Question3. What is meant by term VALUE.

Elucidate an ethical and Value based leadership and its role in Business
Organization? 2019\2017\2015 diff between VALUE AND ETHICS. 2016

VALUE:
In ethics, value denotes the degree of importance of something or action, with the aim of determining what actions are best to do or what
way is best to live, or to describe the significance of different actions. Value systems affect ethical behavior of a person or are the basis of
their intentional activities. Often primary values are strong and secondary values are suitable for changes. What makes an action valuable
may in turn depend on the ethical values of the objects it increases, decreases or alters. An object with "ethic value" may be termed an
"ethic or philosophic good".
Values can be defined as broad preferences concerning appropriate courses of actions or outcomes. As such, values reflect a person's sense
of right and wrong or what "ought" to be. "Equal rights for all", "Excellence deserves admiration", and "People should be treated
with respect and dignity" are representatives of values. Values tend to influence attitudes and behavior and these types
include ethical/moral values, doctrinal/ideological (religious, political) values, social values, and aesthetic values (appreciation of beauty).

ETHICAL & VALUE BASED LEADERSHIP:

“Ethical leaders speak to us about our identity, what we are and what we can become, how we live and how we could live better”

A: Leadership is the art of motivating a group of people to act towards achieving a common goal. In a business setting, this can mean
directing workers and colleagues with a strategy to meet the company's needs.

Individuals with strong leadership skills in the business world often rise to executive positions such as CEO (chief executive
officer), COO (chief operating officer), CFO (chief financial officer), president, and chairman.

The terms "leadership" and "management" tend to be used interchangeably. Management refers to a company's management
structure as its leadership, or to individuals who are actually managers as the "leaders" of various management teams.

B: According to Hitt senior leadership has two key responsibilities:

1) to ensure that ethical decisions were made;

2) to develop an organizational climate in which ethical follower conduct is encouraged.

Ethical leadership is defined as “the demonstration of standardized appropriate conduct through personal actions and interpersonal
relationships, and the promotion of such conduct to followers through two-way communication, reinforcement and decision-making”.

This definition proposes that:

1) ethical leaders’ conduct serves as role-modeling behaviour for followers as their behaviour is accepted as appropriate;

2) ethical leaders communicate and justify their actions to followers (i.e. they make ethics prominent in their social environment);

3) ethical leaders want to continually behave according to ethics, therefore they set ethical standards in the company and reward ethical
conduct by employees as well as punish unethical behaviour;

4) ethical leaders incorporate ethical dimension in the decision-making process, consider the ethical consequences of their decisions and
above all try to make fair choices.

C: Value-based leadership:

Ethical values in an organizational setting are emphasized and strengthened primarily through values-based leadership, which
can be defined as a relationship between leaders and co-workers, based on shared, internalized values that are acted upon by the
leader. Values are general principles that guide action. Values are not actions; they are codes which underlie the sanctions or
punishments for some choices of behavior and rewards for other.

On the basis of virtue (value) theory five values are crucial for ethical leaders:

1. Pride. Ethical leaders demonstrate healthy pride, not self-importance, as the dividing line between them is thin due to strong
egotistic tendency in human beings.

2. Patience. In the process of implementing strategies that enable an organization to reach its goals, a leader is faced with obstacles
from internal and external environment, reluctance and lack of commitment from followers.
 3. Prudence. Prudence is a virtue that refers to exercising sound judgement in practical affairs.

4. Persistence. It refers to leader’s striving for goals and his continuing quest to take all the necessary steps to achieve them, even if
they involve sacrifice and personal risk.

5. Perspective. It is understood as the capacity to perceive what is truly important in any given situation.

D: THE LEADER’S ROLE IN FOSTERIN (developing) ETHICAL BEHAVIOUR IN ORGANIZATIONS

Leaders are the primary influence on ethical conduct in an organization and are responsible for the norms and codes of conduct that guide
employees’ behaviour.

1. For Enderle there are three ethical tasks a leader should involve: perceiving, interpreting and creating reality; showing
responsibility for the effects of one’s decisions on the human beings concerned; being responsible for the implementation of
organizational goals.

2. Gardner even believes that it is more difficult for businesspeople to adhere to an ethical mind than it is for other professionals,
because in business one does not need a licence to practice. It is relatively easy to wander off the correct path, as professional
standards are more a vocational option than part of the territory. In business world, an organization can voluntarily take on
corporate social responsibility. However, there are no penalties if it chooses not to.

3. Gellerman asserts that management/leadership in an organization holds the responsibility for developing and sustaining
conditions in which people are likely to behave themselves, and for minimizing conditions in which they may be tempted to
misbehave. It seems that setting the tone at the top is a crucial but not sufficient condition.

E: Table : Criteria for evaluation of ethical leadership

Criterion Ethical Leadership Unethical Leadership

Serves followers and the

Use of leader power and influence organization Satisfies personal needs and career Objectives

Handling diverse interests of Attempts to balance and integrate

multiple Stakeholders them Favours coalition partners who offer the most benefits

Development of a vision for the Attempts to sell a personal vision as the only way for the
organization Develops a vision based on follower organization to succeed

input about their needs, values and

ideas

Integrity of leader behaviour Acts consistent with values Does what is expedient to attain personal objectives

Avoids necessary decisions or actions that invole personal

Risk taking in leader decisions and Is willing to take personal risks and risk to the leader

Actions make necessary decisions

Makes a complete and timely

Communication of relevant disclosure of information about Uses deception and distortion to bias follower
information operations events, problems and actions perceptions about problems and progress

Response to criticism and dissent Encourages critical evaluation to

by find Discourages and suppresses criticism or Dissent

Followers better solutions

 Development of follower skills and Uses coaching, mentoring and Deemphasizes development to keep followers weak and
self-confidence training to develop followers dependent on the leader

Source: (G. A. Yukl & Yukl, 2002, p. 422)

F: Basic rules of conduct that ethical leaders should follow in order to be considered true leaders are outlined as follows:

1. Leader principle: a leader is foremost a member of the company and its spokesman, therefore his deeds must serve the purpose
and benefits of the corporation

2. Constituent’s principle: leaders respect their co-workers and perceive them as people who share common purpose. Their
individuality and freedom is accepted within the borders of ethical behavior.

3. Outcome principle: a leader connects values to stakeholder support as well as societal legitimacy. Company mission, vision, values
and goals are outlined within an understanding of ethical ideals.

4. Processes/skills principle: the leader is open to different opinions and ideas, views and creates an atmosphere of dynamic and
fruitful communication.

5. Situation/context principle: moral judgements are used to make ethical decisions and when crossing the boundaries of different
ideas. The ethical leader knows the limits of the values and ethical principles they live.

6. Ethics principle: a leader understands leadership and ethics as an integrated process and frames actions and proposes in ethical
terms.

G: The determinants of highly ethical organization according to Pastin include:

1) individuals who recognize and accept personal responsibility for the actions of the organization;

2) a thoughtful commitment to fairness with an emphasis on the other person;

3) being comfortable interacting with external groups;

4) tying all activities in with an overall purpose.

H: Comparison Chart
BASIS FOR
ETHICS VALUES
COMPARISON

Meaning Ethics refers to the Value is defined as the

guidelines for conduct, principles and ideals, that
that address question helps them in making
about morality. judgement of what is more
important.

What are they? System of moral Stimuli for thinking.

principles.

Consistency Uniform Differs from person to person

Tells What is morally correct What we want to do or

or incorrect, in the achieve.
given situation.
 BASIS FOR
ETHICS VALUES
COMPARISON

Determines Extent of rightness or Level of importance.

wrongness of our
options.

What it does? Constrains Motivates