Ethical Leadership - Free Essay Example

ETHICAL LEADERSHIP This paper is an exploratory study on Ethical Leadership in the present Business environment which starts with the introduction to leadership and ethical leadership concept and explains about the components of ethical leadership which consists of purpose, knowledge, authority and trust. Also outlined about the modes of ethical leadership which comprises of inspiration, facilitation, persuasion, manipulation and coercion and followed by the best of the best Ethical Leaders identified in 2007. It also mentions about the world’s popular Ethical Companies of 2009. Finally, there are few guidelines mentioned for practicing the Ethical Leadership in today’s world. INTRODUCTION Leadership has been described as the â€Å"process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task†. Leadership remains one of the most relevant aspects of the organizational context. A leader is a person who influences a group of people towards a specific result. It is not dependent on title or formal authority. Leaders are recognized by their capacity for caring for others, clear communication, and a commitment to persist. Good leaders are made not born. If you have the desire and willpower, you can become an effective leader. Good leaders develop through a never ending process of self-study, education, training, and experience. Generally, Ethics means Standards of conduct that indicate how one should behave based on principles about right and wrong. And Ethical leadership means keeping the lines of communication between you and those that you are leading open and strong. Those that you are leading should feel that they can come to you to discuss any problems that they may be having concerning the job at hand, at the very least. They need to know that you will hear them out, and that you will always make the fairest possible decision. An ethical leader would never promise something to someone and not follow through with it. Furthermore, ethical leadership means that the leader never gossips about other members of the group, or shares any private information about them with others. Real leaders concentrate on doing the right thing, not on doing things right. Components of Ethical Leadership Ethical leadership begins with the way leaders perceive and conceptualize the world around them. Ethical leadership, organizational ethics, and social responsibility are inseparable concepts. The leaders role is to guide the human potential of the organizations stakeholders to achieve organizational aspirations in ways that liberate rather constrain their imaginatio ns and judgment. Ethical leadership must, then, be effective, efficient, and excellent if it is not to waste human potential. It is not enough to be ethical in ones individual actions to be an ethical leader. To be effective, efficient, and excellent, four components of ethical leadership must be understood and developed: purpose, knowledge, authority, and trust. ? Purpose-The ethical leader reasons and acts with organizational purposes firmly in mind. This provides focus and consistency. ? Knowledge-The ethical leader has the knowledge to judge and act prudently. This knowledge is found throughout the organization and its environment, but must be shared by those who hold it. Authority-The ethical leader has the power to make decisions and act, but also recognizes that all those involved and affected must have the authority to contribute what they have toward shared purposes. ? Trust-The ethical leader inspires-and is the beneficiary of-trust throughout the organization and its environment. Without trust and knowledge, people are afraid to exercise their authority. The relationship between these four compon ents can be visualized as interrelated components, as described in the figure opposite. Attention to any one component alone is incomplete and isleading. Ethical Modes: It is often thought that ethical leadership must be soft leadership. Being an ethical leader means applying the right amount of authority in each situation. Sometimes the situation requires leadership that is anything but gentle. Gratuitously tough leadership, however, cannot be maintained for long without developing resentment and cynicism. It is helpful to think of the ethical leader as exercising authority within five modes or levels of intervention into the judgments and actions of followers: 1. Inspiration-Setting the example so that other committed members will contribute their fullest capabilities to achieve organizational purposes. 2. Facilitation-Supporting other committed members, and guiding them where necessary, so that they are able to contribute their capabilities as fully as possible. 3. Persuasion-Appealing to reason to convince other members to contribute toward achieving organizational purposes. 4. Manipulation-Offering incentives other than the intrinsic value of contributing to the achievement of organizational purposes, where commitment is lacking. . Coercion-Forcing other members to contribute some degree of their capability where they have little or no commitment to do so on their own. The modes of ethical leadership intervention depend in large part on the organizational culture. If the culture allows the organization to learn and grow within its environment, leadership may be largely inspirational. If the culture does not support organizational learning and growth within that environment, then manipulative, even coercive, leadership would be necessary. Moreover, the style of ethical leadership will vary with the degree to which it reflects the Organizational Culture and the urgency of its situation in the environment. Ethical leadership is a stewardship that preserves the aspirations and culture of the organization. It scans the community and develops and communicates organizational aspirations: the organizations core purpose, core values, and vision of a desired future and persuades, manipulates, and coerces its stakeholders to comply until the culture has adapted. Ethical leadership balances (1) achieving the organizational aspirations that are realistically attainable at this time with (2) developing the organizational culture over time. Ethical Leaders who made the difference in 2007 1. Stuart Rose, Chief executive, Marks Spencer, UK retailer Marks Spencer. 2. Lee Scott, Chief executive, Wal-Mart, the world’s largest retailer. 3. Patrick Cescau, Chief executive, Unilever, the consumer goods giant. 4. Anne Lauvergeon, Chairman of Areva, the French nuclear group. 5. Chris Harrop, Marketing director of Marshalls, the UK stone company. 6. Richard Ellis, Head of corporate social responsibility at Alliance-Boots 7. Noel Purcell, General manager of stakeholder communications at Westpac. 8. Mike Clasper, Former chief executive of BAA, the UK airports operator. 9. Chris Avery, Founder of Business-humanrights. org. 10. Fiona Harvey, Environment correspondent, the Financial Times. 11. Lala Rimando, Business editor, Newsbreak Magazine in Manila, Philippines 12. Christine Loh, Founder and chief executive of Civic Exchange, an independent, non-profit public policy think-tank in 13. Neelie Kroes, European Union competition commissioner. 14. Penny Wong, Australian senator and new climate change minister. 15. Bill Clinton, Former US president. 2009 World’s Most Ethical Companies 1. Honeywell International- USA †¢ Aerospace and Defense 2. Harris Corporation USA †¢ Aerospace and Defense 3. Nike- USA †¢ Apparel 4. BMW- Germany †¢ Automotive 5. Toyota Motor- Japan †¢ Automotive 6. HSBC UK †¢ Banking 7. Accenture Bermuda * Business Services 8. Hewlett-Packard- USA †¢ Computer Hardware 9. Unilever Netherlands/UK †¢ Consumer Products 10. Intel USA †¢ Electronics Semiconductors In Accenture’s ethics and compliance program, the company uses six â€Å"core values† of stewardship, best people, client value creation, one global network, respect for the individual and integrity Ethical Leadership- A few general guide-lines ? Ethical leadership requires a clear and coherent ethical framework on which the leader can draw in making decisions and taking action. ? Your ethical framework should agree with the ethical framework, vision, and mission of the organization or initiative. ? Ethics should be a topic of discussion. ? Ethics should be out in the open. ? Ethical thought must be connected to action. Ethical leadership is a shared process. Conclusion There is no one-size-fits-all style of leadership for all organizations. For that matter, there is no such style for any one organization at all points in its organizational life. The appropriate leadership style, then, depends upon the ethical context of the organization, its organizational culture, and the situation it finds itself in at any point in its organizational life. The specific organizational culture required, and the challenges it must face, are a function of its essential social responsibility and the dynamics of its larger community