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: Ethical Leadership: The Effect on Employees

: Atiya Alshammari, Naser N. Almutairi & Shebaib Fahad Thuwaini
Year of Publication: February 27th, 2015
Source: International Journal of Business and Management, Vol.10, No.3;2015
The article, Ethical Leadership : The Effect on Employees focuses on the impact of this
style of leadership and also its contribution to the performance, efficiency and productivity
of employees of an organization that adapts ethical leadership in their business
environment. The author believes ethical leadership is the key ingredients in ensuring the
success of an organization. In recent years, a few companies has collapsed such as
Lehman Brothers as a result of unethical behavior which caused harm to thousands of
employees, forced the government to apply new strict regulations as well as losing
customers confidence investing in financial industry. Cases like these proves that without
ethical leadership, the tendency of negative influences to appear within the employees of
the organization will generate trust issues among peers and lack of faith in the leadership
of the leaders of the organization which will result in unproductive and inefficiency in the
Ethical leadership is defined as the process of influencing people through principles,
values and beliefs of something that we believe as the right behavior. The practice of
ethical leadership is increasingly popular in every modern organizations nowadays even
though its started gaining momentum in the early 20 th century when leaders realized the
relation of ethical practices and decision making contributes to efficiency and business
profitability. This realization has lead to the development of 4-V model of ethical
leadership by Dr. Bill Grace, a framework that aligns the internal factors i.e. beliefs and
values with the external factor, i.e. the behaviors and action, in the effort of achieving the
common good and a lot of other researches on ethical leadership which helped
organizations to maintain understanding and properly implement various views, values
and opinions in regards to ethics for the greater good of the organization.
The growing number of business malpractices in todays contemporary business world
has become the major drive for leaders to devote their focus and time to ensure that
businesses and deals are conducted within the range of values and ethics suitable for
their business practices. This will be the base where the leaders and the followers (the
employees) create the same perspective and understanding of ethical foundation that is
well understood by both parties, which is the leaders and the followers. The common
understanding of this matter will incorporate the spirit of values and good characters in
the organization. However, it is very important that the chief executive officers (leaders)
in the contemporary companies sets a good example or become the role model for
ethical business practices to work and to be accepted in the society but it is also
important that the managers and employees take full responsibilities for any unethical
business practices and decision makings that may affect the organization. Ethical
leadership is a two-way relationship, where balance, non-manipulation and fair treatment
are to be expected from both leaders and the employees.
Ethical leadership looks at how leaders pay attention to sustainability issues, consider the
effect of their actions beyond their self-interests and care for the welfare of the
employees. They also act as role models and promote an ethical and positive work
environment. In addition to that, ethical leaders are also transparent and communicate
openly to make responsibilities, expectations and performance roles clear. Ethical
leaders are considered to be credible by employees. Leaders who treat employees with
respect and fairness are considered trustworthy. These are the core functions of ethical
leader in an organization.

Ethical leadership engages or influence employees in a big way and it encourages

employee engagement. Engaged employees make a huge difference in an organization,
they generally feel trusted, cared for and experience real concern when theyre managed
by ethical leaders. This will result in them responding by focusing on their work, being
proud of their job and optimistic and confident in the organization as well as willing to go
beyond what is expected of them. Employees who are managed by leaders that reward
ethical behavior, emphasize on ethical guidelines and show interest on sustainability
issues will feel positive towards the organization.
Within the public sector where leaders are to be expected to uphold high level of ethical
responsibility, it is compulsory for leaders in the public sector to meet many of the
idealized expectations of how a leader in a public sector should behave. Citizens have
become more demanding towards leaders in public sector, showing less or no tolerance
for leaders mistakes. Unfortunately, the common culture among leaders in the public
sector makes it quite challenging to implement ethical leadership approach. This is due to
the leaders egotistical nature in decision making, in other words, the possession of
power in the public sector makes the leaders feel that they can be excused from the
requirements of moral dispensation and practicing ethical management. Possession of
power in a public sector can lead to selfishness and ignorance as well as aiming for
personal gain instead of aiming for the benefit for the entire organization. Environment
factor can also be a tough challenge on implementing ethical leadership in public sector.
The definition and understanding of what is fair and just varies from one to another. For
example, a certain ethics or moral values might be acceptable to a group of people but it
is not accepted in other culture within the same country. Finding the balance of what is
good, right and fair that can be accepted by the society will be a challenging task for both
leaders and followers in the public sector. As such, the ethical public sector leader
focusing on ethical leadership will likely enforce policy and guidelines and provide the
subordinates with relevant training and education of all relevant laws and policies relating
to their position.
The implementation of ethical leadership in the public sector is very beneficial to the
public sector because it restores pride and prestige to the public service and gain trust
from citizen on the public administration and also inspire their followers to also engage in
what is right, good and fair. Ethical leadership approach help in uplifting the moral
awareness of the followers and directly contribute a highly motivated workforce, job
satisfaction and effectiveness in service delivery. However, for ethical leadership
approach to work in public sector, the leaders must be the key people in leading and
showing good example on issues of trust and integrity before they can influence followers
to embrace the approach.
As noted above, the field of ethical leadership is evolving and it forces leader to
constantly reevaluate existing theories as ethical dilemmas is an on-going issue that
needs to be addressed from time to time. Much of the current researches and findings
mentioned in the article centralize to three main topics, ethics within the individual leader,
ethical leaders influencing followers and challenges in implementing ethics in
organization and public sector. There are a lot of grey areas that exist within ethical
leadership that needs to be addressed in future researches and studies on this topic.