Ethics are the values, principles, and beliefs that describe the right and wrong behavior and leadership can defined as the process of inspiring people to achieve goals. Therefore, the ethical leadership can be defined as the process of influencing employees, colleagues, or others through their values, beliefs, and principles that are termed as the right behavior .
The organization may face challenges due to ethical issues in budgeting process. Budgeting can be defined as the process in which the company allocates financial resources to different department of the company. Decisions are usually made are based on values and priorities and that is the primary reason of instigating politics in budgeting process. The budgeting process often raises the question in the mind of employees or even board of directors and stakeholders regarding the use of funds in the organization and other expenses. Similarly, the auditing process can also raise a challenge for the organization by showing that the auditing officials do not have decision-making powers in final verdicts judgments. However, the organization can use different ways to react on political aggressiveness like several allegations and options can be presented to ensure that the budgeting process is real. In addition, oversight committee is established to vet employees who are affected. This process will ensure people, regarding the fairness of budgeting.
The politics in budgeting process may create ethical issues inside as well as outside the organization environment. The auditing team may also be doubted for taking extra taxes. Similarly, unfair attitude when board members of the organization take unreasonable benefits and favors, that also rises ethical issues. Since, in such cases, top management takes profits all in their own pocket and do not divide it. These ethical issues are raised due to lack of proper planning and inefficient decision-making. It is the responsibility of the leader to ensure fair behavior at the organization and build the trust of employees by developing transparent procedures of recruitment, promotions, and other benefits. Unless employees will trust the organization, they cannot perform well for the organization. Other unethical issues includes fraud, tax evasion, conflicts of interest, accountability, and salaries and perks .
The organizational structure greatly influence the ethical behavior of employees in the organization. Two main types of the organizational structure are hierarchical and flat structure. In a hierarchical structure, there are still chances of the rising ethical issues due to large number of authorities. However, in flat structure, employees are more closely connected with each other and therefore, can raise large number of ethical issues. Other features of the organizational structure includes compensation practices, trainings, and performance and evaluation systems. These systems builds up motivation for the leaders and to avoid any kind of ethical issues, they fairly treat their employees, convince them for the right doings, and implement new policies based on the right behavior to improve the system. The formal or hierarchical structure of the organization is much effective, but still not sufficient to ensure ethical conduct. It is mainly because; senior managers and chief executive do not implement clean and fair system in the organization. However, the strong ethical culture at the organization can help eradicating the ethical issues. Corporate codes and ethical training do not seem to make any effect in resolving ethical issues .
Ethical behaviors and issues varies from organization to organization based on the organization structure, culture, and policies of the organization. Suppose, if one organization is public agency and the other is non-profit organization, then ethical issues considered at public agencies may not be perceived as ethical in non-profit organizations. Private organization or agencies consider politics budgeting as one of the serious ethical issues. However, in case of non-profit organizations, people do not consider budgeting issues as the ethical concern. Since, all amounts are transferred back to organization’s account. Salaries are not divided among employees as like in the private agencies. Since, in non-profit public organization’s project, most work as volunteers. The revenues collected are used all in to improve the organization’s resources and for public welfare projects like educational institutes, religious instructions, charitable outreach, and artistic displays. Furthermore, non-profit organizations depend on donations and grants from public for survival. If the nonprofit organization loses trust of people from its functions, poor management, and malfeasance then the organization may also lose the amount of donations it receives from public. Therefore, the importance of ethical standards is very high in non-profit organization as compared to private agencies. In nonprofit organizations, the transparency is most laid in front of public like on website so that the reputation can be maintained.
Funds corruption, unfair behavior, and change in organizational culture tends to increase the pressure on public leaders. For this purpose, the public leaders need to bring improvements in their functions. However, the policies and instructions discussed in public administration are of no benefits unless the person or the leader practice them and let people in the organization follow him. Before implementation of polices, the leader needs to self-evaluate and identify the weaknesses and strengths in his/her personality. I took the test of public administration inventory and found that I am a social person, but seeks to avoid people. Moreover, I believe more on the individual assignments instead of teamwork. These two activities can affect the performance as a leader. Since, the public administration leader needs to be highly social and knows how to deal with them. In fact, the primary job is to connect with people and resolve their issues while convincing them to work as instructed. If the leader fails to connect people then it would also affect the culture of the organization. Employees would not get an idea what they are expected to do and achieve which goals. Furthermore, employees do not feel motivated and accomplished towards performing their job. Although, it is the primary concern of the leader to motivate, build respect, and enthuse organizational employees. The leader lacking abilities can affect the performance of employees and that may raise the illegal behavior among them. Even lots of misunderstandings result from the introvert behavior of the leader. Employees perceives the policies, rules as unfair, and doubt on their authenticity.
For purpose of dealing with these leadership inadequacies, the managers, CEOs, and executive staff should organize for the training program for the leaders. These programs shall be focused on developing leadership abilities. There are different skills that should be considered developing in one’s personality so that effective leadership be ruled. Considering the lacking factors or the leadership skills in the manager’s personality will be focused so that arising issues of public administration and ethical issues can be resolved. The program shall also focus on introducing training of strategic thinking. It helps in understanding the core issues and dealing with them accordingly. Strategic thinking is the ability to organize things in an efficient manner and deciding suitable action planning for the given case. It focuses on the vision and strategy of the organization, understand the key criterion of risk management, and understand how to understand and implement these skills. In case of my personality, I would have to bring in changes largely. First, ability to socialize, decision making, and motivation have to be considered.
Good decisions are highly important for the leaders. Decisions have to be aligned with the organization strategies. Therefore, the leader should first analyze the vision, mission, and objectives of the organization and then make decisions accordingly. Similarly, in this case, leader has to consider how to develop the process of making budgets, and build the relationship of trust among the employees and the leader. Politics in budgets must be resolved through building fair and transparent system of salaries, build good relations with the employee and his/her relation with others. These leadership skills will help professionals in developing fair and strong culture, strengthening relationships among and with employees .
References
Buren, J. V. (n.d.). Ethical Leadership. Noonmark Non Profit Services, 1-5.
James, H. (2000). Reinforcing Ethical Decision Making Through Organizational Structure. Journal of Business Ethics.
Kumar, K., Jain, K., & Tiwary, R. (2013). LEADERSHIP ACTIVITIES AND THEIR IMPACT ON. International Journal of Leadership Studies.
Ray, L. (2014). Top Five Ethical Issues for a Nonprofit Organization. Retrieved from Ascentral: http://yourbusiness.azcentral.com/top-five-ethical-issues-nonprofit-organization-5979.html
