Term ProjectEthical Business LeadershipSubmitted To:Course Instructor:Dr. Abdul Wahab SuriCourse Title: Business Policies & EthicsCourse Code: 94047

  Submitted By:Name of Student: Muhammad Asif KhanStudent ID: MB-2-05-51271Semester: Fall 2016Campus:PAF- Karachi Institute of Economics & Technology (KIET) –City Campus

Ethical Business LeadershipWhat Is Leadership? •Leaders are first and foremost members of their own organizations and stakeholder groups.

“Leaders see their constituents as not just followers, but rather as stakeholders striving

to achieve that same common purpose...”•Their purpose, vision, and values are for the benefit of the entire organization and its key stakeholders.•These follower and stakeholder constituents have their own individuality and autonomy which must be respected to maintain a moral community.

Ethical Business LeadershipWhat Is Ethical Leadership? •Ethical leaders embody the purpose, vision, and values of the organization and of the constituents, within an understanding of ethical ideals. •They connect the goals of the organization with that of the internal employees and external stakeholders (Customers & Community). •Leaders work to create an open, two way conversations, thereby maintaining a generous understanding of different views, values, and constituents’ opinions. They are open to others’ opinions and ideas because they know those ideas make the organization they are leading better.

Ethical Business LeadershipCharacteristics of Ethical Leadership? Following are the ten facets of ethical leaders offer a way to understand ethical leadership that is more complex and more useful than just a matter of “good character and values.”1) Articulate and embody the purpose and values of the organization

“It is important for leaders to tell a compelling and morally rich story, but ethical leaders must also embody and live the story.”

2) Focus on organizational success rather than on personal ego

•Ethical leaders understand their place within the larger network of constituents and stakeholders. •It is not about the leader as an individual, it is about something bigger—the goals and dreams of the organization. •Ethical leaders also recognize that value is in the success of people in the organization.

Ethical Business LeadershipCharacteristics of Ethical Leadership? 3) Find the best people and develop them

“Ethical leaders pay special attention to finding and developing the best people”

4) Create a living conversation about ethics, values and the creation of value for stakeholders•There is a fallacy that values and ethics are the “soft, squishy” part of management. Nothing could be further from the truth. •In organizations that have a live conversation about ethics and values, people hold each other responsible and accountable about whether they are really living the values. •Making a strong commitment to bringing this conversation to life is essential to do if one is to lead ethically.

Ethical Business LeadershipCharacteristics of Ethical Leadership? 5) Create mechanisms of dissent.

“There must be mechanisms of pushing back to avoid the values becoming stale and dead”

6) Take a charitable understanding of others’ values. •Ethical leaders can understand why different people make different choices, but still have a strong grasp on what they would do and why. •Ethical leadership is not to prevent people from doing the wrong thing, but enabling people to do the right thing.

7) Make tough calls while being imaginative.•Ethical leaders do not attempt to avoid difficult decisions by using an excuse of “I’m doing this for the business.”•The ethical leader consistently unites “doing the right thing” and “doing the right thing for the business.”

Ethical Business LeadershipCharacteristics of Ethical Leadership? 8) Know the limits of the values and ethical principles they live“One issue common to the recent business scandals

was that managers and executives did not understand the limits of putting shareholders first.”9) Frame actions in ethical terms•Ethical leadership requires an attitude of humility rather than righteousness:

A commitment to one’s own principles, and at the same time, openness to learning and to having conversations with others who may have a different way of seeing the world.

Ethical Business LeadershipCharacteristics of Ethical Leadership? 10) Connect the basic value proposition to stakeholder support and societal legitimacy. •The ethical leader must think in terms of enterprise strategy, not separating “the business” from “the ethics.”•Ethical leadership is about “raising the bar,” helping people to realize their hopes and dreams, creating value for stakeholders, and doing these tasks with the intensity and importance that “ethics” connotes.•Ethical leaders speak to us about our identity, what we are and what we can become, how we live and how we could live better.

Ethical Business LeadershipBecoming an Ethical Leader To become an ethical leader, commit to asking yourself the following types of questions:• What are my most important values and principles?• Does my calendar—how I spend my time and attention—reflect

these values?• What would my subordinates and peers say my values are?• What mechanisms and processes have I designed to be sure that

the people who work for me can push back against my authority?• What could this organization do or ask me to do that would cause

me to resign for ethical reasons?• What do I want to accomplish with my leadership?• What do I want people to say about my leadership when I am gone?• Can I go home at the end of the day and tell my children (or a loved

one) about my leadership, and use my day’s work to teach them to be ethical leaders?

Ethical Business LeadershipDeveloping Ethical Leader 1) Informal Way• The first step is to bring life to a conversation about how the

organization benefits its stakeholders and about understanding the organization’s values. This doesn’t need to be a formal program.

• It could be as elaborate as town hall meetings. Or

We can simply could have an “ethics” or “stakeholders” moment at most meetings. Such moments, analogous to “safety moments” at companies like DuPont, set aside a brief time to raise concerns about the effects of the meeting on key stakeholders, or on a company’s values and ethics.

• Equally, the “ethics” moment could elaborate on how the conversations and decisions of the meeting were aligned with company values.

Ethical Business LeadershipDeveloping Ethical Leader 2) Through Leadership Program• Many companies have leadership development programs.

These programs need to be strengthened by adding the idea of “ethical leadership.”

• Executives can develop shared conversations and conceptions of how “ethical leadership” can be implemented in their particular company.

3) Challenge Meetings• Executives need to figure out how to have “challenge

meetings,” routine processes where anyone in the organization can raise a challenge to whether or not the company is living its values, or its enterprise strategy approach.

• Without the ability to challenge authority, there can be no such thing as true ethical leadership.

Ethical Business LeadershipThe Road to Ethical, Balanced Leadership

There some suggestions to over- archingsystems approach to improving ethical practice in organizations.

These suggestions are grouped under the headings of various attitudes and that are appropriate

for CEOs and corporate directors, organizational tools and initiatives, and challenges for business education.

Ethical Business LeadershipThe CEO Perspective

Raytheon’s CEO, Dan Burnham personal in articulating what he viewed as the responsibility of senior executives:• Implementing and sustaining ethics programs is important,

but we need to do more. • Leaders and leaders-to-be need to focus on the desired end

state:o On the vision for their company.o On the values and the culture of their company.

• The CEO must be the chief ethics officer of the firm. He or she cannot delegate integrity.

• CEOs should develop an ‘‘early warning system’’ that identifies problems and even potential problems.

• If unethical behavior is uncovered, it’s important for CEO to act swiftly and decisively.

Ethical Business LeadershipOrganizational Tools and InitiativesBlair Shepherd of Duke Corporate Education is commented on aspects of developing good organizational tools and initiatives.

He asserted, • Firms that know what kinds of developmental needs

their people have and are committed to providing those developmental opportunities are obviously ahead of companies that simply assume that the ‘fit will survive’—without asking, ‘fit for what?’

• Integrity is probably a more important developmental need than the ability to understand foreign exchange or transfer pricing.

Ethical Business LeadershipOrganizational Tools and InitiativesPfizer’s Mila Baker spoke of ways that ethical leadership can become a core competency and lever for organizational effectiveness.• First, it is essential to establish ethical leadership as a

strategic imperative.• Next, care should be taken to develop a ‘Strategic

Ethical Leadership Agenda’ with as much specificity as possible.

o This agenda should describe actions that demonstrate commitment and acceptable conduct as well as identify actions that do not measure up to the values of the firm.

Ethical Business LeadershipCorporate Governance•Since the top of the organization sets the tone for leadership throughout the firm, board of directors should be asked to assume increased responsibility for developing an ethical corporate climate.

P4 Management Model and Corporate Governance•It is a modern model for management and leadership in the 21st Century.•It’s an interpretation of the ‘personality’ of good ethical modern management and leadership.•As such it’s not a process or technique-it’s an attempt to characteristics good modern ethical management and leadership.

Ethical Business LeadershipCorporate Governance

Probity means honesty, uprightness- it's from the Latin word probus, meaning good.

Purpose is a replacement word for the usual 'Profit‘.

People represent staff, customers, suppliers, local communities, stakeholders, etc.

Planet - the world where we live in (in terms of sustainability, environment, wildlife, natural resources, our heritage, 'fair trade', other cultures and societies,

etc.)

Ethical Business LeadershipGood Corporate Governance Gives Organizational Benefits

• Competitive Advantage• Better Staff Attraction and Retention• Investment• Morale and Culture:• Reputation• Legal and Regulatory Reasons• Legacy

Ethical Business LeadershipThe Five Pillars Of Ethical Business Leadership

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipFirst Pillar: Commitment•The first pillar is an essential starting point for leaders in business wanting to get a grip on ethics. This pillar requires a leader to show a wholehearted and public sharing of their ethical position. Only through a personal willingness to fully engage will each leader makes an impact within their own organization, let alone play a part on a wider stage

Action• Clarify your own values and those of your organization–how well do they

match?• Share agreed values frequently–be seen talking about them and explaining

why they matter so much• Show you’re willing to exert great effort to get people committed to the

core values and what they mean for each person• Through your everyday actions demonstrate integrity, fairness and respect

of others• Set in motion structures, procedures and processes to help people

understand what’ expected of them when it comes to ethical choices–don’t just delegate, be concerned with how these are implemented.

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipSecond Pillar: Relevance• The second pillar guides leaders to ensure ethical concerns

connect to their business–directly or indirectly. A legitimate leadership concern is therefore:

“How do ethics affect my business?”• This second pillar therefore encourages a leader to ask:

“Is this ethical choice relevant to our business?” Action

Using the second ethical leadership in business pillar suggests various practical actions:• When facing business choices with an ethical or social

implication ask: does this have relevance to our business now and the long term?

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipSecond Pillar: Relevance

 Action• Check the ethical implications of the company’s goals and

business plans–explore for hidden benefits and unexpected drawbacks.

• Ensure all business decisions pass through an ethical “filter” to assess the wider impact on people and the planet.

• Seek ways to make a positive, not a negative impact on the operating environment and “do what’s right.”

• Establish clear ethical guidelines to ensure all stakeholders understand and subscribe to them.

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipThird Pillar: Add Positive ValueThe third pillar of Ethical Leadership in business prompts leaders to look for ways to add positive, rather than negative value to what their companies do.

How can a leader use ethics to add positive value?• A practical step is to make sure ethics and compliance are

integrated into operational decision making. That is ensures ethics permeates the culture and drives changes in behavior. A further benefit from this is to reduce inconsistencies and the impact of silos.

• Another positive leader action is seeking to alter the company mind-set. Instead of ethics and compliance being seen as a defence against misconduct, instead it is used to play a vital role in contributing to high performance.

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipThird Pillar: Add Positive Value• Finally, leaders can ensure ethics add positive value by ensuring they

help their company reach beyond education and communication, to affect a variety of company practices including: Performance appraisals, promotion and recruiting practices, what is celebrated and rewarded and punished, customers’ services, and sales training.

ACTION Here are some basic actions leaders can explore:• Can ethical issues and concerns be readily discussed in my company

without negative consequences?• Does my senior management support and practice high standards of

ethical conduct• Is my organization clearly committed to serving the interests of all its

stakeholders including customers, employees, suppliers and community, not just shareholders?

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipThird Pillar: Add Positive Value

ACTION• Is the behavior of our employees consistent with the

organization’s mission, vision and values?• When we advance or reward our employees is this based

on behavior that demonstrates our company values?

Fourth Pillar: Influence•The fourth pillar is about Influence. Basically this prompts leaders to ask about any particular ethical concern: “How can we influence through our ethical actions?"

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipFourth Pillar: Influence

The Starting Point is ValuesFor leaders wanting to maximize their moral or ethical influence the best starting point is values. Certain values do have a universal appeal and business leaders cannot avoid taking them into account. For example:

Courage and integrity—the ability to “do what’s right” even when no one is lookingLove and Kindness—these show up as an organization “with heart”, where compassion, kindness and mutual respect guide people in facing ethical challenges.Justice and Fairness—these exist for example when individuals feel they receive a fair return for the energy and effort they expend.Means matter as much as ends—Self-Control-- Putting personal motivations aside and acting with objectivity by doing what is right.

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipFourth Pillar: Influence

Action• Identify core values and make sure they suffuse the organization’s

direction and strategy.• Establish a formal statement of organizational values and provide a

framework of expected behavior.• "Values must lead and be right up there in a company's mission

statement, strategy and operating plan.• Ben & Jerry's Ice Cream founders Ben Cohen and Jerry Greenfield• Review standard operating procedures and performance

measurements—make sure these do not encourage unethical behavior.

• Lead by example—don’t just talk about values and ethics, personally demonstrate them

• Use existing capabilities to benefit the wider community in which the company operates.

Ethical Business LeadershipThe Five Pillars Of Ethical Business Leadership

Fifth Pillar: Means not Just Ends

•The fifth pillar requires a focus on means and not just ends. This is when a leader shows concern with how their organization achieves its goals, not just the goals.

•The fifth Pillar says "how we get there" is just as critical as "where do we want to go"--the actual destination.

•The implication is the need to build relationships to release the energy and creativity of people inside and outside the organization.

Ethical Business LeadershipThe Five Pillars Of Ethical Business LeadershipFifth Pillar: Means not Just Ends

ACTION• Regularly review how goals are achieved in terms of acceptable

norms, not just the goals themselves.

• Look beyond the financial bottom line to assess the social, environmental, economic and ethical implications of what the company does.

• Avoid over reliance on formal governance measures to stay ethical, check the effectiveness of the culture--"how we do things round here".

• Involve all stakeholders in staying ethical, seeking their full engagement in being a responsible company.

• Seek to bring consistency and transparency to the company's decision making process.

Ethical Business LeadershipHow to Become More Ethical Business Leader

Strategy 1: Make Sure to Walk the Talk 

Strategy 2: Find Your Mantra 

Strategy 3: Avoid Self-Serving Pitfalls 

Strategy 4: Do Not Go at It Alone 

Ethical Business LeadershipLeader’s Behaviour

• You Inspire Others to Be Ethical• You Are Always on Stage• You Communicate with Care

• You Admit Your Mistakes 

• You Inspire Ethical Team Work

• You Run an Ethical Operation

• You Have Guiding Principles

Ethical Business LeadershipThe Challenge of Ethical Leadership•Ethics, values, leadership, and trust are timely issues of immense importance to executives attempting to recover from a substantial downturn in the national and global economies.•After a brief review of the context, we can find several leaders from the ranks of senior executives and academic and human resource development specialists who will describe largely in their own words their perspectives on and approaches to mediating the epidemic of unethical behavior incorporations.•Individually, these leaders’ comments are insightful and pragmatic. Collectively, these observations from the basics of a systemic approach to the challenges of ethical leadership and suggest some responses that offer potential for raising the level of ethical behavior in organizations.

Ethical Business LeadershipIs Ethical Behavior Profitable for Businesses?•Reports Curtis Verschoor, author of the study ‘‘Corporate Performance is closely Linked to Strong Ethical Commitment.’’•The report reveals that the excess value a company provides its shareholder over the total amount of their investments increases significantly when an ethics code is clearly stated by accompany.•The report found that in the 87companies where an ethics code was clearly stated, the average market value added (MVA) was 2.5 times larger than the average of companies not mentioning a code of ethics or conduct. •For the 47 companies expressing an extensive commitment to an ethics code, the MVA was three times that of the other companies not expressing an ethics code.

Ethical Business LeadershipBusiness Leaders Share How They

Solved The Biggest Moral Dilemmas Of Their Careers

Ethical Business Leadership1) Sallie Krawcheck, Chair of Ellevate

Network and Ellevate Asset Management •Weeks after Krawcheck took over running Merrill Lynch’s wealth management division, in the fall of 2009, she was told that the Stable Value Fund, a financial product Merrill had sold in 401k plans, wasn’t actually so stable.•There were two options, one of which was to say tough luck to the Wal-Mart employees who owned the Stable Value Fund," says Krawcheck. Or to put money in, in order to increase the fund's value.The lesson: Know what your indicator is. My indicator has always been my stomach. When my stomach starts to hurt, I know that something’s wrong.

Ethical Business Leadership2) Binta Niambi Brown, CEO And Cofounder of Fermata

Entertainment Ltd. And Lawyer •At the time, her partner wasn’t reachable and Brown had a choice to make: either tell her client and risk losing the deal, or keep quiet until the papers were signed. She chose to tell the client. It was early in my career," she says. •"Even if the deal had been blown up for good, honest reasons rooted in decent integrity and morality, there’s always the fear that you’re going to become the associate whose deal blew up, and now everybody’s talking about how the senior person wasn’t around and you’re being Goody Two-shoes and you ruined the deal.“The lesson: Sometimes the things we think could really hurt us or embarrass us end up being the things that become our shining, most glorious moments.

Ethical Business Leadership3) Scott Gerber, CEO of The Gerber Group•When Gerber found out that one of his employees was clocking in his wife who wasn’t actually showing up until three hours later, the company immediately fired the employee.The lesson: Loyalty and longevity still matter at some companies.

4) Laurie Peterson, Founder of Build & Imagine Toys

•When Peterson started working for big toy companies more than 10 years ago, she wanted to get young girls excited about science. Somewhere along the way, she forgot her mission and found herself—like most in the industry—advocating for toys catering to boys simply because they’re more profitable.

Ethical Business Leadership4) Laurie Peterson, Founder of Build & Imagine Toys

•The thinking was that if we design it for boys, then girls will just play too," she says. But if we do the reverse and design it for girls, we don’t know if boys will play. The thing to do was, by default, design the toys for boys.•I found that to be morally not right, but I absolutely advocated what I thought was right for the business, to lead with boys, because we found that to be a more sound business decision," continues Peterson. "There I was, year after year, representing this position that the best business decision we can make is to design toys for boys. I was never my authentic self because of that."

The lesson: You need to be the change you want to see.

Ethical Business Leadership5) Kathryn Minshew, CEO And Cofounder of The MUSE•Minshew’s toughest ethical decision involved firing a company they had signed on to do business with. "They'd already paid us for the Muse recruiting product, but were treating our team so badly during on boarding that it just didn't feel like how I wanted to do business," recalls Minshew. •To make it worse, they were really nice to me. It was just the junior staff they treated poorly. The lesson: I think backing your team in situations like that is really important, but it's not always easy. Especially when you're early stage.

Ethical Business Leadership6) Anthony Soohoo, Cofounder And CEO of Dot & Bo

•During my time as a product manager on Apple's PowerBook team, we were gearing up to launch a new product. As part of testing, we had found that a very small sample size was flawed and could be harmful.•I was under tremendous pressure to make a decision on whether or not to hold off bringing the product to market. And there were good arguments on both sides.The lesson: Trust your gut to do the right thing for the customers. When there is a difficult decision to make, make it based on what would create long-term value instead of gaining the short-term win. That lesson has remained with me throughout my career.

Ethical Business Leadership7) Trae Bodge, Spokeswoman And Senior Editor Of Retialmenot.Com And Cofounder of Beauty Brand Three Custom Specialists

•When Bodge started her company Three Custom Color Specialists back in the '90s, there were very few products for women of color. And there was a reason why:

oCreating makeup for darker skin tones was more costly.

The lesson: If you’re looking at your bottom line as a company, part of that equation should be, am I catering to all consumers? And yes, certain shades will be more profitable and certain shades will be less profitable, but there’s a middle ground there. It’s a mistake from a PR and customer service perspective not to cater to all consumers

Ethical Business LeadershipDevelopment of Business Incubator Company

Ethical Business LeadershipDevelopment of Business Incubator Company

•The basic purpose to develop the company is to provide workspace, coaching, and support services to potential entrepreneurs at early-stage of businesses.• Our core objective is to encourage and support the rural area population male and female (domestic women) to take initiative and commence their own venture though effectively utilizing the available resources and their skills.•We are committed to create a diversified value chain through effectively developing the Micro Level Enterprises with the help of these entrepreneurs and provide value to our customer with affordable price and the pride to contribute toward a social cause. This success of the venture will allow us to transform it in to the:  

“Entrepreneurial Development Incubator Company”

Ethical Business LeadershipDevelopment of Business Incubator Company 

Entrepreneurial Development Program:•Selection of the high potential individuals those who has an ability and they keen to commence their professional career as an entrepreneur.•They must be hard working and able to interact with the people highly social can work under stress.•They must be able to develop and lead team.•They will be continually monitored and all the necessary assistance will be provided to them whenever required.•They will encourage supporting others for the development of their own ventures.•They will encourage supporting others for the development of their own ventures.

Ethical Business LeadershipDevelopment of Business Incubator Company

Entrepreneurial Development Program:• All the new ventures (Micro Level

Enterprises) will be develop on the basis of BOTT (Built Operate Train & Transfer).

• A comprehensive education and training program will be inaugurate to fully equip them with the appropriate knowledge skills and abilities to run their own venture in their respective area of interest and ease to doing business in their respective locality.

Ethical Business Leadership

Question &

Answers

Ethical Business Leadership

Thank You!