W7 Article Analysis
Chapter 11: Ethical Leadership: 11-11 Chapter Review Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Kennisha Holloman (kholloman@grantham.edu) © 2019 Cengage Learning, Cengage Learning
11-11 Chapter Review
11-11a Summary
Leadership is the ability or authority to guide and direct others toward a goal. Ethical
decisions should be one dimension of leadership. Ethical leadership has a significant impact
on ethical decision making because leaders have the power to motivate others and enforce
the organizations norms and policies.
Ethical leadership skills are developed through years of training, experience, and learning
from other best practices of leadership. Ethical leadership involves modeling organizational
values, placing what is best for the organization over the leader’s own interests, training and
developing employees throughout their careers, establishing reporting mechanisms,
understanding employee values and perceptions, and recognizing the limits of
organizational rules and values. Ethical leaders have strong personal characters, a passion
to do what is right, are proactive, consider all stakeholders’ interests, are role models for the
organizations values, are transparent and actively involved in decision making, and take a
holistic view of the firm’s ethical culture.
There are many benefits to ethical leadership. Ethical leadership encourages employees to
act in an ethical manner in their daily work environment. Ethical leadership can also lead to
higher employee satisfaction and employee commitment. Customers are often willing to pay
higher prices for products from ethical companies. Ethical leadership can also impact the
long-term market valuation of the firm. Finally, companies that demonstrate they have strong
ethics programs are more likely to see their fines reduced if misconduct should occur.
Ethical leaders generally adopt one of two approaches to leadership: a compliance-based
approach or an integrity-based approach. A compliance approach is more focused upon
risks, while an integrity approach views ethics more as an opportunity. Leaders can be
classified as unethical leaders, apathetic leaders, and ethical leaders. The unethical leader
is usually egocentric and will often do whatever it takes to achieve personal and
organizational objectives. A small proportion may even be classified as psychopathic, in
which they have no conscience and little or no empathy toward others. This type of leader
does not try to learn about best practices for ethics and compliance. Apathetic leaders are
not necessarily unethical, but they care little for ethics within the company. Ethical leaders
include ethics at every operational level and stage of the decision making process.
Ethical leaders are skilled at conflict management. Ethical business conflicts occur when
there are two or more positions on a decision that conflicts with organizational goals.
Sometimes ethical conflicts emerge because employees feel uncomfortable about their own
or their coworkers’ decisions. There are five types of conflict management styles:
competitive, avoiding, accommodating, compromising, and collaborating. However, an
ethical leader should be able to adapt his or her style depending on the situation.
Additionally, ethical leaders are often skilled at recognizing the conflict management styles
of others and adapting their styles accordingly.
While we tend to focus on top managers when discussing ethical leadership, ethical
leadership is not limited to managers or supervisors. Employee empowerment is an
essential component of a values-based organizational culture. Employees can contribute to
the firm’s ethical culture by reporting questionable activities, providing suggestions to
improve the firm’s culture, and modeling the firm’s values to new employees. A firm’s ethical
culture relies not simply on documents such as a code of ethics, but on how employees
embody the principles of integrity the organization values.
Communication is an important part of ethical leadership. Four types of communication
include interpersonal communication, small group communication, nonverbal
communication, and listening. Communication is essential for reducing leader isolation and
creating leader–follower congruence. Leader–follower congruence occurs when leaders and
followers share the same vision, ethical expectations, and objectives for the company. An
important way of communicating ethical values to employees is through codes of ethics and
training on how to make ethical decisions. Minimizing power differences and workplace
politics and encouraging feedback from employees are also ways to create leader–follower
congruence to support an ethical organizational culture.
As teams become increasingly important, particularly in organizations requiring complex
problem solving, knowing how to manage teams has taken on a significant role for
organizational leaders. Ethical leaders can increase the effectiveness of teams by
supporting the team’s ability to make decisions, initiating the structure of the team, and
assigning tasks if needed. Team members should be trained in effective team building skills
to help them arrive at more ethical decisions while avoiding common pitfalls such as
groupthink.
Leadership styles influence many aspects of organizational behavior, including employees’
acceptance of and adherence to organizational values. The most effective ethical leaders
possess the ability to manage themselves and their relationships with others effectively, a
skill known as emotional intelligence. Resonant leaders are emotionally intelligent leaders
who demonstrate mindfulness of themselves and their own emotions, a belief that goals can
be met, and a caring attitude toward others within the organization. Transactional leaders
attempt to create employee satisfaction through negotiating, or “bartering,” for desired
behaviors or levels of performance. Transformational leaders strive to raise employees’
level of commitment and to foster trust and motivation. Another leadership style gaining
attention is authentic leadership. Authentic leaders are passionate about the company, live
out corporate values daily in their behavior in the workplace, and form long-term
relationships with employees.
The RADAR model stands for Recognize, Avoid, Discover, Answer, and Recover. An ethical
leader can use this model to identify ethical risk areas, respond to ethical issues, and, if
necessary, help the organization recover from ethical mishaps. First, an ethical leader must
be able to identify or recognize issues having an ethical component. Next, the leader should
seek to avoid having the ethical risk areas turn into ethical disasters by putting systems and
controls in place to limit the opportunity for misconduct. Discovery involves proactively
uncovering ethical risk areas that could lead to misconduct. Ethical audits are a good
discovery tool. When an ethical issue or a misconduct disaster occurs, answering involves
responding to the discovery of an ethical dilemma through communication both internally
and externally. Finally, recovery involves fixing any weaknesses in the ethics program and
developing improved ways of detecting misconduct.
Chapter 11: Ethical Leadership: 11-11 Chapter Review Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Kennisha Holloman (kholloman@grantham.edu) © 2019 Cengage Learning, Cengage Learning
© 2020 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means - graphic, electronic, or mechanical, or in any other manner - without the written permission of the copyright holder.