Leadership Ethics and Social Responsibility

By: Reed, Smith, Stabile, Starnes, Thorton, Williamson

Five Ethical Leadership Behaviors• Be Honest and trustworthy and Have Integrity in

Dealing with Others• Pay Attention To all Stakeholders• Build Community• Respect the Individual• Accomplish Silent Victories

Honest, Trustworthy, and Integrity

Survey evidence supports the belief that ethical leadership is important for the welfare of a company: attracting, retaining, and ensuring

Trust in business leaders is now low.1,200 workers were surveyed across a variety of

industriesAn ethical leader is honest and trustworthy and

therefore has integrity

Pay Attention to All StakeholdersAn ethical and moral leader strives to treat fairly

all interested parties affected by his or her decision.

CEO’s primary responsibility is to maximize shareholder wealth conflicts with the principle of paying attention to all stakeholders.

1.Laying off valuable employees to reduce payroll cost

2.Overcharing customers.3.Reducing health benefits for retirees

Build CommunityThe needs of all stakeholders to achieve a

common goal.When different types of people work torwards the

constructive goal, they build a community.A common goal among employees is equal

treatment amongst each other.

Respect the IndividualPrinciple of ethical and moral leadership that

incorporates other aspects of morality.Telling the truth, keeping promises, and treating

other fairly.Showing respect for the individual also means that

you recognize that everybody has some inner worth and should be treated with courtesy and kindness.

Accomplish Silent VictoriesModesty and restraint are largely responsible for

the achievements of the most effective moral leaders in business.

Ethical and moral leader works silently and somewhat behind the scenes, to accomplish moral victories

Moral leaders usual work quietly on an ethical agenda.

Factors Contributing to Ethical Differences

Leader’s level of greed, gluttony, and avariceRationalizationImplied PermissionLevel of moral development EntitlementSituationPerson’s character

Factors ContinuedGreed- Maximize personal returns, even at the

expense of othersRationalization- Focus on the intent of the action,

not the action itselfImplied Permission- Must be okay, if no one is

telling me to stopLevel of moral development- preconventional,

conventional, postconventional

Factors ContinuedEntitlement- some leaders lose sense of reality

and think they can do whatever they wantSituation- If top leaders take unethical risks, other

leaders under them might behave similarly Person’s character- Higher a person’s character,

better chance they will be ethical

Ethical Mind for LeadersEthical Mind- “ point of view that helps the

individual aspire to good work that matters to their colleagues, companies, and society in general.”

Evaluating the Ethics of a Decision

Is it right? Deontological theory Is it fair?Who gets hurt?Would you be comfortable if the details of your

decision or actions were made public in the media or through mail?

What would you tell your child, sibling, or young relative to do?

How does it smell?

Strategic Leadership of Ethics and Social

Responsibilitysenior managers become ethics leaders: policies

and actions set the ethical and social responsibility tone for an organization

if high ethics receive top priority, workers at all levels are more likely to behave ethically

includes leading by exampleworkers throughout an organization should believe

that behaving ethically is “in” and behaving unethically is “out”

ethical behavior should be rewarded and unethical behavior punished

Creating a Pleasant Workplacea pleasant workplace should have flexible

working hours, on-site daycare, concierge services

stimulates employee productionfirms with pleasant workplaces are also some of

the most profitableincreases chances that employees’ lives will be

enricheda social responsibility initiative that directly

affects employees’ well-being

Social Responsibility (Environment

It is the duty of the corporation to protect the environment from their own production

They are apart of the community toWhat ever changes, even if minor, are a major

help

Leadership Ethics(Environment

If the leadership doesn’t have good morals or ethics neither will the company

If its important to the leaders it will be important to everyone else

The leaders decide whether or not the company will ultimately be socially responsible or not

PhilanthropyPhilanthropy is donating money to specific causes

or charity’sMost companies do this in order to gain good

public relationsSome do it because the leadership decides its

what should be done

Ethical Behavior & Organizational Performance

High ProfitsHigh Demand Investments (Ex. Poor Community)Reinforce Each OtherCustomer & Client Loss (New & Old)