Leadership – Theory and Role of ethical leaders in Business
Leadership is a network of relationships between a leader and a team or group member that connects their fellows to fulfill their mission. Leadership is a process reserved for those who influence a group of people toward a common goal (Northouse, 2015). The role of ethical leaders in business organizations is to develop a variety of high-standard honest emotion quality styles that can challenge and improve their organization’s performance. In this research paper, I examine how ethical leaders apply to three types of leaders: transactional, transformational, and authentic.
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A transactional leader is a type of leader who works with their employees to ensure that they all comply with reward and punishment. “Transactional leaders are types of leaders who use goods to reward outstanding employees and punish those who produce poor results until they produce good results” (Bass, 2008). For example, Google used a decentralized approach to empower each employee. The main corporate headquarters campus has been built with an on-site gym, daycare service, and laundry service, as well as recognizing their employees’ dedication to hard work, as they have invested long hours in building the company to thrive consistently in this ever-changing environment. Furthermore, Google provides benefits that allow employees to make the area their second home. Furthermore, Google employees receive additional bonuses, health insurance, a massage every other week, a free gourmet lunch, tuition reimbursement, discounts on solar panels when they choose to install them at home, and the ability to bring their favorite pet to work with them. p.459 (Ferrell et al., 2015).
Transactional leaders focus on maintaining required conduct and procedures, which directly corresponds with an organization’s code of conduct in which top ethical Leadership creates an ethical concern, as long as the Leadership and employees find the exact exchange relationship to reward or punish the conduct, the relationship will be expected to be successful (Ferrell et al., 2015, p.331). Transactional leaders lead the business value structure with many rules and regulations to get their employees and suppliers on the same page and work toward the same goal. Starbucks CEO Howard Schultz, for example, was born in 1953 and grew up in the Brooklyn housing projects. Following graduation, he began selling coffee makers to companies such as Starbucks Coffee Tea and Spice Company, which initially sold coffee beans rather than made-to-order drinks. In 1982, he was hired by the company. Schultz opened the first Starbucks coffeehouse in 1984, modeled after an Italian espresso bar. Schultz wanted to expand Starbucks, but the owners preferred to keep it small. In 1985, Schultz left to start his own business. In 1987, he purchased Starbucks and merged the two companies with the help of investors. Schultz was ranked 394 on Forbes magazine’s list of the 400 wealthiest people in America by 2006. As a transactional leader, he was in charge of the Starbucks model’s vision and implementation (Pamela Spahr, 2016)
Along with the transactional leadership style, there is another type of leader: the transformational leader. Transformational leaders are leaders who classify the need for change, create a vision that guides the influence, and lead the change with the commitment of a group of people. Transformational leaders strive to increase employee commitment while fostering trust and motivation (Ferrell et al., p.331, 2015). Transformational leaders communicate with the impression of mission and thinking, challenge any status, and encourage their colleagues or employees to explore new work methods. The leader recognizes each individual exclusively.
Furthermore, transformational leaders must be credible role models for others to look up to and emulate. Let’s say; Martin Luther King was a transformational leader who certainly challenged the existing state of segregation and injustice, suggesting a new pathway to democracy, racial justice, and brotherhood for all, fueled by creating the “urgency of now.” Martin Luther King took the time to empathize with his followers’ “great trials and tribulations…storms of persecution and…police brutality,” encouraging them to “continue to work with the faith that unearned suffering is redemptive” and comforting them with the hope of imminent change that their cooperation could effect. Martin Luther King eloquently shared his dream, which 50 years later transcends race, economic status, and any other societal boundary, and inspires and motivates millions beyond his original audience of 200,000 people to believe that they, too, can emancipate themselves from whatever shackles keep them from living the life to which they are equally entitled. His physical existence may seem distant fifty years after his memorable speech and 45 years after his assassination, but the impact of his leadership legacy is ever-present. He convinced others to believe in his “dream” for a better future. He changed the course of history and continues to have an impact on countless generations of people, regardless of “the color of their skin” (Rhondajaipaul, 2013)
Finally, authentic leaders are ethical leaders who can increase passion for Leadership in a company or organization. An authentic leader loves his company and lives out the corporation’s values in their behavior at work, establishing long-term value with their employees through open communication (Gardner et al., 2011). Leaders can help improve individual employee and team operation performance by instilling trust and garnering support from all associates. According to William George, Authentic Leadership was meant to be a wake-up call to the next generation to learn from the mistakes of Enron, WorldCom, and Tyco. In it, I defined authentic leaders as “people of the highest integrity, committed to building enduring organizations… who have a deep sense of purpose and are true to their core values, who dare to build their businesses to meet the needs of all their stakeholders, and who recognize the importance of their service to society.” (2015) (Bill George). For example, GM Motors had a difficult time and went bankrupt, but in 2009, President Obama boldly bailout financial to bring GM out of bankruptcy. He named a successful leader from the board chair, Ed Whitacre, as CEO. Whitacre was a successful telecommunications executive who served as the chair and CEO of SBC and saved AT&T from bankruptcy. Ed Whitacre’s extraordinary Leadership quickly turned around GM. His one-year tenure signaled a dramatic shift in the old way of doing business as the days of redundant bureaucracy and fragmented innovation ended.
Whitacre abandoned GM’s dormant committee system, which shielded executives from accountability for results, in favor of making clear, decisive decisions while challenging people to move much faster. Whitacre even appeared in GM advertisements, heralding the new GM and challenging customers to try GM cars while guaranteeing their money back if dissatisfied. When Toyota experienced quality issues, he seized the opportunity by increasing production rates and sales and marketing efforts. Whitacre has faced unjustified criticism for stepping down since handing over the CEO reins to successor Dan Akerson. However, this was his intention. “I planned to help return this company to greatness—and not stay a day longer,” he said. He is a man of his word, and he has kept every promise and commitment he has made. GM is now solidly profitable, increasing revenues, retooling its vehicle lineup, and allowing the US government to recoup its bailout investment. (George, Bill, 2016). Finally, authentic leaders empower their employees rather than controlling the power and ordering them to work. Allowing their fellows to work allows them to put in more effort and create a more pleasant work environment. Pam O’Connor, for example, is the CEO and President of Leading Real Estate. An authentic leader who believes in empowering her team and allowing them to succeed and fail at work because mistakes often lead to innovation. She leads by example, authorizing every employee who aspires to heights and always thinking of new ways to overcome any new challenge. Don Kottick (Don Kottick, 2015)
As a manager, Leadership can have an impact on their coworkers. And the role of the leadership ethic requires them to be involved in their organization’s activities responsibly and strongly. There are three types of leadership roles: transactional leaders, transformational leaders, and authentic leaders. Whatever leadership style you have, the primary purpose of Leadership is to use this skill in the organization and to build vital ethical behavior decisions for leaders. As a result, to be a leader and guide their team or business to success, good leaders should have a combination of leader roots and skill sets learning skill.
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References
Northouse, G (2015). Leadership: Theory and practice. Los Angeles, CA: Sage
Rhondajaipaul (2013) MLK – A TRANSFORMATIONAL LEADER, Humphrey fellows at Cronkite School of Journalism and Mass Communication – ASU, Exploring the world through servant Leadership. http://cronkitehhh.jmc.asu.edu/blog/2013/08/mlk- a-transformational-leader/
Gardner, L., Cogliser, C.C., Davis, K.M., & Dickens, M.P. (2011). Authentic Leadership: A review of the literature and research agenda. Leadership Quarterly, p. 22, 1120–1145.
Bill George (2016). Authentic Leadership, New Media http://www.billgeorge.org/page/authentic-leaders1
O.C. Ferrell., & John Fraedrich., & Linda Ferrell (2015). Business Ethics: Ethical Decision Making and Cases (10th Ed.).Stamford, CT: Cengage Learning
Pamela Spahr, (2016). St Thomas University, http://online.stu.edu/transactional-leadership/
Bass, B. (2008). Bass & Stogdill’s Handbook of Leadership: Theory, Research & Managerial Applications (4th ed). New York, NY: The Free Press. pp. 50,623).
Don Kottick (2015), what the best in the industry are doing to lead, eight examples of authentic Leadership in real estate, Inman 101.
http://www.inman.com/next/8-examples-of-authentic-leadership-in-real-estate/
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Question 
Leaders are everywhere and hail from all walks of life. Sometimes they are business or government leaders or even leaders in your own families.
Leadership – Theory and Role of ethical leaders in Business
Most people meet someone in their lives whom they admire for their leadership characteristics and skills. Think about some leaders you have known
or read about and why they inspired you.
Use the library, your course materials, and the Internet to research biographies of various leaders and leadership theories. Then, respond to the
following:
Identify three leaders, and discuss why you admire them.
Briefly describe 1 of the leaders you admire and why you selected that leader.
What leadership traits do they possess that you think are most important in being an effective leader?