The topic Ethical Leadership is more complex than meets the eye. It means leadership that knows what is right and acting based on those guidelines. The question that should be asked then is “what is right?” Once the ethical course of action is determined the leader must then have the integrity and fortitude to proceed with that course of action. In addition to decision making ethical leadership also implies that a leader must be ethical in their attitudes and interactions. This essay seeks to inform about the practice of ethical leadership and its value to an organization
The Practice of Ethical Leadership
In order to understand the practice of Ethical Leadership it must be broken down to its constituent terms; Leadership and Ethics. Leadership is defined as a process of social influence in which a person can enlist the aid and support of others to accomplish a common task (Chemers, 1997). Ethical leadership is when the leader demonstrates integrity and trustworthiness to convince employees to buy his vision (Dirks & Ferrin, 2002). In order to demonstrate his integrity and trustworthiness the ethical leader is a people-oriented person (Resick, et. al, 2006) who motivates people towards accomplishing the goals of the group instead of personal benefit. Ethical leader must look within himself and upon reliable sources for guidance in determining what is ethical. Laws, Culture, Religion, and even personal upbringing can be sources of the framework for ethical leadership. The reason why the sources are so varied is because the ‘right’ in doing what is right is not always fixed in stone. While some ethics are immutable, such as lying to a business partner or stealing company materials, other are less so.
For example, dissent or talking back to superiors is strictly taboo in Oriental cultures but it calm disagreement is tolerated in western organizations. In order to have a clear set of ethical guidelines it is often preferable to have well-known company ethical standards. These standards can often be gleaned from a company’s mission vision statement. But it would be best practice if they were clearly spelled out and publicly available. Means of publication can include printing with the company handbook and / or placing copies of company ethics in frequented areas such as the pantry or reception.
By making the ethical standards clear and ubiquitous it will be difficult for leaders to derogate from them without consequences. The practice of ethical leadership requires that the leader adheres to the ethical standards of the company at all times even when no one is looking. If the leader is unable to follow ethical practices and his subordinates learn of this he will be viewed as a hypocrite and his attempts to impose ethical leadership will fall on deaf ears. A leader’s integrity must be beyond reproach if he is to expect his subordinates to follow his example.
Value of Ethical Leadership to an Organization
Recent events like the Enron scandal, the Sub-prime mortgage crisis, and the financial meltdown that followed are just a few examples of what happens in the absence of ethical leadership. In those circumstances the desire for profits overpowered ethical considerations. Of particular noteworthiness was that during the sub-prime crisis people who were likely not responsible enough to make housing loans were pressured to contract such loans by predatory leaders who were merely trying to meet their quota. Then the Collateralized Debt Obligations (CDOs) were sold to a public that was not sophisticated enough to understand what the CDOs really were. Enron was scandalized beyond repair. The largest banks in America continue to bear the stigma of the subprime crisis. Their brands have been permanently afflicted.
Had their leadership been ethical then they would not have consented to such actions. A reputation for integrity and ethical leadership can only build up an organization’s brand. Known ethical acts can also increase the popularity of a brand in the eyes of the public such as when Costco pays its workers better than minimum wages. On a more down to earth level an ethical leader is respected by his subordinates and will be better able to coax performance from them. Subordinates are less likely to do unethical acts if their leaders are ethical. Hence, even just one ethical leader in the chain of command can have a ripple effect upon his fellow workers.
In conclusion ethical leadership is difficult because knowing the right and ethical course of action is difficult. Worse, the temptation to take the expedient or easy path that is unethical can be very strong. The lucrative and unethical is always an attractive choice for anyone engaged in business. But an ethical leader can have a multiplier effect upon his organization and help build its reputation to those around it.
Chemers M. (1997) An integrative theory of leadership.
Dirks, K. T., & Ferrin, D. L. (2002). Trust in leadership: Meta-analytic findings and implications for research and practice. In Journal of Applied Psychology, 87, 611- 628. Resick, C. J., Hanges, P. J., Dickson, M. W., & Mitchelson, J. K. (2006). A cross-cultural examination of the endorsement of ethical leadership in Journal of Business Ethics, 63, 345-359.