Table of Contents
It is a well-known fact that the key to successful governance lies in the hands of those who lead. Actions that influence and direct others can be performed by a person who can not only possess certain personality traits but also bears a huge responsibility on his or hers shoulders. Being an internal set of moral codes and standards, ethics plays an important role in shaping worthy leaders. Responsibility and integrity are the key components of a highly efficient ethical leadership.
Ciulla (2005, p.324) raises a contentious issue in the discipline debate by wondering how to distinguish leaders from ordinary people. To be a leader and to fill a position of one is not the same thing. It has been argued that some researches ‘implicitly or explicitly assume that only ethical leaders are ‘real’ leaders’ (p. 325). Only those who possess a number of specific traits can exercise leadership. As a rule, people behave rather predictably, which allows to determine certain characteristics typical of them (Treviño, Hartman & Brown 2000, p. 130). Nonetheless, it is not enough to have integrity and trustworthiness as primary qualities, because in order to lead ethically, a person should behave likewise (Treviño & Brown 2004, p. 75).
Brown and Treviño (2006, p. 597) characterize ethical leaders as those who make thoughtful and well-balanced decisions; they also set an example of being active role models for their followers. Ciulla (2005, p. 332) describes a moral assessment of leadership as three evident and completely intertwined points, namely: 1) the ethics of leaders themselves, which relies on individuals traits; 2) the ethics of how a leader leads, which concerns the relationships between a leader and his or her followers; 3) the ethics of what a leader does, which is mainly about actions and behavior. According to Kalshoven (2010, pp. 48-49), responsibility and integrity are the features that make an ethical leader an effective one.
Brown and Treviño (2006, p. 597) have interviewed a large number of people to reveal personal traits related to ethical leadership. In addition to the abovementioned integrity and trustworthiness, a number of features were also named, such as fairness, honesty and care. Assuming ethical behavior both in private and professional life, such leaders are expected to be most efficient, reliable, satisfactory and inspirational.
The “Big Five” personality traits are believed to be basic underlying trait dimensions of personality: agreeableness, openness, extraversion, conscientiousness and neuroticism. Brown and Treviño (2006, p. 603) suggest that that ethical leadership is related the leader's agreeableness, conscientiousness, and neuroticism. Kalshoven (2010, p. 93) researched the importance of the role of individual differences, and especially conscientiousness, agreeableness and emotional stability in ethical leadership.
Treviño, Hartman and Brown (2000, p. 130) highlight the most important pillars, which form the basis for maintaining a reputation for ethical leadership. In order to develop it, a person should be perceived not only as a “moral person”, but also as a “moral manager.” Leadership may be distinguishing by taking into account the moral point of view. Holding a position of leadership an executive influences his or her subordinates without knowing how far the ripples of these decisions may go (Ciulla 2005, p. 329).
Moral judgment refers to differences in the perception of what is right. The managerial test of moral judgment was developed to measure the moral judgment of individuals who face different ethical situations. Loviscky, Treviño and Jacobs (2007, pp.266-275) identified the importance of moral judgment and its impact on the decision-making process. Besides, people rely on others’ opinions, which is rather predictable.
In a research conducted by Treviño, Hartman and Brown (2000, p. 129), a lot of executives stated the importance of having principles and taking care of the needs of society. Their assumptions were based on sufficiency of being just a good leader, as long as the followers would define them as ethical by default. However, according to Ciulla (2005, p. 331), actions of a leader are of great importance, just like other significant questions, such as ‘what leaders should be like, their responsibilities and relationships with constituents as leaders, how they lead, and where they lead people’. Fisher and Lovell (2005, p. 175) point out that there is no particular reason to believe that people, who become executives, will be capable of being ethical leaders.
Kalshoven (2010, p. 68) adds that it is rather incomprehensible why some people choose to settle matters through ethical behaviors, while others prefer alternative ways of arrangement. The answer to this question may appear to be connected to the character of a person who makes tough decisions.
Blanchard and Peale 1988 (Fisher & Lovell 2005, p. 175) argued about ‘the cardinal virtues for organizational leaders: the five ‘Ps’ – pride, patience, prudence, persistence and perspective’. One does not have to follow in order to become a leader, but the very admiration of ethical behavior of a person he or she follows stimulated to act in a like manner. That is the main reason for leaders to aspire to be moral because the failures can be very costly.
Being perceived as a “moral person” means a high evaluation of the leader’s traits, behaviors and decision making processes by employees. Honesty, trustworthiness, respect and concern for others are the main characteristics of such a person. Building relationships is based on support and transparency (Treviño & Brown 2004, p. 75). Being a moral person is the substantive basis of ethical leadership. However, if a person does not believe in what he or she promotes, others will not, either.
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The relationship between followers and leaders has some distinctive characteristics that make it morally different, because leaders usually have more power or a different kind of power and influence than followers. It can be a leader’s position, expertise, personality or charisma. Persuasion, personal or political network, coercion or rewards are the instruments of effective influence. However, with power comes a greater responsibility (Ciulla 2005, p. 326).
Being perceived as a “moral person” is not enough. Followers also need to understand what the leader expects them to do. Therefore, it is essential to be a perceived as a “moral manager” to lead others, set standards, communicate ethics messages and use rewards and punishments to guide ethical behavior (Treviño & Brown 2004, p. 75). A leader who is strong at combining the “moral person” and “moral manager” is perceived to be an ethical leader. The main challenge for such a leader is to make ethics and values stand out and be absorbed by others.
Integrity is one of the concepts that would form part of any definition of business ethics. The importance of integrity within organizational life in general, and executive decision making in particular, is discussed by Srivastva and Cooperrider (1988), although they stress that the way forward is not easily mapped. It can only be navigated and negotiated through dialogue, reflection, learning, tolerance and wisdom (as cited in Fisher & Lovell 2005, p. 33).
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Integrity can defined as a unity or wholeness of thoughts and actions based on moral codes and principles. The choice of ethical horizons allows to assess certain situations that are being faced by a leader and detect its morality and integrity. Therefore, integrity and loyalty ‘are affected by the extent of the subject’s ethical horizon’(Fisher & Lovell 2005, p. 205).
The Ethical Leader
Ethical leaders should be aware of what he is doing and it should be the right thing. When referring to followers, they come first. Not being self-centered, such a person can maintain a sustainable relationship with people around. Openness and ability to listen allows employees to feel comfortable when sharing good or bad news. Personal morality is associated with ethical leadership (Treviño, Hartman and Brown 2000, p. 132).
The Unethical Leader
Unethical leader can be identified as someone who is neither a moral person nor a moral manager. The main purpose of such executives is to achieve success by any means. People are not being valued or treated with dignity and respect. Though Ciulla (2005, p. 330) affirms that ‘not all unethical leaders are evil; some simply make bad decisions or moral mistakes’.
The Hypocritical Leader
Those who can perform their duties as moral managers, but who are acting the opposite way in their personal life, can be thought of as hypocritical leaders. They raise expectations, but at the same time turn out to be unreliable. Treviño and Brown (2004, p. 76) claim that ‘nothing makes people more cynical than a leader who talks incessantly about integrity, but then engages in unethical conduct himself and encourages others to do so, either explicitly or implicitly’. It causes aversion when someone only talks about ethics but never actually acts. As a result, followers not only distrust their leader, but also assume they can ignore ethical standards likewise (Treviño, Hartman and Brown 2000, p. 138).
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The Ethically Neutral Leader
This type of leaders is also called ‘ethically silent’, for it applies to executives, who are neither strong ethical nor strong unethical leaders. Such a person may not be perceived as unethical, but at the same time does nothing to prove his interest or concern. To be specific, such a leader is usually more self-centered, less open to interaction with others and less compassionate. Followers need evidence of positive ethical traits, behaviors and decision processes (Treviño, Hartman and Brown 2000, p. 138-139).
Speaking generally, it requires more than a strong character to develop a reputation for ethical leadership. In order to be effective ethical leaders, executives must demonstrate that they are ethical in many ways themselves. Actions speak louder than words. The key is in constant individual growth and learning. It is a way to get to know one’s potential. (Fisher & Lovell 2005, p. 120)
Many businesses and nearly all professions have a code of ethics. The public demands ethical conduct on the part of business persons and professionals, but their expectations regarding professional behavior are higher than their expectations regarding business persons. (Jamal & Bowie 1995, p. 703). Stevens (2008, p. 601) states that codes can be effective instruments of shaping ethical behavior, whereas culture and effective communication are key components to a code’s success. At one level, codes of conduct and ethics can be seen as legitimate and necessary devices for senior management to develop in order to specify expected codes of behavior of all employees. Each employee of an organization will be seen as a representative of that organization by others external to the organization. Thus, it is important that employees reflect behavior that is commensurate with the persona and reputation that the organization wishes to project. In this context, some writers see codes of conduct as principally manipulative control devices to achieve managerial ends (Fisher and Lovell 2005, p. 383).
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There are three main factors that influence followers’ perceptions of a leader: moral intensity, ethical decision-making and role modeling.
Moral intensity of a situation or problem is faced by a leader and felt by a concerned employee. According to Treviño & Brown (2004, p. 70), ‘an individual is more likely to identify an issue as an ethical issue to the extent that a particular decision or action is expected to produce harmful consequences and to the extent that relevant others in the social context view the issue as ethically problematic’.
There is a certain connection between moral intensity and ethical leadership. In case of a correct solution of an intense situation or problem, the recognition of an executive as the ethical leader grows. If a problem is not solved the right way, it results in a negative perception of leader’s image. Therefore, moral intensity has a direct relation to ethical leadership.
Ethical values and principles are the background to leader’s decision-making. The main challenge is to maintain objectivity and fairness, broaden the boundaries of narrow vision and perceive the essence of the matter. Fisher and Lovell (2005, p. 401) state that the direction and example presented by senior management in terms of what is considered to be acceptable practice within an organization must inform and shape the behavior r of others.
Ethical leaders set ethical standards and communicate them to their followers. The followers are being encouraged to make decisions themselves. Moral responsibility of a leader is to set a high standard on the process and, therefore, produce more ethical decisions. Such behavior will make followers to weigh their decisions and make more ethical ones as a result (Brown and Treviño 2006, p. 607).
Hoffman and Rowe (2008, pp.181-182) confirm that preoccupation with rules, as opposed to values, and a failure to appreciate the importance of corporate culture on individual conduct are problems that have been appreciated to a greater extent in the wake of some spectacular corporate scandals. An ethical leader should maintain problems that are related to motivation and morale to maintain a well-coordinated environment (Katz & Kahn 1978, p.68). A leader’s integrity lies between vision and action that promotes trust and moral standards (Gottlieb & Sanzgiri 1996, p. 1275).
To better the quality of decisions,all facts regarding consequences must be evaluated. Calculating potential risks in advance allows to avoid silly mistakes (Messick, Bazerman & Stewart 2006, p. 5).
According to the social learning theory, if there are role models, individuals will strive to emulate them. Both top management and supervisory ethical leaders influence employee, though the levels of such an impact differ. Mayer et al. (2009, p. 5) suggest a ‘trickle-down effect of ethical leadership such that the influence of top management on employee behavior is indirect, flowing through supervisory leadership’. Brink (2011, p. 310) indicates that integrity is vital to a leaders’ ability to attract followership.
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Ethical leadership also concerns wellbeing of followers, which is defined as the overall quality of an employee’s experience and functioning at work, and includes such elements as satisfaction, attachment, arousal, tension, and depression. Kalshoven and Boon (2012, p. 61) suggest that ethical leaders can provide job resources by successfully defending employees, protecting them from unfairness, or mobilizing job resources, which positively affects employee wellbeing. Therefore, ethical leaders play an important role in employees experiencing high job wellbeing.
Role modeling emphasizes visible action. Kalshoven (2010, pp. 136) points out that along with stimulation of responsibility it is very important to provide followers with a range of different behavioral options and responses they could choose from, including whether to take responsibility or not.
Ethical leadership deals with a moral dimension and therefore distinguishes from other types of leadership. Recent researches concentrate on close interdependence of effective performance of an executive and his or hers character traits. Combination of “moral person” and “moral manager” is the key to a leader’s integrity which allows to act as a real role model to numerous followers.
The value of ethical leadership lies in the way it deals with modern governance. In an increasingly fast-changing world, ethics is what remains the same. This set of high moral standards will be passed on from one generation to another, thus promoting the best qualities eternally.