Blog 1: Leadership and Ethics

Figure 1 (Google Source)

The facet of Ethics and Leadership

Ethical leadership is defined as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement and decision-making”(Rubin et al 2010: 216-17). Based on this statement, to really understand Ethical leadership, we must first expand on what is ethics and leadership individually.

Ethics from a general viewpoint is the concept of practicing a universal code of conduct that benefits all people and the environment that they are in. Leadership on the other hand is having the ability to influence people on meeting with objectives and vision of the leader, two entities working hand in hand to achieve a common goal.

In regards to organizational practices, ethical leadership comes into significance. It is not just about knowing the surface of acting upon what is morally good and bad as a leader, its also taking into account personal actions and decision-making compromising values and principles that benefits both the organization and the employees in a ethical manner. But to what extend can ethical practices be justifiable as ethical or unethical. Two companies will be illustrated in this blog to demonstrate ethical and unethical practices and the impact that has brought to the environment.

Figure 2: Cadburry Scweppes (Google Source)

Cadburry Scweppes on Ethical Responisbilities

Cadburry Schweppes was voted as one of the ‘most admired companies for the community and environmental responsibility’ by Management today magazine in 2013 (Cadbury Schweppes Corporate and Social Responsibility Report, 2002). Example of their ethical practice is supporting cocoa farming communities in Ghana through programs on sustainable tree crop management and building wells for drinking water. Furthermore establishing the international cocoa initiative that’s aimed to support field projects in West Africa and will act as a clearinghouse for best practices to ensure that cocoa is grown responsibly (Cadbury Schweppes Corporate and Social Responsibility Report, 2002). In return of their practice, not only they help build communities but also they simultaneously increase the quality of their product through sustainable crops of quality beans.

Figure 3: Enron (Google Source)

The Dark Side of Enron

An example of unethical practices is Enron, which is an energy, commodities and service company that used Arthur Andersen, an accounting company to conduct fraudulent loopholes to increase their revenue through employee pensions and money laundering (Bien and Carsten 2007, p 187). The effect of this unethical practice has left a dent in terms of employees lost pension and damaged relationships, finally the company was announced bankrupt on 2001. This was due to leaders, bankers and advisors that aided the company that focused more on satisfying stakeholder by reaping profits unethically which finally led their doom.

Figure 4: Immanuel Kant (Google Source)

Deontological and Teleological Ethics

Using the two frameworks of Deontological ethics and Teleological ethics, we can identify how ethical leadership can wear a dual mask in providing different impacts to organizations and stakeholders. Deontological ethics, which was formulated by Immanuel Kant, is an ethical decision-making based on duty or rules. Teleological frameworks, also known, as “Consequentialist” are ethics based on the outcome of a result rather than duty based. Hoover and Pepper (2014, p 608) states that Utilitarianism, a form of teleological ethics is mainly used by corporate managers to conduct decision making ethics corresponds to the maximization of economic value, such as cost –benefit analysis and profitability.

4V model Framework

The 4V model framework is another ethical leadership framework that expands on moral development, human development, leadership development and community development. Best practiced on an individualistic manner, this framework consists of values, vision, voice and virtue. Value carries an individual’s ideas, principle and direction that are able to influence behavior and perception. Vision is the ability of a leader to frame and commute their actions in the service to others. Voice is the process of articulating the vision with explicit clarity to motivate other people. Virtue are personal principles that differentiate one person to another, it is the collective output of their practices in daily lives.

Figure 4 (Google Source)

Two-Way Communication in Organisation Structure

These frameworks are foundational pillars that propel future leaders to embed a tone of trustworthiness, respect and responsibility to organization leadership. However in current times, ethical leadership is also bounded with on going issue of hierarchy structures and authority. Due to this phenomenon, there are misconceptions between making right decisions and doing the right thing. Current scholars and business executives are continuously conceptualizing on implementing ethical leadership practices that requires both the higher ups and subordinates to problem solve together and come up with solutions that benefits the organization without hierarchy structure (Bien and Carsten, 2007, p189).

For future recommendation, it is suggested that future leaders imprint Upward Ethical Leadership in their policies and code of conduct. (Bien and Carsten, 2017) explains that upward ethical leadership will encourage two-way communication rather than just one way. Which can be quite beneficial due to the reason that two parties are working together providing different avenue and perspective of ethical decision-making. This approach also known as shared leadership.

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References

1. Bien, M.U., Carsten, M.K., (2007) ‘ Being Ethical When the Boss is not’. Organizational Dynamics 36 (2), 187-201
2. Hoover, K.F., Pepper, M.B., (2014) ‘How did they say that? Ethics statements and normative frameworks at best companies to work for’.
3. Rubin, R, Dierdorff, E, & Brown, M (2010), ‘Do Ethical Leaders Get Ahead? Exploring Ethical Leadership and Promotability’, Business Ethics Quarterly, 20, 2, pp. 215-236.
4. Business case studies (2002) Ethical Business Practices: A Cadburry Schweppes Case Study [online] available from < http://businesscasestudies.co.uk/cadbury-schweppes/ethical-business-practices/the-importance-of-ethics-in-business.html&gt; [27 September 2017]