LEADERSHIP ETHICS: THE INTEGRITY CAPACITY CHALLENGE Dr. Joseph A. Petrick Executive Director...
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Transcript of LEADERSHIP ETHICS: THE INTEGRITY CAPACITY CHALLENGE Dr. Joseph A. Petrick Executive Director...
LEADERSHIP ETHICS: THE INTEGRITY CAPACITY CHALLENGE
Dr. Joseph A. PetrickExecutive Director
Institute for Business IntegrityWright State University
Leadership Ethics Lecture SeriesOhio Northern University
March 7, 2007
AGENDA
A. Leadership Ethics and Rebuilding Stakeholder TrustB. Integrity Capacity Model for Leadership
Development1. Leadership Process Integrity Capacity2. Leadership Judgment Integrity Capacity3. Leadership Developmental Integrity
Capacity4. Leadership System Integrity Capacity
C. Microeconomic and Macroeconomic Improvements1. Improved Microeconomic Moral
Accountability2. Improved Macroeconomic Moral Accountability
D. New Agenda for Responsible Leadership
Leadership Ethics and Rebuilding Stakeholder Trust
1. Ethical Leadership Failures
2. Literature on Leadership is Vast.
3. Need For a Current Working Definition of Leadership
4. Need for a Current Working Model of Moral Leadership
Working Definition of Leadership
• Leadership is an influence process, both visible and invisible, in a society inherited, constructed, and perceived as an interaction of persons in human (and inhuman) conditions of partnership and/or inequality – an interaction measured by ethical values and by the degree of realization of intended, comprehensive, emergent, balanced and sustainable change.
Integrity Capacity Model of Moral Leadership
The individual and collective capability for repeated process alignment of moral awareness, deliberation, character and conduct that demonstrates balanced judgment, enhances sustained moral development, and promotes supportive systems for moral decision making.
Integrity Capacity Model of Moral Leadership
1. Individual and Collective Integrity Capacity as both Intrinsically and Instrumentally Valuable
2. Integrity Capacity as an Intangible Strategic Asset that Enhances Power and Reputational Capital
Instrumental Value of Leadership Integrity Capacity
Leadership Integrity Capacity
ReputationalCapital
Sustainable Competitive Advantage, Multiple Stakeholder Trust & World-
Class Performance
Dimensions of Leadership Integrity Capacity
1. Leadership Process Integrity Capacity: Moral Coherence
2. Leadership Judgment Integrity Capacity: Moral Soundness
3. Leadership Developmental Integrity Capacity: Moral Maturity
4. Leadership System Integrity Capacity: Moral Wholeness
Leadership Process Integrity Capacity: Moral Coherence
The alignment of individual and/or collective leadership moral awareness, deliberation, character, and conduct on a sustained basis, so that moral coherence results.
Leadership Process Integrity Capacity: Moral Coherence
MORAL AWARENESSPerceptionSensitivity
MORAL DELIBERATIONAnalysisResolution
MORAL CHARACTERCognitive Readiness to ActVolitional Readiness to Act
MORAL CONDUCTResponsibleSustainable
Virtues That Build Leadership & Collective Character
1. Intellectual Virtues
2. Moral Virtues
3. Social Virtues
4. Emotional Virtues
5. Political Virtues
Leadership Judgment Integrity Capacity: Moral Soundness
The balanced and inclusive use of key ethics theories and their subordinated cognate theoretical resources in the analysis and resolution of individual and/or collective ethical issues that demonstrate the moral soundness of leadership judgment.
Leadership Judgment Integrity Capacity (R2C2): Moral Soundness
External
Internal
Control
Flexibility
Achieve Good Results
Follow Right Rules
Build Virtuous Character
Enhance Supportive Contexts
Positive & Negative Zones of Leadership Moral Judgment Integrity (R2C2)
Character
Context
ResultsRules
Negative Zone
AmoralProfessionalism
Negative Zone
Positive ZoneWastes Energy
DisruptsContinuity
DestroysCohesion
OffendsIndividuals
StiflesProgress
NeglectsPossibilities
SlowsProduction
AbdicatesAuthority
CollectsInformation
Maintains Structure Provides Structure
Initiates Action
AcquiresResources
Envisions Changes
FacilitatesInteraction
Shows Consideration
Leadership Judgment Integrity Capacity Based on Respecting Four Human Nature Drives
Character
Context
ResultsRules
Negative Zone
AmoralProfessionalism
Negative Zone
Positive Zone
DRIVE TO DEFEND
DRIVE TOACQUIRE
DRIVE TO LEARN
DRIVE TO BOND
Ranges of Moral Judgment Evaluation using R2C2 ™
Quantitative Qualitative Anchors Ranges 0 – 1 Extremely Unacceptable
Under-emphasis
2 Unacceptable Under-emphasis
3 Minimally Acceptable Emphasis
4 Below Average Emphasis
5 Average Emphasis
6 Above Average Emphasis
7 Optimal Emphasis
8 Unacceptable Over-emphasis
9 – 10 Extremely Unacceptable Over-emphasis
Context
Results
Character
Rules
Flexibility
ExternalInternal
Control
(INVOLVEMENT)
(ADAPTABILITY)
(EFFECTIVENESS)
(CONTINUITY)
LEADERSHIP EXTREME CONCERN FOR PROFITS
Leadership Developmental Integrity Capacity: Moral Maturity
The organizational and extra-organizational cultural cognitive improvement of individual and/or collective leadership moral reasoning capabilities from a stage of self-interested connivance, through a stage of external conformity, and onto a stage of internalized commitment to moral principles that demonstrates moral maturity.
Leadership Moral Development Stages & Their Work Cultures
Principled Integrity
Democratic Participation
HOUSE OF COMPLIANCE
HOUSE OF MANIPULATION
Allegiance to Authority
Popular Conformity
Machiavellianism
Social Darwinism
(Conformity)
(Connivance)
HOUSE OF INTEGRITY
(Commitment)
Leadership Moral Development Stages & Leadership Theories
Principled Integrity
Democratic Participation
Path-Goal/Transactional Leadership Theories
Allegiance to Authority
Popular Conformity
Machiavellianism
Social Darwinism
(Conformity)
Autocratic Coercive Power Leadership Theories
Principled Transforming Leadership Theories
Leader-Membership Exchange Theories
Majority Participation and Servant Leadership Theories
Institutional Contingency Leadership Theories
Leadership System Integrity Capacity: Moral Wholeness
The development and alignment of the moral infrastructure within the organization and the shaping of the external moral environment of the leader’s organization to provide a supportive context for moral wholeness in decision making.
Leadership and Internal System Integrity Capacity
Organizational Moral Environment
• Compliance-Based Systems• Prevent Criminal Misconduct• U.S. Federal Sentencing Guidelines
(USFSG)• Sarbanes-Oxley Act (SOX)
• Integrity-Based Systems• Enable Responsible Conduct
Compliance-Based Organization Internal Systems
1. Establish compliance standards and
procedures
2. Assign high level individuals to oversee
program
3. Exercise due care in delegating
discretionary authority
4. Communicate and train
Compliance-Based Organization Internal Systems
5. Monitor, audit, and provide safe reporting system
6. Enforce appropriate discipline with
consistency
7. Respond to offences and prevent
further misconduct
8. Comply with USFSG & SOX requirements
Integrity-Based Organization Internal Systems
1. Moral Leadership at the Top
2. Ethics Needs Assessment &
Compliance Standards in Place
3. Ethics in Strategy and Structure
4. Integrity Steering Committee
5. Statement of Values/Written
Code of Conduct
6. Ethics Policy and Procedure Manuals
Integrity-Based Organization Internal Systems
7. Ethics in Selection, Socialization, and Performance Subsystems
8. Ethics in Appraisal, Rewards/Recognition/Incentive,and Development Subsystems
9. Ethics in Communication Processes and Work Attitudes
10. Ethics Training and Education Programs11. Ethics in Decision-Making/Meeting
Processes
Integrity-Based Organization Internal Systems
12. Organizational Integrity AdvisorResponsibilities
13. Ethics Reporting, Whistleblower Protection and Conflict Resolution Processes
14. Enforcement Processes of Ethical Standards
15. Ethics Monitoring, Auditing & Improving Subsystems
16. Ethics System and Quality Work Process Control and Improvement
Ethical Leadership Assessment Instrument
1. Listens to what employees have to say2. Disciplines employees who violate
ethical standards3. Conducts his/her personal life in an
ethical manner4. Has the best interests of employees in
mind 5. Makes fair and balanced decisions
Ethical Leadership Assessment Instrument
6. Can be trusted 7. Discusses business ethics or values
with employees 8. Sets an example of how to do things
the right way in terms of ethics 9. Defines success not just by results but
also by the way that they are obtained10. When making decisions, asks “what is
the right thing to do?” Source: M.E. Brown et al. / Organizational Behavior and Human Decision Processes
(2005) 97:117–134
External System Integrity Capacity
1. Domestic External Moral Environment• Corruption Elimination and/or Control• Industry & Professional Standards• Proactive Positive Stakeholder Relations &
Triple Bottom Line Accountability
2. Global External Moral Environment• Corruption Elimination and/or Control• Industry & Professional Standards• Proactive Positive Stakeholder Relations &
Triple Bottom Line Accountability
Improved Microeconomic Moral Accountability
A. Individual Leadership Accountability Improvement1. Demonstrated Process Integrity Capacity: Moral Coherence2. Demonstrated Judgment Integrity Capacity: Moral Soundness3. Demonstrated Developmental Integrity Capacity: Moral Maturity4. Demonstrated System Integrity Capacity: Moral Wholeness
Improved Microeconomic Moral Accountability
A. Collective Leadership Accountability Improvement1. Demonstrated Process Integrity Capacity: Moral Coherence2. Demonstrated Judgment Integrity Capacity: Moral Soundness3. Demonstrated Developmental Integrity Capacity: Moral Maturity4. Demonstrated System Integrity Capacity: Moral Wholeness
Improved Macroeconomic Moral Accountability
A. Professional Association/Industry Accountability Improvement1. Strengthen leadership professional education2. Strengthen leadership for institutional reform3. Strengthen professional/industry/education
accountability linksB. Political Economy Accountability Improvement
1. Balancing types of capitalism/economic democracy 2. International leadership harmonization through global business, government & NGO linkages3. Domestic & global governance board reforms
Balancing Types of Capitalism
Community
Capitalism
EntrepreneurCapitalism
InvestorCapitalismRegulatory
Capitalism
Negative Zone
AmoralProfessionalism
Negative Zone
Positive Zone
DRIVE TO DEFEND
DRIVE TOACQUIRE
DRIVE TO LEARN
DRIVE TO BOND
New Agenda for Responsible Leadership in Organizations
• National commission with task forces on improving microeconomic levels of leadership integrity capacity accountability
• International commission with task forces on improving macroeconomic levels of leadership moral accountability
• Integrity capacity building skills in mainstream leadership professional education