Chapter 5 Values, Ethics, and Character Introduction In Chapter 4 we examined many facets of power and its use in leadership. Leaders can use power for good or ill, and a leader’s personal values and ethical code may be among the most important determinants of how that leader exercises the various sources of power available. That this aspect of leadership needs closer scrutiny seems evident enough in the face of the past decade’s wave of scandals involving political, business, and even religious leaders who collectively rocked trust in both our leaders and our institutions. Even in purely economic terms, in 2010 the Association of Certified Fraud Examiners estimated that businesses around the world lose $2.9 billion every year to fraudulent activity.1 Further, in the 2016 presidential election one party’s nominee consistently referred to his opponent as “Crooked Hillary” while his own character and ethics were themselves questioned throughout the election—and continue to be. In the face of this distressing situation, it is not surprising that scholarly and popular literature have turned greater attention to the question of ethical leadership.2 Leadership and “Doing the Right Things” In Chapter 1 we referred to a distinction between leaders and managers that says leaders do the right things whereas managers do things right. But what are the “right things”? Are they the morally right things? The ethically right things? The right things for the company to be successful? And who says what the right things are? Leaders face dilemmas that require choices between competing sets of values and priorities, and the best leaders recognize and face them with a commitment to doing what is right, not just what is expedient. Of course the phrase doing what is right sounds deceptively simple. Sometimes it takes great moral courage to do what is right, even when the right action seems clear. At other times, though, leaders face complex challenges that lack simple black-and-white answers. Whichever the 143 144 Part Two Focus on the Leader Leadership cannot just go along to get along. . . . Leadership must meet the moral challenge of the day. Jesse Jackson, American civil rights activist case, leaders set a moral example to others that becomes the model for an entire group or organization, for good or bad. Leaders who themselves do not honor truth do not inspire it in others. Leaders concerned mostly with their own advancement do not inspire selflessness in others. Leaders should internalize a strong set of ethics—principles of right conduct or a system of moral values. Both Gardner and Burns have stressed the centrality and importance of the moral dimension of leadership.3,4 Gardner said leaders ultimately must be judged on the basis of a framework of values, not just in terms of their effectiveness. He put the question of a leader’s relations with his or her followers or constituents on the moral plane, arguing (with the philosopher Immanuel Kant) that leaders should always treat others as ends in themselves, not as objects or mere means to the leader’s ends (which does not necessarily imply that leaders need to be gentle in interpersonal demeanor or “democratic” in style). Burns took an even more extreme view regarding the moral dimension of leadership, maintaining that leaders who do not behave ethically do not demonstrate true leadership. Whatever “true leadership” means, most people would agree that at a minimum it is characterized by a high degree of trust between leader and followers. Bennis and Goldsmith described four qualities of leadership that engender trust: vision, empathy, consistency, and integrity.5 First, we tend to trust leaders who create a compelling vision: who pull people together on the basis of shared beliefs and a common sense of organizational purpose and belonging. Second, we tend to trust leaders who demonstrate empathy with us—who show they understand the world as we see and experience it. Third, we trust leaders who are consistent. This does not mean that we only trust leaders whose positions never change, but that changes are understood as a process of evolution in light of relevant new evidence. Fourth, we tend to trust leaders whose integrity is strong, who demonstrate their commitment to higher principles through their actions. Another important factor affecting the degree of trust between leaders and followers involves fundamental assumptions people make about human nature. Several decades ago Douglas McGregor explained different styles of managerial behavior on the basis of people’s implicit attitudes about human nature, and his work remains quite influential today.6 McGregor identified two contrasting sets of assumptions people make about human nature, calling these Theory X and ­Theory Y. In the simplest sense, Theory X reflects a more pessimistic view of others. Managers with this orientation rely heavily on coercive, external control methods to motivate workers, such as pay, disciplinary techniques, punishments, and threats. They assume people are not naturally industrious or motivated to work. Hence it is the manager’s job to minimize the harmful effects of workers’ natural laziness and irresponsibility by closely overseeing their work and creating external incentives to do well and disincentives to avoid slacking off. Theory Y, by contrast, reflects a view that most people are intrinsically motivated by their work. Rather than needing to be coaxed or coerced to work productively, such people value a sense of achievement, personal growth, pride in contributing to their organization, and respect for a job well done. Peter Jackson, director of the Lord of the Rings film trilogy, seems to exemplify a Chapter 5 Values, Ethics, and Character There is nothing so fast as the speed of trust. Stephen Covey, American author and educator 145 Theory Y view of human nature. When asked, “How do you stand up to executives?” Jackson answered, “Well, I just find that most people appreciate honesty. I find that if you try not to have any pretensions and you tell the truth, you talk to them and you treat them as collaborators, I find that studio people are usually very supportive.” But are there practical advantages to holding a Theory X or Theory Y view? Evidently there are. There is evidence that success more frequently comes to leaders who share a positive view of human nature. Hall and Donnell reported findings of five separate studies involving over 12,000 managers that explored the relationship between managerial achievement and attitudes toward subordinates.7 Overall, they found that managers who strongly subscribed to Theory X beliefs were far more likely to be in their lower-achieving group. The dilemma, of course, is that for the most part both Theory X and Theory Y leaders would say they have the right beliefs and are doing the right things. This begs the question of what people generally mean by “right,” which in turn raises an array of issues involving ethics, values, moral reasoning, and the influence they have on our behavior. Values Values are “constructs representing generalized behaviors or states of affairs that are considered by the individual to be important.”8 When Patrick Henry said, “Give me liberty, or give me death,” he was expressing the value he placed on political freedom. The opportunity to continually study and learn may be the fundamental value or “state of affairs” leading a person to pursue a career in academia. Someone who values personal integrity may be forced to resign from an unethical company. Values are learned through the socialization process, and they become internalized and for most people represent integral components of the self.9 Thus values play a central role in one’s overall psychological makeup and can affect behavior in a variety of situations. In work settings, values can affect decisions about joining an organization, organizational commitment, relationships with coworkers, and decisions about leaving an organization.10 It is important for leaders to realize that individuals in the same work unit can have considerably different values, especially because we cannot see values directly. We can only make inferences about people’s values based on their behavior. An interesting perspective on the importance of the consistency between one’s behavior and their values can be seen in Highlight 5.1. Table 5.1 lists some of the major values that may be considered important by individuals in an organization. The instrumental values found in the table refer to modes of behavior, and the terminal values refer to desired end states.11 For example, some individuals value equality, freedom, and a comfortable life above all else; others may believe that family security and salvation are important goals. In terms of instrumental values, such individuals may think it is important always to act in an ambitious, capable, and honest manner, whereas others may think it is important only to be ambitious and capable. The point to keep in mind here is not just that different people often have different values. It is that their different values sometimes lead them to behave very differently. Consider, for example, whether 146 Part Two Focus on the Leader On the Danger of Making Small Compromises to Your Values HIGHLIGHT 5.1 What do you think? Is it easier to stick to your values 100 percent of the time or 98 percent of the time? That is a question professor Clay Christensen (an expert in business innovation) posed to his students at Harvard in an end-of-semester lecture requested by them. The students wanted to know whether and how the business principles he taught in class applied to their personal lives. One of the personal stories Christensen shared in the lecture occurred when he played on the Oxford University basketball team. It was a good team, and it had been a very successful year. They were going to play in the British equivalent of the NCAA tournament, and they made it to the final four. When Christensen saw the tourney schedule, however, he was chagrined: Their championship game would be played on a Sunday. Christensen told his students that because of deep religious convictions, TABLE 5.1 People Vary in the Relative Importance They Place on Values Source: Adapted from M. Rokeach, The Nature of Human Values (New York: Free Press, 1973). Glass, china, and reputation are easily crack’d, and never well mended. Benjamin Franklin he’d made a firm commitment never to play on a Sunday. At the time, his coach and teammates were incredulous; after all, it would be an exception, “just this once.” What difference would it really make? Christensen stood by his principles, though, and did not play in the championship game. The point he was making to his Harvard students was that, as counterintuitive as it might seem, it is easier to stick to your values 100 percent of the time than it is to stick to them 98 percent of the time. Christensen explained that, tempting as it might be to make an exception “just this once” because of extenuating circumstances, “you’ve got to define for yourself what you stand for and draw the line in a safe place.” Source: C. M. Christensen, “How Will You Measure Your Life? Don’t Reserve Your Best Business Thinking for Your Career,” Harvard Business Review, July/August 2010, pp. 46–51. Terminal Values Instrumental Values An exciting life Being courageous A sense of accomplishment Being helpful Family security Being honest Inner harmony Being imaginative Social recognition Being logical Friendship Being responsible someone decides to share with others (for example, the boss) a challenging but potentially constructive opinion about the organization. Whether the person speaks up or not depends, in part, on her values. If “sense of duty” were more important to the person than “getting ahead,” then she would be more likely to speak up than if the reverse were true.12 Various researchers have said that the pervasive influence of broad forces like major historical events and trends, technological changes, and economic Chapter 5 Values, Ethics, and Character 147 c­ onditions tends to create common value systems among people growing up at a particular time that distinguish them from people who grow up at different times.13,14,15 They attribute much of the misunderstanding that may exist between older leaders and younger followers to the fact that their basic value systems were formulated during different social and cultural conditions, and these analyses offer a helpful perspective for understanding how differences in values can add tension to the interaction between some leaders and followers. Zemke is another researcher who has looked at differences in values across generations and how those value differences affect their approaches to work and leadership.16 Following is his delineation of four generations of workers, each molded by distinctive experiences during critical developmental periods: The Veterans (1922–1943): Veterans came of age during the Great Depression and World War II, and they represent a wealth of lore and wisdom. They’ve been a stabilizing force in organizations for decades, even if they are prone to digressions about “the good old days.” The Baby Boomers (1942–1960): These were the postwar babies who came of age during violent social protests, experimentation with new lifestyles, and pervasive questioning of establishment values. But they’re graying now, and they don’t like to think of themselves as “the problem” in the workplace even though they sometimes are. Boomers still have passion about bringing participation, spirit, heart, and humanity to the workplace and office. They’re also concerned about creating a level playing field for all, but they hold far too many meetings for the typical Gen Xer. As the Boomers enter their retirement years, they take with them a work ethic characterized by ambition, an achievement orientation, and organizational loyalty.17 The Gen Xers (1961–1981): Gen Xers grew up during the era of the Watergate scandal, the energy crisis, higher divorce rates, MTV, and corporate downsizing; many were latchkey kids. As a group they tend to be technologically savvy, independent, and skeptical of institutions and hierarchy. They are entrepreneurial and they embrace change. Having seen so many of their parents work long and loyally for one company only to lose their jobs to downsizing, Xers don’t believe much in job security; to an Xer, job security comes from having the kinds of skills that make you attractive to an organization. Hence they tend to be more committed to their vocation than to any specific organization. In fact, the freeagency concept born in professional sports also applies to Xers, who are disposed to stay with an organization until a better offer comes along. Among the challenges they present at work is how to meet their need for feedback despite their dislike of close supervision. Xers also seek balance in their lives more than preceding generations; they work to live rather than live to work. Millennials (1982–2005): This is your generation, so any generalizations we make here are particularly risky! In general, however, Millennials share an optimism born, perhaps, from having been raised by parents devoted to the task of bringing their generation to adulthood; they are the children of soccer moms and Little League dads. They doubt the wisdom of traditional racial and sexual 148 Part Two Focus on the Leader categorizing—perhaps not unexpected from a generation rich with opportunities like having Internet pen pals in Asia with whom they can interact any time of the day or night. As they move into the workplace, Millennials are seeking teamwork, security, and work–life balance.18 As “digital natives,” Millennials bring to the workplace sharing habits born of extensive experience with social media; their comfort level with transparency of action may well have a profound long-term effect on the workplace.19 Of more concern, many college professors perceive Millennials to lack drive and a sense of accountability yet still expect positive evaluations despite marginal effort.20 Question authority, but raise your hand first. Bob Thaves, cartoonist Some research has looked at how the values of Gen Xers impact the leadership process at work. One clear finding from this research involved the distinctively different view of authority held by Xers than previous generations. “While past generations might have at least acknowledged positional authority, this new generation has little respect for and less interest in leaders who are unable to demonstrate that they can personally produce. In other words, this generation doesn’t define leading as sitting in meetings and making profound vision statements, but instead as eliminating obstacles and giving employees what they need to work well and comfortably.”21 Gen Xers expect managers to “earn their stripes” and not be rewarded with leadership responsibilities merely because of seniority. Often that attitude is interpreted as an indication of disrespect toward elders in general and bosses in particular. It may be more accurate, however, to characterize the attitude as one of skepticism rather than disrespect. Lest we overemphasize the significance of intergenerational differences, however, consider the results of a scientific sampling of over 1,000 people living in the United States that found little evidence of a generation gap in basic values. Indeed, the director of one of the largest polling organizations in the world called the results some of the most powerful he had seen in 30 years of public opinion research. They showed, he said, that even though young people have different tastes, they do not have a different set of values than their elders.22 Considering the weight of scholarly research on value differences across generations, it’s been said that the idea of a generational gap in values may be more popular culture than good social science.23 That is consistent with results from a study that found “overwhelming consistency” in the ways managers from different generations evaluated the importance of various leadership practices as well as proficiency in them. The study concluded that Boomers, Xers, and Millennials in the managerial workforce are much more similar in their views of organizational leadership than they are different. 24 A very personal example of similarity in values between two generations of leaders is presented in Profiles in Leadership 5.1. Moral Reasoning and Character-Based Leadership Until now our discussion has focused primarily on the content of people’s values— that is, on what people claim to value. Related to this are matters concerning how people think and act concerning matters of right and wrong, to matters of moral Chapter 5 Values, Ethics, and Character 149 Aung San Suu Kyi PROFILES IN LEADERSHIP 5.1 In 1991 Aung San Suu Kyi already had spent two years under house arrest in Burma for “endangering the state.” That same year she won the Nobel Peace Prize. She was not released from house arrest until 2010, and in 2012 was elected to Parliament. In 2016 she was named state counselor in Myanmar (formerly Burma), a position even above the country’s presidency. Suu Kyi has become an international symbol of heroic and peaceful resistance to government oppression. But maybe no longer to everyone: Some have criticized her role in Myanmar’s crackdown on religious minorities in the country, some even comparing the crackdown to ethnic cleansing. Until the age of 43, Suu Kyi led a relatively quiet existence in England as a professional working mother. Her life changed dramatically in 1988 when she returned to her native country of Burma to visit her sick mother. That visit occurred during a time of considerable political unrest in Burma. Riot police had recently shot to death hundreds of demonstrators in the capital city of Rangoon (the demonstrators had been protesting government repression). Over the next several months, police killed nearly 3,000 people who had been protesting government policies. When hundreds of thousands of pro-democracy demonstrators staged a protest rally at a prominent pagoda in Rangoon, Suu Kyi spoke to the crowd. Overnight she became the leading voice for freedom and democracy in Burma. Today she is the most popular and influential leader in her country. What prepared this woman, whose life was once relatively simple and contented, to risk her life by challenging an oppressive government? What made her such a magnet for popular support? Impressive as Aung San Suu Kyi is as a populist leader, it is impossible to understand her effectiveness purely in terms of her own personal characteristics. It is impossible to understand it independent of her followers—the people of Burma. Her rapid rise to prominence as the leading voice for democracy and freedom in Burma must be understood in terms of the living link she represented to the country’s greatest modern hero—her father. He was something of a George Washington figure in that he founded the Burmese Army in 1941 and later made a successful transition from military leadership to political leadership. At the height of his influence, when he was the universal choice to be Burma’s first president, he was assassinated. Suu Kyi was two years old. Stories about his life and principles indelibly shaped Suu Kyi’s own life, but his life and memory also created a readiness among the Burmese people for Suu Kyi to take up her father’s mantle of ­leadership. reasoning and character. We look first at moral reasoning and then turn our attention to the somewhat broader question of leader character. Moral reasoning refers to the process leaders use to make decisions about ethical and unethical behaviors. It does not refer to the morality of individuals per se, or their espoused values, but rather to the manner by which they solve moral dilemmas. Values play a key role in the moral reasoning process because value differences among individuals often result in different judgments regarding ethical and unethical behavior. In addition, fundamental and dramatic changes occur during young adulthood in how people define what is morally right or wrong. Those individuals whose moral judgment develops most are those who “love to learn, seek new challenges, who enjoy intellectually stimulating environments, who are reflective, who 150 Part Two Focus on the Leader make plans and set goals, who take risks, and who take responsibility for themselves in the larger social context of history and institutions, and who take responsibility for themselves and their environs.”25 Of course, not everyone fully develops their moral judgment. For example, research suggests that whereas most people believe they behave ethically, there is considerable reason to believe that they are significantly more biased than they think and that their actions fall short of their self-perceptions of ethical purity. Several unconscious biases affect our moral judgments, and paradoxically, the more strongly one believes that she is an ethical manager, the more one may fall victim to these biases.26 That is probably one reason why in business and government many organizations are developing practical programs to develop moral decision-making competence among their leaders.27 We take it for granted that the effectiveness of any such programs to develop moral decision making depends a lot on the quality of our understanding of the process itself, and recent research suggests that the psychological processes involved are more complicated than you might imagine. Perhaps this should not be surprising given that philosophers long have disagreed over the essential nature of moral judgment. Philosophers such as Plato and Kant believed mature moral judgment to be an essentially rational process whereas other philosophers, such as David Hume and Adam Smith, believed that emotions are at the heart of moral judgment (no pun intended!). Joshua Greene, a Harvard psychologist, finds research support for both views. He has proposed a dual-process theory of moral judgment wherein moral judgments dealing primarily with “rights” and “duties” are made by automatic emotional responses whereas moral judgments made on a more utilitarian basis are made more cognitively. Greene’s methodology is fascinating and includes brain-imaging studies while people are pondering dilemmas similar to those featured in Highlight 5.2.28,29 Studying Moral Judgment: The Trolley Problem HIGHLIGHT 5.2 The trolley problem, originally posed by philosopher Philippa Foot, involves two different dilemmas, a “switch” dilemma and a “footbridge” dilemma. In the switch dilemma a runaway trolley is racing toward five people who will be killed if the train does not change course. You can save these five people by diverting the train onto another set of tracks. That alternative set of tracks has only one person on it, but if you divert the train onto those tracks that person will be killed. Is it morally permissible to switch the train onto the other track and thus save five lives at the cost of one? According to Greene’s research, most people say yes. In the footbridge dilemma the trolley is again heading for five people. You happen to be standing next to a large man on a footbridge spanning the tracks, and if you push the man off the footbridge and into the path of the trolley you can save the other five people. Is it morally permissible to push the man into the path of the trolley? According to Greene, most people say no. These results pose a challenge for moral philosophers: Why does it seem right to most people to sacrifice one person to save five others in the first situation but not in the second? Greene’s answer to that puzzle is his dual-process theory mentioned in the text. Chapter 5 Values, Ethics, and Character 151 Although moral dilemmas like the trolley problem are useful for scholarly and heuristic purposes, the scenarios may seem far from our everyday experience. A far more common yet still challenging ethical dilemma involves choosing between two “rights.” Rushworth Kidder has identified four ethical dilemmas that are so common to our experience that they serve as models or paradigms:30 • Truth versus loyalty, such as honestly answering a question when doing so could compromise a real or implied promise of confidentiality to others. • Individual versus community, such as whether you should protect the confi• • dentiality of someone’s medical condition when the condition itself may pose a threat to the larger community. Short term versus long term, such as how a parent chooses to balance spending time with children now as compared with investments in a career that may provide greater benefits for the family in the long run. Justice versus mercy, such as deciding whether to excuse a person’s misbehavior because of extenuating circumstances or a conviction that he or she has “learned a lesson.” Kidder offers three principles for resolving ethical dilemmas such as these: ends-based thinking, rule-based thinking, and care-based thinking. Ends-based thinking is often characterized as “do what’s best for the greatest number of people.” Also known as utilitarianism in philosophy, it is premised on the idea that right and wrong are best determined by considering the consequences or results of an action. Critics of this view argue that it’s almost impossible to foresee all the consequences of one’s personal behavior, let alone the consequences of collective action like policy decisions affecting society more broadly. Even if outcomes could be known, however, there are other problems with this approach. For example, would this view ethically justify the deaths of dozens of infants in medical research if the result might save thousands of others? Rule-based thinking is consistent with Kantian philosophy and can be characterized colloquially as “following the highest principle or duty.” This is determined not by any projection of what the results of an act may be but rather by determining the kinds of standards everyone should uphold all the time, whatever the situation. In Kant’s words, “I ought never to act except in such a way that I can also will that my maxim should become a universal law.” Lofty as the principle may sound, though, it could paradoxically minimize the role that human judgment plays in ethical decision making by consigning all acts to a rigid and mindless commitment to rules absent consideration of the specific context of a decision (“If I let you do this, then I’d have to let everyone do it”). Care-based thinking describes what many people think of as the Golden Rule of conduct common in some form to many of the world’s religions: “Do what you want others to do to you.” In essence, this approach applies the criterion of reversibility in determining the rightness of actions. We are asked to contemplate proposed behavior as if we were the object rather than the agent, and to consult our feelings as a guide to determining the best course. 152 Part Two Focus on the Leader It’s important to emphasize that Kidder does not suggest any one of these principles is always best. Rather, he proposes that it would be a wise practice when considering the rightness of an action to invoke them all and reach a decision only after applying each to the specific circumstances one is facing and weighing the collective analyses. In other words, one principle may provide wise guidance in one situation whereas a different one may seem most helpful in a different one. There can be such critical yet subtle differences across situations that all three principles should be applied tentatively before any final course of action is chosen. Although most of the research and training applications pertaining to ethical behavior have focused on the essentially cognitive process of moral reasoning, it is important to recognize that the ability to make reasoned judgments about ethically laden situations does not guarantee a person will act ethically (witness the case of athlete Lance Armstrong, who after many years of public lies to the contrary finally admitted he had long taken performance-enhancing drugs to win his many Tour de France races; or consider the notorious and career-damaging “sexting” by New York politician Anthony Wiener). Research has identified four particular biases that can have a pervasive and corrosive effect on our moral decision making. One of these is implicit prejudice. Although most people purport to judge others by their merits, research shows that implicit prejudice often distorts their judgments. The insidious nature of implicit prejudice lies in the fact that people are by nature unconscious of it. When someone is queried, for example, about whether he or she harbors prejudice against, say, Eskimos, the individual answers based on his or her self-awareness of such attitudes. Some people are overtly racist or sexist, but offensive as such prejudice may be, it is at least something known to the person. In the case of implicit prejudice, however, judgments about some group are systematically biased without their awareness. This has been documented in a fascinating series of experimental studies ­designed to detect unconscious bias.31 These studies require people to rapidly ­classify words or images as “good” or “bad.” Using a keyboard, individuals make split-­second classifications of words like love, joy, pain, and sorrow. At the same time, they sort images of faces that are black or white, young or old, fat or thin (depending on the type of bias being examined). The critical results indicating implicit prejudice involve subtle shifts in reaction time in associating a particular image (such as a black face) with “good” words. People who consciously believe they have no prejudice or negative feelings about particular groups, say black Americans or the elderly, are nonetheless systematically slower in associating “good” words with those faces than they are in associating white or young faces with them. Another bias that affects moral decision making is in-group favoritism. Most of us can readily point to numerous favors and acts of kindness we’ve shown toward others, and we understandably regard such acts as indicators of our own generosity and kindly spirit. If the whole pattern of one’s generous acts were examined, however, ranging from things like job recommendations to help on a project, there is typically a clear pattern to those whom we’ve helped: Most of the time Chapter 5 Values, Ethics, and Character So near is a falsehood to truth that a wise man would do well not to trust himself on the narrow edge. Cicero, Roman politician 153 they’re “like us.” This may not seem surprising, but one needs to consider who’s not being helped: people “not like us.” In other words, when we may make an exception favoring a job applicant who is “like us,” and fail to make such an exception for an identical candidate who is “not like us,” we have effectively discriminated against the latter.32 Overclaiming credit is yet another way we may fool ourselves about the moral virtue of our own decision making. In many ways we tend to overrate the quality of our own work and our contributions to the groups and teams to which we belong.33 This has been widely documented, but one of the most telling studies was a 2007 poll of 2,000 executives and middle managers conducted by BusinessWeek magazine. One question in that poll asked respondents, “Are you one of the top 10 percent of performers in your company?” If people were objective in rating themselves, presumably 10 percent would have placed themselves in the top 10 percent. But that’s not what the results showed. Overall, 90 percent of the respondents placed themselves in the top 10 percent of performers!34 Finally, our ethical judgments are adversely impacted by conflicts of interest. Sometimes, of course, we may be conscious of a potential conflict of interest, as when you benefit from a recommendation to someone else (such as getting a sales commission for something that may not be in the consumer’s best interest). Even then, though, we misjudge our own ability to discount the extent to which the conflict actually biases our perception of the situation in our own favor.35 Other research strikes even more fundamentally at the idea that progress in understanding ethical behavior and increasing its likelihood or prevalence can adequately be based on a purely rational or reasoning-based approach.36 The nature of human information processing at the cognitive and neurological levels inherently involves nonconscious processes of association and judgment. Earlier in this section we introduced the term implicit prejudice, but the word implicit should not itself be deemed undesirable. Some of the most impressive—and distinctly human— aspects of our thinking are inherently tacit or implicit. For example, one line of study suggests that in making moral judgments people often follow something more like scripts than any formal and rational process of ethical reasoning. Behavioral scripts from one’s religious tradition (such as the Good Samaritan story) may be subconsciously triggered and lead to ethical behavior without explicit moral reasoning.37 Some go so far as to say that “moral reasoning is rarely the direct cause of ethical judgment.”38 Although that kind of perspective initially may seem to represent a pessimistic outlook on the possibility of truly improving ethical conduct, the reality is not so gloomy. Advocates of this view recognize that constructive things can be done to enhance ethical decision making. They also propose that a more complete answer lies not only in enhancing ethical and moral reasoning but also in approaches that enhance people’s awareness of their ways of construing or constructing moral dimensions of any situation. As noted earlier, just because we profess certain values or moral codes does not ensure we will act that way when confronted with situations that engage them. That is one reason it is vital for leadership development programs to broaden and deepen one’s sensitivity to the challenge and importance of ethical leadership (see 154 Part Two Focus on the Leader What Are Critical Elements of Developing Ethical Leadership? • HIGHLIGHT 5.3 Howard Prince and his associates have developed an impressive and comprehensive proposal for ethical leadership development at the undergraduate level. Here is a summary of what they view as critical elements of such a program: • • • Knowledge of leadership and ethics to provide a conceptual framework for understanding the practice of ethical leadership Opportunities to practice leadership roles requiring collective action where the learner has some responsibility for outcomes that matter to others Opportunities to study, observe, and interact with leaders, especially those who have demonstrated moral courage • • • Formal and informal assessment of the efforts of those learning to lead ethically Feedback to the learner, and opportunities for the learner to reflect on that feedback Strengthening the learner’s personal ethics and core values Inspiring students to think of themselves as leaders and to accept leadership roles and responsibilities, including students who had not previously thought of themselves as leaders Source: H. T. Prince, G. R. Tumlin, and S. L. Connaughton, “An Interdisciplinary Major in Ethical Leadership Studies: Rationale, Challenges, and Template for Building an Adaptable Program,” International Leadership Journal, Fall 2009, pp. 91–128. Highlight 5.3 which describes how this is approached in one undergraduate program). It should be no surprise that in general when people are confronted with situations they’ve never faced before, their behavior may be different than they might have predicted. Unexpected natural disasters or threatening engagements with ill-willed people easily come to mind as situations in which our own behavior can surprise us. But it’s also true that we don’t always behave as ethically as we think we would in morally demanding situations. In studying how accurately people can forecast their own ethical behavior, social psychologist Ryan Brown found that although their predictions were generally consistent with their personal values, their actual behavior often was not. The general design of these experiments placed individuals in situations where they could choose to behave rather selflessly or somewhat more selfishly. A typical situation required the individual to choose between one of two sets of anagrams to complete (ostensibly as part of a study having a different purpose): either a short set of anagrams that would take only about 10 minutes to complete, or a longer set that would take about 45 minutes to complete. Whichever set the subject did not select presumably would be given to another soon-to-arrive experimental subject. As it turned out, 65 percent of the participants acted selfishly, selecting the easier task for themselves. Maybe you’re saying to yourself, “Well, of course . . . you’d be crazy not to choose the easier one for yourself if given the chance to get the same credit for it.” Perhaps, but only 35 percent predicted that they would make a selfish choice. It seems that when we are asked to forecast our behavior, we take our actual personal values into account. But the results of these studies also make a persuasive case that our personal values represent how we think we ought to act rather than how we often actually do act.39 Chapter 5 Values, Ethics, and Character 155 Ask Yourself These Questions HIGHLIGHT 5.4 • An important foundation of behaving ethically at work is to become more self-conscious of one’s own ethical standards and practices. The National Institute of Ethics uses the following questions in its self-evaluation to facilitate that kind of self-­ reflection: • • • • • • • • • • • • • • How do I decide ethical dilemmas? Do I have set ethical beliefs or standards? If so, do I live by these beliefs or standards? How often have I done something that I am ashamed of? How often have I done things that I am proud of? Do I admit my mistakes? What do I do to correct mistakes that I make? Do I often put the well-being of others ahead of mine? Do I follow the Golden Rule? Am I honest? Do people respect my integrity? What are the three best things that have ever happened to me? What is the most dishonest thing I have ever done? Did I ever rectify the situation? What is the most honest thing I have ever done? All leaders should regularly ask themselves questions like these. Source: N. Trautman, Integrity Leadership, Director, ­National Institute of Ethics, www.ethicsinstitute.com. These results should give us some pause when, in the face of unethical behavior by others, we feel confident that we would have acted differently facing the same situation. Such apparent overconfidence seems to be caused by the bias of idealizing our own behavior, and this bias, ironically, may leave us ill-prepared to make the most ethical choices when we actually confront ethically challenging situations. Being aware of this bias is a good first step in avoiding the same trap. ­Highlight 5.4 offers some suggestions for this kind of self awareness.40 A related aspect of ethical conduct involves the mental gymnastics by which people can dissociate their moral thinking from their actions. As noted earlier, the ability to reason about hypothetical moral issues, after all, does not ensure that one will act morally; one’s moral actions may not always be consistent with one’s espoused values. Bandura, in particular, has pointed out several ways people with firm moral principles nonetheless may behave badly without feeling guilt or remorse over their behavior. We should look at each of these, especially since Bandura’s analysis has been validated in a major study of moral disengagement at work—in other words, why employees do bad things.41–43 Moral justification involves reinterpreting otherwise immoral behavior in terms of a higher purpose. This is most dramatically revealed in the behavior of combatants in war. Moral reconstruction of killing is illustrated dramatically by the case of Sergeant York, one of the phenomenal fighters in the history of modern warfare. Because of his deep religious convictions, Sergeant York registered as a conscientious objector, but his numerous appeals were denied. At camp, his battalion commander quoted chapter and verse from the Bible to persuade him that 156 Part Two Focus on the Leader under appropriate conditions it was Christian to fight and kill. A marathon mountainside prayer finally convinced him that he could serve both God and country by becoming a dedicated fighter.44 Another way to dissociate behavior from one’s espoused moral principles is through euphemistic labeling. This involves using cosmetic words to defuse or disguise the offensiveness of otherwise morally repugnant or distasteful behavior. Terrorists, for example, may call themselves “freedom fighters,” and firing someone may be referred to as “letting him or her go.” Advantageous comparison lets one avoid self-contempt for one’s behavior by comparing it to even more heinous behavior by others. (“If you think we’re insensitive to subordinates’ needs, you should see what it’s like working for Acme.”) Through displacement of responsibility people may violate personal moral standards by attributing responsibility to others. Nazi concentration camp guards, for example, attempted to avoid moral responsibility for their behavior by claiming they were merely carrying out orders. A related mechanism is diffusion of responsibility, whereby reprehensible behavior becomes easier to engage in and live with if others are behaving the same way. When everyone is responsible, it seems, no one is responsible. This way of minimizing individual moral responsibility for collective action can be a negative effect of group decision making. Through disregard or distortion of consequences, people minimize the harm caused by their behavior. This can be a problem in bureaucracies when decision makers are relatively insulated by their position from directly observing the consequences of their decisions. Dehumanization is still another way of avoiding the moral consequences of one’s behavior. It is easier to treat others badly when they are dehumanized, as evidenced in epithets like “illegal aliens” or “Satan-worshippers.” Finally, people sometimes try to justify immoral behavior by claiming it was caused by someone else’s actions. This is known as attribution of blame. How widespread are such methods of minimizing personal moral responsibility? When people behave badly, Bandura said, it is not typically because of a basic character flaw; rather, it is because they use methods like these to construe their behavior in a self-protective way.45 Perhaps, but there is a demonstrable crisis of confidence in leadership, 46 and even if character flaws per se among leaders are not the root cause, it is still telling that scholars have been giving increasing attention to that very concept of character. It’s rather remarkable, in fact, that a term that until recently was virtually ignored in the scholarly literature is now described as “an indispensable component of sustainable leadership performance”47 and “a central and defining feature of ethical leadership.”48 One reason may be belated recognition that the long-standing preoccupation with the narrower concept of moral judgment simply did not square with the fact that it explained only about 80 percent of the variance in ethical behavior. That has led Hannah and Avolio to recommend greater attention be paid to a concept they call moral potency.49 It has three main components: • Moral ownership: A felt sense of responsibility not only for the ethical nature of one’s own behavior but also for one’s commitment not to allow unethical Chapter 5 Values, Ethics, and Character • • It takes many good deeds to build a good reputation, and only one bad one to lose it. Benjamin Franklin, author, inventor, statesman 157 things to happen within their broader sphere of influence including others and the organization. Moral courage: The fortitude to face risk and overcome fears associated with taking ethical action. Moral efficacy: Belief or confidence in one’s capability to mobilize various personal, interpersonal, and other external resources to persist despite moral adversity. Riggio and his associates have taken a complementary approach to studying leader character in their focus on the virtues of prudence, temperance, fortitude, and justice as hallmarks of an ethical leader. And although they freely admit that this approach is in some ways “just” a renewed call to recognize age-old wisdom, their development of an assessment instrument (the Leadership Virtues Questionnaire) should generate new ways of studying and deeper ways of understanding these ideas.50 Another advance in the challenging task of assessing seemingly hard-to-measure constructs was the analysis of alternative approaches to measuring managerial integrity by Kaiser and Hogan.51 They suggest that the common method of measuring managerial integrity using coworker ratings of observed ethical behavior probably seriously underestimates the problem since it is relatively rare for managers to get caught in ethical lapses. As an alternative, they recommend assessing managerial integrity using what they call the dubious reputation approach. In essence, this approach asks subordinates (presumably the most likely group to see a manager’s “dark side”) to speculate on the likelihood that the manager would be likely to behave unethically, as distinguished from having directly observed such behavior. Character-Based Approaches to Leadership Can you be a good leader without being a good person? Does it make any sense to say, for example, that Adolf Hitler was an effective leader even if he was an evil person? In that sense, although some people might consider the phrase ethical leadership to be redundant, Avolio and his associates have defined ethical leadership as having two core components: the moral person and the moral ­manager.52 The moral person is seen as a principled decision maker who cares about people and the broader society.53 The actions of such people indicate they try to do the right things personally and professionally, and they can be characterized as honest, fair, and open. In addition, ethical leaders have clear ethical standards that they pursue in the face of pressure to do otherwise. More than being just moral people, ethical leaders are moral managers who “make ethics an explicit part of their leadership agenda by communicating an ethics and values message, by visibly and intentionally role modeling ethical behavior.”54 In recent years there has been a rekindling of interest in approaches to leadership that are inherently and explicitly based on the interdependence between effective leadership and certain value 158 Part Two Focus on the Leader systems. This is in bold contrast to decades of tradition in the social sciences of being self-consciously “values-free” in pursuit of objectivity. Two prominent approaches in this movement are described in greater detail here. Authentic Leadership The most important thing in acting is honesty. Once you’ve learned to fake that, you’re in. Samuel Goldwyn, early film producer Authentic leadership is grounded in the principle found in the familiar adage “to thine own self be true.” Authentic leaders exhibit a consistency among their values, their beliefs, and their actions.55 The roots of authentic leadership are also in various expressions of the humanistic movement in psychology including Maslow’s theory of self-actualization (see Chapter 9) and Carl Rogers’s concept of the fully functioning person.56 Central to both Maslow’s and Rogers’s theories is the idea that individuals can develop modes of understanding and interacting with their social environments so as to become more truly independent of others’ expectations of them (individual, group, and cultural) and guided more by the dictates of universal truths and imperatives. Such individuals manifest congruence between how they feel on the inside and how they act, between what they say and what they do. They have realistic self-perceptions, free from the blind spots and misperceptions of self that are common to most people. At the same time, they are accepting of themselves, their nature, and that of others too. Authentic leaders have strong ethical convictions that guide their behavior not so much to avoid doing “wrong” things as to always try to do the “right” things, including treating others with respect and dignity. They know where they stand on fundamental values and key issues. Authentic leaders behave as they do because of personal conviction rather than to attain status, rewards, or other advantages. As Avolio puts it, authentic leaders both are self-aware and self-consciously align their actions with their inner values.57 He points out that such authenticity is not just something you either “have or don’t have.” Authenticity as a leader is something that you must always be striving to enhance. It requires regularly identifying with your best self, checking in with your core values concerning your leadership agendas and operating practices, and verifying that your actions are aligned with the highest ethical and moral principles you hold. In this way, practicing authentic leadership becomes taking actions that serve high moral principles concerning relationships, social responsibilities, and performance standards.58 One way to understand authentic leadership is to contrast it with what might be called inauthentic leadership. If you think of a leader who “plays a role,” or puts on different acts with different audiences to manage their impressions, that is being inauthentic. For example, two detectives playing the roles of “good cop” and “bad cop” when interviewing a suspect are being inauthentic (you may believe that it makes sense for them to do so, but it’s inauthentic nonetheless). A boss who exaggerates his anger at an employee’s mistake to “teach a lesson” is being inauthentic. A leader who denies that her feelings were affected by critical feedback from her direct reports is being inauthentic. It must be recognized, of course, that authenticity in and of itself does not ensure effective leadership. One might point out, after all, that Hitler and Osama bin Laden were pretty open about their true values; so the nature of a leader’s character matters, too—not just whether one is “authentic” in one’s presentation of self. Chapter 5 Values, Ethics, and Character 159 The study of authentic leadership has gained considerable momentum in the last decade because of beliefs that (1) enhancing self-awareness can help people in organizations find more meaning and connection at work; (2) promoting transparency and openness in relationships—even between leader and followers—builds trust and commitment; and (3) fostering more inclusive structures and practices in organizations can help build more positive ethical climates.59 In contrast to stereotypical notions of the stoic “hero leader” who shows no weakness and shares no feelings, authentic leaders are willing to be viewed as vulnerable by their followers— a vital component of building a trusting leader–follower relationship. Equally important to building trust is a leader’s willingness to be transparent—in essence, to say what she means and mean what she says. A major review of the scholarly literature on authentic leadership concluded by noting that the “assumption of authentic leadership theory that people in organizations can effectively lead, and follow, in a way that enables them to express their own unique identity and style, has created a sense of excitement among leadership scholars and practitioners.”60 Some scholars, however, still view the excitement about authentic leadership with a bit of a jaundiced eye, as Highlight 5.5 points out. Servant Leadership Servant leadership has since 1970 described a quite different approach to leadership than that derived from a bureaucratic and mechanistic view of organizations Will Humility and Authenticity Get You to the Top? HIGHLIGHT 5.5 For the most part, the approaches to leadership presented in this chapter collectively call for leaders of the 21st century to be humble and authentic— servants, even, to others in their organizations. This stands in marked contrast to the style of leadership demonstrated by Donald Trump, who before he ran for president of the United States may have been best known for the saying, “You’re fired!” But is the Trump style truly out of favor in the 21st century? Stanford professor Jeffrey Pfeffer thinks not. Pfeffer finds, for example, that self-centered narcissists are more likely to get promoted than are their more humble counterparts. He also says the value of authenticity in the workplace is overrated. In fact, he says authenticity is hardly even possible. “Leaders don’t need to be true to themselves; in fact, being authentic is the opposite of what they should do.” Instead, he says, leaders need to do what the situation calls for, which involves playing a role and at least sometimes putting on an act. How helpful would it be, for example, if a military commander in combat told the troops, “I don’t know about you, but I’m scared as hell and not sure we’re going to make it?” It’s far more important for leaders to understand what a particular situation requires and to act in an appropriate way, says Pfeffer. “Each of us plays a number of different roles in our lives, and people behave and think differently in each of those roles, so demanding authenticity doesn’t make sense.” In his book, Pfeffer cites sociological research that has shown how the attitudes of employees change depending on their situation at work—whether they are rank-and-file employees or managers, for example, or whether they are members of a union. Research has also shown that a person’s personality can be affected and changed by his or her job and workplace conditions. Source: J. Pfeffer, Leadership BS: Fixing Workplaces and Careers One Truth at a Time (New York: HarperBusiness, 2015). 160 Part Two Focus on the Leader wherein workers are thought of as mere cogs in a machine. In the latter, the leader’s primary role may be understood as doing whatever it takes to ensure that things run smoothly, tasks are performed, and goals are met. This has commonly involved a hierarchical approach to leadership. From the contrasting perspective of servant leadership, the leader’s role is literally to serve others. The modern idea of servant leadership was developed and popularized by Robert Greenleaf after he read a short novel by Herman Hesse called Journey to the East.61,62 This is the mythical story of a group of people on a spiritual quest. Accompanying the party is a servant by the name of Leo, whose nurturing character sustained the group on its journey until one day he disappeared. The group fell apart and abandoned its quest when it realized that it was helpless without its servant. Finally, after many years of continued searching, the story’s narrator found the religious order that had sponsored the original quest. It turned out that Leo, whom the narrator had only known as a servant, was actually the order’s revered leader. To Greenleaf, this story meant that true leadership emerges when one’s primary motivation is to help others. The idea of servant leadership, of course, has been around for thousands of years. It stems at least in part from the teachings of Jesus, who instructed his disciples that servanthood is the essence of worthy leadership (such as through the example of him washing their feet). Ten characteristics are often associated with servant leaders. As you’ll see, most of them also seem in line with the idea of authentic leadership just described:63 • Listening: While all leaders need to communicate effectively, the focus is often • • • • • • • • • on communicating to others; but servant leadership puts the emphasis on listening effectively to others. Empathy: Servant leaders need to understand others’ feelings and perspectives. Healing: Servant leaders help foster each person’s emotional and spiritual health and wholeness. Awareness: Servant leaders understand their own values, feelings, strengths, and weaknesses. Persuasion: Rather than relying on positional authority, servant leaders influence others through their persuasiveness. Conceptualization: Servant leaders need to integrate present realities and future possibilities. Foresight: Servant leaders need to have a well-developed sense of intuition about how the past, present, and future are connected. Stewardship: Servant leaders are stewards who hold an organization’s resources in trust for the greater good. Commitment to others’ growth: The ultimate test of a servant leader’s work is whether those served develop toward being more responsible, caring, and competent individuals. Building community: Such individual growth and development is most likely to happen when one is part of a supportive community. Unfortunately numerous factors like geographic mobility and the general impersonal nature of large Chapter 5 Values, Ethics, and Character 161 ­ rganizations have eroded people’s sense of community. Thus it is the servant o ­leader’s role to help create a sense of community among people, and effective servant leaders are able to inspire in others a “circle of service in which followers learn to serve each other, customers, and the broader community.”64 Such a community or “serving culture” is epitomized in the world-class hotel chain ­Ritz-Carlton, with its core value of “ladies and gentlemen serving ladies and gentlemen.65,66 Not surprisingly, the concept of servant leadership has detractors as well as adherents. The most common criticism is that although the idea of servant leadership has a certain popular appeal in what we might call its “soft” form (for example, leaders should be more concerned about others’ well-being and development, should create a more developmental climate in their organizations, and should seek what’s good for the whole organization rather than just their own advancement), when taken more literally and extremely the concept seems to suggest that serving others is an end in itself rather than a means to other organizational goals and purposes. Perhaps not surprisingly, extreme forms of any approach to leadership may be losing credibility. Highlight 5.6 notes that even in the world of sports, the effectiveness of harsh coaches may be more legend than fact. Do “Nice Guys” Finish Last? HIGHLIGHT 5.6 Authentic leadership and servant leadership stand in dramatic contrast to a style we might call “bullying leadership.” Bullying leaders have populated all our organizations, from athletics to business to the military. For example, a CEO famed for turning struggling businesses around was nicknamed “Chainsaw” because of how he treated people in the process. And Bobby Knight, one of the most successful college basketball coaches of all time is known to have hit players and thrown chairs around. Perhaps Hall of Fame baseball player and manager Leo Durocher was right when he famously said, “Nice guys finish last.” Although bullying or abusive leadership has had its practitioners in all endeavors, the magazine Sports Illustrated (SI) looked specifically at its pervasiveness and longevity in athletics. We believe, however, that SI’s findings may well be generalizable to a range of organizational contexts. There is plenty of evidence of bullying behavior by athletic coaches. According to the SI article, 31 percent of Division I basketball players and 22 percent of football players reported that a coach “puts me down in front of others.” Only 39 percent of women’s basketball players agreed that “my head coach can be trusted.” One of the points of the SI article was that bullying behavior (for example, “in-your-face” hollering at players) may be the predictable result of many if not most bullying coaches having been treated that way themselves when they were players. Regardless of how bullying coaches adopted their behavior, the article notes that today’s college athletes are less responsive to being treated that way than athletes of earlier generations. The tide may be turning in part because, as increasing evidence indicates, the bullying style doesn’t actually work. In other words, Chainsaw Al and basketball coach Bobby Knight—and thousands of lesser-known examples—were probably successful in spite of their bullying behavior, not because of it. More and more research from the field of sports psychology indicates that athletes perform best in an environment in which they are respected and valued. Among other things, such an environment tends to make people “more flexible, resilient, and creative.” And perhaps that is the case not just in sports. Source: A. Wolff, “Abuse of Power,” Sports Illustrated, September 28, 2015, pp. 51–55. 162 Part Two Focus on the Leader A scholarly review of the theory of servant leadership noted an almost irreconcilable conflict between the ideas of servant leadership and the inherent realities of organizational life: Servant leaders develop people, helping them to strive and flourish. Servant leaders want those they serve to become healthier, wiser, freer, and more autonomous. Servant leaders serve followers. But managers are hired to contribute to organizational goal attainment. It would seem that these goals can be attained only by having subordinates (not followers) solving tasks that lead to productivity and effectiveness.67 Productivity and effectiveness, however, may not be inherently incompatible with servant leadership. For example, the results of one study suggest that servant leadership can impact profits by increasing trust in the organization, reducing customer turnover, and increasing employee satisfaction.68 Nonetheless, even if the ideas of servant leadership and the realities of organizational life are not irreconcilable, they at least present clear challenges. For example, just how empathetically can and should a leader act? Showing genuine empathy toward others is emotionally exhausting; it is self-limiting (people may have only “so much” empathy—showing it toward one person may limit the amount shown to another); and it even may erode ethics by causing lapses in ethical judgment (for example, by making us more willing to overlook someone else’s transgressions).69 The Roles of Ethics and Values in Organizational Leadership Subordinates cannot be left to speculate as to the values of the organization. Top leadership must give forth clear and explicit signals, lest any confusion or uncertainty exist over what is and is not permissible conduct. To do otherwise allows informal and potentially subversive “codes of conduct” to be transmitted with a wink and a nod, and encourages an inferior ethical system based on “going along to get along” or the notion that “everybody’s doing it.” Richard Thornburgh, former U.S. attorney general Just as individuals possess a set of personal values, so too do organizations have dominant values. Many times these values are featured prominently in the company’s annual report, website, and posters. These values represent the principles by which employees are to get work done and treat other employees, customers, and vendors. Whether these stated values represent true operating principles or so much “spin” for potential investors will depend on the degree of alignment between the organization’s stated values and the collective values of top leadership.70,71 For example, many corporate value statements say little about making money, but this is the key organizational priority for most business leaders and, as such, is a major factor in many company decisions. There is often a significant gap between a company’s stated values and the way the company operates. Knowing the values of top leadership can sometimes tell you more about how an organization operates than will the organization’s stated values. In any organization, the top leadership’s collective values play a significant role in determining the dominant values throughout the organization, just as an individual leader’s values play a significant role in determining team climate. Related to the notion of culture and climate is employee “fit.” Research has shown that employees with values similar to the organization or team are more satisfied and likely to stay; those with dissimilar values are more likely to leave.72,73 Thus one reason leaders fail is due not to a lack of competence but rather to a misalignment between personal and organizational values. Although the advantages of alignment between personal and organizational values may seem self-evident, leaders with dissimilar values may be exactly what some organizations need to drive change and become more effective. Chapter 5 Values, Ethics, and Character 163 Finally, values are often a key factor in both intrapersonal and interpersonal conflict. Many of the most difficult decisions leaders make are choices between opposing values. A leader who valued both financial reward and helping others, for example, would probably struggle mightily when having to make a decision about cutting jobs to improve profitability. A leader who highly valued financial reward and did not strongly value helping others (or vice versa) would have much less trouble making the same decision. Likewise, some leaders would have difficulties making decisions if friendships get in the way of making an impact, or when taking risks to gain visibility runs counter to maintaining comfortable levels of stability in a team or organization. Values also play a key role in conflict between groups. The differences between Bill O’Reilly and Al Franken, Israelis and Palestinians, Shiite and Sunni Muslims in Iraq, Muslims and Hindus in Kashmir, and Christians and Muslims in Kosovo are all based at least partly on differences in values. Because values develop early and are difficult to change, it’s usually extremely difficult to resolve conflicts between such groups. In sum, it’s vital for a leader to set a personal example of values-based leadership, and it is also important for leaders—especially senior ones—to make sure clear values guide everyone’s behavior in the organization. That’s likely to happen only if the leader sets an example of desired behavior. You might think of this as a necessary but not sufficient condition for principled behavior throughout the organization. If there is indifference or hypocrisy toward values at the highest levels, it is fairly unlikely that principled behavior will be considered important by others throughout the organization. Bill O’Brien, the former CEO of a major insurance company, likened an organization’s poor ethical climate to a bad odor one gets used to: Organizations oriented to power, I realized, also have strong smells, and even if people are too inured to notice, that smell has implications. It affects performance, productivity, and innovation. The worst aspect of this environment is that it stunts the growth of personality and character of everyone who works there.74 Carried to an extreme, this can lead to the kinds of excesses all too frequently evident during the past decade: Who knew the swashbuckling economy of the ’90s had produced so many buccaneers? You could laugh about the CEOs in handcuffs and the stock analysts who turned out to be fishier than storefront palm readers, but after a while the laughs became hard. Martha Stewart was dented and scuffed [and subsequently convicted]. Tyco was looted by its own executives. Enron and WorldCom turned out to be the twin towers of false promises. They fell. Their stockholders and employees went down with them. So did a large measure of faith in big corporations.75 Leading by Example: The Good, the Bad, and the Ugly One of the most quoted principles of good leadership is “leadership by example.” But what does it mean to exemplify ethical leadership and be an ethical role model? In one study, people from a range of organizations were interviewed about a person they knew who had been an ethical role model at work. Not all ethical role 164 Part Two Focus on the Leader models exhibited exactly the same qualities, but four general categories of attitudes and behaviors seemed to characterize the group:76 • Interpersonal behaviors: They showed care, concern, and compassion for others. • • • A man who wants to lead the orchestra must turn his back on the crowd. Max Lucado, preacher and author They were hardworking and helpful. They valued their relationships with others, working actively to maintain and sustain them. They tended to focus on the positive rather than the negative, and accepted others’ failures. Basic fairness: A specific quality of their interpersonal behaviors was manifested in the fairness shown others. They were not only open to input from others but actively sought it. They tended to offer explanations of decisions. They treated others respectfully, never condescendingly, even amid disagreements. Ethical actions and self-expectations: They held themselves to high ethical standards and behaved consistently in both their public and private lives. They accepted responsibility for and were open about their own ethical failings. They were perceived as honest, trustworthy, humble, and having high integrity. Articulating ethical standards: They articulated a consistent ethical vision and were uncompromising toward it and the high ethical standards it implied. They held others ethically accountable and put ethical standards above personal and short-term company interests. Arguably the most important example for anyone is his or her boss, and it raises difficult and complex challenges when a boss is a bad ethical role model. This becomes a challenge far greater than merely the hypocrisy inherent in being told, “Do as I say, not as I do.” It should go without saying that those in responsible positions have a particular responsibility to uphold ethical standards—but what if they don’t? What should you do when your own boss does not behave ethically? One approach to addressing these challenges is to reject the notion that organizational leadership is synonymous with formal position or hierarchical power in the organization, and to embrace instead the idea that all organizational members have a role in organizational leadership, including responsibility for ethical leadership in the organization. The term upward ethical leadership has been used to refer to “leadership behavior enacted by individuals who take action to maintain ethical standards in the face of questionable moral behaviors by higher-ups.”77 However, there are almost always reasons that may constrain employee behavior in such situations, including fear of retribution by bosses. More generally, do employees feel they have a safe outlet for raising ethical concerns about misbehavior by superiors in the organization? One variable that moderates an employee’s likelihood of raising such concerns is the general quality of ethical climate in the organization. Ethical climates refer to those in which ethical standards and norms have been consistently, clearly, and pervasively communicated throughout the organization and embraced and enforced by organizational leaders in both word and example. Unethical climates are those in which questionable or outright unethical behavior exists with little action taken to correct such behavior, or (worse) where such misbehavior is even Chapter 5 Values, Ethics, and Character It’s important that people know what you stand for. It’s equally important that they know what you won’t stand for. Mary H. Waldrip, author 165 condoned.78 It’s likely that employees experience some degree of moral distress whenever a manager is perceived to behave unethically, but the distress is usually greater in unethical climates. Even in ethical climates, however, some individuals may be more likely than others to address perceived ethical problems in an active and constructive manner. This inclination is likely to be enhanced among individuals who feel a sense of personal power. Employees tend to feel greater power, for example, if they believe they have attractive opportunities in the broader employment marketplace, if they’re respected for their credibility and competence in the organization, and if others within the organization are somewhat dependent on them. Organizations can further enhance the likelihood that employees will address perceived ethical problems in an active and constructive manner by nurturing a culture that is not all “command and control,” by fostering a sense of shared leadership more than hierarchy, and by valuing upward leadership.79 In the end, though, the most powerful way organizations can enhance the likelihood that employees will address ethical problems in a constructive manner is by proactively creating an ethical climate throughout the organization, and that is not just a responsibility of informal ethical leaders throughout the organization but inescapably a responsibility of formal organizational leaders. In fact, being in a formal leadership role imposes unique ethical responsibilities and challenges. Leaders more than followers (1) possess unique degrees of both legitimate and coercive power; (2) enjoy greater privileges; (3) have access to more information; (4) have greater authority and responsibility; (5) interact with a broader range of stakeholders who expect equitable treatment; and (6) must balance sometimes competing loyalties when making decisions.80 With conditions like these, which sometimes also may represent seductive temptations to excuse one’s own behavior, it is all the more important for leaders to take positive steps to create an ethical climate and hold themselves accountable to it. The dangers of not doing so are underscored in the downfall of Enron, described in Highlight 5.7. Creating and Sustaining an Ethical Climate So how do leaders do this? Several “fronts” of leadership action are needed to establish an ethical organizational climate:81 • Formal ethics policies and procedures: It’s sometimes said that “you can’t legislate • morality,” and the same may be said about legislating an ethical climate. Nonetheless, certain formal policies and procedures are probably necessary if not sufficient conditions for creating an ethical climate. These include formal statements of ethical standards and policies, along with reporting mechanisms, disciplinary procedures, and penalties for suspected ethical violations. Core ideology: A core ideology is basically an organization’s heart and soul. It represents the organization’s purpose, guiding principles, basic identity, and most important values. Starbucks is a good example. Starbucks’s guiding principles include (1) respect and dignity for partners (employees); (2) embracing diversity; (3) applying the highest standards of excellence to the business; 166 Part Two Focus on the Leader The Cult of Enron HIGHLIGHT 5.7 COMPELLING AND TOTALISTIC VISION Enron has come to represent the epitome of greed, ethical lapse, and spectacular failure in the business world. Its senior executives CEO Kenneth Lay and Jeffrey Skilling were blamed and prosecuted for the company’s collapse and callous indifference to the welfare of its employees. But the problems at Enron ran deeper than just the shoddy ethics and illegal actions of a few people at the top. A large part of the problem was the Enron culture itself that people throughout the company perpetuated. A root of the problem may be that Enron’s culture had many characteristics of a cult. Cults are characterized as having these four qualities: Hyperbole was rampant at Enron, as in banners proclaiming its vision of being the “world’s leading company.” Such exalted self-images encourage members to feel a sense of privilege and destiny. Employees were bombarded with messages that they were the best and the brightest. Their commitment to organizational success had an almost evangelistic fervor, and workweeks of even 80 hours were considered normal. • • • • Charismatic leadership. A compelling and totalistic vision. A conversion process. A common culture. Here are some of the ways that Enron’s corporate culture was like a cult. You can see how corporations as well as religious cults can encourage counterproductive conformity and penalize ­dissent. CHARISMATIC LEADERSHIP Enron’s leaders created an aura of charisma around themselves through ever more dramatic forms of self-promotion. Skilling, for example, cultivated his image as the Enron version of Darth Vader, even referring to his traders as “Storm Troopers.” The reputations of Skilling and other top executives at Enron were further reinforced by the ways in which they were lionized in respected business publications and by the opulent lifestyles they enjoyed. • CONVERSION AND INDOCTRINATION From an employee’s recruitment to Enron onward, communication was one-way: top-down. In the early stages this involved intense and emotionally draining rituals over several days wherein the recruit would hear powerful messages from the leaders. Group dynamics research has shown that such initiation rituals incline people to exaggerate the benefits of group membership in their minds. In Enron’s case the purpose was to ingrain in employees a single-minded personal commitment to continued high rates of corporate growth. COMMON CULTURE Despite all the effort put into selecting new employees and imbuing them with a sense of privilege, a punitive internal culture was also nurtured through which all the psychic and material benefits of being in Enron could be withdrawn on a managerial whim. Enron was quick to fire any of these “best and brightest” who did not conform; they could be branded, almost overnight, as “losers” in others’ eyes. This could happen for mere dissent with the corporate line as well as for failing to meet Enron’s exceedingly high performance goals. Source: D. Tourish and N. Vatcha, “Charismatic Leadership and Corporate Cultism at Enron: The Elimination of Dissent, the Promotion of Conformity, and Organizational Collapse,” Leadership 1, no. 4 (2005), pp. 455–80. (4) developing “enthusiastically satisfied customers”; (5) contributing positively to local communities and to the environment more generally; and (6) maintaining profitability.82 Integrity: The core ideology cannot be a mere set of boardroom plaques or other exhortations to behave well. The core ideology must be part of the fabric of Chapter 5 Values, Ethics, and Character • • 167 e­ very level and unit in the organization. Just as personal integrity describes an individual whose outward behavior and inward values are congruent and transparent, organizational integrity describes an organization whose pronouncements are congruent with its public and private actions at every level and in every office. And it is especially important that the highest level of executives in any organization is perceived as demonstrating high integrity.83 Structural reinforcement: An organization’s structure and systems can be designed to encourage higher ethical performance and discourage unethical performance. Performance evaluation systems that provide opportunities for anonymous feedback increase the likelihood that “dark side” behaviors would be reported, and thus discourage their enactment. Reward systems can promote honesty, fair treatment of customers, courtesy, and other desirable behaviors. If poorly designed, however, reward systems can also promote dishonesty. In an effort to increase the speed of repairs in its auto repair facilities, for example, Sears gave its mechanics a sales goal of $147 an hour. What that did, however, was to encourage the mechanics to overcharge for services and “repair” things that didn’t need repairing.84 Process focus: There also needs to be explicit concern with process, not just the achievement of tangible individual, team, and organizational goals. How those goals are achieved needs to be a focus of attention and emphasis too. When senior leaders set exceptionally high goals and show that they expect goals to be achieved no matter what it takes, employees may be tempted to engage in unethical behavior. And when leaders turn a blind eye even to seemingly small organizational transgressions, it can lead one down a slippery slope of moral disengagement that enables larger transgressions later on.85 Another way to think about the essence of creating an ethical climate in organizations is to recognize that it is not simply the sum of the collective moralities of its members. Covey has developed and popularized an approach called principlecentered leadership,86 which postulates a fundamental interdependence between the personal, the interpersonal, the managerial, and the organizational levels of leadership. The unique role of each level may be thought of like this: Personal: The first imperative is to be a trustworthy person, and that depends on both one’s character and competence. Only if one is trustworthy can one have trusting relationships with others. Interpersonal: Relationships that lack trust are characterized by self-protective efforts to control and verify each other’s behavior. Managerial: Only in the context of trusting relationships will a manager risk empowering others to make full use of their talents and energies. But even with an empowering style, leading a high-performing group depends on skills such as team building, delegation, communication, negotiation, and self-management. Organizational: An organization will be most creative and productive when its structure, systems (training, communication, reward, and so on), strategy, and vision are aligned and mutually supportive. Put differently, certain o ­ rganizational alignments are more likely than others to nurture and reinforce ethical behavior. 168 Part Two Focus on the Leader Only mediocrities rise to the top in a system that won’t tolerate wave ­making. Laurence J. Peter, author of The Peter Principle I do believe in the spiritual nature of human beings. To some it’s a strange or outdated idea, but I believe there is such a thing as a human spirit. There is a spiritual dimension to man which should be nurtured. Aung San Suu Kyi Summary Interestingly, the interdependence between these levels posited in principlecentered leadership is quite similar to recent conceptualizations of authentic leadership that also view it as a multilevel phenomenon. That is, authentic leadership can be thought of not only as a quality characterizing certain individual leaders but also as a quality of certain leader–follower dyads, groups or teams, and even organizations. Thus it makes just as much sense to talk about authentic organizations as it does to talk about authentic leaders.87 In concluding this chapter, we would be remiss not to explicitly address a question that has been implicit throughout it: Why should a company go to the trouble of creating and sustaining an ethical climate?88 One answer—perhaps a sufficient one—is because it’s the right thing to do. Sometimes, however, it’s too easy merely to assume that because something is the right thing to do there must be some costs or disadvantages associated with it. As is apparent from this chapter, it’s not easy to create and sustain an ethical environment in an organization; it takes conviction, diligence, and commitment. In some ways, such continuing focus and effort can be thought of as a cost. However, such focus and effort can pay dividends beyond an intrinsic sense of satisfaction. Johnson has identified a number of tangible positive outcomes for an organization that creates an ethical climate. One of these is greater collaboration within the organization: An ethical climate produces greater trust within an organization, and trust is a key element underlying collaboration. Another positive outcome can be improved social standing and improved market share for the organization. Eightyfour percent of Americans said that if price and quality were similar, they would switch allegiance to companies associated with worthy causes. Over $2 trillion is now invested in mutual funds focusing on companies demonstrating commitment to the environment, ethics, and social responsibility.89,90 There also is evidence that ethical companies often outperform their competitors.91 Similar tangible advantages were identified by Harvard professors John Kotter and James Heskett among companies that aligned espoused values with organizational practices. Such companies increased revenues by an average of 682 percent versus 166 percent for companies that didn’t.92 Paying attention to ethics and values can be good business. This chapter has reviewed evidence regarding the relationships among ethics, values, and leadership. Ethics is a branch of philosophy that deals with right conduct. Values are constructs that represent general sets of behaviors or states of affairs that individuals consider important, and they are a central part of a leader’s psychological makeup. Values affect leadership through a cultural context within which various attributes and behaviors are regarded differentially—positively or negatively. It’s not just the content of one’s beliefs about right and wrong that matters, though. How one makes moral or ethical judgments, or the manner by which one solves moral problems, is also important and is referred to as moral reasoning. Ethical action, of course, involves more than just the cognitive process of moral reasoning. That’s why people’s behavior does not always conform to how they ­predict they’ll act, or with their espoused values. Furthermore, the thorniest Chapter 5 Values, Ethics, and Character 169 ethical dilemmas people face tend not to involve choices between what is right or wrong but between two different “rights.” In such cases it is useful to apply several different principles for resolving moral dilemmas. Recently many approaches to leadership have explicitly addressed the interdependencies between effective leadership and particular value systems. The concepts of authentic leadership and servant leadership are among these. There also has been increased interest in recent years in the kinds of practices that can be instituted within organizations to enhance the likelihood that they will have ethical climates. Key Terms Questions ethics, 144 Theory X, 144 Theory Y, 144 values, 145 moral reasoning, 149 dual-process theory, 150 ethical dilemmas, 151 truth versus loyalty, 151 individual versus community, 151 short term versus long term, 151 justice versus mercy, 151 ends-based thinking, 151 rule-based thinking, 151 care-based thinking, 151 implicit prejudice, 152 in-group favoritism, 152 overclaiming credit, 153 conflicts of interest, 153 moral justification, 155 euphemistic labeling, 156 advantageous comparison, 156 displacement of responsibility, 156 diffusion of responsibility, 156 disregard, 156 distortion of consequences, 156 dehumanization, 156 attribution of blame, 156 moral potency, 156 moral ownership, 156 moral courage, 157 moral efficacy, 157 moral person, 157 moral manager, 157 authentic leadership, 158 servant leadership, 159 upward ethical leadership, 164 ethical climate, 164 unethical climate, 164 principle-centered leadership, 167 1. Do you think it always must be “lonely at the top” (or that if it is not, you are doing something wrong)? 2. How do you believe one’s basic philosophy of human nature affects one’s approach to leadership? 3. Identify several values you think might be the basis of conflict or misunderstanding between leaders and followers. 4. Can a leader’s public and private morality be distinguished? Should they be? 5. Can a bad person be a good leader? 6. Are there any leadership roles men and women should not have equal opportunity to compete for? 7. What is the relationship between an individual’s responsibility for ethical behavior and the idea of organizational ethical climate? Does focus on the latter diminish the importance of the former or reduce the importance of individual accountability? 8. Could two different groups have quite different ethical climates if the same people were members of both? 170 Part Two Focus on the Leader Activities 1. Each person should select his or her own 10 most important values from the following list, and then rank-order those 10 from most important (1) to least important (10). Then have an open discussion about how a person’s approach to leadership might be influenced by having different value priorities. The values are achievement, activity (keeping busy), advancement, adventure, aesthetics (appreciation of beauty), affiliation, affluence, authority, autonomy, balance, challenge, change/variety, collaboration, community, competence, competition, courage, creativity, economic security, enjoyment, fame, family, friendship, happiness, helping others, humor, influence, integrity, justice, knowledge, location, love, loyalty, order, personal development, physical fitness, recognition, reflection, responsibility, self-respect, spirituality, status, and wisdom. 2. Explore how the experiences of different generations might have influenced the development of their values. Divide into several groups and assign each group the task of selecting representative popular music from a specific era. One group, for example, might have the 1950s, another the Vietnam War era, and another the 1990s. Using representative music from that era, highlight what seem to be dominant concerns, values, or views of life during that period. Minicase Balancing Priorities at Clif Bar Gary Erickson is a man of integrity. In the spring of 2000 Erickson had an offer of more than $100 million from a major food corporation for his company Clif Bar Inc. He had founded Clif Bar Inc. in 1990 after a long bike ride. Erickson, an avid cyclist, had finished the 175-mile ride longing for an alternative to the tasteless energy bars he had brought along. “I couldn’t make the last one go down, and that’s when I had an epiphany—make a product that actually tasted good.” He looked at the list of ingredients on the package and decided he could do better. He called on his experience in his family’s bakery, and after a year in the kitchen, the Clif Bar— named for Erickson’s father—was launched in 1992. Within five years sales had skyrocketed to $20 million. He considered the $100 million offer on the table and what it meant for his company and decided against the deal. He realized that the vision he had for the company would be compromised once he lost control, so he walked away from the $100 million deal. He has stuck to his vision and values ever since. His commitment to environmental and social issues are evident in everything he does. On the environmental front, his company has a staff ecologist who is charged with reducing Clif Bar’s ecological footprint on the planet. More than 70 percent of the ingredients in Clif Bars are organic. A change in packaging has saved the company (and the planet) 90,000 pounds of shrink-wrap a year. And the company funds a Sioux wind farm to offset the carbon dioxide emissions from its factories. On the social side, Erickson launched a project called the 2,080 program (2,080 is the total number of hours a Chapter 5 Values, Ethics, and Character 171 full-time employee works in one year). Through the 2,080 program employees are encouraged to do volunteer work on company time. Recently Erickson agreed to support (with salaries and travel expenses) employees who wanted to volunteer in developing countries. Erickson is also committed to his team. He thinks about things like, “What should our company be like for the people who come to work each day?” He sees work as a living situation and strives to make Clif Bar Inc.’s offices a fun place to be—there are plenty of bikes around; a gym and dance floor; personal trainers; massage and hair salon; a game room; an auditorium for meetings, movies, and music; dog days every day; and great parties. As the company grows, however, maintaining such values may not be easy. According to Erickson. “We’re at a point where we have to find a way to maintain this open culture while we may be getting bigger,” says Shelley Martin, director of operations. “It’s a balancing act.” 1. Without knowing Gary Erickson’s age, where would you guess he falls in the four generations of workers as delineated by Zemke? 2. Consider the key work values in Table 5.1. Recalling that leaders are motivated to act consistently with their values, what values appear to be most important to Gary Erickson? Sources: http://www.fortune.com/fortune/smallbusiness/managing/articles/0,15114,487527,00 .html; http://www.clifbar.com; The Costco Connection, “Marathon Man,” July 2004, p. 19. End Notes 1. C. Moore, J. R. Detert, L. K. Trevino, V. L. Baker, and D. M. Mayer, “Why Employees Do Bad Things: Moral Disengagement and Unethical Behavior,”Personnel Psychology 65 (2012), pp. 1–48. 2. M. E. Brown and L. K. Trevino, “Ethical Leadership: A Review and Future Directions,”The Leadership Quarterly 17 (2006), pp. 595–616. 3. J. W. Gardner, On Leadership (New York: Free Press, 1990). 4. J. M. Burns, Leadership (New York: Harper & Row, 1978). 5. W. Bennis and J. Goldsmith, Learning to Lead (Reading, MA: Perseus Books, 1997). 6. D. McGregor, Leadership and Motivation (Cambridge, MA: MIT Press, 1966). 7. J. Hall and S. M. Donnell, “Managerial Achievement: The Personal Side of Behavioral Theory,” Human Relations 32 (1979), pp. 77–101. 8. L. V. Gordon, Measurement of Interpersonal Values (Chicago: Science Research Associates, 1975), p. 2. 9. W. L. Gardner, B. Avolio, F. Luthans, D. May, and F. Walumbwa, “‘Can You See the Real Me?’ A Self-Based Model of Authentic Leader and Follower Development,” Leadership Quarterly 16 (2005), pp. 343–72. 10. R. E. Boyatzis and F. R. Skelly, “The Impact of Changing Values on Organizational Life,” in Organizational Behavior Readings, 5th ed., ed. D. A. Kolb, I. M. Rubin, and J. Osland (Englewood Cliffs, NJ: Prentice Hall, 1991), pp. 1–16. 11. M. Rokeach, The Nature of Human Values (New York: Free Press, 1973). 172 Part Two Focus on the Leader 12. W. A. Gentry, K. L. Cullen, J. J. Sosik, J. U. Chun, C. R. Leupold and S. Tonidandel, “Integrity’s Place among the Character Strengths of Middle Level Managers and TopLevel Executives,” The Leadership Quarterly 24 (2013), pp. 395–404. 13. Boyatzis and Skelly, “The Impact of Changing Values on Organizational Life.” 14. M. Maccoby, “Management: Leadership and the Work Ethic,” Modern Office Procedures 28, no. 5 (1983), pp. 14, 16, 18. 15. M. Massey, The People Puzzle: Understanding Yourself and Others (Reston, VA: Reston, 1979). 16. R. Zemke, C. Raines, and B. Filipczak, Generations at Work: Managing the Class of Veterans, Boomers, Xers, and Nexters in Your Workplace (New York: AMA Publications, 2000). 17. C. S. Alexander and J. M. Sysko, “A Study of the Cognitive Determinants of Generation Y’s Entitlement Mentality,” Academy of Educational Leadership Journal 16 (2012), pp. 63–68. 18. N. Howe and W. Strauss, “The Next 20 Years: How Customer and Workforce Attitudes Will Evolve,” Harvard Business Review, July/August (2007), pp. 41–51. 19. A. McAfee, “How Millennials’ Sharing Habits Can Benefit Organizations,” Harvard Business Review, November 2010, p. 24. 20. Alexander and Sysko, “A Study of the Cognitive Determinants of Generation Y’s Entitlement Mentality.” 21. J. J. Deal, K. Peterson, and H. Gailor-Loflin, Emerging Leaders: An Annotated Bibliography (Greensboro, NC: Center for Creative Leadership, 2001). 22. E. C. Ladd, “Generation Gap? What Generation Gap?” The New York Times, December 9, 1994, p. A16. 23. F. Giancola, “The Generation Gap: More Myth Than Reality,” endnote 22, Resource Planning 29, no. 4 (2006), pp. 32–37. 24. W. A. Gentry, T. L. Griggs, J. J. Deal, S. P. Mondore, and B. D. Cox, “A Comparison of Generational Differences in Endorsement of Leadership Practices with Actual Leadership Skill Level,” Consulting Psychology Journal: Practice and ...
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