The Ethics Sage Discusses Ethical Organzational Leadership

My colleague and friend, the Ethics Sage, has a new post which I am privileged to be given early. Please visit his site and join those who follow his blog.

James Pilant

Ethical Leadership in Life and the Workplace

Creating an Ethical Organization Culture

Ethical leadership means to set high standards for ethical behavior and establish a corporate culture that supports ethical values such as honesty, trustworthiness, responsibility, and accountability. Gael O’Brien, a frequent blogger on ethics issues, points out that ethical leadership draws on a high level of “emotional intelligence” and the capacity to own an organization’s values as well as one’s own, linking the means and the end in business strategy.

In organizations where the management sets a good example, significantly less unethical behavior is seen in the rest of the organization than when the management sets a bad example. At the same time employees and outsiders are often critical of the lack of role-modeling at the top. The positive side of this criticism is that it conceals an expectation: employees and outsiders expect top management to provide a good example. That means that there is a need for ethical leadership.

Ethical leaders have a moral compass. They explore their environment, with a well-developed vision of right and wrong. They have a clear sense of direction when it comes to deciding what can and must be done to establish an ethical corporate culture. They see and hear what others do not see or hear. They not only draw a clear line between what is and what is not permissible, but at the same time push the boundaries, and raise the bar, for others as well as themselves to become more ethical.

Ethical leaders have courage. They not only know that things must and can be different, but they do things differently themselves. They have the drive and the guts to persist where others give up. Where others are silent, they speak. They demand responsibility.

Ethical behavior is not only for people in management positions. Ultimately ethical leadership should show people that they are not the product of their environment, but are capable of creating an environment in which they can get the best out of themselves and others.

Creating an ethical environment in one’s organization occurs when top management pays attention to the values they set for the ethical behavior of employees. An interesting approach to doing just that is known as Giving Voice to Values (GVV). GVV is an innovative, cross-disciplinary business curriculum and action-oriented pedagogical approach for developing the skills, knowledge and commitment required to implement values-based leadership. The curriculum was developed by Mary Gentile, the director of Giving Voice to Values at Babson College.

I use GVV in the classroom and provide the opportunity for students to script and practice in front of peers, equipping future business leaders not only to know what is right, but how to make it happen.

Ethical leaders pay special attention to finding and developing the best people precisely because they see it as a moral imperative – helping them to lead better lives that create more value for themselves and others. In other words, ethical leaders know the ethical development of those in their organization begins with making them more ethical people in a variety of situations and establishing a framework to make ethical decisions. That foundation can then carry over to the workplace and enhance ethical behavior in relationships with stakeholders – suppliers, customers, employees, and others who rely on the ethics of the organization to treat them honestly and fairly.

Ethics is not a spigot we can turn on and off at a whim. True ethical leaders know this and they cultivate ethics in everything they do in directing the organization to accomplish ethical goals.

Ethical leaders ‘walk the talk’ of ethics. They demonstrate through actions and words that unethical behavior will not be tolerated and those who witness such behavior within the organization must report it to higher-ups so that appropriate action can be taken.

This leads to my final point, which is that whistle-blowing is the key to improving the culture within organizations. That is why the Sarbanes-Oxley Act and Dodd-Frank Financial Reform Act include protections for whistle-blowers and, in the case of Dodd-Frank, financial rewards for blowing the whistle on corporate wrongdoing where the government can bring a successful lawsuit against the organization for fraudulent behavior.

Former Supreme Court Justice, Potter Stewart, said it best in commenting on ethical behavior: “Ethics is knowing the difference between what you have a right to do and what is right to do.”

Blog posted by Steven Mintz, aka Ethics Sage, on November 12, 2013

From around the web.

From the web site, SORSONGB.

http://culcsorsongb.wordpress.com/2013/06/23/ethical-leadership/comment-page-1/

In every business, leaders are the key driving force of the business, because they can be the one to drive their employees and the decision they make will affect the organization. Recent research (Resick, Hargis, Shao Dust, 2013) shows that, ethical leader are the one who “use their social power to represent the best interests of their organization and employees, set a personal and professional example of ethically appropriate conduct, and actively manage ethical”. Ethical leaders can create important positive effects on both individual and organizational effectiveness. The word “Ethic” may have many definitions but the main point of the word is “knowing and doing what is right”.

Leader-Member Exchange (LMX) is the quality of exchange between a supervisor and an employee (Walumbwa et al., 2011). The LMX theory explained that the “more frequently employees interact with their immediate supervisors, the more likely the relationship will be stronger (Walumbwa et al., 2011)“, this show that with ethical leadership can lead to better relationship with the employees. Ethical leadership always encourages opinion from the employees, which will boost the individual effectiveness and may boost organizational effectiveness as well.