Read "An Ethical Choice: Holding Leaders Ethically Accountable" in Robbins & Judge, page 413. Please answer the following questions:

1. Discuss the roles of leaders in creating ethical organizations. Why are these roles important?
2. How does the culture of an organization influence ethical behavior? Please explain.
3. What are the major theories and approaches to leadership?
4. What role does trust play in creating an ethical organizational culture?

References:

An Ethical Choice Holding Leaders Ethically Accountable

Most people think that leaders should be held accountable for their actions. Leaders must balance many and conflicting stakeholder demands. The first demand is for strong financial performance; leaders are probably terminated more often for missing this goal than for all other factors combined. Leaders balance the extreme pressure for financial performance with the desire that most leaders should act ethically, even when there is no formal accountability. Given those competing aims, ethical leadership may be underrewarded and depend solely on the leader's innate decency.

Ethical leadership is a relatively new area of research attention. Demonstrating fairness and social responsibility even run counter to many old-school models of leadership. Consider, for example, legendary management guru Peter Drucker's advice from 1967: "It is the duty of the executive to remove ruthlessly anyoneand especially any managerwho consistently fails to perform with high distinction. To let such a man stay on corrupts the others." Modern ethical leadership guidelines say this cut-throat mindset fails to consider the moral implications of treating people as objects at an organization's disposal.

While few organizations still require "performance at all costs," financiers, shareholders, and boards have the reward power to teach leaders which outcomes to value. Ethical leadership resounds positively throughout all organizational levels, resulting in responsible and potentially highly profitable outcomes, but the ultimate ethical movement comes when shareholdersand leadersshow signs of balancing these accountabilities themselves.

Sources: Based on T. E. Ricks, "What Ever Happened to Accountability?," Harvard Business Review, October 2012, 93-100; J. M. Schaubroeck et al., "Embedding Ethical Leadership within and across Organizational Levels," Academy of Management Journal 55 (2012): 1053-78; and J. Stouten, M. van Dijke, and D. De Cremer, "Ethical Leadership," Journal of Personnel Psychology 11 (2012): 1-6.