in modern organisations (Ruiz Palamino et al. This powerful relationship between workplace culture and ethical behavior is explained in Zimbardo’s argument that there are no bad ‘apples’, just bad ‘barrels’.Zimbardo argues that the environment and contexts of an organisation establishes inherent cultures that promote or discourage moral standards and ethical behavior.It is assumed that employees look to the behavior of high level management to understand the informal expectations and conduct within an organisation.Therefor, fostering an ethically-orientated culture would be dependent on ethical leadership to establish high moral standards (Kelly 1990).It is believed that formal ethics programs are an effective leadership tool in encouraging ethical conduct and ensuring that employees have a shared understanding of the expectations (Sekerka 2014).Finally, the essay will discuss the impact of leader’s behaviors on employees outlook and conduct.Although conventional wisdom suggests that unethical behavior is the result of a few “bad apples,” there is mounting evidence that in addition to the personal values of employees, the organizational environment plays a critical role in encouraging ethical conduct. If the organizational environment is important in promoting ethical conduct, how can such a context be created?