Plethora of reasons weighs for a company’s choice of leadership strategy. Leadership and government strategy of organizations play an instrumental role in the success of the companies. While many factors such as the presence of resources, capabilities, and knowledge are internally driven, other factors, however, arise outside of the entity. One such factor is the efficiency of governance. This paper explores the relationship between governance, business ethics, and performance. The paper analyzes each of these concepts and their place in the successful management of organizations.
Let us first start with the idea of leadership. The concept of leadership is as old as history. Former president of the United States Dwight Eisenhower once argued that, “Leadership is the art of getting someone else do what you want.” While Eisenhower’s words were the closest to meaning to the meaning of leadership, they were an abstract definition of the concept of leadership. Is Eisenhower’s definition still standing? Scholars agree that while leadership plays an instrumental role in achieving goals and aspirations of organizations, there are conceptually agreed methods that define leadership. Some leadership strategies include authoritarianism, democratic leadership, and servant leadership, among others. How leadership does affect the performance of organizations? Answering this question requires that we first define the concept of leadership.
Defining leadership often appears elusive due to the difference of understanding of what leadership means. Understanding leadership from the diverse and distinct definitions is a critical in developing a holistic paradigm for the study of leadership (Levy, 2006). In the last five decades, there have been over 60 classifications of varying concepts that are instrumental in having a comprehensive understanding of leadership. Brass (1990) defined leadership as “focus of group process” (p.38). Fielder (2002) argued that there is no evidence of one leadership trait, behavior or personality required to be an effective leader. Instead, leadership effectiveness is the ability to get a group to accomplish its mission that does not entirely depend on a leader’s ability and attributes. First, the trait emphasizes how the leader treats the subordinates while the second aspect premises on the leaders organizational skills.
Oh his part, Clark (2004) identifies identical mutual trust, effective communication skills, active empathy, accessibility by workers and personal courage as the key elements of an effective leader. In their part, effective leadership is fundamentally about developing people, setting defined directions to be followed and designing an organization to be successful. Effective leadership involves identifying people within the organization who would be potential leaders and letting them gain the knowledge and skills required for success.
Perhaps an outstanding leadership team is a complimentary team where people’s strength are made productive and their weaknesses made irrelevant by strength of others. While leadership focuses on the ability to communicate and acknowledge people and their potential, management is based on using the potential and talent to achieve a goal. Both leadership and management are vital, and they have to operate in one. Management and leadership are entwined in the general understanding of the human nature as Body, Mind and Spirit. The Whole man understanding of man is pivotal for twenty first century understanding of people and work. In a world where people are more informed, more educated, and have many choices; it makes a lot of sense to govern them in a manner that makes them feel included, and where their ideas and opinions are freely expressed and tolerated (DuBrin, 2012). Organizations that practice the globally minded approach are more successful than those that are stuck in the old mindset.
Gabbaro (1985) document the reason for the success of other leaders and the failure of others. In general, he documents that most managers take a relatively longer period to adapt to the requirements of the new work environments. Gabbaro makes a case that experience play a critical role in the success in the process of transition using examples from American and European managers. Managers with experience of working in different environments take a relatively shorter time to take charge while workers with limited take the longest time to take charge. In addition to work experience, Gabbaro also argues that managerial techniques and leadership models also accounts for smooth or rough transition. He disregards the existence of the common belief in the all-purpose manager.
Having discussed governance and leadership, it is justice if we explore the relationship of leadership in organizations and ethics. This debates starts by defining ethics. The exact meaning of ethics is hard to capture. What is “ethical” varies from place to place depending on the culture and environment. For that reason, it would be an exercise in futility for this paper to make a case for some universal code of ethics. However, scholars are still entangled in the struggle of finding a comprehensive way of describing ethics. Fundamentally, ethical behavior aims to create harmonious coexistence between individuals in a social setting. We can only hope that our laws reflect the ethical standards that we think are important. Ethics refers to a body of standards of wrong and right, borne, not out of a requirement to obey a rule but for the sake of goodness and justice and fairness. Concerns about ethics cut across the whole sphere of society – from the household to the workplace to places of worship et al. So long as people interact, the question of how best to come within reach of their interaction and create an environment that is conducive will always arise.
Dobson (2007) argued that for successful application of virtues in business, there is a need for the practices of business to be practiced in accordance with the rules of virtues or code of ethics that base on conditional assessment and rationality. The practicality of the ethics depends on the type of activity, character, and motivation of the people engaged. The biggest challenge that inhibits the practice of virtue ethics is the inability of organizations to educate their managers on the benefits of virtue-based ethics. Still, effective management requires that morally inclusive excellence. The excellence here is not book- based but accrues from the common societal practices of integrity and professionalism (Dobson, 2007, pg. 34).
Some ethics scholars argue that ethics as of philosophy, involves two types of principles that comprise deltiology and teleology. Detelogical principles assume that behaviors are inherently right or wrong. For this reason, it is the responsibility others to determine the ethicality of actions of others. On the other hand, teleological principles consider the consequences of actions, decisions as based on expected rewards or punishments. In business, many scholars believe that managers apply delelogical and teleological criteria when making ethical judgments. Several scales are used to measure ethics including cognitive moral scales, developmental scales, developmental scales, multi-dimensional scales among others (Shanan & Hyman 2003). However, how accurate are these scales in the measure of morality?
According to Ferrel (2010), corporate social responsibility seeks to ensure businesses contribute to sustainable economic development of a society. Social commercial responsibility premises on the understanding that while firms engage economic development, their primary focus should be on improving the quality of lives of people within the local community. On his part, Rodrigues (2006) argues that corporate social responsibility entails making legal obligations in addition to investing in relationship with stakeholders, the environment, and human capital. The legal obligation is fundamental for businesses and organizations for positive influence in the society as well as reducing the impact of any negative externality. Ethics comes into social responsibility as a means of doing ‘good’ for the society. Evidently, the idea of social corporate responsibility has gained ground on contemporary business world making almost impossible to ignore . Businesses may have no option but embrace the practice corporate social responsibility.
According to Schein (2009), corporate culture refers to shared beliefs, values, and behaviors that a firm subscribes. This beliefs, values, and expected behavior provide a foundation upon which a firm is managed. The organizations executives articulate cultural statements to the workers. Usually, firms with a strong corporate culture outperform those without a strong corporate culture. Because culture is relative, organizations have the power to create culture that fits organizations objectives. Corporate culture plays out in various ways. Company’s culture can be distinct in ways such as the way they handle communication, feedback, project coordination, or customer relations (Kotter, 1992). In some cases, corporate culture is visible in the way an organization is structured. Some companies emphasize servant leadership while others focus on teamwork; others promote basing on appraisals while others promote basing on future objectives. In many cases, culture is also defined by the nature of the competition and by the desire of the company to be like the rest or to form a unique identity (Schein, 2009).
Measurements of appraisals performance premise on the belief that improved work quality from the worker leads to an increase in pay (Taylor, 2007). Cushway (2009) writes that the performance appraisal is something that happens continuously at work. Performance appraisal includes assessing how workers are performing and rewarding them for competence. Effective appraisal drive performance includes aspects such as reviewing past experience, helping workers improve, identifying, and developing needs, improving communications, and allowing the employees to express their feelings. The focus of t appraisals drive argument is that individual’s number one motivational factor is money. Coen & Jenkins refute the argument that money increments insinuate performance. According to them, pay for work incentives have unintended side effects that are not often pleasant. These side effects usually undermine the company’s real objectives and goals. “The bottom line is that any approach that offers a reward for better performance is destined to be ineffective (p.248).
Let me give a publicized scenario that can help with the understanding if the issue at hand. The Customer Service Scorecard, (2009) a website that lists reviews of customer service complaints or approvals from different banks and business organizations report that Bank of America has one of the worst Customer Care Service Approvals. According to the website, Bank of America ranks Number 472 out of 553. The company has a score of 25.62 out of the total 200. This report has been calculated from the reviews of 1104 customers. The customer support system is rated Terrible. Among the issues that the customer complains about include the inefficiency of the automation system. The reviewers say the automation hangs up on the customers even after a long time of waiting on the line. The automation also hangs up every time the call is transferred to another department. The customers also cite rudeness of the customer representatives on the phone as well as waste of time with restating the social security number, account number, and other details while on the phone with the customer service representatives. Banks of America’s situation gives us an incidence that can help us understand the idea of corporate governance, leadership and ethics.
In summary, the paper has explored the concept of leadership and its connection with ethics to transform performance. We have used the example of Bank of America has a publicized case of leadership, ethical, and performance deficit. In general, we present an argument that a more comprehensive and engaging governance of organization creates `room for increased consultation that improves performance. In the same way, while ethics is hard to define, a more engaging and social responsible company will practice standards that are in accordance with the social responsibility. Ethics thus become correlated with both performance and leadership.
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