2. Ethics in Theory
“Leadership should not go along to get along …. Leadership must
meet the moral challenge of the day”
Ethics refers to the principles of right conduct or a system of
moral values
Leaders are judged on the basis of a framework of values and not just in terms of
their effectiveness.
Gardner & Burns stressed the centrality and importance of the moral dimension of
leadership.
Burns even viewed ethically correct leadership behavior to demonstrate “true
leadership”
Ethics and trust go hand in hand
3. The 4 Leadership Qualities
that create Trust
Vision:
• Followers tend to trust a leader who create a compelling vision
Empathy:
• Understand the world as the followers see and experience it
Consistency:
• Leaders who are consistent are trustworthy
Integrity:
• Leaders with strong integrity are trusted by the followers
4. Organizational Leadership
Like individuals, organizations too have dominant values
These values represent the principles by which employees are to
get work done and how to treat other employees, customers, and
vendors
Often times there is a gap between a company’s stated values and
the way the company truly operates
Values of top management can sometimes tell more about the
company’s operations than the company values
Satisfaction and retention rate is higher when employees share the
same values as company
5.
6. Leading by Example
Interpersonal behaviors:
• Optimistic, hardworking and helpful. Shows care, concern and compassion
for others
Basic fairness:
• Behavior is manifested in the fairness shown to others. Treats others
respectfully
Ethical actions and self expectations:
• Possesses high integrity. Perceived as honest, trustworthy and humble
Articulating ethical standards:
• Uncompromising high ethical standards. Puts ethical standards over
personal and short-term company interests
7. Leading by Example
Leaders in the organization have the responsibility to shape
the ethical culture
The term upward leadership comes in here
“ leadership behavior enacted by individuals who take action to maintain
ethical standards in the face of questionable moral behaviors by higher ups”
Employees may not necessarily feel safe for raising ethical
concerns and issues
• Fear of retribution by bosses
• Going along with the group
Ethical climate moderates an employees likelihood of raising
ethical concerns
8. Culture
Ethical climate:
• Ethical standards and norms are consistently, clearly, and
pervasively communicated
• Embraced and enforced by leaders in both word and
example
• Leaders must “Walk the Talk!”
Unethical climate:
• Questionable or outright unethical behavior exists
• Little to no action taken to correct it
• High degree of moral distress among employees
10. Policies and Procedures
Formal statements of ethical standards and policies:
Organizations follow public and private policies and actions
• Companies have increased focus in written policies with Ethics
HRM System Example
Ethics Resource Center website
• Provides resources, research, services, standards, practices for
companies
14. The Six Elements
1. Written standards of ethical workplace conduct.
2. Training on standards.
3. Company resources that provide advice on ethics issues.
4. A process to report potential violations confidentially or
anonymously.
5. Performance evaluations of ethical conduct.
6. Systems to discipline violators.
Source: 2013 National Business Ethics Survey, Ethics Resource Center.
16. Importance in Business
Analogous to Corporate Social responsibility -CSR
SARBANES-OXLEY ACT 2002
Shaming or embarrassment
• Social Media
Bad business equals no business
Add names and color
All should have note cards
Introduction, then Transition
Transitions should be smooth
Tasmia to begin and will present slides 2-4.
True leadership may be a vague term as it is hard to define what true is, however many may characterize by a high degree of trust between leader and follower
* Managing ethics in a business environment has a lot to do with leadership behavior as it has a trickle down effect.
Vision: Pull the organization’s employees and culture towards a common goal
Empathy: demonstrates empathy with the employees
Consistent: Does not refer to an unchanged position but that changes are understood as a process of evolution in light of relevant new evidence
Integrity: commitment to higher principles through their actions
Tasmia last slide to present
GT to present slide 5
Not all ethical role model exhibit the same qualities and it can be categorized as four general categories of attitudes and behaviors
Neha to present slides 6 & 7
Approach is to reject the notion that organizational leadership is synonymous with formal position or hierarchical power in the organization, and to embrace instead the idea that all organizational members have a role in organizational lea
dership, including responsibility for ethical leadership in the organization.
What happens when bosses are bad ethical role models?
Nina to present slide 9 and intro Apple video clip
*Insert Apple Video clip Next Slide---
SLAVA to present slide 10
Sin Heang to present slide 12
Josie to present slide 13
Josie to present slide 14
.
Josie to present slide 15
CSR-For a number of reasons, companies are having to work harder to protect their reputation—and, by extension, the environment in which they do business.
Scandals at Enron, WorldCom and elsewhere undermined trust in big business and led to heavy-handed government regulation.
An ever-expanding army of non-governmental organizations (NGOs) stands ready to do battle with multinational companies at the slightest sign of misbehavior.
This has been evolving and become analogous and synonymous with Corporate Social Responsibility.
SARBANES-OXLEY ACT 2002 -
(PUBLIC LAW 107–204—JULY 30, 2002)-To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.=Corporate
Responsibility!
SOX was created in response to the series of misleading and outright fraudulent activity of big business in the 1990s (Lasher, 2008, p. 187). Essentially, multiple publicly-traded businesses jacked up their stock prices by “publishing false or deceptive financial statements” (Lasher, 2008, p. 187). The most notable company to crash was Enron, followed by Global Crossing (parent of MCI,) and Xerox; later, almost one thousand publicly traded companies restated their financial statements (Lasher, 2008, p. 187). This resulted in almost $6 trillion of stock market value disappearing (Lasher, 2008, p. 187)! In response to these events, Congress drafted and passed the Sarbanes-Oxley Act (SOX) of 2002.
Shaming-Many rankings, ratings and even social media put pressure on companies to report on their non-financial performance as well as on their financial results. And, more than ever, companies are being watched. Embarrassing news anywhere in the world—a child working on a piece of clothing with your company's brand on it, say—can be captured on camera and published everywhere in an instant, thanks to the internet.
Neha and Josie to BOTH to present slide 16
Enron Video INSERT HERE***
Neha to present slide 17