Paper Kiet

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To study the role of Ethical Leadership Vis-à-Vis Organizational Culture ABSTRACT Jyoti Sardana Dr.B.S. Hothi Assistant professor under the guidance of The Director IIMT Management College I.M.E.College Meerut Sahibabad E-Mail: [email protected]  E-Mail: dr.  [email protected] Mobile No: 9837047021 Mobile No: 09210798673 Purpose  Ethical Leadership is defined as the values, attitudes and behaviors that are nece ssary to intrinsically motivate one’s self and others so that they have a sense of ethical well being through calling and membership. (Fry 2003).Ethical Leadership theory is a causal theory for organizational performance designed to create an effective, self motivated, learning organizational culture. The Ethical Leadership has been found to be quite effective in establishing the sense of leader and follower strong well being. It has led the organization towards creating value congruence and ultimately has fostered higher levels of organizational commitment which leads to build up an effective organizational culture.  The main purpose of this paper is to extend and test the impact of Ethical Lead ership as a driver of organizational culture, productivity and firm performance. Ethical Lead ership is hypothesized to result in an increase in one’s sense of ethical well being and ultimately leading towards positive, vibrant and effective organizational culture. This hypothesis will be proved after applying Chi Square test. The primary data will be collected from the IIMT Group of Institutions by preparing a questionnaire .One instrument will be focused on the Ethical Leadership and the other instrument will be focused on the organizational culture. This paper towards the end will accept or reject the hypothesis based on the findings after applying the Chi Square test or any other suitable statistical tool. Design/methodology/approach – The research involves collection of quantitative data from both the instruments separately. Mainly the primary data will be used; collected form the two sets of respondents, working in IIMT group of institutions. Appropriate statistical tools will be applied to show the relationship between Ethical Leadership and Organizational Culture.

Transcript of Paper Kiet

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To study the role of Ethical Leadership

Vis-à-Vis

Organizational Culture

ABSTRACT

Jyoti Sardana Dr.B.S. Hothi

Assistant professor under the guidance of The Director 

IIMT Management College I.M.E.College

Meerut Sahibabad

E-Mail: [email protected]  

E-Mail: dr. [email protected]

Mobile No: 9837047021 Mobile No: 09210798673

Purpose – 

Ethical Leadership is defined as the values, attitudes and behaviors that are necessary to

intrinsically motivate one’s self and others so that they have a sense of ethical well being

through calling and membership. (Fry 2003).Ethical Leadership theory is a causal theoryfor organizational performance designed to create an effective, self motivated, learning

organizational culture. The Ethical Leadership has been found to be quite effective in

establishing the sense of leader and follower strong well being. It has led the organizationtowards creating value congruence and ultimately has fostered higher levels of 

organizational commitment which leads to build up an effective organizational culture.

 The main purpose of this paper is to extend and test the impact of Ethical Leadership as adriver of organizational culture, productivity and firm performance. Ethical Leadership is

hypothesized to result in an increase in one’s sense of ethical well being and ultimately

leading towards positive, vibrant and effective organizational culture. This hypothesiswill be proved after applying Chi Square test. The primary data will be collected from the

IIMT Group of Institutions by preparing a questionnaire .One instrument will be focused

on the Ethical Leadership and the other instrument will be focused on the organizationalculture. This paper towards the end will accept or reject the hypothesis based on the

findings after applying the Chi Square test or any other suitable statistical tool.

Design/methodology/approach – The research involves collection of quantitativedata from both the instruments separately. Mainly the primary data will be used; collectedform the two sets of respondents, working in IIMT group of institutions. Appropriate

statistical tools will be applied to show the relationship between Ethical Leadership and

Organizational Culture.

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Findings –  

The research findings will indicate the correlation between the Ethical Leadership and

Organizational Culture. Towards the end few suggestions will be given to build up aneffective organizational culture.

Research limitations/implications – 

There are a few limitations which may affect the scope of the study. First, the study has

  been conducted with the limited data available. Hence, blanket generalization of the

findings of the study to each and every sector all over the country should be given withcaution. Therefore, it is suggested that future research, if any, in the same area should

take note of this that there should be data from different kinds of organizations as well as

all the parts of India. The given paper is just a small study with a very limited number of respondents and therefore cannot be generalized.

 Practical implications – 

The research investigation offers thought provoking ideas to all the leaders, planners and

the ordinary citizen to come out with a pragmatic view of building up an effectiveorganizational culture. The paper will definitely be an endeavor to instigate an open

forum for discussion which may lead the organizations all over the world towards

 building up an effective organizational culture.

Originality/value – 

The paper offers unique ideas from the author’s side as this kind of Leadership trait has

not been very much discussed rather needs to be brought into light for better future. Asthere is a dearth of the kinds of research where such types of practical comparisons have

 been made; therefore the study can be unique in its own sense.

 

Paper Type:

Empirical paper 

Key Words: 

Ethical Leadership, Organizational Culture, Organizational Commitment, Correlation

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1. Introduction1.1 What is Ethical?

The short answer is that there is n’t an answer. There is no absolute rule of what is

ethical and what is n”t.A simpler broad definition of the word ethical is ‘fair”. This is

not a scientifically proven definition, but as we go deep of what is ethical, it’s very

difficult to be scientific and firm about what it all means. The modern OxfordEnglish Dictionary says: "Ethical - Relating to moral principles or the branch of 

knowledge dealing with these..." In short we may say-Morally correct: Can a

 profitable business ever be ethical? Ethical philosophy can be explained as follows:

• Qualities such as justice, charity, generosity and honesty are the strength of 

 person and person’s society.

• Ethics are very important to morality; human duties are based on rational

ideologies and practicalities of day to day life.

• The guidelines are based on conduct which produces the greatest happiness or  benefit to the maximum number of people.

A single precise definition of ethical is not easy to agree. In a practical sense,

whether something is considered to be ethical by people is generally a matter of 

opinion; except the parameters set by law or any other authority. Both concepts -

ethics and morality are subjective and a reflection of society and civilization. Itimplies that their precise meanings will change with time and situation.So; we may

say that both are relative to time and situation

1.2 What Is Ethical Leadership?

Many thinkers believe that ethical leadership is simply a matter of leaders having good character. By having “the right values” or beinga person of “strong character,” the ethical leader can set the

example for others and build up an effective organizational culture.It has now become a challenge to lead in a world of great changewhere globalization, democratization, and incredible tech-nologicaladvances are there. Various dimensions and models of ethicalleadership have been developed over the past 25 yrs.But I feel sorryto mention here the true and practical experience which is oftencontrary to the picture of business executives one finds in the fieldwhere they are often seen as greedy, competitive, and onlyconcerned with compensation.Leaders are first and foremost members of the organizations. Ethical leaders embody

the purpose, vision, and values of the organization. They work to create an open, two-

way conversation, which helps in maintaining a complete understanding of differentviews, values, and the opinions of team members.

1.3 Characteristics of Ethical Leaders

In today’s turbulent world, it is very difficult for leaders to mention ethics and values

in the working of their organization. The following list provides a framework for developing ethical leadership and makes us understand that ethical leadership is

more complex and more useful than just a matter of “good character and values.”

Ethical Leaders:

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(a) Internalize and live the purpose and values of the organization. It is important for ethical leaders to tell a compelling and morally rich story, but

ethical leaders must also internalize and live the story. This is a difficult task in

today’s business environment where everyone lives an artificial and public life. So

many political leaders fail to embody the high-minded stories they tell at electiontime, and more recently, business leaders have become the focus of similar criticism

through the revelations of numerous scandals and bad behaviors. Telling a compelling

and morally rich story is one aspect, but articulating and embodying the purpose andvalues of the organization is the another one.

(b)Organizational goals are more important than personal ego.

Ethical leaders must understand their place within the larger network of teammembers and organizational goals. It is not about the leader as an individual, it is

about something bigger—the goals and dreams of the organization. It not at all

means that ethical leaders should donate their salaries to charities, rather they should

identify and act on the significant aspects, such as employee loyalty, that driveorganizational culture.

©Hunting talent and then nurturing

This task is fairly standard in different models of leadership. Ethical leaders payspecial attention to finding and developing the best people precisely because they see it as

a moral imperative—helping them to lead better lives that create more value for 

themselves and for others. Ethical Leaders pay special attention to finding and

developing the best people.

(d)Practical approach to Ethics

Too often business executives think that having a laminated “values card” in their 

wallet or having a purely compliance approach to ethics has solved the “ethics problem.”It is more important to have a conversation across all levels of the business where the basics of value creation, principles and societal expectations are routinely discussed and

debated. It means that discussing, bringing the conversation on the table and further 

taking some implementation is more important than just an addition in the compliance.

(e). Encourage people to disagree

It is very necessary to avoid this “Authority Trap” by the ethical leaders to build up

effective organizational culture. It is not easy to have an established and explicit way for 

employees to react if someone thinks that a particular idea is out of line. Team membersneed to be motivated to go against their leaders if they think that to be right.

This needs to be made part of the organizational culture, not just a line item in a

compliance program document. Some companies have used anonymous e-mail andtelephone processes to give employees a way around the levels of management .Many

executives also have used “skip level” meetings where they go down multiple levels in

the organization to get a more realistic view of what is actually going on. All of these

 processes lead to better decisions, more engaged employees, and an increased likelihoodof avoiding damaging mistakes. It is understood that mechanism of ruling out the

Authority Trap is necessary to avoid the values becoming stale and dead as well as

 prevent the scandals and dissatisfaction among employees.

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 (f). Plan and act ethically

It is easy to plan actions in ethical terms and be perceived as “righteous”; but difficult

to act and show an ethical behavior. Ethical Leaders need to start with principles andvalues, and then work hard to figure out how they can be applied in today’s complex

global business environment. Principles, values, cultures, and individual differences often

conflict. Ethical leadership requires an attitude of humility rather than righteousness: acommitment to one’s own principles and openness to learning others’ perspective.

(g). Comfort ability between Value Proposition and Societal legitimacy

The ethical leader must think in terms of enterprise strategy, not separating “the

 business” from “the ethics.”There is no doubt that every business has to be profit makingand profit is the only profit of every business. Ethical leadership is not only about

“raising the bar,” helping people to realize their hopes and dreams, creating value for the

team members, but also to make profit and do business. Values should be approachableand of such type which can be accessed easily. There has to be practical approach instead

of idealistic and bookish.

1.4 Fundamentals of Ethical Leadership

(a) Courage Lack of courage or dependence of thought is the greatest obstacle of 

Ethical leadership. We know that one ingredient of moral courage isindependence of thought. The ethical leader is one who can resist walking on the

“most treaded path “and has the capability of coming out with his own

independent thoughts.

(b) Knowledge It is the most important dimension of ethical leadership. Ethical

leadership recognizes the moral obligation to know enough to do the job right.

1.5 Obstacles to showing ethics in leadership?

One of them is lack of imagination: sometimes what stops the leaders from doing

the ethically right thing is that they cannot see beyond the usual confines of anissue and ethically better solutions. Another issue that prevents them from leading

ethically is staleness: means they have been at the same job for too long and cannot

see the creative spark necessary to ethical leadership.

It is the need of the hour to discuss ethics as a part of Leadership. The task in the

concerned paper is to place ethics and leadership in context with the organizational

culture. Ethical behavior is not only a vital part of leadership but of the human life

as a whole. It is the success mantra of leading a happy and prosperous life.

Vocation, from the Latin verb vocare, is work to which one is called by the gods(Thomas 1992a:13). The word vocation brings self-imposed obligations given by

the almighty to grow, to improve, to strive, to serve, to be our best - the drivingmechanism of vocation is will, not a job. It is very important that all these aspects

are being pursued by ethics and morals. We correlate effectiveness with leadership.

In the words of Macgregor Burns (1978) “leadership and ethics are inseparable -unethical leadership is an oxymoron.”

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2 Review of Literature

2.1 The Ethical Leader

Ethics represent moral conduct, duty, and judgment. People perceive EthicalLeadership as the standard to distinguish right and wrong. In business, ethics is an

essential configuration of leadership. Consequently, George (2003) has extended

the scope of ethics by stating, “We need authentic leaders, people of the highestintegrity, committed to building enduring organizations. We need leaders who

have a deep sense of purpose and are true to their core values. We need leaders

who have the courage to build their companies to meet the needs of all their team

members, and who recognize the importance of their service to society”Ciulla (1995) also asserts that ethics have always been a focal point in scholars'

definitions of leadership. This leads to the subject of goals and means and how

this will raise the sole hearted question of ethics and its implications. On the

contrary, Rost (1991) has differentiated between ethical means and ethical goals.Rost’s proposition led to the conclusion that ethical means do not necessarily lead

to ethical results and that unethical means may lead to ethical results. This schoolof thought is not new. The Prince (1532), written by Machiavelli (1469-1527), is

a good example of such philosophy, which denies any connection between ethics

and leadership. This philosophy has been endorsed by, and has worked fine for  politicians. Yet, it does not work for business leaders because of the vigorous

competition for the market. One mission of ethical leaders is to act as a whole

identity, representing ethical values in its preaching, thinking, decision-making,

and implementing. It is the duty of ethical leaders to instill these principles andface its sequential challenges. In support of this view, Burns (1998) affirms these

ethical values while emphasizing the effectiveness of leadership based on anability to raise the morality of followers when engaging them with nobleobjectives and goals. Currently, there has been an intensive discussion in the news

regarding ethics, particularly that in the business sector. Many major corporations

have been found guilty of accounting irregularities and business frauds. Eachindividual harbors his or her own values and ethics, which in turn are reflected in

their leadership styles. This is true of business executives and others in high-level

management positions.

2.2 Leadership Challenges in Business

The current economy, with its complicated global and domestic dimensions,

requires high-quality leadership with intensive skills to meet rapid changes in adynamic market. Leaders need to remember that ethics and morals are essential in

dealing with the complex challenges in today’s market. Typically during an

economic recession, difficult decisions have to be made to cope with abnormaleconomic situations, yet some of these decisions are in conflict with subordinates”

interests. Under such circumstances, applying ethics and morals could be a

challenge. Tactical business decisions have been used in the form of lay-offs andoutsourcing in order to increase revenues and cut corners in budgets. These

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decisions have been attributed to the loss of a myriad of jobs and employee

 benefits. This type of economic environment challenges leaders’ ethical and

moral principles. Rost (1986) defines such an environment as an ethical dilemma,where the consequences of an individual's decision affect the interests, welfare, or 

expectations of others. Rost, in his definition, warns of the social damage that

may result from these types of business decisions.

2.3 Ethical leadership and organizational Culture

Advocates of workplace ethics propose that people bring unique and individual

spirits to the workplace and are highly motivated by the basic spiritual need to

experience a sense of true happiness and satisfaction in their work. It is the

responsibility of Ethical leaders to create a vision wherein leaders and followersexperience a sense of belongingness and that Life has meaning and provides us

the opportunity of self growth .This all helps in establishing an organizational

culture based on the values of altruistic love whereby leaders and followers have a

sense of connectivity, feel understood and appreciated, and have genuine care,concern, and appreciation for both self and others.

3. Statement of the Problem

The researchers have till now formulated the strong relationship between Ethical

Leadership and organizational culture. Various dimensions of Ethical Leadership

have been traced and their coordination with the organizational performance has been statistically proved. In the given paper the author has tried to show the

relationship between Ethical Leadership and Organizational Culture. It is just a

step ahead of the previous researches and in the given paper it has beenhypothesized that Ethical Leadership is directly proportional to organizational

culture.

4. Methodology

4.1 Sample

The data for this study has been drawn from a small study of an educational

institute named IIMT Group of Institutions. The sample consisted of about 150

team members and around 30 team leaders being employed there. Respondents

were assured anonymity and used a common terminal at their convenience.Demographic information was gathered from the respondents but kept completely

confidential. It was observed that 70% males and 30%females were there,

although they are not the affecting measures in the study. Twenty-six percent had been employed less than a year, thirty-five percent between one and five years,

and thirty-nine percent over five years. Finally, over 90% of the sample indicated

that they used computer technology more than irregularly, and by far, most usedcomputer technology on a daily basis. The leaders were heading a team of 

members ranging from 6 to 26 persons.

4.2 Procedure

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The entire instrument battery was administered to subjects following a brief set of 

instructions. Subjects were asked to grant legal consent and to indicate if they

wished for more information following the accumulation of results. Subjects weregiven ample time to complete both the instruments (generally 30 minutes was

sufficient). Participants were asked to return the instrument to an instructed

location when they completed it. Following administration of the instrument battery; data analysis occurred. Two questionnaires were distributed separately for 

the team leaders and team members to see the relationship between Ethical

leadership and organizational culture. The data collected was used to check the sethypothesis. Chi square test was administered and the result was found.

4.3 Instrumentation

The two instruments have been used one pertaining to organizational culture and other to

Ethical leadership. The first instrument has been related to Ethical leadership which has been filled by the team members to give an idea about the kind of Leadership style

  prevailing in the organization and it will definitely be perceived leadership as the

questionnaire has been filled by the subordinates. The respondents for the second

instrument are the leaders i.e. Directors and Head of the Departments; who have tried togive an idea about the organizational culture in the organization. Both the instruments

have been constructed on the Likert scale and the respondents found it very simple andeasy to fill them. The author has gone personally to get the questionnaire filled by the

respondents in all the respective departments to avoid any inconvenience in understanding

the questions and the motto of getting it filled.

The first instrument utilized in this instrument battery is to get information aboutthe Ethical Leadership styles of the leader which has exclusively been based on

the behavioral aspects of Leadership style and the content of the questionnaire has

also been derived from the general curiosity. Once created, the instrument wasadministered to a pilot survey for the purpose of establishing reliability. Two of 

the questions were further clarified based on this analysis to improve the

instrument. The second instrument, the Organizational Culture Questionnaire, is a20 item survey. In this questionnaire Subject’s self-reported specific leadership

attributes using five point Likert scales ranging from” not at all” to “completely”

have been taken. The questionnaire has been found to be very reliable as it is aself-report measure. Finally, several questions regarding basic demographics of 

the sample were deemed important for this investigation. Subjects were asked to

report on the following: age, sex, years employed, education, use of technology;

which was kept confidential.5. RESULTS

To apply Chi Square Test we frame the following Null and Alternate Hypothesis:H0 – Ethical Leadership is directly proportional to Organizational Culture.

H1 – Ethical Leadership is not directly proportional to Organizational Culture

S.No.

Human

Resourc

e

Practices

Performanc

e

1 Group 86 65

-1

2 57 60

3 72

4 75

5 84

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6 92 7 57

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8 76

9

Group

-2 92 81

10 60

11 63

12 7513 64

14 56

15 42

16 59

17 67

18 82

19 67

20

Group

-3 71 77

21 68

22 6023 78

24 92

25 45

26

Group

-4 38 75

27 56 94

28 58 84

29 99

30 42

31 46

32 84

33 76

34

Group

-5 94 82

35 80 81

36 89

37 79

38 97

39 97

40 84

41 9442 84

43 75

44 86

45 62

46 55

47 86

48 Group 69 83

-6

49 64

50 67

51 75

52 92

53 3454 56

55 80

56

Group

-7 84 74

57 47 82

58 85

59 75

60 84

61 32

62 77

63Group-8 87 69

64 62 78

65 84

66 84

67 79

68 39

69 42

70 36

71 93

72

Group

-9 74 60

73 80 94

74 77 81

75 80

76 63

77 57

78 83

79 61

80 72

81 94

82 8683 88

84Group-10 83 56

85 92 78

86 49

87 32

88 84

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89 87

90Group-

11 82 80

91 46 79

92 61 88

93 76 78

94 76

95 80

96 74

97 96

98 86

99 63

100 51

101 90

102 76

103 95

104 95105 92

106 92

107 79

108 85

109 90

110 76

111 56

112 74

113 92

114 59

115Group-12 86 29

116 32 75

117 42 60

118 62

119 4

120 79

121 86

122 74

123 69

124 72

125 86126 33

127 64

128 84

129 62

130 87

131Group-

13 86 77

132 80 82

133 92

134 82

135 81

136 83

137 90138 88

139 97

140 78

141 97

142 67

143 69

144 84

145 92

146 58

147 76

148 96149 72

150 67

151 81

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Ethical Leadership’s Range

Good 81-100Average 61-80

Bad o-60

Organizational Culture’s Range

Effective 81-100

Average 61-80  Non-Effective 0-60

Observed Table

 

Good Average Bad Row Total

Effective 31 23 19 73

Average 30 21 12 63

 Non-Effective 4 7 3 14

Column Total 65 51 34 150

Grand Total

Expected value =G.T.

 TotalColumnTotalRow ×

Expected Table

 

Good Average Bad

Effective 31.42 24.65 16.92

Average 27.1 21.27 14.6

 Non-effective 6.45 5.06 3.47

1

2

993

2

2

22

1

2

112 )( 

)()(

 E 

 E OO

 E 

 E O

 E 

 E Ocal  X 

−++++

−+

−=

488.9)05(.2

4)1(1(22

=== −− X  X tab X  sr 

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(3-1) (3-1)

2 x 2 = 4

O1 E1 O1-E1 (O1-E1)² (O1-E1)²/E1

31 31.42 -0.42 0.1764 0.00561423 24.65 -1.65 2.7225 0.110446

19 16.92 2.08 4.3264 0.255697

30 27.1 2.9 8.41 0.310332

21 21.27 -0.27 0.0729 0.003427

12 14.6 -2.6 6.76 0.463014

4 6.5 -2.5 6.25 0.961538

7 5.06 1.94 3.7636 0.743794

4 3.47 0.53 0.2809 0.080951

2.934815

As

X2

cal < X2

tabSo, weAccept – Ho.

H0 – Ethical Leadership is directly proportional to Organizational Culture

H1 – Ethical Leadership is not directly proportional to Organizational Culture

Hence, it is proved that Ethical Leadership is directly proportional to Organizational Culture.

74.87

66.0969

62.37

83

65.2869.57

65.55

76.6671.33

78.03

64.8

81.95

62.5

8177

84.381.5 83

7873.5

78.3

67

81.2

54.6

7

1 2 3 4 5 6 7 8 9 10 11 12 13

Relationship between EL& OC

Ethical Leadership Organisational Culture

6. Discussion

Without question, the result of this study does not provide ample support for the notion

that Ethical Leadership and Organizational Culture are strongly and directly related to eachother. The results shown categorically by group -1 &12 are different from others and therefore a

regular pattern in the column is not visible. Many of the researchers that have theorized about the

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relationship have lacked empirical data on which to base their ideas, but this study clearly details

the link. Among the most specific findings in this research study is the relationship between

ethical leadership and Organizational Culture; but not that strong that we can blindly give out a blanket statement. There must be many other factors which are responsible for giving out this

type of trend which need to be taken care in future and tried to be kept constant. In an initial

investigation of the relationship, a chi square test demonstrates the undeniable link. This link may lead to a further investigation through the use of a regression analysis to establish the

validity of a causal relationship. The regression analysis will provide strong evidence of the

causal nature of the link between the two variables; considering Ethical leadership asindependent and organizational culture as dependent variable. It can now easily be argued that

Ethical Leaders will definitely be responsible for building up an effective organizational culture.

After these interesting findings, further investigation into the relationship is warranted with large

sample size of different industries to give the blanket statement.7. Recommendations and Suggestions

I t is suggested to the leaders to become an Ethical Leader to ask the following questions from

their own self:

(a) What are my most important values and principles?(b) Does the way I spend my time and attention reflect these values?

(c) What would others think about my values?(d)Have I designed any full proof system that my subordinates can break the Authority Trap?

(e) What do I do to let others voice their opinions frankly?

(f) What do I want to achieve with my leadership in the organization?

(g) What do I want people to comment about my leadership when I am not there?(h) Can I feel proud at the end of the day about my leadership, and higher my self esteem?

The author would like to put forth few suggestions for the organizations to develop Ethical

Leaders. The organization must spread the message that ethics isn’t just an important set of rules not to violate, but that it is an integral part of what it means to work. The first step that an

organization ought to take is to bring life to a conversation about how the organization benefits

its employees and about understanding the organization’s values. This doesn’t need to be aformal program. It could be as elaborate as town hall meetings. The organization may have

leadership development programs. These programs need to be strengthened by adding the idea

of “ethical leadership.” The organizations can engage participants in a conversation about whatthey see as “ethical leadership.” Executives can develop shared conversations and conceptions

of how “ethical leadership” can be implemented in their particular company. Executives of the

company can take initiatives to explain about the strategies adopted by the company to break the

Authority Trap. Many fear that anarchy would be the result of such a process. In my experience;it is just the opposite. Values, purposes, principles, an enterprise approach, healthy discussions,

honest opinions —all deliver a disciplined way to think about how to make the business better 

and more effective.

8. Conclusion

The author’s summation towards the end is that Ethical Leadership is the driver for excellent

organizational processes which result in excellent organizational outputs; thereby building up anexcellent organizational culture. Customer satisfaction is affected by organizational outputs,

e.g., high product/service quality and on-time delivery and customer satisfaction, in turn,

impacts financial performance. Ultimately this all leads to build up an effective, vibrant, and

happy organizational culture. We all agree, what is measured and reported; can be managed and

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improved. If an important, predictive and leading indicator of organizational culture is Ethical

Leadership, then interventions can be targeted directly as appropriate.

Although the hypothesis has been proved through statistical analysis, yet the blanket statementcannot be given on the basis of this small data. To formulate a generalized opinion it becomes

very important to take the larger data and from the different industries. It is sure that the

organizations having effective organizational culture give better performance and produce more business and vice -versa. So, it is very important to create effective organizational culture and

this study has proved that Ethical Leadership styles are responsible for building up an effective

organizational culture. Good and ethical leaders will only be responsible for building upeffective organizational culture.

Finally, this research brings to the forefront the proposition that Ethical leadership is an

intangible asset that is a lead indicator of future organizational culture. Future research isneeded to test and validate the relationship within a balanced or strategic scorecard framework.

Organizational Culture may suffer if declining sales growth, retrenchment and company layoffs

have created a culture of fear and employees feel unappreciated. This might require an

intervention to change to a culture based on the values of altruistic love where team leaders andteam members have a sense of connectivity, feel understood and appreciated and have genuine

care, concern, and appreciation for both themselves and the organization. .The author opinesthat building human resource capital resulting in excellent organizational processes and

outcomes requires a long term focus and may not be effectively improved with a short term

solution. In reference to the educational institute which is under consideration, the above

 process simply becomes a vicious circle. The product quality; the quality of students in this caseis very much dependent upon the employee commitment-which can only and only be instilled

 by Ethical leaders. So, we may say that employee commitment emerges as a consistent predictor 

of organizational processes and outcomes. Organizations that do not move to adopt the Ethicalleadership paradigm and measure and improve employee commitment leading towards effective

organizational culture; do so at the peril of not addressing the core issue soon enough to be

effective or remain competitive in the marketplace.

9. Limitations

• People were quite reluctant in filling the questionnaire because of the shortage of time.

• This survey was done when there were summer vacations in the college due to whichmany of the respondents were not available.

• There were few leaders who had joined recently, that is why they could not give the true

 picture of the organization.

• Despite that full confidentiality was maintained, people were trying to be manipulative

and afraid of ticking the right answer.

• Leaders as well as team members had the misconception that it was some management

 policy to take the feedback.• People had lots of apprehensions before filling the instrument despite that everything

was made clear to them.

• There might be few other reasons associated with the study and responsible for showing

such results and not coming to the conclusion of showing a clear and fixed trend

 between Ethical Leadership and Organizational Culture.

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10. References

Kothari,C.R.,(2009) Research Methodology –Methods and Techniques ;New AgeInternational P Limited

• Deehoogh, H.B. & Denhartog, N.Deanne. (2008) Ethical and Despotic Leadership,

Relationships with leader’s social responsibility, top management team effectivenessand subordinates optimism: A multi method study ;Volume-19; Issue-3; Pg 297-311

• Brown, E.Michael. & Trevino, K.Lindo (2006) Ethical Leadership: A Review and futuredirections ; Volume -17; Issue-6; Pg-595-616

• Fry, Louis W & Matherly, Laura L.(2006)Spiritual Leadership and OrganizationalPerformance :An Exploratory Study Tarleton State University – Central TexasSouth Clear Creek Rd.Killeen, TX 76549

• Fry, L. W. (2005). Toward a theory of ethical and spiritual well-being and corporatesocial responsibility through spiritual leadership. Forthcoming in Giacalone,.  Positive

 psychology in business ethics and corporate responsibility. Greenwich, CT: Information

Age publishing.

• Schminke,Marshall.,Ambrose, L.Maureen &Neubaum, O. Donald(2005)Organizational

Behavior and Human Decision Processes ;The effect of Leader moral development on

ethical climate and employee attitudes ;Volume 97; Issue -2; Pgs 135-151

• Buller, F.Paul.& McEvoy, M.Glenn.(1999) Journal of world Business Creating andSustaining Ethical Capability in Multinational Corporation. Volume -34 ;Issue-4; Pg-

326-343

n

• Cornett, J Zane, Thomas ,J W (1995)Integrity as Professionalism: Ethics and Leadershipin Practice Society of American Foresters National Convention ;Portland Maine

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Websites:

[email protected]@tarleton.edu

www.darden.virginia.edu/corporateethics

www.chumirethicsfoundation.ca/page.php

www.npu.edu/npu_highlights/rd_activities

Understood