Integrating Leadership Styles and Ethical
Perspectives
Edward Aronson*
McGill University
Abstract
This paper reviews two major ethical theories arid the
manner in which the values they espouse are associated
with the directive, transactional, and transformational
leadership styles. A model of ethical leadership is pro-
posed which relates the diniensiotis of these styles to the
level of the leader’s moral development. Transforniu-
tiotial leadership appears to be most closely connecied
to deotitology, while transactional leadership would
seem to be related more to teleological ethics, and direc-
tive leadership to ethical egoism, a category of teleology.
The paper concludes with some suggestions f o r future
research.
Milton Friedman (1970) referred to a campaign to
induce the General Motors Corporation to study its per-
formance in the area of public safety and pollution as
“pure and unadulterated socialism,” adding: “Business-
men who talk this way are unwitting puppets of the intel-
lectual forces that have been undermining the basis of a
free society” (p. 3 2 ) . According to Mulligan’s (1986) cri-
tique of Friedman’s article, acting with social responsi-
bility in business can imply financial cost, but does not
necessarily mean a neglect of return on investment, bud-
get considerations, employee compensation, or market
competitiveness. Several authors have spoken of the ‘-1”
of the corporation, referring to the leader’s responsibili-
ty to the firm and its owners or shareholders versus the
“We”, pertaining to the company’s personnel, customer
base, suppliers, and to society in general. In the light of
this distinction, Clarkson ( I 99 I ) defined corporate social
responsibility as a function of its two major elements:
profits and ethics.
When the value system of a corporation explicitly
acknowledges the importance of human values by
granting them parity with the values of profit and
*Faculty of Management. McGill University, 1001 Sherbrooke St.
West, Montreal, QC, Canada H3A 1G5. E-mail: aronson@manage-
rnent.rncgill.ca
0 ASAC 2001
Rksumk
Cette Ptude passe en revue deux the‘ories priticipales
d’e‘thiqites et la faeoti dont les valeurs qu’elles compren-
nent sont likes aus styles de leadership directif; transac-
tionriel, et transformationriel. L’auteur pre‘serite un mo-
dele de leadership Pthique d a m lequel les dimensions de
ces styles sont associe‘es ait tiiveau de de‘veloppenierit
moral du leader: Le leadership transformationnel semble
2tre lie‘ plus Ptroitement a la dkontologie tandis que le
leadership tratisactiotinel serait associe‘ plutSt 6
l’e‘thique tde‘ologique et le leadership directif a l’e‘go-
knie Pthique, une cate‘gorie de la te‘le‘ologie. L’Ptude se
ternline par quelques suggestions de recherches
ulte‘rieitres.
technology, then economic responsibilities will be
balanced with moral responsibilities, the corporation
will seek to balance the interests of the stakeholders
without sacrificing its economic responsibilities, and
the responsibilities of its managers will be not only
to the corporation and its shareholders but also to
other stakeholders. The corporation’s economic ori-
entation will not come at the expense of its social, or
moral, orientation. Profits and ethics coexist. The “I”
and the “We” are integrated into the strategic plan-
ning and decision making of the corporation. (pp.
I 93- 194)
Bowie (199 1 ) extended the “I” and “We” analysis to
a discussion of the firm as a moral community in which
management will be carried out from a moral perspective
provided that leaders take into account the interests of all
the stakeholders.
Capitalism may be considered to be the economic
basis for prosperity in democratic countries, but it is sub-
ject to criticism from an ethical perspective. The issue
for capitalists is to be aware that while ineficient firms
will be mercilessly eliminated due to free market forces,
“the moral sentiments of man will only gradually and
uncertainly penalize immoral ones. But, while the quick
destruction of inefficient corporations threatens only
individual firms, the slow anger at immoral ones threat-
ens capitalism-and thus freedom-itself’ (Wilson,
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INTEGRATING LEADERSHIP STYLES AND ETHICAL PERSPECTIVES
1995, p. 60). In order to help maintain the long-term suc-
cess of the firm and ultimately of capitalism and democ-
racy, it is therefore incumbent upon corporate leaders to
earn the confidence and loyalty of their followers and the
esteem of society at large via ethical behaviour, which
may essentially be described as behaviour which is good
as opposed to bad or right as opposed to wrong.
Ethical behaviour on the part of the leader would
appear to be a necessary condition for the establishment
of an ethical organization, but this alone is not sufficient.
Ethical leadership is required. CEOs are obliged to set a
moral example for organizational members and to
demarcate the constant striving for increased profits
from those activities which may be detrimental to the
values of society in general. Leaders must establish the
spirit, set the ambience, and determine the boundaries of
acceptable behaviour. Difficulties arise when leaders’
attention is diverted by operational issues and they
neglect the provision of an effective ethical infrastruc-
ture (Navran, 1997).
But ethical leadership encompasses more than the
fostering of ethical behaviour. It may also be viewed as
effective leadership. “Ethical business leadership
requires not only harvesting the fruit we can pluck today,
not only investing in the small trees and experimental
hybrids that won’t yield a thing in this quarter or the
next, but also caring for the soil that allows us to produce
such a rich harvest in the first place” (Butcher, 1997, p.
6). According to Ciulla (1995), good leadership refers
not only to competence but also to ethics. All instances
of leadership are essentially concerned with influencing
followers to do something. Differences exist, however, in
the way in which this influence is exercised by the lead-
ers and these variations have normative implications.
Any empirical information obtained from the “scientif-
ic” study of leadership will always be deficient if the
moral implications are ignored (Ciulla, 1995).
What are the moral implications of leadership
behaviour? How are different leadership styles related to
ethics of conduct? What are the factors that determine
ethical leadership? The purpose of this paper is to
attempt to answer these questions by exploring the theo-
ries of ethics and leadership and attempting to relate the
various leadership styles to extant ethical viewpoints.
The paper begins with a brief review of the leadership
literature and the specification of a range of leadership
styles. This will be followed by a discussion of current
views on ethical leadership and the identification of a
potential problem that does not recognize the moral
nature of leadership styles other than transformational
leadership. A possible solution will be suggested by first
discussing the diverse ethical theories and then propos-
ing a new model of ethical leadership which combines
the dimensions of the leadership styles with the leader’s
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level of moral development. The paper will conclude
with some suggestions for future research.
Leadership Theories
Behavioural scientists have attempted to discover
what traits, abilities, behaviours, sources of power, or
aspects of the situation determine how well a leader is
able to influence followers and accomplish group objec-
tives. In other words, the predominant concern of
researchers in the area has been leadership effectiveness
(Yukl, 1994). In the early part of the 20th century, lead-
ership research was focused on the trait approach. The
essential attributes examined by investigators are physi-
cal characteristics, abilities such as level of intelligence
and skills, and personality factors (Bass, 1990; Bryman,
1992). By the late 1940s. however, the inability to prove
consistently that individual traits are the sole antecedents
of good leadership caused a shift in emphasis to leader
style or behaviour. This approach essentially states that it
is what leaders do that makes them effective. Within this
context, the investigation of leadership effectiveness cen-
tred on the two major concepts of task orientation and
the interpersonal elements of the leader-follower rela-
tionship (Bryman, 1992). In the late 1960s, another point
of view began to predominate. Style alone was consid-
ered insufficient as a determinant of effectiveness. It was
therefore postulated that it is the situation that creates the
conditions appropriate for leader efficacy. This is known
as the contingency approach. The first major work in this
area was Fiedler’s ( I 967) contingency theory, which was
succeeded by several models such as the path-goal theo-
ry of House (1973), situational leadership of Hersey and
Blanchard (1969), and Kerr and Jermier’s (1978) leader-
ship substitutes. These contingency approaches identi-
fied situational conditions under which a leader’s task-
and/or interpersonal-oriented role behaviours would be
effective or ineffective. Another contingency approach
was developed by Vroom and Yetton (1 973) around the
leader’s decision-making role behaviours that ranged
from autocratic or directive to consultative and partici-
patory styles. These approaches to leadership role behav-
iours and situational contingencies fell out of favour in
the 1980s essentially due to the fact that they were lim-
ited to studying leadership as supervision of small
groups and ignored the larger issue of leading entire
organizations into the future (Conger & Kanungo, 1998).
As a consequence of the dissatisfaction among scholars
with the limitations of these approaches, the early 1980s
marked the emergence of the “new leadership perspec-
tive” (Bryman, 1992). In this new phase, a number of
researchers explored the charismatic leadership phenom-
enon (Conger & Kanungo, 1988) and related it to the
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INTEGRATING LEADERSHIP STYLES A N D ETHICAL PERSPECTIVES
transformational and transactional leadership influence
processes postulated by Burns (1978).
The leadership literature, in general, suggests that
organizational leaders demonstrdtc three major ways of
influencing followers: (a) the directive mode of influ-
ence (ranging from directive to participatory), (b) the
transactional mode of influence, and (c) the transforma-
tional mode of influence. A short description of these
three types of leadership influence is given below.
Directive Leadership
Flamholtz (1990) describes this mode of influence as
a continuum extending from a very directive leadership
style to one which is essentially nondirective. He speci-
fies the following categories: (a) autocrutic-“I’ll tell
you what we are going to do because I’m the boss”; (b)
benevolenr uu~ocratic-“I’Il tell you what we are going
to do because it will be best for all concerned”; (c) con-
sulrarive-“I’ll decide, but I’ll discuss it with you to get
your opinions”; (d) purticiputive-“We’ll decide togcth-
er, but not all votes are equal”; (e) conseriws (team)-
“We’ll all meet and discuss it until everyone agrees on a
decision”; and (f) laissez-faire-“Do whatever you want
to do.” (p. 265). These leadership styles are considered to
be best employed in situations most appropriate to the
required level of task or relationship orientation.
Transactional Leadership
According to Burns (1 978). transactional leadership
involves an exchange between leader and subordinate
such that each receives something from the other in rcturn
for something else. Conger and Kanungo (1998) claim
that transactional leadership is not leadership at all but
rather “managership”, implying an emphasis on main-
taining the status quo of the organization and ensuring the
stable administration of practices and resources essential-
ly via strategies of control. They assert that these transac-
tional strategies enable the leader to develop a quid pro
quo relationship with followers. In this mode: there is no
attempt to change subordinates’ attitudes or values or to
enhance internalization of the organization’s mission,
leaders are not Concerned with enhancing the growth and
development of subordinates, and the effectiveness of the
influence is generally limited to the motivational “life
span” of the strategies employed. This type of leadership
is characteristic of the greatest number of leader-follower
relationships and is thus more widely observed than its
transformational counterpart (Burns, 1978). Bass (1998)
has identified the following manifestations of transac-
tional leadership: (a) contingent reward-the leader spec-
ifies or obtains agreement from followers on the tasks to
be accomplished and issues rewards in exchange for their
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successful .completion; (b) managenlent-by-exceptiotz
(MBE)-this component is corrective and generally less
effcctive than contingent reward. (MBE may be acfive,
where the leader takes steps to follow closely any diver-
gence from planned results and makes corrections as
required, or passive, in which case the leader does not
monitor the subordinate’s progress but waits for devia-
tions before taking action to redress the situation); and (c)
laissez-faire leadership-this type, which cannot really
be considered transactional, indicates non-leadership,
where the leader avoids or declines to exhibit any leader-
ship behaviour whatsoever, neglecting decisions, respon-
sibilities, and authority.
Transfomiational Leadership
According to Conger ( 1 999), most theorization and
empirical studies on charismatic and transformational
leadership have been conducted in the area of leader
behaviours and their effects. with the bulk having been
carried out by three groups of investigators (see Bass &
Avolio, 1994; Conger & Kanungo, 1998; Shamir, House,
& Arthur, 1993). The theoretical perspectives held by
these groups appear essentially to have in common the
following elements: (a) influencing followers by estab-
lishing a vision for a better future, (b) inspiring follow-
ers as opposed to controlling them, (c) leading by exam-
ple through role modeling, (d) contributing to
subordinates’ intellectual stimulation, (e) enhancing
meaningfulness of goals and behaviours, (0 fulfilling
followers’ self-actualization needs, (8) empowering fol-
lowers through intrinsic motivation, (h) exhibiting confi-
dence i n subordinates’ ability to attain higher levels of
achievement, and (i) enhancing collective identity (Con-
ger, 1999). Explicit in the transformational leadership
role is, therefore, the transformational influence process,
where the leader endeavours to stimulate change in sub-
ordinates’ attitudes and values through strategies of
empowerment, thus augmenting their self-efficacy
beliefs and fostering the internalization of the leader’s
vision (Conger & Kanungo, 1998). However, not all
characteristics of charismatic/transformational leaders
have a favourable influence on followers. In certain
cases, this type of leader has created calamitous results
for both subordinates and the organization. Conger and
Kanungo ( 1 998) describe charismatic leaders as tending
to be highly capable of making changes but less profi-
cient with respect to sound management skills, and
sometimes beset by serious character defects. House and
Howell (1992) differentiate personalized charismatic
leaders-characterized as being self-aggrandizing, non-
egalitarian, and exploitative-from socialized charismat-
ic leaders-described as collectively oriented, egalitari-
an, and nonexploitative. While both types of charismatic
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INTEGRATING LEADERSHIP STYLES AND ETHICAL PERSPECTIVES
leader tend to have a high need for power, personalized
charismatic leaders generally score higher on Machi-
avellianism, narcissism, authoritarianism, and have a
propensity for low efficacy expectations, low self-confi-
dence, and an external locus of control.
As may be noted above, the various leadership
styles differ in terms of the processes by which leaders
influence followers. It is the ethical implications of these
differences in process that appear to be considered by
researchers when investigating ethical leadership. It will
be seen, however, in subsequent sections; that this per-
spective may be problematic.
Current Perspectives on Ethical Leadership
The discussion of the relationship between ethics
and leadership appears to be centred on the transactional-
transformational dichotomy begun by Burns ( 1978), who
characterized transforming leadership as ethically superi-
or to its transactional counterpart. With transforming
leadership, leaders and followers experience a mutual
elevation to increased levels of motivation and morality.
By contrast, transactional leadership is seen as restrictive,
self-serving, and exploitative of followers, never advanc-
ing beyond consideration of the things upon which the
exchange is based. Burns implies that without a trans-
forming leader there is no real leadership, in that the
transactional leader is content with emphasizing mecha-
nisms rather than broader purposes and being concerned
with accomplishing enough to avoid problems rather than
maximizing the effectiveness of the organization.
Rost (1991), in a review of approximately 600
books and articles on leadership, distinguishes between
leadership and management. In his opinion, manage-
ment is a relationship between the managcr and the sub-
ordinate founded upon an authority power base and is
transactional in nature. It is therefore concerned only
with controlling and directing other people and may be
characterized by dictatorial and coercive behaviour.
Leadership, however, employs persuasion to influence
others and is noncoercive. It is a relationship between
leaders and followers who collaborate to bring about
meaningful change, and is based on mutual objectives.
The implication is that what Rost refers to as leadership
is more ethical than management.
In discussing the ethical dimensions of leadership
influence processes, Kanungo and Mendonca (1996)
compare those observed in transactional and transforma-
tional leadership. Transactional leaders are viewed as
emphasizing control strategies and seeking the conipli-
ance of followers, which may result in “demolishing
followers’ self-worth and [lead] to their functioning as
programmed robots” (p. 73). This is seen to have an
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unethical moral implication. Transformational leader-
ship, on the other hand, is considered to be ethical, since
it concentrates on strategies of empowerment with the
intention of modifying followers’ basic attitudes, beliefs,
and values through endeavouring to build their feelings
of self-efficacy and self-determination.
Bass (1998) asserts that the leadership of organiza-
tion founders and their successors tends to create a cul-
ture of shared values and assumptions which are deter-
mined by the leader’s particular beliefs. Bass portrays
the highly transactional culture as being more conducive
to personal interest than to that of the organization. In
this context, subordinates have little participation in
decision-making and are watched closely, coerced, and
controlled. In contrast, the transformational organization
encourages discourse on goals, vision, and values, and
highlights teamwork. Due to the influence of transfor-
mational leadership, a moral commitment is developed
between leader and followers which unites them in the
pursuit of higher level mutual goals.
Overall, this perspective on ethical leadership would
appear to indicate that transformational leaders influence
their followers in a moral fashion while leaders who
employ transactional strategies or are dictatorial are
unethical. But there is a problem. The implication that
transformational leadership is ethical and other styles are
not leaves no room for ethical transactional and directive
leaders, when, clearly, these exist. In fact, evidence sug-
gests that many ethically worthwhile projects have been
completed through the efforts of individuals employing
directive or transactional leadership styles. Bird (1 999)
gives the following examples:
...p aternalistic yet authoritarian executives have
helped to create and develop comparatively benevo-
lent business organizations in traditional company
towns in North America and modern firms in Japan.
Militant yet authoritarian union leaders have led
trade union organizations in their fights to create
more democratic workplaces. Visionary yet authori-
tarian political leaders, such as the former president
of Singapore or the former king of Jordan, have been
able to institute widespread economic and political
reforms.... In brief, whether it is morally fitting for
particular individuals to lead by commanding
depends both, one, on character of cultural traditions,
organization forms, and type of issues, and two, on
whether and to what degree such leaders respect their
followers and serve the common good. (p. 7)
The ethical evaluation of the directive leadership
style is also influenced by cultural norms in different
societies. In western cultures, which tend to be charac-
terized by individualistic and low power distance values,
even the benevolent autocratic leader may be seen as less
than ethical, since followers are prevented from making
decisions for themselves. However, in more collectivis-
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INTEGRATING LEADERSHIP STYLES AND ETHICAL PERSPECTIVES
tic and high power distance cultures (Hofstede, 1980),
the benevolent autocratic leader may be seen as both
effective and ethical. An example of this phenomenon
may be found in India. Sinha (1995) describes employ-
ees in Indian organizations as being excessively depen-
dent, having a preference for hierarchy, and functioning
more efficiently under an authoritarian leader. He there-
fore postulates that the most appropriate leadership style
for Indian firms is the nurturant-task style, in which the
leader must first be concerned with fulfilling followers’
needs and expectations, and then concentrate on task-
orientation with the knowledge that subordinates will
follow the specified directives.
According to Bird ( 1999), transactional leadership
appears to be ethically appropriate under certain condi-
tions. For example, these leaders, in emphasizing day-to-
day management rather than leadership, may be instru-
mental in ensuring that organizations maintain their
formal goals and codes of conduct. To the degree that
these leaders are seen as acting fairly, followers will tend
to feel respected and treated in a just manner and may
exhibit higher levels of effort.
The above suggests that ethical leadership does not
depend on the leader’s style per se, but rather on his or
her level of moral development or the extent to which the
influence process employed is motivated by ethical val-
ues. The diverse leadership styles do differ, however, in
the manner in which these ethical values are expressed.
For a proper understanding of the differences, the fol-
lowing section explores the various perspectives in the
ethics literature.
Ethical Theories
Ethics is essentially the study of standards for
determining what behaviour is good and bad or right
and wrong. Various ethical theories exist because
throughout the ages philosophers have adopted differ-
ent perspectives regarding the criteria upon which ethi-
cal judgments should be based. However, despite the
diverse points of view, one thing does remain constant.
Morality is fundamentally concerned with the effects of
actions on other people. This point may be illustrated
by an anecdote attributed to an incident involving the
Jewish scholar Hillel of ancient times. During the reign
of King Herod, Rabbis Shammai and Hillel were con-
fronted individually by a man who insisted he be taught
the entire Torah while standing on one foot. Shammai
repelled the man with the help of a stick, but Hillel did
not. Instead he said to him, “Do not do unto others that
which you would not have them do unto you. That is
the entire Torah; the rest is commentary” (Kaback,
1998, p. 8).
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In the literature on business ethics two major per-
spectives appear to be employed frequently: deontologi-
cal and teleological. These two viewpoints will be exam-
ined next.
Deontological theories. Deontology may be
described as the theory or study of moral obligation. The
deontological perspective, according to Frankena
(1973), states that what is morally right is not dependent
upon producing the greatest level of good as opposed to
evil, but rather is determined by characteristics of the
behaviour itself. According to Hunt and Vitell (1986),
the crux of deontological theories is whether or not an
act is inherently right. Helms and Hutchins (1992) assert
that deontology considers the moral value of a behaviour
to be independent of the outcome since the certainty of
these outcomes is questionable at the moment of the
decision to act. There are two main categories of deon-
tological theories in the literature: rule deontology and
act deontology.
Rule deontology holds that in all circumstances
individuals should follow a set of predetermined stan-
dards or rules, so that behaviour is ethical or unethical
not as a consequence of the action, but as compared to
the standards themselves (Rallapalli, Vitell, & Barnes,
1998). An ethical judgment is therefore dependent upon
some general principle (Garner & Rosen, 1972). and this
overall standard may be composed of a series of more
particular guidelines, each specifying that individuals
should behave in a certain manner in a given set of con-
ditions (Frankena, 1973).
According to act deontology, people act ethically
according to their norms, but this is limited to particular
behaviours, implying that there may be exceptions to the
rule (Rallapalli, Vitell, & Barnes, 1998). Individuals are
obliged to behave toward others in a particular manner
simply because they are human. There is an obligation to
consider their rights and dignity regardless of the conse-
quences, so that the concern is for the moral value inher-
ent in the action itself (White, 1988).
Teleological theories. According to Frankena
(1979, the teleological perspective for the criterion of
what is ethically right is the nonmoral value that is cre-
ated. Therefore, an act is moral if it is judged to produce
a greater degree of good over evil than any other alterna-
tive, and is immoral if it does not do so. In this case non-
moral pertains to the absence of a moral or ethical issue
in determining the value. Helms and Hutchins (1992)
view the teleological perspective of ethics as stressing
the outcome, as opposed to the intent of individual
behaviour. There are various classifications of teleologi-
cal theories in the literature, but the major ones are: eth-
ical egoism, act utilitarianism, and rule utilitarianism.
In the case of ethical egoism, an individual consid-
ers an act to be moral or immoral depending upon its
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INTEGRATING LEADERSHIP STYLES AND ETHICAL PERSPECTIVES
likelihood to achieve personal objectives (Rallapalli et
al., 1998). All other outcomes are irrelevant to the ethi-
cal decision. An act is therefore ethical for a person only
if the results of that act for the individual are more
advantageous than those of any alternative behaviour
(Hunt & Vitell, 1986). It may be that the ethical egoist
will consider the interests of others, but this is not the
main goal. Others are only a medium through which the
ethical egoist’s welfare may be maximized (Shaw &
Post, 1993). The egoist’s basic normative judgment is
directed not to behaviours, but to his particular end
(Marshall, 1992).
Utilitarianism in its basic form may be seen as the
aggregation of two principles (Quinton, 1989): the con-
sequenrialist principle that deciding whether an act is
right or wrong is based upon whether the consequences
of the act are good or bad, and the hedonist principle that
only pleasure is inherently good and only pain inherent-
ly bad. These may be combined into a single statement
termed “the greatest happiness principle: the rightness of
an action is determined by its contribution to the happi-
ness of everyone affected by it” (p. I). According to the
original formulation by Bentham (1996),
By the principle of utility is meant that principle
which approves or disapproves of every action what-
soever, according to the tendency which it appears to
have to augment or diminish the happiness of the
party whose interest is in question .... An action then
may be said to be conformable to the principle of
utility ... when the tendency it has to augment the
happiness of the community is greater than any it has
to diminish it” (p. 12).
In the words of John Stuart Mill, “All action is for
the sake of some end, and rules of action, it seems nat-
ural to suppose, must take their whole character and
color from the end to which they are subservient” (Ben-
tham & Mill, 1973, p. 402). Good or utility may be con-
sidered to be on a continuum, with good and bad being
relative, so there is no distinction between providing the
most good and avoiding the most bad (Baron, 1999).
What is right or wrong from an ethical point of view is
therefore essentially determined by endeavouring to cre-
ate the greatest overall weighing of good over evil
(Frankena, 1973).
Act utilitarianism states that each behaviour is eval-
uated in terms of its potential to produce the greatest
amount of good for the largest number of people (Ral-
lapalli et al., 1998; Regan, 1980). According to Franke-
na (1973). act utilitarians maintain that the determina-
tion of whether an action is right or obligatory must be
derived from the principle of utility, that is by attempt-
ing to evaluate which of the available options may be
expected to result in the highest level of good as
opposed to evil in the universe. Act utilitarianism is
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independent of rules, whether or not they are referred to.
Rules may serve as a guide but do not strictly form part
of the ethical decision.
Rule utilitarianism postulates that persons conform
to sets of rules to act in a way which will again give the
highest degree of good for the greatest number of people
(Rallapalli et al., 1998). These rules should ensure the
most favourable results possible if they are universally
fulfilled (Regan, 1980). The perspective is not that a
given action is morally correct because it has a positive
outcome in a specific situation, but because the action is
of the type that has positive outcomes in general. This
category of behaviour tends to contribute to happiness
and as such cannot be considered as an individual act
which is a single occurrence having a specific set of con-
sequences. Also, from an effectiveness point of view,
ethical decisions frequently must be made in a rapid
manner with little time available for deliberation. In this
circumstance it is appropriate to depend upon a set of
rules for swift action (Quinton, 1989). These rules must
be chosen, upheld, and modified or replaced as required
on the sole basis of their utility. The maxim of utility
remains the absolute criterion, but applies in terms of
rules rather than according to specific evaluations.
In concluding the discussion of ethical theories,
some comments on the distinction between deontology
and teleology would appear to be in order. That the dif-
ferentiation is considered important is evident simply by
virtue of the extensive attention it is given in the ethics
literature. However, the manner in which it may best be
put to use in the study of business ethics is less clear. The
traditional perspective pits deontology and teleology in
opposition to each other and as mutually exclusive. This
may not necessarily be the case. In fact, Brady (1985)
states that they are actually complementary. He uses the
analogy of the two-faced head of Janus, the Roman god
of gates, to depict deontologists as looking principally to
the past in terms of cultural and religious tradition for the
establishment of ethical guidelines, while teleologists
are seen as forward looking and endeavouring to find
solutions that will lead to the most positive outcomes for
all. Ethical problems are thus resolved most effectively
by employing both points of view simultaneously.
According to Woller (1998), people are neither entirely
deontological nor entirely teleological in their moral
points of view, since the human disposition is motivated
both by a sense that certain principles of right and wrong
do exist and at the same time by a concern for the con-
sequences of behaviour. Macdonald and Beck-Dudley
(1994) assert that what is lacking in the traditional deon-
tological-teleological dichotomy is a consideration of
traditional teleology, often termed virtue ethics. While
utilitarianism is concerned with maximizing good or
pleasure and minimizing bad or pain, making no refer-
Canadian Journal of Administrative Sciences
Revue canadienne des sciences de I’administration
U(4).244-256
INTEGRATING LEADERSHIP STYLES AND ETHICAL PERSPECTIVES A RON SON

Figure 1
A Model of Ethical Leadership
'I A
TA
High trmnrvcriunrl

Autocratic - Dc~nolic
I I

--*-- I
Nondirtctive Arlificial transformational Genuine cranrformational
Pscudo-uansfomiationni Nondirrctive Deonroloprul
Pcrwnzlircd charimiatic Auticntic lransforrnalional
I I Swialircd cliarisinatic

La1rce7-laarc

Ethical Leadership Zone

I

Luw moral dzveloprncnt (MD) .egotirni Hign moral dcveioprncnt (MD) - allmism

- Trnnskmndtional Leadership = TF
---.-. . Transactional
Sorc: Items in bold face rcfcr 10 lcadcrrhip srylcr ilcms in rlulrcs rrlcr lo corespotding erlilcal tlieozy
~

Leaderrhip TA =
Direcrivc Leadership DR =

ence to any independent evaluation of right or wrong
desires, traditional teleology's perspective seeks the
most favourable outcome, but within the context of
virtues such as prudence, courage, temperance, and jus-
tice, thus avoiding immoral behaviour. Traditional tele-
ology is therefore not deontological in its method of
evaluation, but it does operate within what may be called
a deontological moral framework providing the best of
both deontology and teleology.
A Model of Ethical Leadership
It was mentioned earlier in the paper that according
to current perspectives on ethical leadership, transforma-
tional leaders influence their followers in a moral fash-
ion while leaders who employ transactional or directive
strategies are unethical. In fact, some authors indicate
that transformational leadership tends to be character-
ized by high moral development, while transactional and
directive approaches tend to be associated with lower
levels of moral development (see Kuhnert & Lewis,
250
1987; Petrick & Quinn, 1997). However, it is postulated
here that transformational, transactional, and directive
are separate leadership dimensions all based on different
influence processes. The level of moral development
does not determine the style of leadership, only how eth-
ical it is. The style of ethical leadership will rather reflect
the ethical perspective adopted by the leader, based upon
his or her valucs.
How then should the various theories of leadership
and ethics be integrated in order to reflect realistically
the fact that an individual leader will likely display a
range of leadership styles and call upon a combination of
moral perspectives in arriving at ethical judgments? Fig-
ure 1 represents a model that links ethics to leadership. It
dcpicts the position of various leadership styles in three-
dimensional space, but separately for high and low lev-
els of moral development as expressed in a leader's
intent or motive for actions.
The bold arrow extending across the bottom of Fig-
ure 1 represents the level of moral development of the
leader. As has been mentioned previously, morality is
fundamentally concerned with the effects of actions on
Canadian Journal of Administrative Sciences
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J3(4), 244-256
INTEGRATING LEADERSHIP STYLES A N D ETHICAL PERSPECTIVES
other people. According to Kanungo and Mendonca
(1 996), altruism may be defined as a regard for the well-
being of others, with moral altruism described as a help-
ing concern for others with no regard for the cost to one-
self. In their words, “The values inherent in the choice of
‘others before myself’ or moral altruism are universal
and form part of the heritage of all cultures” (p. 40).
They believe that it is essential for leaders to be motivat-
ed by a desire to benefit others. The moral development
arrow may therefore also be seen as a parallel dimension
of altruistic versus egotistic leader motivation. The thrce-
dimensional model is therefore shown separately for
high and low levels of moral development. The horizon-
tal axis (TF) of the model represents the level of trans-
formational leadership behaviour. The vertical axis (TA)
represents the level of transactional leadership behav-
iour. This may range from a high level of contingent
reward, through active management-by-exception, and
finally to passive management-by-exception. The trans-
versal axis (DR) of the model represents the degree of
directive leadership behaviour, extending from high
directive or autocratic to nondirective. The model may
thus be seen to be comprehensive in that it takes into
account simultaneously the extent to which the leader
influences followers by attempting to stimulate change
in their attitudes and values, the degree to which the
leader is concerned with the exchange of resources with
followers, and the extent to which the leader’s influence
is directive or participative while dealing with subordi-
nates with respect to their role in decision-making, all at
various levels of moral development or altruism of the
leader.
The essential determining factor as to whether the
leadership behaviours are ethical or not is the level of
moral development or altruism of the leader. For this rea-
son, the high end of the moral development arrow is
referred to as the ethical leadership zone. This zone is
consistent with theories of personality and ethical behav-
iour which show that individuals may be predisposed to
different degrees of altruism depending upon various
stages of moral development, as indicated by Kanungo
and Conger (1990). These authors state that from the
developmental point of view, Piaget (1948) emphasizes
the autonomous morality that stems from the mutual
respect people have for each other and which is exhibit-
ed in terms of reciprocal rights and obligations.
Kohlberg (1969) extended Piaget’s work to propose a
six-stage framework of moral development (see Kegan,
1982, for details). In stages 5 and 6, ethical behaviour is
dependent upon beliefs concerning the responsibility to
meet social commitments due to a utilitarian social con-
tract as well as a belief that these acts are in themselves
morally correct, implying a deontological point of view.
These beliefs correspond to the reciprocity and responsi-
25 1
ARONSON
bility norms underlying altruistic actions (Kanungo &
Conger, 1990).
Kegan ( 1982) postulated a constructive/develop-
mental theory of personality which explicates the beliefs
forming the basis of the personality structure which may
foster altruistic behaviour. He asserts that at higher lev-
els of development, adults’ needs will first be adjusted to
the needs of others in an interpersonal transactional man-
ner. However, later in the development process, people
behave entirely as a function of their own internal prin-
ciples of moral responsibility. The moral development
literature also appears to indicate that individuals will act
in a more altruistic fashion, the higher their level of
moral development (Rushton, 1980).
As will now be shown, the actions exhibited by
leaders at diverse levels o n the various dimensions will
be different depending upon whether or not they are
located in the ethical leadership zone.
Directive Leadership
The ethical theory corresponding most closely to
directive leadership would appear to be ethical egoism, a
category of teleological ethics. For the ethical directive
leader then, a decision is moral depending upon the
probability it will lead to the achievement of personal
objectives and the extent that it takes into account the
interests of subordinates. However, the goals and strate-
gies for the attainment of personal objectives and subor-
dinates’ interests are the leader’s alone.
As was seen earlier, directive leadership may be
described on a continuum ranging from very directive or
autocratic, with no consideration of the followers’ opin-
ions, to completely nondirective or laissez-faire. In the
ethical leadership zone (refer to transversal axis DR on
the right side of Figure l ) , these styles may be observed
as follows:
1. Benevolent autocrutic-This is the highest
degree of directive leadership and would be dis-
played by leaders who make decisions for fol-
lowers, but genuinely act in their best interests.
An example of this type would be nurturant-task
leadership (Sinha, 1995), discussed earlier. Other
cases may be found such as the military or in sit-
uations of crisis where followers defer to and
even welcome their authority because it is seen
as just (Bird, 1999).
2. Consuftutive--This next level of directive leader-
ship would be exhibited by the leader who listens
to subordinates’ points of view but nevertheless
makes decisions alone. This style may be seen
with directive leaders of ethical business firms,
directive trade union leaders fighting for the
rights of their members, and often with directive
Canadian Journal of Administrative Sciences
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INTEGRATING LEADERSHIP STYLES AND ETHICAL PERSPECTIVES
politicians working tirelessly in the interest of
their constituents.
3. Participative-Lower on the directive leadership
dimension are found those leaders who encour-
age followers’ participation in decision-making,
so that they actually contribute to the develop-
ment of ideas rather than simply voicing their
opinions on the leader’s suggestions. The ethical
participative leader may therefore encourage
subordinates to draw on their talents and experi-
ence to propose solutions, but reserves the right
to make the final decision.
4. Consensus-This lowest level of directive lead-
ership is similar to the participative style, but in
this case the leader does not insist on making the
final decision. Rather, he or she stresses the
importance of arriving at a consensus with all
members of the group (Flamholtz, 1990).
On the low moral development side (refer to trans-
versal axis DR on the left side of Figure l), the leader is
concerned only with satisfying his or her own egotistical
needs and has no concern for the well-being of follow-
ers. The directive leadership dimension in this case may
therefore be characterized as:
Autocratic-despotic-Here, at the highest directive
level, may be found leaders who distort the mission and
goals of the organization and abuse resources by using
them to further their own interests. These leaders may
secure the acquiescence of subordinates by threatening to
and actually employing manifest force (Bird, 1999), or
Laissez-faire-The nondirective end of the scale
would be typified by nonleadership, where the individual
i n the position of authority exerts no effort to forward the
organization’s performance, and is content to attend to
his or her own needs with no significance attached to the
activities of followers. There is, of course, a range of
degrees of authoritarianism between these two poles, but
any interest the leader may have in followers’ participa-
tion in decision-making or in any other of the followers’
needs will be strictly limited to the extent the leader
deems them advantageous to the advancement of his or
her own ends.
Transactional Leadership
As was indicated in the section on leadership, this
style involves a quid pro quo exchange between leader
and follower. It thus corresponds to utilitarian ethical
theory which states that decisions are moral if they lead
to the greatest degree of benefit for all concerned. This
category of teleological ethics is therefore concerned
only with the consequences of actions.
It was stated earlier that various levels of transac-
tional leadership exist. In the ethical leadership zone
252
ARONSON
(refer to vertical axis TA on the right side of Figure l),
they may display the following characteristics:
Contingent reward. For leaders of high moral devel-
opment, contingent reward would imply negotiation
(Bird, 1999) in good faith, with the leader and subordi-
nate agreeing on objectives, so that the leader, while not
being concerned with followers’ higher order needs,
changing their attitudes, or enhancing their internaliza-
tion of the organization’s mission, will nevertheless pos-
sess values of honesty, truth, fairness, and trust, and
these values will be manifested in all aspects of the
leader-follower relationship. In fact, for this type of eth-
ical leadership, the leader will emphasize subordinates’
training and stay in close contact with them thus con-
tributing to their ability to attain the agreed upon goals.
Active management-by-exception (MBE-active). At
this level, the transactional leader will devise a system to
prevent any deviation from standards, and on a constant
basis take the steps required to keep followers on course.
This style may be appropriate, for example, in situations
where the personal safety of employees is at risk (Bass,
1998). Although less emphasis is placed on goal-setting
and leader-follower contact than with contingent reward,
the relationship remains characterized by ethical values.
Passive management-by-exception (MBE-passive).
Here the leader will tend to stand by and apply corrective
measures only after the divergence from standards has
occurred. An example of the possible need for this style
is the case where a great number of subordinates report
directly to an individual leader (Bass, 1998). The ethical
leader may therefore lack sufficient time for personal
attention to followers’ needs but will nonetheless operate
with a genuine concern for their well-being and a desire
for them to succeed. Generally, ethical transactional
leadership may be appropriate in situations where
employees have negotiated specific contracts containing
conditions in which they may obtain greater benefits
through the application of extra effort. This leadership
style may also be effective in organizations structured
around impersonal rules connected to well delineated
tasks and where rewards are dependent upon specific
results (Bird, 1999).
On the low moral development side (refer to vertical
axis TA on the left side of Figure l), a high level of trans-
actional leadership may still imply the use of contingent
reward. In this case, however, there is no concern for fol-
lowers and no emphasis on the ethical values mentioned
above. Subordinates are seen strictly as resources or
means to achieve the leader’s objectives, with rewards
issued only to the extent required to maintain sufficient
effort and sanctions applied without concern for follow-
ers’ needs. Transactional leadership may be exercised
as “rigid, mindless management” (Bird, 1999, p. 9).
Leaders may also adjust the rules and procedures of the
Canadian Journal of Administrative Sciences
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INTEGRATING LEADERSHIP STYLES AND ETHICAL PERSPECTIVES
organization and use their power to serve their own
needs. Progressively lower levels of transactional leader-
ship may exist on the low moral development end to the
point where there is no leadership and the person in
charge adopts a laissez-faire attitude, characterized by
egotistical values and no emphasis on the needs of fol-
lowers, or the organization itself, for that matter.
Transfomiational Leadership
According to Ciulla (1 995), the transforming lead-
ership theory proposed by Burns (1978) is based on a set
of ethical assumptions pertaining to the leader-follower
relationship. She states that
Burns’ theory is clearly a prescriptive one about the
nature of morally good leadership.. .. transforming
leaders have very strong values. They do not water
down their values and moral ideals by consensus, but
rather they elevate people.. . . Transforming leader-
ship is concerned with end-values, such as liberty,
justice and equality. Transforming leaders raise their
followers up through various stages of morality and
need. They turn their followers into leaders and the
leader becomes a moral agent. (p. 15)
Clearly then, true charismatic/transformational
leaders operate out of a genuine concern for others. They
are ethical by nature and appear to be guided by a set of
moral values that are highly principled and concerned
with doing the right thing. They thus appear to make eth-
ical decisions from a deontological perspective.
The ethical leadership zone therefore includes gen-
uine charismatic/transformationalleaders (refer to hori-
zontal axis TF on the right side of Figure 1). According
to Kanungo and Mendonca (1996), these leaders demon-
strate ethical leadership when they are guided by altruis-
tic values, attempt to influence subordinates through
empowerment rather than control, and strive to develop
their own virtues. They are sincerely motivated by a con-
sideration for others often at significant personal sacri-
fice, and lead subordinates toward the attainment of
objectives that are in the interest of the entire organiza-
tion, its members, and the outside community. Authentic
transformational leaders are viewed by Bass and Stei-
dlmeier (1999) as often placing the interests of others
before their own personal concerns. The patterns of
behaviour identified by Bass and Avolio (1994), and
described earlier, may now be seen in terms of the values
by which authentic transformational leaders are guided:
(a) charisma or idealized influence is characterized by
morally uplifting values in developing a vision for a bet-
ter future, exuding confidence, and setting high stan-
dards for emulation; (b) inspirational motivation empha-
sizes the best qualities in people-concord, generosity,
and good deeds; (c) intellectual stimulation refers to
253
ARONSON
environmental analysis, vision creation, and implemen-
tation strategies in a spirit of openness and cooperation;
and (d) individualized consideration is altruistic in
nature, manifested by giving emphasis to followers’ per-
sonal growth through coaching and mentoring (Bass &
Steidlmeier, 1999). From the perspective of House and
Howell ( 1992). the socialized charismatic leader is guid-
ed by the values of a collective orientation, egalitarian-
ism, refraining from taking advantage of others, and
influencing followers by developing and empowering
them.
On the low moral development side (refer to hori-
zontal axis TF on the left side of Figure 1) may be found
the arti3cial transformational leaders. These arc the
egotistical leaders that may be prone to narcissism, who
may exhibit exaggerated behaviour and a concern only
for personal gain (Conger & Kanungo, 1998). The pseu-
do-transformational leaders described by Bass and Stei-
dlmeier (1999) also exhibit the behaviours of idealized
influence, inspirational motivation, intellectual stimula-
tion, and individualized consideration referred to above,
but they operate from a set of values totally distinct from
those of their authentic counterparts. Pseudo-transforma-
tional leaders care about their own personal power and
status, often depending on conspiracies and excuses, and
resorting to distortion of truth and manipulation of fol-
lowers for their own ends. They also tend to be con-
cerned with perpetuating followers’ dependence on
them. Persorialized charismatic leaders (House & How-
ell, 1992) are driven by self-aggrandization and non-
egalitarianism, and will not hesitate to take advantage of
others. When these leaders assume positions of authori-
ty in organizations, there is serious risk that the power
that is now theirs to wield will be used essentially to fur-
ther their own interest at the expense of their subordi-
nates and the organization itself.
In summary, this model of ethical leadership pro-
vides an overall view of diverse leadership styles and the
manner in which they manifest the values stemming
from the various ethical perspectives. As was seen, ethi-
cal leadership may be exhibited by an entire range of
leadership styles, provided they are located in the ethical
leadership zone. The same types of leadership located in
the low moral development area will display quite dif-
ferent characteristics.
Conclusions
It appears evident that there is a growing demand for
the business community to conduct its affairs with
greater regard for ethical considerations and that it is
essential for corporate leaders to earn the confidence and
loyalty of their followers and the esteem of society at
Canadian Journal of Administrative Sciences
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l&(4),244-256
INTEGRATING LEADERSHIP STYLES AND ETHICAL PERSPECTIVES
large via ethical actions. It is also vital that these leaders
cultivate ethical behaviour in the firm. Since appropriate
values are at the root of moral conduct, the business
leader of today must possess a set of values that will not
only enhance a favourable perception in the eyes of both
internal and external stakeholders, but also lead to
greater effectiveness and efficiency of organizational
members.
As was seen in the discussion of ethical theories,
many perspectives are possible for ethical values, and
although all may contribute to ethical behaviour in gen-
eral, indications are that moral judgments will usually be
based on some combination of deontological and teleo-
logical evaluation, with the proportion of each likely
determined simultaneously by the personal characteris-
tics of the moral agent and the prevailing contextual fac-
tors. Similarly, as was indicated earlier, any leader will
likely display a composite of several styles, again
depending upon personal factors and situational require-
ments. It is hoped that the model presented i n this paper
will aid in clarifying the concept of ethical leadership
which, it can now be said, may be manifested over a
range of leadership types. The determining factors are
the levels of moral development and altruism of the
leader.
From an applied management point of view, the pro-
posed model of ethical leadership may be of significant
use to organizations. As has been mentioned, certain
types of leadership will presumably be more effective in
specific kinds of firms, and it may be advantageous to
recruit leaders who possess a desired combination of
leadership styles and ethical values. By evaluating
prospective CEOs along the dimensions of the model it
may be possible to locate the particular leader in the eth-
ical leadership zone and to determine if the fit is suitable.
From a research standpoint, it will be useful to test
hypotheses concerning the relationship between trans-
formational leadership and deontological ethical values,
as well as between directive and transactional leadership
and teleological values. It will also be helpful to test
empirically the extent to which leaders make ethical
judgments based on a combination of deontological and
teleological evaluation, and the relative importance of
these types of ethical values for predominantly directive,
transactional, or transformational leaders. It will also be
of interest to examine the effects of ethical leaders on
followers and the relationships between the various
styles of ethical leadership and the performance, effi-
ciency, and satisfaction of organizational members.
Methodologically, the Conger-Kanungo Scale of
Charismatic Leadership (Conger & Kanungo, 1998), the
Leadership Questionnaire for measuring transformation-
al and transactional leadership (Bass, 1985), and the Per-
ceived Leader Integrity Scale (Craig & Gustafson, 1998)
254
AKONSON
may be of aid in measuring leadership dimensions. With
respect to ethical decision-making, Hunt and Vitell
(1986, 1993) elaborated a general theory of marketing
ethics. A number of measures have been developed to
validate this theory (Vitell & Ho, 1997). The reference to
marketing ethics is due to the fact that their research was
conducted in the marketing area, but the measures and
the theory may apply equally well to other domains.
These instruments may be employed in the empirical
investigation suggested above.
There appears to be a growing acknowledgment in
the business community of the need for “good” leader-
ship, implying both effectiveness and morality. It is
hoped that by conducting research in the area of ethical
leadership, a contribution will be made toward increas-
ing the quality of organizational life which may have a
positive influence on both members of the organization
and the wider community.
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