THE ROLE OF LEADERSHIP IN A
CORPORATE CULTURE
LEADERSHIP
Leadership, the ability or authority to guide and direct others
toward achievement of a goal, has a significant impact on ethical
decision making because leaders have the power to motivate others
and enforce the organization’s norms and policies as well as their
own viewpoints.
Leadersare key to influencing an organization’s corporate culture
and ethical posture.
A leader must have not only his or her followers’ respect but also
provide a standard of ethical conduct to them.
EXAMPLE:
Former chairman of Korean electronics giant Samsung Group, Lee Kun-hee,
resigned in disgraced after 20 years on the Samsung board after being
accused of evading $128 million in taxes. His son and heir to the company,
Lee Jae-yong, also resigned from the board. This was only the final in a long
string of corruption charges against Lee. He was also convicted of bribery 10
years ago. Since his resignation, the company has sought to improve its
image.
7 ESSENTIAL QUALITIES OF ALL
GREAT LEADERS
BRIAN TRACY
VISION
COURAGE
INTEGRITY
HUMILITY
STRATEGIC PLANNING
FOCUS
COOPERATION
The Managerial Role in Developing
Ethics Program Leadership
LEADERSHIP STYLES INFLUENCE ETHICAL
DECISIONS
Leadership styles influence many aspects of organizational behavior, including
employees’ acceptance of and adherence to organizational norms and values. Styles
that focus on building strong organizational values among employees contribute to
shared standards of conduct. They also influence the organization’s transmittal and
monitoring of values, norms, and codes of ethics.
In short, the leadership style of an organization influences how its employees act.
The ethical leadership concept is not only for CEOs, boards of directors, and managers
but can also be fellow employees.
Ethical leadership by the CEO requires an understanding of the firm’s vision and values,
as well as the challenges of responsibility and the risk in achieving organizational
objectives. Lapses in ethical leadership can occur even in people who possess strong
ethical character, especially if they view the organization’s ethical culture as being
outside the realm of decision making that exists in the home, family, and community.
EXAMPLE:
Robin Szeliga, former CFO of Qwest, who pleaded guilty for
insider trading, was an excellent community leader, even
serving on a college of business advisory board.
Six (6) leadership styles that are based on
emotional intelligence by Daniel Goleman.
1. The coercive leader demands instantaneous obedience and focuses on achievement,
initiative, and self-control. Although this style can be very effective during times of
crisis or during a turnaround, it otherwise creates a negative climate for organizational
performance.
2. The authoritative leader—considered to be one of the most effective styles—inspires
employees to follow a vision, facilitates change, and creates a strongly positive
performance climate.
3. The affiliative leader values people, their emotions, and their needs and relies on
friendship and trust to promote flexibility, innovation, and risk taking.
4. The democratic leader relies on participation and teamwork to reach collaborative
decisions. This style focuses on communication and creates a positive climate for
achieving results.
5. The pacesetting leader can create a negative climate because of the high standards
that he or she sets. This style works best for attaining quick results from highly
motivated individuals who value achievement and take the initiative.
6. The coaching leader builds a positive climate by developing skills to foster long-term
success, delegating responsibility, and skillfully issuing challenging assignments.
ADVANTAGES OF COERCIVE LEADERSHIP
Increased productivity
Improved workplace safety
Decreased employee deviation
Improved rule enforcement
Effective small group management
DISADVANTAGES
Top-down communication
Dictation
Rigid structure
Rules and regulation
ADVANTAGES OF AUTHORITATIVE LEADERSHIP
Authoritative leaders bring clarity
Authoritative leaders provide direction and vision
Authoritative leaders breed goodwill
DISADVANTAGES
Authoritative leaders can appear overbearing
Authoritative leaders must own their mistakes
ADVANTAGES OF AFFILIATIVE LEADERSHIP
Positively communicated feedback helps boost staff morale.
Interpersonal conflict is swiftly addressed
Employees feel like the leader cares about their wellbeing
Employees experience less stress and higher autonomy
Quicker emotional recovery from difficult incidents
Teams are tightly-knit
DISADVANTAGES
Underperformance tends to be overlooked
Overlooked underperformance leads to a negative chain reaction
Avoiding constructive criticism leads to unresolved problems
The organization’s overall goal may be lost
The leader avoids uncomfortable situations
Employees develop an unrealistic emotional dependence on the leader
ADVANTAGES OF DEMOCRATIC LEADERSHIP
Increased job satisfaction and commitment
Increased innovation
Multiple opinions
Less absenteeism
More cohesion
Relationships built on trust
Higher productivity
DISADVANTAGES
Slower decision process
Decreased performance
Not effective with uneducated employees
Burdened leaders
ADVANTAGES OF PACESETTING LEADERSHIP
Business goals are quickly achieved.
Highlights the competencies of a highly skilled and
experienced team.
Issues are swiftly addressed.
DISADVANTAGES
Employees can feel stressed, overwhelmed, and
unmotivated
Trust is lost
Work becomes repetitive and boring
ADVANTAGES OF COACHING LEADERSHIP
People enjoy working with coaching leaders
Coaching leads to clear expectations
Coaching gives an organization a competitive advantage
Coaching can identify weaknesses, and transform them
into strengths
DISADVANTAGES
Coaching requires a lot of time and patience
Coaching is difficult
Coaching is a two-way street
Coaching without good chemistry can impact progress
TYPES OF LEADERS
Transactional leaders attempt to create employee satisfaction through
negotiating, or “bartering,” for desired behaviors or levels of performance.
Transformational leaders strive to raise employees’ level of commitment and
to foster trust and motivation.
Transformational leaders
Communicate a sense of mission, stimulate new ways of thinking, and
enhance as well as generate new learning.
Transformational leaders strive to promote activities and behavior through a
shared vision and common learning experience.
Transformational ethical leadership is best suited for organizations that have
higher levels of ethical commitment among employees and strong stakeholder
support for an ethical culture.
Transactional leaders
Focus on ensuring that required conduct and procedures are implemented.
Their negotiations to achieve desired outcomes result in a dynamic
relationship with subordinates in which reactions, conflict, and crisis
influence the relationship more than ethical concerns.
Transactional leaders produce employees who achieve a negotiated level of
performance, including compliance with ethical and legal standards.
EXAMPLE
When Eric Pillmore took over as senior vice president of
corporate governance at Tyco, after a major scandal
involving CEO Dennis Kozlowski, the company needed
transitional leadership. To turn the company around,
many ethics and corporate governance decisions needed
to be made quickly. The company also needed cross-
functional leadership, improved accountability, and
empowered leaders in order to improve corporate
culture. Pillmore helped install a new ethics program
that changed leadership policies and allowed him direct
communications with the board in order to help
implement the leadership transition.
HABITS OF STRONG ETHICAL LEADERS
Archie Carroll, a University of Georgia business professor, crafted “7 Habits of
Highly Moral Leaders” based on the idea of Stephen Covey’s The 7 Habits of
Highly Effective People. The adapted Carroll’s “7 Habits of Highly Moral
Leaders” creates “Seven Habits of Strong Ethical Leaders”.
Ethical leaders need both knowledge and experience to make the right
decision.
Strong ethical leaders have both the courage and the most complete
information to make decisions that will be the best in the long run.
Strong ethical leaders must stick to their principles and, if necessary, be
ready to leave the organization if its corporate governance system is so
flawed that it is impossible to make the right choice.
CHALLENGES IN LEADERSHIP
BEING A LEADER TODAY IS MORE COMPLEX AND DIFFICULT THAN EVER.
REFERENCES
Ho, L. (2021, September 2). Successful Leadership Style: 6 Types of Leader That
Inspire Actions. Linkedin.https://www.linkedin.com/pulse/successful-leadership-
style-6-types-leader-inspire-actions-leon-ho
Indeed Editorial Team. (2021, May 24). Coercive Leadership: Concepts,
Advantages and How To Use It. Indeed Career Guide.
https://www.indeed.com/career-advice/career-development/coercive-leadership
Indeed Editorial Team. (2021, May 24). Coercive Leadership: Concepts,
Advantages and How To Use It. Indeed Career Guide.
https://www.indeed.com/career-advice/career-development/coercive-leadership
Lindberg, C. (2021, September 30). Affiliative Leadership – What is it? Pros/Cons?
Examples? Leadership Ahoy! https://www.leadershipahoy.com/affiliative-
leadership-what-is-it-pros-cons-examples/
Stobierski, T. (2019, November 12). 5 Pros & Cons of Authoritative Leadership|
HBS Online - Harvard Business School Online. Business Insights - Blog.
https://online.hbs.edu/blog/post/authoritative-leadership-style
