Introduction
All organizations and enterprise, both profile and profit conducts their business via respect and involvement for those who work in them to attain superior results. This is achieved through involvement of good leadership. According to Uju (2013), leadership is the vision creation concerning a defined future state that seeks to entangle all organizational setting membership, with an influence that is necessary to the achievement of organization objectives. Leadership is defined as a process in which an individual influences others to attain an objective and guides the organization in a manner that makes it more coherent and cohesive. Corporate governance on the other hand refers to a manner, fact and act of controlling, directing and ruling the affairs of an organization, company, city or a country. It covers the association among different participants in establishing the performance and direction of corporations. According to Carcello (2009) the corporate governance process key players are stakeholders, management, and the board of directors. Shareholders are the corporation owners and expect to have good returns from their investment and commensurate with the investment risk. Good governance is also associated with financial reporting, and thus, the external auditor plays an essential role in the function of governance. This paper evaluates the impact of organization leadership on effective organization governance.
Impact of Leadership
An organization is comprised of different sectors and departments that involve individuals of different professions and abilities. Their work and performance are them pieced together to evaluate the overall performance of an...
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Leaders who treat their employees with fairness, honesty, and provide frequent, accurate information are seen as more effective. According to Robbins and Judge (2014), “trust is a primary attribute associated with leadership and followers who trust a leader are confident their rights and interest will not be abused” (p.193). The old General Motor Corporation had eleven different CEO’s from 1923 until 2009 each with their own unique leadership style, which directed employees toward the organization goals. Unfortunately, many of the top level managers under the CEO’s had the tendency of filtering out information that did not match up with their pre-conceived notions about a particular issue and they lacked upward communication. One consumer goal of General Motors was to build trust in the company so people would be repeat customers, but building trust between employees and establishing an ethical culture was not a top priority of the organization. Goal directed leadership alone is important, but differs from a structure of leadership based on ethics. It is important to note, that effective leadership may not be the same as leadership founded on ethical principles. Business competence must exist, along with personal leadership accountability in ethical decisions. Within the General Motors organization, ethics and leadership did not interconnect; there were misalignment between the
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For a company to be successful ethically, it must go beyond the notion of simple legal compliance and adopt a values-based organizational culture. A corporate code of ethics can be a very valuable and integral part of a company’s culture but I believe that it is not strong enough to stand alone. Thought and care must go into constructing the code of ethics and the implementation of it. Companies need to infuse ethics and integrity throughout their corporate culture as well as into their definition of success. To be successfully ethical, companies must go beyond the notion of simple legal compliance and adopt a values-based organizational culture.
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In today’s global society, a Code of Ethics policy is used to label established, acceptable behaviors among that industry’s business associates, potential investors, and the corporation’s executive officers and employees, and most important, the consumer (Ethics Resource Center, 2003). In an attempt to promote an increased efficiency and productivity potential level, among employees and prospective clients, a corporation’s standard Code of Ethics should guide its members toward a more in-depth examination of their personal moral activity, and how these actions affect the people or acquaintances they encounter. A company should utilize this strategy as a model for the professional behaviors and responsibilities of its constituents, and proves the occupational advancement of that business. Ethics are important in every level of a corporation, but specifically in the day-to-day actions of its members, and the image the company broadcasts to its associates is fundamental in building a stable business foundation. These pledges are a vital communication tool used to covey the firm’s standards for business operations, and predominantly, its relationships with the surrounding communities (Ethics Resource Center, 2003).
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Ethical behavior cannot be successfully shaped and maintained in isolation. Therefore, the internal controls characterized by individual attributes must be usually consistent with organizational structure, organizational culture and societal expectations. These four components are key elements for designing an environment supportive of theses ethical conducts (Cooper, 2012 pg. 164).
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Organizations are constantly tested with various moral and ethical problems and dilemmas. Organizational leaders are the key to establishing an ethical climate in the workplace. By understanding and improving their own moral reasoning, and the biases that affect moral judgment, they enable themselves to make better decisions. This has a catalytic effect that positively increases organizational climate, ultimately improving all organizational behavior.
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Leadership is one of the most important facets in organizations. In most cases, leaders act with respect to organizational culture as well as the codes of conduct that determine the manner in which leaders relate with subordinates. Leadership entails the use of effective communication skills to get activities done in the workplace and to ensure that employees shelve their individual interests for the sake of their organizations’ shared targets. It is the role of leaders to ensure that consumers attain high quality products and services by making certain that members of their firms’ workforce are fully motivated to work effectively and utilize resources in an efficient manner (Bass, 22). With the increasingly sophisticated nature of the corporate world, leadership should not be based solely on the desire to control and coordinate affairs within the workplace, but leaders should also exhibit positive examples and continually monitor the changing trends in corporate governance to initiate the most relevant guidelines. Competitiveness can only be attained when leaders are in a position to set the right standards in their firms and coordinate affairs appropriately by understanding consumer and employee needs.
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