Ethics, according to Mullins(2016: 533), is concerned with the study of morality: the practices and activities that are considered to be importantly right or wrong, together with the rules that govern those activities and the values to which those activities relate. Ethical leadership is the appliance of ethics in leadership. This blog is going to talk about the two principle schools of ethics, 4V Model and 2 company examples in ethical leadership.
The social responsibility of business | Alex Edmans | TEDxLondon Business School (source:https://www.youtube.com/watch?v=Z5KZhm19EO0)
There are two principle schools of ethics, namely deontological and technological. Deontological is more related to the rightness or wrongness of an action itself. The philosopher Kant is a supporter of this option and assists that goodness or badness is evident in the action itself, not on its consequences (1998). Technological ethic theory, on the other hand, judges the act according to the result. That is to say, whether an act is right or not depend on that its result is good or not. Under this consideration, a good result is associated with rightness while the bad one wrongness (Alexandra & Miller, 2009).
(Source: SOAS, 2017)
Both of these two principles have benefits and limitations. Deontological approach, according to Larry and Michael, is more accordant with conventional notions of our moral duties(2016). Despite the advantages of deontological ethics, this approach may make the world morally worse because of the seeming irrationality of our having duties or permissions. Technological approach, on the contrast, can accommodate or explain away common moral intuitions. However, it may lack taking account of the moral constraints or moral options which are needed to be added to the basic consequentialist factor(Walter,2015).
4V Model is a quite methods understand ethical leadership. 4Vs stand for Values, Vision, Voice and Virtue respectively(Grace,n.d.). It is the most important thing for a leader to understand the value of the individuals and keep the visions. Virtue is another factor that makes leadership effective(The Center for Ethical Leadership, n.d.).
(Source: The Center for Ethical Leadership, 2017)
A good example of ethical behaviour in retailer industry is Marks and Spencer. M&S has a strategy called ‘Plan A’ which mail concentrating on sustainable and environmental-friendly development. According to the Plan A 2006, the company has achieved many good results. The company not only retain its first place in clothing retailing but also won a good reputation because of its considerations about the environment and stakeholders. For example, M&S has zero carbon emissions from operations for four years and 100% of operational waste from M&S stores, offices and warehouses was recycled(M&S,2016). Many companies also have plan for helping to protect the environment but few as exercised as M&S. They not only include it as a strategic plan but also do as plans. To award the company’s contribution to ethical and sustainable development, the company was awarded as ‘2014 Corporate Social Responsibility Award’ and ‘2014 Most authentic brand in the UK’ etc. which is a good result as it chance company’s reputation(M&S,2016).
Wal-Mart, a retailer giant in the world, can be an example of non-ethical behaviour. Being the wealthiest company in the world, the company seems doesn’t act ethically as wealth as its sales. One of the reasons that people choose to go to Wal-Mart is its low price. The low price strategy seems a win-win strategy as it benefits the company and customers at the same time: the customer can save money and the company get higher sales. According to deontological moral theory, the result is good thus the way which doing business is of rightness. However, whether this ‘good’ result equals to ‘rightness’ is under controversial. Apart from the company itself and the customer, there are other stakeholders in this case: the suppliers who earned less, the employees who were paid less and the competitors who have fewer sales are all neglected in this win-win deal. The strategic predatory pricing tactic drives away the competition and gained the company a monopoly, but regarded as an unethical and aggressive way (PITT BUSINESS REVIEW，2014). Thus a good result to some extent doesn’t equal to rightness directly in Wal-Mart’s case. The company should take more considerations of others benefits when doing business because a benign competitive business environment will enhance the whole industry anyway.
All in all, different companies may choose different strategies in its development and they may attach the different level of ethics when conduct business. Some companies such as Wal-Mart choose to maximise its profit. It did well in this achieving profit maximise, but profit should only be the only criteria for the company to consider when assessing its result. M&S, on the contrast, takes more corporation social responsibilities and can be a good example saying that caring more about others would also make the company successful. So the good or bad result may not be the only criteria judging the company efficiency, the company should include more moral criteria when setting organisation strategy and goals.
Durankiev, G. (2015) 10 Most Ethical Companies In the World. available from <https://plato.stanford.edu/archives/win2015/entries/consequentialism/> [12 May 2017]
Grace, B. (n.d.) 4-V Model. Centre for Ethical Leadership.available from <https://plato.stanford.edu/archives/win2015/entries/consequentialism/> [13 May 2017]
Larry,A. & Michael,M. (2016) “Deontological Ethics”, The Stanford Encyclopaedia of Philosophy Edward N. Zalta (ed.). available from <https://plato.stanford.edu/archives/win2016/entries/ethics-deontological/> [12 May 2017]
M&S (2016) Awards 2010-2014.available from <https://pittbusinessreview.com/2014/11/19/unethical-acts-in-wal-mart-corporation/ > [10 May 2017]
Mullins, L.J. (2016), Management and Organisational Behaviour, 11th Edition, Pearson Higher Education. available from <http://lib.myilibrary.com/Open.aspx?id=897841&src=0# > [15 May 2017]
PITT BUSINESS REVIEW (2014)Unethical Acts in Wal-Mart Corporation. available from < https://pittbusinessreview.com/2014/11/19/unethical-acts-in-wal-mart-corporation/ > [15 May 2017]
TEDx Talks (2015) The social responsibility of business | Alex Edmans | TEDxLondonBusinessSchool.available from < https://www.youtube.com/watch?v=Z5KZhm19EO0> [15 May 2017]
Walter, A. (2015)”Consequentialism”, The Stanford Encyclopedia of Philosophy (Winter 2015 Edition), Edward N. Zalta (ed.). available from <https://plato.stanford.edu/archives/win2015/entries/consequentialism/> [10 May 2017]