Ethics Chapter 11

Two approaches to ethical leadership

(1) compliance-based; (2) integrity-based

Reasons for normative myopia

(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, and (3) the belief that normative values are outside the realm of business.

Six leadership styles that are based on emotional intelligence (Daniel Goleman)

1. The coercive leader 2. The authoritative leader 3. The affiliative leader 4. The democratic leader 5. The pacesetting leader 6. The coaching leader

Ethical Recovery

1. take corrective action; 2. compensate stakeholders harmed by the misconduct; 3. express regret for the misconduct; and 4. reinforce the firm's reputation with positive messages

Groupthink

A situation in which group members seek unanimous agreement despite their individual doubts

avoiding style

A style displaying low assertiveness and low cooperation; no desire to manage misconduct

Ten Most Influential Business Leaders

Brad Smith, CEO of Intuit; Elon Musk, CEO of SpaceX, Tesla, and Solar City; Melinda Gates, cofounder of the Bill & Melinda Gates Foundation

authoritative leader

Considered to be one of the most effective styles—inspires employees to follow a vision, facilitates change, and creates a strongly positive performance climate.

Employee approaches to conflict

Employees may choose to approach a conflict situation in one of five ways: ignore the issue, confront the other person, report the conflict to management, use a hotline, or engage in external whistle-blowing.

transparency

Ethical leaders create transparency by developing a culture where ethics is frequently discussed. Openness and leader accessibility are important in addressing and resolving ethical issues. Reporting is a two-way process in which the communicator communicates with superiors and subordinates

compliance; integrity

Ethical leaders generally adopt one of two approaches to leadership: a _________-based approach or a(n) ________-based approach

authentic leaders

Leaders who 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

ethical conflict

One benefit of _______________________ is it helps pinpoint ethical issues

True

Organizational culture emerges whether or not there is effective leadership.

emotional intelligence

The ability to manage themselves and their relationships with others effectively, characterized by self-awareness, self-control, and relationship building; outward directed and have a vision about achieving "something greater than themselves."

assertiveness and cooperativeness

Two dimensions of conflict

Leader-follower congruence

When leaders and followers share the same vision, ethical expectations, and objectives for the company

cooperativeness

Working toward the best interests of the other person

All responsible employees

_________________ must engage in ethical decision making and exhibit ethical leadership characteristics.

ethical leaders

_____________________ must model organizational values, place what is best for the organization over their own interests, train and develop employees throughout their careers, establish reporting mechanisms, understand employee values and perceptions, and recognize the limits of organizational rules and values

competing style

a management style involving a stance of high assertiveness with low cooperation; not considered to be ethical

collaborating style

a style displaying both high assertiveness and high competition; creative ways for beneficial solutions; most in sync with ethical leadership

assertiveness

acting in one's own best interests

Apathetic leaders

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

Transactional leaders

attempt to create employee satisfaction through negotiating, or "bartering," for desired behaviors or levels of performance

coaching leader

builds a positive climate by developing skills to foster long-term success, delegating responsibility, and skillfully issuing challenging assignments

Reporting

can be a formal or informal process

three elemental ingredients for leadership

character, stewardship, and experience

Nonverbal communication

communication expressed through actions, body language, expressions, or other forms of communication not written or oral

resonant leader

create an ethical corporate culture as well as leader-follower congruence.

Ethical Leadership

creates an ethical culture; ensure goals are met in an ethical manner; implement and reinforce shared ethical values to promote an ethical culture, as well as assume responsibility to model ethical conduct for employees.

coercive leader

demands instantaneous obedience and focuses on achievement, initiative, and self-control

Benefits of Ethical Leadership

direct impact on the corporate culture of the firm; communicate and monitor an organization's values, ensuring that employees are familiar with the company's purpose and beliefs; provide cultural motivations for ethical behavior, such as reward systems for ethical conduct and decision making; higher employee satisfaction and employee commitment; creates strong relationships with external stakeholders; creates strong relationships with external stakeholders

values-based culture

encourages employees to express concerns, bring up ethical issues, and take a proactive approach toward resolving conflicts

Employee Empowerment

essential component of a values-based organizational culture; important in creating employee-centered ethical leadership

transparent communication

ethical conflict issues will not be brought to management's attention without effective mechanisms for _______________________________________________

Organizational Communication Categories

interpersonal communication, small group communication, nonverbal communication

shared values, attitudes, ethical practices

leaders set the tone for an ethical culture through ___________________________

Stewardship

managing the responsibilities and duties of being a leader

feedback

one of the most vital means of testing the effectiveness of a firm's ethical culture and decision making abilities.

Listening

paying attention to both verbal and nonverbal behavior

ethical blindness

propensity to rationalize an unethical action or turn a blind eye to it

democratic leader

relies on participation and teamwork to reach collaborative decisions

Transformational leaders

strive to raise employees' level of commitment and foster trust and motivation

Group polarization

tendency of group members to move to an extreme position after discussing an issue as a group

Leadership

the ability or authority to guide and direct others toward a goal

Ethical Leader Types

the unethical leader, the apathetic leader, and the ethical leader

Paralanguage

the way we talk, such as volume, inflection, tone, and rhythm

two types of leadership styles

transactional or transformational

Transparency and reporting

two major dimensions of ethical communication

psychopathic leader

type of unethical leader; These leaders are characterized as having superficial charm, no conscience, grandiose self-worth, little or no empathy, and enjoyment in flouting the rules.

integrity-based approach

usually have chief officers, human resource managers, and board member committees involved with the ethics and compliance program

affiliative leader

values people, their emotions, and their needs and relies on friendship and trust to promote flexibility, innovation, and risk taking

experience

Ethical leaders need both knowledge and ___________ to make the right decisions.

False

Ethical leadership is possible without effective communication.

accommodating style

a style exhibiting low assertiveness and high cooperation; give in to the other side even if it means sacrificing their own interests and values; can lead to misconduct

Conflict Management Styles

avoiding, accommodating, competing, compromising, collaborating

pacesetting leader

can create a negative climate because of the high standards that he or she sets. works best for attaining quick results from highly motivated individuals who value achievement and take the initiative

Leader-exchange theory

claims that leaders form unique relationships with followers through social interactions

Small group communication

communication occurring within small groups of three or more people; can increase collaboration; can result in groupthink

Unethical Leader

egocentric and often does whatever it takes to achieve personal and organizational objectives; looks at laws as minimum guidelines and searches for loopholes; perceive ethics codes, compliance regulations, and industry standards as optional; justification used for breaking laws or rules is usually that doing so serves a greater good and the risk of getting caught is low

compliance-based approach to ethical leadership

emphasize obedience to rules and regulations and set processes in place to ensure compliance; deter illegal conduct and stresses culture of avoidance

compromising style

in between the assertiveness and cooperativeness dimensions. They believe the best approach to resolving conflicts is for each side to give something up in order to gain something of value; useful in resolving ethical dilemmas/choosing solution beneficial to all participants

Ethical Leaders

include ethics at every operational level and stage of the decision making process; address issues as soon as they appear

integrity-based approach to ethical leadership

views ethics as an opportunity to implement core values; empowers employees but helps them integrate ethical values and principles established by the firm

Archie Carroll's Seven 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 the 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.

How to Avoid Groupthink

1. Understand groupthink and how it can occur.2. Allow open and honest discussions that encourage critiques, questioning, and criticism.3. Criticism should be welcomed and not minimized or dismissed.4. Create group tension by assigning a "devil's advocate" or having half the team on the "pro" side and half on the "con" side to adequately evaluate decisions.5. On important matters, bring in the appropriate subject matter experts (internally or externally).6. Document the situation, options, recommendations, and implementation time table, needed support, and budget.7. Have another team review your output.

RADAR Model

Recognize (risk areas) Avoid (policies and procedures to detect and avoid) Discover (proactively uncovering ethical risk areas) Answer (responding through internal and external) Recover (rebuild)

Ethical business conflicts

When there are two or more positions on a decision that conflicts with organizational goals

to gain trust and commitment

With regards to leadership styles that influence ethical decisions, the challenge for leaders is _______________________, which is essential if organizational leaders are to steer their companies toward success.

normative myopia

when managers overlook or stifle the importance of core values in their business decisions

Interpersonal communication

when two or more people interact with one another