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Business 303 Sheppard
Business Society & Ethics, Week 3:
The Meaning of Good Corp. Leadership
BUSINESS ETHICS WEEK 3:
MAIN QUESTIONS
1. What are some reasons to
discuss leadership now?
2. What impacts taking a moral act?
3. What are the basic qualities of leadership.
4. Are we to be lead by assuming people are
evil (Machiavelli); what’re the implications?
5. Do Ethical People want to be Leaders?
6. What are the signs of failed leadership?
7. What’re some different styles of leadership?
8. How does one build an ethical org. culture?
Wk. 3-2
1. Why Leadership Now?
• Recent events show how leaders can create a
poor ethical climate to lead to poor decisions.
– Let’s blow-up some Sarin Gas.
– B.C’s own Eron Mortgage Fraud.
– Tyco’s Misappropriations.
– The conspiracy at Enron.
– M.C.I. Fraud.
• Ethical conduct of a corp. & its people is often
only as good as its leaders’ ethical standards.
• There are a number of forces in organizational
life that impact taking a moral action.
Wk. 3-3
2a. Taking a Moral Action
• Rest: Components of MoralYoung
Action
& Sheppard
J. of Business Ethics (2007)
Depends on more than just
your stage of Moral development
2b. Impacts on taking a Moral Act 1/4
• Individual Factors (Trevino, 1986)
– Field dependence (Analytic vs. Holistic)
– Locus of control (Internal vs. External)
– Ego strength (Impulse control)
Wk. 3-4
X
2b. Impacts on taking a Moral Act 2/4
• Jones: Moral Intensity:
– Magnitude of
Consequences
– Social Consensus
– Probability of Effect
– Temporal Immediacy
– Concentration of Effect
– Proximity
Wk. 3-5
2b. Impacts on taking a Moral Act 2/4
• Organizational Factors:
– Situational Variables (that leaders affect):
1. Work characteristics
2. Organizational culture
3. Immediate job context
4. Socialization Processes
5. Group Dynamics
(Smith &
Carroll ’84)
6. Authority (Milgram, 1963)
– Zimbardo’s Stanford Prison Experiment
Wk. 3-6
3a. Basic Qualities of Leadership [531,
537]
• Self-knowledge.
• Self-control.
• Confidence.
– Magellan [537] vs. Steve Jobs.
Wk. 3-7
3a. Basic Qualities of Leadership [531,
537]
Two Goods
• Morally Good.
• Technically Good.
Unethical or Stupid [536] (ethical & stupid?).
• Buying slaves & creating a slave market.
• When child labor becomes illegal.
• Starbucks at the Aquarium.
What’ll things look like when I’m done?
Wk. 3-8
3b. The Ethics / Effectiveness Mix [535]
• J & J: Ethics helps recover Tylenol.
• Bata Shoe’s environmental ethics.
3c. Ends & Means [534]
• He may be an scoundrel but he’s our
scoundrel.
• That simply means he’s an scoundrel.
– Make a deal with the devil, you get burnt.
– You may be the scoundrel.
Wk. 3-9
3d. Other Ethical Qualities of Leaders
• Charisma. [534]
• Consistency. [534]
• Effectiveness. [535]
• Humility. [537]
– “Help me do this guys” vs. “Do it.”
Wk. 3-10
5a. The
4a.
Machiavelli
Machiavellian Temptation 1/2
The Role of the Leader, The Prince.
• Ends justify immoral means. [535]
• Human beings are basically evil ?
Wk. 3-11
4a. The Machiavellian Temptation 2/2
‘Safer to be feared than loved.’ [538]
• Know how to use ‘both man & beast.’[539]
– Love & Fear / Push & Pull / Carrot & stick.
• Cruelty is sometimes necessary. [539]
– Folks will forgive taking life before property
• Willingness to deceive (if it will work). [540]
• Morality as a matter of image.
– Use of cruel force only as a last resort.
• Deceit as a tool to promote the common good.
Wk. 3-12
4b. The Machiavellian Firm
What’s a Machiavellian firm look like?
How would managers manage?
Why do employees follow their leader?
Wk. 3-13
5. Do Ethical People
want to be Leaders? [545]
• The risk of being ruled by
someone worse than oneself.
• To lead in order to benefit
others, not oneself.
• People should be forced to
lead, not seek the job.
Wk. 3-14
6a. Failed Leadership: Signs
•
•
•
•
Abuse of privileged access [542]
Abuse of control of resources [542]
Inflated belief in personal ability [543]
Loss of strategic focus [543]
6b. Failed Leadership: Products
• Personal isolation [544]
• Lack of intimacy [544]
• Emptiness [544]
Wk. 3-15
6c. Failed Leadership: Costs
• Personal gratification becomes
more important. [#3, p. 544]
• Harm of innocents. [#5, p. 546]
• ‘Getting caught’ destroys image
and various stakeholders. [#7, p. 546]
• Diversion of needed resources.
Wk. 3-16
6d. Failed Leadership: Prevention
1/4
i. Kantian ethics 1/2
Categorical imperative. [548]
– Unconditional moral law that applies to all.
1. Universality
– If it is wrong for you to murder,
it is wrong for me to murder
2. Humanity as an End
– Act in a way that you always treat all
humanity, never simply as a means, but
always at the same time as an end.
Wk. 3-17
6d. Failed Leadership: Prevention
2/4
i. Kantian ethics 2/2
• ‘Kingdom of ends’ principle. [548]
– Act in a way that you, through your
maxims, are a law-making member of a
kingdom where all are treated not as a
means, but always as an end.
• Egalitarian view of humanity. [547]
• Respect autonomy of followers. [549]
– The Peter Principle
• Empower others to take responsibility.[550]
Wk. 3-18
6d. Failed Leadership: Prevention
3/4
ii. Kantian ethics of leadership
• Consider interests of all stakeholders
equally. [#s 1-3, p. 549]
• Avoid sacrificing stakeholders simply
based on numbers. [549]
• Govern by universal rules of justice
[#5, p. 549]
• Seek unanimity if possible. [550]
– The required (corporate) culture:
Quakers
ΔΣΠ
F.A.L.
– Get People to solve their own issues via
negotiation vs. imposing a solution.
Wk. 3-19
6d. Failed Leadership: Prevention
4/4
iii. Boardroom ethics [546]
• Concern for leader’s
psychological balance. [546]
• Implement codes of conduct.
• Check on authority of the CEO
[good governance / oversight].
• Use of ombudspersons.
Wk. 3-20
7. Other Leadership Styles 1/2
a. Transforming Leadership
• Cause a metamorphosis in form or
structure. [552]
• Not necessarily Great Man theory.[552]
• Mobilizing people for participation in
processes of change. [553]
• Encouraging collective identity. [553]
• Inspiring followers. [553]
• Avoid over-reliance on charisma.[553-4]
Wk. 3-21
7. Other Leadership Styles 2/2
b. Servant Leadership
• To serve all, even the
least privileged.
• Not leader-first.
[555]
• How democratic?
• What are the duties
of the followers?
Wk. 3-22
8. Leadership in Strategy: Ethics 1/3
Developing an ethical org. culture:
 Leaders must inspire a vision.
- Your daddy built that engine. [(576)]
 Leaders need to
entertain a mix of views
(to avoid groupthink).
 Leaders need to
employee a variety
of control devices.
Wk. 3-23
8. Leadership in Strategy: Ethics 2/3
Developing an ethical org. culture:
 Establish & transmit specific goals
noting the firm’s ethical standards.
 Continuously revise & disseminate a
code of conduct, based on inputs from
stakeholders.
 Disseminate a code of
conduct to all stakeholders
to inform them of the firm’s
ethical standard / practices.
Wk. 3-24
8. Leadership in Strategy: Ethics 3/3
Developing an ethical org. culture:
 Develop & implement methods /
procedures to use in achieving the
firm’s ethical standards.
 Have explicit rewards to recognize acts
of courage (e.g., using proper
procedures to report wrongdoing).
From Hitt, Ireland, Hoskisson,
Rowe & Sheppard,
.
Strategic
Mgmt.,
2007
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