Ethical Leadership

Ethical Leadership BECG-4th Semester

Eras of Leadership 

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The Trait Leadership era (1880s-1940s): Essential characteristics of leaders The Leadership Style era (1940s to 1960s): 2dimensional models of what leaders did, instead of their inherent traits The Contingency Leadership era (late 1960s to early 1980s): Complex style theories incorporating situational variables The Transformational Leadership era (1980s to date): (1)a drift from the trait, style and contingency modes; (2) focus on leadership as a socially constructed process of transformational change

Transformational Leadership  

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Concept originated by James McGregor Burns in his book Transforming Leadership (2003). Transactional leadership is inadequate for analyzing the broader and deeper actions of a leader. It is merely give-and-take leadership. Bernard Bass: “Quantitative changes are not enough; they must be qualitative too” Transformation: fundamental, radical, profound change in outward form directed by inner character Different from pure “charismatic leadership” Must be (1) constructive and (2) mutually empowering

Transformational Leadership 

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Transactional and transformational leadership have different core assumptions. [Bass (1999) found this through Multi-factor Leadership Questionnaire (MLQ)] Transactional leadership: (1) a response to followers’ immediate self-interests (2) exchange relationship between leader and follower is rooted in self-interest. Signifies first order of change (of degree). Transformational leadership: (1) empowering environment; (2) influence to go beyond simple self-interests towards self-mastery; (3) develops socially desirable behaviour in followers. Higher order of change (of attitude, beliefs, values)

Transformational Leadership: The “4 Is” 2.

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Idealized influence envision a socially desirable future; articulate how to achieve it; engender pride, respect, trust in achievement. Intellectual stimulation help followers become creative; challenge followers with new approaches and ideas

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Inspiration set example of high performance standards; show determination and confidence; model appropriate behaviour Individualized attention pay personal attention to developmental need of followers; give respect

Transformational leader: The 5th Level Leader [Collins and Porras] 

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Talented individual: Works individually; the individual is an isolated technical / professional expert in a team Team collaborator: Has personal talents, professional skills and team-working abilities Competent manager: Efficiently organizes people towards pre-determined goals Effective leader: Promotes commitment to a compelling vision coupled with high performance standards Social navigator: Builds great companies through exercise of personal humility, optimism, moral courage and strong will power

Why Ethical Leadership? Competence vs. character •Competence without character will result in misconduct & failure •Character without competence will result in failure •Leaders are developed through nurture, not by nature alone.

Character & competence must be developed simultaneously and continuously

Warped Mind-set of “Fat-Cat” CEOs 

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Insatiable desires of top CEOs have less to do with money and more to do with the following: Poor self-image—low self-esteem; fills inadequacy by building a “big” image “I deserve it” myth—need for all credit for firm’s success Unchecked fantasies—out of tune with reality; uses money and power to gratify all desires and dreams Society’s blessing—belief that all is right with positive financial results; often honoured as heroes by media Peer competition for remuneration—the sky is the limit for salaries and perks Boredom—no idea of what to do next; invents new challenges that invite moral disaster Corruptive power—insensitive to the rights and claims of others when exercising power Lonesome soldier syndrome—difficulty in finding friends because of the fear of losing power

Ethical Leadership  Leadership

should not only make a difference to others.

 Ethical

leadership makes a difference to others by drawing on ethical principles and values.

3 Leadership Perspectives— R. E. Freeman  Amoral  Value-based  Ethical

The Amoral Leader Focuses on effectiveness.  Often focuses on personal power and the position of leadership.  Is unconcerned about choices of the followers.  Values don’t count. Ethics don’t count. Getting the job done counts.  Very high human costs. 

The Values-based Leader Leads from personal values.  Can be intensive and charismatic.  Appeals to followers’ values and can be incredibly powerful.  Not always open to criticism and reflection.  In the extreme can become “cult-like”. 

The Ethical Leader Values and principles open to dialogue and criticism.  Leadership by choice of the followers.  Followers and society taken as important elements in guiding leader.  Leader responsible for sound moral judgment, sometimes challenging the status quo. 

Downsides of Unethical Leadership Disruption in routine operations  Insecurity of employees  Destruction of corporate reputations  Loss of consumer confidence  Termination of executive careers  Loss of shareholder confidence  Devastation of local communities  Destruction of nature  Propensity to external scrutiny 

Seven Habits of Strong Ethical Leaders— Steve Covey strong personal character 2. passion to do right 3. proactive behavior 4. stakeholder interests in mind 5. recognition of their value as role models 6. awareness that their decision making should be transparent 7. holistic view of human beings and firm’s ethical culture 1.

Greenleaf and “Servant Leadership” Greenleaf’s book (1977)—”Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness”  A leader is a “Servant first” attending to the moral needs of followers. It begins with the natural feeling that one wants to “serve first”.  Followers develop into autonomous and morally responsible leaders themselves, imbibing the ethical values of the servant leader.  “I will go; come with me; follow me”. Think about Tenzing Norgay. 

“Wisdom Leadership” A wisdom leader aligns spiritual consciousness with the physical, intellectual and emotional energy to manifest that choice as a daily mode of living.  Consciousness-driven wisdom leaders are rooted in an invisible but strong spiritual core  Wisdom leaders are characterised by the power to lead their own lower self (i.e., vyavaharik vyaktitva) being guided by their awakened Higher Self (i.e., paramarthik vyaktitva). 

From Bottom-line Leader to Wisdom Leader Attributes           

pri oriti ze work wit h create foc us on manage fav our work to improv e ask view ins pired by

BOTTOM-LINE LEADERS

WISDOM LEADERS

Ex pedi enc y Priorit ies , structures and sy stems Plans and strategi es Gett ing Hum an ef fort (phy sical & ment al) Mai ntaining Ac cept the stat us quo Cont rol; perf ormance review ; How and When Short range of the bot tom -line Eff icienc y and the bot tom -line

Integrit y People, relat ions hi ps and values Stat e of mi nd Giv ing Hum an energy , heart and spirit Developing Chall enge t he status quo Trust; recogniz ing contribut ion Why and What Long-range of cos mic well being Ques t for at taining higher levels of cons cious nes s