| Amongst the myriad of imposing challenges currently | | | | Lehman Brothers, Merrill Lynch and Washington Mutual |
| weighing upon American society and abroad, the | | | | as well as America's largest mortgage company, |
| most pressing leadership issue of today is the need | | | | Countrywide Mortgage, due to the ill-conceived |
| for a genuine practice of integrity instilled in corporate | | | | subprime mortgage lending scheme. This crisis has led |
| and organizational cultures. This essay will discuss how | | | | to the disintegration of the United States' housing |
| the lack of honesty and transparency in business and | | | | market and subsequently to a steep decline in the |
| other sectors of life have reaped disastrous results | | | | global financial markets. (Duncan, 2008, p. 1). |
| for those who fail to practice them. The discussion | | | | 3. The exploits of Illinois governor Rob Blagojevich |
| begins with a quote from The McKinsey Quarterly | | | | who has allegedly attempted to sell the Senate seat |
| about the quandary corporate leaders face when | | | | of President-elect Barak Obama to the highest bidder |
| attempting to balance the need for a company's | | | | and has now been impeached by the Illinois state |
| long-term health and reputation against short-term | | | | legislature. (Bone, J., 2008, p. 1). |
| profits and personal gratification or gain. | | | | In all the above cases top level executives either hid |
| In an interview with Daniel Yankelovich, The | | | | the truth or used positions of authority for ill-gotten |
| McKinsey Quarterly staff writers Mendoca and Miller | | | | gain. Their unethical actions resulted in a short-term |
| (2007) commented, "As more and more executives | | | | thrill ride with an ultimate end that left stakeholders |
| come to recognize that a company's reputation is an | | | | and shareholders worse off than when they started. |
| important strategic asset, many are understandably | | | | In contrast, in a Business Week article published in |
| confused as they ponder the numerous social and | | | | April of 2002, Wee points out that sticking to a high |
| political issues that now stand alongside simple profit | | | | ethical standard allowed corporate giant Johnson |
| as a measure of long-term corporate health." (p. 1). | | | | & Johnson to weather short-term public relation |
| Unfortunately, leaders in some of the largest and | | | | nightmares tied to its tainted Tylenol product and |
| most well-known organizations have not been able to | | | | continue doing business for the long-term. (p. 2). All |
| withstand the temptation to place profits or personal | | | | these examples illustrate that the most pressing need |
| gain ahead of long-term corporate health and | | | | for today's leader is to learn how to set aside the |
| reputation. In fact, recent events in the (a) | | | | intense pressure for short-term gains and instant |
| corporate, (c) financial, and (d) political sectors of the | | | | gratification in order to instill high ethical standards |
| United States serve as prime examples of how the | | | | that will ensure sustained growth and long-term |
| lack of honesty and transparency has led to | | | | corporate health and profitability. This is so because |
| termination and loss for all stakeholders including the | | | | potential clients remain loyal to companies they trust. |
| individual, the organization, its employees and the | | | | Trust is a major key for sustained growth. If |
| community at large. Included in such examples are: | | | | customers trust a company to consistently offer |
| 1. The accounting debacle that brought down such | | | | superior products and services on the up and up and |
| large corporations as (a) Enron (aided by Arthur | | | | at an affordable price, they will repeatedly frequent |
| Anderson), (b) Adelphia, (c) Tyco, and (d) WorldCom | | | | that establishment. On the other hand, if an operation |
| each of which was forced to reorganize or close for | | | | seems seedy and underhanded, regular and potential |
| filing false financial reports in order to maximize the | | | | customers alike will flee and take their business |
| value of their respective stocks. (Wygal, 2004, p. 1). | | | | elsewhere. |
| 2. The collapse of once mighty investment banks like | | | | |