The Ethical Side of Leadership

The Ethical Side of Leadership

Dr Thomas Donaldson is the Mark O. Winkelman Professor at the Wharton School, University of Pennsylvania, where he is also Director of the Wharton PhD Program in Ethics and Law. He has written broadly in the area of business ethics, values and leadership. He is president-elect of the Social Issues in Management Division of the Academy of Management, and is a founding member and past president of the Society for Business Ethics. At Wharton, he has received many teaching awards, including the Outstanding Teacher of the Year Award, twice, in 1998 and in 2005. He has consulted at many organisations, including Goldman Sachs, Walt Disney and Microsoft.

Is leadership different from management?
‘Leadership’ is a broader and deeper concept than ‘management’. Albert Einstein (the scientist) and V. S. Naipaul (the writer) were intellectual leaders, but not managers. Good management entails good leadership. Leadership is not just the frosting on the cake of good management; it is more like the flour in the cake.

What is the need of the hour for leaders?
Leaders must carry moral authority. Without moral authority, leadership is blind. Surveys of business people around the world show that they rank characteristics such as integrity at the top of the list of essential elements for leadership.

You research extensively on business ethics. Is the concept of ethics different across societies?
The most important truths about ethics are shared among cultures and religions. The underlying truths of the Bhagavad Gita are not so different from those of the Christian Sermon-on-the-Mount or many Islamic verses in the Koran. But developing countries sometimes have trouble adapting their traditional moral practices to the requirements of modern market capitalism. In successful capitalism, friendship must take a somewhat lower priority in the rationale for business transactions than price and quality. This is why good countries like India often struggle with issues of corruption.

How important is ethics to a leader?

Again, leaders must carry moral authority. Consider leaders outside of business. Sometimes, leaders must provoke principled resistance, as did Winston

Churchill in World War II; sometimes, they must restore dignity as Abraham Lincoln did in the struggle against slavery in the US; and, sometimes, they must take a situation that seems impossible but use moral authority to turn it around, as Gandhiji did in his fight against the British occupation of India.

Is ethics different for different sectors — government, business and non-profit sectors?

Non-profit firms and government organisations are not exempt from ethical challenges; indeed, I think they face problems more severe than for-profit organisations. For-profit organisations are at least subject to the rigours of the marketplace. If they cheat customers, they will pay for it in the long run. But governments and non-profits are insulated from this discipline. The current government corruption scandal in the US involving lobbyist Jack Abramoff and the Congress is a case in point.

You have been recognised as an outstanding teacher several times. How can teachers be leaders?

Teachers lead when they care for truth and the education of their students above everything else. They must care for it even above their own desire for academic recognition. This is very difficult.

What is the burning issue that every leader should be thinking about right now?

Business leaders today should be thinking about how to balance the demands of markets, analysts and owners, with the interests of employees, customers and members of the wider community. Our legal institutions everywhere are still reeling from the introduction of market capitalism — and this is true even in developed economies where the market system is almost 200 years old. We continue to struggle with reconciling market systems with our underlying societal values. I am convinced that enlightened business leadership and enlightened consumers, more so than government control, are the long-run solution to this problem.

How can we develop socially-responsible leaders, especially in the developing nations?

Leaders in developing countries should not be Xerox copies of leaders in developed ones. Indeed, leaders in any country should not be Xerox copies of leaders in others. Leadership in India means embodying characteristics that inspire and motivate Indians. In Switzerland, it means embodying characteristics that inspire and motivate the Swiss.

Can leadership be taught?

I know that even some academics who study leadership are pessimistic. They deny that leadership can be taught. But this is wrong. Consider the flip side of the question: “Can leadership be taught?” The flip side is “Can leadership be learned?” Of course leadership can be learned. All great leaders speak eloquently about their process of learning. So, if leadership can be learned, shall we suppose that it only can be learned by the individual himself — alone — without the help of others? This is nonsense. Learning about leadership, and especially about leadership, is like learning everywhere: it is easier through the help of others. But the “others” we learn from may soon be our colleagues at work, our spouse, our children or a teacher in a university.