Behaving ethical is fundamental to good leadership. If a leader is unethical they are unlikely to be seen as a good leader. A leader’s ethics is traced back to their own values and morals. Leaders should set an example for others, as they influence the followers of the organisation. Leadership is more than achieving performance targets. “Successful leadership is about achieving them through ethical and socially responsible means (Schermerhorn 2002) that enhance and develop all the people involved (Burns 1978, Gardner 1990).” (Dubrin, Daglish & Miller, 2006, p.126)

Important to ethics and leadership is the leaders own personal values and morals. It is also important to look at how ethical leadership is linked to the servant leadership style, and how there are different models of ethical decision making a leader can use. Also how leading ethically can affect the organisation and the leader.

Values and Morals

Values are the foundation of ethics and morals. Dubrin, Daglish & Miller (2006) define values as ‘constructs representing generalised behaviours or states of affairs that are considered by the individual to be important’. (Dubrin, Daglish & Miller, 2006, p.127) Values are established throughout childhood and they guide personal behaviour and decision making. The influences on the development of values are shown in the diagram below. (taken from Dubrin, Daglish & Miller, 2006, p.127)

Leaders’ personal values can have significant effects on their leadership style or behaviour. Good leaders align their values to that of their followers or that of the organisation.

The personal moral standards an individual establishes are influenced by the values they hold. “Morality can be defined as the standards that an individual or group has about what is right and wrong”. (Dubrin et al., 2006, p.128) As a person’s morals and values differ for each individual it is impossible to always get a consensus on what some people believe is ethical and unethical. Values and morals form the foundation for ethics which is an essential part of good leadership.

Servant Leadership

The leadership style that embodies ethical behaviour is the servant leadership style. Servant leadership as stated in its title is where a leader acts for others. As the leader acts on behalf of others it is determined that this style is based on trust between the leader and their followers. According to Dubrin et al. (2006) Spears (1997) came up with ten critical characteristics of a servant leader shown in the diagram below.

These characteristics have a strong focus on the followers and what the servant leader should do for them. A good ethical leader embodies these characteristics.

Models of Ethical decision making

A fundamental role of a leader is making decisions. The culture in which decisions are made has a great impact on what is ethical and what is not. But how can a leader decide what is ethical and what is not with all the influences and interests surrounding them. The following models are largely taken from a western stand point however the Buddhist model looks at the eastern culture. Globalisation is also taken into account as it is having an increased influence on society today. Using these models for ethical decision making is an important tool to any leader. They need to analyse their environment to find which will most be beneficial to the stakeholders of the organisation.

The Utilitarianism (consequentialism) model looks at an action being ethical if it benefits the largest number of people as compared to any other action. However this is based on the assumption that the benefits from any action can be measured. However this model can clash with what some people believe is ethical as everyone has a different opinion on what is right and wrong.

The Non-consequentialism model is based on the assumption that some actions are right no matter what the consequence. A decision of what is right and wrong is decided by three sources of power: the legal authority, the religious authority and human reason.

The Justice/fairness model is simply based on what is fair and just for a human being and defines how we as humans should behave. In Australia we base our justice system of punishing those who do wrong, giving those back what was taken from them due to being wronged, justice based on needs, justice based on contribution and justice based on equality. (Dubrin et al., 2006, p.131)

The ethic of care model argues that any special relationship of love and caring involves a special obligation to care for those people. That we should exercise special care to those we have relationships with and we should look after their well being. This can be seen particularly in the business community where employers are to look after the needs and well being of their employees.

The Virtue ethics model is based on deciding what is ethical based on the moral characteristics of the decision maker. A virtue can basically be described as if you see someone doing something good and moral and that makes you want to replicate that behaviour. It also allows the individual to call upon their own moral virtues and use them depending on the situation faced. For example, situational leadership.

Buddhist ethics influence many countries in the Eastern world. The teachings of the Buddha include the concepts of right speech, right action and right livelihood. These concepts aid in what Buddhists believe is ethically right and wrong. For example the concept of ownership of ideas is very different in this type of society. In Western civilisation we look at an idea as a way of making money whereas Buddhist society looks at it as a way to benefit the community and not on the individual level. An example of a leader that embodies this ethical leadership style in the Dalai Lama. Due to the ideals of the religion he practices this ethical style throughout the world.

Leading Ethically

Making a decision on what is ethical and what is not is dependant on the situation. A leader has different stakeholders’ opinions to take into account when making decisions. For example the goal of shareholders may be making a greater return on investment however this may involve cutting staff, and cutting staff is not in the interest of employees. The values of all the different stakeholders in an organisation are going to differ from each other and as a result most leadership decisions will not always benefit everyone. Values help determine what is right and wrong and therefore between what are ethical and unethical. People who have stronger values have the tendency to behave more ethically. For example Nelson Mandela had strong values and this led him to fight for what is ethically right.

Organisational ethical issues

Leaders should always take into account what affect their actions have on others.

Individuals serve for their own interest and sometimes take others into account usually if it serves their needs. A leader’s reputation, social and environmental responsibility, and global responsibility are incredibly important to a leader and organisational ethical issues.

Reputation

Reputation is important to leaders. It is determined by what others perceive the leader to be and therefore managing their perception is crucial to be an effective leader. Leaders need to be perceived as a moral person and that they are focused on ethics and values. Their reputation can often attract and detract customers. It can often provide a competitive advantage not only attracting customers but also in attracting and keeping good personnel.

Social and environmental responsibility

A leader’s role in society is to act ethical and socially responsible. There are four responsibilities that a business should uphold. These include: legal, ethical, economic and philanthropic responsibilities. Sometimes businesses who act socially responsible can be perceived as giving back to society just so they look good and get the recognition for that. However being socially responsible creates a good perception of a business and therefore a leader.

Globalisation and global responsibility

There are ethical issues that affect a leader’s decision on a global level. For example McDonalds are throughout 120 countries. As consequence of this they need to adapt to the different countries cultures. In different countries there are different dress codes, different religions, etc. this effects what people can and can’t eat and therefore they need to change their food slightly to adapt to these cultures and their ethical standards. More on ethics and globalisation can be viewed on: http://www.scu.edu/ethics/practicing/focusareas/global_ethics/

Leading ethical behaviour in an organisation

The ethical culture of an organisation is determined through the actions a leader takes. An ethical organisation makes their values clear to all its stakeholders. It is important when establishing ethical behaviour in an organisation that two elements are considered. Firstly there is a shared organisational purpose and value system in the organisation; and that members have professional self-esteem, self-confidence and commitment. Leaders have the responsibility to ensure that both of these elements are instilled throughout the organisation. It is extremely important for a leader of an organisation to articulate a set of values and standards. More on leadership and ethics can be viewed at: http://home.att.net/~coachthee/Archives/BusinessEthics.html

To conclude it is important to consider all these elements if you are a leader in an organisation; as it is particularly important for leaders to act ethically. As demonstrated a individual or leaders ethics are determined through their own personal values and morals. These values and morals are implemented by a leader in using the servant leadership style. There are many different models of ethical decision making that a leader can adopt depending on the society or the culture they are in. All there different factors can aid in a leader being able to lead ethically in an organisation.