Introduction and Background
In today’s business settings, it is important to consider the role of ethics in leadership and decision-making. Ethics is a concept which describes the systematic reflection on ethical principles or fundamental values which help an individual or organization achieve ethical integrity (Van de Poel and Royakkers 71). The exact principles vary between different cultures, individuals, departments, and companies, but they all govern behavior, which is considered virtuous. Organizational leaders are in a position to create and maintain an ethical workplace culture and promote ethical business practices among employees.
The Concept of Ethical Leadership and its Characteristics
In today’s increasingly complex and ferociously competitive business environments, more people come to realize the role of leadership in a company’s success. Leadership has been defined in many ways over the years. The main component inherent to many of the conceptualizations of leadership is organizing the work of people in order to achieve a certain goal (Northouse 16). As such, leadership can be viewed as a process of organizing people into a group pursuing a common goal.
Since leadership is a process, it can be viewed as a transactional event, which is the result of the leader’s behavior. The process component suggests that leadership is a series of interactions that occur between a leader and their followers, and ethical leadership a series of interactions based on ethical principles. As such, ethical leaders make their decisions with respect to ethical values and beliefs. Ethical leadership can be defined as ““the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships (Brown and Trevino 595).
A number of characteristics have been associated with ethical leadership. These include integrity, honesty, and trustworthiness (Brown and Trevino 597). Ethical leaders have to behave ethically in their personal and professional settings, and this requires a degree of honesty and integrity.
Another characteristic of ethical leadership is using ethical principles in decision-making. Ethical decision-making is a process that relies on ethical principles to evaluate all courses of action and choose one which will be viewed as ethical by a larger community (Jones 367). Ethical decision-making allows an ethical leader to come to an ethical decision.
The third characteristic of ethical leadership is “the moral manager dimension” (Brown and Trevino 597). This concept is used to describe the leader’s efforts to influence the followers’ behavior to be in accordance with the ethical culture of an organization. The leaders influence their followers’ behavior by being an example and acting as a role model, communicating the ethical message.
The relationship between ethical leaders and followers is based on trust and honesty. Ethical leaders work towards establishing such an organizational culture, which will promote high moral standards and values and discourage unethical behavior. In order for their work to be meaningful, ethical leaders have to be perceived by their followers as people who represent the values and beliefs promoted inside the organization.
Since the followers have trust in their leader, they are not afraid to voice their concerns and opinions. As such, the communication between the leader and the followers is two-sided, and followers are able to and encouraged to voice their opinions regarding organizational processes (Walumbwa and Schaubroeck 1276). Such characteristics of the leader and followers relationship allow ethical leaders to build an organizational culture based on feedback from the employees. “When leaders interact with followers with openness and truthfulness, interpersonal trust and mutual respect are promoted both between followers and the leader and among the followers themselves” (Walumbwa and Schaubroeck 1276).
The Role of the Chief Ethics Officer
The ability of the company to create an ethical organizational culture depends on the top management’s ability to represent and promote ethical values among employees. However, senior executives of corporations have other responsibilities to attend to and may find it difficult to include making ethics a priority on their agenda.
Large organizations are in a constant public view and may find themselves in the center of a scandal. The CEOs of large organizations might not be competent to fulfill their position as an ethical leader. In such cases, this role is delegated to the Chief Ethics Officer. Their role is to create and maintain an ethics program and “contribute to the establishment of an enduring ethical culture” (“Defining the Role of the Chief Ethics and Compliance Officer (CECO)” 1). The Chief Ethics Officer has the knowledge and expertise required to shelter the company from legal action and create a positive image of the company committed to ethical values.
Ethics plays an important part in business settings. An ethical organizational culture makes employees feel more secure and allows the company to improve its business operations by using the feedback provided by the employees. An integral part of the ethical organizational culture is ethical leadership. An ethical leader creates an ethics program and acts as a role model for the employees to follow. Ethical leaders are committed to integrity and strive to address and prevent unethical behavior. In some organizations, the responsibility of ethical culture establishment is given to the Chief Ethics Officer.
Brown, Michael and Linda Trevino. “Ethical leadership: A review and future directions”. The Leadership Quarterly 17 (2006): 595-616. Print.
Defining the Role of the Chief Ethics & Compliance Officer (CECO) 2007. Web.
Jones, Thomas. “Ethical Decision Making by Individuals in Organizations: An Issue-Contingent Model”. Academy of Management Review 16.2 (1991), 366–395. Print.
Northouse, Peter. Leadership: Theory and Practice, London: SAGE Publications, 2015. Print.
Van de Poel, Ibo and Lamber Royakkers. Ethics, Technology, and Engineering: An Introduction, Hoboken: John Wiley & Sons, 2011. Print.
Walumbwa, Fred and John Schaubroeck. “Leader Personality Traits and Employee Voice Behavior: Mediating Roles of Ethical Leadership and Work Group Psychological Safety.” Journal of Applied Psychology 94.5 (2009): 1275–1286. Print.