effective leadership strategies

All posts tagged effective leadership strategies

Corporate Leadership (Part 1)

Published February 18, 2015 by Mayrbear's Lair

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(Orginal Post July 26, 2013)

Executives have the power to shape corporate culture and motivate ethical conduct. Most leaders consider themselves ethical. Some, however, question whether ethics is a relevant component of leadership. Boatright (2009) contends that it is just as important to embrace ethical behavior in public life as well as in private life. Most corporate moguls are under the impression that behaving ethically alone is enough to sustain them as an effective leader. In fact, studies suggest that leaders do not believe specialized skills or knowledge in ethics are necessary to produce effective results in the work place (Boatright, 2009). This is a false perception. Situations arise more often than not in a business environment where leaders cannot easily resolve issues without identifying the ethical implications. This research focuses on the role a leader plays in the development of an ethical corporate culture. It takes a closer look at the importance of ethical leaders and the various roles they serve in an organization.  In addition, this study will illustrate the relationship between ethical leaders and their stakeholders. The analysis will also examine various leadership styles, the impact they have on corporate culture, how they affect ethical-decision making, and draw from examples to support this investigation. The findings of this research will conclude that leaders, who engage in business practices without ethical rules and regulations, will eventually discover that ethical misconduct behavior can easily become an inevitable component in their future.

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Importance of Ethical Leadership

The most successful leaders use their power to shape corporate culture and motivate ethical conduct. Because they are in the business of making a profit, they design strategies to achieve desired outcomes. Deepak Chopra (2012) reminds us that life is riddled with challenges, obstacles, and situations that leave many individuals asking the question, “Why is this happening?” No matter what advantages an individual may possess – money, intelligence, charismatic personality, a positive disposition, or influential social connections – none of these elements offer a magic key to effective leadership (Chopra, 2012). Managing directors are continually faced with difficult challenges. How they manage these trying situations can make the difference between the prospect of success and the threat of failure (Chopra, 2012). For example, when leaders cultivate an environment of fraud and deceit, they are fertilizing the ground for failure and destruction. In order for an executive to be considered an effective leader, they must have the ability to: (a) guide a corporation to profits for the sake of the stakeholders, (b) achieve organizational goals in an ethical manner, and (c) motivate their employees to adhere to behavior that is in alignment with the organization’s code of conduct.

Consistency also plays an important role for successful executives. The most effective leaders incorporate policies that inspire high performance levels and motivate organizational behavior that goes beyond just observing regulations. When leaders establish trust with subordinates, they earn the loyalty of their staff. In return, employees trust their leaders to protect them from harm in return for their services, dedication, and loyalty. By making choices to work in partnership with their employees, leaders can help them achieve greater levels of success than perhaps even they realized were capable of achieving. Employees who respect their supervisors, feel supported and appreciated by them, are more likely to become motivated and go beyond just achieving organizational goals.

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Leaders and Stakeholders

Stakeholders provide leaders another reason to cultivate an ethical culture. As a leader, it is their responsibility to make sure the company is guided towards the path of success and profit for the benefit of the stakeholders that support them. Executives, therefore, must incorporate effective strategies and hire the appropriate talent to reach desired outcomes as part of their responsibility to the employees, consumers, suppliers, and society as a whole. Ferrell et al. (2013) posit that because stakeholders have the ability to affect corporate policies it is imperative that leaders find methods to use their power to influence positive outcomes. There are five power strategies leaders utilize to achieve their goals: (a) reward power, (b) coercive power, (c) legitimate power, (d) expert power, and (e) referent power. Studies suggest these five power bases can be implemented to achieve both ethical and unethical outcomes (Ferrell, Fraedrich, & Ferrell, 2013). For example, a leader that incorporates legitimate power believes they have the right to exert their influence and that others are obligated to accept it. This kind of power is typical in hierarchical environments where leaders are assigned titles and specific positions of authority. In this type of culture, stakeholders readily acquiesce to leaders who command legitimate power. In some instances, however, leaders use this power to engage in behavior that is opposite of their belief systems. These individuals use strict protocol and the chain of command to their advantage. This is typically one way leaders can influence individuals to engage in misconduct. In this setting, it is easier to establish a climate of deceit because subordinates are hesitant to disobey orders for fear of the punishment or termination. The leaders at the well-oiled Enron machine, for example, employed all five power strategies to maintain their grand illusion.

That wraps up part one. Stay tuned on Wednesday for the conclusion. Until then … stay organized!

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Leadership and learning are indispensable to each other. – John F. Kennedy

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2 organizational management business skills publications nov 2014

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References

Boatright, J. (2009). Ethics and the Conduct of Business (Sixth ed.). Upper Saddle River, NJ: Pearson Education, Inc.

Chopra, D. (2012). Spiritual Solutions. New York, NY: Random House, Inc.

Ferrell, Fraedrich, & Ferrell. (2013). Business ethics and social responsibility (9th ed.). Mason, OH: Cengage Learning.

Glanz, J. (2002). Finding your leadership style. Alexandria, VA: Association for Supervision and Curriculum Development (ASCD).

Hanh, T. (2012). Work: How to find joy and meaning in each hour of the day. Berkeley, CA: Parallax Press.

O’Neil, J. (1999). Leadership Aikido. New York, NY: Three Rivers Press.

Ethics and the Strategy of Lying

Published July 16, 2014 by Mayrbear's Lair
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A top priority in today’s world is a firm’s ability to recognize and address complicated business ethics issues. This is due to the number of well-publicized incidents of corporations engaging in fraudulent and deceitful behavior.  In their book, Business Ethics (2013) Ferrell et al., revealed that once a firm loses the public’s trust after a highly visible business ethics scandal, it changes the climate and new regulations are implemented to make businesses more accountable (Ferrell, Ferrell, & Fraedrich, 2013). The fact is, we all face ethical decisions as a part of everyday life. This means that we rely on our own personal views of ethical responses as part of the decision-making process. Ethical decisions also influence our work conduct and a company’s management goals. Furthermore, ethics play a role in the development of company policies and helps with setting the parameters of what constitutes informal communications, which tend to reflect the firm’s code of ethics.
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However, when the media exposed that trusted, well-known companies like Countrywide Financial, AIG, and ENRON had engaged in fraudulent and illegal practices, the world realized that they had all done so while hiding behind images of highly ethical conglomerates. In other words, the stark reality was that these firms had incorporated organizational management strategies that supported a culture of lying and deceit and hid it well. This meant that the leaders of these firms were either: (a) unable to make good ethical decisions because they did not subscribe to a construct that many leaders do, which is that mastering ethical reasoning is a component that is just as important in the success of an organization as is mastering accounting, financial, and marketing decisions; or (b) the firm’s tunnel vision focus to achieve their outcomes was more significant than operating with ethical sensibility. Choice (b) is the most common reason why many leaders choose to engage in a strategy of lying. This is because the marketplace is highly competitive and leaders are typically under pressure from the firm’s stockholders to achieve higher profits. For example, when a company is actively promoting and saturating the market with a new brand, they can choose to report what the firm actually sold, or they can engage in a strategy of deception by reporting numbers shipped, but not sold. This is one way a company can make themselves seem more successful than they really are. However, when a firm engages in deceitful strategies, they always risk getting caught and can end up like Countrywide, AIG, and ENRON.
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Many people in leadership positions have dealt with and processed their own experiences of betrayal or being lied to. They can either choose to behave like those who hurt them, or they can become motivated to make different choices. I revealed in my eBook, Ethics in the Real World (2013), that as a result of the conditions of my upbringing and various life experiences, I, like many others, operate with a zero tolerance for lying policy in my both my business and personal life. In today’s highly competitive market place, we have seen, this is not an easy code to subscribe to. Business leaders however, can support this policy by communicating to staff members that they must be willing to work harder as a team to support and cultivate a culture that subscribes to a code of conduct based on everyone’s abilities to identify right and wrong behavior. It is the responsibility of the leaders of an organization to establish an ethical environment. They can do so by applying the golden rule model using compassion and understanding as an integral part of the decision making process. In addition, to help enforce these policies, the organization must be open to operating with transparency and oversight, clearly articulating the consequences for misconduct, poor outcomes, and the use of lying as a strategy. On Friday, we will take a closer look at when lying as a strategy can actually yield successful outcomes. Until then, stay organized!

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Information is not knowledge. – Albert Einstein

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References:

Berry, M. A. (2013). Ethics in the Real World. USA: Kindle Direct Publishing.

Ferrell, L., Ferrell, O., & Fraedrich, J. (2013). Business ethics: Ethical decision making and cases (9th ed.). Mason: South-Western.

 

Ethics and Law

Published August 14, 2013 by Mayrbear's Lair

Ethics Graphic

Ethical theories help individuals to decide what is morally right. The concepts of right and wrong are determined by the group to which one belongs to. Geisler (1989) suggests that ethics is defined in terms of ethnics or what the community deems as morally right and that each society creates its own ethical standard. Similarities that exist between different social groups for instance, result from common needs and desires rather than universal moral prescriptions (Geisler, 1989). In a business environment, leaders must rely on their own views of morality and ethics to assist them in the decision making process. However, there are times when a leader is confronted with making a decision and is required to determine whether it is more important for the organization to engage in ethical practices or lawful ones. For example, many lenders in the mortgage and loan industry approved home loans for individuals who were not qualified. These practices were justified because of loopholes in the legal system. In this case, executives acted under the notion that their conduct was well within the parameters of the legal framework, and skirted past the ethics issue.

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Leaders that find themselves in situations such as this, where they confront challenges that require them to make a choice that is lawful or ethical can draw from a variety of philosophical theories to help them make the most effective decision that will benefit the organization and their stakeholders. Seaquist (2012) outlines the following philosophical theories that help guide the decision makers: (a) ethical absolutism, religious fundamentalism, utilitarianism, deontology, ethical relativism, Nihilism, virtue and justice ethics (Seaquist, 2012). For example, if a leader in the mortgage and loan industry relied on the religious fundamentalism of Christianity, the executive would look to God’s will as to what is right or wrong to help guide their actions. This philosophical style is similar to the ethical absolutism, in that right and wrong concepts are absolute and do not change. Religious fundamentalism relies on the doctrines of truths laid out by the prophets and interpreted from Biblical scriptures. In this respect, an executive’s views are defined on a Christian’s perspective of ethics based on God’s will, which is absolute. From this philosophical view, an executive may choose to assist families that are at a disadvantage for making a first time home purchase, and engage in business practices they deem lawful, even though it may be considered unethical. In this respect, as a Christian, the individual’s choice is to find a way to help others first which in God’s eyes is good, even though the behavior, in the eyes of the financial institution they represent may consider it unethical.

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A leader, on the other hand, that draws conclusions from a philosophy that embraces ethical relativism, rejects the concept of absolute moral values. These leaders do not conform to ideas that moral judgments are finite. Huemer (2005) postulates, that ethical naturalism and intuition also play a role that can influence individuals. Ethical naturalism for instance holds the view that right and wrong can be identified by whatever promotes human welfare and happiness. Ethical intuitionism, on the other hand, refers to a philosophy that some things (actions, states of affair, etc.) independently consist of one’s attitudes towards various situations (Huemer, 2005). This view embraces an attitude that at least some moral truths are known intuitively and subject to individual interpretation. In other words it is generally understood that some moral truths are known directly and not through the perception of a person’s five senses, or based of other truths. Like the ethical relativism philosophy, they deny the existence of absolute moral principles. Leaders that conform to this kind of philosophy are focused on following the parameters of the laws and although are concerned with ethical values, do not place it as a priority in the decision making process. For example, an executive that embraces this philosophy may approve a loan to the tobacco industry to make a huge profit for the organization, even though it may be deemed unethical to support an industry that hides the harmful effects of their products. In conclusion, each leader must decide for themselves the kind of leadership style they intend to embrace and how they run their business efficiently. Hanh (2012) reminds us that business leaders do not have to sacrifice happiness or their values, to make a profit (Hanh, 2012). Business leaders that cultivate an ethical climate will automatically operate their organization within the framework of the law and incorporate this attitude into their codes of conduct. This effective leadership strategy is more likely to ensure an organization’s long term success.

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References:

Geisler, N. (1989). Christian ethics. Grand Rapids, MI: Baker Publishing Group.

Hanh, T. (2012). Work: How to find joy and meaning in each hour of the day. Berkeley, CA: Parallax Press.

Huemer, M. (2005). Ethical intuitionism. New York, NY: Palgrave MacMillan.

Seaquist, G. (2012). Business law for managers. San Diego, CA: Bridgepoint Education, Inc.