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The role of ethics in creating the right business environment or culture for businesses to continue to thrive or succeed can not be underestimated. Most companies recognize this; hence, they have put in place the right ethical guidelines to help shape their employees' activities. However, without the right leader to implement the appropriate ethical culture, the moral standard within an organization can be severely compromised. "The most significant leadership challenge is being a leader who sets an example worthy of following (Warrick, 2016)". Any business's ethical culture is an ongoing process that requires influential leaders willing to lead by example and hold others accountable to create moral practices that align and supports their overall vision (Ethical systems, 2020).
Businesses that operate and do things the right way turn to build a strong relationship with their all stakeholders, attract the right investment, and build strong brand loyalty that propels it to long-term success. Therefore, management must create the best ethical culture, which starts with recruiting individuals with reliable moral judgments, promote healthful behaviors, and drives accountability to deter bad habits. Such environments will enhance employee self-confidence, motivation, inspire self-accountability, and encourage them to speak up without fear of retaliation. Ultimately, an ethical culture like this will positively influence performance, brand image, and profitability.
On the other hand, a break down in ethics within an organization may lead to irrecoverable damages or, sometimes, the company's death. Without a robust moral leadership outlook, bad behaviors become normalized, which ultimately leads to the lack of trust, break down in communication, and adverse impact on an organization's bottom line. ERON is an excellent example of a company that collapsed due to the lack of ethical standards by leadership and employees (Segal, 2020).
Leadership must create a culture that promotes moral values like honesty, integrity, accountability, etc. They must lead by example and continuously evaluate their moral codes to provide the proper ethical guideline to help employees engage their environments for both their personal and professional development.
Ethics plays an important role in success or failure of almost every type of the organization. One cannot think about a good organizational culture without understanding and incorporating ethical principles in business policies and actions. This is the reason due to which most of the organizations formulate ethical code of conduct for each of its stakeholders.
This code cannot be implemented properly until good leader will not handle its designing and implementation part. According to Warrick( 2016) , A good leader will have to set some example for other to follow in the organization. They influence shape and strategies of ethical practices in line with the overall vision.Business organizations can establish strong relationships with each of its stakeholders so as to gain long term business transaction.
Ethical culture can be started through hiring of moral having candidates for various leadership roles. A person of strong personality may influence several people to follow mutual beneficial and ethically sound decision outcomes. The need of hour is to create confidence, motivation and person with values who can positively shape the organizational cultural system. Unethical organizations will not be survived for perpetual succession and they always pay more for compensation too much legal and indirect loss of customers and business opportunity.
Companies like ENRON, HUAWEI (Recently, banned for unethical phone tapping in USA) etc. has lost business and reputation due to unethical business practices. We can say that companies must work on creating talent pool having qualities like ethical personality, moral values, accountability, honesty, prudence etc. it will offer competitive edge and professional competence.
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