Understanding Leadership and Ethics - Blog 1

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    Being ethical will bring ethical consequences.


An ethical leader inspires, advises, and grows their colleagues to help them prosper and sets a positive example for the audience. Followers see the leader as a role model for the firm's "proper" ethical behavior (Mayer et al. 2009). Ethical leaders should demonstrate appropriate behavior to achieve organizational goals while maintaining healthy employee relationships.

However, these behaviors are regarded to be significant due to the outcomes they are expected to affect, especially in decision making. Leaders play a crucial role on it. Ethical leaders are an essential source of ethical guidance for their followers as an attractive role model. They also make judgments they believe are fair, considering the demands of stakeholders (Brown & Trevino, 2006). These decision-making processes are vital because leaders will provide an example and being observed to learn about ethical decision-making. Therefore, it's important to establish a fair conclusion because their followers will adopt as an example.


        What distinguishes an ethical and unethical leadership?


Figure 1, Dan Helfrich, Deloitte CEO (Medium, 2021).

Current leadership philosophy is connected to deontology ethics since most leadership promotes collaboration and the common good. However, it will inevitably be authoritarian and centered on structure and regulations rather than on people or the community (Mitchell, 2012). For example, Deloitte Consulting CEO, Dan Helfrich is working on the White House's DEI (Diversity, Equity, and Inclusion) agenda. The firm's practice and regulations have been modified, delivering good outcomes. The company was able to fortify its organization while also getting to know its personnel better (Gallagher, 2021). By modifying regulations and implementing presidential direction, he greatly improves working conditions. This indicates that by focusing on laws, Deontology promotes ethical consequences.

 


Figure 2, Elizabeth Holmes and Sunny Balwani, Theranos CEO (Telegraph, 2021).

Teleology ethics, on the other hand, is based on outcomes. The benchmark of being ethical in this view is to be a competent leader who is expected to get the job done (Perry, 2018). One of the most well-known examples is the Theranos Scandal. Elizabeth Holmes and Ramesh Sunny, the CEO of Theranos, were found guilty of fraud and sentenced to prison. The couple is accused of manipulating investors and consumers about Theranos' blood test equipment results (Rossenblatt, 2022). Teleology has certain unethical flaws in this scenario, allowing leaders to commit crimes. In this case, the leaders abuse their position and go to any length to finish the task, including deceiving their investors.


         4-V Model


Figure 3, 4-V Model of Ethical Leadership (Kar, 2014).

For the common good, the 4-V Model of ethical leadership blends concepts and values with conduct and deeds. Internal (beliefs and values) and exterior (behavior and actions) components are aligned. The four pillars of the 4-V framework are Values (fundamental morals and values), Vision (excellent judgment), Voice (motivating action), and Virtue (understanding and exhibiting virtuous behavior) (Kar, 2014).

The previously mentioned CEO of Deloitte, successfully adapting all four 4-Vs. In an interview with Medium, He emphasized that exhibiting leadership does not come from merely picking a limited set of leaders, but from debating advantages and disadvantages, listening to feedbacks, and learning from it (Gallagher, 2021). He did an excellent job of adjusting the models, using excellent judgment, and comprehending all its values. On the other hand, both Theranos CEOs, Holmes, and Sunny failed to do so, resulting in their imprisonment and the company's closure in 2019. (Khan, 2022).


Conclusion

Ethical leadership has a tremendous impact on the organization in a variety of ways. According to the research and case studies, if the leaders take the proper actions, it could be an opportunity to increase the company's reputation, which could lead to possible investors. To obtain the best results, leaders must make right decisions. Otherwise, being a bad leader will damage both leader and company value (Schilling & Schyns, 2014). The best suggestion is to have a clear and positive mindset to be a leader, understand the premise of becoming an ethical leader, practice and turn the theory into actions to create ethical surroundings. Furthermore, leaders must accept some obligations and bear some repercussions if they make mistakes.

 

 

References:

  1. Brown, M. E., & Trevino, L. K. (2006). Ethical leadership: A review and future directions. The Leadership Quarterly, 17(6), 595–616. doi:10.1016/j.leaqua.2006.10.004
  2. Gallagher, T. (2021). Deloitte’s Dan Helfrich: 5 Steps We Must Take To Truly Create An Inclusive, Representative, and Equitable Society. Medium. https://medium.com/authority-magazine/deloittes-dan-helfrich-5-steps-we-must-take-to-truly-create-an-inclusive-representative-and-equi-4dce59728f24
  3. Kar, S. (2014). Ethical leadership: Best practice for success. IOSR Journal of Business and Management, 1(14), 112-116. https://www.iosrjournals.org/iosr-jbm/papers/ICIMS/Volume-1/14.pdf
  4. Khan, M. (2022). What happened to Elizabeth Holmes and Sunny Balwani? Where the shamed Theranos execs are today. Fortune. https://fortune.com/2022/05/04/elizabeth-holmes-update-today-net-worth-sunny-balwani/
  5. Mayer, D. M., Kuenzi, M., Greenbaum, R., Bardes, M., & Salvador, R. B. (2009). How low does ethical leadership flow? Test of a trickle-down model. Organizational behavior and human decision processes, 108(1), 1-13. https://doi.org/10.1016/j.obhdp.2008.04.002
  6.  Mitchell, G., R., L. (2012). Doing the Right Thing: Ethical Leadership and Decision Making. New Directions for Community Colleges, 2012(159), 63–72. doi:10.1002/cc.20027 
  7.  Perry, A. (2018). Ethics, Leadership, and Ethical Leadership. Biblical Theology for Ethical Leadership, 23–43. doi:10.1007/978-3-319-75043-9_2 
  8.  Rossenblatt, J. (2022). Theranos Ex-President Balwani Found Guilty of Fraud. Time. https://time.com/6194731/theranos-sunny-balwani-guilty-fraud/
  9. Schilling, J., & Schyns, B. (2014). The Causes and Consequences of Bad Leadership. Zeitschrift Für Psychologie, 222(4), 187–189. doi:10.1027/2151-2604/a000185 

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