Blog #1: Leadership and Ethics

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Leaders have to make decisions on a daily basis. How do they define what actions are  ethical?

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First of all, let’s define what ethical is.

According to Oxford dictionary ethics are “Moral principles that govern a person’s behavior or the conducting of an activity.” (OxfordDictionaries, 2017)

On paper question sounds simple but is there an objective way to determine what is right behavior?

Philosophers have had disagreements about what precisely gives an action its ethical force, and to answer such complex questions over time  two principle schools of ethics were established offering distinct answers:  Deontological and Teleological.

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  1. Deontological ethics

Deontological ethics (e.g. Kant) are concerned with the action itself and not the result, and believe that consequences have no role when judging a person’s action. People have a duty to do the right things.

Deontologists live in a universe of moral rules (BBC, 2017), such as:

·        It is wrong to kill innocent people
·        It is wrong to steal
·        It is wrong to tell lies
·        It is right to keep promises

The advantage is that you don’t have to question yourself; you know you have done right no matter what is the result of your action. However, not many people can act these principles out.  For example the philosopher Kant thought that it would be wrong to tell a lie in order to save a friend from a murderer but how many of us would actually live up to it?

  1. Teleological ethics

Teleological ethics (e.g. Mills) on the other hand argue that the morality of an action is based on the action’s outcome.  The more good consequences an act produces, the better. This principle gives a good general guidance on how to lead a life – maximize good consequences.

However, a limitation of this approach is that it offers no distinction between consequences that are foreseen and those that are intended. Consequences can be inconsistent, e.g. short-term results differ from long-term results.  For example, using cheap sources of energy has good economic short-term results but  produce bad long-term results for global climate.

Furthermore, happiness and unhappiness of the group can be subjective and easily influenced or controlled. Choosing different groups of people or different time may produce different results, and it is easy to bias in favor of particular groups.

Thus, both ethical concepts have their benefits and limitations, and I think that actions must be viewed through both prisms of moral rules and possible consequences. Had Bernard Madoff thought of both morals and future consequences over greed before starting his “Ponzi scheme” that spanned decades and defrauded customers of approximately $20 billion he wouldn’t have ended up in prison and left his family broken and shamed. (Guardian, 2013)

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According to Rubin ethical leadership is: “The demonstration of normatively appropriate conduct through personal action….” (Robert S. Rubin, 2010)

A weakness of such definition is that it doesn’t explain what “normatively appropriate conduct” is. Cultural and social standards play a big part in perception of what can be considered “right” or “wrong”.

There are parts of the world where child labor and sweatshops are not considered abnormal. Companies like Apple don’t break any social laws by utilizing sweatshops in their manufacturing process but absent from the list of ethical companies (Forbes, 2016).

Since Apple is one of the most successful. Does that mean that companies don’t have to be ethical to be successful?

To gain more insight  let’s look at 4-V Model of Ethical Leadership.

4-V Model of Ethical Leadership

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According to the Center for Ethical Leadership, “Ethical leadership is knowing your core values and having the courage to live them in all parts of your life in service of the common good.” (Center for Ethical Leadership, 2017)

The Center recommends a 4-V Model of Ethical Leadership as a framework that aligns leader’s internal beliefs and values with his or her external behaviors and actions for the purpose of advancing the common good. The 4-V model serves as a guide to put the needs and interests of the group ahead of their own. It creates commitment that makes all parties responsible in the pursuit of common goals.

In the past, the main goal of leadership has been to increase production and gain bigger profits. At present leaders also have the responsibility for ensuring standards of ethical conduct as the new concept of management. Various studies showed that more advantages for ethical work models than disadvantages, with positive effects on both individual and organization. It improves customers trust in the brand through high quality service. The ethical leaders are admired by the teams and the customers (Elc, 2012).

One of the examples of the ethical leader who influences employees through her own values is Indra Nooyi, CEO of Pepsico. Under her leadership PepsiCo was named World’s Most Ethical Companies for the 10th year in a row in 2016.

Through her vision “Performance with Purpose” initiative was established, which ties PepsiCo’s sustained financial performance to human, environmental, and talent sustainability (Pepsico, 2017). Her virtues are established through personal letters that she writes to the family members of each of her direct reports to enable the latter experience pride in their children and to know that they have succeeded in their roles as parents , which in order boost morale of staff and the efficiency of employees is increased.

In conclusion, concept of ethics is very complex. There is no single simple answer what is right or wrong and only time will tell whether ethical leadership is here to stay or are they just a trend or a fashion of modern world.

What do you think – in a profit driven society are companies trying to act ethically genuinely or they just use ethics as just another marketing tool?

Please leave a comment below.

Reference

BBC, 2017. Duty-based ethics. [Online]
Available at: http://www.bbc.co.uk/ethics/introduction/duty_1.shtml
[Accessed 03 2017].

Center for Ethical Leadership, 2017. 4-V Model. [Online]
Available at: http://www.ethicalleadership.org/concepts-and-philosophies.html
[Accessed 03 2017].

Elc, M., 2012. Social and Behavioral Sciences. The Impact of Ethical Leadership and Leadership Effectiveness on Employees’ Turnover Intention: The Mediating Role of Work Related Stress, Issue 58.

Forbes, 2016. the-worlds-most-ethical-companies-2016. [Online]
Available at: https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/karstenstrauss/2016/03/09/the-worlds-most-ethical-companies-2016/&refURL=https://www.google.co.uk/&referrer=https://www.google.co.uk/
[Accessed 03 2017].

Guardian, 2013. [Online]
Available at: https://www.theguardian.com/business/2013/dec/12/jpmorgan-facing-2bn-fine-madoff-involvement
[Accessed 03 2017].

Independent, 2014. Bolivia becomes first nation to legalise child labour. [Online]
Available at: http://www.independent.co.uk/news/world/americas/bolivia-becomes-first-nation-to-legalise-child-labour-9616682.html
[Accessed 03 2017].

OxfordDictionaries, 2017. ethics. [Online]
Available at: https://en.oxforddictionaries.com/definition/ethics
[Accessed 03 2017].

Pepsico, 2017. [Online]
Available at: http://www.pepsico.com/Purpose/Performance-with-Purpose
[Accessed 03 2017].

Robert S. Rubin, E. C. D. a. M. E. B., 2010. Do Ethical Leaders Get Ahead? Exploring Ethical Leadership and Promotability. Business Ethics Quarterly.

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16 comments

  1. culchasnolm · March 29, 2017

    Very interesting read indeed. Ethics has always fascinate me in all ways. One of it is that, as what you have quite rightly said is that there is no simple answer to what is right or wrong.

    Now to your own etchical stance, say for instance that your boss gave you credit for a project on which a colleague did most of the work. Would you accept the praise?

    Like

    • Vladimir · March 30, 2017

      Haiqal, thank you for taking your time and reading my blog.
      I would mention to the boss that collegue contributed a lot and should be praised as well.

      Like

      • lyov555 · April 4, 2017

        can the leader manage without ethical approach

        Like

  2. Andrew Ariananda · March 29, 2017

    A very good written blog you have done. How you present your blog also really help me to describe how your way of thinking about the ethics. One question. If it’s no right or wrong for both ethics. What is more preferable ethics for a company? Thank you

    Like

    • Vladimir · March 30, 2017

      Hi Andrew.
      Thank you for your question.
      I think mix of both ethics should be used in companis. Companies must have ethical intentions from the start but also think about long term results of their actions.

      Like

  3. culcikram · March 29, 2017

    Is vision an important aspect of ethical leadership?

    Like

    • Vladimir · April 4, 2017

      Thank you for your comment Ikram!

      I think vision is one of the most important parts of leadership.
      Every good leader must have a vision of where he wants to bring the company and the followers as we say in Russia: “There is no favorable wind, for the person who does not know where he wants to go”.

      Like

  4. Amber Lin · April 3, 2017

    Hi, Vladimir, In my opinion, some organisations may use this as a marketing tool, but some organisations they do realised the importance of being ethical and they are trying to act ethical. I understand that being ethical is not always be a easy thing for profit driven society, especially when they are dealing with money issue. But ethics become more and more important for an organisation, as there are many organisations went bankrupt because their unethical behaviour, so I think with the time goes by, organisation will realise the importance of being ethical and act genuinely.

    Like

    • Vladimir · April 3, 2017

      Thank you for your answer.
      I think many things may start without organization actually believing in it but as the time goes on it will become a natural thing for them.
      So i think its a good thing that many organizations start to apply ethics even if they don’t truly believe in them.

      Like

  5. culcmshawm10 · April 3, 2017

    Hi Vladirmir, such a great blog. Do you any unethical company that still can operate its business successfully until now?

    Like

  6. culcchiuw9 · April 3, 2017

    Hi Vladirmir, it is such a great blog!! Do you think Deontological ethics work well in real world?

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    • Vladimir · April 4, 2017

      Thank you for your comment Viki.
      I think both Deontological and Teleological principles work in real life.
      One allows us to value our present actions while another helps us think about result in the future.
      I don’t think they contradict one another.

      Like

  7. JFK · April 4, 2017

    Hello Vladimir, this is a good explained blog! I have a question about which one is more important, is it the company’s future or doing the right thing ?

    Like

  8. Vladimir · April 4, 2017

    Hi Farouk!
    Thank you for your question!

    I don’t think now and future are the opposite sides of the argument because future comes from now, so if we don’t do the right thing in the now than there is no right future.

    Like

  9. culcrezandyd · April 4, 2017

    Well, it can be both Vladimir. Because they once they act to be ethical they have to take granted from it. For example, if one company running CSR activities for the environment, maybe because of the regulations, they can use it for their marketing tools, to socialize people about what they have done to the environment, so it can bring benefits to their corporate image. I think nothing wrong with that.

    Like

  10. Mridu Jain · April 4, 2017

    Hi, i liked your blog, but do you think deontological leadership is always successful

    Like

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