Topic 6 Leadership Ethics

Ethical Leadership
1
• “People leave managers, not companies” is
the most common phrase you’ll hear when
corporate leadership is discussed.
• 75% of people quit their job to “get away from

their manager at some point in their career.
2
Leadership in Corporate Culture
 Leadership: The ability or authority to guide and
direct others toward achievement of a goal
 Leaders provide a blueprint for an organization’s
corporate culture and ethics
 Eg: Elon Musk for Twitter
 https://www.nytimes.com/2022/05/06/technology/
elon-musk-twitter-pitch-deck.html
 Leadership styles influence organizational
behavior
 Including employee’s acceptance of/adherence to
organizational norms and values
 A challenge for leaders is gaining trust and
commitment
3
Leadership and Ethics
• Ethics is the principle that governs a leader’s
behavior
• Self understanding: making sense of one’s
own values, beliefs and ideas
• Other-understanding: making sense of the
needs and differences among others
• Leadership ethics is a mindset skillset that
include self and others understanding
4
What followers want from Ethical leaders
• From the most influential leaders followers need

the following:
• Trust, care stability, hope
• Treat people as you want to be treated – platinum
rule of leadership
• Leadership values: what I stand for
• Leadership competencies: how I lead
• Leadership mission: why a person’s leadership
matters
5
The Managerial Role in Developing Ethics Program
Leadership
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Leadership Styles
 Coercive leader: Demands instant obedience

and focuses on achievement, initiative, and
self-control
 Authoritative leader: Inspires employees to
follow a vision, facilitates change, and creates a
strongly positive performance climate
 Affiliative leader: Values people, their
emotions and needs, and relies on friendship
and trust to promote flexibility, innovation, and
risk taking
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Leadership Styles (continued)
 Democratic leader: Relies on participation and

teamwork to reach collaborative decisions
 Pacesetting leader: Can create a negative
climate because of the high standards that
he/she sets
 Coaching leader: Builds a positive climate by
developing skills to foster long-term success,
delegating responsibility, and issuing
challenging assignments
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Leadership Styles (continued)
 Transactional Leaders: Create employee

satisfaction through bartering for desired
behaviors/performance
 Best-suited for rapidly changing situations,
including those requiring responses to ethical
problems or issues
 Transformational leaders: Raise employees’
commitment and foster trust and motivation
 Is best for organizations with high ethical
commitment and strong stakeholder support
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Habits of Strong Ethical Leaders
Developed by Archie Carroll; based on

Stephen Covey’s The 7 Habits of Highly
Effective People
 Ethical leadership is based on holistic thinking
that embraces the complex issues that
companies face
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Habits of Strong Ethical Leaders
1 Ethical leaders have strong personal character.
2 Ethical leaders have a passion to do right.
3 Ethical leaders are proactive.
4 Ethical leaders consider stakeholders’ interests.
5 Ethical leaders are role models for the organization’s values.
6 Ethical leaders are transparent and actively involved in
organizational decision making.
7 Ethical leaders are competent managers who take a holistic view
of the firm’s ethical culture.
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Understanding Ethical Decision Making and the
Role of Leadership
Ethical issue intensity, individual factors, and

opportunity result in business ethics
evaluations and decisions
 An organizational ethical culture is shaped by
effective leadership
 Top level support is required for ethical behavior
 An ethical corporate culture needs shared values
and proper oversight
The more you know about ethical decision
making, the more likely you will be to make
good decisions
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Framework for Understanding Ethical Decision
Making in Business
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Ethical Issue Intensity
The perceived relevance or importance of an ethical

issue to the individual, work group, and/or organization
 Reflects the ethical sensitivity of the individual and/or work
group
 Triggers the ethical decision-making process
 Individuals are subject to six spheres of influence
Workplace Legal system
Family Community
Religion Profession
Moral intensity: Relates to a person’s perception of social
pressure and the harm his/her decision will have on others
https://ethicalunicorn.com/2019/01/12/how-ethical-is-amazon/
14
Individual Factors
People base their ethical decisions on their own
values and principles of right or wrong
 Values are learned through socialization
 Good personal values decrease unethical behavior and
increase positive work behavior
 Values are subjective; vary across cultures
 An organization may intend to do right, but
organizational or social forces can alter this intent
 Research shows that various factors influence ethical
behavior
 Gender–women are more ethical than males
 Education, work experience, nationality and age affect
ethical decision making
15
Organizational Factors
Organizational culture has a stronger influence

on employees than individual values
 Corporate culture: A set of values, norms, and
artifacts that members of an organization share
 Ethical culture: Reflects whether the firm has an ethical
conscience; is a function of many factors
 Significant others: Those who have influence in a
work group
 Obedience to authority: Helps to explain why many
employees unquestioningly follow superior’s orders
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Contd….
• The more ethical employees perceive an
organization’s culture to be, the less likely they
are to make unethical decisions.
• Walt Disney, American Express, Starbucks,
IBM, Proctor and Gamble, South west airlines-
strong traditional values inculcated into their
new trainees and reinforced throughout their
stay in organizations.
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Opportunity
The conditions in an organization that
limit/permit ethical/unethical behavior
 Immediate job context: Where employees work,
with whom they work, and the nature of the work
 Opportunities for misconduct can be reduced by
establishing formal codes, policies, and rules
 Aggressive enforcement is required
Knowledge can sometimes lead to unethical
behavior
• A person who has an information base, expertise, or
information about competition has an opportunity to
exploit knowledge
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Ethical Leadership

• 75% of people quit their job to “get away from

• From the most influential leaders followers need

 Coercive leader: Demands instant obedience

 Democratic leader: Relies on participation and

 Transactional Leaders: Create employee

Developed by Archie Carroll; based on

Ethical issue intensity, individual factors, and

The perceived relevance or importance of an ethical

Organizational culture has a stronger influence

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