Chapter 1 - The Leader's Light or Shadow
I. This chapter defines the difference between moral and immoral leaders. Leaders can fail to meet ethical challenges by:
a. abusing power
b. hoarding privileges
c. mismanaging information
d. acting inconsistently
e. misplacing or betraying loyalties
f. failing to assume responsibilities
II. Seven types of bad leaders:
a. Incompetent – these leaders don’t have motivation or ability to sustain effective action
b. Rigid – may be competent, but they are unyielding, unable to accept new ideas or changing conditions
c. Intemperate – lack self control and are enabled by followers who don’t or can’t intervene.
d. Callous – uncaring, unkind, and ignores or downplays the needs/wants of followers.
e. Corrupt – leaders who lie, cheat and steal. Put self interest ahead of public interest.
f. Insular – draws a clear boundary between the welfare of his or her immediate group or organization and outsiders.
g. Evil – commit atrocities, using their power to inflict severe physical or psychological harm.
III. The Shadow of Power – Power is the foundation for influence; the more power we have the more likely people will comply with our wishes.
a. 5 Power Bases (leaders typically draw from more than one source):
i. Coercive Power – based on penalties or punishments
ii. Reward Power – depends on being able to deliver something of value to others, tangible or intangible.
iii. Legitimate Power – resides in position, not person
iv. Expert Power – based on characteristics regardless of position
v. Referent (role model) Power – rests on admiration one has for another
b. Box 1.1 – Jamestown: The Life and Death of Peoples Temple
i. Jim Jones led 910 people in Nov 18, 1978 promoting racial harmony and social justice
ii. He became delusional with his power, claiming deity, abusing Temple members for breaking rules, and even leading people to commit suicide with cyanide-laced Kool-Aid
c. Leadership cannot exist without power, which makes people uncomfortable
i. Abuse of Power
1. 90% of surveyed individuals experienced disrespect from a boss throughout their career.
2. 20% of these people work for an abusive leader, who engage in the following activities:
a. Deceit
b. Constraint
c. Coercion
d. Selfishness
e. Inequity
f. Cruelty
g. Disregard
h. Deification
3. Greater Power à Greater Abuse
a. Power makes it easier for selfish, impulsive people to pursue goals w/o considering the needs of others
b. People in power protect positions by attacking those they perceive as threats
c. Powerful people are prone to biased judgments
d. Power deprivation in followers can also lead to adverse consequences
4. Leaders need to consider:
a. What types of power they should use and for what purpose?
b. How much power to keep and to give away?
c. Recognize and resist dangers by having too much power and make sure followers aren’t corrupted by having too little.
IV. The Shadow of Privilege – the greater the leaders powers, the greater the privilege, or rewards, they receive
a. Those who hoard power are likely to hoard status and wealth, and take it away from employees
b. Unequal distribution of wealth in America
c. We should ask the following questions:
i. How many additional privileges should leaders have?
ii. What should be the relative difference in pay and benefits between workers and top management?
iii. How do we close the gap between the world’s haves and have-nots?
V. The Shadow of Mismanaged Information – leaders have access to more information than do others in the organization
a. Possessing this knowledge makes their lives more complicated
b. Temptation arises to lie to protect themselves or tell the truth
c. Questions regarding the release of information
d. Privacy issues
e. Unethical Leaders:
i. Deny having knowledge in their possession
ii. Withhold information followers need
iii. Use information solely for their personal benefit
iv. Violate privacy rights of followers
v. Release information to the wrong people
vi. Put followers in ethical binds by preventing them from releasing information that others have a right to know
f. Case Study 1.1 – Hiding the Truth
i. Former NFL star Pat Tillman was killed by friendly fire in SE Afghanistan when attempting to stop the confusion-led battle in April 2004
ii. To cover up the fact, communication was severed, orders of silence were commanded, and false reports were filed
iii. Eventually, due to a report from Army coroners, the cover-up was exposed and several fines and criticism were given
iv. The misinformation was disseminated given that the Iraq War was going badly; a similar case happened with Private Jessica Lynch
g. Patterns of deception destroy trust that binding leaders and followers.
i. Conspiracy theories
h. Leaders must also consider ethics related to the image they hope to project to followers
i. Manage words, behaviors, visual images = impression management
ii. The closer the person is to the ideal the more likely they will be selected as a leader.
iii. Can be used for immoral ends – we need to consider the end product.
VI. The Shadow of Inconsistency – leaders deal with a variety of constituencies, each with its own set of abilities, needs, and interests.
a. Leader-Member Exchange theory (LMX) – based on the notion that leaders develop closer relationships with one group of followers who become the “in-group”.
i. These people get more job responsibility, higher levels of trust, mutual influence, and support from the leader.
ii. Members of the “out group” expected to carry out basic requirements
iii. Leaders need to develop relationships w/ all their followers
b. Situational variables make consistency an ethical burden
i. Guidelines
ii. Diverse followers
iii. Varying levels of relationships
iv. Elements of the situation
v. Issues of inconsistency and misgivings
VII. The Shadow of Misplaced and Broken Loyalties – leaders must weigh loyalties and duties when making choices.
a. They must consider employees, stockholders, families, communities, environment, etc.
b. Noteworthy leaders put needs above the community ahead of their own.
c. Loyalties can be broken and misplaced – mergers and acquisitions are often evidence of this
VIII. The Shadow of Irresponsibility – the breadth of responsibility is one of the factors distinguishing between the leader and follower roles.
a. Leaders act irresponsibly when:
i. They fail to make reasonable efforts to prevent followers misdeeds
ii. Ignore or deny ethical problems
iii. Don’t shoulder responsibility for consequences
iv. Deny duties to followers
v. Hold followers to higher standards then themselves
IX. Case Study 1.2 – Casting Shadows at Enron
a. Enron’s CFO Andrew Fastow created “imaginary” SPEs to share the risk of debt and write off deficits with the financing
b. In December 2001, Enron filed for bankruptcy; eventually CEO Ken Lay resigned, Fastow and energy traders pled guilty to manipulation of information, and the government is still acquiring restitution
X. Case Study 1.3 – The Stock Options Scandal
a. In the 1990s, when stock option compensation was popular, backdating options became a practice to inflate prices and earn extra income
b. Executives, board members, and other employees changed hiring records and stock option dates to improve option value and avoid losses
a. abusing power
b. hoarding privileges
c. mismanaging information
d. acting inconsistently
e. misplacing or betraying loyalties
f. failing to assume responsibilities
II. Seven types of bad leaders:
a. Incompetent – these leaders don’t have motivation or ability to sustain effective action
b. Rigid – may be competent, but they are unyielding, unable to accept new ideas or changing conditions
c. Intemperate – lack self control and are enabled by followers who don’t or can’t intervene.
d. Callous – uncaring, unkind, and ignores or downplays the needs/wants of followers.
e. Corrupt – leaders who lie, cheat and steal. Put self interest ahead of public interest.
f. Insular – draws a clear boundary between the welfare of his or her immediate group or organization and outsiders.
g. Evil – commit atrocities, using their power to inflict severe physical or psychological harm.
III. The Shadow of Power – Power is the foundation for influence; the more power we have the more likely people will comply with our wishes.
a. 5 Power Bases (leaders typically draw from more than one source):
i. Coercive Power – based on penalties or punishments
ii. Reward Power – depends on being able to deliver something of value to others, tangible or intangible.
iii. Legitimate Power – resides in position, not person
iv. Expert Power – based on characteristics regardless of position
v. Referent (role model) Power – rests on admiration one has for another
b. Box 1.1 – Jamestown: The Life and Death of Peoples Temple
i. Jim Jones led 910 people in Nov 18, 1978 promoting racial harmony and social justice
ii. He became delusional with his power, claiming deity, abusing Temple members for breaking rules, and even leading people to commit suicide with cyanide-laced Kool-Aid
c. Leadership cannot exist without power, which makes people uncomfortable
i. Abuse of Power
1. 90% of surveyed individuals experienced disrespect from a boss throughout their career.
2. 20% of these people work for an abusive leader, who engage in the following activities:
a. Deceit
b. Constraint
c. Coercion
d. Selfishness
e. Inequity
f. Cruelty
g. Disregard
h. Deification
3. Greater Power à Greater Abuse
a. Power makes it easier for selfish, impulsive people to pursue goals w/o considering the needs of others
b. People in power protect positions by attacking those they perceive as threats
c. Powerful people are prone to biased judgments
d. Power deprivation in followers can also lead to adverse consequences
4. Leaders need to consider:
a. What types of power they should use and for what purpose?
b. How much power to keep and to give away?
c. Recognize and resist dangers by having too much power and make sure followers aren’t corrupted by having too little.
IV. The Shadow of Privilege – the greater the leaders powers, the greater the privilege, or rewards, they receive
a. Those who hoard power are likely to hoard status and wealth, and take it away from employees
b. Unequal distribution of wealth in America
c. We should ask the following questions:
i. How many additional privileges should leaders have?
ii. What should be the relative difference in pay and benefits between workers and top management?
iii. How do we close the gap between the world’s haves and have-nots?
V. The Shadow of Mismanaged Information – leaders have access to more information than do others in the organization
a. Possessing this knowledge makes their lives more complicated
b. Temptation arises to lie to protect themselves or tell the truth
c. Questions regarding the release of information
d. Privacy issues
e. Unethical Leaders:
i. Deny having knowledge in their possession
ii. Withhold information followers need
iii. Use information solely for their personal benefit
iv. Violate privacy rights of followers
v. Release information to the wrong people
vi. Put followers in ethical binds by preventing them from releasing information that others have a right to know
f. Case Study 1.1 – Hiding the Truth
i. Former NFL star Pat Tillman was killed by friendly fire in SE Afghanistan when attempting to stop the confusion-led battle in April 2004
ii. To cover up the fact, communication was severed, orders of silence were commanded, and false reports were filed
iii. Eventually, due to a report from Army coroners, the cover-up was exposed and several fines and criticism were given
iv. The misinformation was disseminated given that the Iraq War was going badly; a similar case happened with Private Jessica Lynch
g. Patterns of deception destroy trust that binding leaders and followers.
i. Conspiracy theories
h. Leaders must also consider ethics related to the image they hope to project to followers
i. Manage words, behaviors, visual images = impression management
ii. The closer the person is to the ideal the more likely they will be selected as a leader.
iii. Can be used for immoral ends – we need to consider the end product.
VI. The Shadow of Inconsistency – leaders deal with a variety of constituencies, each with its own set of abilities, needs, and interests.
a. Leader-Member Exchange theory (LMX) – based on the notion that leaders develop closer relationships with one group of followers who become the “in-group”.
i. These people get more job responsibility, higher levels of trust, mutual influence, and support from the leader.
ii. Members of the “out group” expected to carry out basic requirements
iii. Leaders need to develop relationships w/ all their followers
b. Situational variables make consistency an ethical burden
i. Guidelines
ii. Diverse followers
iii. Varying levels of relationships
iv. Elements of the situation
v. Issues of inconsistency and misgivings
VII. The Shadow of Misplaced and Broken Loyalties – leaders must weigh loyalties and duties when making choices.
a. They must consider employees, stockholders, families, communities, environment, etc.
b. Noteworthy leaders put needs above the community ahead of their own.
c. Loyalties can be broken and misplaced – mergers and acquisitions are often evidence of this
VIII. The Shadow of Irresponsibility – the breadth of responsibility is one of the factors distinguishing between the leader and follower roles.
a. Leaders act irresponsibly when:
i. They fail to make reasonable efforts to prevent followers misdeeds
ii. Ignore or deny ethical problems
iii. Don’t shoulder responsibility for consequences
iv. Deny duties to followers
v. Hold followers to higher standards then themselves
IX. Case Study 1.2 – Casting Shadows at Enron
a. Enron’s CFO Andrew Fastow created “imaginary” SPEs to share the risk of debt and write off deficits with the financing
b. In December 2001, Enron filed for bankruptcy; eventually CEO Ken Lay resigned, Fastow and energy traders pled guilty to manipulation of information, and the government is still acquiring restitution
X. Case Study 1.3 – The Stock Options Scandal
a. In the 1990s, when stock option compensation was popular, backdating options became a practice to inflate prices and earn extra income
b. Executives, board members, and other employees changed hiring records and stock option dates to improve option value and avoid losses
Title.
Chapter 1 – The Leader’s Light or Shadow
I. This chapter defines the difference between moral and immoral leaders. Leaders can fail to meet ethical challenges by:
a. abusing power
b. hoarding privileges
c. mismanaging information
d. acting inconsistently
e. misplacing or betraying loyalties
f. failing to assume responsibilities
II. Seven types of bad leaders:
a. Incompetent – these leaders don’t have motivation or ability to sustain effective action
b. Rigid – may be competent, but they are unyielding, unable to accept new ideas or changing conditions
c. Intemperate – lack self control and are enabled by followers who don’t or can’t intervene.
d. Callous – uncaring, unkind, and ignores or downplays the needs/wants of followers.
e. Corrupt – leaders who lie, cheat and steal. Put self interest ahead of public interest.
f. Insular – draws a clear boundary between the welfare of his or her immediate group or organization and outsiders.
g. Evil – commit atrocities, using their power to inflict severe physical or psychological harm.
III. The Shadow of Power – Power is the foundation for influence; the more power we have the more likely people will comply with our wishes.
a. 5 Power Bases (leaders typically draw from more than one source):
i. Coercive Power – based on penalties or punishments
ii. Reward Power – depends on being able to deliver something of value to others, tangible or intangible.
iii. Legitimate Power – resides in position, not person
iv. Expert Power – based on characteristics regardless of position
v. Referent (role model) Power – rests on admiration one has for another
b. Box 1.1 – Jamestown: The Life and Death of Peoples Temple
i. Jim Jones led 910 people in Nov 18, 1978 promoting racial harmony and social justice
ii. He became delusional with his power, claiming deity, abusing Temple members for breaking rules, and even leading people to commit suicide with cyanide-laced Kool-Aid
c. Leadership cannot exist without power, which makes people uncomfortable
i. Abuse of Power
1. 90% of surveyed individuals experienced disrespect from a boss throughout their career.
2. 20% of these people work for an abusive leader, who engage in the following activities:
a. Deceit
b. Constraint
c. Coercion
d. Selfishness
e. Inequity
f. Cruelty
g. Disregard
h. Deification
3. Greater Power à Greater Abuse
a. Power makes it easier for selfish, impulsive people to pursue goals w/o considering the needs of others
b. People in power protect positions by attacking those they perceive as threats
c. Powerful people are prone to biased judgments
d. Power deprivation in followers can also lead to adverse consequences
4. Leaders need to consider:
a. What types of power they should use and for what purpose?
b. How much power to keep and to give away?
c. Recognize and resist dangers by having too much power and make sure followers aren’t corrupted by having too little.
IV. The Shadow of Privilege – the greater the leaders powers, the greater the privilege, or rewards, they receive
a. Those who hoard power are likely to hoard status and wealth, and take it away from employees
b. Unequal distribution of wealth in America
c. We should ask the following questions:
i. How many additional privileges should leaders have?
ii. What should be the relative difference in pay and benefits between workers and top management?
iii. How do we close the gap between the world’s haves and have-nots?
V. The Shadow of Mismanaged Information – leaders have access to more information than do others in the organization
a. Possessing this knowledge makes their lives more complicated
b. Temptation arises to lie to protect themselves or tell the truth
c. Questions regarding the release of information
d. Privacy issues
e. Unethical Leaders:
i. Deny having knowledge in their possession
ii. Withhold information followers need
iii. Use information solely for their personal benefit
iv. Violate privacy rights of followers
v. Release information to the wrong people
vi. Put followers in ethical binds by preventing them from releasing information that others have a right to know
f. Case Study 1.1 – Hiding the Truth
i. Former NFL star Pat Tillman was killed by friendly fire in SE Afghanistan when attempting to stop the confusion-led battle in April 2004
ii. To cover up the fact, communication was severed, orders of silence were commanded, and false reports were filed
iii. Eventually, due to a report from Army coroners, the cover-up was exposed and several fines and criticism were given
iv. The misinformation was disseminated given that the Iraq War was going badly; a similar case happened with Private Jessica Lynch
g. Patterns of deception destroy trust that binding leaders and followers.
i. Conspiracy theories
h. Leaders must also consider ethics related to the image they hope to project to followers
i. Manage words, behaviors, visual images = impression management
ii. The closer the person is to the ideal the more likely they will be selected as a leader.
iii. Can be used for immoral ends – we need to consider the end product.
VI. The Shadow of Inconsistency – leaders deal with a variety of constituencies, each with its own set of abilities, needs, and interests.
a. Leader-Member Exchange theory (LMX) – based on the notion that leaders develop closer relationships with one group of followers who become the “in-group”.
i. These people get more job responsibility, higher levels of trust, mutual influence, and support from the leader.
ii. Members of the “out group” expected to carry out basic requirements
iii. Leaders need to develop relationships w/ all their followers
b. Situational variables make consistency an ethical burden
i. Guidelines
ii. Diverse followers
iii. Varying levels of relationships
iv. Elements of the situation
v. Issues of inconsistency and misgivings
VII. The Shadow of Misplaced and Broken Loyalties – leaders must weigh loyalties and duties when making choices.
a. They must consider employees, stockholders, families, communities, environment, etc.
b. Noteworthy leaders put needs above the community ahead of their own.
c. Loyalties can be broken and misplaced – mergers and acquisitions are often evidence of this
VIII. The Shadow of Irresponsibility – the breadth of responsibility is one of the factors distinguishing between the leader and follower roles.
a. Leaders act irresponsibly when:
i. They fail to make reasonable efforts to prevent followers misdeeds
ii. Ignore or deny ethical problems
iii. Don’t shoulder responsibility for consequences
iv. Deny duties to followers
v. Hold followers to higher standards then themselves
IX. Case Study 1.2 – Casting Shadows at Enron
a. Enron’s CFO Andrew Fastow created “imaginary” SPEs to share the risk of debt and write off deficits with the financing
b. In December 2001, Enron filed for bankruptcy; eventually CEO Ken Lay resigned, Fastow and energy traders pled guilty to manipulation of information, and the government is still acquiring restitution
X. Case Study 1.3 – The Stock Options Scandal
a. In the 1990s, when stock option compensation was popular, backdating options became a practice to inflate prices and earn extra income
b. Executives, board members, and other employees changed hiring records and stock option dates to improve option value and avoid losses
I. This chapter defines the difference between moral and immoral leaders. Leaders can fail to meet ethical challenges by:
a. abusing power
b. hoarding privileges
c. mismanaging information
d. acting inconsistently
e. misplacing or betraying loyalties
f. failing to assume responsibilities
II. Seven types of bad leaders:
a. Incompetent – these leaders don’t have motivation or ability to sustain effective action
b. Rigid – may be competent, but they are unyielding, unable to accept new ideas or changing conditions
c. Intemperate – lack self control and are enabled by followers who don’t or can’t intervene.
d. Callous – uncaring, unkind, and ignores or downplays the needs/wants of followers.
e. Corrupt – leaders who lie, cheat and steal. Put self interest ahead of public interest.
f. Insular – draws a clear boundary between the welfare of his or her immediate group or organization and outsiders.
g. Evil – commit atrocities, using their power to inflict severe physical or psychological harm.
III. The Shadow of Power – Power is the foundation for influence; the more power we have the more likely people will comply with our wishes.
a. 5 Power Bases (leaders typically draw from more than one source):
i. Coercive Power – based on penalties or punishments
ii. Reward Power – depends on being able to deliver something of value to others, tangible or intangible.
iii. Legitimate Power – resides in position, not person
iv. Expert Power – based on characteristics regardless of position
v. Referent (role model) Power – rests on admiration one has for another
b. Box 1.1 – Jamestown: The Life and Death of Peoples Temple
i. Jim Jones led 910 people in Nov 18, 1978 promoting racial harmony and social justice
ii. He became delusional with his power, claiming deity, abusing Temple members for breaking rules, and even leading people to commit suicide with cyanide-laced Kool-Aid
c. Leadership cannot exist without power, which makes people uncomfortable
i. Abuse of Power
1. 90% of surveyed individuals experienced disrespect from a boss throughout their career.
2. 20% of these people work for an abusive leader, who engage in the following activities:
a. Deceit
b. Constraint
c. Coercion
d. Selfishness
e. Inequity
f. Cruelty
g. Disregard
h. Deification
3. Greater Power à Greater Abuse
a. Power makes it easier for selfish, impulsive people to pursue goals w/o considering the needs of others
b. People in power protect positions by attacking those they perceive as threats
c. Powerful people are prone to biased judgments
d. Power deprivation in followers can also lead to adverse consequences
4. Leaders need to consider:
a. What types of power they should use and for what purpose?
b. How much power to keep and to give away?
c. Recognize and resist dangers by having too much power and make sure followers aren’t corrupted by having too little.
IV. The Shadow of Privilege – the greater the leaders powers, the greater the privilege, or rewards, they receive
a. Those who hoard power are likely to hoard status and wealth, and take it away from employees
b. Unequal distribution of wealth in America
c. We should ask the following questions:
i. How many additional privileges should leaders have?
ii. What should be the relative difference in pay and benefits between workers and top management?
iii. How do we close the gap between the world’s haves and have-nots?
V. The Shadow of Mismanaged Information – leaders have access to more information than do others in the organization
a. Possessing this knowledge makes their lives more complicated
b. Temptation arises to lie to protect themselves or tell the truth
c. Questions regarding the release of information
d. Privacy issues
e. Unethical Leaders:
i. Deny having knowledge in their possession
ii. Withhold information followers need
iii. Use information solely for their personal benefit
iv. Violate privacy rights of followers
v. Release information to the wrong people
vi. Put followers in ethical binds by preventing them from releasing information that others have a right to know
f. Case Study 1.1 – Hiding the Truth
i. Former NFL star Pat Tillman was killed by friendly fire in SE Afghanistan when attempting to stop the confusion-led battle in April 2004
ii. To cover up the fact, communication was severed, orders of silence were commanded, and false reports were filed
iii. Eventually, due to a report from Army coroners, the cover-up was exposed and several fines and criticism were given
iv. The misinformation was disseminated given that the Iraq War was going badly; a similar case happened with Private Jessica Lynch
g. Patterns of deception destroy trust that binding leaders and followers.
i. Conspiracy theories
h. Leaders must also consider ethics related to the image they hope to project to followers
i. Manage words, behaviors, visual images = impression management
ii. The closer the person is to the ideal the more likely they will be selected as a leader.
iii. Can be used for immoral ends – we need to consider the end product.
VI. The Shadow of Inconsistency – leaders deal with a variety of constituencies, each with its own set of abilities, needs, and interests.
a. Leader-Member Exchange theory (LMX) – based on the notion that leaders develop closer relationships with one group of followers who become the “in-group”.
i. These people get more job responsibility, higher levels of trust, mutual influence, and support from the leader.
ii. Members of the “out group” expected to carry out basic requirements
iii. Leaders need to develop relationships w/ all their followers
b. Situational variables make consistency an ethical burden
i. Guidelines
ii. Diverse followers
iii. Varying levels of relationships
iv. Elements of the situation
v. Issues of inconsistency and misgivings
VII. The Shadow of Misplaced and Broken Loyalties – leaders must weigh loyalties and duties when making choices.
a. They must consider employees, stockholders, families, communities, environment, etc.
b. Noteworthy leaders put needs above the community ahead of their own.
c. Loyalties can be broken and misplaced – mergers and acquisitions are often evidence of this
VIII. The Shadow of Irresponsibility – the breadth of responsibility is one of the factors distinguishing between the leader and follower roles.
a. Leaders act irresponsibly when:
i. They fail to make reasonable efforts to prevent followers misdeeds
ii. Ignore or deny ethical problems
iii. Don’t shoulder responsibility for consequences
iv. Deny duties to followers
v. Hold followers to higher standards then themselves
IX. Case Study 1.2 – Casting Shadows at Enron
a. Enron’s CFO Andrew Fastow created “imaginary” SPEs to share the risk of debt and write off deficits with the financing
b. In December 2001, Enron filed for bankruptcy; eventually CEO Ken Lay resigned, Fastow and energy traders pled guilty to manipulation of information, and the government is still acquiring restitution
X. Case Study 1.3 – The Stock Options Scandal
a. In the 1990s, when stock option compensation was popular, backdating options became a practice to inflate prices and earn extra income
b. Executives, board members, and other employees changed hiring records and stock option dates to improve option value and avoid losses
