Part 3—The Importance of Ethics McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Six qualities of Transformational Leaders Vision Energy Symbolism Empowerment Intellectual stimulation Integrity 3-2

Aristotle’s Six Elements of a Whole Human Life Health Wealth Friendship Moral Virtue Intellectual Virtue Good Fortune 3-3

Important Influences on Character Formation Associations Our friends, family, and role models Books Can expand or limit our potential Self-Concept We do what we do to be consistent with who we are 3-4

Levels of Morality A person’s level of morality determines whether people will trust and respect the leader. On what basis does the individual make ethical decisions? Preconventional Morality Conventional Morality Postconventional Morality Stages 1 & 2Stages 3 & 4Stages 5 & 6 3-5

Most Mentioned Values Honesty Respect Service Excellence Integrity 3-6

The Ethical Leader Focuses on the Well-Being of Four Groups of People Customers Employees Shareholders Community 3-7

Six Values of Caring Leaders Honesty Consideration Responsibility Persistence Excellence Commitment 3-8

Six Types of Values Theoretical Economic Aesthetic Social Political Religious 3-9

Theoretical Primary interest is the discovery of truth Prefers a cognitive approach Prefers to order and systemize knowledge One example is Albert Einstein 3-10

Economic Primary interest is finding what is useful Enterprising and efficient More interested in financial worth than political or social worth Want practical education One example is Andrew Carnegie 3-11

Aesthetic Receives the highest satisfaction from harmony and beauty Feels life is to be enjoyed for its own sake Interested in people but not necessarily their welfare Individualistic One example is Leonardo da Vinci 3-12

Social Love is their highest value Kind, sympathetic, and helpful to others Others are people, not tools Unselfish One example is Jane Addams 3-13

Political Interested in gaining power and influence Want to exercise authority Want to be in charge One example is Queen Elizabeth I 3-14

Religious Highest value is spiritual peace Focus on events, people, and experiences in the world An example is Mother Teresa 3-15

Character Development Stephen Covey, author, wrote the book The Seven Habits of Highly Effective People. He concluded that each person should strive to develop seven important habits that are basic ingredients for character development. 3-16

Habit #1 Be Proactive Take personal responsibility for your life. Be a driver, not a drifter View yourself as the master of your own destiny. 3-17

Habit #2 Begin with the end in mind Have a clear picture of what you want to accomplish before you act 3-18

Habit #3 Put first things first Prioritize your activities in line with your value system to gain control of your life 3-19

Habit #4 Think Win-Win Helping others can let both parties succeed. Treat others how you would like to be treated. 3-20

Habit #5 First Understand Then be Understood This shows humility and respect. It yields more truth and multiplies knowledge. 3-21

Habit #6 Synergize Together everyone achieves more! Synergy requires openness to change and appreciation of diversity. 3-22

Habit #7 Sharpen the Saw There is inevitable need for renewal and reinforcement. Continue your education and open yourself to new experiences! 3-23

Criteria for the Best Work Rules 1) they reflect the ethical ideals of the ownership, or, in the case of public organizations, the public trust; 2) they are reviewed periodically for needed revisions; 3) they are few in number; 4) they are stated clearly; 5) they are communicated to all employees; and 6) they apply equally to all employees, regardless of level of authority or nature of duties. 3-24

Six Areas for Ethical Guidelines Government relations Employee relations Community and environment relations Business relations Production Consumer relations 3-25

Seven Basic Rules for Organizations Ethics Obey the law Tell the truth Show respect for people Follow the Golden Rule Primum non nocere (above all, do no harm) Practice participation, not paternalism Always act when you have the responsibility to do so 3-26

Four key Ethical Questions of Rotary International 1. Is it truth? 2. Is it fair to all concerned? 3. Will it build goodwill and better relationships? 4. Will it be beneficial to all concerned? 3-27

Sample Credo of an Ethical Company We will be honest and trustworthy in all of our dealings. We will treat every individual with respect and dignity. We will follow the golden rule in all matters. We will strive for excellence in all work performed. We will obey the laws of our land in fact and in spirit. We will always do the right thing in every situation to the best of our abilities. If we fail in abiding by these principles, we will do whatever is needed to make amends. 3-28