Culture, Ethical Leadership and Values-based Decision Making in the Workplace
Understanding the relationship between culture, ethical leadership and behavior in the workplace is essential to establishing an ethical tone at the top and promoting ethical decision making in the workplace. The culture reflects shared beliefs, norms and values that define what is important and what is appropriate for those in an organization. To establish an ethical culture, four questions should be asked:
1. What are the goals and purposes of the organization?
2. What strategies need to be implemented to achieve those objectives?
3. What kind of behaviors will support achievement of the goals?
4. How should the 'tone at the top' be set to create an environment of ethical leadership?
Boards of directors and top management should follow certain broad guidelines in establishing an ethical culture:
- Align and embed core values at the very top.
- Establish a hot line for employees to report perceived unethical/illegal acts on an anonymous basis.
- Create a pathway for would-be whistle-blowers to come forward and provide an opportunity for the organization to take corrective action before an employee brings the matter to the attention of regulators.
- Develop ethics training programs based on the core values and code of conduct that uses case studies specific to the business to provide guidance to employees about how to handle difficult situations.
- Reward ethical performance by meeting with employees about their concerns; ask how they handled identified conflicts or other ethical problems; have them sign-off that their actions are in accordance with the code.
- Use a feedback loop to take the information gathered above and re-visit whether the core values are being effectively communicated.
Ethical behavior must be modeled by the leader of an organization. For me the issue is not so much a lack of business ethics but it is a lack of ethical leadership by management. Underlying all leadership characteristics is the need for a strong sense of ethics – right and wrong – to help those in the organization that look for moral guidance when difficult issues arise or workplace conflicts occur.
Leadership and management go hand in hand. They are not the same thing. But they are necessarily linked, and complementary. Any effort to separate the two is likely to cause more problems than it solves.
Still, much of organizational development writings have been spent delineating the differences. The manager’s job is to plan, organize and coordinate. The leader’s job is to inspire and motivate. In his 1989 book “On Becoming a Leader,” Warren Bennis composed a list of the differences:
- The manager administers; the leader innovates.
- The manager focuses on systems and structure; the leader focuses on people.
- The manager relies on control; the leader inspires trust.
- The manager has a short-range view; the leader has a long-range perspective.
- The manager asks how and when; the leader asks what and why.
- The manager has his or her eye always on the bottom line; the leader’s eye is on the horizon.
- The manager is the classic good soldier; the leader is his or her own person.
- The manager does things right; the leader does the right thing.
In the new economy, where value comes increasingly from the knowledge of people, and where workers are no longer undifferentiated parts of an industrial machine, management and leadership are not easily separated. People look to their managers, not just to assign them a task, but to define for them a purpose. And managers must organize workers, not just to maximize efficiency, but to nurture skills, develop talent and inspire results.
The late management guru Peter Drucker was one of the first to recognize this truth, as he was to recognize so many other management truths. He identified the emergence of the “knowledge worker,” and the profound differences that would cause in the way business was organized.
With the rise of the knowledge worker, “one does not ‘manage’ people,” Drucker wrote. “The task is to lead people. And the goal is to make productive the specific strengths and knowledge of every individual.”
For businesses to become more ethical and inspire a new generation of leaders, the manager must share a vision of what it means to be successful in business. In the end it is not the bottom line profit, which is fleeting at best. It is the way that managers interact with people; how they treat their employees; how they deal with customers and suppliers; and whether they respect the accounting process and make decisions based on accurate and complete financial statements, not manipulated statements for short-term gain and to enhance one’s self-interests.
Managers and leaders are committed to ethical relationships and ethical decision making, and such decisions must be ingrained in the DNA of the organization.
It has been said that character is revealed over time and under pressure. Nothing could be more true than to observe how a crisis is handled by the management in an organization and whether underlying core ethical values are stressed (i.e., honesty, integrity, respect and responsibility), and not unethical values (i.e., profits, individual wealth, power and influence).
Blog posted by Dr. Steven Mintz, aka Ethics Sage, on November 12, 2015. Professor Mintz is on the faculty of the Orfalea College of Business at Cal Poly San Luis Obispo. He also blogs at: www.ethicssage.com.