Teaching PowerPoint Slides - Chapter 4

4
ETHICAL LEADERSHIP
AND CORPORATE
CULTURE
Learning Outcomes
At the end of this chapter, you should be able to:

 Explain the concept of role in ethics
 Discuss the roles of managers as economic actors,
company leaders and community leaders
 Define ethical leadership
 Describe the two pillars of ethical leadership, i.e. ‘moral
person’ and ‘moral manager’
 Explain the traits of an ethical leader
 Explain the meaning and importance of setting the right
tone from the top in the context of the ethical leader
BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2018 4–3
Learning Outcomes (cont.)
 Explain some critical elements of a formal ethics

programme
 Compare and contrast compliance-based code of ethics
and integrity-based code of ethics
 Define corporate culture and ethical corporate culture
 Outline the role of ethical leadership in inculcating
ethical corporate culture

Introduction
 There will be two parts discussed in this chapter:

– Ethical leadership
– The role of leadership to inculcate an ethical corporate
culture
 We will look at the meaning of role in ethics and the
three roles of business managers.
 Then, the definition of ethical leadership, examine the
pillars of ethical leadership, and the traits of ethical
leaders.
 The ethics programme helps leaders to set the right
tone from the top and instil ethical corporate culture.
Role as an Ethical Concept
 A role is a structured set of relationships with

accompanying rights and obligations that are
sometimes added to those of ordinary morality over and
above those of everyday life.
 Roles are created in order to serve society better as a
whole since everyone is contributing or taking some
responsibility to accomplish something for the well-
being of the society.
 Thus, roles are directly related to social responsibility.
 Business people have a role to play for a nation’s
economic growth, prosperity and well-being.
Role as an Ethical Concept
(cont.)
 Roles of business managers:

Defining Ethical Leadership
 According to Brown et al. (2005), ethical leadership is the

ability or power to instil ethically acceptable behaviour
through personal actions and motivate followers to
emulate such behaviour through two-way communication,
reinforcement and ethical decision-making.
 In fact, an organization is only ethical if its leaders are
ethical and most importantly, if the leaders are able to
motivate their followers to behave ethically.
 Employees learn through observation. Leaders can
influence the behaviour of their followers through role-
modelling and establishing ethical behaviour practices.

Two Pillars of Ethical Leadership
 These two pillars basically reinforce the idea that ethical

leadership requires someone that does not only have a
core set of ethical values and acts on them, but also
establishes various platforms and a work environment
that promotes such values among his followers.
 The moral person pillar represents the leader’s personal
traits, character and altruistic motivation.
 The moral manager pillar represents the proactive
efforts of the manager to influence the way his
employees behave.

(cont.)
 These two pillars

are important
because
individuals learn
appropriate
behaviour through
a role modelling
process
(observing others)
(Bandura, 1977).

(cont.)

Traits of Ethical Leaders
 Traits are stable personal characteristics of any

individual; an individual acts in a similar fashion at
different times and situations and others describe the
individual to those attributes (Trevino, Hartman and
Brown, 2000).

Traits of Ethical Leaders (cont.)

Critical Elements of a Formal
Ethics Programme

Critical Elements of a Formal
Ethics Programme (cont.)

Corporate Culture and Ethical
Corporate Culture
 Corporate culture is the shared beliefs, values, norms,

customs, expectations and meanings of the members of
an organization that shape or influence their thinking
and behaviour. It is the way everyone does things in
an organization.
 Ethical corporate culture is an unspoken understanding
among members of an organization of the legitimate
and unacceptable practices. It is the part of corporate
culture that promotes the ethical values of an
organization and guides employees to understand the
importance of doing the right thing.

Ethical Leadership and Ethical
Corporate Culture
 Ethical leaders play a dominant role to cultivate ethical

corporate culture in an organization. They have a great
influence on the way the followers behave and perceive
things in the organization.
 When leaders practise ethical leadership, the followers
learn the appropriate behaviour through observance and
copying such behaviour.
 Ethical leadership lets employees know the boundaries of
acceptable and unacceptable behaviour in the workplace.
 This will help inculcate an ethical corporate culture in the
organization.


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4

At the end of this chapter, you should be able to:

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

 Explain some critical elements of a formal ethics

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

 There will be two parts discussed in this chapter:

 A role is a structured set of relationships with

 Roles of business managers:

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

 According to Brown et al. (2005), ethical leadership is the

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

 These two pillars basically reinforce the idea that ethical

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

 These two pillars

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

 Traits are stable personal characteristics of any

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

 Corporate culture is the shared beliefs, values, norms,

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

 Ethical leaders play a dominant role to cultivate ethical

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

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