Leadership Studies
Lecture #4 Notes
Outline Session
Why study ethical leadership?
Ethics
Ethical theory
Ethical decision making
Determinants of ethical leadership
Principles of ethical leadership
More ethical and not-so-ethical leadership styles
Developing ethical followers
Significant Ethical Issues
UK study identified most significant ethical issues in business, including…
Bribery
Corruption and facilitation payments
Whistle blowing/speaking up
Discrimination
Harassment or bullying
These ethical issues are present in both developed and developing nations!
E.g. 2008 Chinese milk scandal (milk and infant formula along with other food materials
being contaminated with melamine); 2010 Nigerian bank chief jailed for fraud
Meanwhile, impoverished ethical behavior and nonexistence leadership (Plineo et al., 2010)
Why study ethical leadership?
Little studies with regard to ethical leadership more studies need to take place for the
field to develop
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 leaders
Respect for persons – leaders need to be sensitive to followers’ own interests and needs
Leaders help establish and reinforce organizational values; they set an ethical climate
Effects of Ethical Behavior
Ethical reputation can provide competitive advantage or disadvantage in the marketplace
Unethical behavior can cause legal, financial, and marketing risks
Ethical behavior has positive effects on:
Perceived ethical climate
Cooperative behaviors (helpin others, extra role behaviors)
Willingness to ‘whistleblow’
Sense of autonomy increased effort and task significance
1
, Job satisfaction and dedication
Employee well-being
Task performance
Studies have largely focused on the North American context rather than representing the global
population (Lee et al., 2019)
Ethics and Ethical Theories
‘Ethics’ a derivative of the Greek word ethos, meaning customs, conduct, or character
o Definition: the study of morality and the application of reason
o Morality is defined as norms, values, and beliefs about what is right and wrong
Ethical theories elucidate specific rules and principles that determine right and wrong
for a given situation
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
Definition of Ethical Leadership
Defined in different ways
o E.g. focus on character or how a leader relates/communicates ethical issues to
his/her followers
A matter of leaders having a good personality and the right values or being a person of
strong personality (Freeman and Steward, 2006)
Common definition the demonstration of normatively appropriate conduct through
personal actions and interpersonal relationships, and the promotion of such conduct to
followers through two-way communication, reinforcement, and decision-making (Brown
et al., 2005)
Research on Ethical Leadership: Two Approaches
1. Normative approaches: defined by how individuals “ought” to behave in the workplace
2. Descriptive approaches: attempt to understand how people actually perceive things and
also investigate the background and consequences of those perceptions
Judgments
Judging individual leader: person’s values, stage of moral development, conscious
intentions, freedom of choice, use of ethical and unethical behavior, type of influence
used
Judgment about the ethics of a particular situation:
o The purpose (end)
o The extent to which behavior is consistent with moral standards (means)
o The consequences for self and others (outcomes)
Ethical Theory
2
, 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
Two Domains of Ethical Theories
Theories about leaders’:
o Conduct
Consequences (teleogical theories)
Ethical egoism
Utilitarianism
Duty (deontological theories)
o Character
Virtue-based theories
Conduct
Teleological theories: focus on consequences of actions, results
Ethical egoism (create greatest good for the leader)
o Influenced by Plato and Adam Smith
o Definition: An action is morally right if the decision-maker freely decides in
order to pursue either short-term desire or long-term interest
o Closely related to transactional leadership theories
o Example: leader takes a political stand on an issue for no other reason than to
get re-elected
Utilitarianism (create greatest good for greatest number)
o Rooted in the 18th and 19th century
o Focuses on happiness principle
Focuses on better overall consequences which promote the well-being,
happiness, health, integrity, dignity, freedom, and respect for all people
involved
o Closely related to a cost-benefit analysis
o Limitations: subjectivity, problems with quantification, distribution of utility
o Example: leader distributes scarce resources so as to maximize benefit to
everyone, while hurting the fewest; preventative health care vs. catastrophic
illnesses
Altruism (show concern for best interests of
others)
o Authentic transformational leadership
based on altruistic principles
o Example: the work of Mother Teresa, who
gave her entire life to the poor
Deontological Theories
3
Lecture #4 Notes
Outline Session
Why study ethical leadership?
Ethics
Ethical theory
Ethical decision making
Determinants of ethical leadership
Principles of ethical leadership
More ethical and not-so-ethical leadership styles
Developing ethical followers
Significant Ethical Issues
UK study identified most significant ethical issues in business, including…
Bribery
Corruption and facilitation payments
Whistle blowing/speaking up
Discrimination
Harassment or bullying
These ethical issues are present in both developed and developing nations!
E.g. 2008 Chinese milk scandal (milk and infant formula along with other food materials
being contaminated with melamine); 2010 Nigerian bank chief jailed for fraud
Meanwhile, impoverished ethical behavior and nonexistence leadership (Plineo et al., 2010)
Why study ethical leadership?
Little studies with regard to ethical leadership more studies need to take place for the
field to develop
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 leaders
Respect for persons – leaders need to be sensitive to followers’ own interests and needs
Leaders help establish and reinforce organizational values; they set an ethical climate
Effects of Ethical Behavior
Ethical reputation can provide competitive advantage or disadvantage in the marketplace
Unethical behavior can cause legal, financial, and marketing risks
Ethical behavior has positive effects on:
Perceived ethical climate
Cooperative behaviors (helpin others, extra role behaviors)
Willingness to ‘whistleblow’
Sense of autonomy increased effort and task significance
1
, Job satisfaction and dedication
Employee well-being
Task performance
Studies have largely focused on the North American context rather than representing the global
population (Lee et al., 2019)
Ethics and Ethical Theories
‘Ethics’ a derivative of the Greek word ethos, meaning customs, conduct, or character
o Definition: the study of morality and the application of reason
o Morality is defined as norms, values, and beliefs about what is right and wrong
Ethical theories elucidate specific rules and principles that determine right and wrong
for a given situation
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
Definition of Ethical Leadership
Defined in different ways
o E.g. focus on character or how a leader relates/communicates ethical issues to
his/her followers
A matter of leaders having a good personality and the right values or being a person of
strong personality (Freeman and Steward, 2006)
Common definition the demonstration of normatively appropriate conduct through
personal actions and interpersonal relationships, and the promotion of such conduct to
followers through two-way communication, reinforcement, and decision-making (Brown
et al., 2005)
Research on Ethical Leadership: Two Approaches
1. Normative approaches: defined by how individuals “ought” to behave in the workplace
2. Descriptive approaches: attempt to understand how people actually perceive things and
also investigate the background and consequences of those perceptions
Judgments
Judging individual leader: person’s values, stage of moral development, conscious
intentions, freedom of choice, use of ethical and unethical behavior, type of influence
used
Judgment about the ethics of a particular situation:
o The purpose (end)
o The extent to which behavior is consistent with moral standards (means)
o The consequences for self and others (outcomes)
Ethical Theory
2
, 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
Two Domains of Ethical Theories
Theories about leaders’:
o Conduct
Consequences (teleogical theories)
Ethical egoism
Utilitarianism
Duty (deontological theories)
o Character
Virtue-based theories
Conduct
Teleological theories: focus on consequences of actions, results
Ethical egoism (create greatest good for the leader)
o Influenced by Plato and Adam Smith
o Definition: An action is morally right if the decision-maker freely decides in
order to pursue either short-term desire or long-term interest
o Closely related to transactional leadership theories
o Example: leader takes a political stand on an issue for no other reason than to
get re-elected
Utilitarianism (create greatest good for greatest number)
o Rooted in the 18th and 19th century
o Focuses on happiness principle
Focuses on better overall consequences which promote the well-being,
happiness, health, integrity, dignity, freedom, and respect for all people
involved
o Closely related to a cost-benefit analysis
o Limitations: subjectivity, problems with quantification, distribution of utility
o Example: leader distributes scarce resources so as to maximize benefit to
everyone, while hurting the fewest; preventative health care vs. catastrophic
illnesses
Altruism (show concern for best interests of
others)
o Authentic transformational leadership
based on altruistic principles
o Example: the work of Mother Teresa, who
gave her entire life to the poor
Deontological Theories
3
