Ethical Leadership | Leading with a Soul

Across history, the portrayal of leaders has changed (Northouse, 2016, p. 2-5), from an approach of dominion to one of mutual relationship. But four components have remained constant. It is a transactional event between leaders and followers which is only possible in a group setting, while working towards a shared goal under the leader’s influence (Northouse, 2016, p. 6).

As ethics takes a more prominent stage in the 21st century, companies such as, for example, SHIEN are experiencing backlash due to unethical practices in their production factories (Goh, 2023). Societal pressure for organisations to be ethical in business dealings is increasing, the same must be said for its leadership (Singh & Gaur, 2020, p. 303).

By including ethics in leadership, leaders should incorporate a deep sense of integrity and have the instinct to adhere to ethical conduct for themselves and others (Halbusi, 2021, p. 162). They are in a position of influence and empowerment to bring positive change to the organisation, the employees’ work ethics & work performance, and ultimately the business performance (Halbusi et al, 2021, p. 163; Shafique & Masood, 2020, p. 128; Sharma et al, 2019, p. 713; Abun et al, 2023, p. 539), as understood through the 4-V Model of Ethical Leadership (Kar, 2014, p. 114). Ethical leaders should reflect the following traits, as showcased in Figure 2.

Firstly, ethical leaders should know their values, as their personal beliefs will affect their decision-making (Kar, 2014, p. 114). Secondly, they need to know their vision, as they have to plan to reach a certain goal in the service of others. Thirdly, they need to know their voice, to influence and rally others to action to bring the vision into reality. Lastly, they need to know their virtue, as they will become what they practice, depending on their ethical stance. Thus closely resembling the traits of transformational leadership (Ahmad et al, 2017, p. 14).

Views on Ethics

There are two principal areas of ethics.

Derived from the Greek word ‘deon’ which means duty, deontology is when decisions are made based on a universal morality regardless of the outcome (Baumane-Vitolina et al, 2016, p. 110). Teleology, which derives from the Greek word ‘telos’ which means the end, is when decisions are morally judged based on the ethical impact of the outcome.

While deontology gives a clear guideline to the action based on morality, its rigidity does not allow leaders to consider the outcome. Likewise, teleology’s obsession with outcome could lead to a mindset of “the end justifies the means” (Baumane-Vitolina et al, 2016, p. 110-111). However, when looking at their strengths, they could counteract one another’s weaknesses. This suggests that both approaches can be used simultaneously to increase the odds of an ethical outcome.

Real-World Case

To illustrate ethical and unethical leadership, the 2018 Cambridge Analytica case will be used.

Former chief executive of Cambridge Analytica, Alexander Nix, has allowed unethical activities to fester in companies connected to him (Davies, 2020). Such activities include honey-trapping, bribery, and blackmailing, which takes teleology to the extreme. It was during his tenure that Cambridge Analytica was found to be unlawfully harvesting user data from social media platforms. It was used to create a prediction programme to influence political votes. The null presence of ethics in Nix’s decision-making and leadership led to the company’s closure (Watkins, 2018).

This highlights the importance of instating ethical leaders within organisations to ensure their survivability and profitability (Sharma et al, 2019, p. 726).

Facebook, was pulled along and scrutinised when it was revealed its user data were released without consent to Cambridge Analytica, affecting around 280 million users (McCallum, 2022). Facebook’s chief executive, Mark Zuckerberg, admitted to the lapse in policy coverage and oversight (Watson, 2018). Despite losing its users’ trust for a period, and profit dipping the following year (Weisbaum, 2018; BBC, 2020), from a deontology standpoint, Mark’s decision to improve the organisation’s policy and hold himself accountable instead of self-preservation was ethical, as it may have helped divert Facebook’s potential downfall, and preserve the jobs of his employees. Thus portrayed himself as an ethical leader.

Final Thoughts

The influence of a leader’s ethics can heavily affect the company’s survivability, regardless of which ethical principal areas their decisions fall under. Leaders are recommended to use both teleology and deontology approaches in their decision-making to avoid lapses seen in the case study. But more importantly, the ethics of potential leaders must be carefully considered before promoting them to power.

References

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Ahmad, I., Gao, Y., & Hali, S. M. (2017). A Review of Ethical Leadership and Other Ethics-Related Leadership Theories. European Scientific Journal, 13(29), 10-23. https://dx.doi.org/10.19044/esj.2017.v13n29p10

Baumane-Vitolina, I., Cals, I., & Sumilo, E. (2016). Is Ethics Rational? Teleological, Deontological and Virtue Ethics Theories Reconciled in the Context of Traditional Economic Decision Making. Procedia Economics and Finance, 39, 108-114. https://doi.org/10.1016/S2212-5671(16)30249-0

BBC. (2020, January 30). Facebook: Privacy scandals take toll on profits. https://www.bbc.com/news/business-51304516

Browne, R. (2018, April 26). Facebook ‘concealed the truth’ of what it knew about Cambridge Analytica, lawmaker claims. CNBC. https://www.cnbc.com/2018/04/26/facebook-concealed-truth-of-cambridge-analytica-scandal-uk-mp-says.html

Centre for Ethical Leadership. (nil). Concepts and Philosophies. https://www.ethicalleadership.org/concepts-and-philosophies.html

Davies, R. (2020, September 24). Former Cambridge Analytica chief receives seven-year directorship ban. The Guardian. https://www.theguardian.com/uk-news/2020/sep/24/cambridge-analytica-directorship-ban-alexander-nix

Goh, C. (2023, July 01). Explainer: What went wrong with Shein's marketing campaign flying American fashion influencers to tour its China factory?. Channel News Asia. https://www.channelnewsasia.com/singapore/shein-china-factory-tour-social-media-us-fashion-influencers-criticism-what-went-wrong-3599751

Halbusi, H. A., Williams, K. A., Ramayah, T., Aldieri, L., & Vinci, C. P. (2021). Linking ethical leadership and ethical climate to employees' ethical behavior: the moderating role of person–organization fit. [Linking ethical leadership and ethical climate] Personnel Review, 50(1), 159-185. https://doi.org/10.1108/PR-09-2019-0522

Kar, S. (2014). Ethical Leadership: Best Practice for Success. IOSR Journal of Business and Management, 112-116. https://www.iosrjournals.org/iosr-jbm/papers/ICIMS/Volume-1/14.pdf

McCallum, S. (2022, December 23). Meta settles Cambridge Analytica scandal case for $725m. BBC. https://www.bbc.com/news/technology-64075067

Northouse, P. G. (2016). Leadership Theory and Practice (7th ed.). Thousand Oaks, CA: Sage Publications Inc. https://www.sarahnilsson.org/app/download/968226317/20160324050750leadership_theory_and_practice_7th___peter_g._northouse.pdf

Shafique, I., Bashir, A., & Masood, N. K. (2020). How ethical leadership influences creativity and organizational innovation: Examining the underlying mechanisms. [Ethical leadership] European Journal of Innovation Management, 23(1), 114-133. https://doi.org/10.1108/EJIM-12-2018-0269

Sharma, A., Agrawal, R., & Khandelwal, U. (2019). Developing ethical leadership for business organizations: A conceptual model of its antecedents and consequences. [Ethical leadership for business organizations] Leadership & Organization Development Journal, 40(6), 712-734. https://doi.org/10.1108/LODJ-10-2018-0367

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Singh, S. K., & Gaur S. S. (2020). Corporate growth, sustainability and business ethics in twenty?first century. Journal of Management and Governance, 24, 303-305. https://doi.org/10.1007/s10997-020-09512-2

Watkins, E. (2018, May 16). Cambridge Analytica announces closure. CNN. https://edition.cnn.com/2018/05/02/politics/cambridge-analytica-closure/index.html

Watson, C. (2018, April 11). The key moments from Mark Zuckerberg's testimony to Congress. The Guardian. https://www.theguardian.com/technology/2018/apr/11/mark-zuckerbergs-testimony-to-congress-the-key-moments#:~:text=“When%20we%20heard%20back%20from,t%20make%20that%20mistake%20again.”

Weisbaum, H. (2018, April 11). Trust in Facebook has dropped by 66 percent since the Cambridge Analytica scandal. NBC News. https://www.nbcnews.com/business/consumer/trust-facebook-has-dropped-51-percent-cambridge-analytica-scandal-n867011