Northouse (2016) explains that “ethics is concerned with the kinds of values and morals an individual or society finds desirable or appropriate.” (p. 330). As a leader, it is expected of you by stakeholders, employees, shareholders, and customers that you are a morally decent human being. Despite expectations and good intentions, one can see that many organizations have been charged for ethical violations. In an ethical article, Ross Kelly (2017) mentioned that “between 2012 and 2016, ethical lapses accounted for 5.3% of forced CEO exits at the world’s largest 2,500 companies” (Kelly, 2017). Unethical mistakes can have a serve impact on the career of a leader and it is crucial to understand the importance of being an ethical leader.
Northouse (2016) explains that ethics is a central part of leadership as leaders have a significant impact on the values exhibited by the organization. (Northouse, 2016, p. 337). When there is a lack of ethical guidance from the leader, it creates an environment for unethical mistakes to occur. To further emphasize how unethical mistakes can have a severe impact on one’s career, we can look at an example. Martin Winterkorn was the former CEO of Volkswagen. Dishman (2015) reports that Winterkorn “may have contributed to the company’s unethical and illegal installation of software that failed to accurately report emissions on its vehicles” (Dishman, 2015). Winterkorn was a perfectionist and imposed his personality on his employees. To show the perfectionist personality characteristic of Winterkorn, Dishman (2015) reports Winterkorn would measure the gaps between car doors to make sure they were the perfect measurement to secure the top spot among global car manufacturers (Dishman, 2015). His leadership tactic of publicly criticizing employees for their mistakes may have motivated employees to keep information from him in order to keep their jobs. Winterkorn exhibited some of the traits Northouse (2016) presents within the dark side of leadership. Northouse (2016) states that “destructive leaders are characterized by having charisma and a need to use power and coercion for personal gains” (p. 339). Using the employee’s fear of losing their job against them contributed towards employees hiding information on the vehicle’s emissions. Winterkorn resigned from his position as CEO of Volkswagen as the organization admitted to cheating U.S. emission tests.
According to Carucci (2016), billions of dollars have been spent by organizations to cover ethical breaches (Carucci, 2016). Companies have ethical policies in place to guide leaders and employees towards ethical compliance, but unethical decisions are still made. Carucci (2016) presents ways in which organizations incite people to make unethical decisions and the listing of excessive pressure to reach unrealistic performance targets as a reason is supported throughout the example. He states that significant research “suggest unfettered goal setting can encourage people to make compromising choices in order to reach targets, especially if those targets seem unrealistic” (Carucci, 2016). Through the demands of Winterkorn and not wanting to be criticized, Volkswagen employees may have been motivated to believe that it was acceptable to cheat in order to meet the demands of Winterkorn. Now the reputation of Volkswagen has been tarnished and it may be hard for Volkswagen to rebound after this ethical mistake since there will always be a doubt in regards to the character of the organization.
Carucci, R. (2017, September 07). Why Ethical People Make Unethical Choices. Retrieved from https://hbr.org/2016/12/why-ethical-people-make-unethical-choices
Dishman, L. (2015, December 28). The 10 Best And Worst Leaders Of 2015. Retrieved from https://www.fastcompany.com/3054777/the-10-best-and-worst-leaders-of-2015
Kelly, R. (2017, November 28). More CEOs are Getting Fired for Ethics Violations. Retrieved from https://chiefexecutive.net/ceos-getting-fired-ethics-violations/
Northouse, P. G. (2016). Leadership: Theory and Practice. Los Angeles, Calif.: SAGE