Application of ethical leadership
western governors university
A. Effective powers
Surely establishment of ethical climate in an organization requires a lot of debate and deliberation. Currently it can be seen that the current climate of Paradigm Toys is that of coercive power. It can be seen from the fact that the employees are afraid of the loss of jobs if targets are not achieved and this in turn is affecting the quality of the product. Lately Paradigm is facing lot of issues on quality front. It is therefore necessary that current climate of coercive power be replaced with a culture of referent power.
Reference power comes from being trusted and respected. A formal definition of referent power in leadership is the ability of a leader to cultivate the respect and admiration of his followers. In other words referent power is leading by example.
There are no short cuts to implement referent power though in an organization as development of trust in management from employees is a long process and not an easy task. A change in management or management style together with leadership training would help implementation of referent power in Paradigm Toys. The essence of this power is not only it develops respect and trust in the leadership for employees but also empowers and instills confidence in their ability to make same decisions even when leaders are absent.
This will have a positive impact on the organization culture and surely quality of the product will improve. As said before it won’t be an easy process and surely in the short term targets may not be achieved as focus is achieving quality of the product.
B. Primary and Secondary Stakeholders
Primary stakeholders are those who directly benefit from business activity of Paradigm Toys. They are : Employees, management, leadership of the organization, customers who are children who enjoy the toys, parents of the children etc....