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.