Journal of Human Values

http://jhv.sagepub.com

Ethical Leadership in Three Dimensions

R.N. Kanungo and M. Mendonca
Journal of Human Values 1998; 4; 133
DOI: 10.1177/097168589800400202
The online version of this article can be found at:
http://jhv.sagepub.com/cgi/content/abstract/4/2/133

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Ethical

in Three Dimensions

Leadership

R.N. KANUNGO and M. MENDONCA

Is an ethical leader an oxymoron? Society demands and expects greater accountability from organizational
leaders. The literature on leadership, especially business leadership, has neglected ethical issues by
focusing only on those approaches and strategies that emphasize self-centred, individualistic concerns. However, true and effective leadership is one in which the leaders behaviour and the exercise of the leadership
influence process are consistent with ethical and moral values. The authors argue that our understanding of
leadership is incomplete, if not deformed, if it does not include the three critical dimensions of ethical

leadership.

He who knows the good chooses the good

Socrates
.

suddenly fmd yourself with season tickthe 50-yard line, youre being seduced. If you are swept off by corporate jet
to meetings in Hawaii and Nassau, youre
being seduced. If theres an offer to pay one

you
ets

Some of the most powerful people in American business went back to school for two
days and got a stem lecture on ethics and

attendpersonal responsibility. They

Law
School
Stanfords
of
working
program
for
directors.
Arthur
Levitt,
shops corporate
Chairman of the US Securities and Exchange
Commission, delivered the keynote address,
and later told reporters that corporate directors need to consider questions and issues
such as:

board member more than the others ...

chances are that director is being seduced.
These are things that can-and usually dolead to larger problems.

were

Are they more concerned about what

receive than what they contribute?

they

...

R.N.

Kanungo and

M. Mendonca

are

If

on

Corporate responsibility stirs ethical debate

....

Academics from across North America

meeting at the University of Toronto

to tackle the directors role in protecting all
stakeholders, including employees and cusare

...

tomers.22
Group launched to expose unethical deals

faculty members in the School of Management, McGill University, Canada.

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134

The Canadian branch of Transparency

was founded in Germany and has spread to 60 countries ...
aims to make businesses follow ethical business practices at home and in international
....

International, which

goals; communicates the beliefs and values which

influence and shape the organizations culture and
behavioural norms; and lays the foundation for
the organizations strategies, policies and procedures.

However, it is the leaders moral principles and

dealings.

integrity which impart legitimacy and credibility

items reflect the increasing societal
concern that it is unacceptable for organizational
leaders to be indifferent to moral responsibility,
much less engage in unethical behaviour. They
also raise several questions such as: Is it realistic
to hold leaders to high moral standards when selfcentred, materialistic values are rampant in society
at large? Do we not, indeed, get the leaders we
deserve? This paper seeks to demonstrate that the
situations, implicit in these questions, are due precisely to the absence of ethical leadership. For
this purpose, it explores the true nature of leadership ; the need for ethical leadership; and the three
dimensions of ethical leadership or the three ways
in which it is manifested in organizations.
Every organization has a purpose, and it is the
desire to achieve this purpose efficiently and
effectively that creates the need for leadership.
Organizational leaders plan, organize, provide
direction and exercise control-the functions
through which they seek to achieve the

These

news

organizations objectives. Leadership behaviour-in the sense of leading others-is more than
the routine maintenance activities of allocating
resources, monitoring and directing followers, and
building the organizations esprit de corps. True
leadership assesses the followers needs and expectations and inspires them to realize a vision
which best serves the followers and the organization. Without a leader, the organization is much
like a rudderless ship adrift in turbulent waters.
The leaders vision informs and expresses the
organizations mission; provides the direction and
rationale for the organizations objectives and

to the vision and sustain it. Without ethical lead-

the organization is a soulless structure.

When the leaders moral integrity is in doubt, the
leaders vision, however noble, well-crafted and
articulated, is viewed with scepticism by the
followers, loses its vigour, and is incapable of
moving them to work towards its realization. As
will be discussed later, ethical leadership exists
in the organization when moral intent and principles infuse and guide the leaders actions in
achieving the vision.

ership,

Is There

Need for Ethical

Leadership Today?
At a time when impressive breakthroughs in technology are providing new and better products and
services, when improved communications are
transforming the world into a global village, and
when democracies are sprouting in former communist lands, we are simultaneously witnessing
events that make us question whether so much
progress is indeed progress. For example, we
see reports of widespread bribery by Italian and
Japanese government officials, exorbitant executive salaries in North America, extensive environmental pollution in Eastern Europe, and
other instances of immoral or morally questionable conduct in our organizations. In many otherwise prosperous and affluent cities, we see an
increase in the numbers of homeless people. In
the current scenario of layoffs and downsizing,
even in profitable companies, those who are

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135

enough to have a job find that work is

only
opportunity for growth, but also a
source of much anxiety and insecurity.
Such observations have led to an increasing
realization today that organizational leaders need
which includes all their stake-

economic and ethical performance-and to mount

guard-rails to keep corporate wayfarers on track ,5
It is not sufficient that corporate leaders be intelligent, industrious and competent in their technical specialty because research has shown that,
despite these admirable qualities, leaders are ineffective when they lack ethical qualities and are

holders-consumers, employees, suppliers,

governments, local communities, etc. Aristotle in

perceived as arrogant, vindictive, untrustworthy,

selfish, emotional compulsive, overcontrolling,

his Politics

insensitive, abrasive ... .6

fortunate

not an

not

to be more sensitive to their moral

the

larger society

obligations to

proposed that the state comes into

being to provide law and order but continues for
the sake of good law, good order and noble actions.
In
in

similar vein, the raison d8tre of leadership

organizations, as reflected in the design of

organization structure and mechanisms, norms
and activity, is to support some good and be in
accord with the highest excellence. It is the
recognition of this responsibility that hasled
several large corporations to formulate codes of
ethics for their organizations with positions such
as ethics officers, compliance officers, vice-president of ethics and employee ombudsman. The
code of ethics can be an important reminder that
individual employees, not the organization, engage
in ethical or unethical practices. However, such
ethical codes and structures need to be more than
mere window dressing. Much less should competitive business advantage become the reason for
the organizations code of ethics.
An organizations code of ethics establishes
ethical principles that should govern the leaderss
decisions and behaviours in order that the leader
can fulfil the mission of uplifting the moral climate
of the organization. For this purpose, the leader
must develop morally as a person and also assist
in the moral development of the followers. This
is possible when corporate leaders focus their
attention on three aspects of organizational ethics:
the leaders development as a moral person; the
development of a moral environment in the organization ; and the promotion and encouragement
of activities that serve ... to map a high road to

In addition to the leaders ethical qualities. the

organizations moral environment is equally im-

portant, if leaders are

to be effective. The nature

of the moral environment of an organization
depends on the moral calibre of its members.
However, the moral calibre of an organizations
members is largely shaped by those in leadership
positions. The manner in which leaders function
can directly contribute to the strengthening or
destruction of the moral fibre of society. The lives
of Socrates, Buddha, Mohammed, Lao Tse,
Gandhi among many others, attest to their salutary influence in their own day, as well as for all
time. On the other hand, the case of senior government officials in France who knowingly permitted the use of contaminated blood resulting in
the death of several hundred haemophiliacs,
illustrates the harm that a few can inflict upon
the populace and society. When people in leadership positions compromise their moral values,
they do more than physical harm. Their callous
neglect or compromise of moral values tends to
create an atmosphere of moral cynicism which,
like a cancer, corrodes the moral health of society.
The role of a leader has always carried with it
grave and onerous responsibilities. In the modem
world, this role poses rather unique and formidable challenges because of the fundamental shift
in societal norms and values. We refer specifically to economic imperialism, and the cult of
self-worship which is so pervasive in North
America. Economic imperialism demands that

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136

money and material possession be the primary

criterion to measure success and failure in every
sphere of human life, and therefore be valued
more than anything else in society. The cult of
self-worship is based on the assumption that egoism or self-centred reward is the only functional
ethical principle that should guide ones conduct.
Underlying these approaches is the emphasis on
the rights of the individual to fulfil his/her life
ambitions in any form or manner he/she chooses
without regard or concern to ones duties and
obligations to others. This focus on self is an ...
extreme expression of individualistic psychology
first created by a frontier society and now supported and corrupted by consumerism.~8
As a psychologist observed two decades ago

question, it is necessary to specify what we mean

by the terms leadership and ethical,. The term
leadership refers to a set of role behaviours or
actions

on

the part of a person who

There is

absolute and urgent need for moral

leadership organizations and in society if we
truly want to achieve the common goal of human
welfare at the personal, organizational, and societal levels.
an

in

Three Dimensions of Ethical

Leadership
How can we judge leadership in an organization
to be ethical or unethical? In order to address this

the

values, beliefs and behaviour towards the attainof the organizational objectives.
The term ethical implies that which is morally good, that which is considered morally right,
as opposed to that which is legally or procedurally
right. According to Thomas Aquinas, the ethical
motive of an action should be judged on the basis
of three factors: the objective act itself, the subjective motive of the actor, and the context in
which the act is performed. The actor, in order to
be ethical, must engage in objectively good or
virtuous acts instead of evil acts or vices. The actor
must also have good intentions without which an
objectively good act cannot be considered ethical. For instance, an act of charitable donation to
avoid income tax vitiates the moral goodness of
the act. Furthermore, the context or the situation
in which the act is performed must also be considered. A charitable donation to defend ones
country in the face of foreign aggression may be
ethically justified but a similar act to support terrorist organizations in peace time is morally
wrong. Hence, if leadership acts are to be ethically justified, they must be correct in terms of
all three factors: the objective act, the motive and
the context.
Leaders are responsible for the organizations
ment

there is in psychology today a general background assumption that the human impulses
provided by biological evolution are right and
optimal, both individually and socially, and that
repressive or inhibitory moral traditions are
wrong. This assumption may now be regarded
as scientifically wrong. Psychology, in propagating this background perspective in its teaching helps to undermine the retention of what
may be extremely valuable social-evolutionary systems which we do not fully understand.
...

assumes

leadership role in an organization either because

of a formal appointment or because of the informal choice of organizational members. The term
also implies the nature of the influence process
adopted by the leader to change the followers
values, beliefs and behaviour. Leadership therefore can be viewed from two perspectives: first,
as a set of role behaviours to accomplish the task
and maintain cohesion in the organization; and
second, as an influence process, that is, a set of
strategies and tactics to influence the followers

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137

moral climate which, in effect, reflects the moral

development of the leader as well as the followers. The leaders moral development is a result of
character formation through the practice of virtue in private as well as in public life. The moral
development of followers can be facilitated by
the leader through the use of morally appropriate
influence strategies and tactics which are motivated and guided by moral intent. Ethical leader-ship therefore manifests itself on three dimensions : the leaders motives; the leaders influence
strategies; and the leaders character formation.
As depicted in Figure 1 and discussed in the following sections, ethical leaders strive to operate
with an altruistic intent; they utilize empowering
rather than control strategies to influence followers ; and they endeavour to cultivate virtues and
abstain from vices in order to build up their own
inner strength.

Leaders Motives for Action

The overarching motive for ethical leadership is
the leaders altruistic intent as opposed to egotistic intent. Leaders are truly effective only when

they are motivated by a concern for others, when

their actions are invariably guided primarily by
the criteria of benefit to others even if it results in
some cost to self In deciding on a leader, the fundamental expectation is that the leader will direct
and guide the organization towards goals and
objectives which benefit it and its members, as
well as society at large. It is only in the context of
such benefits that the leaders efforts and strategies in the areas of organizational planning, controlling and coordinating follower activities, are
justified and assume meaning and significance.
Since the other, that is, the organizations members and society at large, is the raison dtre of

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138

the leaders efforts, the altruistic motive logically

becomes the only morally justifiable motive for
the leaders role behaviours. Hence, leadership
effectiveness is assured only by altruistic acts that
reflect the leaders incessant desire and concern
to benefit others despite the risk of personal cost
inherent in such acts.
The altruistic motive of helping others is an
acquired motive which develops through ones
early training and socialization. The influence of
the family, educational and religious institutions
leads to the formation of personal, internalized
norms or moral codes of reciprocity and social
responsibility. The reciprocity norm dictates that
I
we do good to those who have done good to us.
This norm generally applies in situations in which
leaders interact with their equals or with those
who possess greater resources. However, when
leaders deal with their subordinates who are not
in a position to reciprocate, the inner moral code
of social responsibility needs to be invoked. The
norm of social responsibility refers to an internalized belief of a moral obligation to help others
without any consideration of an expected future
personal benefit from them.&dquo; Such internalized
beliefs regarding social and moral obligations
constitute the basis of an altruistic motive in leaders
which, in turn, energizes their altruistic behaviour.
The leaders altruistic concern can be manifested in two principal ways. First, leaders can
combine it with a concern for their own self-interest. In such a case, the resulting behaviour may
be termed utilitarian or mutual altruism. The
motivational basis of utilitarian altruism is the
expectation that the obligatory behaviour will lead
to mutually beneficial consequences. The second
manifestation is that the leaders helping concern
for others is prompted without any consideration
of self-interest, and even when such concern adversely affects the leaders self-interest, that is,
involves considerable personal sacrifice or inconvenience. This behaviour can be categorized as

or moral altruism. The primary motivational force underlying moral altruism is the internalized social responsibility norms or moral
imperatives.2 Moral philosophers may argue
about different normative theories of ethics or
morality, but it cannot be denied that the values
inherent in the choice of others before myself
or moral altruism are universal and form part of
the heritage of all cultures.3
In spite of the high, universally accepted value
of moral altruism as a motive for effective leadership, its critical role is often ignored in discussions of moral and ethical issues in leadership.
Instead, it has been suggested that effective leadership is motivated by other needs such as those for
affiliation, power and achievement.4 A closer
examination of the leadership phenomenon reveals that these needs explain the basis of effective leadership only to the extent that they are a
manifestation of the overarching altruistic need.
Stated differently, leaders behaviours are ineffective when guided solely by one or more of
these needs without a concern for altruism. On
the other hand, leaders behaviours motivated by
these other needs are effective only to the degree
that the nature and manner of such motivation be-

genuine

comes an

operative manifestation

or

expression

of altruism. This point is further elaborated in discussion of altruism and affiliation, power and
achievement motivation.
Altruism and the Affiliation Motive. Leaders
who have a high need for affiliation, regard warm
and friendly relationships with their followers as
extremely important and, therefore, make considerable effort to be sensitive to their followers feelings and to conform to their wishes. These
characteristics of the need for affiliation suggest
a concern for others and, hence, seem to be compatible with the characteristics of the altruistic
motive. However, Boyatzis has identified two
manifestations of the need for affiliation: affiliative
assurance and affiliative interest .15 Leaders high

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139
on

affiliative assurance

prompted by their

emphasize relationships
of personal insecudeep
sense

rity, which cause them to engage in behaviours

that are inappropriate and improper to the demands of the situation. For example, such leaders are reluctant to give negative feedback to their
subordinates, and readily yield to their unreasonable and unjustified requests for the sole reason
that they do not wish to incur their displeasure.
The dysfunctional behaviours of leaders motivated
by affiliative assurance produce low morale
among followers. Their followers feel weak, irresponsible, and without a sense of what might
happen next, or even of what they ought to be

doing. 166
On the other hand, leaders high on affiliative
interest emphasize relationships in a manner that
is consistent with the demands of the organization. Affiliative interest has its origin in the leaders recognition that the uncertainty in dealing
with problems needs to be reduced by information sharing. A leaders affiliative interest manifests itself in helpful but task-oriented interventions, which demonstrate a high degree of
interpersonal competence. Such leaders relate
to organizational members with the full recognition that these individuals have ideas and resources, and are partners in problem solving and
related activities necessary for attaining task objectives.~ Consequently, supportive feelings permeate
the interpersonal relations motivated by the
affiliative interest. Thus, it is clear that leaders
who are high on affiliative assurance behave in
self-serving ways which are incompatible with
moral altruism. On the other hand, the motivation of organizational leaders who are high on
affiliative interest is consistent with and conducive to the motivation underlying moral altruism.
Altruism and Power Motive. When one talks
of a leader, the notion that immediately comes to
mmd is power. Undeniably, the power motivation or high need for power has driven many a

leader. Power, particularly in a democracy, has a

very unfavourable press, but it is an inescapable
fact that a leader needs power in order to influence others. Akin to the affiliation motivation,
there are two types of power motivation. In the
first case, the leader is motivated by power for
personal aggrandizement; in the other, the leader
is motivated by power to serve the purpose of the
institution. The former is referred to as personal
power need, and the latter as the institutional
I
power need.18
Leaders high on personal power need are preoccupied with their self-interests and concerns
even at the cost of the organizations welfare and
effectiveness. When power is exercised in this
manner, leaders demand and expect that their
followers loyalty and efforts be directed towards
the achievement of their personal goals. Such
leaders tend to rely on the formal authority or
power derived from their position or office. Accordingly, they do not hesitate to use the resources
attached to their position, that is, the carrot-andstick approach, in order to induce follower compliance. The personal power need of leaders seems
to be rooted in a deep-seated sense of personal
insecurity which manifests itself in dictatorial
forms of behaviour and defensive feelings in their
relationship with their followers. These leaders,
insensitive to the needs of their followers, expect
the followers unquestioning obedience to and
compliance with their authority and decisions.9
On the other hand, the dominant preoccupation of leaders high on institutional power need
is the interests of the organization and its members. Such leaders subordinate their personal or
self-interest to that of the organizations mission,
which then becomes the sole reason for their desire to influence and control others. Leaders who
are high on institutional power motivation emphasize orderliness, discipline and task stnicture
primarily to ensure the accomplishment of the
organizations objectives. For this purpose, they

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140

draw primarily on their personal resources and

inner strength of character, that is, their expertise
and the power of their example as perceived by
their followers.2 When they are required to use
rewards and sanctions as a means of control and
influence, they do so impartially and equitably.
Contrary to personal power need, institutional
power need is derived from the leaders identification with and commitment to the organizationss
objectives and interests. For this reason power
becomes the vehicle to serve the needs of the organization and its members. It is manifested in
behaviours and feelings that serve to assist and
support the followers in accomplishing their tasks.
Furthermore, leaders motivated by institutional
power need tend to create a climate in which followers are encouraged to comment and critique
the leaders decisions and actions. This practice
serves two purposes. First, leaders use the feedback as a valuable information source in their

continuing self-improvement effort.2 Second,

leaders self-development effort provides a positive role model which followers can emulate. Both
purposes ultimately contribute to the organizations
effectiveness.
The discussion of personal power need relative
to institutional power need suggests that personal
power need clearly places the interests of self
before those of others, and might even be at considerable cost to others; hence, personal power
need is the antithesis of altruism. On the other
hand, institutional power need is a form of moral
altruism as it accords priority to the interests of
others and may even be at considerable cost to self.
Altruism and Achievement Motive. Leaders
high on achievement motive derive satisfaction
from achieving their goals, as well as from their
relentless efforts in the pursuit of achievement
almost as an end in itself. They not only assume
a high degree of personal responsibility, but also
tend to be self-oriented in that they view organi-

zational resources and support primarily in terms

of their own objectives. Similar to affiliation and
power needs, the need for achievement may take
two forms: a leader may be motivated either by
personal achievement or by social achievement .22 Leaders driven by personal achievement
motives are more likely to engage in behaviours
that benefit self rather than others ... because
they focus on personal improvement and doing
things better by themselves ....z3
On the other hand, leaders driven by social
achievement motive show a concern for others
and initiate efforts ... in terms of articulation of
individual and collective capability, concern for
a better quality of life and need to engage in meaningful organizational and social action in order to
influence the environment .24 Thus, such leaders
generally tend towards efforts which primarily
benefit others and therefore reflect altruism. However, leaders motivated by personal achievement
may also engage in efforts that benefit others
when the objective of their efforts includes the
interests of others. For example, when leaders
engage in self-development the objective may be
viewed as personal achievement. However, if
the ultimate objective of leaders is to prepare
themselves to better serve their followers, then
such achievement motivation would be congruent
with the altruistic motive.
To summarize, the motivation underlying
leaders behaviours can be characterized either
as altruistic or egotistic. The altruistic motivation
of a leader manifests itself at the operative level
in terms of affiliative interest, institutional power
need, self-discipline or self development and social
achievement needs. The egotistic motivation of a
leader, on the other hand, expresses itself in
affiliative assurance, personal power need, and
personal achievement chiefly in terms of selfaggrandizement. These differences are summarized in Table 1.

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141

the

Table 1
Two

Contrasting Leadership Motive Patterns

Leaders Influence Strategy

There are two basic approaches available to leaders

who want to influence their followers beliefs,

attitudes and behaviours: transactional and transformational modes of influence.25 In the transactional influence mode, leaders use the power of
their position or office, and rewards and sanctions
under their control ensure that their followers
perform the required behaviour and demonstrate
the desired commitment and loyalty. Followers
in turn exhibit such compliance behaviours and
attitudes to gain valued rewards and to avoid possible sanctions. Clearly, leaders who adopt the
transactional influence mode use control strategies solely to elicit follower compliance; they do
not intend to promote the growth and development of their followers. There are serious ethical
and moral implications inherent in the transactional influence process. At best, this process
views followers as providers of knowledge,
abilities, skills and efforts which enable leaders
to accomplish their own objectives. At worst, it
views followers as mere instruments or appendages of machines which can be traded so long as

price is right. Consequently, it offends the

dignity of the human person. It also frustrates the

basic human need to maintain ones self-worth

and consequently leads to much psychological,
and sometimes physical, harm to employees.26
The transactional influence process is not conducive to the development of the organizations
moral environment which is a crucial responsibility of organizational leaders. When leaders use
control strategies of the transactional influence
mode, followers cease to experience dignity,
meaning and a sense of community so essential
for the growth of both the organization and its
members. Control strategies create a climate
which breeds dysfunctional norms and values that
lead to conflict rather than cooperation among
followers. Such control strategies also compel
followers to place their own interests before those
of others without any regard to the superordinate
interests of the organization, and to the organizations responsibilities and obligations to its external
stakeholders.
In the transformational influence mode, leaders
use empowerment rather than control strategies
to bring about a change in their followers core
beliefs and values as they move the organization
toward its future goals. Leaders formulate the
future goal or vision for the organization. In order
to move the organization toward its goals, leaders use their personal expertise and good example
primarily to transform their followers beliefs and
values so that they are consistent with the vision,
rather than merely elicit their overt compliance
behaviour. The empowerment strategy achieves
two objectives. First, followers internalize the beliefs
and values inherent in the vision formulated by
the leader. Second, followers feel more empowered which changes their self-efficacy belief and
consequently they feel more competent to handle
the tasks required for the realization of the vision.
What are the critical elements of the empowerment strategy? Conger and Kanung027 identified

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142

several steps the leader takes in using this strategy.

First, the leader identifies the contextual conditions which arouse feelings of powerlessness
among followers, and attempts to reduce or eliminate these conditions. Second, the leader develops the followers feeling of competency through
such leadership practices as encouraging followers participation in decision-making and in goal

Table 2
A

Comparison of the Transactional and Transformational Leadership Influence Processes

setting; providing helpful feedback on task accomplishment ; engaging in exemplary behaviour that
is worthy of emulation; and expressing confidence
in the followers capability. These practices, in
particular the followers participation in decisionmaking and goal setting, offer followers the opportunity to test their own efficacy. Sashkin considers
such participation as an ethical imperative because
it leads to the followers self-development. 28 The
exemplary behaviour of leaders serves as a role
model which empowers followers to believe that
they too have the capacity to behave in a like
manner. When such beliefs are widespread in an
organization, the overall effectiveness of the organization increases. The message to the followers
when the leader empowers them is: I will attend
to your personal growth and competence regardless of the personal cost and sacrifice to me. The
empowerment strategy, inherent in the transformational influence process, is a crucial means to
restore and develop the moral environment.
To conclude, several significant contrasts between
the two modes of influence processes can be identified. These are presented in Table 2.
In the transactional mode, leaders use control
strategies in order to elicit their followers compliance behaviour. This mode relies on the social
exchange of valued resources which leaders can
draw from their reward, coercive and legal power
base. However, compliance by followers often
leads to self-denial and loss of self-worth, with
the result that they may function like programmed
robots. The near destruction of the followers selfesteem for the benefit to the leader makes the

transactional influence process highly offensive

to the dignity of human person and it cannot be
considered as an ethical social influence process.
On the other hand, in the transformational
mode, leaders objective is to change their followers core attitudes and values through empowerment strategies. The followers empowering
experience increases their self-efficacy belief and
their capacity for self-determination. The source

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143

of the transformational influence is twofold: leaders expert power and referent power. Expert
power makes leaders credible and trustworthy
to the followers; referent power makes leaders
attractive to the followers mainly because of their
selfless efforts and altruistic intent. The empowerment strategy also brings about an attitude
change in followers through processes of identification and internalization. Followers identification with the leader and their internalization
of the leaders vision for the organization ensure
that they are willing partners in the efforts to
achieve organizational objectives. Unlike the transactional mode, the influence processes in the transformational mode are designed by the leader to
enhance the followers self-growth, enhance their
self-worth, and enable them to function as autonomous persons. These effects reflect the leaders
s
altruistic value and orientation and promote the
dignity of the human person. When leaders adopt
the transformational influence process mode, their
leadership is more likely to be ethical, effective
and enduring.

Leaders Moral Character

Formation
The preceding discussion highlights the need for
altruistic intent and transformational mode of
influence in.ethical leadership. What can leaders
do to prepare themselves and their organizations
to meet the challenging demands of such ethical
imperatives? It is not enough for leaders to distinguish between morally good or evil motives or
acts. Leaders must make efforts to habitually incorporate moral principles in their beliefs, values
and behaviour. If ethical leadership is essentially
transformational in nature, then it includes selftransformation of both leaders and followers.
Ethical leaders readily recognize that self-transformation ought to begin with ones self. In the

context of ethical

management, Blanchard and

Peale offer inspiring and practical principles of

ethical power.3 They are purpose, pride, patience,
persistence and perspective. Leaders can tap these
sources of ethical power as they go about their
task of self-transformation.
Purpose. The critical set of behaviours of leaders is to evaluate the status quo, to formulate and articulate a vision that is different from the status
quo, and to adopt such means as personal sacrifice, building trust among followers and using unconventional behaviour to achieve the vision.3
Leaders draw on their ethical power when they
subject the vision as well as the means to achieve
it to the rigorous scrutiny of the purpose that is
intended to be served. What higher purpose does
the vision serve? In the context of the business
organization, it is universally admitted that the
business must be profitable. The ethical leader,
however, stops to ask: Are profits a means or an
end in itself? Corporations committed to a higher
purpose ... exist to provide society with the
goods and services it needs, to provide employment, and to create a surplus of wealth (profit)
with which to improve the general standard of
living and quality of life .32 The scrutiny of the
vision in the perspective of its higher purpose will
encourage the leader to practise primarily the virtues of prudence and justice.
Prudence. Implies that leaders assess situations
in terms of the likely favourable and unfavourable
consequences of their decisions for organizational
members and for society at large, rather than in
terms of their own self-serving goals. The practice of prudence encourages leaders to habitually
assess situations and problems in the light of moral
standards before making a final decision. The
habitual practice of justice requires that leaders
recognize their duties and responsibilities, and
strive constantly to respect others legal and moral
rights. It is leaders responsibility to balance in a
fair manner the rights of all the organizations

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144

stakeholders. Furthermore, the practice of prudence and justice in the pursuit of the leaders
vision not only strengthens the leaders moral
character, but also enhances the followers perceptions of the leaders trustworthiness.
Pride. Leaders obviously need to have high
self-esteem. Self-esteem originates from a healthy
pride in their own accomplishments as well as
the esteem of their followers. However, leaders
behaviours are not designed to merely secure the
acceptance of their followers. For example, in
formulating the vision the leader ought to take
into account the needs and aspirations of the
followers, but the leader ought not to allow the
desire to be accepted by the followers to compromise the vision, when such compromise would
jeopardize the higher purpose. In other words,
leaders do not look to their followers for affiliative
assurance&dquo; to reinforce their self-love, but rather
to transform their followers to accept and realize
the vision. Ethical leaders exhibit healthy pride
not vanity. The dividing line between healthy
pride and vanity is thin because of the strong egotistic tendency in us, but ethical leaders recognize that inordinate self-love is a human vice and
not a virtue.
Patience. As leaders work towards the realization of the vision, they are bound to face obstacles
either from the environment (internal or external)
or from the reluctance of their followers to accept
and be committed to the vision. It takes both time
and effort to overcome such obstacles that are
inevitable in a worthy and noble endeavour.
Hence, the need for patience. Leaders face present
difficulties with calm and serenity because of their
faith in the vision. They develop an inner realization that in good time the difficulties would be
resolved. The faith referred to here is not fatalism that inevitably paralyses action. Rather, the
vision and the leaders convictions that the vision
would be achieved contribute to the leaders con. stancy of purpose that leads them to continue

undaunted with what needs

to

be done. This is

particularly true of leaders who strive to exercise

prudence and fortitude. The practice of prudence
enables them to accurately assess all facts and
circumstances related to their decisions, and the
practice of fortitude develops the capacity to act
positively in the midst of difficulties. The relevance
of prudence for leadership is reflected in the leaders need to be sensitive to the environment; the
relevance of fortitude is demonstrated by the fact

that leaders are called upon to perform behaviours

that involve great personal risks and sacrifices.&dquo;
As a result, patient leaders who practise prudence
and fortitude will not be inclined to resort to unethical practices when things do not proceed as

planned.
Persistence. The power of persistence is best
captured in Winston Churchills bulldog-like perseverance-Never ! Never! Never! Never! Give
Up! Persistence does not mean stubborn obstinacy. Rather, such leaders do not allow difficulties
to weaken their resolve to stay the course; they
continue to take the necessary steps, even those
involving great personal risk and sacrifice, in order
to achieve the vision. It is perfectly human to justify
unethical practices when one is overwhelmed by
insurmountable internal or external difficulties.
The practice of fortitude allows one to strive to
overcome difficulties not because it is convenient
or pleasant to do so, but because ones duty requires
that it be done. This idea is forcefully expressed
by John Boyt Stookey ofNational Distillers (now
Quantum Chemical) when he declared: One of
the things ... that we mean by ethical behaviour
is that we will forego profit in order to adhere to
a standard of conduct. I believe thats a message
a CEO needs to convey loud and clear to an organization and I find myself doing that .35
Perspective. Perspective is the capacity to see
what is really important in any given situation.&dquo;
The habit of reflection is critical to acquiring a
sense of perspective. Reflection is simply not

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145
some time each day
silence-a resource which has been recommended strongly by wise men of all times and
from all cultures, and yet the one resource that is
most untapped. Silence is more than refraining
from noise; it refers to the inner silence that
allows one to reflect on the higher purpose, to
question ones decisions in the light of that purpose, and to seek strength not to deviate from it.
It allows one to listen to the inner stirrings of the
spirit, and it is needed to make distinctions between
right and wrong, to discern what one ought to do.
In the preceding discussion several suggestions
have been made which leaders can adopt in their
efforts to develop the inner strength they need to
function as ethical, moral persons. The ascetical
literature, however, emphasizes that the enduring effectiveness of these suggestions largely
depends upon their habitual practice and, more
importantly, on a specific time leaders set aside
for the ascetical practice of examination of conscience. It is a fact of human experience that we
do not suddenly find ourselves engaging in grave
and serious unethical practices. Rather, such grave
practices are preceded by minor unethical lapses
which we might rationalize as acceptable because
they are so inconsequential or that everyone is
doing it. A periodic, systematic examination of
behaviour in the light of the higher purpose can
prevent one from, or at least alert one to the fact
that one might be treading the slippery slope of
unethical behaviour.

possible unless one devotes

to

altruistic ethic. Are moral values inherent in the

altruistic ethic unique to Western societies, or are
these moral values also compatible with the cultural norms and values that are prevalent in nonWestern societies? Several major religions and
moral paradigms, that are dominant in nonWestern societies, have been, and still are, the
major forces that pervade the socialization of their
members, influence their norms and orientations,
and explain the social institutions and structures.
The worlds major religions may provide different and even contradictory theological insights,
but there is a remarkable consensus on the norms
of ethical behaviour. The underlying thrust of such
norms is that the individuals growth and development occurs not when the individual seeks to
satisfy his or her own interests, but rather when
the individual strives, even at the cost of great
pain, risk, or inconvenience to the individual, to
seek the good of the other-whether that other
be a friend or foe or stranger.
In India, the Hindu way of life exhorts individuals to view themselves as instruments of the
divine will, bom to engage in moral duties that
benefit the social order at the cost of considerable personal sacrifice.&dquo; According to Vedanta,
the most influential school of Hindu thought, the
ideal life is a process of becoming nonegotistic,
equanimous and stable-minded.38 In his Management by
on

Values, Chakraborty39 drawing extensively

the Gita observes:

the supreme law of all existence-cosmic
human-is sacrifice .... Human energy
and talent, power and strength are all variegated reflections or embodiments of the grand
act of sacrifice .... To work without being
aware of this pervasive cyclical process of
exchange is a violation of the supreme principle,
preparing the ground for weakened ethics-inwork.
....

or

Ethical

Leadership: Congruence

with Non-Western Cultural Norms

and Values
The discussion, so far, has demonstrated that the
leaders motives, influence strategies and character formation, manifested in the transformational leadership mode, are consistent with the

This is the

Karma-yoga of the Gita, the

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way

to

146

become one with the infinite activity by the exercise of the activity of disinterested goodness. 40
In the context of globalization and the economic
policies of liberalization, the challenge facing
Indian corporate management is to do justice to
the interests of all the organizations stakeholders.
Through altruistic leadership, management functions as a steward for the stakeholder, engages in
ethical practices in achieving the organizations
mission, serves societal interests, but avoids publicity-seeking activities, however charitable and
noble, which are incompatible with, and often
deleterious to, the legitimate and urgent interests
of the organization and its stakeholders. Altruistic leadership ... anchors the organization into
an idealism that not only improves its public image
but eggs on its stakeholders to superhuman efforts
and sacrifices,4
Similar expressions of the altruistic ideal are
found in Islam. For example, some of the deeply
cherished values of Arab society are comrnitments to honour, honesty, respect to parents and
older persons, loyalty to primary group, hospitality and generosity.42 These values clearly indicate that ones personal goals and interests ought
not to be pursued to the detriment of the goals
and interests of the group or community. The
concept of the more inclusive self, that is, one in
which the desires of the individual are subordinated to the needs of the larger community, is
also found in Buddhism and Confucianism. One
Buddhist sect emphasizes personal sacrifice and
service to others.43 In a similar vein. Confucianism depicts individuals as embedded in a larger
social order with a set of obligations to define
themselves in relation to others and to foster harmony in their relations .44
Cross-cultural studies which explicitly used
cultural variables to examine leadership effectiveness suggest that the nurturant-task leadership
model is effective in non-Western societies.45 The
model postulates that subordinates can be devel-

oped to a state of preparedness in order to function

autonomously. It requires that the nurturant-task
leader focuses on the growth and development of
both the followers and the leader. This other
focus implies the use of the transformational influence process and, in that sense, reflects the
altruistic ethic.
The knowledge that societys well-being ought
to supersede ones own well-being is inherent in
the nature of human beings, but its development
is affected by the socialization process. In this
process, individuals spiritual experiences that
stem from their religious beliefs and practices
serve to further reinforce altruistic behaviour.
Therefore, religious influences that characterize
non-Western societies serve to facilitate the effectiveness of the transformational leadership mode.

The Manifestation of Altruistic

Behaviour in Organizations
On the basis of the preceding discussion, it may
be concluded that the leaders altruistic behviour
is the natural consequence of three dimensions

of ethical leadership: leaders intention, leaders

influence strategy and leaders character, which
are inextricably linked to ethical leadership, and
contribute to the development of both the leader
and the followers. As depicted in Figure 1, altruistic behaviours, which flow from such development, represent the responses of organizational
members as they strive to serve organizational and
societal interests. Thus, altruistic behaviours can
be seen at four different levels of the social
environment: the interpersonal, group, organizational and societal levels. 16
At the interpersonal level, examples of altruistic
behaviours are consideration of others needs; task
or technical assistance to subordinates, co-workers and superiors; empowering practices including monitoring and modelling to enable others to

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147

gain the needed competence. Altruistic behaviours

which meet the needs of specific groups include
efforts to foster team building, interdepartmental
cooperation, and programmes that protect employee
groups from discriminatory practices and sexual
and racial harassment. The organization, as an
entity, can benefit from the altruistic behaviour
of a leader which is generally categorized as ex-

emplary good citizenship behviour.&dquo; Examples

are demonstration of personal commitment and
loyalty and efforts to maintain the integrity of the

organization.48 Altruistic behaviours of a leader

may benefit society at large, for example, contributions to social welfare and community needs
in the areas of health, education, the arts and culture ; environmental pollution control; and lobbying

for

public interest legislation. These examples

clearly reveal that ethical leadership is more than
a theoretical construct; it has profound and pervasive implications for the survival and growth
of the organization and its members.
When asked about his primary job, the chairof Matushita Electric said: To model love. I
the soul of this company. It is through me that
our organizations values pass.49 This response
succinctly underscores the three major elements
of ethical leadership: altruistic motive, empowering strategies and moral character formation. It is
only when leadership is fused with these elements
that it proves to be fruitful to the organization, its
followers and society at large.

man
am

NOTES AND REFERENCES

1. J. Flinn, Dont get Sucked into Managements World,

Directors Told, The Gazette (Montreal), 1995, C2.
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3. B. Shecter, Group Launched to Expose Unethical
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5. K.R. Andrews, Ethics in Practice, Harvard Business
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6. R. Hogan et al., What We Know About Leadership:
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Statement, American Sociological Review, 1960, 25,

161-78.
11. L. Berkowitz, Social Norms, Feelings, and Other Factors Affecting Helping and Altruism, in L. Berkowitz,
ed., Advances in Experimental Psychology (New York:
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12. See, R.N. Kanungo and J. Conger, Promoting Altruism
as a Corporate Goal, Academy of Management Executive, 1993, 7(3), 37-48; R.N. Kanungo and J. Conger,
The Quest for Altruism in Organizations, in S. Srivastva

1994, 49, 493-504.

See, F. Hirsch, Social Limits to Growth (Cambridge, MA:
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8. P.C. Vitz, Psychology as Religion: The Cult of self-worship, 2nd ed. (Grand Rapids, MI: Eerdmans, 1994).

The Power of Positive Thought and Action in Organizations (San Francisco, CA: Jossey-Bass, 1990),
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13. R.N. Kanungo and M. Mendonca, Ethical Dimensions
ofLeadership (Thousand Oaks, CA: Sage Publications.

9. D. Campbell, On the Conflicts between Biological and

Social Evolution and between Psychology and Moral
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14. D.C. McClelland and D.H. Burnham, Power is the Great

Motivator, Harvard Business Review, 1995, 126-39.
15. R.E. Boyatzis, The Competent Manager: A Model for
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7.

et

al., eds, Appreciative Management of Leadership:

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Interpersonal Competence, in G.H. Litwin and R.A.
Stringer Jr, Motivation and Organizational Climate (Boston : Division of Research, Harvard Business School,

1968).
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19. J.M. Howell and B.J. Avolio, The Ethics of Charismatic
Leadership: Submission or Liberation?, Academy of
Management Executive, 1992, 6(2), 43-54.
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Motivation: Models for Developing Countries (New
Delhi: Sage, 1994), 161-83.
23. McClelland and Burnham, Power is the Great Motivator (n. 14 above).
24. Mehta, Empowering the People for Social Achieve-

ment (n. 22 above).

25. B.M. Bass, From Transactional to Transformational
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Imperative, Organizational Dynamics, 1984, 5-22.

Conger and R.N. Kanungo, The Empowerment ProIntegrating Theory and Practice, Academy of
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Sashkin, Participative Management in an Ethical Imperative (n. 26 above).
H.C. Kelman, Compliance, Identification and Internalization : Three Processes of Attitude Change, Journal
of Conflict Resolution, 1958, 2, 51-60.
K. Blanchard and N.V. Peale, The Power of Ethical Management (New York: Fawcett Crest, 1988).
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Settings, Academy of Management Review, 1987, 12,

27. J.A.

cess :

28.
29.

30.
31.

637-47.
32. J. OToole, Vanguard Management: Redesigning the

Corporate Future (Garden City, NY: Doubleday, 1985).

33. R.E. Boyatzis, The Need for Close Relationships and
the Managers Job, in D.A. Kolb et al., eds, Organizational Psychology:Readings on Human Behavior in
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34.

Conger and Kanungo, Toward a Behavioral Theory of

Charismatic Leadership in Organizational Settings (n.
31 above).
35. C.E. Watson, Managing with Integrity: Insight from
Americas CEOs (New York: Praeger, 1991).
36. Blanchard and Peale, The Power of Ethical Management (n. 30 above).
37. W. Buck, Ramayana (New York: New American Library, 1978).
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Moksha, in R.N. Kanungo and M. Mendonca, eds, Work
Motivation: Models for Developing Countries (New
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39. S.K. Chakraborty, Management by Values: Towards
Cultural Congruence (Bombay: Oxford University
Press, 1991), 167.
40. Ibid., 162.
41. Pradip N. Khandwalla, Effective Corporate Response
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Clinical Psychology: Implications from the Hong Kong
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Y. Tuan, Segmented Worlds and Self (Minneapolis:
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45. See, M. Mendonca and R.N. Kanungo, Managing Human Resources: The Issue of Cultural Fit, Journal of
J.B.P. Sinha,
A Model of Effective Leadership Styles in India, in
A.M. Jaeger and R.N. Kanungo, eds, Management in Development in Developing Countries (London: Routledge,

Management Inquiry, 1994, 3, 189-205;

46.
47.

1990), 252-63.
Kanungo and Conger, The Quest for Altruism in Organizations (n. 12 above).
T. Bateman and D. Organ, Job Satisfaction and the Good
Soldier: The Relationship between Affect and Employee
Citizenship, Academy of Management Journal, 1983,
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48. J. Dozier and M. Miceli, Potential Predictors of Whistleblowing : A Prosocial Behaviour Perspective, Academy
of Management Review, 1985, 10, 823-36.
49. Blanchard and Peale, The Power of Ethical Management (n. 30 above).

1984), 81-86.

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