Plato's Statesman and the nature of business leadership: An analysis from an ethical point of view

Plato's paradigm for statesmanship in the Statesman, the “weaving” of temperate and courageous properties, provides the contemporary business ethics theorist with an aid for determining certain problems and solutions with regard to business leadership. The history of American business values manifests the destructive, and especially unethical, effects of deviating from this paradigm by over-emphasizing one or the other of the above types of qualities. However, with the aid of Plato's model for leadership in the Statesman and suggestions from Peters and Waterman's In Search of Excellence, progress can be made towards constructing an adequate model for corporate leadership, especially from an ethical standpoint.     

Detecting Linguistic Traces of Destructive Narcissism At-a-Distance in a CEO’s Letter to Shareholders

Destructive narcissism is recognized increasingly as a serious impairment to good corporate leadership and ethical conduct. The Chief Executive Officer’s letter to shareholders (an important formal corporate communications medium) has potential to provide linguistic traces of destructive narcissism and insight to aspects of corporate leadership and the ambient ethical culture of a company. We demonstrate this potential through selective analyses of the letters of the Chief Executive Officers of Enron, Starbucks, and General Motors.     

Corporate governance effectiveness during institutional transition

Is corporate governance effective during the early stages of transition from central planning to market? If so, is the effectiveness due to the newly instituted reforms, or the remnants of the previous institutional regime? This study addresses these questions by drawing on agency theory and neo-institutional theory to examine the effectiveness of corporate governance during transition in the largest of the transition economies, the People's Republic of China. We choose a period of institutional upheaval—1998–2003—and test competing hypotheses with a sample of 416 publicly listed firms. We find strong evidence that poor-performing CEOs are more likely to leave or be dismissed which suggests that China's corporate governance was effective during this time period. However, the results also suggest that the effectiveness was likely due more to the remnants of the previous institutional regime than to the newly implemented Anglo-American style governance structures.     

Ethical leadership,organizational identification and employee voice: examining moderated mediation process in the Chinese insurance industry

This study examines the link between ethical leadership and employee voice behaviour by focusing on the mediating role of organizational identification and the moderating role of organizational trust. The results of distinctive data from 293 supervisors–follower pairs in an insurance group from the People's Republic of China reveal that ethical leadership positively relates to employee voice behaviour, and that organization identification fully mediates the positive influence of ethical leadership on employee voice behaviour. We also found that organization trust moderates the relationship between the organization identification and employee voice. Furthermore, the mediating effect between ethical leadership and employee voice is moderated by organizational trust, that is to say moderated mediation. We discuss implications of these findings for research and practice.     

CSR development in post‐communist economies: employees' expectations regarding corporate socially responsible behaviour – the case of Romania

Drawing on stakeholder theory and the evolutionary approach to institutions, this paper investigates the channels through which corporate social responsibility (CSR) is developed in post‐communist economies by focusing on the employee background factors that shape the employees' expectations with regard to corporate socially responsible behaviour. We identify three channels through which exogenous and endogenous CSR are developed: employees with work experience in multinational enterprises (MNEs) (leading to exogenous CSR), employees with CSR knowledge (leading to exogenous CSR) and employees with experience of the socialist system (leading to endogenous CSR). Furthermore, we argue that the interactions between these channels lead to hybrid CSR in transition economies. We use a questionnaire‐based survey with employees of domestic and MNEs in Romania and we conduct regression analysis. We find that employees with work experience in MNEs act as channels for exogenous CSR, while employees with experience of the socialist system act as channels for endogenous CSR. Furthermore, employees with experience of the socialist system and CSR knowledge or work experience in an MNE act as channels for hybrid CSR in transition economies. Based on our results, we put forward implications for theory, managers and policy makers.     

An Empirical Study of Leader Ethical Values,Transformational and Transactional Leadership,and Follower Attitudes Toward Corporate Social Responsibility

Several leadership and ethics scholars suggest that the transformational leadership process is predicated on a divergent set of ethical values compared to transactional leadership. Theoretical accounts declare that deontological ethics should be associated with transformational leadership while transactional leadership is likely related to teleological ethics. However, very little empirical research supports these claims. Furthermore, despite calls for increasing attention as to how leaders influence their followers’ perceptions of the importance of ethics and corporate social responsibility (CSR) for organizational effectiveness, no empirical study to date has assessed the comparative impact of transformational and transactional leadership styles on follower CSR attitudes. Data from 122 organizational leaders and 458 of their followers indicated that leader deontological ethical values (altruism, universal rights, Kantian principles, etc.) were strongly associated with follower ratings of transformational leadership, while leader teleological ethical values (utilitarianism) were related to follower ratings of transactional leadership. As predicted, only transformational leadership was associated with follower beliefs in the stakeholder view of CSR. Implications for the study and practice of ethical leadership, future research directions, and management education are discussed.     

Stakeholders' Impact on Turnaround Performance: The Case of German Savings Banks

This study explores how savings banks as powerful stakeholders of SMEs in Germany assess turnaround performance. It tests the impact of the support provided by German savings banks and distressed SMEs' actions with survey data from corporate advisors. The results show that structural and continuing support foster turnaround performance. This support is conducive in the initial stage of turnaround but negligible in the recovery stage. Contributing to stakeholder theory and turnaround management, the findings shed light on the factors that motivate a selected stakeholder's involvement and SMEs' ability to engage in actions fostering this stakeholder's support for a turnaround.     

The Perils and Opportunities of Communicating Corporate Ethics

This paper examines critical success factors for ethics-related corporate communication with a view to helping companies communicate their ethical stance more effectively. We analyze this communication process from the company's point of view and discuss the implications of source credibility, attitude formation, audience involvement and media choice for image management. We argue that the ideal relationship between corporate ethics, corporate communication, and corporate image is a sequence of activities, with companies adjusting their messages as they change their business conduct. In this way, public perceptions are a fair reflection of corporate behaviour. This process should be a continuous, upward moving cycle that stops when the company's public image matches its desired image. We also point out the dangers inherent in communicating corporate ethics, including public cynicism and elevated stakeholder expectations.     

Ethical Leadership Evaluations After Moral Transgression: Social Distance Makes the Difference

In light of continuing corporate scandals, the study of ethical leadership remains an important area of research which helps to understand the antecedents and consequences of ethical behavior in organizations. The present study investigates how social distance influences ethical leadership evaluations, and how in turn ethical leadership evaluations affect leader–member exchange (LMX) after a leader’s moral transgression. Based on construal level theory, we propose that higher social distance will lead to more severe evaluations of immoral behavior and therefore entail lower ethical leadership ratings. More- over, we hypothesize that ethical leadership will positively affect LMX. Participants read a scenario describing a moral situation in which a leader, who was presented in either high or low social distance, behaves unethically toward an employee. We tested our predictions using a structural equation modeling approach. As expected, participants in the high social distance condition judged leaders more harshly (i.e., they gave lower ethical leadership ratings) than in the low social distance condition. Thus, social distance moderated the extent to which leaders are perceived as ethical leaders after moral transgression. Moreover, in accordance with our proposition, ethical leadership ratings had a positive influence on LMX.     

Does ethical leadership enhance group learning behavior? Examining the mediating influence of group ethical conduct,justice climate,and peer justice

The link between ethical leadership and employees' ethical behaviors is well established, but are ethical leadership's benefits confined to ethical behaviors? This study aimed to address this question by examining the extent to which ethical leaders create an environment conducive to cultivating a broader set of desirable behaviors such as group learning behavior. We drew upon and integrated insights from social learning theory and the social marketplace model to develop and test a model that illuminates how ethical leadership enhances group learning behavior. We propose that group ethical conduct, justice climate, and peer justice are three contextual mechanisms through which ethical leadership improves group learning. Using data collected over two time periods from 95 supervisors and 323 work group members from a large financial institution in the United States, we found that ethical leadership significantly relates to group learning behavior, and that this relationship is partially explained by group ethical conduct and peer justice, but not justice climate. Implications for future research and practice are discussed.     

Changing an Organization's Culture Under New Leadership

Turning around and changing an organization's culture does not happen by chance. The purpose of this paper is to offer insights into what is needed for an organization to successfully transform itself from a culture and experience that does not support individual ethical behavior. The recent bond trading scandal at Salomon Brothers will be used to demonstrate that a successful ethical turnaround does not just happen spontaneously. In particular, we argue that new leadership, altering policies, structure, behavior, and beliefs are paramount to successfully change to an organizational culture that supports ethical behavior. Schein's five primary mechanisms available to leaders for embedding and reinforcing culture will be used to systematically analyze efforts to change Salomon Brothers' culture.     

The effect of ethical leadership on service sabotage

ABSTRACT

This study aims at examining the impact of ethical leadership activities on service sabotage, and the mediating role of service climate and corporate ethical values (CEV) on this impact. The study was completed via 384 acceptable questionnaires in total. The research findings show that ethical leadership affects the service climate and the CEV in a positive way whereas it has a negative effect on the service sabotage. In addition, it is observed that the CEV have a positive effect on the service climate. In the light of the research findings, managers’ ethical personal and managerial characteristics affect the service climate in a positive way and play a significant role for the ethical values to become more common within the organization. Furthermore, the ethical leadership is effective for decreasing the service sabotage which is referred as the undesirable and harming behaviors within the organization.     

On achieving sustainable development: The Costa Rican model

One of the hottest buzzwords in today's global corporate environment is “sustainability.” But long before the topic became “cool,” it was on the mind and on the agenda of Costa Rica's president, José María Figueres. In this well‐thought‐out article, Figueres maps the route that he forged for Costa Rica's future as a developing country leveraging its resources into a model of sustainable development for Latin American emerging economies. Using concrete examples, he explains the thought leadership behind projects that have moved Costa Rica into the forefront of countries doing well by also doing good. © 2008 Wiley Periodicals, Inc.     

The influence of religious commitment on consumer perceptions of closed-on-Sunday policies: an exploratory study of Chick-fil-A in the southern United States

Many businesses operate long hours that often include nights and weekends to accommodate consumers. However, a few businesses maintain a closed-on-Sunday policy and do so while still operating successfully although closed-on-Sunday policies mean forgoing potential sales hours. As most Christian faiths consider the Sabbath as a day of rest, an oft-used rationalization for the success of businesses maintaining this policy is that they must be supported by consumers with strong religious beliefs, who appreciate the message sent by the company and as a result perceive the company favorably. The purpose of this paper was to investigate whether consumers' religious commitment influences their ethical judgment of a company's closed-on-Sunday policy and to determine whether this ethical judgment impacts a company's corporate or brand image and consumer loyalty intentions. The results suggest that consumers with higher levels of intra-personal religious commitment are more likely to hold favorable ethical judgments of closed-on-Sunday corporate policies. In addition, favorable ethical judgments of closed-on-Sunday corporate policies are likely to positively influence corporate image. A more positive corporate image ultimately results in higher consumer loyalty intentions.     

Does integrity matter for CSR practice in organizations? The mediating role of transformational leadership

Scholars have long debated whether leader's integrity affects managerial decision making with respect to social responsibility. In this paper, we propose a model in which transformational leadership mediates integrity and corporate social responsibility (CSR) and examine the relationship between these concepts. A survey of 170 senior managers from 50 organizations was conducted. Results indicate that integrity is a predictor of transformational leadership behavior and that transformational leaders’ behaviors are linked to CSR practices. It was also found that leaders rated with higher integrity are engaged in CSR because they exhibit more transformational leadership behaviors. These findings add to the extant literature by demonstrating that integrity is important as transformational leaders engage more actively on ‘responsible’ behaviors. Practical implications call for an understanding among corporate leaders of the benefits of integrity and how it relates to transformational leadership. Organizations can improve their selection and leadership development processes by focusing on these two dimensions.     

Perceived Leadership Integrity in the Manufacturing Industry

Ethics is a significant issue among those in leadership positions, especially since the ethical corporate scandals of the 1970s followed by corporate scandals in the 1980s and the S&L scandals of the 1980s and 1990s and most recently the global financial crisis of 2006–2009. The purpose of this research was to measure the perceived leadership integrity in today’s manufacturing environment, since the global financial crisis, as perceived by their employees. This study included 7,233 manufacturing employees in the United States. A total of 66 surveys were used to calculate data for this study. The Perceived Leader Integrity Scale (PLIS) was used to collect data from respondents that included demographic questions. The research addressed the following question: To what degree are leaders in the manufacturing industry considered “low ethical,” “moderate ethical,” and “high ethical” on the PLIS?     

A New Scale to Measure Executive Servant Leadership: Development,Analysis, and Implications for Research

This article introduces a new scale to measure executive servant leadership, situating the need for this scale within the context of ethical leadership and its impacts on followers, organizations and the greater society. The literature on servant leadership is reviewed and servant leadership is compared to other concepts that share dimensions of ethical leadership (e.g., transformational, authentic, and spiritual leadership). Next, the Executive Servant Leadership Scale (ESLS) is introduced, and its contributions and limitations discussed. We conclude with an agenda for future research, describing ways the measure can be used to test hypotheses about organizational moral climate, ethical organizational culture, corporate responsibility, and institutional theory.     

The Struggles of the Interculturalists: Professional Ethical Identity and Early Stages of Codes of Ethics Development

Ethicalisation processes that partake in the construction of a firm or a professional group’s ethical identity are often described as a relatively linear combination of several components, such as policies (starting with the development of a code of ethics), corporate practices, and leadership. Our study of a professional community dealing with the topics related to cultural diversity indicates a more reciprocal relationship between ethical identity and ethicalisation processes. We argue that a tangible form of ethical identity can pre-date the ethicalisation process of a professional group, and additionally, can impact this process at the start. We highlight that, despite the absence of official ethical statements in the community, a form of ethical professional identity is already present among the interculturalists of the international organisation Society for Intercultural Education Training and Research. Using critical discourse analysis, we identify the proclaimed humanist ethos in the discourses that interculturalists co-produce and diffuse during conferences, on on-line discussion forums, and in the mission of their professional organisations. This study contributes to the literature on ethical identity development by showing how a pre-existing form of ethical identity can influence the early stage of the development of a code of ethics. In addition, we indicate that, similar to organisational identity construction, ethical identity construction uses self-other identity talks, thus, defining an ethical other (or less ethical other) in its development.     

Responsible Leadership in a Stakeholder Society – A Relational Perspective

We understand responsible leadership as a social-relational and ethical phenomenon, which occurs in social processes of interaction. While the prevailing leadership literature has for the most part focussed on the relationship between leaders and followers in the organization and defined followers as subordinates, we show in this article that leadership takes place in interaction with a multitude of followers as stakeholders inside and outside the corporation. Using an ethical lens, we discuss leadership responsibilities in a stakeholder society, thereby following Bass and Steidelmeier’s suggestion to discuss “leadership in the context of contemporary stakeholder theory” (1999: 200). Moreover, from a relational and stakeholder perspective we approach the questions: What is responsible leadership? What makes a responsible leader? What qualities are needed? Finally, we propose a so-called “roles model” of responsible leadership, which gives a gestalt to a responsible leader and describes the different roles he or she takes in leading stakeholders and business in society.     

Commentary on “an empirical study of moral reasoning among managers”

Managerial reasoning is characteristic of a care-relationship ethics:

1. If a corporation provides certain community values to corporate members not reducible to their self-interested economic or professional objectives;
2. If such values are generated by a division of labor based on interdependence, reciprocity and concern for another's self-realization;
3. If it's based on promoting an ethical corporate self independent of its economic value.

Such an ethic is appropriate, given employees' tremendous personal contributions, the unique position of private industry to provide distinctive resources without committing extensive social resources, and due to its potential for reducing managerial moral fragmentation and hypocrisy.