CHAPTER TWELVE LEADERSHIP ETHICS AND DIVERSITY © Prentice Hall 2006 12-1 Learning Objectives After reading this chapter, you should be able to the following:    Explain why ethical leadership is so important in organizations Describe major ethical issues that leaders face and approaches for addressing those issues Explain how leaders can create an ethical climate in their organization © Prentice Hall 2006 12-2 Learning Objectives After reading this chapter, you should be able to the following:    Describe the role of spirituality in creating an ethical organizational climate Explain the competitive and advantages of diversity for organizations Describe leadership strategies and behaviors for creating a multicultural organization © Prentice Hall 2006 12-3 An Example of Leadership Ethics The collapse of Enron     Enron executives developed a deceiving web of pseudo-partnerships with newly created “investment companies” that were actually Enron subsidiaries The executives had encouraged and modeled an organizational culture of individualism, innovation, aggressive cleverness, and excess at the expense of compassionate, honest, and responsible leadership These unethical leaders demonstrate the importance of leadership in establishing an ethical climate in an organization Leaders are the prime example that followers emulate when it comes to ethical or unethical behavior © Prentice Hall 2006 12-4 Ethics and Leadership Ethics is the study of morality and the moral choices people make in their relationships with others  Ethics concerns how we should behave in the roles that society gives us  Leaders are often in roles that can determine the well-being of others and they sometimes influence the broader good   technically good (effective) morally good © Prentice Hall 2006 12-5 Power Power is the basis for a leader’s influence on followers  the more power a leader has, the more likely that followers will comply with the leader’s wishes  the greater a leader’s power, the greater the potential for abuse © Prentice Hall 2006 12-6 Corrupting influences of power Power may become desired as an end in itself and be sought at any cost  Power differences may cause followers to give the leader false positive feedback and create an elevated sense of self-worth on the leader  The leader may devalue followers’ worth and to avoid regular contact with followers or mistreat them A leader’s failure to acknowledge the ethical limits of power causes a loss of credibility and trust and does devastating damage to the leader and his constituency  © Prentice Hall 2006 12-7 Moral Consistency If leaders’ behavior does not match their stated values, they will lose the trust of their followers and colleagues • A leader’s moral inconsistencies are open to public scrutiny • Leaders who not behave consistently with their stated ethical values risk being labeled hypocrites © Prentice Hall 2006 12-8 Approaches to Ethical Behavior Categorical CategoricalImperative Imperative Follow Followuniversal universal moral morallaws laws Moral MoralLearning Learning Persistent Persistentefforts efforts to tobe bejust, just, prudent, prudent,&&truthful truthful Virtue VirtueEthic Ethic High Highmoral moral character characterresults results in ethical behavior in ethical behavior Utilitarianism Utilitarianism Approaches Approaches to to Ethical Ethical Behavior Behavior Greatest Greatestgood goodfor for greatest greatestnumber number Altruism Altruism Primary Primaryconcern concernisis for forothers’ others’welfare welfare © Prentice Hall 2006 12-9 Creating an Ethical Climate Role Rolemodeling modelingimportant important values valuesand andbehaviors behaviors Spiritual Spiritualawareness awareness as asaaguide guideto toaction action Creating Creatingan an Ethical EthicalClimate Climate Socially Sociallyresponsible responsible charismatic/transformational charismatic/transformational leadership leadership Directing Directingethical ethical policies policiesand andpractices practices Rewarding Rewardingethical ethical and andpunishing punishing unethical unethicalbehavior behavior Conducting Conductingparticipative participative discussions discussionsof ofethical ethical assumptions assumptionsand andactions actions © Prentice Hall 2006 11-10 Charismatic/Transformational Leadership and Ethics Charismatic/transformational leaders are considered unethical when their behavior reflects a self-serving or egotistical bias rather than altruistic values   Some charismatic/transformational leaders behave unethically because they are so committed to otheroriented values that they mistakenly believe generally applicable moral requirements not apply to them Transformational leaders sometimes assume followers are ignorant and leaders have superior knowledge and insight this encourages leaders to believe that normal ethical requirements not apply to their behavior © Prentice Hall 2006 12-11 Spirituality     Spirituality is part of our nature as humans, The content of our work and the context (environment) help determine our total work experience, the work context and/or content today are often injurious to the human spirit and may be getting worse, Embracing spirituality at work may help counteract these injurious trends and benefit organizations, their members, and communities © Prentice Hall 2006 12-12 DIVERSITY Diversity refers to the multiple social, cultural, physical, and environmental differences among people that affect the way they think, feel and behave © Prentice Hall 2006 12-13 Competitive Advantages of Diversity Outstanding OutstandingHuman Human Resources Resources Cost CostSavings Savings From FromExperience Experience At AtIntegration Integration Competitive CompetitiveAdvantages Advantages of ofDiversity Diversity Effective Effective Marketing Marketing Strategies Strategies Creative CreativeIdeas Ideas And AndSolutions Solutions To ToProblems Problems Flexibility Flexibilityin in Adapting Adaptingto to Environment Environment © Prentice Hall 2006 12-14 Leadership for Diversity Rewarding and recognizing those who promote and participate in diversity programs Directing all employees to participate in diversity training and seminars Participating in training and in discussions on diversity issues and programs Leadership Leadership for forDiversity Diversity Supportiveness through creation of flexible personnel policies and mentoring Boundary-spanning to help minorities build networks and support groups © Prentice Hall 2006 12-15 ... diversity for organizations Describe leadership strategies and behaviors for creating a multicultural organization © Prentice Hall 2006 12-3 An Example of Leadership Ethics The collapse of Enron... excess at the expense of compassionate, honest, and responsible leadership These unethical leaders demonstrate the importance of leadership in establishing an ethical climate in an organization... Sociallyresponsible responsible charismatic/transformational charismatic/transformational leadership leadership Directing Directingethical ethical policies policiesand andpractices practices