Chapter 7: Values and Ethics in Leadership

Chapter 7: The Role of Values and Ethics at Work

• Learning Objectives:
  • Understand the importance of leadership by values.
  • Understand the role of courage in character formation.
  • Describe values that guide moral dilemmas.
  • Know the leader's role in setting the workplace's ethical climate.

Values and the Organization

• Values are the "social glue" of an organization.
• They provide guidance for independent decision-makers.
• Values should reflect daily practice and long-term commitments.
• Inconsistent values (written vs. actions) can lead to cynicism among customers and employees.
• Leaders must translate good intentions into observable actions.

Values and the Organization, 2

• Organizations recognize the need for clarifying or reinforcing values when:
  • Employees lack understanding of expected behavior.
  • Different individuals/groups have varying value systems.
  • Top leaders send conflicting messages.
  • Daily operations are disorganized.
  • Employees complain about the organization.
  • The organization has values but doesn't practice them.

Values in the American Workplace

• Honesty: Foundation for other values.
• Respect: Consideration for others' beliefs/needs.
• Service: Helping others as you would want to be helped.
• Excellence: Greek ideal of virtue, leading to personal and public admiration.
• Integrity: Acting and living by convictions, crucial in moral dilemmas.

Values and the Importance of Courage

• Character is defined more by actions and sacrifice than by words.
• Character is a lived value system that is known, cherished, stated, and practiced.
• The pinnacle of living by one's values is caring to the point of personal sacrifice.

Values and the Importance of Courage, 2

• Courage underlies other values, giving it a strong foundation.
• Leadership often involves ambiguity, uncertainty, and danger. Courage allows leaders to overcome these obstacles.
• Courage of conviction is staying true to one's values even when circumstances are difficult—a characteristic of successful leaders.

Traditional Definitions of Good

• Western culture defines "good" and "right" through various lenses:
  • Power: Machiavelli believed might makes right.
  • Personal Integrity: Nietzsche emphasized individual judgment and moral virtue.
  • Natural Simplicity: Rousseau connected goodness to a natural state.
  • God's Will: Many religions consider ethical actions aligned with divine will.
  • Pleasure: Aristippus emphasized physical enjoyment and avoiding pain.
  • Greatest Good for the Greatest Number: Utilitarianism focuses on maximizing benefits for the majority.
  • Pragmatism: Ethical evaluation based on practical results.
  • Duty and Right Action: Kant highlighted acting from duty, regardless of outcome.

Honesty as a Leadership Value

• Honesty is the most important leadership value.
• Effective leaders prioritize truth as a foundational value.
• True character comes from within, separate from reputation.

Full Swing Values

• Full-swing values is a method for assessing values strength and their impact.
• A complete "home run" in values comes only if a full swing is achieved.
• This process includes knowing, cherishing, declaring, acting upon, and habitually acting on one's values.

Leadership and Values

• Power without accountability can lead to harmful actions.
• Culture shapes a leader's values, which influence their actions.
• Leaders set the moral tone of the organization through their actions.

Leadership and Values, 2

• Healthy pressure can motivate performance, but excessive pressure can encourage unethical behavior.
• Trust is essential for long-term organizational survival and growth.

Leadership and Values, 3

• People find it difficult to forgive non-principled leaders.
• Leaders set the moral tone of the organization through actions.
• Ethical leaders – honest, unselfish, and dedicated – contribute to group success.

Instrumental Values of Caring Leaders

• Values that guide ethical behaviors of caring leaders include honesty, consideration, responsibility, persistence, excellence, commitment.

Instrumental Values of Caring Leaders, 2

• These leaders prioritize service to customers, employees, shareholders, and the community.

Personal Values

• Culture impacts personal values.
• Personal values can be influenced by socialization and role modeling.
• Values differ across cultures.
• American society values specific traits, though these may vary by gender.
• Examine whether learned American values align with your personal values.

Organizational Ethics

• Good organizational ethics reflect the values of ownership, are reviewed regularly, are few in number, clearly set, communicated properly, and applied equally across all employees.

Organizational Ethics, 2

• A comprehensive code of ethics guides decision-making across:
  • Government Relations
  • Employee Relations
  • Business Relations

Organizational Ethics, 3

• Organizational ethics also encompass:
  • Production Standards
  • Consumer Relations
  • Community & Environmental Concerns

Organizational Ethics, 4

• A formal code of ethics provides standards for right and wrong when dealing with stakeholders.
• Ethical organizations focus on satisfying constituents, having high/broad purposes, commitment to learning, reacting appropriately to change, and being the best at their work.

Organizational Ethics, 5

• Organizations often establish ethics ombudsmen to monitor ethical practices and procedures and their responsible duties are:
  • Communicating ethical standards
  • Designing monitoring systems
  • Training personnel on ethical decision-making

Organizational Ethics, 6

• Ethical decision-making can be evaluated by asking if the action reflects:
  • Truth
  • Fairness to all
  • Goodwill and improved relationships
  • Benefits for all

Why is Ethics at Work Important to Leaders?

• Ethical conduct and business success have a positive correlation.
• Ethical practices lead to building trust and reputation, attracting suitable employees.
• Maintaining a good ethical reputation also reduces the possibility of lawsuits/legal strife.
• Being a role model to others is an important factor.

Why is Ethics at Work Important to Leaders?, 2

• Misconduct has social/economic costs for the organization including:
  • Loss of customers
  • Loss of top employees
  • Loss of trust & goodwill

Why is Ethics at Work Important to Leaders?, 3

• Ethical leaders respect, value, and put into practice moral principles, such as truth, trust, and respect.
• Ethical leaders act with responsibility in all circumstances and are not motivated by outside pressures.
• Ethical leaders have employees who have pride in their workplace and who go above and beyond with their work/their discretionary behavior.

Business Ethics across Cultures

• Different countries/cultures have varied ethical standards.
• The two basic approaches to guiding ethical conduct across cultures are:
  • Adopting a global standard of practice.
  • Following local practices.
  • Employing "situation" ethics will lead to organizational decline and failure.

Ethical Climates of Organizations

• Ethical climate embodies consistently communicated/enforced moral standards, especially by leaders.
• Organizational climates can be categorized as:
  • Profit-maximizing
  • Trusteeship
  • Quality-of-life management

Ethical Climates of Organizations, 2

• Different ethical climates impact moral decision-making and workplace experiences.
• Consider what organizational types you respect and the type of organizations you work within.
• Analyze how you can positively affect your organization’s ethical climate.

Ethical Climates of Organizations, 3

• Profit-maximizing corresponds with Kohlberg's Level 1 (preconventional morality) focusing on self-gain.
• Trusteeship corresponds with Kohlberg's Level 2 (conventional morality) focusing on conformity to societal expectations.

Ethical Climates of Organizations, 4

• Quality-of-life management corresponds with Kohlberg's Level 3 (postconventional morality) focusing on ethical principles.

Ethical Climates of Organizations, 5

• Many Americans observe ethical misconduct in the workplace.
• Comprehensive ethics programs are rare.
• Ethics are sometimes incorporated within performance reviews.
• Comprehensive ethics and compliance programs are uncommon.

Ethical Climates of Organizations, 6

• Warning signs of potential ethical issues in an organization include:
  • Lack of written ethics codes
  • Failure to include ethical considerations in performance reviews.
  • Reluctance to maintain ethical positions that might place the organization at a disadvantage financially (or otherwise).
  • Viewing ethical standards as a public relations/legal exercise only.
  • Absence of clear procedures for ethical issues
  • Tolerance of unethical leadership practices.

Ethical Climates of Organizations, 7

• To foster a positive ethical work environment, leaders must:
  • Choose/reward individuals who uphold integrity and meet business standards.
  • Hold leaders/employees accountable for ethical lapses.
  • Model and enforce desired values to promote a productive ethical culture.

This quiz explores the critical role of values and ethics in organizational leadership. It emphasizes how leaders can influence ethical climates and navigate moral dilemmas by establishing clear values. Understand the impact of consistent values on workplace behavior and decision-making.