Business Ethics: Perspectives, Management and Issues 1536183768, 9781536183764

Table of contents :
Contents
Preface
Chapter 1
Business Ethics: Introduction and Overview
Understanding Ethical Perspectives
Management and Ethics
Issues in Business Ethics
The Responsibility for Being Ethical Lies within each Person and is an Individual Obligation as Important as Obeying the Law
The Role of Academic Leaders and Faculties Includes Teaching Correct Principles and Being Personal Examples of Those Principles
The Role of Academic Accrediting Bodies Includes Establishing Justifiable Standards for Teaching Business Ethics, rather than Simply Giving that Responsibility Token Emphasis
The Moral Responsibility of Individuals and Organizations is to Pursue Socially Responsible Solutions to Present and Future Societal Problems
The Obligation of Leaders of Governments at All Levels is to Provide Incentives for Individuals and Organizations to Address and Mitigate Social Problems
The Solutions to Present and Future Social Problems can be Addressed only by Individuals and Organizations Expanding Their Efforts to Partner with Others in
Summary of Remaining Chapters
Chapter 2 – Leadership Morality – A Transformative Philosophy Approach
Chapter 3 – Ethics of the Individual Leader
Chapter 4 – The Leader as a Friend
Chapter 5 – The Ethic of Self-Interest in the Modern World – Understanding Duties Owed to Stakeholders
Chapter 6 – Ethical Stewardship and Transcendent Leadership
Chapter 7 – Tragedies in Business Education
Chapter 8 - Ethical Challenges in Human Resource Management – Understanding the Complexities
Chapter 9 – Transformative Ethics and Competitive Advantage
Chapter 10 – Responses to Religious Identity Threat in Thick and Thin Cultures
Chapter 11 – Ethical Foundations of Spiritual Intelligence
Chapter 12 – On Being, Doing, and Becoming – The Ethic of Excellence
Conclusion
References
Chapter 2
Leadership Morality: A Transformative Philosophy Approach
Understanding Moral Behavior
Transformative Philosophy
Moral Applications and Practical Significance
Committed to Change
Responsive to Customers
Learning-Focused
Externally Adaptive
Internally Integrated
Ethically Virtuous
Dynamically Capable
Consistently Focused
Contributions of the Paper
Conclusion
References
Chapter 3
Ethics of the Individual Leader: Keys to Personal Preparation
Challenges Facing Leaders
Articulating Organizational Purpose
Recognizing Contextual Priorities
Understanding Psychological Contracts
Assessing Ethical Consequences
Modifying Personal Responses
Recognizing Optimal Possibilities
Communicating the Decision-Making Rationale
Twelve Critical Ethical Qualities
Telling the Truth
Keeping Commitments
Thinking Long-Term
Honoring Relationships
Evaluating Opportunities
Respecting Individual Rights
Encouraging Self-Development
Modeling the Way
Challenging the Status Quo
Discovering New Truths
Pursuing Innovation
Touching Hearts
Contributions of This Chapter
Describes Seven Significant Challenges That Leaders Must Address in Order to Be Perceived as Ethical
Identifies Twelve Qualities That Ethical Leaders Can Incorporate to Demonstrate That They Are Ethical
Clarifies the Importance of a Holistic Approach to Understanding the Complex Nature of Leadership and Its Ethical Scope
Affirms the Importance of Recognizing the Complex Impacts of Leadership Decisions on Stakeholders and the Obligation of Ethical Leaders to Address Those Impacts
Explains Why Leaders Who Think Short-Term and Who Apply Many of the Common Practices of So-Called “Modern Leadership” Methods Have Been So Consistently Ineffective
Conclusion
References
Chapter 4
The Leader as a Friend: The Ethic of Friendship and the Psychological Contract
The Nature of Friendship
Friendship of Utility
Accidental Friendship
Virtuous Friendship
Harmonious Friendship
Spiritual Friendship
Charitable Friendship
Carnal Friendship
Friendship from Common Ethical Perspectives
Clarifying an Ethic of Friendship
The Psychological Contract and the Ethic of Friendship
The Ethic of Friendship in the Work Place
Ten Recommendations for Adopting the Ethic of Friendship
Identify How You Would Wish To Be Treated As an Employee in Your Own Organization
Acknowledge the Importance Of Mutually Beneficial Partnerships
Admit the Significance of Trust In Virtually Every Relationship
Recognize the Value of a Leader’s Example in Influencing Others
Assess your Own Personal Qualities and Evaluate Your Virtues and Vulnerabilities as a Friend
Invest in Discovering the Importance of Emotional Intelligence in Improving Relationships
Conduct Empirical Research about the Benefits of Creating a High-Performance Work Culture
Experiment by Creating a Supportive Relationship with Other Associates at Your Work Place
Examine the Ten Factors That Make Up the Definition of the Ethic of Friendship and Study How They Apply For You
Explore Within Your Mind, Your Heart, and Your Conscience What You Think You Ought To Do in Applying the Ethic of Friendship
Conclusion
References
Chapter 5
The Ethic of Self-Interest: Duties Owed to Stakeholders
The Ethic of Self-Interest
Enlightened Self-Interest
Ethical Egoism
Hedonism
Individualism
Altruism
Rational Egoism
The Hosmer Decision-Making Model
Guidelines for Duties to Stakeholders
Principals and Shareholders
Employee Partners
Vendors and Suppliers
Customers
Society
Reexamine Perspective about the Short-Term and Long-Term Goals of an Organization
Recognize that Long-Term Wealth Creation Can Be Jeopardized By Short-Term Thinking
Research the Consequences of Short-Term Actions on Long-Term Wealth
Appreciate the Wisdom of Hosmer’s Decision-Making Model in Assessing Outcomes
Acknowledge the Interconnectedness of Stakeholders and Their Common Interests
Understand the Importance of Communicating with Other Stakeholder’s About Priorities
Conclusion
What Seems Like Altruism Is Often Self-Interest
The Failure To Examine the Consequences of Actions is Against Self-Interest
Benefiting Society Ultimately is a Moral Duty of Self-Interest
Partial Information About Consequences Often Leads to Failure and is Against Self-Interest
Stakeholders May Compete For Their Own Self-Interests Recognize the Importance of Long-Term Value Creation
References
Chapter 6
Ethical Stewardship and Transcendent Leadership
Understanding Stewardship
Transcendence and Its Importance
Transcendent Leadership
Comparison of Ethical Stewardship and Transcendent Leadership
Eight Principles for Leaders
Five Contributions of this Chapter
Conclusion
References
Chapter 7
Eight Tragedies in Business Education: The Issues are Ethical
The Current Status of Business Schools
Tragedies in Business Education
Writing is Not Considered An Important Graduate Business Student Priority
Publishing is Not Valued By Many Business Faculty as Important For Teaching Effectiveness
Plagiarism and Academic Dishonesty Are Both Tolerated and Ignored
Adjuncts, Temporary, and Part-Time Faculty Now Teach More Than Half of All Classes
New Faculty Lack Adequate Understanding of Teaching Concepts and Receive No Training
Faculty Give Lip Service to Business Concepts but Fail to Practice What They Teach
Business Schools Largely Ignore Their Obligation to Address World Problems
Ethics and Values Are Not Taught Effectively At the Majority of Business Schools
Recommendations for Improvement
Discontinue Hiring Adjuncts to Teach Graduate Courses
Teach Business Ethics as a Stand-Alone Course for All Business Students
Require Business Students to Demonstrate Research and Writing Skills as a Prerequisite for Program Entrance
Expand the Focus on Teaching Methods and on Improving Teaching Effectiveness
Incorporate Service Learning Into the B-School Curriculum at All Levels
Hold All Full-Time Faculty Accountable to Publish in Their Fields to Retain Accreditation
Increase B-School Partnerships with Local Businesses, Churches, Ngos, and Local Government
Expand the Political Role of B-Schools In Lobbying For State and Federal Dollars
Integrate B-Schools with STEM Programs and Other Academic Departments
Conclusion
References
Chapter 8
Ethical Challenges in Human Resource Management
Key Roles in Human Resources
Ethical Duties and Human Resource Roles
Eight Guiding Ethical Principles
Contributions of the Chapter
Conclusion
References
Chapter 9
Transformative Ethics and Competitive Advantage
Transformative Ethics and Its Importance
Competitive Advantage and Its Ethical Elements
Ethic of Self-Interest
Virtue Ethics
Ethic of Religious Injunction
Ethic of Government Regulation
Utilitarian Ethics
Ethic of Universal Rules
Ethic of Universal Rights
Ethic of Economic Efficiency
Ethic of Distributive Justice
Ethic of Contributing Liberty
Ethic of Self-Actualization
The Ethic of Care
Transformative Ethics
Benefits of a Transformative Ethics Perspective
TE Increases Understanding of Others’ Ethical Perspectives
TE Provides a More Complete Framework For Examining Problems
TE Clarifies the Importance of Explaining the Rationale for Decisions
TE Enhances Self-Awareness and the Importance of Compassion
TE Affirms the Importance of Open Communication and Transparency
Conclusion
References
Chapter 10
Responses to Religious Identity Threat in Thick and Thin Cultures
Abstract
Theoretical Groundwork
Religious Identity Threat
Thick and Thin Organizational Cultures
Responses to Religious Identity Threat
Individual Expressions
Identity Protection Response: Concealment
Identity Restructuring Response: Importance Change
Relational Interactions
Identity Protection Response: Derogation
Identity Restructuring Response: Identity Exit
Collective Associations
Identity Protection Response: Positive Distinctiveness
Identity Restructuring Response: Meaning Change
Conclusion
References
Chapter 11
The Ethical Foundations of Spiritual Intelligence
Defining Spiritual Intelligence
Covey’s Four Intelligences
Physical Intelligence
Mental Intelligence
Emotional Intelligence
Spiritual Intelligence
Transformative Ethics and Spiritual Intelligence
The Challenge of Ethical Dilemmas
What Are The Net, Net Consequences?
What Are My Core Obligations?
What Will Work In The World As It Is?
Who Are We?
What Can I Live With?
Resolving Ethical and Moral Conflicts
Maintain a Long-Term Perspective in Evaluating Alternatives
Reflect on Your Most Important Core Values in Assessing Options
Be Open and Transparent in Communications with Stakeholders
When Evaluating Alternatives, Emphasize the Overriding Purpose to Be Achieved
Involve the Affected Parties in Identifying Options
Obtain as Much Information about the Consequences of Options as Possible
Identify What Can Be Done to Reduce the Negative Impacts of the Preferred Choice
Examine How and Why the Dilemma Occurred and Its Root Causes
Develop a Realistic Plan of Action to Prevent Similar Problems in the Future
Create Systems and Structures That Address the Dilemma and Its Causes
Conclusion
References
Chapter 12
On Being, Doing, and Becoming: The Ethic of Excellence
Ethics and Excellence
The Three Personal States
On Being
On Doing
On Becoming
The Challenge
References
Bibliography
About the Editors
Index
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Citation preview

BUSINESS ISSUES, COMPETITION AND ENTREPRENEURSHIP

BUSINESS ETHICS PERSPECTIVES, MANAGEMENT AND ISSUES

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BUSINESS ISSUES, COMPETITION AND ENTREPRENEURSHIP Additional books and e-books in this series can be found on Nova’s website under the Series tab.

BUSINESS ISSUES, COMPETITION AND ENTREPRENEURSHIP

BUSINESS ETHICS PERSPECTIVES, MANAGEMENT AND ISSUES

CAM CALDWELL AND

VERL ANDERSON EDITORS

Copyright © 2020 by Nova Science Publishers, Inc. All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means: electronic, electrostatic, magnetic, tape, mechanical photocopying, recording or otherwise without the written permission of the Publisher. We have partnered with Copyright Clearance Center to make it easy for you to obtain permissions to reuse content from this publication. Simply navigate to this publication’s page on Nova’s website and locate the “Get Permission” button below the title description. This button is linked directly to the title’s permission page on copyright.com. Alternatively, you can visit copyright.com and search by title, ISBN, or ISSN. For further questions about using the service on copyright.com, please contact: Copyright Clearance Center Phone: +1-(978) 750-8400 Fax: +1-(978) 750-4470

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NOTICE TO THE READER The Publisher has taken reasonable care in the preparation of this book, but makes no expressed or implied warranty of any kind and assumes no responsibility for any errors or omissions. No liability is assumed for incidental or consequential damages in connection with or arising out of information contained in this book. The Publisher shall not be liable for any special, consequential, or exemplary damages resulting, in whole or in part, from the readers’ use of, or reliance upon, this material. Any parts of this book based on government reports are so indicated and copyright is claimed for those parts to the extent applicable to compilations of such works. Independent verification should be sought for any data, advice or recommendations contained in this book. In addition, no responsibility is assumed by the Publisher for any injury and/or damage to persons or property arising from any methods, products, instructions, ideas or otherwise contained in this publication. This publication is designed to provide accurate and authoritative information with regard to the subject matter covered herein. It is sold with the clear understanding that the Publisher is not engaged in rendering legal or any other professional services. If legal or any other expert assistance is required, the services of a competent person should be sought. FROM A DECLARATION OF PARTICIPANTS JOINTLY ADOPTED BY A COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND A COMMITTEE OF PUBLISHERS. Additional color graphics may be available in the e-book version of this book.

Library of Congress Cataloging-in-Publication Data Names: Caldwell, Cam, editor. | Anderson, Verl A. (Verl Allen) editor. Title: Business ethics: perspectives, management and issues / [edited by] Cam Caldwell, Verl Anderson. Description: Hauppauge : Nova Science Publishers, 2020. | Series: Business issues, competition and entrepreneurship | Includes bibliographical references and index. | Summary: "Recent evidence readily confirms that ethical conduct in human interaction has declined in the context of business, but also in virtually every phase of life. An alarming number of government leaders at all levels have demonstrated by their conduct that their primary goal is the pursuit of self-interest for themselves, their party, and their constituents - regardless of whether the choices they make are in the long-term best interests of those whom they are obligated to serve. Academic institutions and their leaders similarly seem to be either tied to past assumptions and traditions that seem, or blatantly out of touch with the needs of their students and the communities that they serve. Increasingly, college and university academic programs are being taught by part-time and temporary faculty who are paid less than their elementary and high school counterparts who lack their educational preparation, level of knowledge, or responsibility in preparing students for their chosen careers. Non-governmental organizations also struggle to earn the respect of the public, and their trustworthiness has been called into question as chief executive officers and staff receive high salaries, but lack accountability for achieving results or acting with integrity. Those who work in the media are as a group no longer trusted to provide an objective and unbiased assessment of the news. Even religious institutions are under attack and their leaders are being asked to be accountable to the standards which their doctrines advocate. Implicit in ethical conduct is the responsibility to identify the far goals of human achievement - rather than short-term interests that undermine long-term value creation and outcomes that best serve society. Abraham Maslow has wisely noted that the pursuit of efficiency must be evaluated in terms of the specific goals intended to be achieved, but the ramifications of individual and collective actions often seem to be out of focus, misdirected, and short-sighted"-- Provided by publisher. Identifiers: LCCN 2020039697 (print) | LCCN 2020039698 (ebook) | ISBN 9781536183764 (hardcover) | ISBN 9781536186598 (adobe pdf) Subjects: LCSH: Business ethics. Classification: LCC HF5387 .B8716 2020 (print) | LCC HF5387 (ebook) | DDC 174/.4--dc23 LC record available at https://lccn.loc.gov/2020039697 LC ebook record available at https://lccn.loc.gov/2020039698

Published by Nova Science Publishers, Inc. † New York

CONTENTS Preface

vii

Chapter 1

Business Ethics: Introduction and Overview Cam Caldwell and Verl Anderson

Chapter 2

Leadership Morality: A Transformative Philosophy Approach Cam Caldwell and Verl Anderson

27

Ethics of the Individual Leader: Keys to Personal Preparation Cam Caldwell and Verl Anderson

61

The Leader as a Friend: The Ethic of Friendship and the Psychological Contract Cam Caldwell and Verl Anderson

87

Chapter 3

Chapter 4

Chapter 5

Chapter 6

The Ethic of Self-Interest: Duties Owed to Stakeholders Cam Caldwell and Verl Anderson Ethical Stewardship and Transcendent Leadership Cam Caldwell, Charles Goodall and Verl Anderson

1

131 159

vi Chapter 7

Chapter 8

Contents Eight Tragedies in Business Education: The Issues are Ethical Cam Caldwell and Verl Anderson

191

Ethical Challenges in Human Resource Management Cam Caldwell and Verl Anderson

221

Chapter 9

Transformative Ethics and Competitive Advantage Cam Caldwell and Verl Anderson

Chapter 10

Responses to Religious Identity Threat in Thick and Thin Cultures Morela Hernandez, Hana Johnson and Andy Wicks

Chapter 11

The Ethical Foundations of Spiritual Intelligence Cam Caldwell, Charles Goodall and Verl Anderson

Chapter 12

On Being, Doing, and Becoming: The Ethic of Excellence Cam Caldwell and Verl Anderson

249

277

309

341

Bibliography

371

About the Editors

393

Index

395

PREFACE Recent evidence readily confirms that ethical conduct in human interaction has declined in the context of business, but also in virtually every phase of life. An alarming number of government leaders at all levels have demonstrated by their conduct that their primary goal is the pursuit of selfinterest for themselves, their party, and their constituents – regardless of whether the choices they make are in the long-term best interests of those whom they are obligated to serve. Academic institutions and their leaders similarly seem to be either tied to past assumptions and traditions that seem, or blatantly out of touch with the needs of their students and the communities that they serve. Increasingly, college and university academic programs are being taught by part-time and temporary faculty who are paid less than their elementary and high school counterparts who lack their educational preparation, level of knowledge, or responsibility in preparing students for their chosen careers. Non-governmental organizations also struggle to earn the respect of the public, and their trustworthiness has been called into question as chief executive officers and staff receive high salaries, but lack accountability for achieving results or acting with integrity. Those who work in the media are as a group no longer trusted to provide an objective and unbiased assessment of the news. Even religious institutions are under attack and their leaders are being asked to be accountable to the standards which their doctrines advocate.

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Implicit in ethical conduct is the responsibility to identify the far goals of human achievement – rather than short-term interests that undermine long-term value creation and outcomes that best serve society. Abraham Maslow has wisely noted that the pursuit of efficiency must be evaluated in terms of the specific goals intended to be achieved, but the ramifications of individual and collective actions often seem to be out of focus, misdirected, and short-sighted. The purpose of this book is to identify key ethics-related issues facing individuals and organizations in the 21st century, and to offer recommendations and encouragement to those who choose to raise the bar for their standards of conduct. This volume combines established thinking about ethics and morality with new insights and ethical perspectives that have never before been addressed by traditional business ethics. The authors are comfortable in challenging the status quo and failures of so many leaders and organizations who have been unable to earn the trust of the general public. In criticizing the failures of institutions and their leaders, this book is also a plea to those who lead to rethink the standards and criteria which they have adopted about duties that they owe to others. Many of the insights contained within this book invite readers to begin from within themselves by examining their identities and their assumptions about their ethical beliefs. The evidence about personal ethical standards suggest that individuals rarely make conscious decisions regarding their own actions, and fall into patterns that they later acknowledge to be questionable and less than ideal. This book challenges the way that leaders make decisions about moral conduct and asks those who read this book to reassess the impacts of the choices that they make. Finally, this volume encourages readers to discover the best version of themselves. Only when people strive to achieve their highest potential are those individuals likely to optimally benefit others and create a better world. Ultimately, ethics is about each person’s responsibility to constantly improve and to help others along the way. We trust that this book will challenge the thinking of its readers, that it will become the source of dialogue and even possible disagreement about duties and obligations. Our intention is that this book will ultimately inspire

Preface

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individuals to think more clearly about the way that they interact with others and how they can best fulfill their highest purpose in life. Cam Caldwell Verl Anderson

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 1

BUSINESS ETHICS: INTRODUCTION AND OVERVIEW Cam Caldwell1,* and Verl Anderson2 1

American University of the Emirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

In a world where trust in organizations and in their leaders has been a struggle to maintain, the blame lies in many corners. The inability of leaders, managers, and supervisors to be perceived as worthy of follower commitment is certainly not a new issue1 – but that failure has profound implications in an economy dependent upon high trust and employee engagement for organizations to succeed 2 . As leaders and supervisors interact with their employees, their combined ability to generate followership and loyalty is correlated with their capacity to be perceived as

Corresponding Author’s E-mail: [email protected]. Chester Barnard noted that leaders and organizations struggled to earn the followership of others in Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA: Harvard College. 2 The problems facing organizations lie on the failures of managers and supervisors according to a comprehensive study by Gallup. See Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. * 1

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trustworthy3. Trustworthiness is dependent upon the character, integrity, and honesty which leaders and supervisors demonstrate 4 – and the growing evidence confirms that leaders and supervisors are perceived as lacking in those same qualities5.

In this book about business ethics, we have sought to provide leaders of business, government, and academia with insights about the importance of dealing with others with integrity and with a commitment to the long-term best interests of society. It is not news that we live in a world that others have decried for failing to uphold the values of honesty, good will, and mutual respect6. The consequences of these failures are that the leaders of business, government, the media, and non-governmental entities are less trusted than in the past 7 and are, therefore, ineffective at leading their organizations8. The evidence is abundantly clear: leaders and organizations Mayer, R. C., Davis, J. H. & Schoorman, F. D., (1995). “An Integrative Model of Organizational Trust.” Academy of Management Review, Vol. 2o, Iss. 3, pp. 709-734. 4 Ibid. 5 Clifton, J. & Harter, J., (2019), op. cit. See also Harrington, M., (2017). “Survey: People’s Trust has Declined in Business, Media, Government, and NGOs.” Harvard Business Review, January 16, 2017 and found online on March 29, 2020 at https://hbr.org/2017/01/surveypeoples-trust-has-declined-in-business-media-government-and-ngos. 6 For example, see Kouzes, J. M. & Posner, B. Z., (2011). Credibility: How Leaders Gain and Lose It, Why People Demand It (2nd ed.). San Francisco, CA: Jossey-Bass and Callahan, D., (2004). The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead. Orlando, FL: Harcourt. 7 Harrington, M., (2017), op. cit. 8 Clifton, J. & Harter, J., (2019), op. cit. 3

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must become more ethical if they wish to deserve the trust of those whom they serve. Despite the growing evidence about the downsides of blatant dishonesty and subtle self-interest, leaders of all types have failed to acknowledge the importance of ethical conduct and virtuous behavior as keys to interpersonal success and organizational flourishing.

In this introductory chapter, we begin by explaining the importance of business ethics perspectives, management, and issues that play a major role in today’s modern business world. We identify the subjective nature of ethical perspectives and the impact of those individual perspectives on trust and commitment. We then identify why ethical standards are so important in the management of organizational tasks, and summarize critical issues that make understanding business ethics so important. Following that overview, we then present a brief summary of the contents of each of the remaining chapters of this book for readers who may have a specific interest in the business ethics topics contained herein. This chapter then concludes with a challenge to readers to examine their own ethical perspectives and the implications of those perspectives on others with whom they associate.

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UNDERSTANDING ETHICAL PERSPECTIVES

According to the most current academic research, there are no fewer than sixteen different ethical perspectives in Business Ethics alone.9 Ethical perspectives vary because every person views the world through her or his own mediating lens This lens is a subjectively determined means by which each person evaluates others and draws inferences about the actions and behaviors of others10. Figure 1 is a representation of how that assessment of the trustworthiness is determined – an inference drawn based upon the complex factors by which each individual establishes a relationship with others11.

Al Lawati, H. A. H., Sayed, R. T., and Caldwell, C., (2019). “Transformative Ethics and Moving Toward ‘Greatness.’ – Problems and Realities.” Journal of Values-Based Leadership. Volume XII, Iss. 1, Winter/Spring Edition, 10 Gullett, J., Canuto-Carranco, M., Brister, M., Turner, S., and Caldwell, C. (2009). “The BuyerSupplier Relationship: An Integrative Model of Ethics and Trust.” Journal of Business Ethics, Vol. 90, pp. 329-341 11 Caldwell, C., and Hayes, L., (2007). “Leadership, Trustworthiness, and the Mediating Lens.” Journal of Management Development. Vol. 26, Iss. 3, pp. 261-278 9

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Figure 1. The Mediating Lens and the Trust Decision.

The personal decision to believe that another person is ethical is based upon whether the perceiver believes that the other individual’s ethical assumptions match the criteria that the perceiver defines as “ethical.” Because these criteria which define ethical behavior are dependent upon a variety of ethical assumptions and principles, the mediating lens of every person is uniquely different and becomes the basis for assessing whether another person is ethical12. Because this decision is subjectively determined, two individuals may observe the same behavior yet arrive at markedly different conclusions as to whether the observed individual is trustworthy and ethical. More information about the nature of the different ethical perspectives associated with an ethical assessment and the mediating lens is found in Chapter 3 of this book.

12

This model was first developed and explained in Caldwell, C. and Clapham, S., (2003). “Organizational Trustworthiness: An International Perspective.” Journal of Business Ethics, Part 1, Vol. 47, Iss. 4, pp. 349-364

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What is universally understood is that the ability to trust another person is closely associated with the perceptions held about whether that person is believed to be honest, ethical, and consistent in her/his actions and behaviors13. The willingness to cooperate and to be personally committed to that person is ultimately a subjective decision and the degree of commitment demonstrated by the individual who trusts is measured on a compliancecommitment continuum which is based upon the degree to which the perceiver believes that the other party is trustworthy and ethical14.

13 14

Mayer, R. C., Davis, J. H. & Schoorman, F. D., (1995), op. cit. Ibid.

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The evidence is also clear that leaders in modern organizations depend upon their employees to be fully engaged and committed to organization objectives for their organizations to be optimally successful in today’s highly competitive world 15 . Accordingly, those leaders who are able to demonstrate that they are ethical and trustworthy are much more successful at earning others’ trust, loyalty, and commitment – thereby benefiting their organizations and their competitive advantage16.

MANAGEMENT AND ETHICS To many, the linking of “management” and “ethics” is an ironic oxymoron of the highest order. The failures of managers and leaders have been chronicled in the public press, in academic journals, and in thousands of books. Labeled a “moral abhorrence” and a “crisis,” the inability of managers and leaders to act with integrity has been a tragedy of human interaction and has led to the decline in moral values, the deterioration of respect in which leaders are held, and the distrust in leaders, agencies, and organizations17. For more than four decades managers and leaders have collectively struggled to earn the trust and respect of the public . . . yet academic institutions, accreditation bodies, and professional associations have failed to adequately respond to the public’s low opinion of those who lead. Part of the problem lies in the reality that people view ethical duties owed so differently . . . but much of the problem lies in the unfortunate belief that what is legal is therefore ethical and acceptable.

15

Clifton, J. & Harter, J., (2019), op. cit. Caldwell, C., and Ndalamba, K. K., (2017), op. cit. 17 See Boling, T. E., (1978). “The Management Ethics “Crisis”: An Organizational Perspective.” Academy of Management Review, Vol. 3, Iss. 2, pp. 360-365. 16

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To many managers and leaders, the apparent concern is “Will I get caught?” rather than “What is the right thing to do?” The tolerance for leaders with questionable values has grown to the point where an “acceptable” leader to many is one who is known to have violated standards of decency and good conduct, but whose performance has nonetheless been perceived as beneficial to one’s self-interest. Ironically, what is in one’s short-term self-interest is often harmful to self, to others, and to society over the long term. The critical question posed by Harvard University’s Clayton M. Christensen, “How will you measure your life? 18 ” is at the heart of business ethics, personal conduct, and long-term satisfaction in a world that has seen ethical standards deteriorate.

18

Christensen’s question was the basis for a presentation to graduates of the Harvard Business School, a Harvard Business Review article, and a book he later co-authored. See Christensen, C. M., (2010). “How Will You Measure Your Life?” Harvard Business Review, July/August and found online on April 6, 2020 at https://hbr.org/2010/07/how-will-you-measure-yourlife,

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The University of Michigan’s LaRue Hosmer has noted that leaders have an obligation to assess the implications of their management decisions with a full understanding of the impacts of those decisions on stakeholders. Hosmer has emphasized that by explaining the rational model for decisionmaking and communicating the basis for decisions, leaders are able to increase trust by honoring their ethical obligations. Leaders have an obligation to assess the implications of their management decisions with a full understanding of the impacts of those decisions on stakeholders. By explaining the rational model for decision-making and communicating the basis for decisions, leaders are able to increase trust by honoring their ethical obligations

Unfortunately, many leaders 1) fail to understand the moral implications and impacts of decisions which they make, 2) believe that information shared is not in their interests, 3) focus primarily on the short-term economic implications of their actions, and 4) choose not to communicate the ethical, economic, and legal ramifications of the decisions19. The deterioration in stakeholder trust is a corollary of these actions. We suggest that the obligation of leaders and managers demands that the basis for decisions be carefully evaluated by those who act in decisionmaking roles, and that those decision-makers have an absolute obligation to communicate the rationale for their decisions to those with whom they labor 20 . The failure to address the implications of decisions and to

19

Hosmer, L. T., (2010). The Ethics of Management (7th ed.). Boston, MA: McGraw-Hill Education and Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379403 20 Ibid.

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communicate theit rationale applies to organizations of all types – and has characterized the decision-making process of most leaders..21.

ISSUES IN BUSINESS ETHICS The practical solution to improving the ethical behavior of business professionals is deep-seated and comprehensive. The failure to honor this obligation is a violation of the implied social contract owed by leaders in organizations and is the root cause of much of the distrust that has resulted toward those who lead22.. No simplistic panaceas can address the interrelated moral and ethical issues that have infected society at a comprehensive level.23 For that reason, there are multifaceted issues that must be addressed that can begin to reverse the systemic factors that plague society and the dysfunctions that have undermined individuals and institutions. The following are six factors that must be a part of the efforts to improve the standard of behavior of organizational leaders of all types.

21

See Barnard, C. I., (1938), op. cit. Callahan, D., (2004). The Cheating Culture: Why More Americans are Doing Wrong to Get Ahead. Orlando, FL: Harcourt Books. 23 Ibid. 22

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The Responsibility for Being Ethical Lies within each Person and is an Individual Obligation as Important as Obeying the Law Personal accountability and the willingness of each leader, manager, and supervisor is required if organizations are to be able to restore the confidence in leaders and organizations that no longer exists. That accountability will only be acknowledged if and when public leaders of all types band together to formally address the need for ethical reform.

The Role of Academic Leaders and Faculties Includes Teaching Correct Principles and Being Personal Examples of Those Principles Academic institutions have been criticized broadly for their lack of success in teaching students about ethical values and in their failure to make teaching ethics a priority in their curricula. Deans, college and university presidents, and faculty members have been in collective denial about their own responsibility to make ethical principles an important part of academic learning. In addition, most college and university faculty have failed to become active personal examples for their students. Until those who administer academic programs and teach in the classroom change that

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behavior and model the values needed to change society, there is little likelihood that their students will follow their examples.

The Role of Academic Accrediting Bodies Includes Establishing Justifiable Standards for Teaching Business Ethics, rather than Simply Giving that Responsibility Token Emphasis Accrediting institutions have consistently ducked holding member institutions accountable for teaching ethical principles. The Association to Advance Collegiate Schools of Business (AACSB) has perpetuated the myth that ethics can be taught successfully across the academic curriculum and refuse to acknowledge that academic dishonesty may be a problem at their schools24 – despite the fact that business students are among the least ethical of all college students. Unil the AACSB acknowledges that business schools must effectively teach ethical values, the status quo is likely to continue -to the detriment of society.

24

Swanson, D. L. & Fisher, D. G., (2010). Toward Assessing Business Ethics Education. Charlotte, NC: Information Age Publishing and Swanson, D. L. & Fisher, D. G., (2008). Advancing Business Ethics Education. Charlotte, NC: Information Age Publishing

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The Moral Responsibility of Individuals and Organizations is to Pursue Socially Responsible Solutions to Present and Future Societal Problems Social responsibility is an obligation of every organization and every person and those who refuse to be part of the solution are simply part of the problem 25 . Corporate Social Responsibility is an obligation of firms as stakeholders within their communities and the problems facing society – both current problems and those in the future – will take the collective effort of everyone26.

Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017). “Social Responsibility in a Troubled World: A Virtuous Perspective.” International Journal of Public Leadership, Vol, 13, Iss. 2, pp 98-115 26 Friedman, T. L., (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution and How It Can Renew America 2.0. New York: Penguin Books. 25

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The Obligation of Leaders of Governments at All Levels is to Provide Incentives for Individuals and Organizations to Address and Mitigate Social Problems Governmental leaders have the opportunity to not only participate in projects that mitigate social problems but have the moral obligation to provide incentives for individuals and groups who are actively involved in addressing those problems 27 . Financial incentives, grants, reductions in costs, and access to information can help address problems and assist individuals and groups to resolve critical community and national problems.

The Solutions to Present and Future Social Problems can be Addressed only by Individuals and Organizations Expanding Their Efforts to Partner with Others in the Pursuit of Shared Goals Only when this partnering effort is embraced at all levels of society will communities be successful at determining the root causes of many of these problems, addressing the solutions necessary to resolve current needs, and

27

Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017), op. cit.

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preventing the exacerbation of these problems28. Rather than passing the cost of resolving issues that onto future generations, individuals and groups must accept personal responsibility.

These six issues are unlikely to resolve all of the ethical problems facing society in the 21st century – but they are a necessary beginning that warrants collaborative attention . . . without the posturing and delays that so often occurs when change is badly needed. Until these issues are productively addressed, the problems that currently exist will simply worsen – as the current trends of the past four decades can quickly affirm.

28

Caldwell, C., (2014). “Forging Ethics-Based Business Partners: The Integration of Business, Employees, and Education.” Graziadio Business Review found online at https://gbr.pepperdine.edu/2014/04/forging-ethics-based-business-partners/.

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SUMMARY OF REMAINING CHAPTERS The following brief summaries of the remaining chapters in this book are provided below. Each summary offers an overview to the respective subjects addressed herein. Readers with a special interest may wish to focus their attention on the chapters of greatest interest to them personally, but the entire book provides important insights worthy of the readers’ thoughtful consideration.

CHAPTER 2 – LEADERSHIP MORALITY – A TRANSFORMATIVE PHILOSOPHY APPROACH The purpose of this chapter is to suggest that would-be leaders in the modern organization can benefit by adopting a new “Transformative Philosophy” to guide their moral decision-making and interpersonal relationships in today’s demanding and competitive world29. We begin this chapter by identifying essential elements of moral behavior that have practical application for leaders in the modern world. We then introduce “Transformative Philosophy” (TP) as a highly moral “hyper-norm” 30 for guiding leadership behavior. Citing evidence from leadership scholars, we identify eight factors that establish the relationship between elements of and leadership effectiveness. After identifying five contributions of this chapter for today’s leaders, we conclude with a brief summary of the value of a TP approach to moral leadership in the 21st century.

CHAPTER 3 – ETHICS OF THE INDIVIDUAL LEADER The purpose of this chapter is to identify the key ethics-related qualities that leaders must exemplify to merit the followership of those whom they Hooper, H. & Caldwell, C., (2018). “A Transformative Philosophy: Insights to Excellence) in Human Resource Management: A Transformative Approach, Caldwell, C. & Anderson, V. (Eds.) 30 Donaldson, T., & Dunfee, T. W. (1999). Ties that bind: A social contracts approach to business ethics. Harvard Business Review Press, Boston, MA. 29

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seek to lead. The chapter begins with a summary of the challenges facing leaders in obtaining others’ trust – citing leadership scholars who have addressed that objective over the past century. Following that introduction, the chapter identifies twelve critical ethics-related qualities that effective leaders incorporate to be perceived as highly ethical. After identifying five contributions of this chapter to the literature about ethical leadership, the chapter concludes with a challenge to leaders to become more aware of the ethical obligations that they owe those whom they lead and serve.

CHAPTER 4 – THE LEADER AS A FRIEND The purpose of this chapter is to address the concept of the leader as a friend to her or his employees and to view that relationship as part of an “Ethic of Friendship.”. The chapter begins by defining the nature of friendship and then presenting the factors that make up a new Ethic of Friendship. Incorporated within that introduction is an explanation of the psychological contract – the subjectively perceived assumptions of the relationship that exists and perceived duties owed between the two parties. The chapter then identifies how and why it is in an employer’s interest to adopt the Ethic of Friendship and suggests ten recommendations for adopting that ethical perspective. We conclude the chapter with a challenge to leaders to reflect on their assumptions about the employer-employee relationship in the pursuit of competitive advantage.

CHAPTER 5 – THE ETHIC OF SELF-INTEREST IN THE MODERN WORLD – UNDERSTANDING DUTIES OWED TO STAKEHOLDERS This chapter views that current trend in context with the Ethic of SelfInterest, a well-recognized ethical perspective that seems to be the underlying philosophical frame of reference for decision-making in many modern organizations. The chapter begins by defining the Ethic of Self-

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Interest and identify the perspectives and the metrics by which the Ethic of Self-Interest contributes to decision-making in today’s business context. The Ethic of Self-interest is correlated with the ethical decision-making model developed by the renowned ethics scholar, LaRue Hosmer. Hosmer’s model is explained in context with the ethical duties owed by leaders and organizations. Following that explanation, the chapter identifies six guidelines for today’s organizational leaders as they assess the duties that they owe five key stakeholders. The chapter concludes by identifying five “take-aways” that come from understanding self-interest and challenges leaders to rethink their assumptions about ethical duties and the self-interest of their firms.

CHAPTER 6 – ETHICAL STEWARDSHIP AND TRANSCENDENT LEADERSHIP The purpose of this chapter is to identify the importance of leaders being ethical stewards – a leadership commitment that rises far above common practice – by adopting the qualities of transcendent leadership. We begin by briefly summarizing the well-documented problems associated with the lack of trust in today’s leader and identify four root causes of those problems. We then define and describe what it means for a leader to be perceived as an ethical steward in his or her organization and explain the qualities of transcendent leadership. The chapter then identifies eight principles to follow for would-be leaders to incorporate into their own personal leadership style if they seek to be perceived by others as ethical stewards and transcendent leaders. We conclude by noting five important contributions that this chapter contributes to the discussion about ethical leadership and challenge readers to reexamine the assumptions which they make about leadership.

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CHAPTER 7 – TRAGEDIES IN BUSINESS EDUCATION The purpose of this chapter is to identify eight tragedies in business school practices – issues that have their roots in one or more ethical or moral problems. Business school deans, department heads, and faculty are either turning a blind eye to the moral problems of business education, simply do not know how to resolve them, or do not care to address and resolve the ethical and implications of these tragedies. Unfortunately, these tragedies have become so familiar to the academic community, the business world, and the students being taught at Business Schools that the underlying problems merit an immediate response and can no longer be ignored without those leaders and faculty members being labeled both negligent and irresponsible.

CHAPTER 8 - ETHICAL CHALLENGES IN HUMAN RESOURCE MANAGEMENT – UNDERSTANDING THE COMPLEXITIES The purpose of this chapter is to address the very difficult ethical challenges facing Human Resource Professionals (HRPs) as they struggle to motivate employees who no longer are treated as key organization assets. The chapter begins with a summary of the roles of Human Resource Management (HRM) to provide context regarding the HRP’s responsibilities to stakeholders. Those roles are then examined in context with the complex array of ethical duties and obligations associated with the HRM function – incorporating the sometimes-conflicting perspectives of the stakeholders that HRPs serve. Following that explanation, the chapter suggests eight guiding principles for HRPs to consider as they strive to address the ethical challenges associated with their roles. After identifying five contributions which the chapter makes to the HRM literature, the chapter concludes with a challenge to HRPs to incorporate those principles in order to contribute more effectively to the success of their organizations.

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CHAPTER 9 – TRANSFORMATIVE ETHICS AND COMPETITIVE ADVANTAGE The focus of this chapter is on the importance of organizational leaders adopting a relatively new ethical perspective, Transformative Ethics (TE). The chapter explains why leaders who adopt TE as the foundation for their relationships with employees are likely to create a competitive advantage for their organizations by so doing. The chapter begins by explaining both the nature of TE and the factors that enable a firm to achieve a competitive advantage. The twelve different ethical perspectives upon which TE is founded are described in terms of their contribution to increasing employee trust and commitment which are so essential in maintaining competitive advantage. The chapter identifies five benefits achieved by leaders by adopting TE as their ethical commitment and concludes with a challenge to those who lead to incorporate TE in their relationships with others.

CHAPTER 10 – RESPONSES TO RELIGIOUS IDENTITY THREAT IN THICK AND THIN CULTURES In this chapter we explore different ways that employees’ religious expressions in the face of identity threat might be shaped by their organization’s cultural context. Because organizations owe a moral obligation to their employees to protect their identities and to honor personal differences, this discussion of the impact of organizational culture on religious identity is implicitly an ethical issue.

CHAPTER 11 – ETHICAL FOUNDATIONS OF SPIRITUAL INTELLIGENCE The focus of this chapter is on examining the ethical foundations that guide personal improvement, emphasizing the importance of Spiritual Intelligence (SQ) as the guiding compass for this journey. The chapter

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defines SQ and cites a variety of sources from the scholarly literature. The chapter incorporates Stephen R. Covey’s concept of four intelligences as a framework for understanding the self-improvement process in understanding SQ. This exploration includes the identification of ethical dilemmas to be addressed to balance the normative and instrumental factors associated with self-improvement and suggests ten recommendations for resolving ethical conflicts – using SQ as a touchstone for reconciling those dilemmas. The chapter concludes with encouragement to readers as they examine their ethical obligations.

CHAPTER 12 – ON BEING, DOING, AND BECOMING – THE ETHIC OF EXCELLENCE The purpose of this chapter is to explore the importance of the rarified experiences that teach great lessons about our highest potential and to place those experiences within the framework of what Robert Solomon called “the ethic of excellence.” The chapter begins by identifying the importance of ethics as a purpose-related commitment to personal and organizational values in the quest for excellence in the lives of individuals and groups. Following that introduction, the chapter explores the three universal activities of being, doing, and becoming associated with that journey. We conclude with a challenge to individuals to prepare themselves to pursue the peak experiences that allow them to become the highest and best versions of themselves.

CONCLUSION It would be painfully naïve and even irresponsible to suggest that the perspectives, management, and issues associated with business ethics are all addressed within this volume. Notwithstanding, this book is provided as an opportunity to begin to address critical problems facing society at a time when the world has seemed to redefine its complexity and the issues upon

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which the future of the world as we have known it is based. The COVID-19 virus that has spread throughout the world has confirmed how interrelated mankind is – and how intertwined our future will be in the years ahead.

this book is provided as an opportunity to begin to address critical problems facing society at a time when the world has seemed to redefine its complexity and the issues upon which the future of the world as we have known it is based. Perhaps the opportunity to redefine the status quo and the assumptions upon which we have based the world are blessings to people of all nations, creeds, and philosophies. The changing world of the 21st century has provided profound evidence of the need to rethink what truly matters and the moral and ethical responsibilities that we owe to one another – whatever our status in life, our nationality, or our citizenship might be.

As citizens of the earth upon which we collectively dwell, we share a common reality. As such, whether as leaders or followers, whether as business or government workers, we have the opportunity to rededicate ourselves to making this world a better place. As citizens of the earth upon which we collectively dwell, we are all brothers and sisters. As such, whether as leaders or followers, whether as business or government workers, wherever we are from, we have the opportunity to rededicate ourselves to making this world a better place. The

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ethical and moral responsibilities that we owe to one another have frequently been ignored or minimized in the past. We can no longer afford to look past the moral obligations, duties, responsibilities, and opportunities that await us.

REFERENCES Al Lawati, H. A. H., Sayed, R. T. & Caldwell, C. (2019). “Transformative Ethics and Moving Toward ‘Greatness.’ – Problems and Realities.” Journal of Values-Based Leadership. Volume XII, Iss. 1, Winter/Spring Edition. Anderson, V., Ndalamba, K. K. & Caldwell, C. (2017). “Social Responsibility in a Troubled World: A Virtuous Perspective.” International Journal of Public Leadership, Vol, 13, Iss. 2, pp. 98-115. Barnard, C. I. (1938). The Functions of the Executive. Cambridge, MA: Harvard College. Boling, T. E. (1978). “The Management Ethics “Crisis”: An Organizational Perspective.” Academy of Management Review, Vol. 3, Iss. 2, pp. 360365. Caldwell, C. & Hayes, L. (2007). “Leadership, Trustworthiness, and the Mediating Lens.” Journal of Management Development., Vol. 26, Iss. 3, pp. 261-278. Caldwell, C. & Ndalamba, K. K. (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Journal of Management Development, Vol. 36, Iss. 8, pp. 1076-1086. Caldwell, C. (2014). “Forging Ethics-Based Business Partners: The Integration of Business, Employees, and Education.” Graziadio Business Review published by Pepperdine University in the April, 2014 edition found online at https://gbr.pepperdine.edu/2014/ 04/forgingethics-based-business-partners/. Caldwell, C. & Clapham, S. (2003). “Organizational Trustworthiness: An International Perspective.” Journal of Business Ethics, Part 1, Vol. 47, Iss. 4, pp. 349-364.

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Callahan, D. (2004). The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead. Orlando, FL: Harcourt. Christensen, C. M. (2010). “How Will You Measure Your Life?” Harvard Business Review, July/August and found online on April 6, 2020 at https://hbr.org/2010/07/how-will-you-measure-your-life. Clifton, J. & Harter, J. (2019). It’s the Manager. Omaha, NE: Gallup Press. Friedman, T. L. (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution and How It Can Renew America 2.0. New York: Penguin Books. Gullett, J., Canuto-Carranco, M., Brister, M., Turner, S. & Caldwell, C. (2009). “The Buyer-Supplier Relationship: An Integrative Model of Ethics and Trust.” Journal of Business Ethics, Vol. 90, Supp. 3, pp. 329341. Harrington, M. (2017). “Survey: People’s Trust has Declined in Business, Media, Government, and NGOs.” Harvard Business Review, January 16, 2017 and found online on March 29, 2020 at https://hbr.org/ 2017/01/survey-peoples-trust-has-declined-in-business-mediagovernment-and-ngos. Hayes, L., Caldwell, C., Licona, B. & Meyer, T. E. (2015). “Follower Behaviors and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285. Hosmer, L. T. (2010). The Ethics of Management (7th ed.). Boston, MA: McGraw-Hill Education and Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379-403. Kouzes, J. M. & Posner, B. Z. (2011). Credibility: How Leaders Gain and Lose It, Why People Demand It (2nd ed.). San Francisco, CA: JosseyBass. Mayer, R. C., Davis, J. H. & Schoorman, F. D. (1995). “An Integrative Model of Organizational Trust.” Academy of Management Review, Vol. 2o, Iss. 3, pp. 709-734. Pfeffer, J. (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press, and Caldwell, C.

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and Anderson, V. (Eds.). (2020). Leadership: Touching Lives. Hauppage, New York: NOVA Publishing. Swanson, D. L. & Fisher, D. G. (2010). Toward Assessing Business Ethics Education. Charlotte, NC: Information Age Publishing. Swanson, D. L. & Fisher, D. G. (2008). Advancing Business Ethics Education. Charlotte, NC: Information Age Publishing.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 2

LEADERSHIP MORALITY: A TRANSFORMATIVE PHILOSOPHY APPROACH Cam Caldwell1, and Verl Anderson2,† 1

American University of the Emirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

Despite the importance that leadership is widely acknowledged to play in the success of great organizations1, the modern leader not only struggles to earn the followership of his or her colleagues and team members2, but is often held in low regard by customers and the general public3. Alarmingly, the result is that employee engagement was reported by a Gallup4 survey to 

Corresponding Author’s Email: [email protected]. Corresponding Author’s Email: [email protected]. 1 Collins, J. (2001), Good to Great: Why Some Companies Make the Leap and Others Don’t, Harper Business, New York, NY. 2 Gallup, (2017). “American’s Confidence in Institutions Edges Up.” June 26, 2017. Accessed online on July 6, 2018 at https://news.gallup.com/poll/212840/americans -confidenceinstitutions-edges.aspx. 3 Glint, (2018). The State of Employee Engagement in 2018. HR.Com. Report accessed online on July 6, 2018 at https://info.glintinc.com/2018_03_WP_State_o f_EE_PPC. 4 Gallup, op. cit. †

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be only 15% worldwide. The failure of leaders to be perceived as trustworthy has become the primary reason why businesses fail to earn the commitment and best efforts of their employees.

Although there are no “guarantees” that those who seek to lead will be either successful or even appreciated by those whom they seek to serve5, The importance of leading with integrity has been described as a “virtuous” responsibility6 and a “covenantal” obligation7 that demands the merging of financial acumen and socially integrated standards that many leaders overlook8. The purpose of this chapter is to suggest that would-be leaders in the modern organization can benefit by adopting a new “Transformative Philosophy” to guide their moral decision-making and interpersonal relationships in today’s demanding and competitive world9. We begin this chapter by identifying what ethical leadership highly scholars have documented to be essential elements of moral behavior that have practical application for leaders in the modern world.

5

Quinn, R.E. (1996), Deep change: Discovering the Leader Within. Jossey-Bass Publishers, San Francisco, CA. 6 Cameron, K. (2011), “Responsible leadership as virtuous leadership,” Journal of Business Ethics, 98(25), pp. 1023-1036. 7 Pava, M. (2003), Leading with Meaning: Using Covenantal Leadership to Build a Better Organization, St Martin’s Press, New York, NY. 8 Paine, L. (2002), Value Shift, McGraw-Hill, New York, NY. 9 Hooper, H. & Caldwell, C., (2018). “A Transformative Philosophy: Insights to Excellence) in Human Resource Management: A Transformative Approach, Caldwell, C. & Anderson, V. (Eds.).

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We then introduce “Transformative Philosophy” (TP) as a moral guide for leadership behavior. Citing evidence from leadership scholars, we review eight factors that establish the relationship between elements of and leadership effectiveness. After identifying four contributions of this chapter for today’s leaders, we conclude with a brief summary of the value of a TP approach to moral leadership in the 21st century.

UNDERSTANDING MORAL BEHAVIOR Leadership scholars emphasize the importance of moral behavior because integrity is universally recognized as a foundation element of trust10 at both the individual11 and the organizational levels12,13. Hosmer14 provided a powerful model for moral decision-making that has been highly regarded as a means of acknowledging the responsibilities of leaders. Diagram 1 identifies the key elements of the Hosmer model. 10

Kouzes, J. M., & Posner, B. Z. (2017). A coach's guide to developing exemplary leaders: Making the most of the leadership challenge and the leadership practices inventory (LPI). John Wiley & Sons. 11 Kouzes, J. M., & Posner, B. Z. (2011). Credibility: How leaders gain and lose it, why people demand it (Vol. 203). John Wiley & Sons. 12 Hosmer, L.T. (2010), The Ethics of Management, McGraw-Hill, New York, NY. 13 Primeaux, P. S., Karri, R., & Caldwell, C. (2003). “Cultural Insights to Justice: A Theoretical Perspective through a Subjective Lens.” Journal of Business Ethics, 46(2), 187-199. 14 Hosmer, op. cit.

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Diagram 1. Hosmer Decision-Making Model; Hosmer, 2010.

As indicated by the Hosmer15 model, the moral obligation of leaders is to 1) articulate underlying normative and instrumental moral assumptions associated with a decision option; 2) acknowledge the impacts – both positive and negative – of each option on affected stakeholders; 3) define at multiple levels of analysis the nature of the moral problem; 3) address the economic, legal, and ethical implications of the moral problem; and 4) propose a moral solution that takes into account the aforementioned factors and explain why this proposed solution is superior to other alternatives. This Hosmer model is instrumentally rational in explaining why a preferred solution is both practical and superior16 but is also normatively responsible in adhering to virtuous organizational and cultural values17. The Hosmer model fits well within two commonly accepted moral perspectives. The masculine moral perspective developed by Lawrence

15

Hosmer, Op. Cit. Vogler, J., & Stephan, H. R. (2007). The European Union in global environmental governance: Leadership in the making?. International Environmental Agreements: Politics, Law and Economics, 7(4), 389-413. 17 Cameron, K. (2011), “Responsible leadership as virtuous leadership,” Journal of Business Ethics, Vol.98 No. 25, pp. 1023-1036. 16

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Kohlberg18 is a six-stage adaptation of a psychological theory developed by Piaget that consists of three levels of moral development.  



Pre-Conventional: This level consists of the motivation to avoid punishment and/or to accrue a self-serving benefit. Conventional: This level is based upon the perceived need to fit in and to conform with in-group social norms and/or to comply with the law and conform to acceptable societal legal standards. Post-Conventional: At this level, individuals seek to comply with professional or ethical standards defined by an organization in which they are members and/or to obey “universal laws” perceived to be true principles that apply to all of society.

The Kohlberg19 model is widely considered to be based upon justice, the rule of law, and social order and each of the six stages and three levels is based upon the assumption that each successive stage reflects an increased level of moral development.

18

Kohlberg, L. (1981). The Philosophy of Moral Development: Moral Stages and the Idea of Justice, New York: Harper and Row. 19 Kohlberg, Op. Cit.

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Contrasting with Kohlberg’s masculine moral model, Carol Gilligan20 proposed a feminine moral perspective based upon: Gilligan’s model is based upon three important elements. 1) the beliefs that moral duties are composed of interpersonal responsibilities and relationships; 2) the obligation of individuals to honor and care for others with whom they have an identified set of relational duties; and 3) the premise that by honoring these relational duties, individuals promote the best interests of the self, others to whom special duties and obligations exist, and the long-term needs of a society that recognizes the needs of such relationships and obligations. Both the Kohlberg’s masculine and Gilligan’s feminine moral models have their advocates – including proponents who believe that the two moral models are not, in fact, mutually exclusive21.

TRANSFORMATIVE PHILOSOPHY The concept of a Transformative Philosophy (TP) was introduced in 201822 as a framework for guiding leaders and organizations in the pursuit of virtuous results. A philosophy explains the basis for governing an organization and the underlying rationale for pursuing desired instrumental outcomes and identifying associated normative priorities23. A philosophy

Gilligan, C. (2016). In a Different Voice: Psychological Theory and Women’s Development. Boston, MA: Harvard University Press. 21 Caldwell, C., Floyd, L. A., Atkins, R., & Holzgrefe, R. (2012). “Ethical duties of organizational citizens: Obligations owed by highly committed employees.” Journal of Business Ethics, 110(3), 285-299. 22 Hooper, H. & Caldwell, C., (2018). “A Transformative Philosophy: Insights to Excellence) in Human Resource Management: A Transformative Approach, Caldwell, C. & Anderson, V. (Eds.). 23 Caldwell, C., & Hansen, M., (2010). “Trustworthiness, Governance, and Wealth Creation.” Journal of Business Ethics, 97(2), 173-188. 20

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also provides value-based standards to be adhered to in the governance process24.

Hooper and Caldwell 25 defined TP as “an ethically-based way of thinking, feeling, and interacting that earns the respect, trust, and commitment of others by effectively aligning purpose, principles, policies, people, practices, and priorities in the constant pursuit of long-term value creation and performance excellence.” This definition identifies six components of TP as a framework for adapting to change, delivering services to customers, competing within an industry, and honoring duties owed to society. The practical significance of all six of these components has profound moral and ethical implications for the leader-follower relationship. The following is a brief summary of each of these six components and their moral and ethical significance26. Transformative Philosophy incorporates the six components, identified in Diagram 2 below.

Caldwell, C., Hayes, L., Karri, R. and Bernal, P. (2008), “Ethical stewardship: the role of leadership behavior and perceived trustworthiness,” Journal of Business Ethics, 78(1/2), 153164. 25 Hooper, Op. Cit. 26 Hooper. Op. Cit. 24

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Diagram 2. A Model of Transformative Philosophy; Hooper & Caldwell, 2018.

The practical significance of all six of these components has profound moral and ethical implications for the leader-follower relationship. The following is a brief summary of each of these six components and their moral and ethical significance27. 

27

Purpose. The mission and purpose of an organization define the reason for an organization’s existence, its role in adding value to society, and its rationale for being attractive to current and/or future organization members 28 . Collins and Porras 29 found that organizations that emphasize being excellent at what they seek to do are actually more profitable than comparable companies that focus on maximizing their profitability. TP imposes upon leaders and organizations the moral obligation to add value to society, to honor duties to stakeholders, and to optimize long-term wealth creation.

Hooper. Op. Cit. Barnard, C. I. (1938), Functions of the Executive, Boston, MA: Harvard Business School Press. 29 Collins, J. & Hansen, M. (2011), Great by Choice: Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them all, New York: Harper Business. 28

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30 31

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Principles. Principles are the underlying universal values and assumptions about people and organizations upon which philosophy of governance and leadership is based. Covey, 30. TP affirms the importance of universally-acknowledged principles – consistent with both the masculine and feminine moral perspectives. Research by organizational scholars confirms that adherence to virtuous moral principles results in organizations that serve customers better, develop more effective relationships with employees, and generate greater long-term profitability compared with equivalent organizations in their industries31.

Covey, S. R. (1992). Principle centered leadership. New York: Simon and Schuster. Beer, M. (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass.

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Practices. Practices include the systems, structures, policies, and procedures that translate philosophy and to achieve governance objectives and reinforce organizational values32. For example, an organization that adopts a High-Performance Work System philosophy will implement Human Resource Management practices that reinforce the creation of a high trust organization culture, that value and develop employees throughout the organization, and that share decision-making and ownership with employee participants33.



People. The philosophy of a company regarding its assumptions about the role of its people establishes an organization culture and reinforces organizational values 34 . Treating employees as commodities, or as “Its,” is a common practice in many organizations but has been found to result in decreased employee commitment and engagement 35 . TP advocates that employees should be treated as “owners and partners”36 in their companies, or as valued “Yous”37.

Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass. 33 Caldwell, C., Floyd, L. A., Atkins, R., & Holzgrefe, R. (2012). “Ethical duties of organizational citizens: Obligations owed by highly committed employees.” Journal of Business Ethics, 110(3), 285-299. 34 Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass. 35 Gallup, (2017). “American’s Confidence in Institutions Edges Up.” June 26, 2017. Accessed online on July 6, 2018 at https://news.gallup.com/poll/212840/americans -confidenceinstitutions-edges.aspx. 36 Block, P. (2013). Stewardship: Choosing Service Over Self Interest, Oakland, CA: BerrettKoehler Publishers. 37 Buber, M. (2013). On Judaism. New York: Schocken.

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37



Perspective. Perspective includes the outlook and assumptions that organizational leaders have about the context of the world in which they compete and how people and organizations behave. For example, organization leaders that adopt an “abundance mentality” philosophy38 are far more prone to adopt a “disruptive innovation” perspective or create a “blue ocean” 39 organizational strategy, as compared to organizations that are reluctant to change and that adopt a reactive rather than a proactive perspective40.

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Priorities. Priorities confirm what matters most – those factors that are truly important as opposed to issues that are perceived as “urgent.” Priorities also identify what is valued in personal conduct and articulate the instrumental and normative criteria for honoring

Covey, S. R. (2013). The 8th habit: From effectiveness to greatness. New York: Simon and Schuster. 39 Stavros, J. M., & Caldwell, C. (2017), “Strategy From A Strengths-Based Perspective: The Soar Approach To Positive Results.” Competitive Advantage, 35. 40 Christensen, C. M. (2016), The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press.

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Cam Caldwell and Verl Anderson duties owed to society in making decisions41. Implicit within the priorities of TP is the normative and instrumental moral expectations of leaders as they govern and as their organization serves its stakeholders42,43,44,45.

Each of these six components of Transformative Philosophy interrelates as leaders and organizations integrate these components as guideposts for their employees and customers46.

MORAL APPLICATIONS AND PRACTICAL SIGNIFICANCE The need for a new and more effective approach to solving problems has identified by leadership scholars for decades. For example, forty years ago James MacGregor Burns47 called for a “transformative” and highly ethical leadership approach that honored duties owed to stakeholders and

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Hosmer, L.T. (2010), The Ethics of Management, New York: McGraw-Hill. Paine, L. (2002), Value Shift. New York: McGraw-Hill. 43 Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 44 Hosmer, L.T. (2010), The Ethics of Management, New York: McGraw-Hill. 45 Cameron, K. (2011). “Responsible leadership as virtuous leadership,” Journal of Business Ethics, 98(25), 1023-1036. 46 Hooper, H. & Caldwell, C., (2018). “A Transformative Philosophy: Insights to Excellence) in Human Resource Management: A Transformative Approach, Caldwell, C. & Anderson, V. (Eds.). 47 Burns, J. M. (1978). Leadership. New York: Harper & Row. 42

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epitomizes moral responsibility. Burns’48 book about leadership explained that leadership and ethics were as similar as two sides of the same coin and declared unequivocally that leaders owed duties to society, to their shareholders, and to their employees to respond effectively to the demands facing organizations in an increasingly complex and constantly changing world.

Other experts also emphasized the need for “transformative leaders” that inspired others, committed them to action, and made them effective agents of change49. Covey50 advocated that leaders redefine their commitment to employees, assist them to “find their voice,” and develop a proactive rather than reactive response to change, to service to society, and to moral duties owed by leaders. That which is transformative has been identified by Hooper and colleagues 51 as incorporating eight important characteristics. In this section, we review each of those eight characteristics identified by Hooper and co-authors and present eight propositions which address the moral and ethical obligations of transformative leadership and TP.

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Burns, J. M. (1978). Leadership. New York: Harper & Row. Bennis, W. G. & Nanus, B. (2007). Leaders: Strategies for Taking Charge. New York: Harper & Row. 50 Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 51 Hooper, H. & Caldwell, C., (2018). “A Transformative Philosophy: Insights to Excellence) in Human Resource Management: A Transformative Approach, Caldwell, C. & Anderson, V. (Eds.). 49

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Committed to Change To be transformative is to not only acknowledge that the world is constantly evolving, becoming more globally competitive, and more innovative 52 but to recognize that survival depends upon proactively anticipating that change and the capacity to respond quickly to it53. Collins and Hansen54 have identified the verity that, although we cannot accurately predict the precise nature of change, we nonetheless have the opportunity to influence it and to thereby frame the future. Although chaos, uncertainty, and luck have a profound impact on organizations of all types, Collins and Hansen55 identify the strategies implemented by companies to reduce those three factors. Moreover, Collins 56 has provided empirical research about how leaders can create organizational conditions to improve the likelihood of competing successfully in the evolving economic environment. Collins and Hansen have identified the verity that, although we cannot accurately predict the precise nature of change, we nonetheless have the opportunity to influence it and to thereby frame the future

TP adopts the implicit moral perspective suggested by scholars and leadership experts57,58,59 that leaders have an absolute duty to create a change receptive organizational culture60 and that the failure to proactively adopt

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Friedman H. H. & Friedman, L. W. (2009). How Virtuous is Your Firm? A Checklist Electronic. New York: Simon and Schuster. 53 Christensen, C. M. (2016), The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 54 Collins, J. and Hansen, M. (2011), Great by Choice: Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them all, New York: Harper Business. 55 Collins, Op. Cit. 56 Collins, J. (2001), Good to Great: Why Some Companies Make the Leap and Others Don’t, Harper Business, New York, NY. 57 Burns, J. M. (1978). Leadership. New York: Harper & Row. 58 Bennis, W. G. (1959). Leadership theory and administrative behavior: The problem of authority (Vol. 4). New York: Ardent Media. 59 Christensen, C. M. (2016), The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 60 Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass.

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practices and strategies to anticipate, respond to, and initiate change is morally unacceptable61.

Responsive to Customers Recognizing not only the evolving needs of customers but understanding the significance of what those customers are trying to accomplish has been recognized by Harvard’s Clayton M. Christensen62 as a critical element of increased profitability, economic survival, and longterm competitive advantage, This ability to constantly monitor customer needs, create relationships with customers that result in superior knowledge about their businesses, and that integrate employee knowledge about customers into the daily operations of an organization are fundamental elements of what Schein and Schein63 defined as “external adaptation.” In addition to constantly monitoring economic conditions and other externalities, successful firms demonstrate the ability to not only use superior knowledge about customer needs to meet the needs of current customers but that enables them to initiate “disruptive innovations” that create new customers, new markets, and higher-than-normal profitability64,65. In addition to constantly monitoring economic conditions and other externalities, successful firms demonstrate the ability to not only use superior knowledge about customer needs to meet the needs of current customers but that enables them to initiate “disruptive innovations” that create new customers, new markets, and higher-than-normal profitability.

Cameron, K. (2011). “Responsible leadership as virtuous leadership,” Journal of Business Ethics, 98(25), 1023-1036. 62 Christensen, C. M. (2016), The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 63 Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass. 64 Christensen, Op. Cit. 65 Christensen, C., Raynor, M., & McDonald, R. (2011). Disruptive innovation. Boston, MA: Harvard Business Review Press. 61

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At a time when employee commitment and engagement are seriously declining66, the ability of leaders to inspire employees to engage in extramile efforts to help a company to relate to its customers is wellacknowledged as a key to competitive advantage67,68,69. Creating cultures that promote connecting with customers and monitoring their progress is not only a key element of economic survival but is a moral obligation that builds employee commitment.

Learning-Focused In their discussion of the importance of a transformative approach to leadership, Bennis and Nanus70 emphasize that leaders and their employees at all levels must be constantly learning and applying that added insight from what they learn if they hope to compete in the modern economy. Covey71 described today’s work world as a knowledge-, wisdom-, and informationbased economy and that description is virtually universally supported. MIT’s Peter Senge 72 is famous for describing the importance of “the learning organization” as a condition precedent for organizational survival.

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Glint, (2018). The State of Employee Engagement in 2018. HR.Com. Report accessed online on July 6, 2018 at https://info.glintinc.com/2018_03_WP_State_o f_EE_PPC. 67 Joshi, B., Vuong, A., Casey, J., Quey, I., & Caldwell, C. (2011). “Organizational Citizenship Behavior and the Hofstede Model: Implications for Business.” Journal of Global Business Development, 3(1), 126-139. 68 Caldwell, C., Floyd, L. A., Atkins, R., & Holzgrefe, R. (2012). “Ethical duties of organizational citizens: Obligations owed by highly committed employees.” Journal of Business Ethics, 110(3), 285-299. 69 Caldwell, C., and Hansen, M., (2010). “Trustworthiness, Governance, and Wealth Creation.” Journal of Business Ethics, 97(2), 173-188. 70 Bennis, W. G. (1959). Leadership theory and administrative behavior: The problem of authority (Vol. 4). New York: Ardent Media. 71 Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 72 Senge, P. M. (2006). The Fifth Discipline: The Art and Practice of the Learning Organization, New York: Doubleday.

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Leaders and their employees at all levels must be constantly learning and applying that added insight from what they learn if they hope to compete in the modern economy Any modern leader would be sharply criticized for failing to properly service and maintain a multi-million-dollar capital asset or piece of equipment. At the same time, an employee making $80,000 per year in salary and benefits who works for a company for twenty years actually costs that company $1.6 million dollars in wages and benefits; and those same leaders who would never fail to properly maintain that capital asset often fail to invest in the training and development of that $1.6 million dollar employee – and, ironically, are even praised for saving their companies money by “keeping training costs low” to artificially inflate quarterly profits. Blundell, Dearden, Meaghir, and Sianesi73 have documented the importance of “human capital” as a critical organizational asset and a key to employee development, organizational success, and value creation. A growing body of research has confirmed the absolute importance of creating a learning culture that prepares employees to perform effectively and to keep pace with the demands of constantly changing realities.

Externally Adaptive Organizational leaders recognize the many factors such as new technology, changing economic conditions, constant innovation, and 73

Blundell, R.; Dearden, L.; Meaghir, C.; & Sianesi, B. (1999). ‘Human capital investment: The returns from education and training to the individual, the firm and the economy’, Fiscal Studies, 20(1), 1–23.

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changing industry standards that affect the external context of their business74 In a world where the body of knowledge about virtually every subject area is doubling at an ever-increasing rate75, the need to be adaptive to constant change is critical to business success. In his analysis of businesses that have failed to be responsive to the demands of change in their external environment, Jim Collins76 opined that the question is not, “Will such non-responsive businesses survive?” Instead, the question has now become, “How long will it be possible for those businesses to continue before they ultimately fail?”

Christensen and colleagues77,78 document that the ability to keep pace with the external demands of the changing environment is a threat to even long-established business giants – companies like the once great Sears and Eastern Airlines that have either already gone out of business or that are limping along but destined to ultimately collapse and no longer exist. The modern corporation and its leaders must not only demonstrate the ability to 74

Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass. 75 Aburdene, P. (2005). Megatrends 2010: The rise of conscious capitalism. Charlottesville, VA: Hampton Roads Publishing Company. 76 Collins, J. (2001), Good to Great: Why Some Companies Make the Leap and Others Don’t, Harper Business, New York, NY. 77 Christensen, C. M. (2016), The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 78 Christensen, C., & Raynor, M. (2013). The innovator's solution: Creating and sustaining successful growth. Boston, MA: Harvard Business Review Press.

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monitor its external environment, but it must be able to change gears and upgrade its systems and processes if it hopes to compete. The reality for virtually every modern leader is that s(he) owes their stakeholders the capacity to not only keep pace with what is happening in their external environment but demonstrates the execution skills required to meet the demands required by that constantly changing context79,80.

Internally Integrated Schein and Schein81 have emphasized the importance of the leader’s role in creating internal integration of organization systems, processes, and practices in the establishment of an organizational culture that enabled their companies to perform efficiently and to accomplish intended tasks. Internal integration is also an important transformative quality that aligns those systems and structures with a company’s values, beliefs, assumptions, and actions 82 , 83 . Internal alignment of organizations enables employees to accomplish their tasks with clear direction and is well documented as a vital organization requirement for effective leadership84.

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Pfeffer, J. (1998), The Human Equation: Building Profits by Putting People First, Boston, MA: Harvard Business School Press. 80 Beer, M. (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. 81 Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass. 82 Hooper, H. & Caldwell, C., (2018). “A Transformative Philosophy: Insights to Excellence) in Human Resource Management: A Transformative Approach, Caldwell, C. & Anderson, V. (Eds.) 83 Caldwell, C., Hooper, H., & Atwijuka, S. (2018), “Transformative Philosophy-A Leadership Approach to Achieving Excellence.” 84 Kouzes, J. M., & Posner, B. Z. (2017). A coach's guide to developing exemplary leaders: Making the most of the leadership challenge and the leadership practices inventory (LPI). New York: John Wiley & Sons.

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High performance and high trust work systems are based upon this same emphasis on internal integration – particularly for Human Resource Management systems – and have a powerful impact in creating team commitment and the reinforcement of organizational values85 ,86 . Internal integration, of course, is absolutely essential for organizations that seek to effectively achieve goals that are also associated with external adaptation87.

Ethically Virtuous Leaders play a critical role in reinforcing organizational values and in modeling those values88.

Takeuchi, R., Chen, G., & Lepak, D. P. (2009). “Through the looking glass of a social system: Cross-level effects of high-performance work systems on employees’ attitudes.” Personnel Psychology, 62, 1–29. 86 Evans, W. R., & Davis, W. D. (2005). “High-performance work systems and organizational performance: The mediating role of internal social structure.” Journal of Management, 31(5), 758-775. 87 Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass. 88 Kouzes, J. M., & Posner, B. Z. (2017). A coach's guide to developing exemplary leaders: Making the most of the leadership challenge and the leadership practices inventory (LPI). New York: John Wiley & Sons. 85

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It is well-established in the ethics literature that ethical conduct is an important precedent for establishing high trust89,90. Cameron91 observed that virtuousness and responsibility were closely aligned qualities of leaders and essential for creating employee commitment and trust. Building on the work of Carroll & Buchholtz 92 and Cameron 93 , the concept of a virtuous continuum identifying four levels of moral responsibility was suggested by Caldwell, Hasan, and Smith 94 . That virtuous continuum is presented in Diagram 3.

Diagram 3. The Virtuous Moral Continuum; Caldwell, Hasan, & Smith, 2015.

The significance of this Virtuous Continuum is that it adds to the moral obligation of modern leaders and reinforces the importance of a transformative perspective. Carroll and Buchholtz95 included the three moral standards on the right of this continuum, describing moral behavior as that behavior which honors commitments, adds value, and complies with the law and ethical principles. The addition of the virtuous moral standard added by 89

Hosmer, L.T. (2010), The Ethics of Management, New York: McGraw-Hill. Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. New York: Nelson Education. 91 Cameron, K. (2011). “Responsible leadership as virtuous leadership,” Journal of Business Ethics, 98(25), 1023-1036. 92 Carroll, Op. Cit. 93 Cameron, Op. Cit. 94 Caldwell, C., and Hansen, M., (2010). “Trustworthiness, Governance, and Wealth Creation.” Journal of Business Ethics, 97(2), 173-188. 95 Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. New York: Nelson Education. 90

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Caldwell, Hasan, and Smith 96 suggested that transformative leadership required that leaders raise their standard of performance to the level of “ethical stewardship” in seeking to optimize long-term value, magnifying duties owed to stakeholders, and going beyond that which is simply moral 97 , 98 , 99 . As a transformative characteristic, this commitment to the higher moral standard of ethical stewardship is an important component of TP.

Dynamically Capable Leaders who are transformative and effective do much more than identifying new and better approaches to serving customers and creating well-crafted strategic plans. Leaders who are dynamically capable translate ideas into realities and demonstrate the competencies to turn a strategic plan into a pragmatic and practical opportunity100. Employees and peers clearly understand the important distinction between being creative and innovative and demonstrating the dynamism to turn ideas into action 101 . Although the ability to be innovative and creative is important, without the ability to convert brilliant ideas into value-adding products and services that creativity is of little value102.

Caldwell, C., Hasan, Z. & Smith, S. (2015), “Virtuous leadership: insights for the 21st century,” Journal of Management Development, 34(9), 1181-1200. 97 Caldwell, C., Bischoff, S. J., & Karri, R. (2002). “The four umpires: A paradigm for ethical leadership.” Journal of Business Ethics, 36(1-2), 153-163. 98 Hernandez, M. (2008), “Promoting stewardship behavior in organizations: a leadership model,” Journal of Business Ethics, 80(1), 121-128. 99 Caldwell, C., Hayes, L., Karri, R. and Bernal, P. (2008), “Ethical stewardship: the role of leadership behavior and perceived trustworthiness,” Journal of Business Ethics, 78(1/2), 153164. 100 Pfeffer, J. (1998), The Human Equation: Building Profits by Putting People First, Boston, MA: Harvard Business School Press. 101 Kouzes, J. M., & Posner, B. Z. (2011). Credibility: How leaders gain and lose it, why people demand it (Vol. 203). New York: John Wiley & Sons. 102 Christensen, C., & Raynor, M. (2013). TheIinnovator's Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business Review Press. 96

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Dynamic capability is the action-oriented capacity to combine the resources and implement the action steps that empower an organization to compete efficiently and effectively in the global arena Dynamic capability is the action-oriented capacity to combine the resources and implement the action steps that empower an organization to compete efficiently and effectively in the global arena. This capability integrates a multitude of other skills, an understanding of the customers, the ability to communicate effectively to others, and the organizational capacity to create systems that make task accomplishment not only possible but practical. This “execution” skill is widely recognized as the differentiating quality between good and great leaders 103 . Moreover, such leaders understand that their ability to perform effectively is a moral obligation and responsibility to stakeholders within their organization and to customers and society outside their organization as well104,105,106.

Consistently Focused In his study of organizations that successfully transitioned from “good” to “great,” Jim Collins107 noted that one of the required capabilities of those 103

Pfeffer, J. (1998), The Human Equation: Building Profits by Putting People First, Boston, MA: Harvard Business School Press. 104 Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. New York: Nelson Education. 105 Caldwell, C., Hasan, Z. & Smith, S. (2015), “Virtuous leadership: insights for the 21st century,” Journal of Management Development, 34(9), 1181-1200. 106 Cameron, K. (2011). “Responsible leadership as virtuous leadership,” Journal of Business Ethics, 98(25), 1023-1036. 107 Collins, J. (2001), Good to Great: Why Some Companies Make the Leap and Others Don’t, Harper Business, New York, NY.

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organizations was that they understood what they do extremely well, are purpose-driven, and focus their efforts. Citing the metaphor of the hedgehog, Collins 108 explained that leaders of organizations kept their companies focused on 1) what they did at a world-class level of excellence, 2) what they were able to do that produced added value that the world recognized or that “drove their economic engine,” and 3) what they intrinsically loved to do that made work a pleasure rather than a drudge for which they possessed a passionate commitment. For organizations that focused on these three overlapping capabilities, as shown in Diagram 4, their ability to “stick to their knitting” 109 enabled those organizations to successfully compete. The ability to be consistently focused is a powerful leadership trait that allows leaders to identify their priorities, concentrate their efforts, and stay on task 110 . Many are the organizations that focused on perceived opportunities to generate quick profits – only to discover that they had so diversified their efforts that they actually lost their focus and, ultimately, their profitability 111 . Once again, leaders who understand their moral obligation to add value and optimize wealth creation demonstrate this transformative competency.

Diagram 4. Collins’ Hedgehog Concept; Collins, 2001.

Collins, J. (2001), Good to Great: Why Some Companies Make the Leap and Others Don’t, Harper Business, New York, NY. 109 Collins, Op. Cit. 110 Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 111 Covey, Op. Cit. 108

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These eight transformative characteristics enable organization leaders to keep their team members on track with the demands of the modern economy and make it possible to compete successfully.

CONTRIBUTIONS OF THE PAPER In an organizational climate where employees often feel betrayed by their organizations and resent the hubris of the “command and control” philosophy that characterizes the leadership style of so many dysfunctional leaders, this paper about TP and its value as a practical framework for leaders and organizations makes four significant contributions to the leadership and governance literature. 1) It presents TP as a morally virtuous leadership model for guiding organizations. The paper presents TP within the context of two highly-respected moral frameworks112 and the moral decision-making model proposed by the University of Michigan’s LaRue Hosmer113. Hosmer’s114,115,116 research about moral leadership, trust, and the integration of economics and ethics are considered to be classics in the field of ethical leadership. 2) It integrates the six components of TP with the roles of leaders and their ethical obligations. Citing experts about the leader’s role, we document how each of the six components of the TP model has a practical application and a profound set of ethical obligations as leaders seek to honor the

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Kohlberg, L. (1981). The Philosophy of Moral Development: Moral Stages and the Idea of Justice, New York: Harper and Row, 113 Hosmer, L.T. (2010), The Ethics of Management, New York: McGraw-Hill. 114 Hosmer, Op. Cit. 115 Hosmer, L. T. (1994). Moral leadership in business. w York: McGraw-Hill. 116 Hosmer, L.T. (1995), “Trust: the connecting link between organizational theory and philosophical ethics,” Academy of Management Review, 20(2), 379-403.

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Cam Caldwell and Verl Anderson duties that they owe to stakeholders117. By honoring these six responsibilities of TP, leaders are able to raise the bar of their ethical obligations to become ethical stewards in the pursuit of optimizing long-term wealth creation which is so crucial to the success of the modern organization118. 3) It affirms the eight characteristics of TP as morally relevant transformative qualities. Each of these eight transformative characteristics is presented along with documentation about the importance of each of TP’s defining contributions for economically viable organizations led by trustworthy leaders. As leaders and organizations utilize the insights associated with these eight characteristics of TP, they have the opportunity to increase their understanding of the comprehensive nature of the moral responsibilities that are implicit in the leader’s role. 4) It challenges leaders to examine formally their own philosophical assumptions about leadership -- assumptions that are rarely consciously examined and thoughtfully compared with the actual behaviors and actions of those same leaders119. The gap between what leaders and organizations post on the walls of their organizations and their actual behaviors is welldocumented120,121. Leaders of organizations have an absolute moral obligation to carefully examine their values, beliefs, intentions,

Hernandez, M. (2008), “Promoting stewardship behavior in organizations: a leadership model,” Journal of Business Ethics, 80(1), 121-128. 118 Caldwell, C., Hayes, L., Karri, R. and Bernal, P. (2008), “Ethical stewardship: the role of leadership behavior and perceived trustworthiness,” Journal of Business Ethics, 78(1/2), 153164. 119 Fishbein, M. & Ajzen, I. (2015). Predicting and Changing Behavior: The Reasoned Action Approach. New York: Psychology Press. 120 Arbinger Institute. 2009. Leadership and Self-Deception: Getting Out of the Box. New York: Berrett-Koehler Publishers, Inc. 121 Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass. 117

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and conduct and the ethical duties implicit in their complex roles in serving their stakeholders122.

Each of these contributions merits thoughtful consideration as current leaders, scholars, and tomorrow’s future leaders reflect on the implicit principles, values, and beliefs that are present in today’s complex world. For that reason, TP represents a thoughtful new contribution to the academic lexicon and the field of ethical leadership.

CONCLUSION Eighty years ago, Chester Irving Barnard 123 presented a series of lectures to the Harvard University School of Business. Those lectures, eventually compiled into a well-regarded book about leaders and organizations, have had a profound impact on management thought and are frequently referenced in the scholarly literature today as not only applicable to today’s economic and business context but to the leader-follower relationship. Pulling no punches and speaking frankly, Barnard declared that most organizations are ineffective and poorly led and most leaders fail to earn the followership of those who they seek to lead.

Hernandez, M. (2012), “Toward an understanding of the psychology of stewardship,” Academy of Management Review, 37(2), 172-193. 123 Barnard, C. I. (1938), Functions of the Executive, Boston, MA: Harvard Business School Press. 122

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The challenge of leadership has always been ominous. In 1959, Warren Bennis thoughtfully observed that more has been written and less is truly understood about leadership than any other subject in the social sciences124. Despite the more than sixty years since Bennis made that declaration, most scholars would confirm that little progress has been made in 1) understanding the keys to effective leadership, or 2) increasing the likelihood that leaders will merit the high trust so essential for organizations to succeed, thrive, and even survive.

Increasingly, the evidence affirms that leaders are not trusted – and for very good, highly practical yet increasingly discouraging reasons. But the good news is that the evidence also documents that moral leadership, when accompanied by competence and focus, can enable organizations to be far more effective, more profitable, and more able to meet the growing demands of customers, employees, and other stakeholders. To that extent, TP is a philosophy about moral leadership worth carefully examining and thoughtfully applying in today’s difficult world of global competition.

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Bennis, W. G. (1959). Leadership theory and administrative behavior: The problem of authority (Vol. 4). New York: Ardent Media.

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REFERENCES Aburdene, P. (2005). Megatrends 2010: The rise of conscious capitalism. Charlottesville, VA: Hampton Roads Publishing Company. Arbinger Institute. 2009. Leadership and Self-Deception: Getting Out of the Box. New York: Berrett-Koehler Publishers, Inc. Barnard, C. I. (1938), Functions of the Executive, Boston, MA: Harvard Business School Press. Beer, M. (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. Bennis, W. G. & Nanus, B. (2007). Leaders: Strategies for Taking Charge. New York: Harper & Row. Bennis, W. G. (1959). Leadership theory and administrative behavior: The problem of authority (Vol. 4). New York: Ardent Media. Block, P. (2013). Stewardship: Choosing Service Over Self Interest, Oakland, CA: Berrett-Koehler Publishers. Blundell, R.; Dearden, L.; Meaghir, C.; & Sianesi, B. (1999). ‘Human capital investment: The returns from education and training to the individual, the firm and the economy’, Fiscal Studies, 20(1), 1–23. Buber, M. (2013). On Judaism. New York: Schocken. Burns, J. M. (1978). Leadership. New York: Harper & Row. Caldwell, C. (2012). Moral Leadership: A Transformative Model for Tomorrow’s Leaders. New York: Business Expert Press. Caldwell, C., & Hayes, L. A. (2010). “Leadership, trustworthiness, and ethical stewardship.” Journal of Business Ethics, 96(4), 497-512. Caldwell, C., (2018). “Strategic Human Resource Management: Why it Matters” in Strategic Human Resource Management, C. Caldwell & V. Anderson (Eds.) Hauppage, NY: NOVA Publishing, 1-12. Caldwell, C., and Floyd, L. A., 2014. “High Performance Work Systems: Building Commitment to Increase Profitability.” Graziadio Business Review, 17(3), found online at http://gbr.pepperdine.edu/2014/12/highperformance-work-systems/.

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Caldwell, C., and Hansen, M., (2010). “Trustworthiness, Governance, and Wealth Creation.” Journal of Business Ethics, 97(2), 173-188. Caldwell, C., Bischoff, S. J., & Karri, R. (2002). “The four umpires: A paradigm for ethical leadership.” Journal of Business Ethics, 36(1-2), 153-163. Caldwell, C., Floyd, L. A., Atkins, R., & Holzgrefe, R. (2012). “Ethical duties of organizational citizens: Obligations owed by highly committed employees.” Journal of Business Ethics, 110(3), 285-299. Caldwell, C., Hayes, L., Karri, R. and Bernal, P. (2008), “Ethical stewardship: the role of leadership behavior and perceived trustworthiness,” Journal of Business Ethics, 78(1/2), 153-164. Caldwell, C., Hooper, H., & Atwijuka, S. (2018), “Transformative Philosophy-A Leadership Approach to Achieving Excellence.” Caldwell, C., Hasan, Z. & Smith, S. (2015), “Virtuous leadership: insights for the 21st century,” Journal of Management Development, 34(9), 11811200. Cameron, K. (2011). “Responsible leadership as virtuous leadership,” Journal of Business Ethics, 98(25), 1023-1036. Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. New York: Nelson Education. Christensen, C., & Raynor, M. (2013). The innovator's solution: Creating and sustaining successful growth. Boston, MA: Harvard Business Review Press. Christensen, C., Raynor, M., & McDonald, R. (2011). Disruptive innovation. Boston, MA: Harvard Business Review Press. Christensen, C. M. (2016), The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. Collins, J. & Porras, (2004). Built to Last: Successful Habits of Visionary Companies. New York: HarperBusiness. Collins, J. (2001), Good to Great: Why Some Companies Make the Leap and Others Don’t, Harper Business, New York, NY.

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Collins, J. and Hansen, M. (2011), Great by Choice: Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them all, New York: Harper Business. Covey, S. R. (1992). Principle centered leadership. New York: Simon and Schuster. Covey, S. R. (2013). The 8th habit: From effectiveness to greatness. New York: Simon and Schuster. Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. Donaldson, T., & Dunfee, T. W. (1999). Ties that bind: A social contracts approach to business ethics. Boston, MA: Harvard Business Review Press. Evans, W. R., & Davis, W. D. (2005). “High-performance work systems and organizational performance: The mediating role of internal social structure.” Journal of Management, 31(5), 758-775. Fishbein, M. & Ajzen, I. (2015). Predicting and Changing Behavior: The Reasoned Action Approach. New York: Psychology Press. Friedman H. H. & Friedman, L. W. (2009). How Virtuous is Your Firm? A Checklist Electronic. New York: Simon and Schuster. Gallup, (2017). “American’s Confidence in Institutions Edges Up.” June 26, 2017. Accessed online on July 6, 2018 at https://news. gallup.com/poll/212840/americans-confidence-institutions-edges.aspx. Gilligan, C. (2016). In a Different Voice: Psychological Theory and Women’s Development. Boston, MA: Harvard University Press. Glint, (2018). The State of Employee Engagement in 2018. HR.Com. Report accessed online on July 6, 2018 at https://info.glintinc. com/2018_03_WP_State_o f_EE_PPC. Hernandez, M. (2008), “Promoting stewardship behavior in organizations: a leadership model,” Journal of Business Ethics, 80(1), 121-128. Hernandez, M. (2012), “Toward an understanding of the psychology of stewardship,” Academy of Management Review, 37(2), 172-193. Hooper, H. & Caldwell, C., (2018). “A Transformative Philosophy: Insights to Excellence) in Human Resource Management: A Transformative

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Approach, Caldwell, C. & Anderson, V. (Eds.) Hauppage, NY: NOVA Publications, Chapter Three. Hosmer, L. T. (1994). Moral leadership in business. w York: McGraw-Hill. Hosmer, L. T. (1995), “Trust: the connecting link between organizational theory and philosophical ethics,” Academy of Management Review, 20(2), 379-403. Hosmer, L. T. (2010), The Ethics of Management, New York: McGraw-Hill. Joshi, B., Vuong, A., Casey, J., Quey, I., & Caldwell, C. (2011). “Organizational Citizenship Behavior and the Hofstede Model: Implications for Business.” Journal of Global Business Development, 3(1), 126-139. Kohlberg, L. (1981). The Philosophy of Moral Development: Moral Stages and the Idea of Justice, New York: Harper and Row. Kouzes, J. M., & Posner, B. Z. (2011). Credibility: How leaders gain and lose it, why people demand it (Vol. 203). New York: John Wiley & Sons. Kouzes, J. M., & Posner, B. Z. (2017). A coach's guide to developing exemplary leaders: Making the most of the leadership challenge and the leadership practices inventory (LPI). New York: John Wiley & Sons. Paine, L. (2002), Value Shift. New York: McGraw-Hill. Pava, M. (2003), Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St Martin’s Press. Pfeffer, J. (1998), The Human Equation: Building Profits by Putting People First, Boston, MA: Harvard Business School Press. Primeaux, P. S., Karri, R., & Caldwell, C. (2003). “Cultural insights to justice: A theoretical perspective through a subjective lens.” Journal of Business Ethics, 46(2), 187-199. Quinn, R. E. (1996), Deep change: Discovering the Leader Within. San Francisco: Jossey-Bass Publishers. Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San Francisco: Jossey-Bass. Senge, P. M. (2006). The Fifth Discipline: The Art and Practice of the Learning Organization, New York: Doubleday.

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Snape, E. & Redman, T. (2010). “HRM Practices, Organizational Citizenship Behaviour, and Performance: A Multi-Level Analysis,” Journal of Management Studies 47(7), 1219-1247. Stavros, J. M., & Caldwell, C. (2017), “Strategy from a Strengths-Based Perspective: The Soar Approach to Positive Results.” Competitive Advantage, 35. Takeuchi, R., Chen, G., & Lepak, D. P. (2009). “Through the looking glass of a social system: Cross-level effects of high-performance work systems on employees’ attitudes.” Personnel Psychology, 62, 1–29. Vogler, J., & Stephan, H. R. (2007). “The European Union in global environmental governance: Leadership in the making?” International Environmental Agreements: Politics, Law and Economics, 7(4), 389413. Zizek, B., Garz, D., & Nowk, E. (2015). Moral Development and Citizenship Education. New York: Sense Publishers.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 3

ETHICS OF THE INDIVIDUAL LEADER: KEYS TO PERSONAL PREPARATION Cam Caldwell1, and Verl Anderson2 1

American University of the Emirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

The challenge for a leader in the modern organization is to prepare themselves to be thought of as a person with character and integrity to be worthy of the trust and followership of others. Although leaders today have consistently struggled to be worthy of others’ high regard, many fail to understand what is required to be perceived as trustworthy. The evidence is clear that leaders and organizations struggle to earn the dedication, loyalty, and commitment required for today’s organizations to be successful – even though it is also well documented that competitive success depends upon the ability of organizations to generate a high level of employee engagement.



Corresponding Author’s E-mail: [email protected].

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The purpose of this chapter is to identify the key ethics-related qualities that leaders must exemplify to merit the followership of those whom they seek to lead. The chapter begins with a summary of the challenges facing leaders in obtaining others’ trust – citing leadership scholars who have addressed that objective over the past century. Following that introduction, the chapter then identifies twelve critical qualities that effective leaders incorporate in order to be perceived as highly ethical. After identifying five contributions of this chapter to the literature about ethical leadership, the chapter concludes with a challenge to leaders to become more aware of the ethical obligations that they owe those whom they lead and serve.

CHALLENGES FACING LEADERS Although leadership scholars have struggled over the past century to explain precisely how leaders function and the conditions which determine their success, elite leadership experts have opined regarding the challenges that leaders must overcome. Those challenges require effective leaders to address an array of ethically-related problems that are common to organizations of all types. The purpose of this section is to identify seven of those challenges and the ethical and moral issues that leaders address as they

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strive to serve organizations and the colleagues with whom they work. Those challenges and their underlying ethical roots are briefly summarized.

Articulating Organizational Purpose Chester Barnard, the author of The Functions of the Executive, explained that effective leaders obtained followership and cooperation by pursuing an organizational purpose that was worthy of others’ efforts. 1 Pursuing a worthy goal which positively benefits society is an important task for organizations and leaders who inspire others to cooperate to achieve a shared vision accomplish a vital leadership function2.

Barnard’s speeches at Harvard University were compiled and his insights are among the most frequently cited of all business books ever written. See Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA: Harvard College. 2 The importance of inspiring a shared vision is a key leadership task identified in Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (6th ed.). San Francisco, CA: Jossey-Bass. 1

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Recognizing Contextual Priorities The ability to understand the context of any situation and the action steps to take in response to unique conditions is a challenge facing every leader and a key attribute of Emotional Intelligence.3 This capacity demands the ability to recognize how people are responding to a situation and the most effective way to help them to accomplish desired outcomes.

Understanding Psychological Contracts The psychological contract is the perceived set of assumptions about obligations that each individual believes are owed to him or her by another

3

The moral and ethical implications of Emotional Intelligence for those who lead are identified in Goleman, D., (2006). Emotional Intelligence: Why It Can Matter More than IQ. New York: Bantam Books.

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person4. The challenge facing leaders includes recognizing that individuals often view these obligations far differently than the assumptions about those duties which the leaders believe are due 5 . Recognizing that trust can be gained or lost from person to person by understanding how others perceive the duties that are owed to them can enable leaders to bridge the trust gap.

Assessing Ethical Consequences The challenges associated with assessing ethical consequences are many-faceted and include the difficulty of determining how the respective options associated with decision-making may affect multiple stakeholders6. Despite the uncertainties in measuring consequences, identifying and

4

The nature of the psychological contract and its important role in communications and in maintaining trust are explained in Rousseau, D.M., (1995). Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand Oaks, CA: Sage Publications. 5 Ibid. 6 The difficulty in sifting through and identifying information is part of the bounded rationality problem noted by Simon. H. A., (1997). Administrative Behavior (4th ed.) New York: Free Press.

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considering those impacts is a vital responsibility with great ethical importance that must be carefully considered by wise leaders7.

Modifying Personal Responses Leaders face the daunting challenge of understanding the complexity of issues, reading a situation accurately, and then framing a response that allows the leader and his or her colleagues to be most successful in addressing a problem. Their wisdom in recognizing what needs to be done and then regulating how they respond to achieve an intended result is the most difficult task of Emotional Intelligence8. Ethical leaders are best able to manager this challenge effectively because they fully appreciate the need to make the most positive contribution possible.

The decision-making model developed by the University of Michigan’s LaRue Hosmer is a great resource in understanding this challenge. See Hosmer, L. T., (2010). The Ethics of Management (6th ed.). Boston, MA: McGraw-Hill Education. 8 Goleman, D., (2006), op. cit. 7

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Recognizing Optimal Possibilities Ethical stewards seek the optimization of outcomes, despite the many difficulties associated with identifying how factors interrelate to facilitate or limit possibilities. Most importantly, great leaders accept as a personal obligation the responsibility to work diligently in the pursuit of solutions that maximize the positive good and minimize the negative impacts of decisions on others9.

9

Hosmer, L. T., (2010), op. cit.

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Communicating the Decision-Making Rationale The obligation to explain the reasoning for decisions, the factors taken into consideration, the values given priority, the rights evaluated, the costs and benefits, and the best means of communicating to stakeholders are all numbingly complex factors10. Leaders who make the effort to address these very difficult elements do so with the understanding that their communication efforts build understanding, trust, and commitment and that failing to communicate clearly is a major mistake11.

Understanding each of these seven challenges is essential for those who seek to lead in a manner that earns the trust and respect of others. The failure to recognize the moral and ethical implications of these challenges demonstrates that a leader has not understood the importance of critical factors that others are likely to value as important in the leader-follower relationship12. 10

Ibid. Ibid. 12 For an understanding of the importance of issues associated with the leader-follower relationship, see Caldwell, C., Karri, R., & Vollmar, P., (2006). “Principal Theory and Principle Theory: Ethical Governance from the Follower’s Perspective.” Journal of Business 11

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Twelve Critical Ethical Qualities Ethical leaders address the seven challenges associated with being perceived as ethical by their words and actions – and it is by their behaviors, policies, and practices that leaders demonstrate that they and their organizations are able to be perceived as credible and trustworthy13. The literature about leadership factors associated with ethics identifies twelve critical qualities which those who lead can acquire to establish a reputation for being ethical.

Telling the Truth Honesty and personal integrity are the most important and most preferred qualities of leader, according to their peers and those who work for leaders. Extensive leadership research has affirmed that integrity and honesty are foundations for both personal and professional credibility14. Ethics, Vol. 66, pp. 207-223 and Hayes, L., Caldwell, C., Licona, B. and Meyer, T. E., (2015). “Follower Behaviors and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285. 13 Caldwell, C. and Clapham, S., (2003). “Organizational Trustworthiness: An International Perspective.” Journal of Business Ethics, Part 1, Vol. 47, Iss. 4, pp.349-364. 14 Kouzes, J. M. & Posner, B.Z., (2011). Credibility: How Leaders Gain and Lose It, Why People Demand It. San Francisco, CA: Jossey-Bass.

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Keeping Commitments Although it is often difficult for leaders if and when conditions change, keeping commitments and promises made to others is viewed by followers as a sacred moral obligation15. Leaders who “do what they say they will do” are held in high regard and earn the respect and followership of others.

15

Kouzes, J. M. & Posner, B. Z., (2017), op. cit.

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Thinking Long-Term Rather than focusing solely upon short-term profit-taking that can often compromise the long-term value-creating capacity of an organization, the most effective and most ethical leaders recognize that they are ethical stewards who pursue long-term wealth creation and who honor obligations owed to stakeholders16. Value is ultimately measured long term.

Honoring Relationships The honoring of relationships, the responsibility to care about others with whom one has a personal association, and the obligation to be kind and supportive are all elements of what has been labeled the feminine ethic17. This moral obligation enables great leaders to demonstrate their personal commitment to others and their value18. 16

Caldwell, C. and Anderson, V., (Eds.). (2019). Trust, Trustworthiness, and Stewardship: A Transformative Approach. Hauppage, New York: NOVA Publishing and Caldwell, C., Hayes, L., Karri, R., and Bernal, P., (2008). “Ethical Stewardship: Implications for Leadership and Trust.” Journal of Business Ethics, Vol. 78, Iss. 1/2, pp. 153-164. 17 This tremendously important feminine ethic has been largely attributed to Carol Gilligan. See Gilligan, C., (2018). In a Different Voice: Psychological Theory and Women’s Development. Boston, MA: Harvard University Press. 18 Ibid.

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The honoring of relationships, the responsibility to care about others with whom one has a personal association, and the obligation to be kind and supportive are all elements of what has been labeled the feminine ethic

Evaluating Opportunities The moral and ethical responsibilities of leaders include their obligation to thoughtfully and comprehensively assess the ethical, legal, and economic impacts of decisions on stakeholders and society – both in the short term and the long term19. This evaluation process demands that leaders incorporate the broad range of ethical perspectives in considering choices and in identifying their ramifications20.

19

The importance of this evaluation process as a key requirement of ethical management is explained in Hosmer, L. T., (2010), op. cit. 20 Ibid.

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Respecting Individual Rights The importance of protecting the rights of others as a leadership obligation and an ethical priority has been articulated as the foundation of many ethical perspectives. Respecting and protecting others’ rights demonstrate the leader’s concern for her/his responsibility in honoring those basic human rights – and the people who would otherwise be harmed21.

Encouraging Self-Development The ethical duty of leaders is to not only discover their own unique significance but to help others to also become the best version of themselves 22 . This commitment to the self-development and selfactualization culminates in the pursuit of what Maslow called “transcendence,” or the personal fulfillment that comes from achieving inner peace and harmony with others, with God, and with the world.23

21

The several perspectives that address this ethical obligation are addressed in Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379-403. 22 This obligation to “find your voice and help others to find theirs” is the 8th habit identified by Stephen R. Covey and is the moral responsibility of leaders. See Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 23 Maslow, A. H., (1976). Religions, Values, and Peak Experiences. New York: Penguin Books.

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Modeling the Way By their personal examples, leaders honor their ethical responsibilities and confirm the ethical values that they espouse24. By modeling those values and principles, leaders demonstrate their personal integrity and their commitment to that which they claim to be important. Leading by example encourages others to emulate their actions25.

24

Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership. San Francisco, CA: Jossey-Bass. 25 Caldwell, C. and Anderson, V. (Eds.). (2020). Leadership: Touching Lives. Hauppage, New York: NOVA Publishing.

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Challenging the Status Quo Ethical leaders have the courage to address the importance of constant improvement – never being satisfied with “the way things have always been done around here.” They willingly challenge the process when that challenge is necessary and are most effective when they do so tactfully and with consideration for others . . . but they recognize when change is needed and honor their obligation to pursue that change26.

Discovering New Truths Leaders have a moral obligation to not only serve and teach others but are challenged to lead others in striving to constantly learn and to discover new truths27. This ethical responsibility is the key to progress for individuals and for society and has been described as a sacred and “covenantal” responsibility of leaders and organizations.

According to the research about leadership, great leaders “challenge the process.” See Kouzes, J. M. & Posner, B. Z. (2017), op. cit. 27 The importance of the “covenantal” nature of leadership and the pursuit of new truths is the message of Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St. Martin’s Press. 26

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Pursuing Innovation The dilemmas facing organizational leaders involve the struggle to stay current with technology, to expand the market despite new competitors, and to constantly innovate28. This challenge demands that leaders develop the capacity to understand their customers, to monitor their ever-changing industry, and to innovate successfully in order to compete in a challenging world29.

28

The importance of dealing with the challenges of innovation is emphasized in Christensen, C. M., (2011). The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business. New York: HarperBusiness. 29 Ibid.

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Touching Hearts The ability to make a powerful emotional connection with others enables leaders to inspire and even dynamically change the very nature of followers30. This charismatic capacity enables leaders to not only achieve noble objectives but to transform the lives of those who they lead and serve in the pursuit of worthy goals31.

These twelve qualities demonstrate the ethical leaders understanding of her or his commitment to honoring duties owed to others, creating organizations that serve society, and utilizing resources that optimize the potential of people and organizations in the pursuit of worthy goals. The failure to demonstrate any of these twelve qualities raises questions about a leader’s understanding of the sacred nature of the leadership relationship and its ethical obligations32.

30

Kouzes, J. M. & Posner, B. Z., (2017), op. cit. Ibid. 32 The ethical nature of the leader’s responsibility and the leader’s sacred responsibilities are well described in many places. See, for example, DePree, M., (2004). Leadership is an Art. New York: Crown Publishing. 31

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CONTRIBUTIONS OF THIS CHAPTER Although much continues to be written about the importance of leadership and its ethical obligations, leaders throughout the world continue to struggle to establish relationships that earn the respect of employees, customers, and stakeholders. 33 This chapter makes five significant contributions to the literature about ethical leadership.

Describes Seven Significant Challenges That Leaders Must Address in Order to Be Perceived as Ethical These seven challenges are common to virtually all leaders and every organization and reflect the importance of leaders investing far greater effort in understanding the human dynamic of interpersonal relationships as key to building trust, increasing commitment, and contributing to the competitive advantage of organizations.34 33

The universal problems of leaders to engage employees and to earn their followership are chronicled in many places. For a comprehensive explanation of these problems and their underlying causes, see Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. 34 Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press and Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: JosseyBass.

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Identifies Twelve Qualities That Ethical Leaders Can Incorporate to Demonstrate That They Are Ethical The scholarly literature about ethical leadership confirms the importance of interpersonal qualities as the foundation of trustworthiness – providing powerful evidence that perceived trustworthiness is ethically related but frequently underappreciated in the modern organization.35

35

Hosmer, L. T., (1995), op. cit.

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Clarifies the Importance of a Holistic Approach to Understanding the Complex Nature of Leadership and Its Ethical Scope The interrelated challenges and the qualities that contribute to effective and ethical leadership give weighty evidence about the importance of viewing leadership as strongly related to many of the distinctly different ethical perspectives36. Recognizing and incorporating the value of a holistic leadership style that incorporates a broad range of ethical perspectives is the logical issue to research related to ethical leadership37.

Affirms the Importance of Recognizing the Complex Impacts of Leadership Decisions on Stakeholders and the Obligation of Ethical Leaders to Address Those Impacts The need to carefully examine the impacts of leadership decisions, longterm as well as short-term, has been well documented38. Similarly, the need Al Lawati, H. A. H., Sayed, R. T., and Caldwell, C., (2019). “Transformative Ethics and Moving Toward ‘Greatness.’ – Problems and Realities.” Journal of Values-Based Leadership. Volume XII, Iss. 1, Winter/Spring Edition. 37 For a holistic model which incorporates many different ethical perspectives, see Caldwell, C., (2012). Moral Leadership: A Transformative Model for Tomorrow’s Leaders. New York: Business Expert Press. 38 Hosmer, L. T., (2010), op. cit. 36

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to examine the consequences of leadership decisions, based upon a variety of different ethical perspectives seems abundantly clear.39

Explains Why Leaders Who Think Short-Term and Who Apply Many of the Common Practices of So-Called “Modern Leadership” Methods Have Been So Consistently Ineffective Common wisdom about “command and control” leadership models that have characterized modern thinking for decades has been cited as the root cause of much ineffective leadership40. The widely emphasized focus on quarterly stock prices has also been cited as being counter-productive to long-term business success and a violation of duties owed to society and to stakeholders.41 These five contributions to the ethical leadership literature provide those who study leadership, who teach business concepts, or who seek to apply leadership concepts with rich insights that can enhance their understanding of the importance of ethical behavior in organizations.

CONCLUSION The importance of each of tomorrow’s leaders understanding the significance of his or her ethical lens has been advocated for decades and the problems that are well-documented about the failure of leaders are increasingly being identified. Leadership is a face-to-face and nose-to-nose personal relationship – a verity long-established and repeatedly emphasized42.

39

Hosmer, L. T., (1995), op. cit. Pfeffer, J., (1998), op. cit. and Beer, M., (2009), op. cit. 41 Friedman, T. L. (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution – And How It Can Renew America, Release 2.0. New York: Picador Press. 42 Kouzes, J. M. & Posner, B. Z., (2017), op. cit. and Burns, J. M., (2010). Leadership. New York: HarperCollins. 40

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Leadership is a face-toface and nose-to-nose personal relationship – a verity longestablished and repeatedly emphasized It has been widely established that those who are perceived as moral and ethical leaders must also be moral and ethical individuals43. Those who seek to lead others successfully must be committed to living what they profess and modeling the values that they espouse . . . if they expect to earn the trust and followership of others in the service of their organizations44. Making a personal investment in understanding the challenges of leadership and the qualities required to be perceived as ethical are steps of personal preparation that can benefit those who wish to lead and to serve. Failure to make that investment increasingly appears to be a recipe for failure.

Trevino, L. K., Hartman, L. P., & Brown, M., (2000). “Moral Person and Moral Manager: How Executives Develop a Reputation for Ethical Leadership.” California Management Review, Vol. 42, Iss. 4, pp. 128-142. 44 Schein, E. H. & Schein, P., (2016), op. cit. 43

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REFERENCES Al Lawati, H. A. H., Sayed, R. T., and Caldwell, C., (2019). “Transformative Ethics and Moving Toward ‘Greatness.’ – Problems and Realities.” Journal of Values-Based Leadership. Volume XII, Iss. 1, Winter/Spring Edition. Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA: Harvard College. Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. Burns, J. M., (2010). Leadership. New York: HarperCollins. Caldwell, C. and Anderson, V. (Eds.). (2020). Leadership: Touching Lives. Hauppage, New York: NOVA Publishing. Caldwell, C. and Anderson, V., (Eds.). (2019). Trust, Trustworthiness, and Stewardship: A Transformative Approach. Hauppage, New York: NOVA Publishing. Caldwell, C., Hayes, L., Karri, R., and Bernal, P., (2008). “Ethical Stewardship: Implications for Leadership and Trust.” Journal of Business Ethics, Vol. 78, Iss. 1/2, pp. 153-164. Caldwell, C., (2012). Moral Leadership: A Transformative Model for Tomorrow’s Leaders. New York: Business Expert Press. Caldwell, C., Karri, R., & Vollmar, P., (2006). “Principal Theory and Principle Theory: Ethical Governance from the Follower’s Perspective.” Journal of Business Ethics, Vol. 66, pp. 207-223. Caldwell, C. and Clapham, S., (2003). “Organizational Trustworthiness: An International Perspective.” Journal of Business Ethics, Part 1, Vol. 47, Iss. 4, pp.349-364. Christensen, C. M., (2011). The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business. New York: HarperBusiness. Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press.

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DePree, M., (2004). Leadership is an Art. New York: Crown Publishing. Friedman, T. L. (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution – And How It Can Renew America, Release 2.0. New York: Picador Press. Gilligan, C., (2018). In a Different Voice: Psychological Theory and Women’s Development. Boston, MA: Harvard University Press. Goleman, D., (2006). Emotional Intelligence: Why It Can Matter More than IQ. New York: Bantam Books. Hayes, L., Caldwell, C., Licona, B. and Meyer, T. E., (2015). “Follower Behaviors and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285. Hosmer, L. T., (2010). The Ethics of Management (6th ed.). Boston, MA: McGraw-Hill Education. Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379-403. Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (6th ed.). San Francisco, CA: Jossey-Bass. Kouzes, J. M. & Posner, B.Z., (2011). Credibility: How Leaders Gain and Lose It, Why People Demand It. San Francisco, CA: Jossey-Bass. Maslow, A. H., (1976). Religions, Values, and Peak Experiences. New York: Penguin Books. Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St. Martin’s Press. Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press Rousseau, D.M., (1995). Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand Oaks, CA: Sage Publications. Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership. San Francisco, CA: Jossey-Bass.

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Simon. H. A., (1997). Administrative Behavior (4th ed.) New York: Free Press. Trevino, L. K., Hartman, L. P., & Brown, M., (2000). “Moral Person and Moral Manager: How Executives Develop a Reputation for Ethical Leadership.” California Management Review, Vol. 42, Iss. 4, pp. 128142.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 4

THE LEADER AS A FRIEND: THE ETHIC OF FRIENDSHIP AND THE PSYCHOLOGICAL CONTRACT Cam Caldwell1, and Verl Anderson2,† 1

American University of the Emirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

The notion of a leader-follower relationship has historically been based upon the assumption that the leader should maintain an arms-length association with those who (s)he directs. This approach to the employeremployee relationship has evolved over time – going back to the days when 1) skilled craftsmen entered into contracts with apprentices to work a fixed number of years of service in exchange for the opportunity to learn a trade, and 2) landlords required laborers who worked on their properties to commit to work a set number of years in exchange for a portion of the annual harvest.

 †

Corresponding Author’s Email: [email protected]. Corresponding Author’s Email: [email protected].

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This transactional exchange was a quid pro quo contractual relationship which viewed the individual employee as a “human resource” to be paid for work performed – with the obligations of the association viewed as legalistic and formal. The relationship was based upon the assumption that the parties exchanged a “fair day’s work” for a “fair day’s pay.” The negotiation of labor agreements for individuals working in similar positions for employers were not allowed under the law until employers were perceived to be overreaching and often treated employees as little more than property.

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The rule of law, the “employment-at-will” doctrine, was established in the United States more than a century ago and was established to formalize the imbalance in the employer-employee relations. That doctrine remains in force to day in forty-nine of the fifty states and essentially states that an employer has the right to terminate an employee with or without cause – including for bad cause1. Exceptions to the employment-at-will rule protect employees who have a written contract but are difficult for employees to enforce, even when such contracts may exist and employers continue to be arbitrary in dismissing an employee without due cause. Employees are typically referred to as “the weaker vessel” in the employer-employee relationship and historic and legal precedent confirm that employees are in a disadvantageous position if their employer chooses to act in a manner perceived to be against the employees’ interests2.

For many years during the period between the end of World War II and the Vietnam War, labor-management relationships were such that employees entered into a career and performed work for an employer throughout that career 3 . Pension systems, compensation philosophies, Only Montana has a “just cause” legal requirement for employee termination. This relationship and its legal and moral context are the subjects of Van Buren III, H. J., (1999). “Acting More Generously than the Law Requires: The Issue of Employee Layoffs in halakhal.” Journal of Business Ethics, Part 1, Vol. 19, Iss. 4, pp. 335-343. 3 The content of this paragraph is clearly summarized in Wren, D. A., (2004). The History of Management Thought (5th ed.). Hoboken, NJ: Wiley & Sons Publishing. 1 2

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and human resource policies and programs acknowledged the importance of employees as contributing to the long-term profitability of an organization. Performance evaluation systems were designed to help employees to achieve goals that added value to the organization. Training and employee development were activities that recognized the importance of investing in employees. Termination of employment occurred when employees failed to perform their duties – but turnover of employees was viewed as a cost to contain and organizations made an effort to create a partnership with their employees in an effort to sustain performance, increase effectiveness, and build loyalty. The assumptions of the employer-employee relationship which leading organization scholars advocated reflected the belief that the organization’s moral obligation was based upon a transformational relationship. This relationship recognized that employees were important individuals, in addition to being contributors to organization success4. The acknowledgement of the importance of employees as an investment of the organization confirmed the often-stated mantra contained in organizational values statements that “Our employees are our most valued assets 5 .” Leaders and organizations recognized that employees were far more important in contributing to service quality, innovation, and competitive advantage than simply performing job tasks6.

4

This viewpoint was articulated by highly regarded scholars like Burns, J. M., (2010), op. cit. and DePree, M., (2004), op. cit. However, this recognition of the need for leaders and organizations to partner with employees is well established and is a key component of modern leadership theory and organization behavior principles. 5 Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass. 6 See Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press.

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The purpose of this chapter is to address the concept of the leader or manager as a friend to her or his employees and to view that relationship as part of an “Ethic of Friendship” between leaders and employees. The chapter begins by defining the nature of friendship as it has been viewed by philosophers and then presenting the factors that make up a new Ethic of Friendship. Incorporated within that introduction is an explanation of the psychological contract – the subjectively perceived assumptions of the relationship that exists between two parties – and how that set of assumptions about duties owed is often perceived by employees. The chapter then identifies how and why it is in an employer’s interest to adopt the Ethic of Friendship in relationships with employees and suggests ten specific recommendations for adopting that ethical perspective. We conclude the chapter with a challenge to leaders to reflect on their assumptions about the employer-employee relationship in the pursuit of competitive advantage and identify the advantages of adopting the Ethic of Friendship in their relationships with employees.

The Nature of Friendship The concept of “friendship” has been studied in many academic fields and has also been addressed in a variety of academic theories in an effort to describe the relationship. Friendship connotes a mutual interpersonal partnership involving a commitment to each other’s best interests and

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welfare7. Distinguishing platonic friendship from a more intimate personal relationship is important in the employer-employee association for several important reasons – including legal and social implications that may arise ranging from allegations of preferential treatment and bias to sexual harassment and personal manipulation8.

Understanding ethical perspectives associated with friendship have their roots in Aristotelian ethics in which Aristotle described philia as a community-related virtue. Aristotle explained that the Greek word, philia, meant brotherly love or a close friendship relationship in which one individual desires what is perceived to be good, for the other party’s sake and not for his or her own benefit. Under this arrangement, the first individual is inclined, to the extent that is possible, to do those things which are beneficial for the other party9. As a virtue associated with character, Aristotle described friendship as a key to a flourishing life and as an important moral dimension 10 . The ideals of

Demir, M.; Tyra, A. & Özen-Çıplak, A., (2019). “Be There For Me and I Will Be There for You: Friendship Maintenance Mediates the Relationship between Capitalization and Happiness.” Journal of Happiness Studies, Vol. 20, Iss. 2, pp. 449-469. 8 Lussier, R. N. & Hendon, J. R., (2018). Human Resource Management: Functions, Applications, and Skill Development (3rd ed.). Thousand Oaks, CA: Sage Publications. 9 This explanation of Aristotle’s concept of philia comes from Aristotle & Chase, D. P., (2019). Nichomachean Ethics. Portsmouth, NH: SDE Classics. 10 This point is made by Hoyos-Valdes, D., (2018). “The Notion of Character Friendship and the Cultivation of Virtue.” Journal for the Theory of Social Behavior, Vol.48, Iss. 1, pp. 66-82. 7

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friendship from the time of Aristotle to St. Thomas Aquinas distinguished seven distinct types of friendship relationships, briefly summarized as follows.

Friendship of Utility Aristotle identified as a friendship of utility in which two people seek a short-term mutually beneficial association wherein each person benefits from the other’s actions. As the relationship evolves the persons maintain the friendship as long as the mutual benefit occurs11. Accidental Friendship Aristotle described a second level of association as an accidental friendship which typically consists of the enjoyment of a shared mutual experience involving a specific event in time or involvement over an extended time period in a shared activity12. Typically, such friendships are of short-term duration and exist only while both parties are engaged in the same experiences. As involvement in activities, preferences, and personal tastes change, so will these friendships. Virtuous Friendship A third level of friendship which Aristotle described was a virtuous friendship involving the mutual appreciation of each other’s virtues. In such relationships, the people themselves and the qualities that they share and hold dear are the foundation for the friendship13. These relationships often take time to fully evolve and depend upon mutual growth. This third level of relationship encompasses both the shared benefits and the enjoyment of the first two levels and sustains both mental and emotional health. Harmonious Friendship Cicero identified harmonious friendship as a materially beneficial relationship that included companionship in meeting both person’s need for 1111

Aristotle & Chase, D. P., (2019), op. cit. Ibid. 13 Ibid. 12

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association. Typically, this relationship involves the sharing of common experiences that often requires a degree of cooperation to accomplish a shared goal14 . The friendship leads to a mutual appreciation of the good qualities of the other person.

Spiritual Friendship The English monk, Aelred of Rivaulx, viewed spiritual friendship as interpersonal connection based upon shared discipleship and shared goals from a Christian perspective15. This relationship is a chaste partnership that seeks to emulate the pure love of God for man in an interpersonal connection that is unselfish and devoted to the service to others. Charitable Friendship St. Thomas Aquinas identified charitable friendship as benevolent kindness to another out of a desire to do something genuinely good for them in a manner that is also personally self-gratifying and satisfying 16 . The relationship between the parties involves shared communication, a close association, and the desire to wish good for another person without requiring them to be perfect. Carnal Friendship Hedonistic carnal friendship is intended to gratify the physical needs of the parties and make include sexual or other physical appetites. This friendship relationship may be mutually gratifying or may exchange one type of physical gratification for another desired benefit. Aelred of Rivaulx argued that carnal friendship was not a genuine friendship relationship but

Mews, C. J., (2014). “Cicero on Friendship” in Caine, B., (Ed.). Friendship: A History, New York: Routledge, pp. 65-72. 15 Carroll, P., (1999). “Aelred of Rievaulx: On Spiritual Friendship.” CatholicIreland.Net, November 30, 1999 and found online on April 11, 2020 at https://www.catholicireland.net/ aelred-of-rievaulx-on-spiritual-friendship/. 16 Hoye, M., (2016). “Charity as Friendship According to St. Thomas Aquinas”. Assumption College Digital Commons. Found online on April 11, 2020 at https://digitalcommons. assumption.edu/honorstheses/31/. 14

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was primarily self-serving and not interested in the welfare of the other party17. Each of these seven distinct types of friendship views the relationship in terms of the importance of another person, a genuine desire to contribute to that person’s benefit, and a recognition that the connection is mutually gratifying and fulfilling.

In describing the theoretical foundation of friendship, Homans Social Exchange Theory18 suggests that relationships between people occur as the result of a cost-benefit analysis of the value of each relationship. Relationships, Homans suggested, are maintained as long as the two parties believe that they are obtaining a benefit or personal gratification that is at least equal to the costs that they are investing in maintaining the relationship. Thus, according to Homans’ theory, friendship is ultimately a selfserving decision requiring a personal advantage or benefit. The goal of individuals is to maximize rewards and minimize costs in sustaining relationships and the purpose of the relationship is primarily about individual gains rather than a legitimate concern for others.

17 18

Carroll., P., (1999), op. cit. Homans, G. C., (1974). Social Behavior: Its Elementary Forms. San Diego, CA: Harcourt Brace Publishing.

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Friendship is also a part of Social Identity Theory, inasmuch as people regard the group with which they closely identify as their friends. Social identity is associated with group experiences and expressed through interaction with one’s peers – often those with whom an individual has an ethnic commonality. Through their self-stereotyping, individuals identify themselves as part of a group and affirm their values and behaviors as being consistent with the actions of others19. This theory also focuses on the individual’s self-serving benefit which occurs by having others with whom to identify in order to enhance one’s sense of self – rather than to contribute to the well-being of those others. Equity Theory seeks to equalize the costs and benefits associated with a friendship or other relationship and typically refers to the degree of personal investment in a relationship. According Equity Theory, a person who gets more benefits than they put in to a relationship will feel guilt or shame, while a party who thinks that (s)he has put a lot in but obtained very little back is likely to be angry and resentful20. The longer that feelings of unfairness or the lack of balance exist within the relationship persists, the more likely it is that the relationship will eventually dissolve. Benefits obtained from a Leszczensky, L., Jugert, P. ^ Pink, S., (2019). “The Interplay of Group Identifications and Friendships: Evidence from Longitudinal Social Network Studies.” Journal of Social Sciences, Vol. 75, Iss. 2, pp. 460-485. 20 Young, J., (2018). “Heroes of Employee Engagement No. 6: John Stacy Adams.” Peakon.com. June 2, 2018 and found online on April 11, 2020 at https://peakon.com/blog/futurework/john-stacy-adams-equity-theory/. 19

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relationship and the perceived efforts of the parties involved may change over time.

Relationship Stage Theory describes friendships as relationships that evolve through the predictable stages of acquaintance, interdependence, consolidation, deterioration, and break-up21.

21

Levinger, G. (1980). ”Toward the Analysis of Close Relationships.” Journal of Experimental Social Psychology, Vol. 16, pp. 510-544.

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This theory argues that friendships and other relationships continue only as long as the partners involved continue to add value to each other in ways that are mutually gratifying and beneficial. As those perceived contributions depreciate in importance, the relationship will also begin to decline and the parties need to reinvest in achieving mutual benefits in order to sustain the friendship and continue the relationship. Relational Dialectics Theory, related to friendship, is a theory of communication that focuses on the contradictions, inconsistencies, and diversity of goals that occur in relationships. The tensions that occur in relationships may be internal within one party, internal between the parties, or conflicting between the parties and social norms.

A core assumption of this theory is that relationships involve ongoing dynamic contradictions consisting of a continuous interplay between contrary or opposing tendencies in an effort to maintain balance in the relationship. The focus of this theory is on the communication process and the resolution of conflicts, rather than on the mutual benefit created for the parties.

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Each of these theories provide context to the nature of the friendship relationship and are descriptive regarding some of the activities in which participants in a relationship are engaged. Comparing these theories with the previously listed definitions of friendship, the theories imperfectly describe the nature of friendships but focus on accompanying characteristics associated with friendships.

Friendship from Common Ethical Perspectives In this section we look at thirteen frequently cited ethical perspectives and identify how each of them “fits” with the values, priorities, and duties commonly associated with friendship. The purpose of this examination is to demonstrate that friendship is closely aligned with ethics and to identify how an Ethic of Friendship might logically be framed. Table 1 presents each of these thirteen ethical perspectives, briefly describes their fundamental ideas, describes how each perspective relates to friendship, and comments on the ethical nature of the connection.

Ethic of Universal Rights

Ethic of Universal Rules

Utilitarian Ethics

Ethic of Religious Injunction Ethic of Government Regulation

Virtue Ethics

Ethical Perspective Ethic of SelfInterest

Fundamental Idea “Pursue outcomes which have the greatest positive benefit for oneself and one’s organization without infringing upon the rights of others.” “Constantly pursue excellence, make that pursuit a habit, and treat others with integrity.” “Always treat others with dignity, respect, and kindness – as valued ‘Yous’ and never as anonymous ‘Its.’” “Live by both the letter and the spirit of the law in honoring duties owed to others, but remember that the law by itself is a minimal moral standard.” “No actions should be engaged in which do not result in the greatest good for that community of which you are a part.” “Act according to universal principles and rules which you would have others apply if they were in your similar situation and your positions were reversed.” “No one, including governments, may take action that infringes upon the legitimate rights of any other individual.” Friendships are sustained when the parties honor the other party’s rights and friends scrupulously avoid hurting each other.

Friendships work best when both parties comply with principles and rules which are mutual and reciprocal – especially principles that benefit each other.

Treating others with dignity, respect, and kindness encompasses many of the basic qualities that build friendships. Friendships focus on doing far more than simply complying with the letter of the law but include honoring its intentions – and even going beyond legal obligations. Friendship relationships strive to assist others to be as productive as possible in benefiting both parties and demonstrate respect for others.

Friendships are enhanced when each partner is virtuous and treats others with integrity.

Relationship to Friendship Creating friendships sustains emotional health, increases cooperation, and improves the ability to achieve greater accomplishments.

Respecting the rights of others is an ethical mandate for sustaining a relationship with a friend and demonstrates authenticity.

Honoring others and treating them as friends complies with the ethical requirements of this ethic and strengthens relationships. Friendships encourage individuals to comply with the law and to exceed its requirements to do that which is just and good – rather than just that which is “legal.” Friends seek to do that which is positive and helpful and avoid doing that which harms the other party. By cooperating together, both parties are able to benefit. Complying with this ethical standard is a basic assumption of the friendship relationship and strengthens the ethical relationship and the trust of both parties.

Nature of the Ethical Connection Establishing long-term relationships that value others increases the ability of individuals and organizations to be more productive and honor ethical duties. Being ethically virtuous in honoring relationships strengthens relationships.

Table 1. Ethical Perspectives and their Relationships to Friendship

“Seek to discover your innate greatness and fulfill that potential to create a better world.” “Respect others as valued individuals, share concern for their welfare, and honor the responsibility to treat each person with empathy and compassion.” “Incorporate the ethics and values of each of the other ethical perspectives to honor the rights of others and conform to correct moral and ethical principles.”

Ethic of Self-Actualization

Transformative Ethics

Ethic of Care

Being a genuine friend enables a person to become his/her best self and creates esteem for both parties – leading to self-actualization Taking responsibility for others’ welfare and caring for a friend if (s)he has a need demonstrates the empathy and compassion of genuine friendship and honors the relationship. Demonstrating a commitment to others’ needs is personally fulfilling and honors the highest and best values of interpersonal relationships and the expectations of friendship.

Friendship behavior demonstrates the authentic desire to help the other party to achieve that which best benefits, fulfills, and enriches them.

This ethic reflects the need to mutually benefit, to be fair with a friend, and to take no actions that would harm a friend.

“Act only in ways that acknowledge the rights, liberty, and equality of all and take no actions that harm the least among us.” “Take no actions which impede the self-development or self-fulfillment of others.”

Ethic of Distributive Justice

Ethic of Contributing Liberty

Relationship to Friendship Friends cooperate to best utilize their own resources while also respecting and caring genuinely about other’s resources as well.

Fundamental Idea “Achieving an efficient use of resources to create value for society is a virtuous goal.”

Ethical Perspective Ethic of Economic Efficiency

Nature of the Ethical Connection Avoiding wasting resources honors the mutual relationship and treats the other party with respect and genuine concern for their best interests. Fairness and justice are key ethical standards that demonstrate the respect that friends have for each other and their desire to benefit both parties equitably. The ethical obligation to help another person to feel fulfilled and satisfied is an implicit part of the friendship relationship and gives satisfaction to both parties. The ideal of achieving one’s innate greatness is a noble objective that authentic friends aspire to for themselves and for their counterpart as well. Acknowledging the special relationship of obligations and duties owed to a friend in need is the foundation of this ethical perspective and essential to a good friendship. Respecting others’ ethical perspectives demonstrates moral and ethical virtue and a commitment to the best interests of others and the principles of interpersonal connection.

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Table 1 confirms that all thirteen of these ethical perspectives apply directly to ethical obligations of friendship and affirm the importance of individuals interacting in ways that pursue both their own and others’ best interests. Ethical perspectives associated with friendship primarily address the reciprocity and mutuality of relationships1. For purposes of examining the ethical factors associated with friendship to complement Table 1, we offer a definition of friendship that incorporates its ethical components. We define friendship as “experiencing a close, mutual relationship characterized by strong and positive emotional connections that 1) create a sense of well-being and security, 2) provide companionship and psychological support, and 3) validate one’s identity and social status in ways that other relationships are unable to provide2.”

Such friendships incorporate trust, support, and mutual regard in an interdependent relationship that benefits both parties. Nothing on this earth, Thomas Aquinas suggested, is more to be prized than true friendship3.

Clarifying an Ethic of Friendship The ethical components of friendship are widely recognized, although the idea of an Ethic of Friendship has not been previously identified, as such, in either the social psychology or the business literatures4. Notwithstanding that failure to formally define an Ethic of Friendship, many scholars have addressed the employer-employee relationship to suggest a close parallel with the definition of friendship which we have provided – with the leader’s responsibilities incorporating a strong moral and ethical requirement. For

1

2

3

4

See, for example, Sommers, M. C., (1997). “Useful Friendship: A Foundation for Business Ethics.” Journal of Business Ethics, Vol. 16, Iss. 12/13, pp. 1453-1458. This explanation of Aristotle’s concept of philia is summarized in “Definitions – philia.” sensagent. Found online on April 11, 2020 at http://dictionary.sensagent.com/Philia/en-en/. “Thomas Aquinas Quotes about Love.” AZQuotes. Found online on April 10, 2020 at https://www.azquotes.com/author/490-Thomas_Aquinas/tag/love. This statement is based upon a search of EBSCOhost and the website for Business Source Complete and the Psychology and Behavioral Sciences Collection as of April 11, 2020.

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example, Moses Pava has suggested that the leader’s obligation to others is sacred, covenantal, and service-oriented5. Max DePree described leaders as being both a servant and a debtor to those whom they lead 6 and James MacGregor Burns’ definition of the leader-follower relationship emphasized that the most effective leader was as deeply committed to the growth and development of employees as to the organization7.

The ethical components of friendship are widely recognized, although the idea of an Ethic of Friendship has not been previously identified, as such, in either the social psychology or the business literatures Also compelling with regard to creating a model for an Ethic of Friendship is the research about High-Performance, High-Trust, and HighCommitment organizations 8 . That body of research cites the empirical evidence about organizations that create cultures based upon respect for employees, a commitment to paying them fairly and providing them with job stability, and demonstrating high trust by engaging and empowering employees at all levels of the organization. By aligning human resource management systems and policies to reinforce the message that employees are truly valued by organizational leaders, these High-Performance organizations are more profitable, more innovative, provide better customer

5

Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St. Martin’s Press. 6 DePree, M., (2004). Leadership is an Art. New York: Crown Publishing, Chapter One. 7 Burns, J. M., (2010). Leadership. New York: Harper Torchbooks. 8 See, for example, the evidence from Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press and Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass.

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service, have lower turnover, and are more competitive than comparable companies in their industry9.

We define the Ethic of Friendship as “a mutually beneficial partnership between two parties which actively pursue the long-term welfare of themselves and another person as committed ethical stewards.” We suggest that the Ethic of Friendship consists of ten individual components. 

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9

Ibid.

Mutually Beneficial – The friendship between the two parties motivates them both to understand and pursue desired outcomes that benefit both participants. Trust-Based – The friendship is based upon the willingness of both participants to invest personally and be vulnerable and to expect that the other party can be trusted to honor that risk or vulnerability. Partnership – The participants acknowledge and accept a shared desire to collaborate, although the partnership need not be formalized to be deemed to be in force. Two Parties – Friendship is not a one-sided endeavor but requires that the desire to benefit both oneself and the other party be motivating factors. Actively Pursue – Friendships may not necessitate frequent contact, but the relationship is active not passive and goals are implicitly shared.

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Long-Term – Friendships are not casual interchanges but are engaged in with the understanding that they will exist over and extended time period. Welfare – The needs of others that protect their interests and promote their personal development are addressed in the relationship. Themselves – Each individual seeks to gain a satisfying an important personal benefit for herself or himself and recognizes that the association will be beneficial. Another Person – The friendship requires that each party also be worthy of the trust of that other individual in honoring her/his expectations. Ethical Stewardship – Both parties accept the ethical steward’s obligation to do that which not only seeks the other’s interests but to optimize possible benefits that are available.

This definition of the Ethic of Friendship integrates important elements that make up the definition, the various types of friendship that have been discussed over many centuries, the ethical duties implicit in the friendship relationship, and elements of other behavioral theories.

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We define friendship as “experiencing a close, mutual relationship characterized by strong and positive emotional connections that 1) create a sense of well-being and security, 2) provide companionship and psychological support, and 3) validate one’s identity and social status in ways that other relationships are unable to provide 10 .” Such friendships incorporate trust, support, and mutual regard in an interdependent relationship that benefits both parties. Nothing on this earth, Thomas Aquinas suggested, is more to be prized than true friendship 11 . This definition of the Ethic of Friendship integrates important elements that make up the definition, the various types of friendship that have been discussed over many centuries, the ethical duties implicit in the friendship relationship, and elements of other behavioral theories.

The Psychological Contract and the Ethic of Friendship A psychological contract is the subjective perceptions held by an individual toward another party that define what the perceiving individual believes that other party owes to him or her in exchange for the perceiving party’s obligations 12 . A psychological contract is, therefore, entirely a personal perception that may or may not match with the obligations which the other party may hold. In fact, the evidence suggests that the perceptions about perceived obligations are more likely than not to conflict between the parties rather than to be aligned13.

This explanation of Aristotle’s concept of philia is summarized in “Definitions – philia.” sensagent. Found online on April 11, 2020 at http://dictionary.sensagent.com/Philia/en-en/. 11 “Thomas Aquinas Quotes about Love.” AZQuotes. Found online on April 10, 2020 at https://www.azquotes.com/author/490-Thomas_Aquinas/tag/love. 12 The definitive work about the nature of psychological contracts is Rousseau, D. M., (1995). Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand Oaks, CA: Sage Publications. 13 This problem of inconsistency between the parties about the duties owed is clearly enumerated in Robins, S. L. & Rousseau, D. M., (1994). “Violating the Psychological Contract: Not the Exception but the Norm.” Journal of Organization Behavior, Vol. 15, Iss. 3, pp. 245-259. 10

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When another party fails to honor the perceived duties of a psychological contract, the first party infers that a breach in the contract has occurred – whether their counterpart understood and accepted the perceptions believed to be a part of their relationship or not14. The perceived breach of inferred duties signals a violation of the trust that exists between the parties and undermines their relationship – even in cases when no mutually understood agreement has ever been made.

14

Ibid.

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The Ethic of Friendship assumes that the two parties in a relationship have established clear communication and that they recognize and value the other party’s priorities and the importance of the factors that bind the parties together. The exchange relationship that exists between two friends is based upon a mutual reciprocity and exchange of benefits; the psychological contract between those friends is based upon the inference that the parties fully understand each other’s needs. The friendship assumes that both of the individuals are actively involved in honoring the relationship between them and take upon themselves the personal responsibility to act to achieve the other’s welfare, growth, and wholeness15. Trust between the parties is based upon past experiences and the belief that the other party will act in a manner that is consistent with the other party’s best interests16.

In a psychological contract, an employee has a reasonable expectation that her/his employer will honor all of the legal and interpersonal requirements of the employment relationship17. The quid pro quo exchange 15

This commitment to the welfare of others is a responsibility of Ethical Stewardship. See Caldwell, C., Hayes, L., Karri, R., and Bernal, P., (2008). “Ethical Stewardship: Implications for Leadership and Trust.” Journal of Business Ethics, Vol. 78, Iss. 1/2, pp. 153-164. 16 This understanding of the reciprocal nature of trust is identified in Gullett, J., Canuto-Carranco, M., Brister, M., Turner, S., and Caldwell, C. (200)9. “The Buyer-Supplier Relationship: An Integrative Model of Ethics and Trust.” Journal of Business Ethics, Vol. 90, Supp. 3, pp. 329341. 17 Rousseau, D. M., (1995), op. cit.

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of obligations that exist in working relationships largely focus on the mutual obligations of employees to follow policies and procedures, respond promptly to the directives of their superiors, and achieve an appropriate level of performance typically outlined as part of the requirements of the job description. The assumption of employees is that they will be supervised effectively, treated reasonably, and informed about the changing conditions of their jobs – in addition to being compensated, as agreed upon.

For many years during the period between the end of World War II and the Vietnam War, labor-management relationships were such that employees entered into a career and performed work for an employer throughout that career18. Pension systems, compensation philosophies, and human resource policies and programs acknowledged the importance of employees as contributing to the long-term profitability of an organization. Performance evaluation systems were designed to help employees to achieve goals that added value to the organization. Training and employee development were activities that recognized the importance of investing in employees. Termination of employment occurred when employees failed to perform their duties – but turnover of employees was viewed as a cost to contain and organizations made an effort to create a partnership with their

18

The content of this paragraph is clearly summarized in Wren, D. A., (2004). The History of Management Thought (5th ed.). Hoboken, NJ: Wiley & Sons Publishing.

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employees in an effort to sustain performance, increase effectiveness, and build loyalty. The assumptions of the employer-employee relationship which leading organization scholars advocated reflected the belief that the organization’s moral obligation was based upon a transformational relationship. This relationship recognized that employees were important individuals, in addition to being contributors to organization success19.

The acknowledgement of the importance of employees as an investment of the organization confirmed the often-stated mantra contained in organizational values statements that “Our employees are our most valued assets20.”

19

This viewpoint was articulated by highly regarded scholars like Burns, J. M., (2010), op. cit. and DePree, M., (2004), op. cit. However, this recognition of the need for leaders and organizations to partner with employees is well established and is a key component of modern leadership theory and organization behavior principles. 20 Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass.

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Leaders and organizations recognized that employees were far more important in contributing to service quality, innovation, and competitive advantage than simply performing job tasks21.

In the past forty-odd years, however, the psychological contract between employers and employees has been rewritten and totally revised in its basic values – largely unilaterally by company leaders as part of a new management philosophy 22 . Employees are increasingly viewed as a fungible, or easily exchanged, commodity and considered to be participants in a largely transactional relationship 23 . This “redefined” relationship is characterized by organizations no longer viewing the employer-employee relationship as transformational and assumes that employees are a cost center to be minimized, rather than an asset to be maintained24.

See Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 22 This change in the new employee contract is addressed in Pfeffer, J., (1998), op. cit. 23 The nature of this transactional relationship is identified in Burns, J. M., (2010), op. cit. 24 Beer, M., (2009), op. cit. 21

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Part-time and contract employees are offered temporary employment with no long-term job benefits and no commitment from employers. The cost of this new employee contract is that a majority of employees no longer have a loyalty commitment to their employers, do not feel engaged as members of the organization for which they work, are actively looking for a better job opportunity where they will be treated better, and no longer trust their employers or the supervisors with whom they work25. The evolution of the new management philosophy has largely disrupted the relationship between leaders and followers in organizations. As a result, the Ethic of Friendship which could have existed is absent in most organizations

25

This unsatisfactory set of circumstances has been well documented by Gallup and is a worldwide problem. See, for example, Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press.

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The evolution of the new management philosophy has largely disrupted the relationship between leaders and followers in organizations. As a result, the Ethic of Friendship which could have existed is absent in most organizations. The new employment contract essentially treats employees as commodities and as performers of tasks. The idea that employees are truly considered as a valued partner is viewed skeptically by employees who see their organizations downsized and their peers eliminated.

The impact on the psychological contract between employers and employees has also changed and many employees view their supervisors as individuals who seek to “command and control” their performance in order to maximize their short-term utility – rather than as partners in a mutually beneficial relationship. The notion of a supervisor as a participant in an Ethic of Friendship relationship is undermined by the way that most employers hire and fire employees at will, by their hiring of part-time employees, and by the way that many supervisors treat employees in interpersonal relationships26.

26

The content of this paragraph is consistent with the writings of many scholars. See, for instance, the work of Stephen R. Covey in Covey, S. R., (2004), The 8th Habit: From Effectiveness to Greatness. New York: Free Press.

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The Ethic of Friendship in the Work Place Within the context of the work place, the factors that seem to dominate the leader-follower relationship and the current philosophy of management suggest that the Ethic of Friendship no longer seems to apply – with the exception of those organizations where leaders adopt a transformational27 or transformative 28 leadership approach and are actually committed to the welfare, growth, and fulfillment of their employees. By treating employees as commodities rather than as people, leaders and organizations have undermined their ability to inspire employees to work for the long-term good of their companies. The idea that a leader is a friend of the employees has essentially evaporated as leaders demonstrate that their policies, practices and philosophies give priority to short-term benchmarks of performance.

27 28

The transformational leadership perspective is described by Burns, J. M., (2010), op. cit. Transformative leadership is a highly moral leadership model developed in Caldwell, C., (2012). Moral Leadership: A Transformative Model for Tomorrow’s Leaders. New York: Business Expert Press.

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Rather than incorporating the mutual commitment of friends toward others’ growth and development, most organizations seek to cut costs associated with employee training and development and focus on hiring part-time employees to whom they have little real commitment, other than to accomplish day-to-day tasks. For that reason, a recent Gallup survey has confirmed that more than 80% of employees do not self-describe as engaged in their organization or committed to its long-term success 29. When 70% of employees affirm that they are actively looking for a new job with a new employer, it is painfully clear that those employees feel little loyalty to their company and a minimal commitment to their leader or supervisor30. Genuine friendship includes mutual support and recognition that the other person is of value. Employees in the 2018 study who explained why they are seeking new employment cite lack of support and recognition as the reasons why they are looking elsewhere for work.

29 30

See Clifton, J. & Harter, J., (2019), op. cit. Schwantes, M., (2018). “A New Study Reveals that 70 Percent of Workers Say They Are Actively Looking for a New Job. Here’ the Reason in Five Words.” Inc., December 4, 2018 and found online on April 11, 2020 at https://www.inc.com/marcel-schwantes/a-new-studyreveals-70-percent-of-workers-say-they-are-actively-looking-for-a-new-job-heres-reasonin-5-words.html,

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Contrasted with the more typical work environment, High-Performance Work Systems create organizational cultures that honor their relationships with employees, invest in their development, treat them fairly and with a commitment to their welfare, and empower and trust them 31 . If such treatment sounds much like the criteria of the Ethic of Friendship, it is certainly very close to it. Leaders who treat their employees with compassion and consideration and who strive to create a work environment that is based upon high trust earn high employee commitment in return32. The many organizations that treat employees as commodities and who adopt policies like the employment-at-will doctrine send a message to their employees that loudly blares, “Do not confuse us with your friends. We are not that!” And employees who are people with hopes, dreams, and aspirations for a better life look elsewhere for interpersonal connection and a sense of fulfillment. Although it is the rare leader and the unusual organization that makes the effort to treat employees with respect and a commitment to their personal growth, those who do adopt that approach are measurably more successful than their competitors – or, at least, that’s what a growing body of empirical evidence suggests33. 31

Beer, M., (2009), op. cit. Pfeffer, J., (1998), op. cit. 33 See the research by Kim Cameron, Robert Quinn, and other scholars involved in the Positive Organizational Scholarship movement. For example, see Cameron, K., (2012). Positive Leadership: Strategies for Extraordinary Performance. San Francisco, CA: Berrett-Koehler Publishing 32

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Despite the fact that each individual would readily admit that (s)he would prefer to be treated with consideration, trust, respect, and a commitment to our success, most organizational leaders choose to do otherwise – according to the feedback from the latest Gallup research34. Clearly, the evidence strongly confirms that the Ethic of Friendship is rarely the guiding philosophy of most leaders and organizations – even though it seems worthy to query “Why are leaders so reluctant to treat employees as valued friends?”

34

Cifton, J. & Harter, J., (2019), op. cit.

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Ten Recommendations for Adopting the Ethic of Friendship Although each person is familiar with what it means to be a friend and the importance of friendship in human associations, the standard of the Ethic of Friendship is so infrequently practiced in organizations that it may be worth the effort for leaders, managers, and supervisors to reflect on how being a friend to their employees may actually correlate with their work responsibilities on the job. Certainly, being a friend does not mean to abrogate the obligation for the leader or employee to be responsible in honoring work-related duties, nor does it mean that employees should be coddled or pandered to when work needs to be performed at the highest possible level. Even friendship relationships expect others to be accountable and responsible. However, the following are ten recommendations that leaders and supervisors may wish to consider with regard to adopting the standards of the Ethic of Friendship in employer-employee relationships.

Identify How You Would Wish To Be Treated As an Employee in Your Own Organization We all want to be informed about key factors associated with our work. If we are committed to an organization’s success, we want to be involved and contribute to improving the systems and processes which affect our work. Ultimately, we wish to be supported and recognized as valued partners35. When those basics are not part of our work place experience, employees tend to feel discounted and overlooked.

35

Schwantes, M., (2018), op. cit.

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Acknowledge the Importance Of Mutually Beneficial Partnerships

Each of us wants to feel a sense of social justice and equity in our relationships with others, where we benefit from our efforts and feel that those same efforts are both respected and reciprocated36. Creating mutually beneficial partnerships enables individuals to feel a connection with others and provides the social and psychological gratification and the personal satisfaction that makes life fulfilling and enjoyable.

36

Young, J., (2018), op. cit.

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Admit the Significance of Trust In Virtually Every Relationship The mantra that “trust is the glue” of every organization and every relationship is so widely accepted as to be almost a cliché in life37. It seems illogical that leaders, managers, and supervisors in organizations would do so many things that destroy trust and that treat their employees as if they are mere commodities. Nevertheless, those same organizational leaders seem to go brain dead and continue to demonstrate that they are consistently not trustworthy38.

Recognize the Value of a Leader’s Example in Influencing Others Leaders effectively model the way39 and their virtuous behaviors tend to be emulated by their followers. Those who wish to be positive role models and examples to others must recognize that their personal integrity, their consistency in honoring commitments, and their dedication to helping others to become the best version of themselves are qualities that best demonstrate the Ethic of Friendship and that generate personal progress in others40.

37

Covey, S. R., (2004), op. cit. Clifton, J. & Harter, J., (2019), op. cit. 39 Kouze, J. M & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (6th ed.). San Francisco, CA: Jossey-Bass. 40 Covey, S. R., (2004), op. cit. 38

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Assess your Own Personal Qualities and Evaluate Your Virtues and Vulnerabilities as a Friend Conducting a constant personal inventory will enable individuals to assess the degree to which they honor the complex moral obligations that are required from friends – as set forth in the table above. That selfassessment process is a key to improving oneself and one’s relationships with others and is a fundamental requirement for great leadership41.

Invest in Discovering the Importance of Emotional Intelligence in Improving Relationships Emotional intelligence is a critical virtue for leaders in crafting productive responses that are contextually appropriate and effective at achieving goals 42 . Developing the skills associated with this intelligence enables individuals to demonstrate both empathy and compassion and solve

Caldwell, C. and Atwijuka, S., (2019). “SELF-Examination and the Ethic of Self-Interest.” Working paper submitted for publication in the Journal of Values-Based Leadership 42 Goleman, D., (2005). Emotional Intelligence: Why It Can Matter More Than IQ. New York: Bantam Books. 41

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problems that are often at the crux of interpersonal relationships and interpersonal growth.

Conduct Empirical Research about the Benefits of Creating a HighPerformance Work Culture Understanding the facts about the importance of treating others with kindness, respect, and trust can strengthen a leader’s commitment to becoming a better leader and a better person. High-Performance work systems are well-documented organizational systems that align systems and values and are virtue-based and principle-centered philosophies of leadership that have proven to be effective 43 . Leaders interested in improving themselves can learn more about how to improve their organizations by conducting this research and applying the concepts.

43

Pfeffer, J., (1998), op. cit. and Beer, M. (2009), op. cit.

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Experiment by Creating a Supportive Relationship with Other Associates at Your Work Place Principles associated with the Ethic of Friendship are value-based and principle-centered. These principles are appreciated by others and enable leaders to strengthen their positive influence. Taking the time and making the effort to apply these principles can enable leaders to discover that the principles improve communication, enhance relationships, build trust, and enable organizations to perform more effectively44.

Examine the Ten Factors That Make Up the Definition of the Ethic of Friendship and Study How They Apply For You The ten factors are each positive and realistic concepts that make rational sense. More importantly, they are principles that touch lives, improve relationships, and enhance individual and organizational performance. Studying these ten factors is a worthy endeavor that is consistent with established principles of effective human relations and organization performance.45

44 45

Covey, S. R., (2004), op. cit. The truth of the principles associate with the ten factors that make up the Ethic of Friendship and their logic and rationality are addressed throughout the leadership literature. See, for example, Covey, S. R., (1992). Principle-Centered Leadership. New York: Simon & Schuster.

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Explore Within Your Mind, Your Heart, and Your Conscience What You Think You Ought To Do in Applying the Ethic of Friendship Reflect on the goals, concepts, and purpose of the Ethic of Friendship and the philosophy upon which it is based46. Examine your heart and your conscience and inquire within yourself whether the fundamentals that make up the Ethic of Friendship are valid, reproducible, and efficacious in relationships and within organizations. Determine for yourself whether applying this ethic has value in your life and on the job.

Reflect on the goals, concepts, and purpose of the Ethic of Friendship and the philosophy upon which it is based Honoring these ten recommendations will strengthen bonds between leaders and followers and treat employees with respect – to the point that leaders clearly demonstrate that the psychological contract obligations that they owe others are both understood and met. These ten recommendations 46

This self-analysis and self-discovery process is well established as a means of coming to terms with the value of important truths. The process is articulated by many scholars. See, for example, Covey, S. R., (2004), op. cit.

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about the application of the Ethic of Friendship affirm the potential excellence and inherent goodness that lies hidden within each one of us.

One of the great discoveries and surprising joys of life is that when we honor the principles implicit within the Ethic of Friendship, we immediately become a better friend to ourselves and improve the quality of our life and our satisfaction with who we are – as well as our relationships with others and our effectiveness as leaders within organizations.

CONCLUSION It is not enough to be disingenuous by treating employees “as if they matter” with pretense or deception. Employees do matter – just as true friends really matter. Other persons quickly see through inauthentic and manipulative behaviors. If leaders and supervisors attempt to “game” their employees by pretending that they actually care about employees, those leaders and supervisors will be quickly discovered – just as individuals quickly learn that they have been defrauded by so-called friends who are simply self-serving and selfish.

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The principles of the Ethic of Friendship prove their value as they are applied – and the empirical evidence that readily exists can be duplicated if organizations apply the principles of the Ethic of Friendship with competence and wisdom. Although there are no “quick fixes” or “instant pudding 47 ” in organizations or in human relationships, the Ethic of Friendship can improve organizational relationships and change lives.

Moral leadership treats people as valued individuals while pursuing organizational success48. As leaders seek to understand others whom they serve, as they strive to understand the assumptions that make up the psychological contracts that exist in the minds of each person, those leaders prepare themselves to work for employees’ interests while simultaneously improving their organizations. 47

The fact that there are no instant solutions to complex problems is a true principle that has repeatedly been documented. See, for example, Deming, W. E., (2000). Out of the Crisis. Cambridge, MA: MIT Press. 48 This fundamental principle about the obligations of effective leaders has been the message of many scholars and dates back to the early work of Chester Barnard. See Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA: Harvard College.

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The nobility and value of the Ethic of Friendship is that it is a morally virtuous, responsible, and life-enhancing ethical perspective that can make the world better for employees, for organizations, and for society – and by abiding by its principles, that application can also enable leaders to become better people themselves.

REFERENCES Aristotle & Chase, D. P., (2019). Nichomachean Ethics. Portsmouth, NH: SDE Classics. Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA: Harvard College. Burns, J. M., (2010). Leadership. New York: Harper Torchbooks. Caldwell, C. and Atwijuka, S., (2019). “Self-Examination and the Ethic of Self-Interest.” Working paper submitted for publication in the Journal of Values-Based Leadership. Caldwell, C., (2012). Moral Leadership: A Transformative Model for Tomorrow’s Leaders. New York: Business Expert Press. Caldwell, C., Hayes, L., Karri, R., and Bernal, P., (2008). “Ethical Stewardship: Implications for Leadership and Trust.” Journal of Business Ethics, Vol. 78, Iss. 1/2, pp. 153-164. Cameron, K., (2012). Positive Leadership: Strategies for Extraordinary Performance. San Francisco, CA: Berrett-Koehler Publishing. Carroll, P., (1999). Aelred of Rievaulx: On Spiritual Friendship. CatholicIreland.Net, November 30, 1999 and found online on April 11, 2020 at https://www.catholicireland.net/aelred-of-rievaulx-on-spiritualfriendship/. Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. Covey, S. R., (2004), The 8th Habit: From Effectiveness to Greatness. New York: Free Press.

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Covey, S. R., (1992). Principle-Centered Leadership. New York: Simon & Schuster. Deming, W. E., (2000). Out of the Crisis. Cambridge, MA: MIT Press. Demir, M.; Tyra, A. & Özen-Çıplak, A., (2019). “Be There For Me and I Will Be There for You: Friendship Maintenance Mediates the Relationship between Capitalization and Happiness.” Journal of Happiness Studies, Vol. 20, Iss. 2, pp. 449-469. DePree, M., (2004). Leadership is an Art. New York: Crown Publishing, Chapter One. Gullett, J., Canuto-Carranco, M., Brister, M., Turner, S., and Caldwell, C. (200)9. “The Buyer-Supplier Relationship: An Integrative Model of Ethics and Trust.” Journal of Business Ethics, Vol. 90, Supp. 3, pp. 329341. Homans, G. C., (1974). Social Behavior: Its Elementary Forms. San Diego, CA: Harcourt Brace Publishing. Hoye, M., (2016). Charity as Friendship According to St. Thomas Aquinas. Assumption College Digital Commons. Found online on April 11, 2020 at https://digitalcommons.assumption.edu/honorstheses/31/. Hoyos-Valdes, D., (2018). “The Notion of Character Friendship and the Cultivation of Virtue.” Journal for the Theory of Social Behavior, Vol.48, Iss. 1, pp. 66-82. Kouze, J. M & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (6th ed.). San Francisco, CA: Jossey-Bass. Leszczensky, L., Jugert, P. ^ Pink, S., (2019). “The Interplay of Group Identifications and Friendships: Evidence from Longitudinal Social Network Studies.” Journal of Social Sciences, Vol. 75, Iss. 2, pp. 460485. Levinger, G. (1980). ”Toward the Analysis of Close Relationships.” Journal of Experimental Social Psychology, Vol. 16, pp. 510-544. Lussier, R. N. & Hendon, J. R., (2018). Human Resource Management: Functions, Applications, and Skill Development (3rd ed.). Thousand Oaks, CA: Sage Publications.

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Mews, C. J., (2014). “Cicero on Friendship” in Caine, B., (Ed.). Friendship: A History, New York: Routledge, pp. 65-72. Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St. Martin’s Press. Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press and Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: JosseyBass. Robins, S. L. & Rousseau, D. M., (1994). “Violating the Psychological Contract: Not the Exception but the Norm.” Journal of Organization Behavior, Vol. 15, Iss. 3, pp. 245-259. Rousseau, D. M., (1995). Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand Oaks, CA: Sage Publications. Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass. Schwantes, M., (2018). A New Study Reveals that 70 Percent of Workers Say They Are Actively Looking for a New Job. Here’ the Reason in Five Words. Inc., December 4, 2018 and found online on April 11, 2020 at https://www.inc.com/marcel-schwantes/a-new-study-reveals-70percent-of-workers-say-they-are-actively-looking-for-a-new-job-heresreason-in-5-words.html. Sommers, M. C., (1997). “Useful Friendship: A Foundation for Business Ethics.” Journal of Business Ethics, Vol. 16, Iss. 12/13, pp. 1453-1458. Van Buren III, H. J., (1999). “Acting More Generously than the Law Requires: The Issue of Employee Layoffs in halakhal.” Journal of Business Ethics, Part 1, Vol. 19, Iss. 4, pp. 335-343. Wren, D. A., (2004). The History of Management Thought (5th ed.). Hoboken, NJ: Wiley & Sons Publishing. Young, J., (2018). Heroes of Employee Engagement No. 6: John Stacy Adams. Peakon.com. June 2, 2018 and found online on April 11, 2020 at https://peakon.com/blog/future-work/john-stacy-adams-equitytheory/.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 5

THE ETHIC OF SELF-INTEREST: DUTIES OWED TO STAKEHOLDERS Cam Caldwell1, and Verl Anderson2,† 1

American University of the Emirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

In a world where businesses and their leaders struggle to create competitive advantage and differentiate themselves from their competitors, the common tendency of most Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs) is to do everything possible to keep costs low, be as efficient as possible, and minimize variable costs. Employee salaries and benefits tend to be under the magnifying glass as employers of all types have moved toward hiring part-time, temporary, and contract employees to avoid making long-term financial commitments and to decrease the cost of employee benefits and insurance.

 †

Corresponding Author’s E-mail: [email protected]. Corresponding Author’s E-mail: [email protected].

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This chapter views that current trend in context with the Ethic of SelfInterest, an ethical perspective that seems to be the underlying philosophical frame of reference for decision-making in many modern organizations. The chapter begins by defining the Ethic of Self-Interest and identifying the perspectives and the metrics by which the Ethic of Self-Interest contributes to decision-making in today’s business context.

The Ethic of Self-interest is then correlated with an ethical decisionmaking model developed by the renowned ethics scholar, LaRue Hosmer, of the University of Michigan. Hosmer’s model is presented and explained in context with the ethical duties owed by leaders and organizations. Following that explanation, the chapter identifies six guidelines for today’s organizational leaders as they assess their ethical lens and the duties that they owe five key stakeholders. The chapter concludes by identifying five “take-aways” that come from understanding self-interest and challenges

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organization leaders to rethink their assumptions about ethical duties and the self-interest of their firms and its stakeholders.

The Ethic of Self-Interest From the days of the Greek philosophers, the Ethic of Self-Interest was established as a rational model for evaluating one’s actions. There are many and varied perspectives about actions that reflect self-interest that have been articulated in philosophy. Adam Smith, the noted economist, had suggested that self-interest economically would create a balanced economy as long as every man is free “to pursue his own interest in his own way1.”

Unfortunately, that premise requires that men act honorably and that government restrains actions that violate that principle Adam Smith clearly understood this distinction between self-interest and selfishness. Smith wrote the following: One individual must never prefer himself so much even to any other individual, as to hurt or injure that other, in order to benefit himself, though the benefit to the one be much greater than the hurt or injury to the other2.

1

Smith, A. An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1. Indianapolis, IN: Liberty Classics, p. 186. 2 Smith, A., (1976), The Theory of Moral Sentiments. Oxford, UK: Clarendon Press, p. 138.

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History confirms that selfishness often has resulted in economic imbalance as individuals have sought to take advantage of others and as governments have failed in their role to effectively monitor commerce. Building on the differences between selfishness and self-interest, Adam Grant of the University of Pennsylvania noted that there are “Givers,” Takers,” and “Matchers 3 ” According to Grant, each term represents a different “reciprocity style.” Givers tend to put the needs and interests of others above their own. Takers put themselves first in interactions with others. Matchers seek to maintain an equal balance of giving and getting. Clearly, the Ethic of Self-Interest is far from simple in its complexities. The following are six common perspectives about the different philosophical issues in identifying self-interest.

Enlightened Self-Interest Actions which benefit others that then benefit oneself are often described as enlightened self-interest. In particular, actions which serve the public interest are believed to be in the best interests of all individuals and groups4. Ethical Egoism Ethical egoism argues that parties have a normative obligation to act in their own self-interest – whether as individuals or as members of society5. Ethical egoism may equate with the obligation to do what is in one’s longterm self-interest – even when doing so is different from what one desires to do in the short-term6.

3

Grant, A. M., (2013) Give and Take: A Revolutionary Approach to Success. New York: Penguin Books. 4 Blenman, J., (2020). “Adam Smith and ‘The Wealth of Nations.’” Investopedia, February 6, 2020 and found online on March 20, 2020 at https://www.investopedia.com/updates/adam-smithwealth-of-nations/ 55 Waller, B. N., (2005). "Egoism." In Consider Ethics: Theory, Readings, and Contemporary Issues. New York: Pearson Longman, pp. 79–83. 6 Ibid.

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Hedonism Hedonism advocates that seeking pleasure, or sensual self-indulgence, is the ultimate intrinsic good and should thus be pursued. Similarly, avoidance of pain should also be pursued. Hedonism acknowledged that honoring a social obligation or altruism could produce personal satisfaction and was, therefore, a worthy activity.

Individualism Individualism is a moral and political philosophy that identifies the importance of the individual and his or her rights – including the pursuit of independence, freedom, personal goals, and the opportunity to be self-

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reliant7. Individualism seeks to guarantee the rights of the single individual in society, rather than to suggest that those rights are less important than the rights of the collective group8.

Altruism Altruism is the belief or philosophy about the practice of concern for and behavior reflecting that which contributes to the happiness and welfare of others. Altruism is often thought of as the opposite of selfishness and the manifestation of self-lessness; however, altruism also enables a person to achieve personal satisfaction by creating a better world9.

Rational Egoism Rational egoism argues that a choice is only rational if it optimizes one’s personal benefit10. Rational egoism acknowledges the inherent difficulty in distinguishing the benefits between one’s present and one’s future self11.

Biddle, C. (2012). ”Individualism vs. Collectivism: Our Future, Our Choice. The Objective Standard, Vol. 7, No. 1. February 20, 2012 and found online on March 20, 20202 at https://www.theobjectivestandard.com/issues/2012-spring/individualism-collectivism/ 8 Ibid. 9 Tsvetkova, M. & ; Macy, M, .(2015). "The Contagion of Prosocial Behavior and the Emergence of Voluntary-Contribution Communities." Social Phenomena: From Data Analysis to Models. New York: Springer International Publishing, pp.117–134. 10 Parfit, D., (1984), Reasons and Persons, Oxford, UK: Oxford University Press. 11 Ibid. 7

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Each of these six distinctions provides insight into understanding selfinterest as a standard for moral behavior. At the same time, these six perspectives provide a useful foundation for defining a metric for the Ethic of Self-Interest in the modern organization.

In his review of the varying ethical perspectives of a business context, the University of Michigan’s LaRue Hosmer summarized the nature of the Ethic of Self-Interest and provided a defining principle to use in guiding this perspective. Hosmer wrote the following. If we would all look after our own self-interests, without forcefully interfering with the rights of others, then society as a whole will be better off because it will be as free and productive as possible. Over the short term this would seem to be a simple recipe for selfishness; over the long term, however, it creates a much more meaningful guide for action because our long-term interests are usually very different from our short-term

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Building on the many perspectives about self-interest and for purposes of this chapter’s review, we define the Ethic of Self-Interest as “the rational conduct of an individual as (s)he seeks to optimize his/her long-term personal priorities, goals, and rights as a member of an organization and the larger community.”

This definition acknowledges an individual’s obligation to obey the law while pursuing his/her best interests. the interests of the organization in which that person may be involved, and the interests of society.

The Hosmer Decision-Making Model Hosmer’s landmark book, The Ethics of Management, provides a model for ethical decision-making that offers a useful framework that fits well with the Ethic of Self-Interest 13 . Figure 1 provides Hosmer’s model and the

Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379-403. 13 Hosmer, L. T., (2010). The Ethics of Management (7th ed.). Boston, MA: McGraw-Hill Education. 12

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factors that play a role in the leader’s obligations associated with moral conduct.

Figure 1. The Hosmer Model of Ethical Decision-Making.

Each of the eleven factors that make up this model merits a brief explanation. Table 1 briefly describes all eleven of the factors in the Hosmer model, identifies their significant ethical value, and correlates them with associated ethical elements of the Ethic of Self-Interest. The Hosmer model clarifies how each of its factors contributes to an ethical outcome that honors a leader’s duties to stakeholders. The model also makes it crystal clear why the rights and priorities of each stakeholder must be understood in the decision-making process. Finally, the Hosmer model provides powerful insights into the issues associated with the Ethic of SelfInterest.

Determine Economic Outcomes

Define Moral Problem

Rights Denied

Rights Honored

Benefits to Some Harm to Others

Hosmer Factor Understand Moral Standards Recognize Moral Impacts

Standards for rights to be protected ultimately impact all decisions. Possible usurpation of individual and group rights must be identified. Virtually every decision has implications that make that decision an ethical dilemma. Translate outcomes into economic costs and benefits.

Considers the broad ranging ethical standards for assessing conduct. Understand the implications of duties owed to others and the leader’s responsibility. Every decision must be assessed based upon its positive outcomes. Decisions typically have negative as well as positive impacts.

Description

Utilitarian Assessment

Balanced Justice

Universal Rights

Fundamental Freedoms

To what degree are stakeholders’ interests achieved or limited compared to other options. The trade-offs of short-term and long-term benefits and costs must be considered.

Universal principles and values are the standard for assessing leader credibility. Self-interest includes recognizing positive impacts on stakeholders. The value of these harms is measured against the benefits that are accrued. Sacred rights must be honored and preserved as a fundamental assumption. The morality of decisions must ultimately protect universal rights.

Importance of Universal Rules Valued Consequences Consequential Harms

Importance to Ethic of SelfInterest It is in a leader’s interest to consider all ethical perspectives.

Significant Ethical Value Defining Values

Defining short-term and long-term outcomes may often be uncertain and arguable by the parties affected. Economic costs and benefits have different implications on the parties.

Decisions that harm protected rights threaten all of society.

Society’s obligation to protect individual rights is a moral necessity.

Without credibility, leaders are unable to accomplish their goals and benefit organizations. Every decision must achieve utilitarian net benefits to be considered rational. Net benefits and harms must include present and future outcomes.

Ignoring an ethical standard makes a leader vulnerable for being “unfair.”

Comment

Table 1. Factors in the Hosmer Model and the Ethic of Self-Interest

Propose Moral Solution

Evaluate Ethical Duties

Hosmer Factor Consider Legal Require-ments

Decision-maker explains decision and its rationale.

Decisions must comply with the letter and intent of established law. Consequences influence obligations owed.

Description

Leadership Transparency

Moral Mandate

Significant Ethical Value Legal Compliance

Importance to Ethic of SelfInterest Credibility is often affected when legal requirements are not honored. Assessing right and wrong requires a clear prioritization of values. How and why decisions are made and the values determining are identified. The rationale, values, and impacts of decisions on stakeholders must be justified.

Self-interest is ultimately based upon long-term impacts.

The intent of legal requirements and their impact must both be considered.

Comment

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Guidelines for Duties to Stakeholders As leaders in organizations contemplate their obligation to honor the Ethic of Self-Interest, they recognize that self-interest over the long term requires that they engage and empower the stakeholders with which they are key partners in the pursuit of value creation. Recognizing the interests of five important stakeholders enables leaders to optimize their ability to achieve an organization’s purpose. The relationships with five stakeholders are described here.

Principals and Shareholders Principals and shareholders provide the capital financing for an organization and view it as an investment that yields a reasonable return. Leaders owe these investors the opportunity to earn a return and have the

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responsibility to guide an organization so that short-term and long-term needs are properly addressed. Although some investors, such as venture capitalists, may prefer the short-term optimization of results, wise leaders will choose options that do not compromise the future success of an organization1.

Employee Partners Employee stakeholders have been proven to add the greatest value to a firm when they are treated as valued partners2. The research about highperformance organizations confirms that organizations that develop, train, and invest in the capabilities of their employees earn greater returns, improve quality, enhance service to customers, and generate greater profits than organizations that merely treat employees as participants in an exchange relationship.3 It is in the self-interest of a leader and the entire organization when employees understand that they are valued partners.

Caldwell, C., Karri, R., & Vollmar, P., (2006). “Principal Theory and Principle Theory: Ethical Governance from the Follower’s Perspective.” Journal of Business Ethics, Vol. 66, pp. 207223. 2 Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 3 Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. 1

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Vendors and Suppliers

Organizations that create high trust relationships with their vendors and suppliers not only build greater commitment but share information that allows all parties to improve their ability to work together to lower costs and reduce waste. 4 Programs such as Just-in-Time coordination enable companies and their suppliers to plan more effectively and increase 4

Gullett, J., Canuto-Carranco, M., Brister, M., Turner, S., and Caldwell, C. (2009). “The BuyerSupplier Relationship: An Integrative Model of Ethics and Trust.” Journal of Business Ethics, Vol. 90, Supp. 3, pp. 329-341.

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efficiency. Vendors and suppliers who are treated with high trust tend to reciprocate that treatment and work to the advantage of those with whom they do business5.

Customers A company enhances relationships with customer stakeholders by developing a clear understanding not only of present needs but of future opportunities6. The research confirms that creating loyalty with customers reduces the costs of marketing and advertising while increasing profits.

A company enhances relationships with customer stakeholders by developing a clear understanding not only of present needs but of future opportunities. Society Current thinking about an organization’s obligations to society emphasize the importance of being good corporate citizens, partnering with community organizations, and responding to local and regional needs. Social responsibility efforts increase the ability of an organization to do business in a stable and prospering environment and demonstrate its role as partners in the needs of future generations, as well as the needs of the current community7.

5

Ibid. Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 7 Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017). “Social Responsibility in a Troubled World: A Virtuous Perspective.” International Journal of Public Leadership, Vol, 13, Iss. 2, pp 98-115. 6

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Duties owed to stakeholders are moral obligations of an organization and failing to honor those obligations destroys trust. Maintaining the support and commitment of stakeholders is critical to the long-term success and selfinterest of every organization8.

The following six guidelines can make a substantial difference in demonstrating that the leaders of an organization are aware of the key factors that ensure organizational success. Although these guidelines are straight forward and easy to understand, leaders and organizations often fail to recognize how following these guidelines is in their self-interest and in the interests of all of their stakeholders.

8

Gullett, J., et al., (2009), op. cit.

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Reexamine Perspective about the Short-Term and Long-Term Goals of an Organization Investors and agents have a moral responsibility that extends beyond their own self-interest when they seek to create a short-term benefit that has long-term negative consequences on an organization and its other stakeholders. An example of an agent who was often hired to create such short-term benefits – while seriously harming employees and long-term stockholders is “Chainsaw Al” Dunlap.9 Similarly, John Paulson, the creator of the Abacus financial instrument, made billions along with Goldman Sachs for creating an instrument virtually guaranteed to fail10. In both cases, the actors sought a personal benefit while harming other stakeholders to whom they owed duties.

Investors and agents have a moral responsibility that extends beyond their own self-interest when they seek to create a shortterm benefit that has long-term negative consequences on an organization and its other stakeholders Recognize that Long-Term Wealth Creation Can Be Jeopardized By Short-Term Thinking Many businesses make the major mistake of cutting costs associated with effective hiring, employee development, and training their personnel – motivated by the notion that short-term cost saving will benefit their

Brink, G., (2019). “Remembering ‘Chainsaw’ Al Dunlap, Ruthless Corporate Cost-cutter and Big-time FSU Donor.” Tampa Bay Times, January 19, 2019 and found online on March 22, 2020 at https://www.tampabay.com/business/remembering-chainsaw-al-dunlap-ruthlesscorporate-cost-cutter-and-big-time-fsu-donor-20190129/ 10 Whalen, P., (N.D). “Goldman Sachs and the ABACUS Deal.” Seven Pillars Institute. Found online on March 22, 2020 at https://sevenpillarsinstitute.org/case-studies/goldman-sachsand-the-abacus-deal/. 9

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companies 11 . Although short-term cost savings may occur, the ability of those same firms to retain top employees and to refine the talents of those who remain are undermined12. The short-term quest for a higher quarterly stock market price jeopardizes the ability of such companies to compete in a global market place13. What seems to be in the self-interest of a company can turn out to be a poison pill for its future.

Research the Consequences of Short-Term Actions on Long-Term Wealth Stanford’s Jeffrey Pfeffer was sharply critical of company leaders who applied what they considered to be “conventional wisdom” which had not been adequately studied.14 The need to research what is and is not effective is often overlooked by busy leaders – at their peril. For example, the research about high-performance work systems confirms that creating aligned human resource policies that treat employees like valued partners actually enables companies to be more profitable than their competitors15. Clear thinking and careful research are key elements of self-interest and leaders have the responsibility to make decisions based upon the best available information.

11

Minocha, S. & Hristov, D., (2019). Global Talent Management: An Integrated Approach. Thousand Oaks, CA: Sage Publications. 12 Ibid. 13 Ibid. 14 Pfeffer, J., (1998), op. cit. 15 Beer, M., (2009), op. cit.

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Appreciate the Wisdom of Hosmer’s Decision-Making Model in Assessing Outcomes Hosmer’s decision-making model contributes to a leader’s self-interest because it incorporates a broad range of ethical principles, considers legal and economic consequences, honors the rights of multiple stakeholders, and incorporates the leader’s obligation to explain her/his rationale for decisionmaking16. Leaders who adopt the Hosmer model are likely to be perceived as fair and trustworthy than if they fail to integrate factors upon which the model is based.

Acknowledge the Interconnectedness of Stakeholders and Their Common Interests Clarifying the impacts of decisions on stakeholders and “beginning with the end in mind17”” identify the importance of stakeholder interdependence. 16 17

Hosmer, L. T., (2010), op. cit. Covey, S. R., (1994). The 7 Habits of Highly Effective People: Positive Lessons in Personal Change. DC Publishing.

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Failing to address the reality that interdependence can build trust and enhance the pursuit of common interests is to be blind to the nature of others’ self-interest and is counterproductive to one’s own priorities.

Understand the Importance of Communicating with Other Stakeholder’s About Priorities Being respectful of others, open, and transparent and explaining the rationale for decisions is an important element of procedural justice and is viewed as more important in establishing trust than advantageous distributive outcomes 18 . Procedural fairness builds confidence in others, even when the end result may be unfavorable. Failing to appreciate the importance of these six guidelines and acting in conflict with their underlying principles are recipes for disaster by destroying both the commitment of stakeholders and the ability of organizations to generate long-term wealth. Unfortunately, many organizational leaders look sidestep principle-based ethical issues -- rather than taking ownership and addressing difficult issues that are not easily resolved19. Colquitt, J. A. & Rodell, J. B., (2011). “Justice, Trust, and Trustworthiness: A Longitudinal Analysis Integrating Three Theoretical Perspectives.” Academy of Management Journal, Vol. 54, Iss. 6, pp. 1183-1206. 19 The obligation of present actors to future generations is a primary theme of Friedman, T. L. (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution – And How It Can Renew America, Release 2.0. New York: Picador Press. 18

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CONCLUSION This review of the Ethic of Self-Interest, the multiple factors that relate to that ethic, and the responsibilities owed to stakeholders all provide context for leaders as they consider how they can best create wealth for organizations and for society.

Balancing the disparate interests and priorities of the respective stakeholders and assessing the impacts of various options can enable a leader to honor her or his obligation to optimize the creation of long-term wealth20.

20

Hosmer, L. T., (2010), op. cit.

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We suggest that there are five important take-aways for leaders as they assess their decision-making role and evaluate those options.

What Seems Like Altruism Is Often Self-Interest When leaders are aware of others’ needs and treat them with respect and kindness, their employees reciprocate and demonstrate their commitment to the organization as well 21 . Ethical choices that consider stakeholders enhance trust and commitment.

The Failure To Examine the Consequences of Actions is Against SelfInterest What benefits short-term is often toxic despite what seems to be an immediate advantage. The ability to understand the cause and effect of actions is a refined skill that is often overlooked in the hustle-bustle of a busy world. Self-interest is preserved by carefully evaluating options and recognizing that making quick decisions often results is a sub-optimal outcome22

21

22

See Anderson, V. and Caldwell, C., (Eds.). (2018). Humility as Enlightened Leadership. Hauppage, New York: NOVA Publishing and Owens, B. P. & Hekman, D. R., (2016). “How Does Leader Humility Influence Team Performance? Exploring the Mechanisms of Contagion and Collective Promotion Focus.” Academy of Management Journal, Vol. 59, Iss. 3, pp. 1088-1111. The importance of assessing options carefully, rather than making premature decisions, is identified in Simon, H. A., (1997). Administrative Behavior. (4th ed.). New York: Simon & Schuster.

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Benefiting Society Ultimately is a Moral Duty of Self-Interest A healthier society benefits future generations. Failing to acknowledge costs passed on to future generations imposes a burden on those who follow – financial costs for which present actors are responsible23. Passing on the cost obligations of present-day actions is morally repugnant and plainly irresponsible – and is increasingly viewed as such by society24.

Partial Information About Consequences Often Leads to Failure and is Against Self-Interest Effective leaders and organizations are thorough in examining information and in identifying consequences of actions. Reliance upon partial information is often necessary in a world where information overload

23 24

Friedman, T. L. (2009), op. cit. Ibid.

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is common and it is difficult to ascertain which information is correct and what additional information is needed25.

Stakeholders May Compete For Their Own Self-Interests Recognize the Importance of Long-Term Value Creation Leaders of organizations will ultimately be most effective when they listen attentively to stakeholder concerns and then incorporate the values and insights obtainable from the Hosmer model26. Explaining the justification for a final decision and articulating how that decision was made may not always satisfy the respective stakeholders but the effort to clarify values and explain the rationale will earn the leader stakeholder trust27.

25

Simon, H. A., (1997), op. cit. Hosmer, L. T., (2010), op. cit. 27 Colquitt, J. A. & Rodell, J. B., (2011), op. cit. 26

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Ultimately, the Ethic of Self-Interest is a subjectively perceived construct. The ability of leaders to accurately assess the consequences of their actions and their diligence in seeking long-term value creation is at the heart of the leader’s obligation to the entire organization, to external and internal stakeholders, and to society.

As leaders attempt to predict the consequences of their decisions, the Ethic of Self-Interest becomes a powerful resource in assessing the moral obligations of decision-making – but only when leaders honor those obligations to stakeholders by optimizing long-term value creation. Selfinterest for leaders requires that they be credible, have integrity, and be discerning in their ability to make wise choices.

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REFERENCES Anderson, V. and Caldwell, C., (Eds.). (2018). Humility as Enlightened Leadership. Hauppauge, New York: NOVA Publishing Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017). “Social Responsibility in a Troubled World: A Virtuous Perspective.” International Journal of Public Leadership, Vol, 13, Iss. 2, pp 98-115. Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. Biddle, C. (2012). Individualism vs. Collectivism: Our Future, Our Choice. The Objective Standard, Vol. 7, No. 1. February 20, 2012 and found online on March 20, 20202 at https://www.theobjectivestandard. com/issues/2012-spring/individualism-collectivism/ Blenman, J., (2020). “Adam Smith and ‘The Wealth of Nations.’” Investopedia, February 6, 2020 and found online on March 20, 2020 at https://www.investopedia.com/updates/adam-smith-wealth-of-nations/ Brink, G., (2019). “Remembering ‘Chainsaw’ Al Dunlap, Ruthless Corporate Cost-cutter and Big-time FSU Donor.” Tampa Bay Times, January 19, 2019 and found online on March 22, 2020 at https://www.tampabay.com/business/remembering-chainsaw-aldunlap-ruthless-corporate-cost-cutter-and-big-time-fsu-donor-2019 0129/ Caldwell, C., Karri, R., & Vollmar, P., (2006). “Principal Theory and Principle Theory: Ethical Governance from the Follower’s Perspective.” Journal of Business Ethics, Vol. 66, pp. 207-223. Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. Colquitt, J. A. & Rodell, J. B., (2011). “Justice, Trust, and Trustworthiness: A Longitudinal Analysis Integrating Three Theoretical Perspectives.” Academy of Management Journal, Vol. 54, Iss. 6, pp. 1183-1206. Covey, S. R., (1994). The 7 Habits of Highly Effective People: Positive Lessons in Personal Change. DC Publishing.

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Friedman, T. L. (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution – And How It Can Renew America, Release 2.0. New York: Picador Press. Grant, A. M., (2013) Give and Take: A Revolutionary Approach to Success. New York: Penguin Books. Gullett, J., Canuto-Carranco, M., Brister, M., Turner, S., and Caldwell, C. (2009). “The Buyer-Supplier Relationship: An Integrative Model of Ethics and Trust.” Journal of Business Ethics, Vol. 90, Supp. 3, pp. 329341. Hosmer, L. T., (2010). The Ethics of Management (7th ed.). Boston, MA: McGraw-Hill Education. Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379-403. Minocha, S. & Hristov, D., (2019). Global Talent Management: An Integrated Approach. Thousand Oaks, CA: Sage Publications. Owens, B. P. & Hekman, D. R., (2016). “How Does Leader Humility Influence Team Performance? Exploring the Mechanisms of Contagion and Collective Promotion Focus.” Academy of Management Journal, Vol. 59, Iss. 3, pp. 1088-1111. Parfit, D., (1984), Reasons and Persons, Oxford, UK: Oxford University Press. Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. Simon, H. A., (1997). Administrative Behavior. (4th ed.). New York: Simon & Schuster. Smith, A. (1976). An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1. Indianapolis, IN: Liberty Classics, p. 186. Smith, A., (1976), The Theory of Moral Sentiments. Oxford, UK: Clarendon Press, p. 138. Tsvetkova, M. &; Macy, M. (2015). “The Contagion of Prosocial Behavior and the Emergence of Voluntary-Contribution Communities.” Social Phenomena: From Data Analysis to Models. New York: Springer International Publishing, pp.117–134.

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Waller, B. N., (2005). “Egoism.” In Consider Ethics: Theory, Readings, and Contemporary Issues. New York: Pearson Longman, pp. 79–83. Whalen, P., (N.D). Goldman Sachs and the ABACUS Deal. Seven Pillars Institute. Found online on March 22, 2020 at https://seven pillarsinstitute.org/case-studies/goldman-sachs-and-the-abacus-deal/.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 6

ETHICAL STEWARDSHIP AND TRANSCENDENT LEADERSHIP Cam Caldwell1,*, Charles Goodall2,† and Verl Anderson3,‡ 1

American University of the Emirates, Dubai, United Arab Emirates 2 Indiana Wesleyan University, Marion, IN, US 3 Dixie State University, St George, UT, US

The challenge facing leaders in the modern organization is to demonstrate that they are trustworthy and credible 1 . Unfortunately, a growing body of evidence confirms that many leaders are not only ineffective but that they actually undermine employee commitment 2 . Leadership trends and public policy undermine the ability of leaders to be trusted and leaders must demonstrate that they are honorable, worthy of Corresponding Author’s E-mail: [email protected]. Corresponding Author’s E-mail: [email protected]. ‡ Corresponding Author’s E-mail: [email protected]. 1 Harrington, M., (2017). “Survey: People’s Trust has Declined in Business, Government, Media, and NGOs.” Harvard Business Review, January 16, 2017 and found online on March 19, 2020 at https://hbr.org/2017/01/survey-peoples-trust-has-declined-in-business-mediagovernment-and-ngos. 2 This fact is the inferred conclusion of Clifton, J. & Harter, J., (2019). It’s the Manager: Gallup Finds the Quality of Managers and Team Leaders is the Single Biggest Factor in Your Organization’s Long-term Success. Omaha, NE: Gallup Press. * †

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being followed, and dedicated to the well-being of employees and the bottom line of the organization3. At the heart of the leader’s task is the need to establish the reputation that (s)he is an individual whose integrity is above reproach.

The purpose of this chapter is to identify the importance of leaders being Ethical Stewards – a standard of leadership commitment that rises far above common practice – by adopting the qualities of Transcendent Leadership. The chapter defines what it means to be perceived as an Ethical Steward, explains the nature of transcendence, and identifies the defining characteristics of Transcendent Leadership. After discussing the important relationships between Ethical Stewardship and Transcendent Leadership, the chapter identifies eight principles for leaders to incorporate into their own personal leadership style to be perceived as Ethical Stewards and Transcendent Leaders. The chapter then challenges readers to examine their own assumptions about leadership in becoming their best selves.

3

This message is clearly enumerated by leadership scholars. See, for example, Bennis, W. G. & Nanus, B., (2007). Leaders: Strategies for Taking Charge. New York, NY: HarperCollins and Burns, J. M., (2010). Leadership. New York, NY: Harper Perennial.

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UNDERSTANDING STEWARDSHIP Stewardship involves a leader’s commitment to secure the welfare of others and placing their interests above one’s own self-interest 4 . The motivation of a steward leader is a sense of duty or moral obligation to create long-term wealth for an organization 5 . Hernandez explained that stewardship is not based on a set of rules, but rather on organizational structures and systems that leaders create to generate trust, clarify strategy, and demonstrate their commitment to followers6. Given a choice between service to others and the pursuit of self-interest, the steward acknowledges the moral responsibility of leadership and opts for service – understanding that honoring the commitment to others will result in an increase in trust, commitment, and loyalty7.

Ethical Stewardship, a term introduced to emphasize the moral and ethical nature of leaders in honoring duties owed to stakeholders, is the operationalizing of virtues and values which work together to uniquely address challenges to external adaption and internal integration 8 . An Hernandez, M., (2008). “Promoting Stewardship Behavior in Organizations: A Leadership Model,” Journal of Business Ethics, Vol. 80, Iss. 1, pp. 121–128. 5 Wilson, K., (2016), Steward Leadership in the Nonprofit Organization. Downers Grove, IL: IVP Books. 6 Hernandez, M., (2008), op. cit. 7 Block, P., (2013). Stewardship: Choosing Service over Self-Interest. San Francisco, CA: BerrettKoehler. 8 Schein, E. H., (2017). Organizational Culture and Leadership, (5th ed.). Hoboken, NJ: Wiley. 4

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organization requires external focus to benefit its economic health, but also internal focus to meet the individual needs of employees 9 . Ethical Stewardship is encompassed within the following six features: 1. The leader–follower relationship is established as a dyadic one-onone relationship10. Consistent with leader-member exchange theory, the desired result is a partnership based on mutual trust, respect, and obligation within the relationship11. 2. The relationship established is transformational and transactional12. Transformational and transactional leadership have been widely recognized as having great potential when used simultaneously13. 3. The relationship incorporates both implicit and explicit social contracts14. Followers have complete surety that their needs will be adequately met15. 4. Each follower participant interprets the relationship based upon subjective self- perception16 . Follower behaviors are individually and subjectively determined through a mediating lens that determines one’s perception of others17. Like all leaders, the Ethical Steward is viewed through the individual lens of each follower18.

9

Ibid; Caldwell, C. et al. (2008), op. cit. 11 Graen, G. B. and Uhl-Bien, M., (1995). “Relationship-Based Approach to Leadership: Development of Leader-Member Exchange (LMX) Theory of Leadership over 25 Years: Applying a Multi-Level Multi-Domain Perspective.” The Leadership Quarterly, Vol. 6, Iss. 2, pp. 219–247. 12 Caldwell, C. et al. (2008), op. cit. 13 Men, L. R. and Stacks, D. W., (2013). “The Impact of Leadership Style and Employee Empowerment on Perceived Organizational Reputation.” Journal of Communication Management, Vol. 17, Iss. 2, pp. 171–192; Vera, D. and Crossan, M., (2004). “Strategic Leadership and Organizational Learning.” Academy of Management Review, Vol. 29, Iss. 2, pp. 222–240. 14 Caldwell, C. et al. (2008), op. cit. 15 Rousseau, D. M., (2003). “Extending the Psychology of the Psychological Contract.” Journal of Management Inquiry, Vol. 12, Iss. 3, pp. 229–238. 16 Caldwell, C. et al. (2008), op. cit. 17 Primeaux, P., Karri, R., and Caldwell, C., (2003). “Cultural Insights to Justice: A Theoretical Perspective Through a Subjective Lens.” Journal of Business Ethics, Vol. 46, Iss. 2, pp. 187– 199. 18 Caldwell, C. et al. (2008), op. cit, 10

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5. The focus of Ethical Stewardship is long-term rather than shortterm19. The motives of an Ethical Steward are pure and consistent with the long-term interests of all parties 20 . Ethical Stewardship honors the duty of long-term wealth creation for all stakeholders over the pursuit of short-term personal interests21. 6. Ethical Stewardship demands the constant management of meaning22. An Ethical Steward is concerned with establishing stable patterns worthy of emulation such as active caring, integration, honesty, fairness, justice, and moral growth23.

Caldwell, 2008

By exhibiting Ethical Stewardship, leaders earn the trust and followership of those whom they serve. By creating integrated organizational systems they also demonstrate leader commitment and obligation to the duties owed to employees, stakeholders and society 24 . Those duties help companies create long-term wealth by generating increased employee commitment 25 and building organizational trust 26 . Ethical Stewardship is a value-based philosophy of governance in which

19

Ibid. Davis, J. H., Schoorman, D., Donaldson, L., (1997), op. cit. 21 Caldwell, C. et al. (2008), op. cit. 22 Ibid. 23 Pava, M. (2003), op. cit. 24 Caldwell, C., and Karri, R., (2005). “Organizational Governance and Ethical Systems: A Covenantal Approach to Building Trust.” Journal of Business Ethics, Vol. 58, Iss. 1–3, pp. 249–259. 25 Caldwell, C. et al. (2008), op. cit. 26 Caldwell, C. and Karri, R. (2005), op. cit. 20

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leaders create high-trust cultures that honor covenantal duties owed to employees, stakeholders, and society in the pursuit of long-term wealth creation27.

Ethical Stewards earn trust by being trustworthy 28 , honoring covenants29, and by genuinely investing in and affirming the identities of those whom they serve 30 . Ethical Stewards seek to help each person to achieve their maximum potential31 as they commit to the ‘‘welfare, growth, and wholeness’’ of their followers32. Followers are treated as owners and partners 33 rather than a means to an end 34 . Ethical Stewards honor transformational obligations to create new opportunities and reframe traditional command-and-control views of leadership35. As a moral philosophy of interpersonal relations and organizational leadership, Ethical Stewardship sets a standard of ethical behavior that rises 27

Caldwell et al. (2008), op. cit.; Caldwell, C., Truong, D. X., Linh. P. T., and Tuan, A., (2011). “Strategic Human Resource Management as Ethical Stewardship.” Journal of Business Ethics, Vol. 98, Iss. 1, pp. 171–182; Pava, M. (2003), op. cit. 28 Caldwell, C., Hayes, L., and Long, D., (2010). “Leadership, Trustworthiness, and Ethical Stewardship.” Journal of Business Ethics, Vol. 96, Iss. 4, pp. 497–512. 29 Pava, M., (2003), op. cit. 30 Caldwell et al., (2008), op. cit. 31 Covey, S., (2004), op. cit. 32 Caldwell, C., Bischoff, S. J., and Karri, R., (2002), op. cit. 33 Block, P., (2013), op. cit. 34 Hernandez, M., (2008), op. cit. 35 Caldwell, C., Bischoff, S. J., and Karri, R., (2002), op. cit.

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far above the actions exhibited by those who lead in most organizations. Epitomizing the sacred nature of the relationship between leaders and other parties, Ethical Stewards view the leader as striving to help individuals to excel while also being deeply committed to creating the best possible organization36.

TRANSCENDENCE AND ITS IMPORTANCE Transcendence is a state of personal growth and development in which a person exceeds that which (s)he thought was possible in establishing connection with others, with the world, with nature, and with God 37 . Abraham Maslow described transcendence as the capacity to cross a previously unachieved and often unimagined personal boundary, frequently exceeding one’s expectations and hopes. Those who achieve this transcendent level of personal development have risen above their previous state of being or existence. Such an achievement comes as a result of the ability to focus one’s life on refining his or her awareness of values and outcomes that are personally fulfilling38.

36

DePree, M., (2004). Leadership is an Art. New York: Crown Publishing. This definition of transcendence comes from Maslow, A. H., (1976a). Religions, Values, and Peak Experiences. New York, NY: Penguin Books. 38 Maslow, A. H., (1969). “Various Meanings of Transcendence.” Journal of Transpersonal Psychology, Vol. 1, Iss. 1, pp. 56–66. 37

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Transcendence occurs as one exchanges everyday material rewards for nobler values -- including the ability to achieve a mutual commitment and alignment with others, not only in the quest for worthy outcomes but in relationships that inspire optimal personal growth

Through transcendence, personal self-interests and accomplishments are superseded by the pursuit of more significant meanings in life 39 . In the pursuit of that which is most important, individuals serve as engaged team members and adopt organizational priorities and goals which become more important than their own self-interests40. Fry referred to transcendence as a calling – a need for connection and membership that inspires one to make a difference in the lives of others through service41. Transcendence occurs as one exchanges everyday material rewards for nobler values – including the ability to achieve a mutual commitment and alignment with others, not only in the quest for worthy outcomes but in relationships that inspire optimal personal growth 42. Erich Fromm suggested that one’s capacity to love others and to love oneself involved this pursuit of one’s greatest potential43. Other authors have suggested that humility also incorporated the ongoing pursuit of one’s highest and greatest abilities in the service of others and in honoring one’s Sarkar, A., (2017). “Leadership Role in Instilling Workplace Spirituality in Organizations.” Purusharta, Vol. 10, Iss. 2, pp. 61–68. 40 Bass, B., (2008). The Bass Handbook of Leadership: Theory, Research & Managerial Applications (4th ed). New York, NY: Free Press; Pawar, B., (2009). “Some of the Recent Organizational Behavior Concepts as Precursors to Workplace Spirituality.” Journal of Business Ethics, Vol. 88, Iss. 2, pp. 245–261. 41 Fry, L. W., (2003). “Toward a Theory of Spiritual Leadership.” The Leadership Quarterly, Vol. 14, Iss. 6, pp. 693–727. 42 Schwartz, S. H., (1992). “Universals in the Content and Structure of Values: Theoretical Advances and Empirical Tests in 20 Countries,” in Orlando, M. P., (Ed.), Advances in Experimental Social Psychology. San Diego, CA: Academic Press. 43 Fromm, E., (2006). The Art of Loving. New York, NY: Harper Perennial. 39

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relationship to humankind, to self, and to God44. Both love and humility are built upon the pillars of a correct understanding of oneself, an appreciation for others and their greatness, and a desire to constantly learn and grow to not only become one’s best version of oneself but to make a greater contribution to others and to the world45.

Abraham Maslow wrote about the importance of peak experiences in achieving transcendence – a stage he identified as a higher human need and motivational factor than self-actualization 46 . In his later years, Maslow expanded his hierarchy of needs beyond the five needs that are most frequently cited by scholars. He concluded that transcendence was even more important as a human need than self-actualization as a source of personal motivation and inspiration for individuals who achieved personal self-development. Maslow wrote that the goal of life was “to aid the person to grow to fullest humanness, to the greatest fulfillment and actualization of his highest potentials, to his greatest possible stature. In a word, it should help him to 44

Anderson, V. and Caldwell, C., (Eds.). 2018. Humility as Enlightened Leadership. Hauppage, NY: NOVA Publishing. 45 This insight about humility and love and their key components is addressed in Okpala, C. O. & Caldwell, C. 2019. “Humility, Forgiveness, and Love: The Heart of Ethical Stewardship.” Journal of Values-Based Leadership, Vol. 12 Summer 2019 and found online at https://scholar.valpo.edu/jvbl/vol12/iss2/10/. 46 Maslow, A. H., (1976a), op. cit.

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become the best he is capable of becoming, to become actually what he deeply is potentially (Italics in the original)47.”

By achieving one’s very best and treating others as ends not means, Maslow believed that man was able to achieve harmony with the forces of life, become a better person than he ever imagined possible, and achieve this transcendence Maslow defined transcendence as “the very highest and most inclusive or holistic levels of human consciousness, behaving and relating, as ends rather than means, to oneself, to significant others, to human beings in general, to other species, to nature, and to the cosmos48” and “the ultimate expression of human awareness 49 .” By achieving one’s very best and treating others as ends not means, Maslow believed that man was able to achieve harmony with the forces of life, become a better person than he ever imagined possible, and achieve this transcendence. Maslow described the transcendence experience as “the ultimate expression of subjective awareness” 50 . He identified two types of transcendent experiences: the green type involving ecstatic elation and the mature type or a long-term state-of-consciousness experience consisting of an enduring feeling of quasi-sacred union or oneness with all life, beauty, love, or nature51. Like Maslow, Stephen R. Covey also addressed the importance of transcendent potential in proposing an “8th habit” of finding one’s voice in his sequel to his famous book about the seven habits of highly effective

47

Ibid. Maslow, A. H. (1976b). The Farther Reaches of Human Nature. New York, NY: Penguin Books. 49 Ibid. 50 Ibid. 51 Ibid. 48

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people. 52 Covey’s concept of “voice” referred to one’s highest potential, unique significance, or the realization of becoming the best that an individual could be. Covey explained that there is an innate yearning within every person to find one’s voice because it echoes the internal beckoning of the soul. The summons is one toward greatness; feelings of fulfillment, passionate execution, and of having made a significant contribution.

The ability to find one’s voice is the product of three freely bestowed gifts provided at birth. Those gifts are the power and freedom to choose, natural laws or principles, and four intelligences53. It is at the intersection of these intelligences that individuals may identify their voice, their unique personal significance54 . Table 1 identifies each of the intelligences, their primary focus on man’s quest for fulfilling personal needs, and the associated attributes of each intelligence55. Observe how the whole person, Body, Mind, Heart, and Spirit, are linked together in the pursuit of leading a fulfilled life by employing attributes to fulfill life’s needs corresponding to the four intelligences. Humankind is well-equipped for the search for voice should the conscious choice be made to find it.

52

Covey, S., (2004), op. cit. Ibid. 54 Ibid. 55 Ibid 53

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Cam Caldwell, Charles Goodall and Verl Anderson Table 1. Four Intelligences and Transcendence

Covey suggested that human fulfillment is the result of satisfying four categorical needs. Individuals should seek to live, to learn, to love, and to leave a legacy56. Consider further the way Table 1 portrays the ways the Four Intelligences work together to facilitate transcendence in a life of fulfillment: 1. To Live is to use Physical Intelligence. Our Physical Intelligence supports the need to live and often goes unnoticed because the body does so much work without any voluntary effort57. However, it is the conscious endeavors of Physical Intelligence that facilitate good health and contribute to personal self-mastery associated with transcendence. To live is to apply Physical Intelligence to disciplining one’s body so it may transcend self and serve others. 2. To Learn is to use Mental Intelligence. The need to learn is what one might typically classify as a life-contributor that fosters fulfillment. A hungered mind’s eye feeds the need to learn by using vision to conceptualize a future state58. Learning involves using the Mind and one’s Mental Intelligence to visualize, analyze, reason, think abstractly, and to comprehend 59 . To learn is to use Mental 56

Covey, S., Merrill, A. R., and Merrill, R. R., (2003). First Things First. New York, NY: Free Press. 57 Covey, S., (2004), op. cit. 58 Ibid. 59 Ibid.

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Intelligence to traverse a lifelong journey of discovery. A dedicated and humble commitment to learning motivates individuals toward continuous self-improvement 60 . The benefits help individuals ameliorate personal shortcomings and become better equipped to help others and to benefit society61. 3. To Love is to use Emotional Intelligence. The need to love refers to the social voids filled by relating to other people; the need to belong, to love, and to be loved62. Emotional Intelligence, or the Heart, fuels the passion that drives one’s self-knowledge, social sensitivity, and empathy to successfully communicate with others63. The heart is the universal symbol of caring and compassion64 . Using the heart to respectfully communicate the worth of others by actively promoting their welfare, growth, and wholeness is the essence of love65. Many try unsuccessfully to compensate for their lack of Emotional Intelligence with other qualities such as IQ only to accentuate their weaknesses66. The key to one’s ability to successfully relate to others in the fulfillment of their need to love is reflected in their passionate exercise of Emotional intelligence. 4. To Leave a Legacy is to use Spiritual Intelligence. It is Spiritual Intelligence that activates one’s conscience, the moral compass within that makes it possible to discern true principles 67 . It is Spiritual Intelligence that activates one’s Conscience, the moral law within, to discern true principles 68 . As a compass is faithful in pointing northward, “true north” principles will always direct the way to higher moral ground69. The Spirit of man, the need that desires Okpala, C., and Caldwell, C., (2019). “Humility, Forgiveness, and Love – the Heart of Ethical Stewardship.” Journal of Values-Based Leadership, Vol. 12, Iss. 2, pp. 1–12. 61 Ibid. 62 Covey, S., Merrill, A. R., and Merrill, R. R., (2003), op. cit. 63 Covey, S., (2004), op. cit. 64 Bracey, H. et al., (2011). Managing from the Heart. New York, NY: Random House. 65 Caldwell, C., and Dixon, R., (2010). “Love, Forgiveness, and Trust: Critical Values of the Modern Leader.” Journal of Business Ethics, Vol. 93, Iss. 1, pp. 91–101. 66 Covey, S., (2004), op. cit. 67 Covey, S., (2004), op. cit. 68 Covey, S., (2004), op. cit. 69 Ibid. 60

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The Four Intelligences work together to reveal an individual’s Unique Personal Significance, their true “voice”, as illustrated in Figure 1. Two of the terms, discipline, and vision, have been replaced with parallel concepts, talents, and need. It takes discipline to use one’s talent to find proper solutions71. Out of need grows vision, the desire to expand the capacity of people to meet similar needs on a larger scale, and thus, in turn, inspire others to find their voice as well72. Discipline enables leaders to tap their talents and fuel their passions that rise out of significant needs, which their consciences compel them to meet73.

Figure 1. The Four Intelligences and Finding One’s Unique Significance.

Covey explained that Spiritual Intelligence, or conscience, was the guide to the other three intelligences and that one’s voice, or unique personal significance, can be discovered at the intersection of all four intelligences. It 70

Covey, S., Merrill, A. R., and Merrill, R. R., (2003), op. cit. Covey, S., (2004), op. cit. 72 Ibid. 73 Ibid. 71

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is at this nexus where one arrives at the answer to the longing for living a life of greatness and contribution – to really matter, to really make a difference 74 . It is one’s unique personal significance that answers one’s calling to transcend Body, Mind, Heart, and Spirit to impact the lives of others through service. Figure 1 is a useful tool for individuals to use conscience, self-assessment, and motivation to decide to transcend self and find their voice, their unique personal significance.

TRANSCENDENT LEADERSHIP Transcendent Leadership incorporates the leading of self, others, and organizations in the achievement of unprecedented personal, interpersonal, and organizational accomplishments 75 . In his book about Transcendent Leadership, Fred Kofman explained that it is a leader’s primary responsibility to lead by “moral authority” or a sense of moral obligation to excel. By so doing, leaders can instill within followers a sense that they can make a lasting difference in the world76.

74

Covey, S., (2004), op. cit. Kofman, F., (2017). The Meaning Revolution: The Power of Transcendent Leadership. New York, NY: Currency. 76 Ibid. 75

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Similarly, Larkin posited that Transcendent Leaders experience purposefulness and meaning77. The transcendent leader seeks to create an organizational culture that is free of fear wherein members feel an opportunity for openness to others, to self, to knowledge, and to growth78. The active use of the Transcendent Leader’s inner wisdom opens consciousness to awareness at all levels, a caring self that is characterized by “being”, not just by “doing”79. By combining these two essential actions, Transcendent Leaders demonstrate the authenticity of their commitment to their words80.

Larkin, 1995; Caldwell, 2020

Table 1 compares key elements of Ethical Stewardship and Transcendent Leadership and provides counsel for leaders who are considering integrating the two concepts within their own leadership approach. In addressing the importance of Transcendent Leadership and its key attributes, Stebbins identified six factors which help to clarify the nature of a Transcendent Leader’s purposeful journey81:

Larkin, D., (1995). “Beyond Self to Compassionate Healer: Transcendent Leadership.” Seattle, WA: Seattle University. 78 Ibid. 79 Ibid. 80 Caldwell, C., (2020). “Transformative, Transcendent, and Transforming Leadership: Opportunities for Increasing Empowerment.” Manuscript submitted for publication. 81 Stebbins, G., (2017), op. cit. 77

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1. Acceptance is an attribute that enables a Transcendent Leader to keep an open mind and effectively lead in an environment having diverse values. 2. Reverence is the appreciation for the value and contribution of others. It is the Transcendent Leader’s responsibility to both embody and teach reverence within an organization82. 3. Presence is the quality of the Transcendent Leader that comes from active deep listening while in dialogue with another83. Such listening enables one to comprehend the situation fully and feel with the other’s thoughts, emotions, and needs84. 4. Courage enables one to let go of any preconceived labels, judgments, and bad experiences that have been put in place by the “small self”. In contrast, “Self” embodies courage, which allows a leader to hold fast to their convictions85. Larkin posited that it is the courage to be free from fear that characterizes growth, healing, and the movement toward Transcendent Leadership86. 5. The Transcendent Leader goes beyond a mere acknowledgment of others to express genuine Gratitude for their contributions, realizing they are partners who deserve to be valued. Always curious and open to learning new things, Transcendent Leaders consider every human being as having value, which can contribute to the leader and or to the situation at hand87. 6. Transcendent Leaders also work toward the “Highest Good” of all concerned88. Striving for excellence requires a fully dedicated effort to deliver one’s best and refuses to be satisfied with anything less.

82

Ibid. Ibid. 84 DeMauro, A. et al., (2019). “Mindfulness and Caring in Professional Practice: An Interdisciplinary Review of Qualitative Research.” Mindfulness, Vol. 10, Iss. 10, pp. 1969– 1984. 85 Stebbins, G., (2017), op. cit. 86 Larkin, D., (1995), op. cit. 87 Stebbins, G., (2020), op. cit. 88 Stebbins, G., (2017), op. cit. 83

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Table 1. Comparing Ethical Stewardship and Transcendent Leadership Essential Factors

Application to Ethical Stewardship

Purpose

Honor the opportunity to optimize long-term value creation for stakeholders.

Time Focus

Focused on long-term value creation but also practical.

Value Creation

Seeks optimal outcomes financially and socio-politically for society as well.

Moral Priority

Focus is on service and duty to others.

Application to Transcendent Leadership Assist individuals and organizations to achieve the best version of themselves. Recognizes importance of achieving long-term fulfillment. Acknowledges tremendous importance of individual selffulfillment and organizational achievement. Focus is on achieving fulfillment of potential of all participants.

Counsel for Leaders

Be duty-oriented and seek to achieve morally virtuous outcomes.

See the big picture and avoid compromising the future for short-term gains. Recognize the importance of pursuing the best possible outcomes that benefit all participants.

Emphasis may be different, but outcome is similar.

Ethical Stewardship and Transcendent Leadership Essential Factors

Application to Ethical Stewardship

Responsibility due Employees

Treat employees as valued partners and participants who also have varied personal needs. Employees are an investment.

Societal Duty

Views society as a vitally important stakeholder. Application to Ethical Stewardship

Essential Factors

Primary Value

Honoring covenantal duties owed to serve others.

Metric of Success

Optimization of economic and sociopolitical outcomes that serve others.

Implementation

Focus is organizational and interpersonal with concern for all stakeholders.

Application to Transcendent Leadership Employees are unique individuals who need to achieve more than selfactualization but also personal fulfillment – in addition to meeting the needs of the organization. Society is served but the focus tends to be more internal. Application to Transcendent Leadership Achieving the greatest possible fulfillment for people’s lives. Optimization of personal growth and self-fulfillment for people and organizations. Focus is personal and then organizational with emphasis on humanistic development.

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Counsel for Leaders

The relationship between what is in the organization’s interest and the employees’ interests is inter-related and crucial.

Duties are owed to society, but emphasis is different. Counsel for Leaders

Transcendence is more personalized and individual. Both cares deeply about people and their importance.

The two perspectives reinforce each other and honor individuals and society.

Table 2 clarifies how the six distinguishing characteristics of Transcendent Leadership set it apart from other forms of leadership 89 , explain the impacts of each of these characteristics on one’s influence, and demonstrate Transcendent Leadership’s practical impact on relationships and the pursuit of optimal organizational and interpersonal achievements.

89

Ibid.

Highest Good

Gratitude

Courage

Presence

Reverence

Characteristic Acceptance

Description Acknowledging and validating differences of opinion and values without judgment. Respect for and recognition of the inherent greatness and value of others. Focus of attention on others is constant and demonstrates respect and a desire to learn. Suspending judgment, despite previous experiences and past to be open to others. Treats others with genuine appreciation & conveys optimism and positive thinking. Refuses to “settle” or to be satisfied with a mediocre result or effort. Honors the purpose to be achieved and does not compromise commitment.

Demonstrates the openness of a leader and confirms the value of truth obtained from others. Views stakeholders as partners that deserve to be served & valued

Treats others as valued members, contributors, partners in an organization. Listening. confirming understanding strengthens connec-tion,creates wisdom.

Empowering Impact Recognizes others’ right to see the world in a different way without labeling.

Seeks to optimize the creation of long-term value.

Creates personal connection with others that others can feel.

Letting go of one’s biases and personal point of view takes true humility.

Comment Recognizes that differences of opinion can benefit an organization by generating discussion. Affirms that others are important and worthy of making a contribution. Demonstrating presence to all parties requires great discipline.

Table 2. Distinguishing Characteristics of Transcendent Leadership

Honor the opportunity to optimize longterm value creation for stakeholders. Focused on long-term value creation but also practical. Seeks optimal outcomes financially and socio-politically for society as well.

Purpose

Views society as a vitally important stakeholder. Honoring covenantal duties owed to serve others. Optimization of economic and sociopolitical outcomes that serve others.

Societal Duty

Implemen-tation

Metric of Success

Focus is organizational and interpersonal with concern for all stakeholders.

Treat employees as valued partners and participants who also have varied personal needs. Employees are an investment.

Responsi-bility due Employees

Primary Value

Focus is on service and duty to others.

Moral Priority

Value Creation

Time Focus

Application to Ethical Stewardship

Essential Factors

Application to Transcendent Leadership Assist individuals and organizations to achieve the best version of themselves. Recognizes importance of achieving long-term fulfillment. Acknowledges tremendous importance of individual self-fulfillment and organizational achievement. Focus is on achieving fulfillment of potential of all participants. Employees are unique individuals who need to achieve more than selfactualization but also personal fulfillment – in addition to meeting the needs of the organization. Society is served but the focus tends to be more internal. Achieving the greatest possible fulfillment for people’s lives. Optimization of personal growth and self-fulfillment for people and organizations. Focus is personal and then organizational with emphasis on humanistic development.

The two perspectives reinforce each other and honor individuals and society.

Duties are owed to society, but emphasis is different. Transcendence is more personalized and individual. Both cares deeply about people and their importance.

Emphasis may be different, but outcome is similar. The relationship between what is in the organization’s interest and the employees’ interests is inter-related and crucial.

Be duty-oriented and seek to achieve morally virtuous outcomes. See the big picture and avoid compromising the future for short-term gains. Recognize the importance of pursuing the best possible outcomes that benefit all participants.

Counsel for Leaders

Table 3. Comparing Ethical Stewardship Transcendent Leadership

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COMPARISON OF ETHICAL STEWARDSHIP AND TRANSCENDENT LEADERSHIP The characteristics of Ethical Stewardship and Transcendent Leadership have each been reviewed independently. Another profitable means of review is to think about each construct considering a contributing purpose or metric. Table 3 depicts Ethical Stewardship and Transcendent Leadership from nine different standpoints. Also included with each categorical comparison are instructions toward leaders who might aspire to live the principles of Ethical Stewardship as they take a journey of Transcendent Leadership. The observations contained in Table 3 reveal how that even though Ethical Stewardship and Transcendent Leadership are not identical, they can both be complementarily used in one’s leadership.

EIGHT PRINCIPLES FOR LEADERS Principles are foundational ideas that should pattern one’s thoughts and behavior. Individuals who want to experience a leadership transcendence of Body, Mind, Heart, and Spirit must find congruence between their intentions and what they are willing to sacrifice to make those intentions happen. Listed below are eight principles for leaders which facilitate the ability of individuals to move toward personal transcendence and to become true ethical stewards. 1. Identify your own ethical perspective. The tools, considerations, and methods used to make ethical decisions heavily influence the ways one chooses to live, to learn, to love, and to leave a legacy. Your voice is your voice and understanding the foundations of your ethical assumptions and underlying values are key to achieving the self-knowledge required to reach your highest potential. 2. Acknowledge and embrace the importance of purpose. Determine whether you are clear about the distinction between short-term goals and long-term responsibilities. Ascertain whether you understand

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3.

4.

5.

6.

1

the extent of the duties required of covenantal relationships. Bill George believed that for many, it takes a transformative event to light the way to discovering their true purpose1. Assess your own self-regard. Confirm whether you have a sufficiently clear understanding of yourself to be comfortable with the obligation to be a servant leader. Leaders are most effective when they know who they are – and are then more able to serve others2. Until an individual loves herself or himself, that person is limited in her/his ability to fully appreciate, love, and serve others3. Affirm your valuing of others. Humility not only searches out potential greatness in others but recognizes the need to help others to become their best4. Covey defined leadership as “communicating to people their worth and potential so clearly that they come to see it in themselves”5 . Identify whether you authentically care about others’ welfare and the welfare of society. Driven by valuing and serving others, servant leaders are willing to make a commitment to constant learning and self-improvement6. Develop a driving passion. Without passion, there is no emotional connection to one’s purpose 7 . Passion has the capacity to ignite internal fires that enable leaders to transcend fear, doubt, and discouragement. 8 Acknowledge that power, persistence, and patience demand a passionate commitment to excellence. Commit to continuous learning and improvement. Embrace the fact that the roles of the steward and the leader require becoming a role model who continuously strives to become better. Serving others and honoring oneself requires the personal moral obligation of constant commitment9. This dedication to learning and growth is

George, B., (2015). Discover Your True North. Hoboken, NJ: Wiley. Bass, B., (2008), op. cit. 3 Fromm, E., (2006), op. cit. 4 Okpala, C., and Caldwell, C., (2019), op. cit. 5 Covey, S., (2004), op. cit. 6 Okpala, C., and Caldwell, C., (2019), op. cit. 7 Ibid. 8 Covey, S., Merrill, A. R., and Merrill, R. R., (2003), op. cit. 9 Okpala, C., and Caldwell, C., (2019), op. cit. 2

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Cam Caldwell, Charles Goodall and Verl Anderson part of an ethical obligation to transcend oneself – a pursuit that continues throughout one’s lifetime10. 7. Invest in self-discovery. Recognize that your requirement is to find your own voice so that you can help others to find theirs as well. Each individual possesses the power to discover her/his voice, virtually unlimited potential, and latent seeds of greatness11. One’s talents, intelligences, opportunities, and capacities remain largely untapped without the conscious desire to understand one’s true identity and discover one’s greatness12. 8. Optimize your own Spiritual Intelligence. Refine and pay constant attention to your ability to listen to your conscience, to attune yourself with universal truths, and to access inspired insight. The inborn sense of what constitutes fairness and justice, right vs. wrong, thoughtfulness vs. unkindness, things that beautify vs. things that destroy, and what contributes vs. what detracts are all manifest God’s voice speaking to His children13.

These eight guiding principles can enable individuals to recognize the opportunity to discover a personal identity that facilitates in how to redefine how they view themselves, their purpose in life, and their relationships with others, with God, and with the world.

10

Ibid. Covey, S., (2004), op. cit. 12 Ibid. 13 Ibid. 11

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FIVE CONTRIBUTIONS OF THIS CHAPTER This chapter makes five contributions to the discussion about the nature of leadership, the leader’s ethical obligations, and the nature of ethical stewardship and transcendent leadership. 1. It expands the understanding of ethical stewardship as a leadership perspective. The nature of the leader’s demonstrated obligation to others and to society earns the trust and commitment of those whom (s)he serves and ethical stewardship’s dedication to others’ welfare and to long-term value creation enable leaders to become more effective servant leaders. 2. It emphasizes the importance of the pursuit of personal transcendence. Transcendence in striving to achieve peak experiences that enable an individual to glimpse possibilities never previously imagined are within the reach of those who seek to become their very best. The striving for personal excellence enables individuals to realize that their potential is far greater than that which they have believed to be possible. 3. It integrates ethical stewardship and transcendent leadership. Comparing and contrasting the two concepts enables would-be leaders to identify how they can incorporate higher level standards of personal development that can enable them to transform their own lives and more effectively serve others. The nine factors comparing the two concepts are all contributing elements of a successful leader’s commitment to excellence. 4. It clarifies why the constant pursuit of correct principles is vital for leaders. Leadership is a profoundly difficult task and those who seek to lead others face challenges that they rarely fully comprehend. Developing personal excellence, becoming committed to serving others, and exceeding one’s highest previous potential are all opportunities for leaders that can be achieved by integrating ethical stewardship and transcendent leadership.

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Cam Caldwell, Charles Goodall and Verl Anderson 5. It offers eight principles for increasing a leader’s potential to serve. The importance of these principles is founded in the leader’s moral obligation to not only serve others but to become the best version of himself or herself. It is by becoming his or her best self that leaders model the way for others to also grow and flourish.

This chapter offers insights that can enable scholars to discuss the underlying importance of the ideas contained herein. In addition, the opportunity for practitioners to apply the concepts can enable them to discover the practical and applied value of these contributions in their lives.

CONCLUSION Deep within every leader, there is a longing to be more, do more, make a difference, and be remembered for having contributed; to really matter14. This chapter has detailed a potential avenue for one who wishes to begin such a quest to fulfill those inner needs. When leaders choose to take on the mantle of Ethical Stewardship by adopting the qualities of Transcendent Leadership, they embark on a rewarding journey to identify their voice, their unique personal significance.

14

Covey, S., (2004), op. cit.

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It is the birthright and obligation of every individual to discover his or her voice and then help others find theirs as well15. Such a life of fulfillment can be lived, and the world is in dire need of leaders who are willing to make that commitment. As leaders seek to transcend their past potential and seek to serve others, they prepare themselves to make contributions to others’ lives that can be the source of great personal satisfaction and fulfillment.

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Ibid.

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Primeaux, P., Karri, R., & Caldwell, C., (2003). “Cultural Insights to Justice: A Theoretical Perspective Through a Subjective Lens.” Journal of Business Ethics, 46(2): 187–199. Rousseau, D. M., (2003). “Extending the Psychology of the Psychological Contract.” Journal of Management Inquiry, 12(3): 229–238. Sarkar, A., (2017). “Leadership Role in Instilling Workplace Spirituality in Organizations.” Purusharta, 10(2): 61–68. Schein, E. H., (2017). Organizational Culture and Leadership, (5th ed.). Hoboken, NJ: Wiley. Schwartz, S. H., (1992). “Universals in the Content and Structure of Values: Theoretical Advances and Empirical Tests in 20 Countries,” in Orlando, M. P., (Ed.), Advances in Experimental Social Psychology. San Diego, CA: Academic Press. Stebbins, G., (2020). “The Transcendent Leader,” available online at https://www.linkedin.com/pulse/transcendent-leader-gregory-stebbinsed-d-. Stebbins, G., (2017). “Council Post: Six Keys to Transcendent Leadership.” Forbes, May 11, 2017, and available online at https:// www.forbes.com/sites/forbescoachescouncil/2017/05/11/six-keys-totranscendent-leadership/. Trevino, L. K., (1986). “Ethical Decision Making in Organizations: A Person-Situation Interactionist Model,” Academy of Management Review, 11(3): 601–617. Vera, D. and Crossan, M., (2004). “Strategic Leadership and Organizational Learning.” Academy of Management Review, 29(2): 222–240. Wilson, K., (2016). Steward Leadership in the Nonprofit Organization. Downers Grove, IL: IVP Books.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 7

EIGHT TRAGEDIES IN BUSINESS EDUCATION: THE ISSUES ARE ETHICAL Cam Caldwell1, and Verl Anderson2,† 1

American University of the Emirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

Business education has struggled to be relevant for decades. Esteemed scholars, Christina Fong and Jeffrey Pfeffer, suggested that there was “less success than meets the eye” in their panning of business education nearly two decades ago. 1 Similar opinions about the shortcomings of business education have been echoed by scholars2 and practitioners3 for decades – 

Corresponding Author’s E-mail: [email protected]. Corresponding Author’s E-mail: [email protected]. 1 Pfeffer, J. & Fong, C. T., (2002). “The End of Business Schools? Less Success Than Meets the Eye.” Academy of Management Learning & Education, Vol. 1, Iss. 1, pp. 78-95. 2 See such notable examples as Mintzberg, H.< (2004). Managers not MBAs: A Hard Look at the Soft Practice of Managing and Management Development. San Francisco, CA: BerrettKoehler Publishers and Bennis, W. & O’Toole, J., (2005). “How Business Schools Lost their Way.” Harvard Business Review, May, 2005 and found online on March 15, 2020 at https://hbr.org/2005/05/how-business-schools-lost-their-way. 3 Denning, S., (2014). “Why Aren’t Business Schools More Business-Like?” Forbes, February 7, 2014, and found online on March 15, 2020 at https://www.forbes.com/sites/stevedenning/ 2014/02/07/why-arent-business-schools-more-business-like/#23ee5f0d5cac. †

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with little significant progress and a host of blunders that make many of those who run business schools appear to be ineffective – if not downright unethical. The recent decline in student interest to obtain the vaunted MBA degree at even the best colleges and universities 4 gives testimony to the fact that B-Schools are no longer as highly regarded as they once were in past years.

The purpose of this chapter is to identify eight tragedies in business school practices – issues that have their roots in one or more ethical or moral problems. B-school deans, department heads, and faculty are either turning a blind eye to the moral problems of business education, simply do not know how to resolve them, or do not care to address and resolve the ethical and implications of these tragedies. Unfortunately, these tragedies have become so familiar to the academic community, the business world, and the students being taught at Business Schools that the underlying problems merit an immediate response by B-School leaders and faculty and can no longer be ignored witho9ut those leaders and faculty members being labeled both negligent and irresponsible.

4

Hess, A., (2018). “Recent MBA Grads Earn $150,000 – But 70% of Schools Say Applications Are Down.”CNBC.com, October 3, 2018 and found online on March 15, 2020 at https://www.cnbc.com/2018/10/03/applications-are-down-at-70percent-of-us-mbaprograms-including-harvard.html.

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B-school deans, department heads, and faculty are either turning a blind eye to the moral problems of business education, simply do not know how to resolve them, or do not care to address and resolve the ethical and implications of these tragedies.

The chapter begins by briefly summarizing the growing problem of business school ineffectiveness at a time when trust in business, government, and organizations of all types has declined5 and society has been defined as “the cheating culture 6 .” We then identify eight specific “tragedies” that exemplify the problems that have become increasingly common at even the highly regarded schools of business. We identify the ethical breaches associated with each of these problems. The chapter concludes by offering nine suggestions for business school leaders, business faculty, and societyat-large to address to remediate the major ethical problems that are at the heart of business schools’ current status quo.

The Current Status of Business Schools Although the previously noted scholars and commentators have decried the ineffectiveness of B-schools, those problems persist. “Ivory tower” thinking and the lack of relevance of the business school curriculum have been complained about for decades7. Stanford’s Jeffrey Pfeffer had noted twenty years ago that the biggest cause of business failures is the application of commonly accepted but unproven management theories that are misapplied by practitioners who think they understand those concepts 8 . Despite that warning, business leaders have continued to apply fuzzy Harrington, M., (2017). “Survey: People’s Trust in Business, Government, Media, and NGOs.” Harvard Business Review, January 18, 2017 and found online on March 15, 2020 at https://hbr.org/2017/01/survey-peoples-trust-has-declined-in-business-media-governmentand-ngos. 6 Callahan, D., (2004). The Cheating Culture: Why More Americans are Doing Wrong to Get Ahead. Boston: Mariner Books. 7 For a critique of business schools and their ivory tower perspective see Caldwell, C., and Jeane, L., (2007). “Ethical Leadership and Building Trust – Raising the Bar for Business.” Journal of Academic Ethics, Vol. 5, No. 1, pp. 1-4. 8 Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 5

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thinking in the ways that they treat employees and fail to apply proven principles about employee empowerment and engagement9.

Unfortunately, business schools have reinforced the trend to treat employees like cost centers. The result is that today’s business leaders have drunk the Kool-Aid and believe the myth that it is a good idea to avoid paying employees benefits, hire part-time and temporary employees, and apply a” lean and mean” approach to staffing. “Keep personnel costs low” is the rallying cry of CEOs and CFOs – despite the fact that a growing body of evidence has confirmed that creating high-trust and high-performance work systems results in greater profitability, better customer service, and greater innovation10. Today’s business school faculties continue to prepare their students to be financial analysts and number crunchers, rather than like managers of people11 -- a problem identified more than three decades ago that has been perpetuated despite longstanding and continuing criticism12.

Clifton, J. & Harter, J., (2019). It’s the Manager: Gallup Finds the Quality of Managers and Team Leaders is the Single Biggest Factor in Your Organization’s Long-Term Success. Omaha, NE: Gallup Press. 10 Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. 11 Mintzberg, H., (2004), op. cit. 12 Porter, L, W., & McKibbin, L- E, (1988). Management Education and Development Drift or Thrust into the 21st Century. New York: McGraw-Hill, 9

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Jeff Pfeffer and Christina Fong offered the following scathing criticism of the quality of academic preparation offered at many B-Schools nearly two decades ago13. (T)here is scant evidence that the MBA credential, particularly from non-elite schools, or the grades earned in business courses—a measure of the mastery of the material—are related to either salary or the attainment of higher level positions in organizations. These data, at a minimum, suggest that the training or education component of business education is only loosely coupled to the world of managing organizations. A similar disconnection is observed when we consider research. Again, the small amount of available evidence suggests a modest effect and limited linkage between the research on management and management practice.

The proliferation of MBA programs offered by many online schools – and even a growing number of relatively highly-regarded and AACSBaccredited B-Schools – has resulted in an academic product that continues

13

Pfeffer, J. & Fong, C. T., (2002), op. cit., p. 92.

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to be criticized for its failure to adequately prepare business students for the world in which they will be required to work14.

The online MBA and Doctoral Programs offered by such schools as Capella University, Walden University, Colorado Technical University, and the University of Phoenix are taught by faculties who typically lack the academic preparation and competencies to adequately supervise graduate students and water down the quality of the academic degrees made available to their students – often at a high cost requiring government loans and longterm debt. Unfortunately, even some AACSB-accredited schools are equally guilty of offering graduate degrees in business that are taught primarily by non-tenured and part-time adjunct faculty who are either out-of-date in their academic preparation or doctoral candidates asked to teach topics about which they are only marginally prepared. Schools that provide out-of-date or sub-standard requirements of their students to obtain a degree discredit the reputation of business education overall.

14

Poff, D. (Ed..) (2020). Corporate Social Responsibility and University Governance. New York: Springer Nature and Anderson, V. and Caldwell, C., (Eds.). (2019). Business Education’s Future: A Transformative Approach. Hauppage, New York: NOVA Publishing.

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Guilty of offering graduate degrees in business that are taught primarily by non-tenured and parttime adjunct faculty who are either out-of-date in their academic preparation or doctoral candidates asked to teach topics about which they are only marginally prepared

The state-of-the-art of B-Schools has resulted in many business graduates singing the refrain from the old Peggy Lee country and western ballad, “Is That All There Is?15” Though many of these same graduates leave frustrated and disappointed, others discover that what they have been taught is not only impractical and often out of date but actually dangerous if implemented in their careers16.

What graduates of business programs ultimately discover, however, is that the debts that they have incurred in obtaining a business degree are real and must be repaid. Many graduates feel cheated, angry, and appalled by the discovery that their highly-touted academic degrees are quasi-fraudulent in

Byrne, J. A., (2014). “The Worst Things EMBA Students Say About Their Experiences.” Poets and Quants for Executives, May 16, 2014 and found online on March 16, 2020 at https://poetsandquantsforexecs.com/2014/05/16/the-worst-things-emba-students-say-abouttheir-experiences/. 16 Pfeffer, J., (1998), op. cit 15

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preparing them for future employment – even those who have completed course work at many AACSB-accredited academic institutions.

Tragedies in Business Education

By definition, a tragedy is a serious failure that has resulted in a serious loss of major proportions. Tragedies occur when major opportunities occur to achieve an important outcome and are badly mishandled to the detriment of a particular group or to the detriment of society as a whole. Although errors of omission are not always recognized as tragedies, when a significant loss results from the failure to act is evaluated, those errors of omission can rise to the level of a tragic situation.

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Writing is Not Considered An Important Graduate Business Student Priority The failure to require graduate business students to be accountable for developing effective writing skills has its roots in the Association to Advance Collegiate Schools of Business (AACSB) dropping the requirement – due to the fact that many business faculty members struggle to write in English and are non-English-speaking natives. The AACSB accrediting body quietly omitted the writing standard for MBA students – despite the fact that employers have cited the failure of business graduates to write effectively as a primary complaint when evaluating new hires17.

More significantly, the failure to write also reflects the inability of graduate students in business to conduct appropriate research when evaluating a business problem. For example, in a group of 84 new graduate business students at a Texas university, only seven of the students were familiar with either the EBSCO Host business data base or Google Scholar as a source of academic information. Students asked to write a one-page paper inevitably used Google Search as their source of information –

17

The AACSB accreditation standards for 2013 and 2018 may be found online at their website at https://www.aacsb.edu/accreditation/standards.

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frequently citing “commercials” written by consultants seeking to advertise their products to potential customers.

Publishing is Not Valued By Many Business Faculty as Important For Teaching Effectiveness Although the AACSB requires “Scholarly Academics” to publish, the Accreditation Council for Collegiate Schools of Business (ACBSP) does not recognize that faculty at its accredited institutions be required to publish in their fields. The failure to acknowledge the importance of the faculty role in actively being involved in research in their fields is alarming – given the fact that the body of knowledge in the world doubles every two years in many business fields. The plain fact is that we live and work in a knowledge-, information-, and wisdom-based economy that depends on current information and the ability of faculty who provide that information to students to be up to date. Recently, the Dean of a small B-School in Southern Utah told its leading publisher that “publishing is not a requirement for effective teaching and adds no value.” Those comments were made by a dean who had not published an academic paper in more than five years – and that individual’s opinion is in conflict with AACSB standards 18 and the opinions of many other scholars.

18

Ibid.

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Plagiarism and Academic Dishonesty Are Both Tolerated and Ignored Although academic dishonesty is rampant at many college campuses, with a recent study citing 86% of college and university students admitting that they cheat, many faculty members simply ignore cheating.19 At one South Florida business school, a graduate student who plagiarized 100% of a paper he submitted responded to ta new instructor in a Human Resource Management class, “Sir, this is my last semester in the program and every paper I have written thus far has been written this way.” When other faculty were confronted by the new faculty member about the plagiarism problem, the faculty member teaching Business Ethics responded, “Oh, when I find plagiarism in a student’s paper, I simply deduct points and call it a ‘citation error.’” At another small school in Louisiana, 80% of undergraduate students were found to be plagiarizing on a mid-term assignment. The students responded to the teacher, “You are the first professor we have had who has seemed to even read our papers.”

19

Farkas, K. (2019). “86 Percent of College Students Say They’ve Cheated. It’s Easier than Ever with Mobile Devices.” The Plain Dealer, January 11, 2019 and found online on March 16, 2020 at https://www.cleveland.com/metro/2017/02/cheating_in_college_has_become.html.

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Adjuncts, Temporary, and Part-Time Faculty Now Teach More Than Half of All Classes Because of the decrease in state and federal funding but the increase in reporting requirements, there are more administrators and staff at B-Schools but fewer dollars available. Consequently, Business Schools have begun teaching classes in their curriculum with part-time adjuncts, temporary or “visiting” faculty, and other non-tenured instructors who lack academic credentials. Moreover, most of those part-time instructors receive compensation for teaching far below that of full-time or tenured faculty members. In order to keep their jobs, those same faculty members contribute to wholesale grad inflation to appease their students and to appear as if they are providing students a high-quality academic product. Meanwhile, these faculty members are frequently assigned large classes and typically resort to multiple choice exams to assess student learning.

New Faculty Lack Adequate Understanding of Teaching Concepts and Receive No Training It is a legendary truth that doctoral candidates at most schools are unprepared to teach effectively but are simply assigned to teach classes in their subject areas. Unfortunately, the commitment to improving teaching quality at even the best schools is minimal and is rarely accessed when it is available. At one Top 50 B-School in the Southern USA, the Department

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Chair recently told his management faculty, “Don’t worry about your teaching. Focus on getting published in top-tier journals.” Although that school had a teaching support program, access to teaching resources and instruction as to how to use the online support system was not available until the second week of the academic year for either students or for new instructors.

Faculty Give Lip Service to Business Concepts but Fail to Practice What They Teach The concepts taught by B-School faculty are rarely practiced by those who teach those same ideas20. Human Resource Management policies are often ignored in the hiring of new faculty and “best qualified” candidates are often bypassed for a number of reasons. Highly-published scholars often have a difficult time finding employment at many schools where the current faculty have few or no publications. Involving students in consulting projects occurs at some schools by individual faculty but is a rarity at most Business Schools. In a business world where continuous improvement is a requirement and creating a learning culture is a necessity for innovation and survival, the faculties at business schools may teach those principles but

20

Caldwell, C., Karri, R., and Matula, T. (2005). “Practicing What We Teach – Ethical Considerations for Business Schools.” Journal of Academic Ethics, Vol. 3, pp. 1-25.

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rarely engage in proactive projects that benefit their communities 21 . Fortunately, there are noteworthy exceptions at some schools where financial resources are sufficient and leadership within the school is unusually good. However, many B-Schools, like the Colorado on-line university, advise its faculty to water down their grading standards so that students who are unprepared to meet the standards of a university-level education will not drop out of the program.

Business Schools Largely Ignore Their Obligation to Address World Problems Faculty and administrators at Business Schools tend to self-describe as “extremely busy and overworked.” Ironically, most full-time B-School faculty are also assigned a “two-day a week” work schedule with Friday off at virtually every college campus. Faculty, especially in the area of Accounting, often have secondary work opportunities which complement their incomes and full-time faculty members do quite well financially. Nonetheless, very few B-School faculty engage in projects focused on addressing community issues or world problems – although they teach in the classroom the importance of social responsibility. Henry Mintzberg, the world-famous management expert, has cited the importance of B-Schools 21

Caldwell, C., (2014). “Forging Ethics-Based Business Partners: The Integration of Business, Employees, and Education.” Graziadio Business Review published by Pepperdine University in the April, 2014 edition found online at https://gbr.pepperdine.edu/2014/04/ forging-ethics-based-business-partners/.

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and their leaders adopting a “communityship” approach to addressing major societal problems as an obligation that those leaders owe the world22 -- but Mintzberg’s suggestion has largely been ignored at many schools23.

Ethics and Values Are Not Taught Effectively At the Majority of Business Schools In a famous study conducted by Amitai Etzioni at Harvard Business School, he reported that teaching business ethics principles was ineffective – when it was done at all. Etzioni gave Harvard an “F” grade for teaching business ethics in an article he later authored. 24 The reality is that the AACSB has acknowledged that teaching ethics and values to obtain accreditation is important – but that it is not required for B-Schools to actually teach a class in ethics. Moreover, when Deans of Business Schools were surveyed about whether their faculty members were qualified to teach ethical principles across the curriculum, an alarming 40% said that their faculty members lacked the qualifications. Fewer than one-third of Business Schools now offer a class in Business Ethics as part of their curriculum, and See Mintzberg’s comments in Mintzberg, H. and Caldwell, C., (2017). “Leadership, ‘Communityship,’ and ‘The Good Folk.’” International Journal of Public Leadership, Vol. 13, Iss. 1, pp. 5-8. 23 Szalek, G. & Caldwell, C. (2020). “Organizational Revolutionaries in a Transformative World” in D. Poff (Ed.). Corporate Social Responsibility and University Governance. New York: Springer Nature. 24 Etzioni, A., (2002). “When It Comes to Ethics, B-Schools Get an F.” Washington Post, August 4, 2002 and found online on March 16, 2020 at https://www.washingtonpost.com/ archive/opinions/2002/08/04/when-it-comes-to-ethics-b-schools-get-an-f/c92d6899-fd204451-8ca1-113708f5ef92/. 22

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often those classes are considered a low priority. At one Georgia B-School, a Department Chair told the faculty member who discovered students plagiarizing in their Business Ethics MBA course, “Make it go away.” At a university in Utah, teaching a stand-alone Business Ethics course was discontinued because the individual making the recommendation noted that “other schools” reported that teaching ethics was difficult to do effectively – despite the strong objection of the faculty member who had been teaching that Business Ethics course at that school for several years.

At the core of each of these eight issues is the failure of Business School faculties and administrators to honor the moral and ethical obligation to provide their students with a quality educational experience that prepares those students for a successful career. That failure is ultimately an ethical breach on the part of those who teach and those who lead at many of today’s B-Schools. When Business Schools fail to deliver a quality product, they violate obligations owed to those students, their families, their future employers, and a society dependent upon well run and ethical economic commerce.

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Recommendations for Improvement Many B-School faculties and administrators already acknowledge the obvious deficiencies in the academic offerings that they provide to their undergraduate and graduate students – and have expressed that opinion for many years Many B-School faculties and administrators already acknowledge the obvious deficiencies in the academic offerings that they provide to their undergraduate and graduate students – and have expressed that opinion for many years25. Despite that realization, the wheels of productive change grind slowly, with one Department Chair from an AACSB-accredited B-School in Utah confessing, “It takes two years to get a simple curriculum change approved.” In today’s fast-moving world, such slow-motion decisionmaking is no longer acceptable – but is unfortunately the norm at many schools. The following are nine specific recommendations for deans, department chairs, and faculties at today’s B-Schools to thoughtfully consider as they weigh their moral and ethical obligations to their students and to society.

Discontinue Hiring Adjuncts to Teach Graduate Courses Adjunct and non-tenured faculty are not required to publish at most schools – and few have an incentive to publish in their fields. Many parttime adjuncts fail to have doctoral degrees – and many are actually doctoral students who moonlight to make a few dollars and get some teaching experience. Such individuals are not typically current in new teaching 25

Heskett, J., (2005). “How Can Business Schools Be Made More Relevant?” Harvard Business School Working Knowledge, July 4, 2005 and found online on March 16,2020 at https://hbswk.hbs.edu/item/how-can-business-schools-be-made-more-relevant.

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methods, nor do they have the incentive to require students to develop and demonstrate writing and research skills. In addition, these part-time and contract employees depend upon favorable teaching evaluations from their students and tend to avoid holding students accountable to the same standards that a tenured or tenure-track faculty member would require of students. The use of adjuncts to teach graduate level courses simply waters down the quality of education provided to graduate students.

Teach Business Ethics as a Stand-Alone Course for All Business Students The extensive research conducted by Kansas State University Ethics Professor, Diane Swanson and her colleagues has confirmed the importance of stand-alone Business Ethics courses in the business curriculum26. Despite Swanson’s well-articulated documentation, the AACSB has ducked requiring B-Schools to teach business ethics – beyond allowing those schools to claim that ethics is incorporated in business courses “across the curriculum27.” At the same time as ethics is allegedly taught as a part of other courses, 40% of the B-School deans surveyed by Swanson admit that their

26

See Swanson, D. L. & Fisher, D. G., (2008). Advancing Business Ethics Education. Charlotte, NC: Information Age Publishing and See Swanson, D. L. & Fisher, D. G., (2010). Toward Assessing Business Ethics Education. Charlotte, NC: Information Age Publishing 27 AACSB Accreditation Standards, op. cit.

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faculties lack the qualifications to adequately teach business ethics to their students28.

According to a survey conducted by Workplace Solutions Group, more than 60% of employers say that applicants lack communication and interpersonal skills and “are clueless about the fundamentals of office life Require Business Students to Demonstrate Research and Writing Skills as a Prerequisite for Program Entrance It is not news that employers decry the inadequate writing skills of college graduates or that those same employers wish to hire business graduates who know how to properly research a major business issue and prepare a well-documented summary report29. Requiring undergraduate and graduate business students to demonstrate strong writing and research skills BEFORE they begin taking substantive courses in their business curricula lays the foundation for those same students to polish and apply those skills as they take their classes.

28 29

Swanson, D. L. & Fisher, D. G., (2008), op. cit. Tucker, M., (2017). “Our Students Can’t Write Very Well – It’s No Mystery Why.” Education Week, January 12,v 2017 and found online on March 16, 2020 at http://blogs.edweek.org/edweek/top_performers/2017/01/our_students_cant_write_very_we llits_no_mystery_why.html and

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According to a survey conducted by Workplace Solutions Group, more than 60% of employers say that applicants lack communication and interpersonal skills and “are clueless about the fundamentals of office life30.”

Expand the Focus on Teaching Methods and on Improving Teaching Effectiveness Although freshly-minted doctoral recipients in business may be relatively current in their knowledge level about their primary area of study, they are unlikely to have much experience teaching – except as Teaching Assistants at the universities where they obtained their doctoral degrees. They rarely have any training about teaching pedagogy and the most effective teaching techniques. None other than Derek Bok, former President of Harvard University, has emphasized the importance of improving the effectiveness of teaching at colleges and universities – especially for new PhDs31.

White, M. C., (2013). “The Real Reason New College Grads Can’t Get Hired.” Time, November 10, 2013 and found online on March 16, 2020 at https://business.time.com/2013/11/10/thereal-reason-new-college-grads-cant-get-hired/. 31 Bok, D. (2013). “We Must Prepare Ph.D. Students for the Complicated Art of Teaching.” Chronicle of Higher Education. November 11, 2013 and obtained on March 16, 2020 online at http://chronicle.com/article/We-Must-Prepare-PhD-Students/142893/. 30

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Incorporate Service Learning Into the B-School Curriculum at All Levels

Service learning assignments for business students confirms to them the importance of social responsibility while also providing opportunities for students to work with local companies, governmental units, schools, and other community groups32. The notion of business having an obligation to be part of the solution to the problems of communities and nations is wellestablished and has increasingly been acknowledged in business schools –

32

Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017). “Social Responsibility in a Troubled World: A Virtuous Perspective.” International Journal of Public Leadership, Vol, 13, Iss. 2, pp 98-115.

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despite the fact that many business schools have not yet incorporated that responsibility into their business curricula33.

Hold All Full-Time Faculty Accountable to Publish in Their Fields to Retain Accreditation Business students are entitled to a “gold standard” of quality. Compromising that standard, diluting the quality of their education, and enabling students to skate by without learning the concepts or developing the skills required for business success is a fundamental error being perpetuated by many B-Schools. Full-time faculty should be required to publish in the field where they teach. The rationale of the AACSB for requiring faculty to publish and to make significant intellectual contributions to their field is a well-reasoned requirement that should be adopted by every business school – in addition, of course, to maintaining the quality of classroom preparation and teaching. The reality is that many full-time business faculty members work fewer than 25 hours per week under existing workload requirements. Holding faculty accountable to publish periodically benefits students and keeps faculty current in their disciplines.

33

Caldwell, C., (2014), op. cit.

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Increase B-School Partnerships with Local Businesses, Churches, Ngos, and Local Government B-School faculties have much to offer to the groups within their communities and have a responsibility to those communities that they serve34. Lip service is often given by faculty and administrators about their responsibility to partner with community businesses and other organizations -- but when all is said and done, less is typically done than is said. The service that B-School faculties and students can provide to their communities is well-documented 35 . Unfortunately, the opportunity to be involved in practical opportunities to consult with and to assist local community groups and organizations is the exception rather than the rule for most business faculty – and for most business students.

Expand the Political Role of B-Schools In Lobbying For State and Federal Dollars Governmental reporting has required universities and colleges to increase their administrative and support staff – while actually decreasing the number of full-time faculty despite huge increases in the number of students involved in business education. Meanwhile, federal funding of colleges and universities has decreased in “real dollars” at many schools – 34 35

Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017), op. cit. Caldwell, C., (2014), op. cit.

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although “fly-by-night” private universities that offer a questionable academic product have greatly increased their portion of federal dollars. The result is that the cost of B-School educations has increased dramatically. Faculty, administrators, and business students need to exponentially increase their political roles in lobbying for federal dollars – including creative ways in which B-Schools can receive “bonus” dollars or supplemental revenues for engaging with community stakeholders in addressing high priority social problems.36

Integrate B-Schools with STEM Programs and Other Academic Departments Business education principles can uniformly be applied throughout academic departments at colleges and universities – and have successfully been integrated at many schools. In particular, the opportunity to partner with Science, Technology, Engineering, and Mathematics departments makes tremendous sense in today’s high-technology economy. However, partnering in other academic areas – ranging from healthcare, education, and nursing to psychology, public administration, and architecture – makes logical sense as well. “Silo thinking” that characterized many college and university campuses -- wherein departments competed for dollars -- needs to be updated in the 21st century to meet the realities of today’s demand for efficiency, effectiveness, and humanity. Organizations of all types can

36

Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017), op. cit.

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benefit from understanding and applying business principles – and partnering makes sense economically and practically.

These nine recommendations include ideas that have successfully been applied in some colleges and universities – but the unfortunate reality is that they have also been ignored by far more B-Schools than those which have incorporated them.

CONCLUSION It would be dishonest and unfair to say that most business faculties and administrators are incompetent or unethical – although the product delivered at far too many B-Schools borders on a fraudulent misrepresentation of what tomorrow’s business graduates require to succeed. The painful reality – one acknowledged literally for decades – is that many Business Schools are poorly administered by faculty who are far better in their potential than they display in their classrooms. It is ultimately the responsibility of the deans and department chairs to lead the way in ensuring that the business education delivered meets the standards required for business students to succeed -and to do so effectively and ethically.

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Years ago, Robert C. Solomon equated ethics with excellence in identifying the importance of cooperation and integrity in business. In the three decades since Solomon wrote his landmark book, B-Schools and their leaders have lost the way. Many B-Schools have failed to hold themselves and their students accountable to the ethical standard of excellence, Much is needed for B-School deans and their faculties to raise the bar, practice what they teach, and honor their obligations to those stakeholders that they are obliged to serve.

At some colleges and universities, business education is succeeding. At many schools the business programs are and are not preparing tomorrow’s leaders to serve in a world that will increasingly depend upon the cooperation and integrity about which Solomon wrote. Until deans and faculties make a concerted effort to raise the bar and exponentially improve the quality of the product that they deliver to their students, they will have

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failed in their moral and ethical responsibilities and that failure will constitute a painful tragedy with ramifications on individual lives, on employers, on communities, and on the world.

REFERENCES Anderson, V. and Caldwell, C., (Eds.). (2019). Business Education’s Future: A Transformative Approach. Hauppauge, New York: NOVA Publishing. Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017). “Social Responsibility in a Troubled World: A Virtuous Perspective.” International Journal of Public Leadership, Vol, 13, Iss. 2, pp 98-115. Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. Bennis, W. & O’Toole, J., (2005). “How Business Schools Lost their Way.” Harvard Business Review, May, 2005 and found online on March 15, 2020 at https://hbr.org/2005/05/how-business-schools-lost-their-way. Bok, D. (2013). “We Must Prepare PhD Students for the Complicated Art of Teaching.” Chronicle of Higher Education. November 11, 2013 and obtained on March 16, 2020 online at http://chronicle.com/article/WeMust-Prepare-PhD-Students/142893/. Byrne, J. A., (2014). “The Worst Things EMBA Students Say About Their Experiences.” Poets and Quants for Executives, May 16, 2014 and found online on March 16, 2020 at https://poetsandquants forexecs.com/2014/05/16/the-worst-things-emba-students-say-abouttheir-experiences/. Caldwell, C., (2014). “Forging Ethics-Based Business Partners: The Integration of Business, Employees, and Education.” Graziadio Business Review published by Pepperdine University in the April, 2014 edition found online at https://gbr.pepperdine.edu/ 2014/04/forging-ethics-based-business-partners/.

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Caldwell, C., Karri, R., and Matula, T. (2005). “Practicing What We Teach – Ethical Considerations for Business Schools.” Journal of Academic Ethics, Vol. 3, pp. 1-25. Caldwell, C., and Jeane, L., (2007). “Ethical Leadership and Building Trust – Raising the Bar for Business.” Journal of Academic Ethics, Vol. 5, No. 1, pp. 1-4. Callahan, D., (2004). The Cheating Culture: Why More Americans are Doing Wrong to Get Ahead. Boston: Mariner Books. Clifton, J. & Harter, J., (2019). It’s the Manager: Gallup Finds the Quality of Managers and Team Leaders is the Single Biggest Factor in Your Organization’s Long-Term Success. Omaha, NE: Gallup Press. Denning, S., (2014). “Why Aren’t Business Schools More Business-Like?” Forbes, February 7, 2014, and found online on March 15, 2020 at https://www.forbes.com/sites/stevedenning/2014/02/07/why-arentbusiness-schools-more-business-like/#23ee5f0d5cac. Etzioni, A., (2002). “When It Comes to Ethics, B-Schools Get an F.” Washington Post, August 4, 2002 and found online on March 16, 2020 at https://www.washingtonpost.com/archive/opinions/2002/08/04/ when-it-comes-to-ethics-b-schools-get-an-f/c92d6899-fd20-44518ca1-113708f5ef92/. Harrington, M., (2017). “Survey: People’s Trust in Business, Government, Media, and NGOs.” Harvard Business Review, January 18, 2017 and found online on March 15, 2020 at https://hbr.org/2017/01/surveypeoples-trust-has-declined-in-business-media-government-and-ngos. Heskett, J., (2005). “How Can Business Schools Be Made More Relevant?” Harvard Business School Working Knowledge, July 4, 2005 and found online on March 16, 2020 at https://hbswk.hbs.edu/item/how-canbusiness-schools-be-made-more-relevant. Hess, A., (2018). Recent MBA Grads Earn $150,000 – But 70% of Schools Say Applications Are Down. CNBC.com, October 3, 2018 and found online on March 15, 2020 at https://www.cnbc.com/2018/10/03/ applications-are-down-at-70percent-of-us-mba-programs-includingharvard.html.

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Mintzberg, H. and Caldwell, C., (2017). “Leadership, ‘Communityship,’ and ‘The Good Folk.’” International Journal of Public Leadership, Vol. 13, Iss. 1, pp. 5-8. Mintzberg, H. (2004). Managers not MBAs: A Hard Look at the Soft Practice of Managing and Management Development. San Francisco, CA: Berrett-Koehler Publishers Pfeffer, J. & Fong, C. T., (2002). “The End of Business Schools? Less Success Than Meets the Eye.” Academy of Management Learning & Education, Vol. 1, Iss. 1, pp. 78-95. Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. Poff, D. (Ed..) (2020). Corporate Social Responsibility and University Governance. New York: Springer Nature Porter, L, W., & McKibbin, L- E, (1988). Management Education and Development Drift or Thrust into the 21st Century. New York: McGrawHill, Swanson, D. L. & Fisher, D. G., (2008). Advancing Business Ethics Education. Charlotte, NC: Information Age Publishing Swanson, D. L. & Fisher, D. G., (2010). Toward Assessing Business Ethics Education. Charlotte, NC: Information Age Publishing Szalek, G. & Caldwell, C. (2020). “Organizational Revolutionaries in a Transformative World” in D. Poff (Ed.). Corporate Social Responsibility and University Governance. New York: Springer Nature. Tucker, M., (2017). “Our Students Can’t Write Very Well – It’s No Mystery Why.” Education Week, January 12, v 2017 and found online on March 16, 2020 at http://blogs.edweek.org/edweek/top_performers/ 2017/01/our_students_cant_write_very_wellits_no_mystery_why.html White, M. C., (2013). “The Real Reason New College Grads Can’t Get Hired.” Time, November 10, 2013 and found online on March 16, 2020 at https://business.time.com/2013/11/10/the-real-reason-new-collegegrads-cant-get-hired/.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 8

ETHICAL CHALLENGES IN HUMAN RESOURCE MANAGEMENT Cam Caldwell1,* and Verl Anderson2,† 1

American University of the Emirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

At a time when organizations are struggling to effectively deliver high quality products and services to their customers, the challenges facing organizations have been made exponentially more difficult by the rewriting of the employer-employee relationship. Stanford University’s Jeffrey Pfeffer has articulated the many difficulties that have resulted due to the growing complexities of a world that is often described as volatile, uncertain, complex, and ambiguous1.

Corresponding Author’s E-mail: [email protected]. Corresponding Author’s E-mail: [email protected]. 1 Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. * †

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Pfeffer has noted that today’s “new employment contract” has put employees in a position where they are typically viewed as commodities – despite lip service given to the importance of employees2. The claim that “employees are our most important asset” is contradicted by organization systems that treat employees as cost centers to minimize rather than assets to be developed. The solution, Pfeffer affirms, is to create aligned human resource programs and policies that engage, empower, and enhance the capabilities of employees and treat them as partners in an organization’s success3.

The purpose of this chapter is to address the difficult ethical challenges facing Human Resource Professionals (HRPs) as they struggle to motivate employees. The chapter begins with a summary of the roles of Human

2 3

Ibid. Ibid.

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Resource Management (HRM) to provide context regarding the HRP’s responsibilities to stakeholders. Those roles are then examined in context with the complex array of ethical duties and obligations associated with the HRM function. Following that explanation, the chapter suggests eight guiding principles for HRPs to consider as they strive to address the ethical challenges associated with their roles. After identifying five contributions which the chapter makes to the HRM literature, the chapter concludes with a challenge to HRPs to incorporate the eight principles in order to contribute more effectively to the success of their organizations.

KEY ROLES IN HUMAN RESOURCES It is well established that HRPs function as staff support – and that the HRP purpose and the role of HRM is to assist an organization’s Top Management Team to achieve its overall mission4. Despite that fundamental perspective, the roles of HRPs are often badly misunderstood and misapplied in organizations. Nonetheless, the HRM function is a vitally important contributor to an organization’s strategic success when its key roles are effectively conducted5. Unfortunately, according to well-documented research the vast majority of individuals who currently serve in HRP roles lack formal training in the field and do not fully appreciate the complexities of their roles 6 . The following is a listing of seven key strategic roles of HRPs and a brief summary of each of those roles7.

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The Human Resources function is well explained in Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L., (2015). Managing Human Resources (8th ed.). London, England: Pearson. 5 See Caldwell, C., Truong, D., Linh, P., and Tuan, A., (2011). “Strategic Human Resource Management as Ethical Stewardship.” Journal of Business Ethics, Vol. 98, Iss. 1, pp. 171182. 6 Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L., (2015), op. cit. 7 These seven roles are described in Caldwell, C. and Anderson, V. (Eds). (2018a). Strategic Human Resource Management. Hauppage, New York: NOVA Publishing and in Caldwell, C. and Anderson, V., (Eds.). (2018b). Human Resource Management: A Transformative Perspective. Hauppage, New York: NOVA Publishing.

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Identifying and documenting employee attitudes. HRPs are not only attuned to the perceptions and priorities of employees at all levels but they monitor employee attitudes via periodic surveys of employee opinions. Employee surveys complement and provide detailed information about employee concerns and perspectives. Serving as a resource in organization analysis training. Employees in organizations typically lack polished skills in knowing how to conduct organization analysis. Although these skills may be developed by employees throughout the organization, training in the process of carrying out an accurate assessment of organization conditions, the root causes of problems that occur, and the impact of those problems can exponentially improve the ability of employees and managers in analyzing systems, processes, and organization outcomes. Implementing programs enhancing employee empowerment and engagement. HRPs can play a major role in the development of employee empowerment and employee engagement programs that promote employee ownership, increase commitment, and support a change-oriented culture. Demonstrating technical skills supporting organizational objectives as a subject matter expert. The HRM function requires a specialized knowledge of technical, interpersonal, and legal topics that are essential to the effective performance of any organization and that contribute to its ability to hire, retain, and support employees.

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Creating metrics for assessing driving and restraining forces. If they are to be valuable strategic resources for the organization, HRPs must develop the ability to accurately measure the value added by employees and departments and to assist the Top Management Team to assess the critical factors essential to create organizational change. Providing research about best practices. To effectively assist an organization to manage change HRPs must become Subject Matter Experts about organization analysis and managing change. The nature of change can be ambiguous, uncertain, and difficult to achieve and HRPs must not only understand best practices but the underlying principles upon which they are achieved. Developing programs that support a culture of change. HRPs play an important role in the development of a productive and supportive work culture by developing aligned programs that support change. Resistance to change is a common phenomenon when systems, policies, and processes do not exist that reinforce change initiatives.

Understanding the importance of each of these roles is particularly important as HRPs assist the Top Management Team, supervisors, and team leaders. In addition, the obligations associated with these seven roles are a necessity in order to honor ethical duties owed to those with whom HRPs work. In their staff support role, HRPs must become experts in the performance of all seven of these roles and must be adept at working with

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both the Top Management Team and employees if their organizations are to compete successfully in today’s challenging environment. The expectations and priorities of the Top Management Team and those of the employees within an organization may vary somewhat with regard to each of the goals just listed. Table 1, provided below, identifies key elements of each of the roles, as viewed through the lens of top management and employee expectations.

Each of these seven roles suggests a variety of important ethicallyrelated responsibilities owed by HRPs to those whom they serve in their staff function. More than four decades ago, the University of Michigan’s LaRue Hosmer explained that ethical issues frequently arose throughout the HRM process – adding that an analysis of those issues revealed that employer actions or the failure to act appropriately often caused undue harms to employees. Ethically, leaders and organizations have a moral obligation to avoid such harms – and it is in leaders’ long-term best interests to honor what have been called “covenantal” obligations owed to employees8.

8

Hosmer, L. T., (1987). “Ethical Analysis and Human Resource Management.” Human Resource Management, Vol. 26, Iss. 3, pp. 313-330.

Supporting a Culture of Change

Research About Best Practices

Metrics Assessing Key Forces

Key Roles Identifying Employee Attitudes Organization Analysis Resource Empowerment and Engagement Programs Demonstrating Technical Skills

Constantly staying current about best practices and how they are implemented enables the organization to compete. Explains to Top Management how creating a change- responsive culture can benefit the organization.

Top Management Expectations Gathering information about employee attitudes should include identifying ways to respond effectively. HRPs are expected to train employees at all levels in how to conduct this analysis. Identifies to Top Management the need for engagement and empowerment and how to achieve both. Advising Top Management as a subject matter expert keeps an organization current and out of trouble. Monitoring metrics about organization performance internally and externally increases responsiveness.

Employee Expectations Collecting this information imposes an expectation to employees that issues identified will be addressed. Involving employees in this training obtains their input and identifies problems. Opportunities to be fully involved in the organization and to participate in decisions strengthens commitment. Implementing cutting-edge HRM best practices enables an organization to serve employees and support them. By teaching employees about key factors affecting their jobs and how to measure those factors increases awareness. Sharing information with employees about the constant changes in technology and best practices creates ownership. Creating systems and processes that support change reinforces the ability of employees to adapt as needed.

Change is likely to be resisted unless elements of a change culture are successfully implemented.

In a world that is marked by innovation and change, tracking best practices is an essential task.

Programs and systems that support empowerment and engagement require constant monitoring. The practical reality is that the technical skills of HRM are both very complex and constantly evolving. Tracking key performance indicators enables an organization to respond on a timely basis.

Comment Credibility of the Top Management Team and the HRPs are on the line regarding the response. Training participants about analysis of the organization creates ownership.

Table 1. Human Resource Roles and Expectations of Top Management and Employees

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ETHICAL DUTIES AND HUMAN RESOURCE ROLES

Figure 1. Sixteen Ethical Perspectives.

With the increased complexities facing the modern organization and the added pressures pressed upon executives and their HRPs to manage efficiently, many of these ethical complexities cause problems for employees – sometimes resulting in the violation of the good-faith ethical obligations and duties owed by organizations to their employees 1 .

1

The moral obligations owed to employees are outlined in many scholarly sources. For example, see DePree, M., (2004). Leadership is an Art. New York: Crown Publishing wherein DePree enumerates those responsibilities.

Value Balanced Self-Interest

Commitment to Excellence

Authentic Understanding

Legal Compliance

Primary Idea “Pursue outcomes which have greatest positive benefit for oneself and one’s organization without infringing upon the rights of others.”

“Constantly pursue excellence, make it a habit, and treat others with integrity.” “Treat others with dignity, respect, and kindness – as valued ‘Yous’ and never as anonymous ‘Its.’” “Live by both the letter and spirit of the law in honoring duties owed to others, but remember that the law by itself is a minimal moral standard.”

Virtue Ethics

Ethic of Religious Injunction

Ethic of Government Regulation

Ethical Perspective Ethic of SelfInterest HRPs have the obligation to advise the Top Management Team in establishing policies that generate employee best efforts in order to optimize long-term value creation. Protecting employee rights also applies in order to maintain credibility. The Top Management Team and the HRPs need to honor their obligations to be virtuous examples and role models to generate employee trust. Honoring others and treating them as friends complies with the ethical requirements of this ethic and strengthens relation-ships. Kindness is a moral obligation of HRM personnel. Organizations are vulnerable when they violate the laws governing a broad range of HRM issues. However, they are also vulnerable when they fail to honor the intent of those laws and violate individual rights.

Application to HRM Roles

Table 2. Ethical Perspectives and Human Resource Roles

Many HRPs fail to understand the requirements of the law or the actual intent which the laws were established to protect.

People are not commodities and HRPs have the duty of emphasizing that point to Top Management.

Excellence and virtuousness are qualities that earn followership.

Short-term efforts to increase revenue can be detrimental to the ability of a firm to be profitable in the long term.

Comment

Ethic of Economic Efficiency

Ethic of Universal Rights

Ethic of Universal Rules

Ethical Perspective Utilitarian Ethics Value Optimization

“No actions should be engaged in which do not result in the greatest good for that community of which you are a part.” “Act according to universal principles and rules which you would have others apply if they were in your similar situation and your positions were reversed.” “No one, including governments, may take action that infringes upon the legitimate rights of any other individual.” “Achieving an efficient use of resources to create value for society is a virtuous goal.” Efficient Use

Guaranteed Rights

Just Action

Value

Primary Idea The HRP role includes advising Top Management Team about opportunities to increase employee commitment and trust – keys to greater innovation, better service, increased profits. Complying with universal principles, values, and rules enables organizations to demonstrate their basic fairness. Justice and fairness are key elements to establishing a reputation for the trustworthiness of leaders and HRPs. Respecting the rights of each employee and honoring those rights through policies and procedures that demonstrate fairness increases a reputation for integrity. Avoiding wasting organization resources and establishing policies and rules that reward efficiencies and cost savings serve to demonstrate the importance of efficient actions and build commitment.

Application to HRM Roles

Table 2. (Continued)

HRPs have the opportunity to help an organization to achieve this goal as they monitor performance metrics.

Individual rights associated with justice and fairness transcend legal requirements and affect credibility.

Because fairness and justice are subjective constructs, leaders and HRPs earn a reputation for fairness when they explain decisions.

Understanding topics such as High-Performance Work Systems are necessary for HRPs.

Comment

SelfFulfillment

Discovered Greatness

Responsible Caring

“Take no actions which impede the self-development or selffulfillment of others.” “Seek to discover your innate greatness, fulfill potential to create better world.” “Respect others as valued individuals, share concern for their welfare, and honor the responsibility to treat each person with empathy and compassion.” ”Seek to assist others to achieve their highest potential and be candid but considerate of them and their needs.”

Ethic of Contributing Liberty

Ethic of SelfActualization

Ethic of Care

Authentic Commitment

Honoring Everyone

“Act only in ways that acknowledge rights, liberty, and equality of all and take no actions that harm the least among us.”

Ethic of Friendship

Value

Primary Idea

Ethical Perspective Ethic of Distributive Justice

Acknowledging the responsibilities owed to employees and treating them as valued partners earns the long-term commitment of those employees and demonstrates that the organization truly values them. Organizations that treat employees with authenticity and with a commitment to their employees’ welfare see employees respond with an effort to optimize their contribution to the organization.

The ethical obligation to help employees to develop skills, become best version of themselves is a moral obligation of organizations. Truly effective efforts to enhance employee performance and to help them to become their best selves enable employees to excel.

Fairness and justice are key ethical standards that demonstrate respect that an organization has for employees and their rights. Protecting those rights increases trust.

Application to HRM Roles

The “command and control” arms-length treatment of employee generates distrust and lack of commitment.

Acknowledging the partnership that exists with employees requires that HRPs willingly assume an obligation to serve those employees.

Training and development programs and effective coaching help to achieve this objective. The benefit to the organization when employees excel is also an obvious benefit.

Taking advantage of employees – often under color of the law – destroys confidence in the organization.

Comment

Value Personal Discipline

Supportive Validation

Enlightened Insight

Primary Idea “Always acknowledge and seek to overcome your shortcomings and strive to better yourself.”

“Seek to not only empathize with others’ needs but to take positive actions that enable them to address those needs.”

“Incorporate the ethics and values of each of the other ethical perspectives to honor the rights of others and conform to correct moral and ethical principles.”

Ethic of Compassionate Understanding

Transformative Ethics

Ethical Perspective Ethic of SelfMastery

Respecting others’ ethical perspectives demonstrates moral and ethical virtue and a commitment to the best interests of others and the principles of interpersonal connection. Being highly ethical confirms the wisdom of leaders.

Setting an example of individual excellence and personal discipline by modeling those behaviors is responded to by employees following that example. Recognizing employees’ needs and responding in ways that affirm the employees’ worth – even when their performance may be inadequate – enables those employees to build competencies while addressing organizational needs as well.

Application to HRM Roles

Table 2. (Continued)

Identifying employees’ shortcomings without helping them to improve their performance fails to help those employees to improve nor benefits the organization – and shows neither empathy nor compassion. HRPs and the Top Management Team earn the dedication of others when they are perceived as ethical and wise leaders.

Setting the bar high and supporting employees to achieve greatness results in excellence.

Comment

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Figure 1briefly summarizes sixteen separate ethical perspectives, along with the primary value that applies to each of these perspectives1. Table 2, which immediately follows, briefly summarizes each of those ethical perspectives and their application to the seven HRP roles. Table 2 identifies in general terms the ethical implications of HRM in serving the needs of organizations and their employees. More specifically, the ethically-related obligations and duties are now briefly summarized for each role. In this section, we address the ethical duties associated with each of the seven roles. By addressing the importance of these responsibilities, we emphasize the importance of HRPs paying specific attention to the moral and ethical duties that they owe others as they perform their substantial responsibilities. 

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Identifying Employee Attitudes HRPs not only have the responsibility to track those attitudes but to honor the Utilitarian Ethic obligation to add value by advising Top Management regarding how employee concerns and priorities can be most effectively addressed. This response to employee needs also meets ethical duties associated with the Ethic of Care and the Ethic of Compassionate Understanding. Organization Analysis Resource. Analyzing how resources are best utilized and training employees about monitoring key performance indicators mesh with the Ethic of Economic Efficiency by empowering the organization to most efficiently utilize resources to achieve organization goals. This analytical process also fits within obligations associated with the application of the Ethic of Universal Rules. Empowerment and Engagement Programs. Working with Top Management to create empowerment and engagement programs not only achieves Economic Efficiency outcomes but contributes to the growth and improvement of employees – incorporating the Ethic of

Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 29, Iss. 2, pp. 379-403.

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Self-Actualization, the Ethic of Contributing Liberty, and the Ethic of Care by providing opportunities for individuals to excel, to become their best selves, and to achieve personal fulfillment in addition to contributing to more effective achievement of organizational goals. Demonstrating Technical Skills. Technical skills mesh well with the Ethic of Governmental Regulations and the Ethic of Universal Rights but also enable organizations to operate smoothly and efficiently at many levels. As HRPs incorporate those skills they also honor the Ethic of Self-Mastery as they adopt the best practices of HRM. Metrics Assessing Key Forces. By constantly monitoring key indicators of organizational purpose within the external environment – as well as internally -- HRPs help their organizations to achieve short-term and long-term goals that are addressed by the Ethic of Self-Interest and Transformative Ethics. Research about Best Practices. As subject matter experts, HRPs demonstrate the Ethic of Economic Efficiency and the Ethic of SelfInterest as they identify opportunities for their organizations to incorporate those best practices. Adopting best practices of HRM also complies with the Ethic of Care and Virtue Ethics in treating employees as valued partners – a proven way of optimizing value creation. Supporting a Culture of Change. Working with Top Management to create a culture that supports constant improvement and change protects the best interests of employees and demonstrates the Ethic of Care, the Ethic of Religious Injunction, and the Ethic of SelfActualization. Employees’ personal financial interests are honored and they are able to achieve organizational goals that also mesh with the Ethic of Economic Efficiency and the Ethic of Friendship.

This brief review demonstrates the practical application of the various ethical perspectives and their relationship with the seven key HRP roles. As HRPs honor their obligations to employees and their organizations in being

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ethical role models for employees, they build the trust, commitment, and loyalty that are so often missing in many modern organizations.

EIGHT GUIDING ETHICAL PRINCIPLES In the practical effort to be perceived as ethical leaders, HRPs and other organizational leaders can increase their ability to be perceived as trustworthy, honorable, and credible by their commitment to high ideals and values2. Failing to be aware of the complex and varied ethical perspectives of others is a recipe for losing the confidence of others and undermining the success of an organization. As Hosmer had noted, virtually every part of HRM is ethics-related, value-based, and principle-centered. The following is a brief summary of eight critically important ethically-related principles that can assist HRPs and other organizational leaders to increase their credibility. 6. Acknowledge the variance in ethical perspectives of employees.Perhaps the most common error made by leaders and HRPs is in assuming that others see the world through the same ethical lens as they do about what is considered ethical3. As noted above, there are a multitude of ethical perspectives and each of them 2

The importance of honoring ethical obligations and the correlation between ethical leadership and employee commitment are subjects addressed in many sources. See, for example, Covey, S. R. (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 3 Hosmer, L. T., (1995), op. cit.

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7. Recognize the importance of honoring employee rights and interests. As noted, by several of the ethical perspectives described in Table 2, employee rights are a fundamental factor in ethical relationships. More importantly, the research about human relations and trust confirms that honoring the rights and working for the interests of employees results in a positive benefit for organizations in earning the highest levels of employee commitment, increased innovation, and better customer service4. 8. Prepare yourself well by researching the complex issues facing organizations. Many of the HRP roles require that they become subject matter experts regarding the broad range of behavioral, technical, and industry issues associated with their company5. The issues of external adaptation and internal integration that are fundamental to the purposes of every organization demand that HRPs become knowledgeable, 4

For an extensive review of the importance of leaders and organizations optimizing employee commitment that is directly related to respecting employee rights and interests, see Cameron, K. S. & Spreitzer, G. M., (2012). The Oxford Handbook of Positive Organizational Scholarship. Oxford, UK: Oxford University Press. 5 Caldwell, C. and Okpala, C. O., (2018). “Human Resource Management – A Transformative Approach.” Open Journal of Human Resource Management, Vol. 1, Iss. 1, pp. 16-21 and available online at http://www.sryahwapublications.com/openjournal-of-human-resourcemanagement/volume-1-issue-1.

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current, and precise in their understanding of issues because they each have an underlying ethical responsibility6.

9. Constantly refine your understanding of HRM issues. The HRM profession is broad, far-reaching, and complex and has evolved substantially. HRPs rarely have an adequate knowledge of the varied issues associated with the profession – even those individuals with professional certifications7. More significantly, there is much inaccurate information that HRPs fail to correctly understand and that demand extensive study. For example, few HRPs understand the importance of High-Performance Work Systems to create organizational cultures that optimize performance8. 6

Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass. 7 Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L., (2015), op. cit. 8 Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass.

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10. Strive to create partnerships with employees in optimizing value creation. Creating partnerships with employees changes an organization’s culture from the current “arms-length” relationship that exists in many of today’s organizations. When employees are treated with interpersonal skill, a commitment to their welfare, high trust, and authentic kindness 9 , they measurably improve their performance10. Training and development programs demonstrate to employees that they are partners in the process of improving the organization and increasing value. 11. Advise Top Management about the long-term consequences of decisions. The strategic credibility of the HRM function and the role of HRPs includes advising the Top Management Team about the long-term impacts of decisions on employee attitudes – as well as the consequences of decisions on key performance indicators 11 . Because organization leaders are often short-term in their focus in pursuit of quarterly stock prices, they tend to overlook the consequences of decisions that may have important long-term results and that undermine value creation12. Caldwell, C., (2017). “Understanding Kindness: A Moral Duty of Human Resource Leaders.” Journal of Values-Based Leadership, Vol. X, Iss. 2 available online at http://scholar.valpo. edu/cgi/viewcontent.cgi?article=1188&context=jvbl. 10 Cameron, K. S. & Spreitzer, G. M., (2012), op. cit. 11 This theme is a key issue of Caldwell, C. and Anderson, V., (Eds.). (2018b), op. cit. 12 Caldwell, C. and Anderson, V. (Eds). (2018a), op. cit. 9

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12. Incorporate best practices in establishing key elements of organization culture. Understanding how to implement best practices and converting those practices associated with improving an organization’s culture into action are far different than simply establishing the goal of improving that culture13 . Developing the finesse and interpersonal expertise associated with changing an organizational culture is a refined capability not easily acquired and demands an awareness of the best practices associated with organization change14. 13. Develop personal relationships based upon trustworthiness and competence. Effective interpersonal relationships and the establishment of trust demand both character and competence 15 . Trust creates value and the ability to earn the trust of others is one of the most refined capabilities of leadership16. Leadership, whether that of the Top Management or the HRP, is fundamentally a relationship based upon the demonstrated ability of leaders to integrate trustworthy-ness and the ability to achieve results17. It is by honoring these principles and demonstrating their personal commitment to excellence that HRPs and organizational leaders honor their ethical responsibilities – because excellence and ethics are inseparably created18.

13

Schein, E. H. & Shein, P., (2016), op. cit. The challenges associated with leading any change associated with a culture are addressed in Kotter, J. P. (2012). Leading Change, with a New Preface by the Author. Boston, MA: Harvard Business Review Press. 15 Covey, S. R., (1992). Principle-Centered Leadership. New York: Simon & Schuster. 16 Caldwell, C., and Ndalamba, K. K., (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Journal of Management Development, Vol. 36, Iss. 8, pp. 1076-1086. 17 Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations. (6th ed.) San Francisco, CA: Jossey-Bass. 18 The linkage of excellence and ethical responsibilities is the focus of Solomon, R. C., (1992). Ethics and Excellence: Cooperation and Integrity in Business. New York: Oxford University Press. 14

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CONTRIBUTIONS OF THE CHAPTER The critical importance of ethical issues in HRM and the need for HRPs to understand these ethical factors are not often fully appreciated. Accordingly, this chapter makes five important contributions to the HRM literature. 14. Reinforces the nature of HRM as an ethically-related organizational priority. HRPs often view their roles as focused entirely on helping Top Management to achieve short-term goals. However, HRM has profound ethical obligations with long-term consequences that are clearly ethically related and that influence an organization’s ability to create wealth19. Although others have identified the ethical nature 19

Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L., (2015), op. cit.

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of employee relationships, the significance of ethical issues in HRM is rarely fully appreciated20.

15. Introduces ethical perspectives never before described as HRM factors.

This chapter introduces the importance of sixteen ethical perspectives and equates them with the HRP role in organizations. Understanding the importance of these sixteen perspectives and their integrated nature have never been addressed in a previous document about HRM and its ethical duties. 16. Proposes ethically-related principles for HRPs to adopt to increase their effectiveness. Building on the work of scholars like LaRue Hosmer21, this chapter emphasizes the importance of ethics in HRM and offers specific guiding principles that have important 20 21

Caldwell, C. and Anderson, V., (Eds.). (2018b), op. cit. Hosmer, L. T., (1987), op. cit.

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17. Raises the bar of expectations for HRPs in developing their capabilities.

Identifying the complex nature of the seven HRM roles and the sweeping implications of those roles on an organization’s success goes far beyond the expectations and performance level of many current HRPs. 23 HRPs and members of Top Management Teams need to be fully aware of these seven roles and the need to hold HRPs accountable for their effective performance. 18. Reinforces the importance of HRPs understanding the complexity of ethics in their roles. Although HRPs may think that they understand 22 23

Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L., (2015), op. cit. Ibid.

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their ethical obligations, this chapter demonstrates why HRM professionals must go far beyond their present level of understanding in recognizing the nature of the ethical obligations that they owe their organizations and its employees. Moreover, HRPs must familiarize themselves with the broad range of ethical issues that others perceive – and by which HRPs are viewed.

These five contributions provide both breadth and depth in understanding the issues that Hosmer addressed more than thirty years ago24. Updating Hosmer’s insights has practical value in a world where trust in leaders and organizations is low25.

CONCLUSION More than thirty years ago, LaRue Hosmer addressed the vital importance of HRPs coming to terms with the profoundly complex ethical issues of the HRM function. Hosmer wrote the following26. There is no single system of belief to guide managers in reaching difficult ethical decisions, but this does not mean that all of us are on our 24

Hosmer, L. T., (1987), op. cit. The struggles facing leaders and organizations in establishing and retaining employee trust are well documented in Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. 26 Hosmer, L. T., (1987), op. cit., p. 329. 25

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own, to do as we like in our decisions and actions that affect others adversely, in ways that are outside their control. We can understand the financial, legal, organizational, social, and personal impacts of our decisions and actions; what we need is a means of evaluating those impacts, with no single set of moral standards to guide us.

Hosmer’s counsel was for HRPs and Top Management members to broaden their horizons in an effort to fully understand the complexity of ethical perspectives and their profound consequences on individuals and organizations27.

As organizations have become much more complex, as the global market place has become more competitive, and as organizations have rewritten the employment contract to treat their employees as cost centers and commodities, the consequences of understanding the ethical implications of HRM decisions seems self-evident. Fortunately, the research confirms that it is possible to increase employee commitment and loyalty, even in these difficult times – but the key to achieving that outcome is by understanding, as Hosmer advised, the varied and individualized ethical perspectives of the employees who work in organi-zations. In response to the decline in organization commitment and trust in leaders, HRPs who incorporate the insights provided herein have the 27

Ibid.

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opportunity to significantly impact the success of their organizations. However, those HRPs who fail to understand the ethical nature of their roles will undoubtedly struggle to earn employee trust – with predictable negative consequences and a continued decline in the ability of organizations to compete in the world of tomorrow28.

REFERENCES Al Lawati, H. A. H., Sayed, R. T., & Caldwell, C., (2019). “Transformative Ethics and Moving Toward ‘Greatness.’ – Problems and Realities.” Journal of Values-Based Leadership. XII(1), Winter/Spring Edition. Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. Caldwell, C. and Anderson, V. (Eds). (2018a). Strategic Human Resource Management. Hauppage, New York: NOVA Publishing. Caldwell, C. and Anderson, V., (Eds.). (2018b). Human Resource Management: A Transformative Perspective. Hauppage, New York: NOVA Publishing. Caldwell, C. and Okpala, C. O., (2018). “Human Resource Management – A Transformative Approach.” Open Journal of Human Resource 28

Caldwell, C. and Anderson, V., (Eds.). (2018b), op. cit.

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Management, 1(1), 16-21 and available online at http://www. sryahwapublications.com/openjournal-of-human-resource-manage ment/volume-1-issue-1. Caldwell, C., Atwijuka, S., & Okpala, C. O. (2018). “Compassionate Leadership in an Arms-Length World.” Journal of Business and Management. Caldwell, C., (2017). “Understanding Kindness: A Moral Duty of Human Resource Leaders.” Journal of Values-Based Leadership, X(2). Caldwell, C., and Ndalamba, K. K., (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Journal of Management Development, 36(8), 1076-1086. Caldwell, C., Truong, D., Linh, P., and Tuan, A., (2011). “Strategic Human Resource Management as Ethical Stewardship.” Journal of Business Ethics, 98(1), 171-182. Cameron, K. S. & Spreitzer, G. M., (2012). The Oxford Handbook of Positive Organizational Scholarship. Oxford, UK: Oxford University Press. Covey, S. R. (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. Covey, S. R., (1992). Principle-Centered Leadership. New York: Simon & Schuster. DePree, M., (2004). Leadership is an Art. New York: Crown Publishing Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L., (2015). Managing Human Resources (8th ed.). London, England: Pearson. Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, 29(2), 379-403. Hosmer, L. T., (1987). “Ethical Analysis and Human Resource Management.” Human Resource Management, 26(3), 313-330. Kotter, J. P. (2012). Leading Change, with a New Preface by the Author. Boston, MA: Harvard Business Review Press.

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Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations. (6th ed.) San Francisco, CA: Jossey-Bass. Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass. Solomon, R. C., (1992). Ethics and Excellence: Cooperation and Integrity in Business. New York: Oxford University Press.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 9

TRANSFORMATIVE ETHICS AND COMPETITIVE ADVANTAGE Cam Caldwell1, and Verl Anderson2,† 1

American University of theEmirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

The success of organizations in the global economy begins with the performance of its Top Management Team and that team’s ability to be trusted. The evidence from highly regarded research 1 confirms that the distrust of leaders and the lack of commitment of employees are major hindrances to the modern organization. In contrast, when leaders are trusted, organizations are more profitable, quality is improved, innovation increases, turnover decreases, and customers receive better service.2



Corresponding Author’s Email: [email protected]. Corresponding Author’s Email: [email protected]. 1 Harrington, M., (2017). “Survey: People’s Trust has Declined in Business, Media, Government, and NGOs.” Harvard Business Review, January 16, 2017 and found online on March 29, 2020 at https://hbr.org/2017/01/survey-peoples-trust-has-declined-in-business-mediagovernment-and-ngos. 2 Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. †

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The focus of this chapter is on the benefits available to organizational leaders by adopting a relatively new ethical perspective, Transformative Ethics (TE), and to explain why leaders who adopt TE as the foundation for their relationships with employees are likely to create a competitive advantage for their organizations by so doing. The chapter begins by explaining both the nature of TE and the factors that enable a firm to achieve a competitive advantage. The twelve different ethical perspectives upon which TE was originally founded are described in terms of their contribution to increasing employee trust and commitment – qualities so essential in maintaining competitive advantage. The chapter then identifies five significant benefits achieved by leaders and organizations by adopting TE as their leaders’ ethical commitment and concludes with a challenge to those who lead organizations to incorporate TE in their relationships with others.

TRANSFORMATIVE ETHICS AND ITS IMPORTANCE

Ethical Virtue Contribution to Virtuous Conduct Balanced Self- Acknowledges that value Interest creation is important and selfinterest is beneficial, but that others have rights that must also be honored. Virtue Ethics “Constantly pursue excellence, make Commitment to Confirms that to be honorable that pursuit a habit, and treat others Excellence and to develop habits of with integrity.” excellence are requisites as personal standards. Ethic of “Always treat others with dignity, Authentic Requires that others be treated Religious respect, and kindness – as valued ‘Yous’ Understanding with kindness, compassion, and Injunction and never as anonymous ‘Its.’” empathy at all times. Ethic of “Live by both the letter and the spirit of Genuine Confirms that the purpose of Government the law in honoring duties owed to Compliance rules must always be taken into Regulation others, but remember that the law by account and that the intent of itself is a minimal moral standard.” those rules is as critical as or more important than the letter. Utilitarian “No actions should be engaged in which Value Affirms that this greatest good is Ethics do not result in the greatest good for Optimization both outcome-oriented and that community of which you are a rights-oriented in creating value part.” – with an obligation to minimize any possible harm.

Ethical Fundamental Idea Perspective Ethic of “Pursue outcomes which have the Self-Interest greatest positive benefit for oneself and one’s organization without infringing upon the rights of others.”

Sustains trust by seeking to optimize outcomes without taking advantage of the position of any stakeholders.

Kindness, caring, and beneficence are qualities that demonstrate a leader’s trustworthiness and honor relationships. Honoring the spirit and the letter of all applicable regulations and complying with the law is essential for maintaining trust and honoring stakeholders.

The pursuit of excellence in conduct is a demonstrated quality that affirms the competence of leaders.

Trust is achieved by the pursuit of self-interest that maintains a long-term perspective and that recognizes that self-interest requires that others cooperate in a shared effort.

Importance in Establishing Trust

Table 1. Twelve perspectives in transformative ethics

Fundamental Idea

Ethical Virtue Contribution to Virtuous Conduct “Act according to universal principles Just Action Treats others fairly and complies and rules which you would have others with universally-understood apply if they were in your similar principles that benefit mankind. situation and your positions were Recognizes others’ needs and reversed.” respects their interests. Ethic of “No one, including governments, may Guaranteed Protects basic human rights and Universal take action that infringes upon the Rights ensures that those rights may not Rights legitimate rights of any other be infringed upon – even under individual.” color of claim for a public benefit. Ethic of “Achieving an efficient use of resources Efficient Use Conserves and efficiently uses Economic to create value for society is a virtuous scarce resources and Efficiency goal.” acknowledges that efficient and effective value creation benefits society. Ethic of “Act only in ways that acknowledge the Honor Recognizes that, though justice Distributive rights, liberty, and equality of all and Everyone is a multi-faceted construct, no Justice take no actions that harm the least actions should be taken that among us.” harm those who are disadvantaged in society. Ethic of “Take no actions which impede the self- Self-fulfillment Promotes the liberty which Contributing development or self-fulfillment of allows all individuals to pursue Liberty others.” self-development and selffulfillment and acknowledges that society benefits thereby.

Ethical Perspective Ethic of Universal Rules

Table 1. (Continued)

Builds confidence in the leader’s distributive fairness and sense of moral responsibility – including the potential harm that can result to the disadvantaged. Creates a culture of moral responsibility to all. Affirms the rights of each individual to be unique and to have opinions and desires that may differ from others. Demonstrates the leader’s respect for and support of others’ independence and their desire to excel.

Demonstrates the leader’s wisdom as well as his/her competence. Respects the needs of all stakeholders and the moral duty of leadership.

Honors the universal rights that affirm the value of each individual and demonstrates the leader’s commitment to fairness.

Honors each individual and demonstrates a concern for the welfare of all. Instills confidence that one’s own rights will also be respected by leaders.

Importance in Establishing Trust

Ethic of Care “Respect others as valued individuals, Care share concern for their welfare, and Authentically honor the responsibility to treat each person with empathy and compassion.”

Ethical Fundamental Idea Ethical Virtue Perspective Ethic of Self- “Seek to discover your innate greatness Discovered Actualization and fulfill that potential to create a Greatness better world.”

Contribution to Virtuous Conduct Emphasizes the innate talents, gifts, and highest potential of individuals and the responsibility to use those talents productively to make a better world. Affirms the responsibility to care for others’ best interests and to treat them with love and with demonstrated concern for their welfare and wholeness. Demonstrates the moral duty of leaders of organizations to seek a transformational benefit of individuals and to assist them to become the best version of themselves. Recognizes and supports individual efforts of each person to find their unique significance. Confirms the relationships that exist between the leader and stakeholders as a key element of the leader’s moral responsibilities and the importance of the leader demonstrating love, caring, and concern for others at an individual level.

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TE is a holistic ethical perspective that incorporates the core ethical principles of twelve other ethical perspectives. The twelve ethical perspectives that make up TE are commonly known and frequently cited by other ethics scholars. Table 1 summarizes the fundamental idea for each of these twelve perspectives, their ethical virtue and contribution to virtuous conduct, and their importance in establishing trust between individuals1. Trust, the underlying foundation of TE, is a subjectively perceived construct, based upon the individual lens of each individual. The trustworthiness of a leader is viewed by the subjective lens of the individual perceiver, with each person making the assessment of the leader’s observed behaviors based upon the perceiver’s expectations as to what constitutes ethical conduct. If a leader’s actions do not reflect the values and priorities of the perceiver, then the leader is perceived to be lacking in ethical values and trust in that leader declines.

TE incorporates the values and ethical standards of all twelve ethical perspectives -- as indicated in Table 1 -- and enables a leader who adopts TE as an ethical standard to be perceived as “worthy” to be trusted based upon

1

Table 1 is a composite of the summary of leadership perspectives developed originally by LaRue Hosmer. See Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Issue, 2, pp. 379-403, Caldwell, C. and Holloway, C. S., (2017). “Raising the Bar: Transformative Ethics and the Example of Christ.” Business and Management Research, Vol. 6, No. 4, pp. 54-63 and Anderson, V. & Caldwell, C., (2017). “Transformative Ethics and Trust: Keys to Competitive Advantage.” Competitive Advantage: Strategies, Management and Performance. Hauppage, NY: NOVA Publishing, Chapter 12, p. 162.

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the leader’s integrity and ethical values2. Figure 1 is a pictorial portrayal of TE and its twelve ethical perspectives.

Figure 1. Transformative Ethics and Its Ethical Virtues.

By connecting with others on an ethical level, leaders demonstrate their alignment with others’ values and eliminate ethical conflicts which are often

2

Caldwell, C., and Ndalamba, K. K., (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Journal of Management Development, Vol. 36, Iss. 8, pp. 1076-1086.

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the root cause of interpersonal distrust3. Failing to recognize that there are many significantly different ethical perspectives is often a pitfall of leaders who perceive that they are ethical according to their own defined ethical standards.

COMPETITIVE ADVANTAGE AND ITS ETHICAL ELEMENTS Michael Porter identified competitive advantage as existing 1) when a firm is able to deliver the same benefits as its competitors at a lower cost, 2) when it can deliver benefits that exceed in quality the benefits of competing products, or 3) when it has established a niche in the marketplace that allows it to deliver benefits that are not provided by other firms4. The ability to sustain a competitive advantage requires a firm to constantly improve its products and services and/or keep costs low so that competing firms are unable to provide customers with goods and services that match or exceed that which a firm can offer5.

Innovations that enable new customers to obtain a somewhat strippeddown version of a product or service at a cost below the customary market

3

Ibid. Porter, M., (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press. 5 Ibid. 4

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rate can also be an effective strategy that enables a firm to meet the needs of those new customers in a manner that other competitors are able to match6. The relationship between employee commitment and competitive performance is well documented and is a critical element of an organization’s ability to serve customers, increase innovation, and reduce employee turnover7. The correlation between performance effectiveness and employee commitment is also associated with both the degree of employee trust in an organization and employee confidence in an organization’s leaders8. For those reasons, understanding the importance of the leader’s commitment to ethical values and her/his ability to incorporate that commitment in establishing policies and relationships with employees are key factors in identifying the importance of the role of a leader’s ethical values.

Understanding the importance of the leader’s commitment to ethical values and her/his ability to incorporate that commitment in establishing policies and relationships with employees are key factors in identifying the importance of the role of a leader’s ethical values Core values are philosophically based and are founded on assumptions that have reflected the thinking of experts for hundreds of years. The following paragraphs identify how each of the ethical perspectives which

Christensen, C. M., (2011). The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business. New York: HarperBusiness. 7 Beer, M., (2009), op. cit. 88 This relationship between employee trust and the actions of supervisors, managers, and leaders is described in Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press and was identified many years ago in Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 6

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make up TE directly impact both employee perceptions about leaders and organizations and the factors that are key to competitive advantage.

Ethic of Self-Interest The leader’s understanding of an organization’s commitment to longterm value creation is a key component of the Ethic of Self-Interest 9 . If employees view their leaders’ actions as compromising long-term needs of the firm and focusing on short-term profit taking, those employees recognize that those leaders are violating their obligation to pursue the best interests of their company and the interests of its stakeholders10. Violating the obligation to honor the needs of stakeholders demonstrates that leaders lack either the vision to recognize the consequences of their actions or the integrity to make the right choices when faced with a less effective but self-serving short-term option.

Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379-403. 10 Caldwell, C., and Ndalamba, K. K., (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Journal of Management Development, Vol. 36, Iss. 8, pp. 1076-1086. 99

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Virtue Ethics A leader’s personal conduct and her/his commitment to excellence demonstrates that leader’s commitment to Virtue Ethics 11 . Virtuous leadership is a responsibility of those who serve in organizations and includes the obligation to demonstrate competence in the pursuit of organization priorities, as well as fair treatment of employees 12 . By demonstrating that competence and by caring about employees, leaders conform with the requirements of Virtue Ethics and earn the respect and followership of those whom they serve13.

Virtuous leadership is a responsibility of those who serve in organizations and includes the obligation to demonstrate competence in the pursuit of organization priorities, as well as fair treatment of employees

Ethic of Religious Injunction The practical application of the Ethic of Religious Injunction within organizations is measured by the degree that leaders treat others as valued partners and as individuals that merit interpersonal respect and kindness14. The standards of this ethical perspective cross the boundaries of many religions and reflect an understanding of the importance of kindness and

11

Hosmer, L. T., (1995), op. cit. Cameron, K., (2011). “Responsible Leadership as Virtuous Leadership.” Journal of Business Ethics, Vol. 98, pp. 25-35. 13 Ibid. 14 Hosmer, L. T., (1995), op. cit. 12

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beneficence15. Treating others with kindness, respect, and genuine caring is well established as a fundamental requirement of trustworthiness 16 . Competitive advantage is dependent upon the ability of leaders to be trusted17.

Ethic of Government Regulation Compliance with the law is critical for a firm’s ongoing survival ... but honoring the spirit of the law is also a condition precedent for earning the trust of others18. The ability to follow the intent of the law requires not only an understanding of the law’s purpose but the ability to translate that purpose into policies and systems that protect the rights of those who the law seeks to protect. When leaders honor both the letter and the spirit of legal requirements, they earn the respect of their stakeholders and demonstrate their integrity19.

Caldwell, C., (2017). “Kindness and Self-Interest: Why Treating Employees Well Makes Such Good Sense.” Graziadio Business Review. Vol 20, Iss. 1, found online at http://gbr.pepperdine.edu/2017/04/kindness-and-self-interest/. 16 Mayer, R. C., Davis, J. H. & Schoorman, F. D., (1995). “An Integrative Model of Organizational Trust.” Academy of Management Review, Vol. 2o, Iss. 3, pp. 709-734. 17 Pfeffer, J., (1998), op. cit. 18 Caldwell, C. and Clapham, S., (2003). “Organizational Trustworthiness: An International Perspective.” Journal of Business Ethics, Part 1, Vol. 47, Iss. 4, pp.349-364. 19 Ibid. 15

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Utilitarian Ethics Although Utilitarian Ethics emphasizes decision-making that pursues “the greatest good for the greatest number,” that ethical perspective also recognizes that morally sound decisions also must protect the interests of others and not infringe upon the rights of any individuals without fair and reasonable compensation20. When leaders explain the rationale for decisions and their consequences on stakeholders, those leaders earn the respect of followers – even when others may disagree with the final decision made21.

20

Hosmer, L. T., (2010). The Ethics of Management (7th ed.). Boston, MA: McGraw-Hill Education. 21 Colquitt, J. A. & Rodell, J. B., (2011). “Justice, Trust, and Trustworthiness: A Longitudinal Analysis Integrating Three Theoretical Perspectives.” Academy of Management Journal, Vol. 54, Iss. 6, pp. 1183-1206.

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Ethic of Universal Rules There are well-established moral and ethical principles that are understood and shared by all individuals and those principles must be followed for leaders to be perceived as ethical22. When leaders violate those ethical principles, they send a message to others in their organizations that they are neither consistent in their values nor worthy of followership23. To compete successfully long-term, leaders must comply with universallyaccepted rules and guidelines or be perceived as hypocritical and untrustworthy24.

There are well-established moral and ethical principles that are understood and shared by all individuals and those principles must be followed for leaders to be perceived as ethical Ethic of Universal Rights Just as honoring universal rules is important, so is honoring the rights possessed by others in society. When organization leaders infringe upon the inalienable rights of others, they violate a standard of acceptable behavior that immediately destroys trust and undermines commitment25. Honoring those same rights, even when doing so involves a financial cost, demonstrates the integrity of leaders and their respect for others 26 . The

22

Covey, S. R., (1992). Principle-Centered Leadership. New York: Simon & Schuster. Caldwell, C., and Ndalamba, K. K., (2017), op. cit. 24 Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass. 25 Hosmer, L. T., (2010), op. cit. 26 Ibid. 23

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dedication of leaders to the rights of others reflects their acknowledgement of a higher priority than simply pursuing profits27.

Ethic of Economic Efficiency Like the Ethic of Self-Interest, the Ethic of Economic Efficiency requires that leaders examine choices from both a short-term and a longterm perspective28. Seeking to make decisions that best utilize resources and that optimize value creation long-term are moral obligations of ethical stewards and reflect their commitment to the best interests of society 29 . Failing to demonstrate a commitment to this ethical perspective raises questions about a leader’s competence and wisdom.

Seeking to make decisions that best utilize resources and that optimize value creation long-term are moral obligations of ethical stewards and reflect their commitment to the best interests of society 27

Ibid. Al Lawati, H. A. H., Sayed, R. T., and Caldwell, C., (2019). “Transformative Ethics and Moving Toward ‘Greatness.’ – Problems and Realities.” Journal of Values-Based Leadership. Volume XII, Iss. 1, Winter/Spring Edition. 29 Caldwell, C., and Ndalamba, K. K., (2017), op. cit. 28

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Ethic of Distributive Justice This perspective holds leaders accountable for being fair to all parties and is key to establishing that a leader is fair and equitable – not taking advantage of any parties in order to pursue self-interest30. This perspective transcends a leader’s opportunity to take advantage of a legal system that may defer an obligation to others and, like the Ethic of Government Regulation, addresses the leader’s obligation to honor the spirit of the law in addition to its letter. The credibility of a leader is at issue regarding this perspective and a leader may be financially successful but morally questionable31.

Ethic of Contributing Liberty By honoring this ethical perspective, a leader demonstrates her/his commitment to others’ best interests – as those others define those interests32. The recognition of the importance of self-development and the leader’s responsibility to be committed to the welfare, growth, and wholeness of others is exemplified as leaders honor this ethical perspective. This perspective views the leader’s role as far more than a transactional

30

Hosmer, L. T., (2010), op. cit. Ibid. 32 DePree, M., (2004). Leadership is an Art. New York: Crown Publishing. 31

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exchange relationship but affirms the leader’s commitment to others as a moral obligation33.

Ethic of Self-Actualization The Ethic of Self-Actualization reflects the leader’s responsibility to assist others to discover their greatness, their highest potential, and their unique significance34. The underlying assumption of this ethical perspective is that leaders best serve their organizations when they help each individual to excel and achieve that which allows them to flourish rather than to simply excel35. By demonstrating a commitment to employees’ best interests, such leaders act with the highest integrity and demonstrate that they recognize the positive impact of helping employees to excel on the long-term welfare of society as well as to the employee and the organization 36 . This trust in employees and in their best interests demonstrates the leader’s confidence that employees will respond with the same trust that the leader demonstrates toward them.

33

Ibid. Covey, S. R., (2004). The Eighth Habit: From Effectiveness to Greatness. New York: Free Press. 35 Ibid. 36 Ibid. 34

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The Ethic of Care The Ethic of Care demonstrates that a leader views her/his relationship with stakeholders as a duty, a responsibility, and a moral obligation37. Caring about others and honoring the special relationship that exists between the leader and the stakeholders (s)he serves is perceived as more than a moral duty but is considered part of an interpersonal connection that is powerful and unique38. This demonstration of the leader’s personal commitment to others demonstrates an authentic dedication to others’ needs and reflects the moral commitment of a leader to the personal lives and individual needs of other people39.

Gilligan, C., (1982). In a Different Voice: Psychological Theory and Women’s Development. Boston, MA: Harvard University Press. 38 Ibid. 39 Ibid. 37

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Transformative Ethics TE’s integration of the ethical values of the twelve other perspectives demands that a leader demonstrate a virtuous commitment to the importance of all stakeholders and her/his commitment to their long-term needs. These ethical standards honor the responsibility owed to each individual and each stakeholder as a sacred “covenantal” responsibility and treats the mantle of leadership as a calling rather than simply as a positional obligation. TE holds a leader accountable to achieving the highest possible organizational outcomes while pursuing the long-term best interests of all parties.

These thirteen ethical perspectives each contribute to the ability of a leader to be perceived as credible, ethical, and trustworthy – as viewed by stakeholders who possess the individual lens described. These perspectives may be held in combination by individual stakeholder and may sometimes overlap in their ethical standards. For a leader to be perceived as worthy of trust – the variable so critical to long-term commitment – that leader must demonstrate the ability to be perceived as trustworthy by her or his stakeholders40. TE has the obvious competitive advantage of being perceived as ethical by stakeholders who may possess any or all of these thirteen ethical perspectives41.

40 41

Caldwell, C., and Ndalamba, K. K., (2017), op. cit. Al Lawati, H. A. H., Sayed, R. T., and Caldwell, C., (2019), op. cit.

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BENEFITS OF A TRANSFORMATIVE ETHICS PERSPECTIVE Adopting a TE ethical perspective increases the ability of a leader and her/his organization to be more capable of building trust with others and can significantly impact an organization’s likelihood of creating successful trustbased partnerships with employees and other stakeholders. The reason why TE can establish stronger leader-follower relationships is directly associated with five key benefits.

TE Increases Understanding of Others’ Ethical Perspectives Developing an understanding of the complex nature of TE makes it possible for individuals to recognize the complex nature of ethics and morality and the reality that there are many ethical perspectives – each of which is founded upon a logical set of principles about people and values42. Recognizing that the world is far more complex in its perspectives about values increases one’s awareness of the importance of those differences43.

42 43

Hosmer, L. T., (1995), op. cit. Ibid.

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TE Provides a More Complete Framework For Examining Problems An awareness of the importance of examining the consequences of decisions – including their long-term costs as well as their short-term benefits – is a powerful contribution that TE provides44. By the very nature of identifying the impact of decisions on multiple stakeholders, leaders increase their appreciation of the unintended impacts of decisions and the need to become familiar with the rights of all stakeholders. This increased awareness of ethical decision-making enhances the quality of decisions made45.

44 45

Hosmer, L. T., (2010), op. cit. Ibid.

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TE Clarifies the Importance of Explaining the Rationale for Decisions Familiarity with the multiple ethical perspectives that must be taken into consideration in making decisions enables leaders to appreciate the tremendous need to explain the rationale behind decisions, the values considered, the economic and legal factors involved, and the costs as well as the benefits associated with other options considered. Trust in leaders’ decisions is often closely tied with the extent to which leaders are transparent and open in explaining why they have made decisions46.

TE Enhances Self-Awareness and the Importance of Compassion Familiarity with the ethical perspectives that make up TE enables leaders to assess and be more sensitive to their own ethical perspectives, as well as the underlying principles which make the many ethical perspectives important47. Inasmuch as each of these ethical perspectives is based upon the pursuit of excellence in decision-making, a leader who adopts a TE perspective will be more genuinely compassionate about others’ ethical and moral priorities and more willing to address those priorities in establishing relationships48.

46

Colquitt, J. A. & Rodell, J. B., (2011), op. cit. Al Lawati, H. A. H., Sayed, R. T., and Caldwell, C., (2019), op. cit. 48 Ibid. 47

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TE Affirms the Importance of Open Communication and Transparency

Leaders who adopt at TE perspective about ethical decisions automatically recognize the value of transparency and open communication in building trust and in communicating to others about values and priorities. Sensitivity to the nuances of all twelve ethical perspectives enables leaders to explain how and why they considered the implications of each perspective and improves their ability to communicate with stakeholders about the values addressed in making decisions.

Each of these five benefits enables a leader to relate more effectively with others in appreciating conflicting points of view and ethical priorities. By understanding others’ ethical perspectives, the thoughtful leader will also be more capable of acknowledging the value of others’ ethical viewpoints and be able to incorporate those viewpoints into her/his own decision-

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making model. That enhanced recognition of the validity of other points of view enables a leader to earn others’ trust and develop a common ground for identifying shared goals and priorities. Including others’ priorities in making decisions and in considering alternatives demonstrates respect for others and enhances the strength of interpersonal relationships. Building trust by demonstrating that consideration of others’ viewpoints is essential in maintaining employee commitment that is so necessary in sustaining competitive advantage49.

CONCLUSION Moral and ethical decision-making is often a difficult process for leaders and organizations. The consequences of decisions are often profoundly complex and the challenge facing leaders is often associated with weighing the impacts of decisions and their ultimate effects on the sustainability of organizations50. The advantage of adopting TE as a lens for assessing ethical consequences of decisions is that TE is comprehensive, broad reaching, and thorough in its ability to consider the many important values associated with management decisions.

49 50

Beer, M., (2009), op. cit. Hosmer, L. T., (1995), op. cit.

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As organizations and their leaders struggle for position in today’s extremely competitive global marketplace, TE enables those who make decisions to increase their confidence level regarding the decisions that they make. TE offers decision-makers with an ethical perspective that assists leaders and organizations to consider the legal, financial, and ethical implications that are often overlooked in making decisions – and focuses on the long-term responsibilities of individuals and organizations to today’s stakeholders and future stakeholders as well51.

REFERENCES Al Lawati, H. A. H., Sayed, R. T., and Caldwell, C., (2019). “Transformative Ethics and Moving Toward ‘Greatness.’ – Problems and Realities.”

51

Hosmer, L. T., (2010), op. cit.

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Journal of Values-Based Leadership. Volume XII, Iss. 1, Winter/Spring Edition. Anderson, V. & Caldwell, C., (2017). “Transformative Ethics and Trust: Keys to Competitive Advantage.” Competitive Advantage: Strategies, Management and Performance. Hauppage, NY: NOVA Publishing, Chapter 12, p. 162. Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. Caldwell, C., (2017). “Kindness and Self-Interest: Why Treating Employees Well Makes Such Good Sense.” Graziadio Business Review. Vol 20, Iss. 1, found online at http://gbr.pepperdine.edu/ 2017/04/kindness-and-selfinterest/. Caldwell, C. & Clapham, S., (2003). “Organizational Trustworthiness: An International Perspective.” Journal of Business Ethics, Part 1, Vol. 47, Iss. 4, pp. 349-364. Caldwell, C. & Holloway, C. S., (2017). “Raising the Bar: Transformative Ethics and the example of Christ.” Business and Management Research, Vol. 6, No. 4, pp. 54-63. Caldwell, C., & Ndalamba, K. K., (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Journal of Management Development, Vol. 36, Iss. 8, pp. 1076-1086. Cameron, K., (2011). “Responsible Leadership as Virtuous Leadership.” Journal of Business Ethics, Vol. 98, pp. 25-35. Christensen, C. M., (2011). The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business. New York: Harper Business. Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. Colquitt, J. A. & Rodell, J. B., (2011). “Justice, Trust, and Trustworthiness: A Longitudinal Analysis Integrating Three Theoretical Perspectives.” Academy of Management Journal, Vol. 54, Iss. 6, pp. 1183-1206. Covey, S. R., (2004). The Eighth Habit: From Effectiveness to Greatness. New York: Free Press.

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Covey, S. R., (1992). Principle-Centered Leadership. New York: Simon & Schuster. DePree, M., (2004). Leadership is an Art. New York: Crown Publishing. Gilligan, C., (1982). In a Different Voice: Psychological Theory and Women’s Development. Boston, MA: Harvard University Press. Harrington, M., (2017). “Survey: People’s Trust has Declined in Business, Media, Government, and NGOs.” Harvard Business Review, January 16, 2017 and found online on March 29, 2020 at https://hbr.org/2017/ 01/survey-peoples-trust-has-declined-in-business-media-governmentand-ngos. Hosmer, L. T., (2010). The Ethics of Management (7th ed.). Boston, MA: McGraw-Hill Education. Hosmer, L. T., (1995). “Trust: The Connecting Link between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Issue, 2, pp. 379-403. Mayer, R. C., Davis, J. H. & Schoorman, F. D., (1995). “An Integrative Model of Organizational Trust.” Academy of Management Review, Vol. 2o, Iss. 3, pp. 709-734. Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. Porter, M., (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press. Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 10

RESPONSES TO RELIGIOUS IDENTITY THREAT IN THICK AND THIN CULTURES Morela Hernandez1,, Hana Johnson2 and Andy Wicks1 1

University of Virginia, Charlottesville, Virginia, US 2 Washington State University, Washington, US

ABSTRACT Some of our employees are passionate about their faith. Some of them aren’t, and some people feel uncomfortable having to listen to other people telling them what to believe. I got involved when one of our supervisors told an employee to stop “hassling” another employee who felt awkward about saying "Please stop inviting me to your church -- I don’t want to go." Everybody involved is feeling bruised and I have to address the situation. I realize that we can’t very well write (much less enforce) a policy on talking about religion at work -- but what else can we do? How do we keep everyone feeling valued while also letting our employees know that we don’t expect them to come to work to be converted to their co-workers’ religious faiths? (HR manager)1.

 1

Corresponding Author’s Email: [email protected]. https://www.forbes.com/sites/lizryan/2015/11/06/how-to-talk-about-religion-at-work/#794eef0 a4180.

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Every person entering an organization navigates the expression of their identities, one of which might be a religious identity. As this human resources (HR) manager highlights, there is significant ambiguity in how best to handle the expression of religious beliefs in the workplace. Indeed, religious identity is a unique type of self-expression; it can be associated with a perceived contagion effect. Some expressions of religious identity might come across as proselytizing and cause relational conflict 2 . Although scholars have theorized about potential conflicts that can arise from the expression of religious beliefs at work 3 , little is known about the ways in which organizational cultures influence employees’ responses to workplace threats to religious identity. In this chapter we explore different ways that employees’ religious expressions in the face of identity threat might be shaped by their organization’s cultural context. Because organizations owe a moral obligation to their employees to protect their identities and to honor personal differences, this discussion of the impact of organizational culture on religious identity is implicitly an ethical issue4. Drawing from the literature on organizational culture, we examine how “thick” and “thin” cultures affect identity threat arising from the expression of religious identity. Whereas “thick” or “strong” cultures contain widely shared organizational beliefs, practices, and values, “thin” or “weak” cultures express a more loosely defined set of core values5 6 7. In both thick and thin cultures, companies organize stakeholders to create value.

2

Gebert, D., Boerner, S., Kearney, E., King, J.E., Zhang, K., & Song, L.J. (2014). Expressing religious identities in the workplace: Analyzing a neglected diversity dimension. Human Relations, 67(5):543-563. 3 Ghumman, S. & Jackson, L. (2008). Between a cross and a hard place: Religious identifiers and employability. Journal of Workplace Rights, 13(3): 259–279. 4 Hosmer, L. T., (1987). “Ethical Analysis and Human Resource Management.” Human Resource Management, 26(3): 313-330. 5 Alvesson, M. (2012). Understanding Organizational Culture (2nd ed.). Sage Publications. 6 Deal, T. E., & Kennedy, A. A. (1983). Culture: A new look through old lenses. Journal of Applied Behavioral Science, 19(4), 498–505. 7 Pascale, R. (1985). The paradox of “corporate culture”: reconciling ourselves to socialization. California Management Review, 27(2).

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Organizing attributes can be tied to brand identity, for instance, or to the strategy of the firm (e.g., needing particular capabilities, skills, and greater interdependence among value-chain stakeholders). For companies with thick cultures that compete based on differentiation rather than price, these forms of differentiation have many consequences. On the one hand, they limit both the potential pool of stakeholders they can bring into the company as part of value creation, such as employees, customers, suppliers, and those they can appeal to for value capture, such as consumers of their products or services. On the other hand, such differentiation can make the company and its products more unique, desirable, and “sticky” (i.e., harder to replace with a competitor’s product). In thick cultures, members display cohesiveness in their underlying assumptions and follow similar patterns of behavior8. They are bound by common beliefs and attitudes that are closely tied to organizational values. In contrast, the value of thin cultures is that they are more inclusive. Though this strategy allows the firm to appeal to a wide array of stakeholders, both within value creation and value capture processes, it also limits their ability to create a distinctive connection to the company or brand. Thus, even though in thin cultures members might share common values and operating methods, they do so to a lesser extent than thick cultures. Members tend to display more differentiated attitudes and behavior. In this way thin cultures tend to display greater flexibility and adaptability to changing conditions and distinct stakeholders9. To provide a visual, albeit imperfect, point of reference, we compare the two types of organizational cultures to animals. Consider the meerkat, for instance, a small burrowing member of the mongoose family found in southwestern Africa. “There are few animals on Earth who work as well together as meerkats 10 .” Much like the characteristics of thick cultures, meerkats display extraordinary alignment in values, coordination of efforts, and homogeneity in how they operate. 8

Kono, T. & Clegg, S. R. (1998). Transformations of Corporate Culture: Experiences of Japanese Enterprises. Berlin and New York: de Gruyte Studies in Organization. 9 Kono, T. & Clegg, S. R. (1998). Op cit. 10 National Geographic (2020). Accessed June 3, 2020: https://kids.nationalgeographic. com/animals/mammals/meerkat/.

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Thick Culture: The Meerkat Aligned, Cohesive, Uniform

Thin Culture: The Cat11 Independent, Creative, Inclusive

Contrastingly, consider the domesticated cat. Often rebellious, territorial, creative, and independent minded, the cat is a uniquely adaptable animal. It can grow accustomed to living (and perhaps, even enjoy) living with other species. This inclusivity, however, does not come at the cost of their individuality.

We use these two broad understandings of organizational culture to examine how organizational cultures can affect the ways in which employees respond to religious identity threat at work. In so doing, we remain intentionally broad, speculative, and provocative in our theorizing to stimulate new ideas on this topic We use these two broad understandings of organizational culture to examine how organizational cultures can affect the ways in which employees respond to religious identity threat at work. In so doing, we remain intentionally broad, speculative, and provocative in our theorizing to stimulate new ideas on this topic.

11

Photo by Anusha Barwa on Unsplash.

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Organizations would benefit from minimizing identity threat experienced by employees because studies have shown that identity threat can result in diminished performance 12 13 14 , aggressive behavior 15 , antisocial behaviors16 , and decreased job satisfaction 17 . Accordingly, our goal is to develop a new theoretical framework that can accelerate the work of future scholars seeking to improve these detrimental outcomes. Through this approach, we shed light on the potential resources and strategies that organizations can deploy to mitigate religious identity threat. Our work brings together research on identity and organizational culture to offer important contributions to the literatures on religiosity and identity. First, we advance scholars’ understanding of religiosity within the management domain by positing how organizational cultures can affect expressions of religious identity at work. The tenets of religiosity help explain why expectations based on organizational cultures (thick vs. thin) can shape employees’ experiences of and responses to expressions of religious identity. Second, we enrich the literature on identity threat, which has identified its sources18,19 and interventions for reducing stereotype threat20, but offered 12

Steele, C. M. (1997). A threat in the air - How stereotypes shape intellectual identity and performance. American Psychologist, 52(6): 613-629. 13 Steele, C. M., & Aronson, J. (1995). Stereotype threat and the intellectual test performance of African Americans. Journal of Personality and Social Psychology, 69(5): 797-811. 14 Steele, C. M., Spencer, S. J., & Aronson, J. (2002). Contending with group image: The psychology of stereotype and social identity threat. Advances in Experimental Social Psychology, 34: 379-440. 15 Inzlicht, M., & Kang, S. K. (2010). Stereotype threat spillover: How coping with threats to social identity affects aggression, eating, decision making, and attention. Journal of Personality and Social Psychology, 99(3): 467-481. 16 Aquino, K., & Douglas, S. (2003). Identity threat and antisocial behavior in organizations: The moderating effects of individual differences, aggressive modeling, and hierarchical status. Organizational Behavior and Human Decision Processes, 90(1): 195-208. 17 Griffith, K. H., & Hebl, M. R. (2002). The disclosure dilemma for gay men and lesbians: “coming out” at work. Journal of Applied Psychology, 87(6): 1191-1199. 18 Branscombe, N. R., Ellemers, N., Spears, R., & Doosje, B. (1999). The context and content of social identity threat. In N. Ellemers, R. Spears, & B. Doosje (Eds.), Social identity: Context, Commitment, Content: 35-58. Oxford, England: Blackwell Science. 19 Petriglieri, J. L. (2011). Under threat: Responses to and the consequences of threats to individuals' identities. Academy of Management Review, 36(4): 641-662. 20 Davies, P. G., Spencer, S. J, & Steele, C. M. (2005). Clearing the air: Identity safety moderates the effects of stereotype threat on women's leadership aspirations. Journal of Personality and Social Psychology, 88(2): 276-287.

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little insight into how organizations can actually minimize religious identity threat.

The literature on psychological interventions for minimizing stereotype threat provides a basis for explaining situational mechanisms through which that threat can be reduced; however, it is unclear how individual efforts to express religious identity at work intersect with the larger strategic focus of organizations (i.e., how we create value, how we organize, how we get buyin from stakeholders). Our research highlights the value of extending our investigative lens from stereotype-based elements when analyzing responses to identity threat from the perspective of organizational culture.

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From a practical perspective, our theorizing informs the manner in which organizations can approach a universal struggle: the expression of normative beliefs. Past scholars21,22 have noted that thick cultures can create tremendous value, connection, and align stakeholders in their appetite for the particular value that company creates. At the same time, thick cultures might discriminate, lack creativity, or create problems that put the organization at risk of losing stakeholder support. Thin cultures, in accommodating individual particularities, run the danger of “trying to be all things to all people.” This can limit an organization’s ability to “stand for” anything or to have anything that makes that organization truly unique—beyond this openness. That, in itself, has value to many people yet it does little to create a driving connection to others or to make any distinctive statement about the brand, the culture, or how stakeholders collaborate to create value. “our theorizing informs the manner in which organizations can approach a universal struggle: the expression of normative beliefs”

Our investigation sheds light on the opportunities and constraints organizational cultures can impose on employees’ expressions of religious identities as it relates to themselves and those with whom they interact. Ultimately, we seek to advance the knowledge of religious identity to better understand how and why our lived experience in organizations often shapes the way in which we engage with topics that have personal importance and long-term societal consequences.

21

Warrick, D.D. (2017). What leaders need to know about organizational culture. Business Horizons, 60(3): 395-404. 22 Kono, T. & Clegg, S. R. (1998). Transformations of Corporate Culture: Experiences of Japanese Enterprises. Berlin and New York: de Gruyte Studies in Organization.

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THEORETICAL GROUNDWORK Religious Identity Threat The earliest studies of religious identity reduced it to a set of values, beliefs, motivations, or attitudes. In the 1960s and 1970s, scholars began problematizing this conceptualization, primarily after observing the complex relationship between the subjective dimensions of religions, and observed behavior. Darley and Batson’s23 experiments revealed seminary students en route to preach a sermon on the Good Samaritan parable, when encountering an injured person deliberately placed in their path, were far more affected by situational (i.e., time constraints) than dispositional factors when deciding whether or not to offer assistance. As research insights developed, it became clear to scholars that values and value systems—religious or otherwise—did not play a central role in shaping behavior, nor were they observed to have stability and consistency when observed over time24.

23

Darley, J. M., & Batson, C. D. (1973). From Jerusalem to Jericho: A study of situational and dispositional variables in helping behavior. Journal of Personality and Social Psychology, 27: 100-108. 24 Williams, R.M. (1979). Change and stability in values and value systems: a sociological perspective. In Understanding Human Values: Individual and Societal. Edited by M. Rokeach. New York: Free Press.

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This early work gave way to investigations within organizational settings by identity theorists in social psychology 25 , 26 , 27 and business ethics28,29.

Modern scholarship emphasizes an actor’s affiliation and belonging to a particular group and the resulting interrelations as a central feature of the expression of religious identity. Accordingly, threat to an employee’s religious identity can result when interpersonal interactions or an intergroup event are perceived as harming the value, meanings, or enactment of a person’s religious beliefs30.

25

Tajfel, H., & Turner, J. C. (1986). Social identity theory and intergroup behavior (2nd ed.). Chicago: Nelson-Hall Publishers. 26 Turner, J.C., Hogg, M.A., Oakes, P.J., Reicher, S.D. & Wetherell, M.S. (1987). Rediscovering the social group: a self-categorization theory. Oxford: Basiel Blackwell. 27 Hogg, M.A. & Terry, D.J. (2000). Social identity and self-categorization processes in organizational contexts. Academy of Management Journal, 25(1):121-140. 28 Aquino, K. & Reed, I.I. (2002). The self-importance of moral identity. Journal of Personality and Social Psychology, 83(6):1423-1440. 29 Aquino, K., Freeman, D., Reed, I.I., Americus, L., Vivien, K.G., & Felps, W. (2009). Testing a social-cognitive model of moral behavior: the interactive influence of situations and moral identity centrality. Journal of Personality and Social Psychology, 100(4):703-718. 30 Petriglieri, J. L. (2011). Under threat: Responses to and the consequences of threats to individuals' identities. Academy of Management Review, 36(4): 641-662.

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“individuals derive positive affect or belonging from their relationships with others and from their membership in groups.”31

Because individuals derive positive affect or belonging from their relationships with others and from their membership in groups, identity threat can occur when employees perceive that another person or group degrades or devalues their religion32 33. Identity threats manifest as rejection and criticism in relation to individuals’ identities, including, for instance, coworkers reacting negatively in response to discovering a colleague is gay or lesbian34 and stereotyping based on colleagues’ social categories (e.g., gender or ethnicity). Employees can experience threat to the value that they associate with their religious identity when others negatively react to the expression of that identity, or when they perceive their religious expression being stigmatized. For example, in one study, job applicants who presented in Muslim attire were perceived more negatively than job applicants who did not35. 31

Photo by Jon Tyson on Unsplash Baumeister, R. F., & Leary, M. R. (1995). The need to belong: Desire for interpersonal attachments as a fundamental human motivation. Psychological Bulletin, 117(3): 497-529. 33 Richman, L. S., & Leary, M. R. (2009). Reactions to discrimination, stigmatization, ostracism, and other forms of interpersonal rejection: A multi-motive model. Psychological Review, 116(2): 365-383. 34 Griffith, K. H., & Hebl, M. R. (2002). The disclosure dilemma for gay men and lesbians: “coming out” at work. Journal of Applied Psychology, 87(6): 1191-1199. 35 King, E. B., & Ahmad, A. S. (2010). An experimental field study of interpersonal discrimination toward Muslim job applicants. Personnel Psychology, 63(4): 881-906. 32

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In another study, applicants who wore Muslim religious identifiers to job interviews were rated as more employable for low-status job and less employable for high-status jobs36. When a religion is perceived as a stigma, people who do not profess that religion perceive membership in the religion as tainted and morally inferior 37 38 . This stigma associates religious membership with inferiority and disgrace, lowering the value members possess in relation to their religious identity.

Employees might express their religious identity because they would like others to appreciate their beliefs as they do. When religion is central to

36

Ghumman, S. & Jackson, L. (2008). Between a cross and a hard place: Religious identifiers and employability. Journal of Workplace Rights, 13(3): 259–279. 37 Devers, C. E., Dewett, T., Mishina, Y., & Belsito, C. A. (2009). A general theory of organizational stigma. Organization Science, 20(1): 154-171. 38 King Jr, J. E., McKay, P. F., & Stewart, M. M. (2014). Religious bias and stigma: attitudes toward working with a Muslim co-worker. Journal of Management, Spirituality & Religion, 11(2): 98-122.

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an employee’s self-concept39, social environments that affirm these beliefs can promote a sense of predictability, stability, and consistency 40 . Individuals who psychologically perceive their religious identity as central to their self-concept are more likely to express that identity to others41. Expressers of religious identity can experience threat to the meaning of their identity if others perceive that the expresser is trying to convert them. Specifically, if the perceiver believes the expresser is trying to change their own self-definitions, beliefs, and behaviors, the perceiver’s response might entail criticizing the expresser’s personal attributes, and questioning their abilities and private life42 .

Religious identity threat can also result, to a large extent, from not being able to express or display these identities at work, because employees might not be allowed to according to company policy and/or because they are not comfortable doing so. That is, individuals’ behavior is affected by their identities; they may perceive a threat if an experience limits their ability to act according to their personal beliefs.

39

Gebert, D., Boerner, S., Kearney, E., King, J.E., Zhang, K., & Song, L.J. (2014). Expressing religious identities in the workplace: Analyzing a neglected diversity dimension. Human Relations, 67(5):543-563. 40 Swann, W. B., Jr., Johnson, R. E., & Bosson, J. K. 2009. Identity negotiation at work. Research in Organizational Behavior, 29: 81-109. 41 Rosenberg, M. 1979. Conceiving the self. New York: Basic Books. 42 Aquino, K., & Douglas, S. (2003). Identity threat and antisocial behavior in organizations: The moderating effects of individual differences, aggressive modeling, and hierarchical status. Organizational Behavior and Human Decision Processes, 90(1): 195-208.

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Past studies have found that employees can experience identity threat when they are not allowed to display artifacts (e.g., family pictures, awards, diplomas) in their cubicles that portray their personal and social identities43. These prohibitions can threaten employees’ need for distinctiveness44 45. Similarly, employees have reported not being allowed to take time off work for prayer time or to observe religious holidays, or wear facial hair even when it is associated with their religion46. In the U.S., expressing religion at work is often perceived as counter to workplace norms47 and employees fear offending their co-workers48 . To summarize, religious identity is not clearly a surface-level or deeplevel characteristic because individuals might have the opportunity to keep their religious identity invisible should they choose (or have the ability) to

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Elsbach, K. D. (2003). Relating physical environment to self-categorizations: Identity threat and affirmation in a non-territorial office space. Administrative Science Quarterly, 48(4): 622654. 44 Brewer, M. B. (1991). The social self: On being the same and different at the same time. Personality and Social Psychology Bulletin, 17(5): 475-482. 45 Leonardelli, G. J., Pickett, C. L., & Brewer, M. B. (2010). Optimal distinctiveness theory: A framework for social identity, social cognition, and intergroup relations. Advances in Experimental Social Psychology, 43: 63-113. 46 Lips-Wiersma, M., & Mills, C. (2002). Coming out of the closet: Negotiating spiritual expression in the workplace. Journal of managerial Psychology, 17(3): 183-202. 47 Cash, K. C., & Gray, G. R. (2000). A framework for accommodating religion and spirituality in the workplace. Academy of Management Perspectives, 14(3): 124-133. 48 Lewis, J. S., & Geroy, G. D. (2000). Employee spirituality in the workplace: A cross-cultural view for the management of spiritual employees. Journal of Management Education, 24(5): 682-694.

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conceal or avoid specific clothing, jewelry, or skin markings that signal their religion49. Religious identity is, therefore, different from other identities such as gender or race, where concealment is (usually) not a choice. Membership of a religion can be considered a stigma such that an individual associating with the religion may be perceived by others as being tainted, discredited, and morally inferior50. People disassociate from, exclude, or ostracize members of stigmatized categories. Stigma associated with religious identity might be particularly strong in the U.S. where religious expression is often explicitly prohibited within the workplace. Perhaps most unique to religious identity is the potential for others to perceive that the possessor of the religious identity may be trying to proselytize or convert others51.

Other identities are not characterized by proselytism; a White employee interacting with a Black employee does not actually fear being turned Black. Yet, an agnostic employee interacting with an LDS employee may fear that the LDS employee is trying to convert the agnostic to Mormonism. In general, religious identity is distinctive because individuals may choose

49

Gebert, D., Boerner, S., Kearney, E., King, J.E., Zhang, K., & Song, L.J. (2014). Expressing religious identities in the workplace: Analyzing a neglected diversity dimension. Human Relations, 67(5):543-563. 50 Devers, C. E., Dewett, T., Mishina, Y., & Belsito, C. A. (2009). A general theory of organizational stigma. Organization Science, 20(1): 154-171. 51 Gebert, D., Boerner, S., Kearney, E., King, J.E., Zhang, K., & Song, L.J. (2014). Expressing religious identities in the workplace: Analyzing a neglected diversity dimension. Human Relations, 67(5):543-563.

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whether to conceal that identity, and if they decide to express it, risk being stigmatized and accused of proselytizing. We build on these theoretical insights to outline how these dynamics could be shaped by organizational thick and thin cultures.

Thick and Thin Organizational Cultures Weaver and Agle52 theorized that religious identity affects behavior to the extent that the identity is salient within an environment. They defined salience as greater social conformance with the expectations associated with a particular identity. This idea is consistent with identity theory53 54, which describes identity salience as the likelihood or probability of an identity being “played out.” Identities are organized in a salience hierarchy with identities at the top of the salience hierarchy more likely to affect behavior than those at the bottom of the hierarchy. Different factors affect the location of an identity within the salience hierarchy such as psychological centrality (an internal factor), and commitment (an external factor). Commitment is the degree to which others depend on an individual being a particular type of person55. The more others depend on the individual to enact a specific identity, the more committed the individual is to the identity. In short, commitment is a result of the number and strength of ties individuals have to others through the enactment of an identity. Therefore, if many people depend on an individual to enact a specific identity and those people are important to the individual, the individual is more committed to the identity.

52

Weaver, G.R. & Agle, B.R. (2002). Religiosity and ethical behavior in organizations: a symbolic interactionist perspective. Academy of Management Review, 27(1):77-97. 53 Stets, J. E., & Burke, P. J. (2000). Identity theory and social identity theory. Social Psychology Quarterly, 63(3). 54 Stryker, S., & Serpe, R. T. (1994). Identity salience and psychological centrality: Equivalent, overlapping, or complementary concepts? Social Psychology Quarterly, 57(1): 16-35. 55 Stryker, S., & Serpe, R. T. (1982). Commitment, identity salience, and role behavior. In W. J. Ickes, & E. S. Knowles (Eds.), Personality, Roles and Social Behavior: 199-218. New York: Springer-Verlag.

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The stronger the commitment to an identity, the higher its salience or likelihood of being activated56. In contrast, psychological centrality is the significance of the identity to a person’s self-concept. An identity may be “central or peripheral, cardinal or secondary, a major or minor part of the self”57. In other words, of the identities that an individual possesses, some are subjectively and relatively more important than others. Weaver and colleagues theorized that organizational contexts can influence the salience of identities58. Drawing on Lynn et al., 59 Weaver has argued that religiously saturated organizations—a characteristic that might be found in thick cultures—are likely to activate personal religious identities, provided the two are or can become congruent over time. When there is no overarching organizational culture heavy in religious or transcendent framing60, employees could separate their identification to their religion from other identities such as organizational identity (i.e., “split identification,”61. Though the organizational context might prompt such a separation or compartmentalization of personal beliefs, employees’ commitment to maintaining their religious identities and the psychological centrality of their religious identities to a non-work context is likely to increase. Thin cultures can reduce religious identity salience, both in crowding out employees’ personal religious identity with other identities while diluting the number of co-religionists present. Moreover, the number of 56

Stryker, S., & Serpe, R. T. (1982). Op. Cit. Rosenberg, M. 1979. Conceiving the self. New York: Basic Books. 58 Weaver, G.R. & Stansbury, J.M. (2014). Religion in organizations: Cognition and behavior. Religion and Organization Theory (Research in the Sociology of Organizations, Vol. 41), Emerald Group Publishing Limited, 65-110. 59 Lynn, M.L., Naughton, M.J., VanderVeen, S. (2011). Connecting religion and work: Patterns and influences of work-faith integration. Human Relations, 64(5): 675-70. 60 Dyck, B., & Wong, K. (2010). Corporate spiritual disciplines and the quest for organizational virtue. Management, Spirituality, & Religion, 7(1): 7-29. 61 Tracey, P. (2012). Religion and organization: A critical review of current trends and future directions. Academy of Management Annals, 6(1): 87-134. 57

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commitments that workers make to their co-workers and organization can weaken religious identity in favor of organizational identity. This arrangement, however, presumes religious pluralism: some scholars have argued that company leadership should create environments where members come to know and respect differences, referred to as “respectful pluralism” where employees can express their religion, political, cultural, and other commitments in the workplace 62 . In such an environment, the commitment and psychological centrality of religious identities is likely to decrease. We theorize that there are unique responses to identity threat from the expression of religious identity in meerkat-like thick and cat-like thin cultures. Our focus is not just on employees who self-identify as “religious”; rather it is on the workplace context in which there is a spectrum of religious identities including those who self-identify as atheist or agnostic.

RESPONSES TO RELIGIOUS IDENTITY THREAT Previous scholars have been sensitive to the interaction between religious identity and the cultural, structural, situational, and social dimensions of organizational life. Though there is no guarantee that religious identities will transpose in any particular moral or spiritually infused behavior, religious behavior “likely will depend on the extent to which the organizational context is supportive of such transference, providing triggers for religious schemes and scripts, and legitimating their applicability when triggered. Thus, the salience of a person’s religious identity is contingent upon a number of situational factors” 63 . In other words, organizational context

62

Hicks, D. A. (2002). Spiritual and religious diversity in the workplace: Implications for leadership. The Leadership Quarterly, 13(4): 379-396. 63 Weaver, G.R. & Stansbury, J.M. (2014). Religion in organizations: Cognition and behavior. Religion and Organization Theory (Research in the Sociology of Organizations, Vol. 41), Emerald Group Publishing Limited, 65-110.

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plays a significant role in whether and how employees express their religious identities in the workplace. Following this rationale, the experiences of potential harm to the value, meaning, or enactment of individuals’ identities (i.e., identity threat) likely will depend on the extent to which the organizational context is supportive of such transference. Although identity threat is a cognitive process that occurs at the individual level, we propose that by understanding how organizational culture can shape responses to religious identity threat, we can identify ways to manage religious identity expression at work. Assuming that incongruence exists between employee and organizational religious identities, we present a framework of potential responses to religious identity threat. Specifically, we use Petriglieri’s64 framework of identity protection and restructuring responses to analyze the effect of thick and thin organizational cultures on religious identity threat at multiple levels of organizational life. Identity-protection responses to identity threat include actions directed at the source of threat in an effort to affirm the threatened identity without changing it. We predict identity-protection responses are most likely to occur in thick organizational cultures. In contrast, identity-restructuring responses are focused on the threatened identity itself and allow for the value or meaning of the identity to the individual to be adjusted. Compared to identity protection responses, identity restructuring responses consider threatened identities as more malleable. We predict identity-restructuring responses to religious identity threat are most likely to develop in thin organizational cultures. Using this distinction, we sketch out possible responses related to individual experiences, relational interactions, and collective associations.

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Petriglieri, J. L. (2011). Under threat: Responses to and the consequences of threats to individuals' identities. Academy of Management Review, 36(4): 641-662.

Responses to Religious Identity Threat in Thick and Thin Cultures Identity Protection Responses

Identity Restructuring Responses

Individual Expressions

Concealment

Importance Change

Relational Interactions

Derogation

Identity Exit

Positive Distinctiveness

Meaning Change

Collective Associations

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Individual Expressions Identity Protection Response: Concealment In thick cultures, employees might conceal their threatened identity from the disapproval of others at work. For instance, Griffith and Hebl65 found that gay men and lesbians tended to not disclose their sexual orientation if they perceived low organizational support for being gay. Similarly, when individual and organizational normative beliefs are incongruent, employees are likely to carve out a private “identity space” in their organizations where religious-moral identities can remain salient 66 organizations might provide separate spaces such as prayer rooms for Muslim employees, encourage Jewish affinity groups to meet at Temple, or limit religious expression to secular celebrations such as the International Day of Tolerance. A concealment response implies that religious identities require insular social space to be cultivated by workers in thick cultures.

65

Griffith, K. H., & Hebl, M. R. (2002). The disclosure dilemma for gay men and lesbians: “coming out” at work. Journal of Applied Psychology, 87(6): 1191-1199. 66 Trevino, L.K., Weaver, G.R., & Reynolds, S.J. (2006). Behavioral ethics in organizations: A review. Journal of Management, 32: 951-990.

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Identity Restructuring Response: Importance Change In thin cultures, employees might engage in importance change by making their threatened identity seem less important or restructuring how it is expressed. Importance change responses to religious identity threat can involve efforts to teach expressers modified ways to express their religious identities and teach perceivers how to interpret other people’s expression of religious identities 67 . Such is the case of the increasingly popular Hindu festival “Holi,” which involves a celebration where individuals throw color powders; a ritual that has become increasingly popular outside of India.68 These efforts amount to a pro-social accommodation focused on increasing awareness of religion and enabling individuals to interact positively on the topic of religion.

Relational Interactions Identity Protection Response: Derogation In thick cultures, employees might engage in derogation by discounting the opinions of the threatening others. An example of derogation is when hospital cleaning personnel condemned the negative treatment they received from doctors and instead focused on the positive interactions they experienced with families69. Related to religious identity, an employee may simply ignore or rationalize why co-workers hold negative attitudes toward his or her religion; perhaps viewing threatening others as “less enlightened.” In this manner, employees are able to maintain their religious identities while lowering their perception of identity threat.

67

Gebert, D., Boerner, S., Kearney, E., King, J.E., Zhang, K., & Song, L.J. (2014). Expressing religious identities in the workplace: Analyzing a neglected diversity dimension. Human Relations, 67(5):543-563. 68 https://time.com/5799354/what-is-holi/. 69 Dutton, J. E., Debebe, G., & Wrzesniewski, A. (1996). The revaluing of devalued work: The importance of the relationships for hospital cleaning staff. Paper presented at Annual Meeting of the Academy of Management, Cincinnati, OH.

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Identity Restructuring Response: Identity Exit In thin cultures, employees might engage in identity-exit by no longer identifying with the threatened identity. That is, identity exit involves an employee deciding to actually abandon their religion. This type of identity-exit response is illustrated by a staff member at an abortion clinic disengaging from the abortion clinic identity and instead identifying herself as a staff member in a women’s health clinic70. After publicized scandals within the Catholic Church made clear that child sexual-abuse had been actively and purposely ignored for at least four decades, many believers chose to exit their faith71. In organizational cultures where independence and debate are encouraged, such identity exit might be encouraged via employees’ interpersonal interactions with co-workers.

Collective Associations Identity Protection Response: Positive Distinctiveness In thick cultures, employees might engage in positive distinctiveness in trying to change how threatening others perceive them by focusing on the positive traits related to the threatened identity. Take, for instance, the case of an employee moving to a new work group and reporting to a new supervisor. In the previous work group and role, the employee—over time— had likely established who they were, with co-workers and the supervisor developing an understanding of the employee’s religious identity. The new work group and supervisor are apprehensive about the employee given the unusual nature (by their organizational culture standards) of the employee’s behavior, resulting in threat.

70

Ashforth, B. E., Kreiner, G. E., Clark, M. A., & Fugate, M. (2007). Normalizing dirty work: Managerial tactics for countering occupational taint. Academy of Management Journal, 50(1): 149-174. 71 Green, E. (2019). Why Does the Catholic Church Keep Failing on Sexual Abuse? Accessed June 3, 2020. https://www.theatlantic.com/politics/archive/2019/02/sean-omalley-pope-franciscatholic-church-sex-abuse/582658/.

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According to social identity theory, in a negative intergroup comparison, the threatened group can respond with social competition strategies72. In this case, the employee could respond by identifying dimensions in which the ingroup may be superior to the outgroup. A Hindu employee, for instance, could point out the benefits of meditation and mindfulness; noting that these practices are part of his daily routine, he could highlight his superior focus throughout the day. The employee engages in this positive distinctiveness response as way of demanding accommodation of his religious identity in this new group—a strategy that can result in increased conflict between groups.

Identity Restructuring Response: Meaning Change In thin cultures, employees might engage in meaning change by altering the collective meanings they associate with their threatened identity. For example, people who work in “dirty work occupations” may re-position their occupation in a more positive manner, such as personal injury lawyers describing their jobs as making companies accountable for product defects73. Moreover, changes in organizational norms can intensify employees’ attachment to a new set of collective beliefs, minimizing the centrality of their religious identity. Group norms represent the informal rules or standards that a group shares that dictate the types of behaviors that are acceptable within the group74. Openness to experience, for instance, describes individuals who are tolerant and innovative 75 . Individuals possessing this personality trait of openness to experience are likely to be open-minded and welcoming of diverse perspectives. 72

Tajfel, H., & Turner, J. C. (1986). Social identity theory and intergroup behavior (2nd ed.). Chicago: Nelson-Hall Publishers. 73 Ashforth, B. E., Kreiner, G. E., Clark, M. A., & Fugate, M. (2007). Normalizing dirty work: Managerial tactics for countering occupational taint. Academy of Management Journal, 50(1): 149-174. 74 Feldman, D. C. (1984). The development and enforcement of group norms. Academy of Management Review, 9(1): 47-53. 75 Costa, P. T., & McCrae, R. R. (1992). Revised NEO personality inventory (NEO PI-R) and NEO five-factor inventory (NEO-FFI): Professional manual. Lutz, FL: Psychological Assessment Resources, Inc.

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A work group that possesses the trait of openness to experience would be expected to support principals of nonconformity and diversity76. Norm changes within organizations or work groups could encourage their members to support and accept their fellow colleagues; the values of tolerance and acceptance of differing backgrounds instilled within work group members could reduce the experience of religious identity threat.

CONCLUSION Research on religious identity has typically relied upon three arguments: 1) studies of actors consulting religious identities (ethics); 2) studies of actors performing religious identities (outcomes); and 3) studies of actors expressing religious identities (pluralism). The consulting religious identities research fundamentally probes conditions for “ethical workplaces” to take place. The research of performative religious identities probes the dimensions of religious identities that made a positive contribution to organizational performance (e.g., job satisfaction, turnover). The research on expressive religious identities explores the conditions that facilitate free expressions of religiosity while maintaining an overarching pluralism and peaceful coexistence. All three strands of inquiry preserve the place of religious attributes as causally efficacious—not reducible to situational or contextual factors—and as an independent variable plugged in as an input to particular settings. Our research most closely aligns to the literature on expressive religious identities, which are centrally at home in human resource management inquiries. This space focuses on the organizational task of managing religious diversity and the legal principle of “accommodating” religious commitments77.

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Hofmann, D. A., & Jones, L. M. (2005). Leadership, collective personality, and performance. Journal of Applied Psychology, 90(3): 509-522. 77 Cash, K. C., & Gray, G. R. (2000). A framework for accommodating religion and spirituality in the workplace. Academy of Management Perspectives, 14(3): 124-133.

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As Ghumman and colleagues78 pointed out in their review of religious discrimination, the expression of religious identity in the workplace is a particularly difficult endeavor to manage given the unique nature of religion, perennial legal ambiguities, the increased religious diversity in the American workforce and the increasing expression of religious beliefs. As such organizational contexts are likely to play a significant role in shaping the expression of religious identity.

“the expression of religious identity in the workplace is a particularly difficult endeavor to manage given the unique nature of religion, perennial legal ambiguities, the increased religious diversity in the American workforce and the increasing expression of religious beliefs.”

Though expressing religion is related to many outcomes such as physical and mental health, coping, concern for others, creativity, commitment, ethical behavior, prejudice, intelligence, personality79, we have focused on the potential employee responses to religious identity threat at work in thick and thin cultures. We developed theory at the intersection of individuals’ efforts to express their religious identity in organizations and the broader cultural orientation of organizations that defines how stakeholders organize to create value. 78

Ghumman, S., Ryan, A. M., Barclay, L. A., & Markel, K. S. (2013). Religious discrimination in the workplace: A review and examination of current and future trends. Journal of Business and Psychology, 28(4), 439-454. 79 Day, N. E. (2005). Religion in the workplace: Correlates and consequences of individual behavior. Journal of Management, Spirituality & Religion, 2(1): 104-135.

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Though we have merely scratched the surface of our potential understanding of these phenomena, our work builds a platform from which future research can investigate how organizational cultures shape religious identity protection and restructuring employee responses. For instance, future researchers might further develop this work by examining the development of individuals’ religious identities within the workplace80 (e.g., identity work and construction). If identities are purely answers to the question “Who am I?” and the collection of these identities represent individuals’ self-concept or how they define themselves 81 , identity construction can explain how employees resolve the tensions between their religious identity and other identities. Beyond the differences in response tactics we discussed in response to religious identity threat within thick and thin cultures, studying identity construction can reveal additional types of responses individuals engage in as a result of the tensions introduced by the organization. The identity construction literature describes employees engaging in social recategorization to influence others to group them in a more valued social category than the threatened category. This might occur through integrating the positive traits related to a social identity into a professional identity82. Other responses described in the identity construction literature include employees enriching the meaning of their identity by providing a more nuanced interpretation of the identity or building upon an identity that is established (i.e., patching it)83.

80

Pratt, M. G., Rockmann, K. W., & Kaufmann, J. B. (2006). Constructing professional identity: The role of work and identity learning cycles in the customization of identity among medical residents. Academy of Management Journal, 49(2): 235-262. 81 Gecas, V. (1982). The Self-Concept. Annual Review of Sociology, 8: 1-33. 82 Roberts, L. M. (2005). Changing faces: Professional image construction in diverse organizational settings. Academy of Management Review, 30(4): 685-711. 83 Pratt, M. G., Rockmann, K. W., & Kaufmann, J. B. (2006). Constructing professional identity: The role of work and identity learning cycles in the customization of identity among medical residents. Academy of Management Journal, 49(2): 235-262.

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Future scholars should draw on this past work to deepen our understanding of religious identity threat in different organizational cultures with a particular focus on how identity construction as it pertains to religious expressions can improve employees’ well-being84. Practically, it is safe to assert that organizations care about the kind of culture that allows them to compete in the marketplace. Thick and thin cultures can influence access to talent, express founding values, and enable other critical stakeholder capabilities. They can also influence the ways in which individuals respond when their personal identities are threatened. Organization leaders owe a moral obligation to their members to enable them to feel safe regarding their religious identities. The University of Michigan’s LaRue Hosmer85 made the responsibilities of organizations clear in writing that “(e)thical analysis involves an evaluation of the impacts of the proposed managerial action upon the members of the organization and the members of the society, and then justification of those impacts according to one of the first principles or essential values of normative philosophy.” Hosmer’s insights directly apply to protecting individuals’ personal feelings about their religious identities. We hope our examination of responses to religious identity threat can spark new understandings of how employees experience normative beliefs at work and how organizations can foster the productive expression of those beliefs. At a moment in U.S. history where people are becoming more tribal, and when the foundations of democracy are under threat, understanding the dynamics of religious identity expression is both timely and consequential.

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Roberts, L. M. (2005). Changing faces: Professional image construction in diverse organizational settings. Academy of Management Review, 30(4): 685-711. 85 Hosmer, L. T., (1987).”Ethical Analysis and Human Resource Management.” Human Resource Management, Vol..26, Iss. 3, pp. 313-330.

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Such dynamics have a direct impact on people’s ability to navigate their lives as fellow citizens.

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In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 11

THE ETHICAL FOUNDATIONS OF SPIRITUAL INTELLIGENCE Cam Caldwell1,, Charles Goodall2,† and Verl Anderson3,‡ 1

American University of the Emirates, Dubai, United Arab Emirates 2 Indiana Wesleyan University, Marion, Indiana, US 3 Dixie State University, St George, UT, US

In addressing the quest for personal improvement, many experts have identified the importance of self-assessment -- and then using the insights from this introspection to establish personal goals to enhance skills, address shortcomings, and increase personal strengths. Uniformly, this advice is both instrumental, or focused on goal achievement, and normative, or principle-based, and acknowledges that the ability to accomplish worthy goals integrates both outcomes and values.



Corresponding Author’s E-mail: [email protected]. Corresponding Author’s E-mail: [email protected]. ‡ Corresponding Author’s E-mail: [email protected]. †

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The pursuit of a worthy purpose demands that both the ends to be accomplished and the means by which results are obtained must be taken into account. Implicit in the advice associated with goal attainment is the recognition that there are moral responsibilities that are a natural part of the quest for achievement. The focus of this chapter is on examining the underlying ethical foundations that guide personal improvement, emphasizing the importance of Spiritual Intelligence (SQ) as the guiding compass that drives this journey. The chapter begins by defining spiritual intelligence and cites a variety of sources from religion and the academic literature. The chapter then incorporates Stephen R. Covey’s concept of four intelligences as a framework for understanding the self-improvement process and closely examines the moral and ethical factors that are at play in understanding SQ as the guiding compass for personal growth. This exploration will include the identification of possible ethical dilemmas that must be addressed in the effort to balance the normative and instrumental factors associated with self-improvement and will suggest ten specific recommendations for resolving apparent ethical and moral conflicts – using SQ as a touchstone for reconciling those dilemmas. The chapter concludes with encouragement to readers as they examine their own moral and ethical obligations on their personal improvement odyssey.

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DEFINING SPIRITUAL INTELLIGENCE The concept of SQ has its roots in religious literature – both JudeoChristian and Islamic. Solomon asked God for wisdom and knowledge1 and the foundation of God’s inspiration to mankind is a central biblical theme of both the Old and New Testaments.2 King David prayed to God, imploring God to create within him a clean heart and a right spirit to direct his life3. In Islam, the importance of spiritual intelligence is a fundamental concept and the Qur’an exhorts all believers to have a close relationship with God4. In writing about the important role of spirituality in the Islamic faith, Bensaid and colleagues wrote the following. Spirituality is made through a process of profound inner reflection, devotion to God, commitment to lifestyle of worship, and adherence to morality; all however set to enhance a solid awareness of themselves and the world around them while furthermore refining human character, building balance and strengthening effective social bonds. Muslim spirituality is geared to synchronize the inner and outer make-up of emotional, rational and behavioural exercise in light of revelatory norms, and as such would lead Muslims to a stage whereby they develop inner peace, maintain healthy wellness, and sustain driving motivation for good5.

Whether as a fundamental Judeo-Christian or Islamic principle of personal development, SQ is intended to direct individuals to the path of life that will bring them optimal personal growth. Many scholars describe SQ as the source of personal direction in individuals’ lives. In the academic literature, the term is attributed to the work of Danah Zohar who has been credited for introducing the term in her writings about SQ within a business context6.

Solomon’s request to God is recorded in 2 Chronicles 1: 7-10. The importance of God’s direction to the people is cited in Amos 3:7 and God’s guidance of the Children of Israel is a fundamental them of the Old Testament. 3 See Psalms 51:10. = Bensaid, B. Machouche, S. B. T.& Grine, F., (2014). “A Qur’ranic Framework for Spiritual Intelligence.” Religions, Vol. 5, pp. 179-198. 5 Ibid., p. 181. 6 Zohar’s work in writing about Spiritual Intelligence is extensive. Her first book about the topic is Zohar, D., (1997). Rewiring the Corporate Brain. San Francisco, CA: Berrett-Koehler. 1 2

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Around the same time as Zohar’s publication, an Australian scholar, Ken O’Donnell, also introduced the term in his writings about the integration of emotional and spiritual direction of individuals in organizations7. Since that time, many articles and books have been written about the important contribution of SQ in human relations and organizational life. SQ has been described in a multitude of ways by scholars and the following is a representative sample of some of those descriptions and definitions. 



7

A framework for identifying and organizing the skills and competencies needed for the adaptive use of spirituality consisting of five components: 1. The capacity to transcend the physical and material. 2. The ability to experience heightened states of consciousness. 3. The ability to sanctify everyday experience. 4. The ability to utilize spiritual resources to solve problems. 5. The capacity to be virtuous. A set of adaptive mental capacities based on non-material and transcendent aspects of reality, specifically those that enhance or contribute to the application of the nonmaterial and transcendent

The book title in English is Endoquality - The Emotional and Spiritual Dimensions of the Human Being in Organizations. See. O'Donnell, Ken (1997). Endoquality - as dimensões emotionais e espirituais do ser humano nas organanizões. Manaus, Brazil: Casa da Qualidade.

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

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  

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aspects of existence that lead to enhancement of meaning, personal transcendence, and increased spiritual insight.8 The capacity to seek socially relevant purposes in life by understanding oneself and increasing the personal impacts of conscience, compassion and commitment in relationships9. An internal ability resting in that deep part of the self that enhances the need to access the meaning, vision, values and a sense of purpose in lives and that provides the means to It heal oneself and make oneself whole10. The development of enhanced self-awareness, alignment of purpose, the ability to view challenges and adversity as opportunities for personal growth, and an alertness to the alignment of life’s patterns and connections11. A “crossparadigmatic dictionary” that integrates spirituality with science by incorporating empirical methods in order to explain the phenomenon of invisible.12 The inner life of mind and spirit and their relationship to the world13. The effective use of spiritual information in problem solving and goal attainment14. The ability to combine wisdom and compassion, while maintaining inner and outer peace, in any circumstances15.

King, D. B. (2009). “A Viable Model and Self-Report Measure of Spiritual Intelligence," David B. King & Teresa L. DeCicco (Eds.) The International Journal of Transpersonal Studies, Volume 28, pp. 68-85. 9 Kumar, V. V. & Mehtam M., (2011). “Gaining Adaptive Orientation through Spiritual and Emotional Intelligence” in A. K. Chauhan & S. S. Nathawat (Eds.) New Facets of Positivism. Delhi, India: Macmillan Publishers., pp. 281-301). 10 Joseph, C, & Sailakshmi, S.,(2011) “Spiritual Intelligence at Work.”. IUP Journal of Soft Skills. Vol. V, No. 4, pp. 21-30. 11 Hacker, S. K. & Washington, M. (2017). “Going Beyond IQ and EQ to Develop Resilient Leaders.” Global Business and Organizational Excellence, Vol. 36, Iss. 3, pp. 21-28. 12 Hawkins, D., (2008). Reality, Spirituality, and Modern Man. Sedona, AZ: Veritas Publishing 13 Vaughan, F., (2002). “What is Spiritual Intelligence?” Journal of Humanistic Psychology, Vol. 42, Iss. 2, pp. 16-33. 14 Emmons, R. A., (2009). “Spirituality and Intelligence: Problems and Prospects.” The International Journal for the Psychology of Religion, Vol. 10, Iss. 1, pp. 57-64. 15 Wigglesworth, C., SQ21: The Twenty-one Skills of Spiritual Intelligence. New York: SelectBooks Inc. 8

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Each of these definitions add to an understanding of SQ. That insight is amplified by Covey’s identification of the four intelligences possessed by each individual and the role of SQ in guiding individual decisions.

COVEY’S FOUR INTELLIGENCES Just as Abraham Maslow refined his “Hierarchy of Needs” as he continued to learn, Stephen R. Covey developed and added on to his “7 Habits of Highly Effective People” by identifying the importance of finding one’s voice, one’s highest potential, or one’s unique significance.

Both Maslow and Covey came to recognize the divine influence in the search for personal excellence and the importance of accessing that power to achieve one’s best version of his or her self. For Covey, his insights included recognizing that there are four intelligences that influence personal progress and growth. The following is a brief summation of each of those intelligences16.

16

The contents of each of these four sections and the accompanying figure of the four intelligences which follow come from Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press,

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PHYSICAL INTELLIGENCE Physical Intelligence, which Covey abbreviated as PQ, includes a broad array of physical characteristics that consciously and unconsciously regulated the BODY’s responses – but also included refined capabilities that were able to be acquired with conscious effort and practice. This intelligence and the ability to live a long and productive life demand that individuals obey natural laws of good health, as well as working diligently to acquire fine-grained physical abilities associated with specific tasks to be accomplished. The fundamental purpose of physical capabilities is to live productively, to be able to sustain life in a healthy condition, and to acquire the skills necessary to physically relate with other people in the pursuit of common goals. Developing one’s physical capacities and adhering to principles of good health are also important parts of PQ.

MENTAL INTELLIGENCE Mental intelligence, commonly known as IQ, is the capacity to think clearly, analytically, and rationally and to learn and apply new information. IQ is a measure of the MIND and the capacity to acquire, understand, interpret, apply, and generate information associated with the accomplishment of tasks. This ability not only applies to the utilization of information but to synthesize that information, to discern relationships, to

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predict outcomes, to plan and implement ideas, and to constantly learn and improve. Although IQ is often considered the measure of a person’s intelligence, the research indicates that mental intelligence is not always the most important factor in determining personal success. However, IQ is also considered a necessary requirement which, when coupled with other intelligences, is a necessary requirement in performing job functions.

EMOTIONAL INTELLIGENCE Emotional Intelligence, or EQ, is broadly associated with one’s ability to understand others and oneself and reflects the feelings of emotion that come from one’s HEART. Using that understanding, EQ enables individuals to empathize with others, to establish social connections that are responsive to others’ needs and situational contexts, and that make it possible for a person to evaluate the most effective response to a varying set of situations and to act effectively to achieve a valued result.

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EQ is an essential quality to allows an individual to create and maintain interpersonal relationships or to choose to not engage with others. EQ also is the ability to discern the authenticity of others’ actions and responses, the capabilities involved in caring about and loving others, and the control required to manager the broad array of emotional responses that confront an individual as (s)he responds to events, successes and failures, and the actions of others.

SPIRITUAL INTELLIGENCE Spiritual Intelligence, or SQ, is the ability to access one’s sense of right and wrong in evaluating the moral and ethical factors associated with the choices that one makes. The conscience represents the SPIRIT and is much like an inner voice that affirms or disconfirms whether an action is “right” and is often an intuitive assessment or a gut feeling that sounds an internal alarm or that gives a feeling of assurance about a decision. SQ also is the capacity to access one’s higher power or relationship with the divine. Providing guidance about what is right or wrong, SQ affirms the principles of truth that a person follows to govern his or her life. SQ is also a driving force in giving a person’s life purposeful meaning, in monitoring and refining the other three intelligences, and in the pursuit of a personal legacy in life. SQ is often considered to be a critical factor in establishing credibility with others – particularly when the credibility and integrity of a person is concerned.

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Covey’s framework for the four intelligences is reflected in Figure 1. SQ -- or the conscience, is at the center of the intelligences when individuals choose to be guided by this intelligence in their relationships with others. 17. One’s personal values are affirmed by the conscience and guide individual decisions associated with the other three intelligences. Covey noted that the conscience and one’s access to his or her divine potential enabled a person to make decisions associated with finding one’s voice –that special potential or unique significance that is the key to individual excellence.

Figure 1. Covey’s Framework for the Four Intelligences.

In each area of one’s life there are inevitably ethical and moral issues associated with the intelligences and the decisions that one makes. Covey noted that the role of SQ was to provide normative standards and values to guide personal decisions. Table 1 provides representative examples of ethical decisions associated with each of the four intelligences.

17

Ibid.

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Table 1. Ethical decisions and the four intelligences Intelligence Primary Goals Physical Develop skills, talents, Intelligence and physical abilities associated with work, play, and personal interests.

Mental Acquiring information Intelligence and applying knowledge that can enhance decisionmaking and make life more productive, and enjoyable and add value to the world.

Ethical Issues Maintaining good health honors obligations to others. Skills developed should be used productively.

Information, education, and intelligence in making decisions can be used productively or misused in ways that violate others’ rights. Emotional Building interpersonal Utilizing one’s Intelligence relationships and personal skills and identifying the most ability to craft a effective ways to response can be respond to a situation used for personal to achieve a valued benefit or to outcome. benefit others.

Guiding Values Maintain health, wellness, and fitness. Acquire skills that add value to the world.

Wisdom is the most positive way in which mental intelligence can be productively used. Superior knowledge can be a major resource

Compassion and empathy in responding to others and personal insights about getting things accomplished. Spiritual Serving others, helping Stakeholders may Honoring others Intelligence them to become their have strong and putting very best, seeking the personal but service over selfoptimal long-term conflicting interest guides this creation of value for interests that need intelligence and others, and serving as a to be understood benefits others. conscience to guide the and resolved. This intelligence three other resolves ethical intelligences. dilemmas.

Comment Physical abilities and physical health contribute to the quality of one’s life and can provide the means to make life more enjoyable for self and others. Information and its application can be used for a multitude of purposes and can benefit individuals and organizations – but can also be used in a selfserving manner. Using these skills can be extremely helpful to assist individuals and organizations or can be a form of personal manipulation and control. Distinguishing between choices that produce outcomes that are difficult to measure and that have differing time frames can be challenging.

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Table 1 helps to clarify the key functions of each of the four intelligences and emphasizes the importance of SQ in pursuing ethical outcomes that have the optimal long-term benefit for society and for other stakeholders. SQ provides a sense of perspective that aligns decision-making with the core values and ethical obligations that are important in interpersonal relationships, organizational obligations, and intrapersonal responsibilities that people owe themselves. By providing a conscience to guide choices, options, and opportunities, SQ enables individuals to stay grounded in a world that may be very complex and chaotic.

TRANSFORMATIVE ETHICS AND SPIRITUAL INTELLIGENCE There were twelve ethical perspectives that comprise the original ethical framework known as Transformative Ethics (TE), which encompass key

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characteristics of frequently cited ethical viewpoints18. Scholars universally agree on the close relationship of leadership, ethics, and trustworthiness19. TE is based on subjective perceptions of trustworthiness but have parallel applications to the challenges which managers face as they lead using SQ in problem-solving. The same categorical missteps that result in breaches of trust challenge a leader to wisely and circumspectly consider all twelve ethical categories as they make decisions on behalf of their stakeholders. Each of the twelve ethical perspectives of TE honors an ethical duty owed to others20. Figure 1 is a representation of the twelve perspectives of TE.

Figure 1. A Model of Transformative Ethics.

18

Caldwell, C., (2018). Leadership, Ethics, and Trust. Newcastle upon Tyne, UK: Cambridge Scholars Publishing. 19 This point about the integration of leadership and trust is clearly the message of Burns, J. M., (2010) Leadership. New York: Harper Row. See also Caldwell, C., Hayes, L., and Long, D., (2010(. “Leadership, Trustworthiness, and Ethical Stewardship.” Journal of Business Ethics, Vol. 96, Iss. 4, pp. 497-512 regarding the integration of all three variables. 20 Anderson, V., and Caldwell, C., (2019). Humility as Enlightened Leadership. New York, NY: Nova Science Publishers, Inc, p. 239.

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Table 2. Spiritual Intelligence as a View of Transformative Ethics

Duty-Based

Category

Transformative Ethic / Theorist Universal Rules (Kant) Government Regulation (Hobbes and Locke) Virtue Ethics (Plato and Aristotle)

Outcome-Based

Self-Actualization (Maslow) Economic Efficiency (Adam Smith) Utilitarian Benefits (Bentham and Mills) Self-Interest (Protagoras) Care (Gilligan)

Relationship-Based

Contributing Liberty (Nozich) Distributive Justice (Rawls) Universal Rights (Rousseau and Jefferson) Religious Injunction (St. Augustine)

Ethical Responsibilities See that rules are uniformly and universally applied Obey those in positions of authority

SQ Themes Lead justly, love mercy, and exercise fairness

Recognize that all powers are appointed of God and are used according to His purpose Honor godly principles Prayerfully forgive, express and virtues gratitude, being humble, compassionate, and merciful See and appreciate value Heed the challenge to adopt all the of others qualities of humility; value others as God values them Help the organization to Recognize godliness of good create wealth business practices Maximize productive Improve usages of inclusivity, optimal benefit for awareness, steadfastness and collective persistence Protect one’s reputation Recognize that each day’s personal walk is one of sacred implications Pursue responsive Remember that the call to virtue empathy demands showing love for others Respect the free will of Recognize the divine accountability others that comes with bestowed authority Honor rights of the Know that the eye that is on the vulnerable sparrow is also on the weak and helpless Ensure others feel safe Know that serving God is to serve and free of fear others; Just stewards look to protect those in their care Treat others as God Apply principles of humility in would want them treated serving others in accordance with revealed precepts

SQ enables an individual to nurture an ethically-informed conscience, a process which may be enhanced with an understanding of how TE categorizes ethical considerations. TE encompasses a threefold taxonomy of ethical foundations including Duty (deontological, character), Outcome

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(utilitarian, competence), and Relationships (axiological, caring)21. Table 2 lists each perspective of TE by ethical foundation, followed by ethical responsibilities associated with the perspective. Examples of themes of SQ are also indicated for the three major ethical elements. As moral agents, leaders can apply an integrated approach to ethical understanding in preparing for the complex ethical dilemmas that often await the modern-day manager.

THE CHALLENGE OF ETHICAL DILEMMAS Every facet of life contains conflicts, challenges, and difficult decisions. The term, “ethical dilemma,” describes an ethical paradox or moral dilemma that makes the life of decision-makers difficult. These difficult problems have been described as “defining moments when managers must choose between right and right.22”

Unfortunately, ethical dilemmas also occur when every option seems to be a bad one – but a decision, nonetheless, needs to be made 23 . Such problems involve “choices between two or more courses of actions, each of which is a complicated bundle of ethical responsibilities, personal commitments, moral hazards, and practical pressures and constraints24.” Brady, F. N., (1999). “A Systematic Approach to Teaching Ethics in Business,” Journal of Business Ethics, Vol. 19, Iss. 3, p. 311. 22 Badaracco, J., Jr., (2016a). Defining Moments: When Managers Must Choose between Right and Right. Boston, MA: Harvard Business Review Press. 23 Ibid. 24 Ibid., p. 6. 21

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In his book, Managing in the Gray, the Harvard University professor of business ethics, Joseph Badaracco observed that ethical dilemmas and “gray areas” were “the hardest problems managers face at work... (and) the hardest problems we face in life.25” Such decisions about moral questions define the identity of leaders and organizations and affirm or disconfirm who they really are and what they truly believe26.

Facing challenging decisions demands the personal responsibility that leaders face in choosing a course of action, committing to that course, and living with the ultimate consequences of those decisions27. To avoid both the folly of impetuousness and the quagmire of indecision, Badaracco developed five questions to help leaders navigate what he called “the gray areas28.” The five questions are as follows:

What Are The Net, Net Consequences? Badaracco encouraged broad and deep thinking that would not only result in the maximum positive outcomes, but that would also achieve hope, joy, security, health, friendship and love, and living effectively29. The farreaching consequences of difficult decisions can impact the lives and 25

Badaracco, J., Jr., (2016b). Managing in the Gray: Five Timeless Questions for Resolving Your Toughest Problems at Work. Boston, MA: Harvard Business Review Press. 26 Ibid. 27 Ibid. 28 Ibid., p. 2. 29 Badaracco, J., Jr., (2016b), op. cit.

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livelihoods of many people. It is, therefore, paramount to be open-minded and flexible to achieve the most informed decision as possible 30 . Overlooking the long-term impacts of choices is a common error made in evaluating ethical decisions and can have profound consequences to a multitude of stakeholders.

What Are My Core Obligations? Ethical decision-making calls for managers to consider a holistic view of the impact of a decision’s consequences which affect not only the corporation, but workers, customers, and the community31. In contrast to determining the net, net consequences of the first question, the question of core obligations requires decision-makers to understand their primary duties and responsibilities to others32. To consider core obligations is to look beyond the concerns of economics and shareholder interests and to address the fundamental human rights of stakeholders to ensure that they can live free of needless danger, pain, and suffering33. By placing oneself in the shoes of all stakeholders, a manager can better relate to others’ and understand how others prefer to be treated34. Badaracco, J., Jr., (2016c). “How to Tackle Your Toughest Decisions", Harvard Business Review, Vol. 94, Iss. 9, pp. 104-40. 31 Ibid., p. 105. 32 Badaracco, J., Jr., (2016b), op. cit. 33 Ibid., p. 62. 34 Badaracco, J., Jr., (2016c), op. cit. 30

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To consider core obligations is to look beyond the concerns of economics and shareholder interests and to address the fundamental human rights of stakeholders to ensure that they can live free of needless danger, pain, and suffering

What Will Work In The World As It Is? Leaders who have significant responsibilities must avoid the trap of insisting on seeing the world as they want it to be35. Ethical decision-makers need to meet the hard realities of human nature head-on, or they betray those who depend on them36. Because sound plans do not always work out as anticipated, wise leaders understand that much of what happens is beyond their control37.

Limited resources and freedoms cause leaders to make painful choices38. Ethical decision-makers must consider the practicalities of situations, identify which solution allows for the most resilience and flexibility, and determine which option is most likely to work39. 35

Badaracco, J., Jr., (2016b), op. cit. Ibid., p. 80. 37 Ibid., p. 106. 38 Ibid. 39 Ibid. 36

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Who Are We? “Who are we?” is a crucial question that requires addressing several gray area problems and factors like the culture and the community in which an organization operates40. The reality is that relationships, values, and norms are potent forces41. Those forces shape, mold, and define human aspirations, and should not be ignored42. When making hard decisions, managers should assess the values and norms that define relationships and identify how the respective decision options affect the organization’s norms and values 43 . Addressing these values ultimately defines the true identity of an organization.

What Can I Live With? The fifth question reminds managers that a gray area decision-making process can be a complex intertwining of judgment and character 44 . However, at some point, all the available facts will have been gathered, the analysis of benefits and fallout for all alternatives will have been weighed, and the time ultimately will arrive for the manager to make the decision.

40

Badaracco, J., Jr., (2016b), op. cit. Ibid., p. 106. 42 Ibid., p. 106. 43 Ibid., p. 106. 44 Ibid., p. 124. 41

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Depending on the background and values of the decision-maker, the final decision will communicate much about a person’s character45. Ending the discussion of options and retreating into an empty room with a closed door and no distractions to reflect on what really matters -- both as a manager and as a human being46.

At some point, all the available facts will have been gathered, the analysis of benefits and fallout for all alternatives will have been weighed, and the time ultimately will arrive for the manager to make the decision. As an admonition to managers, Badaracco said, “In gray areas, your job isn’t finding solutions; it’s creating them, relying on your judgment” (italics in the original)47. Answering all five questions will help managers improve their ability to arrive at sound judgments, even when the inputs are incomplete or inconsistent and the correct responses are far from obvious48. Ethical dilemmas also occur when individuals know what they would like to accomplish but struggle in their efforts because of any of a a multitude of reasons. Failure to plan effectively, limited access to resources, a deficit in personal self-mastery, and the intervention of external variables may restrict the ability of individuals to honor their commitments and wellmeaning intentions.

RESOLVING ETHICAL AND MORAL CONFLICTS There are often no easy solutions when facing ethical dilemmas. At the same time, there are key insights available when attempting to resolve an

45

Ibid. Badaracco, J., Jr., (2016c), op. cit. 47 Ibid. 48 Ibid., p. 104. 46

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extremely difficult problem when no available options adequately addresses a situation. The following are ten recommendations when faced with ethical dilemmas.

Maintain a Long-Term Perspective in Evaluating Alternatives Although it is often compelling to seek solutions that are expedient and that resolve short-term needs, SQ confirms that such solutions may actually create a dysfunctional precedent. By conveying a message that “good enough for right now” is an acceptable operating policy and that a short-term accommodation is adequate, individuals and organizations can begin to follow a pattern of decision-making that often lead to disastrous long-term outcomes. Stephen R. Covey’s counsel, “Begin with the end in mind” applies well when considering the consequences of making tough decisions49.

Reflect on Your Most Important Core Values in Assessing Options Relying upon and understanding core values and principles when evaluating ethical decisions provides a foundation for assessing the implications of decisions and serves as a moral compass when the pressures 49

Covey, S. R., (2013). The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change. New York: Simon & Schuster.

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of a situation increase50. Although ethical dilemmas may involve a conflict between two core values or principles, there is often a hierarchy of moral values that provides direction as to the priority of those principles51.

Be Open and Transparent in Communications with Stakeholders When choices about decisions become difficult to make, it is in the interest of decision-makers to clarify assumptions, explain the rationale for decisions, and communicate the basis for one’s preference for a plan of action52. Being forthright and transparent in explaining the justification for one’s decision process may not please every stakeholder, but it honors the duties owed to stakeholders and builds trust53.

50

This approach to ethical dilemmas is called the Value Theory Approach. For a thorough discussion, see Schroeder, M. (2016). “Value Theory.” E. N. Zalta (Ed.) The Stanford Encyclopedia of Philosophy, Fall, 2016 and found online on April 17, 2020 at https://plato.stanford.edu/archives/fall2016/entries/value-theory. 51 Schroeder, M., (2016), op. cit. 52 The critical importance of clarifying the criteria for decisions made is explained thoroughly in Hosmer, L. T., (2010). The Ethics of Management (6th ed.). Boston, MA: McGraw-Hill Education. 53 Ibid.

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When Evaluating Alternatives, Emphasize the Overriding Purpose to Be Achieved

The consequences of options that conflict with an organization’s purpose not only sends a mixed message about priorities but raises doubts about both the validity of that purpose and the decision-maker’s ability to make decisions that make logical sense. Alternatives that seem to conflict with an organization’s fundamental reason for being must be weighed in context with other available options and the consequences associated with each option must be taken into consideration and explained to others54.

54

Ibid.

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Involve the Affected Parties in Identifying Options The stakeholders affected by decisions and involved in implementing options should have input into the process whenever possible. By so doing, these individuals become owners and partners in identifying problems associated with carrying out decisions and in implementing solutions 55 . Those stakeholders will be likely to support decisions when treated justly, even if they may not totally agree with the choices56. Treating stakeholders with candor and fairness is an ethical obligation.

Obtain as Much Information about the Consequences of Options as Possible Gathering information about rights affected, harms caused, and benefits created is a key element of a thorough ethical decision-making model57. This information is not only vital in assessing potential outcomes and consequences but is critical when explaining choices to stakeholders about decisions made. The rationale and justification for making ethical decisions

55

Ibid. and Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Bass. 56 Colquitt, J. A. & Rodell, J. B., (2011). “Justice, Trust, and Trustworthiness: A Longitudinal Analysis Integrating Three Theoretical Perspectives.” Academy of Management Journal, Vol. 54, Iss. 6, pp. 1183-1206. 57 Hosmer, L. T., (2010), op. cit.

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are based upon accurate information58. Note, however, that there is always a distinction between “facts” and their subjective interpretation59.

Identify What Can Be Done to Reduce the Negative Impacts of the Preferred Choice The obligation to minimize negative impacts of ethical dilemmas and to identify what can be done to reduce the damages of those choices are moral responsibilities of leaders60.

58

Ibid. The distinctions between facts and their interpretation is made by Friedrich Nietzsche, the brilliant German philosopher. See Nietzsche, F., (1968). The Will to Power. New York: Vintage, p. 267. 60 Badaracco, J., Jr., (2016a), op. cit. 59

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Many ethical decision-making models and ethical perspectives emphasize the importance of honoring obligations to stakeholders – including the obligation to minimize negative short-term impacts61.

Examine How and Why the Dilemma Occurred and Its Root Causes Although many problems that are generated are unanticipated, it is often possible to identify the factors that caused an ethical dilemma and the underlying root causes which may or may not have been anticipated and addressed at an earlier point in the decision process. This knowledge can be extremely important in preventing the recurrence of problems in the future62.

Develop a Realistic Plan of Action to Prevent Similar Problems in the Future It is far from sufficient to understand how and why a problem has occurred. Those who lead have a moral obligation to develop a realistic action plan to prevent the recurrence of the same problems. Although developing a plan of action is far easier than carrying out such a plan, the

Hosmer, L. T., (1995). “Trust: The Connecting Link Between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379-403. 62 Badaracco, J., Jr., (2016a), op. cit. 61

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best available information should be incorporated in developing a realistic solution to problems that have occurred63.

Create Systems and Structures That Address the Dilemma and Its Causes

Both organizational and interpersonal solutions need to be addressed and well-crafted policies, programs, systems, and structures need to be carefully planned and successfully implemented64. The resources to convert a well-conceived plan into action are absolutely necessary and ensuring that these resources are available sends the message that leaders are prepared to honor their duties to stakeholders65.

63

The difficulty in implementing an action plan is identified in Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 64 Ibid. 65 Ibid.

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The value of these ten recommendations is that they are practical, realistic, and necessary in order to confirm that decision-makers are committed to obligations owed to stakeholders. Each of these recommendations addresses issues associated with ethical responses in the face of dilemmas that may arise. The limitation, however, of these recommendations is that supposed “solutions” can be derived by analytical techniques or reliance on data. As Joseph Badaracco clearly has noted, although many of the hard problems facing decision-makers require analysis, “tools and techniques will not give you answers. You have to use your judgment and make hard choices66.”

Using SQ to address each of these ten recommendations can be critically important when applying these insights. SQ can not only reveal the depth of humanity, character, and integrity that a person possesses but can be a means of accessing personal inspiration based upon true principles. Despite the fact that these ten recommendations include elements of the scientific method for problem solving and the utilization of rational and objective thinking, the most effective decision-making is ultimately a subjective process involving the interpretation 67 of reality, the affirmation of personal values, and the revealing of one’s personal character and integrity68.

66

Badaracco, J., Jr., (2016b), op. cit. Nietzsche, F., (1968), op. cit. 68 Badaracco, J., Jr., (2016b), op. cit. 67

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CONCLUSION In his research about the search for truth and the pursuit of personal excellence, Abraham Maslow explained that traditional problem-solving techniques based upon cognitive thinking and rational analysis were often insufficient in achieving one’s highest potential69. As individuals seek to become more capable, more successful, and more fulfilled in life, their ability to access and apply correct principles can play a powerful role in that journey. SQ and the ability to access one’s heart of hearts or inner conscience can be a powerful tool in making decisions and in utilizing one’s intelligences and abilities. Although there are many ways that individuals can grow and progress in life, the ability to discern between right and wrong, truth and error, and “the good” and “the better” can make a profound difference in those individuals’ ability to optimize relationships, achieve career success, and establish a life of integrity. Honoring the elements that make up SQ, focusing on making moral and ethical decisions, and incorporating the ten recommendations contained herein can make a profound in achieving personal goals and in refining individual lives. The French philosopher, Teilhard de Chardin, has observed, “We are not human beings having spiritual experiences. We are spiritual beings having

69

Maslow’s insights about the process of discovering ultimate truths and achieving one’s highest potential are found in Maslow, A. H., (1976). Religions, Values, and Peak Experiences. New York: Penguin Publishing.

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human experiences.” 70Chardin’s insights and the writings of many other scholars have affirmed the importance of SQ in the quest for discovering the best version of ourselves, finding our voice, or achieving the most fulfilling and satisfying life possible. By making choices based upon correct principles, by following one’s conscience and inner voice of truth, and by honoring our obligations to society, to our associates, to ourselves, and to God, each person has the opportunity to discover the truth of de Chardin’s observation and achieve not only greater self-awareness but the ability to realize his or her greatness – a greatness that few people attain and a doorway to an identity far beyond what most individuals ever contemplate.

REFERENCES Badaracco, J., Jr., (2016a). Defining Moments: When Managers Must Choose between Right and Right. Boston, MA: Harvard Business Review Press. Badaracco, J., Jr., (2016b). Managing in the Gray: Five Timeless Questions for Resolving Your Toughest Problems at Work. Boston, MA: Harvard Business Review Press. 70

This quote which has been attributed to Pierre de Chardin is found in Koetzer, B., (2013). “We are Spiritual Beings Having a Human Experience.” The Clearing, September 5, 2013 and found online on April 23, 2020 at https://www.theclearingnw.com/blog/spiritual-beingshaving-a-human-experience.

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Bensaid, B. Machouche, S. B. T.& Grine, F., (2014). “A Qur’ranic Framework for Spiritual Intelligence.” Religions, 5:179-198. Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Bass. Caldwell, C., (2020). Communication, Meaning, and Identity: Moving Toward Discovery. Hauppage, New York: NOVA Publishing. Colquitt, J. A. & Rodell, J. B., (2011). “Justice, Trust, and Trustworthiness: A Longitudinal Analysis Integrating Three Theoretical Perspectives.” Academy of Management Journal, 54(6): 1183-1206. Covey, S. R., (2001). “Center on Principles,” Executive Excellence, 18(5): 17. Covey, S. R., (2013). The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change. New York: Simon & Schuster. Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press, Emmons, R. A., (2009). “Spirituality and Intelligence: Problems and Prospects.” The International Journal for the Psychology of Religion, 10(1): 57-64. Hacker, S. K. & Washington, M. (2017). “Going Beyond IQ and EQ to Develop Resilient Leaders.” Global Business and Organizational Excellence, 36(3): 21-28. Hawkins, D., (2008). Reality, Spirituality, and Modern Man. Sedona, AZ: Veritas Publishing Hosmer, L. T., (2010). The Ethics of Management (6th ed.). Boston, MA: McGraw-Hill Education. Hosmer, L. T., (1995). “Trust: The Connecting Link Between Organizational Theory and Philosophical Ethics.” Academy of Management Review, 20(2): 379-403. Joseph, C, & Sailakshmi, S., (2011) “Spiritual Intelligence at Work..” IUP Journal of Soft Skills. V(4): 21-30. King, D. B. (2009). “A Viable Model and Self-Report Measure of Spiritual Intelligence," David B. King & Teresa L. DeCicco (Eds.) The International Journal of Transpersonal Studies, 28: 68-85.

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Koetzer, B., (2013). “We are Spiritual Beings Having a Human Experience.” The Clearing, September 5, 2013 and found online on April 23, 2020 at https://www.theclearingnw.com/blog/spiritual-beings-having-ahuman-experience. Kumar, V. V. & Mehtam M., (2011). “Gaining Adaptive Orientation through Spiritual and Emotional Intelligence” in A. K. Chauhan & S. S. Nathawat (Eds.) New Facets of Positivism. Delhi, India: Macmillan Publishers., pp. 281-301. Maslow, A. H., (1976). Religions, Values, and Peak Experiences. New York: Penguin Publishing. Nietzsche, F., (1968). The Will to Power. New York: Vintage. O’Donnell, Ken (1997). Endoquality - as dimensões emotionais e espirituais do ser humano nas organanizões. Manaus, Brazil: Casa da Qualidade. [Endoquality - the emotional and spiritual dimensions of human beings in organizations] Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. Schroeder, M. (2016). “Value Theory.” E. N. Zalta (Ed.) The Stanford Encyclopedia of Philosophy, Fall, 2016 and found online on April 17, 2020 at https://plato.stanford.edu/archives/fall2016/entries/valuetheory. Vaughan, F., (2002). “What is Spiritual Intelligence?” Journal of Humanistic Psychology, 42(2): 16-33. White, L. P. & Wooten, K. C., (1983). “Ethical Dilemmas in Various Stages of Organizational Development.” Academy of Management Review, 8(4): 690-697. Wigglesworth, C., SQ21: The Twenty-one Skills of Spiritual Intelligence. New York: SelectBooks Inc. Zohar, D., (1997). Rewiring the Corporate Brain. San Francisco, CA: Berrett-Koehler.

In: Business Ethics Editors: Cam Caldwell et al.

ISBN: 978-1-53618-376-4 © 2020 Nova Science Publishers, Inc.

Chapter 12

ON BEING, DOING, AND BECOMING: THE ETHIC OF EXCELLENCE Cam Caldwell1,* and Verl Anderson2,† 1

American University of the Emirates, Dubai, United Arab Emirates 2 Dixie State University, St George, UT, US

The challenges of life sometimes result in delightful surprises as we succeed in overcoming what we thought were insurmountable obstacles. and marvel at achieving what we had previously thought was beyond our capacity to accomplish1. Those peak experiences are particularly satisfying, if not somewhat startling. We come to realize that the potential we have achieved was within our grasp and the experience is exhilarating and leaves us humbled2.

Corresponding Author’s E-mail: [email protected]. Corresponding Author’s E-mail: [email protected]. 1 Csikszentmihalyi, M., (2008). Flow: The Psychology of Optimal Experience. New York: Harper Perennial. 2 Maslow, A. H., (1976a). Religions, Values, and Peak Experiences. New York: Viking Press. * †

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The purpose of this chapter is to explore the importance of these rarified experiences in teaching us great lessons about our highest potential and to place those experiences within the framework of what Robert Solomon called “the ethic of excellence”. The chapter begins by identifying the importance of ethics as a purpose-related commitment to personal and organizational values that individuals must incorporate in the quest for excellence in their own lives and the lives of others.

Following that introduction, the chapter explores the three universal activities of being, doing, and becoming that are associated with that journey and that are fundamentally ethically rich activities. We conclude with a challenge to individuals to prepare themselves to pursue the peak experiences that allow them to become the highest and best versions of themselves.

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ETHICS AND EXCELLENCE In its many forms, ethics is about the pursuit of excellence as individuals and organizations strive to pursue worthy goals. Each of the many ethical voices “call out” a slightly different theme that is the metric by which desired outcomes are pursued.

Neil Brady suggested a framework for understanding business ethics as a set of six voices – each with obligations and priorities. Brady identified relationships, duties, and utilitarian outcomes at both the individual and the universal level of analysis as the basis for his model3. Other scholars have argued that ethics theory is far more complex than Brady had noted and have added ethical duties based upon individual human rights, self-development, and justice 4 . Although many of these ethical perspectives may overlap to some degree, sixteen separate ethical perspectives have been identified in business ethics alone. Figure 1 identifies the broad range of ethical perspectives that scholars have cited, including the primary contributing value of each of those perspectives.

Brady, F. N., (1999). “A Systematic Approach to Teaching Business Ethics.” Journal of Business Ethics, Vol. 19, Iss. 3, pp. 309-318. 4 See, for example, Hosmer, L. T., (1995). “Trust: The Connecting Link Between Organizational Theory and Philosophical Ethics.” Academy of Management Review, Vol. 20, Iss. 2, pp. 379403. 3

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Figure 1. Sixteen Ethical Perspectives.

Each of these perspectives places a priority on the achievement of slightly varying outcomes. Each perspective is purpose driven and goal oriented in its intent. The hierarchy of priorities and moral obligations associated with each of the perspectives varies to some degree from one perspective to another, but each of these perspectives serve to guide individual conduct as people interact one-on-one and in groups. Aristotle suggested that ethical conduct was important for the purpose of creating a better society. In the Nichomachean Ethics, Aristotle explained that eudaimonia, or the good life, was achieved by individuals living ethically and with a commitment to acquiring individual virtues. Eudaimonia equated with the achievement of happiness, personal flourishing, prosperity, and blessedness.

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To Aristotle, man was fulfilled by achieving inner peace or a serene and permanent happiness – rather than simply the gratification of the senses. Moral virtue, Aristotle believed, is the desire to live in the right manner and was achieved by adhering to a mean between excesses and deficiencies in human qualities5. To Aristotle, the human identity combined the physical and the metaphysical self. Men and women were successful by applying practical wisdom in relationships and in pursuing their self-interest without harming others in society.

Each ethical perspective contributes to achieving a value-oriented purpose that enhances the quality of life in society. In addition, the goals of 5

Aristotle & Irwin, T., (1999). Nichomachean Ethics (2nd ed.). Indianapolis, IN: Hackett Publishing.

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every ethical perspective are to enable individuals to honor their own highest potential while honoring others’ rights as well.

In framing a model for ethical decision making, LaRue Hosmer of the University of Michigan emphasized the importance of a rational approach to decision making that clarified the consequences of decisions on other stakeholders, the values utilized in making decisions, and the legal and economic factors that are taken into account The assumption that ethics is both purpose-driven, or instrumental, and values-oriented, or normative, has been a major part of the insights about life’s goals that have been emphasized by many writers.

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Viktor Frankl noted that having a purpose-driven life and being willing to take personal responsibility for self and for others were the ultimate priorities in one’s life and gave people the ability to endure almost inconceivable hardships.6 Abraham Maslow offered a similar perspective and identified the importance and the interplay of ends and means in achieving one’s ultimate capabilities and highest potential -- despite the realities of stress, anxieties, and failures in life.7

Stephen R. Covey noted the importance of each person becoming the best version of himself or herself by finding his/her unique significance and then taking the responsibility of helping others to also achieve their potential. Maintaining a positive perception about the importance of life and learning from disappointments as well as successes can provide clarity about life’s ultimate purpose and can empower people to hang on and withstand life changing trials and to learn precious lessons from those experiences. Erich Fromm suggested that each person is able to add to others’ lives when (s)he develops within his or her self the understanding to appreciate others’ individual worth – as well as the capacity to appreciate one’s own value. The capacity to love others and to serve them begins, Fromm explained, only after a person first recognizes his or her own potential greatness and genuinely has developed the ability to see his or her worth, despite personal shortcomings or imperfections. 6 7

Frankl, V., (1992). Man’s Search for Meaning. Cutchogue, NY. Buccaneer Books. Maslow, A. H., (1976), op. cit.

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The recognition of others’ worth and the ability to appreciate others and their importance is also widely recognized as a fundamental principle of humility. Combined with a commitment to constantly learn, to fulfill one’s own potential, and to serve others as they strive to grow, appreciation for others and love of oneself are the pillars of both love and humility and enable individuals to constantly improve while making the world better as well.

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In the writings of each of these scholars, the purpose of ethical conduct has been to encourage individuals to understand how they can best achieve morally virtuous goals that benefit others and create added value while developing a perspective about oneself that was ennobling and enriching. By achieving these integrated perspectives, individuals are able to honor what several scholars describe as “covenantal” obligations that are sacred responsibilities in fulfilling life’s true purpose.

It is in the constant and unending pursuit of excellence that individuals honor themselves, benefit others, and create a society that is not only fulfilling but that allows people to grow and to flourish. As Stephen R. Covey noted, this achievement of excellence begins “from the inside-out” and requires individuals to live their lives in harmony with principles that are unbreakable truths with profound natural consequences8.

8

Covey. S. R., (1992). Principle-Centered Leadership. New York: Simon & Schuster.

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By understanding that individuals must do their own personal improving before they can be ready to help others, those who do that very challenging individual work recognize that they are convincing and effective only when they are also authentic role models of the truths that they advocate

By understanding that individuals must do their own personal improving before they can be ready to help others, those who do that very challenging individual work recognize that they are convincing and effective only when they are also authentic role models of the truths that they advocate9.

THE THREE PERSONAL STATES In this section, we address the importance of the personal growth process that is the foundation of personal excellence and ethical conduct. It is by recognizing the importance of three critically important personal stages in their development that individuals are able to evolve, grow, and improve in the journey toward becoming their best selves.

9

Covey, S. R., (2004), op. cit.

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ON BEING The essence of a person is one’s identity and the qualities that make up personal values, individual direction, defined priorities, and ultimate purpose10. It is in the process of understanding one’s identity that a person can recognize that which makes him or her distinctive and unique. The identity is made up of the ways in which a person defines himself or herself and the associations that make up that definition. Each individual is a member of a complex set of categories – differentiated by age, by gender, by ethnic background, by social circle, by religious affiliation, by country of origin, by sexual preference, by political preference, and by a variety of other classifications. Identities include those defining characteristics that tend to be central and enduring – in addition to distinguishing a person from others.

An identity defines the. “being” of a person and who (s)he is during any given moment in time. Although a person’s self-assessment and self-image may change over time, the identity is often thought of as the defining set of standards by which an individual holds herself or himself accountable under a given set of circumstances. The following are six core beliefs about the nature of the identity11.

10 11

Burke, P. J. & Stets, J. E., (2009). Identity Theory. Oxford, UK: Oxford University Press. Caldwell, C., (2020). Communication, Meaning, and Identity. Hauppage, NY: NOVA Publishing.

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2. Beliefs about Others. The relationships that we have with significant others in the world, the duties that we owe and that we believe are owed to us, and the extent of our identification as a member of one or more groups make up this category13. 3. Beliefs about Universal Laws. For each of us, our assumptions about the way in which the world is governed and its determining values and priorities have a profound impact on our lives. These assumptions may also include whether we believe in a divine force, the nature of that force, and how that belief affects the criteria by which we should live our lives14.

12

Burke, P. J. & Stets, J. E., (2009), op. cit. See Senge. P. M., (2006). The Fifth Discipline: The Art & Practice of the Learning Organization. New York: Doubleday Business. 14 Caldwell, C., (2020), op. cit. 13

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4. Beliefs about the Past. Our personal and family history, the significant emotional events, the peak experiences and most painful events, and the degree to which the past has influenced who we are influence what we believe about the future15. 5. Beliefs about Current Reality. How we assess our present situation, the context of our relationships, the problems and opportunities that confront us in the here and now, and how we stand relative to other identified individuals and groups affect our view of current reality

How we assess our present situation, the context of our relationships, the problems and opportunities that confront us in the here and now, and how we stand relative to other identified individuals and groups affect our view of current reality16. 6. Beliefs about the Future. The future and how we view it is an extension of our status quo but also includes our hopes and dreams 15 16

Ibid. Burke, P. J. & Stets, J. E., (2009), op. cit.

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Cam Caldwell and Verl Anderson about what is likely and/or possible in our lives. The future can include our plans for changing ourselves and the world as well as our fears about weaknesses and threats that may beset us17. The future and how we view it is an extension of our status quo but also includes our hopes and dreams about what is likely and/or possible in our lives.

These six beliefs provide a foundation and context for understanding one’s values, ethical priorities, and perceptions about duties owed to and owed from others. An individual’s identity incorporates these factors in establishing the standards which they set for personal behavior.

ON DOING We are not only human “beings” but humans who are “doing” as well. By recognizing who we are, we are then able to establish a clearer sense of our potential 18 . Understanding one’s identity provides a foundation for achieving what Maslow called “peak experiences,” or the achievement of a state of self-understanding, inner peace, and personal fulfillment that cause

17 18

Senge. P. M., (2006), op. cit. Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press.

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individuals to be stunned, humbled, and grateful for what (s)he is able to accomplish19.

That which a person chooses to do in using his or her time defines that person’s self-discipline, self-mastery, and integrity20. The choices associated with how we invest the limited hours of our lives reflect the values that we believe really matter – as opposed to those values to which we give lip service but which we do not commit our time.

The Theory of Reasoned Action confirms that our identity is made up of that which we ultimately choose to do21. It is how we strive as we convert what we feel and believe to intentions and actual behaviors. The degree of

19

Maslow, A. H., (1992), op. cit. Burke, P. J. & Stets, J. E., (2009), op. cit. 21 Fishbein, M. & Ajzen, I., (2016). Predicting and Changing Behavior: The Reasoned Action Approach. New York: Routledge. 20

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our beliefs, values, and intentions are ultimately manifest by what we actually do. Figure 1 shows the interplay between our actions and those factors that influence our behaviors.

Figure 1. Theory of Reasoned Action

What we cognitively believe and how we feel are in constant interaction with our intentions and our desire to translate those beliefs and feelings into behavioral choices. Although our intentions may be the best available predicter of our behaviors, there are factors that intervene, including the strength of our commitment to what we claim to believe, that ultimately determine how we convert those intentions into conduct22. It is far from enough in life to be well intended, and what a person chooses to actually do reflects that person’s preparation, commitment, and ultimate willingness to grow and to evolve. When one’s identity is strong, (s)he is then able to translate desires, hopes, and wishes into actions. Although those actions may not always yield an intended result, they provide an opportunity to learn and grow – thereby enhancing the individual’s ability to achieve a desired goal.

22

Ibid.

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One of the great personal accomplishments of life is to discipline oneself to the point where one achieves peak experiences. Those experiences give a person a glimpse of who (s)he truly is and who (s)he can potentially become. Peak experiences affirm an individual’s potential and validate one’s identity. In writing about such experiences, Abraham Maslow explained their impact23. “One can and does learn from such experiences that e.g., joy, ecstasy, and rapture do in fact exist and that they are in principle available for the experiencer, even if they have never been before. Thus, the peaker learns surely and certainly that life can be worthwhile, that it can be beautiful and valuable. There are ends in life i.e., experiences that are so precious in themselves as to prove that not everything is a means to some end other than itself.”

Ralph Waldo Emerson wrote that our ability to accomplish tasks that we are not fully aware that we are capable of achieving is nonetheless within our grasp. He wrote, “That which we persist in doing becomes easier, not that the nature of the thing has changed but that our power to do is increased24.” The growth process comes by making a personal investment and paying the price to achieve success.

23 24

Maslow, A. H., (1976a), op. cit. “Ralph Waldo Emerson.” BrainyQuote. Found online on May 10, 2020 at https://www. brainyquote.com/authors/ralph-waldo-emerson quotes.

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As individuals focus on improving what they can do, as they strive to learn and increase their knowledge and understanding, and as they persist with integrity to be diligent in their efforts, they often achieve what they previously perceived to be miraculous results. In this quest for personal excellence, they honor their moral responsibility to themselves and to the world and become what Abraham Maslow called being “fully human”. It is this inner drive for self-transcendence that is the fulfillment of human potential – and the outcomes of the process affirm one’s true identity and personal integrity.

ON BECOMING Each person has the moral and ethical obligation to constantly improve and to become the best version of his or her highest potential. Despite that obligation, we often are afraid of what becoming truly great actually means

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and what it requires. Marianne Williamson addressed this concern that limits many individuals25. Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, “Who am I to be brilliant, gorgeous, talented, fabulous?” Actually, who are you not to be? You are a child of God. Your playing small does not serve the world. There’s nothing enlightened about shrinking so that other people won’t feel insecure around you. We are all meant to shine, as children do. We were born to make manifest the glory of God that is within us. It’s not just in some of us; it’s in everyone. And as we let our own light shine, we unconsciously give other people permission to do the same. As we’re liberated from our own fear, our presence automatically liberates others.

Paralyzed by the reality that we are far greater than we have previously been, many individuals justify a mediocre effort by denying that they have the potential that many scholars have described as sacred and profound26. Perhaps by denying that they are capable of greatness makes it more tolerable for such individuals to accept the limitations that others would impose upon them.

Williamson, M., (1996). A Return to Love: Reflections on the Principles of “A Course in Miracles.” New York: Harper One. 26 Ibid. 25

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In our heart of hearts, however, we cannot deceive ourselves if we are truly honest 27 . Through being honest we can acknowledge that our past efforts have been imperfect, that we have allowed ourselves to coast or be distracted, and that we recognize that we have far greater capabilities than we have demonstrated.

In the process of becoming greater, individuals who approach their highest capabilities do so by focusing outside themselves in the service of others. Abraham Maslow identified eight ways that he listed as critical requirements for those noble individuals who had the courage and integrity to seek to achieve their highest potential28.

7. Becoming one’s best requires focused commitment. Efforts demand total dedication to a valued outcome. The emphasis on what is to be achieved is on a selfless purpose, rather than on self-gratification.

Caldwell, C., (2020), op. cit. This concept was also identified in Samuel Clemens’ classic, The Adventures of Huckleberry Finn. 28 Maslow, A. H., (1992), op. cit. 27

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8. Self-actualization is a constant process. Excellence requires staying on track in the ongoing pursuit of growth and improvement. Choices must be made that reinforce the goals to be achieved and must be consistent with their purpose.

9. Self-discovery demands self-awareness. The inner self must find its own voice and discover what matters to it, rather than reflecting the preferences of significant others in that person’s life.

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11. Being courageous is absolutely essential.

Growth can only come when individuals listen to their inner voices and follow them. Being willing to be different, unique, and apart from the crowd is a necessity if one’s inner voice demands taking a position that others might not like or understand. 12. Achievement demands preparation. It is not enough to achieve a peak experience or a major accomplishment. Self-fulfillment and self-actualization require a full investment of one’s energy,

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consistent preparation, and the unwillingness to settle for second rate results. It is a journey, not an end state.

13. Peak experiences necessitate preparation.

The discovery process is often a surprise and is achievable only when individuals develop the ability to recognize what they are experiencing. That preparation brings elation and satisfaction when individuals are able to understand what has occurred. 14. Self-discovery demands letting go. Each person who seeks to become her or his best must understand her or his own self well enough to be able to be divested from defense mechanisms and internal barriers to growth that hamper personal potential.

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The process of becoming does not take place in one great moment29. Becoming involves a constant awareness of who one is, the importance of seeking to create a better self and a better world, and the dedicated commitment to refine one’s capabilities in the quest to go beyond oneself to add value to others30. Implicit in this becoming is the recognition that there are moral imperatives that must be pursued in order to achieve human fulness and the personal fulfillment that comes from becoming one’s true self. This quest for becoming demands a sense of personal capacity to make a difference for others and to add value in life. In describing the essence of this becoming, George Bernard Shaw offered the following insight31.

29

Maslow, A. H., (1976), op. cit. Maslow, A. H., (1992), op. cit. 31 This famous quote comes from Shaw, G. B., (1890). Man and Superman: A Comedy an Philosophy. New York: Penguin Books. 30

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This is the true joy in life being used for a purpose recognized by yourself as a mighty one the being thoroughly worn out before you are thrown on the scrap heap the being a force of nature instead of a feverish, selfish little clod of ailments and grievances complaining that the world will not devote itself to making you happy. I am of the opinion that my life belongs to the whole community, and as long as I live it is my privilege to do for it whatever I can. I want to be thoroughly used up when I die, for the harder I work the more I live. I rejoice in life for its own sake. Life is no “brief candle” for me. It is a sort of splendid torch which I have got hold of for the moment, and I want to make it burn as brightly as possible before handing it on to future generations.

As individuals seek to be and do all that they can to improve themselves and serve others, they also become different persons as well. They uncover a version of themselves that makes life joyful, centered, and aligned with true principles. The discovery of a potential that they dreamed might be possible to achieve becomes much more than enervating. That experience opens their eyes to even greater horizons and opportunities previously never fully imagined – and creates a passion to excel even further.

The universal nature of each of these three stages begins with a clear understanding of one’s identity and her or his sense of self. Until individuals can see beyond their foibles, past mistakes, and shortcomings, they are unable to raise their vision and realize what is actually possible in their lives. For each person, the opportunity exists to “turn to the light” or “to change

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their mind” about themselves, their capabilities, and the world in which they interact with others.

The basis for self-discovery, for constant improvement, and for raising the bar of personal performance is much akin to the religious concept of repentance32. The capacity to examine what needs to change in one’s life leads to a personal commitment that one undertakes – sometimes struggling and reverting to past errors but eventually, when finally, successful, putting off the past and rising above self-destructive and ineffective behaviors33. Out of the process of such personal refining, individuals come to understand themselves more fully, grow closer to God, and redefine their vision about what life means. Through this change process, individuals become more responsible and more able to find harmony with the world and contribute to solving its problems.

THE CHALLENGE It is not enough for any man or woman to be satisfied by settling for a suboptimal level of personal achievement when greater accomplishments are possible. The failure to recognize what one can become is a major Caldwell, C., Dixon, R. D., Atkins, R., and Dowdell, S. M., (2011). “Repentance and Continuous Improvement: Ethical Implications for the Modern Leader.” Journal of Business Ethics, Vol 102, Iss. 3, pp. 473-487. 33 Caldwell, C. (2018). Leadership, Ethics, and Trust. Newcastle upon Tyne, UK: Cambridge Scholars Publishing 32

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limiting factor in one’s self-appraisal and a source of eventual unhappiness and regret.

Those individuals who view their lives as personal callings to make the world better serves as an inspiration for those who have not yet caught the vision of their own opportunities or potential. Finding one’s voice, or one’s unique significance, can unlock the ability of individuals to discover their own greatness and to realize who and what they can actually become.

The great challenge for each individual is to take himself or herself seriously – to be committed enough to honestly assess their strengths and to make the effort to refine their abilities. By responding to the inner voice that affirms their inherent worth and their ability to make themselves into

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someone far greater than they have ever been, each person can discover the personal joy and inner peace that comes from not only making their own lives better but helping others to become their best as well.

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ABOUT THE EDITORS Cam Caldwell received his PhD in Human Resources and Organization Behavior from Washington State University where he was a Thomas S. Foley Graduate Fellow. He holds the Senior Professional and Global Professional in Human Resources professional certifications. Prior to earning his PhD, he worked as a Human Resource Director, City Manager, and Management Consultant for more than twenty years. This is his Eleventh book and he has published many papers about a variety of management and leadership topics. Dr. Cam Caldwell – University of Illinois Springfield Verl Anderson obtained his doctorate degree in Business Administration from Arizona State University. He is currently a professor in Management and International Business at Dixie State University, St George, Utah. He has taught university courses as a visiting professor in New Zealand and four universities in China. He has published 34 articles in the past two years on leadership, ethics, China culture, kindness, strategic management, and social responsibility. His research interests include China culture and international cultures. He has traveled extensively, and annually takes groups on cultural/educational tours to China and New Zealand. Dr. Verl Anderson – Dixie State University

INDEX # 8th habit, 37, 38, 39, 42, 50, 57, 73, 83, 113, 127, 168, 187, 235, 246, 314, 339, 354, 368, 379

A accreditation, 7, 199, 205, 212, 371 administrators, 202, 204, 206, 207, 213, 214, 215 antisocial behavior, 281, 288, 303 attitudes, 46, 59, 224, 227, 233, 238, 279, 284, 287, 306, 389 authenticity, 100, 174, 231, 317 awareness, 165, 168, 174, 227, 239, 268, 269, 296, 311, 322, 364

B Badaracco, 323, 324, 325, 326, 327, 328, 333, 334, 336, 338, 372 business education, 19, 191, 192, 193, 195, 196, 213, 215, 216

business ethics, viii, 2, 3, 8, 16, 21, 57, 205, 208, 285, 324, 343, 380 businesses, 28, 41, 44, 131, 147, 213

C Cameron, 28, 30, 38, 41, 47, 49, 56, 116, 127, 236, 238, 246, 259, 274, 377 capitalism, 44, 55, 371 career success, 337 categorization, 285, 306, 308 categorization theory, 285, 308 challenges, viii, 17, 18, 19, 52, 62, 65, 68, 69, 76, 78, 80, 82, 132, 160, 161, 183, 221, 222, 239, 313, 321, 323, 341 changing environment, 44 Christensen, Clayton M., 8, 41 citizens, 22, 32, 36, 42, 56, 145, 303, 376 colleges, 192, 210, 213, 214, 215, 216, 379 communication, 68, 98, 108, 210, 271 community, 14, 19, 92, 100, 138, 145, 192, 204, 211, 213, 214, 230, 251, 325, 327, 365 compassion, 101, 116, 121, 171, 231, 232, 251, 253, 270, 313

Index

396 compensation, 89, 109, 202, 261 competitive advantage, vi, 7, 17, 20, 37, 41, 42, 59, 78, 90, 91, 111, 131, 249, 250, 254, 256, 258, 260, 267, 272, 274, 275, 388 competitors, 76, 116, 131, 148, 256, 257 complement, 102, 204, 224 complexity, 21, 66, 242, 244 conflict, 106, 150, 200, 278, 298, 308, 330, 331 consciousness, 168, 174, 312 consistently focused, 49, 50 construction, 301, 302, 307 conventional, 31, 148 cooperation, 63, 94, 100, 216 cost, 15, 90, 95, 109, 111, 112, 131, 147, 153, 156, 194, 196, 214, 222, 230, 244, 256, 262, 280, 374 cost saving, 147, 230 cost-benefit analysis, 95 Covey, Stephen R., 21, 73, 113, 168, 310, 314, 329, 347, 349 culture, 36, 122, 193, 224, 225, 227, 234, 238, 239, 252, 278, 283, 302, 307, 327, 393 curricula, 11, 209, 212 curriculum, 12, 193, 202, 205, 207, 208, 211 customer service, 104, 194, 236 customers, 27, 33, 35, 38, 41, 42, 48, 49, 54, 76, 78, 143, 145, 200, 221, 249, 256, 257, 279, 325

D diversity, 98, 278, 288, 290, 293, 296, 299, 300, 305 dynamically capable, 48

E economic consequences, 149 education, 43, 55, 191, 195, 204, 208, 212, 214, 319, 371, 373, 390 educational experience, 206 eight guiding ethical principles, 235 Emerson, Ralph Waldo, 357 emotional health, 93, 100 emotional intelligence, 64, 66, 84, 121, 171, 313, 316, 319, 340, 381, 384 emotional responses, 317 empathy, 101, 121, 171, 231, 232, 251, 253, 319, 322 employability, 278, 287, 305 employer actions, 226 employment, 89, 90, 108, 109, 112, 113, 115, 116, 198, 203, 222, 244 employment relationship, 108 employment-at-will, 89, 116 empowerment, 194, 224, 227, 233 encouragement, viii, 21, 310 environment, 40, 45, 116, 145, 175, 226, 291, 293 equity theory, 96 ethical egoism, 134 ethical implications, 30, 33, 34, 64, 68, 233, 244, 273 ethical issues, 10, 150, 226, 240, 241, 243 ethical standards, viii, 3, 8, 31, 101, 140, 231, 254, 256, 267 ethical stewardship, v, 18, 33, 48, 52, 55, 56, 71, 83, 105, 108, 127, 159, 160, 161, 163, 164, 167, 171, 174, 176, 177, 179, 180, 183, 184, 186, 188, 223, 246, 321, 375, 376, 385 ethical virtues, 255 ethics, viii, 3, 7, 11, 12, 15, 16, 18, 21, 23, 39, 47, 51, 58, 62, 69, 92, 99, 101, 132, 204, 205, 208, 216, 217, 218, 232, 235, 239, 241, 242, 251, 254, 268, 295, 299,

Index 308, 321, 342, 343, 346, 371, 375, 380, 382, 393 ethnic background, 351 evidence, vii, viii, 2, 3, 7, 16, 22, 29, 54, 61, 79, 80, 103, 106, 116, 117, 126, 159, 194, 195, 249 exchange relationship, 108, 143, 265 external environment, 44, 45, 234

F fear, 174, 175, 181, 289, 290, 322, 359 feelings, 96, 169, 302, 316, 356 financial, 28, 131, 147, 153, 194, 204, 234, 244, 262, 273 financial resources, 204 Frankl, Viktor, 347 friendship, 17, 91, 92, 93, 94, 95, 96, 98, 99, 100, 101, 102, 104, 105, 108, 115, 118, 127, 324, 377 Fromm, Erich, 166, 347

G Gilligan, 32, 57, 71, 84, 266, 275, 322, 381 global competition, 54 global economy, 249 goal attainment, 310, 313 governance, 30, 33, 35, 36, 51, 59, 163, 390 graduate students, 196, 199, 207, 208 guidelines, 18, 132, 146, 150, 262 guiding principles, 19, 182, 223, 241

H health, 162, 170, 297, 315, 319, 324 hedgehog concept, 50 Hedonism, 135 helping behavior, 284, 304 hierarchy of needs, 167

397 hiring, 113, 115, 131, 147, 203, 207 honesty, 2, 69, 163, 362 Hooper, 16, 28, 32, 33, 34, 38, 39, 45, 56, 57, 377, 382 Hosmer, 9, 18, 24, 29, 30, 38, 47, 51, 58, 66, 67, 72, 73, 79, 80, 81, 84, 132, 137, 138, 139, 140, 141, 149, 151, 154, 157, 226, 233, 235, 241, 243, 244, 246, 254, 258, 259, 261, 262, 264, 268, 269, 272, 273, 275, 278, 302, 306, 330, 332, 334, 339, 343, 346, 368, 382, 383 Hosmer Decision-Making Model, 30, 138 human, vii, viii, 7, 43, 73, 78, 88, 90, 103, 109, 118, 123, 126, 148, 167, 168, 170, 175, 222, 236, 246, 252, 278, 286, 299, 304, 311, 312, 325, 326, 327, 328, 337, 338, 340, 343, 345, 354, 358, 364, 383 human capital, 43 human experience, 338 human motivation, 286, 304 human resources, 278 human right, 73, 252, 325, 343

I identity, 20, 96, 102, 106, 182, 278, 279, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 295, 296, 297, 298, 299, 300, 301, 302, 304, 306, 307, 308, 324, 327, 338, 345, 351, 354, 355, 356, 357, 358, 365 identity threat, 20, 278, 280, 281, 282, 286, 288, 289, 293, 294, 296, 299, 300, 301, 302, 303, 304, 305, 307 individual differences, 281, 288, 303 individual rights, 140, 229 individualism, 135, 136, 156, 373 innovator, 44, 56, 378 institutions, vii, viii, 7, 10, 11, 12, 27, 36, 57, 198, 200, 381

Index

398 integration, 45, 46, 51, 161, 163, 236, 267, 292, 306, 312, 321 integrity, iv, vii, 2, 7, 28, 29, 61, 69, 74, 100, 120, 155, 160, 216, 229, 230, 239, 247, 251, 255, 258, 260, 262, 265, 317, 336, 337, 355, 358, 360, 362, 375, 388 intelligence, 121, 169, 171, 300, 310, 311, 315, 316, 318, 319 internal barriers, 363 internal integration, 45, 46, 161, 236 interpersonal relations, 16, 28, 78, 101, 113, 122, 164, 239, 272, 317, 319, 320 interpersonal relationships, 16, 28, 78, 101, 113, 122, 239, 272, 317, 319, 320 investment, 43, 55, 82, 90, 96, 110, 142, 177, 179, 357, 362, 373

J job satisfaction, 281, 299

K

loyalty, 1, 7, 61, 90, 110, 112, 115, 145, 161, 235, 244

M management, 3, 7, 9, 21, 47, 49, 53, 56, 72, 89, 109, 111, 113, 114, 163, 193, 195, 203, 204, 226, 236, 272, 281, 289, 306, 377, 393 marketplace, 256, 273, 302 Maslow, Abraham, iv, viii, 165, 167, 314, 337, 347, 357, 358, 360 mental intelligence, 170, 315, 316, 319 moral behavior, 16, 28, 29, 47, 137, 285, 303 moral development, 31 moral hazard, 323 moral identity, 285, 303 moral imperative, 364 moral standards, 47, 244 morality, viii, 140, 268, 311 motivation, 31, 161, 167, 173, 311

N

Kofman, Fred, 173

L leadership, 16, 17, 18, 27, 28, 29, 30, 33, 35, 38, 39, 40, 41, 42, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 56, 57, 58, 62, 63, 69, 73, 75, 77, 78, 79, 80, 81, 82, 90, 110, 114, 121, 122, 123, 126, 160, 161, 162, 164, 174, 177, 180, 181, 183, 189, 204, 235, 239, 252, 254, 259, 267, 281, 293, 304, 305, 321, 376, 377, 379, 382, 384, 388, 393 leadership style, 18, 51, 80, 160 learning, 42, 43, 171, 175, 181, 202, 203, 211, 212, 301, 307, 347, 380 learning culture, 43, 203

natural laws, 169, 315 negotiation, 88, 288, 307

O openness to experience, 298, 299 opportunities, 23, 50, 145, 164, 182, 183, 198, 204, 211, 213, 230, 234, 283, 313, 320, 353, 365, 367 organizational culture, 20, 36, 40, 41, 44, 45, 46, 52, 58, 74, 84, 90, 110, 116, 129, 161, 174, 189, 237, 239, 247, 262, 275, 278, 279, 280, 281, 282, 283, 291, 292, 294, 297, 301, 302, 303, 308, 387 organize, 278, 282, 300

Index ownership, 36, 150, 224, 227

P participants, 36, 99, 104, 111, 143, 176, 177, 179, 227 peak experience, 21, 167, 183, 341, 342, 353, 354, 357, 362 performance indicator, 227, 233, 238 personal accomplishment, 357 personal benefit, 105, 136, 147, 319 personal development, 105, 165, 183, 311 personal goals, 135, 309, 337 personal identity, 182 personal qualities, 121 personal relationship, 81, 92, 239 personal responsibility, 15, 108, 324, 347, 362 pre-conventional, 31 problem solving, 313, 336 profitability, 34, 35, 41, 50, 90, 109, 194 psychology, 53, 57, 214, 281, 307, 382 questioning, 288

R rational egoism, 136 reality, 7, 45, 150, 205, 212, 215, 227, 268, 312, 327, 336, 353, 359, 362 reciprocity, 102, 108, 134 recognition, 90, 95, 110, 115, 178, 264, 272, 310, 348, 364 recommendations, iv, viii, 17, 21, 91, 118, 124, 207, 215, 310, 329, 336, 337 relational dialectics theory, 98 relationship stage theory, 97 religion, 277, 286, 287, 289, 290, 292, 293, 296, 297, 299, 300, 304, 306, 310 religious beliefs, 278, 285, 300 religious identity, vi, 20, 277, 278, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289,

399 290, 291, 292, 293, 294, 296, 297, 298, 299, 300, 301, 302 reputation, 69, 160, 196, 230, 322 resource management, 103, 299 resource policies, 90, 109, 148 resources, 49, 77, 101, 203, 225, 230, 233, 252, 263, 281, 312, 326, 328, 335 response, 19, 39, 64, 66, 192, 227, 233, 244, 286, 288, 295, 298, 301, 316, 319 rights, iv, 68, 73, 100, 101, 135, 137, 138, 139, 140, 149, 229, 230, 231, 232, 236, 251, 252, 260, 261, 262, 269, 322, 332, 346 rules, 100, 161, 230, 251, 252, 262, 298, 322

S school, 12, 19, 191, 192, 193, 194, 195, 196, 201, 202, 203, 204, 205, 206, 207, 208, 211, 212, 213, 214, 216, 217, 218, 377, 379, 380, 382, 384 self-actualization, 73, 101, 167, 177, 179, 231, 234, 253, 265, 322, 361, 362 self-assessment, 121, 173, 309, 351 self-awareness, 270, 313, 338, 361 self-concept, 288, 292, 301 self-discovery, 124, 182, 361, 363, 366 self-improvement, 21, 171, 181, 310 self-interest, vii, 3, 8, 18, 132, 133, 134, 137, 138, 142, 143, 146, 147, 148, 149, 150, 152, 153, 154, 161, 166, 251, 260, 264, 274, 319, 345 self-knowledge, 171, 180 services, iv, 33, 48, 221, 256, 279 Shaw, George Bernard, 364 sixteen ethical perspectives, 228, 241, 344 social cognition, 289, 306 social contract, 10, 16, 57, 162, 380 social exchange theory, 95

Index

400 social identity theory, 96, 285, 291, 298, 307, 308 social problems, 14, 214 social psychology, 102, 285 social responsibility, 204, 211, 393 spiritual intelligence, vi, 20, 171, 172, 182, 309, 310, 311, 313, 317, 319, 320, 322, 339, 340, 373, 383, 390 spirituality, 289, 299, 304, 306, 311, 312, 313 stock price, 81, 238 supervisors, 1, 112, 113, 118, 120, 125, 225, 257, 277 survival, 40, 41, 42, 203, 260 sustainability, 47, 49, 56, 272, 377

T teaching effectiveness, 200, 210 teaching evaluation, 208 teaching experience, 207 teaching quality, 202 team members, 27, 51, 166 Teilhard de Chardin, 337 Theory of Reasoned Action, 355, 356 thick cultures, 279, 283, 292, 295, 296, 297 thin cultures, vi, 20, 277, 278, 279, 283, 291, 292, 293, 296, 297, 298, 300, 301, 302 threats, 278, 281, 285, 286, 294, 306, 307, 354 training, 43, 55, 115, 147, 195, 202, 210, 223, 224, 227, 233, 373 transcendent leadership, v, 18, 159, 160, 173, 174, 175, 176, 177, 178, 179, 180, 183, 184, 188, 189, 388 transformative ethics, vi, 4, 20, 23, 80, 83, 186, 234, 245, 249, 250, 251, 254, 255,

263, 267, 268, 273, 274, 320, 321, 322, 371, 375 transformative philosophy, v, 16, 28, 29, 32, 33, 34, 38, 39, 45, 56, 57, 377, 382 treatment, 116, 145, 231, 259, 296 trustworthiness, vii, 4, 33, 48, 52, 55, 56, 79, 230, 239, 251, 254, 260, 321, 375, 376 turnover, 90, 104, 109, 249, 257, 299

U universities, 192, 210, 213, 214, 215, 216, 393 utilitarian ethics, 230, 251, 261

V virtue ethics, 100, 229, 234, 251, 259, 322 virtuous moral continuum, 47 vision, 63, 170, 172, 258, 313, 365, 366, 367

W wealth, 34, 50, 52, 71, 134, 147, 148, 150, 151, 156, 161, 163, 240, 322, 373 welfare, 92, 95, 101, 104, 108, 114, 116, 136, 161, 164, 171, 181, 183, 231, 238, 252, 253, 264, 265 Williamson, Marianne, 359 work environment, 116 workers, 22, 115, 129, 277, 289, 293, 295, 296, 297, 325, 387 workplace, 278, 288, 289, 290, 293, 294, 296, 299, 300, 301, 304, 305, 306