Ethical Characteristics of Innovation and Change

Ethical Characteristics of Innovation and Change

Within Corporate Leadership

Ethics has been defined as overall standards and norms of individuals that direct the behavior of groups, organizations, and individual participants (Bottoroff, 2007). As it relates to the organization, the concept of ethics must be rooted in the basic culture of the firm. As such, leadership plays an integral role in the ethical behavior of employees and of how the firm itself conducts business.

According to Nelson (2004), a culture of ethics should consist of two interwoven parts: “shared values based on ethical guidelines and practices and an infrastructure of ethical resources that decision makers can turn to when the guidelines are not enough”. For a company that strives to be innovative, it is often difficult to balance the desire to meet or surpass set goals and objectives with the need to remain ethically sound. Therefore, it is important that the CEO of the company set the tone for the rest of the firm.

Ethical challenges can impact any sized company. Enron, on the surface was looked upon as being the pinnacle of correct ethical behavior while at the same time, the top executives of the company were destroying stakeholder and shareholder value. Inner business circles reported that in its last months of operations, even the Enron employees displayed behavior that went against their own documented company culture (CEOEthics.com, 2007). Interestingly, Bottoroff (2007) suggests an important relationship where “change management requires ethics, and ethics requires change management”. Truly innovative companies and those that desire real change, require ethics to establish and cement desired results into the company culture.

Leadership for effective change requires that ethics and values must be prioritized. The firm should expect its employees to make decisions that reflect high ethical standards related to the business community in which it participates. Even in the case of industries that have traditionally been suspect such as auto dealerships, ethics must take priority over bottom-line goals. There are, however, many differing views and opinions related to what constitutes ethical behavior.

In addition to matching corporate goals with ethical decision-making, there are those decisions that leaders make on a day-to-day basis that impact the operation. Decisions that conflict with societal norms can cause low morale, decreased productivity, and increased turnover in organizations. For example, this writer observed the downfall of a senior members of management at Staples. The company requires an annual confidential assessment of strengths and opportunities, which offers all employees a chance to give feedback regarding supervision and company support. A “concerned” senior manager opted one day to hijack the credibility of the survey by opening and reading the feedback about herself from her employees. She discovered