Ethical Leadership in an Asian Century


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Ethics could be said to be very much like the weather, in the sense that everybody talks about it but nobody does much about it! This presentation provides an insight into Ethical leadership and suggests ways in which you can safeguard your organisation’s ethics.

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Ethical Leadership in an Asian Century

  1. 1. Business Ethical Leadership in Asian CenturyDr Attracta Lagan
  2. 2. Today’s FocusTalk about business ethics & promote sharedunderstanding of the term West & EastProvide opportunity reflect on your own ethicalstance – personal, organisational & societalLook at some of the challenges inunderstanding Asian perspectivesTalk about ethical leadershipSuggest ways of safeguarding yourorganisation’ ethics & responding to times
  3. 3. Business Ethics vs Individual MoralityEthics is examining moralstandards of a person, acompany or a society todecide whether thesestandards are reasonableand to apply them tocontexts and issues.Morality refers to howindividuals makejudgments about right& wrong.Whodecides what’s ethical?
  4. 4. Society DecidesWhat’s Ethical  (CSR) Corporate SocialResponsibility Sustainability ( withformally endorsed ChineseGovernment Institutional integrity - doorganisational systems supportstated values? Do employees understand values/codes and when to apply them? Is the common good protected?
  5. 5. Where are you starting from?An organization can only be as ethical as it’s employeesLeaders can have different personal and work standardsEvery employee possesses ethical leadership qualitiesOrganizational culture is the lengthened shadow of the peopleat the topEthical people will behave unethicallySuccess without ethics... is failureTrue or FalseTrue or FalseTrue or FalseTrue or FalseTrue or FalseTrue or False
  6. 6. Bad Apple/Bad Barrel Cultural ChecklistPersonal LevelPressure to conformCompliance PriorityBlame culturesIgnorance of Ethical ImplicationsSelf InterestPsychological DisengagementSystems LevelLack of ethical leadership – do as Isay not as I do; expediency rulesUnprofessional managersDiffusion of responsibilityGroup CommitmentPoor underperformancemanagementLack of ConsequencesSense of Entitlement
  7. 7. Ethical Conductin theInformation AgeSexualHarassment &Family IssuesWorker’sRights (UnjustDismissal)15Ethical Behaviour at WorkPrivacyProtection DiscriminationOccupationalHealth &SafetyWhistle-BlowingCorporateGovernance &CSREthicalConduct inMarketing &AdvertisingTrade secretsand Conflict ofInterestProductSafetyEthics inFinanceEnvironmentalProtectionInternationalBusinessEthicsEthicalBehaviour
  8. 8. Business Ethics @ WorkHow organisational culture corrupts‘What is right in the corporation is not what is right in aman’s home or in his church.What is right in the corporation is what the guy above youwants from you.That’s what morality is in the corporation.’- Robert Jackall, Moral Mazes
  9. 9. Models of Ethics ManagementUnethical/ImmoralManagementCircumvent the law; absence of ethicalPrinciples and accountabilitiesEthical/MoralManagementConforms to high standardsof ethical behaviorAmoralManagementIntentional: does not considerethical factorsUnintentional: casual or carelessabout ethical factors
  10. 10. Conflict of Interest• Conflicts of interest are inevitable as leaders have have widepersonal networks and can encounter situations whereloyalty might conflict the integrity of their position.• Leaders need hone skills not to avoid conflicts of interest,but to manage values tensions to minimise harm.• The last person to spot a conflict of interest is the personengaged in it. Conflicts that are obvious to others oftenblindside the person concerned• Conflicts of interest are actual and perceived. The perceptionof self-dealing can be just as damaging as the real thing.
  11. 11. Know your time Western PerspectiveIn interconnected world anything you do in private can findits way into the public domainLegislators around the world insist business leaders acceptaccountabilities for the types of organisational cultures andethical risks that emerge under their stewardshipPeople listen with their eyes and take their lead from whatgets rewardedNewly enacted US and UK legislation makes business leaders(not employees) accountable for corrupt corporatebehaviour2011 research amongst 144 global organizations found thetop 3 challenges:•Getting employees to speak up about ongoing concerns•Getting leaders to demonstrate ethical leadership•Establishing an ethical culture
  12. 12. Learning from current reputational crisis –BP, Rio Tinto, Citibank, Siemens, HSB, Federal Reserve Bank;AWB, Goldman Sachs…• It can no longer be assumed that people know the right thing todo; a company’s reputation is too valuable to be left to chance• Strengthening your ethics infrastructure is an essential part ofmodern business success and is the collective responsibility of allleaders• Your brand value is as strong as the weakest link within youroperations• What’s legal often falls short of what’s ethical and leavesreputations vulnerable
  13. 13. $ ImageYou are a senior manager with a reputation for fairness and being open minded.In amongst the dozens of emails you receive daily, you receive some that arehumorous, which of course you ignore most of the time. However, you have justreceived an email that has pornographic images in it, albeit intended to be funny.You find this one offensive; you also know that the sender has a reputation forcrude language and using inappropriate nicknames for his female colleagues.What do you do?What would you do? Delete the email. You are too busy and you expect these things in anindustrial environment. Ring the individual and tell him you don’t appreciate receiving materialof this nature and to stop sending this stuff. Go to the individual’s manager, a peer of yours, and tell him that heshould speak to him. Forward the email to the Director HR and make a formal complaint.
  14. 14. • Where is your company’s line in the sand?• How do your leaders model ethical behaviour and set the ethicaltone?• Why might good people in your company do unethical things?• What do existing ethical challenges look like?• How do you protect the values associated with your company?• How are your values promoted, measured and rewarded?How do you currently rate in managing the ethical dimension?
  15. 15. Business EthicsBusiness Ethics involves learning what is right or wrong as defined by theorganisation and then doing the right thing even when the ‘right thing’ costs.How to justify thedecision taken?How to resolvethe issue / case?How to identifywhat is important?
  16. 16. Doing the right thing?The ‘Western’ way is individualistic and results-oriented. Fromthis perspective individuals are responsible for what happens intheir lives and organizations.The ‘Eastern’ way accepts reality the way it is. This is ‘Tao’:observe nature and see that change is inherent in everything.Individuals change in response to other changes nothing is blackand white rather it is relative to the context.There is an external locus of control and the collective is moreimportant than the individual and social etiquette can trumpbusiness loyalties/ interests.
  17. 17. Know your time Eastern PerspectiveEast knows more about the West than West does about theEast. West is seen as arrogant and judgmental. Youngergenerations educated in the west and fluent in EnglishSocial order is respected and governments have morelegitimacy and authority than in the WestGiving and receiving “Face” and family obligations arecritically importantBoth Chinese & Indonesian governments have signaled theyare clamping down on black corruptionSolid business relationships can only be build on solid socialrelationships first.
  18. 18. HeidenheimerClass A Black Corruption• bribe, fraud, embezzlement, extortion, tax evasion, smuggling‘economic crimes’Class B Grey Corruption• abuse of institutional power to further self interests; extravagance orwaste public purseClass C White Corruption• ‘common practice’ of social life including nepotism, favouritism,preferential treatment. Creating & maintaining networks of personalrelations to seek and give favourable treatments
  19. 19. Global Standards and Accountabilities The 1991 U. S. Federal Sentencing Guidelines for Corporations UK Bribery Act Companies signed to the UN Global Compact (over 3,700) Commitsparticipating businesses of the Global Compact to “avoid bribery,extortion and other forms of corruption” and to “develop policies andconcrete programs to address corruption”. Australian Criminal Code 2004 states that a corporation can be heldcriminally responsible if it is established that "a corporate cultureexisted within the body corporate that directed, encouraged,tolerated or led to non-compliance with the relevant provision" or byshowing that "the body corporate failed to create and maintain acorporate culture that required compliance with the relevantprovision"
  20. 20. Beyond Leadership-Ethical LeadershipLeaders find ways to talk about ethics ofte• Connecting what is right & wrong with goals, purpose & directionThe How is as important as the what• How business is pursued is not left to chance & managed rigorouslyPeople Matter• Trust, respect, dignity, reciprocityInspiration & engagement• Ethical leaders get others to lift their standards so the wholebecomes more than the sum of its parts an ethical climate prevails
  21. 21. Ethics at Work – The RealityThe ethical side of workplace decisions donot take care of themselvesEthical issues need to be anticipated,confronted, discussed and managedOrganisational values need to guide ourethical decisions at workAccept you have a choice & personalaccountabilityMake informed choicesBe prepared to stand up and be counted123456
  22. 22. Evaluating the Right Thing to DoIndividualPerceptionTimeDimensionContextDimensionStakeholderDimension©Managing Values
  23. 23. Ethical Decision Making ModelStep 1. Define the problemStep 2. Identify and considerstakeholdersStep 3. Identify relevant legislation,underlying values and policiesStep 4. Specify and evaluate alternativesStep 5. Get another opinion from aninformed personStep 6. Make a decision and act
  24. 24. ThankyouDr Attracta