Employee morale

Organization Impact: How Leader Decisions and Behaviors Influence Morale

Chapter I


Statement of Research Problem

Employee morale is a critical factor in any organization (McFadzean & McFadzean, 2005). Opperman (2009) reveals that employees reported that their business manager displayed unacceptable behavior by violating company policies and exercising their authority with abusive actions by coming and going as they pleased during the business hours, favoring specific employees, failing to communicate effectively with subordinates and setting a poor example of leadership traits. Hunter (2008) describes that everyday management decisions affect individuals, families, and even nations. For people in leadership positions, they know one of their major responsibilities is making decisions. Their decisions may have an impact on others or on oneself. Either way, the reactions and results have a certain degree of influence and impact.

Toor and Ofori (2009) insist that people who lead must demonstrate the highest moral standards and ethical conduct in their everyday conversation, actions, decisions, and behaviors so that others in their organizations can follow. McFadzean and McFadzean (2005) states that managers who do not involve or value their employees can also have an effect on morale. Behm (2009) mentions that according to the Great Place to Work (GPTW) Institute, a great place to work is one in which people trust who they work with, have a sense of pride for what they do, and enjoy the people they work with. Gini (2004) was convinced that ethical leadership is the life blood of an organization's operation and establishing ethical standards were crucial in setting up the structure and culture for a life long success. Leaders are needed and do provide importance to any organization. Their decisions and behaviors have many unknown variable reasoning to applied situations, and it does not always explain why they make those certain choices or act the way they do. One concern was leaders are still expected to lead and satisfy. There are many variables that must correlate morale with leadership, therefore this study attempts to identify and examine the awareness for leaders to be able to make moral judgment of their actions and implement ethical decisions that will benefit the whole entire organization and oneself.

Expected Contribution of Study

The purpose of this study was to describe and learn the reasons of how people in leadership positions come to their conclusions prior to implementing their decisions and conducting their behavioral acts while examining and interpreting the impact and influences it has on others. “Typically, good decisions are the product of careful thought and common sense” (Maddalena, 2007). Leaders of various types need to be able to understand the impact and implications of their decisions and behaviors and that they are viewed to a higher standard of conduct. Gini (2004) implied that leaders need to establish their goals with a clear vision and effective communication channel of what they stand for, what they want to achieve, and what they expect from others, and where the organization wants to go.

However leaders are just as an important factor to an organization as are employees and according to Banerji and Krishnan (2000) a leader aligns vision with followers' needs and aspirations, propagates open communication and generates team motivation, is a risk taker, helps and coaches in confidence building and promotes team building (p. 3). Leadership characteristics may start at the home or classroom for some and Stein (2009) states that teachers are undeniably leaders in the community and in the classroom, they must be able to have some kind of life lasting impact on students and be able to motivate them to strive for excellence. Besides having their students sit and behave, they must also inspire them to achieve their goals.

Global Environment

Gini (2004) points out that leaders' are people who posses a characteristic of knowledge and strength which was expressed through effective communication. They are tactful and know their weaknesses are compensated through their secondary traits, and successful through cooperation and support. Svensson and Wood (2007) inputs that companies and their corporate leaders and countries and their political leaders should align their resources to minimize collateral damage to themselves or targets as a result of ethical behavior in corporate leadership to establish the framework for corporate leaders to shape their society. The role of organizations within a society should include their need to analyze the economic, legal, moral, social, and physical elements of the environment when making decisions.

Research Environment

To have a better understanding how various types of leaders obtain and implement their decision making process and to support their behavioral actions, a survey was conducted to leaders of the various groups in the military, medical field, education, and business. The purpose was to situate the leader in a scenario base condition and given the circumstances for justification. Using the types of environmental conditions: 1) Planning environment which will allow the leader time and information. 2) Competition environment which will allow the leader minimal time and information, and 3) Emergency crisis which will allow the leader no time and information. Leader decisions maybe subconscious or automatic influenced by position, experience, seniority, knowledge, training, character, and ethics.

Research Questions

Using a mixed method of qualitative and quantitative methods this study will examine the following research questions: “What variables influence leaders to make their decisions and behavior?” “What are some advantages and disadvantages to making right or wrong decisions?”

Research Hypotheses

This research sets out to examine the extent to which leaders of various titles and positions will implement their decision making processes and conducting their behavioral acts while justification is the basis for reasons why. H1: “Leaders who involve subordinates in the decision making processes tend to create better morale in organizations.” H2: “Leader decisions do not always support leader actions.”

Conceptual Definitions

The following terms listed will be used quite frequently throughout this paper and are defined here to represent the design concept which will be used quite often: Behavior is presented in terms of ethical business behavior and was defined from Potter Stewart's quote as “ethical behavior is doing what is right to do which often takes you beyond what you have the legal right to do.” (Thompson, 2006 p.2). Decision is the process of “feeling along” and modifying, rather than a discrete moment of choice among clear alternatives (Akdere & Altman, 2009). Ethical leadership is “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making” (Neubert, Carlson, Kacmar, Roberts, & Chonko, 2009 p. 2). Leader is simply explained in easy terms as “Someone has to be in control” (Holmes, 1999). Morale refers to the overall attitude about one's workgroup (Forret & Love, 2008). Organization may be a country, a company or a family (Zemke, 2000).

Assumptions, Limitations and Delimitations

This study was based on the assumption that organization morale will decrease if leader decisions and behaviors are not easily accepted. It was also based on the assumption that leaders who do not always make the right decisions or perform the acceptable actions may also decrease organization morale. Confidentiality was maintained in that responders were not asked for identification other than their present title and position within their command, department, division, and unit. Identification of title and position provided the ability to determine boundaries and limitations for ethical decision making and behavior acts.

Limitation; of research variables examined in this study did not include highest management level personnel. The survey only polled average day to day leaders in management levels who have superiors above them. The leader participants came from various ethnic and socio-economic backgrounds. They represent one of five leader positions or titles at their present site of employment.

Delimitations; for the purpose of this research, were within the data compilation. They were limited to participants that have been in a leadership position for a minimum of six months or more at their present employment. This allowed for greater accuracy within responses. Implementing tenure for participants allowed for a reasonable period in which observation and/or direct involvement could have occurred.


Leaders make decisions all the time, their decisions may not always be right or wrong, but the best decision based on the circumstances given may be better than no decision. Leaders are looked upon to know everything whether or not they do, and are held to a higher level of ethics and standard of conduct. It's supposed to be automatic with the position, but leaders also say things and do things without clear explanation. Morale is essential to the success of any organization and leaders are the forefront to ensuring their organization is headed in the right direction. Influencing by way of leadership power and position may continually be used in any organizational situation and is sometimes needed to achieve the objective. Leaders lead by example and their behavior alone may expresses more than words can explain, but one concern is sure and that subordinates do look for positive role models and their leaders doing the right thing.

Chapter 2

Literature Review


Morale is very influential in the success of an organization. It indirectly provides direction and guides employees' feelings towards how they may feel towards their organization. Akdere and Altman (2009) provides in addition to morale that the decision making process is also influential in the positive effect of business performance of an organization in which results in employee and customer satisfaction. Forret and Love (2008) defined morale in two different states of directions as either being high or low. Depending on what direction morale was in an organization often times determined the overall attitude one felt towards their work environment. High morale was characterized by workers feeling satisfied and positive with coworkers and their work environment, in contrast low morale was characterized as being negative, bitter, frustrated, and hate towards the overall work environment.

McPherson (2008) reasons that it does matter if morale is low by using examples like teachers complaining of low salaries, health services staff feeling undervalued and unsafe, or when social workers feel budget cuts and pressure. Any of these variables may have a major negative impact effect on the quality of rendered services. McFadzean and McFadzean (2005) show various definitions of morale as a matter of teamwork, employees feeling good about their work environment, and in military terms as a condition with respect, discipline, and confidence. The military uses morale in a form of unit cohesion, camaraderie, teamwork, honor, courage, and commitment. An office employee may judge it by lack of communication within their department. Zemke (2000) points out that morale isn't that difficult to analyze or interpret and that it is simply the state of relationship an individual may have with an organization. Organizations should be observed on a larger scale than just looking at a group of people, and on an expanded view as a country, company, sports team, or even a family (p. 1).

Jones (2009) reveals management and leadership levels in organizations may unwillingly overlook morale and not recognize that it may be heading into a spiral downspin without any display of hints. She displays some common morale buster examples as: 1) rules not applied equally or only applied towards certain employees may be seen as favoritism. This is often looked at as a one way rule or discriminatory action. 2) employees experiencing tension and conflict amongst each other without resolution often times leading to unfairness. This questions truth and honesty. 3) failing to recognize and reward well deserved individuals with promotions or monetary incentives may be perceived as discriminating or favoritism also. Once again these perceptions may have two sides to the story and these actions must be identified to prevent a morale issue in the organization, and 4) supervisors' and subordinates are viewed as the worst morale buster if seen in a romantic relationship because its perception is viewed towards negativity. How true is the morale busters is up to the individual to interpret, but viewed without words can be misinterpreting and headed the wrong way which can cripple an organizations morale.

Although morale issues continue to be a revolving cycle for organizations, leaders also continue to revolve within that cycle and different leadership styles may not always be in synchronization with subordinates and Shulstad (2009) inserts that leaders must be aware of the authority they hold and not be afraid to take chances or make mistakes. The key is to be proactive and assertive, communicate effectively, push for excellence, and trust their instincts.

Make decisions on imperfection and accept accountability for their actions.

“Who's in charge?” These may be words possibly asked quite often by people who are looking for guidance and some kind of order. For those ever in a position to lead, or have ever held some type of leadership position or role, know their decision making processes and physical actions are usually going to be questioned. It's not to prove if they were wrong, but were their actions justifiable. Banerji and Krishnan (2000) imply “…such a leader aligns vision with followers' needs and aspirations, propagates open communication and generates team motivation, is a prudent risk taker, helps and coaches in confidence building and promotes team building”(p. 3).

Gini (2004) states that leader behaviors and actions reflect leadership and subordinates perceiving unacceptable actions by their leaders as acceptable may damage the reputation of the organization and their people. Establishing ethical standards by leaders is critical to achieving ethical decisions and choices by workers, and aligning the vision and mission for a successful organization. Hunter (2008) states the importance of an effective ethical culture within an organization will only enhance increased morale and increased sales, but establishing ethical standards for an organization should be the primary goal for executive management. For a long-term goal Hunter (2008) again also recalls that ethics establishes the framework and stresses it to be the foundation and groundwork to achieving future success for the companies' organization.

The research presented in this paper suggests people in a leadership position make decisions that are not always right or wrong, and that their physical actions can impact a positive or negative feeling that may affect their organizational morale. Findings may imply that leader decisions and behaviors can be perceived and misinterpreted by negative influence and that they can abuse their influences for personal gain. Shulstad (2009) addresses that leaders are not born leaders and that they are developed through various factors of years and experiences, and when they do make mistakes for the most part of the time they may be able to recover and remain effective.

Literature to Support the Problem

Leaders are major contributors in an organization's morale. Zemke (2000) points out that morale has a huge impact on production and should come to no surprise for people working in an organization environment. When people love their jobs, careers or co-workers, it may determine their comfort zones and result to high productivity. McFadzean and McFadzean (2008) reinforces that one of the important variables of an organizations success is dependent on the morale of the people who are part of the organization. In the education system students should come first and that their well being should be the number one priority goal. For any military organization to win battles and accomplish missions with minimal loss of personnel and equipment, requires hard work, dedication, and support to providing a quality of life. On the basketball court or playing field, every player is valuable to their team whether or not they are on the first string, second string or third string teams, they provide structure and support.

McPherson (2008) asks if it matters if staff morale was low, and answers at a team level it will certainly affect whether people enjoy coming to work and the extent of teamwork performed. People can feel very positive about the work of their team or service but negative about the organization they work for. Teachers, nurses, and social workers who really enjoy their profession and along with the people they work with may easily lose their morale if management level decisions from the top do not allow them the opportunity to negotiate salary or programs cuts, and that may give off a feeling of job insecurity.

Fitzgerald (2009) describes when it comes to organizations and human behavior, the perception is reality. Managers may act or react to the forces they perceive. Frontline supervisors are sometimes caught between senior management and reality, and to express their truthfulness, they often mention their open opinions as perceived from reality. Gilmore, Ferris, Dulebohn, and Harrell (1996) points out perception is often seen by subordinates as acceptable by their supervisors. Supervisors influencing their subordinates' perception that political behavior in the organization is viewed acceptable and encouraged in similar behaviors, thus enhancing the supervisor's reputation. Political behavior in an organization majority of the time may look to have a negative influence, but Kacmar and Ferris (1993) reinforce that political behavior may also have positive influences for an organization. Leaders who may be responsible in the negotiation process with vendors may use legal tactics to withhold certain information thus allowing them to capitalize the better deal and benefiting all concerned within the organization.

Employees' seen dating or showing affectionate to each other in the workplace, is enough hints to interpret the question, what if? Schaner (1994) displays an example for the reader's interpretation between coworkers in a romantic relationship and how it may affect other coworkers. When coworkers see romantic relationships between supervisors and subordinates, the perception for favoritism becomes bias and in turn workers will feel they will be treated unfairly which may lead to jealousy, anger, and resentment. As a result, employee morale will diminish, productivity will decline, and company dedication and loyalty will disipitate. Meaning it doesn't matter, the winner is already chosen.

Roy and Roy (2004) explore specific situational, and relationship variables associated with student perceptions of favoritism in the business classroom and defined favoritism as, “the favoring of one person or group over others with equal claims” (p. 1). Supporting data claimed favoritism in the business classroom was favored at different times. Female students were slightly favored more than male students by their professor and the perception of favoritism was based on positive feedback of intellectual prowess and not preferential treatment. Classroom favoritism can easily occur unintentionally by categorization, but viewed as favoritism. It's a tough call to make and whether or not what the degree of intellectual ability was, students felt a sense of jealousy of their co-students from initiated comparisons by their professors.

Leader positions vary in titles but all have one thing in common, they are decision makers and have the influence of exercising their authority. Presidents, Chief Executive Officers, high ranking military leaders, managers, supervisors, principals, teachers, coaches, and even parents have an extent of power and responsibility. Gini (2004) explores the case of Enron's collapse of leader unethical decisions and behaviors, and asks why would someone who would make over a million dollars a year would steal. “It was all about the money,” in addition it was a very human thing of excitement, challenge, the need to win at whatever costs, and risk than more of a rational decisions. Scharff (2005) reported that defective group think decisions was one of the major responsibilities for WorldCom's accounting fraud and that their organizational structure and culture failed to rationalize events and decisions, moral superiority, and may explain all of the fraudulent activities of unethical leadership.

Forret and Love (2008) display an example that employees who feel abused or mistreated by a supervisor often complain about such mistreatment to their coworkers. The negative attitude toward their supervisors is then likely to spread among the employees, causing a decrease in morale. Leaders may have the potential to cross their boundaries from time to time and exceed their authority by title or position they possess. How it is applied can be perceived the wrong way and Schaner (1994) states coworkers may perceive favoritism and bias resulting from romantic relationships between supervisors and subordinates. In turn, when employees perceive that they are treated unfairly, the perception of unfairness can lead to jealousy, resentment and diminish employee morale and productivity. Using favoritism may be a strong influence on the decision making process for those who exercise it. Its' outcome may be viewed very negatively and impact organization morale.

Leader influences do not always have to be viewed in a negative way. Goldsmith and Wagner (2009) say support the decision maker no matter what the outcome. “In most cases, your manager is trying to look out for you and other direct reports. If you do your best to influence the decision-maker and the decision goes the other way, act supportive. Learn more about what led to the decision. When you act supportive, especially when you didn't win, you gain influences over the next decisions” (p. 1). Power and position can be viewed as an advantage tool as long as it is not abused. Rules, policies, and laws are in place to maintain order and discipline and given the uncertain situations that people experience at work, on the playing field, in the classroom, or in the hospital may require exceeded influencing.

Kacmar and Ferris (1993) show two influencing examples leaders may use for personal gain. Managers may use the selection system to hire people like themselves in an effort to build a power base or coalition. Other managers may abuse the performance appraisal process by under evaluating valuable employees to keep them in their area so that the areas numbers and manager in charge will continue to look good. People in a leader position do have an extent of power and may exercise advantages or abuse to achieve personal interest.

Preference for gender specific may also cause leader decisions to be ineffective and unfair. In a classroom environment, Aydogan (2008) explains teachers may be influenced by the gender of a student. Female teachers may have a tendency to favor male students, and male teachers may favor female students. This means that these types of common tendency by leaders were chosen because of past experiences. The experience could've been either positive or negative towards the opposite gender and justifies why their decisions were made.

Aydogan (2008) explored a setting where favoritism definitely took place. Favoritism was seen most popularly in education institutions. Leaders in the classrooms and in administration environments often times made unintentional mistakes of favoritism. The ethical principles of the teaching profession include professionalism, fairness, equality, loyalty, and honesty, but when it is compromised because of favoritism in the classroom, it affects instructions and student success. “It destroys equality as it brings certain advantages to people who did not earn them and hurts others' with good intentions” (p. 1).

While gender can be a favorable factor in a classroom setting, it can also be a major factor in the working environment. Dubinsky, Comer, Jolson, and Yammarino (1996) present evidence suggesting women in managerial capacities were often viewed as inferior, and less qualified than their male counterpart. Research in sales management regard favoring male sales managers over female sales manager. Employees' favoritism towards male managers was often seen as male supervisors having more experience than females. Blau, Tatum, Cook, Dobria, and McCoy (2005) point out perceptions of gender discrimination can be perceived as unfairness of the employee selection process. The perceived discrimination can be misinterpreted under the indirect blanket of favoritism. Studies focused mainly on the negative affects on females, but results also displayed negative affects on males. Perception of employment decisions, selections, tasks, or reward were influential based on individual gender and choice.

Ryan, Haslam, and Postmes (2007) provide another form of favoritism in relation to gender-related in-group favoritism. “I think when a cushy job comes up; the old boys' network set-up means that men select their friends for the position. When none of their chums want the job, it gets given to the women” (p. 6). Messick (1998) places people in categories. In social categorization, people refer to nations, races, genders, religion, professions, and organizations. Category membership provides features of identity which creates in-groups. It creates a difference and the categorization of people of in-groups and out-group does more than create a beneficial differential. Mohr and Larsen (1998) take in-group favoritism “Down Under” to the Australian Football League where favoritism was shown to be obvious by in-group umpires, who were influencing leaders of the game that the outcome of a game was based on where the umpires came from. Instate umpires had control of games played by teams of instate versus out state irrespective of who had home field advantage. To prevent the obvious, the instate umpire manifested in-group favoritism rewards by obstructing out-group scoring opportunities rather than rewarding high scoring opportunities to the in-group.

Middlemiss (2007) explains sexual favoritism exists where a person who is in a position of authority rewards only those who respond to his or her sexual advances, while other deserving employees do not respond are denied promotion, merit rating , and salary promotion. Serial sexual favoritism illustrates how widespread it can violate Title VII of the Civil Rights Act of 1964 in allegation of two supervisors in a workplace had engaged in sexual relationships with two secretaries receiving promotions, cash bonuses, and other job benefits.

When people are in a leader status they are most likely to be viewed to a higher standard than others in the organization and are expected to act without mistake. They may be viewed to be the perfect example or role model and their actions say a lot more than words can describe. Hawkins (2009) believes employees examine leader decisions thorough their own individual experiences and memories and tries to interpret it differently. Opperman (2009) describes employees who reported that their practice manager was ineffective, showed favoritism toward certain members, failed to respond to employees' problems and set a poor example by coming in late, taking long lunch hours and coming and going as they wish. This means that leaders who continue to practice those bad traits may be doomed to fail their organization and their subordinates. It will bring a decrease in morale and if employees see no disciplinary actions taken upon their superiors may assume that they can copy their actions too. That can lead to violations of policies and unethical behavior by the rest of the organization.

Subordinates look up to their leaders for answers and resolution and expect them to handle conflict situations. Perry (2009) mentions too often managers avoid dealing with conflict. Very often supervisors say, “It's not my problem. And take a hands-off approach” (p. 2). Personnel conflict may be a difficult situation to handle and some leaders do refuse to handle those situations. Final decisions are expected to be fair and equal and leaders who do not take a stand or side of a conflict, their false decisions may lose their credibility and respect from their subordinates in which can lead to a decline in morale.

For recognition and reward, leaders make nominations for who will be the employee of the month, student of the week, or even player of the week. Their decisions may be justifiable and the right one chosen based on merit and not favoritism. Roy and Roy (2004) point out a good observation that perceptions of favoritism can be cancerous because of their effect on trainee morale, jealousy, and retention. However, probably the most important reason for eliminating perceptions of favoritism is the elimination of barriers to learning. Zellar and Kacmar (1999) from previous research found that ingratiatory behaviors are indeed observable by coworkers. Increase perception of favoritism and inequity lowers level of satisfaction. Leader behavior can be misleading and people will continue to see it and call it like it is.

Displayed evidence of favoritism has its' toll in the workplace and can be costly to the company. Perry (2009) addresses issues in the workplace when employees clash with one another. Their reasons are endless and the most obvious would be a perception of favoritism which may result into jealousy, anger, rage, and revenge. When people work together, there will always be some type of misunderstanding. Bitter employees will take out their frustrations on coworkers and customers, and that can be detrimental to the organization. Lives have been lost because of an unjust employee. One affected employee can affect a whole department and it could spread throughout the rest of the organization.

In another impact to organizations, employers failed to seek the problem and instead continued to cover the issues. Crow and Hartman (1995) recommend employers needed to eliminate the negative sources of their organization and improve employee satisfaction through employee responsibility. Remove pay inequities, favoritism, abusive supervision, poor working conditions and most of all poor communication and poor performance. Employers were focusing too much on satisfying the employee and not focusing on the organizational effectiveness of employee responsibility.

Knowing people in an organization creates network and brings out great socialization, but abusing who you know for personal gain can affect a whole office or department. Persons (2009) use a corporate code of ethics on 18 scenarios assessing business students ethically as measured by their behavioral intentions. Anti-nepotism Policy in a business organization was defined as reducing favoritism or the appearance of favoritism and to prevent family conflict from affecting the workplace. The policy prevents an employee's relative is not permitted to be their supervisor or subordinate of the employee. The scenario is seen quite often in the workplace and company policies that dictate the issue should be enforced to the fullest extent. If it continues without action, and then the whole entire organization has failed each other.

Hidden favoritism or indirect favoritism can often be seen in a form of politics. Kacmar and Ferris (1993) categorize many definitions of politics in organizations and the political activities that occur in competitive environments. “There was obvious favoritism in the employment of the present Housing Office secretary, where the applicant was interviewed by the supervisor, offered the job and hired all at one session” (p. 1).

Leaders, managers, supervisors, are key people in an organization that impact employees most often. They provide direction, guidance, and act as mentors. They provide good moral standings and establish ethical practices. Hunter (2008) explains the importance of an effective ethical culture within an organization will only enhance increased morale and increased sales, but establishing ethical standards for an organization should be a primary goal for executive management. Companies must design an environment that encourages high ethical standards and produces ethically minded management and employees, resulting in making good ethical decisions. Van Fleet and Van Fleet (2007) describe dysfunctional work environments characterized by unfair systems, favoritism, and or lack of communication may frequently have bad or toxic leaders. These leaders micromanage, abuse power, display lack of anger management, or display unethical behaviors. Miller and Nicols (2008) indicate individuals with low-quality relationships with their superior may tend to perceive leader favoritism toward in-group members that was based on political factors rather than objective performance factors.

Literature to Support the Global Environment

Once again the importance of leaders in any organization is a valued commodity and is something that may not be easily replaced and according to Stashevsky and Burke (2004) leaders who were effective with successful organization, resulted in high morale and peak levels of performance. Ineffective leaders resulted in failing performance, dissatisfaction, and low commitments. Robinson and Harvey (2008) describes that cultural diversity affects the way leaders go about defining their roles as leaders and applying themselves to the responsibilities of leadership. With the acceleration of globalization businesses were struggling to adapt to a new paradigm of leadership. Globalization demanded new approaches and the challenges to find the appropriate leadership was imperative to changing problems. There was a need to adapt ones leadership perspective to be effective in culturally-diverse situations. Banerji and Krishnan (2000) studied a sample of 100 pairs of managers and subordinates from four multinational organizations in India and indicated from their findings that inspirational leadership were negatively related to leaders preference of bribery and favoritism. Leaders come from a global spectrum and are made up from a wide span of ethnicity and culture, Sarros, Cooper, and Hartican (2006) support that when ethical decisions and moral judgments are performed, true character reveals each leaders style of leadership. Having character is vital in reinforcing the decision making process based on the demographic variables that one comes from.

Literature to Support the Research Model

Leaders try do the best they can with the best resources available to them when making ethical decisions, but times the best information or feedback are not always available and they must make quick decisions to prevent any harm or damage to individuals or equipment. McDonald and Nijhof (1999) make good sense in pointing out that managers in organizations find it impossible at times to make the right ethical decisions because of the conditions given. They want to follow the good ethics program, but there are political implications that can hinder their moral decisions and that their behavior may drift out of bounds of the ethical guidelines. In addition other variables that may hinder leaders from following the ethical guidelines were stated by Bachkirova and Cox (2007) in which they investigated that in various situations, leaders can experience affects of attitudes and values that interfere with emotions. High tensions between rationality and emotion can get in the way of leaders making ethical decisions. The experience is potentially a strong feeling and could possibly disorganize and turmoil the decision process.

Leaders must continue to strive to be successful and Ncube and Washburn (2006) infer that situations will continually increase from time to time and leaders must be able to cope with each situation and make decisions that involve a value system that regulates good practice. In addition the decision making processes should remain critical in the collaboration with attitudes while maintaining the ethical climate at the same time. Some decisions are made without explanation or rationalization and are made “just because”. To elaborate “just because” Coffin (2009) inserts it in easier terms of leader power and position. Leaders risk right and wrong decisions with authority limitations and sometimes forget that each passing moment adds up into a thousand bad decisions. They are in charge and make the calls without remorse and say that it was just a business decision. This form of leadership abuse will eventually form into various types of wickedness.

Organization challenges cannot be fixed by one person and McManus (2006) shares his experience from a front-line leader to tolerating poor performance. Leader expectations are high and not always synchronized with the rest of the organization, and they must be willing to make changes, ensuring their expectations are clear and actions reinforced by following the rules and developing new habits day by day. Shulstad (2009) concludes that leaders have multiple tasking duties with viewed high expectations and in order to sustain that level of superiority they must not forget their people. Exercising empowerment, encouragement, inspiration, and support through good moral judgment and actions will enhance company morale.

Literature to Support the Hypotheses

Maddalena (2007) cites managers' who are in position to make a decision, should carefully analyze gathered information and consider the various options to implement the action. Make the decision and move forward ensuring though the process is communicated clearly to others.

Foster, Angus, and Rahinel (2008) investigates the conceptual framework for enhancing morale activities among employees and reported the overwhelming enthusiasm results from the Leadership Roundtable (LR) management development program which increased individual confidence, decision-making skills and strategies, and developing the “big picture” perspective.


Loewe, Blume, and Speer (2008) consolidate the term favoritism in every aspect perceived and performed from a business climate, and in any organizational setting. “A good business climate is central to economic growth and poverty alleviation; it is the key determinant of the decision of private firms to invest, and create jobs” (p. 1). Favoritism was described as the preferential treatment amongst relatives, friends, neighbors, other acquaintances. When relatives or friends are favored based on relationship than knowledge or skill, it becomes abusive and a form of corruption. Favoritism can come in many forms of direct and indirect ways and can be distinguished in other forms like bribery, direct exchanges of material favors, and reciprocity.

Khatri and Tsang (2003) discuss another term used as favoritism called cronyism. “Defined as favoritism shown by the superior to his or her subordinate based on their relationship, rather than the latter's capability or qualification” (p. 1). Used from a Cambridge University slang from the word crony meaning “long standing” (p. 2). Cronyism was used in a various extents and most likely to exist in organizations of every culture. In the Middle East, the Jordanians refer to it as “using wasta” (connections) (Loewe, Blume, & Speer 2008). Two types of cronyism are distinct as horizontal and vertical. Horizontal cronyism referred to peers, friends, and business associates, and vertical cronyism referred to superior-subordinate relationship within an organization.

Zellars and Kacmar (1999) represent co-worker responses to ingratiation. The ability to go beyond for others as it is defined has a two-sided outlook. Coworkers using ingratiatory tactics with their supervisors showed a greater satisfaction of perceived fairness from their supervisors bonus allocations than those not exposed to an ingratiatory coworker. Ingratiatory behaviors often times cannot be concealed and coworkers are observable to make comparisons with their coworkers than attempting to compare job input or output.


Every leaders' concern should be their people and how the organization is operating, Van Fleet and Van Fleet (2007) describes employees belonging to an organization with very low morale were frequently made to feel unworthy of and had no empowerment for input questions to managers or managerial decisions. This put them in a position of uneasiness and a false sense of unity within their working environment. These types of organizations can breed bad leaders and spread uncontrollably if not kept under control. Unethical behavior can surface from micromanagement habits, abuse by level of authority, demonstrate explosive anger while threatening or demeaning others, and engaging in illegal activities. Leaders are needed and do provide importance to the organization. Their decisions and behaviors have many unknown variable reasoning to applied situations and explain why certain choices were made or certain acts performed. One thing is for certain, leaders are still expected to lead and satisfy.

Studies indicate favoritism in an organization leaves a fine line between what is right and wrong. Viewed from various angles, it is often left open for interpretation. Once favoritism was perceived and witnessed to be occurring in the workplace, it generated a great impact of negativity to those affected by it. Employees are number one assets in an organization and their morale may determine the future outcome of their company. Research proves employees affected by low morale may have some connection resulting from a favoritism act in the workplace. People who experienced an act of favoritism going on in the organization almost instantly developed some type of resentment or anger. That anger spreading beyond office boundaries can cripple productivity of an organization. Favoritism can be performed directly or indirectly and depending on the extent of it can cross boundaries into a discrimination act.

Favoritism can be viewed as a categorization process between in-groups and out-groups in which studies show it can occur in various organization levels in education, sports, business, and health. It is obvious and natural for other cultures to use favoritism for personal gain based on the common interest of the other individual. Family members, relatives, and acquaintances often received favoritism. Organizations affected by the witness of unfairness due to favoritism are impacted by a decline in employee morale which can also be a result of bad leadership abuse of favoritism. Leaders have power and position and any display of favoritism to subordinates questions their leadership abilities and decision making. Employees will lose trust and respect and may feel a sense of rejection by leaders who favor others over well deserved others. In the long run, every person in an organization is tied in somehow and affected by the act of favoritism. People affect people and daily decisions impact people. Ethical implications should be considered by those who make decisions and exercise moral judgment. The goal should be a lasting impression along with well consequences (Hunter, 2008).


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