Perhaps no other issue can so dramatically define the difference between management and leadership, than the attention the individual gives to ethics.

A manager must focus on the on the day-to-day aspects of keeping the department, team or organization running smoothly. This includes making sure the department is staffed appropriately, that the company is on target for sales, that production is on target, etc. A leader, on the other hand, must be able to set goals and aspirations for the team, set the tone of the organization, motivate and inspire the group, etc. Realistically, managers must be able to do both. They must inspire and motivate and they must ensure that the company operates effectively. Setting the ethical tone of the organization is a leadership function. The challenge for most managers is to spend enough time focusing on leadership functions without becoming totally consumed by the day-to-day operations of the team. Because “business ethics are about the morally functional nature of our business relationships…giving them the attention and care they deserve is crucial to an organization’s success” (Hamm, 2003, p. 1). I suggest six steps for a manager to take to lead ethically.

1. Reflect on Values. To focus the appropriate attention on the ethical tone of the organization, a leader must “draw on their own fundamental values and capabilities” in order to optimize their leadership potential (Quinn, 2005, p. 76). To do this, leaders must find time to reflect and identify their own personal moral compass as well as to ask themselves what are the key ethical questions and dilemmas facing their organizations. Just as a manager must take time to understand their market, budgets, production timelines, etc., an ethical leader must take time to understand his/her own personal values, the values of the team, what the value statements of the organization should be and identify the gaps that exist in aspired goals and current behavior within the organization (Hamm, 2003, p. 3).

2. Establish Trust. Build an environment of trust with employees in order to create an environment where employees feel free to discuss ethical dilemmas and issue with management.

3. Establish a Shared Ethical Vision. To ensure buy-in and commitment from the organization, include members from various levels of the team to help create a “Code of Conduct” that is aligned with the Ethical Vision of the organization (p. 3).

4. Communicate the Ethical Vision and Code of Conduct. A leader must ensure that the vision and code is communicated to everyone within the organization. This can be done through policy manuals, training events, one-on-one and team coaching, newsletters, team meetings, etc… “Communicating the program frequently is another important success factor (p. 3), as is establishing a way for employees to communicate their concerns back to management in a safe and confidential manner.

5. Act. To be effective, the leader must show that all the organization is serious about ethical behavior. All reports of unethical behavior must be investigated thoroughly. Furthermore, all violators of ethical standards must be punished equally and justly throughout the organization, irregardless if the perpetrator is a senior executive or first line hire. In addition to punishing negative behavior, effort should be made to reward and recognize positive ethical behavior (Trevino and Nelson, 2005, p. 304). Just as a good manager knows that rewarding employees for reaching goals is important, the ethical leader will recognize that equal importance must be given to recognize those who exemplify ethical behavior within the organization. Acting also means leading by example by letting ethical behavior guide the actions of the leaders at all times. Doing so will help establish and sustain a culture of ethical behavior.

6. Monitor and Sustain Ethical Behavior. The leader must consider ethical leadership a key aspect of their role as a manager. It cannot be seen as a passing organizational fad. Effort must be made to gather feedback through surveys, focus groups, one-on-one interviews, etc., to identify employee concerns regarding the ethical environment where they work. This should be a continuous improvement process to identify concerns and to improve the overall ethical environment.

There are at least seven benefits for a manager to focus on being an ethical leader, including; improved public image of the organization, restoration or enhancement of investor confidence, prevention and reduction of criminal penalties, preventing civil lawsuits of employees who could not have their grievances met satisfactorily inside the company, improved employee retention, market leadership through by improved customer satisfaction and setting the example for others in the market (Hamm, 2003, p. 1- 2).

References:

Hamm, B.A., (2003). Want a company you can be truly proud of? Try a business ethics program. Quinn, R. (2005). Moments of greatness: Entering the fundamental state of leadership. Harvard Business Review, July – August 2005. 75-83.

Trevino, L., and Nelson, K., (2005). Corporate social responsibility and managerial ethics. Hoboken, NJ: John Wiley and Sons, Inc.