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CHAPTER TWELVE
LEADERSHIP ETHICS
AND DIVERSITY
© Prentice Hall 2006
12-1
Learning Objectives
After reading this chapter, you should be able to
do the following:



Explain why ethical leadership is
so important in organizations.
Describe major ethical issues
that leaders face and
approaches for addressing those
issues.
Explain how leaders can create
an ethical climate in their
organization.
© Prentice Hall 2006
12-2
Learning Objectives
After reading this chapter, you should be able
to do the following:



Describe the role of spirituality
灵性 (língxìng) in creating an ethical
organizational climate.
Explain the competitive and
advantages of diversity 多样
(duōyàng) for organizations.
Describe leadership strategies and
behaviors for creating a
multicultural 多元文化 (duōyuán
wénhuà) organization.
© Prentice Hall 2006
12-3
An Example of Leadership Ethics
The collapse of Enron
 Enron executives developed a
deceiving 欺骗 (qīpiàn) plan with bad
partnerships in a newly created
investment 投资 (tóuzī) company

The executives had encouraged and
modeled an organizational culture of
individualism, innovation, aggressive
cleverness, and excess at the
expense of compassionate, honest,
and responsible leadership.
© Prentice Hall 2006
12-4
An Example of Leadership Ethics
The collapse of Enron
 These unethical leaders
demonstrate the importance of
leadership in establishing an
ethical climate in an
organization.
 Leaders are the prime example
that followers want follow when
it comes to ethical or unethical
behavior
© Prentice Hall 2006
12-4
Ethics and Leadership



Ethics is the study of morality 道德
(dàodé) and the moral choices people
make in their relationships with others.
Ethics concerns how we should behave
表现 (biǎoxiàn) in the roles that
society gives us.
Leaders are often in roles that can
determine the well-being of others and
they sometimes influence the broader
good.


technically good (effective)
morally good.
© Prentice Hall 2006
12-5
Power
Power is the basis for a leader’s
influence on followers
 the more power a leader has,
the more likely that followers
will comply 执行 (zhíxíng) with
the leader’s wishes
 the greater a leader’s power, the
greater the potential for abuse
© Prentice Hall 2006
12-6
Corrupting 败坏 (bàihuài)
influences of power
 Power
may become desired
as an end in itself and be
sought after or looked for at
any cost
 Power
differences may cause
followers to give the leader
the wrong feedback and
make the leader feel better
than they are.
© Prentice Hall 2006
12-7
Corrupting influences of power
 The
leader may not value
followers’ worth and avoid
contact with followers or
treat them bad.
A leader’s failure to not do the
right things or their abuse of
power causes a loss of
credibility and trust and does
terrible damage to the leader
and his followers
12-7
© Prentice Hall 2006
Moral 道德 (dàodé) Consistency 一致
性 (yīzhì xìng)
If leaders’ behavior does not match
their values, they will lose the trust
of their followers and colleagues
• A leader’s moral problems are
open for people to see.
Leaders who do not behave
consistently with their stated
ethical values risk being labeled
hypocrites 伪君子 (wèijūnzǐ)
© Prentice Hall 2006
12-8
Ethical Issues for Leaders
Moral Standards
Power
Moral
Mistakes
Ethical Issues for
Leaders
Moral
Consistency
Ethics and
Effectiveness
© Prentice Hall 2006
12-9
Approaches to Ethical Behavior
Moral
Learning
Efforts to
Be True
Virtue Ethics
High moral
Character results
In ethical
behavior
Right Behavior
Follow universal
moral laws
Approaches to
Ethical
Behavior
Utilitarianism
功利主义
gōnglì zhǔyì
Greatest good
For the most
people
Altruism
利他主义 lìtā zhǔyì
Concern for others
© Prentice Hall 2006
12-9
Creating an Ethical Climate
Role modeling important
values and behaviors.
Spiritual awareness
as a guide to action
Directing ethical
policies and practices
Creating an
Ethical Climate
Socially responsible
charismatic/transformational
leadership.
Rewarding ethical
and punishing
unethical behavior.
Conducting participative
discussions of ethical actions.
© Prentice Hall 2006
11-10
Charismatic/Transformational
Leadership and Ethics
Charismatic/transformational leaders are
considered unethical when their behavior
reflects a self-serving attitude rather than a
concern and care for others.
Some charismatic/transformational leaders
behave unethically because they wrongly
believe moral requirements do not apply to
them.
Transformational leaders sometimes think
followers do not see that they are
behaving wrongly or they consider
themselves as
“above the law”.
© Prentice Hall 2006
12-11
Spirituality 灵性 (língxìng) p. 325, 326




Spirituality is part of our nature as
humans,
The content of our work and the
context (environment) help
determine our total work experience,
the work context and/or content
today are often hurts the human
spirit and may be getting worse,
Embracing spirituality at work may
help counteract these hurtful trends
and benefit organizations, their
members, and communities
© Prentice Hall 2006
12-12
Spirituality 灵性 (língxìng)
Spirituality is an awareness 意识
yìshí of the human need to grow
toward a vision of an ideal self. This
growth process is personal to
everyone.
 A spiritually healthy person accepts
themselves as they are but strives to
become more like their ideal self.
 For many leaders this means making
higher order values part of their
leadership behavior

© Prentice Hall 2006
12-12
Spirituality 灵性 (língxìng)

Two processes necessary to use
spirituality at work:
1. Self-reflection – ways to think about
the inner self such as meditation 冥想
míngxiǎng or prayer.
 2. Connection – The need to relate to
something external like a higher power,
or God.

Leader practices include prayer,
meditation both as a group and as
individuals and rely on faith to
© Prentice Hall 2006
guide
12-12
Spirituality 灵性 (língxìng)
their self-reflection and connect them
with outside source of guidance and
protection.
Many people see that religion 宗教
zōngjiào and spirituality cannot be
separated.
Religions view spirituality as a focus or
connection to God, Mohammed, Jesus,
Buddah or Allah.
© Prentice Hall 2006
12-12
Spirituality 灵性 (língxìng)
Researchers have concluded that
spirituality in leadership can improve
creativity, innovation (new ideas),
teamwork, decision-making, morale,
integrity, values and ethics in
organizations.
There is also a personal satisfaction
and peace that comes from a belief or
faith in something beyond one’s own
self.
© Prentice Hall 2006
12-12
Diversity多样化 (duōyàng huà)
Diversity refers to the
multiple social, cultural,
physical, and environmental
differences among people
that affect the way they
think, feel and behave
© Prentice Hall 2006
12-13
Diversity多样化 (duōyàng huà)
Diversity includes race, ethnicity,
gender (male-female), age,
mental & physical abilities,
religion and social class. How we
look at these differences are
influenced by our culture.
Culture tells us a lot about who
we are and how we should
behave.
© Prentice Hall 2006
12-13
Diversity多样化 (duōyàng huà)
Different cultures deal with
ethical issues in different ways.
What might be acceptable in one
culture might be totally different
in another culture.
One such example is bribery
行贿 (Xínghuì), which is accepted in
African, Asian and Middle Eastern
countries but not in the US.
© Prentice Hall 2006
12-13
Diversity多样化 (duōyàng huà)
Diverse cultures provide us with
new information, ideas and ways
of dealing with life and people.
One key benefit of diversity is
that it allows companies to hire
the best people available for a
job.
© Prentice Hall 2006
12-13
Diversity 多样化 (duōyàng huà) and
barriers 障碍 (zhàng'à)
The challenge of this millennium is to unify
all the diverse groups of people in the
world within an organization.
Dealing with barriers to diversity:
 Ethnocentrism: 民族中心主义
(mínzú zhōngxīn zhǔyì) is looking at the world
from our own perspective.
 Stereotypes: 定型 (dìngxíng) Looking at all
people from the same group as exactly the
same.
 Prejudice: 偏见 (piānjiàn) Thinking bad
about a group of people without knowing
12-12
about them. © Prentice Hall 2006
Competitive Advantages
of Diversity
Outstanding Human
Resources
Cost Savings
From Experience
At Integration
Competitive Advantages
of Diversity
Effective
Marketing
Strategies
Creative Ideas
And Solutions
To Problems
Flexibility in
Adapting to
Environment
© Prentice Hall 2006
12-14
Leadership for Diversity
Rewarding and
recognizing
those who
promote and
participate in
diversity
programs.
Directing all employees
to participate in
diversity training
Participating in training
and in discussions on
diversity issues and
programs.
Leadership
for Diversity
Supportiveness
through
creation of
flexible
personnel
policies
Expanding boundaries to
help minorities build
support groups.
© Prentice Hall 2006
12-15
Chapter Summary



Ethics is the study of morality (right
and wrong) and the choices people
make in their relationships with
others.
Creating a right and moral
organizational environment means
leaders role model ethical behaviors
and reward ethical policies and
behaviors.
Spirituality and Diversity are keys to
creating an ethical environment.
© Prentice Hall 2006
12-12
Chapter Summary


A great question to always ask
yourself as a leader is: “Would I want
others to behave or do as I did?” If
the answer is yes!, the behavior is
ethical. If not, it is unethical.
Always keep in mind and make the
“golden rule” the standard for your
behavior, “Do unto others as you
would have them do unto you!”
© Prentice Hall 2006
12-12
Thinking Critically about Ethics
What role do ethics play in
company profits? When
organizations like Exxon make
huge profits, there are always
questions about company behavior
and if companies such profits are
reasonable.
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
8–29
Thinking Critically about Ethics
• In a capitalistic society 资本主义 (zīběn
zhǔyì), is there a limit on what an
organization or individual should earn?
Why or why not?
Should there be rules that limit profitability?
If so, what would they be?
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
8–30
Encouraging Ethical Behavior from a
Management/Leadership Perspective
• Organizational Culture Influence
What is considered ethical behavior
within the organizational context?
What are the expectations of
management?
What are the expectations of coworkers?
Is there a code of ethics?
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
5–31
Factors That Affect Leadership and Employee
Ethics from a Management Perspective
1. Hire individuals with high ethical and moral
standards.
2. Establish codes of ethics and decision rules.
3. Lead by example.
4. Set realistic job goals and include ethics in
evaluations.
5. Provide ethics training.
6. Provide support for individuals facing ethical
dilemmas.
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
5–32
Effective Use of a Management Code of Ethics
• Develop a code of ethics as a guide in handling
ethical dilemmas in decision making.
• Communicate the code regularly to all
employees.
• Have all levels of management continually
reaffirm the importance of the ethics code and
the organization’s commitment to the code.
• Publicly reprimand and consistently discipline
those who break the code.
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
5–33
Codes of Ethical Conduct
•Formal statement of an
organization’s values and
ethical principles regarding
how to behave in situations
susceptible to the creation of
ethical dilemmas 困境
kùnjìng
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
5–34
Exhibit 5–9
Codes of Ethics
Cluster 1. Be a Dependable Organizational Citizen
1. Comply with safety, health, and security regulations.
2. Demonstrate courtesy, respect, honesty, and fairness.
3. Illegal drugs and alcohol at work are prohibited.
4. Manage personal finances well.
5. Exhibit good attendance and punctuality.
6. Follow directives of supervisors.
7. Do not use abusive language.
8. Dress in business attire.
9. Firearms at work are prohibited.
Cluster 3. Be Good to Customers
1. Convey true claims in product advertisements.
2. Perform assigned duties to the best of your ability.
3. Provide products and services of the highest quality.
Cluster 2. Do Not Do Anything Unlawful or Improper That
Will Harm the Organization
1. Conduct business in compliance with all laws.
2. Payments for unlawful purposes are prohibited.
3. Bribes are prohibited.
4. Avoid outside activities that impair duties.
5. Maintain confidentiality of records.
6. Comply with all antitrust and trade regulations.
7. Comply with all accounting rules and controls.
8. Do not use company property for personal benefit.
9. Employees are personally accountable for company funds.
10. Do not propagate false or misleading information.
11. Make decisions without regard for personal gain.
Source: F. R. David, “An Empirical Study of Codes of Business Ethics: A Strategic Perspective,” paper
presented at the 48th Annual Academy of Management Conference, Anaheim, California, August 1988.
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
5–35
The Value of Ethics Training
• Can make a difference in ethical behaviors.
• Increases employee awareness of ethical issues
in business decisions.
• Clarifies and reinforces the organization’s
standards of conduct.
• Helps employees become more confident that
they will have the organization’s support when
taking unpopular but ethically correct stances.
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
5–36
Exhibit 5–11 Being an Ethical Leader
• Be a good role model by being ethical and honest.
° Tell the truth always.
° Don’t hide or manipulate information
° Be willing to admit your failures.
• Share your personal values by regularly communicating
them to employees.
• Stress the organization’s or team’s important shared
values.
• Use the reward system to hold everyone accountable to
the values.
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
5–37
Managing Ethical Problems and
Bad Behavior of Employees
Provide ethical leadership
•Protect employees who raise ethical issues
(whistle-blowers)
•Whistleblowers 告密者 (gàomì zhě)
Expose bad behavior of others to:
Preserve ethical standards
•Protect against wasteful, harmful, or illegal
非法 fēifǎ (unlawful) acts.
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
5–38