MBA Research

Trend #25: Ethics, Ethical Issues, and Ethical Leadership

Business Trend

Our trend this month focuses on businesses’ increasing focus on ethics, ethical issues, and ethical leadership. Ethical challenges have proliferated due to the convergence of a variety of other trends: expanding workplace and societal diversity, mobile technology, globalization, and social media. Many businesses are struggling to establish a common view of ethics across the multigenerational workforce composed of different cultural backgrounds and different worldviews. Globalization, mobile technology, and social media have flattened the world and shortened the potential point-to-point connections among people around the world.

Workplace Implications

Business leaders establish organizational culture, and their misconduct is instantly more public. Tales of ethical failures are quickly spread through internal and external communication channels. Therefore, organizations have begun to treat business ethics as a strategic management issue. Leading by example is not just a “good thing to do,” or the “expected thing to do,” it is the “mandated thing to do.”

In June, some of our Iowa business panelists had this to say about ethics:
    “Unethical behavior is poison and will affect everyone.”
    “Ethical leaders balance their own self-interest with the interest of other stakeholders.”
    “Ethical leaders do the right thing vs. the politically expedient thing.”
    “Ethics starts at the top of the organization. People feel empowered to be unethical when their role models are unethical.”
    “Ethical leaders think long term and endure short-term pains to achieve long-term results.”

A zero-tolerance mentality is emerging on the business landscape resulting in highly punitive actions for any ethical lapse. Concurrently, business leaders are challenged to respond to rapidly changing business dynamics. They are encountering unique and complex situations that require quick decision-making, often without all of the facts. This results in a stress-filled climate.

As the cost of failures continues to increase, prospective employees are more heavily scrutinized to determine fit. Meeting educational and experiential qualifications is no longer enough to secure a job position.   

Classroom Implications

The ability to do the right thing even under stressful, ambiguous situations should be emphasized with students. They need to understand the different ethical situations encountered within the workplace and an ethical decision-making process. Cultural context should be incorporated within the lessons so that students understand how viewing the same issue from different perspective may result in different ethical conclusions. Teachers may also want to review the cost of ethical lapses for both the organization and individual(s) involved. Finally, students should be engaged in a discussion on the causes of ethical lapses and given opportunities to support or refute their opinions with research.