In a broad construction of the
ethical role of the manager, managing and leading can be said to be inherently
ethics- laden tasks because every managerial decision affects either people or
the natural environment in some way—and those effects or impacts need to be
taken into consideration as decisions are made. A narrower construction of the
ethical role of the manager is that managers should serve only the interests of
the shareholder; that is, their sole ethical task is to meet the fiduciary
obligation to maximize shareholder wealth that is embedded in the law,
predominantly that of the United States, although this point of view is
increasingly accepted in other parts of the world. Even in this narrow view,
however, although not always recognized explicitly, ethics are at the core of
The ethical role of managers is
broadened beyond fiduciary responsibility when consideration is given to the
multiple stakeholders who constitute the organization being managed and to
nature, on which human civilization depends for its survival. Business
decisions affect both stakeholders and nature; therefore, a logical conclusion
is that those decisions have ethical content inherently and that managerial
decisions, behaviors, and actions are therefore inherently ethical in nature.
Whenever there are impacts due to a decision, behavior, or action that a leader
or manager makes, there are ethical aspects to that decision or situation.
While some skeptics claim that business ethics is an oxymoron, the reality is
that decisions and actions have consequences, and that reality implies some
degree of ethics, high or low. Thus, ethics and the managerial role cannot
realistically be teased apart.
The ethical role of managers, or
what the business ethicist Linda Treviño and her colleagues call ethical
leadership, is a combination of being a moral person and being a moral manager.
Being a moral person rests on a combination of key traits such as integrity,
honesty, and trustworthiness. Integrity involves not only forthrightness and
honesty or truthfulness but also consideration for the soundness of the whole
entity that one manages as well as of the society in which the organization is
located. Integrity also means firm adherence to a code, such as an ethical code
of conduct. Thus, being a moral person suggests that the individual has
integrity and can be trusted.
In addition to these traits, being a
moral person also involves behaviors such as doing the right thing, concern for
people, being open, and standards of personal integrity. The essence of ethics,
of course, is doing the right thing, especially under difficult circumstances,
and that involves being able to reason well about what the right thing to do
actually is. To be able to reason well about a difficult ethical situation, a
person needs to be open to learning from multiple sources about the situation
while taking care not to harm people and actually attempting to treat people
well in the decision- making process or when decisions are being implemented.
To be able to make good decisions ethically, an individual needs to have
thoughtfully developed his or her personal set of standards or values, a
personal code of conduct or integrity. Personal standards allow an individual
to think through a decision with a clear rationale in mind.
When decisions involving ethical
considerations need to be made, Treviño and her colleagues argue, the moral
person sticks to her or his core values, tries to be objective and fair,
exhibits concern for society and the welfare of those in society, and follows
ethical decision-making rules. But being a moral person is not the only
requirement for becoming a moral leader. Moral leadership also includes being a
moral manager, which involves recognition that the leader or manager serves as
a role model for others in all his or her duties. It also means providing
rewards and discipline around the ethical and unethical decisions made by
others, so that a clear message is sent about what behaviors are and are not
acceptable in the organization or situation. In addition, moral management
means communicating openly, explicitly, and frequently about ethics and values.
One question that frequently arises
in considering the ethics of management is whether individuals can be
considered moral leaders or managers in their work lives if they act
unethically in their personal lives or vice versa. Considering that an
individual's character is reflected in all his or her decisions and actions,
such an inconsistency would reflect badly on the individual as a whole. The
branch of ethical theory called virtue ethics explores this relationship in depth.