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

2. Six qualities of Transformational Leaders
Vision
Energy
Symbolism
Empowerment
Intellectual stimulation
Integrity
Vision: Having a purpose and a clear sense of direction; communicating these to others; developing excitement about accomplishing goals.
Energy: Arousing others’ enthusiasm, pride, and trust in themselves through the power of personal reference and appeals to emotion.
Symbolism: Identifying “heroes,” offering special rewards, and holding spontaneous and planned ceremonies to celebrate excellence and high achievement.
Empowerment: Helping others develop, removing performance obstacles, sharing responsibilities, and delegating truly challenging work.
Intellectual stimulation: Gaining the involvement of others by creating awareness of problems and stirring their imagination to create high-quality solutions.
Integrity: Being honest and credible, acting consistently out of personal conviction, and by following through on commitments.
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3. Aristotle’s Six Elements of a Whole Human Life
Health
Wealth
Friendship
Moral Virtue
Intellectual Virtue
Good Fortune
Aristotle’s Six Elements of a Whole Human Life:
1. Health: physical and emotional well-being.
2. Wealth: absence of economic want or need.
3. Friendship: The love and admiration of worthy comrades.
4. Moral Virtue:
a. Justice – a clear sense of right and wrong.
b. Courage – bravery to uphold one’s convictions.
c. Moderation – the avoidance of harmful extremes.
d. Prudence – action tempered by caution.
5. Intellectual Virtue including:
a. Knowledge – breadth and depth of understanding the world.
b. Wisdom – good judgment based on reason.
6. Good fortune: favorable luck and circumstances; she was born to caring parents.
Aristotle on Ethics: The word ethics is derived from the Greek word ethos, referring to a person’s fundamental orientation toward life. Originally, ethos meant “a dwelling place.” For the philosopher Aristotle, ethos came to mean “an inner dwelling place,” or what is now called “inner character.” The Latin translation of ethos is “mos, moris,” from which comes the English word moral. In Roman times, the emphasis shifted from internal character to overt behavior – acts, habits, and customs.
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4. 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
Associations. Family, friends, and role models help shape our future lives. The example and encouragement of some people may improve us, while others may pull us down.
Books. The printed page and other media can poison us with wrong accounts and depressive thoughts, or can enlighten and life up our lives with reason and spirit fundamental to a healthy person.
Self-concept. We do what we do to be consistent with who we think we are. Our primary motivation is not self-preservation, but preservation of the symbolic self. Whoever considers herself to be honest, brave and worthy is likely to be so, as our outer lives are first decided in our inner hearts.
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5. 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?
A person’s level of morality is one of the most important dimensions of leadership, determining whether people will trust and respect the leader. Regardless of the code of ethics a society teaches and regardless of one’s personal values, on what basis does the individual make ethical decisions? What motive, goal, or frame of reference does the person bring to moral dilemmas? There are many ideas on this question, but the work of social psychologist Lawrence Kohlberg occupies center stage.
Different people go through the six stages of moral development at different rates, and some people never reach the principled morality of stages 5 and 6. Individuals who remain at lower levels of morality experience arrested developmental integrity. The egocentric orientation of stages 1 and 2 is most characteristic of preadolescent children, whereas the community-oriented morality of stages 3 and 4 is common in teenagers and most adults. The self direction and high principles of stages 5 and 6 are characteristic of only 20 percent of the adult population, with only 5 to 10 percent of the population operating consistently at level 6.
Stages 1 & 2
Stages 3 & 4
Stages 5 & 6
Preconventional Morality
Conventional Morality
Postconventional Morality
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6. Most Mentioned Values Honesty Respect Service Excellence Integrity
HONESTY in all dealings. . .as a foundation for all other values.
RESPECT for others. . .as shown by consideration for their beliefs and needs.
SERVICE to others. . .guided by the principle of doing for others as you would have them do for you.
EXCELLENCE in all work performed. . .reflecting the Greek ideal of excellence as a virtue, and resulting in both public admiration and personal pride.
INTEGRITY. . .courage to act and live by one’s convictions.
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7. The Ethical Leader Focuses on the Well-Being of Four Groups of People
Customers
Employees
Shareholders
Community
Customers – anticipating their needs, providing state of the art products, and serving them responsibly.
Employees – providing a healthy work environment, treating them with fairness, and helping them achieve their professional potential.
Shareholders – maintaining a strong growth rate and return on investment.
Community – exemplifying the highest standards of ethical behavior and contributing to the well being of society.
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8. Six Values of Caring Leaders
Honesty
Consideration
Responsibility
Persistence
Excellence
Commitment
Honesty – knowing oneself and being honest in all dealings with others.
Consideration – doing unto others as you would have them do unto you.
Responsibility – taking the attitude that life is what you make it and choosing to make a difference.
Persistence – being determined; if at first you don’t succeed, try, try again.
Excellence – living by the motto, “Anything worth doing is worth doing well.”
Commitment – viewing the great essentials of life as someone to love and something to do.
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9. Six Types of Values Theoretical Economic Aesthetic Social Political
Religious
Honesty – knowing oneself and being honest in all dealings with others.
Consideration – doing unto others as you would have them do unto you.
Responsibility – taking the attitude that life is what you make it and choosing to make a difference.
Persistence – being determined; if at first you don’t succeed, try, try again.
Excellence – living by the motto, “Anything worth doing is worth doing well.”
Commitment – viewing the great essentials of life as someone to love and something to do.
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10. Theoretical Primary interest is the discovery of truth
Prefers a cognitive approach
Prefers to order and systemize knowledge
One example is Albert Einstein
Primary interest is the discovery of truth.
Prefers a cognitive approach, one that looks for identities and differences, rather than beauty and the usefulness of things.
Some major concerns for Theoretical people are to order and systemize knowledge and understand the meaning of life.
One Example of a Theoretical person is Albert Einstein.
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11. 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
Primary interest is to find out what can be useful.
This type of person is usually enterprising and efficient.
Economic people are more interested in surpassing people financially rather than politically or socially.
They want education to be practical and regard unapplied knowledge as wasteful.
One person who was Economic was Andrew Carnegie.
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12. 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
Receives the highest satisfaction from harmony and beauty.
Regards life as a series of events where each is to be enjoyed for its own sake.
In relationships the Aesthetic person is interested in people but not necessarily their welfare.
They lean towards individualism, and self-sufficiency.
One famous person who was Aesthetic was Leonardo da Vinci.
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13. Social Love is their highest value
Kind, sympathetic, and helpful to others
Others are people, not tools
Unselfish
One example is Jane Addams
The highest overall value for this type of person is love.
Social people are kind, sympathetic, and helpful toward others.
They see others as people, not tools or means to achieve other goals.
As a whole Social people are totally unselfish.
One famous Social person was Jane Addams.
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14. Political Interested in gaining power and influence
Want to exercise authority
Want to be in charge
One example is Queen Elizabeth I
Political people are interested in gaining power and influence.
They want to be on top and exercise authority.
One famous person who was political is Queen Elizabeth I.
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15. Religious Highest value is spiritual peace
Focus on events, people, and experiences in the world
An example is Mother Teresa
The highest value of this person is spiritual peace.
They may focus on events, people, and experiences in the world.
An example of a Religious person would be Mother Teresa.
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16. Leadership Ethics Description
Definition & Theory
Ethics
Is a derivative of the Greek word ethos, meaning customs, conduct, or character
Is concerned with the kinds of values and morals an individual or society ascribes as desirable or appropriate
Focuses on the virtuousness of individuals and their motives
Ethical Theory
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
Development of ethocal theory goes back to Plato and Aristotle.

17. Leadership Ethics Description
Ethics & Leadership
Has to do with what leaders do and who leaders are
It is concerned with the nature of the leaders’ behavior and their virtuousness
In any decision-making situation, ethical issues are either implicitly or explicitly involved
What choices leaders make and how they respond in a particular circumstance are informed and directed by their ethics

18. Ethical Theories
Two Broad Domains: Theories about leaders’ conduct and about leaders’ character

19. Page 304 in text

20. Ethical Theories CONDUCT
Teleological Theories: focus on consequences of leaders’ actions, results
Three different approaches to making decisions regarding moral conduct -
Ethical egoism (create greatest good for the leader)
Closely related to transactional leadership theories
Example: leader takes a political stand on an issue for no other reason than to get re-elected
Teleological – consequenses of

21. Ethical Theories CONDUCT Teleological Theories, cont’d.
Three different approaches to making decisions regarding moral conduct -
Utilitarianism (create greatest good for greatest number)
Example: leader distributes scarce resources so as to maximize benefit to everyone, while hurting the fewest; preventive healthcare vs. catastrophic illnesses
Altruism (show concern for best interests of others)
Authentic transformational leadership is based on altruistic principles
Example: the work of Mother Theresa, who gave her entire life to help the poor
Teleological – consequenses of

22. Ethical Theories CONDUCT
Deontological Theories: duty driven, for example, relates not only to consequences but also to whether action itself is good
Focuses on the actions of the leader and his/her moral obligation and responsibilities to do the right thing
Example: telling the truth, keeping promises, being fair
Teleological – consequenses of

23. Ethical Theories CHARACTER Focus on who people are as people
Virtue-based Theories: about leader’s character
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 present within person’s disposition, and practice makes good values habitual
Examples: courage, honesty, fairness, justice, integrity, humility

24. Centrality of Ethics to Leadership
Influence dimension of leadership requires the leader to have an impact on the lives of followers
Power and control differences create enormous ethical responsibility for leader’s
Respect for persons – sensitive to followers’ own interests, and needs
Leaders help to establish and reinforce organizational values – an ethical climate
Ethics plays a central role in the leadership process.

25. Diverse Perspectives of Leadership
Heifetz’s Perspective
Emphasizes how leaders help followers to confront conflicting values & to effect change from conflict
Ethical perspective that speaks directly to –
Values of workers
Values of organizations and the communities in which they work
Leaders use authority to mobilize followers to
Get people focused on issues
Act as a reality test regarding information
Manage and frame issues
Orchestrate conflicting perspectives
Facilitate the decision-making process
Several prominent scholars – Heifetz, Burns and Greenleaf – they’ve made unique contributions to our understanding of ethical leadership –
The theme that is common to all 3 – is an ethic of caring - which pays attention to followers needs and the importance of leader-follower relationships.

26. Diverse Perspectives of Leadership
Heifetz’s Perspective
Emphasizes how, cont’d.
Leaders use authority to mobilize followers to
Get people focused on issues
Act as a reality test regarding information
Manage and frame issues
Orchestrate conflicting perspectives
Facilitate the decision-making process
Leader provides a holding environment, a supportive context in which there is –
Trust, nurturance & empathy
Leaders duties –
Assist the follower in struggling with change and personal growth
Several prominent scholars – Heifetz, Burns and Greenleaf – they’ve made unique contributions to our understanding of ethical leadership –
The theme that is common to all 3 – is an ethic of caring - which pays attention to followers needs and the importance of leader-follower relationships.

27. Diverse Perspectives of Leadership
Burn’s Perspective
Theory of Transformational Leadership
Strong emphasis on followers’ needs, values & morals
Leaders help followers in their personal struggles concerning conflicting values
Stressing values such as:
Liberty
Justice
Equality
Several prominent scholars – Heifetz, Burns and Greenleaf – they’ve made unique contributions to our understanding of ethical leadership –
The theme that is common to all 3 – is an ethic of caring - which pays attention to followers needs and the importance of leader-follower relationships.

28. Diverse Perspectives of Leadership
Burn’s Perspective
Theory of Transformational Leadership, cont’d.
Connection between leader & follower
Raises level of morality of both
Leader’s Role
Assist followers in assessing their values & needs
Help followers to rise to a higher level of functioning
Several prominent scholars – Heifetz, Burns and Greenleaf – they’ve made unique contributions to our understanding of ethical leadership –
The theme that is common to all 3 – is an ethic of caring - which pays attention to followers needs and the importance of leader-follower relationships.

29. Greenleaf’s Perspective
Servant Leadership – has strong altruistic ethical overtones
Leaders –
focus on & attentive to needs of followers
empathize with followers
take care of and nurture followers
Leadership has a moral dimension

30. Greenleaf’s Perspective
Leader has a social responsibility to be concerned with “have-nots” in the organization and:
Remove inequalities & social injustices
Uses less institutional power
Uses less control
Shifts authority to followers
Leadership has a moral dimension

31. Greenleaf’s Perspective
Servant Leadership Values:
Involvement
Respect
Trust
Individual strength
Follower Needs
Become more knowledgeable
More autonomous
Become more like servants
Listening
Empathy
Unconditional acceptance

32. Identifying attributes of service leadership
Recent Research –
Includes wide range of concepts focused on:
Identifying attributes of service leadership
Examining conceptual frameworks of servant leadership
Developing instruments to measure servant leadership
Leadership has a moral dimension

33. Ethical Leadership
Discussion of 5 principles of ethical leadership – These principles provide a foundation for the development of sound ethical leadership
In addition I am emphasizing 3 points that reinforce the impact a leader has on followers, and the responsibility leaders have to be sensitive to how their leadership affects followers lives and why Ethics is central to leadership, because of -

34. Principles of Ethical Leadership
Ethics - is central to leadership because of:
The process of influence
The need to engage followers to accomplish mutual goals
The impact leaders have on establishing the organization’s values
Discussion of 5 principles of ethical leadership – These principles provide a foundation for the development of sound ethical leadership
In addition I am emphasizing 3 points that reinforce the impact a leader has on followers, and the responsibility leaders have to be sensitive to how their leadership affects followers lives and why Ethics is central to leadership, because of -

35. Treating others as ends (their own goals)
rather than as means (to leaders’ personal goals)
Leader shall:
Treat other people’s values and decisions with respect
Allow others to be themselves with creative wants and desires
Approach others with a sense of unconditional worth and value individual differences
Respects
Others

36. Follower-centered - Based on the altruistic principle of placing followers foremost in the leader’s plans
Leader’s have -
A duty to help others pursue their own legitimate interests and goals
To be stewards of the organization’s vision; in serving others they: clarify, nurture, and integrate the vision with, not for, organization members
An ethical responsibility to make decisions that are beneficial to their followers’ welfare
Serves
Others

37. Ethical leaders are concerned with issues of fairness and justice; they place issues of fairness at the center of their decision making
Leader’s shall –
adhere to principles of distributive justice
Leader behaviors
All subordinates are treated in an equal manner
In special treatment/special consideration situations, grounds for differential treatment are clear, reasonable, and based on sound moral values
Shows
Justice

39. Honest leaders are authentic but also sensitive to the feelings and attitudes of others
Are not deceptive
Tell the truth with a balance of openness and candor while monitoring what is appropriate to disclose in a particular situation
Leader behaviors
Don’t promise what you can’t deliver
Don’t suppress obligations
Don’t evade accountability
Don’t accept “survival of the fittest” pressures
Acknowledge and reward honest behavior in the organization
Manifests
Honesty

40. Ethical Leaders & Followers
Concern for common good means leaders cannot impose their will on others; they search for goals that are compatible with everyone.
Ethical Leaders & Followers
take into account purposes of everyone in the group, and
reach out beyond their own mutually defined goals to wider community
Leader behaviors
Takes into account purposes of everyone in the group
Is attentive to interests of the community and culture
Does not force others or ignore intentions of others
Builds
Community

41. 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.
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.
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42. 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.
Be proactive: Take personal responsibility for your life. Be a driver, not a drifter. View yourself as the master of your own destiny.
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43. Begin with the end in mind
Habit #2
Begin with the end in mind
Have a clear picture of what you want to accomplish before you act
Begin with the end in mind: Everything is created twice, first in the mind, then in the deed. Beginning with the end in mind means having a clear picture of what you want to accomplish before you act.
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44. Habit #3 Put first things first
Prioritize your activities in line with your value system to gain control of your life
Put first things first: To gain control of your time and your life, prioritize your activities in line with your value system. Then work on first things first.
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45. Habit #4 Think Win-Win Helping others can let both parties succeed.
Treat others how you would like to be treated.
Put first things first: To gain control of your time and your life, prioritize your activities in line with your value system. Then work on first things first.
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46. Habit #5 First Understand This shows humility and respect.
Then be Understood
This shows humility and respect.
It yields more truth and multiplies knowledge.
Seek first to understand, then to be understood: This shows humility, which is an endearing human quality. Also, it shows respect, which meets a universal human need. Finally, it yields more truth and multiplies knowledge, two requirements for human advancement.
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47. Habit #6
Synergize
Together everyone achieves more! Synergy requires openness to change and appreciation of diversity.
Synergize : This is the principle behind the concept that together everyone achieves more. It means that one plus one can equal more than two. Synergy is the process that reveals a third and otherwise undiscovered alternative. Synergy requires an openness to change and appreciation of diversity.
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48. Habit #7
Sharpen the Saw
There is inevitable need for renewal and reinforcement. Continue your education and open yourself to new experiences!
Sharpen the Saw : Even if one develops principles for good living and applies these to achieve personal, social, occupational, and physical well-being, there will be inevitable need for renewal and reinforcement. This is where continuing education, sabbaticals, foreign exchange, and good books can be used to keep one fresh and effective. Also, this is where doing the right things in private helps produce public victories.
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49. 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.
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.
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50. Six Areas for Ethical Guidelines
Government relations
Employee relations
Community and environment relations
Business relations
Production
Consumer relations
Government relations – how does the organization pay its taxes and obey national and international law?
Employee relations – how does the organization deal with employee welfare and grievances?
Community and environmental relations – what are the effects of the organization on its social and physical environment?
Business relations – how does the organization deal with suppliers and competitors?
Production – what are the standards of quality for the organization’s products and services?
Consumer relations – how does the organization price and advertise its products and services?
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51. 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
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
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52. Four key Ethical Questions of Rotary International
Is it truth?
Is it fair to all concerned?
Will it build goodwill and better relationships?
Will it be beneficial to all concerned?
One of the most influential guidelines for ethics at work comes from Rotary International. Many generations of leaders from all areas of the world have been taught to test their actions against 4 key questions:
1. Is it the truth?
2. Is it fair to all concerned?
3. Will it build goodwill and better relationships?
4. Will it be beneficial to all concerned?
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53. 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.
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54. What is “Good”? Machiavelli: Power Nietzsche: Integrity
Rousseau, Thoreau: Natural simplicity
Various religions: Will of god
School of Socrates: Pleasure
Bentham: Greatest good for the greatest number
James, Dewey, et al: What works (pragmatism)
Kant: Duty to conscience