Critically consider what Sheila could do and the associated ethical decision-making pressures, principles, and practices within contemporary organizations. Recommend a course of action and justify your recommendations?

        In today’s era, every organization competes with other firms not only for the profitability but also to maintain the goodwill of the company. The retention of key employees of the company is also an aspect of this. Every organization and its employees have a bond which provides them with two-sided perceptions and expectations. The employees perceive that their firm will take care of their well being by valuing their perceptions and rewarding them properly for their efforts. The organization, on the other hand, expects that its employees will remain loyal to them. They will help the company to achieve its long-term objectives and win the market-share by maintaining the organizational secrecy.

Ethical organization and ethical leadership

          The organizational internal culture, as well as the way it works better, serves as a determinant for an organization’s ethical considerations. Its work is directed by a proper set of principles and beliefs.

The key features of an ethical organization include the following:

·         Decision making and policy implementation by the organization have a strong impact on all the stakeholders of the organization.

·         Provision of solutions to the problems in organizational work-flow.

·         An audit of employees’ performance on a daily basis.

·         Appreciation for employees’ opinions and their participation in decision-making.

·                 Making the employees work at their best for customers’ satisfaction. It will better help to retain the key employees of the organization and gain customer loyalty.

        The keyword “moral” and ethical leadership are used interchangeably. The main motto for the ethical leaders is “doing the right things”. Although it is not that easy to cop up with the requirements of ethics, even then the managers and the leaders try their best to meet with the requirements. The work of  (De Hoogh, 2008) identified the aspects for the ethical leadership, i.e., righteousness, power of distribution, politeness, and illumination of the position. For most of the researchers, ethical leadership is considered as an element that instigates from the higher authorities and then the lower level employees follow the road-map of these higher authorities. So as is the case with research of (Thornton, 2014). He argued that ethical leadership practices always start from the higher-level authorities. The lower-level employees tend to follow these practices only if their managers are doing so. The employees’ contributions are higher than their normal performance only if they are provided with their leaders who follow the ethical guidelines.

        For the case study, Sheila is the regional marketing manager for a well-known coach company. Being a manager, she is responsible for making such decisions which will make the organization to gain the market share and gain a competitive advantage. But this should not be done at the cost of integrity (i.e. by giving a chance to a person who has already cheated on his organisation). As a part of decision-makers, she is required to work under the laws and regulations along with ethical considerations. This is the only key which can make her to enhance the organizational profitability. Although it might not be possible for her to follow all the requirements of the law but something can be done (i.e. not to trust a stranger who is also a competitor).There is a possibility that he may trap Sheila by misguiding her. It is not only about doing things right but doing the right things. She is obligated to follow the legal requirements which are directly linked with the ethical obligations. It will help to put the more responsibility on the stakeholders. One good decision can make the company to stand at a differentiated place so as is the case with Sheila. Her decision about considering the competitor’s marketing plan can either make the company to gain the competitive advantage or loss its existing choice. It is all about a single choice. If she accepts the offer then it will be wrong ethically.

            For every organization, there is a greater responsibility to formulate effective strategies that can better deal with ethical issues among the employees. These strategies should be compliant with the organizational mission, vision, and long term objectives and goals. These strategies are required to deal with not the only day to day issues but also exigent and serious issues. For example, the identification of the fraud can be taken as a serious matter that relates to ethical issues of the organization. The employees’ loyalty towards the organization increase based on different styles of ethical leadership. The direct impact of this factor is basically about employees’ increased satisfaction from the job (Okan, 2015). (Okpara, 2008) also confirmed the strong positive relationship between job satisfaction and ethical leadership.

Strategic Leadership decisions and ethical considerations

(Thornton, 2014) argued that following guidelines need to be followed by the organizational leaders:

·              Make organizational decisions by considering the employees other than higher authorities. It will help the organization to get the view-point of those employees who are closer to the customers. By doing this, the organization strategies can be formulated in a better way. This will assist the higher authorities to make greater contributions to the company’s profitability by increasing the customer count of the company.

·         Try to include the ethics’ related conversations for every activity of the company. This may relate to the employee's meetings with their managers, training session for newly recruited employees or already existing employees of the company and strategy formulation sessions.

·         Create an environment where the employees can feel free to have a conversation over the topic of ethical leadership as well as ethical considerations.

·         To obey the laws and regulations is not sufficient for a company. Also, employees are required to consider ethics.

·                     The organization’s leaders should have a great responsibility for both, i.e., following the ethical standards and making other employees to follow the same. It will assist the company to retain the key asset of the organization and make the customers of the company more loyal towards the company. (Ramus, 2000) discussed ethical leadership as a key element for determining the initiatives of the employees. The employees’ rewards and recognition, organizational goals and objectives as well as the effective communication among the employees can better be determined through varying leadership styles. The leaders who tend to consider and focus the needs and perceptions of the employees make the employees remain committed with their company on long term basis.

            Sheila needs to present the ethical behaviour for making this type of decision (i.e. about taking the marketing plan of a company which is a competitor of Sheila’s company). This thing will serve as an example for other employees because the employees learn from their leaders and decision-makers. Nothing can serve as the basis for teaching someone as a person’s experience.

The different leadership styles include the following:

·         Authentic Leadership: The expression “authentic” is taken from the ancient Greeks. It means “to be true to oneself”. The key features for authentic leaders include the positivism, optimistic as well as confidence (Avolio, 2004).

·         Transactional Leadership: A transaction is related to business activities. These business activities are performed by the employees of the organization. If the employees tend to perform at their best, then they should be rewarded accordingly. These rewards may include the compensations, bonuses and other benefits that relate to the performance of the employees as per the organizational culture. So, transactional leadership is about dealing with the employees’ performance concerns (Jamal, 2014).

·         Situational Leadership: (Bohan, 2014) argued that situational leadership is a leadership style that is adopted by the employees as per the changing nature of the situation.

·         Spiritual Leadership: Spiritual leadership deals with those ethical considerations and the styles that are necessary to inspire not only an individual but also the others (Fry, 2003).

·         Transformational Leadership: This leadership style is about a category of leaders that are not only concerned about their interest but are also caring about other’s interests (Krishnan, 2005).

            The above-said leadership styles are a key determinant for employees’ performance as well as leadership strategies of the higher authorities of the organization. These leadership styles not only help the employees in self-grooming but also help them to work with more enthusiasm for achieving the organizational goals.

            The main character of the case study (Sheila) is obligated to make the decision by considering these ethical leadership styles. This optimistic decision will help her not only in consideration of self-interests (i.e. being loyal with the company) but also the organizational goals and objectives.

Critical analysis and evidenced decisions for problem-solving (to find innovate solutions)

             By efficient decision-making, a problem can better be avoided and solved. If the higher authorities provide the employees with innovative solutions, then critical situations are handled easily. Once an effective strategy is formulated, it can be used in the future for the problem of the same nature.

Following is a step-wise model for effective decision-making by the ethical leaders:

·         Stop & think action: The managers can make effective decisions only if their minds are free from any pressure and other thoughts. They should try to avoid the un-necessary events that permit effective decision-making.

·         Review action: Before relying on some information for decision-making, try to review the available data. The misleading information will direct towards wrong decisions that will affect the organizational performance. The correct information will help to take into consideration both the personal as well as the organizational goals and values.

·         Making a list of options action: Good decisions are always the outcomes of the proper planning. For decision-making, there is a need to list down all of the available options. After making a list, extract the best options based on certain criteria. The actions should be headed by the best available choices. It will also be easier for ethical leaders to maintain the records of these options. Try to evaluate the concerned benefits and the losses for not opting for the best options.

·         Consult action: After choosing the best option, make a discussion and the review of the action with the stakeholders and those who are directly or indirectly affected by these decisions, i.e., supervisors, managers, and colleagues. As discussed earlier, try to seek help from the cases of the same nature. The selected options will help to set up a precedent for the said situation.

·         Choose a course of actions: Figure out the course of action that will assist in creating the most effective outcome. While doing this, also take into consideration the rights of the concerned managers as well as the stakeholders.

·         Decision implementation: Once the best options are selected, and the proper path is chosen, now it is time to implement the plans and decisions. There is a need to implement these decisions as per the need of the situation.

·         Decisions’ evaluation: After the implementation of the decision, it is the time for decision evaluation. When the managers and the leaders tend to evaluate the decisions, they try their best to evaluate it against some parameters. These parameters better help to determine whether the decisions deal with the concerns and the requirements or not. Also, an evaluation is made to the fact that whether the same strategy will be adopted in the future or something different will be done for the same situation.

(Carmeli, 2013) discussed his viewpoint about ethical leadership. He narrated that the organizational leaders if promote the culture of ethical considerations, knowledge-sharing, exchange of the ideas and openness they better help the employees to share their knowledge not only with their colleagues within the organization but also outside the organization.

The actions for promoting the ethical culture in the organization include the following:

·         The induction procedures, either for the staff or the board members, are required to have a discussion over the topic of ethical leadership rules and principles. The organizational norms and the values better help for this type of discussion.

·         The well-defined code of ethics defines the guidelines for the company’s operations. These guidelines provide the organization with a set of rules to follow for the organizational work-flow activities. The other aspects of this code of ethics may include moral responsibility, honesty as well as accountability. To better avail the benefits of these rules, there is a need that the primary code of conduct should be consistent with the newly defined code of conduct.

            In the case study, Sheila also has an option not to take the decision by her but also discuss it with her seniors and the industry professionals of her organization who have got a lot of experience in the market. They will better provide her with the options that will be equipped with ethical considerations. 

Task 2:  Critically consider whether ‘All is fair in love and war and market competition’ by examining cross-cultural business practices where payments are made to ease business transactions. What are the implications of this for leading cross-cultural business teams?

        This is the era of competition. There is a greater responsibility on the organizations to make the organizational culture so comfortable that the employees feel satisfied to work in this environment. Even if they are provided with some increased benefits and better opportunities, they prefer your organization. All of this can be achieved by formulating effective strategies by the company’s leaders. Ethical consideration serves as a reliable means to cover the cross-cultural business gaps. There is a great saying that ‘All is fair in love and war’. Although this saying goes correct there are certain exceptions to this saying. One of the exceptions includes ‘market competition’.

·         The business competitors strive not only for the profits but also for the goodwill and increased customer count along with loyalty.

·         The organization which follows proper rules and regulations and the code of conduct is only successful. The liability to make a company successful is on both the entities, i.e. the employees and the organization.

·         Any organization can achieve more market share in case its employees are more satisfied.

·         The term ethical consideration has some requirements that include being fair, having guts to think about the welfare of the others as well as thinking of the impact of one’s procedures on the others.

·                 The organizational leaders take the decisions and make the strategies that have long term effects. They also consider the drawbacks of their decisions. Irrespective of the circumstances, they have a single motto, i.e., do the things that are right. It is not easy to serve as a role model even for those who are not a part of your culture. To better cater to this problem, the organizational leaders provide the basis to serve more ethically by proper formulation of the strategies for the organization. For this purpose, the socialization process also helps the newly inducted employees to get know-how about the company’s culture and the environment.

·                 Any successful organization requires its leaders to make some sacrifices. It can be in the form of time or other parameters. The more the leaders make the sacrifices for their organization, the more their followers will learn to work for the benefits of the organization (Katarina Katja Mihelič, 2010).

            If we highlight the point that is discussed in the case study, then we conclude that Sheila should not accept the offer of that person who met him in the party and offered her the marketing proposal of his company. The reason behind such an argument is purely based on the concept of ethical considerations. Under work ethics, every employee is liable to work only for organizational benefits. Even if he feels that he is not getting as per his perceptions or the organization is not providing him the desired benefits. Still, he has the responsibility to do the right things. In case the employee has some grudge for the company, he is even not allowed to misuse the assets of the company for some other’s benefits. Sheila should not trust that guy who has breached the rules of his company and performed badly by stealing the marketing plan of the company. Although the company of Sheila can have increased market share by having implemented the competitor’s plan even then she should reject the offer of that person. A person who did badly to his current company can also do the same with your company. So, that person should not be trusted at any cost.

            It is required that every organization should have the committees for evaluating the compliance with the code of conducts. The review and provision of advice, in case of non-compliance, are a part of this scrutiny. The ethical behaviours can be evaluated against ethical standards. It can be done by using the audit practices by the organization’s leaders.

Potential challenges and solutions associated with cross-cultural management

            Based on the research related to the topic of ethical leadership, it is confirmed that ethical leadership has a positive association with the organizational as well as individual effectiveness. There is a huge research work on the topic of ethical leadership along with the consideration of cultural differences among the workers of an organization. Most of the studies link the ethical leadership styles with decision-making. Although there exist cultural differences, ethical leadership provides a roof to the organizational hierarchy. All the employees, under the umbrella of ethical practices, are required to act as per the rules and regulations. Mere implementation of these rules is not desired. Rather, there is an expectation that all the employees will behave perfectly by following a well-drafted code of conduct. The slogan of the workers should be “behave well and do what is right”. The environment equipped with strong ethical leadership makes the employees more determined to their job.

                The work environment having characteristics of ethical leadership encourages employees to show their urge to work with full devotion for promoting, generating as well as implementing innovative ideas, which eventually play their part in organizational innovation. Moreover, it is vital to know that when an organization has multicultural contexts, then practice, as well as evaluation of ethical leadership, will be under that context; and keeping conformity purposes in view, the conducts and dimensions may change for a transformation. The parent & subsidiary relation is an important thing to keep in mind while elaborating different beliefs about ethical leadership, because those beliefs may come up with some challenges for the leaders (Martin et al., 2009). It is not an easy task to maintain ethical standards with proper conduct in multinational firms, especially on the global level. That’s why it is vital for managers to realize that what particular cultural expectations are associated with the ethical behavior of employees (Martin et al., 2009).

            The business leaders should understand that universal approach for ethical leadership may never be suitable in global, diverse work culture, because people come from different cultures, so a proper system should be developed to keep each cultural context in view. It means that all employees may not be happy with a single approach to deal with them, so a diverse approach is a great way to go in right direction. It is vital to make such decisions with proper strategy and planning because things can get bad for a multinational firm if they do not manage their work environment accordingly (Resick et al., 2011). Moreover, it is critical to define some golden rules associated with ethical leadership, which are generally accepted by everyone so that cultural effects in an organization can be neutralized. The executives have a lot of responsibility to perform especially when dealing with different cultural factors. Asian, European, and North American cultural systems in every context have come up with variety of assumptions regarding government, business as well as society (Aguilera and Jackson 2010; Matten and Crane 2005; Redding et al. 2014; Redding and Witt forthcoming).

            It was demonstrated by Martin et al. (2009) that acceptable or unacceptable behavior of the leader is expected with the essence of cultural beliefs and values with variety, which hinders the types of behavior shown by leaders and elements endorsed by a particular society. So, it can be said that expectations made by senior executives regarding their corporate responsibilities can vary across the globe keeping different cultural contexts in view. The research about cross-cultural elements has explained that beliefs are closely associated with the cultural value system regarding effective leadership in organizations (Dickson, Den Hartog, & Mitchelson, 2003; House et al., 2004). The integrity and character of leadership are one of the most important elements associated with ethical leadership in a variety of cultures regardless of work environment or societal system (Resick et al., 2006Resick et al., 2011). However, the integrity of ethical leadership will have to consider various other factors (Keating, Martin, Resick, & Dickson, 2007; Martin, Resick, Keating, & Dickson, 2009). Effective leadership has to show its integrity in any given circumstances. The discussion made in above-mentioned studies reveals that across variety of cultures, integrity remains to be an important aspect of effective leadership. However, there was no evidence found to see that elements linked with integrity of leadership are same or they are different across different cultures.

The issues of leading across cultures

            Every organization is involved in their own culture, which they have adopted since ages. There may be some issues while working in a different culture. The most ethical problem arises around the organization. These types of problems are sophisticated due to the wrong implications. In management and leadership, there may also be some ethical problem. It may be related to the organization or the staff.

Issues in ethical leadership:

            In an organization, people work with different background and cultures. The holding authority captures the whole system of organization. The employees who convert himself in their culture can work better. A leader may face the following issues while working with the people who are from different cultures;

·         Lack of understanding: In across culture, employees work from different cultures and regions. A leader has to corporate with all the employees who are a difficult task to do. So due to different mind perception, the information could not flow properly, which may cause a failure.

·         Miscommunication: People with different culture also speak a different language, which may be a reason for miscommunication between the employees and the management of the organization. For example, people working in the Gulf countries are not all Arabic, which is working in the same organization, and many workers face the difficulty of communication.

·         Incomplete information: A leader is responsible for the performance of their employees. For the better flow of information, the leader should properly deal with the complete information.

·         Diplomatic leader: In some countries, not only the communication matters but it is necessary to getting along with ahead. In some cultures, employees want to work with a leader who provides a pleasant and friendly environment. Constructive work demands to fulfil the requirement of employees. So in cross-culture leader have to work diplomatically.

·         Aggressive leader: Some leaders became aggressive due to misbehaving or mistrust by employees and eventually showed the power of the seat by dominating the subordinates. This is a big hurdle to lead in the cross-culture. Workers could not express the feelings or willingness, which affects the work badly. Leaders of aggressive nature mostly exist in Indonesia and Malaysia.

·         Straight shouting leader: In some countries, leaders are straight shouting and treat the employees with saying in simple words, but in some countries, leaders are not adapted to this environment and treat the employees with arranged rules and regulations. They are not interested in interpersonal communication, which is not an ethically good option.

·         Religious beliefs: Sometimes, leadership fails when the management has to take the decisions which are against the religion. This impact directly on the performance of employees as people is emotionally attached to their religion.

·         Societal issues: The employees face different social issues like changes in the rituals and different events which may cause distortion in leading a group or team.

Despite the issues that pertain in ethical leadership and its styles, it is required that Sheila should make the decision that is beneficial for her organization. This should be beneficial for gaining the competitive edge in the market place and make the company maintain its goodwill.

References of Ethical Leadership

Avolio, B. &. (2004). Authentic Leadership: Theory-Building for Veritable Sustained Performance. Journal of Business and Management, 11-30.

Bohan, P. (2014). Can Leadership Behaviour Affect Quality & Safety (Q & S) in Complex Healthcare Environments? American Journal of Public Health Research, 2 (2), 56-61.

Carmeli, A. &.-P. (2013). Leadership, Creative Problem-Solving Capacity, and Creative Performance: The Importance of Knowledge Sharing. Human Resource Management, 52, 95-122.

De Hoogh, A. &. (2008). Ethical and despotic leadership, relationships with the leader's social responsibility, top management team effectiveness, and subordinates' optimism: A multi-method study. The Leadership Quarterly, 19, 297-311.

Fry, L. W. (2003). Toward a Theory of Spiritual Leadership. The Leadership Quarterly, 14, 693-727.

Jamal, A.-H. (2014). Leadership Styles and Value Systems of School Principals. American Journal of Educational Research, 2 (12), 1267-1276.

Katarina Katja Mihelič, B. L. (2010). Ethical Leadership. International Journal of Management & Information Systems, 14, 11-30.

Krishnan, V. R. (2005). Leader-member exchange, transformational leadership, and value system. Electronic Journal of Business Ethics and Organizational Studies, 10 (1), 14-21.

Okan, T. &. (2015). Exploring the Relationship between Ethical Leadership and Job Satisfaction with the Mediating Role of the Level of Loyalty to the Supervisor. Business and Economics Research Journal, 6 (4), 155-177.

Okpara, J. &. (2008). The impact of ethical climate on job satisfaction and commitment in Nigeria. Journal of Management Development, 27, 935-950.

Ramus, C. &. (2000). The Role of Supervisory Support Behaviors and Environmental Policy in Employee ‘Ecoinitiatives’ at Leading Edge European Companies. Academy of Management Journal, 43, 605-626.

Thornton, K. (2014). Mentors as educational leaders and change agents. International Journal of Mentoring and Coaching in Education, 3 (1), 18-31.