TOPIC 9

Ethics & Values in

Leadership

INTRODUCTORY COMMENT
Leaders can use power (as we discussed in topic)
for good or ill, and the leaders personal values
may be one of the most important determinants of
how power is exercised or constrained.
The mere possession of power, of any kind, leads
inevitably to ethical questions about how that
power should and should not be used.

INTRODUCTORY COMMENT (CONT)

The challenge of leadership becomes complex

when we consider how individuals of different
backgrounds, cultures, and nationalities may
hold quite different values yet be thrown into
increasingly closer interaction.

LEADERSHIP AND DOING THE RIGHT

THINGS (BENNIS)
Leaders

face dilemmas that require

choices between competing sets of
values and priorities (i.e.,satisfying
multiple stakeholders).
Leaders set a moral example to
others that becomes the model for
an entire group or organization, for
good or bad.

LEADERSHIP AND DOING THE RIGHT

THINGS
Leaders

should internalize a strong

set of ethics, principles of right
conduct, or a system of moral
values.
Good leaders tend to align the
values of their followers with those
of the organization or movement.

ETHICS AND STAKEHOLDERS

Stakeholders: people or groups that

have an interest in the organization.

Stakeholders include employees, customers,

shareholders, suppliers and others.
Stakeholders often want different outcomes
and leaders must work to satisfy as many as
possible.

Ethics: a set of beliefs about right and

wrong.

Ethics guide people in dealings with

stakeholders and others, to determine
appropriate actions.
Leaders often must choose between the
conflicting interest of stakeholders.

ETHICS

Ethics

Rules and principles that define right and wrong conduct

Ethics are principles of right conduct or a system of

moral values

ETHICS
It is difficult to know when a decision is
ethical. Here is a good test:
Leader Ethics: If a leader makes a decision
falling within usual standards, is willing to
personally communicate the decision to
stakeholders, believes friends would
approve ,believes it would be okay if it was
a lead story in tomorrows news----- then it
is likely an ethical decision.

ETHICAL LEADERSHIP

General Conceptions of Ethical Leadership

Diverse Perspectives on Ethical Leadership

Burns
Heifetz
Greenleaf

ETHICAL LEADERSHIP

Personal Integrity and Ethical Leadership

Dilemmas in Evaluating Ethical Leadership

Influencing Expectations
Influencing Values and Beliefs
Multiple Stakeholders

ETHICAL ORIGINS

Societal Ethics: standards that members of

society use when dealing with each other.

ETHICAL ORIGINS

Professional Ethics: values and standards

used by groups of managers in the workplace.

Individual Ethics: values of an individual

resulting from their family & upbringing.

WHAT DETERMINES ETHICAL

BEHAVIOR?
According

to research, the single most

important factor in fostering corporate
behavior of a high ethical standard is the
actions of the leader(s).
Unethical business practice is most often
the result of several employees (possibly at
varying levels in the organization) tacitly (if
not explicitly) cooperating with others.

LEADER BEHAVIOR

Actual leader behavior can be described (in the

broadest of terms ) as fitting into 3 ethical types:

Immoral

Amoral

Moral

WHY BEHAVE ETHICALLY?

Leaders should behave ethically to avoid

harming others.

Unethical leaders run the risk for loss of

reputation.

Unethical behavior might be exposed.

WHISTLEBLOWER
A whistleblower is an employee who reports real or
perceived wrongdoing under the control of his or
her employer to those who may be able to take
appropriate action.

ETHICAL DECISIONS
A

key ethical issue is how to disperse

harm and benefits among stakeholders.

If a firm is very profitable for two years, who

should receive the profits? Employees,
managers and stockholders all want a share.
Should we keep the cash for future slowdowns?

What

is the ethical decision?

ETHICAL DECISIONS

Should you withhold payment to suppliers as

long as possible to benefit your firm?

Should you pay maximum or minimum levels

of severance pay to laid off workers?

Should you buy goods from overseas firms

that hire children?

WHAT ARE VALUES?

Values are constructs representing
generalized behaviors or states of
affairs that are considered by the
individual to be important.---(simply
said, representations of our behavior
based on what we see as important).
Values play a fairly central role in ones
overall psychological makeup and
can affect behavior in a variety of
situations.

WHAT ARE VALUES?

Individuals

in the same work unit

can have considerably different
values.
We can only make inferences
about peoples values based on
their behavior.
How do values develop?

THE RELATIVE IMPORTANCE PEOPLE PLACE ON

VALUES (ROKEACH)

Terminal Values

Instrumental Values

An exciting life

Being courageous

A sense of accomplishment

Being helpful

Family security

Being honest

Inner harmony

Being imaginative

Social recognition

Being logical

Friendship

Being responsible

SOME INFLUENCES ON THE DEVELOPMENT

OF PERSONAL VALUES
Family
Religion

Peers

Personal
Value
System

Technology

Education

Media

FOUR GENERATIONS OF WORKERS

The pervasive influence of broad forces tend to create

common value systems among people growing up at
a particular time that distinguish them from people
who grow up at different times.
Each generation is molded by distinctive experiences
during their critical developmental periods:
The Veterans (pre 1943)
The Baby Boomers (1946-1964)
The Xers (1965-1980s)
The Nexters (1980+)

GENERATIONAL VALUES
The

results of a scientific sampling of

over 1,000 people living in the U.S.
found little evidence of a generation
gap in basic values.
Values are the result of education
and experience.
Once established, it is relatively
difficult to change a leaders values.

HOW VALUES IMPACT LEADERSHIP

Values are a primary determinant in what data are
reviewed by leaders and how they define
problems.
Values often influence leaders perceptions of
individual and organizational successes as well as
the manner in which these successes are
achieved.
Values help leaders choose right from wrong, and
between ethical and unethical behavior.

HOW VALUES IMPACT LEADERSHIP

Leaders

tend to like followers with similar

values and dislike those with dissimilar
values.
It is important for leaders to surround
themselves with followers who possess
divergent values.
Leaders are motivated to act in ways
consistent with their values, and they typically
spend most of their time engaged in activities
that are consistent with their values.

KOHLBERG
6 Stages of Moral Development
Organized into 3 Higher Order Levels:

Pre-conventional: values based on self-interest

Conventional: values based on gaining approval of
others
Post-conventional: values based on universal, abstract
principles

DEVELOPMENTAL LEVELS OF MORAL

REASONING
Preconventional

- the level in which a

persons criteria for moral behavior are based
primarily on self-interest
Conventional - the level the criteria for moral
behavior are based primarily on gaining
others approval
Postconventional - the level in which the
criteria are based on universal, abstract
principles that may even transcend the laws of
a particular society

STAGES OF MORAL REASONING

Preconventional Level

Stage 1: Bad behavior is that which is punished.

Stage 2: Good behavior is that which is concretely rewarded.

Conventional Level

Stage 3: Good behavior is that which is approved by others;

bad behavior is that which is disapproved by others.

STAGES OF MORAL REASONING CONTINUED

Conventional

Level

Stage 4: Good behavior conforms to standards set by

social institutions; transgressions lead to feelings of guilt or
dishonor.

Postconventional

Stage 5: Good behavior conforms to community standards

set through democratic participation; concern with
maintaining self-respect and the respect of equals
Stage 6: Good behavior is a matter of individual
conscience based on responsibly chosen commitments to
ethical principles.

LEADERSHIP AND ORG. VALUES

Organizational values represent the principles
by which employees are to get work done and treat
other employees, customers, and vendors.
The top leaderships collective values play a
significant role in determining organizational
values and culture.
Research has shown that employees with values
similar to the org are more satisfied and likely to
stay; those with dissimilar values are likely to
leave.

LEADERSHIP AND ORG.VALUES

It is vital for a leader to set a

personal example of valuesbased leadership to make sure
that clear values guide
everyones behavior in the
organization.
Its important that
people know what you
stand for. Its equally
important that they
know what you wont
stand for.
~Mary
Waldrop

LEADERSHIP AND ORG.VALUES

If there is indifference or
hypocrisy toward values at the
highest levels, then it is fairly
unlikely that principled
behavior will be considered
important by others throughout
the organization.

PRINCIPLE-CENTERED
LEADERSHIP
( COVEY )
The

principle-centered approach
postulates a fundamental
interdependence between the unique
roles of each level:

Personal
Interpersonal
Managerial
Organizational

EMPIRICAL STUDIES ON VALUES AND THE

ETHICAL DIMENSIONS OF LEADERSHIP.

People with strong value systems tend to behave

more ethically, unless situations are highly
competitive and unsupervised or there is no formal
ethics policy governing behavior. Leaders with a
strong sense of values and moral reasoning will be
more effective.

PERCEPTIONS OF UNETHICAL BUSINESS

PRACTICES
Percent of people expressing belief business would...

62%
48%

Harm the
environment

44%

38%

37%

Endanger
public health

Sell unsafe
products

42%

Knowingly sell Deliberately Risk employee

inferior
charge inflated
health and
products
prices
safety

HOW GOOD PEOPLE JUSTIFY DOING BAD

THINGS
Moral justification
Euphemistic labeling
Advantageous comparison
Displacement of responsibility

HOW GOOD PEOPLE JUSTIFY DOING

BAD THINGS, CONTINUED
Diffusion of responsibility
Disregard or distortion of consequences
Dehumanization
Attribution of blame

IMPLICATIONS FOR LEADERSHIP

PRACTITIONERS
Leadership

practitioners should
expect to face a variety of
challenges to their own system of
ethics, values, or attitudes during
their careers.
Interacting with individuals and
groups holding divergent and
conflicting values is inevitable.

IMPLICATIONS FOR LEADERSHIP

PRACTITIONERS
Leaders

in particular have a
responsibility not to let their own
personal values interfere with
professional leader-subordinate
relationships.

QUESTIONS FOR THOUGHT

What ethical principles do I value most? How well

have I done in upholding them? What can I do to
improve?

What ethics are explicitly valued in my

organization? How can I be more effective in
reinforcing them?

QUESTIONS FOR THOUGHT (CONT.)

Have

I experienced a situation at work when

I knew the right action to take but felt I
should or could not take it because it would
not be accepted or valued?

When

I come to work each day, do I feel I

have to put aside ethics or values that are
important to me in order to get along and be
successful? If so, what are these ethics or
values, and what makes you think you have
to put them aside?

QUESTIONS FOR THOUGHT (CONT.)

How can I better support ethical behavior among

my colleagues, team members, and others in my
organization? Are there significant differences
between my own ethics and those of my
colleagues?