Ethical Leadership

Overview about Leadership Ethics

Leaders must understand the subject of ethics – what it is and why is it important. Ethics is the branch of philosophy concerned with the intent, means and consequences of moral behavior. It is the study of moral judgments and right and wrong conduct. Some human judgments are factual (the earth is round); others are aesthetic (she is beautiful); and still others are moral (people should be honest and should not kill).

Define Ethical Leadership Behavior

Ethical Leadership is leadership that is involved in leading in a manner that respects the rights and dignity of other.

“As leaders are by nature in a position of social power, ethical leadership focuses on how leaders use their social power in the decisions they make, actions they engage in. And ways they influence others’ decisions. Leaders who are ethical, demonstrate a level of integrity that is important for stimulating a sense of leader trustworthiness, which is important for followers to accept the vision of the leader.

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These are critical and direct components to leading ethically. The character and integrity of the leader provide the basis for personal characteristics that direct a leader’s ethical beliefs, values, and decisions. Individual values and beliefs impact the ethical decisions of leaders.

Five Ethical Leadership Behavior

1. Be Honest and Trustworthy and Have Integrity in Dealing with Others. Trustworthiness contributes to leadership effectiveness. A perception that high-ranking business leaders were untrustworthy contributed to the spectacular decline in stock prices during the 2000-2002 period. An ethical leader is honest (tells the truth), and trustworthy (constituents accept his or her word).

In other words, he or she has integrity. According to Thomas E. Becker, this quality goes beyond honesty and conscientiousness. Integrity refers to loyalty to rational principles; it means practicing what one preaches regardless of emotional or social pressure.

2. Pay Attention to All Stakeholders.

An ethical and moral leader strives to treat fairly all interested parties by his or her decisions. To do otherwise creates winners and losers after many decisions are made. The widely held belief that a CEO’s primary responsibility is to maximize shareholder wealth conflicts with the principle of paying attention to all stakeholders. A team of management scholars observes: “We used to organize corporations as both economic and social institution--as organizations that were designed to serve a balanced set of stakeholders, not just the narrow interests of the shareholder”.

A leader interested in maximizing shareholder wealth might attempt to cut costs and increase profits in such ways: laying-off valuable employees to reduce payroll costs, overstating profits to impress investors, overcharging customers, siphoning money from the employee pension fund and reducing health benefits for retiree. Although the aforementioned may be standard practice, they all violate the rights of stakeholders.

3. Build Community.

A corollary of taking into account the needs of all stakeholders is that the leader helps people achieve a common goal. Peter G. Northouse explains that leaders need to take into account their own and followers’ purposes and search for goals that are compatible to all. When many people work toward the same constructive goal, they build a community.

4. Respect the Individual.

Respecting individuals is a principle of ethical and moral leadership that incorporates other aspects of morality. If you tell the truth, you respect others well enough to be honest. If you keep promises, you also show respect. And if you treat others fairly, you show respect. Showing respect for the individual also means that you recognize that everybody has some inner worth and should be treated with courtesy and kindness. An office supervisor demonstrated respect for the individual infront of his department when he asked a custodian who entered the office: “What can we do in this department yo make your job easier?”

5. Accomplish Silent Victories.

The ethical and moral leader works silently, and somewhat behind the scenes, to accomplish moral victories regularly. Instead of being perceived as hero or heroine, the moral leader quietly works on moral agenda. Quite often he or she will work out a compromise to ensure that a decision in process will have an ethical outcome.

Typical Ethical Dilemma for Supervisors

Maintaining professional ethics in the supervisory process can pose unique challenges. The same ethical violations that can occur in a therapeutic relationship can be paralleled in a supervisory relationship. From performance evaluations to dual relationships, the supervisory relationship can be fraught with chances for uncomfortable, inappropriate, and potentially litigious situations. • “My supervisor uses me as a confidante and openly discusses another worker’s shortcomings with me, yet she never approaches the worker about it.” • “My supervisor degrades me and makes personal comments about me—usually negative—and sometimes in front of other staff.” • “My coworker reads all day long and doesn’t spend much time working with clients.

My supervisor is unwilling to address it and said to me, ‘Mind your own business. He gets his work done. That’s all that’s important.’ It drives me crazy that I end up picking up his slack with clients.” • “My supervisor passes work on to me even though I am overwhelmed with my own work. She dumps administrative duties on me that she should be performing. If I do them, it’s credit in the bank for me to get favors from her. I don’t like the game, but it does have benefits.” • “I used to be best friends with a person I now supervise. Do we have to give up our friendship? I don’t see why, as long as it is after work hours.” • “I’m a supervisor of a domestic violence agency with a shelter program. A new employee reported she is being abused by her live-in boyfriend. She feels she is in danger and would like to enter the shelter and receive counseling with us. What do I do?”

Define Leadership attempts and the influence of ethical and unethical behavior on leadership attempts In any thesaurus or dictionary, you will find that successful and effective are oftentimes used as synonyms for each other. On a fundamental level, they are very similar terms. However, when you break these terms down within the context of leadership, they can mean two very different things. So different, in fact, that the researcher Bass created an illustration (Figure 1) that demonstrates the difference. Leadership Attempts is an effort by any individual to have some effect on the behavior of another individual.

This leadership attempts can be measured successful or unsuccessful, depending upon production of the desired action or response. A good example of this is getting employees to complete tasks on time. Referring to the figure below, Person A (leader) attempts to influence Person B (constituent/employee) toward a desired outcome; Person A will be considered successful or unsuccessful along the continuum, depending upon the desired response of Person B.

To be considered an effective leader, one must take leadership to another level, past just being successful. If Person B does what Person A asks only because of positional power, influence, or guilt, then the leader (Person A) has been successful in this scenario, but not effective. If Person B does the task because he/she finds it personally rewarding, then Person A has been both successful (at getting the desired result) and effective (in affecting the attitude/motivation of Person B). The bottom line is that success has to do with how the individual or group behaves; effectiveness describes the internal state of the individual or group and is attitudinal in nature. An effective leader will usually generate personal power through follower acceptance and will use more general supervision. Both of these are great ways to empower group and community members.

If doing what is right produces something bad, or if doing what is wrong produces something good, the force of moral obligation may seem balanced by the reality of the good end. We can have the satisfaction of being right, regardless of the damage done; or we can aim for what seems to be the best outcome, regardless of what wrongs must be committed. This pattern of dilemma is illustrated in the chart.

DEFINITION OF ETHICAL DILEMMA

ETHICS/ETHICAL
It is an internal feeling or sense of obligation to do the right thing. It refers to judgement about what is right and wrong.
It has to do with the behavior specifically one’s moral behavior with respect to society.

DILEMMA
It seems a negative term.
A situation requiring a choice between equally undesirable alternatives, any difficult or perplexing situation or problem.

ETHICAL DILEMMAS
It is a situation in which two or more deeply held values come into conflict It is a problematic situation whose possible solutions all offer imperfect and unsatisfactory answer. It occurs when key factors within a situation lead to different decisions and each of the decisions is equally valid. Is often Evoke powerful emotions and strong personal opinion. An ethical dilemma is a complex situation that often involves an apparent mental conflict between moral imperatives, in which to obey one would result in transgressing another. The topics of ethics, integrity, compromise and corruption have to become as important as other critical areas of law enforcement training if significant changes can occur. This is also called an ethical paradox since in moral philosophy, paradox often plays a central role in ethics debates.

Ethical dilemmas are often cited in an attempt to refute an ethical system or moral code, as well as the worldview that encompasses or grows from it. Leaders have a tough time these days convincing us that they are honest. A US survey in 2011, for example, found that nearly half (48 percent) of those questioned rated the honesty and ethics standards. That is, few have developed their values into a moral compass pointing the way to comprehensive trading policies, robust structures and systems, and many other elements contributing to running an ethical business. In trying to shift their cultures towards a more ethical approach, many leaders will conclude that they need to develop their own skills in handling ethics. For example, some may neglect to ensure that nuts and bolts of what makes an ethics programme effective. This is seldom due to negligence, but to lack of awareness of what it takes to make a sustained cultural change in the right direction.

Consequently, many leaders will benefit from having their own ethics and values tune-up. This includes opportunities to examine their own ethical decision-making skills and the ethical environment of the company. Not sure if what you feel is an ethical dilemma? Here are the signs that may help you determine if you are experiencing an ethical problem. Discomfort – if something about a situation makes you uneasy, it is time to start finding out what is causing the feeling and why. Guilt – rather than deny the feeling, explore and respond to it. Stress – Putting off making a difficult choice, losing sleep and feeling pressured can be all signs of an ethical problem Anger – If you are feeling angry at being pressured, it could be a sign of an ethical problem. Embarrassment – If you would feel awkward about telling your boss, co-workers, friends or family about what you are doing, or thinking of doing, it’s a good chance that the issue is an ethical one. Fear – if you’re afraid of being caught, found out or exposed for what you are doing or thinking of doing, it’s almost certainly an ethical matter.

Training can help managers clarify their ethical framework and practice self-discipline when making decisions in difficult circumstances. According to the London-based Institute of Business ethics, which surveys UK companies every three years on the use of their codes of ethics, six out of ten UK companies provided training in business ethics for all their staff in 2010. However, this is a 10 per cent drop on 2007. ‘Although we are living in a time of austerity, cutting back on ethics training is a short-sighted thing for companies to do’, comments Simon Webley, Research Director of IBE and author of the survey. “Is this ethical?”

An ethical dilemma at work arises when there’s conflict between two possible desirable or undesirable actions. It is typically where the “rules” are unclear and with unacceptable trade-offs. For example, an employee may know something’s wrong – “it smells bad”, as one approach puts it. Yet the employee may be torn between loyalty to colleagues and commitment to the company. The eventual choice will depend on developing a uniquely personal view of the world, drawing on existing formal guidance but more significantly, also referring to individually held beliefs and desires. This is why rehearsals – the chance to practise with realistic examples of cases – is so essential for acquiring the necessary learning. Recognizing an ethical issue can be difficult, even when right in front of you.

In fact, people predict that they will behave more ethically that they actually do. When evaluating past unethical behaviour, they usually believe that they will behaved more ethically than they actually did. So there is a general tendency for people to fail to realize that they are making choices which affect others, with possible adverse consequences, and which should therefore be considered from a moral point of view. It is simply not a viable business strategy to claim that there is no such thing as ethics in business – this is a sure way of avoiding any personal responsibility for what is happening. If your only frame of reference for making choices is to “make a profit”, “maximize shareholder value”, “win this sale” or “meet the legal minimum requirements”, you will almost certainly miss the ethical dimension.

Given the complex socio-cultural milieu in which leaders operate, it is not surprising that they would find themselves, from time-to-time, faced with ethical dilemmas. Ethical dilemmas are decisions “that require a choice among competing sets of principles, often in complex and value laden contexts” (Ehrich, Cranston, & Kimber, 2005, p. 137). These competing choices have been described as pulling leaders in different directions, and have been found to cause leaders great stress and anxiety. Difficulties are said to arise when leaders are faces with choices that are considered “right.” For example, Kidder (1995) states that many ethical dilemmas facing professionals do not concern right versus wrong options but right versus right. In other words, the choices could all be seen as right. Alternatively, when all of the options are deemed “wrong”, it would also potentially cause angst for leaders. How leaders interpret, respond to, and resolve ethical dilemmas is likely to depend on a variety of factors and forces both internal and external to the leader.

Two classification of Ethical DILEMMA
RIGHT VERSUS RIGHT DILEMMA

Ethical issues emerge when two core values come into conflict with each other. When one important value raises powerful moral arguments for one course of action, while another value raises equally powerful arguments for an opposite course, we must make a choice since we can’t do both.

RIGHT VERSUS WRONG DILEMMA

Ethical issues emerge when a core moral value has been violated or ignored. When honesty is an important value to a person, and another person is found to be acting dishonestly, it is generally acknowledged that the action was unethical.

Question to ask help determine appropriate steps to take in an ethical dilemma

Ethics transcends everything we do. Think about it, most, if not all, decisions made by today’s leaders may have an ethical component. Consequently, a leader may choose to be amoral, which means he does not consider the ethical consequences of the component of his decision. An amoral leader functions as though ethics does not exist. A leader may also choose to be immoral and ignore the ethical ramifications of his actions. This leader consciously chooses to engage in the behaviour with complete knowledge that his behaviour is wrong. Finally, a leader may choose to be moral and consider the ethical impact of his decision. Of course, the latter is the desired course of action. Ideally, all decisions should be made taking into consideration the ethical ramifications of one’s actions. Whether a leader is deciding to lay off an employee, or promote an employee, the ethicality of the leader’s action must be considered. Here are seven questions asked as strategies for resolving ethical dilemmas. Is it legal?

When considering the ethicality of an action, the first thing the leader must do is consider whether the action is legal. As previously stated, one of the paramount concerns of a leader must be the long-term survival of the organization. Corporations are legal entities that can be sued and charged with crimes. When a leader engages in behaviour that is illegal, it opens up the organization for civil liability and, possible, criminal prosecution. Such actions can result in large fines and negative publicity, which may result in declining sales and market share and may ultimately lead to bankruptcy of the organization as what occurred with Enron.

Determining whether an action is legal or not is pretty simple. There are people trained to provide assistance in this area. They are called lawyers. In the US, all crimes are codified, so there is no excuse for a leader unknowingly engaging in criminal behaviour. If there is an area of doing, that so called gray area, you should err on the side of caution and not run the risk of violating the law, regardless of the benefits. Although ethical behaviour is not required, legal behaviour is so never straddle the line. Always follow the law, it is your duty to your organization. Does it harm others?

Although complying with the law is required, being ethical is not, it is a desired outcome. Therefore, when faced with an ethical dilemma and based on the ethical principles, one of the first factors that must be taken into consideration is whether the decision will cause harm to others. By incorporating this fundamental principle of ethics, showing concern for the interest of others, you may avoid making an unethical decision. However, it is important to make something perfectly clear, the ethical course of action does not necessarily mean that you will never cause harm. Sometimes, the ethical course of action may result in others being harmed.

For example, eminent domain results in harming the minority for grater societal good. The focus here is to minimize hard to others. The leader should always strive to seek the course of action that minimizes harm, while producing an ethical result. A decision to right size will inevitably harm the person being laid off. However, giving that person sufficient notice, providing them with severance of possible, and providing alternative-job training are all things that can mitigate the harm. The simple fact of showing concern for the interest of others may result in a decision being modified because upon analysis, the leader may discover that the perceived benefit does not outweigh the harm that will ensue. Does it pass the CNN test?

I (author of the book) had a former boss tell me that, “visibility is good, but exposure will kill you.” He was encouraging me to take the jobs that will bring visibility to my strengths and avoid jobs that will expose my weaknesses. There is also an old saying that transparency is the best disinfectant. Well, the same applies when it comes to our actions. When resolving an ethical dilemma, a leader should consider how he would feel if his actions were publicized to the entire world on CNN.

Would you be comfortable with your decision if it was the main topic of discussion on Anderson 360 and you knew you were being subjected to public disclosure and critique? I think (author of the book) if the former CEO and CFO of Enron had considered that their actions were going to be subjected to public disclosure, they probably would have chosen a different course of action. If the former CEO had known that it would have been publicly disclosed that he was dumping shares of Enron stock while encouraging others to buy, he probably would not have made that unethical decision.

Get a second opinion

In the field of healthcare, it is a common practice to seek second and sometimes third opinions. Although your primary physician may be a board-certified expert in his chosen field, seeking a second opinion is a form if validation. It also may provide other options that may not have been on the table. The same applies to resolving ethical dilemmas. A leader would be well served to seek the advice of a trusted advisor, who he feels will give him an unbiased, objective opinion. That person may be an expert in the field, who can point out factors you may not have considered, or it may be someone whom you believe to have a good moral compass.

Let me (author of the book) caution you here that getting a second opinion does not mean that you abdicate your responsibility because ultimately, as the leader, the buck stops with you. It is your decision, and you must bear the responsibility. However, the second opinion may reveal some factors that you may have not considered. In addition, if the person has a good moral compass, their confirmation can be reassuring that you are going down the right road. Does it pass the Ambien test?

Ambien is a prescription sleep aid used for the treatment of insomnia. Insomnia is a sleep disorder characterized by difficulty falling and/or staying asleep. Now I’m sure (author of the book) you never though insomnia to be an ethical condition; however, if your decision agonizes you and causes you to stay awake at night, you have probably not made the right decision. By the same token, if you can lie down and go to sleep after making your decision without the need for Ambien, you may have made the proper decision.

Assuming that you are not a psycho or a sociopath, you should be troubled when you make a decision that is blatantly unethical. The physicians and scientists participating in the Tuskegee study should have been troubled that once penicillin was available, they refused to treat the subjects of the study. They should have had difficulty sleeping at night. They should have need Ambien to fall asleep! Now, assuming that they made the right decision, there should be no agonizing over it, and the need for Ambien for that decision should not exist—test passed! Does it pass the Socrates test?

Socrates us the ancient Greek philosopher who is given credit for setting the agenda for the tradition of critical thinking. I (author of the book) can recall my first year of law school and being exposed to the Socratic method of teaching, which is specifically designed to enhance critical-thinking skills. When faced with an ethical dilemma, a leader must ensure that the resolution is not reached based solely on gut feelings or the subjective desire to do the right thing. Yes, good intentions are important. Doing the right thing is important, but the process of getting to the right result must be based on the reason and objectivity. Does it make God smile?

At the end of the day, the final question the leader should consider is, does the chosen course of action make God or the higher power of your choosing, smile? I (author of the book) use God loosely here, and I’m not advocating any particular religion of faith. For those who may be atheist or agnostic, you may substitute God for your mother or any other figure you revere. I (author of the book) must point out that I’m speaking of an unconditionally living God, who is concerned with only good, not the God depicted in the Old Testament of the Bible, or the God who condones torturing souls in eternal damnation.

The point here is simply to look to a source beyond you that you feel reflects the characteristics of good and of being one’s best self. In legal parlance, we (author of the book) use the term the prudent or reasonable person standard. This is the person who goes through life exercising proper judgment and engaging in the right course of action under the circumstances. It is an objective standard that can be used as a benchmark for how one should act under certain situations. So if God would look at your decision and smile at your actions, you’ve probably done the right thing!

STEPS in an ETHICAL DILEMMA & ETHICAL SOLUTIONS

Step1. WHAT ARE THE OPTIONS
List the full range of alternative courses of action available to you.

Step2. ANALYZE THE CONSEQUENCES
Assume you have a variety of options. Consider the range of both positive and negative consequences connected with each one. (Who will be helped by what you do? Who will be hurt? What kinds of benefits and harms are we talking about?) After looking at all of your options, which of your options produces the best combination of benefits maximization and harm minimization?

STEP3. ANALYZE THE ACTIONS
Concentrate instead strictly on the actions. How do they measure moral principles like honesty, fairness, equality, respecting the dignity of others, respecting peoples’ right, and recognizing vulnerability of individuals weaker or less fortunate than others. Do anything of the actions that you’re considering “cross the line”, in terms of anything from simple decency to an important ethical principle. What you’re looking for is the option whose actions are least problematic.

STEP4. MAKE YOUR DECISION AND ACT WITH COMMITMENT
Take both parts of your analysis into account and make a decision. This strategy should give you at least some basic steps you should follow.

STEP5. EVALUATE THE SYSTEM
Think about the circumstances which led to dilemma with the intention of identifying and removing the conditions that allowed it to arise.

Ethical Solutions

A model for examining and understanding ethical dilemmas

We now turn our attention to a conceptual model of ethical dilemmas we have been using for some time derived initially from the literature, but refined through various iterations from empirical research with leaders across three organizational contexts : schools, universities and the public sector. As can be seen from the figure above, the model considers of five core components. The first component is the critical incident that generates the ethical dilemma for the decision maker. Critical incidents are “issues or situations in [leaders’] work that produce ethical reflection and moral emotions”. The leaders who have participated in our (author of the book) research have identified a variety of critical incidents, including: Dealing with staff under performance or behaviour such as different interpretations of institutional policies;

Observing student actions such as breaking school rules or plagiarizing sources; Being given a directive from a supervisor that conflicts with their personal values and professional ethics or with their notions of wider accountability; Confronting institutional changes that conflicts with the ethos of the organization, such as the managerial imperative to make money versus maintaining standards of academic excellence; and Uncovering the misuse of public money.

A variety of factors (or forces) can highlight the critical incident and influence the choices a desision maker sees open to him or her (second component of the model). These factors are: The public interest or public good—what a community decides is in the best interest of its members as a whole as “expressed through the ballot box, interest groups and ongoing debate and discussion”. It entails ensuring that public officials are accountable to the community for making and administering policies. Any organization that receives public money (money collected through the taxation system) is accountable to the community for the use of that money. Thus, public officials must act in the public interest or for the public good. The political framework—the political ideology, system, and structure of a jurisdiction socializes people and enhances or constrains the decisions and actions they take.

The community or society—the multiple and competing stake holders (individuals and groups) that impact on and react to leaders’ decisions. Professional ethics—the ethical standards and valued held by members of a particular profession that guide their actions and that the community expects of a member of that profession Legal institutions are requires to comply with legislation and judicial rulings. Economic and financial contexts could develop from the impact of the dominant economic paradigm, on the policies and actions of an organization such the impact of preference of r neoliberal economic thinking leads to policies that result in the privatization of public sector goods and services. International or global social, political, cultural, and economic trends impact on institutions. The institutional context and factors beyond the immediate workplace—the operational milieu within which leaders work, which includes policies, procedures, and society.