Ethical Leadership Lessons from Carly Fiorina's HP Tenure

Introduction

This paper examines the controversial tenure of Carly Fiorina, the former Chief Executive Officer of Hewlett-Packard (HP), using the ethical leadership construct. In his article, Craig Johnson generates several questions that relate to leadership and management practices. The evaluation of HP's former Chief Executive Officer is influenced by the fact that the company experienced a decline in productivity within a short period after the CEO joined the organization. Fiorina entered a largely successful firm and introduced significant changes within a short time, which had considerable impacts on the firm's operations. The dramatic changes introduced within a short time culminated in the decline of the value of the company's stock within five years and the eventual unceremonious removal of the CEO. This paper responds to Johnson's article by examining how it demonstrates the principles—and failures—of ethical leadership.

Analysis and Discussion: Leadership Elements and Ethical Failures

The article by Craig Johnson examines the rise and fall of Carly Fiorina, HP's former Chief Executive Officer, who was unceremoniously removed following the tremendous impact that her dramatic changes had on the firm's productivity and success. At the turn of the millennium, Carleton Fiorina was widely regarded as the most powerful entrepreneur in the United States, having risen quickly through two major technology companies (Johnson, 2008, p. 188). Given her significant achievements, Fiorina was appointed Chief Executive Officer of Hewlett-Packard in 1999. She entered the company at a time when it was very successful and profitable, holding a strong position in the market reflected by the high value of its stock. It was widely expected that Fiorina would lead the company to even greater productivity and success, given her experience and her prominent appearances in company commercials and on the covers of business magazines. Her arrival at the firm generated considerable excitement among employees and the media alike.

However, Carleton Fiorina was abruptly dismissed by the HP board of directors in 2005 following the company's poor performance and a significant decline in the value of its stock. The decline was mainly attributed to the dramatic changes that Fiorina introduced within a short time. These changes had a substantial impact on the company's culture, resulting in a significant deterioration in the relationship between the Chief Executive Officer and the workforce. According to findings from a survey of the firm's employees, workers expressed deep dissatisfaction with poor communication and poorly executed decisions by the Chief Executive Officer. These factors also caused the relationship between Fiorina and the board to deteriorate, which ultimately culminated in her dismissal.

The article and the case of Carleton Fiorina's rise and fall provide a compelling example of the failure of ethical leadership. According to Schultz (2013), leadership does not merely entail possessing certain traits and characteristics, but requires mastery of a competency-based set of skills that are not only learned but also practiced (p. 47). Leadership also entails the leader's ability to inspire others—particularly subordinates—toward the achievement of established organizational or group goals. There are various elements of leadership that enable leaders to achieve this, such as vision, coordination of diverse efforts, and developing enabling structures.

One of the elements of leadership identified in Johnson's article is vision, which involves determining and articulating a compelling future while focusing on the long term. While Fiorina failed to deliver the anticipated success and productivity of Hewlett-Packard, she is recognized as a leader with the ability to create and sell her vision. The dramatic changes she initiated, which profoundly affected the company's culture, were rooted in the vision she developed and articulated for the organization. For instance, she believed that the "HP Way" was a major factor contributing to mediocre performance and required change in order to enhance productivity and success.

The second element of leadership demonstrated in the article is support—the structure that holds an organization together and drives interactions and actions toward the achievement of organizational goals. Support involves developing enabling structures, coordinating diverse efforts, and strengthening behaviors toward the common good (Miller, 2014, p. 37). The process also entails embracing different cultures in order to harness their power toward maximum advantage (Bishop, 2013, p. 83). Support was Fiorina's greatest failure, as evidenced by her inability to manage daily operations in pursuit of her vision. She did not develop appropriate support structures and communicated poorly with subordinates, which resulted in employee dissatisfaction and an eventual decline in productivity.

Failure of Ethical Leadership: Character, Execution, and Incivility

The primary reason for Fiorina's dismal performance as Chief Executive Officer of Hewlett-Packard was the failure of ethical leadership. Numerous business scandals in recent decades have made ethics an increasingly important issue in organizational leadership relative to the success and profitability of companies (Lu & Lin, 2013, p. 209). The significance of ethics in leadership has also been fueled by growing interest among practitioners in the role of leadership behaviors in preventing unethical conduct in organizations. Consequently, ethical leadership is described as the demonstration of ordinarily suitable conduct through individual actions and interpersonal relationships (Lu & Lin, 2013, p. 209). Leaders are generally expected to exhibit the highest moral standards and ethical conduct in the daily operations of an organization, serving as beacons of morality to their subordinates (Fehr, Yam & Dang, 2015, p. 183).

Together with members of the board, Fiorina failed as both a moral individual and a moral manager, resulting in her abrupt dismissal and the eventual HP spying scandal. One reason for this failure was poor execution—Fiorina's apparent inability to effectively coordinate the daily operations of the company. Her poor execution, combined with the board of directors' inadequate oversight, contributed to a failure to properly manage day-to-day operations. Secondly, the failure of ethical leadership can be attributed to Fiorina's lack of three important leader character traits: integrity, compassion, and humility. Compassion refers to the ability to put others before oneself; integrity refers to consistent and reliable actions; and humility involves a realistic self-assessment, openness to transcendence, and receptivity to new knowledge and ideas.

Upon assuming leadership of HP, Fiorina prioritized her own needs by creating a considerable distance between herself and the workforce. She regularly announced sweeping policy changes without fully understanding their impact and made promises she could not keep. When she failed, Fiorina blamed other managers and the company's culture rather than accepting personal responsibility. At a time when she was attracting significant public attention, she failed to demonstrate openness to new concepts, a realistic sense of self-evaluation, or a sense of transcendence.

The third reason for the failure of ethical leadership at Hewlett-Packard is workplace incivility, demonstrated through poor relationships between the CEO and both her workers and the board. Workplace incivility is among the most common types of deviant behaviors that harm an organization or its workforce (Taylor & Pattie, 2014, p. 596). Since most of Fiorina's initiatives involved introducing change, they were met with resistance and incivility that compounded the failure of ethical leadership. According to Sharif and Scandura (2013), employees' responses to organizational change are sometimes influenced by their perceptions of their leader's ethicality (p. 185). Workplace incivility at Hewlett-Packard during Fiorina's tenure was also demonstrated by the board's actions in shirking ethical responsibility and eventually endorsing criminal conduct.

Conclusion

The situation regarding the rise and fall of Hewlett-Packard's former Chief Executive Officer, Carleton Fiorina, is a compelling case study in the implications of ethics for organizational leadership. Despite being regarded as one of the most powerful businesswomen in America, Fiorina failed to inspire HP toward improved growth and productivity, which resulted in her dismissal. Her inability to propel the company forward was primarily due to the failure of ethical leadership, a failure attributable to multiple organizational stakeholders—including the board of directors and the workforce—not solely the CEO herself.

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