Question

All stakeholders in an organisation are responsible for creating an ethical organisation. Leaders set the tone by acting ethically and articulating ethical values in the organisation. The HR department is responsible for ensuring that systems and processes are established to improve, maintain and monitor ethics, while all organisational members must adhere to the highest ethical principles. Organisations that are perceived as ethical draw and retain discerning employees and customers. With reference to this: 4.2.1 Discuss why ethics is a crucial aspect of effective leadership. (8) 4.2.2 Discuss the role of HR in creating an ethical organisation

Answer 1

4.2.1 : Ethics is a behavior that aids in decision making and usually relates to issues pertaining to frauds, siphoning of funds and engaging in activities that causes financial or moral harm. It is crucial in leadership in a sense that organizations that set high ethical standards and also get the managers to implement the same attain better financial results, have a risk tolerance capacity and are better equipped to handle ethical issues. It is important that the top management creates the right ethical culture in the entity and check for loop holes violating the policies. Also, ethical leadership ensures that there is a sense of ownership and responsibility towards the organization and they themselves must not break the rules.

4.2.2 HR plays an important role in creating an ethical organization. HR must frame rules and policies and have a no tolerance policy towards unethical policy. Also ,it must have a whistle blower mechanism where any unethical behavior is immediately reported with out any fear of being reprimanded. They have to create an ethical culture and ensure that each employee is aware of the ethics and conduct regular trainings as a refresher.