Ethics Competency and Approach to Leadership

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Introduction

The concept of leadership is an important part of the business operation and ethics in business, corporate, and industrial world. Work with people presupposes that a leader should coordinate the efforts of the group towards a certain goal. The main task of the leader is to make everything be done appropriately in terms of mutual decisions and effectiveness of cooperation. Ethics is a part of the decision-making process as it allows the leader to decide correctly on appropriateness of certain decisions and actions to be taken. As the competency means the condition of being capable to govern people, the leader should be able to coordinate and control actions of the group accountable to him/her in terms of moral and physical abilities.

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Statement of Personal Belief

Ethics and Ethical Decision Making

Ethics and ethical decision making are essential concept in the understanding of the ethics in business and other spheres of industry and cooperation that include interpersonal relations and require some management. Management is a formal representation of leadership, though a manager can appear not to be a formal leader and vice versa, a formal leader does not always obtain position of a manager. Ethical decision making can happen to be of crucial importance for further promotion and career as a whole, so, “Leaders have to adopt ethical norms and abide by them before trust can be generalized among its members.” As suggested by Bruhn (2005),

Ethics are rules of conduct that govern the nature of our interaction with others. Rules of conduct are derived from our values. Values express our beliefs regarding the “rightness” or “wrongness” of certain behavior. We learn our values from many sources; it is the composite of our values that makes each of us unique, while we conform to the values espoused by the society we live in and the organization we work for.

Ethics can be regarded as the best way to control human fantasies, desires, and ambitions in terms of certain positions that can or cannot be obtained. “Deception is ethics failure, [which] comes at a cost. The most salient and irredeemable cost of ethics failure is the loss of public trust. Organizations with persistent ethics deficits have abandoned the values society associates with good citizenship and the common good.”

Interviewing a senior leader, that meets the requirements of being a person that has a leadership position in business, government, or education and that has 15+ years experience in the sphere he is engaged into, I have learned about his idea of ethics:

In the Iran-Iraq War over 80 countries sold weapons to both sides. Is this ethical? Wall Street Banks get billions in tax payer bailouts from a credit crisis they created then pay out 40% of their company revenues in bonuses the same year, is this ethical? Fortunately, the ethical decisions I need to make daily are nothing this important, nevertheless, I will try and provide you some real world experience from my industry which is an automotive parts firm with production facilities in China and customers all over the world. In my experience as it relates to business ethics, I find that they ethics are different according to people’s different cultural background and personal experience. And yet, in the business world there are shared universal concepts with written rules and some unwritten rules depending on where you’re doing business. I consider poor ethics in business to “be bad for business” and, therefore, do not making profits and have good business ethics as mutually exclusive concepts.

Moreover, the concept of leadership is connected to ethics in terms of regulating and directing ambitions into the ‘right’ and the most appropriate way. So, the ethics limit human ambitions; though ambitions can soften ethical behavior (see Table 1).

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Importance of Ethics to My Career

Career is an important set of positions obtained by a person within the whole period of working activity. It includes the process of hiring, period of adaptation, promotions, and further training, and retirement. Though not all careers are the same these elements are the most common ones for people engaged into the business, corporate, and industrial world. “The structural changes taking place in business have impacted very directly the individual differences or capabilities needed by executives and managers.”5 The career presupposes some changes and some learning that enhances progress and favors the promotion.

Sometimes you should be a leader to get a promotion, though leadership is a fundamental aspect while hiring you. Such leadership competencies as ethics, intellectual capacity, and maturity are considered fundamental and new employees “refine them through job experiences at successive management levels.” As these competencies are regarded concerning character, they are important in the process of hiring. After this, the essential leadership competencies become important; they are major when a person becomes responsible for a certain function or a formal group (department). The customer orientation, developing people, inspiring others, and business health and results are considered to be essential leadership competencies. The next set of leadership competencies that should be developed is visionary ones because they let leaders develop their talents and abilities and practise them in their work.

My career can benefit greatly from my ethical norms and leadership potential; as the ethical decision making is an integral part of the leadership competence, I would succeed in both leadership and decision making because I possess all fundamental leadership competencies and some essential ones that are necessary while directing a certain formal group. Bass (1990) suggested that “…leaders have a direct influence on the performance of the organization as well as on the satisfaction and performance of those whom they lead.” 10 This means that I can do well with ethical decision making as well as demonstrating my leadership competencies to influence the operation of a certain group and directing efforts to attain a common goal.

Importance of Ethics to the Society in Terms of Business World

The society is a group of people, though the size and various purposes of its members give a great topic for consideration. The ethics within a certain group is important as well as within the whole society. People are members of the society as well as of a certain business activity. Corporate, business, and industrial world is an area where people as members of the multinational and multi-purpose society try to attain their goals. In this case a healthy balance is important because it is necessary to take into account the demands, goals, and problems of other groups that have leaders as well as a certain goal.

The ethical decision making is important for the society in terms of the business world because ethics presupposes that the group should benefit and bring less harm to others (see Table 2). This means that ethics lets groups attain their goals about the position of others and influence of the group’s decisions on them, while the society may benefit or suffer from a group’s decision. In this respect ethics regulates interrelationships between a group and a society.

As ethics includes the concept of leadership, “… the intended applications of the leadership model were: accurate assessment of leadership capability more effective development of talent within the organization selection and placement of leaders into key positions.” Consequently, a good leader within a group that directs it with the help of ethical decisions is sure to succeed in terms of the business world and contribute to the attaining of goals performed by a society.

Interview Senior Leader

An Interview in the Form of Questions-Answers

The interview has been conducted in the form of questions-answers; the process included twelve questions with personal assessment of the interviewee and sharing personal experience with an interviewer. The information on questions and answers can be found in the section of appendices in the end of the work.

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Personal Assessment of the Interview

I have learned new information on leadership, ethics, and ethical decision making in the process of completing the current report. The interviewee shared his personal experience on ethical decision making and his ideas about ethics and importance of ethics to the society in terms of the business world.

Article Review

Overview of the Main Points

I have chosen the book chapter for the article review as it perfectly met the requirements on the source for review; the chapter is written by Joanne B. Ciulla “Ethics and Leadership Effectiveness.” It can be found in the book The Nature of Leadership edited by John Antonakis, Anna T. Cianciolo, and Robert J. Sternberg. The chapter (hereinafter referred to as an article) contain discussion of the essential elements and concepts of ethics and leadership as an integral parts of ethical decision making. The author of the article presents a great number of definitions of leadership that can be traced throughout the history of the twentieth century.

The ethics is regarded in the article with a view of morality and moral principles; it is analyzed as critical theory in the theoretical studies performed by philosophers who thought that “… ethics is about social values and morality is about personal values.” The ethics and leadership are considered to be discussed in terms of moral actions and importance of morality for leadership. The example presents the Hitler problem and the issue of evaluating immoral actions as those performed by a leader of his group.

The author of the article also argues about the moral luck and effectiveness in terms of ethics, “…the problem we face is that we do not always find ethics and effectiveness in the same leader. Some leaders are highly ethical but not very effective. Others are very effective at serving the needs of their constituents or organizations but not very ethical.” This problem can be considered one of the burning issues within the discussion of the moral and ethics about the mutual influence on leadership.

Personal Evaluation of the Material

The article appeared to be relevant for the report and the discussion of ethics, ethical decision making, and the concept of leadership as it may influence the career or society in terms of the business world. It is necessary to mention that I learned a lot of new concepts that regard the ethics as a philosophical aspect and the moral in this case is analyzed as something abstract. Moral standards, altruism, and theological theories did not seem relevant to the topic of ethics and leadership until I had read the article by Joanne B. Ciulla “Ethics and Leadership Effectiveness.”

The author has managed to cover all aspects that seemed worth consideration; she made an effective presentation which made me think over the genuine impact of the leadership on my career and the society. Thus, I believe that every person has his/her idea about the concept of leadership in terms of decision making. The theology is not related to business about the leadership as it exists and is interpreted in the business world. “The discursive use of competencies as a language for organizational leadership could, in some way, compensate for the weaknesses of their use in a more formal assessment mode.” The corporate and industrial world considers leadership and ethics as the methods to develop personal abilities of the group members as well as help to increase productivity and promote different products and ideas.

Conclusion

The area of business is a set of groups and competencies that can be developed in the process of cooperation and attaining a common goal. As “… the competency approach can be considered as a repetitive call that gives some structure and predictability to the field of management and leadership”,16 it is necessary to develop leadership potential to succeed. The competencies are essential aspects, traits of character and abilities that contribute to the overall effectiveness of business operation and productivity.

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Works Cited

Bolden, Richard, and Gosling, Jonathan. “Leadership Competencies: Time to Change the Tune?” Leadership 2(2), (2006):147-163. Web.

Alldredge, Margaret E., and Nilan, Kevin J. “3m’s Leadership Competency Model: An Internally Developed Solution.” Human Resource Management 39(2,3), (2000): 133-145. Web.

Ciulla, Joanne B. “Ethics and Leadership Effectiveness.” The Nature of Leadership. 302-327. Ed. John Antonakis, Anna T. Cianciolo, and Robert J. Sternberg. Thousand Oaks: SAGE, 2004.

Bruhn, John G. “Looking Good, but Behaving Badly: Leader Accountability and Ethics Failure.” The Health Care Manager 24(3), (2005): 191-199. Web. 28 Mar. 2010.

Appendices

Interview with a Senior Leader

How would you define ethical decision making?

I could sub-divide ethical decision making into certain areas of our daily business decisions. There are ethical issues with regards to human resources, production, and sales & marketing. We also have to make ethical decisions as they relate to dealing with customers, government officials, or employees.

What do you think is important concerning ethics and ethical decision-making?

An applied ethical approach to business provides a template for fair dealing which all employees, customers, suppliers, and all stake holders can understand. A mutual understanding and trust between these stake holders will bring prosperity to the firm.

Please give a real example of right ethical decision making?

Here are a few:

  • Human Resources: We discovered we had a person in our packaging plant who was a supervisor. He previously had served 7 years in prison for murder. Is this a guy you want around your company? His work performance was quite good but is this person to much of a risk? I decided to not keep this person in the company to limit risks to the others. His experience also involved gang activity so it was decided we do not want this type of person to provide a safe work environment for the other employees.
  • Material Substitution: It would be easy to substitute poor input material in your products or even send off-spec products to your customers. We would never do this as quality is the founding principle of our company. Any problems on our products would damage this reputation and we will not put this at stake. This is an example where good ethics = good business. Some companies choose the other short term route.

Please give a real example of wrong ethical decision making?

One example of wrong decision making would be bribery or some form of facilitation payments. This type of thing is very common in the developing world but in most cases is not required to do successful business. The merit of your products and services should be able to stand on their own.

How important is ethics to you?

I would not participate in unethical business practices and would consider it a loss of face to do something not honorable.

How important is ethics to the business that you are in?

Ethics is important to us with regards to offering a fair playing field to all the stake holders in our business.

What do you personally believe about ethics and its importance to your career?

I have a Christian background which has ingrained certain concepts such as “treat others as you would want them to treat you”, the Ten Commandments, etc… These concepts are part of my foundation yet I don’t approach business decisions thinking about these concepts but instead they are carried subconsciously and are part of my personal cultural experience.

Do you think of ethics as an add-on or part of the business plan?

For us, ethics is not a main focus of our business plan but used as a guide in our daily activities.

Would you say that most people consider ethics as an add-on to the business plan? Or part of the plan?

I would say it is mostly an after the fact consideration.

What do you personally believe concerning the importance of ethics to society, specifically to the corporate/business/industrial world?

Economies and societies that have poor ethics in business often fail or underperform other countries. The lowest levels of corruption in society can be found in Nordic countries, these countries also share the highest standard of living. If you look at the most corrupt countries in the world such as some failed states in Africa you also find the lowest standards of living. I would assume you could find a statistical correlation between poor business ethics and lower standards of living.

Please share a little bit about your personal experience with ethical decision making?

I have had many business ethic decisions to make. Here are some examples:

  • Example 1: Environmental Permit: Once we needed a special environmental permit from the local government, we were told if we use Company A’s environmental filter equipment, then the license would not be a problem. Company A and Company B both have similar pricing and filters equipment. Why would the local government recommend company A? Who owns company A? Of course, it’s someone’s friend or family; you just go along and buy from company A as long as the price, service, and equipment is okay.
  • Example 2: Treat people well, the Karma approach: I once was in a company where one of our people quit as they found another job. They were owed 1 month salary but according to labor law as they did not give us an official 30 days notice before leaving I could have withheld some of the last month’s salary from the employees pay. I did not withhold their pay as they had worked for that month. This person then joined one of our customers and a year later supported us on a large new contract for new business.

What do you do when the issues fall in the grey areas of ethical decision making?

Fortunately, I would say most decisions fall inside or outside the boundary of local laws so you do not need to stress over these decisions frequently. When you do encounter a grey area item you just have to make a decision.

Tables

Table 1: Comparison of Themes from Reflective Reports and Competency Frameworks (sorted by descending order of difference)

Word/theme Number of reflective reports Percent
(a)
Number of competency frameworks Percent
(b)
Difference
(a-b)
#reflect 30 78.90% 3 10.30% 68.60%
#follow* 26 68.40% 0 0% 68.40%
#moral 26 68.40% 2 6.90% 61.50%
#belief 28 73.70% 4 13.80% 59.90%
#trust 32 84.20% 8 27.60% 56.60%
courage 29 76.30% 6 20.70% 55.60%
#challenge 33 86.80% 10 34.50% 52.30%
humility 18 47.40% 1 3.50% 43.90%
#learn 32 84.20% 13 44.80% 39.40%
Work/life balance 17 44.70% 2 6.90% 37.80%
#honesty 21 55.30% 6 20.70% 34.60%
#intellect 21 55.30% 6 20.70% 34.60%
#Inspiration 24 63.20% 9 31.00% 32.20%
#empathy 15 38.50% 2 6.90% 31.60%
#confidence 25 65.80% 10 34.50% 31.30%
#Aware 24 63.20% 10 34.50% 28.70%
#emotion 16 42.10% 4 13.80% 28.30%
#Ethics 21 55.30% 8 27.60% 27.70%
#complexity 17 44.70% 5 17.20% 27.50%
#values 34 89.50% 18 62.10% 27.40%
#Vision 34 89.50% 18 62.10% 27.40%
integrity 26 68.40% 12 41.40% 27.00%
Diversity 18 47.40% 6 20.70% 26.70%
#Flexibility 20 52.60% 8 27.60% 25.00%
#intuition 11 28.20% 1 3.50% 24.70%
#adapt 16 42.10% 7 24.10% 18.00%
#listen 17 44.70% 8 27.60% 17.10%
change 33 86.80% 20 70.00% 16.80%
uncertainty 9 23.70% 2 6.90% 16.80%
#motivate 23 60.50% 13 44.80% 15.70%
#determination 13 34.20% 6 20.70% 13.50%
#influence 23 60.50% 14 48.30% 12.20%
#Communication 34 89.50% 23 79.30% 10.20%
#resilience 12 31.60% 7 24.10% 7.50%
Perseverance 3 7.90% 1 3.50% 4.40%
#develop 37 97.40% 27 93.10% 4.30%
others 33 86.80% 24 82.80% 4.00%
#decision 28 73.70% 21 72.40% 1.30%
TOTAL OBS. 38 29
  • Note: # indicates that words with a common stem have been grouped only instances that refer to the process of followership

Table 2: Some Societal Consequences of Ethics Failure Organizations

Promotes the decline of social virtues, that is, loyalty, honesty, reliability, cooperativeness, and a sense of duty to others
Encourages public cynicism regarding the integrity of organizations and lowered expectations of their products and services
Reinforces public skepticism regarding justice if leaders are not held accountable
Provides negative leadership modeling for young entrepreneurs
Questions the purpose and accountability of the boards of directors
Challenges the methods and criteria used in choosing CEOs
Flaunts the abuse of power by the elite
Creates disbelief about the public language of organizational leaders
Depletes social capital and aids in developing a low-trust society
Weakens the creditability and competitiveness of economic institutions in a global economy
Affects work climate and productivity and encourages employee turnover

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