Ethically Neutral Leaders

This person does not send out strong messages about ethics and leaves followers unsure about where he or she stands on moral issues. Ethically neutral leaders appear to be self-centered and focus exclusively on the bottom line. Sandy Weill, former Citigroup CEO, typifies the ethically neutral leader. Weill stayed on the sidelines when it came to ethics, rewarding his managers according to their results. It was during his tenure that Salomon analyst Jack Grubman continued to promote Winstar Communications even as it was heading for bankruptcy. From their analysis of the four categories of ethical leadership, Trevino and her colleagues conclude that acting ethically is not enough. Executives must also ensure that employees know that they care

From the cultural vantage point, an organization is a tribe. As tribal members gather, they develop their own language, stories, beliefs, assumptions, ceremonies, and power structures. These elements combine to form a unique perspective on the world called the organization’s culture (Pacanowsky, M.E., & O’Donnell-Trujillo, N, 1983). How an organization responds to ethical issues is a part of this culture. Every organization faces a special set of ethical challenges, creates its own set of values and norms, develops guidelines for enforcing its ethical standards, honors particular ethical heroes, and so on. Ethical climate, in turn, determines what members believe is right or wrong and shapes their ethical decision making and

(Southwest Airlines)

Codes of Ethics

Codes of ethics are among the most common ethics tools. Companies listed on the New York Stock Exchange and the Nasdaq are required to have them, and under the Sarbanes–Oxley Act, public firms must disclose whether they have a code for their senior executives (Paine, L., Deshpande, R., Magolis, J. D., & Bettcher, K. E., 2005). Many government departments, professional associations, social service agencies, and schools have developed codes as well. Nevertheless, formal ethics statements are as controversial as they are popular. Skeptics make these criticisms:

• Codes are too vague to be useful.

• Codes may not be widely distributed or read.

• Most codes are developed as public relations documents designed solely to improve an organization’s image.

• Codes don’t improve the ethical climate of an organization or produce more ethical behavior.

• Codes often become the final word on the subject of ethics.

• Codes are hard to apply across cultures and in different situations.

• Codes often lack adequate enforcement