In the current report, we have explored the topic of ethical leadership in business world. The ever encompassing question of what is ethical and what is not depends on the moral intellect of the managers holding the leadership position in the company. The decisions made by him reflect his inner characteristics and ethical orientation. The company is said to be made up of people who work there, thus the actions of the manager exhibit the quality of ethical structure of the company as a whole. We would explore and conclude how ethical management not only enables better management but also helps in setting up great examples for the industry to follow. Following the ethical statues makes the task of managers easy in the face of moral crisis and thus strengthens the company from its core. All these factors lead to make manager with high ethical values perform better in comparison to those who are not driven by the force of doing the right thing and abiding by the ethical values.
Sandel (2009) further explores the three general and historical ideologies of ethical leadership. The first theory deals with the maximum possible welfare of the people following the leader are known as Utilitarianism Theory. The second theory is Libertarianism Theory which deals with the people in leadership roles extending protection to the freedom of their followers. The last theory known as Kant’s Ethical Theory only emphasizes on the role of leaders in encouraging its followers to do the right thing, without fearing or regarding the consequence. It is believed that a manager uses one of these traditional approaches to make decisions and to decide what is ethical.
Skovira and Harmon (2006) have brought into light the concept of ethical ecology in a company. It describes an ethical landscape or moral environment in which leaders operate. This ecology affects the decision making process of the leaders in the company. The main constituents which could easily be used to determine the ethical ecology of any company are its codes of conduct, corporate policy, financial affairs, human resources approach, environmental considerations, organizational reputation, personal moral boundaries of the leaders and relationships. The set of standards are identified by ethics which assist leaders to determine the consequences of various behaviors (Hickman, 1998). In synopsis, we can say that ethics are basically a matter of choice and ethical leadership means conduct of managers to convince followers to do the right thing. Managers with high ethical standards would emphasize on making the right choice. Thus the inner strength of character and morality of a person is tested in his role as a manager in responsible position.