Blog

Co-authors Johann Burden & Piet Joubert

1. Overview

There is an emerging trend in business leadership towards leader behavior that is based on authenticity, integrity, and transparency. This is considered as values-based leadership.

What caused this trend?

Mainly a reaction to persistent questionable corporate practices over recent decades which not only revealed significant shortcoming in leadership, management, and governance but became full-blown corporate scandals.

The collapse of Lehman Brothers led the way through sub-prime lending practices which had their peak with the Global Financial Crises in 2008/09.

There are many other examples that the mass media reported on.

2. Doubtful leadership practices

Questionable practices powerfully demonstrate how real or perceived loopholes in the law and governance were extremely attractive pursuits to some leaders whose conduct and management systems were used solely to satisfy their egoistic needs.

This dodgy behavior could have some degree of benefit to the organization but had no regard for ethical decision making.

These bad leadership behaviors pretended to be proper business leadership but in reality, undermined manipulated and weakened the core of the business sometimes to the point of failure.

3. Mistrust in corporate leadership

Bad leadership practices evoked doubts in the minds of all layers of society whether or not there were genuine intentions and integrity in leadership and decision-making.

Corporate practices and leadership behaviors can’t pretend to be credible, proper and ethical when they actually mask blatant self-interest and disguised misconduct.

Broader society would like organizational leaders to act with professionalism and their behaviors aligned with the leader’s core values.

These core values need to be clearly and openly communicated and transparent to all and also endorsed by other stakeholders. The values must be in alignment with everyday people’s needs. It must contribute to the greater good and IMPORTANCE OF AUTHENTIC AND ETHICAL LEADERSHIP.

Values-based leadership is not a very clear term and concept that is well understood by people. The prominent ethical scandals of the past several years such as Enron, Arthur Andersen, WorldCom, Tyco, and Adelphia, have brought the issue of values to the forefront of the business world.

Even South Africa did not go unscathed. South Africans are continuously confronted with political and economic scandals.

The press unmasked a number of large enterprises because of dubious economic transactions and unethical behavior. At the political level, the state capture saga by the Gupta’s receives daily prominence in the press. Of all people, the state president seems to be affiliated with them.

Did these ethical failures reflect a lack of values on the part of the leaders of these organizations/institutions? Or did these leaders pursue a set of values that were at odds with most of the society?

Were they exploiting their respective organizations and external communities?

4. The importance of values-based leadership

Most people assume values are desirable, good, right, fair and just. However, this is only one side of the coin. On the flip side of the coin, we have values with a negative orientation that are destructive to some segments of humanity.

To say, for example, that the leaders of Enron who were found guilty of various crimes had no values is to deny the value they placed on greed. These bad values have a destructive effect on humanity in general, especially when linked with leadership.

Negative values-based leadership seems to have infiltrated many business organizations, governmental agencies, educational institutions, and non-profit organizations in the past several years.

In leadership publications, values-based leadership (VLB) models have received increased attention, in the past decade. Many charismatic and seemingly transformational leaders emerged that lacked a moral, authentic and ethical dimension in their leadership efforts.

VBL, like many evolving theories, has multiple definitions. Some leadership authors define values-based leaders as those with an underlying moral, ethical foundation.

VBL describes behaviors that are rooted in ethical and moral foundations. Examples of prominent VBL styles in the leadership research include:

1. Spiritual,
2. Servant,
3. Authentic,
4. Ethical and
5. Transformational leadership constructs.

VBL theories and leadership research changed the way the world looks at leadership. A prominent researcher outlined that VBL is essential for leaders to be truly successful and effective in an ethical and positive way. She believes that the concept is however not very well defined and needs further research, especially within the context of organizations and how it will contribute to organizational success.

5. What is the product or process that we intend to develop?

Up to now, we have realized that VBL is vague and not well researched.

Our aim is to research and define values-based leadership properly. Not for academic purposes but for business and industry leaders on how to implement a practical process of VBL. We want to determine how values-based leadership can gain credibility as a leadership construct and practice. How can our people become successful values-based leaders?

6. Where are we and what can be expected from this study?

During our research, we want to identify what characteristic a Values-based leader must possess. Once we have achieved this we will be sharing our findings with you.

We are also going to investigate a leadership development process which will help leaders to not only change their values but also their behavior in order to successfully become Values-Based Leaders which will ultimately help them to lead sustainable successful organizations.

Comments

We will appreciate your comments on this post in the space provided below.

7. Selected references

1. Avolio, BJ & Gardner, W 2005, ‘Authentic leadership development: getting to the root of positive forms of leadership’, The Leadership Quarterly, vol. 16, no. 3, pp. 315-38.

2. Bass, B.M., 1985, Leadership and performance beyond expectations, Free Press, New York.

3. Cianci, AM, Hannah, ST, Roberts, RP & Tsakumis, GT 2014, ‘The effects of authentic leadership on followers’ ethical decision-making in the face of temptation: An experimental study’, The Leadership Quarterly, vol. 25, no. 3, pp. 581-94

4. Padilla, A, Hogan, R & Kaiser, RB 2007, ‘The toxic triangle: Destructive leaders, susceptible followers, and conducive environments’, The Leadership Quarterly, vol. 18, no. 3, pp. 176-94.

5. Zona, F, Minoja, M & Coda, V 2013, ‘Antecedents of corporate scandals: CEOs’ personal traits, stakeholders cohesion, managerial fraud, and imbalanced corporate strategy’, Journal of Business Ethics, vol. 113, no. 2, pp. 265-83.