Ethical Leadership

What is an Ethical Leadership?

Ethical leadership is the practice of leading people and making decisions based on a defined set of values, such as fairness, accountability, trust, honesty, equality, and respect. These values form the core foundation of ethical leadership. Ethical leaders focus on creating the most value for society and they encounter and overcome cognitive limitations that keep them from acting ethically as they would want.

Why Ethical Leadership is Important?


Ethical leadership is essential for effective management and organizational success, as it shapes a company's culture, values, and reputation. It is critical for building stakeholder trust, increasing staff engagement, and influencing decision-making. Ethical leaders not only set a good example for their staff, but also help to create a more ethical organizational culture. Finally, ethical leadership is critical for sustaining integrity, establishing trust, and assuring long-term business practices in today's complicated and competitive landscape.

Let's look at a few points on why Ethical Leadership is important.

1. Trust and Credibility: 

Ethical leadership is essential for establishing trust and credibility within a company. Leaders who continuously display ethical behavior gain the trust of their employees, peers, and stakeholders. This trust is critical for effective communication, collaboration, and organizational success. Employees are more likely to follow ethical leaders and be confident in their decisions, resulting in a more positive and productive workplace.

2. Organizational Culture:

Ethical leadership has a significant impact on company culture. Leaders that prioritize ethical beliefs and conduct, offer a good example for others to emulate. This contributes to the development of an integrity culture in which ethical considerations play an important role in decision-making at all levels. A strong ethical culture can boost employee morale, loyalty, and dedication, resulting in better organizational performance.

3. Decision-Making:

Ethical leaders think about the ethical consequences of their decisions and actions. They seek to make decisions that are fair, honest, and mindful of others' rights. This strategy not only helps to prevent ethical breaches and wrongdoing, but it also ensures that choices are made in the long term best interests of the company and its stakeholders. Ethical decision-making can improve an organization's reputation while reducing the danger of legal and ethical concerns.

4. Employee Engagement:

Ethical leadership is closely related to employee engagement. Employees are more likely to be engaged at work if they believe their leaders are ethical and trustworthy. Ethical leaders encourage employee loyalty and commitment, which leads to increased job satisfaction and performance. This, in turn, can lower turnover and boost staff retention.

5. Reputation and Brand:

Ethical leadership can significantly improve an organization's reputation and brand. Organizations that are known for their ethical procedures are more likely to attract customers, investors, and business partners. Ethical leadership can help to establish a positive reputation, increase brand loyalty, and set the firm apart from competitors. This can lead to enhanced customer trust, stronger stakeholder connections, and long-term corporate growth.


Pros and Cons of Ethical Leadership

Ethical leadership has various benefits, including establishing trust, improving decision-making, enhancing reputation, and promoting employee engagement. However, on the other hand, it can be time-consuming, subjective, conflict-prone, and impacted by individual preconceptions.

Pros of Ethical Leadership

  • Establishing trust: Ethical leaders are viewed as trustworthy, which develops employee trust, resulting in stronger relationships and loyalty.
  • Improves Decision-making: Ethical leaders think about the influence of their decisions on all stakeholders, resulting in more considered and principled decision-making processes.
  • Enhances reputation: Organizations led by ethical leaders frequently have a positive reputation, which attracts top personnel, consumers, and investors.
  • Increases employee engagement: Ethical leaders inspire colleagues by setting a positive example, resulting in better levels of engagement and motivation.

Cons of Ethical Leadership

  • Time-consuming: Making ethical decisions may take longer than making decisions based merely on profit or efficiency.
  • Subjectivity: Ethical norms differ between persons and cultures, resulting in subjective judgments of what is ethical.
  • Potential for conflict: Ethical leaders may encounter conflicts between what is ethically good and what is best for the organization, resulting in difficult decisions.
  • Personal bias: Even ethical leaders are susceptible to personal biases, which can influence their judgment and decision-making processes.

In Summary, Ethical leadership is a management technique that emphasizes integrity, fairness, and honesty. It includes setting a good example for employees and stakeholders, encouraging ethical behavior, and making decisions that consider the impact on others. Ethical leadership can contribute to a better organizational culture, higher employee morale, more trust, and a stronger reputation. However, it takes continual effort and can be difficult to maintain in complex business environments.


References: 

A new model for ethical leadership (2020) Harvard Business Review. Available at: https://hbr.org/2020/09/a-new-model-for-ethical-leadership (Accessed: 30 March 2024).

Barry D. Moore et al. (2022) What is ethical leadership? principles & examples, Great Work Life. Available at: https://www.greatworklife.com/what-is-ethical-leadership-decision-framework/ (Accessed: 30 March 2024).

Comments

  1. A D A DHARMASIRIApril 1, 2024 at 11:55 PM

    Hi Hasith this is one of my favorite topics and i believe having good ethical practices in an organization benefits in many ways, Hence, would like to know the benefits of having Ethical practices in an organization which makes and impact on both employer and employee?

    ReplyDelete
    Replies
    1. Hasith Tharuka WijesingheApril 13, 2024 at 12:24 PM

      Absolutely, Anjala! Ethical practices in an organization help both employers and employees. Employers can improve their company's reputation by implementing ethical procedures, which leads to improved consumer loyalty and trust. Ethical behavior promotes a positive work environment, which can boost employee morale and productivity. Furthermore, ethical standards can help attract and retain top talent because employees are more inclined to stick with a company that values integrity and justice.
      For employees, ethical practices foster trust and loyalty to the organization. It fosters a secure and polite workplace culture in which employees feel appreciated and respected. Ethical standards also encourage transparency, which can result in improved communication and decision-making processes. Overall, ethical behaviors help to foster a positive business culture that benefits employers and employees equally.

      Delete
  2. Anjalika (Anji) Fernando (LAG Fernando)April 11, 2024 at 9:35 PM

    I am a huge fan of ethical leadership as I think most organizations don't value its importance, especially when it comes to studying its principles in depth. I know for its cons ethical leadership poses challenges such as subjectivity and potential conflicts, but overall I personally believe ethical leadership has a long term vision and is a much needed breath of fresh air to today's business environment. I would have preferred to see some reference to case studies or other real world examples of successfully implemented ethical leadership in companies.

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    Replies
    1. Hasith Tharuka WijesingheApril 12, 2024 at 4:22 PM

      I completely agree with your perspective on the value of ethical leadership. It's true that while there are challenges like subjectivity, the long-term vision and positive impact on organizational culture make it a crucial approach. Incorporating real-world examples or case studies could indeed provide practical insights for readers. Do you have any specific examples or instances where you've seen ethical leadership make a significant difference?

      Delete
    2. Anjalika (Anji) Fernando (LAG Fernando)April 13, 2024 at 8:49 PM

      Definitely, Hasith. Ethical leadership has made a massive difference in various real-world situations. For instance if you read up on the Johnson & Johnson's handling of the Tylenol poisoning crisis in 1982, you see how well they handled this by placing "consumers first by recalling 31 million bottles of Tylenol capsules from store shelves and offering replacement product in the safer tablet form free of charge." Rehak, 2002 for the the New York Times. James Burke, then CEO of J&J took immediate responsibility and he prioritized public safety over profits demonstrating brilliant ethical principles. Another example is Tim Cook, CEO of Apple who publicly defended user privacy and refused to compromise the security of Apple's products. “We care about the user experience. And we’re not going to traffic in your personal life,” Cook said of Apple. “I think it’s an invasion of privacy.” (CNBC, 2018)

      Another of my favorites is the Patagonia's commitment to sustainability, implementing eco-friendly practices throughout their supply under the leadership of founder Yvon Chouinard. "In 1986, the company made its first sustainability commitment. With this initiative, Patagonia pledged 1% of total sales or 10% of total profit each year would be donated to environmental non-profits and advocacy groups. Nearly 40 years later, Patagonia has honored this commitment each and every year, having donated over $100 million dollars to environmental agencies. " (Alonso, 2023)

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    3. Hasith Tharuka WijesingheApril 15, 2024 at 6:59 PM

      These are great examples of ethical leadership in action! Johnson & Johnson's response to the Tylenol crisis, Tim Cook's stance on user privacy at Apple, and Patagonia's dedication to sustainability, all demonstrate how ethical leadership can promote positive change and preserve ideals under difficult circumstances. These instances demonstrate the importance of prioritizing ethical values in decision-making, which can lead to long-term success and positive effects on society and the environment.

      Delete
  3. Judith FernandoApril 12, 2024 at 2:59 AM

    An informative article about ethical leadership, Hasith.
    As cited in a 'builtin' article by Jacobson, (2021), "Ethical leadership is a leadership style grounded in principles like trust, equality and fairness that ultimately promotes the common good of an entity and the success of others".
    I like the way you have explored the pros and cons in this article. Yes, Hasith. Ethical leadership can boost the organizational culture, increase employee morale, build trust, and build a good reputation. On contrary, continuous effort is required to maintain and could be complex to be practiced in large business environments.

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    1. Hasith Tharuka WijesingheApril 12, 2024 at 4:24 PM

      Thank you for your thoughtful feedback Judith! It's great to hear that you found the article informative. I agree, maintaining ethical leadership in large organizations can be challenging, but the benefits it brings to organizational culture and reputation are invaluable. Have you encountered any specific challenges or successes with ethical leadership in your own experiences?

      Delete
  4. Hasini DasanayakaApril 12, 2024 at 7:47 AM

    Ethical leadership goes beyond simply following the rules; it's about building trust, fostering a positive work environment, and inspiring employees to make the right choices. You have beautifully elaborated the path to it.

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    1. Hasith Tharuka WijesingheApril 12, 2024 at 4:25 PM

      Thank you for your kind words! I'm glad you found the article insightful. Indeed, ethical leadership is about creating a culture where integrity and trust are paramount. Have you had any experiences with ethical leadership that you'd like to share?

      Delete
  5. Lakshitha WeerakkodiApril 12, 2024 at 3:41 PM

    Ethical leadership in HR sets the tone for integrity, fairness, and accountability, fostering trust and respect within the organization while ensuring ethical decision-making at all levels.

    ReplyDelete
    Replies
    1. Hasith Tharuka WijesingheApril 12, 2024 at 4:26 PM

      Absolutely! Ethical leadership in HR is crucial for creating a positive work environment and upholding ethical standards. It helps in building a strong organizational culture based on trust and respect. Have you seen any specific examples of ethical leadership in HR that have had a positive impact?

      Delete
  6. Jayani ElvitigalaApril 13, 2024 at 4:56 PM


    The article provides valuable insights into ethical leadership and offers practical guidance for leaders seeking to cultivate a culture of ethics and integrity within their organizations. Effectively encapsulates the key points discussed in the article, reaffirming the importance of ethical leadership in promoting integrity, fairness, and honesty within organizations. It acknowledges the challenges associated with practicing ethical leadership but emphasizes its long-term benefits for organizational culture, employee morale, trust, and reputation.

    ReplyDelete
    Replies
    1. Hasith Tharuka WijesingheApril 13, 2024 at 7:18 PM

      Thank you very much for your comment Jayani! It accurately captures the key points of the article on ethical leadership. Ethical leadership is essential for building business culture and instilling trust in people. It's wonderful to see a focus on practical leadership advice, because ethical leadership is more than a concept. it's a practice that can be developed and integrated into daily decision-making.

      Delete

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