Blog Entry # 1: Ethical Leadership

“I am sure that in estimating every man’s value either in private or public life, a pure integrity is the quality we take first into calculation, and that learning and talents are only the second.”
– Thomas Jefferson

What is ethics? Oxford Dictionary (2021) defines ethics as the “moral principles that control or influence a person’s behaviour”. The discussions around ethics and ethical behaviours dates back from the times of ancient Greece. In its simplest definition, it is doing the “right” thing. In business environment, ethical leadership is the act of leading and influencing people with the right behaviours to achieve the business goals (Luenedonk 2020).

Characteristics of an Ethical Leader

Numerous studies, researches, and articles provide extensive lists of characteristics that ethical leaders exhibit such as being honest, leading by example, and being considerate, among others. However, key attributes emerged as important ones that an ethical leader should have. They are integrity, conscientiousness, and accountability.

Integrity

“The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office.”
-Dwight D. Eisenhower

Integrity refers to the quality of being honest and having strong moral principles (Cambridge Dictionary 2021). It encompasses other traits such as honesty, trustworthiness, and kindness (Brown and Trevino 2006). Survey conducted by Robert Half with CFO and employees identified integrity as the top leadership trait (Williams n.d.). Integrity is central to the employees’ decision on who to follow, who to trust, and to whom they will place their loyalty and commitment to, which ultimately determines their performance (Moorman and Grover 2009).

Robert Half Survey: Which of these are the most important attributes in a corporate leader?
Source: Robert Half (2012)

Conscientiousness

“Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity.” – Martin Luther King Jr.

Another key trait of an ethical leader is being conscientious, or the ability to be thorough, careful, and vigilant (Kalshoven, Den Hartog, and De Hoogh 2011). Ethical leaders perform their work diligently and with dedication,  and empowers others in order to ensure success of each other and the organization. Moreover, conscientious leaders exhibit strong conviction of doing the right things and the consequences of their actions (Luenedonk 2020). They demonstrate strong work ethics, reliability, and attention to details, among others.

Accountability

“It is wrong and immoral to seek to escape the consequences of one’s acts.”
-Mahatma Gandhi

Ethical leaders are also mindful of the effect of their actions and decisions, both internal and external to the organization. They avoid the “blame-game”. Furthermore, leaders, due to the nature of their position, must be accountable for everything that’s happening in their domains. Accountable leaders exude confidence in their actions to be righteous, regardless whether it is popular nor good (Crew 2015). Accountability also promotes ethical behaviours throughout the organization, thereby resulting in increased productivity, work quality, and improved communications (Ghanem and Castelli 2019).

Case Studies: British Petroleum and Starbucks

British Petroleum – Deepwater Horizon Oil Spill

On 20 April 2010, the BP Deepwater Horizon oil rig located in the Gulf of Mexico experienced an explosion which triggered an oil spill of 130 million gallons into the ocean. It is considered to be the one of the worst environmental crisis in the history, with 11 people dead and countless number of marine animals affected (Meiners 2020). The company also paid $4.5 B in government fines, in addition to other expenses such as legal fees and damage claims. Investigations into the incident found British Petroleum committed several ethical infringements such as not having adequate safety procedures, bad management and culture, and usage of sub-standard materials for the rig in order to maximize profits (Associated Press 2015, Amadeo 2020). Moreover, the executives in British Petroleum also denied its accountability in the incident by putting the blame on its rig contractors (Ingram 2012).

BP Oil Spill
Source: Washington Post (2012)

Starbucks – Philadelphia Incident

On 12 April 2018, two black men were wrongfully arrested inside a Starbucks shop in Philadelphia. The men were in the premises for a business meeting and is waiting for the other associate to arrive when an employee asked them to leave, and when they refused, called the police (Stevens 2018) . The following Saturday, 14 April 2018, Starbucks CEO Kevin Johnson penned a statement and a video of apology, denouncing the actions taken by the staff and owning to the mistake. Johnson also outlined the steps that the Starbucks management will undertake to learn from the incident, including meeting with community to learn what could have been done better. He also met with the two men to discuss the same. In the ensuing weeks and months, Starbucks temporarily closed nearly eight thousand of its stores to conduct bias training and released new set of policies and guidelines with regards to the customer management with the shops (Starbucks 2018).

Two Black Men Arrested at Philadelphia Starbucks
Source: Melissa DePino, via Twitter (2018)

Reflections

While profitability and maximising shareholder value are the primary responsibilities of a business, they should not come at the expense of ethical and moral responsibilities. The case of British Petroleum oil disaster is a clear example prioritising short-term gains over ethical values. Furthermore, instead of owning for the disaster, its executives played the blame-game towards its contractors, which further aggravated its image.

Starbucks CEO Kevin Johnson clearly showed ethical leadership in the Philadelphia case. Firstly, he took it upon himself to issue an apology for the incident and never passed the blame to the local shop manager. He also initiated changes with the company policies, took immediate corrective action through the closing 8,000 stores and conducting bias training among its staff, and engaged stakeholder to learn from the mistake. By accepting responsibility for the incident and taking actions, Kevin Johnson clearly demonstrated his own personal and the company’ values.

References:

Amadeo, K. (2020) BO Oil Spill Economic Impact [online] available from  <https://www.thebalance.com/bp-gulf-oil-spill-facts-economic-impact-3306212> [29 March 2021]

Associated Press (2014)‘Investigation into 2020 BP oil spill finds failures, poor testing and ongoing risks’. The Guardian [online] 5 June. Available from <https://www.theguardian.com/environment/2014/jun/05/bp-deepwater-horizon-spill-report-failures-risks> [29 March 2021]

Brown, M., and Trevino, L. K. (2006) ‘Ethical leadership: A review and future directions’. The Leadership Quarterly 17 (6), 595–615 DOI:10.1016/j.leaqua.2006.10.004

Cambridge Dictionary (2021) Cambridge Dictionaries Online [online] available from <https://dictionary.cambridge.org/dictionary/english/integrity> [29 March 2021]

Ghanem, K. and Castelli, P. (2019) ‘Accountability and Moral Competence Promote Ethical Leadership’ The Journal of Values-Based Leadership 12 (1) DOI:10.22543/0733.121.1247

Ingram, D. (2012) ‘BP executives sought to blame blue collar rig workers: US’.  Reuters [online] 7 September. Available from <https://www.reuters.com/article/us-bp-oilspill-blue-collar-idUSBRE8851DF20120906> [29 March 2021]

Jackson, J. J., Wood, D., Bogg, T., Walton, K. E., Harms, P. D., and Roberts, B. W. (2010) ‘What do conscientious people do? Development and validation of the Behavioral Indicators of Conscientiousness (BIC)’. Journal of research in personality 44 (4), 501–511. DOI: 10.1016/j.jrp.2010.06.005

Kalshoven, K., Den Hartog, D., and De Hoogh, A. (2011) ‘Ethical Leader Behavior and Big Five Factors of Personality’. Journal of Business Ethics 100 (2) 349-366DOI: 10.1007/s10551-010-0685-9

Luenedonk, M. (2020) Ethical Leadership Guide: Definition, Qualities, Pros & Cons, Examples [online] available from <https://www.cleverism.com/ethical-leadership-guide-definition-qualities-pros-cons-examples/> [29 March 2021]

Meiners, J. (2020) ‘Ten years later, BP oil spill continues to hrm wildlife – especially dolphins [online] available from <https://www.nationalgeographic.com/animals/article/how-is-wildlife-doing-now–ten-years-after-the-deepwater-horizon> [29 March 2021]

Moorman, R. and Grover, S. (2009) ‘Why does leader integrity matter to followers? An uncertainty management-based explanation’. International Journal of Leadership Studies 5, 102-114

Oxford Dictionary (2021) Oxford Learners Dictionaries [online] available from <https://www.oxfordlearnersdictionaries.com/definition/english/ethic?q=ethics> [29 March 2021]

Starbucks (2018) Use of the Third Place Policy [online] available from <https://stories.starbucks.com/press/2018/use-of-the-third-place-policy/> [29 March 2021]

Stevens, M. (2018) ‘Starbucks C.E.O. Apologizes After Arrests of 2 Black Men’. The New York Times [online] 15 April. Available from <https://www.nytimes.com/2018/04/15/us/starbucks-philadelphia-black-men-arrest.html> [29 March 2021]

Williams, T. (n.d) Why Integrity Remains One of the Top Leadership Attributes [online] available from <https://execed.economist.com/blog/industry-trends/why-integrity-remains-one-top-leadership-attributes> [29 March 2021]

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