Application of ethics in organizational leadership

¶ … Ethics in Organizational Leadership

The dominant view of leadership has in the past been that leaders should mainly concern themselves with the enhancement of production and profit growth. This view is however slowly diminishing. In its place, a new viewpoint that encourages leaders to embrace ethical and moral conduct is taking shape. This text largely concerns itself with how the ethical leadership theory has actually been applied.

The Ethical Leadership Theory: Overview

Ethical leadership does not have an assigned definition. This is to say that in the past, various definitions of the same have been offered by different authors and leadership experts. Before defining ethical leadership, it would be prudent to first offer a concise definition of ethics. Ethics according to April (as cited in McCann and Holt, 2013) is a system of morals. Essentially, it helps us distinguish between that which is right and that which is wrong in an attempt to achieve distributive justice. The authors further point out that ethics attempts to define not only the rules but also the practices that bring about responsible behavior or conduct amongst people for the common good.

As I have already pointed out above, the terms ethical leadership do not have a definite or assigned definition. However, for purposes of this discussion, it is the definition that Brown, Trevino and Harrison give to the said terms that will be adopted. Ethical leadership in the words of the authors is "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" (Brown, Trevino, and Harrison, 2005, p.120). In that regard therefore, ethics -- with respect to leadership, has largely got to do with not only the character of leaders but also their behaviors and actions.

As Brown and Trevino (2006) argue, ethical leadership should be distinguished from other forms of leadership including but not limited to spiritual, authentic, and transformational leadership. This is regardless of the fact that ethical elements are also present in these other theories of leadership. It is however important to note that in a study conducted by Toor and Ofori, it was found out that a definite positive relationship does exist between transformational leadership (and its various components) and ethical leadership (Toor and Ofori, 2009). Further, the authors point out that their findings are in agreement with the findings of past studies especially on the claim that a positive relationship also does exist between ethical leadership and followers' level of satisfaction with a leader, willingness of followers to go an extra mile, idealized influence, etc. (Brown et al., as cited in Toor and Ofori, 2009).

Discussion

According to Tanner, Brugger, Schie, and Lebherz (2010), a number of things have contributed to the widespread attention on moral and ethical behavior in organizations. These according to the authors include but they are not limited to misuse of power by high-ranking corporate officers, the recent downturn in economic activity, and a number of recent ethical scandals. Some of the most popular scandals in the past have been at Parmalat, WorldCom, and Enron (Knights and O'Leary, 2005).

In addition to raising the bar on ethical behavior, the scandals highlighted above and many others have according to Knights and O'Leary (2005) also forced business schools to identify the need to incorporate ethical studies into their curriculum. The said scandals have also stirred up both research and discussion on a wide array of issues relating to ethical leadership (Toor and Ofori 2009). As Padilla et al. And Schaubroeck et al. (as cited in Sabir, 2012) observe, there is a category of leaders who are referred to as lethal leaders. These leaders according to the author are constantly on the lookout for loopholes that they could exploit for their personal gain.

According to MacIntyre (as cited in Naubert, Carlson, Kacmar, Roberts, and Chonko, 2009), managers have the option of pursuing either external goods or what the authors refers to as internal goods. External goods according to the authors include but they are not limited to reputation and money while internal goods could comprise of job satisfaction and overall work enjoyment. Managers who are more inclined to pursue internal goods according to MacIntyre and Moore (as cited in Naubert et al., 2009) are likely to develop an organizational character that is largely immoral. Such managers as the authors further point out end up shifting their attention from internal goods to material concerns.

A good example of a leader who pursued external goods and paid a rather huge price for her actions is Martha Stewart. Stewart ended up serving a five-month jail term after being found guilty of securities fraud. The Enron scandal is yet another classical example of leaders who elected to pursue that which served their own self-interest as opposed to the common good for all stakeholders. Although hugely successful at the turn of the century, the unethical conduct of top executives of Enron ended up bringing the corporation down. In this particular case, the top executives of the firm sought to paint a picture of favorable performance by amongst other things misrepresenting earnings.

Brown and Trevino (2006) observe that the ethical leadership theory (unlike other forms of leadership) views leaders as moral managers. On this front, ethical leaders are more likely than not to ensure that in addition to communicating ethical standards to subordinates, the behavior as well as conduct of the said subordinates is further reinforced through the utilization of performance appraisals, rewards, and punishments (Brown, Trevino, and Harrison, 2005). Subordinates who fail to follow or embrace the set standards of ethical conduct are punished while those who adhere to the said standards are rewarded.

Indeed, as moral managers, ethical leaders value accountability. This is a point-of-view that has been adopted by many company boards in an attempt to rein in errant executives. Brian Dunn is one of the corporate executives who have been taken down by behaviors and decisions that went against the common good. Dunn resigned as CEO of Best Buy after it was revealed that he had made inappropriate sexual advances to a female employee. This was generally against the company's code of conduct. Yet another top executive who had to resign for failure to embrace his organization's code of conduct is Mark Hurd. The then CEO of the computer giant HP was accused by a subordinate of sexual harassment and it is on the strength of these accusations that he had to resign. Forcing the two CEOs to resign in this case was the best action Best Buy and HP could adopt so as to protect not only their reputation as market leaders in their respective industries, but also the interests of their stakeholders.

Based on the definition of ethical leadership outlined elsewhere in this text, it would be prudent to define the characteristics, behaviors, and conduct of ethical leaders. From the ethical leadership study conducted by Brown, Trevino, and Harrison (2005), one could also easily come up with the various characteristics of ethical leaders. From the onset, it is important to note that ethical leaders as Brown and Trevino (2006) point out are moral persons. In addition to behaving ethically in both their professionals and private lives, ethical leaders value honesty and integrity. As Brown and Trevino (2006) further note, ethical leaders also have genuine concern for the interests of other individuals and by extension, those of the entire or broader society. Ethical leaders also seek to promote ethical standards by making use of two-way communication with their followers. This is an indication that ethical leaders value the input of subordinates.

Other virtues commonly associated with moral leaders include but they are not limited to responsibility, courage, humility, honesty, and fairness. It is important to note that based on their virtues, characteristics, conduct, and behavior, ethical leaders as Brown and Trevino (2006) observe act as legitimate and credible role models for their subordinates. In essence therefore, ethical leaders play a critical role in shaping the behavior of subordinates. The more subordinates try to align their actions and behaviors with those of the leader; the less likely it is that they will engage in behavior that could be regarded deviant. Naubert et al., (2009) found out that the display of ethical leadership by managers plays a crucial role in the moulding of an ethical organizational climate. Indeed, as Thomas et al. (as cited in Toor and Ofori, 2009) point out, in addition to embracing ethics, business executives should make use of their positions to send out consistent and clear messages on the need for all employees to adopt ethical behaviors.

As Naubert et al., (2009) observe, the attention corporate leaders have been receiving in recent times as a result of their positions of authority is largely warranted. This is more so the case given the role they play in influencing the behavior, values, as well as conduct of subordinates. The all important question we should (and must) ask ourselves in the light of the role executives are expected to play in shaping the ethical behaviors of subordinates is: are business executives of today sending clear signals to their subordinates with regard to the acceptable standards of appropriate behavior? Recent happenings paint a somewhat gloomy picture.

At NIB (National Irish Bank), the unethical behavior of employees according to Knights and O'Leary (2005) was at no time suppressed. Leaders in this case according to the authors were largely concerned with profit maximization. This is a clear indication that when leaders fail to mould subordinates, the consequences could be dire. Indeed, a report issued by the inspector general with regard to the scandal at the institution revealed that the role leadership played in the entire scandal was momentous (Knights and O'Leary, 2005). Best Buy CEO's sexual relationship with an employee also set a bad example for other employees to follow. This is more so the case given that the two acted in a way that left no doubt in anybody's mind that they were having an affair. There were also clear disparities between the CEO and the concerned employee especially with regard to age, power, and position.

But why do leaders act unethically? May, Chan, Hodges, and Avolio (as cited in Tanner et al., 2010) argue that leaders could embrace unethical behavior in an attempt to preserve or safeguard their own careers or as a way of avoiding unpopularity. According to Hannah, Avolio, and May (as cited in Schaubroeck et al., 2012), "bad apples" have also been blamed for triggering unethical organizational behaviors. The "bad apples" could in this case be unethical leaders or other senior individuals who do not have any regard for ethical behavior. In what seems to support this assertion, a study conducted by Schaubroeck et al. (2012) came to the conclusion that the impact subordinate leaders have on those whom they lead with regard to their ethical leadership could be facilitated by leaders whose level of ethical leadership happens to be sufficiently high. The reverse is true.

Based on the reasons given above for unethical behavior, it would be prudent to explore some of the solutions that have been proposed to rein in the problem. As Tanner et al. (2010) observe, it is a leader's moral courage that determines or influences his or her resolve to embrace ethical behavior. Moral courage is in this case defined by the authors as an individual's conviction to stand his or her ground in the face of unpleasant consequences. Tanner et al. (2010) are of the view that moral leaders should be ready to embrace ethical behavior even in those instances where embracing the said behavior seems costly. According to Sabir et al. (2012), leaders also have a responsibility to ensure that their ethical behavior as well as conduct is reflected in not only their judgments but in their dealings and daily conversations as well. This way, they could in the opinion of the authors easily become role models for their followers.