How Will You Measure Your Life? prologue S O n the l a st day of the course that I teach at Harvard Business School, I typically start by telling my students what I observed among my own business school classmates after we graduated. Just like every other school, our reunions every five years provided a series of fascinating snapshots. The school is superb at luring back its alumni for these events, which are key fund-raisers; the red carpet gets rolled out with an array of high-profile speakers and events. My own fifth-year reunion was no exception and we had a big turnout. Looking around, everyone seemed so polished and prosperous—we couldn’t help but feel that we really were part of something special. We clearly had much to celebrate. My classmates seemed to be doing extremely well; they had great jobs, some were working in exotic locations, and most had managed to marry 1 HOW WILL YOU MEASURE YOUR LIFE? spouses much better-looking than they were. Their lives seemed destined to be fantastic on every level. But by our tenth reunion, things that we had never expected became increasingly common. A number of my classmates whom I had been looking forward to seeing didn’t come back, and I had no idea why. Gradually, by calling them or asking other friends, I put the pieces together. Among my classmates were executives at renowned consulting and finance firms like McKinsey & Co. and Goldman Sachs; others were on their way to top spots in Fortune 500 companies; some were already successful entrepreneurs, and a few were earning enormous, life-changing amounts of money. Despite such professional accomplishments, however, many of them were clearly unhappy. Behind the facade of professional success, there were many who did not enjoy what they were doing for a living. There were, also, numerous stories of divorces or unhappy marriages. I remember one classmate who hadn’t talked to his children in years, who was now living on the opposite coast from them. Another was on her third marriage since we’d graduated. My classmates were not only some of the brightest people I’ve known, but some of the most decent people, too. At graduation they had plans and visions for what they would accomplish, not just in their careers, but in their personal lives as well. Yet something had gone wrong for some of them along the way: their personal relationships had begun to deteriorate, even as their professional prospects blossomed. I 2 Prologue sensed that they felt embarrassed to explain to their friends the contrast in the trajectories of their personal and professional lives. At the time, I assumed it was a blip; a kind of midlife crisis. But at our twenty-five- and thirty-year reunions, the problems were worse. One of our classmates—Jeffrey Skilling—had landed in jail for his role in the Enron scandal. The Jeffrey Skilling I knew of from our years at HBS was a good man. He was smart, he worked hard, he loved his family. He had been one of the youngest partners in McKinsey & Co.’s history and later went on to earn more than $100 million in a single year as Enron’s CEO. But simultaneously, his private life was not as successful: his first marriage ended in divorce. I certainly didn’t recognize the finance shark depicted in the media as he became increasingly prominent. And yet when his entire career unraveled with his conviction on multiple federal felony charges relating to Enron’s financial collapse, it not only shocked me that he had gone wrong, but how spectacularly he had done so. Something had clearly sent him off in the wrong direction. Personal dissatisfaction, family failures, professional struggles, even criminal behavior—these problems weren’t limited to my classmates at HBS. I saw the same thing happen to my classmates in the years after we completed our studies as Rhodes Scholars at Oxford University. To be given that opportunity, my classmates had to have demonstrated extraordinary academic excellence; superior performance in extracurricular activities such as sports, politics, or writing; and significant contributions to their communities. These 3 HOW WILL YOU MEASURE YOUR LIFE? were well-rounded, accomplished people who clearly had much to offer the world. But as the years went by, some of my thirty-two Rhodes classmates also experienced similar disappointments. One played a prominent role in a major insider trading scandal, as recounted in the book Den of Thieves. Another ended up in jail because of a sexual relationship with a teenager who had worked on his political campaign. He was married with three children at the time. One who I thought was destined for greatness in his professional and family spheres has struggled in both—including more than one divorce. I know for sure that none of these people graduated with a deliberate strategy to get divorced or lose touch with their children—much less to end up in jail. Yet this is the exact strategy that too many ended up implementing. I don’t want to mislead you. Alongside these disappointments, there are many of my classmates who have led exemplary personal lives; they have truly been an inspiration to me. But our lives are not over, and the lives of our children are just now unfolding. Understanding what causes the problems that trapped some of my classmates is important not just for those who have come off the path that they had planned to follow but for those whose lives are still on the right path—as well as those whose journeys are just beginning. We all are vulnerable to the forces and decisions that have derailed too many. I am among those who have been fortunate so far—in many ways due to my wonderful wife, Christine, who has helped us see into the future with remarkable prescience. It 4 Prologue would be folly for me to write this book, however, to proclaim that everyone who replicates the decisions we have made will be happy and successful, too. Instead, in writing this book, I have followed the approach that has characterized my management research. I have engaged my students in the quest as well. In my MBA course, Building and Sustaining a Successful Enterprise, we study theories regarding the various dimensions of the job of general managers. These theories are statements of what causes things to happen—and why. When the students understand these theories, we put them “on”—like a set of lenses—to examine a case about a company. We discuss what each of the theories can tell us about why and how the problems and opportunities emerged in the company. We then use the theories to predict what problems and opportunities are likely to occur in the future for that company, and we use the theories to predict what actions the managers will need to take to address them. By doing this, the students learn that a robust theory is able to explain what has and what will occur across the hierarchy of business: in industries; in the corporations within those industries; in the business units within those corporations; and in the teams that are within the business units. In the past several years, on the last day of my class after I’ve summarized what so frequently happens in the lives of our graduates, we have taken the discussion a step further, plumbing to the most fundamental element of organizations: individuals. For this discussion, rather than use businesses as the case studies, we use ourselves. 5 HOW WILL YOU MEASURE YOUR LIFE? I participate in these discussions with more history than my students do, but I follow the same rules. We are there to explore not what we hope will happen to us but rather what the theories predict will happen to us, as a result of different decisions and actions. Because I’ve been present in these discussions over many years, I’ve learned more about these issues than any one group of my students ever has. To even the score with them, however, I have shared stories about how these theories have played out in my life. To help structure this discussion, I write the theories we have studied along the top of the chalkboard. Then I write three simple questions beside those theories: How can I be sure that s s s ) WILL BE SUCCESSFUL AND HAPPY IN MY CAREER -Y RELATIONSHIPS WITH MY SPOUSE MY CHILDREN AND MY EXTENDED FAMILY AND CLOSE FRIENDS BECOME AN ENDURING SOURCE OF HAPPINESS ) LIVE A LIFE OF INTEGRITYˆAND STAY OUT OF JAIL These questions might sound simple, but they are questions that so many of my classmates never asked, or had asked but lost track of what they learned. Year after year I have been stunned at how the theories of the course illuminate issues in our personal lives as they do in the companies we’ve studied. In this book, I will try to summarize some of the best of the insights my students and I have discussed on that last day in class. * * * 6 Prologue IN THE SPR ING of 2010, I was asked to speak not just to the students in my own class but to the entire graduating student body. But that’s not the only way things were a little different that day. Standing at the podium with little hair as the result of chemotherapy, I explained that I had been diagnosed with follicular lymphoma, a cancer similar to that which had killed my father. I expressed my gratitude that I could use this time with them to summarize what my students and I had learned from focusing these theories on ourselves. I spoke about the things in our lives that are most important—not just when you are confronting a life-threatening illness, as I was, but every day, for every one of us. Sharing my thoughts that day with the students about to make their own way in the world was a remarkable experience. James Allworth, who was in my class that semester and in the audience that day, and Karen Dillon, who heard about my remarks in her position as editor of the Harvard Business Review, were both extremely moved by the topic. I later asked them to help me convey to a broader audience the feeling people had that day in Burden Hall on the Harvard Business School campus. We are from three different generations and have completely different beliefs informing our lives. James is a recent business school graduate, who assures me that he is an atheist. I’m a father and grandfather with a deeply held faith, far into my third professional career. Karen, the mother of two daughters, is two decades into a career as an editor. She says her beliefs and career fall someplace between us. 7 HOW WILL YOU MEASURE YOUR LIFE? But the three of us are united in the goal of helping you understand the theories we share in this book because we believe they can sharpen the acuity with which you can examine and improve your life. We’ve written in the first person, my voice, because it’s how I talk to my students—and my own children—about this thinking. But James and Karen have truly been coauthors in deed. I don’t promise this book will offer you any easy answers: working through these questions requires hard work. It has taken me decades. But it has also been one of the most worthwhile endeavors of my life. I hope the theories in this book can help you as you continue on your journey, so that in the end, you can definitively answer for yourself the question “How will you measure your life?” 8 Chapter One Just Because You Have Feathers . . . There are probably dozens of well-intended people who have adVICE FOR HOW YOU SHOULD LIVE YOUR LIFE MAKE YOUR CAREER CHOICES OR MAKE YOURSELF HAPPY 3IMILARLY WALK INTO THE SELF HELP SECTION OF ANY BOOKSTORE AND YOULL BE OVERWHELMED WITH SCORES OF CHOICES ABOUT HOW YOU CAN IMPROVE YOUR LIFE 9OU KNOW INTUITIVELY THAT ALL THESE BOOKS CANT BE RIGHT "UT HOW CAN YOU TELL THEM APART (OW DO YOU KNOW WHAT IS GOOD ADVICEˆAND WHAT IS BAD S The Difference Between What to Think and How to Think There are no easy answers to life’s challenges. The quest to find happiness and meaning in life is not new. Humans have 9 HOW WILL YOU MEASURE YOUR LIFE? been pondering the reason for our existence for thousands of years. What is new, however, is how some modern thinkers address the problem. A bevy of so-called experts simply offer the answers. It’s not a surprise that these answers are very appealing to some. They take hard problems— ones that people can go through an entire life without ever resolving—and offer a quick fix. That is not what I intend with this book. There are no quick fixes for the fundamental problems of life. But I can offer you tools that I’ll call theories in this book, which will help you make good choices, appropriate to the circumstances of your life. I learned about the power of this approach in 1997, before I published my first book, 4HE )NNOVATORS $ILEMMA I got a call from Andy Grove, then the chairman of Intel. He had heard of one of my early academic papers about disruptive innovation, and asked me to come to Santa Clara to explain my research and tell him and his top team what it implied for Intel. A young professor, I excitedly flew to Silicon Valley and showed up at the appointed time, only to have Andy say, “Look, stuff has happened. We have only ten minutes for you. Tell us what your research means for Intel, so we can get on with things.” I responded, “Andy, I can’t, because I know very little about Intel. The only thing I can do is to explain the theory first; then we can look at the company through the lens that the theory offers.” I then showed him a diagram of my theory of disruption. I explained that disruption happens when 10 J u s t B e c a u s e Yo u Ha v e Fe a t h e r s . . . a competitor enters a market with a low-priced product or ser vice that most established industry players view as inferior. But the new competitor uses technology and its business model to continually improve its offering until it is good enough to satisfy what customers need. Ten minutes into my explanation, Andy interrupted impatiently: “Look, I’ve got your model. Just tell us what it means for Intel.” I said, “Andy, I still can’t. I need to describe how this process worked its way through a very different industry, so you can visualize how it works.” I told the story of the steelmill industry, in which Nucor and other steel mini-mills disrupted the integrated steel-mill giants. The mini-mills began by attacking at the lowest end of the market— steel reinforcing bar, or rebar—and then step by step moved up toward the high end, to make sheet steel— eventually driving all but one of the traditional steel mills into bankruptcy. When I finished the mini-mill story, Andy said, “I get it. What it means for Intel is . . .” and then went on to articulate what would become the company’s strategy for going to the bottom of the market to launch the lower-priced Celeron processor. I’ve thought about that exchange a million times since. If I had tried to tell Andy Grove what he should think about the microprocessor business, he would have eviscerated my argument. He’s forgotten more than I will ever know about his business. But instead of telling him what to think, I taught him how to think. He then reached a bold decision about what to do, on his own. 11 HOW WILL YOU MEASURE YOUR LIFE? I Don’t Have an Opinion, the Theory Has an Opinion That meeting with Andy changed the way I answer questions. When people ask me something, I now rarely answer directly. Instead, I run the question through a theory in my own mind, so I know what the theory says is likely to be the result of one course of action, compared to another. I’ll then explain how it applies to their question. To be sure they understand it, I’ll describe to them how the process in the model worked its way through an industry or situation different from their own, to help them visualize how it works. People, typically, then say, “Okay, I get it.” They’ll then answer their question with more insight than I could possibly have. A good theory doesn’t change its mind: it doesn’t apply only to some companies or people, and not to others. It is a general statement of what causes what, and why. To illustrate, about a year after meeting with Andy Grove, I received a call from William Cohen, then–secretary of defense in the Clinton administration. He told me he’d read 4HE )NNOVATORS $ILEMMA. “Could you come to Washington and talk to me and my staff about your research?” he asked. To me, this was a once-in-a-lifetime opportunity. When Secretary Cohen had said “my staff,” somehow I had imagined second lieutenants and college interns. But when I walked into the secretary’s conference room, the Joint Chiefs of Staff were in the front row, followed by the secretaries of the Army, Navy, and Air Force, and then each of the secretaries’ under-, deputy, and assistant secretaries. I was 12 J u s t B e c a u s e Yo u Ha v e Fe a t h e r s . . . stunned. He said that this was the first time he had convened all of his direct reports in one room. Secretary Cohen simply asked me to present my research. So using the exact same PowerPoint slides I had used with Andy Grove, I started explaining the theory of disruption. As soon as I had explained how the mini-mills had undermined the traditional steel industry by starting with rebar at the bottom, General Hugh Shelton, then the chairman of the Joint Chiefs of Staff, stopped me. “You have no idea why we are interested in this, do you?” he queried. Then he gestured to the mini-mill chart. “You see the sheet steel products at the top of the market?” he asked. “That was the Soviets, and they’re not the enemy anymore.” Then he pointed to the bottom of the market—rebar—and said, “The rebar of our world is local policing actions and terrorism.” Just as the mini-mills had attacked the massive integrated mills at the bottom of the market and then moved up, he worried aloud, “Everything about the way we do our jobs is focused on the high end of the problem—what the USSR used to be.” Once I understood why I was there, we were able to discuss what the result of fighting terrorism from within the existing departments would be, versus setting up a completely new organization. The Joint Chiefs later decided to go down the route of forming a new entity, the Joint Forces Command, in Norfolk, Virginia. For more than a decade, this command served as a “transformation laboratory” for the United States military to develop and deploy strategies to combat terrorism around the world. 13 HOW WILL YOU MEASURE YOUR LIFE? On the surface, competition in the computer chip market and the proliferation of global terrorism could not seem like more different problems to tackle. But they are fundamentally the same problem, just in different contexts. Good theory can help us categorize, explain, and, most important, predict. People often think that the best way to predict the future is by collecting as much data as possible before making a decision. But this is like driving a car looking only at the rearview mirror—because data is only available about the past. Indeed, while experiences and information can be good teachers, there are many times in life where we simply cannot afford to learn on the job. You don’t want to have to go through multiple marriages to learn how to be a good spouse. Or wait until your last child has grown to master parenthood. This is why theory can be so valuable: it can explain what will happen, even before you experience it. Consider, for example, the history of mankind’s attempts to fly. Early researchers observed strong correlations between being able to fly and having feathers and wings. Stories of men attempting to fly by strapping on wings date back hundreds of years. They were replicating what they believed allowed birds to soar: wings and feathers. Possessing these attributes had a high CORRELATIONˆa connection between two things—with the ability to fly, but when humans attempted to follow what they believed were “best practices” of the most successful fliers by strapping on wings, then jumping off cathedrals and flapping hard . . . they failed. The mistake was that although feathers and wings were cor14 J u s t B e c a u s e Yo u Ha v e Fe a t h e r s . . . related with flying, the would-be aviators did not understand the fundamental CAUSAL MECHANISM—what actually causes something to happen—that enabled certain creatures to fly. The real breakthrough in human flight didn’t come from crafting better wings or using more feathers. It was brought about by Dutch-Swiss mathematician Daniel Bernoulli and his book (YDRODYNAMICA, a study of fluid mechanics. In 1738, he outlined what was to become known as Bernoulli’s principle, a theory that, when applied to flight, explained the concept of lift. We had gone from correlation (wings and feathers) to causality (lift). Modern flight can be traced directly back to the development and adoption of this theory. But even the breakthrough understanding of the cause of flight still wasn’t enough to make flight perfectly reliABLE When an airplane crashed, researchers then had to ask, “What was it about the circumstances of that particular attempt to fly that led to failure? Wind? Fog? The angle of the aircraft?” Researchers could then define what rules pilots needed to follow in order to succeed in each different circumstance. That’s a hallmark of good theory: it dispenses its advice in “if-then” statements. The Power of Theory in Our Lives How do fundamental theories relate to finding happiness in life? The appeal of easy answers— of strapping on wings and feathers—is incredibly alluring. Whether these answers come from writers who are hawking guaranteed steps for making 15 HOW WILL YOU MEASURE YOUR LIFE? millions, or the four things you have to do to be happy in marriage, we want to believe they will work. But so much of what’s become popular thinking isn’t grounded in anything more than a series of anecdotes. Solving the challenges in your life requires a deep understanding of what causes what to happen. The theories that I will discuss with you will help you do exactly that. This book uses research done at the Harvard Business School and in some of the world’s other leading universities. It has been rigorously tested in organizations of all sizes around the world. Just as these theories have explained behavior in a wide range of circumstances, so, too, do they apply across a wide range of questions. With most complex problems it’s rarely as simple as identifying the one and only theory that helps solve the problem. There can be multiple theories that provide insight. For example, though Bernoulli’s thinking was a significant breakthrough, it took other work—such as understanding gravity and resistance—to fully explain flight. Each chapter of this book highlights a theory as it might apply to a particular challenge. But just as was true in understanding flight, problems in our lives don’t always map neatly to theories on a one-to-one basis. The way I’ve paired the challenges and theories in the subsequent chapters is based on how my students and I have discussed them in class. I invite you, as you journey through the book, to go back to theories in earlier chapters, just as my students do, and explore the problems through the perspective of multiple theories, too. 16 J u s t B e c a u s e Yo u Ha v e Fe a t h e r s . . . These theories are powerful tools. I have applied many of them in my own life; others I wish I’d had available to me when I was younger, struggling with a problem. You’ll see that without theory, we’re at sea without a sextant. If we can’t see beyond what’s close by, we’re relying on chance— on the currents of life—to guide us. Good theory helps people steer to good decisions—not just in business, but in life, too. S 9OU MIGHT BE TEMPTED TO TRY TO MAKE DECISIONS IN YOUR LIFE BASED ON WHAT YOU KNOW HAS HAPPENED IN THE PAST OR WHAT HAS HAPPENED TO OTHER PEOPLE 9OU SHOULD LEARN ALL THAT YOU CAN FROM THE PAST FROM SCHOLARS WHO HAVE STUDIED IT AND FROM PEOPLE WHO HAVE GONE THROUGH PROBLEMS OF THE SORT THAT YOU ARE LIKELY TO FACE "UT THIS DOESNT SOLVE THE FUNDAMENTAL CHALLENGE OF WHAT INFORMATION AND WHAT ADVICE YOU SHOULD ACCEPT AND WHICH YOU SHOULD IGNORE AS YOU EMBARK INTO THE FUTURE )NSTEAD USING ROBUST THEORY TO PREDICT WHAT WILL HAPPEN HAS A MUCH GREATER CHANCE OF SUCCESS 4HE THEORIES IN THIS BOOK ARE BASED ON A DEEP UNDERSTANDING OF HUMAN ENDEAVORˆWHAT CAUSES WHAT TO HAPPEN AND WHY 4HEYVE BEEN RIGOROUSLY EXAMINED AND USED IN ORGANIZATIONS ALL OVER THE GLOBE AND CAN HELP ALL OF US WITH DECISIONS THAT WE MAKE EVERY DAY IN OUR LIVES TOO 17 A note from the authors Thank you for downloading and reading the opening of "How Will You Measure Your Life?". We hope you've enjoyed it and got a good sense for what this project is all about. We would love for you to continue the journey with us. The book is available at all good bookstores, and is also available on the web at Amazon, Barnes & Noble and iTunes. Finally, we'd love to hear your thoughts. You can get in touch with us through Twitter, Facebook and the web. With our best wishes, ETHICS, CHARACTER, AND AUTHENTIC TRANSFORMATIONAL LEADERSHIP BEHAVIOR Bernard M. Bass* Paul Steidlmeier Binghamton University The morality of transformational leadership has been sharply questioned, particularly by libertarians, “grass roots” theorists, and organizational development consultants. This paper argues that to be truly transformational, leadership must be grounded in moral foundations. The four components of authentic transformational leadership (idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration) are contrasted with their counterfeits in dissembling pseudo-transformational leadership on the basis of (1) the moral character of the leaders and their concerns for self and others; (2) the ethical values embedded in the leaders’ vision, articulation, and program, which followers can embrace or reject; and (3) the morality of the processes of social ethical choices and action in which the leaders and followers engage and collectively pursue. The literature on transformational leadership is linked to the long-standing literature on virtue and moral character, as exemplified by Socratic and Confucian typologies. It is related as well to the major themes of the modern Western ethical agenda: liberty, utility, and distributive justice Deception, sophistry, and pretense are examined alongside issues of transcendence, agency, trust, striving for congruence in values, cooperative action, power, persuasion, and corporate governance to establish the strategic and moral foundations of authentic transformational leadership. ETHICS, CHARACTER AND AUTHENTIC TRANSFORMATIONAL LEADERSHIP Are Bill Gates and Lou Gerstner transformational leaders? What about “chainsaw” Al Dunlap? For many moral analysts, leadership is a many-headed hydra that alternately shows the faces of Saddam Hussein and Pol Pot as well as those of Nelson Mandela and Mother Theresa. The stories that recount the accomplishments * Direct all correspondence to: Bernard M. Bass, Binghamton University, Binghamton, NY 13902–6015; email: bbass@binghamton.edu. Leadership Quarterly, 10(2), 181–217. Copyright  1999 by Elsevier Science Inc. All rights of reproduction in any form reserved. ISSN: 1048-9843 182 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 of such leaders raise moral questions concerning both the character of the leaders as well as the legitimacy of their programs. Following Rogers and Farson (1955), Conger and Kanungo (1988, ch. 11) worried that charismatic leadership (which they defined similarly to transformational leadership) of self-serving leaders could result in deception and exploitation of followers, but argued that most leaders pursued both personal and organizational interests. Subsequently, Conger and Kanungo (1998, ch. 7) reviewed the dark side of charismatic leaders: narcissicism, authoritarianism, Machiavellianism, flawed vision, a need for power coupled with lack of activity inhibition and promotion among followers of dependency, personal identification, and lack of internalization of values and beliefs. In this article, we attempt to differentiate such leaders from authentic charismatic and transformational leaders in terms of ethical discussions of character and authenticity as well as the major themes of the modern Western ethical agenda: liberty, utility, and (distributive) justice. The ethics of leadership rests upon three pillars: (1) the moral character of the leader; (2) the ethical legitimacy of the values embedded in the leaders vision, articulation, and program which followers either embrace or reject; and (3) the morality of the processes of social ethical choice and action that leaders and followers engage in and collectively pursue. Such ethical characteristics of leadership have been widely acknowledged (Wren, 1998; Kouzes & Posner,1993; Greenleaf, 1977; Conger & Kanungo, 1998). Transformational leaders set examples to be emulated by their followers. And as suggested by Burns (1978) and demonstrated by Dukerich, Nichols, and associates (1990) when leaders are more morally mature, those they lead display higher moral reasoning. But not all leadership fits the same pattern and ethical analysis shifts with varying leadership modalities. Two forms of leadership behavior, transactional and transformational, and their components will be analyzed here in terms of moral issues. COMPONENTS OF LEADERSHIP AND RELATED MORAL ISSUES Moral discourse is normative; it is captured in our language of right/wrong, good/ bad, should/ought, good/evil. While meta-ethical discourse is concerned with a critical analysis of the foundations of moral judgments—the worldview and ontological rationale that confers legitimacy upon a set of normative criteria and values— practical ethical discourse is primarily focused upon two issues (Table 1): analysis of the moral agent and analysis of types of moral action. A moral agent is evaluated as praiseworthy or blameworthy in light of three primary considerations: his or her (1) developmental level of conscience; (2) degree of effective freedom; and (3) probity of intention. A moral act is evaluated as a type of behavior no matter who the agent may be. Behavior such as taking property or breaking a promise is judged to be right or wrong in light three principal components: (1) the end sought; (2) the means employed; and (3) the consequences. The pivotal issue in making moral judgments is the legitimacy of the grounding worldview and beliefs that grounds a set of moral values and criteria. Depending upon such worldview and beliefs, a religious leader may morally justify a holy war and a Marxist may justify class warfare and dictatorship of the proletariat. As a Transformational Leadership Behavior 183 Table 1. Components of Moral Analysis Moral Agent Conscience Degree of Freedom Intention Stage of values development, mediated by personal, familial, social, spiritual and cultural factors (Kohlberg, 1981); moral theories of conscientious objection Responsibility mitigated by factors such as compulsion or coercion; moral theories of existential freedom vs determinism The agent’s goal and anticipated outcomes; moral theories of maleficence and beneficence and egoism vs altruism Moral Action Ends sought Means employed Consequences Nobility of purpose of the action and whether it is aligned with core transcendental values, whether religious, philosophical, cultural Whether the end justifies the means Whether the benefits and burdens of an action are fairly distributed among those affected result, moral analysis always exhibits a two-fold nature, which combines (1) the radical critique of underlying worldviews and grounds of moral legitimation and (2) practical judgments of praiseworthy or blameworthy agents and right and wrong behavior within a concrete socio-cultural and historical milieu, as well as within the limitations of socio-historical conscience and freedom. Ethical analysis is further complicated by the fact that it applies not only to content (taking another’s property is wrong; telling the truth is good) but to processes (especially those that affect the freedom and conscience of participants) Ethical content focuses upon values, which highlight the issue of standards and criteria of ethical behavior. While cultural relativities surely apply, foundational moral discourse rests upon polarities found in both moral intention (egoism versus altruism) and in moral consequences (benefits and costs for self and others). Kanungo and Mendonca (1996, ch. 3) argue persuasively for the centrality of altruism, where everyone has moral standing and the interests of “the other” matter. Indeed, something like the Western human rights tradition, which has grown out of the defense of the dignity of the individual, mandates a minimal degree of altruism by safeguarding inalienable human rights not just of self but of all others, even in the face of majority social choices. The morality of processes reflect the legitimacy of both influence processes on the part of leaders and empowerment processes on the part of followers as they engage in dynamic self-transformation (Kanungo & Mendonca, 1996, ch. 4). Modern Western ethics has been preoccupied with moral processes, especially the relationship between the individual, collectivities, (including families, states, business enterprises, religions and other socio-cultural organizations) and society as a whole. Its major themes of liberty, utility and distributive justice attempt to specify what individuals owe each other, what individuals owe to the group and what groups owe to individuals. 184 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 The moral analysis of leadership contains all of these dynamics. It provides critique of both agents and actions. This makes it challenging to morally evaluate charismatic leaders such as the Ayotollah Khomeini or Mao Zedong in realms of religion and politics, and Andrew Carnegie or Steve Jobs in the marketplace. There are clearly many leadership issues and styles that relate to questions ranging from the legitimacy of their authority and informed consent by followers to conscience, freedom and intention, and to ends, means and consequences. There are two distinct but interrelated ideal types of leadership: transactional and transformational. In what follows we first clarify these concepts and then discuss ethical problems related with each. We conclude with an examination of Bass’s proposition (1998a), which is consistent with Burns (1978), that authentic transformational leadership must rest on a moral foundation of legitimate values. The opposite is inauthentic or pseudo-transformational leadership, that of leaders who consciously or unconsciously act in bad faith (Sartre, 1992). Transformational and Transactional Leadership Transactional leadership involves contingent reinforcement. Followers are motivated by the leaders’ promises, praise, and rewards, or they are corrected by negative feedback, reproof, threats, or disciplinary actions. The leaders react to whether the followers carry out what the leaders and followers have “transacted” to do. In contingent rewarding behavior leaders either make assignments or they may consult with followers about what is to be done in exchange for implicit or explicit rewards and the desired allocation of resources. When leaders engage in active managementby-exception, they monitor follower performance and correct followers’ mistakes. When leaders engage in passive management-by-exception, they wait passively for followers’ mistakes to be called to their attention before taking corrective action with negative feedback or reprimands. Laissez-faire leaders avoid leading. Transformational leadership contains four components: charisma or idealized influence (attributed or behavioral), inspirational motivation, intellectual stimulation, and individualized consideration (Bass, 1985, 1998; Bass & Avolio, 1993). Followers identify with the charismatic leaders’ aspirations and want to emulate the leaders. Shamir, House, and Arthur (1993), Conger and Kanungo (l988, 1998), Kanungo and Mendonca (1996) conceive of the same components as all falling under the category of charismatic leadership. For the purposes of discussion, we will speak of transformational and transactional leaders when, in fact, most leaders have a profile of the full range of leadership that includes both transformational and transactional factors. However, those whom we call transformational do much more of the transformational than the transactional. In their defining moments, they are transformational. Those whom we label as transactional leaders display much more transactional leadership behavior. They are more likely to have attitudes, beliefs, and values more consistent with transactional leadership, but they still may be likely to be transformational at times. Each component of either transactional or transformational leadership has an ethical dimension. It is the behavior of leaders—including their moral character, values and programs—that is authentic or inauthentic. Most leaders are likely to Transformational Leadership Behavior 185 Table 2. Leading Moral Components of Transactional and Transformational Leadership Transactional Leadership Leadership Dynamic Ethical Concern Task Whether what is being done (the end) and the means employed to do it are morally legitimate Whether sanctions or incentives impair effective freedom and respect conscience Truth telling Promise keeping Egoism vs altruism—whether the legitimate moral standing and interests of all those affected are respected Impartial process of settling conflicts and claims Reward system Intentions Trust Consequences Due process Transformational Leadership Idealized influence Inspirational motivation Intellectual stimulation Individualized consideration Whether “puffery” and egoism on part of the leader predominate and whether s/he is manipulative or not Whether providing for true empowerment and selfactualization of followers or not Whether the leader’s program is open to dynamic transcendence and spirituality or is closed propaganda and a “line” to follow Whether followers are treated as ends or means, whether their unique dignity and interests are respected or not. display a mixed moral profile; so, when we speak of authentic transformational leaders or authentic transactional leaders, we are labeling leaders who generally are more authentic than inauthentic. Ethical Issues in Transactional Leadership Both styles of leadership, transformational and transactional, have strong philosophical underpinnings and ethical components (Table 2). In individualist philosophies, where leaders and followers each rationally pursue their own self-interests, it is generally thought that leaders should be transactional. A free contract is often assumed as a model of transacting between leaders and followers. A contract has to have moral legitimacy (Donaldson & Dunfee, 1994). The moral legitimacy of transactional leadership is demanding in many ways. It depends on granting the same liberty and opportunity to others that one claims for oneself, on telling the truth, keeping promises, distributing to each what is due, and employing valid incentives or sanctions. It recognizes pluralism of values and diversity of motivations (Rawls, 1971). Ethical Issues in Transformational Leadership Transactional leadership models are grounded in a worldview of self-interest. But the exclusive pursuit of self-interest is found wanting by most ethicists (Gini, 186 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 1995, 1996; Rosenthal & Buchholz, 1995). Authentic transformational leadership provides a more reasonable and realistic concept of self—a self that is connected to friends, family, and community whose welfare may be more important to oneself than one’s own. One’s moral obligations to them are grounded in a broader conception of individuals within community and related social norms and cultural beliefs. Although there is plenty of transactional leadership in punishments for transgressions, authentic transformational leadership is more consistent than transactional leadership with Judaic-Christian philosophical traditions and discourses on the leadership of the moral sage that presuppose a trusting community as the central life context. Nonetheless, it is a matter of modern Western moral concern that ideals not be imposed, that behavior not be coerced, and that the search for truth not be stifled. Ethical norms and behavioral ideals should not be imposed but freely embraced. Motivation should not be reduced to coercion but grow out of authentic inner commitment. Questioning and creativity should be encouraged. Followers should not be mere means to self-satisfying ends for the leader but should be treated as ends in themselves. We label as inauthentic or “pseudo” that kind of transformational leadership that tramples upon those concerns. Burns (1978) discussed leadership as transforming, and, on occasion, as transformational. Both the leader and the led are transformed—sharply changed in performance and outlook. But transforming others is just one of the effects of the leadership. We also need to examine the behaviors of authentic transformational leadership and the attributions given to transformational leadership on a moral basis; that is, the processes of vision articulation and choice are matters of moral concern, not just the consequences. It is the presence or absence of such a moral foundation of the leader as a moral agent that grounds the distinction between authentic versus pseudo-transformational leadership. Burns (1978), Bass (1985) and Howell and Avolio (1992), among others, have examined the morality of transformational leadership. For Burns, to be transformational, the leader had to be morally uplifting. For Bass, in his early work, transformational leaders could be virtuous or villainous depending on their values. Howell and Avolio felt that only socialized leaders concerned for the common good can be truly transformational leaders. Personalized leaders, primarily concerned with their own self-interests, could not be truly transformational leaders. Publicly, hoever, and at a distance, they could act as if they were truly transformational although privately they were more concerned about themselves. O’Connor, Mumford, and colleagues (1995) showed how such inauthenticity in transformational world class leaders could result in destructive outcomes. Critics attribute manipulative, deceptive and other such devious behaviors to socalled transformational leaders. Martin and Sims (1956) and Bailey (1988) hold that to succeed, all leaders must be manipulative. But, in fact, it is pseudo-transformational leaders who are deceptive and manipulative. Authentic transformational leaders may have to be manipulative at times for what they judge to be the common good, but manipulation is a frequent practice of pseudo-transformational leaders and an infrequent practice of authentic transformational leaders. We contrast authentic and pseudo-transformational leadership in terms of the four components Transformational Leadership Behavior 187 of transformational leadership already mentioned: idealized influence (or charisma), inspirational motivation, intellectual stimulation and individualized consideration. Idealized Influence If the leadership is transformational, its charisma or idealized influence is envisioning, confident, and sets high standards for emulation. Recent literature underscores the spiritual dimensions of such influence (Fairholm, 1998, part V; Kanungo & Mendonca, 1996, pp. 87ff.) as well as the moral dimensions of the influence process itself (Kanungo & Mendonca, 1996, pp. 52–56). A first difference between authentic transformational leadership and pseudotransformational leadership lies in the values for which they are idealized. For instance, the authentic leader calls for universal brotherhood; the pseudo-transformational leader highlights fictitious “we-they” differences in values and argues that “we” have inherently good values and “they” do not. Bass (1985, pp. 182–5) summed up the importance of the values held by a transformational leader in determining his or her actions. The observed behavior might seem the same, but according to Burns (1978), only if the underlying values were morally uplifting, could the leader be considered transforming. Bass originally argued that transformational leaders could wear the black hats of villains or the white hats of heroes depending on their values. This is mistaken; only those who wear white hats are seen as truly transformational. Those in black hats are now seen as pseudo-transformational. That is, while they may be transformational, they are inauthentic as transformational leaders. They are the false messiahs and tyrants of history. Pseudo-transformational idealized leaders seek power and position even at the expense of their followers’ achievements. They indulge in fantasies of power and success. They may argue that they are doing so for the good of the organization. Like charismatics, in general, they feel that they honestly know the right answers to problems which need to be sold through effective impression management. Sometimes, they even deceive themselves about their competencies. They exhort their followers to “Trust me!”—but they cannot be trusted. They engage in more self-displays to get more attention from their followers Their visions are grandiose. They do not have the same sense of responsibility as do authentic charismaticinspirational leaders. Pseudo-transformational idealized leaders may see themselves as honest and straightforward and supportive of their organization’s mission but their behavior is inconsistent and unreliable. They have an outer shell of authenticity but an inner self that is false to the organization’s purposes. They profess strong attachment to their organization and its people but privately are ready to sacrifice them. Inauthentic CEOs downsize their organization, increase their own compensation, and weep crocodile tears for the employees who have lost their jobs. In addition to what has already been said, Howell and Avolio (1992) point to the need of authentic transformational leaders to promote ethical policies, procedures and processes within their organizations. They need to be committed to a clearly stated, continually-enforced code of ethical conduct which helps establish acceptable standards. They need to foster an organizational culture with high ethical 188 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 standards by appropriate recruitment, training and rewards to eventuate in the internalization in all the organization’s members of shared moral standards. Inspirational Motivation The inspirational motivation of transformational leadership provides followers with challenges and meaning for engaging in shared goals and undertakings. The inspirational appeals of the authentic transformational leader tend to focus on the best in people—on harmony, charity and good works; the inspirational appeals of the pseudo-transformational leader tend to focus on the worst in people—on demonic plots, conspiracies, unreal dangers, excuses, and insecurities. Kanungo and Mendonca (1996 pp. 61ff) have linked this to an empowerment process. For them, empowerment is more than broadening the scope of participation by followers. It is motivational and enabling, highlighting a new realization and transformation of the person. Idealized, inspirational leaders, who are pseudo-transformational, may mislead, deceive and prevaricate. They can be subtle and speak with a forked tongue, for instance, offering followers empowerment, yet continuing to treat them as dependent children (Sankowsky, 1995). They talk about empowerment but actually continue to seek control (Conger & Kanungo, 1998). Previously, Bass (1985) mistakenly argued that, although the dynamics might be the same if the leaders had virtuous or evil ends, the moral differences were a matter of their aims and values, not the dynamics involved in their influence. But both the dynamics and means-to-ends as well as the ends are different for authentic and inauthentic transformational leaders. The authentic are inwardly and outwardly concerned about the good that can be achieved for the group, organization, or society for which they feel responsible. The inauthentic and pseudo-transformational may publicly give the same impression and be idealized by their followers for it, but privately be concerned about the good they can achieve for themselves. They are captains who sail under false colors. They are spiritual leaders who are false prophets. Intellectual Stimulation The intellectual stimulation of transformational leadership incorporates an open architecture dynamic into processes of situation evaluation, vision formulation and patterns of implementation. Such openness has a transcendent and spiritual dimension and helps followers to question assumptions and to generate more creative solutions to problems. It is especially suited to the normative side of ethics, where human probing of the ground of being is both fathomless and endless. To the point, this dynamic breaks the bonds of organizational and leadership cultures that ignore fundamental questions such as altruism (Kanungo and Mendonca, 1996, pp. 79ff). The intellectual stimulation of pseudo-transformational leaders manifests a logic containing false assumptions to slay the dragons of uncertainty. Pseudo-transformational leaders overweight authority and underweight reason. They take credit for others’ ideas but make them scapegoats for failure (Sankowsky, 1995). They substitute anecdotes for hard evidence. They feed on the ignorance of their followers so that their followers will accept more ambiguities and inconsistencies opening the opportunities for the self-enhancement of charlatans: Transformational Leadership Behavior 189 People like Rush Limbaugh and Louis Farrakhan live well off ignorance. . . . They are smart, ambitious men with great charisma, who look like giants to people of minor intellect. They are snake oil salesmen. They are confidence men who exploit . . . ignorant, scared, angry, frustrated people for personal gain in the name of doing good for the entire nation or race (Lockman, 1995, p. 9a). Authentic transformational leaders persuade others on the merits of the issues. Pseudo-transformational leaders set and control agenda to manipulate the values of importance to followers often at the expense of others or even harm to them. Authentic transformational leaders openly bring about changes in followers’ values by the merit and relevancy of the leader’s ideas and mission to their followers’ ultimate benefit and satisfaction (Howell, 1988). Pseudo-transformational leaders may create the impression that they are doing the right things, but will secretly fail to do so when doing the right things conflict with their own narcissistic interests. They are less likely to listen to conflicting views and more likely to be intolerant of the differences of opinion between their followers and themselves (Howell & Avolio, 1992). They substitute emotional argumentation for rational discourse. Individualized Consideration The individualized consideration component of transformational leadership underscores the necessity of altruism if leadership is to be anything more than authoritarian control (Kanungo & Mendonca, 1996, pp. 85ff). The transformational leader treats each follower as an individual and provides coaching, mentoring and growth opportunities (Bass, 1985). While true transformational leaders are concerned about developing their followers into leaders, pseudo-transformational leaders are more concerned about maintaining the dependence of their followers. They exploit the feelings of their followers to maintain deference from them (Sankowsky, 1995). Pseudo-transformational leaders will welcome and expect blind obedience. They will attempt to enhance their personal status by maintaining the personal distance between themselves and their followers. They encourage fantasy and magic in their vision of the attractive future while true transformational leaders promote attainable shared goals. Narcissistic pseudo-transformational leaders manipulate arguments about political choices with a “twist that achieves the desired responses” (Bass, l989, p.45). Their style of individualized consideration foments favoritism and competition among followers in the guise of being helpful. While the authentic individually considerate leader is concerned about helping followers to become more competent to provide for a more successful succession, the inauthentic counterpart seeks to maintain a parent-child relationship. The difference between authentic and pseudo-transformational leadership is also seen in that authentic transformational leaders, who may have just as much need for power as pseudo-transformational leaders, channel the need in socially constructive ways into the service of others. Pseudo-transformational leaders use power primarily for self-aggrandizement and are actually contemptuous privately of those they are supposed to be serving as leaders (Howell and Avolio, 1992). Although this may not be expressed publicly, privately pseudo-transformational leaders are concerned 190 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 about their power and gaining more of it. Insiders who work closely with them know them to be deceptive, domineering, egotistical demagogues while their public image may be that of saviors. Pseudo-transformational leaders are predisposed toward self-serving biases. They claim they are right and good; others are wrong and bad. They are the reason things go well; other persons are the reason for things going badly. They wear different masks for different occasions, believe themselves to be high in self-monitoring but are betrayed by their non-verbal contradictory behavior. The Moral Spectrum of Transformational Leadership Transformational leadership traces out a complicated moral spectrum, in which most leaders combine authentic as well as inauthentic behavior. For example, many leaders, particularly political leaders who cannot move too far in front of their followers, walk a fine line of moral probity. In their efforts to accent the positive, to make inspiring appeals, to maintain the enthusiasm and morale of followers, they are inauthentic in transformational leadership. They withhold the release of information. Or they time its release for when it will do the most good. They give the appearance of confidence even when they are unsure about what they are doing and what they are telling followers to do. They initiate projects which they personally oppose and delay implementing them so that the projects never are completed. They publicly support but privately oppose proposals. They openly compromise but privately divert the implementation of the compromise (Martin & Sims, 1956; Bass, 1968). They may have the public image of a saint but privately are deceptive devils. They may appear to their followers to behave as a transformational leader but the appearance is deceptive for inwardly they remain more interested in themselves than their followers. They knowingly focus their followers on fantasies instead of attainable visions. They engage in shams and pretense. They don’t practice what they preach. And these masquarades are at the expense of their followers. They are pseudo-transformational. They are Freud’s (1913) totemic leaders who satisfy the fantasies of their followers although they appear to direct their followers towards transcendental purposes, but in fact tend to cater to the self-delusionary interests of their followers. In short, while authentic and inauthentic transformational leaders may fail to exhibit any one of the four components—idealized influence, inspirational motivation, intellectual stimulation or individualized consideration—the component that ordinarily is missing in the personalized leadership of the pseudo-transformational leader is individualized consideration. Thus, many intellectually stimulating, inspirational leaders such as Hyman Rickover, who transformed the U.S. Navy into the nuclear age, were known for their self-aggrandizing, inconsiderate, abusive and abrasive behavior (Polmar & Allen, 1982). Furthermore, instead of earning idealized influence from their followers, the pseudo-transformational leaders seek to become the idols (rather than the ideals) of their followers (Howell & Avolio, 1992). The ethics of transformational leadership are subverted by the pseudo-transformational leader’s contempt for self and others, by learning to rationalize and justify their deceptions, and by their feelings of superiority. They see themselves as having Transformational Leadership Behavior 191 an unconventional but higher morality (Goldberg, 1995). Nevertheless, they are mistaken. O’Connor, Mumford, and associates. (1995) contrasted the biographies of 82 world class personalized and socialized charismatic leaders. The socialized charismatics were rated more highly in their morality than were the personalized, especially as they behaved during their rise to power. Leaders are authentically transformational when they increase awareness of what is right, good, important, and beautiful, when they help to elevate followers’ needs for achievement and self-actualization, when they foster in followers higher moral maturity, and when they move followers to go beyond their self-interests for the good of their group, organization, or society. Pseudotransformational leaders may also motivate and transform their followers, but, in doing so, they arouse support for special interests at the expense of others rather than what’s good for the collectivity. They will foster psychodynamic identification, projection, fantasy, and rationalization as substitutes for achievement and actualization. They will encourage ‘we-they’ competitiveness and the pursuit of the leaders’ own self-interests instead of the common good. They are more likely to foment envy, greed, hate, and conflict rather than altruism, harmony, and cooperation. In making this distinction between the authentic transformational and pseudo-transformational leader, it should be clear that we are describing two ideal types. Most leaders are neither completely saints nor completely sinners. They are neither completely selfless nor completely selfish (Bass, 1998a, p. 171). For example, in an election campaign, the authentic transformational leader points the public to the societal problems he truly believes need solving. The inauthentic transformational leader points to the same issues but is personally uninterested in doing something about them. In an election campaign, the authentic transactional leader makes promises he thinks he can keep, if elected. But he or she may be overly optimistic and be unable to keep the promises. An inauthentic transactional leader knows he is making promises he cannot keep, if elected. If transformational leadership is authentic and true to self and others, it is characterized by high moral and ethical standards in each of the dimensions discussed above. At the same time it aims to develop the leader as a moral person and creates a moral environment for the organization. In Fairholm’s terms (1998) it is at once a type of leadership grounded in values, based in trust and rooted in spirituality. As an ideal moral type, authentic transformational leadership contrasts sharply with what we term its pseudo or unethical manifestations as well as with conventional transactional leadership. The best of leadership is both transformational and transactional. Transformational leadership augments the effectiveness of transactional leadership; it does not replace transactional leadership. (Waldman, Bass, & Yammarino, 1990; Kanungo & Mendonca, 1996, pp. 53ff.). Take the example of Abraham Lincoln. He made many transactional executive decisions based on his own sense of timing and political expediency such as delaying the Emancipation Proclamation until after the first Union victory at Antietem in 1862. Even then, to hold the slave states of Delaware, 192 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 Maryland, Kentucky and Missouri in the Union, the Proclamation only prohibited slavery in those 11 states that had seceded. As an authentic transformational leader, his sense of duty and what he personally thought was right, good and proper, propelled him into executive decisions unapproved by Congress and unsupported by public opinion. He suspended Habeas Corpus in 1862 when Washington, D.C. was almost surrounded by rebel troops. Nevertheless, by his second inauguration in 1864, he was espousing a generous, forgiving peace settlement “with malice towards none.” While transactional leadership manages outcomes and aims for behavioral compliance independent of the ideals a follower may happen to have, transformational leadership is predicated upon the inner dynamics of a freely embraced change of heart in the realm of core values and motivation, upon open-ended intellectual stimulation and a commitment to treating people as ends not mere means. To bring about change, authentic transformational leadership fosters the modal values of honesty, loyalty, and fairness, as well as the end values of justice, equality, and human rights. But pseudo-transformational leadership endorses perverse modal values such as favoritism, victimization, and special interests and end values such as racial superiority, submission, and Social Darwinism (Carey, 1992; Solomon, 1996). It can invent fictitious obstacles, imaginary enemies, and visions that are chimeras. Transactional leadership is moral when the truth is told, promises are kept, negotiations are fair and choices are free (Hollander, 1995). It is immoral when information harmful to followers is deliberately concealed from them, when bribes are proffered, when nepotism is practiced, and when authority is abused. Ethical Criticisms of Transformational Leadership The concepts of leadership we endorse represent ideal types where transactional leadership rests upon transformational foundations and transformational leadership is enlivened and guided by an inner ethical core. Nonetheless, its ethics have been questioned despite the fact that transformational leadership was conceived as leadership which involved moral maturity (Kuhnert & Lewis, 1987) and the moral uplifting of followers (Burns, 1978). Meta-analytical evidence supports the generalizeable findings that transformational leadership is more effective, productive, innovative, and satisfying to followers than is transactional leadership (Lowe, Kroeck & Sivasubrahmaniam, 1996). People’s implicit theories of leadership are likely to be more transformational than transactional (Avolio & Bass, 1991) However, its ethics have been questioned. It has been suggested that transformational leadership: (1) lends itself to amoral puffery since it makes use of impression management (e.g., Snyder, 1987); (2) manipulates followers along a primrose path on which they lose more than they gain (e.g., White & Wooten, 1986); (3) encourages followers to go beyond their own self-interests for the good of the organization and even emotionally engages followers irrationally in pursuits of evil ends contrary to the followers’ best interests (e.g., Stevens, D’Intino, & Victor, 1995); (4) is antithetical to organizational learning and development involving shared leadership, equality, consensus and participative Transformational Leadership Behavior 193 decision-making (e.g., McKendall, 1993); (5) lacks the checks and balances of countervailing interests, influences and power to avoid dictatorship and oppression of a minority by a majority (e.g., Keeley, 1995); and (6) the distinction between authentic and pseudo transformational leadership is not applicable across cultures. Although the criticisms overlap, we analyze them in terms of four broad frameworks: a) traditional ethics of moral character and virtue as found in Socratic and Confucian traditions (criticism 1 above); b) the modern Western ethical agenda of individual liberty, utilitarian social choice, and distributive justice (criticisms 2, 3 and 4 above); c) providing for a balance of power and “due process” in anticipation of the breakdown in practice of ideal types of leadership and ethics (criticism 5 above); and d) authentic transformational leadership and cultural factors (criticism 6 above). MORAL CHARACTER, VIRTUE, AND TRANSFORMATIONAL LEADERSHIP In leadership, character matters. This is not to deny that evil people can bring about good things or that good people can lead the way to moral ruin. Rather, leadership provides a moral compass and, over the long term, both personal development and the common good are best served by a moral compass that reads true. In this section we draw some lessons from the traditions of the moral sage and social prophet which have enjoyed prominence in a wide variety of cultures. Whether visionary or ascetic, the sage and prophet have also widely been perceived as agents of change, as well as people to be emulated and as leaders of others, not followers. To be sure, moral leadership is not to be confused with occupying official positions of authority. In fact, the sage and prophet often held no official office and inveighed against the moral corruption of the “principalities and powers.” An approach to ethics based upon moral character and virtue enjoys an extraordinarily broad cross-cultural base in terms of the “framing narratives” that guide ethical discourse in cultural settings as diverse as Western and Confucian traditions. From Plato’s “philosopher king” to the virtuous Confucian minister of the State, the “moral sage” and the “superior person” are portrayed as both a font of wisdom and the embodiment of virtue, whose very presence and being brings about personal and social transformations. The moral development of the leader embraces individual, familial and spiritual dynamics of personality (Kanungo & Mendonca, 1996, pp. 59, 87ff., 98ff.; Fairholm, 1997, part V). The spiritual dimension underscores not only virtuous behavior but an attitude of openness to the transcendent meaning of human existence. Moral beliefs concerning a leader’s character are reliably associated with conventional morality as assessed by Bass (1956) include: being humble, being virtuous, obeying the dictates of one’s conscience, maintaining old friendships and forming new ones, being loyal, generous and forgiving, helping others, conforming to custom, and maintaining good faith. In what follows we recall the traditions of the ethics of virtue that undergird both Western and Confucian traditions. We confine ourselves to Plato’s Apology (Tredennick, 1969) and the Confucian Analects (Xin, 1994). In doing so, we are 194 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 well aware of the limitations of both Socratic and Confucian thought for the contemporary world in terms of worldview, social hierarchy and immobility, views of the human person, ideals of truth and so forth (Whitehead, 1933; deBary, 1991b). Yet, borrowing from Whitehead that all Western philosophy is but a footnote to Plato, both Socrates and Confucius imparted root metaphors and framing narratives of the moral person as a transforming person that have guided philosophical discourse ever since, both in the West and in the East. The Virtuous Person as Transformational Although there are many diverse elements of Chinese moral tradition that are frequently at odds with each other, there does seem to be some general agreement that among other things, the moral life rests upon foundations of individual virtue and that the individually virtuous person transforms others as well as the social environment (Schwartz, 1985; Lin, Rosemont, & Ames, 1995). Both Socrates and Confucius have come to epitomize leaders with authentic idealized influence. There is no doubt that over the centuries they have taken on heroic dimensions. Their framing narratives underscore a fundamental dynamic of leadership. Each proposed to his followers the highest ethical standards which they themselves implemented in their own lives. More important, in terms of authenticity, each was recognized as a sage and leader by others, not by self-proclamation. Historically, the central focus of ethical concern in Chinese traditions manifests a right ordering of personal relationships. Epitomized in Confucius’ “five relations,” (Taylor & Arbuckle, 1995; Tu, 1985, ch. 3). Chinese ethics emphasizes personal virtue and specify proper conduct in family, kinship, and friendship relations, as well as among social equals and between superiors and subordinates in sociopolitical organizations and institutions. The social and political order has always been seen as a moral issue and it plays a critical role in realizing humanity’s ethical destiny (Schwarz, 1985, p. 52; deBary, 1991a). The virtue of ren (human-heartedness, benevolence, love) and the virtue of yi (righteousness) are the grounding virtues of the moral life. They express the way (dao) that one existentially embraces. Ren is the lodestar that permeates every action of the superior person. The moral person in each tradition would sacrifice anything for the sake of virtue. For example, the Confucian moral tradition is strikingly clear about the relation of profits to moral virtue. From the Analects one reads: Confucius said, “Wealth and honor are what every person desires. But if they have been obtained in violation of moral principles, they must not be kept. Poverty and humble station are what every person dislikes. But if they can be avoided only in violation of moral principles, they must not be avoided. If a superior person departs from humanity (ren), how can s/he fulfill that name? A superior person never abandons ren, even for the lapse of a single meal. In moments of haste, one acts according to it. In times of difficulty or confusion, one acts according to it” (Analects, 4.5). In Socratic terms, one finds a striking similarity: the moral person does not “put money or anything else before virtue” (Apology, 42A). Transformational Leadership Behavior 195 Both Socrates and Confucius base their approach upon authentic inspirational motivation. Each proposes a transcendent vision of fulfillment, justice, and peace based upon the right ordering of relationships. Each is transcendent and grasps the “beyond in our midst,” a better future. Each transforms by invitation, not by coercion. Each manifests consistency between word and deed. The inspiration is simple: virtue is its own reward. The basic scenario of the moral sage in each tradition emphasizes virtue and moral character. In the days leading up to his condemnation to death, Socrates was taken up with a single question: how to be excellent at being human? He sharply criticized the pseudotransformational sophists—the purveyors of false wisdom—because they did not know themselves; even worse, they abandoned fidelity to the way of truth. While pretending to be wise, they were foolish. The Socratic enterprise is grounded in a relentless pursuit of the truth, in the development of wisdom and the cultivation of virtue. Indeed, Socrates himself transformed others precisely because of his fearless commitment to virtue. For Confucius, the moral sage (shengren) is the key person in bringing about personal righteousness and social justice. A superior person (jyundz) is a moral person, who walks the moral way and attempts to practice virtue through selfcultivation. Both the sage and the superior person live under the restraint of virtue and aim to transform society accordingly. A superior person is perforce a moral leader (Analects, 17:3). The common, inferior or small person (xiaoren) either does not know or does not follow the way and is not a positive moral force. Even though written texts idealize them, the commitment to authentic intellectual stimulation of their disciples is notable in each. Both Confucius and Socrates are memorable for their “ways of proceeding” (methodologies) that were based upon relentless questioning. For each moral wisdom was the highest prize. It was for his spirit of inquiry and transformative vision that Socrates was put to death for according to his words in Plato’s Apology: . . . it is the greatest good for a man every day to discuss virtue and the other things about which you hear me talking and examining myself and everybody else . . . the unexamined life is not worth living for a man (Treddenick, 1969, 36c; emphasis added). We do not find in either thinker a treatise on commerce and markets. In fact, they seem to take for granted the institutions of their day together with embedded social hierarchies. Yet for them, every individual had dignity and moral standing and this formed the basis for authentic individualized consideration. Each takes the interests of others seriously and is forgetful of self alone. Each facilitates a common good for all and a future for individuals that is worth sacrificing for. In both Socrates and Confucius we discover an almost tutorial or mentoring method that had as its focus “personal cultivation” as a “superior person” (Confucius) or a true “lover of wisdom” (Socrates). If individual interests are to be sacrificed, it is only to be done for the sake of attaining virtue and justice, not for wealth or for possessions or to serve the leader’s interests. In today’s world, Socrates and Confucius seem almost hopelessly naive, offering 196 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 a vision based on the premise that through personal cultivation guided by moral leaders people will develop strong moral character and embrace virtue above all other things and, in so doing, will transform themselves and society. Personal virtue and moral wisdom of the leader provide the checks and balances upon power and self-aggrandizement! From this simple framework of truth-wisdom-virtue a vision of the transforming power of the moral sage has flowed down through the ages. The heart of the moral enterprise is the development of good character, which is defined by commitment to virtue in all circumstances. This framework was integrated into Judaic-Christian traditions through personages such as Augustine, Aquinas, and Maimonides. In Judaic-Christian traditions, the moral sage (saint, holy person) exercises a transforming influence upon those all those whom s/he contacts. The moral sage is a leader. These traditions of the moral sage serve as a root metaphor and framing narrative of each respective culture’s value systems. In terms of cultural practices, however, the dynamics vary considerably . In China, for example, the morality of factionalism and personal networks (guanxi) are highly discussed (Pye, 1995), especially in light of recent economic reforms (Shanghai Investigative Group, 1995; Zhu & Ye, 1995). In all of this, based on Chinese sources themselves, it is the moral quality of leadership that is foremost in people’s minds. While the tradition of virtue ethics has been less prominent in philosophical traditions of modern Western rationalism, it remained very much alive in religious circles (MacIntire, 1981) and recently has found increasing applications to business ethics (Koehn, 1995; Maitland, 1997). With the renewed emphasis upon leadership in both strategic management and business ethics, the virtues and moral character of leaders have taken center stage. From the literature on transformational leadership, it is clear that there are many points of congruence between the “authentic moral sage” and the “authentic transformational leader.” Being a moral leader is more a creative art than science. Its hallmark is existential practice, where one engenders virtue in self, others and society though example and virtuous conduct. The “superior person” transforms relations between people in society to reflect the “way” of the “mandate of heaven.” What emerges from the above is that a moral person is a superior person precisely by his or her embrace of the way of virtue. The process of growth in virtue is one of creative transformation of self (Tu, 1985; deBary, 1991a; 1991b). But this is no individualist project—it occurs both within and for a fiduciary community. A person becomes virtuous within a community. A person becomes virtuous for the community—to “give all people security and peace.” (Xin, 1994, Analects, 14, 42) The true transformational leader is to be, in Confucian terms, a “superior person.” We examine this further in light of how a leader deals with impression management. Sophistry, Pretense, and Impression Management Impression management is the regulation of information about a vision, the organization, and the Self. The authentic transformational leader may remain ethical in using impression management to provide followers with “identity images” of trustworthiness, credibility, moral worth, innovativeness, esteem, and power (Gard- Transformational Leadership Behavior 197 ner & Avolio, 1998, p.40). Conversely, impression management may be the sophistry and pretense of the pseudo-transformational leader providing self glorification, “spin” on events, excuses, and the big lie. The criticism of its immorality reads as if it were directly taken from the Analects and from the Apology! To foster their influence and esteem among their followers, “transformational” persons, particularly those leaders who want to bolster their charismatic and inspirational image, engage in impression management. (Gronn, 1994). Gardner and Avolio (1998) note that many charismatic leaders orchestrate their presentations to frame, script and stage their performance. The presentations can be moral, amoral or immoral. For example, to maintain morale in the face of uncertainties, without sacrificing their virtuousness, competent leaders may send out messages to rally support. Evidence may be provided projecting an image of strength and decisiveness. On the other hand, morality will be tested when incompetent leaders focus all the attention on their strengths rather than their weaknesses, appeal to the fantasies of their followers, adopt the values they feel fit the implicit theories that followers have about ideal leadership, paint a vision of the future that is more fantasy than reality, and exaggerate the meaningfulness of the followers’ efforts. They are, in short, the “sophists” and “small persons” whom Socrates and Confucius condemned. The most telling difference between them and true moral leaders is that their puffery and self-aggrandizement emanates from them and their handlers, rather than from acclamation by the people who might choose to emulate them. There are differences between absolute truth-telling, the shading of facts, and the big lies; between emotional and intellectual appeals; and between objectivity and advocacy. The basic moral issues are captured in the virtues of authenticity, integrity, truthfulness, and credibility. Moral character and virtue are only adequately expressed in actions and behavior, not mere words. Moral philosophy in every culture and age has been riddled with falsity and pretense—“false prophets,” “angels of darkness” who clothe themselves in light, or “sophists”—in short, pseudo-transformational leaders whose specialty is rationalization of what they do. Nonetheless: the credibility of the leaders suffers when the truth is stretched. Trust in the leaders is risked and . . . trust is the single most important variable moderating the effects of transformational leadership on the performance, attitudes, and satisfaction of the followers (according to a large-scale survey by Podsakoff, Niehoff, Moorman, & Fetter (1993). Although distant leaders may be able to play with the truth longer than can close, immediate leaders . . . the trust so necessary for authentic transformational leadership is lost when leaders are caught in lies, when the fantasies fail to materialize, or when hypocrisies and inconsistencies are exposed (Bass, 1998a, p.173). When self-promotion and hype are excessive, they can create the impression of being manipulative, untrustworthy, overzealous and conceited (Gardner & Avolio, 1998). The relentless moral inquiry advocated by both Socrates and Confucius, as well as much religious tradition easily puncture such balloons. Impression management is the norm for advertising, publicity agents, and spin doctors seeking visibility and celebrity status for their clients. Morality may be a 198 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 matter of what is customary. Hype may be acceptable and controllable by the availability of full information and the concern for maintaining credibility and trust. Rhetorical skills which enhance appeals work best for leaders who are at a distance from their followers rather than close to their followers (Shamir, 1995). Leaders close to their followers lose trust readily with loss of reputation for not telling the truth. Truly transformational leaders, who are seeking the greatest good for the greatest number without violating individual rights, and are concerned about doing what is right and honest are likely to avoid stretching the truth or going beyond the evidence for they want to set an example to followers about the value of valid and accurate communication in maintaining the mutual trust of the leaders and their followers (Bass, 1998a, p. 174). Nonetheless, in a “lesser of two evils” type of argument, when no likely outcome in a particular situation is morally ideal, and the “second best” seems better than nothing, there may be instances when a moral leader may find it necessary to moderate the hard facts of a circumstance. The transformational leader can be hopeful and optimistic without being deceitful and perfidious. Heifetz (1994) suggests that it is ethically acceptable to delay telling patients they have a terminal illness until the physician feels the patients are ready to hear the prognosis. In trying to cope with the strong isolationist sentiments in 1940 in the United States and the emergency needs of Britain to keep open the North Atlantic supply routes being threatened by German successful submarine warfare, President Roosevelt initiated the “lending” of 50 U.S. Navy destroyers to the British rather than asking an isolationist Congress to give them the destroyers. Impression management can also be used defensively to protect the leader’s and the organization’s image and vision. Ronald Reagan was labeled the “Teflon President” because of his skill in deflecting criticism (Gardner & Avolio, 1998). THE MODERN ETHICAL AGENDA OF INDIVIDUAL LIBERTY, UTILITY AND JUSTICE To guide moral actions, modern Western ethics marks a change in Western tradition in its articulation of ethical criteria. While recognizing the moral heritage based upon faith, modern Western ethics was inspired to large degree by reason and by science. It has placed emphasis upon rules or principles to be followed in concrete situations; as a social ethic it has emphasized procedural justice. At one extreme, this new ethical agenda has assigned the highest value to individual liberty and the right of the individual both to determine his or her interests and to pursue them. When a leader appears to arbitrarily or surreptitiously influence the values of followers or to interfere with individual determination and pursuit of interests, it is judged morally objectionable. This issue goes to the heart of the dimensions that we ascribe to an authentic transformational leader. It questions whether it is possible to have “idealized influence” and “inspirational motivation” without controlling, dominating and otherwise diminishing the liberty of conscience, free choice and Transformational Leadership Behavior 199 self-determination of followers. It questions whether leadership that asks for the dedicated commitment of followers can, in the same breath, truly provide for individualized consideration of a follower’s interests. What Constitutes Ethical Leadership for Libertarians Libertarians such as Robert Nozick (1974) and Ayn Rand (1964) view any form of leadership that dominates followers as antithetical to core values. They see the exercise of liberty and free choice by the individual as the heart of the moral enterprise and the thwarting of such liberty by others as the major moral evil. For Nozick and Rand, life is inherently social, in the sense that one pursues happiness while rubbing up against others doing the same. However, their view of society is atomistic: society is an aggregate of self-contracting individuals who go about life both determining what is their happiness as well as how to pursue it. Based upon such a dynamic of liberty, social moral obligations derive only from free valid contracts and the truthfulness and promises they entail. Transactional leadership is valid to the extent that is consistent with a morally legitimate contract between affected individuals. In this view, transformational leadership can only be viewed with suspicion as a covert exercise at control and domination. Everyone should be his or her own transforming leader. Similar themes are sounded in areas of modern existentialist philosophy exemplified by Camus, Sarte and Marcel (e.g., Sartre, 1992). The heart of the moral project is to “choose oneself” and claim responsibility for the “self” that one is and for the relationships one has. To blindly follow others, to embrace their life projects rather than one’s own, to fail to exercise such freedom is a moral evil. Any form of leadership that entails abandoning the existential responsibility for one’s self is a plague. There is little moral role for leaders in such a context, except to enhance individual liberty, rights, and self-determination. Unfortunately, a good deal of the leadership literature is predicated upon the “leader-single follower” model and neglects the dynamics of “leader-diverse stakeholders.” There are certainly grounds for such a focus: A leader may be a catalytic agent of a follower’s personal development. The leader may be inspirational, may set an example to emulate, enhance liberty and choice, and facilitate the pursuits of one’s interests. However, the moral analysis of leadership is severely deficient if it is limited to such considerations. The leader is more than an “enhancer” of individual self-determination and is also more than the most effective calculator of the “greatest happiness of the greatest number.” What Constitutes Ethical Leadership in the Human Relations Movement The Human Relations Movement is at the other extreme of the libertarian ethical position. It espouses shared values, equality, power sharing, consensus, and participative decision-making. It sometimes equates individual leadership with dominant behavior, the power of authority, the giving of directions, the arbitrary making of decisions, and neglect of followers’ interests (Rost, 1991). We argue that such a notion of leadership is truncated and neglects the inspirational side of leadership and the legitimate needs for the power of position, authoritative initia- 200 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 tives, and leader and follower responsibilities. In community affairs, the Human Relations Movement takes the form of “grass roots” democracy. In organizations, it is seen in much of the theory and practices of Organizational Development (OD). It is also seen in sensitivity training that features the spontaneous emergence of the different roles of leadership in initially ambiguous situations. Learning how to give and receive feedback provides the means for the group to progress. For organizations to improve themselves, the seeds of reform reside in the values, interests and capabilities of their members. Organizations could improve if the members were empowered to try out their ideas and learn from feedback (Bass, 1968). The follower-leader distinction should wither away (Burns, 1998; Rost, 1991). Meeting the Moral Requirements of Libertarians and Human Relationists Both libertarian and human relations theories are predicated upon the moral dignity of each person—“everyone counts for one.” The core values of modern Western philosophy affirm individual liberty, inviolability of conscience, self-determination, and choice. Rawls (1971), echoing the tradition of Locke (1960), suggests that the liberty of individuals be maximized subject only to the condition that there be similar liberty for all others. Yet there is a notion of the common good that transcends a mere aggregate of individual goods. And, as all authority derives from the consent of the governed, the key problem is one of social choice, where the common good is provided for without infringing upon inalienable individual human rights. Individual and community exist in a delicate tension (Bellah et al., 1985). Ethically, this provides the grounds for discussions of civic virtue. We suggest that it also provides the grounds for the necessity of authentic transformational leadership. In what follows we discuss these issues on the basis of stakeholder theory, value congruence, agency and cooperative action. Stakeholder Theory It is helpful to place leadership in the context of contemporary stakeholder theory (Freeman, 1984), where a business firm or social organization is seen as composed of various constituencies (workers, customers, suppliers, managers, shareholders, local communities and so forth) all of whom have a legitimate strategic and moral stake in the organization. Yet they all may have different values and interests, different resources, and different sets of other stakeholder relationships deriving from other organizations. The core problem is to achieve the common good of the organization, while at the same time meeting the needs and safeguarding the rights of the various stakeholders. To achieve such an outcome, people must to some extent come together and cooperate on the basis of values, interests, and social choice. In such a view, the common good is not a mere aggregate of individual interests or a “greatest happiness” of a majority (Steidlmeier, 1992; pp. 66–71, 97–99, 260–263). It is a truly common good, that is only possible through civic virtue, cooperative action by all participants. Examples are found in the common goods of language and culture, of social peace and order and economic welfare. These are all social as well as individual goods and only attainable through cooperative action and the exercise of civic virtue. Transformational Leadership Behavior 201 It is in such an arena that one finds the greatest need for authentic transformational leadership, for only such leadership can help people develop the common interests of a community beyond the aggregate interests of its individuals. Authentic transformational leadership goes beyond the individual leader or follower, the aggregate of individual interests, or a calculus of greatest utility. Fundamentally, the authentic transformational leader must forge a path of congruence of values and interests among stakeholders, while avoiding the pseudo-transformational land mines of deceit, manipulation, self-aggrandizement, and power abuse. It is clear that leadership can become exploitative and abusive. In this regard, criticisms of transformational leadership stem from the human relations and organizational development literature in management and the individual/community dialectic in ethics (Bellah et al., 1985). Achieving Value Congruence Many find moral fault with transformational leadership when it motivates followers to go beyond their self-interests for the good of the group or organization. For Stevens, D’Intino and Victor (1995), transformational leaders influence the values of the members of an organization so they will adopt the leaders’ values as their own. This “fundamentally violates the democratic and humanistic values” of Organizational Development (p. 125). Under such influence, members are induced by the leadership to eschew their own best interests for the sake of the organization. For White and Wooten (1986), the democratic and humanistic values of OD conflict with the organizational values of productivity and efficiency. In dealing with such value conflicts, the transformational leader redirects the members into pursuing organizational efficiency instead of the members’ personal needs for income, security, affiliation, and career development (McKendall, 1993). Transformational leadership is seen as immoral in the manner that it moves members to sacrifice their own life plans for the sake the organization’s needs. There is no moral justification for the vision of the CEO becoming the future to be sought by the employees. Furthermore, democracy and humanism espoused by OD require that all such developments result from consensual participative leadership and the “fair settlement of values conflicts” (Stephens, D’Intino, & Victor, l995, p.135). For Rost (1991), the achievement of value congruence between the leader and the led demands consensual decisions, individual rights, and freedom of choice. Yet free choice narrowly conceived can result in the tragedy of the commons. In the ethics of Nozick and Rand, the solution is found by negotiating interests in terms of a contract and then fulfilling that contract. And indeed, “win-win” mathematically optimal solutions can be calculated (Brams & Taylor, 1996). Nonetheless, free choice can produce the Abilene Paradox in which each member of a family group does not want to go to Abilene. With free choice and each member believing he or she is going along with the wishes of the others, without the leadership to test for consensus, every member of the family goes to Abilene although no one wanted to go (Harvey, 1996). Contracts can be skewed in favor of those with more resources, contacts, and “bargaining power.” People often appreciate leadership that points the way out of dilemmas whether it comes from others within their own collective or from external authority. Leaders as divergent in their politics as Mao Zedong 202 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999 and Shimon Peres agreed that the task of leadership is to sense the problems of their followers and to articulate solutions that satisfied their interests. Rost (1991), reminiscent of libertarians Nozick and Rand, asks for leader-follower distinctions be erased to reach true participative democracy. Burns (1998) partially agrees and would substitute for leaders and followers, initiators, supporters and opponents. But the counter-arguments are that if everyone in a group is responsible for its leadership, no one is responsible. Furthermore, if a group is initially leaderless, the members compete with each other for leadership. One or more leaders emerge who initiate and propose more than the other members. Followers emerge who are responsive to the leaders, and non-responsive isolated persons remain who are passive (Bass, 1954). If trying to align the values of members of an organization with the good of all stakeholders is unethical , then it is unethical to contingently reward prison inmates with time off for good behavior or for transformational teachers to move pupils to internalize the values of good citizenship for the benefit of society. “Libertarians would agree that one’s life plans are paramount but they are close to espousing anarchy as are the OD extremists who charge immorality if the transformational leader intervenes in the individual follower’s life plans” (Bass, 1998a, p. 179). With this line of thinking that it is immoral to align the values and behavior of organizational leaders and followers, it then is unethical to send a soldier into harm’s way or to require an employee to avoid disclosing trade secrets of the former employer when the employee transfers to a competing firm. Authentic transformational leaders achieve value-congruence with followers by sharing with them what both will regard as right and good. Pseudo-transformational leaders achieve value-congruence by sharing unrealistic, unattainable, and exploitative expectations. Thus, we argue that there is much moral justification for authentic transformational leaders trying to achieve value-congruence between themselves and those they lead. When such congruence is achieved, both the leaders and the led are more satisfied emotionally (Meglino, Ravlin, & Adkins, 1989). The leaders are aided by acculturation processes, for as followers are socialized into an organization, the congruence increases between their values and the values of the organization (O’Reilly et al., l991). And the congruence results in leaders being seen by followers as more considerate, competent, and successful (Weiss, 1978). Additionally, followers are more satisfied with their assignments (Engelbrecht & Murray, 1993). Transformational leadership is value-centered. Leader and followers share visions and values, mutual trust and respect, and unity in diversity (Fairholm, 1991); however, the moral question remains. Are the followers coerced or unknowingly seduced into adopting the values of the leadership, or is the emerging congruence in the values of the leader and the led the result of their mutual influences? For human relationists, the coming together of the values of the leader and followers is morally acceptable only if it comes about from participative decision-making pursuing consensus between leaders and followers. Whether a leader is participative or directive, however, is not a matter of morality. It is a matter of the naiveté or experience of the followers and many other contextual considerations (Hersey & Blanchard, 1969). In many cases, directive leadership is more appropriate and Transformational Leadership Behavior 203 acceptable to all concerned (Bass, 1990). Ethically, values may be imparted directively to followers by authorities whom they respect and trust, and from whom they want guidance: priests, physicians, parents, and teachers. If the values espoused are immoral, then the authorities are pseudo-transformational. Social Utility and the Achievement of the Congruence of Interests: Transcendence, Agency and Trust In Western philosophy the notion of utility is often put forward as the proper ethical goal of social choice, provided that it does not transgress inalienable individual rights. For all that, it is not easy to specify what the term “utility” means. John Stuart Mill (1967, p. 900) identified it as the “greatest happiness principle” e.g. “. . . actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure, and the absence of pain. By unhappiness, pain, and the privation of pleasure.” Modern parlance is less precise and v...
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