I have learned a tremendous amount about leadership in the workplace in this Psychology class. In addition to learning about specific theories and philosophies of leadership, it is important to slow down and ensure that the values and morals that a person develops are in line with appropriate ways to lead. The best interests of both the leader and their followers need to truly be taken into consideration before important decisions are made. Each individual has their own set of values that become a part of them over years of certain kinds of environmental, educational, and religious influence. Moral reasoning refers to when leaders come to conclusions about what types of behaviors are either ethical or unethical (PSU WC, Lesson 14). In Enron’s case, insider trading occurred, which was a big moral dilemma at the time.
Balancing Ethics in Leadership in the Workplace.
Jeff Skilling, CEO of Enron made the decision to practice immoral and illegal accounting techniques to boost the stock of Enron. This move he made was what he thought “best for the shareholders.” What he did not take into consideration was the consequences of his actions. He did not think about how this sacrifice of ethics would be seen by others or how his company would be negatively effected in the long run. In this clip, http://www.youtube.com/watch?feature=player_detailpage&v=B9K9pNxljjg, the producers show a funny clip from The Simpsons tv show, where they are riding the “Enron Ride,” which skyrockets upwards, then crashes downwards, representing the rise and fall of the shareholders stocks (and emotions).
John L. Kraus is the managing ethics director at the H.J. Heinz Company. Kraus is a great example of how ethical leadership is cultivated and trained to employees in a massive corporation. Within the ethics and compliance department employees are taught to maintain a line of communication with fellow employees and their bosses, and ethical leadership as an idea is stressed as being extremely important to the organization. An example of this is the quarterly newsletter that is issued to company employees. Examples of ethics and compliances are published in the letter, which allows employees to see different ways in which ethical leadership is upheld.They are also educated on ethical leadership, and how to balance making good leadership decisions as well as maintaining the values the company believes in. For example, an online training tool is utilized, where different tools and methods of leading ethically are sent over the computer. There is also in-person training, where Kraus goes out to different offices of Heinz, and educates the employees and bosses on proper ways to maintain ethics and leadership.
One reason that balancing ethics and leadership in the workplace is often difficult is that these huge organizations have many employees with differing values. The first level of moral development is the Preconventional Level. Here, a person’s values are based on their own experiences, and self-interests. The second level is the Conventional Level. In this stage, individuals seek others approval and behaving conventionally (PSU WC, Lesson 14). The third stage of moral reasoning is the Postconventional Level. Here, individuals try to assimilate their values with what the world’s are. These three levels show how different people perceive values, especially in positions of leadership. Not every person is on the same stage of moral development. These stages affect the way in which leaders interact with their followers, affect leader’s perceptions of situations, and can affect the way a solution is reached (PSU WC, Lesson 14). Every organization sets goals and pressures of the way leaders should lead, and it is up to each leader within an organization to determine the role that their own ethics will play in attempting to uphold these big picture goals.
References:
Jacob,
This was a very interesting topic that certainly demonstrates why ethics plays such a key in leadership. To add to your thoughts, balancing ethics in leadership is critical because leaders often make business decisions that do not only affect themselves and their organization, but as shown in the case of Jeff Skilling, these decisions can potentially affect millions of people. Understanding these impacts, it is important for leaders to develop a good sense of moral. In doing this, leaders may sometimes need to detach themselves from personal interests, and take further insight into the various types of ethical systems (i.e. Ethical Formalism, Utilitarianism, Religion, Natural Law, Ethics of Virtue, Ethics of Care, and Egoism) (Pollock, 2011).
Although there are various ethical systems that are used, it appears Jeff Skilling may have been using a teleological ethical approach (i.e. Utilitarianism). A teleological ethical approach is when an individual makes a decision based on the consequences (i.e. “the ends justify the means”) (Schumann, 2001). As such, philosopher Jeremy Bentham postulated that morality of an action is greatly determined by a cost-benefit analysis involving the consequences and good towards the majority (Lefkowitz, 2003). Meaning, that if an individuals’ actions can significantly show a greater good to society, then essentially, that act is deemed moral according to the individuals ethical system. When Skilling made the decisions to practice illegal accounting techniques for Enron, Skilling’s decisions were based on his perception that it was “best for the shareholders.” Therefore, I would assume that Skilling did indeed factor in the consequences of his illegal actions, but from the perspective that his actions would significantly present a greater good to his company, co-workers and shareholders; hence, “the ends justified the means.”
-Eric
References:
Lefkowitz, J. (2003). Ethics and Values in Industrial-Organizational Psychology. Mahwah, NJ: Lawrence Erlbaum Associates.
Pollock, M.J. (2011). Ethical Dilemmas and Decisions in Criminal Justice (7th ed.).
New York, NY: Cengage Learning
Schumann, P. L. (2001). A moral principles framework for human resource management ethics. Human Resource Management Review, 11, 93-111.