Recorded at Cornell University in the Spring of 2009, Ms. Toffler discusses ethics in management and leadership.
Due to several scandals of unethical issues such as Enron scandal happened in recent years, this world is paying more attention to ethical behaviours in business world. According to Quoting Els(2009), the ‘ Obama effect’ refers to the emphasis on ethical and values-based leadership and is against the specific only interests of some stakeholders such as shareholders. Therefore the interests of some other stakeholders such as the customers, environment, and employees should be taken into account when leaders are making some decisions. Therefore, this blog is aimed at pointing out the different sides of the debate of ethical leadership and then give an example from fashion industry to illustrate the ethical leadership in fashion industry .
Different sides of the debate
According to the research conducted by Brown, Trevino&Harrison(2005) , the definition of ethical leadership is that leaders in an organisation should behave in the right way which is should also be believed in the organisation as the core values and cultures. Through conducting the right behaviours in both organisational and individual context，leaders can encourage and lead the followers to behave in the same way. The effectiveness of ethical leadership can be reflected in several aspects: how to guide followers to complete a task in the ethical way; how to guide followers to live ethically everyday; how the leaders make the ethical decision. Similarly, Reilly(2006) points out that all leadership should be able to influence followers to behave a specific action. Effective leaders can not only guide followers how to behave, but also change the followers’ values and attitudes to the right direction. Therefore, we can assume that if leaders are ethical, they could make sure that ethical principles can be put into practice in an organisation. Based on this assumption, having an ethical leader is important for an organisation to carry out ethical operation and to foster ethical employees.
Even though sometimes being ethical does not necessarily mean being effective and being effective does not necessarily mean being ethical, ethics can be effectiveness in some specific circumstances. Being perceived as ethical and trustworthy, a leader is easier to be effective, for followers are easily to follow the guidance set by the ethical leader . But most of the time, the standards that we use to evaluate the effectiveness of a leader could be higher than it should be, this could be explained by our higher expectation towards the works done by a leader(Ciulla,2003).
Example in fashion industry
There is a typical example from the fashion industry to better illustrate the concept of ethical leadership. Being a globally popular brand, H&M has successfully improved its image in sustainability and corporate social responsibility area these years. For example, the leaders in this company have done several ethical projects such as conducting half a million quality test every year; at least 300,000workers in Bandladesh, where the cheap clothes is being produced, have been educated about their proper rights; about 4.5million dollars has been donated to help the children who are suffering. Every year H&M will release a sustainability report for the public to review what they have done for the past year in the CSR area, all these figures are getting better as the CSR principles and projects develop inside the company(Kaye,2012). The employees in H&M can not only benefit from the CSR projects carried out by the company, but also learn the right values in the company, and therefore can conduct the right behaviours in their normal life and in organisational operation. The H&M company deserves a applaud for their quick improvement in CSR.
The importance of CSR and ethics is constantly growing in recent years, due to several scandals exposed in business world and make people reduce their trust in business companies. Therefore, ethical leadership is a key point to improve the ethics of a company. As leaders can guide their followers to follow a right patter to conduct right behaviours in both organisational operation and daily life and change the believes and values. As can be seen from the improvement of the CSR in H&M, we can conclude that even in a company which is already successful, ethical leadership can still help it to increase its value and profits.
Brown, M., Trevino, L. & Harrison, D. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behaviour and Human Decision Processes, 97(2), 117-134.
Els, F. (2009). A new rule book. Finweek, 54.
L,Kaye. 2012. H&M, The Ethical Fast Fashion Leader?. [ONLINE] Available at:http://www.triplepundit.com/2012/04/hm-sustainability-report-2011/. [Accessed 26 March 14].
Reilly, E. C. (2006). The future entering: Reflections on and challenges to ethical leadership. Educational Leadership and Administration, 18, 163-173.