ABSTRACT
The study explored the role of ethical leadership in promoting ethical business practices of business owners at Nasugbu, Batangas. Phenomenological research design was employed in this study that involved five (5) participants using convenience sampling method.
Participants revealed that ethical leadership contributes to promoting ethical business practices through building good relationships, show good leadership and establishing good financial management. They also revealed that ethical leaders should exhibit behaviors such as having a broader understanding, not giving up easily, diligence, and being creative and critical thinkers. All of them stated that they experienced different challenges in implementing and sustaining ethical business practices, these challenges includes misunderstandings, insufficient knowledge about ethical practices, bankruptcy, lack of understanding, lots of hindrances or obstacle, the need to become stricter in business operations and family support.
Moreover, to increase employees' and manager's understanding about ethical business practices, business owners should host trainings and seminars. Leaders should continue on having good attitude, establish good relationship and empower employees about ethical practices concerns. And, also business owners should develop a collaborative intervention program and propose an action plan aimed at developing ethical leaderships among leaders, managers, and executives to be coordinated to proper authorities.
Keywords: Ethical leadership, Ethical business practice, Ethical behavior
INTRODUCTION
According to Bai et.al. (2019), team ethical leadership will foster an ethical climate within the team which will create a moral context that impacts employees’ behaviors. In both instances, employee voice behaviors will be enhanced through these mechanisms. Leaders are essential for employing and implementing the ethical practices in business. Knowing how to lead an organization plays a vital role in promoting ethical practices for the betterment of an organization as well as the employees.
Ethical leadership is as important as it has a positive effect on the employees work behaviors. Several studies indicate that ethical leadership has positive and significant relations with effectiveness of employees’ motivation, job satisfaction, performance and commitment to work.
While the benefits of ethical leadership are evident, organizations often face challenges in implementing and sustaining ethical practices. Moreover, being a leader with integrity entails not only acting morally but also establishing an example for others to follow. Leaders have the chance to encourage others to think about the kind of people they want to be as well as to act well mannered.
Over the years, the demand for ethical leaders who will serve as a role model to other employees has surged as globally continues shaping the business world. Ethical practices are one of the indicators that needs to apply in many situations especially when working with a large amount people.
In order to identify areas where leaders may be having difficulty and to be able to offer them help to improve their leadership, the researchers want to explore the role of ethical leadership in promoting ethical business practices.
By delving into this research topic, researchers aimed to contribute to the existing body of knowledge on ethical leadership and provide practical recommendations, specifically, policy manual for organizations seeking to enhance their ethical practices.
METHODOLOGY
This study used a Qualitative Approach using phenomenological research design. This type of approach aims to study the phenomenon or experiences of people. Also, it gives an idea on how individuals or a group of people react or experience phenomenon. A phenomenon is a rare occurrence or an experience of an individual that is not common. In this study, the researchers want to explore about the role of ethical leadership in promoting ethical business practice.
The sampling technique used by the researchers is convenience sampling.
The study was conducted in JV Grocery located at Brgy. Banilad, Nasugbu, Batangas, Aga Farmers Cooperative located at Brgy. Aga, Nasugbu, Batangas, Almiah RTW Shop located at Brgy. 10, Nasugbu, Batangas, Sunrise Sari Sari Store located at Centro Tumalim, Brgy. Tumalim, Nasugbu, Batangas and Samjune Grocery Store located at Brgy. Bilaran, Nasugbu, Batangas. Establishments were founded from year 1994 to present, there were twenty (20) employees in all.
RESULTS AND DISCUSSIONS
This chapter presents the data gathered, analysis and interpretation to answer the problem which the study aims to achieve.
Table 1: Contribution of Ethical Leadership to Overall Success of a Business
| R1 | Naniniwala ako na ang pagkakaroon ng mabuting pag uugali sa isang pamumuno ay malaking tulong sa pangkalahatang tagumpay ng isang negosyo dahil kailangan mong ipakita ang respeto sa bawat isa para magkaroon ng magandang samahan sa isang negosyo. (I believe that having a good attitude in a leadership is a big help in the overall success of a business because you have to show respect to each other to have a good relations with your colleagues and employees in a business.) |
| R2 | Naniniwala ako na ang etikal na pamumuno ay nakakatulong sa pangkahalatang tagumpay ng isang negosyo dahil ito ang nag papatunay na ang mga employees at ang business owner ng isang negosyo ay nag kakaisa. (I believe that ethical leadership contributes to the overall success of a business because it proves that the employees and the business owner of a business are united. ) |
| R3 | Naniniwala ako na ang ethical na pamumuno ay nakakatulong sa pang ka lahatan ng isang negosyo sa pamamagitan ng pag sisikap mo bilang isang negosyante. Sa ethical na pamumuno pinakikita din doon kung paano ka mag handle ng isang negosyo kung paano mo ito mapapalago kaya naniniwala ako na ang ethical na pamumuno ay siyang nakakatulong talaga sa ating negosyo. (I believe that ethical leadership contributes to the overall success of a business through your efforts as an entrepreneur. Ethical leadership also shows how you handle a business and how you can grow it, so I believe that ethical leadership is what really helps our business.) |
| R4 | Para sa akin, naniniwala ako na ang paggamit ng etikal na pamumuno ay nakakatulong sa pangkalahatang tagumpay ng isang negosyo una sa lahat dahil kapag ginamit natin ang mga pamamaraan na ito, ang ating negosyo ay magkakaroon ng magandang resulta at pag-unlad, nakakatulong ito sa pagpapatupad ng mga patakaran sa isang negosyo dahil sa etikal ang pamumuno ay may pagkakaisa na makatutulong sa pagpapalago ng isang negosyo. (For me, I believe that using ethical leadership helps the overall success of a business first of all because when we use these techniques, our business will have good results and progress, it helps in the implementation of rules in a business because in ethical leadership there is unity that can help us grow a business.) |
| R5 | Naniniwala ako na ang etikal na pamumuno ay malaki ang naitutulong sa bawat negosyo, kasi kung wala eto yung magpapakita sa moral ng isang tao, mula sa pagkilos, pananalita, pakikipag ugnayan, pakikisama. Minsan Pinapakita din kasi dito kung ano ba yung karakter nang isang tao na humahawak o nagpapatakbo ng negosyo. (I believe that ethical leadership greatly helps in every business, because without it, it shows a person's morals, from actions, speech, interaction, camaraderie. Sometimes it also shows what kind of character a person who handles or runs a business has.) |
Interpretation for Table 1
All the participants responses are about building good relation to the employees and having a good leadership. Table 1 shows the contribution of ethical leadership to overall success of a business. Three (3) directly said that having a good leadership is the key to success and the rest are having good relation and unities. Building good relations with colleagues and employees is crucial for a harmonious work environment. It fosters trust, respect, and open communication, which are fundamental for teamwork and collaboration. Unity between employees and business owners is also essential. It promotes a shared vision and goals, which can lead to increased productivity and better business outcomes.Good leadership plays a pivotal role in the success of a business. A good leader inspires, motivates, and guides their team towards achieving the business goals.
This was related to the study of Ashraf et.al (2023), stated that ethical leaders positively influence their subordinates to engage in their work. In addition, employees' trust in leader was noted to mediate the association between ethical leadership and employee work engagement. Finally, employees high in harmonious work passion are more likely to engage in their work when perceived their leaders’ ethical style.
Table 2: Leadership Style in Promoting Ethical Practices
| R1 | Mailalarawan ko ang aking istilo ng pamumuno bilang being the coolest person o isang tao na madaling lapitan pagdating sa mga problema, mapapersonal man o problema sa trabaho. ( I can describe my leadership style as being the coolest person or someone who is easy to approach when it comes to problems whether personal or work problems.) |
| R2 | Hindi ganon kaayos pero naiitaguyod ko naman ng mabuti at marangal ang pamumuno sa aming negosyo, lalo na pag nagkaroon ng problema ang negosyo namin o kaya naman ay ang mga empleyado. (It's not that good, but I support good and honorable leadership in our business, especially when our business or employees have problems.) |
| R3 | Ang istilo ko para maging matagumpay ang aking negosyo dapat alam mo yung pumapasok at lumalabas na pera para hindi masyado malugi pero hindi din natin maiiwasan minsan hindi pag kalugi kasi parte na yun ng isang negosyo minsan okay ang benta pero minsan hindi kaya ang nagiging paraan namin para mas lumago pa ito ay yung maayos na pag aalok sa mga customer, yung quality ng tinda namin at dapat sasamahan mo ng sipag. (My style is for my business to be successful you must know the money coming in and going out so that you don't lose too much but we also can't avoid it sometimes it's not a loss because that's part of a business sometimes the sales are okay but sometimes the it becomes our way to grow even more is the proper offering to customers, the quality of our merchandise and you must accompany it with diligence.) |
| R4 | Batay sa aking karanasan, ang mga istilong ginagawa ko pagdating sa pagtataguyod ng mga etikal na gawi sa loob ng isang organisasyon o negosyo ay ang bawat tao ay may iba't ibang istilo, at para sa akin, ang pakikisalamuha sa mga tauhan at iba pang mga kasama sa negosyo ay maaaring mapanatili nang maayos at pag-usapan kung may hindi pagkakaunawaan dahil kung walang pagkakaisa hindi mabubuo ang matagumpay na negosyo. (Based on my experience, the styles that I do when it comes to promoting ethical practices within an organization or business is that each person has a different style, and for me, getting along with staff and other business associates can be kept properly and discuss if there is a misunderstanding because without unity a successful business cannot be built.) |
| R5 | Sa pagpapatakbo ng aking pamumuno sa etikal na papamamaraan, may tinatawag tayong Sistema, yung sistema na yun ang susundin sa araw-araw mula sa oras ng pagpasok, pag oorganisa ng mga produkto at operasyon sa araw-araw. Ngayon, paano ba mapapatupad yun sa etikal na paraan?Maayos tayong makikipag ugnayan sa mga taong gagawa ng mga bagay na yun. At maayos din natin silang gagantimpalaan ng mga nararapat na kapalit ng trabaho nila, incentives, certificates, etc. na pwede nilang ikatuwa at para pag butihin pa nila ang pagtatrabaho. (In running my leadership in an ethical manner, we have what we call a System, that system is what we will follow daily from the time of entry, organizing products and daily operations. Now, how can that be implemented in an ethical way?We will properly interact with the people who will do those things.And we will also reward them properly with the appropriate return for their work, incentives, certificates, etc. that they can enjoy and to further improve their work.) |
Interpretation for Table 2
All the participants responses are about build good relation, show good leadership and established good financial management. Table 2 shows the leadership style in promoting ethical business practices. Two (2) stated that build good relation as it helps to earn trust form employees and colleagues. Two (2) highlighted that showing good leadership like being well honorably and giving awards such as rewards and incentives are one way to earn the trust of employees and one way to appreciate the hard work of the employees. Another participant emphasized that establishing good financial management helps to avoid bankruptcy of the business.
This was related to the study of Liu et.al (2023), ethical leadership had a significant positive influence on employees’ innovation behavior and interactional justice. At the same time, ethical leadership has a significant regulatory effect on the relationship between interactional justice and employees’ innovation behavior. The study also found that procedural justice had a significant positive influence on distributional justice and interactional justice.
Table 3: Important Attribute/Traits of an Effective Ethical Leader
| R1 | Ang pinakamahalagang katangian mayroon dapat ang isang leader ay mabuting puso, marunong umunawa dahil hindi bawat araw ay smooth ang magiging araw nyo kaya kailangan bilang isang leader, mahalaga na magkaroon ako ng malawak na pang unawa upang kung sakaling dumating yung problema sa amin ay matugunan agad namin. (The most important quality a leader must have is to have a good heart, know how to understand because not every day is going to be a smooth day, it is important that I have a broad understanding so that if a problem comes to us, we can deal with it immediately.) |
| R2 | Dapat ang isang leader ay hindi basta basta sumusuko, dahil magkakaroon tayo ng mga problema na kakaharapin sa ating negosyo, dapat din ang isang leader ay may kakayanang makiisa sa bawat empleyado. (A leader should not just give up, because we will have of the problems that will be faced in our business, a leader must also have the ability to unite with each employee.) |
| R3 | Ang katangian ko bilang isang business owners ay maging masipag sa negosyo para lumago. (My characteristic as a business owner is to be diligent in business to grow.) |
| R4 | Base sa aking karanasan, sa tingin ko ang katangian na dapat taglayin ng isang pinuno ay malawak na pang-unawa at pagdating sa mga tauhan at kasamahan sa trabaho, para sa akin ang mga tauhan ay malaking bagay sa pag-unlad ng isang negosyo dahil kung wala sila ay wala. Ako o ang aking negosyo ay hindi magiging matagumpay. (Based on my experience, I think the characteristic that a leader must have is a broad understanding and when it comes to staff and work colleagues, for me staff is a big thing for the development of a business because without them there is nothing. I or my business will not be successful.) |
| R5 | Pinakamahalagang Traits ng Leader is dapat magaling gumawa at mag isip ng mga posibilities.Posibilidad kung paano maeexcute ng maayos ang mga dapat gawin, para makuha yung goals. (The most important traits of a leader are to be good at creating and thinking of possibilities. Possibilities on how to properly execute the tasks at hand in order to achieve the goals.) |
Interpretation for Table 3
All of the participants responses are about understanding, not giving up easily, diligence and creative and critical thinker. Table 3 shows the important attributes/traits of an effective leader. Two (2) directly blurted out that the most important traits a leader should have is a wider and broader understanding to employees as it helps to build good relation with employees while one is about not giving up easily as it helps to build a positive atmosphere at workplace, another participant stated that diligence is one of the important traits as it helps to increase the productivity of the employees and last participant emphasized that creative and critical thinker is important as it enable to analyze and evaluate the problem and this helps to immediately solved the problem.
This was connected to the study of Angonga and Florah (2019), which they highlighted that it is expected to motivate, attract and retain those employees with competencies to enable the organization to stand tall among its competitors. This competitive advantage has been affected by the employee’s behavior individually and collectively. Employees are expected to behave in an ethical manner to win the trust of customers and stakeholders.
Table 4: Challenges in Implementing Ethical Business Practices
| R1 | Challenges are always there, ang isang halimbawa na lamang nito ay ang pagkakaroon ng hindi pagkakaunawaan ng aking mga empleyado na kinakailangan kong matugunan agad upang hindi maapektuhan ang kanilang ginagawang trabaho. (Challenges are always there, one of those is the misunderstanding of my employees that I need to address immediately so it will not affect their work.) |
| R2 | May mga empleyado na nag resign dahil sa etikal na kasanayan dahil akala nila ay mali ito, at nagkaroon din ng mga problema sa negosyo lalo na sa pakikipag komunikasyon sa ibang empleyado. (There are employees who resigned because of ethical practice because they thought it was wrong, and there were also problems in the business especially that in communicating with other employees.) |
| R3 | Ang naging hamon sa sakin o sa negosyo ko ay yung minsan nga na dating yung panahon na nalulugi tayo pero Kailangan mo parin mag tiyaga para unti unting lumago ang negosyo. (The challenge for me or my business is that once upon a time there was a time when we lost money but you still need to persevere so that the business can gradually grow.) |
| R4 | Ang mga hamon na naranasan ko ay may mga pagkakamali ako at hindi nakakaintindi para sa akin sa abot ng aking makakaya kailangan ko ng malawak na pang-unawa at hindi ako pinangungunahan o sinasabayan ng init ng aking ulo. (The challenges that I have experienced are that I have mistakes and not understanding for me as much as I can I need a broad understanding and I am not led by or accompanied by the heat of my head.) |
| R5 | Marami kang mararanasan pagdating sa negosyo habang nagpapatupad ng etikal na pamamaraan, isa na dun yung tamang pag Handle sa Customers. At kung paano iresolba yung mga gusto nilang service na dapat nating iprovide, syempre bilang may negosyo hindi tayo dapat nakukuntento na sapat na yung service natin palagi nating iisipin na may kulang sa service natin para mas lalo pa nating galingan araw-araw. (You will experience a lot when it comes to business while implementing ethical methods, one of which is the proper handling of customers. And how to resolve the services they want that we should provide, of course, as business owners, we should not be content that our service is enough, we should always think that something is lacking in our service to strive harder every day.) |
Interpretation for Table 4
All of the participants responses are about misunderstandings, insufficient knowledge about ethical practices, bankruptcy, sometimes not understanding their employees and proper handling of customers. Table 4 shows the challenges in implementing ethical business practices. One of the participants stated that one of the challenge in implementing ethical business practices is the misunderstanding that they need to address immediately, the other one is the insufficient knowledge about ethical practices that leads the employees to resigned, the third one is bankruptcy, next is lack of understanding and lastly is about the proper handling of the customers.
This was related to the study of Rahman (2020), wherein he stated that the leader may encounter different challenges, like lack of enforcement, organizational culture, poor leadership, and lack of ethics training. Nowadays compliance has been addressed as factor that increases the efficacy of codes, but it needs to be looked at from the traditional theory viewpoint, including not only punishment but also incentives.
Table 5: Challenges in Sustaining Ethical Business Practices
| R1 | Ang pagpapanatili ng etikal na kasanayan at mahirap dahil may mga balakid o obstacle na darating ngunit kailangang panatilihin ang rules and regulations upang magkaroon ng maayos na samahan sa isang organisasyon. (Maintaining ethical practice is difficult because there are obstacles that will come but it is necessary to maintain the rules and regulations in order to have a good and successful organization.) |
| R2 | Mas naging mahigpit lang kami sa negosyo para na rin mapanatili ang etikal na kasanayan, at para rin mabawasan ang mga problema sa negosyo. (We have become stricter in business to maintain ethical practice, and also to reduce business problems.) |
| R3 | Mas lalo nagiging matibay ang aming samahan sa negosyo dahil nag kakasundo kami minsan minsan katulong ko din ang aking family sama sama kaming nag tataguyod at nag sisipag para mas lumago pa ito. (Our business association is becoming stronger because we agree sometimes my family and my assistant are also supporting each other and working hard to make it grow even more.) |
| R4 | Ang pagpapanatili ng isang etikal na gawain at ang pagsasabuhay nito ay mahalaga at dapat magkaroon tayo ng malawak na pang-unawa at kailangan ng magandang saloobin upang mapanatili at hindi maging mataas sa ating sarili. (Maintaining an ethical work and practicing it is important and we must have a broad understanding and need a good attitude to maintain and not be high on ourselves.) |
| R5 | Minsan Sa pagpapatupad nito, may mga masasaktan kang damdamin ng tao sa pagpapatupad at pagpapanatili nito lalo na kung talagang dapat baguhin ng empleyado mo yung mga factors na nakakaapekto sa negosyo. Kaya dapat maging mas mahaba pa ang ating pasensya at pag unawa sa kanila. (Sometimes in implementing this, you may hurt people's feelings in its execution and maintenance, especially if your employee really needs to change the factors affecting the business. That's why we should have even more patience and understanding towards them.) |
Interpretation for Table 5
All of the participants answers are about lots of hindrances or obstacle, the need to become stricter in business operations, family support and broader understanding. Table 5 shows the challenges in sustaining ethical business practices. Two (2) directly blurted out the need of broader understanding in sustaining ethical business practices, while one of the participants stated that there are many hindrances/obstacle when sustaining ethical practices, the other one is that the need to become stricter in business operations while sustaining ethical business practices to reduce business problems, and last participant stated that family support is one of a key for a business to become stronger.
This was related to Ahmed et.al (2020), unethical behaviors, such as blaming subordinates for their shortcomings, taking credit of others’ work, favoritism, and excessive publishing of ethical leadership failures are prominent among the leaders of the organization. Although research has been conducted on ethical culture, particularly on the causes and effects of ethical-decision, few studies emphasized on the topics outside the business ethics research, such as employee well-being.
CONCLUSIONS
Based on the findings of the study, the following conclusions are drawn.
1. Most of the participants' answers on contribution of ethical leadership in promoting ethical business practices are build good relation, show good leadership and established good financial management.
2. Most of the participants' answers on the key behavior and traits exhibited by ethical leaders are broader understanding, not giving up easily, diligence and creative and critical thinker.
3. Most of the participants' answers on the challenges in implementing and sustaining ethical business practices are misunderstandings, insufficient knowledge about ethical practices, bankruptcy, lack of understanding, lots of hindrances or obstacle, the need to become stricter in business operations and family support.
RECOMMENDATIONS
From the preceding findings and conclusions, the following recommendations are offered by the researcher:
1. Business owners should facilitate trainings and seminars for employees, managers and leaders to expand one’s knowledge about ethical practices in business.
2. Leaders should continue on having good attitude, establish good relationship and empower employees about ethical practices concerns.
3. Business owners should develop a collaborative intervention program and propose an action plan aimed at developing ethical leaderships among leaders, managers, and executives to be coordinated to proper authorities.
KEY WORDS
Challenges. Conceptually defined as a stimulating task or problem (Merriam-Webster, 2024). In this study, this is one of the indicators that affects the leaders in employing ethical practices.
Employee Morale. Employee morale is how your team members feel about their work environment and their role in it. Morale has a tremendous impact on: - engagement. - motivation. - productivity (Nectar, 2023). In this study, it is the mood, attitude, and mindset of employees within an organization.
Ethics. Code of behavior that is defined by the group to which individual belongs (Reynolds, 2019). In this study, it is being related to ethical practices.
Ethical Behavior. This defined as conforms to generally accepted norms, which may change over time to meet the evolving the needs of the society or a group of people who share similar laws, traditions and values that provide structure to enable them to live in an organize manner (Reynolds, 2019). In this study, it is one of the variables to be considered and observed.
Ethical Business Practice. Ethical business practices involve rules and codes of behavior that apply to everyday business operations and policies (online.marquette.edu, 2023). In this study, it influenced not just by overall outcomes but also by personal progress.
Fostering. Defined as to help the growth or development of (Merriam-Webster, 2024). In this study, it is one of the indicators to be observed.
Leader. Defined as the one who rules or guide or inspires others (Vocabulary Dictionary, 2024). In this study, this is one of the indicators affected by challenges.
Ethical Leadership. Defined as a form of management that adopts principles and values which are considered good moral markers, such as honesty, fairness, equality, accountability, and respect (Kennedy and Schofield, 2023). In this study, it highlights the role of setting positive example, promoting ethical behavior, and creating an ethical organizational culture.
Organizational Culture. Organizational culture can be identified as the beliefs and behavior that contribute to the social and psychological atmosphere unique to an organization (Rahman et.al, 2020). In this study, it impacts the employees by shaping their attitudes, behaviors, and overall performance and experience.
Sustainability. Capable of being sustained (Merriam-Webster). In this study, it practices the employees of conducting business or carrying out activities in a way that provide the needs of an individual.