Catherine Owens
catherine3099
week_06.pptWeek 06 - Leading for Change
Leadership and Ethics
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Learning Objectives
- Specify key principles of ethical and moral leadership.
- Apply a guide to ethical decision making.
- Present representative examples of unethical behavior by business leaders.
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Learning Objectives (cont’d)
- Describe what leaders can do to foster an ethical and socially responsible organization.
- Explain the link between business ethics and organizational performance.
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Ethics and Morals
- Ethics is the study of moral obligations, or of separating right from wrong
Ethics can also mean the accepted guidelines of behavior for groups or institutions
- Morals are an individual’s determination of what is right or wrong and are influenced by an individual’s values
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Ethical Leadership Behaviors
Be honest and trustworthy and have integrity in dealing with others
Pay attention to all stakeholders
Build community
Respect the individual
Accomplish silent victories
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Factors Contributing to
Ethical Differences
The leader’s level of greed, gluttony, and avarice
Rationalization
Implied permission to engage in unethical acts
The leader’s level of moral development
Preconventional level
Conventional level
Postconventional level
A sense of entitlement
The situation and organizational culture
The leader’s character
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Extraordinary Executive Compensation
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Executive Compensation
in the U.S.
The average CEO pay at major corporations is now
364 times higher
than the lowest-paid employees.
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The Ethical Mind for Leaders
- To remain ethical, leaders need to develop an ethical mindset, or point of view
- Leader’s need to state this viewpoint and apply it rigorously, using self-checks along the way
- Leader’s must act quickly and publicly on lapses of ethical behavior of others
- The ethical mind of the leader is essential for the overall health of the organization
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Evaluating Ethics of a
Decision Guidelines
- Is it right?
- Is it fair?
- Who gets hurt?
- Would you be comfortable if the details of your decision or actions were made public?
- What would you tell your child, sibling, or young relatives to do?
- What does your intuition tell you?
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Examples of Unethical Leaders
(From Table 6- 3)
- Dennis Kozlowski, Tyco
- Bernie Ebbers, MCI
- Patricia Dunn, Hewlett-Packard
- Frank Quattrone, Crédit Suisse
- Steven Jobs, Apple
- Chung Mong-koo, Hyundai
- Martha Stewart, Martha Stewart Living
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Social Responsibility
- Having obligations to society beyond the company’s economic obligations to owners or stockholders and also beyond those prescribed by law or contract
- Relates to an organization’s impact on society and goes beyond doing what is ethical
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Socially Responsible Actions
- Creating a pleasant workplace
- Guarding the environment
- Engaging in philanthropy
- Working with suppliers to improve working conditions
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Creating an Ethical and Socially Responsible Culture
- Providing strategic leadership of ethics and social responsibility
- Establishing written codes of ethical conduct
- Developing formal mechanisms for dealing with ethical problems
- Accepting whistleblowers
- Providing training in ethics and social responsibility
- Placing company interests over personal interests
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Ethics and Performance
- High ethics and social responsibility are related to good financial performance
- The relationship between social responsibility and financial performance may be a virtuous circle. Corporate social responsibility and corporate financial performance may feed and reinforce each other
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Summary
- Key principles of ethical leadership include having honesty and integrity, paying attention to all stakeholders, building community, respecting the individual, and accomplishing silent victories
© 2010 Cenage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Summary (cont’d)
- Examples of factors contributing to how one person’s ethics differ from another include: the person’s level of greed, gluttony, and avarice, the person’s level of moral development, the person’s sense of entitlement, the situation itself, combined with the corporate culture, and/or the person’s character.
© 2010 Cenage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Summary (cont’d)
- A leader or manager should seek answers to a series of important questions before reaching a decision about an issue that is not clearly ethical or unethical
- Unethical behaviors have had detrimental effects on many companies
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Summary (cont’d)
- A leader can encourage ethical behavior by promoting social responsibility
- Ethical behavior is related to financial performance
Source:
Chapter 6, DuBrin [2013]
Leadership: Research Findings, Practice, and Skills, 7e [South-
Western] (9781133435228)
RMIT University©
School of Management
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School of Management
