1. The document discusses ethical leadership and compares principle-based and utilitarian ethical approaches. It analyzes the Ford Pinto case study where Ford chose not to implement a safer design due to cost considerations. 2. Darley's law is discussed, where individuals may exploit weaknesses in standard-based systems. Performance measurement systems can also incentivize unethical behavior. 3. Ethical leadership involves considering the implications of decisions on others, acting consistently with one's values, and making choices that can be publicly justified. Leaders set the ethical tone and should develop virtues like honesty, fairness and integrity.

1. Beyond
Competence?
Ethical Leadership

2. “Not everything that
counts can be counted,
and not everything that
can be counted counts”
(Bruce Cameron)

3. Define Ethics
Differentiate between
Principle Based and
Utilitarian approaches.
Debate ‘applied ethics’ and
decision making around
ethical dilemmas.
Synthesize ethics with
other leadership theory.

4. Before we begin: A point for debate
1. How useful are ‘standards criterion’ at
promoting expected practice, or do they
promote ‘competence’?
2. Is ‘competence’ good enough’?
3. Do leaders have to ‘be’ and behave in ways
that are somehow ‘beyond these standards’?
4. Can leadership be enhanced by a clear
understanding of ethical leadership and
improved self-efficacy?

5. Darley’s law – ‘Play’ the system?
Darley states, a person with the best will in the
world, does what optimizes his or her performance
measurements, without realizing that this is not
what the system intended” (1994:18-19).
A standard-based system can have another, more
ethically questionable and destructive side effect.
Individuals faced with an established standard may
cheat the system by exploiting its weaknesses.
(Source: Bazerman et al, 1997)

6. The Pinto Fire Controversy (1970’s)
• A new design would decrease the possibility of the Ford
Pinto exploding. (Ford new about this design fault)
• The company chose not to implement the design,
which would have cost $11 per car, even though it had
done an analysis showing that the new design would
result in 180 less deaths.
• The company defended itself on the grounds that it
used the accepted risk/benefit analysis to determine if
the monetary costs of making the change were greater
than the societal benefit.
• Based on the numbers Ford used, the cost would have
been $137 million versus the $49.5 million price
tag put on the deaths, injuries, and car
damages, and thus Ford felt justified not
implementing the design change.

7. What are ethics?
• Is a derivative of the Greek word ethos,
meaning customs, conduct, or character
• Is concerned with the kinds of values and
morals an individual or society ascribes as
desirable or appropriate
• Focuses on the virtuousness of individuals and
their motives

8. A Dictionary Definition
• 1. a system of moral principles: the ethics of a culture.
• 2. the rules of conduct recognized in respect to a
particular class of human actions or a particular group,
culture, etc.: medical ethics; Christian ethics.
• 3. moral principles, as of an individual: His ethics
forbade betrayal of a confidence.
• 4. (usually used with a singular verb ) that branch of
philosophy dealing with values relating to human
conduct, with respect to the rightness and wrongness
of certain actions and to the goodness and badness of
the motives and ends of such actions.

9. Principle based
“The Categorical
Imperative”
Utilitarian
The Most Use

10. Principle based (Kantian)
3 Minute Philosophy: Deontological
• Duty-based or Deontological ethics The word
'deontological' comes from the Greek word deon, which
means 'duty'.
• Deontological (duty-based) ethics are concerned with what
people do, not with the consequences of their actions.
• Do the right thing: Do it because it's the right thing to do.
• Don't do wrong things: Avoid them because they are
wrong.
• Under this form of ethics you can't justify an action by
showing that it produced good consequences, which is why
it's sometimes called 'non-Consequentialist'.

11. Utilitarian (Teleological)
3 Minute Philosophy: Utilitarianism
• Consequentialist theory: the ends justify the
means.
• Humans have 2 masters (motivations)
• 1. Humans seek happiness
• 2. Humans avoid pain.
• Therefore, we should maximise happiness and
minimise pain.

12. What are applied ethics?
• Applied ethics is distinguished
from normative ethics, (see
earlier slides) which concerns
what people should believe to be
right and wrong, and from meta-ethics,
which concerns the nature
of moral statements.
• Require a decision to be made in
a contentious context.
• Require contexts to be realistic.

13. Ethical Dilemmas
• Trolley Dilemma
• Prisoner’s Dilemma
• Two friends out for a drink (my example).
• Cheating Partner (my example).
• Worthy Donation (my example).

14. Leadership Ethics
• Has to do with what leaders do and who leaders are
• It is concerned with the nature of the leaders’
behaviour and their virtuousness
• In any decision-making situation, ethical issues are
either implicitly or explicitly involved
• What choices leaders make and how they respond
in a particular circumstance are informed and
directed by their ethics

15. Principles of Ethical Leadership
Honest leaders are authentic but also sensitive
to the feelings and attitudes of others
Leaders:
– Are not deceptive
– Tell the truth with a
balance of openness and
candor while monitoring
what is appropriate to
disclose in a particular
situation
Leader behaviors
– Don’t promise what you can’t deliver
– Don’t suppress obligations
– Don’t evade accountability
– Don’t accept “survival of the fittest”
pressures
– Acknowledge and reward honest
behavior in the organization

16. Application
• Can be applied to individuals at all levels of organization and
in all walks of life
• Because leadership has a moral dimension, being a leader
demands awareness on our part of the way our ethics defines
our leadership
• Managers and leaders can use information on ethics to
understand themselves and strengthen their own leadership
• Leaders can use ethical principles as benchmarks for their
own behavior
• Leaders can learn that leader-follower relationship is central
to ethical leadership

17. Centrality of Ethics to Leadership
• Influence dimension of leadership requires the
leader to have an impact on the lives of followers
• Power and control differences create enormous
ethical responsibility for leader’s
• Respect for persons – sensitive to followers’ own
interests, and needs
• Leaders help to establish and reinforce
organizational values – an ethical climate

18. • Teleological Theories: focus on consequences of
leaders’ actions, results
– Ethical egoism (create greatest good for the leader)
• Closely related to transactional leadership theories
• Example: leader takes a political stand on an issue for no other
reason than to get re-elected
– Utilitarianism (create greatest good for greatest number)
• Example: leader distributes scarce resources so as to maximize
benefit to everyone, while hurting the fewest; preventive
healthcare vs. catastrophic illnesses
– Altruism (show concern for best interests of others)
• Authentic transformational leadership is based on altruistic
principles
– Example: the work of Mother Theresa, who gave her entire life
to help the poor

19. Ethical Theories
CHARACTER
• Virtue-based Theories: about leader’s
character
– Focus on who people are as people
• Rather than tell people what to do, tell people what
to be
• Help people become more virtuous through training
and development
• Virtues present within person’s disposition, and
practice makes good values habitual
– Examples: courage, honesty, fairness, justice, integrity,
humility

20. Pitfalls in Ethical Decision Making
1. The false-necessity trap (convincing yourself that no
other choice exists)
2. The doctrine-of-relative-filth trap (comparing your
unethical behaviour with someone else’s even more
unethical behaviour)
3. The rationalization trap (justifying unethical actions
with excuses)
4. The self-deception trap (persuading yourself, for
example, that a lie is not really a lie)
5. The ends-justify-the-means trap (using unethical
methods to accomplish a desirable goal)

21. Organizational Ethical Trap: Darley’s
Law (again) beyond competence?
• Performance measurement systems can
incentivise unethical behaviour
• Cheating/lying – to protect or advance self
• Cheating/lying – to protect or advance
organization (“cooking the books”)
• Sub-optimization - Optimize metrics
to detriment of overall organization

22. Framework for Identifying and
Resolving Ethical Issues (source: Dunn & Bradstreet)
1. Why is this bothering me?
– Am I genuinely perplexed?
– Am I afraid to do what I know is
right?
2. Who else matters?
– Implications for customers,
peers shareholders?
– How does the problem appear
from the other side?
3. Is it my responsibility?
– What will happen if I do/ don’t
act?
4. What is the ethical concern?
– Legal obligation?
– Honesty, fairness, promise-keeping,
avoiding harm?
5. Whom can give me advice?
– Supervisor, peers, HR, legal, ethics
hot line?
6. Am I being true to myself?
– Consistency with my values and
personal commitments? With
company values?
– Can I share my decision with family,
colleagues, customers?
– Can I see my decision on the front
page of the newspaper?

23. Conclusions Part 1
• As a leader (and practitioner!) You will often need
to make decisions without someone, ‘telling you
what to do’.
• On what basis do you make these decisions?
• Most if not all decision making involves
considering ‘options’.
• Ultimately, one option is selected and other
options are rejected, then acted upon.
• The selection and rejection of options is
influenced by values.

24. Conclusions Part 2
• Hence, all decision making is value based or
ethical at some level.
• Ethical dilemmas are able to starkly
demonstrate these ethical components.
• Identifying the ethical component within ‘day
to day’ decision making can be a more tricky
business – perhaps REFLECTION can help?