CHAPTER TWELVE
LEADERSHIP ETHICS
AND DIVERSITY
© Prentice Hall 2006
12-1
Learning Objectives
After reading this chapter, you should be able to
do the following:
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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
do the following:

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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
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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.
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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
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© 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 do not behave consistently
with their stated ethical values risk
being labeled hypocrites.
© Prentice Hall 2006
12-8
Approaches to Ethical Behavior
Categorical Imperative
Follow universal
moral laws
Moral Learning
Persistent efforts
to be just,
prudent, & truthful.
Virtue Ethic
High moral
character results
in ethical behavior.
Utilitarianism
Approaches to
Ethical Behavior
Greatest good for
greatest number
Altruism
Primary concern is
for others’ welfare
© Prentice Hall 2006
12-9
Creating an Ethical Climate
Role modeling important
values and behaviors.
Spiritual awareness
as a guide to action
Directing ethical
policies and practices
Creating an
Ethical Climate
Socially responsible
charismatic/transformational
leadership.
Rewarding ethical
and punishing
unethical behavior.
Conducting participative
discussions of ethical
assumptions and 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.
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Some charismatic/transformational leaders behave
unethically because they are so committed to otheroriented values that they mistakenly believe
generally applicable moral requirements do 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 do not
apply to their behavior.
© Prentice Hall 2006
12-11
Spirituality
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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 Human
Resources
Cost Savings
From Experience
At Integration
Competitive Advantages
of Diversity
Effective
Marketing
Strategies
Creative Ideas
And Solutions
To Problems
Flexibility in
Adapting to
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
for 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