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Understanding Ethical Culture, Ethical Climate, and Ethical Leadership

Question:

To What Extent Do Business Ethics Concepts Explain The "Systematic Cultural Issues" At SMRT? 

Ethical culture, ethical climate and ethical leadership are all interrelated with each other though has the different meaning altogether. Ethical culture can be understood as a system that reveals how an organization is managing its ethical values like dealing with projects, employee engagement and responsive approaches from leaders (Akdo?an, Arslan and Demirta? 2016). The ethical climate is a workplace environment which is built upon from a set of ethical values that also reveals the ethical culture in the company (Akdo?an, Arslan and Demirta? 2016). Ethical leadership means how the managers are taking up the responsibilities to attain an ethical culture and climate within an organization (Akdo?an, Arslan and Demirta? 2016). These concepts are being addressed in this study in reference to ethical practices in SMRT which is a case study organization. ‘SMRT’ is a public transport company which follows multi-modal transport systems in Singapore. The services offered through the public figure are comprised of buses, rail and taxis services (Smrt.com.sg 2018). This study is purposefully aimed at understanding the ethical organizational practices in context to the disruptions, flooding, lapses and fake work records at SMRT.

As opined by Lawton and Páez (2015), ethical leadership is of high regards in context to the formation of ethical culture and ethical climate at the organizational level. This means managerial positions at the different types of organizations do play important roles in facilitating a culture or a climate of ethical practices. The fact does indicate towards a fact; however, this requires a real understanding of ethical values to make it a more understandable fact to the readers. The fact highlighted by Lawton and Páez (2015) is understandable in the views supported from Shin et al. (2015) which states that managers are needed to be ethical in every organizational regard like managerial decisions, employee involvement, corporate social responsibility (CSR) and stakeholder management. The few discussions which have been covered to understand the ethical organizational practices can be summarized as the deliverance of values through leadership role-play of managers, employee commitment and the organizational environment.


The discussions have been conducted to understand the probable issues which are affecting the cultural values at SMRT. The probable issues are not those which were being highlighted in few newspaper articles. These are rather the core theory of business ethics which has probably done the real damage. However, the facts identified for floods and lapses do help to relate it to the business theory of ethics. As stated from Yazdani and Murad (2015), business ethics do not happen on its own; these are rather formed with collective efforts from the business leaders and cooperative hands of other stakeholders. The facts presented by Yazdani and Murad (2015) do very well indicate that there are some certain organizational based issues at SMRT. The issue is not just confined only to the managerial positions; it has rather gone to cover its employees as well. This is a real challenge to identify who is at the maximum faults. However, the theory of business ethics suggests that leaders have high involvement in inspiring ethical practices at the organizational level.

Exploring Ethical Organizational Practices in SMRT

The new CEO of SMRT, Mr. Kuek, has indicated the very same fact as suggested by a theoretical background of business ethics. Mr. Kuek has identified the few more critical issues at SMRT. According to the new CEO of SMRT, there are evidently structural, managerial, systematic and cultural issues which are needed to be addressed (SIM 2018). The CEO had further added that few employees have poor in performance and have struggled to perform to their potentials. Although there have been few notable changes like appointing a panel for technical advisory and recruiting more engineers & technicians since the flood has destroyed the normal activities, it still has a long way to go to mitigate the cultural flaws in the organization as felt by the new CEO (SIM 2018).   

As opined by Zehir et al. (2014), the role of leaders is crucial for leaving an impact on the workplace culture and the employee commitment to their jobs. The systematic cultural issues at SMRT is really confusing and probably nothing much can be done to it rather than being just skeptic to few guesses like managerial negligence to their responsibilities or a casual move from employees. As indicated form, the transport economist in Singapore, Dr. Walter Theseira, has urged SMRT to investigate whether organizational issues were the reasons behind the tunnel-flooding. In the opinion of Dr. Walter, it may be the case that employees had not wanted it deliberately to perform their works or is it the  management that has failed to design a robust system to respond to such crisis (Channel NewsAsia 2018).


The theoretical background on business ethics presented form Sekerka, Comer and Godwin (2014) do state that both managers and employees can be at faults for not having an ethical workplace climate. The fact does provide a clue that the flood incident must be put to the investigation in order to identify the actual faults at SMRT. The suggested action if being implemented may help to identify the problem zone. Hence, this will then be comparatively easier for Mr. Kuek to lead SMRT successfully to nullify the managerial and the staffing issues. At the moment, it is very difficult to conclude anything on that. A lot has been reported on different issues like employees had intentionally not shown interest in maintenance work, managers had lacked in producing a robust design and false records on maintenance works (Channel NewsAsia 2018). The outcomes of the inspection as suggested by Dr. Walter Theseira may help to get the one zone which is at maximum fault; however, the damage-repairing work will be challenging in either of the outcomes. The situation is understandable form the views of Bedi, Alpaslan and Green (2016) which state that organizational issues require a leadership approach to mitigate it effectively. A leadership approach helps to govern such actions through the exploration of a wide range of strategic approaches.

Challenges in Promoting Ethical Practices at SMRT

The complexity of cultural issues at SMRT can be understood from a various point of views presented by a few authors. In the opinion of Griffith, Zeni and Johnson (2015), leaders must have the capability to make ethical decisions, so that, it produces a positive impact on the different organizational sectors like workplace climate and culture. According to Chadegani and Jari (2016), corporate ethical culture is a real challenge to its leaders who are responsible for establishing the ethical culture and climate. Aziz et al. (2015) have found few factors like internal control system, integrity system and leadership practices accountable for an ethical practice in public sectors. The various views of different authors do state that ethical practice at the organizational level is challenging and needs utmost attention from leaders and the other stakeholders. If leaders are committed to their duties and also employees are, such thing like the tunnel-flood incident could have been avoided.

The various viewpoints of different authors Griffith, Zeni and Johnson (2015), Aziz et al. (2015) and Chadegani and Jari (2016) suggest the complexity of cultural issues at SMRT. The ethical organizational practices do have an involvement in the cultural issues at SMRT. This is also being believed by different authors. However, it is relatively challenging to identify the actual resource of the issue. The fact is also evident in the concerns of Mr. Kuek who also have two areas of doubts about employee’s commitment and leadership issue. According to Guerci et al. (2015), it is the responsibilities of organizational leaders that they incept motivational strategies to attract the employee’s participation. There are a few employees who require a real push in the form of motivational benefits from management. Such push may comprise of anything from being supportive to employees to creating a friendly working environment where they could feel free to explore a wide range of their expertise. This in other way is talking about the leadership approach from the organizational managers. An effective managerial action may certainly influence the work behavior of employees. 


In regards to the case study organization, the scenario is little different to what has been felt as necessary by several authors highlighted earlier in this study. The leadership role is not as influencing as it should be. Fake or false statements have been released to the media personnel. It was being said by the ex-CEO of SMRT that the company had adopted six core values which also include responsibility, excellence and integrity. According to the company’s officials, an advisory panel for the technical thing was also being formed. The management has also admitted an increment in the number of engineers and technicians that rose by 150% during the last four years. Reportedly, an operation center for maintenance was also being set up in 2015 to enhance the organizational capability to respond to disruptions (SIM 2018). Despite the changes as admitted by company's officials, SMRT has really struggled to mitigate the floods and the staff lapses. Moreover, managerial staffs and employees are both in the area of doubts.

Leadership Role in Mitigating Systematic Cultural Issues

The authors Huhtala et al. (2015) have probably provided a few steps towards the solution of cultural issues at SMRT. According to the authors Huhtala et al. (2015), there are close relations between managers, staffs and the organizational output. This means all factors are interlinked and are serving different purposes that are important for an improved organizational culture. If employees are committed to their roles and responsibilities, a potential outcome may then be expected from them. Such potential outcomes can be in forms like technological advancement, innovative thoughts and strategically proven involvement (Ullah et al. 2017). Leaders, on the other hand, are larger in the picture for their vast area of functionalities that range from supervising the works to create an ethical workplace environment. They are responsible for making innovative decisions to further the progress of organizational success. They are required to motivate employees who are less in moral values, so that, their candidature is also being utilized (Bedi, Alpaslan and Green 2016). It is necessary that leaders are strategically capable, so that, an ethical work environment could be created. An ethical workplace climate is essential to explore the core organizational values that are important for facilitating projects with less or probably no flaws. If organizational values are explored, there won’t be places for criticized activities. People criticize organizational leadership and the culture; however, if values are capably handled then there won’t be cases as such (Gunz and Thorne 2015).


Poor leadership at SMRT had been criticized for tunnel-flooding incident. They were also being criticized in 2011 when two massive breakdowns had hampered the North-South Line. The incident had also attracted a COI investigation from the government. Consequently, an inadequate maintenance and monitoring system was being identified as probable reasons behind the disruptions (SIM 2018). The issues are not being sorted out yet as the reasons behind the recent tunnel-flooding are same again. However, it is only this time that lot of emphasis is being given to finding the core reasons behind the incident. The need to identify the core reasons has provided some other aspects of ethical leadership, ethical climate and the ethical culture.

To conclude, it is now clear that ethical organizational practices like ethical leadership, ethical culture and the ethical climate could be the reasons for tunnel-flooding incident. Ethical organizational practices, as understood by different authors in this study, help to deliver the core organizational values which are vital for operational management. A poor showdown of managers in regards to leadership act may lead to serious destructions like incremented employee turnover and public criticisms. This can also be concluded that ethical organizational practices are better resources to judge the organizational credibility in regards to maximize performances in terms of profitability and ethicality as well. Nevertheless, organizations with the highest standard of ethicality do explore high values to its core features that further help it to attain a maximized position in the market. The highest level of ethicality can only be attained if it features an ethical work environment, ethical leadership and the ethical culture.

References:

Akdo?an, A.A., Arslan, A. and Demirta?, Ö., 2016. A strategic influence of corporate social responsibility on meaningful work and organizational identification, via perceptions of ethical leadership. Procedia-Social and Behavioral Sciences, 235, pp.259-268.

Aziz, M.A.A., Ab Rahman, H., Alam, M.M. and Said, J., 2015. Enhancement of the accountability of public sectors through integrity system, internal control system and leadership practices: A review study. Procedia Economics and Finance, 28, pp.163-169.

Bedi, A., Alpaslan, C.M. and Green, S., 2016. A meta-analytic review of ethical leadership outcomes and moderators. Journal of Business Ethics, 139(3), pp.517-536.

Chadegani, A.A. and Jari, A., 2016. Corporate ethical culture: Review of literature and introducing pp model. Procedia Economics and Finance, 36, pp.51-61.

Griffith, J.A., Zeni, T.A. and Johnson, G., 2015. Utilizing Emotions for Ethical Decision Making in Leadership. In International Business Ethics and Growth Opportunities (pp. 158-175). IGI Global.

Guerci, M., Radaelli, G., Siletti, E., Cirella, S. and Shani, A.R., 2015. The impact of human resource management practices and corporate sustainability on organizational ethical climates: An employee perspective. Journal of Business Ethics, 126(2), pp.325-342.

Gunz, S. and Thorne, L., 2015. Introduction to the Special Issue on Tone at the Top. Journal of Business Ethics, 126(1), pp.1-2.

Huhtala, M., Tolvanen, A., Mauno, S. and Feldt, T., 2015. The associations between ethical organizational culture, burnout, and engagement: A multilevel study. Journal of Business and Psychology, 30(2), pp.399-414.

Lawton, A. and Páez, I., 2015. Developing a framework for ethical leadership. Journal of Business Ethics, 130(3), pp.639-649.

Sekerka, L.E., Comer, D.R. and Godwin, L.N., 2014. Positive organizational ethics: Cultivating and sustaining moral performance. Journal of Business Ethics, 119(4), pp.435-444.

Shin, Y., Sung, S.Y., Choi, J.N. and Kim, M.S., 2015. Top management ethical leadership and firm performance: Mediating role of ethical and procedural justice climate. Journal of Business Ethics, 129(1), pp.43-57.

Smrt.com.sg. 2018. SMRT Corporation Ltd. [online] Available at: https://www.smrt.com.sg/ [Accessed 28 Feb. 2018].

Ullah, I., Rehman, K.U., Hameed, R.M. and Kayani, N.Z., 2017. Development of CSR through Ethical Leadership: Constructive Role of Ethical Culture and Intellectual Capital. Pakistan Journal of Commerce and Social Sciences, 11(3), pp.974-1001.

Yazdani, N. and Murad, H.S., 2015. Toward an ethical theory of organizing. Journal of Business Ethics, 127(2), pp.399-417.

Zehir, C., Müceldili, B., Altinda?, E., ?ehito?lu, Y. and Zehir, S., 2014. Charismatic leadership and organizational citizenship behavior: The mediating role of ethical climate. Social Behavior and Personality: an international journal, 42(8), pp.1365-1375.

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