Ethics are an important facet in any leadership roles as they define a leader’s moral principles pertaining to how they behave and react in the work place in the course of daily activities. Ethics determine an individual’s perception of what is wrong and right. Leadership calls for leaders to remain responsible and accountable for their employee’s actions, hence they ought to possess a particular set of skills and abilities that allow them to make effective decisions (Early & Kushner, 2012). This endeavor is different for all leaders, as they have varied management skills. Hence, it is crucial to understand the ethical understandings of leaders and what makes them successful compared to their counterparts with different views and beliefs. To get more insight on this subject matter, I held a personal interview with the CEO of a financial institution, Maryland Financial Group, Mr. Charles Harley to get his ethical beliefs and practices and how this affects his management skills and capabilities. This essay will discuss Mr. Harley’s views on ethics as the Maryland Financial Group CEO, the challenges he faces, how he solves them and examine the ethical theories relating to his management and leadership style.
Leadership is either multi-faceted role especially when one has to deal with employees from different cultures, backgrounds, beliefs, culturally or religious among other many attributes. Hence, I took time to visit Mr. Harley to get a deeper understanding of the ethical issues that today’s leader’s face. During the interview, Mr. Harley explains that one of the challenges he faces especially since he is in the financial sector is the fact that he has to make sure that unethical behavior like insider trading, bribery, and fraud do not affect his organization. Despite the organization having an ethics codes which govern how employees and leaders ought to conduct business, it is sometimes difficult to instill this on every person due to diverse moral principles that guide people. According to Mr. Harley, One of the challenges is defining what is right to each individual. For example, a financial analyst may get a tip from a friend while they are out of the office on their own time and makes trades relying on this tip, which eventually makes the company money. However, when the Harley asks the individual the reasoning behind the trade, he feels he has not faulted any rules. In this respect, such actions are an example of unethical behavior as they default the professional ethics of the firm.
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Ethical leadership is a leadership theory. Leading people towards a desired goal and vision is a hefty task as there a myriad of moving parts. Effective communication and decision-making, leadership styles, and ethical leadership are some of the major issues that today’s corporations face. These are crucial due to the fact they are everyday questions that Mr. Harley faces on a daily basis. Accountability and responsibility is another challenge that Mr. Harley faces. When a problem comes, he has to take the blame and make sure that he deals with the root cause of the problem rather than shift blame. In this case, Mr. Harley gives a scenario of an employee engaging in fraudulent activities that would cost the company millions of dollars and lead to a full-blown scandal. Ethical leadership entails handling the issue and taking responsibility by leading by example. Essentially, this approach calls for the concept of servant leadership. According to Robert Greenleaf, “Service to followers is the primary responsibility of leaders and the essence of ethical leadership” (Dion, 2012).
Addressing ethical challenges in the workplace is not an easy task as there are varied concerns that leaders have to encounter. However, setting an example and dealing with the little things through a guide and specified system, Mr. Harley believes that it does reduce the chance of unethical behavior. The CEO accommodates different theories and merges them with his leadership styles to remain fair, efficient, responsible, accountable, and honest. He believes that a value-based leadership style is more effective as it makes him question what values his employees have that guide their ethical reasoning. Additionally, he subscribes to the ethical decision making frameworks in which he explains that they allow him to make informed decisions before taking any action. According to Komives, Lucas, and McMahon, honest leadership is an intricate process that necessitates individual development, an influence of role models, values-driven leadership and the organizational environment (2007).
According to Mr. Harley, ethical leadership is an integral part of his leadership style of which he follows different ideologies depending on the particular situation. He believes that every individual has a right to make their own decisions as long as they do not affect the overall wellbeing of the organization he manages. However, there are instances when he believes that all decisions and behaviors ought to follow a specified set of rules for the benefit of the external environment of the company. He maintains that after 25 years in the financial sector, and after observing scandals in major corporations, his ethical theories culminate from a multitude of working relationships with people from diverse cultures, backgrounds, religiously or otherwise and the overall influence of his vision and that of the organization.
One of the major points noted during the interview is his presupposition towards John Rawls understanding of the difference between ethics and morality (Johnson, 2009). According to Rawls, these concepts, morality and ethics, depend on two principles; comprehensive moral systems which entail not only one’s behavior but also an individual’s place in the universe. The second concept is the less comprehensive moral systems, which include the political, economic, and social spheres. Additionally, he emphasizes on the fact that it is vital for one to ask themselves the four essential questions in determining the ethics of an action before settling on a precise behavior. These questions according to Pinnell and Eagan, (1995) contend that they are:
The child on your shoulder which relates to the fact that one ought to ask themselves if they would do a certain thing if they knew there was a child behind them watching
The golden rule question asks people to evaluate if they are comfortable doing something as if they were on the receiving end of these decisions or actions.
The front paper story relays an individual to question themselves if they would be comfortable if the action was a headlining news story in the newspaper
Finally, the rule of universality determines if the person was okay if everyone did the very action.
However, despite Mr. Harley’s ethical leadership, there is a sense of protecting oneself in the public eye. There various instances in the interview where his opinions and perceptions towards leaning on ethical leadership that one tends to feel that some of these C-level leaders make certain decisions that they do not believe in. For example, according to the value-based ethics; an individual’s personal value ought to guide their conduct (Early & Kushner, 2012). However, on the other hand, he believes himself to be a charismatic and transformational leader with ideal impact, inspiring motivation, intellectually stimulated, and individual considerations (Freeman & Stewart, 2006). This ethical ideology does not resonate with these types of leaders. According to Brown and Trevino, they argue that ethical leaders focus their considerations on ethical standards only in communication and responsible practices (2006). Therefore, I believe that leaders often times contradict themselves on the real reason as to why they claim to act ethically.
Since the scandals at Enron, AIG, and Worldcom, some leaders’ motivation is either wholly or partly by the implications that come with non-adherence to appropriate ethical standards and lack of compliance to the rules and regulations set out in the different sectors of industry (Ferrell, O. & Ferrell, L., 2011). However, during the research and interview with Mr. Harley, it is clear that ethical leadership is a daily activity that requires imprinting one’s ideologies on the daily activities of running an organization. In agreement with the CEO, corporations ought not only focus attention on the end result of the business’ aim of profit maximization without adherence to the means of getting there but it is paramount for leaders to take more liberal approaches to influencing their subordinates. Setting up an ethical organizational culture in the management of corporations is the first rule and role of any leader. This policy would allow employees at all levels to report on any misconduct. For example, according to the Ethics Resource Center National Business Ethics Survey conducted in 2007, over half the employees observing misbehavior fail to report to the appropriate channels due to a lack of support of the compliance of ethical codes and policies (Ferrell, O. & Ferrell, L., 2011).
In conclusion, I believe that ethical leadership is integral to the success and long-term benefit to the employees and the organization as a whole with its stakeholders. Doing the right thing is not easy but the long-term benefits are instrumental in developing a culture that transcends outside the work environment. Ethical reasoning and understanding in many firms is quintessential in dealing with daily decision-making processes that lead to profitability, integrity, responsible and accountable leaders. By understanding the different ethical theories and leadership roles, leaders differentiate themselves by being proactive, dynamic, and consistent.
References
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Dion, M. (2012). Are ethical theories relevant for ethical leadership? Leadership & Organization Development Journal, Vol. 33 Issue: 1, pp.4-24, Retrieved 25 October 2018 from, https://doi.org/10.1108/01437731211193098
Early, S, L., & Kushner, K. (2012). Values-based ethical leadership: Developing leaders with integrity. Excellence in Practice, NASPA Knowledge Communities Publication. 63-64. Retrieved 25 October 2018 from, https://mds.marshall.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1013&context=le_st_faculty
Ferrell, O.C., & Ferrell, L. (2011). The Responsibility and Accountability of CEOs: The Last Interview with Ken Lay. Journal of Business Ethics. Retrieved 25 October 2018 from, https://danielsethics.mgt.unm.edu/pdf/Ken%20Lay%20Interview.pdf
Freeman, R. W., & Stewart, L. (2006). A Bridge Paper of the Business Roundtable Institute for Corporate Ethics. Developing Ethical Leadership. Retrieved 25 October 2018 from, http://corporate-ethics.org/pdf/ethical_leadership.pdf
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Komives, S.R., Lucas, N., & McMahon, T.R. (2007). Exploring leadership: For college students who want to make a difference (2nd ed.). San Francisco, CA: Jossey-Bass.
Pinnell, P.S., & Eagan, S.C. (1995). Exploring ethical leadership. Morgantown, WV: West Virginia University Extension Service. Retrieved 25 October 2018 from, http://www.wvu.edu/~exten/infores/pubs/fypubs/wl352.pdf
