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Perspectives
Edward Aronson*
McGill University
Abstract
This paper reviews two major ethical theories arid the
manner in which the values they espouse are associated
with the directive, transactional, and transformational
leadership styles. A model of ethical leadership is proposed which relates the diniensiotis of these styles to the
level of the leaders moral development. Transforniutiotial leadership appears to be most closely connecied
to deotitology, while transactional leadership would
seem to be related more to teleological ethics, and directive leadership to ethical egoism, a category of teleology.
The paper concludes with some suggestions f o r future
research.
Rksumk
Cette Ptude passe en revue deux theories priticipales
dethiqites et la faeoti dont les valeurs quelles comprennent sont likes aus styles de leadership directif; transactionriel, et transformationriel. Lauteur preserite un modele de leadership Pthique d a m lequel les dimensions de
ces styles sont associees ait tiiveau de developpenierit
moral du leader: Le leadership transformationnel semble
2tre lie plus Ptroitement a la dkontologie tandis que le
leadership tratisactiotinel serait associe plutSt 6
lethique tdeologique et le leadership directif a legoknie Pthique, une categorie de la teleologie. LPtude se
ternline par quelques suggestions de recherches
ulterieitres.
0 ASAC 2001
244
1995, p. 60). In order to help maintain the long-term success of the firm and ultimately of capitalism and democracy, it is therefore incumbent upon corporate leaders to
earn the confidence and loyalty of their followers and the
esteem of society at large via ethical behaviour, which
may essentially be described as behaviour which is good
as opposed to bad or right as opposed to wrong.
Ethical behaviour on the part of the leader would
appear to be a necessary condition for the establishment
of an ethical organization, but this alone is not sufficient.
Ethical leadership is required. CEOs are obliged to set a
moral example for organizational members and to
demarcate the constant striving for increased profits
from those activities which may be detrimental to the
values of society in general. Leaders must establish the
spirit, set the ambience, and determine the boundaries of
acceptable behaviour. Difficulties arise when leaders
attention is diverted by operational issues and they
neglect the provision of an effective ethical infrastructure (Navran, 1997).
But ethical leadership encompasses more than the
fostering of ethical behaviour. It may also be viewed as
effective leadership. Ethical business leadership
requires not only harvesting the fruit we can pluck today,
not only investing in the small trees and experimental
hybrids that wont yield a thing in this quarter or the
next, but also caring for the soil that allows us to produce
such a rich harvest in the first place (Butcher, 1997, p.
6). According to Ciulla (1995), good leadership refers
not only to competence but also to ethics. All instances
of leadership are essentially concerned with influencing
followers to do something. Differences exist, however, in
the way in which this influence is exercised by the leaders and these variations have normative implications.
Any empirical information obtained from the scientific study of leadership will always be deficient if the
moral implications are ignored (Ciulla, 1995).
What are the moral implications of leadership
behaviour? How are different leadership styles related to
ethics of conduct? What are the factors that determine
ethical leadership? The purpose of this paper is to
attempt to answer these questions by exploring the theories of ethics and leadership and attempting to relate the
various leadership styles to extant ethical viewpoints.
The paper begins with a brief review of the leadership
literature and the specification of a range of leadership
styles. This will be followed by a discussion of current
views on ethical leadership and the identification of a
potential problem that does not recognize the moral
nature of leadership styles other than transformational
leadership. A possible solution will be suggested by first
discussing the diverse ethical theories and then proposing a new model of ethical leadership which combines
the dimensions of the leadership styles with the leaders
ARONSON
Leadership Theories
Behavioural scientists have attempted to discover
what traits, abilities, behaviours, sources of power, or
aspects of the situation determine how well a leader is
able to influence followers and accomplish group objectives. In other words, the predominant concern of
researchers in the area has been leadership effectiveness
(Yukl, 1994). In the early part of the 20th century, leadership research was focused on the trait approach. The
essential attributes examined by investigators are physical characteristics, abilities such as level of intelligence
and skills, and personality factors (Bass, 1990; Bryman,
1992). By the late 1940s. however, the inability to prove
consistently that individual traits are the sole antecedents
of good leadership caused a shift in emphasis to leader
style or behaviour. This approach essentially states that it
is what leaders do that makes them effective. Within this
context, the investigation of leadership effectiveness centred on the two major concepts of task orientation and
the interpersonal elements of the leader-follower relationship (Bryman, 1992). In the late 1960s, another point
of view began to predominate. Style alone was considered insufficient as a determinant of effectiveness. It was
therefore postulated that it is the situation that creates the
conditions appropriate for leader efficacy. This is known
as the contingency approach. The first major work in this
area was Fiedlers ( I 967) contingency theory, which was
succeeded by several models such as the path-goal theory of House (1973), situational leadership of Hersey and
Blanchard (1969), and Kerr and Jermiers (1978) leadership substitutes. These contingency approaches identified situational conditions under which a leaders taskand/or interpersonal-oriented role behaviours would be
effective or ineffective. Another contingency approach
was developed by Vroom and Yetton (1 973) around the
leaders decision-making role behaviours that ranged
from autocratic or directive to consultative and participatory styles. These approaches to leadership role behaviours and situational contingencies fell out of favour in
the 1980s essentially due to the fact that they were limited to studying leadership as supervision of small
groups and ignored the larger issue of leading entire
organizations into the future (Conger & Kanungo, 1998).
As a consequence of the dissatisfaction among scholars
with the limitations of these approaches, the early 1980s
marked the emergence of the new leadership perspective (Bryman, 1992). In this new phase, a number of
researchers explored the charismatic leadership phenomenon (Conger & Kanungo, 1988) and related it to the
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Directive Leadership
Flamholtz (1990) describes this mode of influence as
a continuum extending from a very directive leadership
style to one which is essentially nondirective. He specifies the following categories: (a) autocrutic-Ill
tell
you what we are going to do because Im the boss; (b)
benevolenr uu~ocratic-IIl tell you what we are going
to do because it will be best for all concerned; (c) consulrarive-Ill decide, but Ill discuss it with you to get
your opinions; (d) purticiputive-Well decide togcther, but not all votes are equal; (e) conseriws (team)Well all meet and discuss it until everyone agrees on a
decision; and (f) laissez-faire-Do whatever you want
to do. (p. 265). These leadership styles are considered to
be best employed in situations most appropriate to the
required level of task or relationship orientation.
Transfomiational Leadership
According to Conger ( 1 999), most theorization and
empirical studies on charismatic and transformational
leadership have been conducted in the area of leader
behaviours and their effects. with the bulk having been
carried out by three groups of investigators (see Bass &
Avolio, 1994; Conger & Kanungo, 1998; Shamir, House,
& Arthur, 1993). The theoretical perspectives held by
these groups appear essentially to have in common the
following elements: (a) influencing followers by establishing a vision for a better future, (b) inspiring followers as opposed to controlling them, (c) leading by example through role modeling, (d) contributing to
subordinates intellectual stimulation, (e) enhancing
meaningfulness of goals and behaviours, (0 fulfilling
followers self-actualization needs, (8) empowering followers through intrinsic motivation, (h) exhibiting confidence i n subordinates ability to attain higher levels of
achievement, and (i) enhancing collective identity (Conger, 1999). Explicit in the transformational leadership
role is, therefore, the transformational influence process,
where the leader endeavours to stimulate change in subordinates attitudes and values through strategies of
empowerment, thus augmenting their self-efficacy
beliefs and fostering the internalization of the leaders
vision (Conger & Kanungo, 1998). However, not all
characteristics of charismatic/transformational leaders
have a favourable influence on followers. In certain
cases, this type of leader has created calamitous results
for both subordinates and the organization. Conger and
Kanungo ( 1 998) describe charismatic leaders as tending
to be highly capable of making changes but less proficient with respect to sound management skills, and
sometimes beset by serious character defects. House and
Howell (1992) differentiate personalized charismatic
leaders-characterized as being self-aggrandizing, nonegalitarian, and exploitative-from socialized charismatic leaders-described as collectively oriented, egalitarian, and nonexploitative. While both types of charismatic
Transactional Leadership
According to Burns (1 978). transactional leadership
involves an exchange between leader and subordinate
such that each receives something from the other in rcturn
for something else. Conger and Kanungo (1998) claim
that transactional leadership is not leadership at all but
rather managership, implying an emphasis on maintaining the status quo of the organization and ensuring the
stable administration of practices and resources essentially via strategies of control. They assert that these transactional strategies enable the leader to develop a quid pro
quo relationship with followers. In this mode: there is no
attempt to change subordinates attitudes or values or to
enhance internalization of the organizations mission,
leaders are not Concerned with enhancing the growth and
development of subordinates, and the effectiveness of the
influence is generally limited to the motivational life
span of the strategies employed. This type of leadership
is characteristic of the greatest number of leader-follower
relationships and is thus more widely observed than its
transformational counterpart (Burns, 1978). Bass (1998)
has identified the following manifestations of transactional leadership: (a) contingent reward-the leader specifies or obtains agreement from followers on the tasks to
be accomplished and issues rewards in exchange for their
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unethical moral implication. Transformational leadership, on the other hand, is considered to be ethical, since
it concentrates on strategies of empowerment with the
intention of modifying followers basic attitudes, beliefs,
and values through endeavouring to build their feelings
of self-efficacy and self-determination.
Bass (1998) asserts that the leadership of organization founders and their successors tends to create a culture of shared values and assumptions which are determined by the leaders particular beliefs. Bass portrays
the highly transactional culture as being more conducive
to personal interest than to that of the organization. In
this context, subordinates have little participation in
decision-making and are watched closely, coerced, and
controlled. In contrast, the transformational organization
encourages discourse on goals, vision, and values, and
highlights teamwork. Due to the influence of transformational leadership, a moral commitment is developed
between leader and followers which unites them in the
pursuit of higher level mutual goals.
Overall, this perspective on ethical leadership would
appear to indicate that transformational leaders influence
their followers in a moral fashion while leaders who
employ transactional strategies or are dictatorial are
unethical. But there is a problem. The implication that
transformational leadership is ethical and other styles are
not leaves no room for ethical transactional and directive
leaders, when, clearly, these exist. In fact, evidence suggests that many ethically worthwhile projects have been
completed through the efforts of individuals employing
directive or transactional leadership styles. Bird (1 999)
gives the following examples:
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In the literature on business ethics two major perspectives appear to be employed frequently: deontological and teleological. These two viewpoints will be examined next.
Deontological theories. Deontology may be
described as the theory or study of moral obligation. The
deontological perspective, according to Frankena
(1973), states that what is morally right is not dependent
upon producing the greatest level of good as opposed to
evil, but rather is determined by characteristics of the
behaviour itself. According to Hunt and Vitell (1986),
the crux of deontological theories is whether or not an
act is inherently right. Helms and Hutchins (1992) assert
that deontology considers the moral value of a behaviour
to be independent of the outcome since the certainty of
these outcomes is questionable at the moment of the
decision to act. There are two main categories of deontological theories in the literature: rule deontology and
act deontology.
Rule deontology holds that in all circumstances
individuals should follow a set of predetermined standards or rules, so that behaviour is ethical or unethical
not as a consequence of the action, but as compared to
the standards themselves (Rallapalli, Vitell, & Barnes,
1998). An ethical judgment is therefore dependent upon
some general principle (Garner & Rosen, 1972). and this
overall standard may be composed of a series of more
particular guidelines, each specifying that individuals
should behave in a certain manner in a given set of conditions (Frankena, 1973).
According to act deontology, people act ethically
according to their norms, but this is limited to particular
behaviours, implying that there may be exceptions to the
rule (Rallapalli, Vitell, & Barnes, 1998). Individuals are
obliged to behave toward others in a particular manner
simply because they are human. There is an obligation to
consider their rights and dignity regardless of the consequences, so that the concern is for the moral value inherent in the action itself (White, 1988).
Teleological theories. According to Frankena
(1979, the teleological perspective for the criterion of
what is ethically right is the nonmoral value that is created. Therefore, an act is moral if it is judged to produce
a greater degree of good over evil than any other alternative, and is immoral if it does not do so. In this case nonmoral pertains to the absence of a moral or ethical issue
in determining the value. Helms and Hutchins (1992)
view the teleological perspective of ethics as stressing
the outcome, as opposed to the intent of individual
behaviour. There are various classifications of teleological theories in the literature, but the major ones are: ethical egoism, act utilitarianism, and rule utilitarianism.
In the case of ethical egoism, an individual considers an act to be moral or immoral depending upon its
Ethical Theories
Ethics is essentially the study of standards for
determining what behaviour is good and bad or right
and wrong. Various ethical theories exist because
throughout the ages philosophers have adopted different perspectives regarding the criteria upon which ethical judgments should be based. However, despite the
diverse points of view, one thing does remain constant.
Morality is fundamentally concerned with the effects of
actions on other people. This point may be illustrated
by an anecdote attributed to an incident involving the
Jewish scholar Hillel of ancient times. During the reign
of King Herod, Rabbis Shammai and Hillel were confronted individually by a man who insisted he be taught
the entire Torah while standing on one foot. Shammai
repelled the man with the help of a stick, but Hillel did
not. Instead he said to him, Do not do unto others that
which you would not have them do unto you. That is
the entire Torah; the rest is commentary (Kaback,
1998, p. 8).
248
u(4). 244-256
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249
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Figure 1
A Model of Ethical Leadership
'I A
TA
High trmnrvcriunrl
Autocratic - Dc~nolic
I
--*--
Nondirtctive
I
Arlificial transformational
Pscudo-uansfomiationni
Pcrwnzlircd charimiatic
Nondirrctive
Genuine cranrformational
Deonroloprul
Auticntic lransforrnalional
Swialircd cliarisinatic
La1rce7-laarc
Sorc: Items in bold face rcfcr 10 lcadcrrhip srylcr ilcms in rlulrcs rrlcr lo corespotding erlilcal tlieozy
~
- Trnnskmndtional Leadership = TF
Leaderrhip
TA
---.-. . Transactional
Direcrivc Leadership
DR
=
=
250
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25 1
ARONSON
Transactional Leadership
As was indicated in the section on leadership, this
style involves a quid pro quo exchange between leader
and follower. It thus corresponds to utilitarian ethical
theory which states that decisions are moral if they lead
to the greatest degree of benefit for all concerned. This
category of teleological ethics is therefore concerned
only with the consequences of actions.
It was stated earlier that various levels of transactional leadership exist. In the ethical leadership zone
252
ARONSON
environmental analysis, vision creation, and implementation strategies in a spirit of openness and cooperation;
and (d) individualized consideration is altruistic in
nature, manifested by giving emphasis to followers personal growth through coaching and mentoring (Bass &
Steidlmeier, 1999). From the perspective of House and
Howell ( 1992). the socialized charismatic leader is guided by the values of a collective orientation, egalitarianism, refraining from taking advantage of others, and
influencing followers by developing and empowering
them.
On the low moral development side (refer to horizontal axis TF on the left side of Figure 1) may be found
the arti3cial transformational leaders. These arc the
egotistical leaders that may be prone to narcissism, who
may exhibit exaggerated behaviour and a concern only
for personal gain (Conger & Kanungo, 1998). The pseudo-transformational leaders described by Bass and Steidlmeier (1999) also exhibit the behaviours of idealized
influence, inspirational motivation, intellectual stimulation, and individualized consideration referred to above,
but they operate from a set of values totally distinct from
those of their authentic counterparts. Pseudo-transformational leaders care about their own personal power and
status, often depending on conspiracies and excuses, and
resorting to distortion of truth and manipulation of followers for their own ends. They also tend to be concerned with perpetuating followers dependence on
them. Persorialized charismatic leaders (House & Howell, 1992) are driven by self-aggrandization and nonegalitarianism, and will not hesitate to take advantage of
others. When these leaders assume positions of authority in organizations, there is serious risk that the power
that is now theirs to wield will be used essentially to further their own interest at the expense of their subordinates and the organization itself.
In summary, this model of ethical leadership provides an overall view of diverse leadership styles and the
manner in which they manifest the values stemming
from the various ethical perspectives. As was seen, ethical leadership may be exhibited by an entire range of
leadership styles, provided they are located in the ethical
leadership zone. The same types of leadership located in
the low moral development area will display quite different characteristics.
Transfomiational Leadership
According to Ciulla (1 995), the transforming leadership theory proposed by Burns (1978) is based on a set
of ethical assumptions pertaining to the leader-follower
relationship. She states that
Burns theory is clearly a prescriptive one about the
nature of morally good leadership.. .. transforming
leaders have very strong values. They do not water
down their values and moral ideals by consensus, but
rather they elevate people.. . . Transforming leadership is concerned with end-values, such as liberty,
justice and equality. Transforming leaders raise their
followers up through various stages of morality and
need. They turn their followers into leaders and the
leader becomes a moral agent. (p. 15)
Clearly then, true charismatic/transformational
leaders operate out of a genuine concern for others. They
are ethical by nature and appear to be guided by a set of
moral values that are highly principled and concerned
with doing the right thing. They thus appear to make ethical decisions from a deontological perspective.
The ethical leadership zone therefore includes genuine charismatic/transformationalleaders (refer to horizontal axis TF on the right side of Figure 1). According
to Kanungo and Mendonca (1996), these leaders demonstrate ethical leadership when they are guided by altruistic values, attempt to influence subordinates through
empowerment rather than control, and strive to develop
their own virtues. They are sincerely motivated by a consideration for others often at significant personal sacrifice, and lead subordinates toward the attainment of
objectives that are in the interest of the entire organization, its members, and the outside community. Authentic
transformational leaders are viewed by Bass and Steidlmeier (1999) as often placing the interests of others
before their own personal concerns. The patterns of
behaviour identified by Bass and Avolio (1994), and
described earlier, may now be seen in terms of the values
by which authentic transformational leaders are guided:
(a) charisma or idealized influence is characterized by
morally uplifting values in developing a vision for a better future, exuding confidence, and setting high standards for emulation; (b) inspirational motivation emphasizes the best qualities in people-concord, generosity,
and good deeds; (c) intellectual stimulation refers to
Conclusions
It appears evident that there is a growing demand for
the business community to conduct its affairs with
greater regard for ethical considerations and that it is
essential for corporate leaders to earn the confidence and
loyalty of their followers and the esteem of society at
253
AKONSON
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