When Leaders Act Unethically

When discussing effective leadership, most experts agree that having a personal vision is necessary to a leader's success. Great leaders have a unique idea to motivate them; they also exemplify that vision in their actions and can articulate it to subordinates. By demonstrating their vision through action, leaders encourage the people around them. By communicating their sense of purpose to the rest of their organization, leaders give everyone a shared understanding of motivation and inspire a sense of loyalty. If done effectively, this leadership causes employees to feel like a part of something bigger than themselves (Heathfield). 

Where things get tricky is when ethics are involved. Some experts shape their definition of good leadership as being inherently moral. In her article, Susan Heathfield lists ethical behavior as one of the characteristics of successful leadership. When listing examples of outstanding leadership, one Forbes article used noble individuals such as John F Kennedy, Eleanor Roosevelt, and founder of Teach for All Wendy Kopp (Ryan). Even if people agree that genuinely great leaders exhibit moral justness, there is no denying all the other skills that make great leaders can also implement an immoral vision. One model of leadership that overlaps with the visionary model is charismatic-based leadership. Charismatic leaders exhibit several traits, including personal conviction, effective communication, and a desire to build influence and loyalty (Kramer and Bisel 223). Charismatic leaders often thrive in crisis or transitional periods, when a clear vision and adept communication skills are necessary. However, their ability to influence others and need for loyalty can inspire over idealization from their subordinates or a culture of group-think that leaves them unchallenged (Slattery 8). In some cases, this blind devotion can allow charismatic leaders to cover up unethical business practices or workplace abuse (Kramer and Bisel 235).

One example of immoral leadership is Jordan Belfort. Nicknamed the "Wolf of Wallstreet," Belfort was the founder of a stockbroker company, Stratton Oakmont, which made its fortune through illegal stock techniques. Specifically, they conducted "dump and pump" schemes, where they would sell stocks to unsuspecting buyers to inflate the price of their own shares, then sell those shares at a high profit (Biography.com Editors). While Belfort's vision of the company was undeniably unethical and rooted in the sense of narcissism, it still played a crucial part in his success as a leader. Visionary leaders actively shape their organization's culture, challenge others to outperform themselves, and display courage when performing actions (Heathfield). Influential leaders also have shared visions that allow subordinates to identify their own hopes and dreams with (Shelton). All of these statements are true of Belfort's leadership. Belfort famously lived a life of luxury, spending his fortune on sports cars, mansions, and drugs; he encouraged his fellow stockbrokers to exhibit this behavior in the workplace. He constantly pushed employees, famously telling them, "Don't hang up until the customer buys or dies." (Biography.com Editors) If true leaders create visions as solutions to problems, as Shelton said, then Belfort's vision was an answer to the problem of "we do not have enough money."

An organization needs contingencies to be in place to prevent extreme cases of corrupt leadership like Belfort. First, there needs to be an environment that welcomes people to come forward with concerns. Research shows that subordinates are more likely to raise ethical questions with their superiors when those superiors include conversations about ethics in the discussion. This pattern of behavior is known as "supervisor moral talk contagion," and it means that instead of making ethics a taboo topic at work, which is the default culture in most environments, leaders foster ethical debates (Kramer and Bisel 234). Such patterns contrast with narcissistic leaders who purposefully quell dissent by rewarding followers who unquestionably fall in line while humiliating employees who speak out (Slattery 9). For a leader to ethically implement their vision, they need to implement four components in their decision making. First, they need to exhibit moral sensitivity by considering how actions affect others. Second, they exercise moral judgment by choosing appropriate measures. Third, they need the source of their motivation to derive from moral laws rather than personal gain. Finally, they need to exercise moral action and execute the morally desirable choice (Kramer and Bisel 235).

There are several advantages to this type of leadership. First, it empowers employees to perform better and push themselves. The presence of ethical leaders also breeds loyalty in employees and gives them less incentive to lead voluntarily, all without resorting to the toxicity of narcissistic leaders. It also prevents leaders from creating PR scandals that immoral leadership would inevitably cause. After all, a scandal cannot hurt an organization's public image if it does not exist in the first place (Kuligowski). For example, Belfort ended up serving four years in prison, and the company he built was rejected from the National Association of Securities Dealers, then forced to liquidate to pay off various fines and court cases (Biography.com Editors). While the example is somewhat extreme, it vividly demonstrates how a leader's amoral direction can destroy an entire company. Finally, ethical leadership creates emotional wellbeing for everyone in the organization (Kuligowski). While Belfort's techniques drove his employees to chase success, it also created a hostile work environment filled with stress and a sense of chaos (Biography.com Editors). Studies show that unethical management makes sense of anxiety that actually decreases productivity.  (Kuligowski).

There has been much scholarship on the correlation between vision and leadership. Extensive research suggests that having a personal vision allows leaders to influence followers, create loyalty, and move organizations in bold new directions. However, just as in real life, any virtue can become a vice if it exists in excessive amounts. While visions can help leaders become more effective and achieve greatness, they can also provide leaders with the tools to shepherd followers in an immoral or unethical direction. By remembering that effective leadership techniques are morally neutral, the conversation can shift to reinforcing ethical behavior, leading to tremendous success and an unspoiled legacy. 

 References

Biography.com Editors. “Jordan Belfort Biography.” Biography.com, A&E Networks Television, 15 June 2020, www.biography.com/business-figure/jordan-belfort#:~:text=Nicknamed%20%22the%20Wolf%20of%20Wall,Street%2C'%20starring%20Leonardo%20DiCaprio.

“Chapter 8 Communication and Leadership.” Organizational Communication a Lifespan Approach, by Michael W. Kramer and Ryan S. Bisel, 2nd ed., Oxford University Press, 2021, pp. 223–235, redshelf.com/app/ecom/book/1642328/organizational-communication-1642328-9780190925819-michael-kramer-ryan-bisel.

Heathfield, Susan M. “Leadership Vision You Can't Be a Real Leader Who People Want to Follow Without Vision.” The Balance Careers, 4 Oct. 2020, www.thebalancecareers.com/leadership-vision-1918616.

Kuligowski, Kiely. “7 Things You Should Do to Be an Ethical Leader.” Business News Daily, 13 Oct. 2020, www.businessnewsdaily.com/5537-how-to-be-ethical-leader.html.

Richard, Skip. “How Leaders Create A Compelling Vision to Engage & Inspire.” Skip Prichard | Leadership Insights, 26 July 2017, www.skipprichard.com/how-leaders-create-a-compelling-vision-to-engage-inspire/.

Ryan, John. “Leadership Success Always Starts With Vision.” Forbes, Forbes Magazine, 11 July 2012, www.forbes.com/2009/07/29/personal-success-vision-leadership-managing-ccl.html?sh=1dcf29b86634.

Shelton, Sonya. “How Executive Leaders Create a Clear Shared Vision.” Executive Leadership Consulting, 25 July 2017, executiveleader.com/executive-leaders-create-clear-shared-vision/.

Slattery, Colin. "The Dark Side of Leadership Troubling Times at the Top." November 2009, http://www.conference.co.nz/files/docs/darksideofleadership2.pdf