Leadership Styles and Employee Ethical/Unethical Behavior Essay

Transformational leaders encourage followers to embrace moral values and to act in the interest of the collective rather than self interest. Transformational leaders are thought to raise followers’ level of moral development and to focus followers’ attention on higher level needs and values. Transactional leaders rely on rewards and punishments to direct followers’ behaviour. Transactional leaders are inconsistent with moral leadership because transactional approaches ignore followers’ needs and aspirations and that transactional leaders focus on the status quo rather than on an inspiring vision of the future and may be motivated by their own achievement and power rather than followers’ needs. Multidimensional transformational leadership construct with the following dimensions which consist on individualized consideration, intellectual stimulation, idealized influence, and inspirational motivation. Transformational leadership has been associated with many positive outcomes such as workers’ satisfaction with work and the leader, organizational commitment, citizenship behaviours, and job performance. Ethical leadership is not a rare phenomenon in today’s business organizations. Ethical leaders are both â€Å"moral persons† and â€Å"moral managers†. We think of the â€Å"moral person† as representing the â€Å"ethical† part of the term â€Å"ethical leadership,† and we think of the â€Å"moral manager† as representing the â€Å"leadership† part of that term. Ethical leaders are thought to be moral persons because they are honest and trustworthy, take good care of their people, and do the right things in both their personal and professional lives. They make decisions based on values and ethical decision rules, and they are fair and concerned about stakeholders’ interests and long-term outcomes. As moral managers, ethical leaders are clear about their expectations of followers. They are visible role models of ethical behaviour, communicate with their people about their ethical and values-based expectations, and use the reward system to hold followers accountable for ethical conduct. The relationship between leadership and employee ethical conduct can be explain by social learning and social exchange. In accordance with a social learning perspective, they behave ethically in their personal and professional lives, and they make decisions based on ethical principles and the long-term interest of multiple stakeholders. Ethical leaders send clear messages to organizational members about expected behaviour and use the reward system to hold everyone accountable to those expectations. This aspect of ethical leadership depends on social learning and can be viewed as more transactional than transformational because followers behave ethically and refrain from unethical conduct largely due to the observed consequences. In social exchange perspective, ethical leaders were described as being trustworthy and as treating their people with care, concern, and fairness. As such, they are likely to create social exchange relationships with their subordinates, who can be expected to reciprocate this care and fair treatment by engaging in citizenship behaviours and by refraining from unethical conduct. Ethical leaders are likely to influence their followers to engage in ethical conduct and to refrain from unethical conduct by way of multiple processes that rely on both transformational and transactional approaches to leadership. There are several potential limitations on the role of leadership. First, we expect that some employees will be less influence by leaders than will others. Second, employees at the lowest levels of cognitive moral development (preconventional) should be less influenced by leaders than by reward system contingencies. Third, ethical leadership may be less influential in homogeneous settings where leaders and their followers share values based on age and cultural similarity. Fourth, Supervisory leaders may be more or less influential depending on characteristics of their work group such as size and type of work. For example, the larger the span of control, the more difficult it may be to communicate ethical standards and to hold work group members accountable. Fifth, individual leaders may also be less influential to the extent that the organization has a strong ethical climate and culture that incorporates formal and informal systems to support ethical conduct. Lastly, some organizations have a strong culture and climate that supports unethical conduct. For example, Douglas Durand had worked for 20 years at Merck & Company which had a strong ethical culture where ethics and social responsibility were taken seriously. Once he arrived, he quickly discovered a culture where sales representatives bribed doctors, did not account appropriately for free samples, and engaged in Medicare fraud. Durand tried to change the culture but failed to do so. Much leadership research does not distinguish between the executive and supervisory levels, although such a distinction is likely to be important for leaders’ influence on ethics related outcomes. Based on our executive ethical leadership data, we inferred four types of executive leader which are ethical leader, unethical leader, hypocritical leader and ethically neutral leader. In conclusion, leaders should play an important role in influencing employee and to be an ethical leader who can be viewed as an attractive, credible, and legitimate role model who engages in normatively appropriate behaviour and makes the ethics message salient.