Ethical vs. Unethical Leadership: Causes and Effects

Introduction

Leadership is not an inherited gift or a family heritage. Becoming a leader is a deliberate and planned process of personal and professional development that must be carried out experientially. It requires the courage to say both "yes" and "no" to an unending chain of large and small tests. In order to become a true leader, one must be prepared to define one's values, character, and leadership style. Resilient, tough leaders make this process a way of life — not only in business, but within their families, communities, and the world (Chandler, 2009).

Leadership can be described as "a process of social influence through which an environment is provided where personal, professional, and/or organizational goals can be successfully achieved" (Bahreinian, Ahi, & Soltani, 2012). In today's rapidly growing and competitive industry, efficient management is a major factor in making one organization superior to another. Management is the coordination of financial and human resources for reaching and attaining organizational goals in a way that is acknowledged by the social order (Bahreinian, Ahi, & Soltani, 2012). If room can be made for people to communicate and act out their values, organizations today might become places where people discover the secret of becoming more compassionate and, therefore, more fully human (Atkins & Parker, 2012).

The significance of leadership in encouraging ethical conduct within organizations cannot be denied. It is the sole responsibility of the leader to set the tone for organizational targets and activities within the work environment. It is also the responsibility of an ethical leader to create an ethical climate in the workplace using social learning principles and sound processes of decision-making (Shin, 2012). An ethical climate helps improve worker confidence, staffing, and retention. It also encourages a more positive work environment that ultimately promotes originality, resourcefulness, and innovation (Marks, 2012).

Leaders frequently occupy positions in which they can exert influence over many outcomes that affect human resources — such as policies, goal-setting, endorsements, and appraisals. What leaders portray, personally and professionally, communicates their values and aspirations, and this conduct serves as motivation for the workforce to act accordingly. It is therefore unsurprising that employees depend on their leaders and managers for direction and assistance when faced with ethical matters or problems (Brown & Mitchell, 2010).

According to several studies, employees conventionally follow the ethical values of their leaders. Leaders who are perceived as morally positive have a great influence on productive employee work behavior. In other words, an ethical leader negatively influences counterproductive work behavior (Brown & Mitchell, 2010).

Behavioral Integrity and Ethical Leadership Defined

Behavioral integrity (BI) is the degree of alignment between an actor's words and conduct as perceived by other people. When the workforce perceives that their leader's deeds and words are consistent, this helps create a desirable workplace where positive outcomes can be more easily achieved. Thus, BI has a profound effect on organizational commitment, citizenship behaviors, job performance, and intention to leave the organization (Kannan-Narasimhan & Lawrence, 2012).

Managers possess lawful authority over the workforce and control over significant organizational resources. This means they are in an exceptional position to dispense impartiality and fairness. More importantly, they are regarded as core agents of the business. Thus, the ethical leadership of a manager is imperative, as it directly affects the behaviors of the people working under them. An ethical leader can be described as "a captain piloting a ship in the right direction" (Loi, Lam, & Chan, 2012). Employees within organizations always seek ethical guidance from their leaders, and the personal and professional conduct a leader displays in the workplace should therefore provide a model of normatively appropriate performance (Loi, Lam, & Chan, 2012).

As far as personal conduct is concerned, an ethical leader is a person of high morals who acts in a rightful manner. He or she is fair, reasonable, truthful, sincere, dependable, upright, and righteous in management, concerned about employees, and attentive to means rather than ends alone. As far as professional conduct is concerned, an ethical leader is a just manager who treats people in the appropriate manner, sets unambiguous moral standards and expectations, and proactively communicates those standards to subordinates. He or she uses rewards and discipline to encourage ethical behavior among the workforce (Loi, Lam, & Chan, 2012).

Ethical leadership therefore fosters a positive work attitude among employees, including job loyalty and organizational commitment. Ethical leadership behavior is also centrally concerned with procedural justice — attending to the concerns of the workforce and making fair decisions. When leaders possess a strong sense of ethics and integrity, procedural justice becomes essential, because workers draw on it to gauge how they will be treated by the organization (Loi, Lam, & Chan, 2012).

Ethical leaders use open, two-way communication to convey their ethical expectations to followers. Their emphasis on faithfulness to organizational strategy and practices demonstrates to employees that the organization values fair procedures. Conversely, unethical managers who display poor ethical leadership avoid discussing fairness and ethics with their employees altogether (Loi, Lam, & Chan, 2012).

As Otken and Cenkci (2012) observe, "ethical behavior on the part of the leader would appear to be a necessary condition for the establishment of an ethical organization, but it is not alone sufficient. Ethical leadership is required. … Leaders must establish the spirit, set the ambiance, and determine the boundaries of acceptable behavior."

In summary, an ethical leader acts with integrity and is a trustworthy individual. He or she ensures that moral behavior in personal life matches the ethical standards advocated in front of others, does the right thing, and acts with honesty and decency. An ethical leader takes responsibility for his or her actions, shows concern for others, and treats them fairly. He or she uses values to guide personal behavior and decisions. Ethical leaders implement decisions justly, ground those decisions in sound ethical principles, and exercise common sense in ways that, at times, transcend narrow organizational performance metrics (Webber, Goussak, & Ser, 2012).

What Is Unethical Leadership?

Unethical behavior by leaders can be defined as "the organizational process of leaders acting in a manner inconsistent with agreed-upon standards of character, decency, and integrity, which blurs or violates clear, measurable, and legal standards, fostering constituent distrust because of personal self-interest" (Chandler, 2009).

In every organization, research on the "dark side" of leadership identifies members who engage in negative or deviant work behavior. Workplace deviance can be described as conduct that violates important organizational norms and harms organizations and their members. Workplace aggression, counterproductive work performance, social undermining, and retaliation are all examples of unethical workplace conduct. In many organizations, leaders are themselves responsible for such deviant acts (Brown & Mitchell, 2010).

Unethical behavior entails acts that are against the law and/or are ethically wrong from a broader societal perspective. An unethical leader may display many dark qualities, including abusive supervision, managerial undermining, toxic leadership, and authoritarian control. Such leaders are domineering, insulting, controlling, and covertly undermining. Their actions are perceived as deliberate, calculated, and damaging, and may form the basis of legal action against the organization (Brown & Mitchell, 2010).

Unethical leadership, moreover, extends beyond the leaders' own personal conduct. An unethical leader can promote dishonest and immoral acts within the organization to accomplish organizational objectives. Unethical leaders may encourage unethical behavior among their workforce without getting directly involved themselves — doing so through rewards, overlooking non-compliance, and ignoring immoral acts in the work environment. Wrongdoers are not punished by such leaders; instead, like-minded individuals are encouraged, intensifying corrupt behavior throughout the workplace (Brown & Mitchell, 2010).

Supported by such leadership, employees may engage in immoral acts to improve organizational performance or assist the organization in other ways. Such embedded practices can insulate leaders from primary responsibility, providing them with "plausible deniability" (Brown & Mitchell, 2010). Unethical leadership sets a dangerous model for today's workforce. The low ethical standards displayed by senior supervisors allow a number of employees to feel justified in their own misconduct — through absenteeism, petty theft, and poor job performance. For this reason, values and ethics are significant factors in managing employee behavior and development.

In short, leaders who engage in, permit, or encourage unethical acts within their organizations do not exhibit ethical leadership. Rather, those who control and embed unethical behavior among their followers demonstrate unethical leadership. Unethical leadership can therefore be defined as "behaviors conducted and decisions made by organizational leaders that are illegal and/or violate moral standards, and those that impose processes and structures that promote unethical conduct by followers" (Brown & Mitchell, 2010).

Conclusion

True and efficient leadership is that in which the conduct and manner of the leader, and the implementation of leadership influence, are consistent with moral and honest values. When the ethical integrity of the leader is in doubt, even a dignified, well-crafted, and coherent vision is viewed with cynicism by subordinates, loses its vitality, and fails to be sufficiently compelling. While there are cases of unethical leaders who have built thriving organizations in the short term, the long-term sustainability of such leadership is highly questionable. The success and survival of an organization over the long term depends on ethical leadership.