Leadership & Ethics

 

“Ethical Leadership is defined as “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”… [and] the evidence suggests that ethical leader behavior can have important positive effects on both individual and organizational effectiveness” (Rubin et al 2010: 216-17).

Present corporations and organization have to face ethical leadership as one of the burning issues to conduct beneficial business. The issue of ethical leadership is often misunderstood in business.  The number of corporate scandals has been recently increased along with financial crisis. For instance, Lay and Skilling, Enron’s leaders, were far away from ethical leadership, trustful relations and ethical behavior as well. As the result of the accounting cooperation with Enron, a big accounting company Arthur Andersen was destroyed.

People do not trust business leaders in building sustainable institutions (Bill 2010). In this blog, I will discuss what is necessary for a good ethical leader, providing the effective leadership and the stable development of organization.

Deontological and teleological perspectives

Normative ethical theories are divided into deontological and teleological perspectives. A deontological theory is based on the specific moral obligations and duties, which are self-evident and have intrinsic value. According to the deontological theory, moral actions can be evaluated due to rightness or wrongness (Ethics at a Glance 2015).

These approaches consider the ethical leadership as “good” phenomenon in connection with moral principles (Lakshmi 2014). The Confucian approach supports the moral leadership, and argues that leadership bases equally on “moral principles and the ethical vision of a good life” (Becker 2009).

According to Immanuel Kant moral universal principles should be acted without any exception and people need to do “what is morally right, regardless of the consequences” (Johnson 1952).  Holmes (1993) described strong deontological theories, in which “goodness is irrelevant to the rightness of an act”, and weak deontological theories, in which “goodness is relevant”.

In contrast, a teleological theory states the rightness or wrongness of actions and is based on the “goodness or badness of their consequences” The examples of teleological theories are ethical egoism and utilitarianism. (Ethics at a Glance 2015).

4 V model of ethical leadership

For better understanding the relations between leadership and ethics, it is necessary to describe the 4 V model of ethical leadership. It was created by B.Grace as a framework that balances the “internal beliefs and values with the external behaviors and actions” in order to achieve the common good. To implement this model it is necessary to follow 4 steps.

                        Figure 1:  4 Values model of ethical leadership (Ghuman 2010).

• Values: The ethical leaders have to understand the core values for identifying themselves.
• Vision: The ethical leaders need to think and shape a future for goals’ achievements.
• Voice: The ethical leaders need to articulate the vision in order to motivate others to action.
• Virtue: The ethical leaders need to behave virtuously in order to do well for common goal (Ghuman 2010).

Examples of Good ethical leaders and unethical leadership

Despite so many examples of ethical and unethical leadership at present, in this part of the blog we will discuss the experience of Jim Skinner, McDonald’s CEO, as one of the best examples of a good ethical leadership. In contrary, another negative example of unethical leadership will be also shown.

Jim Skinner, the ex Chairman of the McDonalds Corporation (2008)

Jim Skinner applied a coaching leadership style, and he is seen as a leader and symbolic promoter of the company’s ideas and initiatives (McDonald’s Corporation 2008). He is a really “charismatic and transformational leader, who “reinvented” the corporation “with a new vision and direction” (Hume 2007). His successful leadership focuses on customer satisfaction, creativity, the way how people present themselves and do not lose the primary objectives (Hume 2007).

On the other side, such leaders as Bruno A Kaelin, the former vice president of Alstom and  David Colby the former CFO of Wellpoint can be characterized by unethical and immoral influence on the corporations, full of professional flubs (Kostigen 2009). Bruno A Kaelin was accused of a bribery case, while David Colby had relations with 30 women.

Recommendations of a good ethical leadership

Leadership means to be responsible and ethical in private and professional life. Ethical leaders are the models of behavior for their followers both in the organization and group. (Phil 2015). An ethical leader should have various peculiarities and characteristics, such as honesty, the ability to make decisions in favor of the leading organization, to use the power according to ethical norms and requirements.

Jaramillo, Bande, & Varela (2015) consider the leadership as phenomenon related to ethical climate. According to (Russell and Stone 2002) ethical leaders follow the principles of integrity. Leaders play a significant role in preserving an ethical climate in organization (Reed 2011). Bart (2011) argues that ethics is extremely important and should be widely used in business in order to conduct moral principles.

George (2010) argues that aligned employees need to commit values of the organization being “the part of something greater than themselves”. A good example of an aligned organization is Johnson & Johnson, which uses their Credo values in leading the company. According to George (2010) in order to be an effective leader, he should be able to sustain excellent results during the extended period of time and focus on the customers. Only “authentic leaders”, as well as aligned, empowered and collaborative employees will be able to lead the organization to long-term and profitable business results (George 2010).

A strong ethical leadership, with articulated values, culture and vision, adherence to ethical standards and responsible norms as well as honesty and trust to customers, employees and stockholders provide organizations with a strategic advantage and sustainable development.

References

Assumptions in Normative Ethics [online] available from <http://rhchp.regis.edu/hce/ethicsataglance/DeontologicalTeleological/DeontologicalTeleological_01.html> [12 February 2016]

Bart, C. (2011) ‘Ethics: The Key to Organizational Culture’, Canadian Manager, Business Source Complete, EBSCOhost, 36, 3, pp. 4-6

Bill, G. (2010) The New 21^st Century Leaders [online] available from <https://hbr.org/2010/04/the-new-21st-century-leaders-1/> [11 February 2016]

Ethics at a Glance. `(2016) Deontological and Teleological

Hume, S. (2007) McDonald’s CEO Jim Skinner – R&I’s , Executive of the Year [online] available from <http://www.rimag.com/article/CA6553963.html> [13 February 2016]

Jaramillo, F. & Varela, J. (2015) Servant leadership and ethics: a dyadic examination of supervisor behaviors and salesperson perceptions’, Journal of Personal Selling & Sales Management Business Source Complete, EBSCOhost, 35, 2, pp. 108-124.kkk

Johnson, C. (1952) Meeting the Ethical Challenges of Leadership: Casting Light or Shadow. New Delhi: Sage 4^th ed.

Karminder, K. (2010) Management: Concepts, Practice & Cases [online] available from <https://books.google.kz/books?id=QfxemvtRxo4C&pg=PA406&dq=4+V+model+of+ethical+leadership&hl=ru&sa=X&ved=0ahUKEwi634LN0c3LAhWrj3IKHbgUBQYQ6AEILTAC#v=onepage&q=4%20V%20model%20of%20ethical%20leadership&f=false> [14 February 2016]

Kostigen, T. (2009) The 10 most unethical people in business [online] available from <http://www.marketwatch.com/story/the-10-most-unethical-people-in-business> [08 February 2016]

Lakshmi, B (2014) Leadership Ethics in Today’s World: Key Issues and Perspectives’, ASCI Journal Of Management, Business Source Complete, EBSCOhost, 44, 1, pp. 66-72

McDonald’s Corporation (2008) [online] available from <http://www.mcdonalds.com/corp.html> [11 February 2016]

Phil, R. (2015) Article leadership [online] available from <http://ctb.ku.edu/en/table-of-contents/leadership/leadership-ideas/ethical-leadership/main> [12 February 2016]

Reed, L. & Scott R. (2011) A New Scale to Measure Executive Servant Leadership: Development, Analysis, and Implications for Research. Journal of Business Ethics 101 (3): 415 – 4 34. doi : 10.1007/ s10551-010-0729-1.

Robert L. Holmes (2013) The Ethics of Nonviolence [online] available from<https://books.google.kz/books?id=0XbHAgAAQBAJ&printsec=frontcover&dq=The+Ethics+of+Nonviolence:+Essays+by+Robert+L.+Holmes&hl=ru&sa=X&ved=0ahUKEwiitIjRzs3LAhWp_HIKHY68CQQQ6AEIHjAA#v=onepage&q=The%20Ethics%20of%20Nonviolence%3A%20Essays%20by%20Robert%20L.%20Holmes&f=false> [14 February 2016]

Russell, F. (2002) A Review of Servant Leadership Attributes: Developing a Practical Model. ” Leadership & Organizational Development Journal 23 (3): 145 – 157. doi : 10.1108/01437730210424