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Posted on June 13th, 2012, by

In the contemporary world the role of leaders of organizations is extremely important, especially in the formation of the organizational culture which is currently getting to be increasingly more significant. In fact, it should be said that nowadays organizational culture is one of the key issues of the general success of organizational functioning that affects practically all spheres of the organizational structure. It means that at the present moment organizational culture is a constituent part of the functioning of any organization and the higher level of culture an organization has the more respectable and popular its brand is (Karakowsky, 2006). At the same time, the development of a high organizational culture is hardly possible without hard work on this issue of leaders of organizations which actually establish the basic ”˜rules of the game’ and are supposed to demonstrate the highest level of culture that should be followed as an example by the rest of the organization’s staff.

In this respect, ethics is particularly important because the leader should maintain the ethical and just policies within the organization. However, on analyzing the current situation, it is possible to estimate that many organizations suffer from the lack of healthy, ethical organizational culture though the understanding of its importance makes this problem one of the main targets in the development of an organization. Also, it should be said that as a rule the problem of healthy organizational culture is often associated with strong and not less healthy leadership and the reasons for such views are quite understandable (Brown, 2008). Obviously, nowadays, despite certain trends to democratization and liberalization of relations within organizations, the role of leaders and their position is still extremely important, especially in relation to the development of a healthy organizational culture.

Furthermore, it is practically impossible to imagine an organization with a high level of organizational culture if its leaders do not maintain the basic, ethical principles that correspond to the notion of organizational culture. In other words, if leaders are characterized by arguable or even immoral ways of actions, or decisions than it is impossible to speak even about the possibility of establishing a healthy culture within the organization they head. For instance, the example of Enron, one of the largest American companies, perfectly illustrates the extent to which the wrong actions and decisions, which are actually totally unacceptable and absolutely immoral, could be ruinous for an organization (Bolt, 2006). Notably, it is impossible to establish a healthy organizational culture if there exist double standards or if executives are in a privileged position. It would be quite natural if the relations and interactions between the personnel of such an organization would be characterized by high level of conflict and total lack of healthy organizational structure.

In such a situation, organizations need to focus on the development of efficient, ethical policies which should be accepted by all people working within organization. In this respect, it is necessary to understand that ethical policies of the organization should refer not only to their internal sphere but also the external sphere. What is meant here is the fact that any organization needs a set of ethical principles and norms which define the work of people within the organization. In such a way, people can clearly distinguish whether their behavior is ethical or unethical. The latter naturally leads to internal problems and interpersonal conflicts within organizations because unethical behavior of some employees is harmful for the rest of the personnel because offensive behavior is always harmful for those people who are influenced by some unethical actions of their colleagues (Madsen and Shafritz, 2006). In such a context, the role of leaders is particularly significant since they should prevent any efforts of unethical or ethically controversial behavior.

However, some leaders tend to unethical behavior themselves that may have a destructive impact on their organization because, being models for their employees, they promote the unethical behavior which undermines the stability of the organization. It proves beyond a doubt that unethical behavior inevitably leads to the interpersonal conflicts and deterioration of the organizational culture.

At the same time, there is always a risk of extrapolating unethical behavior within the organization on the relations of the organization and its representatives with customers and partners of the organization. Thus, the internal ethical problem of the organization becomes externalized and, in the contemporary business environment, it is very dangerous for the successful marketing performance of modern organizations (Benfari, 2008). For instance, the unethical policies can lead to the loss of customers’ loyalty and intentional ignorance of products services of companies which conduct unethical policies. In this respect, it is worth mentioning the example of Shell, which faced considerable problem in the American market in the result of several accidents involving its oil tankers. As a result, the position of the company on the American market has weakened because environmentally unfriendly policy is perceived by customers as unethical.

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