Leadership and Ethics

Principles of moral leadership

The two main principles of moral leadership can be divided into deontology and teleology. (Bass & Steidlmeier, 1999) put forward a persuasive argument that teleology is related to transactional leadership; Deontology is associated with transformational leadership. Teleology theory mainly focuses on the pursuit of the maximum improvement of mutual interests under the premise of compliance. Deontology is based on moral ethics and pays attention to means morality rather than ends morality. (Lowe et al., 1996) has proved that transformational leadership has a stronger impact on individuals and organizations than transactional leadership. (Flynn, 2008) found that, generally speaking, moral leadership actively serves the enterprise to the society. Leaders should recognize the needs of individual employees related to psychological, social and spiritual values. According to (Groves & LaRocca, 2011, p.512) only transformational leadership is related to its followers' belief in the CSR stakeholder perspective.

Qualities needed to be an ethical leader

As corporate social responsibility and business ethics are increasingly valued, leaders need to be more ethical than ever before. (Brown et al., 2005) proposed a new concept of moral leadership, with three key components of moral leadership: being a moral example, treating others fairly and actively managing the organization. According to (Bacha & Walker, 2013), leaders' behaviors lead them to become role models for followers. Credibility has been identified as an important aspect of effective transformational leadership (Palanski & Yammarino, 2009). Moral leaders attach importance to individual views and the results of collective decision-making of the organization (Parry & Proctor, 2002). Such leadership values are consistent with transformational leadership. Meanwhile, transformational leaders look beyond their own self-interest to consider the moral and ethical consequences of their actions (Parry & Proctor, 2002). The survey found that transformational leaders treat employees more fairly and rationally in all aspects, and pay more attention to the interaction with subordinates. (Ramaswami & Singh, 2003) found that leader interaction justice can predict trust in leaders and job satisfaction.

A company with good ethical leadership

The good behavior and ethics of leaders are closely related to the realization of the organization's goals (Kalshoven et al., 2011). Netflix is an American streaming media giant. Its pioneering movie algorithmic recommendation and membership system have changed the way people consume entertainment. In Netflix's corporate culture, founder Mark Randolph encourages vigorous debate among employees. There is no seniority here, everyone is equal, and everyone should argue for their point of view before reaching a consensus. At Netflix, the idea itself is more important than the administrative system. As a leader of the management team, you need to trust the individual execution of your employees. Randolph did, treating every employee like an adult in charge, which is why Netflix in its early days was able to get a lot of quality people to come in and take a pay cut or less.

No matter how big a startup is, it must be supported by its core team, which must be a diversified team with professional knowledge and skills. For Randolph, Netflix's success has been compounded by the amazing team he has assembled.

Example of unethical companies

Unethical behavior is behavior that goes against generally accepted social norms. Achieving the ultimate goal through unethical means will bring negative effects such as reputation and economic loss to the company. For example, Sanlu Group's tainted milk powder incident occurred in China in 2008. The cause of the incident was that many infants who consumed Sanlu Group's milk powder were found to have kidney stones, and then the chemical materials melamine and cyanic acid were found in its milk powder. The tainted milk powder was the result of Sanlu Group cutting corners to cut costs in order to seize the market in China's poor rural areas. At the same time, this kind of social media will expose the negative news, thus arousing the wide attention of society and people's strong criticism, resulting in negative social impact. 

Conclusion

Ethical leaders can bring sustainable development and higher returns to the organization. It is important to select and train managers who are ethical in their work. A true moral leader should have loyalty, equality, strong sense of responsibility and compassion.

References

Bacha, E., & Walker, S. (2013). The Relationship Between Transformational Leadership and Followers’ Perceptions of Fairness. Journal of Business Ethics, 116(3), 667–680. http://www.jstor.org/stable/42001949

Bass, B. and P. Steidlmeier: 1999, 'Ethics, Character, and Authentic Transformational Leadership Behavior', The Leadership Quarterly 10, 181-217.

Brown, M. E., Treviño, L. К., & Harrison, D. A. 2005. Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97: 117- 134.

Flynn, G. (2008). The virtuous manager: A vision for leadership in business. Journal of Business Ethics, 78(3), 359-372.

Groves, K. S., & LaRocca, M. A. (2011). An Empirical Study of Leader Ethical Values, Transformational and Transactional Leadership, and Follower Attitudes Toward Corporate Social Responsibility. Journal of Business Ethics, 103(4), 511–528. http://www.jstor.org/stable/41476041

Kalshoven, K., Den Hartog, D. N., & De Hoogh, A. H. B. (2011). Ethical Leader Behavior and Big Five Factors of Personality. Journal of Business Ethics, 100(2), 349–366. http://www.jstor.org/stable/41475845

Lowe, K., K. Kroeck and N. Sivasubramaniam: 1996 'Effectiveness Correlates of Transformational and Transactional Leadership: A Meta-Analytic Review of the MLQ Literature', The Leadership Quarterly 7, 385- 425.

Palanski, M. E., & Yammarino, F. J. (2009). Integrity and leadership: A multi-level conceptual framework. The Leadership Quarterly, 20 , 405-42.

Parry, K. W., & Proctor-Thomson, S. B. (2002). Perceived integrity of transformational leaders in organizational settings. Journal of Business Ethics, 35 , 75-96.

Ramaswami, S. N., & Singh, J. (2003). Antecedents and conse- quences of merit pay fairness for industrial salespeople. Journal of Marketing, 67 , 46-66.