The benefits of moral leadership go from individual and team performance, financial performance, to perceptions of justice, trust, engagement, and motivation, says Hannes Leroy
Many corporate superstars have been celebrated for their business acumen, innovation, and even edginess but rarely for their moral leadership. However, research shows that morality matters, regardless of industry, firm size, or the status and level of a leader in a company.
The benefits range from individual and team performance, to financial measures, and perceptions of justice, trust, engagement and motivation. For our research we raised the obvious question: Does morality in business matter? Absolutely yes, however, we discovered you need to be careful and smart about it to gain these benefits.
We reviewed 300 studies on moral leadership and found that ethics in leadership is undervalued. We don’t celebrate moral leaders in modern cultures. Perhaps we’re celebrating the wrong people. Study after study, regardless of industry, firm size, or the relative status and level of a leader in a company, morality mattered. The benefits of moral leadership go from individual and team performance, financial performance, to perceptions of justice, trust, engagement, and motivation.
Morality and leadership effectiveness
We discovered that morality is – generally speaking – a good thing for leadership effectiveness. A leader’s morality can influence their leadership effectiveness in distinct ways. If leadership represents a relational process of influencing followers toward achieving collective goals, then moral forms of leadership suggest what those collective goals are and how they might best be reached. But it is also a double-edged sword about which you need to be careful and smart.
Three forms of moral leadership
The research review surfaced three forms of moral leadership—ethical, servant, and authentic—that overlap, but also have important distinctions. We can compare their differences to those of the main characters in the original Star Trek television series.
Mr Spock was the ethical leader, always referring to Starfleet norms and regulations. Bones [the ship’s doctor] was the servant leader, trying to take care of people. Captain Kirk was the authentic leader. He would listen to everyone, but wouldn’t necessarily do what the rules said, or what people expected, or even what would make the most people happy. He did what he felt in his gut was right.
First, followers can be inspired by a leader who advocates the highest common good for all and is motivated to contribute to that common good from an expectation of reciprocity. This type, called the servant leader, is very concerned with outcomes. They focus on how others are helped or harmed by their actions and try to lead organisations to better performance in the interest of the public good. (servant leadership; consequentialism).
The obvious downside to servant leadership is the difficulty—some would say the impossibility—of balancing all these stakeholders. Any money you spend on corporate social responsibility, on making the world a better place, is money you’re taking away from your stockholders and employees. Some argue that this is not a sustainable business model.
Second, followers can also be inspired by a leader who advocates the adherence to a set of standards or rules and is motivated to contribute to the clarity and safety this structure imposes for an orderly society. An ethical leader, may act as moral role models and suppress corrupt acts, such as accepting bribes and selling confidential information. This is the one that’s most strongly getting people to do what they’re supposed to, not embarrassing the organization, avoiding scandals, lawsuits, and negative publicity (ethical leadership; deontology).
On the negative side, ethical leaders may use the rules to achieve purposes that others might find immoral. For example, an agricultural company may take the opportunity to promote tobacco products in a Third World country where that doesn’t violate cultural norms, even though it would be frowned upon in our country. The ethical leader might conclude that doing so ‘is morally appropriate by that country’s standards.’ In other words, to the ethical leader, an action is acceptable if it follows norms or rules, but the outcomes of actions may be less important.
Third and finally, followers can also be inspired by a leader who advocates for moral freedom and corresponding responsibility and is motivated to contribute to this system in the knowledge that others will afford them their own moral autonomy. This type, called authentic leader, is fundamentally fair, honest, and wise. They are highly self-aware, understanding their own strengths and weaknesses, and strive to develop their employees and help them understand themselves. They make decisions based on their own moral compass, rather than on other people’s opinions of ethics. (authentic leadership; virtue ethics).
The downside of authentic leaders is that they can be viewed as unpredictable, following internal rules that only they know. Authentic leaders can be written off by those who follow a different moral compass as a loose cannon.
It is possible for leaders to embody elements of more than one form of moral leadership. The three forms are not mutually exclusive, leaders may find it effective to use different forms of moral leadership in different situations.
A caution for managers
Most of us consider ourselves moral and feel that all people necessarily think the way we do about morality. However, managers should realise, that their form of morality may differ from that of their employees.
For example, what if you run a team of very proactive individuals and their definition of morality actually is more aligned to the idea that people should get their own freedom to do things their own way and be left alone to make their own ethical decisions. Or what happens if you’re a leader who emphasises the common good for a team of people who are actually more predicated on those individual freedoms.
Morality in organisations matters
The tensions between the multiple approaches to morality may mean that some benefits are reaped but others are lost, and that some followers are convinced (those adhering to the same moral philosophy) but others distance themselves.
Managers and leaders should realise that their form of morality may differ from that of their employees. Even if you are a great moral leader, if your morality doesn’t match that of your employees, you may not be as effective as you expect to be.
Hannes Leroy is an Associate Professor from the Department of Organisation and Personnel Management at Rotterdam School of Management, Erasmus University (RSM).
Read the article, Taking Stock of Moral Approaches to Leadership: An Integrative Review of Ethical, Authentic, and Servant Leadership in Acacdemy of Mangement Annals. of G. James Lemoine of the University at Buffalo (State University of New York), Chad A. Hartnell of Georgia State University and Hannes Leroy .