Lee Kuan Yeu and Kenneth Lay Ethical and Unethical Leadership

DARK AND LIGHT LEADERS

Comparing and Contrasting Dark and Light Leaders

Introduction

From the onset, it would be prudent to note that persons in leadership positions often display diverse and unique leadership characteristics and approaches. This text will focus on two historical leaders with an intention of assessing their leadership styles. The leaders selected in this case are and Lee Kuan Yeu and Kenneth Lay. For reasons outlined elsewhere in this text, Kenneth Lay could be described as an unethical leader, whereas Lee Kuan Yeu was essentially an ethical leader.

Discussion

Ethical Leader: Lee Kuan Yeu

a) Biography

Born in 1923, Lee Kuan Yeu (LKY) was a politician and is best known for having served as Singapore’s prime minister for the period between 1959 and 1990. Thus, in this context, Singapore could be deemed as the ‘organization’ lead by this particular ethical leader. It is important to note that LKY is credited with the turnaround of this Southeast Asian country during his 31-year reign (Oei, 2015). Prior to serving as prime minister, LKY served in various capacities within and outside government. He had earlier on, in 1949, earned a law degree in England. As Oei (2015) points out, LKY won the country’s elections in 1959 after riding on a reform agenda. Soon after being elected, he instituted massive reforms that saw Singapore become a high-income economy and one of the most stable countries not only in South East Asia, but also across the world (Oei, 2015). LKY died in the year 2015.

b) Leadership Style

LKY’s leadership style has been described as transformational leadership. In basic terms, transformational leadership “is a leadership style that can inspire positive changes in those who follow” (Burns, 2010). As the author in this case further indicates, transformational leaders have an inherent capability to not only inspire, but also motivate followers. It is this inherent capability that enables them to bring about positive change in organizational settings (Burns, 2010). LKY demonstrated this particular leadership style because he was able to unite an entire country behind a reform agenda. This is more so the case in relation to educational services expansion, women emancipation, initiation of better housing and most importantly, war against graft. In the words of Josey (2013), “while improving health and social welfare services, Lee continually emphasized the necessity of cooperation, discipline, and austerity on the part of the average Singaporean” (187). This is a clear demonstration of his resolve to inspire and motivate followers. He has also been described as energetic and emotionally intelligent – which are some of the key characteristics of transformational leaders (Josey, 2013).

c) Aspects of Ethical Leadership

Ethical leadership, as DuBrin (2012) points out, has got to do with the demonstration of acceptable behavior and pursuit of the common good. LKY was ethical in the sense that he was committed to the promotion of the wellbeing of his people and demonstrated appropriate conduct via his deep reverence for ethics. This is more so the case in relation to the formulation and implementation of policies that uplifted their wellbeing (i.e. slum upgrading projects) and deployment of measures to rein in corrupt behavior (Josey, 2013). It is important to note that as Josey (2013) further observes, LKY was convinced that countries could gain an unassailable competitive advantage via the embrace of ethical leadership. Indeed, according to Josey (2013), LKY is quoted outlining this assertion: “one “X” factor remains a key differentiator, especially for developing countries: that is ethical leadership…A clean, efficient, rational, and predictable government is a competitive advantage” (137).

d) Effects on Organization

Thanks to his embrace of ethical leadership, LKY was able to transform Singapore into a developed country within a spent of just over three decades. Today, the country is considered a high-income economy and has been featured in multiple books and texts as one of the world’s greatest economic transformation stories. As a matter of fact, Singapore’s GDP per capita happens to be consistently higher than that of most of many Western Europe countries. This is especially impressive given that prior to LKY’s ascent to power, the country’s certain crucial aspects of governance and the economy were essentially underdeveloped, i.e. in relation to GDP, housing, industrialization, etc.

Unethical Leader: Kenneth Lay

a) Biography

Born in 1942, Kenneth Lay, as Fox (2004) points out, studied economics and started off by serving in junior economist positions in various companies such as Humble Oil. Later on, Fox (2004) notes that Lay joined the U.S. Navy and eventually attained the lieutenant rank after three years of service. He later on served in diverse roles within the government until 1974 when he returned to the private sector. Here, he assumed leadership roles in some of the key players in the energy sector including, but not limited to; Transco Energy Company, Continental Resources, and Florida Gas Transmission (Fox, 2004). Ten years after joining the private sector, Lay became Houston Natural Gas’ CEO and Chairman. The company was later on, in 1985, named Enron. He was amongst those deemed most culpable for the bankruptcy of Enron in the year 2001. He died five years later, in 2006.

b) Leadership Style

According to Tourish and Vatcha (2005), Lay was a charismatic leader. In the words of DuBrin (2012), “charismatic leadership is defined by a leader who uses his or her communication skills, persuasiveness, and charm to influence others” (113). As the author further points out, charismatic leaders have an inherent ability to establish deep connections with other persons. This is more so the case given that they possess a unique set of skills which are inclusive of, but they are not limited to; excellent communication skills, enthusiasm and high energy, as well as confidence. As a consequence, DuBrin (2012) is categorical that charismatic leaders come in handy in helping navigate organizations or companies through challenging times. In most instances, charismatic leaders are able to develop and nurture an emotional connection with their followers. Lay demonstrates this kind of leadership because as Tourish and Vatcha (2005) observe, he was able to establish an emotional and deep connection with employees at Enron to the extent that the company ended up resembling a cult. Indeed, according to Tourish and Vatcha (2005), Enron’s organizational culture is indicative of charismatic leadership’s dark side. In the words of the authors, “Enron can be usefully regarded as an example of a corporate cult” (Tourish and Vatcha, 2005, p. 456). The authors note that in addition to ensuring that he deployed a compelling vision, Lay was intensely relatable and empathetic. He also constantly painted an optimistic picture even when things were going south. He was able to pull wool over the eyes of most persons due to his charming and engaging nature.

c) Aspects of Unethical Leadership

Prior to its fall, Enron was considered the rare corporate success story. According to Shanker (2012), Lay (and other officers of the firm) were instrumental in this particular company’s demise. It was for this reason that a grand jury indicted him in the year 2004. He was accused of, amongst other things, having played a role in the making of statements of accounts that were misleading and/or false, as well as engaging in wire fraud and securities fraud (Shanker, 2012). It is important to note that all along, Lay maintained that the collapse of Enron had been occasioned by the action of various internal and external rogue players including the mass media, company executives, and short sellers. However, according to Shanker (2012), he was later on found guilty on multiple fraud and conspiracy counts. He died before sentencing.

d) Effects on Organization

To a large extent, Lay’s engagement in unethical conduct resulted in the bankruptcy of an otherwise competitive and hugely successful company. Some of those who were most affected by the unfortunate turn of events were investors. This is more so the case given that at its peak performance, the company’s stock was trading at $90.75 (Benke, 2018). However, at bankruptcy, the price of the company’s stock had collapsed to an all-time low of $.26 (Benke, 2018). The company also owed various creditors billions of dollars. Those affected also included the company’s employees. This is more so the case given that they lost a means of livelihood following the company’s collapse.

Lessons