20/01/2013 12:31

Ethical governance and organizational viability

Ethical governance and organizational viability

The term viability means that, potentially, the organization has what it takes to make it in a long way or to have a long-term survival. Ethical governance is not enough to guarantee the viability of the organization which is a complex machine with people, equipments, management, goods or services, community involvement; all these with the perspective to be useful to the community and the national economy while making a profit. The case of Ben & Jerry ice cream cited in Jennings and Happel (n.d.) research has shown that even a very ethical organization might have to deal with difficulties inherent to management style and openness to the powerful institutions as shareholders or no. The company was mostly community oriented with shares sold mainly to farmers and other community suppliers. However, the competition was very aggressive and the organization was several times in very difficult situations until it was sold.

Ethics set the guidelines to a more people and community oriented approach while the management should not take off the eyes on the productivity side. If ethical climate creates a better environment for employees and stakeholders to make investment decisions that will not harm the society, it does not guarantee that the company will make it on a long range with no real strategic planning to deliver products that can face competition and being recognized by the consumers as overstate the quality standards or at least meet the msin competitors' standards. Company such as GE and Apple have both reached a high ethical standard while creating a market nest that has stood on the ground of quality with on the top unreachable features. Without doubt, the kind of strategic planning and strategic leadership to guarantee the viability of the organization is the one that is guided by ethical conducts. This form of leadership is described in the article produced by Glenn Rowe and Mehdi Hossein Nejad (2009) in the columns of the Ivey Business Journal. They state that “while there are many different definitions of strategic leadership, we define it as the ability to influence others in your organization to voluntarily make day-to-day decisions that lead to the organization’s long-term growth and survival, and maintain its short-term financial health,” (Rowe & Nejad, 2009). Contrary to a toxic leader, a strategic leader is closer to a transformational leadership style that is focused, at the same time, on long term vision, day-to-day productivity, and maintain an ethical climate that inspires followers and stakeholders to be on the same page as the community well-being. This is the kind of leadership style that guaranties the organizational viability. This is exactly like driving a car. Keeping your eyes on the road while paying close attention to speed limit’ signs, other drivers’ moves, the gas control panel, the engine temperature gauge, and the car engine running sound.


Rowe, G., Nejad, M. H., (2009). Strategic leadership: Short-term stability and long-term viability. Ivey Business Journal. Retrieved on November 18, 2012 from http://www.iveybusinessjournal.com/topics/leadership/strategic-leadership-short-term-stability-and-long-term-viability#.UKl-KKCXOSo

Marianne M. Jennings M. M. & Happel S. (n.d. ). The Post-Enron Era for Stakeholder Theory: A New Look at Corporate Governance and the Coase Theorem. Mercer Law Review,(Vol.54). Retrieved on November 2012 from http://www2.law.mercer.edu/lawreview/getfile.cfm?file=54302.pdf






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