Ethics
Influences on leadership and management

Tom Raes

Subject: Leadership

Professor: Alasdair White

Date: 21/02/2013

Introduction

Ethics in leadership and management is something that was something that existed in corporate culture, but pushed to one side. This gradually changed during the last few years where we have experienced multiple scandals. Even today we feel the effect of several decades of unethical behaviour in cultures, corporations and even sports. The world news is filled with stories of unethical behaviour. Acknowledging the growing importance of ethics I want to research it more in the essay below. I want to find an appropriate definition of ethics in Belgian culture. What is the impact of ethics on leadership and management? Last I want to consider if the study of management needs to emphasize more on ethics.

The Belgian identity

First I want to give a personal insight on the Belgian identity. What makes Belgians, Belgians? Many contacts with various cultures make Belgians tolerant and flexible. The many rules, the scepticism towards government and authority, the internal linguistic split between Flanders (Dutch speaking) and Wallonia (French speaking), and the fact that my country is too small to engage in internationally ambitious enterprises, have led to a relative lack of national pride and self-confidence. Belgium may be one of the least nationalistic cultures in the world. Belgians may be one of the few nationals who will criticize their country, rather than make publicity for it. The above has a positive side to it. Belgians are unwilling to engage in offensive actions, or even engage in war unless it is purely defensive.

What all Belgians have in common is a love for the “Good life”. Belgians are not the type waiting to impress other people with their achievements, or to convince others of their righteousness. We tend to be rather reserved or introverted in our first contacts with other people, but are sincerely warm and friendly once we get to know the other person better. Privacy is highly valued in Belgian society. There is a clear aversion towards moralizing, towards telling other people how they should or should not behave. Live and let live lies at the base of our philosophy.

Belgians make very little distinction between classes or social status. Everybody has the right to be taken serious. Respect and privileges are not attained by status, but is something that has to be earned. Scepticism towards government, the lack of about one’s own achievements may create the false impression that life in Belgium is not well organized. Though Belgians dislike discipline imposed upon them by supervisors, bureaucracy, ideology or religion, they compensate by hard work and self-discipline.

Uncertainty avoidance and ethics

Belgium scores very high on the uncertainty avoidance index from Geert Hofstede. Since this score is quite significant, the significance of this score has a great influence on the ethical behaviours in the Belgian culture.

Hofstede (1985) defined uncertainty avoidance as “ the degree to which members of a society feel uncomfortable with uncertainty and ambiguity”, which leads them to support beliefs promising certainty and to maintain institutions protecting conformity (pp. 347-348). To cope with uncertainty about the future, Belgian society creates rules to guide the behaviours of its group members. In Belgian culture, that strives to avoid uncertainty, one’s behaviours must be perceived as positive, desirable, and loyal to maintain group membership. In my culture that is composed of individuals with high uncertainty avoidance, people feel a great need for consensus and written rules, and are intolerant of deviations from the norm. These implications imply that Belgian workers tend to place both their companies and their customers interest (when customer satisfaction is a company objective) above their own. Having worked for a foreign bank I can say that the culture of this bank did not allow me to obtain a balanced weight between the company’s interest and client’s interest.

Prior research indicates that individuals who are low in uncertainty avoidance are more likely to take risks (Hofstede 1984) and that a propensity for taking risks is highly correlated with unethical actions in a consumer setting

Individualism/collectivism and ethics

To give some counter-weight to the positive effect of the high score on ethics from uncertainty point of view, I would like to discuss this other high score on the Hofstede indexing for Belgium that has the opposite effect on ethics then uncertainty avoidance has. An extra motivation to use this score is because I think that the score for Belgium on the individualism/collectivism scale should be higher.

Individualism/collectivism refers to the relationship between an individual and a group to which that person belongs. Belgians value personal independence and pleasure and individual expression and personal time, and they tend to believe that personal goals and interests are more important than group interests. In contrast, collectivism denotes an emphasis on group welfare. Collectivists do not consider themselves primarily as individuals but rather as members of an extended family or organization (Hofstede and Bond 1984). The individualistic nature of Belgians makes them behave in a manner that fulfils their self-interest and hence may be less likely to comply with the organizational rules and regulations when such compliance limits any personal gain. Akaah (1990) found that individualistic workers and ditto organisations were less ethical then their collectivist counterparts.

I would say that the there is one other factor that influences our ethical behaviour. This factor is related to a more general human nature and is the breeding ground for the current economical crisis. This behaviour is called greed. The most frequently cited reasons for unethical behaviours were greed and competiveness.

Implications of ethics on management and leadership

One has only to scan the headlines on the financial pages of the world’s top newspapers over the past several years to realize why corporate ethics-or the lack thereof-has become perhaps the single most prominent and important business issue of current times. It is not only the ethics on a corporate level but also on a governmental level that ethics losing ground. In Belgian we have the Agusta affaire.

Ethical management to me means the full, honest and forthright disclosure and or handling of the situation or matter in accordance with established operating behaviours. The matter is not masked by notes or caveats, statements of half-truths or delayed until more suitable times of disclosure or action.

The conceptual frame that is ethical management consists of the categories that are parts of the corporate leader’s ethical landscape. The most significant component of the ethical landscape is corporate policy. Corporate policy is important to have and communicate to all employees. Policies are a means to create a way to enforce right action (Barth, 2003; Lennick & Kiel, 2005). Corporate policies state what is right and good corporate conduct. The code of conduct presents what is good employee behaviour. There is an ethics policy that outlines and specifies ethical behaviour. We must take into consideration that it is not enough to define what is to be considered ethical behaviour. People must actually act ethically. To enable people to act ethically in organizations, the ethical frame as envisioned in the code of conduct must be an integral part of the corporation’s culture or way of doing business. Financial affairs is also a frame of ethical management (Barth, 2003). It is an important classification of the corporate experience within the ethical landscape. This aspect is, in light of the recent scandals, the nexus of legal and ethical concerns. Also people are an essential aspect of the ethical landscape. The ethical management frame dictates that employees be respected and dealt with in a fair manner. Respect for others is an important aspect of this frame. The culture creates an open environment for constructive communication on all levels. This category of ethical management is also about peoples support for the mission and vision statement of the organization. In this environment people support corporations leadership because of the openness of the information flows. The last element of ethical management is relationships. The world of business is about forging partnerships and building a sense of community of practices with not only employees, but also with customers and society. Bridges are built with employees as well as customers through communicating the vision and mission of the company.

Consideration of ethics in management and leadership

Ethics should be considered more in the study of management and leadership. It should be a guide to give management and leadership more body and content. I believe that when managers take ethics in consideration and apply it in their day-to-day management, they will be successful in the long-term. Management of today too much focused on profit and personal gain. Managers set aside ethics and let greed overpower the ethical frame that should be the cornerstone of how they do business. More effort is put into sending an ethical message out into the world via all kinds of frames in business. This need is created by society who does not accept the indecent behaviour of corporations.

An ethical way of doing business will eventually influence a lot of people’s lives, because we spend most of our lives working for a company. My vision is that managers have the responsibility to inspire community, the employees and the families of the employees. Managers should serve more and not only consider personal financial gains. Ethical management will bring back trust in the corporate world and outline norms and values for everybody.

Conclusion

It shows that culture does have influence on the ethics society. Both have considerable correlations. In Belgian culture we have uncertainty avoidance and individualism/collectivism as driving factors in ethical behaviour. Uncertainty avoidance has a positive effect on ethics in Belgian culture. Individualism has the opposite effect on the ethical behaviour of Belgians. Leadership and management are beginning to acknowledge the importance of ethics in business. Though is in part guided by scandals and resulting dislike of the way things get done, there is a movement towards a more ethical approach to business and community. We need to put the words on paper into action and fill the world with more meaning and respect.

References

Akaah, Ishmael P. 1990. “Attitudes of Marketing Professionals Toward Ethics in Marketing Research: A Cross-National Comparison.” Journal of Business Ethics 9 (1): 45-53”.

Barth, S. R. (2003). Corporate ethics: The business code of conduct for ethical employees. Boston: Aspatore.

Hofstede, G. 1984. Culture’s Consequences: International Differences in Work-Related Values. Abridged ed. Beverly Hills, CA: Sage

Hofstede, G. 1985. “The Interaction Between National and Organizational Value Systems.” Journal of Management Studies 22 (4): 347-357

Lennick, D. & Kiel, F. (2005). Moral intelligence: Enhancing business performance and leadership success. Upper Saddle River, NJ: Pearson Education Wharton School Publishing.