Critical Evaluation of the Statement
Northouse’s statement suggests that leadership involves a moral dimension, and leaders should utilize their power for the common good. One can fairly agree with this claim because it reflects the latest trends in ethical leadership. Recently, societal expectations toward business have changed, calling into question a previously accepted economic ideology that society and its institutions are only external restrictions to an economy (Fürst, 2022). In order to meet these new expectations, organizational leaders should focus not only on attaining benefits for their own companies but also on caring about the well-being of other stakeholders. Moreover, in recent three years, due to the global crisis caused by the pandemic, ethical leadership has become an obligation rather than an option (Radzi et al., 2021). This is because power entails responsibility, and, having the authority to allocate resources, leaders should use their best judgment to make decisions that are fair and contribute to the well-being of others.
Ethical leadership involves six factors, each of which shapes the leader’s behavior. They are the leader’s character, actions, goals, honesty, power, and values (Northouse, 2020). When leaders are honest and responsible, treat others with respect, set the right goals, and commit morally appropriate actions, they can be considered ethical. By following this approach to behavior, they can reap several potential benefits. First, leaders generally serve as role models for their followers; therefore, when leaders behave ethically, they elicit trust, respect, and the wish to reciprocate by doing things that would benefit the leader and the organization (Ogunfowora et al., 2021). Hence, ethical leaders play a crucial role in the formation of organizational culture and achieving corporate goals. Second, by behaving honestly, ethical leaders can keep their influence, maintain positive relationships with their followers, and convey a message that manipulating others is unacceptable (Northouse, 2020). Finally, ethical use of power helps leaders effectively collaborate with followers and achieve mutual goals. Overall, ethical leadership seems to be an essential condition for building a just world in which everybody’s dignity is respected and interests are considered.
Although ethical leadership gives multiple benefits to leaders and their followers, it also poses certain challenges. For instance, since the modern world is characterized by globalization, it means that leaders often have to interact with individuals of different cultures. As a result, leaders are often faced with ambiguous ethical expectations and cultural norms (Fürst, 2022). Northouse (2020) illustrates this issue with an example of bribery: in the US, this practice is forbidden, but in China, bribes are normal. Another challenge is concerned with honesty; although being honest is crucial for leaders, it can be counterproductive or destructive to tell the complete truth (Northouse, 2020). Therefore, there is always a need to balance between being open and recognizing the limits to which it would be acceptable to disclose. One more issue is related to personal values: leaders’ values sometimes can conflict with those of their followers, requiring leaders to remain faithful to themselves while being sensitive to followers’ values (Northouse, 2020). In order to address these challenges, leaders should develop their own ethical positions on different issues because no code of ethics can cover all possible controversial situations.
Recommendations for Leaders at ADNOC
Abu Dhabi National Oil Company (ADNOC) is a large oil and gas firm headquartered in Abu Dhabi, the UAE. The organization’s operations have several aspects that can raise ethical concerns: safety, quality assurance, and employees’ well-being. In ADNOC’s business field, there is a substantial risk of occupational health risks, which is why the company has been making efforts to create a health and safety culture (Yaqoubi & Adnan, 2022). Further, quality assurance is critical because in the oil industry, even a single incident can lead to a disaster for the environment. Finally, since the success of any business depends on individuals’ work, the company should take great care of the overall well-being of its employees.
It has been discussed that ethical leaders are morally obliged to use their power for the good of others. Therefore, several recommendations can be given to the leaders of ADNOC to improve their ethical performance. One recommended strategy is to shift the focus from profit maximization to ethical conduct. According to Schwartz (2020), when businesses see their purpose in maximizing shareholder value, it inevitably leads to ethics breaches, such as accounting scandals or other issues. In the oil industry, violations of ethics can lead to disastrous consequences. For example, in 2010, BP’s top management’s failure to meet its ethical obligations led to the Gulf of Mexico oil spill, resulting in 11 deaths and significant environmental harm (Schwartz, 2020). The catastrophe occurred because the company’s managers rushed the completion of the rig, authorizing the use of flawed materials and allowing for making construction mistakes (Schwartz, 2020). Leaders at ADNOC can learn a lesson from this accident and put the well-being of their stakeholders above their need to maximize profits.
Another strategy recommended for ADNOC is using ethical communication within the organization. Communication is ethical when it is honest, consistent, and respectful. Leaders engaging in such type of communication are viewed as credible and attractive role models and, according to the social learning theory, elicit similar behaviors in their followers (Yaqoubi & Adnan, 2022). By using this strategy, leaders at ADNOC can communicate safety policies ethically, thus improving employees’ compliance with these policies and reducing the risk of workplace accidents.
One final recommendation for ADNOC leaders is to encourage their followers to speak up. According to Zhu et al. (2022), leaders are responsible for institutionalizing ethical standards. They can do it by motivating employees to share their ideas, participate in decision-making, and report any unethical conduct without fear (Zhu et al., 2022). Cultivating openness in workers and listening to their concerns will help ADNOC leaders improve employees’ psychological well-being and decrease the risk of unethical behavior going unnoticed. This strategy may also increase the organization’s effectiveness since employees’ will feel more valued and be more likely to put efforts into achieving corporate goals.
References
Fürst, M. (2022). A corporate’s character is its fate. In I. Stolz & S. Oldenziel Scherrer (Eds.), International leadership: Effecting success across borders in a boundaryless world (pp. 321-344). Springer.
Northouse, P. G. (2020). Introduction to leadership: Concepts and practice (5th ed.). SAGE Publications.
Ogunfowora, B., Maerz, A., & Varty, C. T. (2021). How do leaders foster morally courageous behavior in employees? Leader role modeling, moral ownership, and felt obligation. Journal of Organizational Behavior, 42(4), 483-503.
Radzi, N. A. M., Saidi, N. A., & Ali, A. F. M. (2021). Be ethical in critical times: An option or an obligation? In E-proceeding 8th international conference on public policy and social science (pp. 622-628). Diamond Scientific Publishing.
Schwartz, M. S. (2020). Beyond petroleum or bottom line profits only? An ethical analysis of BP and the Gulf oil spill. Business and Society Review, 125(1), 71-88.
Yaqoubi, R. A., & Adnan, A. A. (2022). Ethical leadership and organizational safety performance in Abu Dhabi National Oil Company in the United Arab Emirates. Scholars Journal of Arts, Humanities and Social Sciences, 6, 276-280.
Zhu, H., Khan, M. K., Nazeer, S., Li, L., Fu, Q., Badulescu, D., & Badulescu, A. (2022). Employee voice: A mechanism to harness employees’ potential for sustainable success. International Journal of Environmental Research and Public Health, 19(2), 921.