Ethics Chapter 11

Stewardship

An ingredient for leadership. It involves managing the responsibilities and duties of being a leader. A leader must assume his or her responsibilities to lead effectively.

Leader-exchange theory

Claims that leaders form unique relationships with followers through social interactions.

Ethics continuity planning

Involves the identification of risk areas and the development of a response plan to deal with major issues. By imagining worst case scenarios, leaders brainstorm with others in the firm the best way to avoid them. Part of the avoid of the RADAR model.

transactional leaders

LEaders that attempt to create employee satisfaction through negotiating, or "bartering" for desired behaviors or levels of performance. They focus on ensuring required conduct and procedures are implemented. Can positively influence the corporate culture.

Authentic leaders

Leaders that are passionate about the company, live out corporate values daily in their behavior in the workplace and form long-term relationships with employees and other stakeholders. These leaders do not mimic other leaders, but they do learn by observing them. They demonstrate core values and integrate these values into the operation of the firm.

Ethical training

One of the ways of communicating ethical values to employees. ______ allows employees to practice the guidelines that are outlined in the ode of ethics. Effective __________ programs teach employees how to apply the firm's values to some of the organization's most common ethical risk areas.

Leader-follower congruence

This occurs when leaders and followers share the same vision, ethical expectations, and objectives for the company.

Ingredients for leadership

1. Character 2. Strewardship 3. Experience

Ways of communicating ethical values to employees

1. Code of ethics 2. Ethical training

Leadership styles based on emotional intelligence

1. Coercive leader 2. Authoritative leader 3. Affiliative leader 4. Democratic leader 5. Pacesetting leader 6. Coaching leader

Conflict management styles

1. Competing 2. Avoiding 3. Accommodating 4. Collaborating 5. Compromising *They are based on two dimensions, assertiveness and cooperativeness

Approaches to leadership

1. Compliance based approach 2. Integrity based approach

7 habits of strong ethical leaders

1. Ethical leaders have strong personal character 2. Ethical leaders have a passion to do right 3. Ethical leaders are proactive 4. Ethical leaders consider all stakeholders' interests 5. Ethical leaders are role models for their organization's values 6. Ethical leaders are transparent and actively involved in decision making 7. Ethical leaders take a holistic view of the firm's ethical culture

Benefits of ethical leadership

1. Ethical leadership has a direct impact on the corporate culture of the firm 2. It can lead to higher employee satisfaction and employee commitment 3. Creates strong relationships with external stakeholders 4. It is a foundational requirement for impacting the long-term market valuation of the firm.

Problems that result from having a psychopathic leader

1. Heightened level of conflict 2. Lower employee commitment 3. Higher organizational constraints 4. Heavier workloads 5. Poor levels of training 6. Lower job satisfaction 7. Increase in employee absenteeism

Ways employees can choose to approach a conflict

1. Ignore the issue 2. Confront the other person 3. Report the conflict to management 4. Use a hotline 5. Engage in external whistle-blowing

Types of communication

1. Interpersonal communication 2. Small group communication 3. Listening 4. Nonverbal communication

Ways to facilitate employee feedback

1. Interviews 2. Anonymous surveys 3. Ethics audits 4. Websites

Steps of recovery (in RADAR model)

1. Take corrective action 2. Compensate stakeholders harmed by the misconduct 3. Express regret for the misconduct 4. Reinforce the firm's reputation with positive messages

Dimensions of ethical communication

1. Transparency 2. Reporting

Classification of leader types

1. Unethical leader 2. Apathetic leader 3. Ethical leader Reality is that each leader type falls on a continuum or line and not in a box.

Reporting

A dimension of ethical communication. It is a two-way process in which the communicator communicates with superiors and subordinates. It can be a formal or informal process.

Transparency

A dimension of ethical communication. Leaders create this by developing a culture where ethics is frequently discussed. Openness and leader accessibility are important in addressing and resolving ethical issues.

Ethics audits

A good discovery tool (in RADAR model) to discover ethical issues. Intended to carefully review such ethics initiatives as ethics programs, codes of conduct, hotlines, and ethics training programs

Apathetic leaders

A leader type. These leaders are not necessarily unethical, but they care little for ethics within the company. They often view ethics as relative and optional in a business context. They often display no passion for the firm or the mission of the organization.

Ethical leaders

A leader type. These leaders include ethics at every operational level and stage of the decision making process. They view employee collaboration as an important resource. Employees are seen as major co-contributors of value.

Unethical leader

A leader type. This leader is usually egocentric and often does whatever it takes to achieve personal and organizational objectives. They perceive ethics codes, compliance regulations, and industry standards as optional.

Coaching leader

A leadership style based on emotional intelligence. Builds a positive climate by developing skills to foster long-term success, delegating responsibility, and skillfully issuing challenging assignments.

Pacesetting leader

A leadership style based on emotional intelligence. Can create a negative climate because of the high standards that he or she sets. This style works best for attaining quick results from highly motivated individuals who value achievement and take the initiative.

Authoritative leader

A leadership style based on emotional intelligence. Considered to be one of the most effective styles. It inspires employees to follow a vision, facilitates change, and creates a strongly positive performance climate.

Democratic leader

A leadership style based on emotional intelligence. Relies on participation and teamwork to reach collaborative decisions. This style focuses on communication and creates a positive climate for achieving results.

Coercive leader

A leadership style based on emotional intelligence. This type of leader demands instantaneous obedience and focuses on achievement, initiative, and self-control. This style can be effective during times of crisis or during a turnaround. But most of the time it creates a negative climate for organizational performance.

Affiliative leader

A leadership style based on emotional intelligence. Values people, their emotions, and their needs, and relies on friendship and trust to promote flexibility, innovation, and risk taking.

RADAR Model

A model that was created to describe an ethical leader's duty to recognize ethical issues, avoid misconduct whenever possible, discover ethical risk areas, answer stakeholder concerns when an ethical issue comes to light, and recover from a misconduct disaster by improving upon a weakness in the ethics program.

Groupthink

A negative side effect of small group communication. It occurs when one or more group members feel pressured to conform to the group's decision even if they personally disagree

Interpersonal communication

A type of communication and is the most well-known form of communication ad occurs when two or more people interact with one another. It provides an intimate opportunity for the ethical leader to receive or dispense information.

listening

A type of communication. It involves paying attention to both verbal and nonverbal behavior. Important for ethics, employee morale, establishing credibility and trustworthiness with employees.

Nonverbal communication

A type of communication. It is communication expressed through actions, body language, expressions, or other forms of communication not written or oral. It provides major clues about an individual's emotional state. Eg. Gestures, facial expressions, proximity, time, dress, and paralanguage

Small group communication

A type of communication. It is growing in organizations and becomes increasingly important to ethical decision making. It is communication within groups.

Resonant leader

A type of leader that demonstrate mindfulness of themselves and their own emotions, a belief that goals can be met, and a caring attitude toward others within the organization. These abilities create resonance within the organization, enabling employees to work toward common goals. They create an ethical corporate culture as well as leader-follower congruence.

Paralanguage

A type of nonverbal communication. It is the way we walk, such as volume, inflection, tone, and rhythm. It provides important indicators of the person's emotional status.

Psychopathic leader (corporate psychopath)

A type of unethical leader. They are characterized as having superficial charm, no conscience, grandiose self-worth, little or no empathy, and enjoyment in flouting the rules. Companies with these types of leaders usually experience various problems

integrity based approach

An approach to leadership. It views ethics as an opportunity to implement core values. Leaders who adopt this take responsibility for the firm's ethical culture and hold employees accountable for practicing ethical behaviors and core practices. Usually have chief officers, human resource managers, and board member committees involved with the ethics and compliance program.

Compliance based approach

An approach to leadership. Leaders that adopt this approach emphasize obedience to rules and regulations and set processes in place to ensure compliance. Such an approach deters illegal conduct and stresses a culture of avoidance. Those in charge of the ethics in the organization are likely called compliance officers or risk managers

Transformational leaders

Leaders that strive to raise employees' level of commitment and foster trust and motivation. These leaders communicate a sense of mission, stimulate new ways of thinking, and enhance as well as generate new learning experiences. They strive to promote activities and behavior through a shared vision and common learning experience. Can positively influence the corporate culture.

Federal Sentencing Guidelines for Organizations

Mandates that public firms have ethics programs in place to detect organizational misconduct.

normative myopia

Occurs when managers overlook or stifle the importance of core values in their business decisions. Thought to occur because: 1. The belief that normative values do not apply to managerial decisions 2. The belief that facts and values can be separated in decision making 3. The belief that normative values are outside the realm of business.

Collaborating Conflict Style

One of the conflict styles of management. It is the most advantageous. Leaders who adopt this style are cooperative and assertive. Rather than immediately compromising, these leaders collaborate with others to find a creative way to obtain a beneficial solution. They desire to meet the needs of stakeholders, but they also strongly adhere to organizational values and principles. It is the role of the ethical leader to facilitate, foster, and model this conflict style.

Competing Conflict Style

One of the conflict styles of management. Leaders having this conflict management style are highly assertive and not very cooperative. They believe in winning at any cost and measure success by how much the other side loses. They are usually not considered to be ethical because their conflict style makes them abusive and less likely to consider the concerns of employees and other stakeholders. Likely to be more power-oriented and narcissistic

Compromising Conflict Style

One of the conflict styles of management. Leaders who adopt this management style are in between the assertiveness and cooperativeness dimensions. They believe that the best approach to resolving conflict is for each side to give something up in order to gain something of value. This management style is useful in resolving ethical dilemmas when all solutions have disadvantages.

Accommodating Conflict Style

One of the conflict styles of management. Leaders who adopt this style are highly cooperative but non-assertive. They will give in to the other side even if it means sacrificing their own interests and values.

Avoiding Conflict Style

One of the conflict styles of management. They are uncooperative and non-assertive. Leaders of this approach are not effective because they avoid conflict at any costs--even if it leads to misconduct. Even if they are aware of misconduct, they have no desire to manage it.

Assertiveness

One of the dimensions of conflict management styles. It is acting in one's own best interests.

Cooperativeness

One of the dimensions of conflict management styles. It means working toward the best interests of the other person.

Code of ethics

One of the ways of communicating ethical values to employees. It provides important guidelines for employees on how to act in different situations. To be effective, it should be accessible and supported by every level of the company.

Group polarization

Refers to the fact that a group is more likely to move toward a more extreme position than the group members might have done individually.

Character

Strong ethical leaders must have the right kind of moral integrity or ______. Such integrity must be transparent; in other words, they must "do in private as if they were in public."

leadership

The ability or authority to guide and direct others toward a goal. Most people agree that effective leadership is essential for any organization.

emotional intelligence

The most effective ethical leaders possess the ability to manage themselves and their relationships with others effectively, a skill known as this. These types of leaders are skilled in self-awareness, self-control, and relationship building

Ethical business conflicts

These occurs when there are two or more positions on a decision that conflicts with organizational goals.