A Review of the Literature Concerning Ethical Leadership with respect to start-ups.
Abstract
Ethical leadership is the phenomena in which leader directs the people by considering ethical beliefs and values. It is thus related to concepts such as trust, honesty, consideration, charisma and fairness. Furthermore, ethics is concerned with the virtuousness of individuals and their motives. This research paper is based on review of literature on Ethical Leadership with respect to start ups .Twenty articles were identified which were written by different authors ,who primarily focussed on following topics. First one was why to follow Ethical Leadership,quality of leader,pros and cones of ethical leadershipit also highlights How ethical leadership is helping the organisation to be successful, values followed by Leader, believes and How leader ethically influences followers. Overall it was understood, Ethical Leadership is relatively complex topic to understand. It also focusses about how difficult it is for the organisation to Practice Ethical Leadership in the organisation.This paper also tries to identify Research gaps from research papers reviews, which will help to define Future scope for research on ethical leadership which is defined at the end of Research paper.
Key words-
Ethical Leadership, Leader, Ethics, values, Believes, Follower
INTRODUCTION
This Papertries to examine the literature regarding the topic of ethical leadership within organizations. The papers were selected from online data base such as Google Scolar, Ebscohost, J gate, Proquest, IEEE, various international Journals .Additional resources were secured at Barnes and Nobles bookstore.
Twenty articles were shortlisted by considering their focus on following main topics:
1)Why to follow ethical leadership,
2)Qualities of Leader
3)Pros and cons of Ethical Leadership
4)How leader ethically influences followers.
Articles were reviews on above mentioned topicsthe structure of the literature review examines each of these topics in greater depth and considers the findings at the end.
Ethical Leadership
“Ethics must begin at the top of an organization. It is a leadership issue and the chief executive must set the example”
– Chief Justice Edward Hennessey
Leadership, a topic of discussion for several centuries, and yet there is not a single leadership model that evaluates all the various kinds of leadership strategies. Leadership has reached a crucial turning point, since ethics has been incorporated into it. A company’s rights and wrongs, and good and bad are often targeted towards the leader. Philosophers have been discussing ethical leadership (as in what leaders should do) for quite some time but the topic is relatively new as an area of social scientific study.Resultantly, the need for a well-informed ethical leader is a paramount in today’s society. When looking at leadership separately, as stated by Susan (2009) it is not a family inheritance or a gift of biology, although initially we did believe that leadership comes from innate characteristics, yet it was also noted that such an assumption has failed in the present day understanding.
It’s been a decade lot of research has been done of ethical leadership in the organisation. Ethical leadership is the phenomena in which leader directs the people by considering ethical beliefs and values. It is thus related to concepts such as trust, honesty, consideration, charisma and fairness. Furthermore, ethics is concerned with the virtuousness of individuals and their motives.
Why to follow Ethical Leadership
Ethical Leadership is the concept in which, leader of the organisation promotes, creates awareness about leadership in the organisation. We have always seen in most of the organisation ethical leadership is promoted as top to bottom concept.
Linda, M.Brown, L.Hartman (2003) Ethical leadership is combination of Ethics in leadership.it is more than values-based inspirational leadership. It includes an overlooked transactional component that involves using communication and the reward system to guide ethical behaviour. Similarities and differences between ethics officers’ and senior executives’ perceptions also led to insights about the importance of vantage point and social salience in perceptions of executive ethical leadership. In order to be perceived as an ethical leader by those outside the executive suite, the executive must engage in socially salient behaviours that make the executive stand out as an ethical figure against an ethically neutral ground.
In the organisation Leaders who lead their teams ethically are been considered to be role models, they are responsible for communicating the importance of ethical standards, holding their employees accountable to those standards, and most importantly in designing Ethical environments in which people work.
Tang, H., & Goldman, D. (2002, 01) ethical leadership can lead to positive outcomes, and reduce the risk of many negative outcomes. Ethical Leadership may therefore be the most important lever in an ethical system designed to support ethical conduct.
Research is investigating the processes that contribute to understanding how ethical leadership affects outcomes. The most important process appears to be modeling (from social learning theory) (Bandura, 1986). If an ethical leader models ethical decisions and behaviours, followers can be expected to do the same.
Further, research has found that followers of ethical leaders tend to identify more with the organization, report higher self-efficacy, and a stronger leader-follower relationship (Walumbwa, Mayer, Wang, Wang, Workman & Christensen, 2011). Also, we have learned that ethical leaders create ethical cultures that influence followers to behave more ethically and to refrain from behaving unethically (Schaubroeck et al., 2012). An essay in Fast Company by ES collaborator David Mayer outlines why it takes more than being a good person to inspire ethical conduct among employees.
Qualities of Leader
Most of the articles debate on this topic and we can’t not generalise about who can become ethical leader in an organisation, it is believed that anyone can become an ethical leader, but researchers have found a few traits that are more commonly found in leaders who are rated by their followers as being ethical leaders. Ethical leaders always know how to do the right thing. It may be difficult to define exactly what “right” is, but a leader who is ethical is not afraid to do what they truly believe to be right – even if it is unpopular, unprofitable, or inconvenient.
These traits include:
- Conscientiousness (WalumbwaSchaubroeck (2009); Kalshoven, Den Hartog, and DeHoogh (2011)), which means being thorough, careful, or vigilant
- Moral identity (Mayer et al., 2012), which means the degree of importance for individuals to define themselves as a good person with moral traits.
- Cognitive moral development, meaning how sophisticated one’s thinking is about ethical issues (Jordan et al., 2013).
- JusticeAn ethical leader is always fair and just. They have no favorites, and treat everyone equally. Under an ethical leader, no employee has any reason to fear biased treatment on the basis of gender, ethnicity, nationality, or any other factor.
- Respect othersone of the most important traits of ethical leadership is the respect that is given to followers. An ethical leader shows respect all members of the team by listening to them attentively, valuing their contributions, being compassionate, and being generous while considering opposing viewpoints.
- Honestyit goes without saying that anyone who is ethical will also be honest and loyal. Honesty is particularly important to be an effective ethical leader, because followers trust honest and dependable leaders. Ethical leaders convey facts transparently, no matter how unpopular they may be.
- Humanebeing humane is one of the most revealing traits of a leader who is ethical and moral. Ethical leaders place importance in being kind, and act in a manner that is always beneficial to the team.
- Focus on teambuildingEthical leaders foster a sense of community and team spirit within the organization. When an ethical leader strives to achieve goals, it is not just personal goals that they’re concerned about. They make genuine efforts to achieve goals that benefit the entire organization – not just themselves.
- Value driven decision-makingin ethical leadership, all decisions are first checked to ensure that they are in accordance with the overall organizational values. Only those decisions that meet this criterion are implemented.
- Encourages initiativeunder an ethical leader, employees thrive and flourish. Employees are rewarded for coming up with innovative ideas, and are encouraged to do what it takes to improve the way things are done. Employees are praised for taking the first step rather than waiting for somebody else to do it for them.
- Values awarenessan ethical leader will regularly discuss the high values and expectations that they place on themselves, other employees, and the organization. By regularly communicating and discussing values, they ensure that there is consistent understanding across the organization.
- No tolerance for ethical violationsan ethical leader expects employees to do the right thing at all times, not just when it is convenient for them. Don’t expect a leader of such high values to overlook or tolerate ethical violations.
Pros and cons of Ethical Leadership
(NFY Interactive, 2014) Ethical leadership also helps organisation by reducing business liability by preventing costly administrative errors and rework. It also helps organisation to avoid government intervention, cost of fines, which may lead to stakeholders trust in the organization.
(Ethicalleadership.com, 2014) Ethical leadership also promotes employee loyalty .It also gives an organization an additional competitive advantage as the people related to company from suppliers to consumer end feel that they are contributors to a system which works for societal good.
(Dimitriou, 2012 ) says Ethical leadership will create positive influence on the organisation, and on overall individual It will help an employees to be motivated ,to boost their morale ,to gain job satisfaction, to act as a role model in the organisation ,which will eventually help the organisationto enhances their commitment towards the organization decreasing their turnover tendency.
(En Pasant Skills. 2014) in his article mentions importance of recruiting people ethically in an organisation by giving the example of IHG they incorporate physically challenged people .This ethical corporate responsibility was fulfilled by IHG , brought pool of talented and loyal employees. Such ethical practices indeed stimulate strong sense of ethics and loyalty in an individual in organization and make him thus give better performance at work.
(Dimitriou, 2012) Every coin has two sides, there is no doubt ethical leadership has many advantages but the side effects of it cannot be ignored.While leading a diverse team, duties, responsibilities and believes do not necessarily always perceive the leader’s behaviour in the way intended. Thus, not always ethical leadership impacts the employees positively. At times it is perceived as restriction to ones individuality Also if the ethical leadership carried out by the leader is not in the exact accord with the company policies but is an outcome of his personal ethical standards then it might confuse the team in distinguishing ethical and unethical practices because of distorted ideas.
(Small Business – Chron.com, 2014)most of the time Ethical leaders create loyal follower, but actually they do not think before act, they do not take any decisions in an organisation.Also due to strong influence of ethical leadership, employees tend to be loyal to leaders than the company thus possessing a threat of mass employee turnover if the leader descends.
(Seidman, 2010) Ethical leadership is not always profitable for the organizations while practicing ethical leadership one has to place society’s interest prior to individual and company profits. At times leader can’t even recognise or appreciate his staff for ethical behaviour, which leads to weak organisation culture in the organisation.
How leader ethically influences followers.
(Mary Kay, 2016) No matter what style of leadership a leader possesses, there are ethical behaviours to consider in the relationship between the leaders and the people they influence. A true measure of leadership is the ethical influence the leader has on his or her followers.An ethical leader is one that considers positive and negative views and the rights of everyone involved, as well as ensuring that decisions are made in an ethical manner and members are held accountable. The ethical actions of a leader enhance his or her credibility and integrity, which causes followers to trust.
Employees establish faith in their leader’s decision making and the choices the leader makes by listening to and watching what they do.
Leader must always keep in mind following aspects when he is trying to influence his followers.
- Leader should always remember he is on stage
- Leader should always communicate with care
- Ethical leaders will always admit their mistake
- Run organisations operation ethically, design standards of the operation
Werpehowski (2007) mentions ethical leader considers spirituality for influencing the followers. Followers of an ethical leader will “see divine immanence in such a life…unfolding of God's agency in liberating pardon, sovereign judgment, creaturely blessing, and faithful love over against the damage brought by sin, suffering, death, and hopelessness”
Moreno (2010) Ethical leaders can influence followers by consistent conduct, proper actions, moral way of being, and doing what one says.Author also pointed out the issue of the trust of employees ethical leader is one who has no gap between actions and words.
Therefore, Marcy, Gentry, and McKinnon (2008) recommend that a leader develop a specific strategy as it relates to ethically influencing followers and gaining trust. This strategy identified by the authors include the following: “look within, assess one’s emotions, question one’s judgment, consider other’s perspectives, assess situation demands, define a best case course of action or implementation, anticipate consequences, weight competing considerations, and recognize one’s circumstances” (p. 5). Strategically approaching ethical dilemmas will better equip leaders to avoid problems, biases, and situational pressures.
Kaptein, Huberts, Avelino and Lasthuizen (2005) Ethical leaders can best influence followers by measuring the results of their actions. The authors propose surveying employees, which can provide better insight about organisations overall ethical pulse. “Surveys can reveal the extent and possible consequences of unethical behaviour in organizations and illuminate the characteristics of ethical leadership” (p. 303). The authors note that leaders will then be able to gauge their effectiveness of implementing ethics.
Manz and Sims (1993), focussed on four important parameters which can be used for influencing employees such as “to act with integrity, to be fair, to have fun, and to be socially responsible” (p. 15).
Conclusions
As mentioned above Ethical leadership is vast, and complex topic of understanding, in review of twenty articles, it was been found that leader wants to exercise these practices of ethical leadership, although they are having willingness for the same, but implementation is difficult. During implementation of these practices leader faces many difficulties,the challenge arrives to determine what is fair. Ethical leadership is usually top- down practice which should be consider.
Future scope always remain to find out possible solutions for challenges faced by leaders in the organisation, Ethical failures are been reported in some of the articles which should be studied deeply. Future research should be consideredin the field of ethics with further development of models dealing with the implementation of ethics in organizations. There are still many undefined grey areas that exist within ethical leadership and new studies are needed to alleviate these areas.. Yet new opportunities are available as a growing number of leading organizations take lead and devote time and resources to the development of ethical leadership.
REFERENCES
1) En Pasant Skills. 2014. [online] Available October/A%20Case%20Study%20in%20the%20Business%20
2) Ethical leadership. (2017, October 19). Retrieved from
3)Kaptein, M., Huberts, L., Avelino, S., & Lasthuizen, K. (2005). Demonstrating ethical leadership by measuring ethics. Public Integrity, 7(4), 299-311.
4)Manz, C. C., & Sims, H. P. (1995). Das Strategieteam: Teams an der Spitze. UnternehmenOhneBosse, 147-166. doi:10.1007/978-3-322-88999-7_9
5) Martinez-Saenz, M. A. (2009). Ethical communication: moral stances in human dialogue. Current Reviews for Academic Libraries, 47(4), 693-693.
6) MaryKay (2017, October 14).Great Leaders Have Ethics. Retrieved from
7) Moreno, C. M. (2010). An approach to ethical communication from the point of view of management responsibilities. Journal of Applied Ethics, (1), 97-108.
8) NFY Interactive, I. 2014. Five Benefits of Ethical Leadership. [online] Available at: [Accessed: 3 Apr 2014].
9) A Qualitative Investigation of Perceived Executive Ethical Leadership: Perceptions from Inside and Outside the Executive Suite - Linda Treviño, Michael Brown, Laura Hartman Human Relations - 01 / 2003
10) Dimitriou, C. K. 2012. The impact of hotel business ethics on employee job satisfaction, organizational commitment, and turnover intention.
11) Ethical Leadership Guide: Definition, Qualities, Pros & Cons, Examples. (2016, August 11) Retrieved from
12) J. (2016, June 05). Leadership and Ethics. Retrieved from
13) Mayer, D. M., Aquino, K., Greenbaum, R. S., & Kuenzi, M. (2012). Who displays ethical leadership and why does it matter? An examination of antecedents and consequences of ethical leadership. Academy of Management Journal, 55(1), 151-171.
14) Mayer, D. M., Kuenzi, M., Greenbaum, R., Bardes, M., & Salvador, R. (2009). How low does ethical leadership flow? Test of a trickle down model. Organizational Behavior and Human Decision Processes, 108, 1–13.
15) New Insights into Ethical Leadership: A Qualitative Investigation of the Experiences of Executive Ethical Leaders - Colina Frisch, Markus Huppenbauer
16) Seidman, D. 2010. Ethical Leadership: An Operating Manual. [online] Available at: [Accessed: 2 Apr 2014].
17)10 Ethical Leadership Characteristics, Attributes & Traits. (n.d.). Retrieved from
18) Marcy, R. T., Gentry, W. A., & McKinnon, R. (2008). Thinking straight: New strategies are needed for ethical leadership. Leadership in Action, 28(3), 3-7.
19) Tang, H., & Goldman, D. (2002, 01). Myocyte Enhancer Factor 2C (MEF-2C). Wiley Encyclopedia of Molecular Medicine. doi:10.1002/0471203076.emm0743
20)Tang, H., & Goldman, D. (2002, 01). Myocyte Enhancer Factor 2C (MEF-2C). Wiley Encyclopedia of Molecular Medicine. doi:10.1002/0471203076.emm0743Journal of Business Ethics - 07 / 2013