At NIB (National Irish Bank), the unethical behavior of employees according to Knights and O'Leary (2005) was at no time suppressed. Leaders in this case according to the authors were largely concerned with profit maximization. This is a clear indication that when leaders fail to mould subordinates, the consequences could be dire. Indeed, a report issued by the inspector general with regard to the scandal at the institution revealed that the role leadership played in the entire scandal was momentous (Knights and O'Leary, 2005). Best Buy CEO's sexual relationship with an employee also set a bad example for other employees to follow. This is more so the case given that the two acted in a way that left no doubt in anybody's mind that they were having an affair. There were also clear disparities between the CEO and the concerned employee especially with regard to age, power, and position.
But why do leaders act unethically? May, Chan, Hodges, and Avolio (as cited in Tanner et al., 2010) argue that leaders could embrace unethical behavior in an attempt to preserve or safeguard their own careers or as a way of avoiding unpopularity. According to Hannah, Avolio, and May (as cited in Schaubroeck et al., 2012), "bad apples" have also been blamed for triggering unethical organizational behaviors. The "bad apples" could in this case be unethical leaders or other senior individuals who do not have any regard for ethical behavior. In what seems to support this assertion, a study conducted by Schaubroeck et al. (2012) came to the conclusion that the impact subordinate leaders have on those whom they lead with regard to their ethical leadership could be facilitated by leaders whose level of ethical leadership happens to be sufficiently high. The reverse is true.
Based on the reasons given above for unethical behavior, it would be prudent to explore some of the solutions that have been proposed to rein in the problem. As Tanner et al. (2010) observe, it is a leader's moral courage that determines or influences his or her resolve to embrace ethical behavior. Moral courage is in this case defined by the authors as an individual's conviction to stand his or her ground in the face of unpleasant consequences. Tanner et al. (2010) are of the view that moral leaders should be ready to embrace ethical behavior even in those instances where embracing the said behavior seems costly. According to Sabir et al. (2012), leaders also have a responsibility to ensure that their ethical behavior as well as conduct is reflected in not only their judgments but in their dealings and daily conversations as well. This way, they could in the opinion of the authors easily become role models for their followers.
The impact of unethical behavior could be vastly unpleasant. According to Knights and O'Leary (2005) past scandals perpetrated by unethical leaders have not only threatened the positions of the said perpetrators, but they have also had a negative impact on the financial well-being of the companies involved. Companies that have had to pay the ultimate price of bankruptcy include but they are not limited to Dynegy, Lehman Brothers, and Enron. Bre-X, a mining company in Canada, also went down after it was discovered that it had released falsified information with regard to the discovery of a treasure chest. HP has also had to hire a PR company to enhance its image after the discovery of a spying scandal. The company found itself in trouble for spying on journalists and some of its board members. Although the company at the time justified its actions citing the need to investigate the source of information that had allegedly been leaked, this particular unethical decision cost Patricia Dunn, its CEO at the time, her job.
In the recant past, corporations have embraced a number of initiatives...
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