In this blog I would like to discuss about “Ethical Leadership”. How people perceive someone’s actions as ethical. As regards to an organisation, this would be – how would a leader or CEO of the company be seemed as an ethical leader in leading the company?
Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objective (Mary Kay Copeland , 2015).
Meanwhile, ethical leadership is related to increased employee motivation and more positive work attitudes; and an ethical leader is a leader who is able to act fairly and justly. They are perceived as caring, truthful and principled persons who make objective decisions and who communicate the importance of ethics and ethical behaviour to their followers (Lisa C. Ehrich , Jessica Harris , Val Klenowski , Judy Smeed , Nerida Spina , 2015)
Nevertheless, Mullins and Christy (2016) stated that there is no single view in general ethics of what makes something right or wrong. Regarding to this, two principles would be used as a fundamental or basic belief in coming to a decision of whether a leader is ethical or unethical.
2 Principles of Ethical Leadership
The first principle is Deontological or known as rules, which refers to the evidence of actions that taken by someone, not to the consequences of their actions (Ethical Leadership In Business, 2017). The Deontological point of view carries that goodness or badness is evident only in the action itself (Mullins, L. and Christy, G, 2016).
For example, under the Code of Conduct of PepsiCo was listed that, all employees and Board of Directors of the company required to obey all laws in promoting the company’s position relative to government authorities and in making political contributions. The company would be deemed as ethical if the members of the company following the listed regulations regarding to politic. In other words, so as long as the company is following certain rules, they would be viewed as ethical. Breaking rules would be considered as unethical. Similarly with the figure illustrated above, it said that the person who kills the evil would be considered as unethical because of the murdering action without bothering the consequences.
The second principle is Teleological or consequentialist, this principle relates to the consequences or the end result of an action. The more good result an act produces, the better or more right that act. A consequentialist view of ethics accommodates that the goodness or badness of a proposed action is evident only in the consequences of that action (Mullins, L. and Christy, G, 2016).
For example, the CEO of Enron Corporation, American energy, commodities, and service company was found out that the CEO of the company was hiding the financial losses of the trading business and other operations where this company was considered as unethical because the corporation does not disclose the true information to public and contributes many disadvantages (consequence) to other parties, especially to the stakeholder of the company.
Model of Leadership
In addition, the fundamental of these principles based on someone’s value (one of the model of leadership). Other than value, there are another three model of leadership, which are voice, vision, and virtue (Centre for Ethical Leadership, 2017). However, in this blog only 1 model that would be focused on. Values is about someone’s ideas as to what is right, good or desirable and influence behaviour, perception and motivation (Ethical Leadership In Business, 2017). That values are form through various factors, such as from the environment where they live, area of study or education that they are studying, level of education they have, and so forth. From the value that someone has, it would then determine the way they behave and how responsible they are with their actions.
Concerning to value, the CEO of PepsiCo, Indra Nooyi said that
“ as a leader, ethics are so important; because you can be courage, communicate beautifully and have competence, but if you are unethical, no body would follow you”
From discussion above, can be could be concluded that the way people perceive of someone’s behaviour would significantly depend on someone’s value or believes that they have, where people might make an assumption of “ethical” either based on Deontological or Teleological point of view.
I personally agree that it is crucial for a leader to be ethical in leading the company. Since, no matter how successful an organisation, if they are not ethical they might put the continuity of their business in danger.
Center for Ethical Leadership. (2017). Concepts and Philosophies. [online] Available at: http://www.ethicalleadership.org/concepts-and-philosophies.html [Accessed 4 Feb. 2017].
Investopedia. (2016). Enron Scandal: The Fall of a Wall Street Darling. [online] Available at: http://www.investopedia.com/updates/enron-scandal-summary/ [Accessed 4 Feb. 2017].
Mary Kay Copeland , (2015), The Importance of Ethics and Ethical Leadership in the Accounting Profession, in Cynthia Jeffrey (ed.) Research on Professional Responsibility and Ethics in Accounting (Research on Professional Responsibility and Ethics in Accounting, Volume 19) Emerald Group Publishing Limited, pp.61 – 98
Michel Dion, (2012) “Are ethical theories relevant for ethical leadership?”, Leadership & Organization Development Journal, Vol. 33 Iss: 1, pp.4 – 24
Mullins, L. and Christy, G. (2016). Management & Organisational Behaviour. 11th ed. New York: Pearson, pp.523-524.
OnlineMBA (2017). 10 Most Ethical CEOs of 2016 | OnlineMBA.com. [online] OnlineMBA.com. Available at: http://www.onlinemba.com/blog/blog10-most-ethical-ceos-in-corporate-america/ [Accessed 18 Feb. 2017].