PBL 3: Ethical Leadership:

What do `judgements about Ethical Leaders take into Account?

the purpose (the ends), the extent to which behaviour is consistent with moral standards (means) and the consequences for others (outcomes)

Definition of Integrity:

emphasises honesty and consistency between a persons values and their behaviour

• integrity helps to explain leadership effectiveness

Consideration of the Word Values in Integrity

the values here must be moral, so the behaviour shown must be consistent with justifiable moral principles

• limitation: moral principles are not the same in different cultures

Most important: must intend no harm and respect the rights of all affected parties

What are Dilemmas that Can Occur in Ethical Leadership

• Influencing Expectations (risky strategies)

• Influencing Values and Beliefs

• Multiple Stakeholders and Competing Values

Influencing Expectations:

How a leader influences follower perceptions of the risks and prospects for a success of a new strategy

• leaders must fully inform followers about likely costs and benefits of a risky venture so they can make a conscious decision, however this may demotivate them

Influencing Values and Beliefs

• Opposing: people think that influence people to change their values and beliefs is unethical even when the intended outcome benefits followers and organisation

• Supportive: leaders have a responsibility to implement major changes in an a organisation to ensure effectiveness and survival, and large-scale change is not possible without changes in member beliefs

Multiple Stakeholders and Competing Values

1. Managers are responsible to represent the interest of the owners in achieving economic success

2. Managers should serve multiple stakeholders inside and outside the organisation (integration)

Unethical Leadership is Related to Individuals with Which Traits?

• Low Conscientiousness

• High Neuroticism

• High Narcissism

• Personalised Power Orientation

• Low Emotional Maturity/Intelligence (more likely to resist the urge to use their power to exploit others)

Kohlbergs Theory of Moral Development:

Low Stage: motivation decisions based on self-interest and satisfaction of needs

Middle Stage: motivation decisions based on following social norms

Highest level: motivation decision based to fulfil internalised values and principles

Self-Identity Theory:

a person with a strong moral self-identity is motivated to act consistent with ethical values and beliefs

Decisions Making with Values Involving Consequences of Behaviour and Observance of Formal Rules

If consequences are more important: people will favour actions likely to benefit all affected parties

If formalism is more important: people will be inclined to obey rules and policies

Situational Influences that Lead to Unethical Behaviour

• a dynamic or uncertain environment

• a formal reward system that encourages unethical behaviour

• intense competition for rewards and advancement

• unrealistically difficult performance goals

• followers traits and beliefs (low self-esteem)

• Societies where violence is prevalant

• Cultural values for uncertainty avoidance and power distance

Solutions to Restrain Unethical Behaviour

Abusive Supervision is more prevalent in organisations that lack mechanisms to limit the power of chief executive

• limit terms, procedures for followers to evaluate leaders, formal procedures to remove leaders who misuses power

Consequences of Unethical Leadership

less organisational citizenship behaviours by employees, more retaliation and displaced aggression toward coworkers and the organisation

Theories of Ethical Leadership:

transformational, authentic, spiritual and servant leadership

Transformational Leadership:

Leaders and followers inspire and motivate each other to innovate, grow, and exceed expectations through a shared vision and personal development

Characteristics of Transformational Leadership:

• seek to raise conscientiousness of followers by appealing to their ideals and moral values

• Followers are elevated from their ‘everyday’ selves to ‘better’ selves

• Changes social systems and reforms institutions

• Mediate conflict among groups and channel that energy into achieving shared objectives

• Benefits larger collectivities not just themselves

The 4 I’s of Tranformational Leadership

Idealised Information: Leaders act as ethical role models whom followers trust and respect

Intellectual Stimulation: Leaders challenge the status quo and encourage people to question old assumptions.

Inspiration Motivation: Leaders communicate a clear, appealing, and compelling vision of the future.

Individualised Consideration: Leaders treat team members as individuals with unique needs, strengths, and goals.

Two Types of Transformational Leadership:

Transformational behaviours can be used in a manipulative way to influence followers task commitment and loyalty to leader

• Authentic vs Inauthentic Transformational Leadership

Servant Leadership:

the primary responsibility is to provide service to followers through trust

• services: empowering, nurturing and defending followers

Servant Leadership in the workplace is about:

1. helping others to accomplish shared objectives by facilitating individual development

2. empowerment

3. collective work that is consistent to health and long-term wellbeing of followers

Ethical Considerations of Servant Leaders:

• should do what is good and right, even if it doesn’t provide highest financial benefits

• social injustice should be imposed whenever possible

• social responsibility should be one of their main objectives

Benefits of Servant Leadership:

• leader integrity and concern for subordinates, increases their trust, loyalty, and satisfaction with leader\

• a favourable relationship makes it easier to influence suboordinates to carry out requests

• employee-oriented culture attract and retains talented, committed employees

Consequences of Servant Leadership:

• balancing competing preferences of owners and employees

• more commitment

Spiritual Leadership:

describes how leaders can enhance the intrinsic motivation of followers by creating conditions that increase their sense of spiritual meaning

2 Essential Elements that define Spirituality;

Transcendence: belief ones activities have a meaning beyond getting economical benefits for a company (manifest sense of calling)

Fellowship: meaningful relationships and being connected to others that provides feelings of joy and wholeness

What do both transcendence of self and fellowship include:

Altruistic love and faith

Benefits of Spiritual Leaders:

increase followers intrinsic motivation, confidence, performance, cooperation and collective learning

Authentic Leadership:

leaders align their external actions with their internal values

• they have positive leader values, self-awareness and a trusting relationship with followers

Their Positive Core Values lead them to do..

1. motivate them to do what is right and fair for followers

2. create a special type of relationship that includes transparency, mutual trust, guidance towards shared objectives, and emphasis on follower welfare and development

Influence of Authentic Leaders on Followers

• enhance their confidence, clarity of values and integrity

• have more personal identification with the leader and more social identification with the team

A Reputation for Ethical Leadership Falls Under Two Pillars:

Perceptions of you as a Moral Person and Moral Manager

How do these two pillars inteact with eachother?

leaders have the executive responsibility to conform to a ‘complex code of morals' (moral person) and creating moral codes for others (moral manager)

Ethically Neutral Leader

a manager or executive who possesses personal moral values, but fails to apply or communicate those ethics within their leadership role (moral person not manager)

How do people tend to form a perception that a leader is ethically neutral?

• Leaders have not experienced a ethical challenge that would provide the opportunity to show their values

• Leaders don’t proactively make ethics an explicit part of their leadership agenda

What is a Moral Person in Leadership

a leader that conveys that he is an ethical person to others

• this is done through traits, behaviours and making ethical decisions

Traits in Moral Person:

Stable personal characteristics including honesty, trustworthiness and integrity

Behaviours in Moral Managers:

Doing the right thing, showing concern for others and treating them right, being open and communicative

What does being open and communicative mean?

• shares successes and failures they have experienced

• they are a food listener and approachable

• treats bad news as a problem to be addressed rather than punished

Decision-making in Moral Person:

hold a solid set of ethical values and principles, aim to be objective and fair, include concerns about broader society

Pillar Two: Being a Moral Manager

Leaders proactively put ethics as the forefront of their leadership agenda

• through role modelling, rewards and discipline and communicationg

Role Modellng Through Visible Action

Emphasises visible action and the perceptual interpretations of the ethical leadership to followers

• effective managers understand which actions are noticed and how they will be interpreted by followers (visible executive action)

Communicating about Ethical and Values

if people do not hear about ethics and values from the top, then it is not clear to employees that ethics and values are important

The Value System:

using rewards and discipline may be one of the most effective ways to convey desirable and undesirable conduct (ie. rewarding those who accomplish their goals by behaving in ways that are consistent with stated values)

What Does Ethical Leader Accomplish:

good for business long-term, avoids legal problems, contributes to employee commitment and satisfaction, imitate behaviour of leader making them more ethical

Dimensions of Weak Moral Leader

Weak Manager and Weak Person

The Hypocritical Leader:

Weak Moral Person and Strong Moral Manager

• not perceived as a strong moral person but they attempt to put ethics at the forefront of their leadership agenda

• Leads employees to distrust and become cynical because words are not matching actions

Ethically Neutral Leaders triats, behaviours and decision making

• Traits: seen more as self-centered than other-centered

• Behaviours: less open to input, care less about others and less compassionate

• Decision Making: narrow view, focus on financial ends, less concerned with leaving th organisation as a better place in the world

Outcomes of Ethically Neutral Leadership:

Employees think ethics is not important to leader and act without clear guidance about the ethics and values of the organisation

Heres and Lasthuizen Extra Aspect of Moral Manager:

Empowerment: involve followers in decision making, allow them to voice their own concerns, help them set realistic and motivating goals, provide with individual attention for coaching

• this heightens perception and trust in the leader

Reasons to suspect that the publicness of an organisation may shape a persons understanding of ethical relationships

Public Service Motivation, Core tasks and mission of the organisation, influence of external stakeholders on the organisation

Public Service Motivation

extent to which individuals hav a desire to serve the public interest and ones loyalty to the government

• PSM is higher in public than private sector (intrinsic vs extrinsic motivation)

Core tasks and mission of the organisation:

aim of private organisation is to maximise profit and public is to provide public services, therefore they feel the need to address ethical dimensions of certain actions more often

Influence of External Stakeholders on the organisation

the publicness of the company affects the extent to which the organisation is susceptible to citizen pressure and scrutiny, therefore public organisations expectations for fairness is higher and therefroe they feel forced to employ more explicit ethical leadership

Similarities of Being a Moral Person in Private and Public

strong moral values, transparent, open to feedback, caring and empathetic, high quality leader-follower relationship

Differences of Being a Moral Person in Private and Public Sectors

• Public is more outward-focused of ethical leadership

• Private concerns the internal organisation and it’s members

Similarities in Being a Moral Manager (Role Modeling)

role modelling the right behaviour and avoid sending out the wrong signals by exhibiting behaviour that could be interpreted inconsistent with the values and norms of the organisation

Similarities in Being a Moral Manager (Reward System)

preference for informal sanctions as opposed to formal punishments/ and inmaterial rewards

Similarities in Being a Moral Manager (Communication)

important and is a one-directional message from leafers to followers

Differences in Being a Moral Manager (Communication)

frequency of communication about ethics (communication is not necessary at all or periodicaly spoken about)

explicitness of communication (implicit vs implicit and explicit communication terms)

Similarities in Being a Moral Manager (Empowerment)

emphasises empowerment, independent judgement, common sense and personal responsibility

• rules are necessary to protect both organisation and employee

Economic Theory of Identity:

proposes that individuals have multiple social identities and thesed identities are associated with specific norms prescribing specific behaviours

Corruption

individual moral deterioration that results in an abuse of power for personal gain that contradicts social and moral norms

Power

the means of which leaders influence followers, usually to enforce ones will over another

Power-Corruption Link

People with power gain a sense of entitlement and self-interest, seeing others as less worthy making them behave unethically and are immune to others suffering

High Power vs Corruption

Giving individuals more pwer increases leaders of taking antisocial or very antisocial decision (correlated and supported)

• they are also more likely to violate social and personal norms they initially adopted

• shows how tempting power is and how it blinds individuals from doing what is appropriate

Slippery Slope Effect

an individual may become more corrupt with time

Corruption Process with Power Overtime

observe how subjects react to an increase in power with knowledge that they are supposed to pick the socially responsible option

Honesty and Testosterone with Corruption

corruption was highest when both power and testosterone were high

honesty does not interact with power to predict corruption (but does not shield it)

Characteristics of Individuals predisposed to corruption

young, male, extroverted and highly consciousness, and low openness