UNETHICAL LEADERSHIP: WHY THIS IS HARMFUL TO AN ORGANIZATION AND WHAT LEGAL RAMIFICATIONS CAN COME FROM IT (Essay Sample)

Unethical Leadership
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Unethical Leadership
It is a widely renowned fact that leaders are responsible for ethical guidance among their followers and are in charge of moral development among employees by designing ethical standards that guide the behavior of their followers and decision-making processes in organizational contexts CITATION Asn19 \l 1033 (Asnakew & Mekonnen, 2019). For organizational leaders, their actions, values, behavior, and ethics have a direct consequence on the attitudes and behaviors of their subject, and consequently, the organizational culture which can either be impacted positively or negatively CITATION Spa12 \l 1033 (Span, 2012). Unethical leadership represents one of the biggest flaws in managerial conduct within an organization. Research has established that the nonconformity of leaders results in negative outcomes for an organization and its employees CITATION Las15 \l 1033 (Lasakova & Remisova, 2015). By definition, unethical leadership represents conducts and choices made by an organization’s heads which are illegal and violate normative standards, and impose structure and processes that promote wrong conduct by their followers CITATION Mis19 \l 1033 (Misha & van Dijke, 2019). Often leaders accused of deviance to these guidelines deliberately make subjective decisions for political or financial benefits. Similarly, the practice occurs in different forms which may involve exploitation of employees, violation of professional guidelines, and employing communication strategies which are contrary to set guiding principles (Lasakova et al. 2016).
A majority of past literature focuses on the effects of unethical leadership in terms of negative employee outcomes. Limited studies focus on the consequence of such practices in an organizational context CITATION Asn19 \l 1033 (Asnakew & Mekonnen, 2019). Some of the impacts on employees include anxiety, low job satisfaction level, workplace frustrations, and loss of trust towards their leaders (Lasakova & Remisova, 2015). These kinds of outcomes, influencing employees’ levels of job satisfaction, that present serious implication to organizations’ overall strategy such as financial performance and other aspects of productivity CITATION Oma19 \l 1033 (Omah & Obikwe, 2019). Still, there are various outcomes in organizations that question unethical leadership but have received little attention in the literature. For instance, focus on corporate scandals which dominated the business environment in the 2000s have received little attention in contemporary research due to the numerous accounting regulations to limit their occurrences (Hail et al. 2018) Therefore, the current piece is advanced based on the need to develop a deeper understanding on the impacts of unethical leadership on an organizational background.
When members of an organization or top management team are caught up in ethical scandals, employees within such entities are likely to monitor closely the actions taken by the organizational leaders in response to such malpractices. Employees’ keen interest in the actions taken are is likely to inform their judgment regarding punishment for deviant behavior which presents critical implications on modeling an undesired organizational culture CITATION Asn19 \l 1033 (Asnakew & Mekonnen, 2019).
Elements of Unethical Leadership
The first antecedent of unethical leadership relates to sexual harassment. According to Hajase (2015), sexual harassment refers to unsolicited sexual advances, verbal or physical conduct that is sexist, and requests for sexual favors that may undermine workplace performance and create a hostile work environment. Robert et al. (2020) stated that the practice contravenes ethical standards of an organization by presenting adverse implications on its leaders’ integrity. Generally, sexual harassment occurs in two dimensions. The first, and the most prevalent, relate to someone in a position of power making sexual requests or advancements to employees lowly ranked in the managerial structure. The second facet occurs in the context of the workplace environment where the victim is intimidated by colleagues creating an uncomfortable working environment (Doss et al. 2014). Some of the most common forms of this harassment include indecent talking, teasing, and making jokes and remarks that are sexually intimidating. Other forms may involve deliberate touching, and coercing for dates or even an actual attempt to rape (Doss et al. 2014).
The first dimension of sexual harassment, described above, possesses a significant relationship to unethical leadership affecting the organization’s performance. Robert et al. (2020) infer that most victims of sexual harassment fall victim to predation due to fear of repercussions. Studies suggest that a majority of the targets are sole breadwinners for their families, thus, their economic vulnerability exposes them to such predations resulting from the fear of losing their jobs. Other influences that make these acts possible are the absence of complaint mechanisms at the workplace, unawareness of existing mechanisms to address the issues, and the fear of getting stigmatized among others. The other target group for sexual harassment is fresh graduates, especially young women who join various private entities as trainees. These groups form an easy target for their immediate supervisors with promises such as permanent job contracts and hikes in salaries and stipends (Doss et al. 2015).
Various aspects of sexual harassment have serious managerial implications. Such harassments relentlessly result in negative employee attitudes and work stresses which affect their performance and job productivity. Research by Merkin and Shah (2014) reviewed the negative impacts of these practices and established that sexual harassment resulted in low turnover intentions among Pakistani employees. Evidence from the same study also pointed out that low job satisfaction levels, resulting from the practice, led to the corresponding absenteeism which led to delayed production and unmet expectations at the workplace. Phillips (1993) also pointed to stress as an outcome of sexual harassment to be linked to low levels of job commitments, reduced productivity, and high incidences of withdrawal which present grave economic implications to an organization.
Considering the legal aspect of sexual harassment, The U.S. supreme court set precedence in 1986 ruling in the case of Meritor Savings Bank vs. Vinson. The court upheld that the Civil Rights Act protects employees against discrimination by their employers in various aspects of compensation and sexual harassment which were perceived to create hostilities and abusive work environments. Therefore, an organization through their top-level personnel who go against these conventions could cause serious repercussions to their entities through lawsuits that may either have financial impacts or negatively impact a company’s reputation which may lead to reduced sales or loss of resources invested to restore an entity’s dented corporate image CITATION Phi93 \l 1033 (Phillips, 1993).
The second aspect of unethical leadership relates to self-centered leaders. In this section, the author presents two case studies that pertain to unbiased decisions made by corporate leaders for financial gains. In the advent of the new Millenium, numerous corporate scandals rocked the business environment which saw the downfall of some of the world’s biggest corporations. Enron, Tyco, and HealthSouth Corporations became some of the major casualties. The downfall of these corporates put a spotlight on the ethical conduct of their leaders who were the main culprits in these scandals.
Enron Inc., one of the affected companies, filed for bankruptcy in 2002 which was the biggest in history of the United States, leading to the collapse of a company that had an asset base of $60 billion and hundreds of employees CITATION Enr \l 1033 (Bondarenko, 2016). The company, on realizing that they had accumulated critical debt levels that could affect their credit rations, engaged in the manipulations of their financial statements to pass various scores but the Moody’s and Standard & Poor rating agencies to boost investor confidence. The manipulations of financial figures were done by the financial officer, in full awareness of the top executive, that despite improving investors’ confidence, increased the organizations’ debt burden CITATION Tho02 \l 1033 (Thomas, 2002)..
Before the collapse, investigations by the United States Securities and Exchange Commission revealed enormous financial fraud perpetrated by the organizations’ top-level managers received millions in salaries, bonuses, loan advances and long-term incentives based on the exaggerated financial performance. The unethical practice by the organizations’ managers, to intentionally alter financial performance, had an enormous impact on the company’s stakeholders where 4,500 employees lost their jobs as a result of the scandal. The company’s shareholders and creditors also lost immensely when the share price fell from $90 face value to less than $1 in the year after the revelation of the scandal. The company’s creditors also lost immensely with many receiving less than a fifth of what they were owed in payback
In the same year, HealthSouth Corp. came under the scrutiny of the U.S Securities and Exchange Commission over similar allegations. The company’s Chief Executive Officer (CEO), Mr. Richard Scrus...