The Ethical Leadership and international Business

Valeria Fonseca Rodriguez

Julieth Cortez Cangrejo

Lizeth Andrea López

Diana Carolina Vela Reyes

Orlando Martínez Corredor

Fundación Universitaria del Área Andina

Faculty of Economic and Financial Administrative Sciences

Bogotá

2019
 Introduction

At the present document, we going to aborting the ethical leadership in the international business

perspective, but first is necessary to know about three important questions that will be resolved in

the following present document, there are:

 What does mean Ethical Leadership?

 How the ethical leadership is related with international business?

 Is there any case of success from ethical leadership in the international business?

In an international context the business are based in trust, is that the most interesting challenge to

facing, for that reason exist different tools and organizations to support the trust in the

international trade a commercial operations such as: banking entities, World Trade Organization,

International Finance Operations, International Monetary Found, in the others (Bounlle, 2009).

Over time has increased terms like corporate social responsibility and ethical leadership, there are

two alternatives to improve the internal company operations based in values and human rights.

Where is possible increase the trust between stakeholders and the company thought the correct

labour practices, fair operation practices and environmental ethical care (Juan David Peláez-

León, 2014).

The Ethical Leadership

To be able to understand what is the meaning of Ethical Leadership, is important to understand

the meaning of the each word by separate.

 The Ethic can be define as a philosophic study that look for the establishment of the right

and wrong actions, but that does not mean that the term of Ethic is study just by philosophies,

thanks that the humans are in constant search of the meanings and context, and is this last one,

the factor that presents a major effect in the current definition of ethic, and the confusion that this

word presents with the term morality, which can be define as the conventional beliefs that a

particular society holds, and the ethic is the correct action accept by the general population

around the world (Dahnke & Dreher, 2006).

By the other hand the term of Leadership focuses on the most important resource that a

company can have, the people and involve the process of developing and communicating a vision

for the future, motivating people and get their engagement, and all of this require an specific skill,

which can be innate, or that can be develop with time and practice, Something that contribute

with the grow of interpersonal relationships (Armstrong, 2008).

Then when we are talking about the Ethical Leadership we are taking this as the

demonstration of normatively appropriate conduct through personal actions and interpersonal

relationships, and the promotion of such conduct to followers through two-way communication,

reinforcement and decision making (Wang A.-c. , Chiang, Chou, & Cheng, 2017).

The implications for ethical leadership in business should be clear: the orientation giving by

the leader can be the successful or the fail key in the company, if the staff are governed by self-

concern, their own egos, the tendency will be to control others, but if since the management have

are genuinely concerned about the well-being of others the staff will respond far more

productively to love than to fear in the workplace (Prozesky, 2009).

 According to the International Economic Forum exist six important principles that can help to

developing ethical leaders in a company, (Seidman, 2015) there are:

Stop and
Think

Lead with
Purpose Extend Trust

Ethical
Leaders
Shape the Twoway
Conversa-
Context tion

Demostrate
Moral
Authority

Source: own elaboration based on document international monetary fund six key principles for ethical
leadership.

1. Stop and think: here is very important take and active pausing before start an activity is

necessary to reflection for obtain a good results (Seidman, 2015).

2. Extend trust: refers to the significance of be honest in each one activity that we

developed (Seidman, 2015).

3. Have two-way conversations: focus primary in the engage with each part involucrate

such as clients, suppliers in the others (Seidman, 2015).

4. Demonstrate moral authority: don’t use the people conversely is indispensable see them

like humans and to transmit trust and moral values (Seidman, 2015).
 5. Shape the context: take care with the mindsets, behavior, the importance of the values

what is right or wrong according morally, at every moment because each context is

different even with the same actors (Seidman, 2015).

6. Lead with purpose: is make the right in every moment first think about the essential of

performance showing at the world (Seidman, 2015).

Is important mention this topic in the international business, because is essential the ethical in the

people and in the organizations. This make that the people that are related with international

business, they must have appropriate ethical behaviors for the decision-making that favor in the

future (Marroquin, 2007).

This topic has had a lot of weight in the last years, owing to that gives an environmental more

favorable.

This has shown the advantage of many companies the people hire that have ethical leadership,

because give innovation, growth, opportunities and economic and social best for the company.

Any personality characteristics of ethical leaders are:

Traits: The decisions good that take persons are the result of your experience in the professional

field and in the life.

As said “Ethical behavior of a leader individual values, conscious intentions, freedom of choice,

stage of moral development, types of influence used of ethical as well as unethical behavior”

(Mihelic , Lipicnik, & tekavcic, 2010).

Values: As sais in the book “Ethical values in an organizational setting are emphasized and

strengthened primarily through values-based leadership, that can be defined as a relationship

between leaders and co-workers, based on shared, internalized values, that are acted upon by the

leader” (Mihelic , Lipicnik, & tekavcic, 2010).

The values are the results of the codes of the behavior that may be punishments or rewards

depending on the case (Mihelic , Lipicnik, & tekavcic, 2010).

Exist 5 values are crucial for ethical leaders (Mihelic , Lipicnik, & tekavcic, 2010).

-Pride, Patience, Prudence, Persistence, Perspective.

This determinate the effectiveness of the person in the growth of the companies, can be that the

decision is right for the ethical for the people is unpopular.

Integrity: As said in the book “Leaders without integrity are only putting on an act; once values

are agreed upon and in place, the CEO should put them into practice.” (Mihelic , Lipicnik, &

tekavcic, 2010).

The honesty is the best example of the leaders to its collaborators, because it demonstrates those

take learning of the mistake and improve them every day. This forms a work team engaged with

their goals and those of the company (Mihelic , Lipicnik, & tekavcic, 2010).

In international business is important take strategic that strengthen your business or the company

and that will help to stay in the competitive market, for this reason to have the knowledge of

ethical leadership makes the difference between others and add a plus of the behaviors right and

wrong of your business or the company.

Success stories

As we know China is one of the country’s most powerful un the world one reason about that is

the strong ethical that they have, the ethical leadership follow three Chinese philosophies: the
rationalism, the rule of man and Taoism.

The relationalim explains how the acts of one person influence the others, for better or for worse,

each act has a consequence.

The rule of man talks about the strongest man, the Chinese are trained to be strong people and the

strongest is who directs and take decisions.

The Taoism consist in the good ethic, the Chinese think that a good person don´t talk about his

good acts, because the good actions must be brought in secret. (Wang & Chiang, 2017)

All this actions and philosophies influence in the way of the leader take decisions, and that make

that Chine wasn´t only a great producer with cheap labor, in this moment Chine is the second

economy more powerful in the world. The factors that made China grows were the kind of

government which they have is a totalitarian regime and them propose is maintain the stability in

the rules of the business, the other factor is the transformation educational this because they have

a perspective of being “the center of the world”, they invested the 4% of the GDP in the

education and create cheap labor with good quality, that make that the economy be competitive.

(Wang & Chiang, 2017)

the case of Xiaomi a start-up in the 2014 was cataloged as the best valued on the planet.

Conclusion

In this moment the companies are implemented new methods for apply as ethical company and

like we mention before a good results depend of the leader of the company, is necessary apply

correct the ethic actions and not make the things as an obligation, in the companies and in the

countries is necessary have a good leader, because that can be the difference between the

competence (Newman & Miao, 2015)

It is important to recognize that ethical leadership exerts a great influence on the companies that

practice it since, in general, there is no corruption and companies take into account the

repercussions that their actions have on others, making the whole society benefit.

In all this topic we talk about the good results of apply good ethics nevertheless there are

moments when the ethic is not good and sometimes is so strict in the case of China, the ethic has

good results but the people is not happy and the countries in Asia have a high indices of suicide

(Wakatsukim & Griffiths, 2017) .This happen because the people in Asia thin a lot of in their acts

and the repercussions, sometimes is necessary make the thinks right or try to do it, and if they

choose was wrong, in the future take better decisions is an experience that we have to live.
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