In recent years, the professional landscape has been shaped by a series of unsettling events. Layoffs and widespread burnout have frequently made headlines, placing many large corporations under scrutiny for their lack of empathy during times of crisis. In moments like these, leadership inevitably comes under the spotlight. Such situations compel us to ponder over a crucial question: how important is ethical leadership when guiding and influencing large groups of people?
Before we move further, let us understand what the terms leadership and ethics mean. Leadership is defined as the capacity of an individual or a group to influence or direct members of an organisation or team. Ethics refers to a set of principles that determine what is morally right or wrong and provide guidance based on accepted standards.
Why is ethics important in leadership?
Applying the principles of ethics in leadership ensures that the senior management creates trust and credibility among the employees. Such leaders guide their teams efficiently and create an environment that values and prioritises mutual respect and integrity. They gain the confidence of their stakeholders by incorporating ethics in everything they do. If these principles are that important, what are their key elements?
The advantages of practising ethical leadership are:
Better brand image
Applying ethics in leadership will enhance your brand image, which in turn can positively impact your business growth. This will also help raise awareness within your community.
Improved staff morale
When you treat people with good moral values, they are likely to treat you the same way. Leadership ethics will boost employee morale, encouraging them to follow organisational policies and act responsibly, be it while doing their tasks, handling the organisation’s resources, navigating dilemmas or interacting with other employees.
Strengthened workplace culture
Good leadership ethics will create positive vibes that affect productivity and other key aspects in the workplace. Adhering to ethics will influence teams, irrespective of whether they work on-site or remotely.
Improved customer loyalty
Good business ethics will impact the organisational culture, which in turn will affect customer service. The right morals will create happy customers, who will be loyal to your company.
Strong investment attraction
A strong brand image, along with a positive company culture, will help in attracting appropriate investments, which in turn will aid in increasing revenue and market share.
What are the elements of ethics?
The core elements of ethics are:
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Honesty: Ethical leadership always focuses on being honest with the team members and encouraging them to share their concerns and opinions. This improves connections among members of the organisation.
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Fairness: Applying ethics ensures that all employees are treated in a fair and just manner, without any bias. Leaders must ensure that decisions are taken based on merit, allowing individuals to grow within the organisation and move up the career ladder.
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Transparency: This involves being open about the organisation’s processes and actions with the team members. Ethical leaders provide necessary information to teams, simplify decision-making and prioritise inclusivity.
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Responsibility: In this case, the leaders must acknowledge their actions and associated consequences. They should own up to their mistakes and emphasise continuous improvement with the team. They must also promote accountability, i.e., being answerable for their actions. Leaders and team members must uphold established standards and ensure their actions align with the organisation’s values.
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Respect: This is a critical part of leadership ethics. Leaders who value and adhere to ethics treat team members with dignity, value their opinions and develop inclusion strategies. This helps in creating trust and professional development in the organisation.
What are some examples of ethical leadership?
Some notable examples of ethical leadership are:
Johnson & Johnson
One of the most important instances of ethical leadership is the case of Tylenol poisonings. This happened in September 1982 in Chicago, where a 12-year-old girl was given a Tylenol with extra-strength to relieve her symptoms. She died an hour later.
This was followed by six other deaths, all of which had the common link in the form of extra-strength Tylenol. Investigation revealed that the tablets were contaminated with cyanide, a chemical that disrupts the body’s ability to use oxygen. The company faced an ethical dilemma, but the leaders practised ethical leadership by acting swiftly and pulled off bottles worth $100 million and stopped ads and production. This prompt action saved lives and prioritised customer well-being.
They collaborated with the Chicago Police, discovering that the perpetrator had added cyanide to the medicine. He had purchased the product, laced it with cyanide and returned it to the shelves undetected. Johnson & Johnson introduced tamper-resistant packaging as a result. Their fast action and transparent care for customers helped the brand recover from this fiasco soon.
Starbucks
In April 2018, an incident occurred at Starbucks in Philadelphia, where two Black men had walked in and asked to use the bathroom. They were informed that restrooms were available for those who purchased, hence they waited for their friend to arrive. The manager called the police, who arrested these men for trespassing. This created outrage across the US.
This was ironic since Starbucks had a very diverse leadership board - 5 out of 14 members were women, and 5 were from racial minority groups. This racially motivated incident went against the organisation’s values. The then CEO, Kevin Johnson, fired the manager who called the police, apologised to the two men and implemented racial bias training for all Starbucks employees. Although the decision cost an estimated $12 million in lost profits, it reflected the company’s care for its customers, employees and society.
How to strengthen ethical practices at work?
Simple ways to promote ethical practices in your organisation are:
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While recruiting, hire people whose values and morals are aligned with the organisation. This will help in amplifying these values effectively.
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Consistently align your business objectives with these values to support them.
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Practice ethical leadership in the way you expect others to, and lead your operations with dignity
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Encourage transparent communication among leaders, employees and stakeholders.
Being an ethical leader means more than just adhering to regulations. It is about doing what is right for your team and organisation. When leaders act with honesty, fairness and respect, they build trust, create a positive workplace, and inspire people to do their best. In the long run, leading with ethics doesn’t just feel good- it can transform your organisation into its most successful version.
