Ethical Leadership

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This paper is an exploratory study on Ethical Leadership in the present Business environment which starts with the introduction to leadership and ethical leadership concept and explains about the components of ethical leadership which consists of purpose, knowledge, authority and trust.

Also outlined about the modes of ethical leadership which comprises of inspiration, facilitation, persuasion, manipulation and coercion and followed by the best of the best Ethical Leaders identified in 2007. It also mentions about the world’s popular Ethical Companies of 2009.

Finally, there are few guidelines mentioned for practicing the Ethical Leadership in today’s world.


Leadership has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task”. Leadership remains one of the most relevant aspects of the organizational context.

A leader is a person who influences a group of people towards a specific result. It is not dependent on title or formal authority. Leaders are recognized by their capacity for caring for others, clear communication, and a commitment to persist.

Good leaders are made not born. If you have the desire and willpower, you can become an effective leader. Good leaders develop through a never ending process of self-study, education, training, and experience.

Generally, Ethics means Standards of conduct that indicate how one should behave based on principles about right and wrong. And Ethical leadership means keeping the lines of communication between you and those that you are leading open and strong. Those that you are leading should feel that they can come to you to discuss any problems that they may be having concerning the job at hand, at the very least. They need to know that you will hear them out, and that you will always make the fairest possible decision. An ethical leader would never promise something to someone and not follow through with it. Furthermore, ethical leadership means that the leader never gossips about other members of the group, or shares any private information about them with others. "Real leaders concentrate on doing the right thing, not on doing things right."

Components of Ethical Leadership

Ethical leadership begins with the way leaders perceive and conceptualize the world around them. Ethical leadership, organizational ethics, and social responsibility are inseparable concepts. The leader's role is to guide the human potential of the organization's stakeholders to achieve organizational aspirations in ways that liberate rather constrain their imaginations and judgment.

Ethical leadership must, then, be effective, efficient, and excellent if it is not to waste human potential. It is not enough to be ethical in one's individual actions to be an ethical leader. To be effective, efficient, and excellent, four components of ethical leadership must be understood and developed: purpose, knowledge, authority, and trust. ● Purpose-The ethical leader reasons and acts with organizational purposes firmly in mind. This provides focus and consistency. ● Knowledge-The ethical leader has the knowledge to judge and act prudently. This knowledge is found throughout the organization and its environment, but must be shared by those who hold it. ● Authority-The ethical leader has the power to make decisions and act, but also recognizes that all those involved and affected must have the authority to contribute what they have toward shared purposes. ● Trust-The ethical leader inspires-and is the beneficiary of-trust throughout the organization and its environment. Without trust and knowledge, people are afraid to exercise their authority. The relationship between these four components can be visualized as interrelated components, as described in the figure opposite. Attention to any one component alone is incomplete and misleading. Ethical...
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