Ethical Leadership and Decision-Making

This assignment focuses on the critical analysis of business ethics, emphasizing the significance of ethical leadership in organizational settings. It delves into various theoretical perspectives, including deontology and relativism, and utilizes real-world examples, such as the NHS case study, to illustrate key concepts. The document also references relevant literature, providing a comprehensive overview of the topic.

Business Ethics

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
a. Brief report ..............................................................................................................................1
b. Implementation of ethical theories...........................................................................................4
PART 2............................................................................................................................................5
Factors that makes an ethical leader and reflection on the way in which ethical manager
manages business.........................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business ethics are referred to as moral guidelines which determines the manner in which
business activities are conducted. The moral guidelines are applicable to individuals and
businesses and assures that activities and tasks are conducted in an acceptable way. In other
words, it can be defined as the analysis of appropriate practices and policies of business that are
related to controversial issues such as bribery, corporate governance, discrimination, insider
trading etc. It guides the individuals to focus of the decisions that are taken by them are right or
wrong (Abend, 2014). This report takes into consideration the case study of NHS to understand
the importance of ethical thinking. This assignment covers various topics such as issues that are
taking place in NHS, their dimensions, role of business in society, benefit and impacts of good
and bad choices, the way in which stakeholders get affected. Apart from this, different types of
ethical theories, factors that make ethical leader and role of personal ethics, organisational values
and methods in guiding ethical manager to manage a business are also covered in this report.
PART 1
a. Brief report
A rule is being implemented by NHS for its staff members including doctors and
managers in which they have to record every gift and grants of more than £50. They are required
to record any winning and dining which is more than £25 and gifts more than £50. The main aim
of this policy is to reduce the negative consequences that are taking place due to conflict of
interest of doctors (Brenkert, 2016). All the subsidiaries of NHS are ordered to keep a register in
which potential conflicts of interest that are held by the staff members are going to be recorded.
There are various types of issues that are taking place in NHS these are as follows:
 Officials were found to be in the pay of drug firms: Doctors and managers in NHS
were found to be in the pay of drug suppliers. According to an article of ABPI the
members of the organisation that are involved in assessing of drugs were receiving a
higher amount which is up to £100000 per annum from pharmaceutical companies (Case
study of NHS, 2019). A new law is being implemented by NHS in which they are
required to declare all their incomes from private practice and they will be banned if they
accept gift more than £50. The ethical dimension for the issue is Utilitarian approach
which was formed in 19th century by two individuals, Jeremey Bentham and John Stuart
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Mill for the legislators to provide knowledge regarding the activities that are morally
right and wrong. Both of authors proposed that all the actions that are proposed by human
beings have a great balance of good and bad. This approach is one of the technical
method for ethics that guides to deal with problematic situations, put efforts to raise good
and decrease evil actions that are done. Utilitarian approach states that from two different
actions the most ethical will result in the appropriate balance of advantages over
disadvantages (Barry, 2016).
 Pretty depressing patchwork: The another issue which was identified from the report is
related to depressing work. The rules are imposed to resolve this issue and putting efforts
to reduce conflict of interest of doctors and managers of NHS. The dimension which is
related to this issue is The Right Approach. It is a part of philosophy of Immanuel Kant
and others who are concerned with the right of individuals for choosing actions according
to their field of interest. Human dignity is mainly focused by this dimension. Human
beings are not objects that can be manipulated, it is their right to select the actions on
their own will. It is mainly concerned with the rights of human beings in which they have
right to truth, privacy, not to be injured etc.
 Failing to meet expectations of patients: The doctors of NHS are establishing
connection with the drug suppliers who are offering them higher monetary gifts for
prescribing their medicines to the patients. They are receiving the medication on higher
price and getting disappointed because the drug prescribed is expensive that cheap
alternatives available in the market. The dimension of this approach is Virtue approach
which is a primitive technique to ethics. It is mainly concerned with attitudes, characters
and dispositions that converts an individual from unethical to ethical. This dimension
states that the action which is ethical, develops moral virtues and human beings and the
community where they live (Crane and Matten, 2016).
The reason for which this case is explored from the ethical perspective is that managers
and doctors in the institution are facing a conflict of interest. It is the one and only factor
which is resulting in the issues that are taking place in NHS. Medicines of such drug
suppliers are prescribed to the patients who were offering higher amount of gifts to them.
They were acting as the paid consultants of pharmaceutical companies. All the managers
and doctors are willing to gain money as a part of their personal interest but it was
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resulting issues such as unsatisfied patients because of the unethical behaviour which has
been portrayed by the doctors. It is explored as ethical question because the activities that
are performed by doctors and managers were totally unethical as they were keeping their
self-interest higher than the well-being of patients. They were not supposed to receive
gifts from pharmaceutical companies and act as their consultant.
Role of business in society: There is a vital role of NHS in the society as it is a part of
hospitality industry in which health related services are provided to the patients. The institution
wants people to recognise them as one of most ethical service provider for which service users
are paramount. NHS is responsible to help the people to improve their health and maintain their
well-being. It is also considered with the activities in which programs related to poverty
reduction are held. Another major role of the enterprise is to provide national leadership for
improvements of health and driving up the quality of care for the individuals (Davies, 2016).
Stakeholders and the way in which they get affected: There are two main types of
stakeholders, internal and external that are related to NHS. Patients and suppliers are considered
as external and trustees are treated as internal stakeholders. All the above described issues affects
all of them and the description for this is provided below:
 Service Users: All the individuals who receive health services from NHS are the service
users. They expect that they will receive medicines from the organisation on low prices
but due to the conflict of interest service users are not given due importance which affects
their health negatively (Weiss, 2014).
 Suppliers: As doctors get in touch with some of the suppliers who offer them great
benefits. It affects other suppliers of drugs because patients will not get aware of their
medicines whether they sold it on low or high price. It will also leave negative impact on
the relation of NHS and its suppliers (Wallace and Sheldon, 2015).
 Trustees: As patients get dissatisfied with the services of NHS so it will also affect
market image of institution and for all the activities of doctors and managers’ trustees
will be questioned. It will be considered as the actions that are taken by staff members are
taken under supervision of trustees.
Impact of ethical choices on companies: Ethical decision leaves impact on companies
from both side positive as well as negative. Google is considered as the highly ethical company
and its motive is Don't be evil. Ethical choices of the organisation leave positive impact on it.
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The enterprise has donated 7643250 pounds for its green program which has positively affected
it by establishing a good market image in the mind of customers and the legal parties. Bad
choices of the organisation or an employee leaves negative impact. Employee of Goldman Sachs
had used confidential regulatory information for the benefit of one client. Due to this action the
whole organisation was fined with 3821325 pounds (DesJardins and McCall, 2014).
Recommendation: It has been recommended to NHS that to deal with the complexity of
decision making that are taking place within the organisation the higher authority is required to
take strict action to resolve them. In future they are suggested to tighten the policies of taking
gifts and going out for dining so that issue of conflict of interest can be resolved appropriately.
b. Implementation of ethical theories
There are different types of ethical theories such as utilitarianism, deontology, virtue,
relativism etc. Two of them that can be applied in the case of NHS are described below:
Deontology: Immanuel Kant had developed ethical theory of deontology. It aims at the
consequences of the actions that are taken by individuals. According to it the human beings
should perform all their activities with obligation and responsibility. Morality is very important
in order to make sure that workers are behaving with others in ethical manner. This theory can be
implemented in the case of NHS because it can guide the doctors and managers to analyse the
consequences that may take place due to the conflict of interest. whether it is positive or
negative. It also facilitates in the process of distinguishing between right or wrong outcome of
the actions. With the help of deontology theory, the higher authority of NHS will be able to
provide information of universal moral laws such never lie, steal and cheat to the staff members.
It can result in ethical behaviour of them and resolution in conflict of interest. It is focused with
the following of set rules as uncertainty and subjectivity are ignored by it (Hoffman, Frederick
and Schwartz, 2014).
This theory can help to analyse that the actions that are taken by the doctors and
managers were not right because they were acting as the consultants of pharmaceutical
companies and focusing on their self-interest. Their unethical decision has resulted in unsatisfied
clients because they have to buy costly medications that are prescribed by doctors. What is
ethical and isn't can be determined with the help of it and then appropriate strategies can be
formulated to bring an ethical culture within the organisation. It is also beneficial for the
stakeholders such as patients, suppliers and trustees to make decisions as they can estimate the
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situations that may take place in future due to incorrect actions of doctors and conflict of interest.
If this theory is implemented by NHS, then the patients will be the winners and the suppliers will
be the losers. After implementation all the activities are going to be performed in ethical manner
which will not allow unethical behaviour of pharmaceutical companies. The patients will be the
winner because they will get the best medicines and losers will be suppliers as they will not be
able to engage with doctors in order to sell their drugs.
Relativism: According to this theory morality is related to the norms of culture of a
person. It also states that right or wrong outcome of an actions depends upon the moral norms of
society in which they are taken. Sometimes from there may be a conflict between two people for
one activity. One may say that it is morally correct but another person may not agree on this
concept. This theory can be implemented in the case of NHS because the according to doctors
the actions that are taken by them were not wrong but ethically they have performed wrong
activities. Sometimes this theory is rejected by the organisations because it creates conflicts
among morals of society (Jennings, 2014). As according to NHS the actions that are taken by the
doctors were not right as they kept their self-interest as a priority rather than looking for the
welfare of the people. In order to stop it the higher authority of NHS established rules against it
in which they mentioned that if staff members are receiving gifts more than £50 and does not
having proper record of it then they will be banned by the enterprise. All the doctors and
managers are required to record all of their dining and winning more than £25 and gifts more
than £50. If this theory is implemented, then doctors will be the winners and suppliers will be the
losers (Schwartz, 2017). After implementation staff of NHS will understand the difference
between wrong and right and they will not support the unethical behaviour. Suppliers will lose as
they will not be able to conduct any unethical activities.
Both the above described theories can be implemented in the case of NHS because they
relate to the condition of the organisation. These theories can guide managers and doctors to
distinguish between the right and wrong actions that are taken by them.
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PART 2
Factors that makes an ethical leader and reflection on the way in which ethical manager manages
business
It is very crucial for an organisation to initiate ethics at the top which would be helpful in
forming ethical decisions. There are some qualities which are possessed by an ethical leader such
as fair behaviour, honesty, respect to others, self-regulations etc. which persuades him to
accomplish what is “right” without being afraid of external factors. There are some certain
responsibilities and obligations are set for the leaders that are required to be fulfilled by them
(Qualities of an ethical leader. 2018). These are making all the expectations clear, treating all the
subordinates equally, setting impressive benchmark for the followers etc. The factors that makes
an ethical leader are as follows:
Respect others: It is one of the essential quality of an ethical leader to respect all the
subordinates and treat all of them equally so that productivity of the organisation can be
enhanced. While team is discussing on a specific topic then leader should listen views of
followers attentively and value their contribution in order to be generous to them. When
suggestions of them are considered then they feel respected and also try to put more efforts for
the betterment of enterprise (Frederickson and Rohr, 2015).
Honesty: This trait also makes ethical leaders because if they are honest and loyal to
subordinates then it assures that they are highly ethical. It is essential for them as it helps to gain
trust and loyalty of followers which is beneficial for whole team to keep confidential information
(Michaelson and et.al., 2014).
Concentration on team building: If leaders are concentrating on team building then it
also helps to make them ethical as they foster team spirit at work place. When strategies to
achieve goals are formulated then it is not for their own objectives but they form them to attain
the motives of group which helps to boost team morale and builds an effective unit.
No tolerance of ethical violence: Information regarding the wrong and rights things is
also provided by them to followers so that possibility of getting stuck in the problem can be
reduced. Whenever subordinates create aggression in unfavourable terms, ethical leaders tackle
the situation appropriately and take strict action so that such type of crisis won't occur on
recurring basis (Valentine, 2014).
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All the above described qualities makes an ethical leader and help them to manage team
effectively and achieve all the predetermined goals successfully. There is a positive relation
between ethical leadership and management. Under ethical leadership, the managers have higher
sense of trust and are more responsible in fulfilling assigned responsibility as leader treats its
followers in a moral and respectful manner.
However, there are some conditions, ethics and values which are major contributors to
the formation of an ethical organisation.
Managers of the business entities are responsible to manage all the operational and
executional activities with high ethical standards so that it can help to ignore such situations that
brings organisations in unethical conditions The primary cause of formation of an unethical
organisation is personalised power and narcissism help by the top management. The behaviour
and ideology results in formation of environment which is unstable and threatening to the
workers. The behaviour of leader directly influences followers as well they become susceptible
and does not conform with ethical standards (Pearson, 2017).
There are various types of conductions that bring forward an unethical organisation,
practices, organisational values and methods of compliance. These my personal interests, low
focus on human rights of subordinates, taking short cuts, hiding mistakes by lying, improper
behaviour with followers etc. Whenever put my interest first then it may lead the organisation to
become unethical because my behaviour will affect the whole company and also some of the
ethics get broken. For example, I does not follow the code of ethics and take short cuts as I am
try to ignore ramifications which is not good and lead the whole enterprise to be unethical. My
lower focus on employee rights can create the situation of dishonourable practices and affect the
engagement of staff members in job responsibilities.
As an ethical manage it is my responsibility to make sure that all the activities are performed
in appropriate manner so that the causes of unethical organisation, practices, organisational
values and methods of compliance can be identified and ignored. To make an organisation more
ethical there is a need to face complexity in making choices and help each other so that decisions
are formed in the right manner. Management can guide the workers into operating rightfully into
day to day tasks so that it embeds in their working system. The portraying of respect and not
allowing negative behaviour to rise is another way through which foundation of an ethical
organisation could be formed (Trevino and Nelson, 2016).
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CONCLUSION
From the above project report it has been concluded that business ethics are the set of
morals and norms that helps to build an ethical environment at work place. There are various
types of issues that may take place and affect organisations due to unethical environment. The
factors that may result in problematic situations for a company are conflict of interest, ignorance
of employment rights etc. If an entity is willing to overcome the consequences, then ethical
theories such as deontology and relativism can be implemented as both of them can help to
analyse difference between right and wrong situations. To operate all the business activities, the
leader and managers are required to be ethical for this purpose they should have specific qualities
such as honesty, team building etc.
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REFERENCES
Books and Journals:
Abend, G., 2014. The moral background: an inquiry into the history of business ethics (Vol. 60).
Princeton University Press.
Barry, N., 2016. Business ethics. Springer.
Brenkert, G. G., 2016. Business ethics and human rights: An overview. Business and Human
Rights Journal. 1(2). pp.277-306.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Davies, P. W., 2016. Current issues in business ethics. Routledge.
DesJardins, J. R. and McCall, J. J., 2014. Contemporary issues in business ethics. Cengage
Learning.
Frederickson, H. G. and Rohr, J. A., 2015. Ethics and public administration. Routledge.
Hoffman, W. M., Frederick, R. E. and Schwartz, M. S. eds., 2014. Business ethics: Readings and
cases in corporate morality. John Wiley & Sons.
Jennings, M. M., 2014. Business ethics: Case studies and selected readings. Cengage Learning.
Michaelson, C. and et.al., 2014. Meaningful work: Connecting business ethics and organization
studies. Journal of Business Ethics. 121(1). pp.77-90.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Schwartz, M. S., 2017. Business ethics: an ethical decision-making approach (Vol. 10). John
Wiley & Sons.
Trevino, L. K. and Nelson, K. A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Valentine, S. ed., 2014. Organizational ethics and stakeholder wellbeing in the business
environment. IAP.
Wallace, M. and Sheldon, N., 2015. Business research ethics: Participant observer
perspectives. Journal of Business Ethics. 128(2). pp.267-277.
Weiss, J. W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Online
Qualities of an ethical leader. 2018. [Online]. Available through:
<https://yscouts.com/10-ethical-leadership-characteristics/>
Case study of NHS. 2019. [Online]. Available through:
<https://www.telegraph.co.uk/news/2016/09/20/nhs-ban-on-staff-receiving-gifts-worth-
more-than-50-in-crackdown/>
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