Developing Ethical Behaviour in our leaders Chapter 8
Ethics – study of moral philosophy, helps us dealt with abstracts concepts such as: good, truth, justice, love, virtue,
compassion, and ultimately what is right or wrong. Socrates felt that - We must be bound by morality – what is wrong
or right and must not be influenced by our emotions or what might happen to us.
Morality is a social construct – existed before individual or organizations cam into existence. Ethically accepted
practices vary across cultures.
Difference between ethical and legal behavior: ethics and law are both moral conventions. Ethics are not
legislated and are not punishable as lawbreakers. We can not assume that law abiding is also being ethical. Many
civil protests have been because laws were seen as unethical.
Most ethical dilemmas are because of two competing ethical concerns and the judgment required to sacrifice one for
the greater good of the other. Jackson stated that there are 2 difficulties in ethical business behavior. 1. Difficulties in
identification or what is your duty and 2. Difficulties in compliance – doing your duty once you know what it is. So
even once we have undergone analysis to make ethical decision we still must face the challenge of putting that
decision in practice.
Guidelines by nature are based on past experience and not particularly adaptable to new situations.
Code of ethics in business – some companies have created them but there is no evidence of that they actually
practice it. Businesses are ethical only when the business leaders themselves act ethically.
Ethical behavior should be of concern only in as much as they affect profits. It can be argued that acting otherwise
could be seen as neglecting the fiduciary responsibilities of management.
The Business ethics Gap (Table8.2 Ethical stance in business)
The ethical position of the business
Negative ethical gap: The organization positions itself
so that it’s ethical practices lag behind societal
expectations and actively resists pressures, particularly
as they effect profitability.
Ethical congruence: The organization
identifies changing societal expectations and
positions its products or service to meet those
Expectations.
Positive ethical gap: The organization
positions itself so that its ethical practices
exceed societal expectations, actively setting a
standard and perhaps providing leadership in
The development of ethical practices.
Example
The Ford Pinto: Ford Motor Company chose to
aggressively contest all lawsuits and legislation brought
against it for culpability in the design and manufacture of
gas tanks in its Pinto automobiles, which were prone to
catch fire in rear-end collisions.
The retail food industry: As concerns grew about our
food supply (preferring organic, avoiding genetically
modified, being unhealthy in other ways) food producers
developed product lines in response to those concerns.
Such products often command a premium price.
Volvo and safe cars: Volvo adopted safety as its ethos,
in its products as well as all of its processes. It began
making its cars safer long before safety standards were
legislated by governing bodies. For example, seat belts
were introduced in 1959 but were not required in Sweden
until 1975.
A road map to ethical decisions: Table 8.3 Three alternative roadmaps for ethical decisions
Type of unethical roadmap
Deontological/Contractarian: Ethical decisions are made
against relatively unchanging principles that set out our
rights, roles and duties. Contractarian theory would dismiss
any consequential damage of our ethical choices as long
Advantages
Such principles can be well
understood and interpreted,
and what is ‘right’ can be
clearly defined.
Disadvantages
Outcomes are not
considered: adherence to
principles could lead to a
lesser good.
as the choice was consistent with agreed principles.
Unfortunately, such consequences may well be morally
unacceptable. It is unrealistic to attempt to justify standing
by our principles, regardless of the outcomes.
Utilitarian/outcome morality: Ethical decisions are made
based on outcomes, the path which will likely lead to the
greatest good.
Moral judgment: Ethical decisions are made based on
internal moral virtues that support a life worth living. These
two dimensions lead to the identification of character traits
or virtues. The social dimension is based on the fact that
we need to live in a community. the virtues of the
Social dimension promote peace in the community. By
contrast, the aspirational virtues promote inner peace.
They are what help differentiate humans from other
community dwelling creatures, for they give us the sense
that we have space to accomplish something, to find a
purpose for our lives, to develop a sense of personal
fulfillment. The virtues associated with the aspirational
dimension include prudence or sensibility, ambition,
enthusiasm, modesty and self knowledge.
Flexibility in ethical
Decision-making will lead to
the best outcome.
Ethical decisions rest on
internal strength of character
traits and morality, and
balance emotion and
judgment
The processes are not
considered, so even
unethical or unlawful
means of achieving the
best outcome can be
employed.
Methods to assess and
develop internal virtues
are not well established
and decisions must still be
made within an external
context.
Leadership and ethical behavior:
It is very clear that the actions of organizational leaders impact on the resultant behaviors of their
employees. It is the leaders who have the ability to establish and communicate organizational values and
then ensure compliance through the imposition of rewards and sanctions. When a leader is perceived to
have a high level of integrity, the ethical intentions of his or her subordinates, whether they have strong
moral beliefs or not, will be higher. Advising and judging are an important part of morality and implicit in
the role of organizational leadership. By its very nature, ethical behavior is difficult to define, as most
dilemmas are the result of two competing ethical considerations: both outcomes are preferable but not
possible. Nevertheless, leaders’ actions, or lack of action, will profoundly affect the ethical stance of their
organizations. And the ethical stance chosen will certainly affect shareholders and stakeholders alike.
There appears to be little doubt that good ethics is good business.
Learning Summary;
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Ethics is a branch of moral philosophy that can assist us, as organizational leaders, in making
decisions about what is right and what is wrong.
Behavior considered unethical, may not, however, necessarily be unlawful.
Ethical behavior has two components: finding what is right, and then doing what is right.
Mechanisms such as ethical codes of conduct and whistleblower policies do not appear to ensure
ethical behavior; the actions of top executives, however, are effective.
There is some support for the view that good ethics is a good long-term business strategy.
Organizations may adopt an ethical stance that lags societal expectations, is congruent with
expectations, or actually leads and perhaps influences expectations.
A company with a strong ethical culture will probably find it to be an asset in coping with crises.
Ethical decisions may be defined through three roadmaps: in congruence with established
principles (deontological), in view of the outcome that is likely to be best (utilitarian) or through the
character of the individual (moral judgment).
Advising and judging are ethical requirements of the leadership function.
Asking basic questions about whether an action harms people or the environment, affronts
human dignity, provides personal gain or needs to be hidden will help us understand whether or
not the action is ethical.