Business

Management
Assignment
Mkhize LC 201317512











Contents

Introduction.. 2
The Importance of Ethics to business sustainability..3
The Importance of Leadership in the success of an organisation.4
References..5




















Introduction
The purpose and aim of this assignment is to explain the importance of ethics and
values in business sustainability. Looking at how the micro environment of an
organisation that acts ethically will be against a one that is unethical. The
organisation and the impact of ethics and values on it will not only look at the micro
environment but also how the business would be affected in its market environment
and further what type of effect this would have on the macro environment. The paper
will further on go to discuss the importance of leadership in the success of business
organisations. Different types of leaders will be discussed and their impacts on
organisation success will be investigated and discussed. Leadership traits and
behaviours will also be covered with the aim of trying to establish the type of leader
that business organisation would need in order to be successful. The impacts the
leadership styles and type of leader will have on the subordinates will also be
covered as the subordinates are an important part of working towards and ultimately
gaining organisation success as it will be their well-being that influences the direction
the organisation will go. The subordinates response to their leaders will also be
crucial as this is the make or break stage for a leader as an unwanted outcome will
make it very difficult for the organisation to succeed. The paper will lastly look at how
leadership and both ethics are interrelated and both need to be present in an
organisation in order for a business to succeed and then be able to sustain itself with
continuous success.













The importance of ethics and values in the sustainability of business organizations.
Do business organizations need to operate in an ethical manner in order to sustain
itself for the foreseeable future? Although this may sound and read like a rhetorical
question, in this day and age the answer to that question wouldnt be what one would
expect it to be, which is yes. With a lot of individuals especially individuals who are in
business organizations using unorthodox principles to get the job done not many
consider ethics to be an important factor which could result in their organizations
downfall if neglected. Ethics have lost their place in the business world as one of the
factors that drives a business to not only grow and progress but also remain a
credible business in business. The best example is the sub-prime loans given to
borrowers in the US in 2008 which brought down the economy of the US and also
badly affected the economy of the whole world (Ebrahim, 2008; Siddiqi, 2008).

Ethics can be defined as moral principles that govern or influence a persons
behaviour-Hornby. What business organizations should greatly focus on but not
forgetting ethics is business ethics. Business ethics can be defined as written or
unwritten codes of principles or values that govern decisions and actions within an
organisation (C Nieuwenhuizen, TFJ Oosthuizen, Business Management; a
contemporary compilation, Chapter 5, pg 93). Organizations need to focus on getting
all their employees from top management all the way low-level management and
even ground staff to fully practice, implement and adhere to all business ethics so
that all individuals in the organization will only know one way to take decisions and
act within the organization. That way would be the ethical way.

Ethics comes hand in hand values. Values can be defined as the context within
which an organisation or a societys norms are established and justified, Values are
attitudes towards things like truth, justice, honesty loyalty, etc.( C Nieuwenhuizen,
TFJ Oosthuizen, Business Management ;a contemporary compilation, Chapter 5,pg
95). Organizations have to realise that ethics and values are dependent on each
other and thus the sustainability of the organization is depending on both existing
within the organization. An organization that lacks business ethics cannot have much
values and such an organization will find it difficult to survive in the long run.

When observing business ethics companies need to come up with a code of ethics
that is relevant not only to their organisation but also the market(s) in which they
compete in. There is another party that has a huge role to play in the establishing of
organizations code of ethics. This party is the government. The government actually
has a bigger role to play in the establishing and implementation of code of ethics
than the organisations because the sustainability of these organisations is of
paramount importance to the economy and in-turn to the government. The best way
to implement business ethics is for the government to prepare a code of business
ethics (Abdul Lalil, Ferdous Azam, et al, October 2010). This is not saying that the
government would prepare this code of ethics independently without the input of
business organisations, no. The government would be requires to liaise with the
organisations and get their input into what this code of ethics should include. When
establishing the code of ethics business organisations and government would need
to take into account the factors that influence ethics. Factors which can be grouped
into three main categories, individual factors (values, personality, etc.),
organisational factors (management philosophy, etc.) and environmental factors
(competition, economic state, etc.). With all these taken into account the code of
principles would then be established and put in place ready to be implemented. Both
government and organisations would then have the responsibility to make sure that
all organization implements and operates by this code of principles.

By establishing, enforcing and continually applying the code of principles
organisations would ensure that they place themselves in a position where they
wouldnt have a problem or have to deal with certain ethical issues. With the
organisations being run in an ethical manner, the organisations wouldnt have to deal
with internal disruptions caused by quarrels or in-fighting because all employees
would know that they have to live by certain standards and observe certain values at
all times. The major ethical issue and one that has proven to be the downfall of many
organisations, like Enron, is corruption within the organisation. By always applying
the code of principles in all that is done the organisation would ensure that they
minimise the level of corruption that exists within the organisation. Minimising the
level of corruption the organisation would be ensuring that it can remain sustainable
and functional for more years to come. There would still be room for corruption in this
type of organisation in the form of spontaneous corruption but because this would be
a rare occurrence it would be easy to spot out and would result in the organisation
quickly taking charge of the situation before too harm is done. Other ethical issues
such as sexual harassment and plagiarism within the organisation would be unheard
of as all employees of the organisation would be easily able to distinguish between
wrong and right and quickly act in the appropriate manner.

Business organizations that are known to be very ethical in their conduct are known
to be credible companies and consumers and customers want to associate
themselves with these types of business organisations. This works in favour of the
business organisations as they are in a position to be able to attract and create a
larger customer base. This leads to the organisation profits increasing and it having
the finances to sustain itself. Furthermore competitors of the organisation would
respect the organisation and the way it is operated that it could result in partnerships
with other companies in the sharing of strategies, information etc. All this would
result in the organisation placing itself in a great position to further excel in the
environment it operates.

It is clear to see that business ethics and values are of paramount importance to the
sustainability of business organisations. What is also clear is that organisations
knowing about business ethics will not be merely enough to make it sustainable. The
organisations would have to continually and consistently apply the business ethics
code of principles into all that they do so that they position themselves to reap all the
rewards that come with being an ethical company. Organisations that dont observe
business ethics and choose to use unorthodox, unethical ways to operate for them
there is only one outcome and that is at some point the organisation will go into
disarray and wont be able to sustain itself thus it ceasing to exist.






The role leadership plays in the success of a business organisation.
Has there ever been a business organisation that has done exceptionally well within
the market it operates without a leader? Can an organisation ever grow without
leadership? Leadership is one of the four primary tasks of management. How
important is it really to the success and even the existence of a business
organisation?
Leadership is the ability of an individual to influence others so that they all work
towards a common goal. The importance of leadership is unquestionable more so
the importance of leadership in a business organisation. Leadership is arguably one
of the foundations for building a thriving organisation.
One of the reasons why leadership is of utmost importance within and to an
organisation is that leadership is effectively the direction the organisation is
ultimately taking although the direction is not always a positive one. Leaders need to
lead and influence all those following them, in a progressive manner so that the
organisation can be able to reap the rewards of their influence. The success of an
organisation does not only rely on leadership existing and being apparent in an
organisation, it also relies on the type of leader that is leading, the manner in which
the leader uses their power and the styles of leadership that the leader utilises to
lead the organisation. A leader has to exhibit certain traits and behaviours in order
to be successful and in turn help the organisation to succeed. It is of no doubt that
some traits are more important than others. A 2009 study conducted by IBM on a
group of CEOs states that the CEOs named the most important skill for leaders as
creativity. The success of the organisation hangs on the ability of its leadership to
be creative so that to drive it forward in the best direction not only in its present but
also preparing it for its future.
The influence which leaders in an organization have on their followers is what is
commonly known as power. The leader(s) possesses certain powers with which they
can use in order to achieve a desired result. For an organisation to be successful the
manner in which leaders exercise their powers is of great importance because if
power is used in a negative way the organisation might experience a decrease in
productivity thus impacting on its success. Leaders would in most cases have two
types of power at their disposal. Leaders will normally have positional power this is
power they have bestowed on them based on the position they hold in the
organisation. Personal power is the power a leader has based on them as the
individual. Within these two main powers that leaders possess there are sub-powers
which they can also exercise:
Positional Power:
Legitimate power
Information power
Connection power
Reward power
Coercive power
Personal Power:
Expert power
Reference power
What leadership of an organization should be able to realise is that if legitimate
power does not coincide with expert power, there may be negative effects on
productivity (Fred C. Lunenburg, 2012) the negative effects on productivity would
then have an effect on how successful the organisation is or ought to be. What
leadership then needs to do is to be able to strike a balance between the different
powers at their disposal, to use them effectively and in a manner that will benefit the
organisation and not themselves.
Leaders furthermore need to use the correct and most effective style of leadership
so that they can continually influence those that follow them so to ensure that they
are fully committed to achieving all objectives and goals that have been set before
them. There are different types of leadership styles that a leader can use to lead
although in todays, day and age no one set of leadership style will ever guarantee an
organisations success. A good leader has to be able to apply different leadership
styles depending on the current situation they find themselves facing. Leaders also
have to realise that people develop fastest when they feel responsible for their own
progress as stated by Nick Petrie (Future Trends in Leadership Development,
December 2011, pg. 6). So this means that in order for an organization to succeed
the leaders will have to promote self-leadership and shy away from leadership styles
that are dictatorial like autocratic leadership, initiating-structure leadership and
production centred leadership etc. By promoting self-leadership the leaders ensure
that they keep their subordinates highly motivated and galvanize them to perform at
their level best, performing their duties as best as they possibly can. This has a
positive effect on the productivity of the organisation and thus the success of the
organisation.
An example of a leader who has demonstrated the most decisive leadership traits
and further gone on to behave in a way not only befitting of a leader but also of a
manager is Alan Mulally, CEO of Ford Motors. Alan Mulally took over a company that
was punching below its weight and making huge losses annually. He stepped in and
immediately positioned himself as a visionary leader. A leader who sold his
subordinates his vision for the ailing company and how great of a turn around it
would be to get the company at its peak again. Mulally had to strike a balance
between being an autocratic leader and at the same time being democratic about the
way he led. He had to come in and steady the ship so he had to dictate how things
had to be done for the benefit of the company. After he had all things in place he
then had to now start allowing and promoting employee input into the way forward
and supervising less than what hed done before, this is where Mulally allowed his
sub-ordinates to lead themselves. A charismatic leader can ignite an entire
organization (Tosi, Misangyi &Fanelli, 2004). This is exactly what Alan Mulally was
able to do he displayed different types of leadership styles during different periods at
Ford and this contributed to the turn around and success of the organisation.
In order for leaders to successfully lead their subordinates and in turn the
organisation they need to realise that leadership is a management task that requires
other secondary tasks in order to be effectively carried out. The two most important
secondary tasks that leadership will require in order to be effective are
communication and motivation. Communication is a process that requires a sender
and receiver of a message. Motivation is the ability of an individual to influence
others towards a specific goal. With leaders communicating with their subordinates
effectively and always motivating them to achieve all the goals set before them an
organisation is bound to be successful because the subordinates would always be
production driven.
The importance of leadership cant be measured using any scale because it is clear
that leadership within an organisation is one of the driving forces of the organisation
and without it business organisations would do very little to nothing at all as the
organisations would be filled with individuals on their own missions trying to achieve
their own goals and there would be no co-ordination which would lead to absolutely
no positive outcome for the organisations.












References
1. Jalil A, Azam F et al, (October 2010), Implementation Mechanism of Ethics in
Business Organizations, Vol. 3, No. 4.
2. Lunenburg. FC, (November 2012), Power and Leadership: An Influence
Process, International Journal of Management, Vol. 15.
3. C Nieuwenhuizen, TFJ Oosthuizen,(2014), Business Management :a
contemporary compilation, Chapter 5,pg 93