Leadership and Ethics

Many academicians describe leadership as revolving around vision, ideas and has more to do with inspiring people as to direction and goals than with day-to-day implementation (Bennis 2007:132).  In order to define ethical leadership one must examine the root concepts of the two main schools of ethics: deontological ethics and consequentialist ethics. 

  • Deontological ethics places special emphasis on the relationship between duty and morality of people’s actions and not the consequences of their actions. Philosopher Kant explained the concept as follows: “it is unethical to tell a lie in order to save a friend from murder” (Introduction to ethics 2014). According to Zidaric (2015), business leaders such as Henry Ford (Ford Motors) and Jack Ma (Alibaba) have enforced deontological principles in their corporate culture. By treating every individual they inspired their employees to follow them in acting morally right.
  • In contrast, consequentialist ethics focuses on the consequences of an action. Firstly, whether an act is right or wrong depends on the results of that act and secondly, the better the consequence an act produces, the better that act (Vilcox and Mohan 2008). The main advantage of this theory is its flexibility as it can account for any circumstance, however rare or extraordinary. On the other hand, consequentialist ethics are impractical in the real life as “the goodness” of consequences is difficult to measure and it’s easy for leaders be biased. Milton Friedman, a consequentialist leader, said that businesses should focus more on increasing profits rather than acting in a socially responsible way.

Among the most popular ethical leadership models, the 4-V model, developed by Dr. Bill Grace, has been widely implemented mainly due to its simplicity.

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4V Model of Ethical Leadership

The model is based on the four main pillars of ethical leadership: value, vision voice and virtue. Value is at the top of the triangle as committing to core values is the starting point for ethical leaders. Leaders also need to be visionary and anticipate how their actions will benefit all members of society in the future. Next, ethical leaders should voice out their values to influence and motivate the public in acting towards a common goal. Virtue symbolises ethical integrity and doing what is right for the common good. Virtuous behaviour (ethical behaviour) is at the centre of the model acting as a glue that binds all the V’s together (Ghurman and Aswathappa 2010). 

ETHICAL LEADERSHIP DILEMMA

Ethical Leaders are defined as honest, trustworthy, caring and principled persons who are proactive models for ethical conduct and practice what they preach (Brown and Trevino 2006:505). Ethisphere has named three main principles to help identify ethical businesses. These are: enforcement of ethical corporate standards internally, enabling managers and workers to make better decisions and contribution to shaping industry standards.

Example 1: Ethical Leadership at Accenture

Accenture, listed for nine consecutive years as one of the most ethical companies by Ethisphere, exemplifies how a company built on a solid ethical foundation can raise the bar for ethical standards in the industry. Accenture makes the growth of people and communities its main focus by implementing business practices that benefit the community. “We believe that companies should have a deep commitment to ethics from the top as well as sustained dedication to high standards from employees at every level” explained Chad Fentress (2010) of Accenture.

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Video link: Adrian Latja explains the three dimensions of ethical leadership at Accenture: value creation, business operation and people development https://www.youtube.com/watch?v=Qp6gIuWxP18

Contrary to ethical governance, unethical leadership is practiced by manipulative and self-absorbing leaders, who are insensitive to employees’ needs, use power in their self-interest, and have little regard for community development (De Hoogh and De Hartag 2008).

Example 2: Unethical Leadership at Toshiba
In 2015 Toshiba’s CEO and half of Toshiba’s Board resigned after an independent investigating team had uncovered that the management overstated earnings by “pressuring employees into creative accounting tactics such as postponing loss reports or moving certain costs into later years”. Toshiba’s corporate culture de-emphasized business ethics, reducing all decisions to the purely economic and it discouraged employees to challenge the management decisions. (Mochizuki 2015). Toshiba accounting scandal proves that unethical leadership based on greed and deception is unsustainable in the long term.

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Toshiba CEO resigned as a result of Accounting Scandal (WSJ 2015)

CONCLUSION

To ensure that ethical issues are deliberated, leaders should learn from the past accounting scandals and craft an ethical culture based on their own virtues, promoting good ethics to all levels within an organization, appoint ethics officers and be morally courageous and motivate others to do the same (Dowling et al. 2009:153). However not all ethical dilemmas have a clear solution and in those cases it will reflect on the leader’s ability to make hard decisions for the best interest of the company.


REFERENCES:

  1. Accenture News Room (2010) [online] available from <https://newsroom.accenture.com/subjects/awards-rankings/accenture-named-one-worlds-most-ethical-companies-for-third-consecutive-year.htm> [18 September 2016]
  2. Bennis, W. (2007) On Becoming a Leader: Twentieth Anniversary Edition. Philadelphia: Warren Bennis Inc.
  3. Brown M. E. and Trevino L. K. (2006) ‘Ethical leadership: A review and future directions’. The Leadership Quarterly, 595-616
  4. Brown M. E., Trevino L. K. and Harrison D.A (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97, 117−134.
  5. De Hoogh and De Hartag (2008) ‘Ethical and despotic leadership, relationships with leader’s social responsibility, top management team effectiveness and subordinates’ optimism: A multi-method study’. The Leadership Quarterly, 297-307
  6.  Dowling P.J., Liesch P., Gray S.J. and Hill C.W.L. (2009) International Business. Asia Pacific Edition. Australia: McGraw Hill
  7.  Friedman M. (1970) ‘The Social Responsibility of Business is to Increase its Profits’ New York Times Magazine [online] available from <http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html > [18 September 2016]
  8. Ghurman K. and Ashwathappa K. (2010) Management: Concepts, Practice and Cases. New Delhi: Tata McGraw Hill
  9. Introduction to Ethics (2014) [online] available from <http://www.bbc.co.uk/ethics/introduction/> [18 September 2016]
  10.  Kar S. (2014) ‘Ethical standards in business raised questions about role of leadership’. IOSR Journal of Business Management, 112-116 [online] available from <http://iosrjournals.org/iosr-jbm/papers/ICIMS/Volume-1/14.pdf>
  11. Mochizuki M. (2015) ‘Toshiba CEO Resigns After Accounting Scandal’ The Wall Street Journal [Online] available from <http://www.wsj.com/articles/toshiba-ceo-felled-by-accounting-scandal-143748537> [16 September 2016]
  12. Vilcox M. W. and Mohan T. O. (2008) Contemporary issues in Business and Ethics. USA: Nova Scence Pub Inc.
  13. Zidaric Z. (2015) ‘Deontological or Consequentialist Leadership’ [online] available from<https://www.linkedin.com/pulse/deontic-consequentialist-leadership-zeljko-zed-zidaric> [16 September 2016].

Published by Alle Ceambur

Digital marketing expert and copywriter. I have over 6 years of experience in business consulting. Passionate to help startups grow online.

11 thoughts on “Leadership and Ethics

  1. When I was reading through your blog, you included the explanation of deontological ethics and but there isn’t any explanation on teleological ethics. I believe you need to add that in as part of the comparison between two types of principle theories namely deontological ethics and teleological ethics.
    Also there is a slight error in your blog’s video media. Please look into it as I’m interested to know the three dimensions of ethical leadership at Accenture

    But overall the blog is a great effort and I fully understand what you’re trying to explain from your blog. Thank you.

    Like

    1. Ivan, It’s nice to hear your comments. I believe that you were confused by the word “consequentialist” ethics which i used as a synonym in describing teleological ethics. Sorry for the technical glitch, I’ve re-uploaded the video for your easy reference.
      Thank you.

      Like

  2. Hi Alex, overall your blog is clear and it is well written with great layout. However, I’m quite uncertain about the examples given on ethical leadership at Accenture, can you provide a brief and clear explanation such as pictures or video as the video could not be view from the blog post. Anyhow, the blog was well written! Good work and good luck 😀

    Like

    1. Of course Emelia, I’ve chosen Accenture as an example of Ethical company as in fact they are the only advisory/accounting firm listed as “Ethical”by Ethisphere.com. What sets them apart, it their well crafted ‘Code of Business Ethics’ which revolves around 6 core values — Client Value Creation, One Global Network, Respect for the Individual, Best People, Integrity and Stewardship. For instance, respect for the Individual means valuing diversity and unique characters, building a trusting, open and inclusive work environment and treating each person in a manner that reflects Accenture’s values. Engagement and inclusion of LGBT employees is an example of the reflection of Accenture core values.

      Liked by 1 person

  3. A very well written and concise blog with colourful visuals. A different approach in your comparison between the both of principles deontological and consequentialists (teleological).Interesting way of defining unethical leadership but perhaps you could elaborate further to give readers a wider understanding of unethical behaviour. I can tell you have put in much effort in your work. Well done and keep it up.!!!

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  4. Well covered blog for leadership and ethics. As for deontology and consequentialist ethics, do you think that it is necessary that these two ethics co-exist in an business environment?

    Like

  5. The word morally courage has capture my attention in a good way and I cannot agree more to it. However your last sentence in conclusion brings me to wonder whether deontology and consequentialist can or have to co-exist in ethical dilemmas. What is your thought on that?

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    1. Thank you for raising this question up. As I mentioned above, consequentialist ethics have short-term advantages while deontological ethics provide a more sustainable value for the long term. Based on this argument, I believe that it’s very good if these two ethics can co-exist in the work environment.

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    1. Thank you for your question Adil. Although deontological and teleological approaches are contradictory theoretical concepts, in reality the balance between these two concepts could be achieved if a leader applies the 4V model. For instance, Elon Musk’s leadership style is based on morally right behaviour and ethical values which he is using in the purpose of serving the common good, in this case to provide affordable eco-friendly cars for customers.

      Like

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