Well, ethical leadership is a theory which sounds great in practice, but in reality what does it mean? As after all, the word ethic is very much a subjective word and a word that changes its definition according to each person as after all what is ethical changes to each person.
Well, there are 2 main principles of ethics which are Teleological and Deontological. Thus, in a theological view that the ethical organisation is grounded on the end of the activity, meaning that if you practise something that might be evil, however, as long as the end of the routine is serious then you have completed something which is believed to be a serious number. However a Deontological system judges on the actual act the person has committed whatever the goal of the act is which means that a Deontological system are primarily characterised by the moral rights. Therefore is about achieving the correct moral decisions compared to Teleological system where the decision is about the consequence that an action may have, therefore to make the right moral choice we have to look at the consequences behind out results this can be summarised like “When we make choices which result in the correct consequences, then we are acting morally; when we make choices which result in the incorrect consequences, then we are acting immoral.” (Atheism 2014)
A good example of ethical leadership would be Ford as they are in Ethisphere top 144 nominees for ethical leadership (Ethisphere 2014). As well as being only 1 of 3 companies in the automotive industry to be in the list as well, it has been in that position for 4 consecutive years. It recognised the Ethisphere award for its ‘innovation, transparency, communication and citizenship’ (Ford, 2014). In addition to that the institute director commented that that “Ford is not shirking its ethical commitments and emphasis on being a responsible corporate citizen. Instead, Ford remains morally strong and thoroughly communicates that to employees and the public” (Ford, 2014). Therefore, not only has ford treating its staff well and been very good to them it also been wary of the negative aspects of its industry, which was cars due to the environment, therefore the company has spent money on innovation products such as “”EcoBoost petrol engines” (Ford,2014) which will lead to the car reducing fuel consumption which in turn reduces the amount of Co2 that it emits in addition to that it has Green manufacturing plants and has been ranked top in the “Best Global Green Band of 2014” (Edie, 2014 ). Therefore Ford has shown a commitment to its employee through its governments and the way it has treated them as well as being ethical to its customers by creating ways for the Cars to emit less Co2 and build them in more sustainable ways.
However a bad example of ethical leadership in this industry would be General Motors the US giant making cars where they have recently been caught in the ignition switch furore which led to 107 deaths and 202 injuries and led to a recall of around 29 million GM vehicles this year which shows the depth of the problem as well as the company has to pay around $400 million in compensation for its victims. In a report it was shown that there was “a pattern of incompetence and neglect” ( GM, 2014 )as well as “The ignition-switch issue was touched by numerous parties at GM–engineers, investigators, lawyers–but nobody raised the problem to the highest levels of the company,”(GM,2014) . Therefore showing that there were plenty of senior people who had realised the fault of the company, but yet none of them tried to stop it before the damage. Therefore, clearly showing that GM had clearly no ethics when many people had worked out there was an issue with the ignition switch. This has also led to a US senator asking about the leadership as well “I do not understand how the general counsel for a litigation department that had this massive failure of responsibility, how he would be allowed to continue in that important leadership role in this company,” ( Yahoo, 2014 ). Therefore, it clearly shows the company had no interest in ethics, but instead were more focused on their own survival as well as the profit margins and were not interested at all in the social ramifications of what happens to the company.
In terms of consequences I believe that in the automotive industry ethics are quite important an example would be the GM ignition switch that has potentially two hundred dead because of it. Therefore, in the automotive industry you need to follow a deontology view where it is your duty to follow the correct moral rules and rights. As GM have not followed the duty of following the moral, but instead tried to take shortcuts, more interested in their selfish survival and this now led to deaths and the company paying hundreds of million in compensation. This depicts the utter collapse in ethics in the company and what a prime case of what takes place when a troupe has no more ethics, in improver to that they will now lose more clients to a company like Ford who have shown how you can move a massive international car giant but still preserve the moral philosophy.
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Ford ranked top global green brand for 2014 as carmakers race ahead. 2014. [ONLINE] Available at: http://www.edie.net/news/6/Ford-ranked-top-global-green-brand-for-2014-as-car-makers-race-ahead/. [Accessed 08 September 2014
World’s Most Ethical Companies – Honorees | Ethisphere® Institute. 2014. World’s Most Ethical Companies – Honorees | Ethisphere® Institute. [ONLINE] Available at: http://ethisphere.com/worlds-most-ethical/wme-honorees/. [Accessed 08 September 2014].
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GM CEO Mary Barra’s Remarks to Employees on Valukas Report Findings. 2014. GM CEO Mary Barra’s Remarks to Employees on Valukas Report Findings. [ONLINE] Available at: http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2014/Jun/060514-mary-remarks.html. [Accessed 08 September 2014].
Senators to GM: Why wasn’t top lawyer fired? – Yahoo Finance. [ONLINE] Available at: http://finance.yahoo.com/news/gm-legal-department-comes-under-153843425.html. [Accessed 08 September 2014].