Leadership Styles and Employee Ethical/Unethical Behavior

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Transformational leaders encourage followers to embrace moral values and to act in the interest of the collective rather than self interest. Transformational leaders are thought to raise followers’ level of moral development and to focus followers’ attention on higher level needs and values. Transactional leaders rely on rewards and punishments to direct followers’ behaviour. Transactional leaders are inconsistent with moral leadership because transactional approaches ignore followers’ needs and aspirations and that transactional leaders focus on the status quo rather than on an inspiring vision of the future and may be motivated by their own achievement and power rather than followers’ needs. Multidimensional transformational leadership construct with the following dimensions which consist on individualized consideration, intellectual stimulation, idealized influence, and inspirational motivation. Transformational leadership has been associated with many positive outcomes such as workers’ satisfaction with work and the leader, organizational commitment, citizenship behaviours, and job performance. Ethical leadership is not a rare phenomenon in today’s business organizations. Ethical leaders are both “moral persons” and “moral managers”. We think of the “moral person” as representing the “ethical” part of the term “ethical leadership,” and we think of the “moral manager” as representing the “leadership” part of that term. Ethical leaders are thought to be moral persons because they are honest and trustworthy, take good care of their people, and do the right things in both their personal and professional lives. They make decisions based on values and ethical decision rules, and they are fair and concerned about stakeholders’ interests and long-term outcomes. As moral managers, ethical leaders are clear about their expectations of followers. They are visible role models of ethical behaviour, communicate with their people about their ethical and values-based...
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