An Example Of A Leader Who Displayed Poor

An Example Of A Leader Who Displayed Poor

Cassie: class, happy week 2! An example of a leader who displayed poor ethical behaviors was Kenneth Lay. Lay was the former CEO of Enron. Lay manipulated accounting documents to hide company losses and liabilities, which is a major ethical dilemma on its own. Aside from this, he was also charged with money laundering, bank fraud, insider trading, and more (Segal, 2022).

These compounded issues demonstrate the severity of Lay's ethical compass. Enron was having financial issues and needed an action plan to start recovering. Instead of reviewing the information and creating a plan to move forward, leadership decided to cover it up and continue to pursue other inappropriate actions. An example of ethical leadership was displayed by Johnson & Johnson during the well-known 'Chicago Tylenol poisonings'. I have read a lot about this case, because of the True Crime aspect and I find it fascinating.

In the early 1980's there was a killer on the loose tampering with Tylenol bottles and causing random deaths around the city. Although this was not directly Johnson and Johnson's fault, they took action and spoke up. The company moved forward with new safety measures to help protect their consumers and try to avoid these issues in the future. It is thought that the Tylenol brand recovered from this horrific incident because Johnson and Johnson's leadership took immediate action to address and solve the issues they could control (Cote, 2023). When comparing these two situations and leadership approaches, it is very clear to see which leaders strived to do the right thing and protect their company and consumers, and which did not.

Enron could have taken a different approach and been honest with the financial issues they were facing and the corruption that was taking place. Acknowledging is the first step to improvement. Once everything was clear, then action steps could have been decided to improve the situation. Johnson & Johnson did a great job of displaying their desire to be ethical and spoke up about an issue occurring that was not even directly their fault. They identified a way to increase consumer safety and try to avoid issues like this in the future.

It was a great show of leadership by the organization and really shows the beliefs of their company. Ensuring employees have a good understanding of the ethical expectations of their company is vital. Although most organizations have Ethics and Compliance training annually, it is important for leadership to demonstrate it, too. As cliché as it sounds, they need to 'walk the walk and not just talk the talk'. Employees need to see leadership practicing ethical decisions in their day-to-day to really see it as a priority.

Paper For Above instruction

Leadership ethics play a crucial role in shaping the reputation and sustainability of organizations. Examining contrasting examples of leadership behaviors—particularly those displaying poor ethics versus exemplary conduct—provides valuable insights into the foundational principles that guide responsible and trustworthy management. Two notable cases that exemplify these contrasting approaches are Kenneth Lay of Enron and the leadership of Johnson & Johnson during the Tylenol crisis. These cases reveal how ethical decisions originate, influence organizational culture, and impact stakeholder trust.

Kenneth Lay’s leadership at Enron epitomizes a failure in ethical judgment and accountability. Enron, once considered a powerhouse in the energy sector, collapsed due to widespread accounting fraud and corporate misconduct. Lay's manipulation of financial data to hide losses misled investors, creditors, and regulators, ultimately leading to the company's bankruptcy in 2001. The scandal reflected a systemic disregard for ethical standards, with leadership prioritizing personal and corporate gain over integrity and transparency. This case illustrates how unethical leadership can cause widespread harm, erode stakeholder trust, and result in legal repercussions. The Enron scandal also underscores the importance of ethical vigilance and the dangers of a corporate culture that neglects moral accountability (Sims & Brinkmann, 2003).

In stark contrast, Johnson & Johnson’s response to the 1980s Chicago Tylenol poisonings exemplifies proactive ethical leadership. When criminal tampering led to deaths associated with Tylenol capsules, the company immediately prioritized consumer safety over financial considerations. Johnson & Johnson swiftly issued a nationwide recall of the product, despite the significant financial loss, and launched new safety measures—including tamper-evident packaging—to prevent future incidents. Their transparent communication and decisive action demonstrated a commitment to consumer welfare and corporate responsibility (Kay, 2004). The company’s response not only minimized public health risks but also restored consumer confidence, illustrating how ethical leadership fosters long-term organizational resilience and reputation management (Valentine & Barnett, 2003). The Johnson & Johnson case exemplifies how transparent, responsible decision-making can serve as a foundation for ethical corporate culture.

Comparing these cases underscores how ethical leadership influences organizational outcomes. Enron's leadership demonstrated unethical conduct by concealing financial problems and engaging in fraudulent practices, which ultimately led to collapse and legal penalties. Conversely, Johnson & Johnson’s leadership embraced transparency, accountability, and consumer safety, allowing the company to recover from the crisis and reinforce its values. Ethical leadership involves not only making morally sound decisions but also demonstrating a commitment to transparency and accountability, thereby cultivating trust within and outside the organization (Brown & Treviño, 2006).

For organizations aiming to foster an ethical culture, leadership must embody and reinforce core ethical values consistently. This includes providing ethics and compliance training, establishing clear behavioral standards, and modeling moral behavior in everyday decision-making. Leaders serve as role models whose actions influence organizational norms and employee perceptions of what is acceptable (Ciulla, 2004). As the adage goes, leaders must 'walk the walk' to ensure their words about ethics translate into tangible behaviors. When employees observe their leaders practicing integrity and accountability, they are more likely to mirror these behaviors, creating a culture where ethics are embedded in the organizational fabric.

Furthermore, effective ethical leadership involves open communication and a willingness to confront ethical dilemmas honestly. Creating an environment where employees feel safe to voice concerns without fear of retaliation is vital for detecting and addressing ethical issues early (Kaptein, 2011). Ethical organizations also develop mechanisms such as ethics committees, whistleblower programs, and ongoing training initiatives to reinforce ethical standards. In this way, leadership practices profoundly influence organizational integrity and social responsibility.

In conclusion, the comparison between Kenneth Lay’s unethical conduct at Enron and Johnson & Johnson’s ethical crisis response underscores the pivotal role leadership plays in organizational ethics. Ethical leadership fosters trust, enhances reputation, and ensures organizational sustainability. To cultivate such a culture, leaders must exemplify ethical principles through consistent actions, transparent communication, and fostering an environment that prioritizes integrity and accountability. As organizations navigate complex ethical landscapes, the lessons from these contrasting cases serve as vital guides for responsible leadership that aligns with both moral standards and long-term success.

References

• Brown, M. E., & Treviño, L. K. (2006). Ethical leadership: A review and future directions. Leadership Quarterly, 17(6), 595-616.
• Ciulla, J. B. (2004). Ethics and leadership effectiveness. In J. B. Ciulla (Ed.), Ethics & Leadership. Praeger Publishers.
• Kaptein, M. (2011). Understanding unethical behavior: A moral decision-making framework. Journal of Business Ethics, 98(1), 105-123.
• Kay, J. (2004). Johnson & Johnson: The Tylenol crisis. Harvard Business Review.
• Sims, R. R., & Brinkmann, J. (2003). Enron ethics (or: Culture matters more than codes). Journal of Business Ethics, 45(3), 243-256.
• Valentine, S., & Barnett, T. (2003). Ethics training and employee decision-making: An integrative framework. Journal of Business Ethics, 45(3), 251-262.