Cultural and Ethical Contingencies of Leadership

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Table of Contents

Introduction
Ethical Leadership
The Roles of Leaders
Corporate Social Responsibility
Coca-Cola Company
Conclusion
References

Introduction

The number of industries and business institutions are increasing day in day out. To maintain all the organizations in the market, their management must be well structured.

These companies usually give out some by-products which when released into the environment could cause problems to the community as well as the environment. This thus lays a responsibility for institutions to look at ways to solve and prevent this problem.

There are some corporations which have branches in various parts of the world. This implies that their responsibilities are spread in various parts of the world. The world is gradually becoming a global village. This is attributed to factors such as improved technology making accessibility of different parts of the world easy. Business bodies form part of the society and therefore ought to be run in an ethical manner.

This paper seeks to explore the cultural and ethical contingencies of leadership as integrated in multi-national companies, the challenges they face as they try to achieve corporate social responsibility (CSR), the measures they take to ensure that their staffs are well trained to become good leaders who have a strong inclination to ethical leadership as well as the attractive means of obtaining the right staff members.

Ethical Leadership

Ethical leadership refers to the concept by which organisations develop core values and stick to them under all circumstance at all times. An organisation must reflect its personality inside the organisation and out in the community.

The organisation must have the courage to stand by their values irrespective of internal and/or external pressure to compromise their values. Ethical leadership must ensure that the values of the organisation add up to a common good for the whole society. This can never be achieved without the collective participation of all members of staff.

Good ethical leadership should encompass a framework that integrates the organisation’s core beliefs and values and the visible behaviours and actions all aimed at achieving a common goal which will create a difference in the leadership and the output of the organisation.

Ethical leadership ensures that all levels of leadership in the management and the whole employee fraternity share a common motivation and that is upholding integrity starting from within themselves and in all their activities towards achievement of a common good for the whole society.

The Roles of Leaders

The success of any multinational company is based on its leaders. They must have universal leadership principles. The leaders are divided into various categories such as relationship oriented, task oriented and participative leaders. These leaders are favored by different working conditions.

The best leaders are found to improve the group effectiveness and usually encourage cohesion. This is because one of the greatest strength in the performance of any activity is unity. Unity makes it possible for different strengths to be focused on one objective thus enabling viewing of problems and situation from both the details and wider view. It is achieved by application of teams and decision groups (Lewis, Goodman, Fandt & Michlitsch, 2006).

Some of the personal attributes of good leadership are flexibility, intelligence, surgency and conscientiousness. These values are very significant especially for the case of multinational leaders who take care of the different regions with people from diverse backgrounds.

Some years back, the main idea behind good management when running a business was increasing the profits. Due to the continuous changes in policies, culture and technology, the trend has continuously been changing. The current aspects of ethical institution management entail corporate social responsibility, ethical leadership, globalization, employee ownership and sustainability.

Globalization has been challenged due arguments that it gets resources from developing countries which end up as losers in the trade (Rayman-bacchus, 2004). Globalization has been blamed to result to environmental degradation and human abuse. This has acted as one of the social economic problem that has emerged and faces many multinational organizations.

Ethical leadership has a close relationship with morality. This means that there must be proper consideration of the effects that an activity is to have on others rather than on returns alone. The growth of any institution is mainly determined by the market forces. These forces are usually derived from people’s needs. Social problems usually affect the people who are meant to be the customers of a business organization.

Taking care of these people and the environment where they live is technically taking care of the business organization. Institutions inclined to socially responsible activities are capable of continuous growth. Ethical leadership requires the leaders to be totally committed to their duties and carry them out ethically. The leadership ought to be intrinsic and not an issue of just ranks (Louche & Idowu, 2010).

Good ethical leadership goes beyond what the law stipulates; what is usually ethical does not have to be in the law. Sometimes the demand for ethics results in the stipulation of new law.

This is because the operation of an activity may have negative effects on many people which would result to calls for the establishment of new guidelines about such an activity. Such issues come up with multinationals which operate in different geographical environments.

It is worth noting that what is ethical in one country may be quite unethical in a different country. This is a fact worth taking into consideration, especially for multinational companies’ leaders due to the fact that they operate in different regions which have different cultural backgrounds.

The fact that cultures are different calls for the sensitivity when policies are being instituted for the different branches operating in different cultural regions. Some of the acts considered to be unethical generally include dishonesty, misleading, feeling manipulation, exploitation, lack of transparency, nepotism, environmental pollution, favoritism and lack of humanity. One area where ethical leadership can be displayed is through the corporate social responsibility.

There are many ways that ethical leadership can be exercised. One of the ways of displaying ethical leadership, especially for the multinational is through corporate social responsibility. There are many arguments for and against corporate social responsibility (CSR). It has been argued that CSR has a limited capacity to give proper approach to social problems. This is because when business organizations engage in CSR part of their income is taken away.

It has been argued that large business organizations make significant contribution to some of the social problems that are experienced in the society and as such they ought to make contribution towards the remedy of the same (Vogel, Bhattacharya & Smith, 2010). Business units are encouraged to view CSR positively as the business units form part of the society. CSR is just part of ethical leadership. It is worth noting that ethical leadership often faces many challenges most of which stem up from the top management.

The management is usually responsible for ensuring continuous improvements of the institution. This is attainable by strictly following the set standards and monitoring the performance so as to provide necessary corrections in time (Sims, 2003). A failure in the administration of management duties would result to substandard services provision and financial losses which would lead to stagnation, deep losses or even the collapse of the entire organization

The stakeholders of any corporation are a very crucial entity of the institution. They should be informed about the corporation’s strategies with respect to corporate social responsibility. The stakeholders should be informed about the responsibility so that there would be no problems arising from the implementation (Peddle & Rosam, 2004). The management should also inform all other entities who may be involved.

The employees should be considered as part of the stakeholders. Ensuring that all the stakeholders are aware of the direction that a business institution is headed to is significant as it makes it possible for unity to be realized and it is also quite ethical for all the stakeholders to be aware of the direction that the company is taking. This is especially pronounced for multinationals as they operation globally and their stakeholders need to be aware of what the kind of operations the business engages in (Rungeler, 2010).

Ethical Leadership pays

As every good investment undertaken is expected to have positive returns, there is improved market for the products of companies with good ethics. This is because so many people like to be associated with responsible institutions. Businesses which uphold ethical leadership are likely to attract workers. This is because ethical leaders usually want to work with ethical institutions. Ethical institutions usually find many individuals attracted to investing with them.

This usually provides the institution with more funds for its development and expansion. It also boosts the morale of the workers as it acts as a motivator. In the long run the company’s reputation improves (Business, 2011). Ethical institutions usually enjoy good management. This ensures better distribution of resources and avoidance of risks. This is evident in that there are few scandals such institutions face. There is increased competition and thus new strategies have to be improvised to win market favor.

Ethical institutions are assisted by the corporate social responsibility to withstand the market forces. They are therefore able to maintain their operations despite the fluctuation. Corporate social responsibility usually assists the institutions to be allowed by the governments to operate in areas where other institutions are not allowed. This is because the main aim of these institutions is not reaping too much at the expense of the consumers and the environment but rather to maintain a balance of mutual benefit (Mullerat, 2009).

There have been so many conferences and meeting held all over the world to handle the issue of corporate social responsibility. Through the international conferences, some progress in regard to leading business bodies ethically has been achieved. These policies will be of great importance when implemented by all the institutions concerned. Companies’ top managements are usually the main targets for conferences which are meant to uphold ethical leadership among business bodies.

Companies can reach all People in the Society

The gap between the rich and the poor has been widening day in day out. This is attributed to factors such as corruption and lack of sufficient knowledge.

Corporate social responsibility may help to reduce this gap. When these multinational companies are undertaking it, they incorporate some of the community members which usually yield positive results. This is because the presence of instability in one region would affect the stability of these multinational corporations (Brennan & Mullerat, 2005).

Some of the challenges that are faced in ethical leadership

There have been technological advancements which have affected all aspects of life. These improvements have availed information to different people all around the world. Education is one of the best assets a human being can get. Proper community empowerment should be provided so that they are informed. This usually triggers economic improvements due to improved methods of approaching and solving problems.

The multi-national companies usually meet hostility when they are undertaking their normal operations in places where the community has insufficient knowledge. This usually slows the development of the corporation in such a region. In places where the people are well informed, the cooperation with the community at large is good. This usually leads to developments which mutually benefit the corporation and the community.

Another challenge faced by multinational companies in trying to achieve corporate social responsibility is lack of sufficient finance. This usually means that they have to part with some of their resources to get the funds. The activities of corporate social responsibility such as controlling the flow of gaseous product are usually very expensive. This is because they require highly experienced and trained personnel and good and up-to-date machinery and equipment.

These costs are usually very expensive and are reasons why some companies resort to shortcuts in the implementation. This usually does not last for long and there are very bad consequences to the environment and the community. To overcome this problem, corporations should set aside some funds to help them achieve corporate social responsibility or improvise new means of raising the funds (Environmental Leader 1).

Training the staff in the right way

Organizations invest heavily in rigorous training of members of staff to “avoid penalties, fines, lawsuits and criminal penalties; build employee loyalty; reduce hiring and training costs; reduce theft and other anti-company activity; drive sales and build customer loyalty; create community goodwill” (Schwartz 8).

Ethical leadership must include four basic foundations which are values, voice, vision and virtue. All the members of the organisation starting with the leadership must understand the core values of the organisation as an identity and make every effort to commit to them .

The organisation must be able to visualise their actions that are oriented towards service to the community in the current time and in the future, put the vision of the organisation into action by letting the society understand what they do and doing what they say to the society. Organisations must commit to do what is good under whatever circumstances. The vision, voice and values must focus to a common good.

All the above fundamentals must be exercised in good faith and commitment but at the same time in the knowledge that the final judge of the performance of the organisation is the community which may determine whether the organisation will make profits, losses or simply be phased out.

There are many companies and organisations that reported massive losses or simply closed by being unable to uphold good leadership ethics and were implicated in scandals. Some of the organizations that failed to appreciate importance of ethical leadership are quoted by Schwartz as:

WorldCom (BernieEbbers), Tyco International (Dennis Kozlowski), and Adelphia (John Rigas), Canadian firms such as Hollinger (Conrad Black) and Livent (Garth Drabinsky), and Italian firm Parmalat (Calisto Tanzi) appear to have been lacking an appropriate tone at the top. (Schwartz 3)

Different organizations use different approaches when it comes to ensuring that members of staff are trained in the rigorous of ethical leadership. One such approach is setting the rules and making a follow-up on how the employees interpret and stick to the rules. Such an approach assumes that the set rules are the determinants of good ethics. The other approach is encouraging the employees to make continuous and consistent assessment of the impact of the organization’s actions on the society.

Coca-Cola Company

This is one of the multinational organizations that have demonstrated excellent leadership ethics from its formation to the current time. The coca-cola brand is represented all over the world and its products are found in the shelves of almost every retail outlet around the world.

It is arguable that coca cola could only achieve such success by exercising good leadership ethics “results expressing the reported performance of companies place Coca-Cola in first position out of 16 Food & Beverage companies, followed by Starbucks, Nestle, and Unilever” (GBS 24).

Coca cola ensures members of staff are trained in the rigours of ethical leadership by following the guidelines of Code of Business Conduct. This code is based on five basics namely integrity, honesty, laws adherence, compliance with code and accountability (Business 2; Malan 2001).

Mentorship programs

Most organizations offer mentorship programs to their workforce in order to ensure that the employees understand the values and beliefs of the organization and how they can be tools for ethical leadership.

Coca cola offers mentorship to their employees especially the senior management “Currently, Coca-Cola North America and The Minute Maid Company have one-on-one mentoring programs designed to foster professional growth and development” (GBS 24). Core values of any organization are absolutely important especially in the top management employees and they are better trained one on one.

Internal trainings

Most multinational organizations have their own trained personnel whose role is to train the employees on the culture, core values, and ethical leadership. Coca cola has a training department that trains the members of the staff in accordance with the code and ethics of the organization that trains the staff on the beliefs and core values of the organization and how they reflect on common good of the society (Conger, 2007).

Training Institutions

Some multinational organizations have established their own specialized institutions where they train among other things the culture of the organization. Coca cola established Coca Cola University in 2007 “the coursework is designed to help associates build capabilities and expertise in commercial leadership, consumer marketing and franchise leadership, as well as leadership and professional development” (coca cola 1).

Apprenticeship in Coca-Cola Company

Apprenticeship is one of the best methods of training potential employees on ethical leadership and culture and values of the organization even before they become fully employed. Coca-cola offers apprenticeship to thousands of student all over the world and this ensures that the students learn and understand about the organization even before they become fully employed (Bellingham 2001).

Attracting the right member of staff

The best and the most practical way of attracting the right members of staff is by ethical leadership itself. Ethical leadership creates confidence and trust in the community. The members of the society are attracted by the actions of the organisation that are demonstrated through ethical leadership. This attracts job seekers to the kind of organisations that they would like to be associated with. No one would like to work in an organization which doesn’t care about the society.

Business bodies which take care of the environment by avoiding for instance pollution are usually quite attractive to young talents who care about the environment. Most people want to work with institutions that believe in worthy courses. People try their best to work for Coca-Cola because they want to add their contribution to what coca cola has done for the society in terms of services, products and corporate social responsibility (Center for Ethical Leadership 1).

Corporate Social Responsibility for the Community

The best way for an organization to reach out to the community is by corporate social responsibility. By involving the organization in these activities the society understands the organisation better thus the people who share the same sentiments as the organisation develop interest in the organization. Corporate social responsibility is a very big window through which corporate bodies display ethical leadership (Boone, 2007).

Apprenticeship programs

Apprenticeship programs allow the organizations to interact with potential employees even before they are employed. This is a great opportunity to closely monitor potential talents who understand and share in the motivation and the drive of the organization.

Many organization offer apprenticeship to thousands of students worldwide and they are able to select the best of the apprentices who are later employed. Perhaps the best example of apprenticeship program is the Donald Trump apprentice program where the apprentices learn and exercise the values of the organization (Associate Training 2011).

Setting standards

One of the ways of ensuring that an organization attracts the right kind of work force is to raise their employment standards high. This ensures that only the right kind of people apply for such positions and leaves out the others. Comprising on the employment standards usually leads to a company having a very weak work force which may not develop the company.

Ethical leadership call for setting of high standards for recruitment of employees and thus only attracts the serious people who will drive the organization to higher levels of success both in profits and ethical leadership (Siebens, 2007).

Incentives

Most of the qualified and talented people have already invested enough in themselves in terms of skills and personality. The best leverage to attract them to the organization is to offer the best working conditions, treatment, remunerations and other employee benefits. These attractive packages attract the best workforce available in the market.

Having a highly talented and developed workforce in an organization is vital for the success of a business organization. This is usually seen in multinational organisations that treat their employees with respect and offers them attractive packages.

Conclusion

Ethical leadership is one of the most important concepts of managing any organization. Any organization should develop core values and stick by them under all circumstances for the common good of the whole society. Organizations must seek to offer services to the society in a way that adds value to the society and not purely focussing on making mega profits.

Organizations invest heavily in rigorous training of members of staff to avoid penalties, fines, lawsuits and criminal penalties. Training also makes it possible to obtain employee loyalty; reduce hiring costs; reduce theft and other anti-company activities; drive sales high; build customer loyalty; and create community goodwill. The final judge of the performance of the organisation is the community which determines the fate of the organization.

There are many companies and organisations that reported massive losses or simply closed by being unable to uphold good leadership ethics and were implicated in scandals and faced the wrath of the society. Others have decided to appreciate the importance of ethical leadership and have benefited both in massive profits and society confidence and trust. Coca-cola has set the pace for ethical leadership which it has maintained since it first started.

Much of the strength comes from the empowerment of the employees in terms of rigorous training of their members of staff in the light of ethical leadership. Organizations invest in various programs such as apprenticeship, ethical leadership, mentorship programs internal and external training while others like Coca-Cola have gone to the extent of opening their own institutions to ensure that they attain the highest levels of ethical leadership.

Due to the power and the potential of ethical leadership, many organizations go to great lengths to attract the right members of staff by offering employee experience and attractive packages. Some organizations opt to set their standards high to filter only the best-suited candidates who can deliver on the vision and mission of the organization. Others prefer apprenticeship as one of the best methods of training potential employees on ethical leadership.

References

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