What is Ethics in Leadership?

Ethics is the moral principles that govern the behavior of an individual. Each person has own ethical principles which he follows whether he is in a profession or not. However, when it comes to profession then they have ethics which are more rigid and they have to follow same strictly which is required for their profession. This paper focuses on how ethics are important in a profession and how it can affect the outcome of an organization.

Leadership is defined as to influence people in performing organizational tasks (Finn & Tonsager, 2008). A leader has to make difficult decisions for performance of his team which will lead to success or failure of the whole organization. The decisions which are made by a leader affects the future of an organization. If those decisions are unethical then it will affect an organization as well as people who make those decisions for good or bad (Campbell & Dahlin, 2009).

Ethics and Leadership:

It is described that leadership with ethics is very important for an organization. The decisions of a leader affects the whole organization (Finn & Tonsager, 2008). Thus it is important for a leader to make ethical decisions which will be beneficial and not harm the future of an organization. It is said that leadership is all about making decisions and taking actions, but these need to be ethically sound (Dunfee, 2012).

Different types of Leaders:

There are various different types of leaders which are categorized on the basis of the position they hold. These include first line leader, mid-level leader and top level leader (Bass & Steidlmeier, 1999). Among these three levels, decisions of a top level player have maximum impact on an organization. The decisions made by top level player can turn the whole company upside down or these decisions will bring up an organization to its peak (Nutt, 2007).

Ethical leadership:

To be a leader one has to be ethical. The decisions made by leaders should not harm anyone but instead they should benefit everyone (Bass & Steidlmeier, 1999). In order to be a successful leader it is important for a person to have ethics. An ethical leader should have knowledge about the company and its policies so that he can take decisions according to them. The top level leaders are responsible for making ethical decisions which will not harm or benefit the future of an organization (Cascio, 2012).

What are the 4 main ethical principles in leadership??

When it comes to making decisions in an organization, there are four major ethical principles which a leader should always follow. These help a leader to make decisions for good and give positive results (Cascio, 2012).

1) Accountability:

Accountability is a very important principle of leadership which allows a person to take responsibility for the decisions made by him. It does not matter whether a decision is good or bad but it is important for a leader to take responsibility for the decisions which are made (Nutt, 2007). Accountability gives confidence in an employee that whatever he does will be evaluated and analysed on basis of his actions rather than his intentions.

2) Fairness:

It is very important for a leader to be fair. This principle helps in taking the right decision and considered as one of the most important ethical principles (Bass & Steidlmeier, 1999).

3) Openness:

Openness allow an employee to work openly and freely without any fear. The main thing which allures an employee to work in an organization is that it should be open and free. It gives employees the freedom of their opinion and they are allowed to share their ideas with everyone (Cascio, 2012).

4) Respect:

Respect for employees is very important which makes them feel valued. Employees always want to be respected at work. Respect is considered as a positive motivational factor for employees. They want to be treated equally at work and they also wish to be given the respect which they deserve (Bass & Steidlmeier, 1999).

A leader should always follow these four ethical principles which will result in making good decisions for an organization. These ethical principles will help a person to become a good leader and he will be able to make decisions which will assist the future of an organization (Nutt, 2007).

Decision Making:

In order to make decisions a leader has to gather all the information from his team members and from different sources. He has to think which option will be beneficial for an organization in future. A good leader is that who does not panic under difficult circumstances and thinks of the most ethical decision possible. He should make decisions which do not harm the organization in future. The information should be gathered from all possible sources and team members so that it will help making a good decision (Cecere, 2012).

Ethical values:

An ethical leader considers different factors before taking any decision. A leader has to think of all the options available for a particular circumstance. He has to gather all the possible information and proceed further (Dunfee, 2012). The decisions should be made with consideration of all pros and cons of it. A leader has to take into account ethics while making any decision. This will affect an organization in future but not only the organization but also the people who work for the organization. The impact will be on the working ethics of employees which further will have an effect on work culture of an organization.

Ethical Leadership in Organizations:

Leadership is said to be impossible without ethics (Nutt, 2007). It is clear that there are various reasons for taking decisions which becomes important for a leader to take into account while making decisions. Leadership and ethics go hand in hand and in order to be a good leader one has to have ethical values (Bass & Steidlmeier, 1999). A leader should also consider the factors which will affect the organization in future before taking any decision. An ethical leader is responsible for making an organization successful and he can achieve this goal only with ethics. An ethical leader should have knowledge about his team members and the organization policies, so that he can take decisions based on them (Cascio, 2012).

A leader is someone who works for an organization to make it successful. He has several responsibilities towards his work, towards employees and towards future of an organization which makes him an essential part of any successful organization. A leader can make or break a company, and it is important for him to take decisions according to the situation (Nutt, 2007). An ethical leader should be open minded and he should not discriminate anyone due to their color, caste, creed etc. He should value ideas of other people and work towards making an organization better. He should take decisions for the betterment of employees, owners and other key stakeholders so that everyone is benefited in one way or other (Cascio, 2012).

The ethical leaders are responsible for taking all the possible factors into account while making any decision. A leader should have knowledge about business policies to make decisions accordingly (Bass & Steidlmeier, 1999). Every decision taken by a leader should have a positive impact on organizations. If any decision takes place which has negative impact on the organization then it becomes essential for a leader to take corrective measures or else he will be removed from his position. There are various ethical values that a leader should uphold for being successful. A leader should demonstrate honesty, integrity and fairness in his work (Dunfee, 2012). He should also be selfless as he has to think about the organization as his own.

An ethical leader is that who treats everyone equally and does not discriminate between employees due to their color, caste etc. He also thinks of others before taking any decision and has to look for the people who will be affected by that decision (Cecere, 2012). He should value people and their ideas so that everyone can work towards making an organization successful. A leader has to take all the factors into account before taking any decision and he should not favor anyone in this process. The success of an organization depends upon the leader. A leader should also aim to make an organization a better place to work for employees.

An ethical leader has certain responsibilities towards his organization which include honesty, integrity and fairness. He takes every decision after thinking about its impact on organizations (Bass & Steidlmeier, 1999). A leader should be selfless as he has to think about organization’s success rather than his own well being. He should treat everyone equally and does not discriminate anyone due to their color or caste (Cascio, 2012). It is important for an ethical leader to value people’s ideas so that everyone can work together towards making an organization successful.

Ethical Leadership Examples

Every corner offers ethical challenges. It’s not just in the most apparent industries, such as banking and finance, that there are issues. It isn’t limited to well-known breaches like manipulating statistics, obscuring assets or liabilities, or squandering corporate money. More subtle instances may exist. Even HR practices are often scrutinized, since they involve the power to hire, fire, promote or otherwise affect career opportunities. Leaders can violate ethical standards at their workplace just by neglecting responsibilities, even if they’re not deliberately trying to hurt anyone (Bass & Steidlmeier, 1999).

An example of unethical leadership is when a leader favors his friends and fails to take corrective measures even after having knowledge of the misdoings of his friend. A leader should look for people who can be affected by his decision and then decide accordingly (Cascio, 2012). He should not let anyone get away with unwanted things such as taking company’s money or violating work rules. It is important for a leader to take all the factors into account before taking any decision as he might make a mistake if he does not consider all the possibilities.

An ethical leader is that who makes decisions without considering his personal interests and with complete knowledge of all the possible scenarios (Dunfee, 2012). A leader should also aim to make an organization a better place to work for his employees. He should take all the factors into account and not favor anyone while making a decision. There are various ethical values that a leader should uphold for being successful.

An example of ethical leadership is when a leader takes every decision after thinking about its impact on individuals stressed out due to the increasing pollution levels in the city (Bass & Steidlmeier, 1999). He allows people who want to take leave to work from home if their location is not suitable for them due to the increasing heat levels. He also takes all the factors into account before making any decisions and does not favor anyone while taking such decisions.

Ethical Violations

It’s not just in the most apparent industries, such as banking and finance, that there are issues. It isn’t limited to well-known breaches like manipulating statistics or obscuring assets or liabilities. More subtle instances may exist. Even HR practices are often scrutinized, since they involve the power to hire, fire, promote or otherwise affect career opportunities.

An example of ethical violation can be when a leader takes personal benefits out of company resources and the company ends up losing money (Cascio, 2012). An ethical leader is responsible for all his decisions and only after evaluating every aspect he should take any decision. It is important for a leader to look at how certain decisions will affect not only him but also other employees.

Leadership Style and Ethics

In most cases, leaders who raise ethical concerns are those who place a strong emphasis on their own values as they relate to leadership. Leaders with this type of focus sometimes advocate treating people fairly and with respect even when it hurts, but they also want to protect the company’s image and interests by all means necessary. This kind of leader may have a difficult time balancing the sometimes-competing demands that come with leadership.

One of the examples of ethical leadership style is when a leader takes responsibility for his decisions and does not blame others if something goes wrong (Bass & Steidlmeier, 1999). An ethical leader has to take all the factors into account before taking any decision as he cannot take a wrong decision. It is important for a leader to have an ethical leadership style as it effects the reputation of the organization.

Ethical Leadership and Moral Courage:

Leaders who don’t follow the ethical path in day-to-day business risk compromising the organization’s morale and its overall cohesion. An employer can easily sense when an employee isn’t in sync with his peers because of a leader’s unethical conduct and behavior. This kind of dissonance is bound to trickle down through other activities and processes, such as sales and customer relations.

One of the examples of ethical leadership is when a leader follows a proper code for all his actions and decisions (Earley, 2008). It is important for a leader to have an ethical leadership style as it effects the reputation of the organization. An employer can easily sense if something is wrong from the behavior or attitude of employees. A leader should be able to make decisions which are right for the company and he should not favor anyone in this process.

Organizational Culture, Leadership Ethics, And Organizational Citizenship Behavior

When leaders find ways to align their own personal values with those of the organization, that is when they start becoming steeped in organizational values. This kind of alignment enhances the organization’s ethical control system and works as a tool to prevent unethical behavior among employees (Cascio, 2012). A recent study by the Center for Creative Leadership found that organizations with strong leadership ethics had four times lower levels of misconduct than those with weak or nonexistent ethics.

Employees always look up to their leader and draw inspiration from them. If a leader is seen taking decisions which are wrong and unethical, then it affects the work culture of the organization (Schermerhorn et al, 2011). An employer should always try to choose leaders who will follow company rules and policies. A leader should be able to make decisions for the good of the organization and not just for himself. Without ethical leaders an organization cannot survive for long as it will fail to provide better services to the customers.

Ethical Leadership And The Role Of Crisis

One of the examples of ethical leadership style is that a leader should always support the staff members even during times of vicissitudes (Cascio, 2012). A crisis may be an opportunity for leaders to show their ethical values and strengthen the bond with employees. Leaders who are focused on the values of the organization and its people tend to become stronger during crises, because it gives them a chance to put those values into action (Cascio, 2012).

While an ethical leader’s actions should speak louder than words, it is also crucial to make sure the employees know about their leader’s moral commitments. Shared values become stronger when they are expressed by everyone, not just through management policy but through leadership action as well (Cascio, 2012).

An ethical leader has to take all the factors into account before doing anything because he cannot do a wrong thing. It is important for a leader to have an ethical leadership style as it effects the reputation of the organization. If a leader is engaged in unethical practices it affects the work culture of the organization. It is also important for leaders to share values with their employees so that they know what is expected of them. Leaders should follow company rules and policies at all times. A leader should be able to make decisions for the good of the organization and not just for himself.

A New Model for Ethical Leadership

A common misconception about ethics is that they’re all about doing things by the book, following every rule precisely, and not cutting any corners. However, following rules without thinking about them is not the same thing as adhering to ethical principles.

It is important for a leader to have an ethical leadership style in today’s world where people are more aware of their rights and it is believed that doing something by the book does not necessarily mean that it is ethical (Mintzberg, 2009). Therefore, if someone wants to follow an ethical leadership style in today’s world it is important to think before making any decision and then take a right decision.

The Value of Ethical Leadership and Its Impacts

These seven characteristics are found in organizations that adhere to ethical leadership, and they have a variety of consequences for businesses. For instance, if leaders act with ethical awareness and don’t allow potential unethical situations to occur, then the organization benefits from increased profits, lower turnover rates, and a better reputation.

Ethical leadership has been linked to multiple positive business outcomes that have a direct impact on organizational performance. For example, creating an ethical culture will minimize risk because management understands and supports the organization’s values and employees know what is expected of them (Bizjak, 2010).

On the other hand, acting unethically reduces an organization’s profits as well as customer and investor confidence (Schermerhorn et al, 2011). Companies which make ethicality a priority will also experience lower levels of employee turnover.

Short-term and long-term benefits accrue when organizations are led by highly moral leaders. Ethical leadership is not only important for businesses; it’s also crucial for their stakeholders and communities as a whole. These consequences include:

Increased profits
Consumer trust and loyalty
Lower turnover rates among employees
A better reputation for the organization
Higher levels of customer satisfaction (Mintzberg, 2009)

Ethical Leadership Characteristics

An ethical leader’s qualities may, for example, cross into the transformational style. However, here are ten leadership traits that all great ethical leaders possess:

Justice

An ethical leader is just and fair. They have no favorites, and everyone is treated equally. Biased treatment based on gender, race, nationality, or any other factor is eliminated in the conduct of ethical leadership.

Respect for Others

An ethical leader shows respect for all team members by listening attentively, valuing different viewpoints and taking opposing views into account.

Transparency

Leaders that are ethical use facts clearly, regardless of how unpleasant the reality may be. These leaders recognize that transparency creates trust and allows others to make their own judgments based on the information they have.

Focus on Team Building

Ethical leaders foster a sense of community and team spirit within the organization. When an ethical leader strives to achieve goals, it’s not just about a personal mission. They make genuine efforts to achieve objectives that benefit the entire organization — not just themselves.

High Personal Standards

Ethical leaders are known for their high personal standards. They hold themselves accountable to the same ethical standards that they expect from others.

Advocacy for the Organization

When unethical practices are employed by business leaders, it is often in an attempt to improve conditions within the company. An ethical leader will not abandon company ideals for personal gain.

Pride in the Organization’s Reputation

Leaders that are ethical take pride in the organization’s reputation and will do everything in their power to achieve its goals. If an ethical leader is forced to accept defeat, they can be counted on to step out of the company gracefully rather than tarnish its image.

Accountability

Leaders that are ethical take responsibility for their mistakes and do not shy away from culpability. These leaders will never blame others when something goes wrong, but instead they will acknowledge their own role in the breakdown of ethics within the organization.

Focus on Growth

Although many ethical leaders may be promoted to a managerial position because of achievement rather than how well they work with others, ethical leaders are focused on the growth of their organizations. They want to see their departments or businesses grow and prosper because it will give them a sense of fulfillment when they know that someone is depending on them.

Visionary Leadership

Ethical leaders have a good understanding of the organization’s mission, vision and values. They understand why the company was started and what it aims to achieve. Ethical leaders have a clear understanding of where their department or business fits within the organizational hierarchy, and they know that they are responsible for furthering the success of the organization by upholding its ethical pillars.

In Conclusion: An ethical mindset is the first step for any leader on their journey to becoming a great leader. Without it, leaders will face many issues and challenges. But if they are able to adopt an ethical mindset, they will be well-equipped to face these challenges head-on.