Springer 2010
Journal of Business Ethics (2010) 93:9–14 DOI 10.1007/s10551-010-0623-x
Ethical Leadership and Global Citizenship: Considerations for a Just and Sustainable Future
ABSTRACT. This article discusses issues of social and distributive justice in the context of global capitalism in the twenty-first century and the necessity of incorporating values-clarification and ethical leadership as part of the core curriculum for university graduates. KEY WORDS: leadership, ethics, sustainability, capitalism, university education
It might be argued that there is sense of the obvious with respect to what is required for global and ethical leadership for a social and economical just world. It seems that our dilemma in achieving a socially and economically just global society stems not from a lack of understanding or analysis but rather from a lack of will or a lack of collective and coordinated will. The current global financial crisis is not a surprising outcome of the type of financial decisionmaking that has driven global capitalism for the past few decades although it has been shocking to many in its systemic impact around the world.1 I was thinking about these things a few weeks ago when I was watching the morning news on Canadian television while having my first cup of coffee of the day. A Canadian anchor person was interviewing spiritual health and well-being populist Deepak Chopra who was about to begin a national speaking An abbreviated version of this article has been published as a chapter in ‘Carla C. J. M. Millar and Eve Poole, Ethical Leadership’, published 2010, Palgrave Macmillan; reproduced with permission of Palgrave Macmillan. Deborah C. Poff Ph.D. is President and Vice-Chancellor of Brandon University, Editor of the Journal of Business Ethics, and Editor-in-Chief, of the Journal of Academic Ethics.
Deborah C. Poff
tour. The interviewer asked something like, ‘‘What would you tell people who are troubled by the current financial crisis?’’ His answer was (and here I paraphrase but not by much), people need to stop thinking of themselves as consumers. Consumption is an ugly way to characterize human agency and human engagement in the world. We need to define ourselves in terms of our personal relationships and not in terms of what we consume. Chopra’s recommendation does not seem particularly remarkable. The assumption that how we define ourselves and manifest that definition through our actions has an influence on our values and our relations with the world and with other persons is hardly a radical thought. If we think that we are fundamentally consumers rather than fundamentally socially engaged relational human beings, our actions and our values will reflect that understanding. The fact that this needs to be said seems an indication of the success of our global socialization to a view of ourselves as fundamentally ‘‘consumptive’’. We traditionally think of that term in its nineteenth century understanding as meaning tubercular disease. In its twenty-first century understanding, it references another kind of disease – a perverse and pervasive distortion of the purpose of life and personal identity as predicated on the value and status of material consumption. This orientation is not only germane to the topic today. It is the topic. Particularly in Capitalist democracies, we are seriously in need of a significant ontological and moral attitude shift. The current financial crisis was supported in its genesis by a worldview which defines the good life and the rightful place of citizens of industrialized democracies in terms of material goods. Wellbeing is confounded with the amount of stuff one possesses.
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Frequently, much of the rhetoric around such discussion confounds the meaning of democracy with the purposes of capitalism. We have seen recently that this definition is failing many people in the industrialized and developed world. It is also failing the majority of citizens in the rest of the world. This is a worldview that presents an unsustainable and unattainable lifestyle as an aspiration to the citizens of developing countries and developing economies. This same worldview is presented to many people who are poor in developed and democratic economies. The large environmental footprint that has been necessary to support the lifestyle to which many of us have become accustomed cannot support comparable lifestyles in populations the size of China and India, countries which understandably think that it is their time to share such. It is not even sustainable for the minority of the world’s population who has thus far attained it. While this article does not present a full analysis of the problems with twenty-first century global capitalism, it is important to note in passing that we have yet to come to terms with an emergent post-Capitalist world economy. This new post-Capitalist world will still have Capitalist features but can no longer continue with its current complexion and its intractable problems in terms of the lack of social, economic, and environmental justice for the majority of people on earth currently or for future generations. There is a growing consensus of opinion on this perspective. Most contemporary scholars addressing global leadership, corporate social responsibility, business ethics, and global citizenship articulate some variation of this view. As Wood et al. (2006, p. 25) put it, [t]he current reality of global capitalism often appears to be skewed toward widening gaps in wealth, dependent upon exploitation of the poor and the earth’s resources. Its leaders too often exhibit a headin-the-sand approach to human rights and environmental abuses. These are the very problems that could ultimately bring capitalism down by providing evidence that plays into the hands of charismatic extremists of many persuasions or by forcing imposition of controls that reduce the freedom essential for successful long-term capitalism. (Wood et al., 2006).
The key issue here appears to be the need for a global values shift in the general population in Capitalist economies or a renaissance in values-orienta-
tion. This understanding is becoming increasingly more apparent to a wider proportion of the global population as well as the scholarly community who write about ethics and capitalism. A further issue is the necessity for leadership in business, public life, and education that is actively and explicitly engaged in championing such a values re-alignment and renaissance. In order to address these matters, I will begin with a brief discussion of values and then move to a discussion of the current issues with leadership. Finally, I will briefly address education for ethical leadership. Overwhelmingly the corporate scandals of the latter part of the twentieth century and the financial crisis that we are currently experiencing are grounded in a value-system that tells us that we are what we wear, what we drive, where we live and that what we own reflects what we are worth. A further assumption is that if you can acquire it then you deserve it. This is buttressed by the belief (and to what extent a number of people still believe this is unclear) that there is no upper limit to profitability for corporations. So there is no moral or legal voice to indicate when enough is enough or more accurately when enough is too much. Economic success and the appurtenances which accompany such success seem to have no agreed upon standard for what is worthy and acceptable and what is excessive. At least with respect to some of the leadership in the Enron, Worldcom, Tyco type scandals, there appears to have been no understanding of the moral desirability of a satiation point in terms of wealth acquisition. Particularly with respect to Enron, many individuals and organizations, including a number of banks, seemed to have been willfully self-ignorant for far longer than seems plausible or reasonable because of the fantastical amounts of money that Enron produced. The values that drove such wrong-doing bring to mind the almost Faustian seduction of the key protagonist of the film, Wall Street, Gordon Gekko, who states in the most memorable line from the film that ‘‘greed is good.’’ Although this film was supposedly an expose of all that was wrong in the greedy 1980s, it is clear that ‘‘greed is good’’ was the leif motif for the current global financial crisis. If that is the case, it is important to spend a little more time focusing directly on the nature of values in framing human understanding and action before discussing the nature of global ethical leadership as a condition for a just and sustainable future.
Ethical Leadership and Global Citizenship As Grojean et al. (2004, p. 226) note values are critically important in directing human behavior. As they put it, First, values are cognitive statements which support the interests of the social environment. Second, values motivate behavior by providing direction and emotional intensity to action. Third, values are standards to judge and justify action. And finally, values are acquired both through socialization activities and an individual’s unique experiences. (Grojean et al., 2004).
Given the centrality of values to cognition, motivation, judgments, actions, and the acquisition of values through socialization, it is hardly surprising that the literature on values-based leadership has grown exponentially over the past two decades. As Johnson (2009, p. 89) states in his discussion of the leader’s character, ‘‘…our values serve as a moral compass to guide us on our journey.’’ Finally, when Ciulla (2004) calls ethics ‘‘the heart of leadership’’ she makes a case for ethics or moral values as essential to good leadership. It is perhaps not surprising that many scholars who were in the vanguard of business ethics in the 1980s and 1990s shifted their research to leadership in the late 1990s or beginning of the twenty-first century.2 Having said that, what may be surprising is how long it took for business ethics to systematically address the central importance of leadership in the field. The early literature in business ethics focused on exposing and analyzing unethical business practices as well as presenting arguments for why businesses and business leaders should be ethical.3 The arguments for the latter usually came in two flavors: the ‘‘being ethical because it pays off arguments’’ and the ‘‘being good for goodness sake arguments’’. The first argument type is primarily empirical and it should be noted that the many studies which have been published since the 1980s have not always been consistent in terms of the evidence for the profitability of ethical business practice. As well, the arguments implicitly suggest that if it turns out that ethics is not profitable, then not being ethical is acceptable. The other type of arguments about ‘‘being good for goodness sake’’ have the limitation that all ethical theory has, namely, that it seems exceedingly difficult to convince bad people that it is important to be good. Early business ethics literature also focused on the importance of corporate social responsibility (CSR) which frequently followed the two types of
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arguments cited here as motivators. David Vogel (2006, p. 4–5) wrote an excellent summary on the achievements and limitations of corporate social responsibility. As he states, [o]n the one hand, it promotes social and environmental innovation by business, prompting many firms to adopt new policies, strategies, and products, many of which create social benefits and some of which even boost profits by reducing costs, creating new markets, or improving employee morale…On the other hand, precisely because CSR is voluntary and market-driven, companies will engage in CSR only to the extent that it makes business sense for them to do so. (Vogel, 2006).
Perhaps also surprisingly, the leadership literature and the business ethics literature seemed to develop on independent and separate tracks until those working in the business ethics field recognized that leadership was critically important for the promotion of ethics in business. This recognition led scholars to turn to the problem of leadership as the fundamental focus for creating at least the necessary if not sufficient conditions for moral behavior in business, government and public life. As Doh and Stumpf (2005, p. 3) note of these separate tracks in research, Management research in leadership, ethics and corporate social responsibility (CSR) has evolved somewhat independently. Despite the proliferation of literature on effective leadership, surprisingly little research attention has been devoted to the interaction among leadership traits, ethical behavior and corporate social responsibility, at least within the mainstream leadership literature.
This pattern changed, as noted previously, by the beginning of the twenty-first century, with the recognition that many of the major financial scandals of the late twentieth century were led from the top. As Grojean et al. (2004, p. 224) note, …Recently, the corporate world has been shaken by several scandals in which CEOs and other top leaders demonstrated a severe lack of ethical conduct in business operations that eventually led to the demise of some of the world’s largest and most successful companies…Leaders not only directly influence the behavior of members which lead to norms and expectations of appropriate conduct that become ingrained in the organization’s climate. Leaders’ actions both directly and indirectly establish the tone of an organization by the actions that are encouraged, rewarded and demonstrated. (Grojean et al., 2004, p. 224).
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Such sentiments are echoed in Bennis (2004, p. 331) who notes that ‘‘it is important to remember that the quality of all of our lives is dependent on the quality of our leadership.’’ Similarly Ciulla (2004, p. 302) states ‘‘in leadership we see morality magnified’’. Given the centrality of the role of leadership and values in directing and influencing the behavior of others, it is critically important that leaders lead with the right values, namely, ethical values or as the organizers of this conference have called it, with a moral compass. Since many leaders have so frequently and publicly failed to do this of late, how do we produce a generation of ethical leaders to foster global citizenship and a just and sustainable world? And here in answering this question, I will present my position on some of the questions posed by the organizers of this conference.
What drives ethical leadership? Essentially, the key internal driver is a commitment to integrity and excellence as part of the core values of the individual leader. That is the short answer. The longer answer is an old one and in western thought was first most fully developed by Aristotle. A virtuous life is part of habituation and education and must be lived through experience and acting in virtuous ways. An ethical leader necessarily must be educated to become an ethical leader. It is both internally driven in the person who is well educated in the development of a virtuous nature and it is externally driven by others who wish to be treated fairly and justly. This raises the issue of the responsibility of universities to educate future leaders in the knowledge of ethics and the moral responsibility of leadership. It also raises the issue of the obligations and duties of the professoriate to educate students for roles as responsible moral agents and future ethical leaders. In its drive for increasingly specialized professional education, many universities have abandoned the more general goal that an educated person must be educated for good citizenship and for responsible leadership. In abandoning such broader goals, universities themselves lose their moral compass. It is important that universities re-focus on this profound goal of educating persons to be fully moral agents as part of their education. Part of the purpose
of universities has always been the education of the next generation of leaders and education without a grounding in ethics is an incomplete education.4
Does globalization change this? Part of the problem of globalization has been that globalized, multinational corporations have seemingly, as Daly and Cobb noted as early as 1989, escaped community and communities have historically been where individuals have been held to be morally and legally accountable (Daly and Cobb, 1989). Daly and Cobb present an interesting argument that were Adam Smith alive today, he would not be a Capitalist because much of his thesis concerning the invisible hand was predicated on capital immobility and the belief that individuals would reside in the communities in which they developed their companies. The current multinational corporation, they argue, which can profligately use human and natural resources from various places in the world seemingly with impunity is something that Smith would never have considered. What this globalization of the economy requires then is some kind of universal standardization with respect to how all human beings are treated as well as universal standards for the environment. The fact that this challenges us given the variation of ethical beliefs in different cultures cannot be used as a justification for treating people and the environment in ways which violate our own standards of what is ethically justifiable simply because the company is operating in other parts of the world. The fact that this is complex and challenging is not a justification for wrong-doing. And, quite clearly, moral relativism was not the problem with Enron, Worldcom or Arthur Anderson.
Is there any way in which we can start defining the ‘‘ethical leadership compass’’? Perhaps the most promising orientation to an ethical leadership compass has come out of the work of those scholars working in the traditions of transformational leadership and servant leadership. Without unduly elaborating on the details of such theories, both are values-based leadership theories and both focus on authenticity and integrity in the leader and
Ethical Leadership and Global Citizenship idealized inspiration and higher order purposes and goals for the followers. Any version of an ethical leadership compass must include competence or effectiveness with values such as integrity, honesty, trustworthiness, and a commitment to virtue as well as to service to the organization. Not only is the development and elaboration of such a compass important for the future, there will be no indefinite future if such a compass is not developed and embraced. The free rider leader who commits evil acts, even when the evil is of a small scale, is no longer affordable in a world where globalization is the basis of much of the world’s economy. In fact, what Daly and Cobb argued about corporations escaping community may no longer be true. The current global financial crisis has made manifest how truly interconnected our economy is, just as, our overly extractive global productivity has made clear that we will all suffer from the unsustainable utilization of non-renewable resources. So the answer as I noted at the beginning of my talk is unfortunately easy to articulate if difficult to enforce. We must educate our leaders to be ethical, re-appraise the misguided nature of valuing material goods in place of human beings and the environment, and create a worldview which embraces sustainability and global justice. Once we do that, everything else will be easy.
Notes 1
This article is an invited contribution based on the author’s keynote address at the Ashridge International Research Conference ‘‘Global Leadership, Global Ethics? – in search of the ethical leadership compass’’ on May 19th 2009 at Ashridge Business School. 2 J. Ciulla, Robert Solomon, Norman Bowie, Al Gini are just some of the scholars working in the fields of business ethics who shifted their research to ethical and responsible leadership. 3 If you look at any issue of the Journal of Business Ethics during the 1980s, you will find many of these types of articles (e.g., Epstein, 1989; Mulligan, 1986; Patton, 1984, Special Issue: Ethics and the Marketplace, guest edited by Wilbur, J. Journal of Business Ethics 3(4) – the entire issue looks at the relationship between business and ethics; Smith and Carroll, 1984).
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4
For more on this, see Bok (2006), Ghoshal (2005), and Poff (2007).
References Bennis, W.: 2004, ‘The Crucibles of Authentic Leadership’, in J. Antonakis, A. Cianciolo and R. Sternberg (eds.), The Nature of Leadership (Sage Publishers, California, Thousand Oaks), pp. 331–342. Bok, D.: 2006, Our Underachieving Colleges (Princeton University Press, New Jersey). Ciulla, J.: 2004, ‘Ethics and Leadership Effectiveness’, in J. Antonakis, A. Cianciolo and R. Sternberg (eds.), The Nature of Leadership (Sage Publishers, Thousand Oaks, CA), pp. 302–327. Daly, H. and J. Cobb Jr.: 1989, For the Common Good: Redirecting the Economy Toward Community, the Environment and a Sustainable Future (Beacon Press, Boston, MA). Doh, J. and S. Stumpf: 2005, Handbook on Responsible Leadership and Governance in Global Business (Edward Elgin Press, Northampton, MA). Epstein, E., et al.: 1989, ‘Business Ethics, Corporate Good Citizenship and the Corporate Social Policy Process: A View from the United States’, Journal of Business Ethics 8, 583–596. Ghoshal, S., et al.: 2005, ‘Bad Management Theories are Destroying Good Management Theories’, Academy of Management Learning & Education 4(1), 75–91. Grojean, M., et al.: 2004, ‘Leaders, Values, and Organizational Climate: Examining Leadership Strategies for Establishing an Organizational Climate Regarding Ethics’, Journal of Business Ethics 55, 223–241. Johnson, C.: 2009, Meeting the Ethical Challenges of Leadership: Casting Light or Shadow (Sage Publishers, Thousand Oaks, California). Mulligan, T., et al.: 1986, ‘A Critique of Milton Friedman’s Essay ‘‘The Social Responsibility of Business is to Increase Its Profits’’’, Journal of Business Ethics 5(4), 265–270. Patton, J., et al.: 1984, ‘The Business of Ethics and the Ethics of Business’, Journal of Business Ethics 3(1), 1–20. Poff, D., et al.: 2007, ‘Duties Owed in Serving Students The Importance of Teaching Moral Reasoning and Theories of Ethical Leadership in Educating Business Students’, Journal of Business Ethics 5(1), 25–31. Smith, H. and A. Carroll, et al.: 1984, ‘Organizational Ethics a Stacked Deck’, Journal of Business Ethics 3(2), 95–100.
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Vogel, D.: 2006, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility (The Brookings Institute, Washington, DC). Wood, D., et al.: 2006, Global Business Citizenship: A Transformative Framework for Ethics and Sustainable Capitalism (M. E. Sharpe, London, England).
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