Chapter 5 Leadership

1. CHAPTER 5:
COURAGE AND MORAL
LEADERSHIP

2. TABLE OF CONTENTS
 SUMMARY
 MORAL LEADERSHIP TODAY
 ACTING LIKE A MORAL LEADER
 BECOMING A MORAL LEADER
 SERVANT LEADERSHIP
 LEADING WITH COURAGE

3. SUMMARY

4. SUMMARY
 This chapter explores a number of ideas
concerning moral leadership and leadership
courage. People want honest and trustworthy
leaders. However, leaders face many pressures
that challenge their ability to do the right thing—
pressures to cut costs, increase profits, meet the
demands of various stakeholders, and look
successful.
 Creating an ethical organization requires that
leaders act based on moral principles. Leaders
are the symbols for the organization’s ethical
climate. When they excessively promote self-
interest, practice deception and breach
agreements, and lack the courage to confront
unjust acts, they hurt the organization and
everyone associated with it.

5. SUMMARY
 Ethical leaders are humble, honest, and
straightforward. They maintain a concern for
the greater good, strive for fairness, and
demonstrate the courage to stand up for what
is right. Acting as a moral leader means
demonstrating the importance of serving
people and society as well as increasing profits
or personal gain.
 One personal consideration for leaders is the
level of moral development. Leaders use an
understanding of the stages of moral
development to enhance their own as well as
followers’ moral growth. Leaders who operate
at higher stages of moral development focus
on the needs of followers and universal moral
principles.

6. SUMMARY
 Ideas about control versus service between
leaders and followers are changing and
expanding, reflected in a continuum of leader–
follower relationships. The continuum varies
from authoritarian managers to participative
managers to stewardship to servant
leadership. Leaders who operate from the
principles of stewardship and servant
leadership can help build ethical organizations.
 The final sections of the chapter discuss
leadership courage and how leaders can find
their own courage. Courage means having the
mental and moral strength to confront,
persevere through, and withstand danger,
difficulty, or fear.

7. SUMMARY
 Courageous leaders accept responsibility, take
risks and make changes, speak their minds,
and fight for what they believe.
 Two expressions of courage in organizations
are moral leadership and ethical
whistleblowing. Sources of courage include
belief in a higher purpose, connection with
others, harnessing anger, and developing
courage step by step.

8. LEARNING OUTCOMES
 After studying this chapter, you should be
able to:
 Combine a rational approach to
leadership with a concern for people and
ethics.
 Understand how leaders set the ethical
tone in organizations and recognize the
distinction between ethical and unethical
leadership.
 Recognize your own stage of moral
development and ways to accelerate your
moral maturation.

9. LEARNING OUTCOMES
 Know and use mechanisms that enhance
an ethical organizational culture.
 Apply the principles of stewardship and
servant leadership.
 Recognize courage in others and unlock
your own potential to live and act
courageously.

10. MORAL LEADERSHIP
TODAY

11. MORAL LEADERSHIP
TODAY
 Acting as a moral leader means
demonstrating the importance of serving
people and society as well as increasing
profits or personal gain.
 Leaders use an understanding of the stages
of moral development to enhance their
own as well as followers’ moral growth.
Leaders who operate at higher stages of
moral development focus on the needs of
followers and universal moral principles.
 Leaders of many corporations have failed to
overcome moral and ethical challenges.

12. ETHICAL CLIMATE IN BUSINESS
 Leaders face many pressures
that challenge their ability to do
the right thing.
Obstacles
for
Leaders
Personal
weakness
Pressure
to cut
costs
Pressure
to
increase
profits
Pressure to
please
shareholders
Pressure to
meet the
demands of
vendors/
partners
Pressure to
look
successful
Self-
interest

13. ETHICAL CLIMATE
IN BUSINESS
Discussion Question
 What are some pressures you face as a
student that challenge your ability to do the
right thing?
 Do you expect to face more or fewer
pressures as a leader?

14. ETHICAL CLIMATE IN BUSINESS
Discussion Answer
 One challenge is that of honesty
in the age of Internet courses.
Because students work from
home or office on personal
computers, it is difficult to verify
if a student does the work and
takes the test for a web class or
has someone else do it. This
places pressure on students to
do the right thing by doing the
work and taking the tests
themselves.
 A leader will have more
pressures. For example, if a
company pays its employees
overtime, the leader needs to be
sure that the employees are not
stretching their hours in order to
claim their overtime pay. If there
is too much overtime pay, then
the leader is not being fiscally
responsible to the company’s
stakeholders.

15. LEADERS SET THE ETHICAL TONE
 Top leaders set the standard for the rest of the organization.EthicalLeaders
Act as positive role models
Share the credit for successes and
accept the blame when things go wrong
Speak up against acts they believe are wrong
Signal what matters by their behavior
Focus on employees, customers, and the greater good
Strive for fairness and honor agreements
Be honest with employees, partners,
customers, vendors, and shareholders

16. COMPARING ETHICAL VERSUS
UNETHICAL LEADERSHIP
The Ethical Leader The Unethical Leader
Possesses humility Is arrogant and self-serving
Maintains concern for the
greater good
Excessively promotes self-interest
Is honest and straightforward Practices deception
Fulfills commitments Breaches agreements
Strives for fairness Deals unfairly
Takes responsibility Shifts blame to others
Shows respect for each individual Diminishes others’ dignity
Encourages and develops others Neglects follower development
Serves others Withholds help and support
Shows courage to stand up for
what is right
Lacks courage to confront
unjust acts

17. COMPARING ETHICAL
VERSUS UNETHICAL
LEADERSHIP
Discussion Question
 Leaders at several organizations, including
Hostess Brands (Twinkies), Sbarro, and
Blockbuster, have gotten significant raises or
bonuses shortly before the firms filed for
bankruptcy.
 The companies have argued that it was a
necessary step to keep managers during a
difficult time.
 Do you think this is a legitimate argument
from an ethical standpoint?

18. COMPARING ETHICAL VERSUS
UNETHICAL LEADERSHIP
Discussion Answer
 Some may say that it isn’t a legitimate
argument from an ethical standpoint. When
a firm is a success, all employees have
contributed to it, not just the leaders.
Similarly, when firms fail, everyone should
share the responsibility.
 It isn’t right to give raises and bonuses to
some of them and not to others.
 Moreover, a firm files for bankruptcy when it
realizes that it doesn’t have sufficient funds
to meet its day-to-day operations. In such
circumstances, paying significant bonuses
doesn’t seem right.

19. ETHICAL LEADERSHIP
Video Time – “Creating ethical cultures in business”
 Boards, executives, and teams
at all levels in an organization
find it very difficult to make
ethically right decisions in the
face of challenging situations.
 Brooke Deterline
 As CEO of Courageous
Leadership, LLC, Brooke
builds on her experiences as
the founding Corporate
Director for the Heroic
Imagination Project with Phil
Zimbardo and combines social
and cognitive psychology and
a strategic focus with a
passion for leadership,
empowerment, collaboration
and impact.

20. ACTING LIKE A
MORAL LEADER

21. ACTING LIKE A MORAL
LEADER
 Business is about values and not just
economic performance.
 The single most important factor in ethical
decision making in organizations is whether
leaders show a commitment to ethics in
their talk and especially their behavior.
Leaders are examples for all employees.

22. HOW TO ACT LIKE A MORAL LEADER
Articulate and uphold high moral principles.
Focus on what is right for the organization as well as the
people involved.
Set the example you want others to live by.
Be honest with yourself and others.
Drive out fear and eliminate undiscussables.
Source: Based on Linda Klebe Treviño, Laura Pincus Hartman, and Michael Brown, ‘‘Moral Person and Moral Manager: How Executives
Develop a Reputation for Ethical Leadership,’’ California Management Review 42, no. 4 (Summer 2000), pp. 128–142; Christopher Hoenig,
‘‘Brave Hearts,’’ CIO (November 1, 2000), pp. 72–74; and Patricia Wallington, ‘‘Honestly?!’’ CIO (March 15, 2003), pp. 41–42.

23. HOW TO ACT LIKE A MORAL LEADER
Establish and communicate ethics policies.
Develop a backbone–show zero tolerance for ethical
violations.
Reward ethical conduct.
Treat everyone with fairness, dignity and respect, from
the lowest to the highest level of the organization.
Do the right thing in both your private and professional
life-even if no one is looking.
Source: Based on Linda Klebe Treviño, Laura Pincus Hartman, and Michael Brown, ‘‘Moral Person and Moral Manager: How Executives
Develop a Reputation for Ethical Leadership,’’ California Management Review 42, no. 4 (Summer 2000), pp. 128–142; Christopher Hoenig,
‘‘Brave Hearts,’’ CIO (November 1, 2000), pp. 72–74; and Patricia Wallington, ‘‘Honestly?!’’ CIO (March 15, 2003), pp. 41–42.

24. MORE THAN WHEELS CORE
VALUES
 At More Than Wheels, the Core Values guide them in achieving their
mission by working with clients and partners towards the goal of
building lasting financial outcomes for our clients.
Source: More Than Wheels Mission and Core Values, http://www.morethanwheels.org/mission (Retrieved May 18, 2013).
•We respect and believe in one another and in our customers.
•We speak the truth, even when it’s hard.
•We value one another’s opinions.
Trust
•We deal with current reality, without judgment.
•We are pragmatic and forward-looking.Nonjudgmental
•We live up to our agreements.
•We are relentless about reaching our goals and creatively solving problems.
•We do the very best we can for our clients.
Accountability
•We value collaboration.
•Our success relies on teamwork.Teamwork
•We learn from one another and from our successes and failures.
•We strive for continual and meaningful improvement in our work.Learning

25. ACTING LIKE A MORAL
LEADER
Discussion Question
 Do you agree that it is important for leaders
to do the right thing even if no one will ever
know about it?
 Why or why not?

26. ACTING LIKE A MORAL
LEADER
Discussion Answer
 Yes, it is important for leaders to do the right
thing even if no one will ever know about it.
 Leaders realize that what they do in their
personal lives carries over to the
professional arena.
 Leaders are models for the organization 24
hours a day seven days a week.
 Ethical leaders are also those who feel their
conscience watches them, their actions, and
decisions regardless of any other person.

27. ACTING LIKE A MORAL LEADER
Read an Article
 Moral Leadership is a very
different kind of leadership.
Moral Leaders aim to serve and
tend to develop the capacities of
others.
 Moral Leaders are always
characterized by a deep sense
of ethics, are driven by core
ideals and are motivated by the
pursuit of a higher purpose.
 Read an article entitled “How
To Deliver Moral Leadership
To Employees”

28. BECOMING A
MORAL LEADER

29. MORAL LEADERSHIP
 Moral leadership is about distinguishing
right from wrong and doing right, seeking the
just, honest, and good in the practice of
leadership.
 Moral leadership uplifts people and
enhances the lives of others.
 Immoral leadership takes away from others
to enhance oneself.

30. THREE LEVELS OF PERSONAL
MORAL DEVELOPMENT
• Follows rules to avoid punishment.
• Acts in own interest.
• Blind obedience to authority for its
own sake.
Level 1:
Preconventional
• Lives up to expectations of others.
• Fulfills duties and obligations of social
system.
• Upholds laws.
Level 2:
Conventional
• Follows internalized universal principles of justice and right.
• Balances concern for self with concern for others and the
common good.
• Acts in an independent and ethical manner regardless of
expectations of others.
Level 3:
Postconventional
Sources: Based on Lawrence Kohlberg, ‘‘Moral Stages and Moralization: The Cognitive-Developmental Approach,’’ in Moral Development and
Behavior: Theory, Research, and Social Issues, ed. Thomas Likona (Austin, TX: Holt, Rinehart and Winston, 1976), pp. 31–53; and Jill W. Graham,
‘‘Leadership, Moral Development, and Citizenship Behavior,’’ Business Ethics Quarterly 5, no. 1 (January 1995), pp. 43–54.

31. BECOMING A MORAL
LEADER
Discussion Question
 If most adults are at a conventional level of
moral development, what does this mean for
their potential for moral leadership?

32. BECOMING A MORAL LEADER
Discussion Answer
 Adults who reach the conventional
stage of moral development tend
to conform to social trends and
follow what is defined by the
collective society and individuals
around them. In this stage, if
deceit and cheating are the norm,
then these adults will follow the
trend without question and if
honesty is the trend, will follow
that course too without question.
Such people cannot be moral
leaders because their own views
and principles are governed by
society, immediate family,
neighbors, and others.
 This leaves them unable to make
independent decisions that require
courage and guts not only to break
away from a set convention but to
also back oneself against challenges
and obstacles in achieving goals.
Leaders can use an understanding of
these stages to enhance their
followers’ moral development and to
initiate ethics training programs to
move people to higher levels of
moral reasoning. When leaders
operate at level three of moral
development, they focus on higher
principles and encourage others to
think for themselves and expand
their understanding of moral issues.

33. BECOMING A MORAL LEADER
Video Time – “Moral Leadership”
In this talk, Barb Allen discusses
the Seven Principles of Moral
Leadership as she inspires the
audience to realize the power of
individual and social
transformation.
 Barb Allen
 She practices developmental
facilitation, incorporating an
inclusive participatory
approach that raises
awareness of groups about
their own processes so that
they can function more
effectively and are empowered
to solve difficult problems and
create needed change on their
own.

34. SERVANT
LEADERSHIP

35. CHANGING LEADER FOCUS
FROM SELF TO OTHERS
 Moral leadership
involves turning
followers into leaders.
The ultimate expression
of this leadership
approach is called
servant leadership.
Authoritarian leader
• Obedient subordinates
Participative leader
• Team players
Stewardship leader
• Self-responsible employees
Servant leader
• Whole employees
Stage 1
Control
Stage 2
Participation
Stage 3
Empowerment
Stage 4
Service
Control
Centered in
the Leader
Control
Centered in
the Follower

36. AUTHORITARIAN MANAGEMENT
 Traditional form of leadership in
which organizational stability
and efficiency are paramount.
 Leaders
• Direct and control their people
• Set the strategy and goals, as
well as the methods and
rewards for attaining them
 Followers are obedient
subordinates who are controlled
by leaders.
Organizati
onal
stability
Efficiency
Authoritarian
Management

37. PARTICIPATIVE MANAGEMENT
 In this type of management,
leaders have a paternalistic
mindset, however employees
are not true partners in the
enterprise.
Encourage increased employee
participation through employee
suggestion programs, participation
groups, and quality circles
Determine purpose and goals,
make final decisions, and decide
rewards
Expect employees to suggest
quality improvements, act as team
players, and take greater
responsibility for their own jobs.
Participative Management

38. PARTICIPATIVE
MANAGEMENT
Discussion Question
 If it is immoral to prevent those around you
from growing to their fullest potential, are
you being moral?

39. PARTICIPATIVE MANAGEMENT
Discussion Answer
 Preventing people around oneself
from growing to their fullest potential
is not a moral thing to do. It is the
moral responsibility of leaders to
speak out to influence others. If
there are barriers—race, education,
lack of access to health care—that
keep others from reaching their
potential, it is the moral duty of
leaders to take action.
 Courage means asking for what one
wants and saying what one thinks. It
is the ability to say no to
unreasonable demands from others.
The desire to please others can
sometimes block the truth and
preserve the status quo.
 The civil rights movement is an
example of leaders speaking out
against immoral behavior that kept
minorities from reaching their
potential. Companies tend to suffer
when employees do not grow to their
fullest potential. Barriers also
increase employee dissatisfaction
and lead to a troubled workplace.

40. Framework
for
Stewardship
Tie rewards to
contributions
rather than
formal positions
Expect core
work teams to
build the
organization
Give decision-
making power
and the
authority to act
to those closest
to the work and
the customer
Adopt a
partnership
mindset
STEWARDSHIP
 Leaders are guardians
and curators of
organizational resources
and values.
 Leaders place the long-
term interests of the
organization first.
 Leaders empower
followers to make
decisions and have
control over how they do
their own jobs.

41. SERVANT LEADERSHIP
Participative Management
Leadership in which the leader transcends
self-interest to serve the needs of others,
help others grow, and provide opportunities
for others to gain materially and emotionally

42. Greenleaf’s
Servant
Leadership
Model
Nourish
others and
help them
become
whole
Inspire
trust
by being
trustworthy
Listen first
to affirm
others
Put service
before
self-
interest
SERVANT LEADERSHIP

43. SERVANT LEADERSHIP
Discussion Question
 Should serving others be placed at a higher
moral level than serving oneself?

44. SERVANT LEADERSHIP
Discussion Answer
 Leaders who care for others more than they
care for themselves tend to have dedicated
and loyal followers and are better known
across the organization. According to the
concept of servant leadership, leaders help
others find the power of the human spirit and
accept their responsibilities.
 This requires an openness and willingness
to share in the pain and difficulties of others.
An example would be the servant leadership
of Mother Teresa, who spent a lifetime
serving the poor and afflicted.

45. SERVANT LEADERSHIP
Video Time – “Servant Leadership: How a jar can
change the way you lead and serve”
In this video, Ali states that everyone will
win if a leader becomes better and
explains the seven concepts through
which you can change the way you lead
and serve others.
 Alison (Ali) Fett
 As the Assistant Vice President of
Talent Development at Verve a
Credit Union, she strives to create a
culture of servant leadership through
developmental trainings and one-on-
one coaching. Her leadership style
is one of self-discovery,
empowerment, candor, and
unconditional love. Ali firmly believes
servant leadership is a journey not a
destination.

46. LEADING WITH
COURAGE

47. COURAGE
 Courage is the mental and moral strength to
engage in, persevere through, and withstand
danger, difficulty, or fear. It is the ability to
act in spite of doubt, confusion, or fear,
when it is necessary for the greater good.
 Many times it isn’t fear as an actual threat
that holds people back, but rather F.E.A.R.,
which stands for False Evidence
Appearing Real. This type of fear better
termed anxiety arises not from a true threat
but from our own thoughts.
Participative Management

48. WHAT IS COURAGE?
 Courage means accepting responsibility.
 Courage often means nonconformity.
 Courage means pushing beyond the
comfort zone.
 Courage means asking for what you want
and saying what you think.
 Courage means fighting for what you
believe.

49. COURAGE
Discussion Question
 How might understanding the difference
between “fear” and “F.E.A.R.,” as described
earlier, make you a better leader? Can you
name an example from your own life of
“false evidence appearing real”?

50. COURAGE
Discussion Answer
 F.E.A.R., which stands for “false
evidence appearing real,” arises
not from a true threat but from
people’s own thoughts. This type
of fear might be better termed
anxiety. This reflects that many
fears are learned and prevent
people from doing what they
want. True leaders step through
these learned fears to accept
responsibility, take risks, make
changes, speak their minds, and
fight for what they believe.
 In other words, it is also a
persecution complex that results
from unnecessary worrying
about a nonexistent issue. On
the other hand, “fear” is an
emotion that manifests itself as a
consequence of an actual event
that could result in retribution or
punishment. Fear is a genuine
emotion and is the main reason
for the existence of courage.

51. ABILENE PARADOX
Participative Management
The tendency of people to resist voicing
their true thoughts or feelings in order to
please others and avoid conflict

52. HOW DOES COURAGE APPLY TO
MORAL LEADERSHIP?
Acting like a
moral leader
requires personal
courage.
Opposing
unethical conduct
requires courage.

53. WHISTLEBLOWING
Participative Management
Employee disclosure of illegal,
immoral, or unethical practices in the
organization

54. HOW DOES COURAGE
APPLY TO
MORAL LEADERSHIP?
Discussion Question
 A consultant recently argued that the
emphasis on corporate governance and
social responsibility has distracted leaders
from key business issues such as serving
customers and beating competitors. Do you
agree? Should leaders put business issues
first or ethical issues first?

55. HOW DOES COURAGE
APPLY TO
MORAL LEADERSHIP?
Discussion Answer
 Companies that have not put ethical issues
first have ended up with major business
issues. It could be argued that good ethics
goes hand in hand with good business.

56. FINDING PERSONAL COURAGE
 Four (4) sources of personal
courage:
Participative Management
Draw strength from
others
Harness frustration
and anger
Take small steps
Believe in a higher
purpose

57. FINDING PERSONAL
COURAGE
Discussion Question
 One finding is that when leaders are under
stress so that fear and risk increase, they
tend to revert to an authoritarian, command-
and-control style. As a leader, how might
you find the courage to resist this tendency?

58. FINDING PERSONAL
COURAGE
Discussion Answer
 Leaders under stress should remind
themselves that authoritarian management
style gives no chance to the employees to
voice their concerns. This might prove to be
a problem in the long run. Leaders should try
their best to adopt a participative style that
makes efforts to actively involve employees.

59. SERVANT LEADERSHIP
Video Time – “Finding The Courage to Be Yourself”
In this video, Ron West talks about
finding the courage to be yourself by
sharing his experience of being bullied
and the positive outcomes which
resulted.
 Ron J West
 Ron West is passionate about
changing the world one company
at a time by helping leaders
change and grow. His book
Corporate Caterpillars - How to
Grow Wings is a blueprint for
corporate transformation. He lives
in Austin where he runs his
executive coaching, consulting
and speaking business.

60. KEY TERMS AND
CONCEPTS

61. KEY TERMS AND CONCEPTS
 Moral leadership:
distinguishing right from wrong
and doing right; seeking the just,
honest, and good in the practice
of leadership.
 Preconventional level: the
level of personal moral
development in which individuals
are egocentric and concerned
with receiving external rewards
and avoiding punishments.
 Conventional level: the level of
personal moral development in
which people learn to conform to
the expectations of good
behavior as defined by
colleagues, family, friends, and
society.
 Postconventional level: the
level of personal moral
development in which leaders
are guided by an internalized set
of principles universally
recognized as right.

62. KEY TERMS AND CONCEPTS
 Stewardship: a belief that
leaders are deeply accountable
to others as well as to the
organization, without trying to
control others, define meaning
and purpose for others, or take
care of others.
 Servant leadership: leadership
in which the leader transcends
self-interest to serve the needs
of others, help others grow, and
provide opportunities for others
to gain materially and
emotionally.
 Courage: the mental and moral
strength to engage in, persevere
through, and withstand danger,
difficulty, or fear.
 Abilene Paradox: the tendency
of people to resist voicing their
true thoughts or feelings in order
to please others and avoid
conflict.
 Whistleblowing: employee
disclosure of illegal, immoral, or
unethical practices in the
organization.