Ethical Leadership

Ethical Leadership: A Ethical Leadership: A Practical and Theoretical Practical and Theoretical

FrameworkFrameworkDiane J. Prince, Clayton State UniversityDiane J. Prince, Clayton State UniversityNora Martin, University of South CarolinaNora Martin, University of South Carolina

Richard Fulton, Troy University – Augusta, GeorgiaRichard Fulton, Troy University – Augusta, Georgia

April 3, 2009April 3, 2009

OutlineOutline

IntroductionIntroduction BackgroundBackground ModelModel DiscussionDiscussion ConclusionsConclusions

Purpose of paperPurpose of paper To posit a holistic To posit a holistic

framework for ethical framework for ethical leadership based upon leadership based upon three levels of ethical three levels of ethical behavior and different behavior and different theories of ethics. theories of ethics.

Bring these Bring these perspectives together perspectives together in the context of a in the context of a case examples in the case examples in the light of the current light of the current economic crisis.economic crisis.

Inspired by a speech Inspired by a speech of James Youngof James Young

Background on TheoryBackground on Theory

Duty/DeontologicalDuty/Deontological– Justice/BeneficenceJustice/Beneficence

Virtue/Moral Virtue/Moral Rights/TheologicalRights/Theological– Values, Moral Beliefs, Values, Moral Beliefs,

Should dosShould dos Consequential, Consequential,

UtilitarianismUtilitarianism– What are Benefits or What are Benefits or

Effects To People, Most Effects To People, Most good for most peoplegood for most people

Ethical LevelsEthical Levels

Societal

Organizational

Personal

Theoretical Basis/

Ethical Setting

Duty/Deontological Virtue/Moral Rights/Theological

Consequential/Utilitarianism

Personal Ethics Benefits to me Right thing for me to do Impacts those around me, legacy

Organizational Ethics

Benefits to org Right thing for org to do Impacts stakeholders

Societal Ethics Benefits to society Right for society Impacts society

The Model: Ethical Leadership The Model: Ethical Leadership FrameworkFramework

DiscussionDiscussion

DutyDuty Moral RightsMoral Rights ConsequencesConsequences

PersonalPersonal OrganizationalOrganizational SocietalSocietal

DutyDuty Personal – Benefits to mePersonal – Benefits to me

– Made me a bonus, great Made me a bonus, great incentives, Are the AIG incentives, Are the AIG bonuses fair?bonuses fair?

Org’l – Benefits to orgOrg’l – Benefits to org– Brought profits to org (more Brought profits to org (more

loans, more money) Is it just loans, more money) Is it just that more people are that more people are defaulting on loans since the defaulting on loans since the org lent to the wrong people?org lent to the wrong people?

Societal – Benefits to societySocietal – Benefits to society– Helps society do better (more Helps society do better (more

people in houses) Is it fair people in houses) Is it fair that banking industry is that banking industry is failing? AIG and others are failing? AIG and others are needing a bailout?needing a bailout?

VirtueVirtue Personal – Right thing Personal – Right thing

to do, Dan Cathy’s to do, Dan Cathy’s (COO) Christian values (COO) Christian values and mentoringand mentoring

Org’l Org’l – Right for org to doRight for org to do– Chick-Fil-A closed on Chick-Fil-A closed on

Sundays and HolidaysSundays and Holidays Societal – Right for Societal – Right for

society (Chick-Fil-A society (Chick-Fil-A Foundation create Foundation create WinShape at Berry WinShape at Berry College)College)

Consequential/UtilitarianismConsequential/Utilitarianism

Personal – Impacts me (difficult to Personal – Impacts me (difficult to get credit)get credit)

Org’l – Impacts stakeholders (difficult Org’l – Impacts stakeholders (difficult to get business loans)to get business loans)

Societal – Impacts society Societal – Impacts society (Bankruptcies, regulations)(Bankruptcies, regulations)

James Young, CEO Citizen’s Trust James Young, CEO Citizen’s Trust Bank, A role modelBank, A role model

Personal Values – “You should not bend Personal Values – “You should not bend the rules, you should embrace them”the rules, you should embrace them”

Org’l Ethics – Military family emergency Org’l Ethics – Military family emergency loan programloan program

Societal Ethics – Societal Ethics – – Biggest value of a company is your Biggest value of a company is your

“credibility with customers” “credibility with customers” – People need to get back to values that People need to get back to values that

you “save, bring debt down and buy a you “save, bring debt down and buy a house that you can afford based on house that you can afford based on your savings, income, and credit your savings, income, and credit history”history”

– Give back to the community; volunteer, Give back to the community; volunteer, create economic developmentcreate economic development

– Believes the banks who did the right Believes the banks who did the right thing should be rewarded; went to thing should be rewarded; went to Washington to shape new laws and Washington to shape new laws and codes regarding the economic codes regarding the economic recovery.recovery.

Conclusions – Practical and Conclusions – Practical and TheoreticalTheoretical

Ethical Leadership starts with the personal values, Ethical Leadership starts with the personal values, attitudes and actions of a personattitudes and actions of a person

Ethical leaders of organizations walk the talk; go Ethical leaders of organizations walk the talk; go beyond legal regulations, embrace rules and beyond legal regulations, embrace rules and policies; infuse a culture of ethicspolicies; infuse a culture of ethics

Ethical Leaders see the wholistic picture of how Ethical Leaders see the wholistic picture of how society is affected by the actions of individuals and society is affected by the actions of individuals and organizations and not just the bottom line. They are organizations and not just the bottom line. They are able to think long term and shape laws and able to think long term and shape laws and regulations as well as societal attitudes.regulations as well as societal attitudes.

Ethical leaders evolve from personal and Ethical leaders evolve from personal and organizational ethics to societal ethics and integrate organizational ethics to societal ethics and integrate ethical perspectives of duty, moral rights and ethical perspectives of duty, moral rights and consequentialism into their lives.consequentialism into their lives.