Leadership and Ethics

 1.1 Theme 1 : Leadership and Ethics

In the business world, ethical leadership is one of the important concepts that need to be implemented and developed properly and correctly, in accordance with the organisation’s business related. Ethical Leadership is a term for emphasising someone to apply ethical considerations and make it as a theoretical base for taking a new solid decision or an action (Gea, 2014). 

Ethical leadership has 2 important principle areas of ethics that have to be implemented when managing a business organisation. The Deontological (Rules) Principle and The Teleological (Consequentalist) Principle. 

Deontological (Rules) Principle 

Deontological Principle is an ethical system that does not measure whether an action is good or not based on its results, but solely based on the intention of the individual in doing the act. This system does not highlight the chosen goal for a person’s actions or decisions, but solely whether or not his actions and decisions are obligatory (Alexander, 2016). Deontological principle brings benefit to provide a solid for rationality and objectivity of human consciousness. It is based on the principle of morality which is derived a priori from pure reason and is not determined by the object of action. It should be noted that the rationality of moral consciousness demands the determination of right or wrong and good or bad behaviour, not based on the tastes or feelings of the person giving the assessment. Therefore, moral decisions must be accountable and the truth can be tested by others. Thus, the objectivity of moral consciousness is guaranteed in deontological ethics, against the currents of subjectivism and relativism, where moral principles are generally accepted. This principle also results with its limitation that does not give place to moral dilemmas and solutions when there is a conflict of moral principles. It should be noted that a moral dilemma is a situation where an individual is obliged to do both A and B at the same time. However, it is not possible to do both at the same time. If he does A, then he wouldn't be able to do B. This shows that his limitations as a human do not allow him to do two actions together. 

Teleological (Consequentalist) Principle

Teleological principle asserts that what makes an initiative, behaviour, or action either right or wrong, is weighed against the consequences of that action or behaviour (Zuhriya, 2017). If the consequences of an action or initiative taken by the company provide benefits, then the action can be said to be the right action. Conversely, if it does not provide benefits, then the action can be categorised as a mistake. Teleological principle brings benefits that have three specific positive values, the first is rationality, second is freedom, and the last is universality. In the rationality system, it appears when there is a decision on interest, incentives, and the marketing system is carried out. Meanwhile, freedom is an opportunity that can be used by business people to run their business as well as possible, but still within the corridor of law and responsibility. This principle also values universality, because business practises are carried out with the aim of earning profits for as many consumers as possible. In addition, This principle also results with its limitation that prioritising the interests of the wider community is a high-value concept, so that in business practice it can actually cause difficulties for business people. 

The concept of Ethical Leadership is defined by the decision-making based on its values. All the decisions are first checked to ensure that they are consistent with the values of the organisation as a whole. Only decisions that meet these criteria are applied. 

Real-life industry examples towards Leadership Behaviour

A famous fashion brand company such as Fendi implemented a satisfactory ethical leadership behaviour to their own organisation as a whole as well as to the whole society. Fendi succeed in managing their company especially with the suppliers to follow with the high quality of their ethical behaviour towards society. Fendi creates the code of conduct as the firm law stating all of their employment requirements and responsibilities, working attitudes and methods, etc, that are published all over the world, including websites, retail shops, and organisation industry itself (Fendi, 2018). Fendi has complied with and followed all of the requirements of the 2 mainly ethical principles, which is the Deontological principle and the Teleological principle.

On the other hand, PT. Perusahaan Listrik Negara (PLN) is a government company that operates in the field of national electricity supply in Indonesia. PT. PLN is included in the type of pure monopoly (Deliarnov, 2012). This is shown because PT. PLN is the sole seller or producer, a unique product with no close substitutes, and the ability to charge them at any price they want. According to the Deontological principle, PT. PLN actually has a good goal, which is to meet national electricity needs. However, it is not followed by good deeds or actions, because PT.PLN has not been able to meet electricity needs in a fair and equitable manner. So according to Deontological principle, it is unethical in it’s business activities. Also according to the Teleological principle it is considered unethical, because PT.PLN carry out a monopoly. By that, all people who are living in Indonesia that need electricity are very dependent on PT.PLN. 

Recommendation 

In conclusion, a leader has to implement a transformational ethical leadership system that can inspire both employees and those around them to go beyond their own-self interest and who has the ability to profoundly influence themselves and those around them. Mostly, a transformational ethical leadership empowers ethical behaviour of individual workers to develop, improve abilities, and increase self-efficacy. 

References

Fendi. (n.d.). Supplier code of conduct | FENDI. Fendi Online Store. https://www.fendi.com/at-en/info/legal-area/supplier-code-conduct

Deontological ethics (Stanford encyclopedia of philosophy). (n.d.). Stanford Encyclopedia of Philosophy. https://plato.stanford.edu/entries/ethics-deontological/

Teleological ethical theories. (2016, July 9). Business Jargons. https://businessjargons.com/teleological-ethical-theories.html

(n.d.). Online Public Access Catalog - Perpusnas RI. https://digilib.unhas.ac.id/uploaded_files/temporary/DigitalCollection/ZTYxZTM2ZjRmMDkzZjFiZmVmMGRkYTI2ZGM3YTkyZTI5YjlmMGQ0YQ==.pdf

The importance of being an ethical leader and how to become one | BetterUp. (2021, April 9). BetterUp: The People Experience Platform. https://www.betterup.com/blog/the-importance-of-an-ethical-leader