Ethical Leadership – Effect on the individual and the organisation:

ETHICS: moral principles that govern a person’s behavior or the conducting of an activity.

LEADERSHIP: the action of leading a group of people or an organisation or the ability to do this.

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With these basic definitions of ethics and leadership what is ethical leadership? The action of leading a group or an organisation by following all the moral principles and working towards the success of an organisation as a whole.

Ethics dates back to two major principles: Deontological and the Teleological ethics. According to Plato and Socrates living a good life is determined by the sort of person you are rather than the acts you perform and this forms the basis of the deontological theory of ethics whereas the teleological ethics conveys that a morally right act is one that produces a good outcome. Considering both these theories in a business point of view it is highly essential that a person needs to work in a way following all the moral values which benefits the individual as well as the organisation.

In order to have a better understanding of ethical leadership, the 4V model devised by Dr. Bill Grace can be taken into view where the framework aligns the internal factors such as beliefs and values with the external factors such as behaviours and actions in a service of approaching the common good (CULChey13, 2014). To begin with ethical leadership one has to:

 Begin with the understanding of the individual core values

 To vision is the ability that the leader possess to incorporate his/her actions

 To voice is to be claimed to articulate the vision of others to be motivated to action

 Finally virtue is where constant good is fostered by the leader.

It is important for a leader to understand that positive relationships are the golden standards for all organizations effort. Ethical leaders understand that the relationships germinate and grow in the deep rich soil which comprises of the “Laws of the universe” which includes the moral values such as trust, respect, integrity, honesty, fairness, equity, justice and compassion (, 2015). It is necessary to build up an organisation on these moral values to be successful in all aspects.

What is the importance of ethical leadership? – The fostering of positive relationship at all levels provides benefits and success at three stages:

 Individual well being

 Energizing the team

 The organisation as a whole.

All the three stages can be summed up with the example of the human body which comprises of trillions of cells which works in complete harmony and cooperation among each other which results in the healthy lifestyle. An outbreak of this law or the chain that goes unchecked results in the complete breakdown like the cancer. This analogy best fits for an organisation, where it is necessary for every individual to work with full passion in order to feel the real taste of success. In the language of the German philosopher and theologian, Martin Buber, real success is described as “I-Thou relationships” in which people recognise the intrinsic worth and value of others and treat each other with sincerity and respect (, 2015). In this way, everyone feels fulfilled, contribute to the common good and share in the personal, emotional and financial rewards of the job.

Effective leader is the one who considers himself a servant not in terms of inferiority but and the one who empowers others to achieve success by focussing on the right action. Ethical leadership or a ethical leader does not mean maintain ethical and positive relationship with workers alone, it is to be maintained with the suppliers and the contractors thereby reaping the benefits of the good will together. Operating this way, organisation can enjoy prospects of continuing economic success.

A very positive example of the success story because of the proper effort and handling of an ethical leader is the famous question: “How southwest handle 9/11?”

During the tragedy of 9/11 every airline shut down but the only airline that worked was southwest because of the effective situation handling of the CEO James Parker, who believed that the company was build on sound business principle for 30 years. He took the risk to fulfil his duties and was followed by the workers with full sincerity. And that is how the company handled the crisis better than the others and stood successful (OPEN Forum, 2010).

At the other hand the story of Enron, the energy company is to understand the effects of lack of ethical leadership which made the company collapse in 2011 due to various scandals and bad leadership (Edmonds, 2015).

The success of an organisation rely on the leader of the organisation because of the fact that he/she is the one who handles every situation and thus, it is highly essential that the leader follows all the moral values and build the company with an ethical foundation where every individual is given importance and treated with due respect. This is when every individual’s view of the duty changes into passion and in turn becomes the success.

A dominant theme about leadership is that it can be taught. But when it comes to ethical leadership, learning must take deep personal reflection that inculcates the essence of moral principles and leadership insights. It lies in the perception of things by an individual. On the whole, ethical leadership is not a substitute for good business skills or political knowledge, but if the business skill needs to be good and wise it is necessary to be anchored to the ethical leadership without which it is a difficult journey for both the employers and the employees.


OPEN Forum, (2010). 10 Examples of Tremendous Business Leadership. [online] Available at: [Accessed 4 Mar. 2015]., (2015). Institute For Ethical Leadership -. [online] Available at: [Accessed 4 Mar. 2015].

Anon, (2015). [online] Available at: [Accessed 4 Mar. 2015]., (2015). Ethical Leadership: Doing the Right Thing. [online] Available at: [Accessed 4 Mar. 2015]., (2015). 7 Steps to Ethical Leadership. [online] Available at: [Accessed 4 Mar. 2015].

Search Inside Yourself Leadership Institute, (2013). What is “Leadership” and What Makes a Good Leader?. [online] Available at: [Accessed 4 Mar. 2015].

Edmonds, P. (2015). NPR : Fall of Enron. [online] Available at: [Accessed 4 Mar. 2015].

Zenger, J. (2012). Ethics in Leadership: The 8 Rules to Prevent Misuse of Corporate Power. [online] Forbes. Available at: [Accessed 4 Mar. 2015]., (2013). Classical models of managerial leadership: trait, behavioural, contingency and transformational theory. [online] Available at: [Accessed 4 Mar. 2015].