ldr 6135 persoanl action paper

Running Head: Personal Action Paper

Personal Action Paper

Ardavan A. Shahroodi

Northeastern University

LDR 6135—The Ethical Leader

Dr. Hernan Murdock

Friday, October 17, 2014


Introduction

This Personal Action Paper first analyzes the philosophical theories of ethics that were

discussed in this course. Next, the Personal Action Paper introduces Donaldson’s (1996)

concept of core human values and his proposals for the adoption of a universal code of ethics

with the goal of promoting ethical leadership in the culture of the organization. In addition, this

paper reviews the material concerning ethical organizational leadership or lack thereof in

“Business Ethics: A View from the Trenches” (Badaracco & Web, 1995), “Managing Ethics and

Legal Compliance: What Works and What Hurts” (Trevino et al., 1999) and “Moral Person and

Moral Manager: How Executives Develop a Reputation for Ethical Leadership” (Trevino et al.,

2000) articles. This Personal Action Paper also includes Personal Action Journals that have been

completed in this course. The final section of this Personal Action Paper is devoted to a

discussion of the most important ethical concepts that have been analyzed in this course and how

these lessons will help this student “in terms of ethical analysis, decision making and ethical

leadership” (Course Syllabus).

An Encapsulation of What You Learned from the Class Readings and Discussions and

How this Course Has Contributed to Your Understanding of Ethics and Leadership

The Philosophical Theories of Ethics

Utilitarianism. Sharp (2006) states that utilitarianism utilizes a “cost-benefit” concept

similar to that used in business and provides the moral foundation of classical economics” (p.

Introduction, XV). This theory holds that an “action is ethical if it produces the greatest good (or

utility) for society overall” (Sharp, 2006, Introduction, XV). However, utilitarianism is criticized

on the basis that “it is usually impossible to measure utility and because it fails to address the


problem of unequal distribution of utility” (Sharp, 2006, Introduction, XV). As an example of

the application of the theory of utilitarianism, in Week One Discussion Board Initial Post, I

utilized the example of Gordon Gillingham, the CEO of Northeastern Mutual Life (Sharp, 2000,

pp. 4-10).

In the aforementioned Post, I argued that Gillingham’s potential consideration in

terminating a substantial number of employees in order to improve the profitability of the

company or the shareholders’ “return on equity” (sharp, 5) is also an illustration of his belief that

such an action would further improve the job security and employment outlook of the remaining

employees. In my Initial Post, I also utilized the concept of “utility” (Sharp, 2000, Introduction,

XV) or “usefulness” in order to describe how an action is rationalized in the theory of

utilitarianism when it is deemed to possess beneficial consequences for shareholders or a larger

number of employees or even a more numerous group in society.

In the Northeastern Mutual Life case, Gillingham is also contemplating a further potential

strategy in terminating the employment of “older employees and hiring new recruits to replace

them” (Sharp, 2006, p. 9). Gillingham calculates that such an action would translate into “fewer

layoffs in total, as the cost savings would be, on average greater per person” (Sharp, 2006, p. 9).

However, in my Week One Discussion Board Initial Post, I observed that it may be argued that

such a strategy in “firing older employees” (Sharp, 2006, p. 9) in order to promote “cost savings”

(p. 9) is an inherently unethical practice. I also stated that in the U.S., such a quid pro quo

calculation by Gillingham regarding the termination of older employees would be considered as

contrary to anti-discrimination statutes. However, the utilitarian argument concerning the

termination of a particular number of associates, a reduction of benefits or demoting some


individuals in order to protect the employment of the remainder of the employees is utilized in

almost all industries in one time or the other.

Justice or Fairness. Sharp (2006) relates the ethical theory of justice or fairness to the

writings of John Rawls (1971). Rawls (1971) placed emphasis on the importance of promoting

equity in human relationships. Northouse (2013) in analyzing the ideas of Rawls (1971), states

that “Issues of fairness become problematic because there is always a limit on goods and

resources, and there is competition for the limited things available…Because of the real or

perceived scarcity of resources, conflicts often occur between individuals about fair methods of

distribution…It is important for leaders to clearly establish the rules for distributing rewards” (as

cited in Northouse, 2013, p. 434).

Sharp (2006) also discusses the concept of “distributive justice” (Introduction, XV) that

holds “society’s benefits should be fairly shared” (Introduction, XV) and that “similar people (…

similar in respect to the treatment in question) should be treated equally and dissimilar people

unequally” ((Introduction, XV). A fairness doctrine contends that “male and female employees

should be treated equally for the same work because they are equal as employees, but it is also

fair to pay senior or more qualified employees more than less qualified employees, as long as

their qualifications are relevant to their work” (Sharp, 2006, Introduction, XV). The practical

complications related to the justice theory is in the very fact that “it is difficult to quantify; how

much more should someone with 20 years of experience be paid compared to a novice? It is

unlikely that one could find an answer that everyone would agree to” (Sharp, 2006, Introduction

XV).

Rights. This ethical theory is derived from the philosophical writings of the German

philosopher, Immanuel Kant (1724-1804). Sharp (2006) explains that “a right is someone’s


entitlement to something, such as a minimum living wage, privacy, and safe working conditions,

to which a society agrees” (Introduction, XV). In regards to the study of history, political

science and government, “humans have attempted to codify and document their rights; the

magna Carta, the American Constitution, and the United Nations Charter are just three of the

better known” (Sharp, 2006, Introduction, XV). Kant (1724-1804) also emphasized that “it is

our duty to treat others with respect…To do so means always to treat others as ends in

themselves and never as means to ends” (as cited in Northouse, 2006, p. 430).

Kant (1724-1804) also introduced the concept of a “categorical imperative” (as cited in

Sharp, 2006, Introduction, p. XV) that implies, “an action that you take is right if the reason you

would do it is the same as the reason you would want everyone else to do it” (Introduction, pp.

XV-XVI). Here, Sharp (2006) brings attention and draws parallels to a similar Biblical concept

called the “Golden Rule: Do unto others as you would have them do unto you” (Introduction,

XVI). Sharp (2006) emphasizes that “rights usually imply reciprocal obligations or duties”

(Introduction, p. XVI) and as a result “if an employee has a right to a safe workplace, then it

follows that employers have a duty to provide safe workplaces” (Introduction, p. XVI).

Relativism. Sharp (2006) observes relativism would contend in a number of situations

“there is no single right answer but it depends on where you are” (Introduction, XVI). Sharp

(2006) brings attention to the “right to privacy” (Introduction, XVI) and how the manner by

which different cultures view this right differs around the globe. As an example, in

“communitarian” (Sharp, 2006, Introduction, XVI) cultures, privacy is deemphasized, while in

societies that are labeled as “individualist” (Sharp, 2006, Introduction, XVI), privacy is highly

regarded. Sharp (2006) states that “a relativist argument is often used to justify an unethical

action (such as paying bribes) on the grounds that it is customary business practice in some parts


of the world” (Introduction, XVI). However, that line of rationalization does not take into

account that “in most cases, even if it is customary in a country, it is still considered unethical

there” (Sharp, 2006, Introduction, XVI).

Sharp’s (2006) emphasis on the aforementioned reality must be regarded as one of the

most important lessons in ethical analysis and understanding. Here, Sharp (2006) inquires,

“Which behaviors (or values) are legitimately different in different cultures, and which are

universal?” (Introduction, p. XVI). In Week One Discussion Board Initial Post, I agreed with

Sharp’s (2006) analysis and stated, “there are indeed universal ethical norms such as the inherent

value all culture attribute to honesty and truthfulness in everyday human conduct or for matter

leadership behavior. Those who pay bribes or promote systems that are energized on bribery

engage in dishonest conduct, enhancement of falsehood and diminution of integrity as one of the

most essential characteristics of leadership”. A further expression of relativist thinking argues

that, “it is right for me to do this because everyone else does it” (Sharp, 2006, Introduction, p.

XVI). Sharp (2006) observes such an argument, “of course, is false” (Introduction, p. XVI).

Egoism. As described by Sharp (2006), “Egoism is a theory that addresses the

legitimacy of self-interest…It is at the core of traditional economics---Adam Smith’s invisible

hand is driven by a self-interest that was assumed to be ethical” (Introduction, p. XVI).

However, complications arise “when self-interest dominates the other considerations noted

above—rights and fairness” (Sharp, 2006, Introduction, p. XVI). A further problem with the

egoism approach is the very fact that “we have no universal theory that can tell us when too

much self-interest becomes unethical, but it is likely that relativism may provide insights—the

legitimacy of self-interest may be culture bound, in that what is seen as excessively selfish in one

country would be acceptable in another” (Sharp, 2006, Introduction, p. XVI).


A Universal Approach to Creating Ethical Organizational Cultures

Core human values. Donaldson (September-October 1996) proposes that there exist

universal ethical norms or “some hard truths that must guide manager’s actions, a set of what…

[he calls] core human values, which define minimum ethical standards for all companies” (p.

53). Donaldson (1996) utilizes Rawls’ (1971) concept of “overlapping consensus” (p. 53) to

argue that “seemingly divergent values converge at key points…Despite important differences

between Western and non-Western cultural and religious traditions, both express shared attitudes

about what it means to be human” (p. 53). Donaldson (1996) calls these three core human

values “respect for human dignity, respect for basic rights and good citizenship” (p. 54). Here,

respect for human dignity mandates that “individuals must not treat others simply as tools; in

other words, they must recognize a person’s value as a human being” (Donaldson, 1996, p. 53).

With respect to companies, a respect for human dignity would mean “creating and sustaining a

corporate culture in which employees, customers, and suppliers are treated not as means to an

end but as people whose intrinsic value must be acknowledged, and by producing safe products

and services in a safe workplace” (Donaldson, 1996, p. 54).

In addition, a respect for basic rights would translate into organizations “acting in ways

that support and protect the individual rights of employees, customers, and surrounding

communities, and by avoiding relationships that violate human being’s rights to health,

education, safety, and an adequate standard of living” (Donaldson, 1996, p. 54). Donaldson’s

(1996) emphasis on good citizenship holds that “members of a community must work together to

support and improve the institutions on which the community depends” (Donaldson, 1996, p.

54). Good citizenship would also hold that companies support “essential social institutions, such

as the economic system, and by working with host governments and other organizations to


protect the environment” (Donaldson, 1996, p. 54). Donaldson (1996) argues that core human

values “establish a moral compass for business practice…help companies identify practices that

are acceptable and those that are intolerable—even if the practices are compatible with a host

country’s norms and laws” (p. 54) such as “dumping pollutants…lying about product

specifications” (p. 54).

Corporate cultures and codes of conduct . Donaldson (1996) argues in order to

“operate ethically in foreign cultures” (p. 54) managers must be guided by “specific…precise

statements that spell out the behavior and operating practices that the company demands” (p. 54).

These “statements of values and codes of conduct” (Donaldson, 1996, p. 54) must be

“unambiguous” (p. 54) and “provide clear direction about ethical behavior when the temptation

to behave unethically is strongest” (p. 54). Nevertheless, Donaldson (1996) emphasizes that

codes of conduct must also “leave room for a manager to use his or her judgment in situations

requiring cultural sensitivity” (p. 56). In addition, employees must not be forced to “adopt all

home-country values and renounce their own” (Donaldson, 1996, p. 56). Most importantly, a

firm’s leadership “need to refer often to their organization’s credo and code and must themselves

be credible, committed and consistent…If senior managers act as though ethics don’t matter, the

rest of the company’s employees won’t think they do, either” (Donaldson, 1996, p. 56).

How Young Managers and Leaders Interact with Ethical Dilemmas in the Organization

Badaracco & Webb’s (Winter 1995) article titled “Business Ethics: A View from the

Trenches” discusses the ethical climate prevalent in many private organizations and the pressures

that young managers experienced in being employed in these ethically compromising

environments. The article that was based on “in-depth interviews with thirty recent graduates of

the Harvard MBA Program” (Badaracco & Webb, 1995, p. 8) revealed how young managers


“felt strong organizational pressures to do things that they believed were, sleazy, unethical, or

sometimes illegal” (Badaracco & Webb, 1995, p. 8). Young managers also expressed the

opinion that instruments such as “ethics programs, codes of conduct, mission statements, hot

lines” (Badaracco & Webb, 1995, p. 9) were not effective in altering the ethical climate of the

organization.

With respect to organizational leadership, the interviews found that in general executives

were “out of touch” (Badaracco & Webb, 1995, p. 9) in regards to ethical questions. Moreover,

in the long run, young managers had to fall back on their “personal reflection and individual

values” (Badaracco & Webb, 1995, p. 9) in order to come up with answers to their ethical

questions separate from any solutions offered by the organization. Eventually, young managers

“came to see themselves…as self-reliant, mobile, autonomous moral agents in an intensely

competitive, sometimes unethical business world” (Badaracco & Webb, 1995, p. 9).

Interestingly, the majority of interviewees thought “organizational pressures—not character

flaws—had led people in their organization to act unethically” (Badaracco & Webb, 1995, p. 10).

In general, young managers stated, “the people who pressured them to act in sleazy ways

were responding to four powerful organizational commandments” (Badaracco & Webb, 1995, p.

10). First, interviewees held that in these organizations “performance is what really” (Badaracco

& Webb, 1995, p. 10) counted. Secondly, those who pressured the young managers valued

loyalty and expected the interviewees to be “team player [s]” (Badaracco & Webb, 1995, p. 10).

Third, young managers were told not to be caught breaking the “law” (Badaracco & Webb, 1995,

p. 10). Fourth, young managers were given the unmistakable impression that they must not

“over-invest in ethical behavior” (Badaracco & Webb, 1995, p. 10).


The interviewees contended that ethics programs “failed to address the issues commonly

faced by young managers, other people in the organization paid no attention to them, and the

principles espoused in the codes and programs seemed inconsistent with what the company was

all about” (Badaracco & Webb, 1995, p. 14). Young managers also observed that in some

companies codes of ethics are related to the “commandments to be loyal and perform well”

(Badaracco & Webb, 1995, p. 15) while in others they are part of the “total quality push” (p. 15)

or concentrated “entirely on serving the customer” (p. 15). Regardless of their character or

orientation, interviewees thought “ethics programs…existed in vacuums” (Badaracco & Webb,

1995, p. 15).

The majority of young managers believed “corporate cultures were set, not by intentions

and pronouncements of those at the top, but by their actions” (Badaracco & Webb, 1995, pp. 15-

16). Interviewees also felt “there seemed to be a significant disconnect between young managers

and senior executives” (Badaracco & Webb, 1995, p. 18) related to the “feckless ethics efforts

many executives had sponsored and the immunity that many companies, even those with

elaborate ethics programs, seem to have granted to sleazy, but high-performing middle and upper

managers” (p. 18). The aforementioned disconnect and alienation resulted in interviewees

resorting to decisions making “by listening to their hearts and avoiding activities that made them

feel uncomfortable” ((Badaracco & Webb, 1995, p. 18) thereby not relying on “corporate credos,

the exhortations and examples of senior executives, or philosophical principles or religious

reflection” (p. 18).

In light of their work related experiences, the young managers “defined professional

ethics in terms of self-reliance and mobility rather than community and commitment”

(Badaracco & Webb, 1995, p. 21) and stated that “being ethical involves fidelity to one’s own


values and willingness to leave an organization that fails to match these values” (p. 21). This

ethical posture translates into “being able to take a stand and walk away…Ethics was a matter of

exit, rather than loyalty or voice” (Badaracco & Webb, 1995, p. 21). Importantly, interviewees

also expressed “very little idealism about corporate visions, the values of top managers, or the

role of companies in society” (Badaracco & Webb, 1995, p. 23). In the end, it is crucial to be

cognizant of the very fact that “the ethical climate of an organization is extremely fragile”

(Badaracco & Webb, 1995, p. 24) and only “actions are what matter” (p. 24) when endeavoring

to promote ethical principles.

Managing Ethics and Legal Compliance: What Works and What Hurts

Trevino, Weaver, Gibson & Toffler’s (Winter 1999) article titled “Managing Ethics and

Legal Compliance: What Works and What Hurts” investigates “what works and what does not

in ethics/compliance management” (p. 2) and how organizational culture and leadership conduct

influence the success of these programs. In this pursuit, the authors conducted a study in which

they observed, “specific characteristics of the formal ethics or compliance program matter less

than broader perceptions of the program’s orientation toward values and ethical aspirations”

(Trevino et al., 1999, p. 1). In this light, Trevino et al. (1999) found that ethics/compliance

programs are effective when there is “consistency between policies and actions” (p. 1) as well as

certain manifestations of the “organization’s ethical culture such as ethical leadership, fair

treatment of employees, and open discussion of ethics in the organization” (p. 1). On the other

hand, what negatively influence the potential of ethics/compliance programs are organizational

cultures that promote “self-interest and unquestioning obedience to authority, and the perception

that the ethics or compliance program exist only to protect top management from blame”

(Trevino et al., 1999, pp. 1-2).


In Week Three Discussion Board Personal Action Journal, I also cited observations in

LDR 6135 Lecture Notes that indicated ethics/compliance programs are meaningful and reach

their intended goals when there exist “consistency between policies and actions” (Murdock,

Week 3 Lecture Notes, Managing Ethics and Legal Compliance, 2014, p. 4) in leadership

conduct and organizational culture. A crucial variable in ensuring the creation of a resilient

ethical orientation within the organization is the promotion of an “open communication

environment” (Murdock, LDR 6135, Week 3 Lecture Notes, 2014, p. 6).

In these open communication environments, “getting good advice early can nip problems

in the bud and provide employees with accurate guidance on company policies and the law”

(Trevino et al., 1999, p. 4). The aforementioned open climate will also lead to employees

seeking “advice within the company” (Trevino et al., 1999, p. 4) in addition to “keeping the

ethics/compliance program dynamic and responsive to employees’ needs” (p. 4). An open

communication environment will further convince employees that they are able to “deliver bad

news to management without fear of repercussions” (Trevino et al., 1999, p. 4) thereby avoiding

“developing ethical risks or problems” (p. 4).

An added feature of an effective ethics/compliance program is the enhancement of

“employee commitment” (Trevino et al., 1999, p. 6) to the organization and the strengthening of

“value congruence—the extent to which employees feel a sense of belonging and connection to

the organization” (p. 6). Effective ethics/compliance programs practice “follow-through…on

ethical concerns raised by employees, and whether there is consistency between

ethics/compliance policies and actual organizational practices” (Trevino et al., 1999, p. 11).

Following-thorough communicates to the “employees that a focus on ethics and legal compliance

represents a sincere commitment on the part of management” (Trevino et al., 1999, p. 11).


Ethical cultures come to fruition when organizational leadership is “openly and strongly

committed to ethical conduct, and give constant leadership in tending and renewing the values of

the organization” (Trevino et al., 1999, p. 12). Here, the values and conduct of leadership is “the

principle determinant of the ethical tone” (Trevino et al., 1999, p. 12) in the organization. In this

juncture, an important caveat must not be neglected that in these environments, the ethics of

leadership is also influenced by supervisory conduct that in practical terms is “responsible for

rewards and punishment and…carry the message of how things are really done in the

organization” (Trevino et al., 1999, p. 12). The particular role of supervisors in organizations

creates an atmosphere where “employees don’t think differently about supervisors and executive

leaders with regard to their attention to ethics and legal compliance” Trevino et al., 1999, p. 13).

In the end, the perceptions of the employees that led them to believe, “supervisors and executives

regularly pay attention to ethics, take ethics seriously, and care about ethics and values as much

as the bottom line” provided one of the necessary ingredients in creating a successful

ethics/compliance program.

Ethics/compliance programs and the ethical culture of the organizations are also

influenced by “employees’ perceptions of general fair treatment” (Trevino et al., 1999, p. 13).

As one company executive stated, “When managers say ethics employees hear fairness”

(Trevino, et al., 1999, p. 13). Accordingly, to the employees, “ethics means how the

organization treats them and their coworkers” (Trevino et al., 1999, p. 13). This is precisely why

“so many calls to ethics hotlines concern human resources issues of fair treatment in hiring,

layoffs, performance appraisals, and promotions” (Trevino et al., 1999, p. 13). One of the most

important actions in promoting fairness in the organization is the “elimination of executive

dining rooms and other perks” (Trevino et al., 1999, p. 13) which is in line with other


indispensable fairness oriented prerogatives that state, “Nobody is above the rules and code of

conduct” (Trevino et al., 1999, p. 13).

Ethical cultures are also facilitated by “reward systems that support ethical conduct”

(Trevino et al., 1999, p. 15) because in general “people do what’s rewarded and avoid doing

what’s punished” (p. 15). Importantly, Trevino et al.’s (1999) study revealed that “employee

perceptions that ethical behavior is rewarded were more important than were perceptions that

unethical behavior is punished” (p. 15). When employees believe that ethical behavior is

rewarded, they in turn have a higher “commitment” (Trevino et al., 1999, p. 15) to the

organization and also believe it is “okay to deliver bad news to management” (p. 15).

In an ethical organizational culture, “individual…accountability and responsibility for…

[ones] actions and an obligation to question authority when something seems wrong” (Trevino et

al., 1999, p. 15) is promoted and supported. On the other hand, unethical organizational cultures

emphasize “unquestioning obedience to authority” (Trevino et al., 1999, p. 15) in the spirit of

“just do as I say and don’t ask any questions” (p. 15). Trevino et al.’s (1999) research found that

cultures that promoted an “unquestioning obedience to authority” (p. 15) negatively influenced

“employee commitment to the organization, willingness to report an ethical or legal violation,

and willingness to deliver bad news to management” (p. 15). In the final analysis, “ethics and

compliance must be baked into the culture of the organization” (Trevino et al., 1999, p. 17) in

order to create successful programs. In this light, organizational leadership “must regularly show

they care about ethics and shared values (including demonstrating that values are as important as

the bottom line), and they must show that they care through words and consistent actions

(Trevino et al., 1999, p. 17). What is also instrumental in bringing about effective

ethics/compliance programs are “employees’ perceptions that the company follows through on


its formal codes, policies, and procedures by working hard to detect violators and by following

up on ethical concerns raised by employees” (Trevino et al., 1999, p. 18).

Moral Person and Moral Manager: How Executives Develop a Reputation for Ethical

Leadership

Trevino et al.’s (Summer 2000) article titled “Moral Person and Moral Manager: How

Executives Develop a Reputation for Ethical Leadership” contends that the effectiveness of

ethical leadership is highly influenced by “other’s perceptions” (p. 128) including “employees at

all levels as well as key external stakeholders” (p. 128). These perceptions that create ones

“reputation for ethical leadership rests upon two essential pillars: perceptions of you as both a

moral person and a moral manager” (Trevino et al., 2000, p. 128). The moral person attributes

of a leader are “characterized in terms of individual traits such as honesty and integrity” (Trevino

et al., 2000, p. 128). On the other hand, the moral manager reputation is represented in the

leader “as the Chief Ethics Officer of the organization, creating a strong ethics message that gets

employees’ attention and influences their thoughts and behaviors” (Trevino et al., 2000, p. 128).

Leaders must understand that to possess a reputation for ethical leadership, it is not sufficient to

“just be an ethical person” (Trevino et al., 2000, p. 128).

In order to fulfill their role as a moral manager, organizational leaders must “find ways to

focus the organization’s attention on ethics and values and to infuse the organization with

principles that will guide the actions of all employees” (Trevino et al., 2000, p. 128). Leaders

must be cognizant of the fact that “values are the glue that can hold things together, and values

must be conveyed from the top of the organization” (Trevino et al., 2000, p. 128). In addition,

employees who do not adhere to organizational ethical standards “can cost the organization


dearly in legal fees and can have a tremendous, sometimes irreversible impact on the

organization’s image and culture” (Trevino et al., 2000, pp. 128-129).

Leaders who aspire to be known as ethical must realize that “a reputation for ethical

leadership can not be taken for granted because most employees in large organizations do not

interact with senior executives…They know them only from a distance” (Trevino et al., 2000, p.

129). In such an environment, executives may “know themselves as good people—honest,

caring, and fair—they should not assume that others see them in the same way” (Trevino et al.,

2000, p. 129). This lack of knowledge by others with respect to an executive’s ethical

orientation may lead them “to think of the leader as being somewhere in between—amoral or

ethically neutral” (Trevino et al., 2000, p. 129). There are two reasons why leaders acquire a

reputation for being ethically neutral. First, leaders may not have “faced major public ethical

challenges that would provide the opportunity to convey his or her values to others” (Trevino et

al., 2000, p. 130). Secondly, the leader “has not proactively made ethics and values an explicit

and evident part of the leadership agenda” (p. 130).

In order to acquire a reputation as a moral person, leaders must be perceived by others

“as having certain traits, engaging in certain kinds of behaviors, and making decisions based

upon ethical principles” (Trevino et al., 2000, p. 130). Crucially, leaders must also be regarded

as holding these attributes authentically (Trevino et al., 2000, p. 130). Leaders who are thought

of as moral persons possess the traits of “honesty, trustworthiness, and integrity” (Trevino et al.,

2000, p. 130). Here, trustworthiness is rooted in “consistency, credibility, and predictability in

relationships” (Trevino et al., 2000, p. 130).

Leaders who have a reputation for being moral persons also engage in the type of

behavior that is characterized by “doing the right thing, showing concern for people and treating


people right, being open and communicative, and demonstrating morality in one’s personal life”

(Trevino et al., 2000, pp. 131-132). Leaders as moral persons also exercise the type of decision

making that is “objective and fair…have a perspective that goes beyond the bottom line to

include concerns about the broader society and community…rely upon a number of ethical

decision rules such as the golden rule” (Trevino et al., 2000, p. 132). These characteristics

illustrate “the ethical leader’s sensitivity to community standards” (Trevino et al., 2000, p. 133).

In spite of the aforementioned perceptions for being a moral person, organizational

leaders must always remember that “having a reputation for being a moral person tells

employees what you are likely to do—a good start, but it does not necessarily tell them what they

should do”. As a result, organizational leaders must also work hard to develop a reputation for

being moral managers. Here, the leader as a moral manager must “serve as a role model for

ethical conduct in a way that is visible to employees…They communicate regularly and

persuasively with employees about ethical standards, principles, and values…they use the reward

system consistently to hold all employees accountable to ethical standards” (Trevino et al., 2000,

p. 134). In this light, role modeling promotes “visible action and the perceptual and reputational

aspects of ethical leadership” (Trevino et al., 2000, p. 134). In addition, communicating about

ethics and values “explains the values that guide important decisions and actions” (Trevino et al.,

2000, p. 135). Furthermore, an ethically empowered reward system, effectively communicates

“desirable and undesirable conduct…in ways that are consistent with stated values” (Trevino et

al., 2000, p. 135).

Ethical leadership benefits the organization by being “good for business, particularly in

the long run, and avoids legal problems” (Trevino et al., 2000, p. 136). Furthermore, ethical

leadership enhances “employee commitment, satisfaction, comfort, and even fun…people enjoy


working for an ethical organization and it helps the organization attract and retain the best

employees” (Trevino et al., 2000, p. 136). In these organizations, the employees “imitate the

behavior of their leader and therefore the employees will be more ethical themselves” (Trevino et

al., 2000, p. 136). Nevertheless, in organizations where the qualities of either a moral person or

a moral manager or both is missing in the executive leadership, the reputation of these leaders

also suffers by being regarded and perceived as an “unethical leader, a hypocritical leader, or an

ethically neutral leader” (Trevino et al., 2000, p. 137).

When a leader is known as being “weak on both dimensions” (Trevino et al., 2000, p.

137), she or he will eventually “develop a reputation for unethical leadership” (p. 137). In

addition, in cases when the leader is perceived to be deficient as a moral person “but who

attempts to put ethics and values at the forefront of the leadership agenda” (Trevino et al., 2000,

p. 138), she or he will be “perceived as a hypocritical leader who talks the ethics talk but does

not walk the ethics talk” (p. 138). Furthermore, there are situations when the leader is

“perceived to be not clearly unethical, but also not strongly ethical” (Trevino et al., 2000, p. 138)

or for that matter ethically neutral. These individuals are usually “more self-centered than other-

centered…less open to input from others and care less about people…focus on financial ends

rather than the means…base decisions upon the short-term bottom line…less concerned with

leaving the organization or the world a better place for the future” (Trevino et al., 2000, p. 138).

Trevino et al. (2000) recommend that in order to develop a reputation for ethical

leadership, executives must place strong emphasis on enhancing their characteristics for being

both a moral person and a moral manager. In relation to being perceived as a moral person,

Trevino et al. (2000) observe that a number of “senior executives arrive in their leadership

positions with all the necessary cognitive and emotional tools to be an active ethical leader” (p.


139). In such cases, these leaders have been promoted to “senior leadership positions…because

they have a reputation for integrity” (Trevino et al., 2000, p. 139).

However, in the event, leaders feel these moral person oriented features “needs work”

(Trevino et al., 2000, p. 139) they must “devote energy to developing this side” (p. 139) of their

leadership. These efforts may include educational activities or seeking the advice of those whose

opinions are respected by these leaders. Highlighting moral person characteristics also include

engaging in two-way conversations with organizational associates in order to inquire regarding

what employees know of the leader “in ethical leadership terms” (Trevino et al., 2000, p. 140).

This may also include conducting employee surveys on this subject matter. The fact remains that

the leader may “not been outspoken on ethics and values issues, or…have not managed a highly

public crisis that provided an opportunity for employees to learn about [the leader’s] values”

(Trevino et al., 2000, p. 140). The practice of fulfilling the moral manager responsibilities of

ethical leadership will involve “overt action on the part of the executive to serve as a role model

for ethical behavior in highly visible ways, to communicate about ethics and values, and to use

the reward system to hold people accountable” (Trevino et al., 2000, p. 140).

Weekly Personal Action Journals

The following are my Personal Action Journals. I have revised some minor parts of these

Journals. I have not included the discussion from Week Three Personal Action Journal due to

the very fact that the material in question has already been covered in this paper.

Week One Personal Action Journal

Week One Personal Action Journal discussed the Northeastern Mutual Life: Preparing

for Employee terminations” (Sharp, 2006, pp. 4-9) case as it related to the ethical dilemma of


balancing shareholders’ right to a favorable “return on equity” (p. 4) versus the right of older

employees not to be terminated in order to realize such an outcome. This Personal Action

Journal takes into consideration different ethical theories and how these ethical concepts are

expressed in the laws of the country of Canada and the province of Alberta.

The Canadian Constitution Act (ACA) adopted in 1982 states, “Every individual is equal

before and under the law, and has the right to the equal protection and equal benefit of the law

without discrimination and, in particular, without discrimination based on race, national or ethnic

origin, color, religion, sex, age or mental or physical ability” (Part 1, Canadian Charter of Rights

and Freedoms, Section 15-1, Equality Rights). The Canadian Human Rights Act (CHRA)

adopted in 1985 states, “…all individuals should have an opportunity equal with other

individuals to make for themselves the lives that they are able and wish to have and to have their

needs accommodated, consistent with their duties and obligations as members of society, without

being hindered in or prevented from doing so by discriminatory practices based on race, national

or ethnic origin, color, religion, age…” (Purpose of Act).

The Canadian Human Rights Act (CHRA) (1985) adds, “For all purposes of this Act, the

prohibited grounds of discrimination are race, national or ethnic origin, color, religion, age…”

(Part 1, Proscribed Discrimination, General, Prohibited Grounds of Discrimination, Section 3-1).

Most importantly, with respect to employment, CHRA declares that “It is a discriminatory

practice, directly or indirectly, in the course of employment, to differentiate adversely in relation

to an employee, on a prohibited ground of discrimination” (Part 1, Proscribed Discrimination,

Discriminatory Practices, Employment, Section 7-b). CHRA (1985) does allow for exceptions to

its rules in situations where the individual “…has reached the maximum age that applies to that


employment by law or under regulations…” (Part 1, Proscribed Discrimination, Discriminatory

Practices, Exceptions, Section 15-1-b).

As indicated in the Northeastern Mutual Life case, this mandatory retirement age is set at

65 years old. A further exception is allowed when “any refusal, exclusion, expulsion,

suspension, limitation, specification or preference in relation to any employment is established

by an employer to be based on a bona fide occupational requirement (BFOR)” (Part 1,

Proscribed Discrimination, Discriminatory Practices, Exceptions, Section 15-1-a). A very

specific, clear and general description of a BFOR is found in the Canadian Forces Morale and

Welfare Office Website, “a bona fide occupational requirement [BFOR] is defined by the

Government of Canada as a condition of employment that is imposed in the belief that is

necessary for the safe, efficient and reliable performance of the job and which is objectively,

reasonably necessary for such performance” (Personnel Support Programs, Fitness and Health,

Fitness, Bona Fide Occupational Requirement).

Explicitly, in regards to the Northeastern Mutual Life case, BFOR will translate into the

firm being unable to concentrate singularly on terminating older employees (a protected group)

as a distinct class/category in order to improve the company’s “return on equity” which has

absolutely nothing to do with the ability of the aforementioned individuals to perform their duties

in a “safe, efficient and reliable” (Canadian Forces Morale and Welfare Office Website,

Personnel Support Programs, Fitness and Health, Fitness, Bona Fide Occupational Requirement”

manner. In addition, the company is also not allowed to collectively select and terminate as a

group, its older employees (involuntary termination), unless and until they have reached the

mandatory retirement age of 65 years old.


Similarly, the Alberta Human Rights Act (Revised Statutes of Alberta 2000, Chapter A-

25.5) also states that “No employer shall refuse to employ or refuse to continue to employ any

person, or discriminate against any person with regard to employment or any term of condition

of employment, because of race, religious beliefs…age…of that person or any other person”

(Code of Conduct, Discrimination re Employment Practices, 7-1-a-b). The Alberta Human

Rights Act (Revised Statutes of Alberta 2000, Chapter A-25.5) also delineates the same bona

fide occupational requirement exception as the national government legislation which does not

include “return on equity” enhancement as a legitimate cause for singularly selecting and

terminating older employees.

In lieu of the existence of the aforementioned body of law at the national and the

Province of Alberta level, Gillingham (CEO, Northeastern Mutual Life) will be unable to

entertain selecting and terminating older employees as a group collectively in order to improve

the company’s return on equity. Nevertheless, theoretically, Gillingham will still be able to

move forward with terminating “20 percent of 2600 administrative employees” (Sharp, 2006, p.

8) provided that the company does not violate anti-discrimination statutes (i.e. singularly

selecting a protected class for termination or resorting to other discriminatory practices such as

terminating older employees who are near retirement age). As indicated in our textbook, in that

scenario, Gillingham may still be ordered to implement “a partial windup of the pension fund”

(Sharp, 2006, p. 8) and furthermore “file reports to the Alberta government” (p. 8).

Employee terminations must always be regarded as extremely painful, serious and

sensitive events. Regrettably, as they may be a potential part of our organizational existence,

they must also be handled with sensitivity, thoughtfulness and sympathy avoiding callousness

and arbitrariness. Competent management must consistently endeavor to avoid terminations


utilizing all available strategies. Once engaged in the act of terminating employees (as a last

resort) due to unavoidable commercial necessity, organizations must act rationally, humanely,

fairly/equitably, thoughtfully and truthfully. All available resources must be placed at the

disposal of terminated employees. This is an ethical disposition with the added value of

maintaining trust in-between the organization and present and future employees. As Gillingham

is pondering his return on equity enhancing options, anti-discrimination statutes act as

parameters that will direct him towards the type of decision making, as painful as they may be,

that are not inherently devoid of ethical standards.

Week Two Personal Action Journal

Week Two Personal Action Journal argues that strong regulations promote ethical

standards in the financial industry. This week’s Personal Action Journal also comments on

other management oriented actions that uphold the ethical character of organizations.

The noted economist and Nobel Laureate, Joseph E. Stiglitz (May 29, 2010) reflecting on

the lessons of the Financial Crisis of 2007/2008 points towards “the failure of regulation” (p.

322) as the major culprit in preventing the development of conditions that eventually led to the

most serious economic upheaval since the Great Depression. Stiglitz (May 29, 2010) observes

that evaluating the history of the past 200 years reveals “one short period, the 25 or 30 years after

World War II” (p. 322) as being the only years were the world economy did not experience

major economic crisis. Stiglitz (May 29, 2010) argues “those years saw the most rapid and most

widely shared economic growth, and in that period there was also strong regulation” (p. 322).

The fundamental pillar of Stiglitz’s argument is the need for effective regulation in

preserving the health of our financial system. Stiglitz (May 29, 2010) holds that “open


unregulated global financial markets are dangerous…They can be the basis of strong economic

growth that can bring prosperity, but they can also bring bubbles and crisis” (p. 334). Stiglitz

(May 29, 2010) insists that in a global economy in order to avoid domino like financial crisis

gripping the individual nations’ economic systems, countries “cannot rely on others’ regulation

to protect… [themselves] in this interconnected world” (p. 334). Here he also calls for

“restrictions and capital controls on capital inflows and outflows” (Stiglitz, May 29, 2010, p.

334).

Interestingly, in regards to adequate levels of capitalization, Stiglitz (May 29, 2010) uses

the example of Spain as the scene of one of the most destructive real estate bubbles during the

crisis where nevertheless due to regulation the financial institutions were “well-capitalized” (p.

336). Spanish regulatory standards concerning capitalization that were adopted years prior to the

crisis “introduced provisions that essentially made sure that as they lent more, they also had

adequate reserves” (Stiglitz, May 29, 2010, p. 334). Stiglitz (May 29, 2010) utilizes Spain as an

example of a country with financial institutions that are “still in relatively good shape” (p. 336)

due to regulatory requirements for sufficient capitalization in spite of experiencing “adverse

circumstances [real estate crisis]” (p. 336).

Most importantly, Stiglitz (May 29, 2010) speaks to the global imbalance that exists

between Asian economies that maintain elevated savings rates and western economies that are

experiencing very high rates of consumption. Instead, Stiglitz (May 29, 2010) proposes

increased rates of investments in the world in order “to retrofit the economy for global warming”

(p. 337) and alleviating “problems of poverty: 40% of the world’s people are living on less than

$ 2.00 per day” (p. 337). However, the global imbalance that Stiglitz (May 29, 2010) is alluding

to also includes the existence of “excess capacity” (p. 339) by not “fully utilizing labor” (p. 339)


and not “utilizing capital goods” (p. 339) resulting in consistent patterns of “massive

misallocation of resources” (p. 339). In other words this intractable and recurring “imbalance

between supply and demand” (Stiglitz, May 29, 2010) is at the root of our inability in not “fully

utilizing our human resources or our capital resources” (p. 339). Stiglitz (May 29, 2010)

envisions the “job of global financial markets” (p. 337) as to “move savings from where there are

surpluses to where they are needed” (p. 337).

In regards to the global utilization of capital resources, unrestricted development without

regard to sustainable environmental standards and regulations is no longer practical or ethically

acceptable. This is one of the most critical periods in the environmental history of the world

where an increasing number of nations are enhancing the levels of their economic development.

These inevitable accelerated rates of development together with population growth the world

over are simply not environmentally sustainable. Indeed, the only types of development that are

able to be sustainable on a global scale and over an extended period of time are those that as

Stiglitz (May 29, 2010) asserts are geared towards environmental concerns or possess

environmental credentials.

In relation to the mobilization of our human resources, there exists an enormous gap the

world over in-between the limitless potential of the human person and the opportunities that are

provided for her or his professional and intellectual advancement. This discrepancy is uniquely

acute in developing nations with scarce economic opportunity, constrained upward mobility

capacity and an ever widening chasm among the haves and the have-nots. As governments and

public policy have been struggling to grapple with these recurring human resources issues on the

national level, we are also reminded of Dr. Murdock’s observations that “U.S. economy is still

trying to fully recover as it deals with income and wealth discrepancies” (LDR 6135, The Ethical


Leader, Week 2 Announcements, September 14, 2014). Furthermore, as Dr. Murdock has stated

“The economy-wide problems mentioned here are a reflection of what happened, and in many

ways may still be happening, collectively at the organizational level” (LDR 6135, The Ethical

Leader, Week 2 Announcements, September 14, 2014).

Indeed, a reasonable argument may be made that organizations have been largely

ineffective in their ability to implement the latest scientific discoveries in individual and social

psychology and human motivation in order to increase their productivity. In a study by Hanson

(1986) researching “the factors that best accounted for financial success over a five-year span in

40 major manufacturing firms…one factor--the ability to manage people effectively—was three

times more powerful than all other factors combined in accounting for financial success over a

five-year period” (as cited in Whetten & Cameron, 2011, p. 6). As Hanson (1986) observed

“good management was more important than all other factors taken together in predicting

profitability” (as cited in Whetten & Cameron, 2011, p. 6). A further study by the U.S. Office of

the Comptroller of the Currency (1990) investigating the roots of bank failures in the U.S. during

the 1980s found that “Almost 90 percent of the failed banks were judged to have had poor

management” (as cited in Whetten & Cameron, 2011, p. 6) and only “35 percent of the failure

had experienced depressed economic conditions in the region in which they operated” (as cited

in Whetten & Cameron, 2011, p. 6).

Effective management also includes truthfulness and transparency in relation to internal

and external stakeholders. As an ethical characteristic, truthfulness is indeed indispensable in

maintaining the credibility of our democratic system of government and the free enterprise

system. An example of this desire for truthfulness is Sarbanes-Oxley Act Section 302 that

requires a corporation’s financial reports must not “contain any material untrue statements or


material omission or be considered misleading…The financial statements and related

information fairly present the financial condition and the results in all material aspects”

(Sarbanes-Oxley Act 2002, Sarbanes-Oxley Act Section 302, Summary of Section 302). Further

examples of this need to promote truthfulness are evident in the Dodd-Frank Act’s provisions

regulating financial institutions ($50 billion or more) labeled as the “Stress Test” requiring the

“Federal Reserve conduct…annual supervisory stress tests to evaluate whether a covered

company has the capital…necessary to absorb losses and continue its operations by maintaining

ready access to funding, meeting its obligations to creditors and other counterparties, and

continuing to serve as a credit intermediary under adverse economic and financial conditions”

(Dodd-Frank Act Stress Test 2013, Supervisor Stress Tests).

An additional example concerning the Dodd-Frank Act are a series of regulations

intended to bring “transparency and accountability to the derivatives market” (Brief Summary of

the Dodd-Frank wall Street Reform and Consumer Protection Act, Creating Transparency and

Accountability for Derivatives) by regulating “over-the-counter derivatives so that irresponsible

practices and excessive risk-taking can no longer escape regulatory oversight” (Creating

Transparency and accountability for derivatives). Our financial institutions are the indispensable

pillars of our economic system. The aforementioned regulations and ethical standards ensure

that they are able to withstand the incredible and uncompromising challenges that lay ahead in

our future.

Week Three Personal Action Journal:

The material discussed in Week Three Personal Action Journal is already included in this

paper in the section devoted to the “Managing Ethics and Legal Compliance: What Works and

What Hurts” (Trevino et al., 1999) article.


Week Four Personal Action Journal:

Week Four Personal Action Journal discusses various theories, concepts and beliefs that

have contributed to the creation of our ethical norms. Here I have particularly highlighted the

intellectual traditions of helping the underprivileged prevalent in the Judeo-Christian heritage.

At the core of Donaldson’s (1996) argument in “Values in Tension: Ethics Away from

Home” (pp.48-62) article is the observation that “some hard truths…must guide managers’

actions, a set of what… [he calls] core human values, which define minimum ethical standards

for all companies” (p. 53). Here he uses among others this particular teaching from Jesus called

the Golden Rule found in the Book of Matthew (7:12, NRSE) stating,

“In everything do to others as you would have them do to you: for this is the law and the

prophets” (Matthew 7:12, NRSE).

Donaldson (1996) observes, this standard is “recognizable in every major religious and

ethical tradition around the world” (p. 53). Here, he cites Confucius advising “people to

maintain reciprocity, or not to do to others what they do not want done to themselves”

(Donaldson, 1996, p. 53). Donaldson (1996) also utilizes John Rawls’ (1971) concept of

“overlapping consensus” (as cited in Donaldson, 1996, p. 53) proposing that in evaluating

“Western and non-Western cultural and religious traditions” (p. 53) one finds “seemingly

divergent values converge at key points” (p. 53). Importantly, we read in the footnotes of page

1870 (Matthew 7:12, NRSE) of the New Revised Standard Edition that “The Golden Rule was

known in many versions in antiquity” (New Revised Standard Edition, p. 1870). In Week Two

Discussion Board Posts, Dr. Murdock (2014) in highlighting the importance of the leaders’

ability to preserve “consistency” in-between “personal” conduct and “professional” conduct in


order to maintain “credibility and the ability to influence others positively” cites this passage

from the Book of Luke (12:48, NRSE),

“From everyone to whom much has been given, much will be required; and from the one

to whom much has been entrusted, even more will be demanded” (Luke 12:48, NRSE) (Please

note that here I have used my own New Revised Standard Edition of the Bible. The

syntax/sentence compositions in other editions of the Bible are different).

In thinking on the fundamental responsibility of managers and leaders to act as role

models when considering universal ethical principles of charity, compassion, empathy, kindness

and sacrifice, we may also consider this lesson form Jesus to his disciples as they sat in front of

the Temple observing those offering donations,

“A poor widow came and put in two small copper coins, which are worth a penny. Then

he [Jesus] called his disciples and said to them, Truly I tell you, this poor widow has put in more

than all those who are contributing…For all of them have contributed out of their abundance; but

she out of her poverty has put in everything she had, all she had to live on” (Mark 12:41-44,

NRSE).

The question of one’s ethical responsibility towards upholding the prosperity and welfare

of others is also the central lesson of Jesus in the Parable of the Good Samaritan (Luke 10:25-37,

NRSE). Here Jesus responds to a question that asks, “what must I do to inherit eternal life?”

(Luke 10:25, NRSE) by stating,

“You shall love the Lord your God with all your heart, and with all your soul, and with

all your strength, and with all your mind; and your neighbor as yourself” (Luke 10:27, NRSE).


In this light, Jesus informs the listener that in order to acquire eternal salvation you must

love God with all your being and love “your neighbor as yourself” (Luke 10:27, NRSE).

What is told next in the Parable of the Good Samaritan (Luke 10:25-37, NRSE) is one of

Jesus’ most central assertions foretold through the instrument of a parable, that our inherent duty

as a human being is to do all that we are able to do as Good Samaritans for every/all other

human beings; even those who are complete strangers to us and especially/particularly those who

are in need or are facing hardship in their lives. In regards to leaders this ethical duty is of a

more critical nature for their potential to positively influence the lives of many human

multitudes.

Week Five Personal Action Journal:

In Week Five Personal Action Journal, I discussed some aspects of Friedman’s

(September 13, 1970) contention that companies and their executives should solely devote their

energies towards profit maximization and not be distracted by Corporate Social Responsibility

(CSR) related activities.

As I studied Friedman’s (September 13, 1970) article titled “The Social Responsibility of

Business Is To Increase Its Profits” (as cited in Hartman, 2002, pp. 225-230), I came away with a

number of reflections. The premise of Friedman’s (1970) argument that “corporate executives”

(as cited in Hartman, 2002, p. 226) or businesses’ responsibility is “to make as much money as

possible while conforming to the basic rules of the society, both those embodied in law and those

embodied in ethical custom” (p. 226) may be rationalized in light of the competitive challenges

that firms encounter on a daily basis. Unlike the public authority that possesses a statutory

mandate through the institution of taxation to raise needed funds, businesses are continuously


under competitive pressures in order to raise revenues through performance and innovation in the

act of justifying their very existence.

Naturally, in this intensely adversarial environment, a corporate executive’s fiduciary and

indeed sacred duty is to preserve and promote the interests of the shareholders. However, the

very existence of this fiduciary agency oriented relationship does not absolve businesses or their

leaders of other responsibilities or duties towards society at large. Crucially, it is material and

significant in this discussion that what Friedman (1970) calls our society’s “ethical custom” (as

cited in Hartman, 2002, p. 226) has experienced drastic transformation historically. In this light,

our society has come to regard discrimination, prejudice and stereotyping as inherently unethical

practices in all domains whether private or public. This is definitely a drastic transformation

from the traditional societies of the 18th, 19th and a very wide span of the 20th century.

Only recently, we have also begun to re-appraise our ethical custom in how we relate to

the natural environment and other species. Consequently, ethical custom as a societal institution

is an evolving phenomenon and not sedentary in its orientation and disposition. As a result, the

question must be asked if business leaders, executive or businesses for that matter have a social

responsibility in creating, generating and supporting innovative solutions in our society in order

to promote and preserve general welfare or should they just be content with merely as Friedman

(1970) emphasizes “conforming” (as cited in Hartman, 2002, p. 226) to the present status quo on

“ethical custom” (as cited in Hartman, 2002, p. 226). The fact remains that for leaders, whether

in business or other fields the ultimate question must be: How can I make this organization a

great place to work? How can I make this a great community or society? How can I make this a

great country? This also entails going beyond the call of duty and engaging in the type of


activity that travels far beyond what Friedman (1970) envisions as “embodied” (as cited in

Hartman, 2002, p. 226) in the present day “ethical custom” (p. 226).

Week Six Personal Action Journal

Kouzes & Posner (2012), in order to more deeply analyze “leadership as a relationship”

(Kouzes & Posner, 2012, p. 33) have researched “the expectations that constituents have of

leaders” (p. 33). This research that has been conducted for the past “thirty years” (Kouzes &

Posner, 2012, p. 33), has involved “surveying thousands of business and government executives”

(p. 33). The respondents were asked to indicate the “personal traits, characteristics, and

attributes they look for and admire in a person whom they would be willing to follow” (Kouzes

& Posner, 2012, p. 33). As described, the inquiry in the research is an “open-ended question”

(Kouzes & Posner, 2012, p. 33) whose results were evaluated by “several independent judges,

followed by further empirical analyses” (p. 33). The survey results have identified “twenty

characteristics” (Kouzes & Posner, 2012, p. 33) that form the basis of the “Admired Leaders

checklist…It has been administered to well over one hundred thousand people around the globe,

and the results are continuously updated” (p. 33).

This second survey, called the Admired Leaders checklist also asks the respondents to

select “the seven qualities, out of twenty, that they most look for and admire in a leader, someone

whose direction they willingly follow” (Kouzes & Posner, 2012, p. 33). Note that the emphasis

is on the word willingly. Kouzes & Posner (2012) have observed that the survey implies the

following thought: “What do they expect from a leader they would follow, not because they

have to, but because they want to” (p. 33). The survey results have remained remarkably

“constant over time” (Kouzes & Posner, 2012, p. 35) and has not varied “across countries,

cultures, ethnicities, organizational functions and hierarchies, genders, levels of education, and


age groups” (p. 35). The survey results year over year indicate that “for people to follow

someone willingly…the leader must be: Honest, Forward-looking, Competent, Inspiring”

(Kouzes & Posner, 2012).

Here, the leadership quality of being Honest has been consistently selected as the highest

rated desired characteristic in “six continents: Africa, North America, South America, Asia,

Europe, and Australia” (Kouzes & Posner, 2012, p. 34). The sheer commonality of Kouzes &

Posner’s survey results over time and across the world verify the authenticity of the ethical

concept of core human values proposed by Donaldson (1996, p. 53) and the veracity of John

Rawls’ (1971) concept of “overlapping consensus” (as cited in Donaldson, 1996, p. 53).

Furthermore, the survey results in selecting honesty as the most desired leader characteristic also

coalesce with Trevino, Hartman & Brown’s (2000) contention concerning this indispensable

moral person “trait” (p. 130) of “ethical leadership” (p. 130).

What Lessons You Intend to Apply to Your Personal and Professional Life in Terms of

Ethical Analysis, Decision Making and Ethical Leadership

As I have shared with you and the students in this class, I have always searched for ways

that would help me better serve the organizations that I have worked for and the larger society.

The imperative of service as an ethical principle has been the central dynamic in my personal and

professional life. This tendency towards service and ethical conduct has also greatly limited the

professional opportunities that have been available to me in my workplaces. As the discussion in

the “Business Ethics: A View from the Trenches” (Badaracco & Webb, 1995) article indicate, I

would be the individual who would “over-invest in ethical behavior” (p. 10) in regards to

employee relations activities such as empowerment and delegation. My volunteer activities for a

number years in teaching entering service providers the basic elements of hospitality, conflict


resolution and ethical conduct were also an expression of my desire to serve the larger

community and society.

This mind set also translated into the reality that I came to practice “professional ethics in

terms of self-reliance and mobility rather than community and commitment” (Badaracco &

Webb, 1995, p. 21). Eventually, I came to view ethical conduct as “listening to… [my heart]”

(Badaracco & Webb, 1995, p. 18), engaging in “decision making based on…the sleep test” and

relying on personal “intuitions and whether they are morally sound”. These particular

understanding “derived from traditional sources of values—fidelity to family values, long-

standing moral maxims, and advice from trusted individuals—as well as reputational concerns”

(Badaracco & Webb, 1995, p. 19). Nevertheless, I must state here that the organizations that I

worked for did reward my efforts with numerous awards (Employee of the Month, Employee of

the Year, municipal service oriented awards) although these commendations did not significantly

enhance my official power in those environments.

One of the most central ethical concepts that we have discussed in this course is the

indispensable necessity of “honesty, trustworthiness and integrity” (Trevino et al., 2000, p. 130)

in leadership. Indeed, leaders or for that matter organizations will possess minimal credibility if

they are not “perceived” (Trevino et al., 2000, p. 130) or do not have a “reputation” (p. 130) for

being honest and truthful. Importantly, the trait of honesty must also be supported by a set of

“behaviors” (Trevino et al., 2000, p. 132) that would witness “ethical leaders do the right thing”

(p. 132) in order to reinforce their reputation as a “moral person” (p. 128). In addition, the trait

of honesty is also reflected in the “personal morality” (Trevino et al., 2000, p. 132) of the ethical

leader as the moral person because she or he has a “greater standard, a greater responsibility than

the average person would have to live up to” (p. 132). As I have discussed in Week Six Personal


Action Journal, the research of Kouzes & Posner (2012) who are noted thinkers in the field of

leadership studies also illustrate that honesty is the single most important characteristic that

employees and subordinates “most look for and admire in a leader, someone whose direction

they would willingly follow” (p. 33).

The need for honesty and truthfulness is also a centerpiece in the discussion of ethics in

the “Values in Tension: Ethics Away from Home” (Donaldson, 1996) article. Here, Donaldson

(1996) argues that in “creating…ethical corporate culture [s]” (Donaldson, 1996, p. 54) leaders

must be mindful that they “need to refer often to their organization’s credo and code and must

themselves be credible, committed, and consistent…If senior managers act as though ethics

don’t matter, the rest of the company won’t think they do, either” (p. 56). This is precisely why I

did not distinguish between the service and respect that our organizations would offer our guests

versus the service and respect that the workplace offered its employees. In this spirit, I felt that

both customers and employees deserve exemplary service from the organization.

The element of respect is also central to Donaldson’s (1996) concept of “core human

values” (p. 53) in the need for leaders to exercise “respect for human dignity, respect for basic

rights, and good citizenship” (p. 54). As you have observed, I have repeatedly returned to

utilizing these ethical concepts in the completion of my course assignments including earlier in

this paper. Donaldson (1996) proposes that first, “individuals must not treat others simply as

tools; in other words, they must recognize a person’s value as a human being” (p. 53) and firms

must “respect human dignity by creating and sustaining a corporate culture in which employees,

customers, and suppliers are treated not as means to an end but as people whose intrinsic value

must be acknowledged, and by producing safe products and services in a safe workplace” (p. 54).

Respect is also a crucial behavioral attribute for ethical leaders as moral persons discussed in the


“Moral Person & Moral Manager” (Trevino et al., 2000, p. 132) article as they “show concern

for people through their actions” (p. 132).

In regards to respect for basic rights, Donaldson (1996) argues that organizations must

act “in ways that support and protect the individual rights of employees, customers, and

surrounding communities, and by avoiding relationships that violate human beings’ rights to

health, education, safety , and adequate standard of living’ (p. 54). I have always worked hard to

contribute to the community through good citizenship efforts through volunteer work and a strict

adherence to the laws that regulate this society. I have believed similar to Donaldson (1996) that

“members of a community must work together to support and improve the institutions on which

the community depends” (p. 53).

There are a number of other similar themes that are evident in the Trevino et al.’s (1999)

article titled “Managing Ethics and Legal Compliance: What Works and What Hurts”. Here, the

practice of respect is manifested in the design of effective ethics/compliance programs that

promote an open communication climate in the organization. This open communication

atmosphere leads to employees seeking “ethical/legal advice within the company” (Trevino et

al., 1999, p. 4). The open communication environment also convinces employees that they are

able to “deliver bad news to management without fear of repercussions” (Trevino et al., 1999, p.

4). Trevino et al. (2000) further emphasize the moral person behavioral character of “being

open…approachable and a good listener” (p. 132) that facilitates an organizational environment

where “employees feel comfortable sharing bad news with the ethical leader” (p. 132).

However, the act of communication must also include the “moral manager” (Trevino et al., 2000,

p. 128) oriented discussions on “ethics and values, not in a sermonizing way, but in a way that


explains the values that guide important decisions and actions” (Trevino et al., 2000, p. 135) in

the organization.

The character of respect is also represented in ethical cultures where “the company

follows up on ethical concerns raised by employees, and whether the company follows up on

ethical concerns raised by employees, and whether there is consistency between

ethics/compliance policies and actual practices” (p. 11). The same importance has been placed

by Donaldson (1996) on leaders “living up” (p. 55) to standards enunciated in the organization’s

codes of ethics. Trevino et al. (1999) observe that “follow-thorough tells employees that a focus

on ethics and legal compliance represents a sincere commitment on the part of management” (p.

11).

One of the most crucial lessons in this course has been the importance of the “fair

treatment of employees” (Trevino et al., 1999, p. 13) because as one leader had contended,

“when managers say ethics, employees hear fairness” (p. 13). Indeed, ethics hotlines are usually

inundated with “human resource issues” (Trevino et al., 1999, p. 13). A Symbolic and practical

representations of the fair treatment of employees is the “elimination of executive dining rooms

and other perks” (Trevino et al., 1999, p. 13). The quality of fairness in also introduced in the

moral person “decision making” (Trevino et al., 2000, p. 132) habits of the ethical leader where

she or he is “thought to hold to a solid set of ethical values and principles…include concerns

about the broader society and community” (p. 132).

Ethical cultures are also characterized by “reward systems that support ethical conduct …

[since] good managers know that people do what’s rewarded and avoid doing what’s punished”

(Trevino et al., 1999, p. 15). Here, the ethical leader as the moral manager rewards “those who

accomplish their goals by behaving in ways that are consistent with stated values” (Trevino et


al., 2000, p. 135) and discipline “employees at all levels when they break the rules” (p. 135).

What hurts ethical cultures, are organizational cultures that emphasize “unquestioning obedience

to authority” (Trevino et al., 1999, p. 15) negatively influencing “employee commitment to the

organization, willingness to report an ethical or legal violation, and willingness to deliver bad

news to management” (Trevino et al., 1999, p. 15).

Conclusion

The aforementioned lessons that I have learned in this course emphasize that ethical

leadership must be honest, truthful, respectful and fair. Ethical leaders must respect the rights

and dignity of other human beings and exercise good citizenship. These leaders must also treat

employees, subordinates and other stakeholders justly and equitably. In this light, ethical

organizational cultures promote a climate of open communication and reward systems that

support ethical conduct and discipline unethical behavior. Most importantly, ethical

organizational cultures and leadership do not emphasize unquestioning obedience to authority.


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