Ethical Leadership: Ideas and Models

Ethical leadership is “the process of influencing people through principles, values and beliefs that embrace what we have defined as right behaviour” (Buren 2013).

                                                 ACFE (2015)

The work of ethical leaders is one of the most interesting and impressive. In fact, the impact that changes everything around us: our organisations, schools, churches and society as a whole (Johnson 2003). The “weather” in any organisation do few right people – ethical leaders.

The meaning of leadership is primarily “a relationship through which one person influences the behaviour or actions of other people” (Mullins 2013: 369).  Leaders can cause a great harm or a great benefit to those who support them.  A great example of unethical leadership can be a scandal with the President of energy company “Enron” in 2001. The president of the company and the entire leadership were accused of selling of the shares worth millions of dollars before the world got to know about the bankruptcy of the company (Silverstein 2013). Thousands of employees lost not only their work, but also savings because management pressured employees to keep their pension in the shares of the company whose price has fallen from $90 to almost zero (Silverstein 2013). Unethical actions in the organisations will be discovered and the truth will eventually come out. Lesson learnt.

Today´s management promotes ethics in all levels of organisations. Tim Cook in the video below expresses his point of view of the ethical leadership and simply defines it as “leading things better than you found them” (Cook 2013).

Cook (2013)

Ethics is “concerned with the study of morality: practices and activities that are considered to be importantly right or wrong, together with the rules that govern those activities and the values to which those activities relate” (Mullins 2013: 676).  To me, Ethics determine how people act in relation to each other in a variety of conditions.

Through the time, two theories about ethics were developed: deontological and teleological.

Doing Ethics (2007)

There are long-term disputes between the supporters of deontological and teleological. Their disagreements are quite simple: the teleological theorists generally assume that action that brings the best result is considered the best (Donnelly 2013). On the other hand, supporters of the deontological theory argue that people can predetermine the correct action without taking into account consequences (Donnelly 2013).  However applying these approaches in the real world business, I believe that organisation has to look after both: making right decisions with the best outcome and taking into account consequences that action would bring.

What distinguishes an ethical leader from ordinary employee who carriers organizational ethical values?

Answering this question, it should be remembered that one of the objectives of the ethical leader is to create conditions for employees to share common values and culture (Trevino and Nelson 2011: 158-159). A bright example of management of organizational culture is the corporation “General Electric” that operates in energy sector (Trevino and Nelson 2011: 158-159).  This multinational company is one of the most ethical companies in the world (3 BL Media 2013). Values that are ​​given by the president, infiltrated at all levels of the organisation. Chief compliance director Al Rosa (3 BL Media 2013) stated that there is one thing that does not change in GE’s is “culture of integrity”. Al Rosa is convinced that their leaders and employees should behave on the highest level of ethical standards “no matter the country, industry or culture” to make sure that interruption within organisation is “in the same way” (3 BL Media 2013).

To conclude, company’s success lies in the fact that everyone understands organisation’s values: from management to employee. Ethical leader is unique when he is able to bring value to its employees at the cognitive, emotional and behavioral, levels to materialize these values.

References:

ACFE (2015) Ethics and Compliance [online] available from <http://www.acfe.com/ethics-and-compliance.aspx>  [18 May 2015]

Buren, J.A.V. (2013) Ethical Leadership [online] available from <http://www.uvm.edu/extension/community/buildingcapacity/pdfs/ethical_leadership_factsheet.pdf> [18 May 2015]

Cook, C. (2013) Apple CEO Tim Cook on Ethical Leadership [online] available from <https://www.youtube.com/watch?v=3ygNKNaMv4c>  [18 May 2015]

Donnelly, J. (2013) Universal Human Rights in Theory and Practice. 3^rd edn. The United States of America: Cornell University Press, 60-62

Doing Ethics (2007) Ethical Traditions [online] available from <http://doingethics.com/DEE/dee%20ch1/ethical.traditions.htm> [18 May 2015]

Johnson, K. (2003) The role of leadership in organisational integrity and five models of ethical leadership [online] available from <http://www.ethics.org/resource/role-leadership-organizational-integrity-and-five-modes-ethical-leadership> [18 May 2015]

Mullins, L.J. (2013) Management and Organisational Behaviour. 10^th edn. The United Kingdom: Pearson Education Limited, 369, 676

Silverstein, K. (2013) Enron, Ethics and Today’s Corporate Values [online] available from <http://www.forbes.com/sites/kensilverstein/2013/05/14/enron-ethics-and-todays-corporate-values/> [18 May 2015]

Trevino, L. K. and Nelson, K. A. (2011) Managing Business Ethics. 5^th edn. The United States of America: Courier Westford, 158-159

3 BL Media (2013) GE makes world’s most ethical companies list for seven straight years [online] available from <http://3blmedia.com/News/CSR/GE-Makes-World%E2%80%99s-Most-Ethical-Companies-List-Seven-Straight-Years> [18 May 2015]