On May 15th, 2018, the lives of Seth Obetz and 250 of his employees changed dramatically. Seth, co-owner of the successful Manheim-based propane company, Worley and Obetz, was forced to lay off all of his employees after his CEO turned off his cell phone and disappeared without warning. The CEO was Jeff Lyons, and he was responsible for “fraudulent activity” with the company’s money. His actions forced Worley and Obetz to lay off its employees department-by-department, until one of their biggest clients, Giant Food Stores, cut all ties with the company. This massive loss of business resulted in Worley and Obetz filing for bankruptcy liquidation in order to pay off its 62 million dollars in outstanding loans. Jeff Lyons’ manhunt ended when he was found by police in Minnesota, but his impact on his former subordinates remains (Mekeel, 2018). Lyons’ actions as CEO of Worley and Obetz demonstrate a clear lack of ethics in leadership and the devastating results that can follow.
The idea of ethics as a set of rules developed in order to maintain the virtue of a society’s customs, conduct, and character dates back to the time of Plato and Aristotle. Ethics set up a basis for understanding what is needed in order to upstand one’s morals and values, and be a decent human being (Northouse, 2016). In contrast, the focus on ethics in leadership is relatively new. One of the earliest writings on leadership ethics was published as recently as 1996 by the W. K. Kellogg Foundation. The research analyzed how society could be improved through the practice of ethical leadership (Ciulla, 1998 as cited in Northouse, 2016). In the wake of so many recent corporate scandals, such as Worley and Obetz’s case, interest and study of ethical leadership has grown immensely. From such research, two categories of ethical leadership have been formed: conduct theories and character theories (Northouse, 2016).
Conduct theories of ethical leadership focus on the duties, actions, and consequences of leadership. Teleological theories answer the question “Do the ends justify the means?”, meaning ethical actions are determined by assessing the consequences. One approach to decision-making is ethical egoism, which is shown when a leader behaves in a certain manner so as to create the best outcome for his- or herself (Northouse, 2016). Jeff Lyons is a prime example of ethical egoism. He allegedly stole millions of dollars from Worley and Obetz, where he had worked for 22 years. His actions resulted in hundreds of employees losing their jobs. Lyons committed his fraudulent activity for his own personal gain, regardless of the known consequences for his subordinates. He showed high concern for self-interest and low concern for the interest of others, perfectly demonstrating ethical egoism.
Another set of conduct theories are the deontological theories. Deontological theories examine whether the actions of a leader are ethical, regardless of the consequences. According to P.L. Schumann, a leader’s actions are ethically responsible if the leader has the right to do them, if the actions do not infringe on the rights of others, and if the actions further the moral rights of others (Schumann, 2001 as cited in Northouse, 2016). Lyons’ actions were far from ethically responsible. As CEO of Worley and Obetz, his duty was to maintain, grow, and empower the company’s finances, reputation, and employees. He accomplished the complete opposite of this by silently diminishing finances through fraudulent activity, tarnishing the organization’s reputation, and causing all employees to lose their jobs.
In addition to conduct theories, there are also character theories of ethical leadership, which approach ethics from the viewpoint of the leader’s character (Williams, 2018). Aristotle has said that a moral person demonstrates courage, temperance, generosity, self-control, honesty, sociability, modesty, fairness, and justice (n.d. as cited in Williams, 2018). In character theories, it is believed that virtue and moral abilities can be acquired and learned through practice (Williams, 2018). Perhaps if Worley and Obetz had implemented a successful moral training program for its employees, Lyons may not have committed such unethical behavior and the company might still be in business.
In conclusion, Jeff Lyons’ unethical approach to leadership resulted in devastating consequences for a business, its employees, the banks that loaned it money, and its surrounding community as a whole. As a long-time resident of Lancaster County, I can attest to the ripple effect being felt by the people around me. Many of my neighbors were customers of Worley and Obetz, work for one of their many local clients, or even worked for the organization itself before being laid off in recent weeks. Ethics are a vital component to successful leadership, in that immoral activity by powerful people can cause great harm to society. Hopefully, Seth Obetz’s is more ethically inclined when hiring management for his next endeavor as Obetz Energy.
References
Ciulla, J. B. (1998). Ethics, the heart of leadership. Westport, CT: Greenwood.
Mekeel, T. (2018, June 10). Here’s what we know about the key aspects of the ongoing Worley & Obetz story. Lancaster Online. Retrieved June 22, 2018, from https://lancasteronline.com/news/local/here-s-what-we-know-about-the-key-aspects-of/article_6948f3e2-6b59-11e8-a4d9-43b1d3c2e6b4.html
Mekeel, T. (2018, June 10). Timeline: Worley & Obetz closes, files for bankruptcy in wake of alleged fraud. Lancaster Online. Retrieved June 22, 2018, from https://lancasteronline.com/news/local/timeline-worley-obetz-closes-files-for-bankruptcy-in-wake-of/article_bc00e762-6b58-11e8-ad91-eb91721bcfb6.html
Northouse, P. G. (2016). Leadership Ethics. Leadership: Theory and practice. Thousand Oaks: SAGE. pp. 329-362.
Schumann, P. L. (2001). A moral principles framework for human resource management ethics. Human Resource Management Review, 11, 93-111.
Williams, J. (2018). Ethics and Leadership. Retrieved June 22, 2018, from https://psu.instructure.com/courses/1940315/modules/items/24597614
Leayle Benjamin says
Mirand,
Your post is a good example of how unethical decisions made by leaders can have a major impact upon an organization. From Northouse (2016), it’s evident to see that ethics is central to leadership since the values promoted by the leader can have a significant impact on the values exhibited by the organization (Northouse, 2016, p. 337). In the example you provided, there was a lack of ethical value exhibited by the CEO, Jeff Lyons. In addition to your analysis of the downfall of Worley and Obetz, CEO Jeff Lyons is guilty of exhibiting the principles of the dark side of leadership. Northouse (2016) mentions that “toxic leaders are characterized by destructive behaviors such as leaving their followers worse off than they found them, violating the basic human rights of others, and playing to their basest fears” (p. 339). Lyons showed no regard for the organization or the employees for that matter. He knew exactly what he was doing when he decided to turn off his phone and disappear after conducting fraudulent activity. His actions definitely left the employees worse off than before since the employees were laid off one by one by department. While Lyons was missing, the organization was disintegrating and it is hard to not believe that Lyons did not know what the consequences of his actions would be. His actions support Northouse’s (2016) statement that destructive leaders demonstrate dysfunctional personal characteristics (Northouse, 2016, p. 339). Lyons actions were unethical and support the idea that he lacks integrity and has reckless disregard for his actions. Your post effectively depicts how the unethical decision of one can have a major impact upon an entire organization. Great blog posting!
Reference:
Northouse, P. G. (2016). Leadership: Theory and Practice. Los Angeles, Calif.: SAGE