CH #11: Ethical Leadership

Leadership

ability or authority to guide and direct others towards a goal

• ethical decisions are one dimension of leadership

Normative Myopia

when managers overlook or stifle the importance of core values in their business decisions

• result: ethical blindness — propensity to rationalize an unethical action or turn a blind eye

Ethical Leadship and Organizational Culture

organization culture emerges whether or not there is effective leadership

• an integrity-based approach views ethics as an opportunity to implement core values

Power

the influence leaders and managers have over behavior and decisions of subordinates

Reward Power

a person’s ability to influence the behavior of others by offering them something desirable

Coercive Power

penalizes actions or behavior

Legitimate Power

the belief that a certain person has the right to exert influence and certain others have an obligation to accept it

Expert Power

derived from a person’s knowledge and usually stems from a superior’s credibility with subordinates

Referent Power

when one person perceives that their individual goals or objectives are similar to another’s

Motivation

a force within the individual that focuses their behavior toward achieving a goal

• an organization offers positive incentives that encourage employees to work toward organizational objectives

Job Performance

a function of ability and motivation and can be represented by the equation (job performance = ability times motivation)

Ethical Business Conflicts

when there are two or more positions on a decision that conflicts with organizational goals

• sometimes emerge because employees feel uncomfortable about their own or their coworkers’ decisions

• helps pinpoint ethical issues

Ethical Disasters

large-scale unethical activity that follows recognizable phases of escalation, from ethical issue recognition and the decision to act unethically to the organization’s discovery of and response to the act

Ethical Leaders Empower Employees

ethical leaders must empower employees to make ethical decisions and take responsibility for their conduct.

• empowerment is an essential component of a values-based organizational culture.

Transparency

develops a culture where ethics is frequently discussed

Reporting

• two-way process — both employee and leader feel a responsibility to report to one’s subordinates

• process can be formal or informal

Groupthink

occurs when one or more group members feel pressured to conform to group’s decision even if they personally disagree

Group Polarization

refers to the fact that a group is more likely to move toward a more extreme position than its individual group members

Leader-Follower Congruence

when leaders and followers share the same vision, ethical expectations, and objectives for the company

Leader-Exchange Theory

when leaders form unique relationships with followers through social interactions

Emotional Intelligence

the ability to manage themselves and their relationships with others effectively, characterized by self-awareness,
self-control, and relationship building

Transactional Leaders

leaders who create employee satisfaction through negotiating, or “bartering,” for desired behaviors or levels of performance

Transformational Leaders

leaders who strive to raise employees’ level of commitment and foster trust and motivation

Authentic Leaders

leaders who are passionate about the company, live out corporate values daily in their behavior in the workplace, and form long-term relationships with employees and other stakeholders