We introduce the concept of "organizational terrorism" to describe dysfunctional leaders who are abusive and who treat organizational members with contempt and disregard. After identifying the moral duties of leaders in organizations, we explain how organization members respond to their dissatisfaction with organizations through Exit, Voice, Loyalty, or Neglect. We explain why exercising voice is the most effective moral choice in dealing with dysfunctional leaders.

The ongoing cynicism about leaders and organizations calls for a new standard of ethical leadership that we have labeled “transformative leadership.” This new leadership model integrates ethically-based features of six other well-regarded leadership perspectives and combines key normative and instrumental elements of each of those six perspectives. Transformative leadership honors the governance obligations of leaders by demonstrating a commitment to the welfare of all stakeholders and by seeking to optimize long-term wealth creation. Citing the scholarly literature about leadership theory, we (...) identify key elements of the six leadership perspectives that make up transformative leadership, suggest leaders who exemplify each perspective, describe the ethical foundations and message of each perspective, and offer ten propositions that scholars and practitioners can use to test the dimensions of this new transformative leadership model. (shrink)

Although trustworthiness has been described as a source of competitive advantage, its value extends to organizational governance and wealth creation. We identify the importance of the commitment—compliance continuum in the decision to trust and note that trustworthiness is a subjective perception viewed through each person's mediating lens. That lens and each person's interpretation of the social contract impact one's commitment to cooperate. We suggest five propositions that integrate trustworthiness, governance, and wealth creation.

The research about strategic human resource management (SHRM) has suggested that human resource professionals (HRPs) have the opportunity to play a greater role in contributing to organizational success if they are effective in developing systems and policies aligned with the organization's values, goals, and mission. We suggest that HRPs need to raise the standard of their performance and that the competitive demands of the modern economic environment create implicit ethical duties that HRPs owe to their organizations. We define ethical stewardship (...) as a model of governance that honors obligations due to the many stakeholders and that maximizes long-term organizational wealth creation. We propose that if HRPs adopt an ethical stewardship framework and the qualities of transformative leaders, they will be more aware of their ethical duties to their organizations and more effective in helping their organizations to create increased wealth, achieve desired organizational outcomes, and establish work environments that are more satisfying to employees. (shrink)

Although leadership of organizations rarely is discussed in terms of the religious construct of repentance, we propose that repentance and continuous improvement are closely related ideas that profoundly impact individuals and organizations. We identify six parallels between repentance and continuous improvement and then show how these parallels apply to the fundamental principles associated with highly regarded leadership perspectives. We conclude by identifying five contributions of the article to the management literature.

Organizational governance has historically focused around the perspective of principals and managers and has traditionally pursued the goal of maximizing owner wealth. This paper suggests that organizational governance can profitably be viewed from the ethical perspective of organizational followers - employees of the organization to whom important ethical duties are also owed. We present two perspectives of organizational governance: Principal Theory that suggests that organizational owners and managers can often be ethically opportunistic and take advantage of employees who serve them (...) and Principle Theory that focuses on guiding principles that are sometimes taken too far in organizations. In introducing these two new organizational governance perspectives, we offer insights into the value of rethinking ethical duties owed to organizational followers. (shrink)

. American businesses and corporate executives are faced with a serious problem the loss of public confidence. Public criticism, increased government controls, and growing expectations for improved financial performance and accountability have accompanied this decline in trust. Traditional approaches to corporate governance, typified by agency theory and stakeholder theory, have been expensive to direct and have focused on short-term profits and organizational systems that fail to achieve desired results. We explain why the organizational governance theories are fundamentally, inadequate to build (...) trust. We advance a conceptual framework based on stewardship theory characterized by “covenantal relationships” and argue that design of governance mechanisms using a covenantal approach is more effective in building trust in organizations. A covenantal relationship is a specialized form of a relational contract between an employee and his or her organization. We argue that regardless of incentives and control mechanisms carefully designed through contractual mechanisms, in the absence of covenantal relationships it is extremely difficult to build trust within organizations. We propose that organizations are more likely to build trust – both at the organizational level and at the interpersonal level – when they create reinforcing and integrated systems that honor implied duties of “covenantal relationships.”. (shrink)

We introduce the concept of “organizational terrorism” to describe dysfunctional leaders who are abusive and who treat organizational members with contempt and disregard. After identifying the moral duties of leaders in organizations, we explain how organization members respond to their dissatisfaction with organizations through Exit, Voice, Loyalty, or Neglect. We explain why exercising voice is the most effective moral choice in dealing with dysfunctional leaders.

Leaders in today's world face the challenge of earning the trust and commitment of organizational members if they expect to guide their companies to success in a highly competitive global context. In this article, we present empirical results indicating that when leadership behaviors are perceived as trustworthy through the observer's mediating lens, trust increases and leaders are more likely to be viewed as ethical stewards who honor a higher level of duties. This article contributes to the growing body of literature (...) about the importance of ethical stewardship in the trust relationship. (shrink)

In a world that has become increasingly dependent upon employee ownership, commitment, and initiative, organizations need leaders who can inspire their␣employees and motivate them individually. Love, forgiveness, and trust are critical values of today’s organization leaders who are committed to maximizing value for organizations while helping organization members to become their best. We explain the importance of love, forgiveness, and trust in the modern organization and identify 10 commonalities of these virtues.

The ability of leaders to be perceived as trustworthy and to develop authentic and effective relationships is largely a function of their personal identities and their self-awareness in understanding and making accommodations for their weaknesses. The research about self-deception confirms that we often practice denial regarding our identities without being fully aware of the ethical duties that we owe to ourselves and to others. This article offers insights about the nature of identity and selfawareness, specifically examining how self-deception can create (...) barriers to self-awareness within both a personal and a business context. (shrink)

Great leaders are ethical stewards who generate high levels of commitment from followers. In this paper, we propose that perceptions about the trustworthiness of leader behaviors enable those leaders to be perceived as ethical stewards. We define ethical stewardship as the honoring of duties owed to employees, stakeholders, and society in the pursuit of long-term wealth creation. Our model of relationship between leadership behaviors, perceptions of trustworthiness, and the nature of ethical stewardship reinforces the importance of ethical governance in dealing (...) with employees and in creating organizational systems that are congruent with espoused organizational values. (shrink)

Individuals who demonstrate organizational citizenship behavior (OCB) contribute to their organization’s ability to create wealth, but they also owe their organizations a complex set of ethical duties. Although, the academic literature has begun to address the ethical duties owed by organizational leaders to organizational citizens, very little has been written about the duties owed by those who practice OCB to their organizations. In this article, we identify an array of ethical duties owed by those who engage in extra-role behavior and (...) describe those duties in context with personality theory. We suggest that employees who understand the complex nature of OCB and the associated duties they owe to others are more likely to reach their potential and make greater contributions within their organizations. (shrink)

Organizational citizenship behavior (OCB) has been widely recognized as a contributor to improving organizational performance and wealth creation. The purpose of this article is to briefly summarize the motives of many employees who exercise OCB and to identify the ethical duties owed by organizational leaders to the highly committed employees with whom they work. After reviewing the nature of OCB and the psychological contracts made with highly committed employees, we then use Hosmer’s framework of ten ethical perspectives to identify how (...) OCB is viewed from each of those ethical viewpoints. We offer six propositions about OCB that relate to building employee commitment and trust. (shrink)

The problem of academic dishonesty in Business Schools has risen to the level of a crisis according to some authors, with the incidence of reports on student cheating rising to more than half of all the business students. In this article we introduce the problem of academic integrity as a holistic issue that requires creating a␣cultural change involving students, faculty, and administrators in an integrated process. Integrating the extensive literature from other scholars, we offer a ten-step model which can create (...) a positive culture for academic integrity. The successful implementation of a well-crafted academic integrity program can have a positive impact on business schools and improve the reputation of tomorrow’s business leaders. (shrink)

Continual corporate malfeasance signals the need for obeying the law and for enhancing business ethics perspectives. Yet, the relationship between law and ethics and its integrative role in defining values are often unclear. While integrity-based ethics programs emphasize ethics values more than law or compliance, viewing ethics as being integrated with law may enhance understanding of an organization’s core values. The author refers to this integration of law and ethics as “substantive ethics,” analogous to the substantive law that evolves over (...) time, which is applied to ethical breaches and carries sanctions for non-compliance. This article describes the integration of law and ethics as a mid-point between two polar views that define law and ethics either as having no relation or as being one and the same. Since corporations expressly state which laws they follow, a sample of corporate compliance statements is used to demonstrate this integrative mid-point. The sample also reveals that corporate ethics codes rarely express ethics and law as being integrated per se. Therefore, the author creates an example of a securities law compliance statement that is introduced with an integrative perspective of law and ethics. Perhaps such revised corporate codes will encourage corporate respect for both law and ethics and enhance ethical sustainability. (shrink)

Supplier diversity programs were created in the United States nearly 50 years ago to encourage private sector companies to provide business opportunities to underutilized minority business enterprises. In order to assess the experiences that minority business enterprise CEOs have with large purchasing organizations and their perceptions of justice and commitment of large purchasing organizations to the buyer–supplier relationship (BSR), this study utilizes survey data collected from 206 minority business enterprise CEOs who supply large purchasing organizations that espouse a strong commitment (...) to supplier diversity. The theoretical framework of organizational justice is utilized to establish testable hypotheses. The results from hierarchical linear regression show minority business enterprise CEOs’ perception of large purchasing organizations’ commitment to the BSR is positively related to the distributive and informational dimensions of organizational justice. Surprisingly, the procedural dimension was found to have a significantly negative relationship. This research also found a significant, negative relationship between minority firm CEOs’ perception of distributive and informational justice and their perceptions of unethical behavior by large purchasing organizations. (shrink)

Although family business comprises the majority of global business, it is significantly under-researched. Yet it is considered to have unique ethical values compared to non-family corporations. This is attributable to its family orientation. Therefore, it is worthwhile to identify and define dominant family business ethics values. The authors compare a sample of the U.S. family business, U.S. corporate entities, and international family business mission statements for frequency of ethics values. The data reveals three primary findings: (1) generally, the U.S. family (...) business expressed a higher frequency of ethical values than its non-family corporate and international counterpart, (2) U.S. family business has a strong lead in “integrity” and “honesty” whereas international family business leads in “environmentalism,” “globalism,” and “social responsibility,” and (3) generally, the frequency of ethics values for all family business globally has increased over time. The family business mission statement continues to provide ethical direction for the majority of global business. The emerging family business values identified in our sample will further impact global business success and promote ethical sustainability world-wide. (shrink)

The paper describes the approach by which ethics are integrated into the undergraduate curriculum at Northern Illinois University''s College of Business. Literature is reviewed to identify conceptual frameworks for, and issues associated with, the teaching of business ethics. From the review, a set of guidelines for teaching ethics is developed and proposed. The objectives and strategies implemented for teaching ethics is discussed. Foundation and follow-up coursework, measurement issues and ancillary programs are also discussed.

The relationship between individuals’ creativity and their ethical ideologies appears to be complex. Applying Forsyth’s (1980, 1992) personal moral philosophy model which consists of two independent ethical ideology dimensions, idealism and relativism, we hypothesized and found support for a positive relationship between creativity and relativism. It appears that creative people are less likely than non-creative people to follow universal rules in their moral decision making. However, contrary to our hypothesis and the general stereotype that creative people are less caring about (...) others, we found a positive relationship between creativity and idealism. These findings indicate that highly creative people are likely to be what Forsyth called “situationists,” individuals with both an ethic of caring and a pragmatic moral decision-making style. The finding that creative individuals tend to be situationists, and particularly that they tend to be high in idealism, appears to refute the line of reasoning that argues for a “creative personality” characterized in part by social insensitivity. Understanding the relationship between creativity and ethical ideologies has important implications for researchers, managers and teachers. (shrink)

Leading a corporation through a crisis requires rational decision making guided by an ethical approach (Snyder et al., Journal of Business Ethics, 63, 2006, 371). Three such approaches are virtue ethics (Seeger and Ulmer, Journal of Business Ethics, 31, 2001, 369), an ethic of justice, and an ethic of care (Simóla, Journal of Business Ethics, 46, 2003, 351). In this article, I consider the effectiveness of these approaches for leading a corporation after a crisis. The standard I use is drawn (...) from recent studies that examine how people tend to react to corporate unintentional harms. I conclude from these studies that an ethic of care approach is most effective for managing corporate crises when it comes to stakeholder concerns. I conclude the article with strategies for managing a crisis using an ethic of care. (shrink)

This paper addresses a number of important issues regarding the ethical practices and recent behaviour of large Australian firms in nine industries. These issues include whether firms have a written code of ethics, whether firms have a forum for the discussion of ethics, whether managers consider that their firm's activities have an environmental impact and whether there are any statistical relationships between the size, industry class, ownership, international involvement and location of the firm and its ethical management practices. These questions (...) are examined by using data collected from a sample of 136 large firms operating in Australia. (shrink)

Mohandas Karamchand “Mahatma” Gandhi discussed corporate responsibility and business ethics over several decades of the twentieth century. His views are still influential in modern India. In this paper, we highlight Gandhi’s cross-level CR framework, which operates at institutional, organizational, and individual levels. We also outline how the Tata Group, one of India’s largest conglomerates, has historically applied and continues to utilize Gandhi’s concept of trusteeship. We then compare Gandhi’s framework to modern notions of stakeholder and stewardship management. We conclude that (...) trusteeship has strong potential to help firms and their stakeholders achieve shared value by considering the interactions between individual, organizational, and institutional factors, and paying attention to a range of multi-level stakeholder obligations. (shrink)

There are gaps in the Social and Ethical issues literature regarding the structure of individual ethical reasoning and the process through which personal ethical standards erode or decline. Social Penetration Theory may be used to view ethical issues of low, moderate, or high salience. It also produces a model of the process by which an individual turns to less desirable ethical reasoning and behavior.

The relationship between individuals' creativity and their ethical ideologies appears to be complex. Applying Forsyth's (1980, 1992) personal moral philosophy model which consists of two independent ethical ideology dimensions, idealism and relativism, we hypothesized and found support for a positive relationship between creativity and relativism. It appears that creative people are less likely than non-creative people to follow universal rules in their moral decision making. However, contrary to our hypothesis and the general stereotype that creative people are less caring about (...) others, we found a positive relationship between creativity and idealism. These findings indicate that highly creative people are likely to be what Forsyth called "situationists," individuals with both an ethic of caring and a pragmatic moral decision-making style. The finding that creative individuals tend to be situationists, and particularly that they tend to be high in idealism, appears to refute the line of reasoning that argues for a "creative personality" characterized in part by social insensitivity. Understanding the relationship between creativity and ethical ideologies has important implications for researchers, managers and teachers. (shrink)

This article argues why and how a participatory approach to implement corporate social responsibility (CSR) in a cluster would be beneficial for small-and medium-sized enterprises (SMEs) who are members of the NCE -Subsea cluster in Bergen, Norway. The political and strategic reasons as well as internal motivation for SMEs to incorporate CSR into their business strategies are discussed with support from relevant literature. Furthermore, we offer a discussion on the characteristics of different approaches to incorporating CSR as part of business (...) strategy and provide examples from the Norwegian context. As part of this discussion, we look into some of the clusters in Europe which have adopted a systematic approach to implement CSR as part of their agenda. We propose a means to undertake CSR as part of the cluster through a network model to address the limitations faced by the SMEs when they try to implement CSR individually. A network model (cluster approach) to CSR will motivate the uptake of CSR among SMEs when the network (cluster) is characterized by close geographical proximity and operates in the same sector. The uptake of CSR as part of the network (cluster) agenda can also lead to innovation through cooperation and competition. The particular challenges faced by the SMEs in implementing and sustaining CSR can be also minimized by being part of a network (cluster). (shrink)