. ook ‘Ethical leadership’, Kanungo and Mendoncafeel that the urge to investigate on the topic of ethical leadership is induced by the rise of unethical behaviour in the organization. This has further been coupled with a decline in upholding moral responsibility and workplace ethics. Furthermore, ethics has been having been given very little attention by both management and psychological education. Business literature as well as management has always emphasized on profits as the primary reason for an enterprise with little regard for ethics. It has led to the moral decay in most business organizations (Kanungo and Mondonca, 2007, Page 2).

An organization is simply a structural-functional unit with an ordinary objective. In order to achieve its goals, organization assign its employees to different roles and status as per one ability and specialization thus leaders and subordinates. Effective leadership involves steering other members in an organization towards the realization of an organization’s set objectives using its policies and procedures (Kanungo and Mondenca, 2007, p. 2).

In the current modern society, there is an increasing awareness of the management to be accountable and transparent not only to its shareholders, but also other relevant stakeholders as well. Managers are with ethical dilemmas pressurizing their decision making. This includes suppliers, employees, consumers, the Government and the society at large. Whilst the core function of the business is profit making, management and leaders should be responsive to the moral duties of the society as a whole. Understanding the significance of these moral duties has led to the formation of an ethical system alongside rules, regulations and policies to be (Starrat, 2004, p.62).

Due to the urgency for morality in organizational leadership and social order, it’s mandatory that we define relevant moral principles to depend on in judgment making.

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