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Ethical Leadership in the Digital Age: Balancing Profit with Corporate Social Responsibility
It is increasingly becoming clear that the future of business and the future of ushering meaningful change in a workspace rest in a leadership that is more ethical and is willing to go the extra mile to deliver results in a more holistic way. Ethical leadership is a buzzword that is taking the professional arena by storm. It is a phenomenon that has a plethora of benefits, such as lower turnover, higher productivity, improved employee retention, and more.
Moreover, ethical leadership also helps balance profit with corporate social responsibility (CSR). In today’s day and age of digital revolution, leadership premised on ethics, empathy, and compassion is no more an option, but a vital necessity for an organization to gain a unique footing amidst cut-throat competition.
What is Ethical Leadership?
In simple words, we can understand ethical leadership as a phenomenon wherein business leaders display appropriate conduct in tandem with recognized principles and values – both inside and outside the office. Ethical leadership entails demonstrating strong moral principles via words and actions. As ethical leaders set the example for the entire company and expect that their words and actions are respected and followed with the same convictions from their staff.
A recent survey reveals that 79 percent of the respondents agree that an organization would make better business decisions if the leaders followed the golden rule of treating others how they would want to be treated. The simplest way to achieve such a feat is by having moral leaders at the frontline.
Why Is Ethical Leadership Important in Today’s Digital Age: Top Six Reasons
Some of the reasons why ethical leadership is indispensable in today’s digital age are −
Better Brand Image
In today’s digital age, maintaining a moral and ethical brand image is more important than ever. Nowadays, as social media becomes the common man’s arsenal, leadership mistakes, especially regarding ethics, morals, and employee well-being, can cost a company everything. Therefore, by behaving and acting responsibly and ethically, the leadership of an organization can drastically bolster the overall brand image to onlookers.
Positive Workplace Culture
Leaders direct the culture of any workplace, and by choosing the ‘ethical’ route, it is possible to establish and condition a positive workspace culture. Walking the talk is where ethical leaders can devise a professional environment that inspires and motivates others to do better, both professionally and morally.
Enhanced Staff Morale
Ethical leadership entails leading, inspiring, encouraging, and making employees feel accountable and appreciated for their work. When such an environment is created, better business success becomes achievable, as employees are happier and more satisfied.
Improved Employee Retention
A workforce that is happier, more satisfied, and has a boosted morale is always easier to retain. As ethical leadership is all about forging trust with employees and getting trust and reliability in return, the staff is less threatened and less objectionable to the direction the enterprise takes. Thus, employee loyalty and, thereby, retention are the culmination.
Ethical leadership not only leads to employee loyalty but also to customer loyalty. In today’s digital age where the customer is aware of multiple nuances of a business’s operation, it is simply not enough for a brand to have good products. Consumers want their purchases to be ethically and morally sound. An enterprise that can display good ethical choices and decisions will, undoubtedly, benefit vis-à-vis customer acquisition and retention.
Last but not least, ethical leadership becomes imperative in today’s digital age because the prospect of receiving investment increases. When an enterprise is premised on clear moral and ethical ground, they exude confidence and attract investors easily.
Ethical Leadership and Corporate Social Responsibility: A Crisp Overview
Now that we know why ethical leadership is important in today’s digital era, let us understand its role in corporate social responsibility.
Ethical leadership sets the tone for productivity that helps the business to engage with the real-life concerns of its employees, customers, and stakeholders. Besides, it is also crucial for establishing trust, accountability, and confidence among stakeholders about the effective implementation of a project.
Corporate social responsibility and ethical leadership transcend the mere management of mundane tasks of an enterprise. Both concepts come together to create holistic corporate governance, which ensures that the company’s policies and practices are ethically sound.
A commitment to direct engagement with customers, employees, and stakeholders is the benchmark of an ethical business. The stakeholder party values consistency and clarity. Thus, an enterprise has to go the extra mile in relaying information to those who matter the most – the stakeholders. When an organization is premised on ethical leadership with an open-door policy, stakeholder engagement, and communication become hassle-free.
Ethical leaders are better at handling the risk management aspects of corporate social responsibility. Managing risks in CSR involves keeping the company’s reputation and fiscal well-being in check. Ethical practices, such as responsible accounting, dodging negative social media scrutiny, keeping the company and its leaders out of legal troubles, and honoring contracts, are simple and effective ways to promote a socially responsible enterprise and manage risk.
Differentiating between Leadership and Management
Last but not least, an important element of corporate social responsibility is creating leaders within the organization. While managers can be leaders; not all managers are leaders. Leadership is a commitment that transcends managing routine and daily duties. Leaders are expected to be accountable, ethical, respectful, and consistent. Dovetailing management skills amidst such morally-sound traits is important to create a hospitable climate of corporate social responsibility.
So, there we have it, a crisp overview of ethical leadership in today’s digital era, and its role in maintaining a balance between profits and corporate social responsibility.
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