DISCUSSION 2.1

Leadership and Change: The Case for Greater Ethical Clarity

Bernard Burnes • Rune Todnem By

Received: 8 January 2011 / Accepted: 17 October 2011 / Published online: 2 November 2011

� Springer Science+Business Media B.V. 2011

Abstract This article addresses the relationship between

the ethics underpinning leadership and change. It examines

the developments in leadership and change over the last

three decades and their ethical implications. It adopts a

consequentialist perspective on ethics and uses this to

explore different approaches to leadership and change. In

particular, the article focuses on individual (egoistic) con-

sequentialism and utilitarian consequentialism. The article

argues that all leadership styles and all approaches to

change are rooted in a set of values, some of which are

more likely to lead to ethical outcomes than others. It also

argues that all stakeholders in an organisation have a role to

play in ensuring ethical outcomes. It concludes that in

order to achieve sustainable and beneficial change, those

who promote and adopt particular approaches to leadership

and change must provide greater ethical clarity about the

approaches they are championing.

Keywords Ethical leadership � Ethical change � Utilitarianism � Consequentialism � Planned change � Emergent change

Introduction

First, leadership is a process that is not specifically a

function of the person in charge. Leadership is a

function of individual wills and individual needs, and

the result of the dynamics of collective will organized

to meet those various needs. Second, leadership is a

process of adaptation and of evolution; it is a process

of dynamic exchange and the interchanges of value.

Leadership is deviation from convention. Third,

leadership is a process of energy, not structure. In this

way, leadership is different from management—

managers pursue stability, while leadership is all

about change (Barker 2001, p. 491).

There are now increasing signs of disenchantment

with the concept of the assertive, no-nonsense leader,

whether of the charismatic or transformative variety.

… The ‘shadow side of charisma’ has been noted by a number of writers … The dangers of narcissism and the associated misuse, and even abuse, of power were

thus known about even at the height of the period

when charismatic and transformational leadership

were being celebrated (Storey 2004, pp. 31–32).

As the above quotes show, leadership and change go

hand in hand. Indeed, the overwhelming body of opinion

over the last 30 or so years is that the prime task of leaders

is to bring about change in order to maintain and enhance

organisational success (Bass 1995; Burns 1978; Hughes

et al. 2009; Kotter 1990, Yukl 2010). Consequently, lead-

ership and change are two of the most important issues

facing organisations. However, they are also two of the

most contentious and problematic elements of organisa-

tional life with much debate and controversy over what

constitutes leadership and how beneficial change should be

B. Burnes (&) Organisational Change, Manchester Business School,

University of Manchester, Booth Street West,

Manchester M15 6PB, UK

e-mail: [email protected]

R. T. By

Organisational Behaviour, Leadership & Change,

Staffordshire University Business School, Staffordshire

University, Brindley Building, Leek Road, Stoke-on-Trent,

Staffordshire ST4 2DF, UK

e-mail: [email protected]

123

J Bus Ethics (2012) 108:239–252

DOI 10.1007/s10551-011-1088-2

achieved (Beer and Nohria 2000; Daft 2002; Cummings

and Worley 2005; Rickards and Clark 2006; Yukl and Van

Fleet 1992). As Burnes (2009a) points out, if leadership

and change were easy, they would not attract so much

attention or be seen as so important. Indeed, there is sub-

stantial evidence that only around 30% of all change ini-

tiatives are successful (Bessant and Haywood 1985; Crosby

1979; Hammer and Champy 1993; McKinsey & Company

2008; Senturia et al. 2008; Smith 2002, 2003). If the main

task of leaders is to bring about change, then this implies

that only a minority of leaders are successful in their job,

which is what research has shown and the relatively high

turnover in senior executives demonstrates (Hughes et al.

2009; Kakabadse and Korac-Kakabadse 1999). Therefore,

in viewing leadership and change, we are looking at phe-

nomena which are vital for organisational success, but

difficult to undertake successfully.

The last three decades have seen the rise of new

approaches to both leadership and change (Bass 1995;

Burnes 2003; Yukl 2010). The former has been accompa-

nied by an emphasis on ethical values and behaviour

which, as the large number of financial scandals have

shown, appear to be more honoured in the breach than in

the observance, whilst the latter has seen a significant

decline in support for ethical approaches to change (Burnes

2009a; Dunphy et al. 2007; Gopalakrishnan et al. 2008;

Jones et al. 2000; Stiglitz 2010; Storey 2004). Despite this,

there is strong evidence that effective organisations are

ones where goals and values are congruent and shared by

the leadership and staff of the organisation (Brown 1998;

Denison and Spreitzer 1991; Detert et al. 2000; du Plessis

2008; Hofstede and Hofstede 2004; Ouchi 1981). For

example, Sosik et al. (2009) assert that the importance of

ethical values is that they influence behaviour, especially in

terms of whether organisational goals are judged as right

and appropriate, and the degree of effort to exert in pur-

suing the goals. Indeed, there has been a long history of

writers drawing attention to the positive relationship

between value alignment, leadership behaviour, employee

commitment and goal achievement (Cohen and Keren

2008; Dubin et al. 1975; Elizur 1996; Graves 1966; Guy

1984; Herzberg et al. 1956; Rokeach 1973; Werkmeister

1967).

The Oxford Dictionary of English (2006, p. 595) defines

ethics as ‘moral principles that govern a person’s behaviour

or the conducting of an activity’. Thiroux and Krasemann

(2007, p. 27) state that ethics relate to a specific area of

study—morality—which:

… deals basically with humans and how they relate to other beings, both human and nonhuman. It deals

with how humans treat other beings so as to promote

mutual welfare, growth, creativity, and meaning and

to strive for what is good over what is bad and what is

right over what is wrong.

Therefore, as Tseng et al. (2010, p. 587) maintain, ethics

is ‘…the study and philosophy of human conduct with an emphasis on the determination of right and wrong’.

Though there have been numerous studies of leadership

and a similarly large number of studies of change, only a

small proportion of these appear to focus on ethics (Burnes

2009c; Cummings and Worley 2005; Hughes et al. 2009;

Kanungo and Mendonca 1996; Yukl 2010). Indeed, despite

the posited importance of value alignment, it is very dif-

ficult to find studies which have examined the ethical

values of leaders and compared these with the ethical

values which underpin the approaches to change which

they adopt (Burnes and Jackson 2011). This perhaps

explains why, as this article will show, there is a damaging

lack of clarity regarding the ethical values which underpin

leadership and change. Therefore, in addressing this topic,

this article is addressing an important but under-researched

area.

In making the case for greater ethical clarity in relation

to leadership and change, we adopt a consequentialist

perspective on ethics. Consequentialism is a philosophy

which holds that the value of an action derives from the

value of its consequences (Blackburn 2008; Kaler 2000a;

Pettit 2003). As this article will argue, this is an appropriate

approach to ethics when considering organisations, given

that the changes leaders initiate are judged by the conse-

quences they produce rather than their intentions. In par-

ticular, we focus on individual (egoistic) consequentialism

and utilitarian consequentialism. We argue that leaders

cannot achieve sustainable and beneficial change for their

organisations unless they act in an ethical fashion and

adopt ethically compatible approaches to change that meet

not only their own individual (egoistic) needs, but also

produce utilitarian outcomes in terms of the greatest good

for the greatest number of stakeholders. We argue that

leaders must be clear regarding their own ethical beliefs

and the ethical values of the approaches they adopt to

change. It also follows that those who develop and promote

particular approaches to leadership and change must be

explicit about the ethical strengths and weaknesses of such

approaches.

Therefore, the aims of this article are to show that

1. Leadership and change are inextricably linked and

their effectiveness in achieving beneficial outcomes for

stakeholders is linked to their underlying ethical

values.

2. Some approaches to change are more likely to lead to

ethical outcomes than others.

3. The need for greater ethical clarity when evaluating

approaches to leadership and change.

240 B. Burnes, R. T. By

123

The article begins by examining the developments in

leadership over the last three decades and how these relate

to change and ethics. It then goes on to review the two

main approaches to organisational change—Planned and

Emergent change—and the implications of these for ethical

behaviour by leaders. We then explore the implications for

leadership and change of the consequentialist perspective

on ethics. This is followed by a discussion of implications

for organisations of the ethics underpinning the different

approaches to leadership and change. The article concludes

that only with greater ethical clarity can organisations

ensure that their leaders will undertake changes which

serve the interests of all stakeholders and avoid the finan-

cial scandals and collapses of the past two decades.

Leadership and Ethics

The study and practice of leadership has undergone a sea

change in the last 30 years. The two main developments are,

first, that older theories of leadership, such as the trait model

and the leader–follower model, have been overtaken by the

contextual or situational model (Griffin 2002; Kotter 1990;

Yukl 2010). This is an approach which stresses that leader-

ship is primarily concerned with bringing about transforma-

tional change and that effective leaders are those who can

adapt their leadership style to the context in which they are

operating (Alimo-Metcalfe and Alban-Metcalfe 2000; Bass

1995; Burns 1978; Hitt et al. 2009; Yukl 2010). The second

development is the rejection of the command-and-control

view of leadership which focuses on top-down control based

on the authority of position. Instead, leaders are now viewed

as individuals who motivate their staff by establishing an

emotional link with them through the power of their per-

sonality—their charisma—and not the power of their position

in the organisation (Brown and Eisenhardt 1997; Conger and

Kanungo 1998; Hughes et al. 2009; Maddock 1999; Nahav-

andi 2000; Peters 2006; Stacey 2007). There is now an almost

cult-like belief in leaders as heroic, larger-than-life, charis-

matic figures who have enormous self-belief, and commen-

surate egos, and who will pursue their objectives come what

may (Bass and Riggio 2006; Bones 2011; Grint 2005; Ka-

kabadse et al. 2007; Mendl and Ehrlich 1987; Storey 2004).

Paralleling these developments in leadership has been

the increasing complexity of organisational life and thus

the leader’s role. This is particularly the case with the

emergence of stakeholder theory (Fisher and Lovell 2003).

The concept that organisations have stakeholders first

began to gain adherents in the 1980s (Freeman 1984). The

basic idea is that organisations are ‘a constellation of co-

operative and competitive interests possessing intrinsic

value’ (Donaldson and Preston 1995, p. 66). However, there

is some dispute as to how wide to draw the circle of

stakeholders and even how to define a stakeholder. The tra-

ditional, or classical-liberal, model of the firm portrays it as an

input–output model having three groups who provide inputs

for the organisation—investors, suppliers and employees, and

one group who receive its outputs—customers (Freeman

1984). Under this model, the purpose of an organisation was

to make a profit, and the four parties involved in this process

had a contractual relationship, but were responsible for

looking after their own interests (Fisher and Lovell 2003).

However, the advent of stakeholder theory now requires or-

ganisations to take account of and serve not just the narrow

interests of shareholders, but the wider interests of society.

This embraces anyone and anything which might be affected

by or have an interest in the firm’s activities, including

communities, governments and the natural world (Donaldson

and Preston 1995; Dunphy et al. 2007; Jawahar and

McLaughlin 2001; Jones and Wicks 1999).

Therefore, leadership has become a much more difficult

and less clear concept than it once was. The quote from

Barker (2001) which introduced this article captures the

essence of this new approach to leadership. Barker distin-

guishes leadership from management. Leadership is

essentially concerned with bringing about transformational

change. Management is primarily concerned with achiev-

ing stability and predictability by ensuring that subordi-

nates comply with the rules, regulations and working

procedures laid down by the organisation. Compliance is

achieved through a transactional exchange between the

subordinates and the organisation which is policed by

managers using the authority granted by their position in

the organisation (Bass 1995; Hughes et al. 2009).

The charismatic-transformational view of leadership has

garnered much support and admiration since it first

emerged in the late 1970s (Burns 1978; Foster and Kaplan

2003; Harrison and Clough 2006; Kanter 1989; Maccoby

2000; Osborne and Gaebler 1992; Peters 2006). There is

certainly evidence to suggest that charismatic-transforma-

tional leaders can bring enormous benefits to organisations

by galvanising them to reinvent themselves, e.g. IBM,

Procter & Gamble, Omron, CEMEX, Cisco and Banco

Real (Kanter 2008). However, the same approach in the

hands of unscrupulous leaders can result in cases of

organisational destruction, such as Enron, Global Crossing,

Arthur Andersen and Bernard M Madoff Investment

Securities LLC and the indictment of senior executives

from these and other companies (Gopalakrishnan et al.

2008; Porter 2008). The problem is that whilst the criteria

for judging a manager’s performance and honesty are

relatively clear, the same cannot be said for leaders. The

fact is that:

• Whilst managers can be sacked for breaking the rules, leaders can be sacked for not breaking the rules.

Leadership and Change 241

123

• The performance measures for holding managers to account are relatively clear and short-term whilst the

criteria for holding leaders to account are far more

fuzzy and long-term.

• Stakeholders can judge the trustworthiness of managers by their adherence to specified and monitored objec-

tives and rules, but the trustworthiness of leaders is

often based on faith, sometimes blind faith, engendered

by their magnetic personality. Unfortunately, a mag-

netic personality is common to both saints and conmen,

hence Storey (2004) warning at the beginning of the

article about the ‘shadow side of charisma’.

Leadership and change go hand in hand; however, if

stakeholders are not to be so dazzled by charismatic-

transformational leaders that any change is seen as good

change (see for example the case of Marconi in Burnes

2009a), they need to ensure that leadership and change are

underpinned by a system of ethics. That is to say, leaders

must possess a moral compass which ensures that they do

not abuse the faith that is placed in them and the unique

freedoms which they enjoy (Burnes 2009b, c). This is a

point made forcibly by Barker (2001, p. 491) when he

states that leadership is ‘a process of transformative change

where the ethics of individuals are integrated into the

mores of a community as a means of evolutionary social

development’. Hollander (1995, p. 55) also identifies the

ethical dimension of change and leadership when he

states that:

This process [leadership] is essentially a shared

experience, a voyage through time, with benefits to

be gained and hazards to be surmounted by the par-

ties involved. A leader is not a sole voyager, but a key

figure whose actions or inactions can determine oth-

ers’ well-being and the broader good… The leader- ship process is therefore especially fraught with

ethical challenges.

The argument that leadership and change need an ethical

base is not new. Such arguments can be found in the work

of Barnard (1938) on leadership in the 1930s and in the

work of Kurt Lewin (Marrow 1969) on change in the

1940s. Indeed, as will be discussed below, Lewin’s ethical

view of change lies at the heart of the Organisation

Development (OD) movement which dominated the field

of change up to the early 1980s (Burnes 2004, 2009a).

Alongside the rise of charismatic-transformational leader-

ship has been the growing volume of calls for organisations

to act in an ethical fashion (Dunphy et al. 2007; Jones et al.

2000; Hitt et al. 2009; Rhodes et al. 2010; Wines 2008).

Prominent in this respect has been the promotion of cor-

porate social responsibility (CSR) by national governments

and international bodies, especially the United Nations

(Garriga and Melé 2004; Li and Zhang 2010; Matten and

Moon 2004; Renouard 2011; United Nations 2010).

However, rather than leading to a diminution of uneth-

ical behaviour, the reverse seems to have been the case.

Unethical and criminal behaviour appears to have mush-

roomed out of control in many organisations, as the 2008

‘credit crunch’ and other organisational and financial

scandals of the last two decades have revealed (Clark 2008;

Deresky 2000; Gopalakrishnan et al. 2008; Leigh and

Evans 2007; Partnoy 2003; Porter 2008; Stiglitz 2010; Tran

2003).

This section has addressed the first aim of the article, to

show that change and leadership are inextricably linked. It

has also demonstrated that leadership and change need an

ethical base. The next section will examine the main

approaches to change and explore their ethical underpinnings.

Change and Ethics

Up to the 1980s, the field of change was dominated by the

Lewin-inspired OD movement (Burnes 2004, 2009a). At its

core lies a set of democratic-humanist values which guide both

the process of change and the actions of those who lead change

(Conner 1977; French and Bell 1999; Gellerman et al. 1990;

Warwick and Thompson 1980). In essence, Lewin-inspired

OD provides an ethical approach to change. However, with the

rise of newer perspectives on change, especially the Emergent

approach, the emphasis on ethics has diminished to the extent

that some approaches even encourage the manipulation and

coercion of those involved (Buchanan and Badham 1999;

Burnes 2009c; Rhodes et al. 2010).

It was only in the 1940s through the work of Kurt Lewin

that a fully fledged change theory emerged—the Planned

approach to change (Burnes 2004). This approach com-

prises four elements: Field Theory, Group Dynamics,

Action Research and the Three-Step model. For change to

be successful, though, there has to be a ‘felt-need’ (Alavi

and Henderson 1981). Felt-need is an individual’s inner

realisation that change is necessary. If felt-need is low,

introducing change becomes problematic. Felt-need can

only arise if individuals and groups are given the oppor-

tunity to reflect on and learn about their own situation, and

change of their own volition (Burnes 2004; Lewin 1947).

Lewin did not believe that people could be tricked or

coerced into change. Instead, he advocated a participative,

open and ethical change process. His approach was greatly

influenced by the work of the Gestalt-Field theorists, who

believe that successful change requires a process of

learning (Lewin 1942; Rock and Palmer 1990). This allows

those involved to gain or change insights, outlooks,

expectations and thought patterns. This approach seeks to

provide change adopters with an opportunity to ‘reason

242 B. Burnes, R. T. By

123

out’ their situation and develop their own solutions (Bigge

1982). Therefore, for Lewin, the change process is funda-

mentally a learning process. It is an iterative, cyclical,

process involving diagnosis, action and evaluation, and

further action and evaluation. It recognises that once

change has taken place, it must be self-sustaining (i.e. safe

from regression).

Lewin’s original purpose was to develop an approach to

change capable of resolving social conflict in society. As

Burnes (2007) relates, Lewin quickly saw the benefits it

could bring to organisations. In organisational terms, the

focus of the Planned approach is on improving the effec-

tiveness of the human side of the organisation. Central to

the approach is the emphasis placed on the collaborative

nature of the change effort: the organisation, both managers

and recipients of change, and the change agent jointly

diagnose the organisation’s problems, and jointly plan and

design the specific changes required. Underpinning Plan-

ned change is a strong humanist and democratic orientation

based on Lewin’s own personal beliefs and his work on

participative management (Lewin et al. 1939). Marching

hand in hand with this humanist and democratic orientation

was the development of a host of tried and tested tools and

techniques for promoting group participation and change.

After Lewin’s death in 1947, his work was further

developed and provided the inspiration and core approa-

ches for the OD movement, which began in the 1950s

(Cummings and Worley 2005). Lewin’s influence on OD

can be seen not only from its adoption of Planned change,

but also in terms of the humanistic values which underpin it

(French and Bell 1995). These values have been articulated

by many writers over the years (Conner 1977; French and

Bell 1999; Gellerman et al. 1990; Warwick and Thompson

1980). One of the earliest attempts was by French and Bell

(1973), who identified four core values of OD:

• The belief that the needs and aspirations of human beings provide the prime reasons for the existence of

organisations within society.

• Change agents believe that organisational prioritisation is a legitimate part of organisational culture.

• Change agents are committed to increased organisa- tional effectiveness.

• OD places a high value on the democratisation of organisations through power equalisation.

In a survey of OD practitioners, Hurley et al. (1992)

found these values were clearly reflected in the five main

approaches they used in their work:

• Empowering employees to act. • Creating openness in communications. • Facilitating ownership of the change process and its

outcomes.

• The promotion of a culture of collaboration. • The promotion of continuous learning.

In order to remain relevant to the needs of organisations, OD

has broadened out its focus from group behaviour change to

more organisation-wide transformational approaches (Cum-

mings and Worley 1997; French and Bell 1995). However,

these approaches tend to be less participative and more

directive, which weakens the ethical basis of OD. Indeed, a

number of leading writers on the subject have begun to argue

that OD has lost its sense of direction and purpose to the extent

that it is no longer clear what constitutes OD (Bradford and

Burke 2004; Greiner and Cummings 2004; Worley and

Feyerhern 2003). Yet, as Wooten and White (1999) argue, the

core values of OD—equality, empowerment, consensus-

building and horizontal relationships—are ones that are par-

ticularly relevant to the needs of contemporary organisations.

Planned change was not only the first fully developed

theory of change, but it has also proved to be the most

enduring (Burnes 2004, 2007; Boje et al. 2011). Never-

theless, since the early 1980s, its pre-eminence has been

challenged by a range of other approaches to change, the

most prominent being Emergent change (Burnes 2009a).

The term Emergent approach was probably first coined by

Wilson (1992). It is used to describe a collection of com-

plementary approaches which take as their starting point

the rejection of Planned change (By 2005). They share the

notion that change is not a linear process or a one-off

isolated event, but a continuous, open-ended, cumulative

and unpredictable process of aligning and re-aligning an

organisation to its changing environment (Falconer 2002).

Weick (2000, p. 225) comments as follows on studies of

Emergent change:

The recurring story is one of autonomous initiatives

that bubble up internally; continuous emergent

change; steady learning from both failure and suc-

cess; strategy implementation that is replaced by

strategy making; the appearance of innovations that

are unplanned, unforeseen and unexpected; and small

actions that have surprisingly large consequences.

Advocates of Emergent change argue that it is more

suitable to the turbulent and continually changing envi-

ronment in which organisations now operate. They reject

what they see as the incremental approach of Planned

change. Instead, they argue that organisations must con-

tinuously and synergistically adapt their internal practices

and behaviour in real time to changing external conditions

(Beer and Nohria 2000). Consequently, ‘The art of lead-

ership in the management field would seem to lie in the

ability to shape the process [of change] in the long term

rather than direct single episodes’ (Pettigrew and Whipp

1991, p. 143). Furthermore, and just as importantly,

Leadership and Change 243

123

proponents of Emergent change view organisations as

power systems and, consequently, they see change as a

political process whereby different groups in an organisa-

tion struggle to protect or enhance their own interests

(Orlikowski and Yates 2006; Wilson 1992).

This highlights one of the more notable shortcomings of the

Emergent approach, which is that its proponents do not appear

to recognise ethics as a topic worthy of consideration. Their

view seems to be that it is an immutable fact of life that or-

ganisations are composed of warring factions and, therefore,

for change to be successful, its proponents must utilise politics

and power to achieve their ends (Buchanan and Boddy 1992;

Caldwell 2006; Dawson 1994, 2003; Hardy 1996; Hatch

1997; Orlikowski and Yates 2006). This view is neatly sum-

med up by Pfeffer (1992, pp. 337–338), who states that:

Computers don’t get built, cities don’t get rebuilt, and

diseases don’t get fought unless advocates for change

learn how to develop and use power effectively.

If one accepts that politics dominates organisational life

and that change is a battle between those who have power

and those who want it, it is only a small step to arguing that

‘might is right’: that those who have the power have the

right to impose their change on the rest of the organisation,

regardless of how those on the receiving end feel about it.

Obviously, the proponents of Emergent change do not

necessarily support such abuses of power. However, they

do see power and politics as a fact of organisational life,

which must be accepted and exploited if change is to be

achieved (Pfeffer 1992). Indeed, as Buchanan and Badham

(1999, p. 29) note, the advice seems to be that:

If all else fails, use dirty tricks such as coercion,

undermining the expertise of others, playing one group

off against another, and get others to ‘fire the bullet’.

What we can see, therefore, is that the ethical dimension

of leadership and change does not get a mention, at least

explicitly, in the Emergent approach to change. However,

as Burnes and Jackson (2011) argue, this does not mean

that the ethical dimension is absent, but that one has to

infer it from the nature of the approach to change.

This section has addressed the second aim of the article,

to show than some approaches to change are more likely to

lead to ethical outcomes then others. It has also shown that

not all approaches to change make clear their ethical basis.

The next section will further examine the ethical under-

pinnings of leadership and change.

The Ethical Basis of Leadership and Change

In organisational terms, as in life in general, ethics are

beliefs about what is right or wrong, they provide a basis

for judging the appropriateness of behaviour and they

guide people in their dealings with other individuals,

groups and organisations (Tseng et al. 2010; Jones et al.

2000). As Wines (2008, p. 484) commented: ‘At bedrock,

those who profess ethics believe that human beings are

autonomous moral actors capable of making meaningful

choices’. Approaches to ethics tend to fall into one of

two philosophical camps: the consequentialist (teleolog-

ical) and the non-consequentialist (deontological) (Pettit

2003; Wood-Harper et al. 1996). Consequentialists argue

that ethical values are meaningless unless they are

actively promoted. For consequentialists, the focus is on

outcomes rather than motives. This view is most closely

associated with the 18th and 19th century philosophers

Jeremy Bentham (Goldworth 1983), Mill (2002) and

Sidgwick (1981). Non-consequentialists take a similar

view of the importance of ethical values, but deny that

the rightness or wrongness of behaviour is determined by

the goodness or badness of its consequences. They

maintain that it is the intention behind an action, or the

rules to which the intention conforms, which define

whether something is ethical, and not the outcome

(Wood-Harper et al. 1996). This view is most closely

associated with the 17th and 18th century philosophers

Locke (1958) and Kant (1873).

In this article, we adopt the consequentialist stance on

ethics, which holds that actions should be judged by their

consequences and not according to their intrinsic nature or

the motives or character of those performing them (Kagan

1992). This seems to be stance most closely aligned to

leadership and change in organisations. Leaders, and the

changes they bring about, are not judged by their inten-

tions, but almost exclusively by the consequences of their

actions. For example, in the case of the Deep Water

Horizon disaster, it was for the outcome of his actions and

not his intentions that Tony Hayward, BP’s CEO, was

condemned (Goldenberg 2010). Similarly, it was the con-

sequences of Richard Fuld’s actions as CEO of Lehman

Brothers which sent the company into bankruptcy, not his

intentions (Wearden et al. 2008). Stakeholders may praise

leaders for their intentions, but what really count are

results: Does the company pump oil or spill it? Does it stay

solvent or go bankrupt?

From the consequentialist view, the right course of

action in any circumstances is that which results in the

maximisation of good outcomes and minimisation of bad

ones (Baggini and Fosl 2007). However, this is not an ‘ends

justify the means’ approach to ethics. From the conse-

quentialist stance, an action would not be judged as ethical

if the outcome benefited a small number of people at the

expense of a larger number. According to Thiroux and

Krasemann (2007), there are three main forms of ethical

consequentialism:

244 B. Burnes, R. T. By

123

• Altruistic consequentialism: This form of consequen- tialism is associated with the 19th century philosopher

Auguste Comte, who defined altruism as the disinter-

ested concern for the welfare of another as an end in

itself (Blackburn 2008; Comte 1875). Altruistic conse-

quentialism maintains that an action is ethically right if

it maximises the beneficial consequences for everyone

other than the instigator. Under altruistic consequen-

tialism, the role of leaders would be to act in the best

interests of everyone but themselves.

• Utilitarian consequentialism: This form of consequen- tialism maintains that an action is ethically right if it

maximises the beneficial consequences for everyone,

including the instigator. The main proponents of

utilitarianism were Jeremy Bentham (Goldworth

1983; Mertens and Dhillon 1999), Mill (2002) and

Sidgwick (1981). Though there is some dispute over

how to define utilitarianism, Bentham’s Principle of

Utility is still the most widely accepted definition: ‘… of the various possibilities open to us in any given case,

we ought to choose that which will produce the greatest

happiness (i.e. pleasure) to the greatest number’ (Jones

1980, p. 368). As Renouard (2011, p. 89) observes of

utilitarianism: ‘The idea is to orient the individual

desire towards the care of others, so that the search for

personal happiness and the quest for the other’s good

merge’. This of course has a very modern ring to it if

one considers such developments as CSR and environ-

mental sustainability. Under utilitarian consequential-

ism, the role of leaders would be to act in the best

interests of everyone including themselves. This is a

recognition that the consequences for all stakeholders,

including the environment, need to be considered when

evaluating the costs and benefits of proposed or

possible courses of action.

• Individual (egoistic) consequentialism: This is a form of consequentialism which maintains that an action is

ethically right if it maximises the beneficial conse-

quences for the instigator. It is associated with the work

of the 17th century philosopher Thomas Hobbes on the

egoistic view of human nature and morality (Jones

1980). Under egoistic consequentialism, the role of

leaders would be to act in the best interests of

themselves alone.

For the purpose of this article, we intend to dispense

with the first of these, altruistic consequentialism, because

it is difficult to see how organisations could survive for

very long if leaders acted purely in an altruistic fashion. As

an example, in seeking to maximise the beneficial conse-

quences for everyone else, an altruistic leader might choose

to close down their own organisation in order to favour

competitors. Our focus here, therefore, will be on the

impact of utilitarian and individual (egoistic) consequen-

tialism. It might, of course, be argued that we should also

dispense with individual consequentialism, because if

leaders pursued only their own self-interests, that must

surely be to the detriment of their organisations. However,

as Kaler (2000b) observes, there is no compelling reason to

withhold the term ‘ethical’ from behaviour motivated by

individual as opposed to utilitarian reasons. For conse-

quentialists, it is the outcome which is important and not

the motivation. Studies of successful organisations, insti-

tutions and nations show that egoistic leadership and suc-

cess can go together (Mooney 2004). For example, how

could leaders such as Henry Ford, Pierre du Pont, Alfred

Sloan, Toyoda Kiichiro, Matsushita Konosuke, Rupert

Murdoch, Bill Gates, Steve Jobs, Ratan Tata, Sir Richard

Branson and many others, have built or rebuilt their or-

ganisations without an enormous degree of self-belief—i.e.

egoism—that they were right and everyone who disagreed

with them was wrong? Unfortunately, the same level of

self-interest can also have disastrous consequences for

individual companies, as was the case with Kenneth Lay

and Bernard Madoff, and even for entire sectors, as in the

case of the bankers, speculators and fund managers whose

individual greed nearly destroyed the world’s financial

system in 2008 (Burnes 2009c; Gopalakrishnan et al. 2008;

Porter 2008; Stiglitz 2010; Sunderland 2008, 2009).

Therefore, in theory, individual consequentialism can be

viewed as no more prone to unethical or illegal behaviour

than is utilitarian consequentialism. However, in practice,

in situations where leaders are not major shareholders in

the organisations they lead, what is good for the egoistic

leader may clash with what is good for the other stake-

holders and the result can be unethical behaviour. Nor is

such unethical behaviour likely to be confined to leaders.

As the Nobel Prize-winning economist, Stiglitz (2010),

observed in his book on the 2008 global financial crisis, the

performance incentives of mortgage salesmen, of the

inventors and purveyors of complex and ill-understood

financial instruments, and of the corporate leaders who

were supposed to supervise them were not aligned with the

long-run interests of the institutions for which they worked.

To put it succinctly, the long-term interests of the many

were sacrificed to the short-term greed and arrogance of the

few.

One of the major reasons for such illegal and unethical

behaviour is that we have been living in a time where

individual consequentialism has been aligned with forms of

leadership and change which allow leaders a large degree

of unquestioned discretion, and even secrecy, regarding

what they do and how they do it. This is not inevitable. The

danger of such situations arising can be reduced where

there is openness about and alignment of values and

objectives, transparency in decision-making and truly

Leadership and Change 245

123

independent external scrutiny. As By and Macleod (2009)

and Burnes and Jackson (2011) show, approaches to

leadership and change are not value-free. Sometimes, as

with Planned change, the values are explicitly stated; in

other cases, such as Emergent change, they are more

implicit. As we will show, individual consequentialist

values align with the Emergent approach to change whilst

the Planned approach is more aligned to utilitarian

consequentialism.

Taking the Planned approach first: as noted above, this

is strongly underpinned by an ethical base which promotes

democratic-humanist values. It is a participative approach

which seeks to involve all those concerned as equal part-

ners, and to ensure that all the parties have access to and

can openly share, analyse and debate the information and

options available. This involvement and transparency helps

to prevent one group or one individual seeking to promote

their interests over those of the other parties. It also aims to

satisfy the needs of all the parties involved by ensuring

they all have an equal say in the analysis, planning and

implementation of change. Therefore, the Planned

approach adopts the utilitarian objective of seeking to

achieve the greatest good for the greatest number. In effect,

as Fig. 1 shows, it creates a virtuous circle whereby the

values of utilitarian consequentialism underpin the Planned

approach which, through openness and democratic deci-

sion-making, promotes the collective good.

Emergent change, on the other hand, makes no claims to

possessing an ethical base, and instead acknowledges and

often promotes change as a political process in which there

is a need to use power and manipulation to achieve the

leader’s ends (Buchanan and Badham 1999; Wilson 1992).

What is perhaps even more worrying is that, under the

Emergent approach, change is seen as uncontrolled and

uncontrollable (Weick 2000). All managers are expected to

seize the opportunity to bring about change and to exper-

iment with the ‘everyday contingencies, breakdowns,

exceptions and unintended consequences’ of organisational

life (Orlikowski 1996, p. 65). This creates the conditions

for ambitious leaders to pursue their own self-interest

under the guise of change. This of course fits in with the

spirit of the age which was neatly summed up by Gordon

Gekko, the central character in Oliver Stone’s 1987 film

Wall Street, who stated that ‘greed, for want of a better

word, is good’. Gekko may have left Wall Street over

20 years ago but his ideology has proved far more endur-

ing, as recent events have demonstrated all too well

(Burnes 2009c; Clark 2008; Gopalakrishnan et al. 2008;

Porter 2008). Many leaders now see themselves as the new

ruling class (Diefenbach 2009) and in some cases have

even adopted the soubriquet ‘masters of the universe’

(Harris 2007). Yet, as Alvesson and Sveningsson (2003)

observe, what makes their actions extraordinary, in their

mind, is that they are done by them, which, of course, is a

working definition of egoism. The result is a surprisingly

high acceptance of mendacious leadership, systemic mis-

management and greed which only a few seem to be pre-

pared to challenge (By 2010; Stiglitz 2010).

It is the unfettered pursuit of the leader’s self-interest

which the Emergent approach allows and even encourages

which shows its strong alignment to individual conse-

quentialism. For many of the leaders who utilise the

Emergent approach, it is the degree to which it results in

the promotion of their interests rather than the collective

good which is important. If both can be achieved, fine, if

not, the collective good will always be seen as subservient

to the individual good—how could it be any other way for

an egoist? Therefore, the combination of individual con-

sequentialism and Emergent change can enable the pursuit

of the leader’s own interest to crowd out the pursuit of the

collective good. However, it is not individual consequen-

tialism which is dangerous per se, but the context in which

it is deployed. When deployed in a context in which leaders

are freed from the normal restraints of organisational life,

in which political behaviour is legitimised, and in which

underhand and even illegal behaviour can be hidden by ‘the

fog of war’, egoistic leadership can be very damaging. As

Fig. 2 shows, it creates a vicious circle whereby egoistic

consequentialist values underpin Emergent change which,

through obfuscation and political manipulation, subverts

the collective good in favour of the leader’s good.

This section has addressed the third aim of aim of the

article, to show the need for greater ethical clarity when

evaluating and implementing approaches to leadership and

Planned Change

The Collective Good

Utilitarian Consequentialism

Transparency Participation Democratic

decision- making

Fig. 1 The virtuous change circle

246 B. Burnes, R. T. By

123

change. It has shown that all approaches to leadership and

change have ethical implications, but that not all of them

are explicit about what these are, especially those which

might lead to unethical outcomes. The next section dis-

cusses the implications of our review of the ethical basis of

leadership and change.

Discussion: The Case for Clarity

Our argument in this article is that all leadership styles and

all approaches to change are rooted in a set of values, and

that these influence the actions of leaders and the outcomes

of change initiatives for good or ill. Support for this

argument can be seen in the Introduction and the review of

the leadership literature. These showed that the over-

whelming view to emerge over the last three decades is that

the main role of leaders is to bring about change in, and

indeed to transform, their organisations (Burns 1978; Bass

1995; Hughes et al. 2009; Yukl 2010). In addition, the

review of the change and ethics literatures showed that the

behaviour of leaders, and others in organisations, is

strongly influenced by their ethical values (Burnes and

Jackson 2011; Cohen and Keren 2008; Fisher and Lovell

2003). We have also shown that in undertaking their role,

leaders are given a great deal of freedom in what they do

and how they do it. This is partly due to the aura of

omniscience which has grown up around the role of the

leader, and partly due to the difficulty of monitoring and

evaluating the process of transformational change (Burnes

2009c; Grint 2005; Storey 2004).

As a consequence, many leaders have been unchal-

lenged in putting their own egos and interests ahead of the

interests of the other stakeholders in their organisation, in

some cases with disastrous results (Bones 2011; Gopala-

krishnan et al. 2008; Kakabadse et al. 2007; Porter 2008;

Stiglitz 2010). For many, this has highlighted the impor-

tance of promoting the ethical dimension of leadership as a

means of ensuring that leaders act in the interests of all

their stakeholders and not just their own interests (Barker

2001; Covey 1991; Hollander 1995; Kanungo and Men-

donca 1996; Storey 2004). However, as the review of

consequentialist ethics demonstrated, not all approaches to

ethics necessarily have beneficial results. Whilst leaders

who adopt utilitarian ethics are likely to pursue the interests

of all their stakeholders, leaders who adopt more individ-

ual-egotistic ethics are more likely to put their own inter-

ests before that of other stakeholders (Clark 2008; du

Plessis 2008; Kanungo and Mendonca 1996; Partnoy 2003;

Porter 2008; Rhodes et al. 2010; Sunderland 2008, 2009).

After examining the ethical underpinnings of leadership,

we examined the ethical underpinnings of approaches to

change. In reviewing the two dominant approaches to

change, we argued that the Planned approach is more likely

to lead to ethical outcomes than the Emergent approach.

This is because Planned change was explicitly developed

by Lewin to achieve collective good rather than to promote

sectional or individual interests (Burnes 2004; Lewin et al.

1939; Marrow 1969). It is an approach which stresses

democratic leadership, participative change, transparency

and ethical values, which we have identified as utilitarian

consequentialism. Emergent change, on the other hand,

makes no claims to possessing an ethical base. It portrays

organisations as political systems, and change as a political

process which requires leaders to use power, manipulation

and obfuscation to achieve their ends (Buchanan and

Badham 1999; Wilson 1992).

Consequently, Emergent change is underpinned by

values which are likely to lead to unethical outcomes,

though this will not always be the case. As Pfeffer (1992)

noted, power and politics can be used to achieve ethical

outcomes. Similarly, charismatic leadership and individual

consequentialism, in the appropriate circumstances, can be

a force for good. However, when charismatic leaders pur-

sue their own agendas using manipulative and coercive

approaches to change, they do pose a danger—the danger

that they will pursue, and even be encouraged to pursue,

their own interests regardless of the wider interests of other

stakeholders or even the survival of the organisation. This

is especially the case given that the last three decades have

also been ones which have been presided over by a Gordon

Gekko-like ‘greed is good’ mentality.

The axis on which acceptable and unacceptable out-

comes revolve is the ethical values which underpin and link

Emergent Change

The Individual Good

Egoistic Consequentialism

Opaqueness Exclusion Leader-

dominated decision-making

Fig. 2 The vicious change circle

Leadership and Change 247

123

together particular combinations of leadership and change.

We believe that the fundamental flaw in some approaches

to change is that not only are they not explicit about values,

but also they give the impression that it is somehow

unworldly or naı̈ve even to mention ethical considerations

(Buchanan and Badham 1999). From this perspective,

ethical change is not an issue, because those who promote

such a view believe that the presence in organisations of

power and politics preclude such considerations: instead

change must be brought about by a combination of power

and manipulation (Pfeffer 1992). However, it seems con-

tradictory that proponents of Emergent change maintain

that most aspects of organisational behaviour can be

changed except those connected with power and politics

(Burnes 2009c). Crucially, it also ignores the issue of

choice. As Hatch (1997, pp. 367–368) observes:

In a socially constructed world, responsibility for

environmental conditions lies with those who do the

constructing… This suggests at least two competing scenarios for organizational change. First, organiza-

tion change can be a vehicle of domination for those

who conspire to enact the world for others… An alternative use of social constructionism is to create a

democracy of enactment in which the process is made

open and available to all… such that we create opportunities for freedom and innovation rather than

simply for further domination.

However, how are such choices to be made? In

answering this question, we return to the title of this article:

‘Leadership and Change: The Case for Greater Ethical

Clarity’. Organisations have to move beyond general

statements of ethics, such as those found in Corporate

Social Responsibility policies (United Nations 2010), and

actually evaluate the ethical values of leaders and their

actions and determine whether they are compatible with the

wider interests of the organisation and its stakeholders.

This requires them to understand ethics both in policy and

practical terms, and to be clear about the ethical basis of

different approaches to leadership and change. They have

to create the sort of virtuous circle of leadership and change

shown in Fig. 1. Nevertheless, if this is to be successful, it

requires stakeholders to play an active rather than passive

role. As Egels-Zanden and Sandberg (2010, p. 35)

comment:

In recent years, stakeholder theory has become one of

the most common frameworks used in the academic

community for conceptualizing and understanding

issues concerning corporate ethical responsibilities.

Unfortunately, as the 2008 credit crunch demonstrated,

key stakeholders, such as investors, regulators and govern-

ments, turned a blind eye to the unethical practices of many

financial institutions (Burnes 2009a; Gopalakrishnan et al.

2008; Porter 2008; Stiglitz 2010; Sunderland 2008, 2009).

Fortunately, there are also many cases where stakeholders

have played a positive role in challenging and correcting

unethical practices. Pressure groups such as Greenpeace,

Friends of the Earth and Amnesty International have been

effective in holding businesses to account for their activities

(Dunphy et al. 2007). Western companies purchasing from

developing nations have proved themselves able and willing

to stamp out exploitative practices such as child labour

(Easton 2003; Jones et al. 2007; Körner 2005). With the

advent of initiatives such as the Fairtrade logo, even indi-

vidual consumers find themselves in a position to influence

the ethical practices of the organisations they purchase

from (Rawles 2010). Similarly, many pressure groups and

non-governmental organisations now monitor and expose

exploitative and environmentally damaging practices

(Weaver 2007). All this has been aided by the advent of the

Internet and social networking, which has made it much

easier to identify and publicise unethical behaviour, and

mobilise individuals and groups against it (Inman 2011).

Therefore, stakeholders have a positive and active role

to play in identifying and ending unethical practices.

However, this is only possible if they can recognise what is

ethical and unethical. Most stakeholders would agree that

child labour is clearly unethical, but would they recognise

which leadership and change practices are unethical? If

stakeholders are to be able to monitor leaders’ behaviour,

they must have a yardstick for judging whether it is

potentially unethical or not. In order to do this, those who

develop, promote and adopt particular approaches to

leadership and change have to be clear about the ethical

implications of these.

Conclusions

As stated in the Introduction, we believe that there is a

damaging lack of clarity regarding the ethical values which

underpin leadership and change, and that this is an

important but under-researched area. Consequently, the

aims of this article are threefold: first, to show that lead-

ership and change are inextricably linked and that their

effectiveness in achieving beneficial outcomes for stake-

holders is linked to their underlying ethical values. Our

review of the leadership and change literature has dem-

onstrated the symbiotic relationship between these. In

addition, by relating the literature on ethics to leadership

and change, we have shown that these are underpinned by

ethical values which influence the outcomes of these two

processes.

Our second aim was to show that some approaches to

change are more likely to lead to ethical outcomes than

248 B. Burnes, R. T. By

123

others. In reviewing the two dominant approaches to

change, we showed that whilst Planned change was

explicitly based on set of ethical principles and practices

which was compatible with ethical outcomes, Emergent

change was not. Though not explicitly stated, the practice

of Emergent change, based as it is on the use of power and

manipulation, revealed that its underlying values under-

mined rather than supported ethical outcomes.

The final aim of the article was to show that there is a

need for greater ethical clarity when evaluating approaches

to leadership and change. As argued in the Discussion,

though some unethical practices are clear and widely

condemned, e.g. child labour, the ethical dimension of

leadership and change is much more difficult to divine.

Yet, if leaders are to act ethically and if organisational

change is to lead to ethical outcomes, there must be greater

clarity over their ethical underpinnings and consequences,

otherwise misconceptions arise which can lead to the

promotion of selfish and narrow actions over the greater

good.

A prime example of such a misunderstanding is the

famous quotation attributed to Charlie Wilson, who was

President of General Motors in the early 1950s: ‘What’s

good for General Motors is good for the country’. Many

leaders appear to interpret this to mean: ‘What’s good for

me is good for the organisation’, which is of course an

individual consequentialist standpoint. But what Wilson

actually said was ‘For years I thought that what was good

for our country was good for General Motors, and vice

versa’ (Time Magazine 1961). Therefore, a more accurate

interpretation of Wilson’s words would be ‘What’s good

for the organisation is good for me’, which is very much a

utilitarian consequentialist stance.

It follows that self-interest and the interests of other

stakeholders are not necessarily incompatible. If one goes

back to the work of Thomas Hobbes, the original proponent

of the individual view of human nature, his view of lead-

ership is closely allied to Wilson’s view of General Motors.

Hobbes believed that the quid pro quo for allowing leaders

authority, for individuals surrendering some of their lib-

erties to them, is that the leader acts for the common good

(Jones 1980). Applying this to organisations, which are

social groupings established, in the most part, to meet the

ends of their stakeholders, then if a leader ceases to act for

the common good, they lose their legitimacy. Conse-

quently, for leaders to have legitimacy, they must act in the

interests of the common good even if their own personal

philosophy is one of individual consequentialism. There-

fore, drawing on both Charlie Wilson and Thomas Hobbes,

one can argue that leaders with individual consequentialist

ethics can best serve their own interests by serving the

collective interests of the rest of the stakeholders in the

organisation.

This, of course, can only be achieved if leaders act in an

ethical manner. In order to serve the interests of all

stakeholders, leaders need to be explicit about what is

acceptable and not acceptable, there need to be transpar-

ency and involvement in decision-making and leaders need

to be subject to appropriate levels of accountability.

Importantly, those who study and offer advice on change

must be explicit about the ethical basis of their work and

the dangers as well as the benefits of their approach to

change. As Roosevelt (1937) commented on the causes of

the Great Depression of the 1930s:

We have always known that heedless self-interest

was bad morals; we know now that it is bad eco-

nomics. Out of the collapse of a prosperity whose

builders boasted their practicality has come the con-

viction that in the long run economic morality pays.

However, this ‘economic morality’ will only prevail if

all the stakeholders in an organisation are able and pre-

pared to ensure that ethical rather than selfish behaviour is

pursued by leaders when undertaking change.

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