Institutionalization of organizational ethics through transformational leadership

Abstract

Concerns regarding corporate ethics have grown steadily throughout the past decade. In order to remain competitive, many organizational leaders are faced with the challenge of creating an ethical environment within their organization. A model is presented showing the process and elements necessary for the institutionalization of organizational ethics. The transformational leadership style lends itself well to the creation of an ethical environment and is suggested as a means to facilitate the institutionalization of corporate ethics. Finally, the benefits of using transformational leadership are demonstrated through the components of a psychological contract, organizational commitment, and ethical culture to institutionalize organizational ethics.