Ethical Leadership
Ethical Leadership Overview
This section introduces the core concepts of ethical leadership, contrasting morals, ethics, and virtues, and outlining the impact leaders have through their actions.
Chapter Overview
Morals vs. Ethics vs. Virtues: Differentiating personal beliefs, guiding principles, and character traits.
Ethics & Leadership: Understanding the role of ethics at the core of leadership.
Leader's Light or Shadow: How a leader's actions determine their influence.
Shadow Casters: Specific ways leaders can enact unethical behavior.
Food For Thought
What distinguishes morals, ethics, and virtues?
How is ethical leadership recognized?
What are the effects of an ethical leader's actions on followers?
Differentiating Morals, Ethics, and Virtues
Ethics
Definition: Refers to the principles or frameworks used to judge whether actions are right or wrong.
Focus: It's about reasoning through dilemmas and making decisions that align with broader societal or professional standards.
Key Features:
Often codified in professional codes (e.g., medical ethics, business ethics).
Involves critical thinking and moral reasoning.
Can vary across cultures and professions.
Example: A leader discloses a conflict of interest before a hiring decision, showcasing ethical transparency, even if not legally required.
In Leadership: Ethical leadership involves both personal moral behavior and moral influence. Leaders model integrity and guide others to act ethically. Ethics is fundamental to leadership and is often noticed by its absence.
Morals
Definition: Personal beliefs about what is right and wrong.
Source: Often shaped by culture, religion, upbringing, and individual experiences.
Key Features:
More individual and subjective than ethics.
Often expressed as rules or prohibitions (e.g., "don’t lie," "don’t steal").
Example: A leader refuses bribes based on a personal belief that it is morally wrong, even if others in the organization might accept them.
In Leadership: Morals serve as a leader’s internal compass, influencing their decisions, particularly in ambiguous situations where clear ethical guidelines might not exist.
Virtues
Definition: Positive character traits or habits that enable one to live an honorable or "good" life and possess a "good" moral character.
Focus: Emphasize who a person is, concentrating on character, not solely on actions.
Key Features:
Focus on character development.
Include traits such as honesty, courage, humility, compassion, and fairness.
Example: A leader consistently demonstrates empathy and fairness, even under significant pressure. These traits foster trust and loyalty among followers.
In Leadership: Virtuous leaders inspire others by embodying values that promote ethical behavior and long-term well-being in the organization and community.
Morals vs. Ethics vs. Virtues: A Comparison
Concept | Focus | Source of Guidance | Example in Leadership |
|---|---|---|---|
Ethics | Right vs. wrong actions | Professional/societal standards | Disclosing conflicts of interest |
Morals | Personal beliefs | Culture, religion, upbringing | Refusing bribes due to personal values |
Virtues | Character traits | Philosophical traditions (e.g., Aristotle) | Leading with humility and courage |
Leadership & Ethics
Leadership Definition: The exercise of influence within a group context.
Interdependent Roles: Leaders and followers are intrinsically linked.
Dynamic Roles: Individuals commonly transition between leading and following roles.
Leadership's Dual Nature: It comes with both significant benefits and substantial burdens.
Ethical Leadership Defined: A holistic process that encompasses a leader's personal moral behavior and their moral influence on others.
Leader Effectiveness
Benefits of Ethical Leaders (EL):
More promotable and demonstrably effective in their roles.
Subordinates working for ELs report higher job satisfaction and engagement.
Followers led by ELs are less prone to engaging in negative or counterproductive behaviors.
ELs significantly enhance organizational trust and foster a positive organizational culture.
ELs exhibit strong social responsibility.
Important Consideration: Unethical leaders can achieve success, but their organizational climate is typically unhealthy and often unsustainable in the long term.
The Dark Side of Leadership
Promoting good or ethical leadership begins with understanding the negative or toxic aspects of leadership.
Toxic Leaders: Those who engage in destructive behaviors and display dysfunctional personal characteristics.
Types of Destructive Leaders:
Tyrannical Leaders: Successfully achieve organizational goals while simultaneously abusing their followers.
Supportive-Disloyal Leaders: Prioritize the welfare of their subordinates, but often at the expense of broader organizational goals.
Seven Types of Bad Leaders
Incompetent: Lack the motivation or ability to sustain effective action, often due to deficiencies in emotional or academic intelligence.
Rigid: May possess competence but are unyielding, unable, or unwilling to adapt to new information, new ideas, or changing conditions.
Intemperate: Exhibit a lack of self-control, often enabled by followers who are unwilling or unable to intervene.
Callous: Uncaring and unkind; they ignore or downplay the needs, wants, and wishes of their followers.
Corrupt: Leaders who engage in dishonest acts such as lying, cheating, or stealing, consistently prioritizing self-interest over the public or organizational interest.
Insular: Establish clear boundaries, primarily focusing on the welfare of their immediate group or organization while disregarding or neglecting the needs of others (outsiders).
Evil: Commit atrocities, utilizing their power to inflict severe physical or psychological harm upon followers or other individuals.
The Leader's Shadows
How leaders handle various challenges determines whether they cast 'light' (positive influence) or 'shadows' (negative influence). These challenges include:
Power
Privilege
Information
Consistency
Loyalty
Responsibility
Casting Shadows: Behaviors of Immoral Leaders
Immoral leaders cast dark shadows when they:
Abuse their designated power.
Hoard privileges for themselves.
Mismanage critical information.
Act inconsistently in their decisions and behaviors.
Misplace or betray loyalties to their followers or organization.
Fail to assume their responsibilities.
The Shadow of Power
Nature of Power: Power forms the foundation for all influence attempts. The greater a leader's power, the higher the likelihood that others will comply with their wishes.
Sources of Power: Power originates from various sources, and leaders typically draw upon more than one. Each power type has inherent advantages and disadvantages.
Dangers of Power: Individuals can become "intoxicated" by power, using their positions to abuse subordinates. Victims of such abuse often suffer from a range of negative psychological and emotional symptoms.
Five Power Bases:
Coercive Power: The ability to deliver punishments or remove rewards.
Reward Power: The ability to deliver something of value to others.
Legitimate Power: Derives from one's recognized position or role.
Expert Power: Based on specialized knowledge, skills, or abilities.
Referent (role model) Power: Based on admiration, respect, or identification with the leader.
Abuse Potential: The greater a leader’s power, the greater the potential for its abuse. Power can enable impulsive, selfish individuals to pursue their goals without considering others’ needs. Powerful leaders may protect their positions by attacking perceived threats and are prone to biased judgments.
Wise Use of Power: Leaders must carefully consider:
Which types of power to use, when, and for what purposes.
How much power to retain and how much to delegate or share.
It's crucial to recognize and resist the intoxicating dangers of possessing too much power while also ensuring that followers are not corrupted by having too little power.
The Shadow of Privilege
Societies grapple with complex questions regarding leader privileges, such as:
“How many additional privileges are justified for leaders?”
“What should be the relative difference in pay and benefits between workers and top management?”
“How can we address the significant global gap between the 'haves' and 'have-nots'?”
Leader Excess: Generally, the greater a leader’s power, the greater the rewards they receive. This phenomenon of leader excess is not new, but it has intensified over time.
Over the past 30 years, the average compensation for chief executives of large U.S. firms has soared to 10.5 million (including salary, bonuses, stock, and stock option grants).
In contrast, the typical U.S. worker's real wage (adjusted for inflation) is lower than it was in the 1970s.
Globally, there are an estimated 950 billionaires with a combined wealth of 3.5 trillion, while concurrently, the poorest populations are deprived of basic necessities like food, shelter, clean water, and healthcare.
The Shadow of Mismanaged Information
Leaders cast shadows not only through outright lies but also by mismanaging information and engaging in deceptive practices.
Unethical Leaders Mismanage Information By:
Denying possession of knowledge they actually have.
Withholding crucial information that followers need to perform effectively.
Using information solely for their personal benefit.
Violating the privacy rights of their followers.
Releasing sensitive information to unauthorized individuals.
Placing followers in ethical dilemmas by preventing them from disclosing information that others have a legitimate right to know.
Examples: Issues in the pharmaceutical industry (e.g., hiding adverse drug effects) or the restaurant industry (e.g., misrepresenting calorie counts).
The Shadow of Misplaced and Broken Loyalties
Employees are often victims of corporate betrayal, frequently motivated by the organization's bottom line.
Examples of Corporate Betrayal:
Slashing salaries and benefits.
Laying off even the most loyal and long-serving workers.
Shutting down domestic plants and research facilities.
Opening new operations overseas without sufficient consideration for domestic impact.
The Shadow of Irresponsibility
Leaders are held accountable for the performance and ethical conduct of their entire department or unit.
Determining Responsibility: A key challenge is establishing the extent of a leader’s responsibility in various situations.
Irresponsible Actions: Leaders act irresponsibly when they fail to make reasonable efforts to prevent misdeeds on the part of their followers.
Corporate Scandals and Boards of Directors: Many corporate scandals highlight what happens when boards of directors fail to meet their oversight expectations. Often:
Boards are composed largely of friends of the CEO or individuals/firms doing business with the company, leading to conflicts of interest.
They are quick to approve generous pay increases for executives and proposals that primarily benefit themselves or their affiliates.
Some board members or chosen leaders may lack the necessary expertise and make no genuine effort to develop their competencies, further compromising oversight.