Ethical leadership, defining it as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement and decision-making”… [And] the evidence suggests that ethical leader behaviour can have important positive effects on both individual and organizational effectiveness (Rubin et al 2010: 216-17).
Companies are now using Ethics to build up strategy and competitive advantage. Nowadays, people/employees can make their voices be heard more powerfully than in the past, as a result ethical leadership is recommended and vital in organisation for achievement (Stewart, 2006). Ethics are the principles, values and beliefs that define what is right and wrong behaviour whereas Leadership is the process of influencing others to achieve goals, which brings us to ethical leadership which is the process of influencing people through principles, values and beliefs that embrace what we have defined as right behaviour (Buren, 2013).
Many directors, managers and professional philosophers are certain that ethical leadership is only a matter of leaders having good character, that is having “the right values” or to be a “strong character,” then they are ethical leader setting an example to others. What they think is not true, ethical leadership is far more complex and the risks are much higher (Stewart, 2006).
- ETHICAL LEADERSHIP THEORIES
Normative ethical systems can be broken down into three theories: Deontological, Teleological and Virtue ethics. The first two are considered action based theories of morality because the attention is completely upon the actions which an individual performs (Derr 2012). When actions are judged morally right based upon their consequences, we have teleological or consequentialist ethical theory. When actions are judged morally right based upon how well they conform to some set of duties, it is Deontological ethical theory (Derr 2012).
However when Deontological and Teleological structures emphasis on the query “What should I do.” Virtue ethics asks an entirely different question: “What sort of person should I be?” Through this comes a virtue-based ethical theory which does not criticise actions as “right or wrong” but rather the charisma of the person doing the actions. The person, in turn, makes moral decisions based upon which actions would make one a good person (About,2014).
HR Managers leading ethics: http://www.youtube.com/watch?v=izXuboAZzCM
- THE DIFFERENT VIEWS OF THIS DEBATE
Today, businesses taking the initiative and making ethical leadership significant will benefit in many ways. There are many ways in which ethical leadership can help organisation to succeed, for instance:
- Ethical consumers are growing and increasingly expecting businesses to act/think outside their own advantage as well as to showing concern and care for a broad group of stakeholders(Thornton 2012).
- Ethical leadership motivates employee to perform better which usually help organisations participate effectively in today’s global marketplace.
- Strong ethical leadership with high trust culture helps organisations attract and maintain the best talented employees. The talented and ethically led employees will attract and satisfy customers which help companies get more done, that way also improving the brand (Thornton 2012).
Since Dan took over the wheel at Aflac, profits have grown nearly tenfold. A big percentage of CEOs would use that as reasoning to increase their wages tenfold as well but not Dan Amos. Dan offered to permit shareholders to vote on the executive reward strategy in which it was the first foremost U.S. Corporation to ever do so. He was then awarded the U.S chamber of commerce’s corporate citizenship award. Since then Aflac is widely acknowledged as one of the best American companies to work for, largely due to Amos’ leadership that fosters ethical business practices with social responsibilities. As just one example, he has overseen the donation of $50 million to the Aflac Cancer Center and Blood Disorders Service of Children’s Healthcare of Atlanta. With the great leadership he has:
- Improved business growth
- Improved bench strength
- Improved employee retention
- Improved bottom-line performance
- Improved ability to attract talent
- Solving problems earlier and at lower levels
- Increased organizational agility
- Improved business sustainability
- Greater market value over time
On the other hand Unethical leadership is bad. It may seem to make things a lot more faster and easier but there is always an end to a bad thing. Unethical leadership can be due to a wide range of things or reasons and is mostly motivated by greediness, money and wanting more than you can have so fast. A good example of of a company would be Enron Corporation.
Unethical Behaviours: http://www.youtube.com/watch?v=ZOk_diECPUw
The Enron scandal, revealed in October 2001, eventually led to the bankruptcy.The company’s failure in 2001 represents the biggest business bankruptcy ever while also spotlighting corporate America’s moral failings. It’s a stark reminder of the implications of being seduced by charismatic leaders or more specifically, those who sought excess at the expense of their communities and their employees. In the end, those misplaced morals killed the company while it injured all of those who had gone along for the ride(Silverstein 2013).
In a nutshell, ethics is essential for today’s leaders. Reading, research and watching video related to ethical leadership has highlighted the significance importance of being ethical in business and generally. What many organisation have done and others can do is to ensure that they are ethical leaders creating an ethical organisation (Anon. 2014). HR departments seem to play a crucial role in promoting ethics, as every HRM practice/policy serve as a vehicle to transmit what is considered really important in the organisation.
Anon. (2014) Human Resource Management And Ethical Behaviour: Exploring The Role Of Training In The Spanish Banking Industry. 1 (2), 69-88
Bunker, K., Hall, D. and Kram, K. (2010) Extraordinary Leadership. 1st edn. San Francisco: Jossey-Bass
Derr, C. (2012) ‘Ethics And Leadership’. Journal of Leadership, Accountability and Ethics 9 (6), 66–71
Ethisphere. (2014). http://www.google.com. Retrieved July 29, 2014, from http://ethisphere.com/worlds-most-ethical/wme-honorees/.
Johnson, K. (2003). The role of leadership in organisational integrity and five modes of ethical leadership. Leadership and Ethics.
Mickey. (2013, March 6). http://www.google.com. Retrieved July 28, 2014, from http://www.theworkplacecoach.com/the-importance-of-ethical-leadership/.
Silverstein, K. (2013) Enron, Ethics And Today’s Corporate Values [online] available from <http://www.forbes.com/sites/kensilverstein/2013/05/14/enron-ethics-and-todays-corporate-values/> [18 August 2014]
Stewart, E. F. (2006). Developing Ethical Leadership. Business Round table Institute for Corporate Ethics.