Ethical Issues in Business: Toxic Leadership, Ethical Frameworks

This essay delves into the critical ethical issues prevalent in the business world, focusing on leadership styles, ethical dilemmas, and their impact on the banking, superannuation, and financial services industries. The analysis begins with an examination of the 'Toxic Leadership Triangle,' exploring how destructive leaders, vulnerable followers, and a conducive environment combine to create negative outcomes, including low performance and a toxic work environment. The essay then evaluates Kellerman's approach to defining bad leadership, highlighting the negative characteristics and behaviors of ineffective leaders. Rushworth Kidder's four ethical dilemmas—short-term vs. long-term goals, individual vs. community, loyalty vs. truth, and mercy vs. justice—are applied to the context of the financial sector. The essay further explores how Kidder’s Ethical Checkpoints framework can assist in addressing these dilemmas. Finally, the paper considers issues of trust in leadership, examining how a lack of trust can create a toxic environment and how it can impact the future of the sector. The essay concludes by referencing relevant academic sources to support its arguments.

Running head: ETHICAL ISSUES IN BUSINESS
ETHICAL ISSUES IN BUSINESS
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Application and/or relevance of the Toxic Triangle including the
justification for your assessment
A Toxic leadership triangle includes the three aspects of the management which are the
leaders who are destructive in their nature, the followers who are vulnerable and the environment
which is very much conducive. All these together combine to form the destructive kind of a
result. It can, therefore, be said that if the leader practices toxic kind of leadership then their
workers tend to become very much unhappy with the organization in which they work this will
ultimately lead to the low performance (Mehta and Maheshwari 2014).This will ultimately create
a toxic kind of environment where the workers, as well as the leaders, will be toxic and less
productive for the organization. Similarly, if a leader who has positivity in his nature will step
inside the toxic environment, he or she will turn into a toxic leader in itself. The role of the
leader is the most important factor, the leader here is most important for creating a toxic kind of
an environment. The creation of a good environment totally depends upon the leader. If the
leader has any sort of unethical kind of behavior towards his employees then the employees are
also going to present a similar kind of behavior. On the other hand, if the workers see that the
leaders are not capable of the work, then they tend to have a certain form of disrespect for the
leader. This ultimately leads to the undermining of the leader as well as of the structure of the
organization. The toxic leaders are also responsible for the inability of the workers to think
critically as well as effectively. The toxic environment which is the second point of the toxic
triangle is often the result of the toxic leaders. When toxic attitudes that remained unaddressed
creates a toxic kind of an environment.

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Consideration and relevance of Kellerman’s approach to defining bad
leadership
According to Kellerman, leadership is an art. However, in the present context, only the
positive aspects of the leader are being focused on. The negative aspects of the bad leaders are
being totally ignored for which the changes are not being modified. Therefore, it is very
important to focus on the negative leaders as well as ultimately, in the end, they are the leaders
who lead the company and which can bring about both positive and negative effects in the team
or the organization (Solas 2016). Another point for which she argues is that possession of certain
characteristics makes an individual a bad leader and because of his or her position, he or she is
being followed. on the other hand, she continues by saying that the bad leaders are the ones who
are very much ineffective in bringing about necessary changes. Apart from this, she also believes
that the bad leaders are the ones who are unethical that are they fail to differentiate between the
good and the bad (Schyns and Schilling 2013).The leaders who are rigid and fail to make any
sort of innovations are considered to be a bad leader by her. The leader who is considered to be
liars and cheaters are also considered to be an unethically bad leader. It is under the guidance of
such leadership that the organization/company or a team tends to suffer.
The application of Kidder’s four ethical dilemmas and how some or all
of these may relate to describing the ethical dilemmas faced by leadership
within the banking, superannuation and financial services industry
The businessmen belonging to the banking, superannuation and even in the financial
service industry often find themselves in the middle of an argument. However, conducting the
right decision is always not an easy task for a leader in an organization. Rushworth Kidder who

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is the founder of the institute of global Ethics identifies four different types of ethical dilemmas
which are the short term vs the long term goals, individual vs the community, loyalty vs the truth
and lastly the mercy vs the justice (Indradevi 2016). It can be said that the short term, as well as
the long term goals, are both beneficial for the organization but changing the short term goal into
the long term goal for the enhanced success of the company is very much important. However,
there are times where the shorter goals of the company are taken into consideration first because
in order to boost the moral support of the organization. The immediate results of the organization
can also result in the alterations of the price of the investors towards the company or an
organization (Rosenbach 2018). In the workplace, there are people with different cultures and
with various differences in the religion as well. In a workplace, there are people belonging to
different genders as well. Hence, it is very natural to have different opinions and choices.
However, conflicting demands need to be balanced. The employment equality act is meant to
create a balance among all the employees (Hadadian and Zarei 2016). There may be a situation
where the truth and honesty may be on one hand and loyalty can be on the other hand. In the
first phase, it cannot be considered to be an ethical dilemma because honesty is considered by
many people as an ethical dilemma. However, it becomes very much difficult when the bond
with other people is very much stronger. There may be situations where justice tends to
contradict with mercy. In such situations, the labor law acts as a guide to the justice side of the
decision. However, the organizations that are related to banking, superannuation and the
financial service industry, the leader while making the decisions must not involve the
stakeholders as interpreting the situation in a different way can actually take place.

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Describing how Kidder’s Ethical Checkpoints framework would assist this
sector in addressing the ethical dilemmas faced including reasons for your
assessment
As per the Kidder’s ethical checkpoint framework, certain steps are to be followed
for addressing the ethical dilemmas that are being faced. Firstly, it is very
important to understand and even analyze the problem so that the issue can be
resolved. In order to analyze the problem, it is very important to uncover the facts
and even involve the parties who are being affected. However, it is also very
important to identify the diverse perspectives as well as ask the most difficult
questions related to the problem concerned in order to analyze the problem, the
second step is to examine various ethical standards that are applicable. The
examination must be conducted between the right versus right values in order to
uncover the values which are being shared. In such a situation it is very important
to work on the imaginative as well as on the creative solutions that tend to
implement various ethical standards. The third step is to examine the moral
motivations concerning potential decisions. In such a situation it is important to
identify and even work through the interest which is contradicting. The fourth step
is to make and even implement a decision it is very important to inspire the
implementation of a decision that tends to have a positive impact on the parties
which are affected. The last step that must be followed is that the leader must

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reflect on the result of the decision. In such a situation, it is very much important to
understand the effect that the outcome has on the others. It is also very much
important to learn from the mistakes in order to make modifications and gain
success in the upcoming future. Kidder’s ethical checkpoint framework must be
followed in order to address to the various ethical issues.
Consider issues of trust in leadership and what may be the implications for
this sector into the future
A leader is the main head of the organization who takes the organization into the path of
success or to its destruction. The leader helps the company to achieve the goals of the company
in the long run. However, it is very important for the employees in the organization to trust its
leaders as well. However, if the leader tends to lack courage and does not stand for what is right
then it becomes very much difficult for the employees to have thrust upon him (Ciulla, 2017)
The employees tend to think the leaders as deceitful and forged when they are too much involved
in the matter of politics (Rosenbach 2018) On the other hand, if the leader is just interested in
himself and not in the growth and progress of the others then the employees tend to lack trust
upon the others. Additionally, if there are negative rumors about the leader, the employees tend
to have less amount of trust in the employees. The lack of trust of the employees on the leader
can create a toxic kind of environment and even a low performance from the employees (Mineo
2014). On the other hand, if the employees tend to have trust up in the leader, it will be
motivating the employees to the right path of success. Even if the organization is going through
some difficulty, the trust of the employees on the leaders will help the employees in the
organization or the company to get highly motivated and influenced (Kenney 2017).

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References
Ciulla, J.B., 2017. Trust and the future of leadership. The Blackwell guide to business ethics,
pp.334-351.
Hadadian, Z. and Zarei, J., 2016. Relationship between toxic leadership and job stress of
knowledge workers. Studies in Business and Economics, 11(3), pp.84-89.
Indradevi, R., 2016. Toxic leadership over the years–a review. Purushartha: A Journal of
Management Ethics and Spirituality, 9(1).
Kenney, T.R., 2017. TEACHING ETHICS IN A LEADERSHIP DEVELOPMENT
PROGRAM. ASBBS Proceedings, 24(1), p.362.
Mehta, S. and Maheshwari, G.C., 2014. Toxic leadership: Tracing the destructive
trail. International Journal of Management, 5(10), pp.18-24.
Mineo, D.L., 2014. The Importance of Trust in Leadership. Research Management
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Rosenbach, W.E., 2018. Contemporary issues in leadership. Routledge.
Scheirton, Linda. "Leadership and Applied Ethics (ILD 802)." (2013).
Schyns, B. and Schilling, J., 2013. How bad are the effects of bad leaders? A meta-analysis of
destructive leadership and its outcomes. The Leadership Quarterly, 24(1), pp.138-158.
Solas, J., 2016. The banality of bad leadership and followership. Society and Business Review.