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By successfully completing this assignment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

Competency 2: Evaluate the context, setting, and rationale for the business problem.

Explain each study's purpose and alignment with an identified problem.

Competency 3: Develop a research purpose statement based on stated business problems.

Compare the articles' foundational theories and concepts supporting the stated business problems' research purposes.

Competency 4: Develop research questions in support of a business problem and research purpose.

Describe the business problems' context, setting, rationale, and operational definitions.

Competency 7: Analyze different approaches to the creation of literature reviews that support applied business research.

Write in standard academic English appropriate for audience using correct grammar and current APA format.

Competency 8: Analyze requirements of ethical research.

Summarize the authors' ethical procedures and processes.

Assignment Preparation

Review the research articles by Al-Emadi and Marquardt (2011) and Marsh (2013) (ATTACHED). Applying your knowledge of critical concepts and principles of applied business research, you will compare the articles' foundational theories and concepts supporting the stated business problem's research purposes.

Assignment Instructions

Compose one formal, APA-formatted paper of no more than 700 words (word count excluding title and reference pages) that demonstrates your understanding of the following concepts for each study:

1. Context: What is the business problem? What is the specialization? Are these appropriately related?

2. Setting: What is the applied business research or research method and design (or both)?

3. Rationale: What is the value (worth) of examining the problem as applied to business? Upon whose research did the authors seek to build, that is, what is the scholarly justification for the research?

4. Research purpose: What is the purpose of the study? What is the alignment between the research purpose and problem identified by the authors?

5. Ethical procedures and processes: In summary, what actions did the authors take to ensure the ethical protections required in applied business research?

6. Operational definitions: Were specialized terms used?

7. Foundational theories and concepts frameworks: How do the articles differ with respect to their foundational theories and concepts?

Refer to the Applying Critical Concepts of Business Research Scoring Guide to ensure you meet the grading criteria.

Additional Requirements

To achieve a successful experience and outcome, you are expected to meet the following requirements:

Written communication: Written communication is free of errors that detract from the overall message, follows standard academic English usage, and uses language appropriate for the intended business and scholarly doctoral audiences.

APA formatting: Paper, references, and citations are formatted according to current APA style and format.

Length: One paper of 700 words, double-spaced. Submissions including a paper for each article will not be accepted for grading.

Font and font size: Times New Roman, 12-point.

Business Executives’ Perceptions of Ethical Leadership and Its Development

Catherine Marsh

Received: 6 July 2011 / Accepted: 22 May 2012 / Published online: 12 June 2012

� Springer Science+Business Media B.V. 2012

Abstract This paper summarized the findings of a qual-

itative study that examines the perceptions of ethical

leadership held by those who perceived themselves to be

ethical leaders, and how life experiences shaped the values

called upon when making ethical decisions. The experi-

ences of 28 business executives were shared with the

researcher, beginning with the recollection of a critical

incident that detailed an ethical issue with which each

executive had been involved. With the critical incident in

mind, each executive told the personal story that explained

the development of the values he or she called upon when

resolving the ethical issue described. The stories were

analyzed through the use of constant comparison, which

resulted in the development of two models: (1) a frame-

work for ethical leadership illuminating valued aspects of

ethical leaderships and the value perspectives called upon

when making ethical decisions, and (2) a model explaining

how the executives’ ethical frameworks developed. The

paper concludes with a brief discussion on virtue ethics,

experiential learning, and human resource development.

Keywords Ethics � Virtue � Leadership � Action learning

Introduction

As the daily news carries allegations of corrupt behavior in

all arenas of life, the world’s attention is focused on the

behavior of leaders in government, business, social, and

even religious institutions. The courts selectively prosecute

high profile-offenders, the Catholic Church sends priests

into retirement, and political candidates challenge one

another’s records for signs of moral weakness. Legislation,

in the form of the Sarbanes–Oxley Act of 2002, passed by

the United States Congress following the Enron, Tyco and

Worldcom scandals, has been enacted, but the scandals

continue.

Both executives and scholars are realizing that while

legislation is necessary, leadership may be the primary

determinant in ethical action. Gini (1998) stressed, ‘‘The

ethics of leadership—whether it be good or bad, positive or

negative—affects the ethos of the workplace and thereby

helps to form the ethical choices and decisions of the

workers in the workplace’’ (p. 28). Pollard (2005) stated,

‘‘While rules may bring a higher standard of accountability

and add the ‘stick’ of more penalties, they cannot deter-

mine the honesty, character, or integrity of the people

involved’’ (p. 14).

Lavengood (Pollard 2005) conceded that where public

policy leaves off, leadership must assist with the devel-

opment of a moral community that shapes human character

and behavior. Gough (1998) concurred and explained that

when caught in an internal struggle with regards to getting

ahead or doing the right thing, ‘‘The determining factor is

nothing less than the strengths and the weaknesses of your

character’’ (p. 43).

Badaracco (2006) emphasized, ‘‘Questions of character

are not simply useful … they are crucial to successful leadership….’’ (pp. 8–9). Quinn (2004) indicated that as leaders become more inwardly focused on their values,

their inner and outer worlds become aligned, significantly

impacting organizational behavior. He expounded, ‘‘We

also become less self-focused and more other-focused’’ (p.

22).

The study summarized in this paper examined the eth-

ical character of leadership in today’s organizations by

C. Marsh (&) North Park University, Chicago, IL, USA

e-mail: [email protected]

123

J Bus Ethics (2013) 114:565–582

DOI 10.1007/s10551-012-1366-7

assisting executives in turning inward and uncovering the

values upon which they base their most difficult business

decisions, and listening to them reveal clues pertaining to

the development of a framework for ethical leadership.

This study can be differentiated from other studies that are

predominantly quantitative and utilize a measurable

approach that begins with existing research on values, such

as that of Rokeach (1973), Schwartz (1992, 1994, 2000), or

research on values embedded in existing leadership models

(Kanungo 2001; Mendonca 2001; Bass and Steidlmeier

1999; Greenleaf 1970/1991). Based on Rokeach (1973),

Hood (2003) connected leadership values with business

ethics in a study that measured, by means of a Likert scale,

the relationship of 14 of the Rokeach values with trans-

formational, transactional, and laissez-faire leadership

styles (Burns 1978, 2003). Based on a modified version of

Schwartz’s instrument (1994) developed by Stern et al.

(1998), Sosik (2005) used multisource field data collected

in five organizations to examine links among managers’

personal values, charismatic leadership of managers, and

three outcome measures. Also, employing the tool devel-

oped by Stern et al. (1998), Fritzsche and Oz (2007) related

personal values to ethical dilemmas, by means of a Likert

scale, to determine the extent to which personal values

inform ethical decisions. To assess the impact of the

exposure of foreign culture on the development of leaders’

values, Chang and Lin (2008) used a modified version of

Schwartz’s Likert based Portrait Values Questionnaire

(PVQ) (Schwartz 2005, 2006). Graf et al. (2011) also made

use of the PVQ in their assessment of the effects of ideal

and counter-ideal values (Van Quaquebeke et al. 2010)

between leaders and followers. Recent empirical studies

that examine leader values through indirect values frame-

works embedded in leadership models include Groves and

LaRocca (2011) and Reed et al. (2011). Groves and LaR-

occa (2011) utilized the historic ethical philosophies of

teleology and deontology as associated with models of

transformational and transactional leadership (Kanungo

2001; Mendonca 2001; Bass and Steidlmeier 1999) to

examine leader ethical values. Reed et al. (2011) examined

ethical leader values implicited within the servant leader-

ship model (Greenleaf 1970/1991).

While the import of quantitative methods in determining

statistical relationships between the variables of human

values and ethical leadership must be acknowledged, the

need for a more interpretative approach to understanding

the immeasurable aspects of ethical leadership, as repre-

sented in the current study, is emerging. A number of

researchers (Trevino et al. 2003; April et al. 2010; Resick

et al. 2011) have approached the topic by means of qual-

itative methods. Trevino et al. (2003) conducted inductive

research by interviewing corporate ethics officers and

senior executives to examine ‘‘the perceived content

domain of executive ethical leadership’’ (p. 5), including

values and behaviors. April et al. (2010) had middle

managers, enrolled in MBA programs in South Africa and

the Netherlands, self-report enablers (values), and stum-

bling blocks to ethical action. Resick et al. (2011) used

qualitative methods to identify attributes (values are

included) and behaviors that managers from Asia, Amer-

ica, and Europe ascribe to ethical and unethical leaders.

Although their findings were consistent with the GLOBE

(House et al. 2004) framework of values across culture, the

Resick et al. (2011) did not design the study with the

GLOBE framework in mind. The three above-mentioned

qualitative studies explored particular phenomenon and did

not attempt to correlate findings to particular models or

frameworks, unlike the quantitative studies. These quali-

tative studies differ from the quantitative studies in that

they do not measure known variables; they explore per-

ceptions of each study’s participants through open-ended

questions. They do not generalize externally (Maxwell

2002), rather they explore multiple perspectives and

meanings in an attempt to understand the complex phe-

nomenon of ethical leadership within a particular, inter-

nally generalizable, context (Maxwell 2002). The

qualitative studies are not designed to measure variation;

they are more concerned with ‘‘describing in detail what

survey questionnaire results do not permit to be descri-

bed—the assumptions, behaviors, and attitudes of a very

special set [of participants]….’’ (Freidson 1975, pp. 272–273).

The study summarized in this paper utilized a qualitative

approach to add to the growing knowledge base that clar-

ifies and expands the concept of ethical leadership. How-

ever, unlike the qualitative studies described above, this

study investigated not only the phenomenon of ethical

leadership, but also examined how ethical leadership

develops. The context of the study was senior executives,

in American businesses ranging from small entrepreneurial

ventures to large multi-national corporations, who were

perceived by others, and identified themselves as ethical

leaders. The field of research on ethical leadership is young

and the topic broad and complex (Trevino et al. 2003),

providing ample territory for a constructivist theory-

building approach (Creswell 2003). Further, due to the

subjective nature of ethical leadership (Conger 1998) a

qualitative exploration may prove more suitable than post-

positivist empirical observation and measurement (Cre-

swell 2003).

Problem Statement and Purpose

Based on the premise that leadership is a fundamental

determinant in ethical action, the study summarized in this

566 C. Marsh

123

paper examined both executives’ perceptions of the

frameworks that guided their ethical decisions and their

thoughts on how those frameworks came into existence. As

previously mentioned, a modicum of research linking

values and business ethics exists (April et al. 2010; Chang

and Lin 2008; Graf et al. 2011; Groves and LaRocca 2011;

Fritzsche and Oz 2007; Hood 2003; Resick et al. 2011;

Sosik 2005; Trevino et al. 2003), but little has been done to

draw upon the actual perceptions of the business leader as

to what life experiences have fostered the development of

values and character. The growth of virtue ethics as an

aspect of the business leadership development provides

new opportunity for research that explores the link between

the growth of personal values and leadership development.

As Donaldson (2003) stated, ‘‘at no time has the legitimacy

of business depended so heavily on clarifying its connec-

tion to human values’’ (p. 365). Further, virtue ethics is

seen to develop through experience (Brewer 1997; Hart-

man 2011; MacIntyre 1984), hence examining the experi-

ences of those who perceive themselves to be ethical may

add to our understanding of ethical leadership develop-

ment. This study, in its attempt to clarify that connection

between the development of personal values and ethical

leadership behavior, took its participants on a journey in

which they discussed their values in the context of ethical

issues with which they had struggled. It allowed them to

take the time to tell their personal stories regarding their

understanding of the dimensions of their ethical frame-

works and the development of the values upon which those

frameworks were based. Specifically, this study contributes

not only to the emerging knowledge on ethical leadership

but also the nascent field of ethical leadership

development.

Research Questions

Two overarching questions guided this study.

1. What aspects of ethical leadership are valued by those

who consider themselves ethical leaders?

2. In what ways do the life experiences of those who

perceive themselves to be ethical leaders inform the

understanding of the process of ethical leadership

development?

Theoretic Framework

In recent years, business ethicists have begun to investigate

the merit of the inclusion of virtue ethics, based on values,

in business ethics education (Whetstone 2001, 2003).

Miller and Collier (2010) cited Crockett (2005) to explain

virtue ethics in the Aristotelian sense: virtues ‘‘…are meant to be exercised in practical judgments, habitualized with frequent

use and gradually adopted as a stable part of one’s character’’

(Crockett 2005, p. 199). This is in keeping with Aristotle who

described ethics as a habit of virtue that is modeled and

developed through practice’’ (Miller and Collier 2010, p. 83).

Similarly, Morrell and Clark (2010) explained, ‘‘virtue ethics

has at its heart the habits and character of key actors—who

become virtuous through carrying out right actions, acting in a

manner that communicates the importance of considering the

means by which outcomes are achieved’’ (p. 257).

This turn toward the character perspective comes as a

result of research that shows that the teleological and

deontological cognitive decision-making approaches alone

have not had sufficient impact (Rest and Narvaez 1994),

and that ethical decisions are ultimately an expression of

the decision maker’s value system. Further, ‘‘by shifting

the focus from the act to the agent, virtue ethics overcomes

these problems [problems posed by act-centered teleolog-

ical and deontological approaches to ethics]’’ (Dawson and

Bartholomew 2003, p. 127). Bastons (2008) discussed the

cardinal virtues as personal decision-making competencies

and stresses, ‘‘… without these competences it is not pos- sible to guarantee a decision is really optimal’’ (p. 399). As

the focus of the research summarized in this paper was on

the connection between leadership values and ethical

decision-making, virtue ethics provided the study with a

foundational framework due to its emphasis on character,

rather than cognitive act-centered decision-making schema,

in the exercise of ethical leadership.

One of the most recognized calls for a return to Aristo-

telian virtue ethics has come from Alasdair MacIntyre

(1984). MacIntyre asserted that current ethical theory and

practice are in a state of grave disorder brought on by the

liberal individualism of the Enlightenment, most notably

articulated by Nietzsche. He postulated that people can best

remedy this disorder by reviving the Aristotelian tradition

of virtue ethics. Moore (2002, 2003) insisted that corpora-

tions can only resist the power of corrupting influences

through incorporation of the virtues of those who represent

the organization. A major tenet offered by MacIntyre’s

premise is that we discover our virtuous character only in

acting it out in relationship within community—it is only

through our association with virtue that we can become

virtuous (Blum 1988). If the community itself is not virtu-

ous, and MacIntyre struggled with the notion that the

business organization could be virtuous, the actions of

community members will be victim to the desires/morals of

the community (Dobson 2009; Hine 2007). MacIntyre

conceded, however, that individual members of the com-

munity are not necessarily bound by what he perceives to be

the moral limitations inherent within business institutions

operating within a capitalist society (Schwartz 2009).

Ethical Leadership and Its Development 567

123

Dawson and Bartholomew (2003) argued that in as much

the business organization serves as community, it plays a

significant role in encouraging and developing the virtues.

Through his or her experience, then, ‘‘the manager would

draw upon an ever increasing understanding of what con-

stitutes the good’’ (Brewer 1997, p. 832). In Hartman’s

examination of the role of the Aristotelian virtues in busi-

ness decision-making he suggested, ‘‘We learn through

experience, and we may look to the insights of literature,

including religious literature, to distill that experience and

improve our moral imagination’’ (2011, p. 14.). Hence,

moral education is at the heart of virtue ethics, and, in turn,

virtue ethics provides a basis for understanding the expe-

riential development of ethical leadership and supports the

quest, undergirding this study, to comprehend the process

by which executives develop their ethical frameworks.

Understanding this process may provide clues for those

engaged in the arduous task of not only leadership devel-

opment, but also ethical leadership development.

Methodology

As previously mentioned, the design for the research

undertaken in the present study is qualitative. As the study

relied primarily upon the capability of the researcher to

enter into dialog with the participants to extract meaning

from lived experience (Maxwell 1996) in an inductive

fashion, an interpretive approach, which is qualitative by

nature, was required (Merriam et al. 2002). In addition, as

the study was undertaken with the hopes that it would pave

the way for new theory to emerge from the perceived

reality of the participants rather than from the researcher’s

own perspective, a qualitative process assisted with the

formulation of theory from the data as it unfolded (Morse

and Richards 2002). The semi-structured data collection

interviews were based on the following questions:

(1) Think of a time in your career in which you were

confronted with a difficult business decision you

considered to be an ethical dilemma.

(2) What was at stake?

(3) What did you decide?

(4) What process did you use in reaching that decision?

(5) Now—tell me some stories about how you developed

the values that supported the decision.

(6) Which of these do you consider to be the most

important influence(s) on your ethical perspective?

The constant comparison methods (Glaser and Strauss

1967), supplemented by critical incident technique (Flan-

agan 1954), were key elements of the data analysis. They

provided the structure that allowed theory to evolve from

the research process. First, the critical incident technique

was used to isolate the ethical dilemmas through which the

executives told their stories. With the incident clearly in

mind, each executive told stories of how he or she came to

hold the values called upon when making the decision.

Second, after the collection of data, the method of constant

comparison was used to understand patterns among the

stories that were shared.

Examples of the incidents detailed in the complete write

up of the study are: (1) A bank executive recalled a time

when he had been asked by his commanding officer to hire

the future son-in-law of a powerful senator over a qualified

internal candidate; (2) A vice president of human resources

of a multi-national software corporation discussed a time

when she was employed by a telecommunications com-

pany that was downsizing for the first time in its over

100 year history. She found herself needing to lay off

employees in their 50s and 60s; and (3) A managing

partner of a professional services firm talked about a time

when he reached a decision to sell his small firm to a more

financially secure competitor knowing that some of his

employees would lose their jobs.

Participants

The participants whose stories informed the research were

senior-level executives ranking from the level of director

and above. The participants ranged in age from 38 to 73.

The goal was to interview between 20 and 30 participants

until the point of saturation was reached (Creswell 1998)

and no new interpretative patterns emerge. 31 executives

were interviewed and 28 of the interviews were utilized in

this study. One of the 31 was eliminated due to his high

public profile and concern as to whether his data could be

kept confidential. Two others were eliminated after their

interviews had been conducted and it was clear that they

did not see themselves as having the power to make

decisions that impacted their organizations and therefore

no longer fit the selection criteria.

There are limitations to this study. The participants were

selected through the technique of nomination by reputa-

tional-case selections in which individuals are selected on

the recommendation of experts in the area to be studied

(Goetz and LeCompte 1984). Initially, business leaders

within this researcher’s own network were contacted due to

her belief that these leaders were ethical; they in turn

nominated others for participation. There was no external,

independent verification conducted to indicate that the

participants were indeed ethical leaders. The participants

perceived themselves to be ethical leaders, and that per-

ception, together with their nomination, qualified them to

participate in this study. Finally, the trustworthiness and

transferability of the data generated by the participants, rest

568 C. Marsh

123

upon the researcher’s ability to write clearly and remain

true to the participants’ stories by providing rich, thick

descriptive (Merriam et al. 2002) narrative to which the

reader could relate. Initial feedback from the participants as

well as practitioners and scholars indicates that the findings

ring true.

Findings

Two models emerged from this study—a framework for

ethical leadership and a model for its development. The

supporting quotes contained within the following synopsis

are representative of a much larger body of data that may

be found in the original study.

A Framework for Ethical Leadership

In answering questions regarding the development of their

ethical frameworks, the participants in the study also

revealed what they most valued in their ongoing practice of

ethical leadership. As the participants’ insights merged, a

framework for ethical leadership surfaced. The overall

framework is made up of four value perspectives and each

of the value perspectives is formed by approaches valued

by the participants in their ongoing practice of ethical

leadership. The term, value perspective, was developed to

retain the integrity of both the study’s purpose and the

questions asked to generate the data. The first research

question asks, ‘‘What aspects of ethical leadership are

valued by those who consider themselves ethical leaders?’’

The participants were not asked about the development of

their leadership qualities, behaviors, or competencies; the

interview questions asked them to discuss how they had

developed the values upon which their most difficult

decisions were based. Hence, the data that emerged rep-

resented the participants’ perspectives on what they valued

in their exercise of ethical leadership. A value perspective

is not a value in and of itself; it is a conduit through which

the participants were able to connect their values with their

decisions and actions. The concept of the value perspective

may be one way in which this study contributes to the

growing body of knowledge on ethical leadership.

The data support the conclusion that the value per-

spectives of mindfulness, engagement, authenticity, and

sustainment provide clues to the practice of ethical lead-

ership. The value perspective of mindfulness, representing

cognitive processes involved when acting ethically, is

composed of the valued approaches of ethical leadership:

observation, time for reflection, systems thinking, rational

process, and dialog and questioning. The value perspective

of engagement, representing involvement in ethical action,

is composed of the valued approaches of ethical leadership:

embraces diversity, cultivates relationships, terminates

relationships, and encourages risk taking. The value per-

spective of authenticity, representing character called upon

in being ethical, is composed of the valued approaches of

ethical leadership: personal integrity, self-knowledge, and

author of one’s own life. Sustainment is the term that

represents the value perspective that anchors the frame-

work, arising from the participants’ narratives as the ‘‘that

without which’’ of ethical leadership. The value perspec-

tive of sustainment is composed of the valued approaches

of ethical leadership: no illusions, hope, and a holistic

approach to work and life.

Mindfulness

The value perspective of mindfulness is supported through

participants’ stories that underscored the exercise of

observation, time for reflection, systems thinking, rational

process, and questioning and dialog in the practice of

ethical leadership. A number of scholars (Boyatzis and

McKee 2005; Fiol and O’Connor 2003; Hansen and Haas

2001; Langer 1989; Langer and Piper 1987; Marques

2012; Ruedy and Schweitzer 2010; Varela et al. 1991;

Verhezen 2010; Weick 1995; Weick et al. 1999) have

begun to investigate the concept of mindfulness in rela-

tionship to leadership activity in organizations. Ruedy and

Schweitzer (2010) defined mindfulness as, ‘‘an individual’s

awareness of his or her present experience,’’ (p. 73). The

study participants highlighted the exercise of observation

as practice for gaining awareness of the present. Obser-

vation was also seen as a method that could assist with

moving beyond self to see and understand the experience

of others. Accordingly, Hays (2007) expanded that defi-

nition, indicating that ‘‘mindfulness is a state of acute

awareness, attentiveness, and perceptiveness in everything

going on around oneself while minimizing the effect of

self and ego’’ (Marques 2012). Verhezen (2010) indicated

that mindfulness, as opposed to ‘‘moral muteness in a

culture of silence’’ (p. 187), will lead not only to compli-

ance with regulations but also to ethical innovations that

demonstrate integrity and respect for all parties. Many of

the study participants understood the importance of

breaking the silence and stimulating questioning and dia-

log with those who held differing perspectives as a method

for challenging their ego-bound assumptions, generating

new ideas and approaches as well as honoring individuals.

The importance of acknowledging and honoring individ-

uals supports Marques (2012) understanding of mindful-

ness pointing not only to the practice of letting go of ego

but also to the nurturing of kindness and compassion.

Vanentine et al. (2010) surmised that ‘‘mindfulness is a

positive characteristic that enables individuals to more

effectively respond to environmental demands’’ (p. 457).

Ethical Leadership and Its Development 569

123

Mindfulness is akin to awareness that is active and con-

stantly taking in, processing, and assimilating information.

This dimension of mindfulness was acknowledged by

many of the participants, as they stressed time for reflec-

tion as essential to remain vigilant to the constant flow of

ideas and action. Marques (2012) suggested that in the

workplace, mindfulness can lead to ‘‘greater concentration,

more joy in the moment, the ability to remain calm in

turbulent situations, and a greater ability to link occur-

rences with one another, which will help to detect pat-

terns’’ (p. 34). The ability to link occurrences and detect

patterns showed up in the participants’ stories that high-

lighted the use of rational process and systems thinking as

aspects of mindfulness.

Of the many stories shared by the participants, one in

particular highlights many of the approaches of mindful-

ness that emerged from the data. This vice president of an

international software consulting company observed, took

time to reflect, engaged in questioning and dialog, and

worked at uncovering deep systematic patterns. He also

assisted his team with using the same approaches. He

shared:

This meeting had ended up with a sense that it didn’t

go anywhere, and the issues still remained with a lot

of bottled-up passions and energy. People were really

frustrated… I just kept thinking….A week later I called the team back. …I got everybody to process their feelings and emotions and then I asked every-

body to get to the root of the dissatisfaction and

unhappiness. I wanted us to know where that was

coming from so we could figure out how to work with

it and chang