Shadows of the Leader - Essay Example

Shadows of the Leader Leadership shadows are the influences that leaders of an organization cast upon their subordinates through their behaviors and actions. The shadow of the leader is used to describe a situation where the leader, through their likes or dislikes, conduct, beliefs, values and tendencies shapes the character of their follower and by extension, the organizational culture (Johnston, 2013). These shadows can be characterized as dark or light which are negative and positive respectively. Some of the dark shadows include abuse of power, immoral behavior, broken loyalties deceit and inconsistencies among others. When leaders practice these, their followers will also be likely to do the same and as a result, the organisational culture will originate from the shadow cast above. This is especially because it is very difficult to try to correct one’s follower’s mistakes if you are their genesis. An example of how such leadership shadows can affect a company is Enron, it started n energy and network-providing firm that experienced unprecedented growth levels in the mid 90’s. After this, they hired the best business school graduates and the best talent in any field (Jickling, 2002). The culture was highly competitive with success being rewarded individually while failure was shunned. However, most of the focus was on the short rather than long-term success. As a result competition between individuals became acute and everyone more so the senior managers were ready to do anything to “make it big”, people were motivated by financial gain and consequently a culture of keeping business secrets and hiding losses in fictitious offshore ventures became rampant. Profits were inflated to keep the firm looking successful and even after it was nearly going bust, its shares were selling at $90 and the directors had assured the shareholders they would hit 120 although most of them sold off theirs. When Watkins, one of the executives blew the whistle on the illegal financial practices, the share price for the firm went down to $15 and the company declared bankruptcy resulting in millions of shareholder’s money being lost, careers and lives brought to ruin. This was caused by several of the shadows discussed above, by manipulating the accounting books, the leaders practiced deceit, which was copied by their juniors and became prevalent in the entire firm (Barreveld, 2002). Inconsistency was engendered in their tendency to say one thing to shareholders then do another, they promised increased share price but went on with practices that made this dream near impossible. Misplaced loyalties are evinced in that the managers kept secrets from each other and they were only loyal to their “partners” who knew of their plans to enrich themselves and each other. The managers who neglected their responsibility to the shareholders and customers cast the shadow of irresponsibility. Lynn Paine’s four part moral compass is an example of a framework that can be applied in situations where leaders are casting dark shadows to identify them try to resolve the problem. In the context of the above case study and specified shadows, this framework can be used to “shed light” into the darkness heralded by leaders (Johnston, 2013). It requires that one ask four questions namely; what will the action achieve, before they engage in any activity they should interrogate the perceived outcome both in the short and long term and determine if they are worthwhile? In Etron’s case, management should have tried to consider the long-term effects of manipulating accounting books and operating clandestinely and encouraging unhealthy competition amongst their staff. Ultimately, the short-term result was an excellent rating for the firm not to mention very high share price, however they failed to consider the long-term consequences of their action. It is during this stage that faulty assumption as well as immoral behavior can be identified. They firm was operating under the assumption that the world is a battlefield and managers and employees had to do anything moral or otherwise to ensure victory. The second principle asks if the action is consistent with relevant principles, this helps the actors identify the moral dilemma and highlight which standards are expected of them and how the action in question conforms or contravenes them (Johnston, 2013). The company’s leadership will be expected to identify the connection between the action and ethical principles that govern business and corporate actions. It is unethical to lie about accounts to investors and government; in fact, it is also illegal. The organization has a responsibility to their shareholders and is morally and legally bound to inform them of the true condition of the business (Swartz & Watkins, 2003). The third question is how the action represents legitimate claims of those who will be affected, in this context the decision makers should have thought about what should be done. The leaders should have through about how these actions would affect the economy, their stakeholders and shareholders, the employees and the industry in general. However since most of the action was done independently and covertly, there was no forum for such consideration and as a result when the firm crashed everyone, even the leaders were negatively affected. Finally, the fourth question interrogates if the principle actors have the power to make a decision or action to perpetuate or prevent the action. The company’s leaders made many decisions using the power vested in them but did it out of self-interest, which ultimately resulted in its collapse. However, some of the decisions made were actually illegal and the decision makers had no power to make them. For example, choosing to give the wrong statistics or preventing the auditor from being “too careful” about their accounts just a way to facilitate impunity by leaders. In addition to authority, leaders should also ask if they have the resources to implement the actions the decisions they take will involve. In the case study, it was clear that they did not have enough to sustain the trend they were pursuing since they could not maintain production in the long run nor could they proved their shareholders with the promised $120 share price. As aforementioned, leadership is supposed to set an example to the followers, however when they set a negative one, it will ultimately be followed to the detriment of the entire organization. In the case study’s context, leaders were motivated by negative and selfish motivators such as the desire to win and be the best as well as protect themselves from the humiliation of appearing weak or ineffective. To this end, they were willing to do anything even if it went against the law and interest of the company. Their juniors then assimilated this in various capacity and ultimately the organization became unmanageable and collapsed. In conclusion, it is self-evident that organisations cannot function effectively unless they factor in ethical considerations in their various activities, current and retrospective evidence has shown that ethical action in leaders is associated high performance (Lütge, 2005). Leadership must in one way or another cast shadows and their nature and consequent impact is depended on how ethically they act or make decisions (Wheatley, 2011). As demonstrated above, dark shadows can have wide reaching and extreme impacts on an organization and starting from a few people at the top, they will can gradually spread throughout the organization. This results in a culture of promoting self-interest, immorality and corruption that is almost impossible to correct since it originates from the top down. However, if the decision-makers or leaders had applied an ethical framework they would have been able to predict the long-term effects of the shadows they were casting and taken advance mitigative action. References Barreveld, D. J. (2002). The Enron Collapse: Creative Accounting, Wrong Economics Or Criminal Acts?: a Look Into the Root Causes of the Largest Bankruptcy in US History. San Jose : Writers Club Press. Jickling, M. (2002). The Enron collapse: An overview of financial issues. Congressional Research Service, Library of Congress. Johnston, C. E. (2013). Meeting the ethical challenges of leadership: casting light and shadow (5th ed.). Thousand Oaks, California: SAGE Publications, Inc. Lütge, C. (2005). Economic ethics, business ethics and the idea of mutual advantages. Business Ethics: A European Review, 14(2), 108-118. Swartz, M., & Watkins, S. (2003). Power failure: The inside story of the collapse of Enron. New York: Random House LLC. Wheatley, M. (2011). Leadership and the new science: Discovering order in a chaotic world. San Francisco, Calif: Berrett-Koehler Read More