Ethics and Leadership

By
Prof Neha Sajnani
 Introduction
• Leaders are characterized by different values, attitudes, beliefs,
conduct, habits and practices and that is to a certain extent
dependent upon the organisational, professional and institutional
culture. To be an ethical leader one has to adhere to a more
universal standard of moral behaviour.

• Like health professionals, ethical leaders have a responsibility to

attend to others, be of service to them, and make decisions
pertaining to them that are beneficial and not harmful to their
welfare.
 Characteristics of a Good Leader

 Integrity
 Ability to delegate
 Communication
 Self-awareness
 Gratitude
 Learning agility
 Influence
 Empathy
 Courage
 Respect
 Importance of a Leader
• Leadership is an important function of management which helps to
maximize efficiency and to achieve organisational goals.
• The following points justify the importance of leadership in a concern
Initiates action
Motivation
Providing guidance
Creating confidence
Building morale
Builds work environment
Co-ordination
 Role of a Leader
• Required at all levels

• Representative of the organization

• Integrates and reconciles the personal goals with organizational goals

• He solicits support,

• As a friend, philosopher and guide

 Ethical Leadership Principles

• Respect for others

• Service to others

• Justice for others

• Honesty towards others

• Building community with others

 Serve others

• Contribute to the greater good of others.

• Service behaviour includes :

Mentoring
Empower others
Team building
 Show Justice

• Treat all subordinates equally

• Fairness should be main priority in decision making.

• Be clear about rules for distributing rewards. No favourites, always

be fair.
 Be Honest

• Always tell the truth

• Be open with others and represent reality exactly the way it is.
Do not promise something that you cannot do
Do not misrepresent others
Do not silence your obligations
 Build community

• Influence others to reach common goal.

• Attend to more than just the leaders and followers goals. Also
attend to the community’s goal and purpose.
• An ethical leader is concerned with the common good, in the
broadest sense.
 Leadership Strategy : which strategy to follow
• Without effective leadership strategy, organisational strategies do not work. Best players
in a team do not guarantee success without a great coach, similarly work teams may not
function effectively if leaders do not follow an appropriate leadership strategy`
• Example of leadership style :
• I - A teacher gives a question to a class full of students , however, solves it for them;
• II – A teacher gives the question to the students and observes how students solve them;
• III - A teacher gives a question to the students and moves around the class, observes the
students, and helps wherever required.
• Thus in I he was ‘Leading from the front’
• In 2 was ‘Supportive Leadership style’ and
• In 3- ‘Interactive Leadership Style’. Besides this leadership styles/ strategies could be
based on personality straits like Directive leadership, Structured Leadership, Intutive or
Process driven leadership.
 Important Leadership Styles

• The leadership style varies with the kind of people the leader
interacts and deals with. A perfect/standard leader style is one
which assists the leader to get the best out of the people who
follow him.

• Autocratic style
• The Laissez faire Leadership style
• Democratic/Participation style
• Bureaucratic style
 Autocratic Style
• The leader has complete command and hold over their employees/team.
• The team cannot put forth their views even if they are in the interests of the
organisation.
• They cannot criticize or question the leader’s way of getting the things done.
• The leader himself gets the things done.
• Advantage is it leads to speedy decision-making and greater productivity
under the leaders supervision.
• Disadvantage is it leads to greater employee absenteeism and turnover.
• This style works only when the leader is best in performing or when the job
is monotonous, unskilled and routine in nature or when the project is short
term and risky.
 Laissez faire style

• Leaders trust their employees/to perform the job themselves.

• He just concentrates on the intellectual aspect of his work and does
not focus on the management aspect of his work.
• The team is asked to share their views and provide suggestions
which are in the organisation’s interest.
• This style works only when the employees are skilled, loyal
experienced and intellectual.
 Democratic / Participative style
• The leaders invite and encourage the team members to play an important role
in the decision-making process, even though the ultimate decision making lies
with the leader.
• The leader guides the employees on what to perform and how to perform,
while the employees communicate to the leader their experience the
suggestions if any.
• The skilled employees get motivated, satisfied and are contend.
• It leads to an optimistic work environment and encourages creativity.
• The only disadvantage is that it is time consuming.
 Bureaucratic leadership
• A bureaucratic leader is one who depends on his or her position in a clearly
defined hierarchy to influence followers,
• Leaders strictly adhere to the organisational rules and policies.
• They make sure that the employees follow the rules and procedures.
• They are generally inflexible and suspicious of change.
• Promotions take place on the basis of employee’s ability to adhere to the
organisational goal.
• Bureaucrat and bureaucracy are not terms of abuse but rather organizations
with great strengths , highest effectiveness, creativity, great innovation as well
as ability to identify and solve unique problems in society.
• However this style discourages creativity and the talented employees are left
discontented.
 Leadership and Management
• Leadership is an essential part of effective management.
• Leadership is the potential to influence and drive the group towards the
accomplishment of the goal.
• This influence may originate from formal sources, like a managerial position in an
organisation.
• A manager must have the traits of a leader. He must possess leadership qualities.
• Managers lay down the structure and delegates authority and responsibility ,
leaders provide direction by developing the organisations vision and
communicating it to the employees and inspiring it to achieve it.
• Management includes focus on planning, organizing, staffing, directing and
controlling; whereas leadership is mainly a part of directing function of
management. Leadership focusses on listening, building relationships, teamwork,
inspiring, motivating and persuading the followers
 Continued
• Leader gets his authority from his followers, a manager gets his
authority by virtue of his position in the organisations
• Management evaluates people by their name, past records, present
performance, leadership sees and evaluates individuals as having
potential for things that cant be measured. i.e. deals with future
and performances of people aspect in an organisation.
• Management is based on written communication, while leadership
is based on verbal communication.
 Authority and Leadership
• Authority exercised is a kind of legitimate power, and people follow
figures exercising it, their positions demand so, irrespective of the
person holding the position.
• Leaders in organisations rely on the informal authority that they
exercise on people to influence them.
• Leaders are trusted for their judgement and respected for their
expertise, integrity etc. and hence followed and not because they
hold a certain position. Eg M.K.Gandhi
 Leadership ethics
• Ethics are essential to leadership
• Ethics is all about the leader’s identity and the leader’s role.
• Ethical theories on leadership talk about 2 main things:
A) the actions and behaviour of leaders; and
B) the personality and character of leaders.

• A leader drives and influences the sub-ordinates to achieve a common

goal, be it in case of team work, organisational goal or any project.
• It is an ethical job to treat the sub-ordinates with respect as each of
them has a unique personality.
 Business Tycoons Who Made India Proud

• Ratan Naval Tata – The Strategic Industrialist

• Dilip Shanghvi – sun and Simplicity

• Azim H. Premji – A Philanthropist at Heart

• Dr. R A Mashelkar – The Warrior of Haldighati

• N R Narayana Murthy – The Sparkling Gem of IT

 James Burke /J & J

• James Burke is often one of the first examples of ethical leader people give and when you
understand the story, you understand why. Burke’s ethical leadership highlights the
difficulties of the corporate world and the need of creating a trust-based relationship with
the organization’s customers.
• Burke’s ethical leadership became evident during a Tylenol Crisis his company J&J faced in
the fall of 1982. Burke took immediate action to have all the company’s Tylenol capsules
removed across the country, although this created a large financial loss for the organization.
He went even further than that. He allowed the media to follow company meetings, he spoke
on several occasions on TV and he introduced new protections to the way the organization
packaged its products. The costs weren’t added to the price, but were absorbed by the
organization.
• In an interview for a 2004 book ’Lasting Leadership’, Burke said,
• “You tell me any human relationship that works without trust, whether it is a marriage or a
friendship or a social interaction; in the long run, the same thing is true about business.”
 Tony Hsieh / Zappos

• Tony Hsieh has achieved meteoric success with his online shoe retailer Zappos. The
organization started in 1999 and turned the retailer market upside down. The success can
partly be put down to Hsieh’s ability to put ethics at the core of what the company does.
• David Henderson interviewed Hsieh for his book ’Making News in the Digital Era’ and the
ethical revolutionary pointed out two important parts of leadership.
• First, the company knew it had to embrace transparency – it wouldn’t achieve its
objectives by trying to hide from its customers.
• Second, Zappos has tried to create a company culture on core values.
• Hsieh made an interesting point about core values in the interview stating,
• “It doesn’t really matter what the core values are, as long as the entire organization
commits to those core values. The most important thing in any large organization is
alignment [around values and vision].”
 Howard Schultz / Starbucks
• Starbucks has consistently appeared on the World’s Most Ethical Companies list by the Ethisphere
Institute. Large part of the company’s ethical approach to making business has stemmed from its leader
Howard Schultz, who has always put employee wellbeing at the heart of the organization.
• Schultz wanted to ensure all employees receive access to healthcare, even if they work part-time for the
organization. The coffee is sourced ethically and there is emphasis on sustainability throughout the
business, from choosing business partners to providing the service to customers.
• The company’s leader has also received personal accolades, continuously ranking high on the Glassdoor’s
list of Highest Rated CEOs. Schultz has been recognized for understanding that great customer service
starts from happy employees. Through ethical leadership, he has been able to inspire employees to serve
better.
• Interestingly, Starbucks is also a good example of the scrutiny ethical leadership brings about. Because the
company has set such high standards to itself, protesters regularly point out to any problems the company
might have in meeting its targets.
• You should watch the start of this interesting talk with Howard Schultz at the 2012 Aspen Ideas Festival.
The conversation tries to answer the questions “Can corporate values drive shareholder value?” The whole
video is rather long, but the starting minutes are the most crucial to understanding ethical leadership.
 Scott Gerber, CEO of the Gerber
Group
• When Gerber found out that one of his employees was clocking in his wife who wasn’t
actually showing up until three hours later, the company immediately fired the employee.
• Afterwards, the employee came in with his father, who has worked for Gerber for two
decades, and the two pleaded for another chance. He explained that he had a newborn son
and that his wife couldn’t leave for work until he got home. Although it was a tough decision,
Gerber and his business partner decided to give the employee another chance, mainly
because his father had been a loyal employee for so long.
• “[We] made the decision to [rehire] him,” says Gerber. “The decision was extremely difficult
because we caught him technically stealing from the company, and we generally have a zero-
tolerance policy for such behavior. But because his father has worked for us for over 20 years,
and vouched that his son would never do this again, we decided to give him another chance.”
• The lesson: Loyalty and longevity still matter at some companies.
 Laurie Peterson, Founder of Build & Imagine
Toys
• When Peterson started working for big toy companies more than 10 years ago, she wanted to get young
girls excited about science. Somewhere along the way, she forgot her mission and found herself–like
most in the industry–advocating for toys catering to boys simply because they’re more profitable.
• BUILD & IMAGINE “The thinking was that if we design it for boys, then girls will just play too,” she says.
“But if we do the reverse and design it for girls, we don’t know if boys will play. The thing to do was, by
default, design the toys for boys.
• “I found that to be morally not right, but I absolutely advocated what I thought was right for the
business, to lead with boys, because we found that to be a more sound business decision,” continues
Peterson. “There I was, year after year, representing this position that the best business decision we can
make is to design toys for boys. I was never my authentic self because of that.”
• Peterson has since founded her own toy company aimed at teaching STEM skills to both girls and boys,
and featuring “adventurous leading female characters.”
• “I now have the opportunity with my own startup to make up the rules, and we get to decide what’s
important,” she says. “We decided to take our industry’s standard and flip it on its head. Instead of
designing products for boys and then looking for opportunities to invite girls to play, we’re designing for
girls and then looking for opportunities to invite boys to play.”
• The lesson: You need to be the change you want to see.
Trae Bodge, Spokeswoman and Sr Editor of Retailmenot
.com and Cofounder of beauty Brand ‘Three custom Color
Specialists’
• When Bodge started her company Three Custom Color Specialists back in the ’90s, there were very few
products for women of color. And there was a reason why: Creating makeup for darker skin tones was more
costly.
• Bodge explains: “A fair-skinned woman may have eight different tones on her face, whereas a dark-skinned
woman may have 25 different tones on her face, so it becomes very hard to cater to a darker-skinned client. So
many brands don’t have darker skin colors because it’s very difficult to have a range of color for those women.
It’s difficult, from a business perspective, to have so many shades available, but we made it a priority.
• “I always understand when I see a bigger company not having darker skin tones, because it’s very difficult in
carrying those tones and making a profit on them, but I think it’s important, and I think that bigger companies
should be willing to take a hit in an effort to answer to the needs of women of color.”
• From day one, Bodge says her company has made it a priority to introduce a broad range of shades. Today,
she’s thankful to see other makeup brands making it a priority to be inclusive of women of all skin tones.
• The lesson: If you’re looking at your bottom line as a company, part of that equation should be, am I catering to
all consumers? And yes, certain shades will be more profitable and certain shades will be less profitable, but
there’s a middle ground there. It’s a mistake from a PR and customer service perspective not to cater to all
consumers.