Task 2 – Paradigm Toys: Establishing an Ethical Climate
Application of Ethical Leadership
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Western Governor’s University – School of Business
Task 2 – Paradigm Toys: Establishing an Ethical Climate
A. Referent power will be the most effective in establishing an ethical climate at Paradigm Toys. Utilizing the informal nature of referent power and ethics modeling by the senior leadership and supervisory staff, an ethical climate will permeate the organization. The CEO is perceived as charismatic, likeable and accessible. He has assembled a senior leadership and supervisors who have similar personal attributes and a strong moral character. As the CEO continues to make himself available and publicly displays his personal values of strong ethical attitude and moral behavior, the staff will continue to respect and trust not only the CEO but also the team he has assembled to lead the organization.
B. Paradigm Toys has many stakeholders that have a vested interested in the viability of the company. Employees and resellers make up the primary stakeholders. Employees count on the company for income, and resellers expect Paradigm Toys to continue supplying them with product. Paradigms’ secondary stakeholders include the US Consumer Product Safety Commission and various consumer activist groups.
1. In order for the Board of Directors of Paradigm Toys to meet their corporate social responsibility to the primary and secondary stakeholders, they should develop 1) a code of ethics and 2) include a summary of the company’s social impact in its annual report. The code of ethics should include the company’s values, standards and mechanisms for reporting suspected ethical misconduct. In addition, the Board of Directors should also include a social impact summary related to product responsibility addressing any US Consumer Product Safety Commission recalls or recommendations and any changes implemented as a result of...