Leadership Issues in the Banking Industry Term Paper

ethical issues in leadership traits that are prevalent in the corporate world. The paper goes on to discuss the solutions that are possible in event of unethical conduct.

LEADERSHIP ISSUES: BANKING INDUSTRY

Ethics can be defined as those steps that safeguard integrity of an individual or a society. The focus of this paper is however limited to ethics in organizations, belonging specifically to the banking industry.

Acting in accordance with ethics translates into accommodating moralistic behavior into one's conduct. Hence ethical conduct in businesses, though not very popular, plays an important role in formation of a healthy society. For instance the banking sector of any economy plays the key role in circulation of money and hence in maintenance of economy. Since it deals in supplying and receiving funds, it is highly important for it to be ethical in practices in order to safeguard the pool of funds (James J. Lynch. Banking & Finance: Managing the Moral Dimension. Woodhead Publishing Ltd., 1994). Due to this role in the economy, while working to achieve profitability, banks are under professional obligation to obey ethical principles of banking profession and organizational ethic. The most important area for ethical practices is utilizing the public funds in the manner that suits the client best and not just the bank. Apart from the interest of depositor, his rights should be safeguarded in order to ensure efficient functioning of the deposit and credit systems. In addition to the above, overall domestic economy, public benefit and interest and the environment should be taken into consideration before finalizing a transaction. Initiation and maintenance of moral compliance, however is only possible through the ability of leaders within the organization in setting a personal example of ethical conduct. Leaders set the tone and conjure up a vision in order to mould the conduct of people under them in an organization. A 1990 nation-wide survey declared that on a scale of A to D, standards of ethical practice and moral leadership of business leaders deserves at the most a C. grading. The survey also conveyed the fact that the low ethical conduct at the leadership level translated into a similar low ethical conduct at the worker level. If the leader at the top does not display ethical behavior, the staff below him begin to perform poorly, engage in petty theft or simply stay indifferent to the work environment by being absent from work. The significance of moral leadership can be judged by the fact as concluded by the survey; American workers are as ethical as their leaders, nothing more, and nothing less (James Patterson and Peter Kim. The Day America Told the Truth. New York: Prentice Hall Press, 1991)

Moral leadership is quite an extinct term in modern-day business environment. This is primarily due to the fact that business, to this day, maintain the rule of "survival of the fittest." In such an environment, it is easy for the leaders to forget about the moral implications of their decision in an effort to get ahead or get there first (Howard S. Schwartz. Narcissistic Process and Corporate Decay. New York: New York University Press, 1990). However as claimed…