Leaders are critical to the ethical performance of any organization. They are largely responsible for determining mission and values, developing structure, and creating ethical climates. As a consequence, leaders deserve a good deal of credit for ethical success and a good deal of the blame when groups fall short. That’s why names of prominent leaders are linked to well-publicized ethical successes (Starbucks CEO Howard Schultz and Patagonia CEO Yvon Chouinard, Southwest Airlines president emeritus Colleen Barrett, Special Olympics founder Eunice Shriver) and failures (real estate mogul and pro basketball team owner Donald Sterling, broadcasting and business figure Martha Stewart, Enron’s Ken Lay, the Food Network’s Paula Dean, Tony Hayward of BP).

Social learning theory helps explain why and how organizational leaders exert so much influence over the ethical behavior of followers and the organization as a whole. 1 Social learning theory is based on the premise that people learn by observing and then emulating the values, attitudes, and behavior of people they find legitimate, attractive, and credible. When it comes to ethics, organizational members look to their leaders as role models and follow their example. Leaders who occupy positions of authority with status and power are typically seen as legitimate, credible, and attractive. According to researchers Michael Brown and Linda Trevino, ethical leaders build on this foundation. They raise their legitimacy by treating employees fairly and boost their attractiveness by expressing care and concern for followers. They enhance their credibility—particularly perceptions of trustworthiness—by living up to the values they espouse. Such leaders are honest and open and set clear, high standards that they themselves follow.

Behaving morally and serving as a role model (the moral person dimension of ethical leadership) is not enough to create ethical organizational cultures. Brown and Trevino argue that leaders must act as moral managers as well. Moral leaders keep ethics in the forefront of organizational life. They make sure ethics messages aren’t drowned out by messages about tasks and profits. They maintain a constant focus on ethics by communicating frequently about mission, values, codes of conduct, and the significance of moral behavior. They reinforce follower learning by using punishments and rewards to regulate behavior, making it clear which actions are acceptable and which are not.

Unethical leaders fail as moral persons and/or as moral managers. Some are hypocritical, talking a lot about moral values but not living up to their rhetoric. Other leaders may not engage in unethical behavior themselves but leave followers unsure about where they stand on moral issues because they don’t send out strong messages about ethics. The worst leaders engage in unethical behaviors (lying, cheating, stealing, bullying subordinates), setting a poor example for followers. They communicate that ethics don’t matter, just results, and reward the wrong behaviors.

In this chapter, we’ll pay particular attention to the moral person dimension of ethical leadership. (I’ll have more to say about the role of leaders in creating ethical organizational climates in Chapter 10 .) The first section, “The Ethical Challenges of Leadership,” introduces the special ethical demands that come with serving in a leadership role. The second section, “The Shadow Side of Leadership,” examines the dark side of leadership that results when we or other leaders fail to meet these ethical challenges. The final section of the chapter surveys normative leadership theories that can equip us to live up to our moral responsibilities as leaders and avoid casting shadows.

The Ethical Challenges of Leadership

Leadership is the exercise of influence in a group context. 2 Leaders engage in furthering the needs, wants, and objectives shared by leaders and followers alike. Because leadership is exercised in the group context in pursuit of common goals, leaders and followers function collaboratively. They are relational partners who play complementary roles. Leaders take more responsibility for the overall direction of the group; followers are more involved in implementing plans and doing the work itself. While leaders and followers work together, they face different sets of ethical demands based on the roles they play.

Leaders, by virtue of the fact that they exert greater influence and have broader responsibility for organizational outcomes, face six principal ethical challenges: power, privilege, responsibility, information management, consistency, and loyalty. These challenges are described below. (We’ll take a closer look at the ethical responsibilities of followers in the next chapter .)

The Challenge of Power

I talked at length about power and influence in Chapter 5 . However, it is worth noting that power is of greater concern to leaders because (1) they generally have more of it, and (2) power is the tool or currency that leaders use to exercise influence over the direction of the group. All too often leaders abuse power. A total of 90% of those who responded to one survey reported that they had experienced disrespect from a boss at some point in their careers. 3 Leaders are particularly prone to engage in bullying behavior (see Chapter 6 ). Bully bosses feel the strong urge to put others down in order to feel good about themselves. Angry and bitter, they frequently threaten and lash out at others, particularly when they feel threatened (which is much of the time). Engaging in hostile, denigrating, verbal personal attacks is one of their favorite tactics. 4

Concentration of power, which tends to corrupt power holders, is also an issue. Media giant Viacom’s CEO Sumner Redstone (still in office in his 90s) knows firsthand the seductive nature of power. He reportedly advised Disney CEO Michael Eisner (who was later removed from his post) to hang onto his job despite the efforts of stockholders who opposed him. Redstone told Eisner, “Once you’ve had this kind of power, Michael, let’s face it, nobody wants to give it up.” 5 Top leaders like Redstone and Eisner are particularly likely to think themselves godlike, believing that they are omniscient (all knowing), omnipotent (all powerful), and invulnerable (safe from all harm). 6 They mistakenly conclude that they know everything they need to know because they have access to many different sources of information and are used to having followers look to them for answers. They are convinced they can do whatever they want because they have so much power. Surrounded by subservient followers, they believe that they will be protected from the consequences of their actions. Disgraced former Virginia Governor Bob McDonnell and his wife may have fallen victim to the delusion that they could escape punishment. The CEO of a dietary supplement firm gave the couple $135,000 in cash, designer clothing (including an Oscar de la Renta gown), golf outings, and a Rolex watch engraved “71st Governor of Virginia.” In return, he wanted the governor to promote the company’s products and attract investors. Instead of avoiding punishment, the McDonnells were convicted on multiple corruption counts and face decades in prison. 7

The Challenge of Privilege

Power and privilege generally operate in tandem. The more power a leader has, generally the greater the privileges he or she enjoys. Evidence of this fact can be found in the wide gulf between the nation’s highest- and lowest-paid workers. As you can see in Case Study 8.1 , the gap between the compensation packages of top executives and those of average workers in the United States is wider than ever.

The appetites of some CEOs are insatiable. Ken Lay wasn’t satisfied with being wealthy. He declared, “I don’t want to be rich, I want to be world-class rich.” 8 Martha Stewart was sentenced to jail and house arrest for lying about a stock sale, which saved her $52,000, a tiny percentage of her billion-dollar net worth. 9 The enormous chasm between the haves and the have-nots extends well beyond organizational boundaries. According to the Economic Policy Institute, the top 1% of Americans own 34% of the country’s wealth; 10% of the population controls more than 70% of the nation’s total net worth. The gap between the richest and poorest Americans is much larger than it was a few decades ago. The top 1 percent took home 95% of all income growth between 2009–2011. Economic inequality in the United States is now greater than in Europe and in a number of Latin American countries. 10

Leaders probably deserve higher salaries and more benefits because they shoulder greater responsibility for the success or failure of the organization as a whole. At the same time, it is clear that far too many leaders get more than they deserve. We must answer such questions as these: How much should top managers be paid? How many additional privileges should they enjoy? What should be the relative difference in pay and benefits between employees and supervisors? What can be done to narrow the current gap in wages and benefits between the top and bottom organizational layers?

Case Study 8.1

CEO Compensation: The Sky’s the Limit

Top U.S. executives are rich and rapidly getting richer. According to the Associated Press, median pay for Standard and Poor’s 500 CEOS reached an all time high of $10.5 million in 2013. 1 CEOs earn 295 times what a typical worker makes. The top earner, Anthony Petrello of Nabors Industries, an oil services company, took home $68.3 million. The second highest earner was Leslie Moonves of CBS at $65.6 million. The highest paid female CEO, TJX CEO Carol Meyrowitz, earned $20.7 million. Average CEO compensation (adjusted for inflation) increased 937% between 1978 and 2013, double the rate of growth of the stock market. CEO pay dipped during the Great Recession but has since rebounded, rising 27% since 2007. The average worker has not kept pace. Employee compensation rose only 10.2 percent during the entire 1978–2013 time period.

Company stock makes up a major portion of CEO pay packages, which means that recent gains in the stock market have boosted CEO incomes. But the rise in stock prices does not account for all the increase in CEO pay. There appears to be a CEO “arms race.” Some companies are convinced that they must pay top dollar for their leaders or risk losing them to other firms. CEOs demand more as well, hoping to be paid as well or better than other top executives.

Supporters of high executive compensation argue that CEOs are worth every penny. According to a senior fellow at the libertarian Cato Institute, “If you have a good CEO at a company, the wealth he [or she] might generate for shareholders could be in the billions. It might be worth paying these guys [gals] millions for doing this type of work.” 2 Proponents of high CEO salaries note that it takes highly skilled individuals to successfully run large multinational corporations and that top executives deserve to be rewarded when stock prices soar.

Critics of CEO pay claim, “CEO compensation has spun out of control.” 3 They point to a University of Delaware study that found that nearly all CEOs are promoted from within. Apparently running a large firm takes a good deal of specialized knowledge. As a result, CEOS are not likely to be hired away by other companies. Other researchers claim that benchmarking, which ties CEO pay to the median pay of CEOs at other, comparable companies, is a flawed strategy. Sometimes benchmarks are inflated by including comparison companies that are much larger. Inflation is also built into the benchmarking process. If one company pays more, others must increase their compensation packages just to stay even with their peers. Then, too, there are issues of fairness. Average workers are not being rewarded for their role in improving company performance. The rising CEO–worker pay gap is a major contributing factor to the growing disparity between the wealthy and the rest of the U.S. population.

Efforts have been make to curb CEO pay. Congress passed the Dodd-Frank reform act in 2010. As part of the law, pay packages for CEOs of public companies must be subject to a nonbinding vote at least every three years and companies must report the ratio of CEO pay to the median pay of company employees. If financial statements have to be restated, then firms are required to recoup (“claw back”) payments to executives. There have been a few shareholder pay rebellions. At Chipotle stockholders rejected the CEO’s proposed pay package. Investor Warren Buffet criticized the Coca-Cola CEO pay package as “excessive” but didn’t vote against it. However, the vast majority of shareholders have approved executive pay raises. For example, JPMorgan CEO Jamie Dimon received a 74% pay hike even as the company was being fined for mishandling mortgage-backed securities during the recession.

Discussion Probes

1. Why do you think that worker pay has not kept pace with CEO pay?

2. Do you think that CEOS deserve their large pay packages? Why or why not?

3. If you think that CEOS are paid too much, how would you go about limiting their compensation?

4. How should executive pay packages be determined?

5. What would be the ideal CEO–average employee pay ratio?

Notes

1. The AP figures are conservative. Depending on how pay is computed, CEO yearly compensation can top $1 billion, as in the case of Facebook’s Mark Zuckerberg and Richard Kinder of Kinder Morgan.

2. Sweet (2014).

3. Sweet (2014). Additional sources for this section are Conyon, Fernandes, Ferriera, Matos, and Murphy (2011); Elson and Ferrer (2013); GMI Ratings’ 2013 CEO pay survey (2013); Mischel and Davis (2014); Morgenson (2012); A. Smith (2007); Yeow (2014).

The Challenge of Responsibility

Leaders are accountable for the entire group (a sports franchise, a nonprofit, a public relations agency), while followers are largely responsible for their own actions. Determining the extent of a leader’s responsibility is difficult, however. That becomes evident when ethical standards are violated. Should Wal-Mart be held responsible for the actions of subcontractors who clean their stores using undocumented workers making subminimum wages? Can we hold the editor of a newspaper responsible for reporters who plagiarize stories? What should be the penalty for military officers if they sanctioned prisoner abuse in Iraq and Afghanistan? Should they receive the same sentences as the soldiers who followed their orders, or harsher ones? How do we respond to business and nonprofit managers who fail to follow the codes of ethics they write for their employees?

Answers to these questions can vary depending on the particular situation. Nevertheless, there are some general expectations of leaders. If we hope to be considered as responsible leaders, we must take the following steps:

· Admit our duties to followers

· Take reasonable steps to prevent crimes and other follower abuses

· Acknowledge and try to correct ethical problems

· Take responsibility for the consequences of our orders and actions

· Hold ourselves to the same standards as our followers

The Challenge of Information Management

Leaders generally have access to more information than do followers. They network with other managers, participate in task forces, keep personnel files, receive financial data, get advance notice of new programs, and so forth. Being “in the know” is a mixed blessing. Leaders need lots of data to carry out their tasks. Yet possessing knowledge raises some sticky ethical dilemmas. The most obvious is deciding whether to tell the truth or to conceal it. Leaders must also determine whether to reveal that they have important information, when to release that information, and to whom. Consider the case of the manager who gets early notice of increases in employee health insurance costs. He is asked to keep this knowledge to himself until the official announcement is made. In the meantime, his subordinates are angered by rumors that health coverage is going to be cut altogether. Does he let it slip that he knows what will happen? Does he immediately try to squelch the rumors, or does he maintain his silence? Finally, how information is gathered is yet another concern. For example, leaders of virtual teams must be careful about how they monitor the online behavior of group members.

You can use the following behaviors as signs that you or your leaders are failing to meet the ethical challenge of information management:

· Lying, particularly for selfish ends

· Using information solely for personal benefit

· Denying having knowledge that is in one’s possession

· Gathering data in a way that violates privacy rights

· Withholding information that followers legitimately need

· Sharing information with the wrong people

· Releasing information at the wrong time (too early or too late)

· Putting followers in moral binds by insisting that they withhold information that others have a right to know

The Challenge of Consistency

In an ideal world, leaders would treat all followers equally, and all followers would respond in an identical fashion. This is not the case, of course. All too often, leaders act inconsistently, giving more favorable treatment—extra pay and time off, special attention, longer deadlines—to their friends and their favorite subordinates. Followers react to leaders in a variety of ways because of diverse backgrounds, skill levels, and personalities. Those from individualistic cultures respond well to personal rewards, while members of collectivist groups (where group unity is prized) do not. Some followers are better at their tasks than others. In addition, tactics that motivate certain individuals will backfire on others. Wise coaches, for instance, know that there are some players who work harder when yelled at in practice and others who get discouraged. The latter group responds better when quietly taken aside for private instruction.

Obviously, a one-size-fits-all approach to managing followers doesn’t work. Throw in the fact that rules may have to bend to fit changing circumstances like weather emergencies and flu epidemics, and you can see why consistency puts ethical demands on leaders. They have to determine (1) how to adapt to individual needs while acting justly, (2) when to bend the rules and for whom, (3) how to adjust to the reality that some followers are going to be more competent than others, and (4) how to be fair to those who aren’t as close to them.

Some degree of inconsistency appears inevitable, but leaders generate resentments when they seem to act arbitrarily and unfairly. To be a consistent leader, respond to the individual preferences of each constituent while supporting the principle that all followers deserve the same level of respect and attention. Go out of your way to treat “fringe” subordinates (those who are less skilled, less committed, and less connected to you) justly and compassionately, providing equal access to promotions and other benefits. Also try to be evenhanded in your dealings with outsiders; treat your opponents as well as your friends with respect.

The Challenge of Loyalty

Leaders have to balance a variety of loyalties, weighing their commitments to employees, suppliers, families, investors, their professions, the larger society, and the environment. To be a model leader, put the needs of the larger community ahead of selfish interests. Reject decisions that benefit you and your organization at the expense of such outside constituencies as consumers, neighborhoods, local governments, and fellow professionals. You will also face the challenge of honoring the loyalty that followers and others place in you. Followers trust leaders to act in their best interests, and the public trusts leaders to act as responsible members of the community. Many organizational leaders fail to live up to this challenge. At Enron, CEO Kenneth Lay assured employees, investors, and the public that the firm was doing well even as it was headed for bankruptcy. Managers at the Imperial Food Products chicken-processing plant betrayed the trust of workers by padlocking exit doors and failing to install a sprinkler system. When fire broke out in 1991, 25 employees died and 56 were injured. Severely damaged, the plant closed down, and the town of Hamlet, North Carolina, lost its largest employer. 11

The Shadow Side of Leadership

As we’ve seen, failure to meet the ethical challenges of the leadership role can lead to a variety of misbehaviors—abuse of power and privilege, irresponsibility, deception, invasion of privacy, injustice, and misplaced and broken loyalties. Recognizing the dark or “shadow” side of leadership can help us become more ethical leaders. 12 By understanding the nature and origins of destructive leadership, we are less likely to cast shadows ourselves (see Chapter 2 ). In this section, we’ll examine four perspectives on the negative face of leadership.

Bad Leadership

Harvard political scientist Barbara Kellerman is critical of the positive bias of most leadership research and training. To scholars and laypeople alike, leadership has a positive connotation. After all, we wouldn’t take leadership classes and attend leadership workshops if we thought that to be a leader was undesirable! Kellerman believes that limiting our idea of leadership solely to good leadership ignores the reality that a great many leaders engage in destructive behaviors. 13 Until we acknowledge that reality, our attempts to become better leaders are likely to fall short. “I take it as a given that we promote good leadership not by ignoring bad leadership,” Kellerman says, “nor by presuming that it is immutable, but rather by attacking it as we would a disease that is always pernicious and sometimes deadly.” 14

According to Kellerman, bad leaders can be ineffective, unethical, or both ineffective and unethical. She identifies seven types of bad leaders:

Incompetent leaders. These leaders don’t have the motivation or ability to sustain effective action. They may lack emotional or academic intelligence, for example, or may be careless, distracted, or sloppy. Some can’t function under stress, and their communication and decisions suffer as a result. Former International Olympic Committee president Juan Antonio Samaranch (1961–2000) is one example of an incompetent leader. Toward the end of his tenure, he turned a blind eye to commercialism, drug scandals, and corruption in the Olympic movement. Federal Emergency Management Agency (FEMA) director Michael Brown was widely considered to be an incompetent leader following Hurricane Katrina. Under his leadership, FEMA’s slow, inadequate response led to unnecessary deaths and widespread lawlessness.

Rigid leaders. Rigid leaders may be competent, but they are unyielding and cannot accept new ideas, new information, or changing conditions. Thabo Mbeki is one such leader. After becoming president of South Africa in 1999, he insisted that HIV did not cause AIDS and withheld antiretroviral dugs from HIV-positive women. These medications would have dramatically cut the transmission of the disease to their babies. Leaders in the U.S. banking industry proved inflexible prior to the mortgage crisis. They believed that home prices would continue to rise despite evidence that the housing market was overpriced and overbuilt.

Intemperate leaders. Intemperate leaders lack self-control and are enabled by followers who don’t want to intervene or can’t. Marion Barry Jr.’s political career demonstrates intemperate leadership in action. Barry served as mayor of Washington, DC, from 1979 to 1991. He ignored widespread corruption in his administration, perhaps in part because he was busy cheating on his wife and doing drugs. Barry was convicted of possessing crack cocaine and served 6 months in jail. After being released from prison, he was elected to the city council in 1992 and was reelected as mayor in 1994. A number of prominent state and national politicians have also demonstrated a lack of sexual self-control. Senator John Ensign of Nevada, South Carolina governor Mark Sanford, and vice-presidential candidate John Edwards, among others, admitted to having extramarital affairs.

Callous leaders. The callous leader is uncaring or unkind, ignoring or downplaying the needs, wants, and wishes of followers. Former hotel magnate Leona Helmsley personified the callous leader. She earned the epithet “The Queen of Mean” by screaming at employees and firing them for minor infractions like dirty fingernails. Helmsley later served time for tax evasion. (She once quipped, “Only the little people pay taxes.”) BP oil executive Tony Hayward appeared callous during the Gulf oil spill. Several weeks into the crisis, he complained that he “wanted his life back,” a comment that came across as extremely insensitive to the families of the victims who had died in the oil rig explosion that triggered the spill. Later, he took time off to participate in a yacht race with his son.

Corrupt leaders. These leaders and at least some of their followers lie, cheat, and steal. They put self-interest ahead of public interest. Former Detroit mayor Kwame Kilpatrick is an exemplar of this type of leader. Unlike Mayor Barry, who ignored corruption, Kilpatrick actively promoted corruption. He shook down contractors, took kickbacks, and stole money from a nonprofit fund for needy kids to pay for travel, golf clubs, and camps for his children. He didn’t cause the city’s subsequent bankruptcy but made the crisis worse. Kilpatrick received 28 years in prison for using city government to enrich himself, family, and friends. Bernie Madoff bilked billions from investors, spending a portion of the money on maintaining his lavish lifestyle (he owned a penthouse in Manhattan, a mansion in Florida, and a villa in France).

Insular leaders. The insular leader draws a clear boundary between the welfare of his or her immediate group or organization and that of outsiders. Former President Bill Clinton behaved in an insular manner when he didn’t intervene in the Rwandan genocide that took the lives of 800,000 to 1,000,000 people in 1994. He later traveled to Africa to apologize for failing to act even though he had reliable information describing how thousands of Tutsis were being hacked to death by their Hutu neighbors. Chinese leaders have insulated themselves from those fleeing repression and starvation in North Korea, sending them back to face torture and imprisonment.

Evil leaders. Evil leaders commit atrocities, using their power to inflict severe physical or psychological harm. Ugandan warlord Joseph Kony is one example of an evil leader. His Lord’s Resistance Army (LRA) kidnaps young boys and turns them into killers who torture and dismember their victims. Former Iraqi leader Saddam Hussein is another example of evil leadership in action. He executed his enemies and used poison gas to kill thousands of his citizens.

Kellerman makes several suggestions to leaders who want to be both effective and ethical:

1. Limit your tenure. If we stay in power too long, we are more likely to become complacent, overreach, lose touch with reality, and lose touch with our moral foundation.

2. 2. Share power. Centralized power is more likely to be abused. Delegate and collaborate instead.

3. 3. Don’t believe your own hype. Far too many leaders begin to believe press accounts of their greatness. They forget that they are fallible human beings.

4. 4. Get real and stay real. Bad leaders block out reality, ignoring corruption in their organizations as well as their addictions, self-destructive behaviors, and crimes.

5. 5. Compensate for your weaknesses. Recognize your limitations, and surround yourself with followers and other leaders who can help you compensate for these deficiencies.

6. Stay balanced. Avoid becoming a workaholic. Spend time with family and friends.

7. Remember the mission. Put the mission of the organization (particularly if it is focused on serving others) above your own desires.

8. Stay healthy. Take care of your physical and mental health, and seek professional counsel when needed.

9. Develop a personal support system. Don’t drive off friends, family, and associates who will always tell you the truth.

10. Be creative. Don’t get stuck in the past, but think of new options for solving problems.

11. Know and control your appetites. Don’t let your hunger for power, money, success, or sex take over your life.

12. Be reflective. Take time for self-refection. Get to know yourself, and develop self-control and good habits.

Toxic Leadership

Claremont University professor Jean Lipman-Blumen introduces the term toxic when addressing the shadow side of leadership. 15 Toxic leaders engage in the destructive behaviors and demonstrate the dysfunctional characteristics described in Table 8.1 . These behaviors and qualities cause significant harm to leaders, groups, organizations, and societies. Toxic leaders appear in every segment of society and in every region of the globe. Examples of toxic corporate leaders include “Chainsaw” Al Dunlap, former CEO of Sunbeam, who ruthlessly eliminated costs and personnel; “junk bond king” Michael Milken, whose illegal financial activities ruined the firm Drexel Burnham Lambert; and A. Alfred Taubman, chairman of the auction house Sotheby’s, who engaged in price fixing. Toxic nonprofit leaders include Westboro Baptist pastor Fred Phelps, who picketed the funerals of military personnel with signs proclaiming “Thank God for dead soldiers,” as well as priests who abused children and the bishops who protected them. Toxic political figures include former FBI chief J. Edgar Hoover and former House of Representatives majority leader Tom DeLay, who was convicted of money laundering.

Lipman-Blumen is most concerned with how followers can keep themselves from being taken in by toxic leaders (see the discussion of toxic followership in the next chapter ). However, she does make suggestions that can help us recognize the early signs of toxicity in ourselves. Ask yourself these questions:

· Do I inflict harm on my enemies or competitors first and then on others in the organization?

· Do I demonstrate disdain for others?

· Have I changed my lifestyle and circle of friends, avoiding my old acquaintances and colleagues?

· Do I keep my own counsel or take advice from just a few others in my inner circle?

· Do I use others to do my dirty work and then get rid of them?

· Have I begun to mistreat the lowest or weakest members of the group?

· Have I begun to engage in excess (lavish spending and lifestyle)?

· Have I become evasive, denying accountability for results?

· Do I blame others for my decisions and actions?

· Am I acting in my self-interest instead of the organization’s interest?

· Do I attempt to disguise unethical behavior as noble and altruistic?

SOURCE: Adapted from Lipman-Blumen, J. (2005). The allure of toxic leaders: Why we follow destructive bosses and corrupt politicians—and how we can survive them. Oxford, UK: Oxford University Press, pp. 19–23.

Destructive Leadership

Norwegian researcher Ståle Einarsen and his colleagues offer a typology of destructive leadership behaviors specifically focused on the organizational context. 16 They emphasize that most leaders are not completely good or bad, toxic or nontoxic, but engage in a mix of constructive and destructive behaviors. Destructive leadership is directed primarily at subordinates, the organization, or both. Based on these dimensions, Einarsen’s group identifies five types of leadership behaviors.

Constructive leadership behavior serves the legitimate interests of the organization while supporting followers through consideration, inspiration, and empowerment. Constructive actions are designed to motivate subordinates to make the best use of organizational resources in order to achieve ethical, shared goals.

Tyrannical leadership behavior achieves organizational objectives at the expense of subordinates. Tyrannical leaders may have excellent technical skills, may be highly efficient, and may successfully complete assignments. Nonetheless, they manipulate, humiliate, deceive, bully, and otherwise abuse followers as they help the organization carry out its mission.

Derailed leadership behavior is both antiorganization and antisubordinate. Such activities simultaneously undermine the organization and followers. Derailed leaders engage in such antiorganizational behaviors as taking unauthorized time off, committing fraud, and stealing, while at the same time attacking followers.

Supportive-disloyal leadership behavior consists of activities that benefit subordinates at the cost of the organization. Supportive-disloyal leaders are very supportive of their followers but deprive the organization of resources. For example, a supervisor may grant too much time off to employees or may look the other way when workers loaf or steal. Supportive-disloyal leaders may also have a different vision or strategy from the organization’s and may encourage workers to pursue those objectives instead of the organization’s official mission. In other cases, these leaders are well liked by followers at the same time that they engage in theft, fraud, and embezzlement.

Laissez-faire leadership behaviors are more passive than active. Laissez-faire leaders avoid interaction with followers, delay decisions, and make little attempt to motivate followers or to reach organizational objectives. Their inaction reduces employee satisfaction and commitment and undermines collective performance.

Using their category system, Einarsen and his colleagues tried to determine the relative frequency of constructive and destructive behaviors. They discovered that constructive behaviors are far more common (“Most leaders behave constructively most of the time”), but the majority of the respondents they surveyed noted at least one type of negative behavior in their immediate supervisors. 17 This means that as leaders, we have the potential to be a force for both good and bad. We should identify those factors—stress, lack of skills, organizational pressure—that encourage us to engage in counterproductive behaviors and take steps to limit their effects on us.

Selfish Leadership

Concern for others is essential for ethical leadership, since leaders exercise influence on behalf of others. Unfortunately, leadership roles, which call for selfless behavior—like understanding and meeting the needs of followers, taking personal risks, and self-sacrifice—are also highly attractive to selfish individuals who focus on their own needs instead. 18 Using their positions for personal gain, they steal, lie, bully, and dominate followers, break promises, and so on. Selfish leaders can be classified as impulsive, narcissistic, or Machiavellian.

Impulsive, selfish people are more likely to seek powerful positions and to be identified as leaders by others. They are often extroverts who come across as charismatic and energetic. Once in power, impulsive individuals are free to fill their selfish desires. They consume more of the group’s resources, are more likely to engage in sexual aggression, and frequently violate social norms. Selfish leaders justify their actions by narrowly defining morality. They put more emphasis on individual rights and freedoms than on obligations and duties to others. They want to allocate resources based on contributions (which favors them) rather than according to needs (which favors less powerful individuals) and typically fail to take into consideration other points of view when deciding on ethical issues. Sadly, organizational environments can reinforce the selfish tendencies of leaders. Powerful leaders often silence the criticisms of followers. Unchallenged, they are able to exert even more control over subordinates. Over time, low-power individuals adjust their emotions and attitudes to match those of powerful people.

Narcissism, like impulsiveness, is common among leaders. 19 The word narcissism has its origins in an ancient Greek fable. In this tale, Narcissus falls in love with the image of himself he sees reflected in a pond. Like their ancient namesake, modern-day narcissists are self-absorbed and think highly of themselves. They are attracted to leadership roles because they like to be the center of attention. They are often named to leadership positions because they are socially skilled; they make a positive first impression because they come across as bold and self-confident. Once in power, they are effective at holding on to their authority (which they believe they deserve). Narcissistic leaders engage in a wide range of unethical behaviors. They claim special privileges, demand admiration and obedience, dismiss negative feedback, respond defensively and aggressively if their egos are threatened, abuse power for their personal ends, ignore the welfare of others, and exercise an autocratic leadership style. Their unrealistic visions and expectations put the organization at risk. For example, some retiring CEOs want to “go out with a bang,” so they involve their firms in mergers and acquisitions that may undermine the long-term health of their firms. 20

Machiavellianism is a third manifestation of self-centered leadership. Psychologists Richard Christie and Florence Geis first identified Machiavellianism as a personality factor in 1970. Christie and Geis named this trait after the Italian philosopher Niccolò Machiavelli, who argued in The Prince that political leaders should maintain a virtuous public image but use whatever means necessary (ethical or unethical) to achieve their ends. 21 Highly Machiavellian individuals are skilled at manipulating others for their own ends. As a result, they are more likely to end up in leadership roles. They have a better grasp of their abilities and of reality than narcissists but, like their narcissistic colleagues, they engage in lots of self-promotion and are emotionally cold and prone to aggressive behavior. Machiavellian leaders often engage in deception because they want to generate positive impressions while they get their way. They may pretend to be concerned for others, for example, or assist in a project solely because they want to get in good with the boss. Machiavellians often enjoy a good deal of personal success—organizational advancement, higher salaries—because they are so skilled at manipulation and at disguising their true intentions. Nonetheless, Machiavellian leaders put their groups in danger. They may be less qualified to lead than others who are not as skilled in impression management. They are more likely to engage in unethical practices that put the organization at risk because they want to succeed at any cost. If followers suspect that their supervisors are manipulating them, they are less trusting and cooperative, which can make the organization less productive. 22

Combating selfishness is an important ethical responsibility. To start, we need to look for selfish tendencies in ourselves, asking why we want to take leadership roles and exercise power. We need to determine if we are overestimating our abilities, demanding admiration and obedience, dismissing negative feedback, manipulating followers for our own purposes, and so on. We also need to keep selfish individuals from assuming leadership roles. 23 Impulsive individuals, narcissists, and Machiavellians all have excellent self-presentation skills, so we need to be careful not to be taken in by initial impressions. Employ objective criteria when making hiring and promotion decisions (see our discussion of impression management in Chapter 5 ). Look for predictors of failure in previous positions, like changing jobs frequently. Ask questions that may reveal selfish tendencies, such as blaming others for previous failures and claiming all the credit for success. Use personality instruments to identify narcissistic and Machiavellian personality traits. (You may also want to complete these instruments yourself to determine if you have these characteristics.)

We can curb the selfish tendencies of current leaders—in others or in ourselves—by building in checks and balances on the use of power and by making leaders accountable for their actions. Performance reviews should be designed to reveal potential trouble spots like employee mistreatment and defensiveness. Those working for selfish leaders should carefully document abuses and form coalitions with others to confront them. Encourage employee development and succession planning. (Self-centered leaders are not likely to want to develop or promote others, because they are threatened by competent coworkers and fear the loss of power.) Create a culture that emphasizes honesty and collaboration over competition and self-promotion.

Normative Leadership Theories

Normative leadership theories tell leaders how to act. They are designed to help us manage our ethical duties when we take on leadership roles and can help us avoid the shadow side of leadership. Each encourages selfless behavior (see Ethics in Action 8.1 ), urging leaders to focus on the needs of followers, raise the moral performance of the group, address community needs, avoid manipulative behaviors, and so on. While specifically focused on the leader–follower relationship, these approaches draw heavily from general ethical perspectives, character ethics, and other material presented in earlier chapters.

Transformational Leadership

Since the late 1970s, the transformational approach has emerged as the dominant perspective in leadership studies. Former presidential advisor, political scientist, and historian James MacGregor Burns laid the groundwork for this approach in his book Leadership. 24 Burns identified two forms of leadership, which he labeled transactional and transformational. Transactional leadership is based on leader–member exchange. Leaders trade money, benefits, and recognition for the labor and obedience of followers. They emphasize values that make routine transactions go smoothly—responsibility, fairness, and honesty—and take a utilitarian approach to ethical decision making, judging the morality of choices based on their outcomes. The underlying system remains unchanged. Transformational leadership is more powerful and inspiring. Transformational leaders speak to higher-level needs—the need to belong, to feel good about oneself, and to reach one’s full potential. They spotlight values that are more likely to mobilize and energize followers, like equality, liberty, justice, and freedom. In the process, these leaders change the very nature of the group, the organization, or the society.

Burns sketched the broad outline of transformational leadership; it was up to other researchers to fill in the details. Bernard Bass, Bruce Avolio, and their colleagues identified seven dimensions of transactional and transformational leadership. 25 Transactional leaders rely on contingent reward and management-by-exception. They provide rewards and recognition for acceptable performance while disciplining followers who fall below performance standards. The poorest transactional leaders are passive-avoidant or laissez-faire. They are inactive, failing to provide goals or standards or to clarify expectations.

Transformational leaders engage in the following:

1. Idealized influence. Transformational leaders serve as admired role models for followers. They put the needs of others first, engage in self-sacrifice, share risks with followers, and act in a way that is consistent with the group’s values and principles. Such leaders set high standards and look for the good in followers.

2. Individualized consideration. Transformational leaders act as coaches and mentors, continually encouraging follower development. They provide learning opportunities along with a supportive climate. Their coaching, mentoring, and teaching efforts are tailored to the personal concerns of each follower.

3. Inspirational motivation. Transforming leaders motivate and inspire through providing meaning and challenge to the work of followers. They are enthusiastic and optimistic, arousing team spirit and focusing follower attention on desirable organizational visions. They have the courage to take risks and keep their focus (and that of the group) on a common purpose.

4. Intellectual stimulation. Transformational leaders foster creativity and innovation in followers by questioning assumptions, reframing situations, and tackling old problems in new ways. They don’t criticize mistakes or new approaches. At the same time, they are open to creative ideas that may challenge their opinions.

Burns believed that leaders were either transactional or transformational, but later investigators found that highly effective leaders use both transactional and transformational tactics. Transformational leaders may inspire, but they aren’t afraid to set standards and monitor performance as well as issue rewards and punishments.

Transforming leadership has attracted so much attention largely because it generates outstanding results. Transformational leaders are more successful than their transactional counterparts in a variety of settings—sales organizations, military units, schools, large corporations. 26 (An example of transformational leadership in crisis can be found in Case Study 8.2 .) However, Burns left no doubt that transforming leadership rests on an ethical foundation. “Such leadership,” stated Burns, “occurs when one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality.” 27 There is a growing body of evidence that demonstrates that Burns was right: Transforming leaders are moral leaders. Studies have found that transformational leaders exhibit the following characteristics: 28

· Display higher levels of moral reasoning

· Are more altruistic

· Receive high integrity ratings

· Model ethical behaviors and actions

· Are rated as more ethical by followers

· Establish organizational practices (e.g., performance and reward systems) that reinforce moral behavior

· Create positive ethical climates

· Help to improve the moral reasoning of followers

· Are effective at leading ethical organizational turnarounds

Two cautions are in order. One, followers can become too dependent on their transformational leaders. This tempts them to keep their doubts to themselves and to set aside their personal moral standards in order follow the leader’s vision. 29 Two, individuals can use transformational tactics to reach immoral ends. When it comes to idealized influence, some leaders appear to be honest and supportive of their people, but privately they are unreliable and all too willing to sacrifice their followers for their own goals. They engage in inspirational motivation by appealing to the worst in people—their fears, anger, and insecurities. Their approach to intellectual stimulation relies on false assumptions and appeals to their own authority instead of on reason and dialogue. Instead of coaching and mentoring followers into leaders, the individualized attention they give followers encourages dependency and blind obedience.

Bernard Bass adopted the terms authentic and pseudo-transformational to distinguish between ethical and unethical transformational leaders. 30 Authentic transformational leaders are altruistic, genuinely concerned for others and the purposes of the organization as a whole. They channel their energies in constructive ways to serve the greater good. They permit their followers free choice in the hope that the followers will voluntarily commit themselves to worthy moral principles. Pseudo-transformational leaders provide a sharp contrast. They are ultimately self-centered. Instead of caring for others, they may secretly despise them. They use power to manipulate others for personal ends instead of on behalf of shared objectives.

Debate over whether or not there is a distinction between ethical and unethical transformational leaders continues. (Application Project 4 gives you the opportunity to discuss this issue with classmates.) Nevertheless, if you want to become a more ethical, effective leader, transformational leadership has a lot to offer. The goal of this approach is to raise the level of morality of the group or organization, encouraging those in both leadership and followership roles to set and meet higher ethical standards. In the process of pursuing this objective, employees engage in higher-level moral reasoning, and the moral climate and culture of the entire organization improves. At the same time, workers achieve better results. The fact that transforming leadership consists of a set of behaviors means that anyone can act as a transformational leader by adopting these practices. You can employ transformational behaviors in a variety of contexts—work, sports, the family, volunteer activities—as well as in virtual groups. 31 In addition, transforming leadership appears to have universal appeal. A study conducted in 62 countries found that effective leaders in all of these cultures exhibit transformational behaviors. They have high integrity, demonstrate foresight, and inspire others by being positive, dynamic, encouraging and by building their confidence. 32

Ethics in Action 8.1 Self-Sacrificial Leadership

Self-sacrifice plays an important role in ethical leadership. In self-sacrifice, leaders give up something they value. They forgo personal benefits in order to remain faithful to their convictions and values, to meet the needs of followers, and to help the group reach its objectives. Mahatma Gandhi lived a life of self-sacrifice, dressing and living simply as he led India to independence from Britain. Carlo De Benedelli, former chairman of Olivetti, spent $1 million of his personal funds to buy the company in order to rescue it from bankruptcy. Hewlett Packard founders Bill Hewlett and Dave Packard rejected such perks as the executive dining room, instead eating lunch with employees in the company cafeteria.

Self-sacrificial behavior falls into three categories. Self-sacrifice in the division of labor means taking on tough, menial, and risky tasks, such as when a leader volunteers for the cleaning crew or night shift or takes the point when an army platoon goes into battle. This form of self-sacrifice can also involve taking the blame or responsibility for the group’s failure. Self-sacrifice in the distribution of rewards is postponing or turning down rewards like salary, recognition, and vacation time. Chrysler CEO Lee Iacocca took a $1.00 salary as he led the company’s turnaround during the 1970s, for instance. Self-sacrifice in the exercise of power is voluntarily giving up the power and privileges of leadership, as in the case of Hewlett and Packard. Gandhi once proclaimed that he would not eat until his people had eaten first.

Self-sacrifice is central to all of the normative approaches to leadership presented in this section of the chapter. Each calls upon leaders to act in a selfless manner, sacrificing on behalf of followers and the group. In so doing, they also increase their effectiveness. Followers are more open to the influence of sacrificial leaders, are more likely to accept them as legitimate, and are more likely to follow their example. At the same time, they feel positive about their group experience and are motivated to work on behalf of the team.

SOURCES: Choi and Mai-Dalton (1998, 1999); De Cremer (2006); De Cremer and van Knippenberg (2004): Matteson and Irving (2006).

Servant Leadership

The servant leadership model is based on the premise that leaders should put the needs of followers before their own needs. This approach has its roots in both Eastern and Western thought. Taoist philosophers encouraged leaders to act like children and humble valleys instead of mountains. 33 Jesus told his disciples, “Whoever wants to become great among you must be your servant, and whoever wants to be first must be slave of all.” 34

Current interest in leaders as servants can be traced back to management expert Robert Greenleaf. He coined the term servant leader in 1970 to describe those whose primary concern is the growth and development of their followers. 35 Greenleaf later founded a nonprofit organization to promote servant leadership. A number of businesses (Toro Company, TD Industries, The Container Store, Synovus), nonprofit groups, and community leadership programs have adopted this approach. Other notable advocates of servant leadership include James Autry, Margaret Wheatley, Max DePree, and Peter Block. ( Case Study 8.2 describes a group of leaders who failed to act as servants.)

Much of the early support for the theory of servant leadership was anecdotal, consisting of examples of servant-leaders and lists of servant characteristics. For example, Larry Spears, past director of the Greenleaf Center for Servant Leadership, identified the following ten characteristics of the servant leader drawn from Greenleaf’s writings: 36

1. Listening. Servant leaders put a high priority on listening. They listen intently to others to identify and clarify the needs of the group. They listen to themselves by hearing their inner voices and analyzing what their bodies, minds, and spirits are communicating. Listening to the self, combined with periods of reflection, promotes personal growth.

2. Empathy. Servant leaders seek both to understand and to empathize with followers. They accept coworkers as unique human beings and assume that others act out of good intentions. However, at the same time, servant leaders refuse to accept destructive behavior or poor performance.

3. Healing. Servant leaders bring followers to wholeness, helping them recover from emotional injury and to experience the personal ethical development described in Chapter 2 .

4. Awareness. Servant leaders are attuned to elements of a situation as well as to their own thoughts and emotions. Such awareness heightens their sensitivity to the ethical dimension of situations.

5. Persuasion. Servant leaders rely on persuasion rather than on positional power when making decisions in the organizational setting. While authoritarian leadership relies on coercion, servant leadership builds group consensus.

6. Conceptualization. Servant leaders master the day-to-day operations but also engage in big-picture, long-range thinking. They create an attractive long-term vision for the organization.

7. Foresight. Servant leaders can foresee or anticipate the likely outcome of a situation, such as the possible negative consequences of an ethical choice or marketing plan. This ability also enables them to understand the lessons of the past and the realities of the present.

8. Stewardship. Servant leaders act as stewards who “hold something in trust for another.” Greenleaf believed that CEOs, executive staffs, and boards of directors are particularly responsible for holding their institutions in trust for the greater good of society as a whole. Stewardship is a key element of servant leadership because it focuses on serving the needs of others.

9. Commitment to the growth of people. Servant leaders believe in the intrinsic value of people that extends beyond their roles as workers. They seek to promote the personal, professional, and spiritual growth of all employees through, for instance, providing development funds, soliciting suggestions from everyone, and involving workers in the decision-making process.

10. Building community. Servant leaders recognize that the influence of organizations has supplanted that of local communities. As a result, they seek to build communities of employees. In this way, a sense of community is rebuilt in society as a whole, one organization at a time.

More recently, scholars have begun to subject servant leadership to empirical testing. They have developed servant leadership questionnaires like the one in Self-Assessment 8.1 and then have used these tools to determine how servant leadership influences followers, organizational culture, and organizational performance in a variety of cultures. 37 They have discovered that servant leadership has global appeal and is practiced in Ghana, India, Australia, Indonesia, the United States, and elsewhere. While the specific attributes of servant leaders vary between studies, there are some common themes. First, servant leadership is person centered or altruistic. Servant leaders are genuinely concerned about their followers as well as their organizations and communities (reflecting an ethic of care). They measure their success based on what happens in the lives of their followers, not on what they themselves have accomplished. Concern for followers, organizational stakeholders, and society comes before concern for self. Putting the needs of others first discourages shadowy behavior. Other-centered leaders are less likely to accumulate power and privilege for themselves, to lie to followers, to take advantage of them, or to act inconsistently or irresponsibly.

Second, servant leadership promotes equity or justice. Servant leaders distribute power by delegating authority to carry out important tasks, sharing information, engaging in collaborative decision making, and encouraging constituents to develop and exercise their talents. Servant leaders are also concerned with distributing rewards fairly. When the company as a whole does well, for example, both employees and executives receive bonuses.

Third, servant leadership rests on ethical character. Servant leaders possess such virtues as empathy, integrity, honesty, and wisdom. They set a high moral example for the rest of the organization through their consistent ethical behavior.

Fourth, servant leadership incorporates stewardship. Servant leaders work on behalf of others—employees, shareholders, communities. They recognize that their positions and organizations are entrusted to them. Practicing servant leadership has a positive influence on followers as well as on collective performance. 38 Subordinates working under servant leaders are more likely to engage in organizational citizenship behaviors, to have a greater sense of self-efficacy, to believe their needs are being met, to report higher job satisfaction, and to say they will stay with their organizations. They also spend more time building relationships with customers and responding to consumer needs. Employees who work for servant leaders believe that they are being treated fairly, which encourages them to work hard. In sum, servant leadership, like transformational leadership, can help us become more ethical and effective leaders. Putting others first helps us meet the ethical challenges of leadership while avoiding destructive leadership behaviors. At the same time, our organizations benefit.

Self-Assessment 8.1

Servant Leadership Questionnaire

Respond to each of the following items on a scale of 1 to 5 (1 = strongly disagree, 5 = strongly agree). The scale asks you to evaluate a department manager, but you can substitute another type of leader instead (CEO, instructor, team leader). Total scores can range from 14 to 70. The higher the score, the more this leader demonstrates servant leader behaviors and attributes.

1. My department manager spends the time to form quality relationships with department employees.

2. My department manager creates a sense of community among department employees.

3. My department manager’s decisions are influenced by department employees’ input.

4. My department manager tries to reach consensus among department employees on important decisions.

5. My department manager is sensitive to department employees’ responsibilities outside the workplace.

6. My department manager makes the personal development of department employees a priority.

7. My department manager holds department employees to high ethical standards.

8. My department manager does what she or he promises to do.

9. My department manager balances concern for day-to-day details with projections for the future.

10. My department manager displays wide-ranging knowledge and interests in finding solutions to work problems.

11. My department manager makes me feel like I work with him/her, not for him/her.

12. My department manager works hard at finding ways to help others be the best they can be.

13. My department manager encourages department employees to be involved in community service and volunteer activities outside of work.

14. My department manager emphasizes the importance of giving back to the community.

SOURCE: Ehrhart, M. G. (2004). Leadership and procedural justice climate as antecedents of unit-level organizational citizenship behavior. Personnel Psychology, 57(1), p. 93. Used by permission.

Authentic Leadership

Authentic leadership theory (ALT) is an offshoot of positive psychology and positive organizational scholarship. Positive psychologists, as we saw in Chapter 2 , believe in developing people’s strengths instead of trying to fix their weaknesses; positive organizational scholars try to bring out the collective best in organizations. Fred Luthans, Bruce Avolio, and their colleagues assert that this positive approach is also a more productive way to develop leaders. 39 Traditional development programs address deficiencies in a leader’s skills, knowledge, and motivations. Failure and other negative events are seen as critical to leader development. ALT proponents argue, instead, that we ought to build on the strengths of individuals and look for positive moments that foster their growth as leaders.

To Luthans, Avolio, and others, authenticity is the “root construct,” or principle, underlying all forms of positive leadership. Authentic leaders know themselves well, and they behave in ways that are consistent with their beliefs. (In other words, they “walk their talk.”) Self-awareness, balanced processing, internalized moral perspective, and relational transparency all play an important role in authentic leadership. 40 Self-awareness means being conscious of, and trusting in, motives, desires, feelings, and self-concept. Self-aware people know their strengths and weaknesses, personal traits, and emotional patterns, and they are able to use this knowledge when interacting with others and their environments. Balanced processing denotes remaining objective when receiving information. Inauthentic responses involve denying, distorting, or ignoring negative feedback. Authentic leaders accept their blind spots and failings and try to address them. Internalized moral perspective refers to regulating behavior according to internal standards and values, not according to what others say. Authentic leaders act in harmony with what they believe and do not change their behavior to please others or to earn rewards or avoid punishment. Relational transparency is presenting the authentic self to others, openly expressing true thoughts and feelings appropriate for the situation.

Authentic leadership has a strong moral component. 41 Not only has authenticity been seen as a virtue since ancient Greece and Rome, but ALT theorists define authentic leaders as “those who are deeply aware of how they think and behave and are perceived by others as being aware of their own and others’ values/moral perspectives, knowledge, and strengths; aware of the context in which they operate; and who are confident, hopeful, optimistic, resilient, and of high moral character.” 42 Such leaders acknowledge the ethical responsibilities of their roles, can recognize and evaluate ethical issues, and take moral actions that are thoroughly grounded in their beliefs and values. Proponents of authentic leadership argue that it is impossible to achieve a high level of authenticity without reaching an advanced level of moral development and holding to high ethical standards. 43

Critical incidents called trigger events play an important role in the development of the moral component of authentic leadership. 44 These events can be positive or negative and promote introspection and reflection. Trigger experiences are often dramatic (facing racial hatred, visiting a third world village). However, authentic leadership theorists posit that, more often than not, these experiences are more mundane—for example, reading an important book, seeing a powerful film, serving under an authentic leader. Sometimes a series of small events, such as several minor successes or failures, can have a cumulative effect, triggering significant thought. Leaders develop a clearer sense of who they are, including their standards of right and wrong, through these experiences. They build a store of moral knowledge that they can draw on to make better choices when facing future ethical dilemmas.

Authentic leadership produces a number of positive effects in followers, beginning with increased commitment and performance. 45 Followers are also likely to emulate the example of authentic leaders who set a high ethical standard. They feel empowered to make ethical choices on their own without the input of the leader and demonstrate moral courage. They align themselves with the values of the organization and become authentic moral agents themselves. (I’ll have more to say about authentic followership in the next chapter .) Leader authenticity fosters feelings of self-efficacy (competence), hope, optimism, and resilience in followers, what positive psychologists refer to as psychological capital. Followers who believe in their abilities are more likely to take initiative and to achieve more, even in the face of difficult circumstances. Feelings of hope and optimism foster their willpower. Resiliency enables followers to recover more quickly from setbacks.

Authenticity also pays dividends for leaders. Followers provide feedback that increases the leaders’ self-knowledge. They reward authentic leaders by giving them more latitude to make difficult, unpopular choices and by getting more done. (Followers are also more productive because they have to waste less time and energy figuring out what their leaders will do next.) In addition, authentic leaders engender more trust; and trust, in turn, has been linked to higher organizational productivity and performance. Those who work in a trusting environment are more productive because they have high job satisfaction, enjoy better relationships, stay focused on their tasks, feel committed to the group, sacrifice for the greater organizational good, and are willing to go beyond their job descriptions to help out fellow employees. 46

The benefits of authenticity demonstrate the truth of the familiar adages “Know thyself” and “To thine own self be true.” Avolio and Luthans encourage you to look to the past, present, and future in order to build your self-awareness, which, in turn, will promote your development as an authentic leader. 47 First, reflect on your past experiences (both good and bad) to see what you can learn from them, and then develop ways to improve. For example, if you successfully managed a conflict with a roommate, consider what that experience can teach you about handling a conflict at work, and put those insights into practice. Next, actively monitor how you currently think and feel and how your actions influence others. Build your self-confidence or self-efficacy through visualization and by observing positive role models; hold high positive expectations for yourself (employ the Galatea effect; see Chapter 5 ). Finally, focus on the future, identifying emerging trends that may impact you and your organizations. You are more likely to spot such developments if you read outside of your field of study, attend seminars, and develop social networks.

Benevolent Paternalistic Leadership

Paternalistic leadership is popular in many regions of the world, including Asia (China, India, Japan, Malaysia), South America, and the Middle East. These collectivistic societies emphasize the importance of the group and are comfortable with large differences in power. 48 (Turn to Chapter 13 for more information on individualism/collectivism and cultural power differences.) Paternalistic leaders act like father figures who treat their employees as extended family. They get involved in the personal lives of their workers by, for example, giving them advice, loaning them money, and attending the weddings of their children. In return, leaders demand loyalty and obedience from subordinates. They also make decisions for their followers.

Western scholars generally treat paternalism with suspicion, believing it infringes on the rights and the personal lives of followers. They describe the paternalistic leadership style as “benevolent dictatorship,” “a hidden and insidious form of discrimination,” and an “iron fist in a velvet glove.” 49 These scholars seem to equate paternalism with authoritarianism, downplaying the benevolent and moral dimensions of paternalistic leadership. Benevolent paternalistic leaders focus on the needs of employees in order to help them, not exploit them, and set a high moral standard by demonstrating personal virtues like self-restraint and integrity. Authoritarian paternalistic leaders often undermine the satisfaction, confidence, and performance of followers while creating a selfish organizational ethical climate, but benevolent paternalistic leaders boost employee satisfaction, loyalty, gratitude, commitment, and effectiveness. Their considerate behavior can reduce the negative impact of authoritarianism while fostering a caring organizational climate. There is evidence to suggest that benevolent paternalism may also appeal to members of cultures that value individuality and equality, not just those from collectivist societies. In one study, employees from both India and the United States were more committed to their organizations when their leaders acted in a benevolent manner. 50

Benevolent paternalistic leadership draws heavily from the Confucian and altruistic perspectives described in Chapter 1 . Paternalism reflects the Confucian values of relationship, hierarchy, and virtue. Leaders have more authority but they are to demonstrate compassion for their followers and sacrifice on their behalf. Benevolent leaders are altruistic, modeling the ethic of care by noting and meeting the needs of others and nurturing relationships with employees. Benevolent paternalistic leadership shares much in common with servant leadership. Like servant leaders, benevolent leaders focus on meeting the needs of followers and set a good moral example. But benevolent paternalist leaders go further than many servant leaders, expressing their concern for employees not just inside but also outside of the workplace.

As a Western reader, you may resist the notion that a leader should get involved in your personal life, viewing such interest as a violation of your privacy (see Application Exercise 8). Nevertheless, benevolent paternalistic leadership appears to be an effective and ethical leadership style in many regions of the world. You may want to consider using benevolent strategies as an organizational leader. To determine if you or your current supervisor uses benevolent tactics, complete Self-Assessment 8.2 .

Self-Assessment 8.2

Benevolent Paternalism Scale

Instructions

Use a five-point scale ranging from 1 (Strongly disagree) to 5 (Strongly agree) to rate your supervisor. As an alternative, you can rate yourself.

My manager:

· Is interested in every aspect of his/her employees’ lives.

· Creates a family environment in the workplace.

· Consults his/her employees on job matters.

· Is like an elder family member (father/mother, elder brother/sister) for his/her employees.

· Gives advice to his/her employees on different matters as if he/she were an elder family member.

· Knows each of his/her employees intimately (e.g., personal problems, family life).

· Exhibits emotional reactions in his/her relations with the employees; doesn’t refrain from showing emotions such as joy, grief, anger.

· Participates in his/her employees’ special days (e.g., weddings, funerals).

· Tries his/her best to find a way for the company to help his/her employees whenever they need help on issues outside work (e.g., setting up home, paying for children’s tuition).

· Gives his/her employees a chance to develop themselves when they display low performance.

Scoring

Scores can range from 10 to 50. The higher the score, the more you or your leader demonstrates benevolent paternalism.

SOURCE: Adapted from Pellegrini, E. K., & Scandura, T. A. (2006). Leader-member exchange (LMX), paternalism and delegation in the Turkish business culture: An empirical investigation. Journal of International Business Studies, 73(2), 264–279. Used by permission.

Chapter Takeaways

· Leaders are critical to the ethical performance of any organization. They serve as moral persons and as moral managers. As moral persons, they act as role models for followers. As moral managers, they keep the organization focused on the importance of ethical behavior.

· The ethical challenges of leaders and followers are a product of their complementary roles. As a leader, you will have power, broader authority, and more responsibility for the overall direction of the group. As a follower, you are accountable for implementing plans and carrying out the work.

· The six moral demands you’ll face as a leader include (1) the challenge of power, (2) the challenge of privilege, (3) the challenge of information management, (4) the challenge of consistency, (5) the challenge of loyalty, and (6) the challenge of responsibility.

· Failure to meet the ethical challenges of the leadership role leads to a variety of misbehaviors that comprise the dark, or shadow, side of leadership. Understanding this side of leadership can keep you from casting shadows.

· Shadow leaders have been described as bad (ineffective and/or unethical), toxic (engaging in antisocial behaviors and demonstrating dysfunctional characteristics), destructive (acting in ways that damage subordinates, the organization, or both), and selfish (impulsive, narcissistic, Machiavellian).

· We can keep from casting shadows by sharing power, remaining accountable, and being alert to signs of toxicity and selfishness in ourselves.

· To be a transformational leader means speaking to the higher-level needs of followers and raising the ethical standards of the organization. This requires practicing idealized influence, individualized consideration, inspirational motivation, and intellectual stimulation. Such behaviors can help you become a more ethical leader as well as a more effective one.

· Servant leaders avoid the ethical pitfalls of the leadership role by putting the needs of followers first. They are person centered (altruistic), promote justice, demonstrate ethical character, and practice stewardship.

· Authentic leaders reflect a high level of self-understanding, and their actions are consistent with their core values. They demonstrate self-awareness, balanced processing (they can remain objective when receiving information), and an internalized moral perspective based on internal standards and relational transparency. You can develop authenticity by developing your ethical skills and knowledge and by increasing your level of self-awareness. You can become more self-aware by drawing lessons from past events, building your current level of self-efficacy, and identifying emerging trends that will shape you and your organization in the future.

· Paternalistic leadership is popular in collectivistic societies that honor significant differences in power between leaders and followers. Benevolent moral leaders increase follower commitment and performance by demonstrating consideration for subordinates both on and off the job. They also model important virtues like compassion and integrity. You may want to employ benevolent strategies to build stronger relationships with your followers.

Application Projects

1. In a group, identify additional ethical demands on leaders that you would add to those in the chapter.

2. Create a case study that illustrates how a leader responded to one of the ethical challenges.

3. Which ethical challenge is the most difficult to resolve? Write up your conclusions.

4. Debate the following propositions.

· Studying the dark side of leadership can help us become more ethical leaders.

· Authenticity is the most important characteristic a leader can have.

· Incompetent leaders can’t be ethical leaders.

· Transformational leadership makes followers too dependent on their leaders.

· In certain situations it is impossible to practice servant leadership.

· It is possible to use transformational leadership strategies to reach unethical objectives.

· No action or decision is ethical unless a leader reaches it using ethical processes.

5. Share your score from the Servant Leadership Questionnaire with a partner. Explain why you rated this individual the way you did and how she/he might improve. How do you think you would rate if others evaluated you?

6. If you serve in a leadership role, spend a week trying to function as a servant leader. Summarize your experience, paying particular attention to how acting as a servant may have changed your attitudes and behaviors.

7. Apply the characteristics of transformational leadership to a leader of your choice. Determine if this person is transactional or transformational. Defend your conclusion.

8. Pair off and discuss your reactions to benevolent paternalistic leadership. Do you believe leaders should get involved in the personal lives of followers outside the job? Does your supervisor use benevolent tactics and, if so, how do you respond?

9. Identify the strengths and weaknesses of each of the normative leadership theories presented in the chapter. Which one do you find most useful and helpful?

Case Study 8.2

Failing to Serve Those Who Served

The mission of the Veterans Affairs health care system is to meet the medical needs of armed forces personnel. To fulfill this mission, the VA operates the largest medical organization in the United States with nine million enrollees receiving treatment at 150 medical centers and 800 outpatient clinics. The VA also provides annual disability payments to four million veterans.

Demand for VA medical services has skyrocketed as Vietnam vets age and as service personnel from Iraq and Afghanistan (many with traumatic brain injuries and post-traumatic stress disorder) return from their deployments to the Middle East. At the same time, the agency has trouble recruiting and retaining medical personnel. The number of outpatient visits grew by 26% in a recent five-year period while the number of doctors and nurses went up by only 18%. As a result, veterans have trouble getting appointments for care and are placed on wait lists.

In order to shorten the waiting time for treatment, former VA director Edward Shinseki mandated that new patients be seen within two weeks of contacting a medical center or clinic. Middle- and senior-level managers were given bonuses and promotions for meeting this objective. Unfortunately, Shinseki’s mandate didn’t solve the access problem but drove it underground. Managers “gamed the system” by falsifying patient access records. They created secret waiting lists that contained the actual number of veterans seeking treatment. At the same time they created another set of shorter lists to present to VA administrators. According to these “official” lists, facilities were meeting the guidelines, which meant that managers received their bonuses. In other cases officials kept wait times down by failing to record new patients, marking the first available appointment as the one requested by the veteran, or by cancelling previously scheduled appointments.

The sham wait lists came to light after a doctor at the Phoenix VA medical center complained. An audit by the Veterans Administration inspector general discovered that the deceptive practices extended well beyond the Phoenix facility, revealing what Secretary Shinseki called “a systemic, totally unacceptable lack of integrity.” 1 Two-thirds of Veterans’ facilities manipulated data in at least one instance in order to conceal the true extent of the access problem. An estimated 100,000 veterans (1,700 in Phoenix) were kept off official waiting lists and, in some cases, were not scheduled for the appointments they requested. The average wait time for Phoenix veterans was 115 days, and 18–40 patients died while waiting for care, though it is not clear if the deaths were caused by the delay in treatment. (Some on the list were terminally ill and requested end-of-life care.)

The inspector general put much of the blame on VA leadership for creating an “overarching environment and culture that allowed this state of practice to take root.” 2 The audit called for a complete overhaul of the VA’s performance management system. A White House report said that the VA medical system had a “corrosive culture” that “encourages discontent and backlash against employees.” 3

Americans were outraged at the reports of the falsified records and lengthy wait times. Military personnel risk their lives for their country, and citizens honor their loyalty and devotion by pledging to meet their needs during and after active service. Lengthy wait times break what President Barack Obama called the “sacred trust” between the country and those who serve in uniform. According to the president, “When we fail to keep faith with our veterans, the bond between our nation and our nation’s heroes becomes frayed. When a veteran is denied care, we are all dishonored.” 4

VA director Shinseki was forced to resign under pressure from congressional representatives. The new director eliminated the 14-day scheduling goal, froze all executive bonuses, vowed to change the reward system to discourage hiding the truth, and promised to fire those engaged in deceptive practices. The agency contacted those who were on the secret lists to initiate treatment. With bipartisan support, Congress passed legislation that allows veterans to seek treatment at private clinics (on an experimental basis) when they can’t promptly schedule VA appointments and approved funds for hiring more staff and building more hospitals. The FBI is investigating to determine if criminal charges should be brought against managers who created the sham lists.

Sadly, the good work of the Veterans Administration has been overshadowed by the records scandal. Thousands of employees—many of themselves veterans—strive to provide excellent care. Veterans often praise the VA for the treatment they receive once they get access to the system. Nonetheless, VA leaders seem to have lost sight of the fact that they are to serve the needs of veterans and the doctors, nurses, pharmacists, lab technicians, and others who treat them. One retiring physician at the Bozeman, Montana, VA facility spoke of his frustration with having to deal with rules and standards set by administrators. He called upon supervisors to focus instead on helping their employees help patients. “It’s a joke—what’s this week’s this month’s this quarter’s new metric that we are all anguishing about?” he said. “I would love to instead see primary care docs asked what they need: ‘How can we help you guys [gals] out?’” 5

Discussion Probes

1. What leadership challenges did VA managers fail to meet?

2. What steps can the VA take to encourage managers to act as servant leaders?

3. What additional steps should the VA take to address the patient access problem?

4. What changes would you make to the reward system to discourage and prevent future deception?

5. Should criminal charges be brought against managers who created the secret waiting lists?

Notes

1. Shear and Joachim (2014).

2. Daley (2014).

3. Zoroya (2014).

4. Kaplan (2014).

5. Goodnough (2014). Additional sources for this section are Carter (2014); Perez (2014); Shear and Oppel (2014); Tritten (2014); Wagner (2014); What ails the VA doesn’t lend itself to quick cures. USA Today, p. 6A.

Case Study 8.3

Leading in the Darkness and the Light

The rescue of 33 Chilean miners in October 2010 was cause for worldwide celebration. After being trapped more than 2,000 feet below ground for 69 days, the rescued men emerged one by one from a capsule, to the cheers of the crowd gathered at the site as well as to the cheers of television viewers around the world.

The happy ending to the Chilean mining crisis was largely due to inspirational leadership both below and above ground. When 700,000 tons of rock collapsed on August 5, the miners were trapped near an underground rescue hut. Under the direction of mine foreman Luis Urzúa, they organized themselves, dividing into work groups to look for escape routes, to police the living area, and to monitor the shaft for evidence of rescue attempts. Together, the men decided to divide their food supply, which consisted of a few cans of tuna, into equal shares and to eat only a few bites every day. They also tried to maintain a routine by setting up a regular sleep schedule.

Conditions in the pit were brutal. The polluted air burned the lungs of the miners, and the temperature averaged 92 degrees with nearly 100% humidity. According to one survivor, “It was like being in a filthy sauna where the air is full of dirt.” 1 The men were forced to sleep on the wet, muddy floor of the mine or on the floors and hoods of vehicles trapped below. They used their light sparingly, for work and to keep up their morale, and took sips of contaminated water from metal drums. Fortunately, the group had an adequate air supply, discovered a waterfall that acted as a shower, and had access to adjoining tunnels. Nonetheless, the men were in desperate shape by the time rescuers located them, dehydrated and malnourished. Determined to die as a group, they had written goodbye letters to their families before they were located.

On the surface, key leaders included Chilean president Sebastián Piñera, mining minister Laurence Golborne, and mining engineer Andre Sougarret. Piñera ordered Golborne to spare no expense in launching a rescue despite estimates that there was only a 10% chance of finding anyone alive. “We made a commitment to look for the miners as if they were our sons,” said Piñera. 2 The president remained committed to the effort, even as the days passed and he learned that the chances of anyone surviving had shrunk to less than 2%. The president told his advisors, “Even if there’s less than one tenth of one per cent chance, it’s our duty to keep searching.” 3

Mining minister Golborne organized the rescue effort, dividing rescuers into three teams. One group was assigned to locate the miners, one group focused on how to keep them alive if they were found, and the third group determined how to bring them safely to the surface. The minister spent most of his time on site, supervising every aspect of the operation and providing regular reports to the media. Engineer Sougarret was in charge of the drilling project. For 17 days, he and his team tried to make contact with the miners through a series of boreholes. On August 22, the drill broke through near the miners’ refuge. Rescuers thought they heard banging on the drill head. When they pulled it up, they found a plastic bag pressed into the drill thread that said, “Estamos bien en el refugio, los 33—We’re all OK in the refuge, the 33.” 4

Once the men were located, the rescue effort kicked into high gear. Additional boreholes were drilled and used to send down food, medicine, messages, and a phone line. Chilean officials weren’t shy about asking for help. They consulted NASA about how best to keep the miners healthy and used the agency’s expertise when designing the escape capsule. Chilean leaders brought in contractors from the United States and Canada to simultaneously drill three rescue shafts in the hopes of speeding the recovery.

The trapped miners were actively involved in their rescue. They provided ideas and maps to Sougarret and his team. At the same time, a variety of group members emerged as leaders, doing their part to keep the group healthy and in good spirits. A miner trained as a paramedic conducted medical tests. Based on information he gathered, the survivors were advised to double their intake of water and to slowly build up their intake of calories. Another miner kept up the group’s morale through humor (when he got to the top of the shaft, he presented Piñera with souvenir rocks from below). Yet another was named the group’s official “pastor,” helping his colleagues keep up their hopes of rescue.

The trip up the rescue shaft in an escape capsule painted in Chile’s national colors was as carefully planned as the rest of the operation. Healthier miners went first, in case there were any unanticipated problems early on. Engineers periodically lubricated the capsule’s wheels to keep them running smoothly and to prevent them from overheating. Much like the captain of a sinking ship, shift foreman Urzúa was the last to leave the mine. Each man emerged from the hole wearing Oakley sunglasses (donated by the company) to help their eyes adjust to the brightness of the surface.

Unfortunately, the goodwill generated by the rescue didn’t generate many lasting changes. Immediately after the disaster President Piñera (who left office in 2014) vowed to improve the treatment of workers and to address the nation’s economic inequality, declaring “We need a new culture of worker dignity, starting with closing the giant gap between rich and poor, so we don’t have people living on two distinct planets.” 5 To that end, he promised to invest more in public education and increased the number of mine inspectors and mine inspections. However, the Chilean legislature failed to pass stricter safety measures that would have allowed miners to refuse to work in unsafe locations. The sharp economic divide between the country’s haves and have-nots remains.

Life has not been easy for the rescued miners. Once international celebrities, they are now largely forgotten. Many of the 33 suffer from post-traumatic stress. They cannot find jobs as miners and some are destitute. They hope that movie rights based on their story (The 33) will bring financial relief. However, the once unified group has splintered. One contingent accepts the film contracts signed immediately after their release from underground; the other contingent wants to renegotiate, claiming that they were taken advantage of.

Discussion Probes

1. What risks did President Piñera face in launching a rescue despite the low chances of success?

2. How did the miners demonstrate transformational leadership? Servant leadership? Authentic leadership?

3. How did the Chilean president, mining minister, and drilling supervisor act as transformational leaders? As servant leaders? As authentic leaders? As benevolent paternalistic leaders?

4. What factors might have prevented Chilean leaders from building on the goodwill generated by the rescue to improve mine safety and build a more just society?

5. What are a society’s long-term obligations to victims of a disaster like the one in Chile?

6. What did you learn from this case that you can apply as a manager or supervisor?

Notes

1. Graham (2010).

2. Fletcher (2010), pp. 4, 5.

3. Fletcher (2010).

4. Sequera (2010).

5. Padgett (2011). Additional sources for this section are Barrionuevo (2011); Carroll and Franklin (October 14, 2010; October 16, 2010); Fountain (2010); Franklin (2013); Hampson and Dorell (2010); Lucky (2013); McNeil (2010); Vanderklippe (2010).