Ethical Leadership Certification

What likely contributed to the flawed corporate culture at Countrywide Financial?

A flawed incentive system

Power:

A key component of leadership Ethical leaders seek to hinder unethical behavior and encourage ethical behavior

An "ethical blindspot" refers to ____

A person's underestimation of his or her own potential to commit misconduct

Based on observations of J. P. Morgan CEO James Dimon's reaction to a crisis, what is a good way to manage a crisis?

Act quickly and take responsibility for the issues.

Authoritative leadership

Align behind a common vision

Which describes an ethical issue

An identifiable problem, situation, or opportunity that requires a person or organization to choose among several actions that may be evaluated as ethical or unethical

Authentic leadership is characterized by leaders who ____

Are passionate about company goals, displaying corporate values in the workplace, and from long-term relationships with stakeholders

Transformational leaders tend to encompass:

Authoritative, coaching, and democratic leadership

Internal locus of control

Believing that one controls their own

Which is true about a compliance orientation and value-based orientation within a company?

Both orientations can increase ethical awareness among employees

Must have ___ to be effective

Character and Competence

What is one of the biggest ethical risks that companies face?

Complacency

Organizational culture

Consists of values, norms, and artifacts expressed through employee handbooks, reward systems, and codes of conduct, dress codes, and group activities

Which statement is true regarding the aftermath of the financial crisis

Consumer trust of business hit a low point.

Primary stakeholders, needed for a firm to survive

Consumers, Employees, Investors or Stockholders, and Regulators

The organizations's principles should ___

Create a foundation for decision making, and no room for compromise

What is one way that ethical leaders can empower employees?

Creating an open communication environment.

What is true about the influence of ethical decision making factors in an organization

Employee decision making is often affected more by organizational relationships.

What are the benefits of ethical leadership?

Employees are more willing to work for ethical companies.

Social learning

Employees develop role models within the organization they model themselves after

Democratic leadership

Encourages employees to participate

Employees disagreeing about the most ethical decision, for resolving an ethical dilemma, is an example of:

Ethical diversity

Which statement is true about the ethical decision-making of leaders?

Ethical leaders must often make trade-offs regarding stakeholder demands.

What is true about ethical leaders?

Ethical leaders place company interests above their own.

What is true about how ethical leaders should perceive stakeholders?

Ethical leaders view stakeholders as important co-contributors of firm value.

Implementing principles requires ___ to avoid misconduct

Experience

If Steve Jobs was admired for his knowledge of Apple products, he displayed _________.

Expert power

External locus of control

Feeling that most events are uncontrollable

What is the first step organizations must take to meet the needs of their stakeholders?

Gather data on the company's stakeholders.

In this module, we described five examples of ethically-challenged CEOs. What is not one of the mistakes they made?

Giving employees more decision-making authority

Coaching leadership

Helps employees develop and reach their aspirations

Pacesetting leadership

High standards and expectations

Ethical issue intensity is:

How important an ethical issue is perceived to be by a company or individual

Locus of control

How individuals perceive their control over events and situations

Which of the following differentiates ethical leaders from less ethical leaders?

How they respond to mistakes

Although companies may differ in their approach to implementing their principles _____ tend to be accepted by all

Human rights, product quality, and respect

Ethical leaders must ___ ethical issues and risks

Identify

Companies taking stakeholder approach to their principles:

Identify their various stakeholders such as: - employees - customers/users - general public - competitors & Then adopted principles that considered the rights and needs of each prof these stakeholder groups

Factors influencing behavior in the workplace

Individual factors Organizational relationships Opportunity

Why would an organization not want to rely solely on an individual's personal ethics?

Individual personal values differ significantly and can result in unethical conduct.

Which definition best describes organizational ethical leadership

Influencing others to ethically achieve company goals.

Daniels Fund Ethics Initiative Principles

Integrity: act with honesty in all situations Truth: build trust in stakeholder relationships Accountability: accept responsibility for all decisions Transparency: maintain open and truthful communications Fairness: engage in fair competition and create equitable and just relations Respect: honor the rights, freedom, views, and property of others Rule of Law: comply with the spirit and intent of laws and regulations Viability:

According to Howard Schultz, which of the following is true about ethical leadership?

It is about finding a way to balance between profitability and social consciousness.

Affiliative leadership

Lead by connecting emotionally

Authentic leadership

Leaders who are passionate about goals and mission of company; try to form long lasting relationships with their stakeholders

Organizations that reward high performance without considering how the results were achieved are:

More likely to have employees engage in unethical behavior

Ethical relativism

Most people believe they are more ethical than others

A person's actions in an ethical dilemma are driven by the fact that

Most people believe they are more ethical than others — ethical relativism

Ethical dilemma

Occurs when a company finds itself in a situation where all the alternatives are not satisfactory

____ are behavioral boundaries that are more universal in nature

Principles

Ethical blind spot

Refers to a persons underestimation of his or her own potential to commit misconduct

Which of these is the least likely to influence an individual's personal ethics?

Regulatory Guidance Friends and fam' Ethnic affiliations religious viewpoints cultures and subcultures

What is organizational ethics?

Right or wrong, acceptable or unacceptable conduct in an organizational environment

Which of these stakeholders is a secondary stakeholder? Regulators Consumers Employees Special-interest groups Suppliers

Special-interest groups

Values are ____

Subjective and enforced by society

What constitutes a conflict of interest?

The best interests of an individual are placed above the best interests of the company.

Based on our definition, how should companies approach principles?

There should be zero tolerance for employees to violate them.

Why would it be a mistake to ignore secondary stakeholders?

They can be an ally or a threat to an organization.

Why might ethics mistakes actually improve an organization in the long-run?

They give the firm an opportunity to learn from its mistakes.

What similarity do they share that contributes to their firm's ethical cultures?

They have the ability to align employees behind a common vision.

What is the fate of ethically-challenged CEOs?

They often face reputational damage.

The most observed form of misconduct in the workplace?

Time theft

It is common for ethical leaders to promote both ___

Transactional and transformational leadership

Example of principles

Trust Property rights Accountability Responsibility Spirit and intent of the law

Which of the following statements is true about ethics?

Unethical conduct is not always black and white.

While principles are more _________ in nature, values are more __________ and tend to be enforced by society.

Universal; subjective

Coercive leadership

Use threats of punishment to lead

Face of the organization

Values Principles Strategic Positioning Influence of Founders Leadership

Groupthink

When employees go along with group decisions even when those decisions conflict with their values

Unlike an ethical issue, in an ethical dilemma ____

all the decisions have negative consequences

Ethical issue

an identifiable problem, situation, or opportunity that requires a person or organization to choose from among several actions that may be evaluated as right or wrong, ethical or unethical

Stakeholders

any individuals that have a stake in an organization;

apathetic culture

cares little for people or company performance

By being highly persuasive and skilled at getting employees to adhere to a common goal or mission, Zappos CEO Tony Hsieh displays what kind of leadership style?

charismatic leadership

An Enron, the lowest 20 percent of performers were systematically fired. This could be an example of __________.

coercive power

organizational culture

consist largely of the company's set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization

Which word best describes a compliance orientation?

contractual

Personal Ethics

developed through personal experiences perhaps includes being honest, trustworthy

Why is expert power one of the more effective forms of power a leader can demonstrate?

followers are able to trust the leader's expertise and credibility

Competence

having the knowledge and the ability to perform certain tasks and handle difficult situations

Ethical investing

invest in companies that not only seem profitable, but also consider their impact on communities and the environment

Character:

involves personal characteristics such as empathy, flexibility, and persistence in business; it also requires the adoption of company values and the willingness to take responsibility for meeting stakeholder needs, leaders with good character hold themselves accountable for the ethical conduct of the organization

Transactional leadership

leadership based on an exchange process in which followers are rewarded for good performance and punished for poor performance;

Transformational leadership

leadership that, enabled by a leader's vision and inspiration, exerts significant influence; encourage leaders to reach their full potential; actively promote a shared vision among

Many individuals caught in misconduct claim that they were just following orders from their supervisors. What type of power might this reflect on the part of the leader?

legitimate power

Ethical Diversity

personal values differ from person to person

Reward power

power that comes from the ability to provide rewards or favors

artifacts

provide important information on a firm's organizational culture; they can be observable but can also consist of rituals and company stories; they are either formal or informal

The five types of power:

reward, coercive, legitimate, expert, referent

Secondary Stakeholders

special interest groups, trade associations, media, competitors

A values orientation should possess ___

strong communication systems

Leaders who display good character________________________

take responsibility for ethically meeting stakeholder needs.

Emotional intelligence

the ability to perceive, understand, manage, and use emotions

charismatic leadership

the behavioral tendencies and personal characteristics of leaders that create an exceptionally strong relationship between them and their followers; highly persuasive and able to get employees to a adhere vision; it is not so positive when the leader is unethical

Those with an internal locus of control believe ____

they have control over events in their lives

Why are principles and values so important to companies?

they provide guidance for employees and leaders in making ethical decisions

Sam Walton, founder of Wal-Mart, would often travel to different stores across the nation to personally meet employees and praise them for their hard work. By actively promoting a shared vision among employees, Sam Walton was a _________________________.

transformational leader

A transactional leader _____

tries to create employee satisfaction by negotiating for levels of performance

Business ethics

understanding what is acceptable and unacceptable conduct