Concept of Moral Leadership and its Importance in Contemporary Organizations - Coursework Example

Moral Leadership Student Name Course Tutor Date Introduction Brown & Trevino (2006, p.596) defines moral leadership, also known as ethical leadership, as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making”. It is a very important concept that needs to be embraced by organizations for their survival in the 21st century. It involves being committed to what is considered right by the society based on their beliefs and values regarding what are acceptable behaviors. Moral leaders are distinguished by their ability to make decisions that may be unpopular or inconveniencing in the short run but have long term benefits. They well understand and stand by their values and take responsibility for their actions. Generally, moral leadership is a responsibility for doing the right thing considering those who will be affected by the outcomes of a person’s decisions rather than considering the powerful few (Brown, Treviño & Harrison 2005). This essay looks at the concept of moral leadership and its importance in the contemporary organizations, some theories explaining the concept and examples of cases where we can identify actions of moral leaders. Characteristics of moral leaders Ethics in leadership focuses on two factors. These include the action and behavior and also their personal characters. Leaders have a responsibility of creating an ethical organizational environment which can be achieved by treating their subordinates with respect and recognizing their unique personalities. Moral leaders can be distinguished by characteristics such as: They are respectful and dignified: moral leaders respect other people and they do not use their power to manipulate the followers for their personal achievements. They listen to their followers, are compassionate to them and they do not take sides when listening to opposing sides. This means that they uphold their values and beliefs when dealing with their followers (Yukl 2012). Moral leaders are just: in all their doings, they act fairly and justly. They treat their followers equally without being biased. Even though differential treatment might be there, it is done fairly, in an open manner and based on morality. Moral leaders take part in building the community: they contribute in developing the community by considering their purposes as well as that of their followers. This means that they consider the interests of the community and works towards the achievement of community goals (Kvalnes 2014). Moral leaders are honest: this makes them effective in their duties and people who can be relied upon. They are always true when handling issues regardless if how critical the issues may be and this earns them respect from their followers (Brown, Treviño & Harrison 2005). They are committed to serving others: moral leaders always put the interests of their followers ahead of theirs. They are human and their actions bear fruits for their followers. Theories of moral leadership Theories describing ethics in leadership and classified into two general categories as those that relate to the behavior of the leaders and those that relate to the character of the leaders. Those relating to the behavior of the leaders are further classified into teleological theories and deontological theories. Teleological theories relate to the outcomes of leaders behavior and the ethics in them. This involves three approaches of ethical egoism which explains the behavior of the leader which aims at obtaining utmost good for him, utilitarianism which considers the leaders behaviors which aims at obtaining utmost good for the majority of the people and altruism which considers the behavior that indicates the leader’s concern for interests of other people regardless of whether they are contrary to his own interests (Mendonca & Kanungo 2007). Deontological theories talks about whether the leader’s actions which resulted to those particular consequences were right or wrong. These theories argue that ethics in an action cannot be determined by its outcome only but also whether the inherent good in that action or behavior. This is because some actions or behaviors are inherently good regardless of their outcomes. This approach to ethical leadership therefore insists on actions of the leaders together with their obligation in doing what is good. Virtue-based theories focus on the leaders, who they are, and their characters. These can be followed back from Plato and Aristotle. According to Aristotle, instead of telling people what to do, they should be told what to be and this can make them more virtuous. This would build in them virtues such as honesty, fairness, modesty and sociability among others (Northouse 2013). Importance of moral leadership in contemporary organizations Moral leadership has become a priority in contemporary organizations making it no longer a luxury but a responsibility. Organizations need to integrate ethics into their mission, vision, and organizational goals. An organization that supports morality achieves a “greater good for all”. It results in good relationships between leaders and followers and also the organization and the society (Yukl 2012). Members of the society are becoming increasingly impatient with leaders who are out on their own agendas and those not responsible for outcome of their actions. To survive in the contemporary society, organizations must therefore engage moral leadership. Some of the reasons as to why it is important include: Moral leadership protects the reputation of the organization This in turn widens its opportunities. When a leader exhibits morality in his or her leadership style, this is also reflected in the organization. This will therefore preserve the legitimacy of the organization and it will be able to use the resources available in the society to achieve its goals. The society is desperately in need for organizations with ethical culture where they can invest their resources. This therefore creates a better opportunity for organizations to influence the social culture by ensuring that they have institutionalized moral values. The society needs an organization that will create a positive influence in them. For example, the employees of that organization will take the positive influence from their places of work to their families, friends and other associates. This will interpret to a general positive influence in the society at large (DuBrin 2010). The case of moral leadership and reputation can be seen in the conduct of Warren Buffett who is the chairman of Berkshire Hathaway where he owns most of the shares and among the wealthiest persons in the world. He is known for always reporting the facts, maintaining integrity and instilling it in his managers as his leadership style. At one time while responding to questions in University of Nebraska, he was asked how he managed to instill ethical leadership among his management team and responded that “he has all the money he needs and can afford to lose it on a bad decision. What he, or his companies, can’t afford to lose is their reputation.” He further stated that “if an article appeared in a local newspaper about a decision and action you made, and your family and friends read the article, would you feel good about it? A reputation is built, tested and reinforced over time. Integrity and ethics are cornerstones of a solid, positive reputation. Integrity and ethics are based on trust, honesty, sincerity and steadfastly adhering to high moral standards and principles” (Cooper 2014). Due to his ability to maintain integrity and ethics in his leadership, his company, Berkshire Hathaway, was listed among the top ten divided-paying stocks in 2015 in America. The company has been able to attract high profile investors due to its clean reputation and performance (Staff 2015). Moral leadership creates a value-based culture in the organization Kidder (2001) stated that “the principle task of this decade is the creation and nurturing of a values-based culture”. He further explained that the nurturing must happen in the organizations where people work because it is where most of their time is spent. Lack of a value-based culture can lead to fraudulent activities in the organization (McGuire 2009). In their article on the “Moral foundations of ethical leadership” Hester & Killian (2010) stated that “No checklist is required to remind us that leadership is fundamentally a moral, relationship-dependent activity. The complexities of the information society require that doctors and nurses, teachers and principals, and CEOs and their management teams work together, each with their specialty and all contributing to the purposes of the organization. The ideal of servant leadership reminds us that teamwork is the new leadership model in the information age.  It is within our workaday environment that we are able to discover our moral purposes and act on them”. This statement emphasizes on the importance of values, morals and civility in building a business environment. They further explain that a value based culture prevents other immoral cultures from having their way into the organizations. Ann Mulcahy can give a good example of how a value-based culture is created through moral leadership. She was appointed the CEO of Xerox in 2000, at time when the company was in a calamitous situation and the investors were abandoning it. Rather than focusing on pleasing the shareholders and investors, she instead focused on employees and customers. Instead of masking the situation in the company, she decided to clearly state the truth regarding the broke state of the company. She stood firm into doing what is right since those are the values that had taken Xerox to a great position it was before. At one point, one the company’s creditors stated that “She was leading by example; everybody at Xerox knew she was working hard, and that she was working hard for them” (George 2008). Due to her firm stand, the employees and customers were able to follow her example and to recognize that indeed she was leading by example. Moral leadership gives organizations a competitive advantage This is because customers and employees want to associate themselves with suppliers and service providers who are responsible and ethical. Therefore organizations that exhibit morality in their leadership are able to attract the best in terms of employees and clients. In this 21st century, the members of the public as well as consumer watch groups are demanding moral leadership and the media is negatively publicizing organizations that fail in moral leadership. Organizations must therefore pay special attention to it to meet the moral expectations of the society (Brown & Trevino 2006). For example, years back, Microsoft was on the wrong side with the law after a ruling by the by a U.S judge that the company should be broken apart since it had violated federal antitrust laws. To come out of this fallout which could have affected its image, the company started the “Corporate Citizenship” program which involved honoring non-profit organizations that were involved in strengthening the economy, addressing challenges faced by the society and also enhancing its online ecosystem. The theme for this program has been “creating a real impact for a better tomorrow”. This has seen the company becoming very committed to fulfilling its public responsibilities and helping meet people’s needs in various communities in the world. This initiative has helped Microsoft to bring back its reputation hence its competitive position. It even appeared in the Forbes’ list of the most ethical companies in the world, outdoing its competitors such as Google, Facebook and Apple (Suder, Gabriele, & Payte 2013). Coca-Cola Company has also been able to gain competitive advantage due to its ethics and compliance program which forms the bases of their code business of conduct. It requires their employees, directors and associates to conduct all their undertaking with honesty and integrity. This cultural spirit was set by its former chairman Roberto Goizueta and Investor Duog Protégé who saw the company grow and expand internationally over a span of ten years (Ferrel 2013). Conclusion As the society embraces the changes brought by globalization especially in the 21st century, there is a lot of focus on performance of organizations. Members of the public want to associate themselves with organizations that operate in an ethical culture and those with strong values. The members of public have become very keen on unethical happenings in organizations and have become intolerant to them. Moral leadership is therefore important for organizational survival in the 21st century and beyond. List of references Suder, Gabriele, and Payte J 2013, Microsoft: A case in cross-company transformation. Thunderbird International Business Review, 555-96. Kvalnes, O 2014, Leadership and Moral Neutralization, Leadership, 456-70. Yukl, G 2012, Leadership in organizations (8th ed.) Upper Saddle River, NJ, Pearson/Prentice Hall. Northouse, P 2013, Leadership: Theory and practice (6th ed.), Thousand Oaks, CA, Sage. Kidder, R.M 2001, Ethics is not optional, Association Management, 53(13), 30-32. DuBrin, A 2010, Leadership: Research findings, practice, and skills (6th ed.), Mason, OH, South-Western/Cengage. Brown & Treviño, L 2006, Ethical leadership: A review and future directions, The Leadership Quarterly, 17, 596-616. Mendonca, M., & Kanungo, R., 2007, Ethical leadership, New York, Open University Press. Brown, M., Treviño, L., & Harrison, D 2005, Ethical leadership: a social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97, 117-134. Cooper, C 2007, Buffet and Gates on Integrity, Power and Purpose, Business Monthly, retrieved from http://lansingbusinessnews.com/management-matters/565-buffet-and-gates-on-integrity-power-and-purpose.html George, B 2008, America's Best Leaders: Anne Mulcahy, Xerox CEO, U.S News and Word Report retrieved from http://www.usnews.com/news/best-leaders/articles/2008/11/19/americas-best-leaders-anne-mulcahy-xerox-ceo Hester, J & Killian, D 2010, The Moral Foundations of Ethical Leadership, Journal of Value Based Leadership, Volume III, Issue I, McGuire, J 2009, The case for value-based leadership: maximizing people and profitability. Retrieved from http://www.corpedgroup.com/resources/ml/ValuesBasedLeadership.asp Staff, S 2015, Warren Buffett’s Top 10 Divided-paying Stocks for 2015, The street, 24th march 2015. Retrieved from http://www.thestreet.com/story/12825278/1/warren-buffetts-top-10-dividend-stocks.html Ferrel, O 2013, The role of ethical leadership in organizational performance, Journal of Management systems, vol 3, pp 120-4. Read More