You’ve just been promoted to lead a team of people who have seen it and done it all before. Perhaps you are just one of a series of leaders who have come and gone. Ho-hum. Hopefully, you’ve spent some time with each member of the team, digging, respectfully, to understand their values and perspectives.
Researcher suggest that there are two paths you can take in your leadership style, transformational or transactional.
The transformational leader seeks to stimulate her team to view their work from a new perspective. In addition, a transformational leader generates excitement and commitment within the team to the organization’s mission and vision. She helps her team to look beyond their own interest and develop the inclination to think about acting in ways that benefit everyone.
According to Bass and Avolio, two researchers in this area, a transformational leader has four emphasis:
- idealized influence
- inspirational motivation
- intellectual stimulation
- individualized consideration
A second path, the transactional leadership style, involves a tight focus on using organizational rewards and discipline to influence team member’s performance. The style emphasizes:
- work standards
- assignments
- task-oriented goal completion
- employee compliance
Several researchers have looked at the outcomes of both styles and found greater benefits from a transformational style. Here’s a brief listing of what they found about the benefits:
- leads to higher employee ratings of effectiveness and satisfaction with the leader
- certain aspects of the style are associated with higher group performance
- affected subordinate extra effort moderately
Overall the transformational style is associated with top performing managers.
The key to implementing a transformational style is the use of multiple intelligences with a strong focus on emotional (intra-personal) and social (interpersonal) intelligence.
Commerce, a key aspect of global culture, is shaped by information technologies, environmental angst and 
economic flux. By tradition, business owners focused exclusively on financial outcomes. The new field of business ethics, however, has contributed ideas about the ‘greater good’ to owners, shareholders, consumers and other key players.
Companies that avoid paying taxes and reduce the wealth of the nation pose a dilemma. A change in values, resulting from current global actualities, appears to be in the works. Of course, many companies are already good citizens. US cellular, a small US cell phone company, pays a hefty 31% in taxes while Starbucks (where we can drink our coffees in good conscience!) pays 33%.
The ‘loopholes’ that corporations utilize to reduce taxes can simply be the tax exemptions or deductions that government puts into place to encourage or deter corporate behaviors. Or they may be the boondoggles resulting from intensive corporate lobbying… Where tax laws are abused reforms are indicated! In his article The Paradox of Corporate Taxes David Leonheardt writes:
Over the last five years, on the other hand, Boeing paid a total tax rate of just 4.5 percent, …. Southwest Airlines paid 6.3 percent. …. Yahoo paid 7 percent; Prudential Financial, 7.6 percent; General Electric, 14.3 percent. http://www.nytimes.com/2011/02/02/business/economy/02leonhardt.html?_r=1
Many consumers, and some businesses, agree that environment matters and that the ethos of sustainability needs to be incorporated into business practices. Green companies themselves bring wealth to their communities and, as well, are unlikely to relocate offshore! In a small town in Michigan, population 5000, Astraeus has found innovative ways of manufacturing wind components and were able to hire most of the one hundred workers let go as a result of the 2009 recession.
Green practices have also impacted many established companies. Cadbury was the first to mass market chocolate in the world using the brand Fairtrade cocoa, and brought the product into 30,000 UK stores. The world’s most sustainable companies according to Forbes are General Electric and PG & E Corp. (See table below).
| Company Name | Country | GICS Ind. Group | Global 100 Rank | Energy Prod. (US$) | Carbon Prod. (US$) | Water Prod. (US$) | Waste Prod. (US$) |
| General Electric Company | United States | Capital Goods | 1 | $3,004 |
$27,878 |
$3,88o |
$729,685 |
| PG & E Corp. | United States | Utilities | 2 | $26,749 |
$8,656 |
n/a |
$1,773,779 |
Ranking The World’s Most Sustainable Companies Helen Coster
The formal study of business ethics has grown over the decades. In their brilliant paper Towards a Unified Conception of Business Ethics Donaldson and Dundee argue that empiricism, the ‘is’ of business practices, are informed by ideas, drawn from the best thinkers over time, that ethics call prescriptive. No amount of factual accuracy “ can ever by itself add up to an ‘ought ’ ”. The authors suggest that the two viewpoints must be integrated to put “the ‘is’ and the ‘ought’ in symbiotic harmony”.
I believe that, despite today’s global uncertainties, and for reason of environmental issues and the advent of the information age, the ongoing search for a new and viable business ethic remains critical.
Life isn’t fair but it is just. My “lieblings” statement is an expression of a trade-off between short-run happenings and long run outcomes. I don’t think there’s any empirical evidence to back up my belief, but history seems to bear witness to dictators getting their just desserts.
The inevitability of justice seems predicated on the idea that there are hidden forces at work, like a chemical reaction, striving for balance between the reactants. Human actors under influence, do the forces bidding.
As a person of faith, I’m prone to believe that hidden forces stand ready to defend widows and orphans. Yet, I think of the quote associated with Margaret Thatcher:
“Pennies do not come from heaven. They have to be earned here on earth.“
Therefore, we have a responsibility to do our part on earth to make sure organizational policies and rules are fair and not dependent on re-balancing from heaven.
In order to formulate a reference for thinking about good organizational policy, let’s fixate on the multiple dimensions of fairness.
There are four dimensions to fairness as follows:
- Distributive – did I get something commensurate with my effort and/or needs?
- Informational – did I get full and complete disclosure?
- Interpersonal – how did the person implementing the policy treat me?
- Procedural – did I get a chance to present my case to potentially influence the outcome?
While perceived justice [fairness] may be a virtuous outcome of any transaction, its managerial significance is based on its potential consequences for customer relationships… the social justice dimensions have proven beneficial in understanding cognitive, affective, and behavioral reactions of employees to specific decisions as well as long-term attitudes towards organizations and towards the authorities in those organizations who made the decisions.
Given that employee attitude affects productivity. Fairness is more than being virtuous.
Based on my experience, most organizations are well focused on distributive and informational dimensions of fairness. Yet, lack clarity on interpersonal fairness and rarely engage procedural forms of fairness.
What’s the way forward?
I can envision a future when employees and employers engage in the co-creation of important organizational policies. There are many barriers to achieving full procedural fairness with co-creation. However, let me extend a short pith saying as a solution.
“Don’t focus on why your organization can’t, but how you can”
“Work is an extension of personality. It is one of the ways in which a person defines himself, measures his worth and humanity.”
Peter F. Drucker, 1909-2005
