What is the role of the leader in an organization?

• A. Establish principles and standards of behavior that guide business decisions
• B. Enforce violations of code rules of conduct
• C. Determine organizational climate and define norms
• D. Develop the principles and strategic initiatives to guide ethical action

Answer: (C)

The main idea here is that leaders shape how people actually behave by setting the everyday atmosphere and unwritten rules of the organization. When leaders model ethical behavior, communicate clearly what matters, and consistently reward or address actions, they create a workplace climate where certain behaviors are expected and others are discouraged. That climate, in turn, defines the norms—shared expectations about conduct—that guide how people make decisions, day in and day out. Because norms become ingrained in routines and judgments, they have a powerful influence on what is considered acceptable or unacceptable.

While establishing principles, enforcing rules, or outlining ethical initiatives are important activities in governance, the core way leadership influences behavior is through the climate and norms they cultivate.