Unit 430 Leadership Topic 7: Ethical leadership

Ethics and the individual

The leading scholars in the field of morality development are John Locke (British philosopher, 1632–1704), Jean Piaget (Swiss philosopher and psychologist, 1896–1980), and Lawrence Kohlberg (American social psychologist, 1927–1987). All three were interested in how people develop their morals throughout the course of their lives.

John Locke believed that as humans we are not born with an innate knowledge, rather, as newborns we are born with a clean slate. According to Locke, knowledge (which is made up of ideas) is developed throughout life through experience. As a consequence, he argues that morality is developed throughout an individual's lifetime based on rational choices, weighing up the positive effects of 'good' choices over the negative and punitive effects of 'bad' choices.

Jean Piaget claimed that people's beliefs of right and wrong are a result of interaction with the environment. He studied the cognitive development of children and argued that morality, too, can be considered a developmental process. He identified four major stages that are dependent on a child's attitude toward rules, intentions and punishment

Sensorimotor Stage (0–2 years):
Preoperational Stage (2–7 years):
Concrete Operational Stage (7–11 years):
Formal Operational Stage (11+ years):

Lawrence Kohlberg expanded on Piaget's work and focused on the cognitive elements of morality. He proposed that there are three morality development stages and that individuals will move from external reward-based and social regulation toward internal, abstract idea regulation

Level 1: Preconventional Morality (Stage 1: Reward and Punishment, Stage 2: Instrumental)
Level 2: Conventional Morality (Stage 3: Peer Group, Stage 4: Societal Expectation)
Level 3: Postconventional Morality (Stage 5: Social Contract, Stage 6: Universal Moral Principle)

Values, like morality, are developed over a lifetime and are a result of education and experience. Parents, family members, peers and community members all play a large role in the development of values. Sociologist Morris Massey claims that values are developed during three major periods in a person's lifetime (Massey, 1979):

1. The Imprint Period (Birth to 7 years)
2. The Modelling Period (8–14 years)
3. The Socialisation Period (15–21 years)

It is not only the differences in values within a given generational group that can create problems in an organisation, but also the differences in values between generational groups.

The Veterans (born 1922–1943): Comfortable with leaders making decisions alone and without consultation, but like being asked to provide input
The Baby Boomers (born 1942–1960): Leadership by consensus
The Gen Xers (born 1960–1980): Delegation and empowerment
The Nexters (Gen Y) (born 1980+): Participative leadership styles

In his research, Kohlberg found that many of his subjects were able to move upward through the developmental level of morality after taking courses in ethics. The evidence indicated that the courses got the individuals to look at ethical issues from a universal point of view.

Most ethical issues can be broken down into four components:
1. Cognitive—what we know
2. Affective—what we feel
3. Valuational—what we value
4. Volitional—what we choose.

From an educator's standpoint, all of these elements can be taught. For example, we can help people to expand their knowledge on a range of ethical issues (cognitive); we can encourage people to gauge their feelings towards issues by getting them to watch films dealing with specific topics (affective); we can assist people to identify and prioritise their values (valuational); and we can present people with various ethical scenarios and get them to choose the most appropriate action (volitional).

Establishing ethical standards

In the first section of this topic we looked at various definitions of ethics, including that provided by Daft (2008: 437): The code of moral principles and values that governs the behaviour of a person or group with respect to what is right and wrong.

Ethical decisions become more problematic in right versus right scenarios. In these scenarios, it depends on the individuals' perspective as to whether the choice is considered the right or wrong thing to do. Rushworth Kidder has identified six common choices people face; he claims those that fall in the right versus wrong category are 'moral temptations' and those that fall in the right versus right category are 'ethical dilemmas' (Kidder, 1995).

Right vs Wrong Dilemmas.
1. Violation of the Law
2. Departure form the Truth
3. Deviation from Moral Recitude

Right vs Right Dilemmas.
4. Truth versus Loyalty
5. Individual versus Community
6. Short-Term Versus Long-Term

When first confronted with a dilemma, it is useful to determine whether it is 'right versus wrong' or 'right versus right'. This distinction is often not so simple to ascertain at first glance. To assist in making the distinction, Kidder (1995) suggests that leaders can ask themselves four key questions.

1. The Legal Test—Is the choice legal? Have any laws been broken or are about to be broken as a result of the choice?
2. The Gut-Feeling Test—Do I feel comfortable with this decision?
3. The Front-Page Test—Would I be happy to have everyone know about this?
4. The Role Model Test—If I were mum/dad/my CEO, would I do this?

Often associated with the Immanuel Kant (German philosopher 1724–1804), the deontological principle of ethical decision-making is based on the premise that we are all motivated by a sense of duty. This sense of duty stems from a fundamental respect for lawfulness. The deontological model is a form of rules-based thinking which assumes that the correct ethical decision is made because it is the right thing to do. The distinction here, according to Kant, is that the individual needs to be motivated by the desire to do the right thing or 'good will'.

First discussed by John Stuart Mill (British philosopher, economist and businessman) in 1863, utilitarianism can best be described by the adage "do whatever produces the greatest amount of good for the greatest number of people". This form of ends-based thinking tells us to look at (forecast) the consequences of our actions before acting.

Where the deontological principle is rules-based and the utilitarian model is ends-based, the reciprocity principle is care-based. It asks you to put yourself in the other person's shoes, to feel compassion and empathy.

The role of ethics in business

According to market and social trend analyst Daniel Yankelovich, the public's widespread cynicism toward businesses today is the third wave of public mistrust about corporations in the past 90 years. The first, set off by the Great Depression, continued until World War II; the second, caused in part by economic stagflation and the Vietnam War, lasted from the early 1960s until the early 1980s. In each of these periods, Dr. Yankelovich states that companies tended to be reactive, blaming 'a few bad apples', dismissing values as 'not central to what we do', or ignoring opportunities to improve because 'we don't have to make major changes'.

The popularity of ethics-related language today appears to do more than set corporate expectations for employee behaviour; it is, effectively, a part of a company's license to operate in a more complex regulatory and legal environment. The importance of these statements of belief has grown so quickly that many companies now can't imagine doing business without them.

Ethical issues in business: Profits, Professional Conduct, Accounting/Finance, People, Production

Emergent ethical concerns for leaders and organisations

When making decisions about the status quo or future direction of their organisations, leaders now need to take into account other peripheral considerations. In addition to traditional accountabilities and duties, leaders today are expected to have regard for:
* sustainability
* corporate social responsibility
* corporate citizenship
* corporate governance
* codes of ethics.

Ethics and moral issues may also become enshrined in formal bodies of rules and institutions. To an extent, Australian law reflects current community values and expectations, and we can see how the community has embraced corporate ethical standards.


I have a couple of issues with some of the material in the study guide concerning ethical leadership. Some of which is factually incorrect, other material which is somewhat unorthodox, and alas, some material which seems to have been neglected but in my considered opinion shouldn't be.

1. Recursive definitions. The dictionary definitions of ethics are fair enough, that's where most people would go, at least to begin with. But of course, if we looked up morals we would find something quite similar. In other words, morals means ethics and ethics means morals, which doesn't really help. A richer source of discussion is the distinction between moral principles and the application of situational ethics, and from there a discussion of ethical dilemmas (trilemmas etc). In this context many mistake Kant when he claims that a breach of a moral principle is still a breach - not recognising that a something can be morally wrong but ethically right if there are grounded reasons to believe a greater moral crime would eventuate from acting morally (e.g., lying to an axe-murderer as to the whereabouts of a hiding person).

2. Piaget's model of mental development was "genetic epistemology", which means that as the brain develops it acquires new structures of thinking which are simply not possible at an earlier age, regardless of education. Whilst the study guide states "Jean Piaget claimed that people's beliefs of right and wrong are a result of interaction with the environment", I believe this statement is perhaps not clear as it could be. According to Piaget: "the child is someone who constructs his [sic] own moral world view, who forms ideas about right and wrong, and fair and unfair, that are not the direct product of adult teaching and that are often maintained in the face of adult wishes to the contrary." Through interaction with peers for content examples and the physical development of the brain itself, comes the cognitive operations for moral decision making.

3. Mention of Kohlberg should also include that his concern was the moral reasoning and ethical justifications, not the content of answers to problematic situations themselves. Further (and this certainly relates to topic 10), Kohlberg's own structure and assessment procedures were criticised for gender biases. Kohlberg's co-researcher and critic, Carol Gillagan, for example, argued that the abstract reasoning of Kohlberg disadvantaged women who would answer with a more concrete and empathic ethic of caring. One very interesting comment from a paper written by Gilligan and Kohlberg was that (following Piaget) whilst every normal adult person had the capacity to engage in the thinking for post-conventional moral reasoning (as they were all cognitively developed to do so), less than a third did "due to environmental factors".

4. With regards to utilitarianism, the Study Guide says:

"First discussed by John Stuart Mill (British philosopher, economist and businessman) in 1863, utilitarianism can best be described by the adage 'do whatever produces the greatest amount of good for the greatest number of people'."

This is certainly not the case. Jeremy Benthem is universally recognised as the founder of utilitarianism from his 1780 text Introduction to Morals and Legislation, which even included a "felicific calculus" to determine the rightness or wrongness of an action based on the aggregated pleasure or pain it caused. Mill himself recognises the contribution of Benthem to the "greatest happiness" principle on the very first page of his 1863 book Utilitarianism:

"Although the non-existence of an acknowledged first principle has made ethics not so much a guide as a consecration of men's actual sentiments, still, as men's sentiments, both of favour and of aversion, are greatly influenced by what they suppose to be the effects of things upon their happiness, the principle of utility, or as Bentham latterly called it, the greatest happiness principle, has had a large share in forming the moral doctrines even of those who most scornfully reject its authority."