Chapter 6: Leadership Ethics and Social Responsibility

Ethics - is the study of moral obligations, or of separating right from wrong.

morals -which are an individual’s determination of what is right or wrong

Leadership Ethics and Social Responsibility

Principles and Practices of Ethical and Moral Leadership

Four ethical leadership behaviors
  1. Be honest and trustworthy and have integrity in dealing with others    a. Integrity refers to loyalty to rational principles; it means practicing what one preaches regardless of emotional or social pressure.
  2. Pay attention to all stakeholders - Ethical and moral leaders strive to treat fairly all interested parties affected by their decisions. To do otherwise creates winners and losers after many decisions are made.
  3. Build community - leaders need to consider their and their followers’ purposes and search for goals that are compatible to all. When many people work toward the same constructive goal, they build a community.
  4. Respect the individual -

Ethical and moral leaders strive to treat fairly all interested parties affected by their decisions. To do otherwise creates winners and losers after many decisions are made.

Factors contributing to ethical differences
  1. Leader moral identity A moral identity involves a self-perception organized around a set of moral traits such as honesty, caring, and compassion. The moral identity acts as a self-regulatory mechanism rooted in a person’s sense of what is right and wrong.
  2. Greed, Gluttony, and avarice - Many people seek to maximize personal returns, even at the expense of others.
  3. Rationalization and implied permission - good people choose the wrong path. focus on the intent of the action rather than on the action itself
  4. Moral development level - Some leaders are morally advanced, whereas others are morally challenged—a mental condition that often develops early in life
  5. Sense of entitlement - the idea that some CEOs lose their sense of reality and feel entitled to whatever they can get away with or steal.
  6. Situational influences - If leaders at the top of the organization take imprudent, quasi-legal risks, other leaders throughout the firm might be prompted to behave similarly. Another potential situational influence on ethical behavior is that national culture in which the leader operates.
  7. Character of the person - The higher the quality of a person’s character, the more likely he or she will behave ethically and morally
  8. Motivational blindness - seeing what we want to see and missing contradictory information.
ethical mind

 point of view that helps the individual aspire to good work that matters to their colleagues, companies, and society in general. Developing an ethical mind begins with the belief that retaining an ethical compass is essential to the health of the organization

Guideline for evaluating ethics of a decision

  1. is it right? Is it fair?
  2. Who gets hurt?
  3. Would you be comfortable if the details of your decision or actions were made public in the media or through e-mail?
  4. What would you tell your child, sibling, or young relative to do?
  5. How does it smell?

Ethical issues that require a run through guide are usually subtle rather than blatant, or a decision that falls into the gray zone

Leadership, Social Responsibility, and Creating an Ethical Organizational Culture

Corporate social responsibility - is the idea that firms have obligations to society beyond their financial obligations to owners or stockholders, and also beyond those prescribed by law or contract.

Initiatives for achieving a socially responsible and ethical organization
  1. Provide strategic leadership of ethics and social responsibility - If high ethics receive top priority, workers at all levels are more likely to behave ethically.
  2. Creating a pleasant workplace - Creating a comfortable, pleasant, and intellectually stimulating work environment is a social responsibility initiative that directly affects employees’ well-being.
  3. Help build a sustainable environment - Helping build a sustainable environment can involve hundreds of different actions such as making packaging smaller; making more extensive use of fluorescent lighting; and, when feasible, using energy from solar panels and wind turbines to replace burning of fossil fuels.
  4. Engaging in social entrepreneurship - social entrepreneurship, the use of market-based methods to solve social problems. Social entrepreneurship is therefore an entrepreneurial approach to social problems such as homelessness, contaminated drinking water, damaged physical environments, and extreme poverty.
  5. Engage in philanthropy - donate money to charity and various other causes.
  6. Work with suppliers to improve working conditions - work with suppliers to improve physical and mental working conditions. Instead of refusing to deal with a supplier who operates a sweatshop, management might work with the supplier to improve plant working conditions.
  7. Establish written codes of ethical conduct - Many organizations use written codes of conduct as guidelines for ethical and socially responsible behavior. They all address conflicts of interest, gifts and things like vendor relationships. They use the word ‘customer’ in one and ‘patient’ in another but they’re all about doing the right thing     a. The Sarbanes–Oxley Act, triggered by the financial scandals around the year 2000, requires public companies to disclose whether they have adopted a code of ethics for senior financial officers
  8. Develop formal mechanisms for dealing with ethical problems - Many large employers have ethics programs of various types. Large organizations frequently establish ethics committees to help ensure ethical and socially responsible behavior.
  9. Accept whistleblowers - A whistleblower is an employee who discloses organizational wrongdoing to parties who can take action. Closely related to encouraging whistleblowers is for leadership to make it safe for people to speak up about even minor ethical violations
    1. Provide training in ethics and social responsibility - Forms of ethics training include messages about ethics and social responsibility from company leadership, classes on ethics at colleges, and exercises in ethics. These training programs reinforce the idea that ethical and socially responsible behavior is both morally right and good for business.
    2. Minimize abusive supervision throughout the organization - Minimizing abusive supervision throughout the organization would include a variety of top-level leadership actions such as frequent communication about the topic, and coaching managers known to be abusive. Listening carefully to employee complaints about being abused would also be helpful

     1. abusive supervision, defined as “a dysfunctional leadership behavior that adversely affects its targets and the organization as a whole.” Abusive supervision can take the form of hostile behaviors such as angry tantrums, public criticisms, and inappropriately assigned blame

Ethical and socially responsible behavior and organizational performance

High ethics and social responsibility are sometimes related to good financial performance.

Ethical leadership was positively related to job attitudes, job performance, and overall evaluation of the leaders.

Ethical leaders are more trusted by employees, and trust often results in positive job attitudes and behaviors.