The Role of Leadership in Organizational Integrity and Five Modes of Ethical Leadership

December 31, 2003
Document

2003
Ken Johnson

Reprinted with permission from the Ethics and Policy Integration Centre.

Components of Ethical Leadership. Ethical leadership begins with the way leaders perceive and conceptualize the world around them. Ethical leadership, organizational ethics, and social responsibility are inseparable concepts. They are developing concepts, to be sure, but inseparable. How ethical leaders relate to and come to understand the world around them involves judgment and action. These can be developed. In sum, the leader's role is to guide the human potential of the organization's stakeholders to achieve organizational aspirations in ways that liberate rather constrain their imaginations and judgment.

Ethical leadership must, then, be effective, efficient, and excellent if it is not to waste human potential. It is not enough to be ethical in one's individual actions to be an ethical leader. To be effective, efficient, and excellent, four components of ethical leadership must be understood and developed: purpose, knowledge, authority, and trust.

The relationship between these four components can be visualized as interrelated components, as described in the figure opposite. Attention to any one component alone is incomplete and misleading.

  • Purpose — The ethical leader reasons and acts with organizational purposes firmly in mind. This provides focus and consistency.
  • Knowledge — The ethical leader has the knowledge to judge and act prudently. This knowledge is found throughout the organization and its environment, but must be shared by those who hold it.
  • Authority — The ethical leader has the power to make decisions and act, but also recognizes that all those involved and affected must have the authority to contribute what they have toward shared purposes.
  • Trust — The ethical leader inspires — and is the beneficiary of — trust throughout the organization and its environment. Without trust and knowledge, people are afraid to exercise their authority. *

Modes of Ethical Leadership. It is often thought that ethical leadership must be "soft" leadership. Nothing could be further from the truth. Being an ethical leader means applying the right amount of authority in each situation. Sometimes the situation requires leadership that is anything but gentle. Gratuitously tough leadership, however, cannot be maintained for long without developing resentment and cynicism.

It is helpful to think of the ethical leader as exercising authority within five modes or levels of intervention into the judgments and actions of followers:

  • Inspiration — Setting the example so that other committed members will contribute their fullest capabilities to achieve organizational purposes. (the lowest degree of intervention)
  • Facilitation — Supporting other committed members, and guiding them where necessary, so that they are able to contribute their capabilities as fully as possible.
  • Persuasion — Appealing to reason to convince other members to contribute toward achieving organizational purposes.
  • Manipulation — Offering incentives other than the intrinsic value of contributing to the achievement of organizational purposes, where commitment is lacking.
  • Coercion — Forcing other members to contribute some degree of their capability where they have little or no commitment to do so on their own. (The highest degree of intervention).

It is also helpful to consider the components of ethical leadership together with the modes of intervention.

Integrating Components and Modes. The leader must employ the authority granted him or her by the organization to achieve the purposes of the organization, all the while recognizing that the knowledge needed to exercise this authority resides throughout the organization and its environment.

He or she must ensure that the purposes of the organization are known and shared, that it has the capacity to support its members' exercising their capabilities, and that communication between mangers and other employees is open and honest.

The mode of intervention selected will depend upon the health of the organization and the pressures in its environment.

  • The ideal is to inspire others as a steward of the vision, values, and excellence of the organization, as reflected in its culture.
  • Often persuasion and facilitation are required of otherwise capable and committed members, where they are unsure of their own capability.
  • Sometimes even manipulation and coercion are appropriate, where the organization is not healthy and the pressures are intense.

The modes of ethical leadership intervention depend in large part on the organizational culture. If the culture allows the organization to learn and grow within its environment, leadership may be largely inspirational.

If the culture does not support organizational learning and growth within that environment, then manipulative, even coercive, leadership would be necessary. Somewhere in between is leadership that is facilitative or persuasive. In any event, leaders must make their roles as integrity champions larger than life. Otherwise they and their examples will be lost in the pressures of day-to-day life. They must speak in terms of vision, values, and integrity. And, when the leader is not involved in a part of the organization's business, he or she must know who speaks for values and integrity.

Moreover, the style of ethical leadership will vary with the degree to which it reflects the Organizational Culture and the urgency of its situation in the environment.

  • In its least demanding sense, ethical leadership is a stewardship that preserves the aspirations and culture of the organization.
  • In its most demanding sense, it scans the community and develops and communicates organizational aspirations: the organization's core purpose, core values, and vision of a desired future and persuades, manipulates, and coerces its stakeholders to comply until the culture has adapted.
  • In between these extremes, ethical leadership balances (1) achieving the organizational aspirations that are realistically attainable at this time with (2) developing the organizational culture over time.

The table in the appendix (Styles of Ethical Leadership) suggests that different styles of leadership are necessary to maintain or implement change in the organizational culture that is optimal for it to survive and thrive within the organization's context.

The specific culture required, and the challenges it must face, will be suggested by the nature of its essential social responsibility and dynamics of its larger community.

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*These works contributed significantly to the development of the Organizational Integrity approach.

Leadership:

  • Zand, Dale E. The Leadership Triad: Knowledge, Trust, and Power. New York: Oxford Univ. Press, 1997.
  • DePree, Max. Leadership is an Art. New York: Doubleday, 1989.
    ________. Leading WIthout Power: Finding Hope in Serving Community. San Francisco: Jossy-Bass, 1997.
  • Block, Peter. Stewardship: Choosing Service over Self-Interest. San Francisco: Barrett-Koehler, 1993.
  • Ciulla, Joanne B. Ethics, the Heart of Leadership. Westport, Conn.: Praeger, 1998.

Purpose:

  • Solomon, Robert C. Ethics and Excellence: Cooperation and Integrity in Business. New York: Oxford Univ. Press, 1992.

Knowledge:

  • Sowell, Thomas. Knowledge and Decisions. 1980. New York: BasicBooks, 1996.
  • Polanyi, Michael. The Tacit Dimension. Garden City, N. Y.: Doubleday Anchor, 1966. (Knowledge that cannot be expressed often resides at all levels of the organization.)
  • Sakaiya, Taichi. The Knowledge-Value Revolution: Or a History of the Future. Trans. George Fields and William Marsh. 1991. New York: Kodansha International, 1992.
  • Wilson, Edward O. Consilience: The Unity of Knowledge. New York: Alfred A. Knopf, 1998.
  • Davenport, Thomas H., and Laurence Prusak. Working Knowledge: How Organizations Manage What They Know. Cambridge: Harvard Business School Press, 1998.

Trust:

  • Fukuyama, Francis. Trust: THe Social Virtues and the Creation of Prosperity. New York: Free Press, 1995.
  • Shaw, Robert Bruce. Trust in the Balance: Building Successful Organizations on Results, Integrity, and Concern. San Francisco: Jossey-Bass, 1997.
  • Lane, Christel, and Reinhard Bachman, eds. Trust Within and Between Organizations.