The 21st century business environment changes have created an opportunity for the rise of ethical leaders as the traditional perception of a leader-as-hero is now being challenged by that of a humble leader who empowers and develops others.
What is ethical behaviour?
Definition: Acting in ways consistent with what society and individuals typically think are good values. Ethical behaviour involves demonstrating respect for key moral principles that include honesty, fairness, equality, dignity, diversity and individual rights.
Environmental changes and leadership
The 2008 financial crisis has taught us that the confidence in organisations, once shattered, can’t be quickly restored. As such, the public has become more scrutinising of corporations’ – especially of their leaders – moral conduct and values.
A 2015 survey conducted by the Institute of Leadership and Management, supports this theory as over 70% of managers interviewed strongly agreed that society has grown higher expectations of corporate ethical behaviour than prior 2008.
After decades of screening potential leaders for charm and charisma, some employers are realizing they’ve been missing some of the most important traits of all: ethical values.
From organisational perspective, the realm of business is changing rapidly as a result of recent emergent trends such as: globalization, deregulation, E-commerce, social media, and virtual teams. Concurrently, these changes have raised new challenges for leadership to be effective in the twenty-first century.
Therefore, it requires leaders to evolve to a new-paradigm mindset which allows them to be more flexible and adaptive in facing environmental changes. The new realities are outlined in the table below.
‘It is fatal to pretend. I prefer to do anything on the quiet rather than boast about it.’—Indira Gandhi
In conclusion, with globalisation and emergence of economies of scale, a company’s role in society has extended and it impacts on many individuals both inside and outside the company. Therefore, it has created an increasing pressure for corporations to operate with a greater regard for moral and ethical concerns. The lessons learned from past scandals and organisational crises that trace back to the early 2000s make one thing clear: without an ethical culture, organisations will be at a great risk.
Business Dictionary. [Online] Available from <http://www.businessdictionary.com/definition/ethical-behavior.html>
Daft and Pirola Merlo (2015). The New Reality for Leadership
Institute of Leadership and Management (2015). [Online] Available from <https://www.i-l-m.com>
Schellenbarger (2018). The Best Bosses are Humble Bosses. [Online] Available from <https://www.wsj.com/articles/the-best-bosses-are-humble-bosses-1539092123>