Category: Review

The aftermath of recent organizational scandals has forced managers and researchers alike to focus their attention on ethical questions in organizational leadership. In respect of this fact, various researchers have made recommendations that ethics in organization leadership should be managed in a proactive manner though explicit ethical leadership and the development of ethical culture. In this context, organizational leaders play a big role in determining whether ethics in organizational leadership can be realized or not. The research has been carried out on the subject of ethics in organizational leadership, but there still remains room for further research and more improvements. This paper provides a review of earlier works that have been used by organizational leaders to better manage their employees and their individual ethical behaviors under the context of ethics in organization leadership.

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Literature Review

Much has been researched and written on organizational leadership and management, especially on the subject of ethics in organization leadership. This plethora of research work has been increased to a greater extent by the manner in which ethical breaches in workplace or organizational setting has been described. This publication has been organized in such a way that all attention has been focused on the issue of ethical behavior and leadership in organizations. In a number of companies, cultural values that guide employees often emanate from the top levels. Employees take their cues from the messages communicated by those in formal organizational leadership roles. This occurs due to the fact that most employees do not know their organization executives personally. They only can make sense from what the information they receive. Therefore, senior executives must develop ethics for their leadership by being visible in ethical matters and communicating strong ethical messages. This paper provides a review of literature concerning ethics in organization leadership.

The aftermath of recent organizational scandals has provoked managers and researchers to turn their attention to questions regarding ethics in organization leadership and management. Despite the fact that scientific study of ethics in organization leadership is relatively new, there exist research and theory that can aid executives who try to manage their organizations and their ethical conduct in a better way. This literature review organizes much of the available research under the following themes:

  1. Ethics in organization leadership from leaders' perspective;
  2. Ethics in leadership's role in creating a ethical culture within the organization;
  3. Authentic leadership versus ethical leadership;
  4. Influence of leadership styles on ethical leadership.

Ethics in Organization Leadership from Leaders' Perspective

Organization leaders behave ethically whenever they do what is just, good, right, and authentic. This act of ethical behavior is not limited to simply complying with rules or even ensuring fairness. It is essentially about taking into consideration the impact of one's actions and words on other people within the organization. Applying ethics in organization leadership requires choices that are aligned with the leaders' core values and beliefs. These choices should also honor other employees' right to foster their own individual values. Organizational leaders are ethical, their words and actions reflect the values of their organizations, the society, and themselves as individuals. In this respect, when leaders bring their positive personal values into the organizational workplace, it should not be viewed as a desirable trait but rather as their responsibility as ethical leaders.

Argue that ethical leaders at different organizational levels employ certain intrinsic traits and behavioral patterns to transmit values and expectations. These intrinsic features come from the argument that being an ethical leader involves being, first of all, a moral person then a moral manager. Ethical leaders must exhibit a high standard of individual moral conduct in line with established standards (relating to moral person aspect) and encourage moral conduct in others (relating to moral manager). Ethical leadership may appear slightly different from country to country and the context within which leaders work may vary too, but what remains unchanged, is that ethical leadership involves being both a moral manger and a moral person irrespective of the context.

A moral person who is a leader at the same time must act with integrity and be perceived as trustworthy. Additionally, the ethical leader has to exhibit traits like honesty, integrity, and candor. The leader as a moral person should be able to:

  • Ensure that his/her private moral behavior is consistent with the moral standards he/she openly espouses;
  • Do what is right in every situation and act morally in all of their actions;
  • Take every responsibility for his/her actions and decisions;
  • Show concern for other employees and treat them fairly;
  • Use values to direct his/her own decisions and behavior;
  • Implement objective and fair decisions, and
  • Use sound ethical principles to make decisions.

As a moral manager, the leader has to be involved in proactive promotion of ethical behaviors in other employees within the organization. This can be realized through the use of communication, a formal reward system, and role modelling. Ethics in organization leadership requires that leaders are able to recognize that their subordinates look for ethical guidance and that they as leaders can influence ethical behavior of their subordinates in a positive way. The ethical leader as a moral manager depicts the following characteristics:

  • Portrays a role model for ethical decision-making and ethical behavior for his/her subordinates;
  • Explains his/her decisions not only "in rationale terms" but also in ethical terms;
  • Discusses ethical issues in most of their communication and encourages ethic-centered discussions among subordinates;
  • Explains ethical principles and rules and incite subordinates to be open and speak up about ethic-related concerns and questions;
  • Gives juniors a say in the organization's decision making and listens to their concerns and ideas;
  • Describes clearly the organization's ethics and ensures that subordinates abide by the set ethical standards.

Taken together, research under this theme suggests that ethics in organization leadership is vital for improving ethical behavior and other critical results in organizations. Reinforcement of ethical behavior is not just an issue of weeding out the few "bad apples" within the organization, but it involves assisting others in achieving high ethical standards. These high ethical standards can be accomplished through demonstration of ethics in organization leadership.

Ethics in Leadership's Role in Creating an Ethical Organizational Culture

Employees who report directly to an ethical leader within the organization engage in fewer acts of workplace deviancy. The study fosters the theme that ethics in leadership creates ethical organizational culture. In this study, harmful acts aimed at the organization will be lower because the supervisor is viewed as the linking pin between the organization and its employees. When an ethical leader represents positive ethical values, the subordinates' attitude toward the organization becomes more positive and they have little motivation to harm it. Additionally, harmful acts directed at the organization and work group members will be lower. It can be explained by the fact that ethical leaders inspire subordinates to transcend their own self-interest for the greater good of the organization. With this type of transcendence, behavior that harms the organization will be inconsistent.

Ethics in organization leadership makes ethical leaders serve as a visible role model within the company. When leaders are ethical role models, then subordinates observe and imitate their ethical behavior. The imitation translates into lower levels of deviance. Unethical or personalized leadership has been associated with increased subordinate destructiveness. Ethical leadership within the organization was positively associated with the perceptions employees have of the organizations attractiveness and with their intentions to pursue employment with organizations that are led by ethical leaders.

Not all leaders within an organization promote their values and maintain an ethical perspective. Many of them do not want to be reminded of ethical leadership. Thus, they offer challenges to subordinates who want to help them generate legally accepted and ethical outcomes. Clear ethical leadership language may be problematic for the subordinates who are involved with a leader of questionable character. Such a leader can either be an unethical or an ethically neutral leader. As an unethical leader, he/she will portray bad leadership characters like: being insular, corrupt, and callous. As an ethically neutral leader, he/she will not consider the ethical perspective. Unethical and ineffective leaders exist in most organizations and people working with them know that discussions on ethics can provoke scorn and a lecture . In these organizations, subordinates do not imitate their leaders, but rather avoid raising ethical issues with them.

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Authentic Leadership versus Ethical Leadership

The subject of whether an ethical leader is necessarily an authentic leader has elicited a foray of debate, with one side arguing that ethics does not contribute to one being viewed as authentic, and the other side taking the opposite view. Authentic leadership as a recently developed perspective of transformational leadership, which does not provide clear consensus on definitions or frameworks. Authentic leadership defines the characteristics of organizational leaders who are genuinely self-accepting, self-aware, and whose behavior is true to their own thoughts and beliefs. Authentic organizational leaders are expected to have understanding and knowledge of who they are, what they believe in, and their value. They also have the capacity to promote their values and beliefs openly. In this respect, subordinates would consider them to be ethical.

Authentic leadership produces one primary quality, which is trust. Authentic leaders share information with their subordinates, encourage open communication, and, in most instances, stick to their ideas. This conduct encourages their subordinates to have faith in them. The concept of authentic leadership is relatively recent and much research has not been carried out on this topic. However, it is a promising way to view ethics in organizational leadership, given that it focuses on the oral aspects of being a leader.

The concept of authentic and ethical leadership should be viewed from aspects of authentic transformational leadership and pseudo-transformational leadership. Distinctions between authentic and pseudo-authentic transformational leaderships often fail to produce a satisfactory response to ethical concerns about organization leadership. It often occurs to the extent that altruism suffices for the organization's ethical success. Attest to this by inferring that when the organization's ethic leadership success is grounded on altruism, the fact that leaders sometimes conduct themselves immorally because they are blinded by their own values may not be seen. Actually, this type of blindness eventually considerably influences moral and ethical psychology of leadership and encourages organization's leaders to believe that they are vindicated when they make exceptions for themselves. This vindication comes from an assumption that their behavior as leaders is authentic and they are authentic leaders.

Influence of Leadership Styles on Ethical Leadership

Leadership styles affect many aspects of organizational behavior, including subordinates' acceptance of and adherence to the organization's values and norms. Leadership styles that focus on building strong values among the organizations employees contribute to common standards of conduct. These styles also influence the way organization transmits and monitors norms, values, and codes of ethics. In a nutshell, the leadership style of an organization influences actions of employees within the organization. Fast-paced and intensively competitive industries require rather nontraditional leadership styles. These leadership styles definitely have an impact on the ethics applied within the organization. In this respect, studying the organization's leadership styles and attitudes can help to pinpoint where ethical concerns may arise in the future.

Stefkovich and Begley have outlined six leadership styles that are based on the leaders' ability to effectively manage themselves and their relationships within an ethical context. They call this ability emotional intelligence. Emotional intelligence gives: a coercive leader, an authoritative leader, an affilliative leader, a democratic leader, a pacesetting leader, and a coaching leader. The coercive leadership style demands instantaneous obedience and a focus on initiative, self-control, and achievement. Even though this leadership style can be very effective in crisis situations or turnarounds, it negatively affects the organizational performance climate and can result in a compromise of ethics. The authoritative leadership style, on the other hand, has been viewed as one of the most effective leadership styles. This approach may be successful due to the fact that it inspires employees to follow a vision, facilitates a change, and creates a strong ethical and positive organization performance climate.

The afflictive and democratic leadership styles as those aimed at fostering ethical leadership within the organization. This assumption is explained by the fact that they are based on trust and friendship that promote risk taking, flexibility, innovation, reliance on participation and teamwork, and realize collaborative decisions respectively. The pacesetting leadership style as creating a negative ethic leadership within the organization because this approach creates a negative climate of high standards that need to be met by employees. In order to achieve these standards, employees may be forced to compromise on ethical issues of integrity.

The above review makes it clear that the empirical study of ethics in organization leadership is flourishing, but the necessity for additional research still remains strong. One issue that continues to be particularly important to the future of ethics in organization leadership research is the fact that important questions about sources of ethical leadership have remained unanswered. For example, where does ethical leadership originate from? Are ethical organizational leaders made or born? Much of the initial work on ethics in organization leadership has majored on attributes of the leader like personality, cognitive and moral development, and moral identity. There is a need for more research to broaden the agenda beyond these dispositional and situational factors. Additionally, the research has focused on the link between strong organizational ethical culture and its ability to foster ethical leadership within an organization. The challenge within todays work environment is that employees do not expect to remain within a single organization for a long time. More work is needed to figure out how this macro feature of the work environment may influence the development of ethical leadership, the leaders' possibility to carry their ethical leadership styles from one organization to another, and whether the local context will have important influence on them.