Project Ethics in Leadership

Facing and Handling Ethical Challenges in Leadership

Similar to other applied ethics that address ethical challenges in specific domains such as law, health, and health information management (HIM), leadership ethics address specific challenges in leadership. Ethics involves questioning what is right and wrong, and what are duties and obligations. It also exercises fairness, justice, and responsibilities in human relationships and with other living things (Ciulla 2014). Therefore, the ethical challenges leaders face ultimately are related to leaders and their relationship with the aspirations, needs, and well-being of their followers.

Ethical challenges can be categorized broadly as centering on personal and moral challenges. Personal challenges involve such things as authenticity, balancing self-interest with the interests of others, and being disciplined and consistent in leadership behaviors. Moral challenges are usually related to such things as justice, duty, competence, and concern for the greatest good. These challenges are not exclusively about making decisions regarding what is right or wrong. Frequently the struggle is between opposing goods. For instance, balancing showing compassion for an individual and being fair to a group of people when making a choice between two alternatives.

This chapter first examines a group of behaviors leaders can exercise to establish an environment that is more likely to support ethical leadership. Creating an ethical environment where people and organizations can flourish is a primary leadership goal and also reduces the opportunity for unethical behavior. The chapter then explores what contributes to ethical challenges and ethical traps and offers insights on how leaders can face and handle these.

Creating a Climate for Ethical Practice

The leader–follower relationship is based fundamentally on the exercise of power and influence. Leaders usually have more power or influence than followers and how leaders choose to use their power frequently gives rise to ethical challenges (Ciulla 2005). Good leadership (chapter 8) relies on developing loyalty and trust in the leader–follower relationship. Honesty and trust are based on fairness, principled decision making, and communication. When the leader’s reason for using influence or power is unjust (such as promotion of self-interest), or when the use of power is unjust (such as administering unfair punishment), then the environment is not conducive to building trust. Participative practices between leaders and their followers that build trust and honesty, encourage communication, and promote the ethical use of power are likely to create a climate for ethical behavior (Hollander 2014). Some of these practices such as inclusive leadership and followership are discussed next.

Inclusive Leadership

Inclusive leadership (IL) is a participative process where the leader includes followers in the decision-making process. The leader encourages followers to voice their ideas and opinions in matters that concern them and listens to these ideas. This is a departure from leader-centric leadership where the leader is the sole decision maker, directing people rather than including them at the decision-making table. Being an inclusive leader means “doing things with people, rather than to people,” (Hollander 2012, 3). Including followers in the decision-making process in matters that affect them not only helps followers participate in leadership, but also improves the likelihood of achieving desired outcomes (Hollander 2014).

In IL the leader–follower relationship is based on four key elements (figure 9.1). These include the following:

•Respect: Listening to others

•Recognition: Acknowledging another’s input can make a contribution to the decision-making process

•Responsiveness: Engaging in discussion and consideration of the input of others

•Responsibility: Accountability for practicing respect, recognition, and responsiveness (Hollander 2012, 3)

Figure 9.1. The four Rs of inclusive leadership

Source: Hollander 2012, 3.

 

Practicing these four Rs is required of both the leader and the follower if IL is to be successful. All of these behaviors rely on two-way communication between leaders and their followers. The following scenario demonstrates how IL might work.

Lynn is corporate director of HIM services for a nine-hospital healthcare system. She has 12 managers who directly report to her and each is responsible for various aspects of health information services at one of the nine hospital centers. Recently the healthcare system hired an outside consulting firm to study efficiency and workflow problems in revenue cycle management. When Lynn reviewed the consultant’s evaluation and recommendations, her first impression was: “There are a lot of challenges here and the recommendations cross organizational, departmental, and functional borders. These are likely to cause a lot of opposition from staff, but because the consultants have recommended these I am not going to be held responsible if they are not well received when they are implemented.” However, Lynn continued to think about the implications of the recommendations before proceeding with them. Ultimately she was as concerned about doing what was right for the organization and staff as she was about doing things right. To be successful, Lynn recognized that the input from her staff was important to determine next steps. Lynn respected the perspectives her staff could provide and arranged for an all-day session with them to review the consultant’s report and determine what action was appropriate and how it should be implemented. During the session Lynn asked questions like the following to engage her direct reports:

What do we know to be true?

•What is difficult here?

•What could we do better?

•If we do not do this, what are the consequences?

•If we do this, what are the consequences?

The assembled group grappled with these questions, offering their opinions and insights. Often they did not agree with each other, but Lynn kept probing them with powerful questions about what actions were the right thing to do and how they could be best implemented. The group came to a consensus in developing an action plan that was right for the organization, was accepted by those who were affected by the actions, and was likely to succeed.

This scenario demonstrates how the four Rs of IL are implemented. First, Lynn showed respect for her followers by soliciting their input. She showed her staff recognition by engaging and listening to them. She demonstrated responsiveness by taking their opinions and crafting an action plan that was practical. Both Lynn and her followers fulfilled their responsibilities acting reciprocally by respecting, recognizing, and being responsive to each other, even when there were disagreements among them.

Inclusive Leadership Experience

Use the list in table 9.1 to assess the extent to which you have experienced an inclusive leadership environment in two organizations where you have worked. Think about times where you felt committed, motivated, and recognized in your job. Then check the column that applies for each statement and answer the questions that follow.

1.What are the similarities and differences between the two managers? Describe their areas of strengths and areas in which they can improve.

2.For each statement where you checked “sometimes”, describe a specific instance where the manager displayed inclusive leadership behavior.

Table 9.1. Inclusive leadership assessment

Inclusive Behavior Manager 1 Manager 2

My manager: Always Sometimes Never Always Sometimes Never

Respect            

Listened to my work concerns

           

Was interested in how I was doing at work

           

Was interested in receiving my input

           

Treated me with courtesy

           

Recognition            

Asked for my input on policies or procedures

           

Solicited input from me and my workgroup members before making decisions affecting myself or the workgroup

           

Recognized my contributions to the organization

           

Responsiveness            

Gave me opportunities to make decisions about how did my work

           

Was fair and consistent with how he or she treated me

           

Addressed work concerns or problems I had

           

3.How did you respond in situations where your manager did not practice inclusive leadership? How did this impact your motivation, commitment, loyalty, and self-esteem? Explain.

4.Pick one occasion where your manager could have changed his or her behavior and been more inclusive and describe possible results.

Followership

Because leadership involves a leader–follower relationship, leaders and followers are dependent on each other and their fortunes (success) rise and fall together (Burns 2012, 489). Inherent with this relationship are ethical challenges particularly in relationship to how leaders use their influence and power. For example, leaders can use their influence and power to advance or thwart various forms of distributive, procedural, and interactional justice discussed later in this section.

Followers can either support or impede a leader. For example, followers can embrace a leader’s vision and take action to achieve it. On the other hand, in cases of situational power (namely, power that has been granted by holding a position) and in a leader-centric environment where respect, autonomy, identify and certainty are lacking, followers may sabotage a leader’s vision and goals. Examples of this are deliberate nonperformance, not speaking up when there is an obvious process problem that will adversely affect an outcome, or stealing or maliciously destroying digital assets. Thus, there is almost universal consensus that mutual reciprocity must exist between leaders and their followers if leadership is to be successful (Hollander 2014). Leaders need to understand their followers to be successful. The concept of followership contests the notion that the sole aim of a leader is gaining personal power. As discussed in the following sections, followership involves understanding and supporting the needs and rights of followers, and advancing various forms of organizational justice.

Followers’ Needs

There are a variety of motivation theories used to describe why people act in certain ways. These theories describe the degree of motivation based on assumptions about people’s needs and how well these are met. For example, Frederick Taylor’s motivation theory is founded on the premise that workers’ performance is directly related the degree to which their need for a reward is being met. Therefore, Taylor’s theory suggests that people are motivated by a reward, such as money, to work more productively. Elton Mayo’s theory of motivation, however, challenges the notion that workers act in a certain way based solely on the need for a reward. Mayo’s theory proposes that meeting the social needs of workers, such as providing humane working conditions, are motivators for workers’ productivity. Others such as David McClelland classify people’s needs somewhat differently. McClelland’s theory suggests that people’s behaviors are motivated by three drivers—needs for achievement, affiliation, and power. Achievement is defined as a need to accomplish something; affiliation is a need for belonging to a group; and power is a need to control others or organize people.

Another theory of motivation, developed by Abraham Maslow, focuses on explaining people’s behavior in relation to the extent that physiological and psychological factors such as safety, social, and ego needs are met (Maslow 1943). Using Maslow’s hierarchy of needs as a basis, followers’ needs beyond physiological and safety needs are divided into four categories: belonging, self-esteem, self-actualization, and transcendence needs. Each of these is described briefly as follows.

•Belonging. This need is described as an individual’s desire for social acceptance and feeling he or she is part of a group. When a follower feels isolated or not appreciated for who they are and what they contribute, then their needs for belonging are not met.

•Self-esteem. This need is described as individuals believing in themselves and receiving the respect and recognition of others. Self-esteem needs are met when others value and validate the individual, listen to him and her without judgment, and recognize the individual’s personal achievements.

•Self-actualization. This need is associated with an individual reaching his or her full potential and includes the autonomy to make choices and decisions and engage in challenging and creative work.

•Transcendence. This need involves a person wanting to identify with or experience something beyond the individual self or provide services to others outside of service to oneself.

The real role of leadership, like business, is not just to generate a product for extreme profit but to also help people fulfill their potential (Hollander 2014). Leaders can help people fulfill their potential by knowing what motivates their behavior and acting in ways that help meet their needs. In building an environment of followership, leaders not only satisfy this criterion but also create an atmosphere conducive for ethical conduct. For instance, a leader can help meet a follower’s need for belonging by practicing inclusive leadership and valuing different cultural viewpoints (chapter 10). Or a leader can help meet a follower’s self-esteem needs by practicing mindful leadership behaviors such as listening and responding to follower’s concerns (chapter 6).

Organizational Justice

Creating a leader–follower relationship involves recognizing followers’ rights—including the right to privacy, autonomy, dignity, and justice—and ensuring these are met. Organizational justice is examined in this chapter because it is closely associated with these other rights.

The right to organizational justice consists of three concepts: distributive, procedural, and interactional justice (figure 9.2).

Studies confirm the practice of organizational justice builds follower trust and commitment, improves follower job performance, and fosters follower citizenship behaviors such as doing more than what is expected and having concern for the welfare of others. The citizenship behaviors cultivated through organizational justice have been shown to have direct effect on both employee relationships and customer relationships, where customers are treated with respect and feel valued and thus are loyal and satisfied (Cropanzano et al. 2007). Each of the rights of organizational justice is summarized as follows.

Figure 9.2. Organizational justice

©Merida L. Johns

Distributive Justice

Distributive justice ensures the appropriateness of outcomes (Cropanzano et al. 2007, 36). Distributive justice is related to equity theory that asserts individuals have the following rights:

•They are rewarded based on their level of contributions (equity)

•They are provided the same compensation for the same work (equality)

•They are provided a benefit based on one’s needs (need) (Cropanzano et al. 2007, 36)

Distributive justice suggests followers have a right to fair treatment and an expectation that leaders treat everyone the same. Equity right requires a fair balance between follower inputs and outputs. Inputs are work quantity and quality, commitment, cooperation, loyalty, and their skill level, for example. Outputs consist of salary, benefits, job security, and recognition. Leaders, therefore, have an obligation to ensure that follower inputs are appropriately balanced for the individual and among individuals. The leader has a responsibility to ensure that the reward-to-effort ratio is consistent among all individuals. This means that one person should not be rewarded more than another when their value and contribution to an organization are the same.

There are three rules leaders can follow to ensure distributive justice. The first rule ensures equity, which means each person is compensated consistent with his or her contributions. For example, Michelle, a coding manager, would be compensated more than either John or Cathy, outpatient coders, because the coding manager has more responsibility than either outpatient coder.

The second rule guarantees equality, meaning each person is treated the same for the same contribution. For example, John and Cathy are both outpatient coders and are expected to meet the same quality and quantity criteria. The work of John and Cathy, therefore, will be evaluated the same, fulfilling the equality rule.

The third rule makes certain each person is treated in accordance with his or her personal requirements. For example, Cathy has physical needs requiring a quiet workplace and is accommodated by a separate work cubical, whereas John works in a common workspace because he does not have these needs.

Procedural Justice

Procedural justice is concerned with the processes used to determine outcomes, such as pay, benefits, and other compensation or recognition. Fair processes in work evaluation and handling employee complaints are two examples of procedural justice. Leaders can achieve procedural justice by using accepted and ethical best practices that are free from bias or discrimination and are applied consistently. Participative decision making is an additional component of procedural justice, where leaders provide opportunities for followers to have input on decisions that impact them. Studies show that procedural justice is related to building trust and loyalty with followers and increasing follower motivation (Cropanzano et al. 2007).

Interactional Justice

Interactional justice involves the leader’s interpersonal behavior with followers. Interactional justice and has two components: informational justice and interpersonal justice. Informational justice refers to truthfulness and fairness in providing explanations for policies, decisions, and procedures that affect the follower. Interpersonal justice refers to treating followers with courtesy, dignity, and respect. Examples of interactional justice include exchanges such as giving a follower appropriate explanations for decisions, listening and paying attention to a follower’s concerns, and showing empathy in difficult situations (Skarlicki and Folger 1997).

Contributors to Ethical Challenges

The leadership process is laden with many ethical challenges. Ethical challenges arise from the convergence of three dimensions activated by a trigger event called a critical incident (Chandler 2009). The first two dimensions that must be present in a leadership ethical challenge include the presence of a leader and a leader’s follower. The third dimension is the situational context or the circumstance impacting the leader–follower relationship (figure 9.3).

Each of these dimensions includes several variables contributing to development of an ethical challenge. For example, leader variables may include healthy or unhealthy self-esteem issues, moral values or character weaknesses, personal stressors, or effective or ineffective personal skills. Follower variables include follower needs, rights, values, attitudes, and beliefs.

Figure 9.3. Dimensions of ethical challenge

Adapted from Chandler 2009

Studies show follower variables can influence leader behavior. In other words, leaders can be susceptible to follower judgments that contribute to leader unethical practices. For example, knowing that a work team dislikes one of its members, the leader fails to stand up for the rights of the member fearing a backlash from the rest of the team. On the other hand, followers are also susceptible to a leader’s unethical behavior. For instance, followers can passively support unethical behavior as bystanders or can actively support leader unethical behaviors by condoning and participating in the unethical behavior. Support of the Nazi regime includes examples of both bystanders and active supporters of unethical behavior (Chandler 2009). In the healthcare realm, followers might passively support unethical billing practices.

The third dimension of an ethical challenge is the situational context or circumstance that influences the leader–follower relationship. The common factors include the amount of environmental uncertainty that exists, the degree of competitive drive, effectiveness of organizational processes and oversight, and previous organizational success (Chandler 2009). Each of these is explained as follows.

•Environmental uncertainty. Environmental uncertainty is caused by factors that create ambiguity. These include such things as organizational transition or growth, financial instability or duress, or weak or absent leadership. For example, a CEO misrepresents information to the company’s board of directors when the company is faltering financially.

•Extreme competitive drive. Extreme competitive drive can be caused by overly optimistic goal setting and tight deadlines, or pressure for higher productivity and higher profits at any cost. Recall the previous example where Ford rushed to production of the Ford Pinto because of an extreme competitive drive and profit at any cost.

•Ineffective processes or oversight. Ineffective processes and oversight are caused by factors that produce inadequate feedback and communication channels, lack of responsibility and accountability mechanisms, insufficient checks and balances, and incomplete or incorrect information. Healthcare contains numerous examples of accounting fraud due to inadequate monitoring of processes (oversight) and the lack of checks and balances within the organization.

•Previous organizational success. Previous organizational success can produce organizational complacency. This may lead to neglecting to update processes and organizational structures or lacking awareness of and response to environmental changes.

Ethical behavior exists within a complex environment and is determined by multiple factors. The interplay among these dimensions, each with their variables, contributes to the development of an ethical challenge requiring the leader to make a decision between the right and wrong actions in a specific circumstance.

Ethical Traps and Incidents

Awareness of the interplay among forces that create an ethical challenge is one of the first steps in grappling with ethical challenges. But the convergence of leader, follower, and situational variables only make the environment ripe for a critical ethical event or trigger. The variables do not by themselves cause the incident; what launches an ethical challenge is sometimes referred to as a critical incident, stimulus, or tipping point. The critical incident is “a thought, condition, intention, or event, which prompts unethical behavior,” (Chandler 2009, 71). Sometimes the critical incident is an external stimulus (like an overly competitive environment), but it can also be internal to the individual (such as an intention to serve self-interests).

A critical incident can be viewed as a social-psychological trap that together with leader–follower and situational variables causes an individual or organization to take an ill-fated action. Critical incidents or ethical traps can fall into three categories: primary, defensive, and personality (Hoyk and Hersey 2008). The following sections provide a description and an example of each.

Primary Ethical Traps

Primary ethical traps are external situations that entice the leader to move in a direction without regard to the leader’s ethical principles. These include obedience to authority, competitive drive, and self-interest. Consider the following example of the obedience to authority trap (AHIMA 2013).

The HIM director of a regional health center is preparing for a Joint Commission review. The Commission has selected 20 closed records to review. The HIM director reviews each of them and finds several where the orders include the date but not the time they were ordered. The director reports this to the hospital Joint Commission coordinator who is also her manager. The manager berates the director: “Why was this not caught by HIM before now? You are going to take the fall for this one—not me! Go back to the physicians and get these orders timed.” What is the ethical challenge for the HIM director and how might the director proceed?

An ethical challenge is created when leader, follower, situation, and the critical event variables converge. In this case, a leader–follower relationship exists within a hierarchical structure where there is an expectation the follower (the HIM director) will obey the authority figure (her manager). Follower variables include follower needs, rights, values, attitudes, and beliefs. In this case, the HIM director’s obedience to authority conflicts with her value of honesty. The Joint Commission standards clearly require that the authentication of the date and time of physician orders must occur at or near the time of the event. The HIM director’s value of honesty requires that she not follow her manager’s directive to now add times to the orders. However, if she disobeys her manager her job, future promotion, or salary increase are potentially in jeopardy. The HIM director’s ethical challenge is balancing her need for job security, her value of honesty, and doing the right thing.

The situational context converges with these other variables and plays a role in the developing ethical challenge. In this instance, appropriate processes that could have prevented the authentication failure did not exist or were not applied. A competitive environment to succeed at any cost may be an instrumental variable as well. For example, what would happen if the hospital was denied accreditation, or would be required to undergo a follow-up survey due to the authentication failure? The critical incident pulling these forces together is the manager’s command to alter patient health records. In addition to the ethical challenge between needs and values, the social-psychological trap for the HIM director is blind obedience to authority. Defensive Traps

Defensive traps are attempts to find easy ways to undo a wrongdoing that has occurred. They are traps that attempt to preserve one’s self-interests. Frequently defensive traps involve trying to lessen guilt or shame (Hoyk and Hersey 2008). For example, excusing wrongdoing by falsely assuming the wrongful act is something everybody does, minimizing the wrongful act by comparing it to something that is worse, renaming the act (that is, “just a white lie”), or transferring blame to another. In the previous scenario there are several defensive traps the HIM director could fall into. If she altered the health records, she might justify her action as “everybody does this,” or “in the big scheme of things this is a little transgression,” or “I am just following orders,” or “It is my boss’s responsibility.” In all cases, the defensive traps are attempts to hide or minimize the unethical behavior and actions.

Personality Traps

Personality traits—such as low self-esteem, or overuse or misuse of personal strengths—and social style such as competitiveness, need for control, and conflict avoidance are particularly susceptible to outside forces and make a leader more vulnerable to unethical behavior. The following scenario offers an example of a personality trap.

Christine, a nurse, is a quality coordinator at a large health system. Her tasks include data collection and analysis and performing audits against specific quality measures. In a recent audit she notices that one physician consistently has more level 4 and 5 billing codes on his encounter form. Upon further inspection of the patient health records, her audit reveals that the codes were not justified in many of these instances. In the past this physician has praised Christine’s work and she is now hesitant to speak to him about overbilling and reluctant to submit the current audit results. Christine fears that the physician will lower his opinion of her if she confronts or reports him. This is a case where Christine’s low self-esteem (needing the approval of others) places her in a potential personality trap that may lead to unethical behavior.

Unethical behaviors can also result from the interaction of more than one ethical trap. For example, Julie works the evening shift in the clinical laboratory department with her co-worker Anne. One evening Anne has a family emergency and has to leave work early. She asks Julie if she will punch her time card for her at the end of the shift. Even though Julie empathizes with Anne, she knows she will be acting dishonestly if she punches Anne’s timecard. Julie falls into a primary ethical trap and goes against her values and punches the time card for Anne. Because productivity levels were not met during the shift, the laboratory director asks Julie if she and Anne were on duty for the entire shift. Falling into a defensive trap, Julie lies and takes the easy way out to cover up her own dishonesty, compounding the ethical failure.

Apply Key Ethical Behaviors

In this chapter, practice means to apply ethical theories and to improve your development of ethical leadership behaviors in a leader role (for example, leading a class team, student organization, or community organization; or as a supervisor or manager in another capacity). Use the assessment in table 9.2 to cross-check your behavior and actions against some of the key concepts presented in this chapter. After your analysis, answer the questions that follow and identify where you can improve and set personal goals to do this.

1.Reviewing the assessment, what are your observations? In which areas can you improve?

2.Write down the areas in which you want to improve and the actions you will take to do so.

Table 9.2. Assessment of ethical leadership

Inclusive Leadership

Inclusive Behavior Current Actions How I can improve

As a leader I : Always Sometimes Never  

Listen to the concerns of my followers        

Ask my followers for input on policies or procedures that affect them        

Am interested in receiving feedback from my followers        

Treat my followers with courtesy and respect        

Give my followers autonomy to make decisions about how they do their work        

Solicit input from workgroup members before making decisions affecting the workgroup        

Recognize my followers’ contributions to the team and organization        

Provide clear work goals to my followers        

Show interest in my followers progress and well-being        

Am fair and consistent with how I treat my followers        

Address the concerns of my followers        

Followership

Attend to my followers’ need to belong        

Validate the value of my followers        

Recognize the achievements of my followers        

Help my followers reach their full potential        

Allow my followers appropriate autonomy to make decisions        

Inclusive Leadership

Inclusive Behavior Current Actions How I can improve

As a leader I : Always Sometimes Never  

Communicate to my followers that they contribute to a bigger purpose        

Organizational Justice

Fairly balance inputs and outputs of followers in compensation considerations        

Ensure that followers are equitably compensated for the work they do        

Fairly evaluate the work of my followers        

Fairly and consistently apply policies to all my followers        

Am truthful with all my followers        

Provide clear explanations to my followers for decisions I make that affect them        

Provide clear goals and expectations to my followers        

Show my followers empathy when they are in difficult situations        

Ethical Traps

Am aware of primary ethical traps such as blind obedience to authority, solely acting in my own self-interests, and winning at any cost        

Am aware of defensive ethical traps such as attempts to hide or excuse my wrongdoing        

Am aware of personality traps where I may overuse or misuse a personal strength or style

References

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Burns, J. 2012. Leadership. New York: Open Road Media.

Chandler, D. 2009. A perfect storm of a leader’s unethical behavior: A conceptual framework. International Journal of Leadership Studies 5(1):69–93.

Ciulla, J., ed. 2014. Ethics, The Heart of Leadership. Santa Barbara: ABC-CLIO, LLC.

Ciulla, J. 2005. The state of leadership ethics and the work that lies before us. Business Ethics: A European Review 14(4):323–335. http://www1.worldbank.org/publicsector/anticorrupt/LeadershipEthics/CuillaBEER06.pdf

Cropanzano, R., D. Bowen, and S. Gilliland. 2007 (November). The management of organizational justice. Academy of Management Perspectives 21(4):34–48.

Hollander, E. 2014. Further Ethical Challenges in the Leader–Follower Relationship. Chapter 3 in Ethics, The Heart of Leadership, 3rd ed. Edited by Ciulla, J. Santa Barbara: ABC-CLIO, LLC.

Hollander, E. 2012. Inclusive Leadership: The Essential Leader–Follower Relationship. London: Taylor and Francis.

Hoyk, R. and P. Hersey. 2008. The Ethical Executive: Becoming Aware of the Root Causes of Unethical Behavior. Stanford: Stanford University Press.

Maslow, A. 1943. A Theory of Human Motivation. Psychological Review 50(4):370–396.

Skarlicki, D. and R. Folger. 1997. Retaliation in the workplace: The role of distributive, procedural, and interactional justice. Journal of Applied Psychology 82(3): 434–443.