Leadership can be defined as the process in which leaders influence their followers to achieve predefined organisational goals (Yukl, 2010). A leader is a person who the subordinates look up to for advices, guidance and also to make decisions which will benefit not only the ones directly involved, but everybody else as well. A leader is an important figure in an organisation because the way the subordinates perform will be the reflection of their leader’s calibre. Therefore, to ensure employees and other staff members to behave and comply with business ethics, the leader must set a good example to them by being ethical. This can also be known as ethical leadership.
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1.1 Importance of Study
In short, this assignment intends to allow a better understanding of the role of leadership in business ethics. This can help identify what are the roles a leader has to play to promote business ethics amongst the employees and other members of the organisation and also why is it so important for leaders to be as ethical as possible.
1.2 Relate Topic with recent news.
In September 2005, Wal-Mart’s Mexico branch, Wal-Mart de Mexico was exposed of a huge bribery case which was led by their then Chief Executive, Eduardo Castro-Wright. He was described as the driving force behind the bribery and was even promoted to a senior position in America for this “outstanding results” in Mexico.
Once news of the bribery had reached the top officers in America, an internal investigation was carried out about possible violations of the Foreign Corrupt Practice Act (F.C.P.A.), as informed to the Justice Department. According to their spokesperson, Mr Tovar, Wal-Mart will not and do not tolerate noncompliance with F.C.P.A. anywhere or at any level of the company.
Wal-Mart has demonstrated good leadership in this case because there are documents which showed that Wal-Mart’s leadership instantly recognised the seriousness of the allegations and worked in secrecy to keep a close eye on their Mexican branch with several current members of Wal-Mart’s senior management. Not only that, Wal-Mart’s current chief executive was also kept informed of the bribery going on.
This shows that Wal-Mart’s leaders are aware that their Mexican subsidiary has done something very wrong and are doing the right and ethical thing by bringing about in investigation on the matter. It would have been wrong if they had allowed the Mexican branch to continue bribing the local authorities there.
However, after demonstrating good ethical leadership by starting off any investigation, Wal-Mart’s leaders found a way to bury the matter. This would demonstrate the unethical side of their leaders as they are being a bad example to their subordinates. Instead of bringing the people involved to justice, the case was closed and as mentioned earlier, Mr Castro-Wright even got a promotion for it.
Mr Castro-Wright, together with the staff members who were involved, should have been brought to justice and striped off their jobs. Should Wal-Mart ever face this sort of situation again in the generations to come, there is no doubt that they will most likely bury the matter again as they did in 2005 because the new leaders would have taken the same steps as their past leaders did. This is because once the leader has behaved unethically, it sends out a message to the employees saying that the organisation allows unethical behaviours (Huhtala et al., 2011).
2.0 Literature Review
Leadership’s role is very important for an organisation, and they not only give advices, guidance and make decision to their subordinate, as well as to gain trustfulness from subordinate in an organisation....