Ethical Leadership MGT 475 PDF

ETHICAL LEADERSHIP 10.16.24 MGT 475  LEADERSHIP ETHICS DESCRIPTION Definition and Theory “Ethics” is a derivative of the Greek word ethos, meaning customs, conduct, or character The topic is concerned with the kinds of values and morals an...

ETHICAL LEADERSHIP 10.16.24 MGT 475  LEADERSHIP ETHICS DESCRIPTION Definition and Theory “Ethics” is a derivative of the Greek word ethos, meaning customs, conduct, or character The topic is concerned with the kinds of values and morals an individual or society ascribes as desirable or appropriate Provides a system of rules or principles as a guide in making decisions about what is right/wrong and good/bad in a specific situation Provides a basis for understanding what it means to be a morally decent human being  ETHIC S C OME WITH LEADERSHIP “The power that comes from being a leader can also be used for evil as well as good. When we assume the benefits of leadership, we also assume ethical burdens.” (Meeting the Ethical Challenges of Leadership, Craig E. Johnson)  GROUP DISCUSSION: FAIRNESS You are the owner of a small trucking company that employs 50 drivers. You have just opened a new route, and it promises to be one that pays well and has an ideal schedule. Only one driver can be assigned to the route, but seven drivers have applied for it. Each driver wants an equal opportunity. Jason, one of the applicants, recently lost his wife to breast cancer and is struggling to care for three young children. Two of the drivers (Matt and Maria) are minorities, and one of them feels strongly that he has the right to the job. Lisa has logged more driving hours for three consecutive years, and feels her effort makes her the logical candidate for the new route. Kevin has a 20-year accident-free driving record. Both Sam and Chris have been with the company since its inception and excelled in their performance year after year. As the owner of the company, your challenge is to assign the new route in a fair way.  GROUP DISCUSSION: CONFIDENTIALITY You are concerned with the morale of your group and decide to talk with each person individually to see if you can find out what the problem is.You assure each person all responses will be strictly confidential. Through the interviews, you discover several people mentioning that Jim, your group treasurer, has been stealing money from the group's account for his own personal use and threatening anyone who suggests they might report him. How do you handle the situation and maintain your promise of confidentiality? What if you decide to report the problem to the authorities and they refuse to take-action unless they have the names of the members who are suspicious?  ETHICAL THEORIES 1 Theories about 2 Theories about leaders’ leaders’ conduct character Consequences Duty Virtue-Based (Teleological) (Deontological) Ethical Egoism Utilitarianism Altruism  ETHICAL THEORIES 1 Theories about 2 leaders’ conduct Consequences (Teleological) Ethical Egoism Utilitarianism Altruism  THEORIES ABOUT CONDUCT 1 CONSEQUENCES (TELEOLOGICAL) Ethical egoism - create greatest good for the leader Utilitarianism - create greatest good for greatest number Altruism - show concern for best interests of others  ETHICAL THEORIES 1 Theories about 2 leaders’ conduct Duty (Deontological)  THEORIES ABOUT CONDUCT 1 Deontological Theories Duty driven, relates not only to consequences but also to whether action itself is good Focus on the actions of the leader and his/her moral obligation and responsibilities to do the right thing Examples: telling the truth, keeping promises, being fair  ETHICAL THEORIES 1 2 Theories about leaders character Virtue-Based  THEORIES ABOUT CHARACTER 2 Virtue-based Theories Focus on who people are as people Rather than tell people what to do, tell people what to be Help people become more virtuous through training and development Virtues are present within person’s disposition; practice makes good values habitual Courage, honesty, fairness, justice, integrity, humility  SIX PILLARS OF CHARAC TER T H E J O SE P H S ON IN ST IT U T E , 19 9 9 1. Trustworthiness - honesty, integrity, reliability, loyalty, keeping promises and not deceiving others. 2. Respect – using the Golden Rule or treating others as you wish to be treated, in addition to being courteous, listening to others, and accepting individual differences. 3. Responsibility – accountability, self-control, the pursuit of excellence, and considering consequences of our actions prior to making them. 4. Fairness – playing by the rules, not taking advantage of others, making informed judgments without favoritism or prejudice, and not blaming others. 5. Caring - kindness, compassion, and altruism, acting to minimize hardship and to help others whenever possible. 6. Citizenship – working to make one’s community better, protecting the environment, making our democratic institutions work, and operating within the law  ETHIC S IN CORPORATE AMERIC A “Ethical mistakes are responsible for ending careers more quickly and more definitively than any other errors in judgment or accounting” (Osland, Kolb, & Rubin, 2001) We’ve seen lots of unethical decision making and scandalous behavior in corporate America. What examples can you think of? WHY DO LEADERS DO UNETHICAL THINGS? WHAT HAPPENS TO THEIR “MORAL COMPASS”?  WHY ARE LEADERS UNETHIC AL? COMPETING VALUES. Individuals may have multiple important values (e.g., success and honesty). Priorities must be assigned to different values and one can take precedence over the others. MOTIVATED BLINDNESS. People see what they want to see and easily miss contradictory information when it's in their interest to remain ignorant. (e.g., executives will unconsciously overlook serious wrongdoing in their company if it benefits them or the organization).  WHY ARE LEADERS UNETHIC AL? ( WE D E L L - W E D E L L S B O R G , 2 0 1 9 ) Omnipotence Cultural Numbness Justified Neglect Feeling so aggrandized Playing along, gradually Thinking of more & entitled that you beginning to accept immediate rewards believe the rules of and embody deviant such as staying on a decent behavior don’t norms good footing with the apply to you powerful.  TYPES OF ETHIC AL DILEMMAS ( KID D ER, 2 005 ) RIGHT VS. WRONG RIGHT VS. RIGHT Ethical issues emerge when a core moral Ethical issues emerge when two core values value has been violated or ignored. come into conflict with each other. When honesty is an important value When one important value raises powerful to a person, and another person is found moral arguments for one course of action, to be acting dishonestly, it is generally while another value raises equally powerful acknowledged that the action was arguments for an opposite course, we must unethical. make a choice since we can’t do both. ETHICS IN PRACTICE  MORAL COU RAGE According to Kidder (2005), moral courage is the intersection of these three concentric circles: 1. Applying values 2. Recognizing risks 3. Enduring the hardship Ethical leaders go beyond just thinking and talking about the right thing – they actually do the right thing.  VEIL OF IGNORANCE Coined by John Rawls, he argued that if you thought about how society should be structured without knowing your status in it (rich or poor, man or woman, Black or white)— that is, behind a veil of ignorance—you would make fairer, more-ethical decisions. How do you think your world view would change? THREE P’S OF THE TRIPLE BOTTOM LINE  CODE OF ETHIC S A standard, or guidelines, for ethical behaviors (not a list of rules) Based on organizational values & mission statement & a philosophy of ethics Requires the commitment of the company’s leaders A well-written and thoughtful code serves as an important communication vehicle – reflecting an organization’s commitment to its values: Commitment to employees Standards for doing business Relationship with the community (Driscoll & Hoffman)  CODE OF ETHIC S Codes of conduct offer an excellent opportunity for organizations to create a positive public identity for themselves. Wherever possible, having employees participate in development of the organization’s code of conduct is useful to create by-in and commitment. It is also useful to define the enforcement capacity of a code of conduct – e.g. what happens when it is violated?  ETHIC S TRAINING Training centered on the company’s mission statement and code of ethics Can include example scenarios, where decision-making models are taught Recommendations: Should be participatory in nature. Must be a commitment from the leadership to participate and embrace the program. All employees should attend Employees should have a voice in putting the program together. Outside facilitators can be utilized to assist with objectivity and efficiency.  NUDGES Leaders can also create more value by shaping the environment in which others make decisions. In their book Nudge, Richard Thaler and Cass Sunstein describe how we can design the “architecture” surrounding choices to prompt people to make value-creating decisions. A common type of nudge involves changing the default choice that decision-makers face (e.g. organ donation).  AN EXAMPLES OF NU DGES A company selling short-term insurance to people who run home-based businesses was looking for ways to get policyholders to be more honest in the claims process. Example nudges implemented: Claimants use a short video taken with a phone to describe a claim. Claimants are also asked verifiable questions about a loss, such as: “What did you pay for the object?” or “What would it cost to replace it on Amazon.com?”— not “What was it worth?” Claimants are asked who else knows about the loss  Imagine you are in a meeting room at a self-driving car company (Waymo or Tesla), discussing the pros and cons. What should you consider when implementing these decisions? SMALL-GROUP DISCUSSION: ETHICS IN TECH What are the consequences of your decision, good or bad? Video for Class: https://www.youtube.com/watch?v=ixIoDYVfKA0 https://www.youtube.com/watch?v=ixIoDYVfKA0  Imagine you are in a meeting room at a pharmaceutical company.Your team has created a breakthrough drug for a serious illness.You hold the patent for the formula, giving you a monopoly in the SMALL-GROUP market. Now, you're discussing strategies DISCUSSION: for rolling out the drug. ETHICS IN MEDICINE What should you consider when deciding on the price of the medication? What are the consequences of your decision, good or bad?  Some medications and equipment have been banned from athletic competitions. SMALL-GROUP DISCUSSION: ETHICS IN What should the athletes, coaches, SPORTS and policy makers consider in this debate? What are the consequences of your decision, good or bad?  Chat GPT and AI is rapidly changing how the world works. While it is improving some business practices and expediting processes, it creates a huge dilemma for educators. Imagine you are a teacher: SMALL-GROUP DISCUSSION: ETHICS WITH AI When should students be allowed to use IN SCHOOLS AI in school? What policies should teachers enforce? What are the consequences of your decision, good or bad?