The tone at the top refers to the ethical behavior created by a company’s management. The management cannot prevent the effects of the tone they set the employees. Employees usually follow the lead as directed by the management. If the management directs the employees to act unethical, the employee will do. Several factors determine the tone at the top.

A major factor is good work ethics. With the developments occurring in this century, competition has hit the peak. The first priority of any management is to make profits. The shareholders want to see the company progressing and the management had to do anything to be on the top. This is the main reason there has been many instances of companies behaving unethically. The minute the management directs the employees to go against some ethics, it is hard to move away from that. Once a company start behaving unethically, it is hard for it to stop.

Communication is a very important aspect in any organization.  Leaders of any organization should communicate to the employees what is expected of them. When employees are not aware what they are expected to do, they assume what they are supposed to do. In such a case, things such as unethical behavior are likely to come up. In addition, leaders should lead by example in order to set a right tone.

Another factor is integrity. The leaders should maintain integrity at all times.  This will ensure that the employees follow suit. If the management introduced an integrity reward, the employees would maintain integrity. There should also be mechanisms to report cases of unethical behavior and any violations of regulations.

Response to Sara Kauffman

Hi Sara, great line of thought over there. I agree in this competitive market, senior managers and executives have a had time meeting company performance targets.  The leaders have to do all they can to meet the first priority of a company, which is to make the shareholders happy by achieving good results. In line with this, the leaders will from time try to manipulate the systems set to regulate them. A good example would be the accounting regulations. There have been cases of companies doctoring the accounting records to indicate that they have made profits while in real sense, they have made losses. To maintain a good tone at the top, managers should communicate effectively, lead by example and set the mechanisms for reporting violations within the organization. If the leaders behave unethically, the employees will follow suit-creating culture where ethic is not a priority to the management or the employees.

Response to LaKara Griffin

Hi LaKara, nice point of view on the topic, the tone set by the top management is very important in any company or organization. The leaders of a company must be careful in their work. This is because they are the role models to the employees. When the leaders decide to behave unethically or commit fraud, the employees will be inclined to act the same. Employees always perceive what the leaders do as the focus of the organization. Therefore, if the leaders commit fraud, employees will feel that non-fraudulent behavior is not a priority in the organization. Ethics is the main factors that dictate the tone at the top. With the competition happening in these developing times, companies are willing to go an extra mile to meet shareholders goals. This involves breaking a few rules and regulations. However, the leaders do not realize that by doing so, they are setting a bad climate in the company.

 
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