[Arthur] If we are in a position of power, if we are in a position of leadership, um,
it's simply not enough to just have the title of leadership. We have to assume that challenge, right?
[Professor Robert Prentice] Ethical leaders
both act ethically as an inspiration to others, and communicate and manage their organization's
culture so as to promote ethical action.
So how does a leader effectively communicate and manage
an organization's culture to create an ethical action?
[Will] Effective leaders lead by example, and that's sort of setting the tone.
[Melissa] As far as with morals, I think somebody who has respect for other people.
[Claire] The most important attribute in being an effective leader is cultivating a self-awareness.
[James] They know, they are responsible for a group of people.
Well, leaders must establish their organization's ethical norms.
They must ask: "What does our organization stand for?"
They should set high expectations.
Leaders must also effectively
communicate to others both the contents of those ethical norms and the intensity of
the organization's commitment to upholding them.
[Carlos] Set expectations. Express what you want done, what you expect, how you expect it to be done.
It's a lot easier for people to meet your standards
and and to meet your expectations if they know them.
The careful drafting, with input from others in the organization,
of a code of ethics can be helpful.
Then, leaders must implement employment practices
consistent with these overall goals.
Of course, they must hire good people and punish those
who violate the organization's ethical norms.
Just as importantly, they must reward those whose
conduct embodies the organization's ethical standards.
[Scott] The most frustrating experience as a young employee is to work for a leader who
loves the gray area, doesn't really give you an upfront answer about everything.
You know, it's easy to say what you're doing but you actually need to, you know, talk the talk,
and walk the walk, as they like to say.
[Nikki] You can all agree that you have these
core values in your company and maybe put some posters on the wall, but if you never
have to talk about it, and figure it out how it relates to your actual day-to-day work,
then it's all fluff.
Leaders must also be aware of the cognitive
and psychological shortcomings, situational factors, and social and organizational influences
that can cause people to make irrational and self-defeating decisions in all areas of their lives.
It turns out that leaders can use psychological knowledge to nudge employees to act more ethically.
So, leaders should keep in mind: People are more likely to steal from their
firms or mistreat their firms' customers if they feel as though they themselves have been mistreated.
So treating employees fairly is an extremely critical part of cultivating
an ethical workforce.
[Howard] As a leader, it is your responsibility to put others ahead of you sometimes.
People tear over things at night, and if they do
that, they're not going to sleep. They're going to feel awful, and you know, they may
quit, or they may go somewhere else.
You want them to be very happy and to be, feel very
good about the work that they are doing, on a constant basis.
Leaders must explain the reasons for taking the actions that they take, for that helps
employees accept decisions even if they disagree with them.
Also, Studies show that employees are more likely to act unethically if they are exhausted,
so to overwork employees is to court disaster.
Relatedly, people tend to act less ethically
if they are under acute time pressure, so this is another reason to be reasonable in
placing demands upon employees.
Professors Margolis and Molinsky studied several organizations
and found that some wisely built into their processes time for pauses and second looks.
[Dorine] So in hyper-competitive environments, there is incentives to be number one or incentives
to be at the top of your class or at the top of sales, or whatever the case may be.
And because of those incentives, people will do whatever they need to do.
People want great jobs. People want to make a lot of money.
People want to be successful, and so, they're
willing to do whatever they can to get to that point.
Remember, employees naturally focus upon
goals that are set for them by superiors. If unrealistic goals are set, especially those
that carry punishments for failing to meet them or extravagant rewards for exceeding
them, then employees will tend to lose focus on the ethical aspects of their actions.
They will concentrate entirely on meeting the goal.
Realistic goals and moderate rewards for meeting them
are a good combination.
Really having a set follow-up schedule in terms of making sure that everyone's on the same page from
an ethical perspective is hugely important.
Whether you're scheduling monthly meetings to just go over how things are going
with your employees and you.
Who knows? I mean, maybe your employees are
scared of you, or what have you. You know, it really takes that extra, in my opinion,
that personal touch, to connect with your employees and make sure that, you know, they
really understand what they're doing from an ethical perspective.
You may not have considered this, but the evidence is clear that people are more likely
to act unethically if they find themselves in a dirty or cluttered workplace or if they
find themselves in a dimly lit space.
Cleanliness and good lighting can go a long way toward
fostering ethical behavior.
[Tony] I was in a company that was, you know, very ethically sound.
It was definitely an open space, it was an office without cubicles, you know.
We were in a big building and there were hundreds of employees with no cubicles,
so that just encouraged more conversations and more interaction.
I think that just kind of told me about the character of my company
and my fellow employees.
Finally, studies show that employees will tend to act more ethically if they are frequently
reminded of the importance to the firm of living up to its espoused values.
Effective leaders create legends that illustrate commitment to the firm's culture.
For decades, accounting firm Arthur Andersen was the most admired accounting firm in the world,
in part because of its employees' belief in the origin story of how founder Arthur Andersen
told a large client that there was "not enough money in Chicago" to induce him to fudge the numbers.
Unfortunately, the leaders of Andersen forgot this lesson and started emphasizing revenue
over character, which is why the firm no longer exists.
How you treat each other, how you treat the customer, how you treat the world around you.
What is important is at the end of the day, is the dollar important? Is it about that,
that corporate social responsibility, that buzz word everyone is talking about? Is it
making sure the community you're working in benefits from your work as much as you do?
Recognizing those effects that we have on the world around us and taking responsibility for them, if we don't,
it's going to affect the corporate culture. If you do, then it's going to create a corporate
culture that people respect from the inside and from the outside.
While there is no single correct way to create and foster an ethical organizational culture,
committed leaders will benefit by keeping these points in mind, and by remembering that
all their actions send messages.
Lead by example. You have to show them what
you want done and how you want it done, based on your own actions. That way, even in the
cases where you are not around, they can say, "What would so and so do?"
I would also say that reinforcing it, reinforcing the ethics upon those who work for you is
hugely important also.
The organizational culture that supports gut
feeling, that supports thinking before action can significantly raise the possibility of
more ethical and moral decisions.
You really want to build a company where people
are going to rally behind a shared set of values. You have to make people talk about
it and relate it to their day-to-day work.
The earlier we understand what those are,
I think, will help to develop a culture where it's not so hard to make right decisions.