5-1 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

5-2 Leadership Ethics and Values “Leadership cannot just go along to get along… Leadership must meet the moral challenge of the day.” ~Jesse Jackson Chapter 55

5-3 Introduction Personal values may be one of the most important determinants of how power is exercised or constrained. Mere possession of power leads to ethical questions about usage of power. The challenge of leadership becomes complex in a diverse and global environment.

5-4 Leadership and “Doing the Right Things” Leaders face dilemmas that require choices between competing sets of values and priorities. Leaders set a moral example that becomes the model for an entire group or organization. Leaders should internalize a strong set of ethics, principles of right conduct, or a system of moral values. Good leaders tend to align the values of their followers with those of the organization or movement.

5-5 Leadership and “Doing the Right Things” (continued) Four qualities of leadership that engenders trust: –Vision –Empathy –Consistency –Integrity Two contrasting sets of assumptions people make about human nature: –Theory X Reflects that most people need extrinsic motivation. –Theory Y Reflects that most people are intrinsically motivated.

5-6 What Are Values? Values: “Constructs representing generalized behaviors or states of affairs that are considered by the individual to be important.” They play a fairly central role in one’s overall psychological makeup. –They can affect behavior in a variety of situations. Individuals in the same work unit can have considerably different values. We can only make inferences about people’s values based on their behavior.

5-7 Are there Generational Differences in Values? Pervasive influences of broad forces at a particular time tend to create common value systems. –This may contribute to misunderstandings and tension between older leaders and younger followers. Each generation is molded by distinctive experiences at their critical developmental periods: –The Veterans (1922–1943) –The Baby Boomers (1942–1960) –The Gen Xers (1960–1980) –The Nexters (1980–)

5-8 Are there Generational Differences in Values? (continued) Research has also found that there is little evidence of a generation gap in basic values. Research has looked at how GenXers impact leadership: –Define leadership as removing obstacles and gioving followers what they need –Believe leaders have to “earn their stripes” rather than advance by seniority

5-9 Moral Reasoning An important consideration is how one thinks about value-laden issues or ethical dilemmas. Moral reasoning: Process leaders use to make decisions about ethical and unethical behaviors. –Manner by which leaders solve moral problems. Value differences often result in different judgments regarding ethical and unethical behavior. Kohlberg offers that although the development of moral reasoning is invariant, not all individuals actually achieve the highest stages.

5-10 Developmental Levels and Stages of Moral Reasoning

5-11 Biases Affecting Moral Decisions Research has identified 4 biases that affect our moral decision making: Implicit prejudice – subconscious prejudices that affect our decisions without us being aware of them In-group favoritism – doing acts of kindness and favors for those who are like us Overclaiming credit – overrating the quality of our own work and contributions Conflicts of interest – we often discount the effects of a conflict of interest

5-12 Examples of Rushworth Kidder’s Four Ethical Dilemmas Truth versus loyalty – when honestly answering a question may compromise confidentiality. Individual versus community – compromising the rights of an individual for the good of the community. Short-term versus long-term – balancing time with children verses on career. Justice versus mercy – for ex excusing a person’s behavior due to extenuating circumstances

5-13 Kidder’s Principles for Resolving Ethical Dilemmas Ends-based thinking – “Do what’s best for the greatest number of people.” Also known as utilitarianism. Rule-based thinking – “Following the highest principle or duty.” Care-based thinking – “Do what you want others to do to you.” Also known as The Golden Rule.

5-14 Ways people avoid feeling guilty Good people sometimes do bad things. Here are some ways people avoid guilty feelings associated with those actions: Moral justification Euphemistic labeling Advantageous comparison Displacement of diffusion of responsibility Disregard or distortion of consequences Dehumanization Attribution of blame

5-15 Authentic Leadership Founded in Greek philosophical notion of “to thine own self be true.” Strong ethical convictions that guide behavior Not so much avoiding doing what is “wrong” as much as trying to do what is “right” Has gained momentum recently because of beliefs that –enhancing self-awareness can help people in organizations find more meaning and connection at work –Promoting transparency and openness in relationships builds trust and commitment –fostering more inclusive structures and practices can help build more positive ethical climates

5-16 Servant Leadership Leadership role is serving others Stems in part from the teachings of Jesus 10 characteristics describe servant leaders: Listening Empathy Healing Awareness Persuasion Conceptualization Foresight: Stewardship Commitment to others’ growth Building community:

5-17 Leading by example… One of the most quoted “principles of good leadership” Research shows that ethical role models are characterized by four general categories of attitudes and behaviors: –Interpersonal behaviors : show care, concern, and compassion for others. –Basic fairness : fairness shown to others –Ethical actions and self-expectations: hold themselves to high ethical standards –Articulating ethical standards: articulate a consistent ethical vision and are uncompromising toward it

5-18 Formal Leadership Roles Formal leadership roles impose unique ethical responsibilities and challenges. Leaders more than followers: Possess unique degrees of both legitimate and coercive power Enjoy greater privileges Have access to more information Have greater authority and responsibility Interact with a broader range of stakeholders who expect equitable treatment Must balance sometimes competing loyalties when making decisions

5-19 Creating and sustaining an ethical climate 5 “fronts” of leadership action are required to create an ethical climate: Formal ethics policies and procedures – formal statements of ethical standards and policies, reporting mechanisms, disciplinary procedures, penalties for ethical violations Core ideology – organization’s purpose, guiding principles, basic identity, and most important values have to have an ethical focus Integrity – can’t be just plaques, posters or declarations… ethics has to be enacted through personal integrity Structural reinforcement – organization’s structure and systems should encourage higher ethical performance and discourage unethical performance Process focus – how goals are achieved is as important as achievement

5-20 Principle–centered Leadership Fundamental interdependence between the personal, interpersonal, managerial, and organizational levels of leadership Unique roles of each are: Personal – be a trustworthy person in terms of both character and competence. Interpersonal – a lack of trust leads to self-protective efforts to control and verify each other’s behavior. Managerial – empowering others requires a trusting relationship and requires team building, delegation, communication, negotiation, and self-management. Organizational – creativity requires the organization’s structure, systems (e.g. training, communication, reward), strategy, and vision be aligned and mutually supportive.

5-21 Summary There is a relationship between ethics, values and leadership More than just the content of what one believes is right and wrong, how one makes ethical decisions is critical. Ethical dilemmas often involve a choice between two “rights” rather than right and wrong. Recent research has explored the interdependencies between effective leadership and particular value systems