Given the increase in organizational downsizings, layoffs, asset write-offs and executive bailouts, how important is the trust factor in defining a good leader? Without an established trust relationship a leader is unable to be effective. The problem to be investigated is the value of trustworthiness and ethical stewardship in the construct of the organizational leadership model. This paper shall explore the co-functions of trust and ethical stewardship and its impact on leadership effectiveness.
Introduction
In 2012, there is very little allegiance or loyalty among organizational members. This is partly due to the recent increase in corporate scandals and the outsourcing of many jobs to foreign countries. Once upon a time in America, one could work a job and retire on that same job after twenty-five or thirty years. The days of working longevity and retiring from the same job are pretty much history. Because of this, organizational members have become distrustful of management. Covey realized that “low trust is the first chronic problem that all organizations face” (Covey, 2004, p. 107). This lack of trust undermines employee commitment and impairs wealth creation (Caldwell et al., 2010, p. 497). This paper will explore and discuss the value of trust and ethical stewardship and its impact on leadership effectiveness.
Trust and Ethical Stewardship
According to Ingenhoff and Sommer, “there is a confusing variety of different definitions
of trust” (Ingenhoff and Sommer, 2010, p. 340). Most logical people will never follow a leader that they do not trust- morally, ethically or intellectually. The author feels that a leader should be moral, ethical and intellectually knowledgeable of the subject m...
... middle of paper ...
...ess, and ethical stewardship. Journal of Business Ethics, 96 (4), 497-512. Doi:10.1007/s10551-010-0489-y
Covey, S. (2004). The 8th habit: From effectiveness to greatness New York: Free Press
Friedman, M. (1970). The social responsibility of business is to increase its profits.
New York Times, New York, NY. pp 32-33,122-124, 126. Retrieved from: http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
Ingenhoff, D. & Sommer, K. (2010). Trust in companies and in CEOs: A comparative study of the Main influences. Journal of Business Ethics, 95 (3), 339-355. Doi:10.1007/s10551-010-0363-y
Jennings, M. (2012). Ethical Theory, Philosophical Foundations, Our Reasoning Flaws and Types of Ethical Dilemmas In R. Dewey (Ed.), Business ethics; Case studies and selected readings (pp. 34-37). Mason, OH; South-Western Cengage Learning.
Leaders who treat their employees with fairness, honesty, and provide frequent, accurate information are seen as more effective. According to Robbins and Judge (2014), “trust is a primary attribute associated with leadership and followers who trust a leader are confident their rights and interest will not be abused” (p.193). The old General Motor Corporation had eleven different CEO’s from 1923 until 2009 each with their own unique leadership style, which directed employees toward the organization goals. Unfortunately, many of the top level managers under the CEO’s had the tendency of filtering out information that did not match up with their pre-conceived notions about a particular issue and they lacked upward communication. One consumer goal of General Motors was to build trust in the company so people would be repeat customers, but building trust between employees and establishing an ethical culture was not a top priority of the organization. Goal directed leadership alone is important, but differs from a structure of leadership based on ethics. It is important to note, that effective leadership may not be the same as leadership founded on ethical principles. Business competence must exist, along with personal leadership accountability in ethical decisions. Within the General Motors organization, ethics and leadership did not interconnect; there were misalignment between the
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2011). Business ethics: Ethical decision making and cases: 2011 custom edition (8th ed.). Mason, OH: South-Western Cengage Learning.
Looking at the ideas behind what ethical and leadership mean you can easily find someone who exemplifies being ethical and one who exemplifies leadership. When choosing a ...
Up until this point, much of the focus has been centered on defining effective leadership from characteristics and traits that have been identified through research and behavioral science, but what do the followers have to say about the leader’s characteristics and traits? Furthermore, what makes someone want to follow a leader? Thus, there are five specific traits or characteristics a leader must display before being followed, and the first characteristic or trait is honesty (Shead, 2016). While people desire to follow an honest leader, honesty is the key trait that allows the leader to influence others besides power; however, leaders have very few opportunities to demonstrate honesty, especially in large organizations (Shead, 2016). Therefore,
Ferrell, O., Fraedrich, J. and Ferrell, L. (2011). Business Ethics: Ethical Decision Making and Cases. 1st ed. Mason, Ohio: Cengage Learning, p.327 -336.
Leaders often talk about trust, rather than building trust. Trust is something that must be earned. Leaders of well-respected, high-performing organizations have long known the value of building and sustaining trust.
Seawell, Buie 2010, ‘The Content and Practice of Business Ethics’, Good Business, pp. 2-18, viewed 22 October 2013, .
Jennings, M. M. (2009). Business ethics case studies and selected readings. Mason, OH: South-Western Cengage Learning.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics: Ethical decision making and cases: 2011 custom edition (9th ed.). Mason, OH: South-Western Cengage Learning.
Jennings, M. (2009). Business ethics: Case studies and selected readings (6th ed.). Mason, OH: South-Western Cengage Learning.
23) is an example of how they help to foster trust the same way a leader fosters trust. A leader or school will teach the followers ethics and hold them to that ethical behavior. A good leader cultivates their people; a good school does this as well with their students. Cultivating ethics in people has pitfalls. Many times we make the mistake of misconstruing Ethics and Compliance. As Stephen Covey points out in his book “The Speed of Trust”- “The problem in organizations, however, is that many “ethics” solutions focus on compliance. The compliance definition of “ethics” is not one of integrity or integratedness; it is a watered-down, devalued definition that essentially means “follow the rules” (Covey, 2006, p. 61). Great leaders however, make sure their people know the difference between ethics and compliance. Aldo Leopold said it best when he said “Ethical behavior is doing the right thing when no one else is watching- even when doing the wrong thing is legal.’ (Goodreads, 2016) This is what separates ethics from compliance, doing the right thing when only you know that it is the right thing to do. Another part of being ethical is character. Character as defined by Dr. Henry Cloud is “the ability to meet the demands of reality” (Cloud, 2006, p. 24). This is how you act in real life. Character and integrity come together to form ethical behavior. At some point everyone has had a leader
In my initial post, I pointed out the relationship between stewardship and trust and stated that to generate high levels of passion among the employees, organizations should inspire trust and passion among their employees by implementing fundamental principles of steward leadership. This assertion was backed up by Block (2013) who stated that part of the meaning of the concept of stewardship is to hold the well-being of some larger entity such as the organization, the community, or the earth itself in trust. And I further explained that this implies that for leaders to effectively hold resources in trust, they must place service and the greater good ahead of control and self-interest
Q1) Morals are the code of conduct for an individual, while values are the ideologies that determine the specific personality trait of an individual. Now, moral leadership is different from other forms of leadership. Moral leaders aim to serve. Considering my morals and values, I believe that I am an empath. An empath is a person who can very quickly relate or feel the issues and problems faced by other people. Justice is a core moral factor present in me. Moral leaders tend to develop capabilities among their subordinates and other employees or team members. In such a scenario, empath are the best suitable person. The reason is they are able to relate with problems quickly which makes it easy to guide the person in trouble
Shaw, W. H., & Barry, V. (2011). Moral Issues in Business (Eleventh ed., pp. 230-244).
Strong Ethics is a Critical Quality of Leadership. Verschoor, Curtis C., Strategic Finance, January, 2006, Vol. 87, Issue 7, P. 19-20.