Ethical Leadership

Group 6

Bhagyesh Saxena – MBA/08/013

Pratik Kunwar – MBA/08/034
Satwinder Singh – MBA/08/043
Sumit Yadav – MBA/08/118
Mahek Manyal – MBA/08/091
Aditya Vikram – MBA/08/188
 Defining Ethical Leadership

• Leadership is the ability or authority to guide and direct others toward a goal.
• Strong ethical leadership must be demonstrated through successors, other managers, and employees
to continue the firm’s success.
• Ethical leadership created ethical culture. For ex. Arthur Andersen
• An ethical corporate culture must be maintained through effective leadership at all times during the
firm’s existence.
• Ethical leaders ensure that the goals of a firm are met in an ethical manner.
• Ethical leadership is about helping each other to implement and reinforce shared ethical values to
promote an ethical culture, as well as assume responsibility to model ethical conduct for employees.
• All responsible employees must engage in ethical decision making and exhibit ethical leadership
characteristics.
 Requirements for Ethical Leadership

• There are seven habits of Strong Ethical Leaders, they are as follows:
1. They have strong personal character
2. They have a passion to do right
3. They are proactive
4. They consider all stakeholder’s interests
5. They are role models for the organization’s values
6. They are transparent and actively involved in decision making
7. They take a holistic view of the firm’s ethical culture

• Additionally, Ethical leaders must model the organization’s values, i.e. they must serve as role models
for the organization’s core values.
Benefits of Ethical Leadership

Corporate culture

Higher employee satisfaction and employee

commitment

Competitive advantage through employee

satisfaction and productivity

Long term market valuation of firm

 Ethical leadership and Organizational Culture

• The ethical dimension of an organization’s culture depends on how the company’s leaders influence the
culture.
• There are two approaches which ethical leaders generally adopt to leadership: a compliance-based approach
or an integrity-based approach.
• Leaders who adopt the compliance-based approach emphasize obedience to rules and regulations and set
processes in place to ensure compliance.
• Leaders who adopt integrity-based approach views ethics as an opportunity to implement core values.
• Another way to classify leader types include the classification of leaders on the basis of the unethical
leader, the apathetic leader, and the ethical leader.
• The unethical leaders are further classified as egocentric leaders and psychopathic leader, these type of
leaders often does things to achieve personal and organizational objectives.
• Apathetic leaders took little care for ethics within the company.
• Ethical leaders include ethics at every operational level and stage of the decision making process.
 MANAGING ETHICAL BUSINESS CONFLICTS

• Conflicts occur when there are two or more positions on a decision that conflicts with organizational
goals.
• On one hand the conflicts may hinder the quick decision process while on the other hand it helps the
management pinpoint crucial ethical issues.
• Firms have different means of managing such issues like : feedback forms, suggestion drobox,
hotlines etc.
• Though such situations require effective and proactive leadership , employees are also expected to
train themselves to recognize and resolve conflicts on their own.
• Some of the approaches employees can take are: ignore the issue, confront the person, report to
conflict management, using a hotline, and engage in whistle-blowing.
CONFLICT MANAGEMENT STYLES
 Ethical Leaders Empower Employees

Encourage employees to express concerns, bring up ethical issues and take

proactive approach towards resolving conflicts

By creating an open communication culture Periodic feedback by leaders and employees

Progressive behaviors and maintains ethical Ethical leadership training for both managers
principles and employees

Encourage the employees inputs and feedbacks

Leadership-Communication

Communication Style

The Concept of Group-Think

 Leader-Follower Relationship

• Leader-follower congruence occurs when leaders and

followers share the same vision, ethical expectations, and
objectives for the company.

• The leader-exchange theory suggests that leaders form unique

relationships with followers through social interactions. Leaders
who have positive & respectful relationships with employees
can increase job satisfaction & commitment to the firm.
 ETHICS PROGRAMS &
COMMUNICATION

Ways of communicating ethical values

CODE OF ETHICS
Provide important guidelines for employees on how to act in different situations.
Effective codes familiarize employees with the firm's values.
Should be supported by all the levels

ETHICAL TRAINING
Allows employees to practice the code of ethics
Teach employees about the application of the firm's values

INTERPERSONAL COMMUNICATION
Formal + Informal
Bringing awareness to ethical topics in the workplace
Employees feel comfortable discussing and demonstrating a commitment to ethical conduct
 •POWER DIFFERENCES:
Leaders occupying positions of authority
may view info from employees as
POWER unimportant; employees who feel
intimidated by power differences might
DIFFERENCES & try to avoid communication

WORKPLACE •WORKPLACE POLITICS:

POLITICS Gossip, manipulation, playing favorites,
taking credits; competing rather than
collaborate => lower morale, higher
turnover, negative behaviors
FEEDBACK

Feedback can occur through informal methods like a simple conversation

or through more formal systems such as employee performance
evaluations. Ethical leaders understand the importance of both positive
(recognition + praise) and negative (weaknesses + constructive ways of
improving) feedback.
Employees’ feedback holds the same importance as the other way
around! Feedback mechanisms for employees help in identifying crucial
ethical issues.
Leadership-Style
Ethical Decisions The RADAR Model

Leader Style- Employee Behavior R- Recognize

Leader Style- Trust- Ethical Choice A- Avoid
Character – Stewardship- Experience
D - Discover
Emotional Intelligence
A - Answer
Transactional & Transformation
R - Recover