Corporate Ethics Leadership 1

Leadership Leaders People who can influence the behaviors of others without having to rely on force People who are accepted as leaders by others What leaders actually do Using non-coercive influence to shape the group’s or organization’s goals Motivating others’ behavior toward goals Helping to define organizational culture 2

Individual Values + Organizational Values = Managerial Values Ethics in Organizations 3

4 Ethical Leadership Business ethics is not always simple or necessarily “Black and White.”

What is ethical leadership? Ethical leadership involves both acting and leading ethically over time all the time.

Why practice ethical leadership? Ethical leadership models ethical behavior to the organization and the community. Ethical leadership builds trust. Ethical leadership brings credibility and respect, both for you and for the organization. Ethical leadership can lead to collaboration. Ethical leadership creates a good climate within the organization. If you have opposition, or are strongly supporting a position, ethical leadership allows you to occupy the moral high ground. Ethical leadership is simply the right way to go. Ethical leadership affords self-respect.

When and by whom should ethical leadership be practiced? Ethical leadership should be practiced all the time by anyone in a formal or informal leadership position.

How do you practice ethical leadership? General guidelines: Ethical leadership requires a clear and coherent ethical framework on which the leader can draw in making decisions and taking action. Your ethical framework should agree with the ethical framework, vision, and mission of the organization or initiative. Ethics should be a topic of discussion. Ethics should be out in the open. Ethical thought must be connected to action. Ethical leadership is a shared process.

Specific components of ethical leadership: Put the good of the organization and the general good before your own interests and ego. Encourage the discussion of ethics in general and of the ethical choices involved in specific situations and decisions as an ongoing feature of the organizational culture. Institutionalize ways for people to question your authority. Don’t take yourself too seriously. Consider the consequences to others of your decisions, and look for ways to minimize harm. Treat everyone with fairness, honesty, and respect all the time. Treat other organizations in the same way you treat other people – with fairness, honesty, and respect.

Specific components of ethical leadership (cont.): Collaborate inside and outside the organization. Communicate. Work to become increasingly culturally and interpersonally competent. Take cultural sensitivity and cultural competence seriously. Work to be inclusive. Take your leadership responsibility seriously, and be accountable for fulfilling it. Constantly strive to increase your competence. Don’t outstay your usefulness. Never stop reexamining your ethics and your leadership.

Exercise ethics leadership Lead by example Have written policies and guidelines Enforce compliance Encourage whistleblowers Promote good corporate citizenship Make corrective adjustments as needed 11

Leader’s Ethical Leadership Responsibilities Be a role model. Develop your subordinates ethically. Avoid creating ethical dilemmas for your subordinates.

Four Essential Character Traits of Ethical Leaders Ability to recognize and articulate the ethics of a problem The personal courage no to rationalize away bad ethics An innate respect for others. Personal worth from ethical behavior

Leaders and Followers Either leading or following, we model ethical behavior in either role. (1) Leaders set standards of ethical behavior. (a) Define and affirm core values. (b) Provide clarity. (c) Act as standard bearers. (2) Followers embrace those standards. (a) Embrace core values. (b) Ask for direction when uncertain. (c) Meet standards.

Leadership Power and Leadership Legitimate power is granted through the organizational hierarchy Reward power is the power to give or withhold rewards Coercive power is the capability to force compliance by means of psychological, emotional, or physical threat Referent power is the personal power that accrues to someone based on identification, imitation, loyalty, or charisma Expert power is derived from the possession of information or expertise 15

Leadership Using Power Legitimate request Compliance by a subordinate with a manager’s request because the organization has given the manager the right to make the request Instrumental compliance A subordinate complies with a manager’s request to get the rewards that the manager controls Coercion Threatening to fire, punish, or reprimand subordinates if they do not do something Rational persuasion Convincing subordinates that compliance is in their own best interest 16

Leadership Using Power (cont’d) Personal identification Using the referent power of a superior’s desired behaviors to shape the behavior of a subordinate Inspirational appeal Influencing a subordinate’s behavior through an appeal to a set of higher ideals or values (e.g., loyalty) Information distortion Withholding or distorting information (which may create an unethical situation) to influence subordinates’ behavior 17