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Week 5: Being an Ethical Role Model
Corporate Corruption: I was the Enron Whistleblower
What is Ethical Leadership?
“the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making’’ (Bedi et al. 2016, p. 519)
This definition highlights two key components of ethical leadership:
First, ethical leaders are ‘‘moral persons,’’ as role models they demonstrate ethical behavior.
Second, ethical leaders are ‘‘moral managers’’; they actively promote ethical behavior. They explicitly communicate their ethical standards and hold followers accountable for ethical conduct.
Within this framework, ethical leaders shape followers’ work-related outcomes in two ways: directly through role modelling and indirectly through social exchange.
Role Modelling Ethics
Social Learning Theory (Bandura, 1986)
Individuals learn the norms of appropriate conduct in two ways; through their own experience, and by observing others.
To learn ethical norms, individuals pay attention to and emulate credible and attractive role models
Ethical leaders become attractive and credible role models when they demonstrate integrity and set high ethical standards for themselves as well as others (Brown et al. 2005)
Leaders as role models motivate ethical behavior by demonstrating the type of actions they want to promote and reward. In addition, leaders also serve as an informational guide for acceptable behaviors.
Characteristics of Ethical Role Models (Weaver et al. 2005, p. 316)
Promote Ethical Conduct through Social Exchange
Social Exchange Theory (Blau, 1964)
Norms of reciprocity or perceived obligation to return favours undergird many social relationships
When followers perceive a leader as caring and concerned for their well-being, they feel obliged to reciprocate that leader’s support.
Therefore, ethical leaders engender feelings of trust and fairness in their followers, and create an organizational environment where followers are more likely to reciprocate with beneficial organizational behavior
Note: Exchange always occurs within cultural norms
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Causes & Consequences of EL (Brown & Trevino, 2006, p. 596)
Differences with other forms of Positive Leadership (Brown & Trevino, 2006, p. 598)
Ethical Leadership and Performance Management
Audit performance management system to determine whether ethical role modelling behaviors (as identified above) are being expected of leaders and to add them if they are not.
Align with other organizational goals and cultural systems; tie to the firm’s values and reiterate in the firm’s code of conduct, mission and values statement
Ethical role modelling competencies must be given as much weight in promotion and compensation decisions as other competencies and outcomes such as financial performance
Finally, invest resources (training & development) in providing leaders with the necessary skills so that they can effectively fulfil EL expectations.
Ethical Decision Making
Markkula Centre EDM framework apply to Case Study (Online); see also Markkula Centre for Applied Ethics – Decision Making App
Defensible Moral Judgements
Moral Standard
Factual information concerning the issue
Moral Judgment on the issue
A society is unjust if it does not treat people fairly
In the USA, 26% of African Americans fall below the poverty lines as compared with 12% of whites
The USA has an unjust society
Defensible Moral Judgements
No blue eyed, blonde haired person will advance into senior management.
People who have attended private schools shouldn’t be eligible for government jobs
No unmarried female should advance to senior management.
It is Ok to lie to customers.
It is OK to sell something unsafe.
It is Ok to sell something unsafe as long as you warn people.
People who work for the profit of others should be paid.
It is morally acceptable to sell products overseas which you cannot sell in your own country because they are unsafe.
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