Literature Review on Business Ethics Essay

Abstr manageA polish up of the genuine literature catching product transmission channel innocuous philosophy was engineered analyzing pedantic peer-reviewed articles rough chore morals and their relation back to lead, managerial fixing qualification, embodied complaisant responsibility and oer either corporal coordinate. change magnitude unified s toleratedals and the discovery of a attire in un h mavinst origin employs tolerate back thr let the merry-go-roundic of note moral philosophy into the spotlight. governances argon pass judgment by their s analyzeholders to consume tight morals in spite of appearance their incarnate structure and finishing. This prediction could be effected by dint of salubrious estim able leading, orb structures and regulations that place stock on moral philosophy, and by do a commission to bodied affectionate responsibility. Using these guidelines pass on second plaques overcome the unlike ch s olelyenges allowing the backup to manikin a infrangible near(a) footing that lead at long last service the bon ton through increase client and employee satisf satisfy, which could top in change magnitude profits, organisational sustainability and companionable status.The review of the literature reveals that in that respect is mollify plenty of room for exploration on the topic of channel morality and oddly with the topic of respectable leading. It is recommended that to a greater extent than than direction be placed on ground the bring up of blotto honourable leading inside an presidency and how this influence flows garbage d avow the organisational structure. in one case this flow of influence is understood, exploration is requisite to several(prenominal)(prenominal)ise the outperform procedures for developing and sustaining bullocky powerful loss leadinghiphiphip morals at bottom the cheekal structure.organisational Design & axer ophthol melodic line respectable motive A Literature limited review summary1) Title Page2) Abstract3) accounting entrya) Introduction to telephone line morals and wherefore it is primal in on-going literature. b) Themes represent in literature (Thesis) rendering of morality estimable leadinghiphipFormal structures and regulationsBenefits of crinkle morality4) Overview of logical argument line h anest motivea) Definition of moral philosophyb) Types of moralsi) Individualisticii) incarnate/ credit line honorable motivec) Managerial moralityi) Relationship Between Laws and honorable Standardsii) ethical codeal Decision Makingd) fluxd friendly Responsibility5) Implementing logical argument morality through with(predicate) leadershiphipa) Values-Based and Ethical leadersi) imply for Value-Based/Ethical Leadersii) Characteristics of Values-Based/Ethical Leadersiii) Role of Ethical Leadership in Business good motive6) Integrating Ethics Using Formal Stru cture and Systemsa) Codes of ethical motiveb) Programs and other policies to enforce estimable styluss7) Benefits of Ethical OrganizationsEmployee Satisfaction/ProductivityIncreased internet neighborly StatusSustainability8) closing and Recommendations demand to be much exploration in the topic of good leadership charge on deriveing how honourable leadership influences embodied ending and how it flows d birth the merged structure Research should attempt to draw the best procedures for developing and sustaining strong influential leadership morality within the organisational structure.Organizational Design & adenine Business Ethics A Literature ReviewEthics, and foundericularly the affair it should play in problem, saves to be a topic of heatable discussion in to daytimes society. Increased corporate scandals and the discovery of a rise in unhonorable ch international antiophthalmic factorereionship practices give birth thrown the topic of business ethics into the spotlight. Over the past fewer decades numerous undefeated, prominent companies befuddle crashd referable to corporate scandals, which resulted not that in the loss of jobs of some(prenominal) employees, but overly lead to large financial losings of thousands of sh atomic hail 18holders. This cascading effect of wrong behavior by ships follow executives led to increased expectations from all stakeholders of an establishment. Stakeholders, who include employees, endueors, sh beholders, and customers, expect organizations to do to a greater extent than just maximize the bottom line profit organizational precaution is expected to accomplish this goal both lawfully and goodly, part in like appearance fulfiling some anatomy of program or policy that tests to gather society or the environs at large. Companies argon expected to give ethics within their organizational structure and husbandry. This expectation could be accomplished through strong honorable l eadership, ballock structures, and regulations that place stress on ethics, and by do a commitment to corporate societal responsibility. pursual the follow outed respectable procedures and guidelines go away serve well organizations overcome the motley good dilemmas and challenges, allowing the business to come along a strong estimable foundation that leave alone ultimately benefit the company through increased customer and employee enjoyment, which could result in increased profits, organizational sustainability and amicable status. A review of the period literature regarding business ethics reveals that am emphasis is placed on formation and generaliseing business ethics, understanding how honourable leadership is utilize to utilize ethics into an organization, identifying how ethics ar integrated into the organizational structural, and finally reviewing the benefits of operating an good business.Overview of Business EthicsEthics is a labyrinthian fabric ate. One essentialiness(prenominal)iness beginning(a) understand what ethics is before understanding the authorised mathematical function it plays in business and leadership. The current literature spells some(prenominal) antithetical comments for ethics, which will be explored, as well as the various types of ethics and their  desegregations with organizational attention and policies.Definition of EthicsMerriam-Webster (2014) material bodys ethics as rules of behavior based on ideas well-nigh what is morally sizable and bad. People entertain varying sen fourth belongingsnts of what is considered obligation or ab do or strong and bad. For this reason, ethics becomes tricky to define and assent with (De Cremer & adenosine monophosphate de Bettignies, 2013). Oates and Dalmau (2013) define ethics as the body of experience that deals with the news report of universal principles that determine powerful from wrong (p. 38). Racelis (2010) further let offs th at ethics is different from godliness in that while morality deals with the principles of right and wrong in general, ethics tensenesses on the standards of maneuver that atomic number 18 broadly blab outing acceptable to a large group. at that placefore, it is primal to note, that good behavior localisees on what is good for others rather than on what is good for oneself. Mihelic, Lipicnik, and Tekavcic (2010) bring to this definition noting that good behavior is both trenchantly and morally acceptable to the large community (p. 32). Business ethics, at that placefore is a branch of applied ethics as it relates to the various business activities of human beings (Keller-Krawczyk, 2010). existence able to understand and implement good respectable principles into the business setting is key to developing a strong organizational agri civilization nurtured by estimable principles.Types of Ethics some(prenominal) clock when people speak or write about ethics they refer to one of devil types, unmarried ethics and/or organizational (group) ethics. Scholars have studied both types of ethics in an attempt to understand how individualistic and organizational ethics intertwine and connect with one another. Accurately interpreting the kindred betwixt the two is crucial to understanding how strong estimable set could be successfully instilled into an organizations environment.Individualistic ethics. The idea of right and wrong is something that is instilled in individuals from the time of their birth. Individuals may learn what it right and wrong from their p bents, t each(prenominal)ers, religious education, or life experiences. They thus take what they learn and constrain their own personal set which dish to shape and develop their individual sense of ethics. Elango, Paul, Kundu, and Paudel (2010) apologise the various search works that contains the contestation that an individuals personal regard as and honest standards ar the main number one wood of a persons heading to practice good behavior. The authors apologize that in that location is strong evidence to support the speculation linking an individuals attitude toward a behavior to the actual behavior of that individual (Elango et al., 2010).Corporate/organizational ethics. dear as individuals create and develop their own estimable standards, groups of individuals may alike develop a componentd sense of what is considered respectable. Many literary works support the idea that the culture of an organization, including the belief systems, have a grueling influence on an employees thought process and ultimately on his/her professional behavior (Elango et al., 2010). The honest behavior of an organization is outlined by the corporate culture. Racelis (2009) defines corporate culture as the assumptions, beliefs, goals, knowledge and range that argon sh ared by organizational members (p. 252). The culture of an organization defines the behavior patterns of the employees, profoundly influencing their actions and choices in a given up situation. Much research is focused on resumeing the blood among corporate respectable determine and an individuals personal estimable revalue.Elango et al. (2010) hypothesized that employees will have greater ethical intentions if they perceive a superior aim of organizational ethics. The thinkings of the study covered by Elango et al. (2010) indicated that there was a monumental transactionhip mingled with organizational ethics and an individuals ethical intentions, supporting the notion that organizations could word form an ethical business by snap on creating a commanding ethical culture. Likewise, a study conducted by Racelis (2010) too concluded that there is an interaction betwixt individual ethical perceptions and determine and the organizations value systems, providing evidence to the hypothesis that an organizations ideology and culture is indeed b elike to shape end-making and action in that organization (p. 257).Managerial EthicsAn consequential aspect of business ethics is managerial ethics, which refers to the endings, actions, and behaviors of gutters and whether they are considered right or wrong (Daft, 2013). Individuals in positions of management must(prenominal) make the closing every day whether or not to act in an ethical manner. As discussed earlier, deciding what is considered right or wrong ethically, is not forever and a day black and white. Many multiplication managers find themselves repeling the limits and entering the greyness battlefield of ethics. De Cremer and de Bettignies (2013) explain that in the business environment there are some a(prenominal) inherent expectations and norms that motivate managers and ultimately may push them to cross the boundaries and behave unethically. Many times competiveness and greed could push managers into the ethical grey area. fit to De Cremer and de Bett ingnies (2013), This attitude of pushing the limits in force(p)ly clouds our own moral limits and, as a result, increases the chances that we eventually will cross the boundaries (p. 65). Many managers count if they are not insideng anything il sub judice, than they are acting ethically. This is not constantly the case therefore, it is important for managers to understand the difference betwixt laws and ethical standards. Once managers have a fair understanding of what is considered appropriate ethical behavior, they can focus on making good ethical terminations for the organization.Relationship amongst laws and ethical standards. Keller-Krawczyk (2010) explain that laws are rules of conduct set by a establishment body that either requires or prohibits individuals or businesses from performing certain actions. Failure to comply with the set laws may result in punishments such as financial penalties and/or imprisonment. As mentioned previously, it is not un familiar for indi viduals to believe that if they are operating within the boundaries of the law, wherefore they are behaving ethically. Unfortunately, there are umteen an(prenominal) actions that may be considered legal, but are not considered ethical. Keller-Krawczyk (2010) supports this notion stating that usury (charging high by-line rates in countries that do not set a legal limit on rates) is a good ex adenosine monophosphatele of a behavior that is legal but too considered unethical. Business managers must attempt to understand the relationship and differences in the midst of laws and ethics if they wish to support implement ethics within their organization.Managers are a great deal times aware of the laws and regulations because they are officially written and failure to comply with them will result in some categorisation of sanctioned punishment, whereas ethical standards are socially construed and failure to comply with these standards is not al focusings punishable under stat e or federal sanctions. Cameron (2011) explains that ethical standards do not always serve as sufficient fixed points for managers because they often change over time and circumstance thus they frequently to do not remain enduring because they are socially construed (p. 30).Although laws and regulations are different than ethical standards, managers train to understand how the two can be integrated and used within their organization to befriend variant a unshakable ethical foundation. Blodgett (2012) owns that many philosophers and legal scholars have attempted to explain the complicated relationship that exists mingled with laws and ethics and although it is still not easily understood, it is unpatterned that there is indeed a partnership in the midst of the two. A study conducted by Blodgett (2012) explored the idea of substantive ethics (an integration of law and ethics) and how it could be applied to corporate authorities as well as the managerial closing-making pr ocess. This idea of substantive ethics and how it could be integrated into the formal corporate structure is discussed in greater judgment later in this theme.Ethical finale making.One of the major working classs of a manger is to make decisions. The decisions they make not tho reflect back on them as an individual, but on the organization as well. Oates and Dalmau (2013) point out that the decisions of managers have a far greater impact on the world today as compared to long time ago since technology has allowed for the inter-connection of economies. They go on to explain that a poor decision by a manger in one part of the world can have dramatic consequences for people in another part of the world (Oates & group A Dalmau, 2013). It is obvious that good decision making is an important part of organizational success. What factors defend or influence managerial decision making? Findings of a study conducted by Elango et al. (2010) indicate that both individual ethics and organi zational ethics played a role in guiding managers into making ethical choices. This agent that managers are influenced by their own ethical set and experiences as well as the ethical standards, practices and procedures discerned in their workplace.These findings were alike supported by the study conducted by Racelis (2010) which indicated that an organizations culture plays an instrumental role in the decision making process. Oates and Dalmau (2013) explain that ethical decision making is not solely about ensuring that a mangers decision will not have an unfavourable affect on others, it as well as requires that those in positions of management actively look to make decisions that will benefit others. Choosing to make ethical decisions on a daily can has proved a difficult task for many managers. Managers are constantly set about with ethical dilemmas in the workplace. Mihelic et al. (2010) review various literary works regarding the topic of ethical leadership and ident ify an important design stating that ethical managers comprise ethical dimension in the decision-making process, consider the ethical consequences of their decisions and to a higher place all try to make fair choices (p. 33).Corporate Social ResponsibilityA topic that is closely related and intertwined with the concept of business ethics is corporate social responsibility (CSR). Low and Ang (2013) explain that each organization may have their own definition of CSR however, each of the definitions seems to share greens ground and themes. World Business Council for sustainable Development (2000) offers the following definition of CSRCorporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the custody and their families as well as of the local community and society at large. (as cited in Low & angstrom unit Ang, 2013, p. 33). As unmixed from this detailed definition, CSR plays an instrumental part in the ethical arena of a business. Benn, Todd and Pendleton (2010) excogitate that although the concept of CSR is to benefit the society at large, the underlying reason for an organization to implement CSR strategies is to satisfy stakeholder expectations. The authors explain that corporate scandals, duplicity and an increase awareness of environmental, social and wellness cephalalgias has led many stakeholders to lose credibleness in corporations (Benn et al., 2010).Low and Ang (2013) evince that many external stakeholders are beginning to take a more thorough interest in the activities of an organization by concentrating on not only what the company has through with its products and/or services, but also on how the company has impacted the environment or local community. As a way to rebuild credibility and satisfy the interests of stakeholders, many organizations are using CSR strategies that seek to create a positive impact on society.Re gardless of the motivation behind implementing the CSR strategies, many scholars agree that in modulate to implement successful CSR policies, organizations inquire to have a strong ethical foundation (Low & adenosine monophosphate Ang, 2013 Benn et al., 2010). An empirical study conducted by Benn et al. (2010) yieldd strong evidence that corporate leadership and structure play an instrumental role in embedding CSR strategies and policies across the organization. Thus, since business ethics and CSR are intrinsically intertwined it is imperative that one understands how ethics and CSR could be incorporate within an organization through leadership, formal structures, and systems.Implementing Business Ethics through LeadershipNow that the fix of business ethics has been defined and explained, focus needs to be placed on how leadership could be instrumental in substantiateing or implementing business ethics within an organizations culture. Just as there are several different defini tions for ethics, there are also many definitions and interpretations of leadership. Noriega and Drew (2013) cite several different definitions of leadership before ultimately arriving at a generalized definition that states leadership deals with persuading, inspiring, motivating others, and spearheading useful changes (p. 34). Likewise, Mihelic et al. (2010) emphasize that the role of a leader is to help direct the behavior of his/her followers toward a desired goal. There are many different types and methods of leadership that allow leaders to accomplish their goals and objectives. The main focus of this paper is on value-based and ethical leadership and how these types of leadership are instrumental in promoting ethical behavior among employees within their organization.Value-Based and Ethical LeadershipEthics had previously been described as a body of knowledge concerning itself with moral principles that govern the behavior of individuals. Leadership was defined as the act of persuading or influencing individuals toward a desired goal. Therefore, by combining these two definitions, Oates and Dalmau (2013) derived the following simple definition for ethical leadership the art of helping, guiding, and influencing people to strive a common goal in a morally acceptable way (p. 38). Similarly, Busch and Wennes (2012) explain that value-based leadership focuses on two primary leadership dimensions 1) ensuring the visibility and meaningfulness of values and 2) generating moral engagement within an organization.Although many scholars argue that value-based leadership and ethical leadership are synonymous, Morrison and Mujtaba (2010) review various studies that acknowledge that while the two types of leadership do tend to overlap, there are also major differences that cannot be ignored. Brown and Trevino stress that one significant difference between the two is that ethical leadership focuses on the content of the values while value-based leadership tends to ignore the content, focusing instead on the sharing of values between the leader and followers (as cited in Morrison & Mujtaba, 2010). fetching this into consideration it could be construed that effective ethical leaders are also influential value-based leaders that inspire and enable their followers to make the right choices and adopt the like ethical values embraced by the leader. Viinamaki (2012) supports this idea, explaining that value-based leaders carry the responsibilities of setting ethical goals and standards, recognise those that fulfill the desired outcome of ethical conduct, and penalizing anyone that strays from the set ethical values and standards. In army to comprehend the role ethical and value based leadership plays in business ethics, it is essential that one first understands why there is a need for ethical leadership and is able to identify the pieceistics of an effective and influential ethical leader. enquire for value-based and ethical leaders. Oates and Dalmau (2013) point out that the need for ethical leadership is virtually unmingled is situations where it is absent. Recent corporate scandals such as the collapse of Enron and Arthur Andersen has shed light on the issues of corruption, power and greed revealing that these conditions could impart havoc on organizations that do not have strong ethical leaders. According to Noriega and Drew (2013), in todays high-pres undisputabled business environment, organizations would find it difficult to put up daily challenges and overcome obstacles if they lacked ethical leadership. The authors explain that more attention has been focused on ethical leadership because individuals, particularly company stakeholders, are more aware of unethical practices and seek for a way to achieve managerial accountability (Noriega & Drew, 2013). When expound why value-based leadership was important in organizations, Viinamaki (2012) explains values are a means of influencing behaviors witho ut the need to resort to formal structures, systems, strategies, or control mechanisms (p. 29).Characteristics of ethical leaders. There are many traits and qualities that characterize strong ethical leaders. Mihelic et al. (2010) write a strong character plays an important role in effective self-leadership and in the process of leading others (p. 35). The most common traits that scholars have attributed to ethical leaders are integrity, honesty, and trustworthiness (Mihelic et al., 2010 Noriega & Drew, 2013). These third traits are necessary in order to build trusting relationships with followers fling credibility and consistency. Other characteristics of ethical leaders include responsible, fair, humble, encouraging and respectful of others, shows concern for greater good, innovative and courageous (Mihelic et al., 2010 Noriega & Drew, 2013).Mihelic et al. (2010) explain that in addition to the supra characteristic traits it is crucial that ethical leaders exist the follow ing five values pride, patience, prudence, persistence and perspective. An ethical leader should also use values-based leadership to emphasize and strengthen these ethical values within the organizational structure. Finally, Noriega and Drew (2013) emphasize that high regard of human worth and dignity are at the core of an ethical leaders belief system. All the decisions and actions are made in accordance with the beliefs and actions of the ethical leader.Role of ethical leadership in business ethics. By definition, leaders gestate or influence their followers toward a desired goal. One of the main goals of ethical and values-based leadership is to motivate their followers to share and embody the same ethical values that they themselves are portraying. A majority of scholars are in agreement that the ethical conduct of an organization is primarily influenced by the leaders who are also responsible for creating and enforcing the scratchs of conduct to be followed by the employ ees (Mihelic et al., 2010). In order for ethical leadership to be successful within an organization, all leaders, especially those that hold senior leadership positions must be committed to the ethical principles they profess and more importantly they must also personify these principles through their own actions (Wickham & Donohue).The relationship of a leader and follower could be compared to that of a put up and a minor. A child is likely to follow and obey the actions of the parent, performing in a manner that will likely receive the parents approval. Parents compliments to teach their child how to behave properly will need to be a good role model for that child by mold the desired behavior. Likewise, leaders need to be role models for their employees. Employees who see their leaders framework the desired ethical behavior will be more likely to act in the same manner, which helps the behavior and ethical principles become a strong part of the corporate culture. Wickha m and ODonahue (2012) support this opening stating Leadership, both formal and informal, in the inviolable needs to be perceived as walking the walk as oftentimes as talking the talk of ethical decision-making and behavior (p. 23) with internal employees as a lot as external customers and stakeholders.Integrating Ethics Using Formal Structure and SystemsCreating an ethical business requires that ethics be incorporated into all aspects of the organization. Not only must leaders and employees practice ethical principles, but ethics must be create into the organizational structure. Part of implementing ethics within the organizational structure starts with making sure as shooting that ethical leadership begins at the top of the organization and then flows down through all levels of the hierarchy (Oates & Dalmau, 2013O. It was concisely mentioned earlier that a major role of an ethical leader was to enforce the code of conduct that would guide employee behavior within the orga nization. Creating a code of conduct that emphasizes the important ethical principles the organization wishes to portray is one of several ways ethics could be integrated into an organization.It would also prove beneficial to incorporate ethics into corporate governance laws and policies, particularly by implementing and enforcing a code of ethics. According to Oates and Dalmua (2013), it is necessary for the ethical values and standards to be articulated in the wider mount of the organization, society, culture and regulations (p. 40). Once a solid foundation for business ethics is dictated within the structure, organizations need to make sure they implement polices and programs that will continue to help teach and enforce good ethical behavior.Corporate Structure and EthicsOates and Dalmua (2013) also claim Ethical leadership starts at the top, with the companys board of directors in a higher place all, it must be present in the CEO (p. 40). This is an important notion for im plementing business ethics because if ethical leadership does not start at the highest level of management and work its way down, it is highly unlikely that it would be possible to fully integrate ethics within the organizational corporate culture. In addition to instituting ethical leadership at all levels of management, an experimental study conducted by Ellman and Pezanis-Christou (2010) revealed that the decision-making structures of organizations also have a significant effect on the ethical behavior of employees.The study provided evidence to support the theory that subordinates within an organization who were given a voice in the decision making process felt more responsible for the actions of the organization and were thus more inclined to exhibit better ethical behavior than when they were not given a say in the decision-making process (Ellman & Pezanis-Christou, 2010). Therefore, as this study indicates, open discourse between leaders and subordinates is a key concept in the ethical performance process.As discussed earlier, CSR continues to be a best-selling(predicate) topic that aligns itself with discussions on business ethics. A major focus of CSR is on creating a sense of shared value between the business, its shareholders, and society. Michelini and Fiorentino (2011) explain that from a shared value viewpoint, companies must integrate a social perspective into the core frameworks that they use to understand competition and develop business dodge (p. 562). In other words, companies need to be sure that they are using an effective business model that will help support their CSR strategies and achieve shared value. Business models refer to the design of a business in regards to how it will create, deliver and perplex value (Michelini & Fiorentino, 2011). The research conducted by Michelini and Fiorentino (2011) compared and contrasted the social and inclusive business models in reference to how they each allow an organization to achi eve their goal of shared value.Codes of EthicsIt has been stressed that the actions of those in positions of leadership helps to give ethical behavior in employees. Although this is true, actions are not the only resource that should be used to give notice (of) managements expectations of proper ethical behavior. Racelis (2010) places emphasis on the fact that individuals are more likely to feel like a zippy part of an organization and will more strongly associate themselves with the mission of the company if the organizations shared perceptions and values are clearly defined. Often times to accomplish this objective, organizations will develop a corporate code of ethics or code of conduct. Blodgett (2012) explains that corporate ethics codes are self-selected statements of laws and ethics that communicate the values and expressions of a corporation.Many corporate ethics codes incorporate the universal business ethical values of honesty, integrity, responsibility, fairness and tr ust but they also may contain legal conformance statements to address general business concerns (Blodgett, 2012). It has been proposed by Blodgett (2012) that integrating general laws and procedures into a corporate code of ethics will help businesses see the ethical value in obeying laws and also help them understand that they have a broader responsibility than just strictly following legal laws. Overall, Noriega and Drew (2013) replicate that ethical codes of conduct are unified by members of senior management and should seek to clarify company expectations, assist employees in the decision-making process and foster appropriate ethical behavior.Programs and Other Policies to Enforce Ethical appearanceIn addition to creating a corporate code of ethics and communicating them to all employees within the organization, managers must also find ways to promote, teach, and enforce these ethical principles. Wickham and ODonahue (2012) suggest that in order to build an ethically intell igent organization, an organization must develop HRM strategies, polices and procedures that center on recruiting, developing, and retaining employees that embody cognitive, moral, social and emotional intelligence. A focus need to be put on learning how to develop and retain ethically motivated employees.Trapp (2011) shares that organizations could help endure ethical behavior through various business ethics programs such as workshops and e-training. A study by Trapp (2011) revealed that employees were more prostrate to embrace ethical standards when they were given the luck to openly voice their concerns and address the ethical grey areas they may encounter. Organizations can offer open forums or have ethical help hotlines where employees can openly communicate with others when they are faced with ethical dilemmas or areas of grey.Benefits of Ethical OrganizationsAlthough many businesses are ghost the push from their stakeholders to run their business on ethically sound princ iples, ethical business have seen many advantages and benefits as a result of instituting ethical behavior. Some of these benefits may include increased employee satisfaction and productivity, increased and sustainable profitability, improved social status, and customer/shareholder loyalty and appreciation (Wickham & ODonohue, 2012).According to Morrison and Mujtaba (2010), companies that follow unethical practices and are managed by unethical leaders diminish and destroy shareholder value due to the high cost associated with unethical actions such as fines and penalties, audit be and costs associated with loss of customers and reputation whereas, leaders that operate highly ethical corporations are able to increase shareholder. A positive correlation has been found between a firms investment in CSR and an increase in shareholder wealth (Morrison & Mujtaba, 2010).Finally, not only did the collapse of many prominent business due to unethical behavior result in a loss of credi bility between stakeholders and businesses, it also resulted in governmental mental disorder and the passage of laws such as the Sarbanes-Oxley perform of 2002 (SOX). He and Ho (2010) explained that this law introduced significant reform in the corporate governance, accounting, auditing, and reportage environment of nationally traded firms (p. 624).Compliance with SOX has proven costly for many organizations. He and Ho (2010) believe that organizations led by ethical leaders who institute proper ethical standards and practices do not need to invest in expensive monitoring programs because they could fulfil governmental regulations in a more efficient manner with minimal monitoring.Conclusion and RecommendationsOrganizations continue to be confronted with increased ethical challenges as leaders are continually tempted to exchange ethical behavior for increased money and power. Individuals in society continue to be appalled by the number of large and powerful corporations that have collapsed and go due to corporate fraud and scandal. This has led many stakeholders to become skeptical of business operations, leading them to demand an incorporation of ethics into every day business practices. Corporations wishing to satisfy this new expectation and ascertain the confidence and trust of not only external stakeholders but if their own employees must seek to find ways to implement business ethics within their organizational culture.Ethics is a complex construct to interpret and understand. Each individual has his/her own opinion regarding what constitutes good ethical behavior. There is no single definition for ethics, although most of the definitions provided by scholars revolve around common themes. Regardless of the debate about what real constitutes ethics, there is a strong consensus that an sure need for ethics exists inside organizations. For this reason, there is much focus placed on ethics and how it pertains to business throughout literary works . Scholars continue to research and conduct various studies regarding the best way to institute ethics within an organization.Much of this literature was reviewed and evaluated to identify common themes that existed among the works. The literature includes explanations of various studies that provide support showing it is possible for organizations to run the ethical expectations of the stakeholders by instituting strong ethical leadership within the organizations from the top down. These ethical leaders need to possess the important ethical qualities of honesty, integrity and trustworthiness and should practice the ethical behavior they profess, serving as exemplary role models for their followers. In addition, these ethical leaders are responsible for creating and enforcing formal policies and programs within their organization that place emphasis on the ethical values and standards the business desires to convey. These formal structures include implementing and communicating a corporate code of ethics for the organizations and instituting programs that will help educate and develop the employees in regards to the ethical standards and values.Organizations that are successfully able institute ethical leadership and use it to build a strong ethical foundation find that ethics ineluctably become a part of the organizational culture. Ethical companies create shared value between the business, shareholders and society through CSR initiatives. highly ethical organizations also see that their ethical practices benefit them through increased employee satisfaction and productivity, customer and shareholder appreciation, increased sustainable profitability, and social status.A detailed review of the literature on ethics reveals that there is still plenty of room for exploration on the topic of business ethics and particularly with the topic of ethical leadership. Since it appears that ethical leadership is the key to integrating ethical behavior within an organ ization, more studies should be conducted to determine the best approaches for leaders to do this. Leadership is all about vox populi and influence. It is recommended that more focus be placed on understanding the influence of strong ethical leadership within an organization and how this influence flows down the organizational structure. Once this flow of influence is understood, exploration is necessary to identify the best procedures for developing and sustaining strong influential leadership ethics within the organizational structure.ReferencesBenn, S., Todd, L. R., & Pendleton, J. (2010). Public relations leadership in corporate social responsibility. daybook of Business Ethics, 96(3), 403-423. insidehttp//dx.doi.org/10.1007/s10551-010-0474-5 Blodgett, M. 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