Chapter 1

Introduction

It is easy to make unethical decisions because it is the easiest or quickest way to decide. Or, the decision is traditional and not thought about. You are all leaders within the student community, on the front line, deciding what is good, bad, appropriate and inappropriate for your organization. If you are carrying out the responsibilities of your position, you will have extraordinary influence on each person with whom you interact. You set the tone, you effect change, and you are the example. When encountering the many grey areas in which it is difficult to distinguish right from wrong, there is always an answer that is more right than the others. This is an ethical answer. Deciding what is right (or what is more right) in a particular situation: determining what ought to be; deciding what is consistent with ones personal or organizational value system. Management is doing things right .Leadership is doing the right thing. Ethical leadership is doing things right WHILE doing the right thing.

b) Problem statement

A lack of trust is a problem in many workplaces.

Leaders know what they value. They also recognize the importance of ethical behavior. The best leaders exhibit both their values and their ethics in their leadership style and actions. Your leadership ethics and values should be visible because you live them in your actions every single day.

If leaders never identified their values in these workplaces, the mistrust is understandable. People don't know what they can expect. If leaders have identified and shared their values, living the values daily, visibly will create trust. To say one sentiment and to do another will damage trust - possibly forever.

Workplace ethics take the same route. If the organization's leadership has a code of conduct and ethical expectations, they become an organization joke if the leaders fail to live up to their published code. Leaders that exhibit ethical behavior powerfully influence the actions of others.

c)

Purpose

The study aims to accomplish that ethical leader has a clear understanding of his/her own personal ethics, and has a sense of the organizations ethics, and then ethical behavior is that which is consistent with these codes.

Behave in ways that are consistent with your purpose. A clear personal purpose is the foundation for ethical behavior. A clear organizational purpose might enhance ethics as well.

Behave in ways that you are personally proud of .Self-esteem is a powerful tool for behaving ethically. Self-esteem is personal pride mixed with a fair amount of humility, and this balance creates the confidence to hang tough when dealing with ethical dilemmas.

Behave with patience and with faith in your decision and yourself. Patience helps us to behave in ways that will be the best in the long run, and to avoid the trap of having to have things happen immediately.

 Behave with persistence. This means behaving ethically all of the time-not just when it is convenient to do so. An ethical leader has persistence to stick to her or his purpose and to achieve what she or he envisions.

Behave in ways that are consistent with what is really important. This means keeping perspective. Perspective allows us to reflect and to see things more clearly so that we can see what is really important to guide our behavior.

d)

Research Questions

1. Are ethical behaviors expected out of leaders?

2. How do leadership values determine the ethical behavior in any organization?

3. How do stated ethics and values of the organization effect leaders?

4. Do the leaders in any organization balance the needs of the business with ethical issues appropriately?

Chapter 2 Literature review

The more we explore how ethics and effectiveness are inextricably intertwined, the better we will understand leadership. The philosophic study of ethics provides a critical perspective from which we can examine the assumptions behind leadership and leadership theories. It offers another level of analysis that should be integrated into the

growing body of empirical research in the field. The ethics of leadership has to be examined along a variety of dimensions that cannot be understood separately. The dimensions are the following: 1. The ethics of a leader as a person, which includes things like self-knowledge, discipline, and intentions, and so forth 2. The ethics of the leader/follower relationship (i.e., how they treat each other) 3. The ethics of the process of leadership (i.e., command and control, participatory) 4. The ethics of what the leader does or does not do. These dimensions give us a picture of the ethics of what a leader does and how he or she does it. But even after an interdependent analysis of these dimensions, the picture is not complete. We then have to take one more step and look at all of these interdependent dimensions in larger contexts. For example, the ethics of organizational leadership would have to be examined in the context of the community, and so forth.1 As you can see, this paper raises far more questions than it answers. I do, however, believe that the relationship between ethics and effectiveness (or technical and moral excellence) is at the core of leadership ethics and, for that matter, all areas of professional ethics. The question of how ethics is related to effectiveness lurks behind the problems with studying leadership that I mentioned earlier the problems of language and definition, descriptive and normative confusions, the discussions about altruism and self-interest and the question of causation and history. Ethical assumptions are deeply embedded in the leadership literature and the way that people think about leadership. Leadership ethics requires scholars to first critically read the leadership literature, separate the normative ideas from the descriptive and then put the two back together again. Like most philosophical endeavors, digging for the questions is the most difficult part. Once the questions are unearthed, the task becomes slightly easier. For thousands of years, moral philosophers have wrestled with questions about the relationship between knowledge and morality, free will and determinism, etc. In our libraries reside the works of some of the greatest minds in history to help us with these questions. We should use them.

Ethics and Leadership Effectiveness Joanne B. Ciulla

When we consider the horrendous problems caused by leaders today and in the past, it is extraordinary that there are not more scholars working in the area of ethics and leadership. Most people agree that leaders should be ethical, but few have delved into what this means. How do we prepare leaders who have the capacity to responsibly use power, to carry out moral obligations to followers, make sound moral decisions and serve their organizations and constituents well, etc.? And, how do we develop followers, organizations, systems and institutions that support good leadership and do not tolerate bad leadership? These are questions faced by people everywhere and we will need the help of scholars around the world to answer them.2 Critics argue that transformational leadership is unethical. They contend that its rhetoric may appeal to emotions rather than to reason. They contend that it lacks the checks and balances of democratic discourse and power distribution. They contend that it violates the principles of the Organization Development (OD) Movement and that it manipulates followers into ignoring the followers own best interests. But truly transformational leaders, who engage in the moral uplifting of their followers, who move them to share in the mutually rewarding visions of success, which enable and empower them to convert the visions into realities, should be applauded, and not chastised.3

Chapter 3 Methodology

Sample size To understand the working conditions of the labor in the cement industry we randomly choose the cement factory in I-9. The factory employed a total of 25 employees which comprised of 1 manager, 3 office workers and 20 labors. Out of these our sample compromised of 4 labors, a supervisor and the manager.

2 3

The state of leadership ethics and the work that lies before us by Joanne B.Ciulla ethics, character, and authentic Transformational leadership by Bernard m. Bass and paul steidlmeier

Instrument:

Since we visited the factory at late hours and the employees at the factory had little or no education so we could not gather data through either observation or questionnaires (neither in English or their native language) so our main instrument of data collection was interview. Our interview was open ended and contained questions which would help us derive out a definitive conclusion on the working conditions of the factory workers and how they it affects the workers and their commitment towards the company and the industry itself. Scope and Limitations:

The main scope our research is limited to the study of the working conditions of the labor in the cement industry, to identify the areas where they are discriminated and its effects on the employees motivation and commitment to the organization. However we faced a few limitations in our research which were as follows: - Our sample size was very small and created biasness while portraying the

average working conditions of the labor in the industry. We say so because the employees told us that the workers in larger factories were also provided residence for their families. -The individuals selected for the sample were shy due to some reason and

werent very open while addressing to our questions. -Since we visited the factory at late hours the labor were exhausted so they

couldnt give us much time. Assumptions:

Since our cement factory is one of the larger cement factories in Islamabad, they make cement products which are export quality, so we assume that the sample, as small as it is, may represent the population fairly and honestly, as the work force in such industries is mainly comprised of individuals who mostly belong to more or less the same region of Pakistan, which is Khyber Pakhtunkhwa or Punjab. As we mentioned earlier, the main source of ornaments in Pakistan is mainly the province of KPK and our chosen industry uses the same source for raw materials.
Chapter 4 Analysis and results

1. How do you develop ethical leaders within such environment (Pakistan)? I believe that employees at all levels throughout the organization must demonstrate and exercise ethical leadership every day. Our salespeople, for instance, have to know and believe that we dont sell products to customers that they dont need by exaghurating and molding service for specific individual Each one of us must work to provide value for our customers and shareholders. In some respects the term ethical leaders is redundantwe really are jus.t developing leaders that are focused on delivering value to our customers every day. Leadership should of course be ethical as well. Development of these qualities is critical, and heres why. In a competitive environment like ours, we look for better ways to serve and develop a competitive edge over others that shapes our comperative advantage. Its whether employees are helpful and whether the organization has the products that customers need when they need them. Thus, we need to emphasize ethical leadership throughout our organization. To develop ethical leaders, it is important for the ethics codes to be clear, and to ensure that all employees understand what is expected of them. Another critical component to ensuring ethical leadership within the culture is hiring, developing, and promoting those people who will embrace the ethical standards. You can put together elaborate ethics codes, but, in the end, if you hire crooks, they will steal. 2. How do you encourage a culture of pushback within your organization? At Telenor, all employees share in the responsibility for creating and maintaining an ethical culture. That effort, of course, starts with the Chief Executive Officer and the

Board of Directors demonstrating their commitment to the company values and principles in consistent and concrete ways. I frequently speak to groups of employees about the importance of our company values, about how we want to treat each other, and about what we stand for as a company. The company culture cant just be mine, it has to be all of ours. Employees must be free to push back, to report ethical violations, and to suggest changesall without fear of retribution. Every employees behavior is important to the companys success. We cant always look over their shoulders, so we need to depend on them to do what is right. And we need to put processes and mechanisms in place so that there are people they can turn to when they need support in discussing the difficult situations they may face. They need to know that doing the right thing is best for them and for our company. Every time someone has the fortitude to speak up on behalf of our values, we need to show that this is something we encouragefailure to communicate that we value this feedback could have a chilling effect that does us all harm. 3. How do you view the connection between executive compensation and ethical leadership? In a free market society, people are valued for their contributions. Some people in a society value one thing and others value another thing. Interestingly, our society puts a greater value on sports figures and entertainersthe average major cricket players salary is $14 million; whereas, the average base salary for a Chief Executive Officer is closer to $.5 million plus an at-risk bonus. Maybe thats too high; I dont know. If corporate leaders focus on and are successful in creating substantial shareholder value, then having a small percentage of that go to the people who create it doesnt seem out of line. Its when things get really out of whack that there are problems. Theres really no right or wrong answer. I think boards need to use a common sense, values-based approach to determine what is right for their shareholders. 4. How do you distinguish between ethics and morals, and how do you incorporate ethics into your business decisions? I think ethics are behaviors inspired by right and wrong. I think morals tend to have more of a religious overtone. We all are products of our upbringing and our religious teaching, but I think that we ought to have ethics as the undergirding rules of business.

It comes down to the religion and basics of law: dont steal, dont cheat, no fraud. All of the rules and laws that have been passed are simply expressions or variations on those themes. Its common to a lot of us CEOs in Pakistani business today that there is a greater deal of unethical behavior going on. Thats why we focus on developing ethical environment, certainly an edge over others but also as per Pakistan a religious following. 5. How do you assess the ethical leadership within an organization? I think today its different and more risky for us as we go through career transitions. You can evaluate all the annual reports and proxies and so forth until your eyes glaze over at night, but at the end of the day, its about the people and values and the company. In my case, I did a lot of research about the people of the company, the employees of the company, and then I insisted on meeting every single one of the directors. Today, the pendulum has swung all the way over from really complacent boards that were friends of the CEO or the chairman to a situation where some boards are made up of people who may or may not understand companies, who may or may not understand business, who may or may not understand the laws and the financial rules. Yet, theyre becoming far more activist, and theyre actually doing some damage to companies. I wanted to make sure that I should have a board that had the right ethics, the right values, and with whom I thought I could work as a team in order to create shareholder value. The bricks and the mortar and the brands and all of that, every companys got them. At the end of the day, its the people that matter most.

Analysis Sticking to values and developing a competitive edge based over ethics is the main goal of the organization. Ethical violations are encouraged to be reported. Positive changes are always welcomed aimed at helping develop an ethical environment. A companys culture in not that of few members but accounts for all. Culture exhibited by the top executive is communicated down the hierarchy ultimately formulating organizational

culture. Reward based system defines our environment, people get compensated for the contribution made, letting shareholders know keeping system transparent and asking for justified reward is ethical perspective. Ethical leadership is valued and adopted, if its the people that matter most, the people should be valued internally and externally.

Chapter 5 Conclusion and recommendation

Ethical leadership is about having certain standards and principles. Here a leader just does not lead but he always monitors his activity seeing whether he is keeping up the standards or is he deviating from the set standards. He is ready to suffer loss but he is not ready to compromise with his principles. Today it is very much required in the corporate world. Today companies hide their actual financial position to lure the investors. So it is imperative that ethical leadership should gain momentum in the corporate world. Communication should not just serve as a means for conveying a message but the communication should be ethical also. It is important that the industries' should always state what is right though it might be bitter. Political leaders' too should refrain from hurting the sentiments of other communities. They should promote tolerance among various communities. Leadership also means that giving the best to the public. In business, it is not just the shareholders and customers who should be taken care of but the business should focus on entire society including the biosphere. Ethics demand that customers should get product of best quality at appropriate rate and there should be no alteration in it. Motive should not be only profit but the motive should also be to serve the customers. Corporate social responsibility is today being practiced by most of the organization. Here the companies use their capital for some social cause such as for child education, AIDS etc. It is a good practice and even the government is encouraging it.

Ethical leadership also demands that leaders, whether they are from industry or from other sectors, should have a broader outlook. They should not surround themselves with yes men and take decisions based on their advice. Leaders should have a proper succession planning wherein the other people are groomed as leaders so that they can take the charge once the incumbent departs. This prevents the void, which often creates havoc in any organization. Leaders should also occupy the office for a particular tenure after which they should voluntarily step out paving way for others. Such practices in the political as well as corporate world will help in creating a better environment where people will live together without any hatred.