Power corruption cycle and its organizational effects

Power Corruption Cycle: You have been asked to teach ethics to a group of managers. In one part of this course you will be discussing "corruption and ways to prevent its occurrence." Describe the way mishandling power can lead to corruption and how it occurs in organizations today. Use an example to illustrate it from your research.

The current credit crisis was the result of preying upon easy credit and overly credulous borrowers, and a false and irrational belief that so long as money could be made during a short-term real estate bubble, unethical actions were justified. Many of the financial actions taken by the 'best and brightest' of top management at firms such as Lehman Brothers were technically legal, but ethically bankrupt, in terms of the way basic risk management principles were ignored. Profits and egos were put ahead of a sense of long-term responsibility to the firms, shareholders, and the people the organization purported to serve as employees and customers.

Only a few years before, at the Enron Corporation, the illegal actions of the management lead to the bankruptcy of a company and the loss of lower-level employee's pensions, despite their lack of involvement in the actions that lead up to the scandal. Encouraging arrogance rather than fostering ethical principles encourages top managers to believe they are smarter than or above the law and the people the organization serves. High CEO salaries and bonuses reinforce that sense of specialness.

What is emotional intelligence? How is it related to leadership? How is emotional intelligence related to different leadership traits? What leadership traits might prevent corruption, or promote it? How might training and development in the area of emotional intelligence and leadership prevent corruption and unethical behavior from developing in organizations?