Ethical Leadership ­ C206 VOT 1

Heather M. Underwood 7/14/2016

In today’s modern society, ethics is defined as “principles, norms, and standards of

conduct governing an individual” (Trevino, L. & Nelson, K., 2014). Although the idea of ethical

behavior has been around for decades, the practice of it has been few and far between.

Businesses today are focused on expansion and innovation, which of course are the driving

forces in the business world today, but many companies lack ethical leadership. With

companies like Enron and WorldCom, whose ethical leadership skills were practically

nonexistent, it is hard to find leaders to admire and aspire to be like. Thankfully with CEOs like

Howard Schultz, creator of the Starbucks brand, individuals and businesses around the world

can admire his values and strive to emulate his success as ethical leaders.

Coming from humble beginnings, Howard Schultz is the definition of an entrepreneur

with a visionary spirit. This previous marketing executive saw a so­called “diamond in the

rough” in a “little local coffee company in Seattle, Washington” (Serwer, A. & Bonamici, K.,

2004). After purchasing Starbucks’ in 1987, Schultz began his reign has CEO. Schultz

envisioned a business that not only served coffee but offered an experience. With each

Starbucks’ store harboring a relaxing ambiance filled with overstuffed chairs and eclectic music,

customers can enjoy their coffee in a setting unlike any other. While Schultz’s passion for

coffee inspired him, his ethical leadership has inspired others. According to the article Hot

Starbucks To Go (2004), Bill Gates Sr. was also inspired by CEO Howard Schultz, stating

“Howard has an ability that isn’t widespread… he is very directed and dogged” (Serwer, A. &

Bonamici, K., 2004).

A. People like Howard Schultz are prime examples of ethical leaders. His innovative ideas

are evident throughout his lifetime achievements. In 2011, Schultz encouraged and supported

the innovation of local small businesses. While he believed that the government should create

programs to financially support small businesses and inevitably create new jobs, Schultz knew

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the idea would be heard but disregarded. Instead, he devised a plan to help aspiring small

businesses grow. Schultz’s idea was for Starbucks to act as a so­called middleman for

“Americans to help start lending to small businesses” (Nocera, J., 2011). Since many small

businesses were unable to obtain credit after the 2008 financial crisis, Schultz propositioned the

idea of microlending. Customers were able to “donate money… when they bought coffee and

receive a wristband” thanking them from their support (Nocera, J., 2011). Schultz also gained

the support of the Community Development Financial Institutions which assisted small

businesses in receiving loans with “extremely low” default rates. And if that were not enough,

Schultz declared that the Starbucks Foundation would pay for all “marketing costs and every

other cost associated with the new program,” that was later called Create Jobs for USA. Many

believed the idea was ingenious and being the humble leader he has always been, Schultz

encouraged other nationally known retail chains to join in the cause as well.

Schultz’s respect for others is another ethical trait that he is often praised for. Although

Starbucks has seen immense success, operating in over 64 countries, Schultz refused to

franchise the coffee corporation even though it would better its profit margins (Starbucks

Corporation, 2014). Why did he do this? Because Schultz choose to better the lives of his

employees instead. Schultz provided higher salaries and better benefits to all employees,

something franchised business like McDonald’s could not do. Andy Serwer, from Fortune

magazine (2004) quoted Howard Schultz saying “that’s simply the price you pay for doing

business this way, and it’s non negotiable”. His ethical leadership skills are incomparable.

Schultz has shown time and again that respect for his employees is his top priority, so much so,

that Schultz also offered stock options and health­care benefits to his part­time employees. His

business ethics are not only uncommon, they are impressive.

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B. Starbucks CEO Howard Schultz is just one example of an exemplary leader with high

ethical standards. A lot can be learned by following in his footsteps. But as a young business

professional, it is often hard to assess one’s own ethical beliefs without the proper help. After

taking the Ethical Lens Inventory (ELI), I was able to identify my core values and gifts as well as

my vices and blindspots. Through careful study and understanding these traits will help me

become an ethical business professional.

B1. My ELI results showed my preferred ethical traits fall under the Rights and Responsibility

Lens. This means I prefer to use my reasoning skills to determine my duties and obey universal

rules to which each person should follow. People who fall on the rationality spectrum of the ELI

chart tend to use their head and reason to determine the right source of action. I believe the

results are quite accurate. It is my understanding that the Rights and Responsibility Lens

focuses partially on fairness. As a young female professional, I believe in fairness and equity in

the workplace. No matter the race or gender of a person, I believe fairness should be a top

priority. I also found that I am an individual with strong beliefs in justice and following rules. It is

believed that in social settings, following rules is not always acceptable. When we are young,

we often believe that being rebellious and headstrong are qualities that are respected by our

peers. However, these qualities tend to derail us later in life if said behavior is continued into

our adult years.

B2. Although the ELI is quite insightful, it also points out “blind spots” or “risks”. According to

my results, I am at risk of being autocratic, or in layman's terms, bossy. Unfortunately, this is

indeed a fault of mine. When at work and even at home, I tend to be straight to the point and

expect things to be done a certain way. This behavior is often met with disdain and attitude on

the part of others. Since my ELI risk is of being autocratic, I try to organize steps to follow to

help refrain myself. I, of course, have to first acknowledge my autocratic behavior before a

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situation occurs. Second, instead of “barking” orders at someone, I can calmly explain what

needs to be done. And lastly, I should consider how each individual works. I cannot not expect

everyone to work through problems and situations the same way, so I must embrace different

and creative outcomes. Hopefully, through these small steps I can restrain my risk of becoming

an autocratic leader.

B3. As previously discussed, my core values revolve around autonomy and rationality.

Protecting individual rights should be a priority to everyone and I strongly believe that each

individual should have the right to pursue their dreams and aspirations without interference.

Although the United States prides itself on “life, liberty and the pursuit of happiness,” his is not

always the case. Inequality still exists today. Attempting to correct this injustice is a difficult

task, but I believe that it can be done. Even as a young professional in the business field, I try

to act on my beliefs and treat everyone I encounter with respect.

In ancient times, Greek philosophers claimed each individual contained both good

virtues and evil vices. And although many ancient philosophers have been disproven some

ideas are still used today. According to my ELI results my classical virtue is temperance which

is characterized as “individual balance and restraint”. I found this information to be quite

interesting. Restraint is not a virtue normally found in most people, but it is a characteristic I

admire. Many see restraint as a weakness, believing that people who hold back do so out of

fear or cowardice, but I disagree. I use restraint when dealing with unpleasant and difficult

situations. Although it is easier and more popular to make rash decisions, I try to weigh my

options before making a decision. After careful consideration I can make a just decision while

considering the needs of others.

My core values and classical virtue were supported in the course exercise “Clarifying

Your Values”. When asked what my personal ethic values were, I immediately thought of

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fairness, equality and honesty, followed closely by innovation and success. While researching

Starbucks’ CEO Howard Schultz, I began to understand that ethical leaders possess an array of

ethical values. In Schultz's case, innovation motivated his success, but it was fairness, equality

and honesty that helped him as a leader. These are the values that make great leaders and

inspire others. I hope one day to find success utilizing all my top ranked values.

B4. The Ethical Lens Inventory has shown me a lot about myself. In past situations, I never

gave much thought to the ethical ramifications of my actions. I always stayed true to my

convictions and values but did not understand the true meaning behind them. After taking the

ELI, I can now pinpoint what is important to me and how I can better myself and future career. I

plan to approach situations and challenges with careful consideration while trying to hear the

opinions or others. I will strive to stay balanced and restrained in unpleasant situations and

always keep others individual rights a priority.

C1. While working in a law office, you come into contact with ethical dilemmas on a daily

basis. How we handle such dilemmas are often scrutinized by superiors and even colleagues.

All jobs have their own set of rules, some more lax than others, but they were established for a

purpose. In my career we deal with sensitive client information which generally include medical

records, past tax forms and sometimes bank statements. All client information is considered

confidential and handled with extreme care. Once a case has been dismissed and

electronically stored, it is company policy to purge the files by shredding. If the files are

considered too large, we must send them to a third party who can properly destroy them. There

have been issues in the past of improper disposal of personal information which is usually met

with undesirable consequences.

C2. One time in particular, a colleague of mine was closing a file and decided to recycle the

sensitive documents instead of following the strict protocol. The first discretion went unnoticed

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by her superiors so she continued to ignore company policy. That is until personal documents

were found haphazardly scattered in the office parking lot where the recycling bins were

located. Confidential documents were discovered in the recycled material by a veteran attorney

who was known for delivering harsh punishments. Since the incident was considered careless,

the attorneys unanimously decided the entire office was to be reprimanded.

C3. Every employee at the office would agree that the incident was careless and the

individual deserved the punishment. But that is easier to say after the fact. Confronting a

trusted colleague can be a difficult task. There is generally two ways in dealing with situations

like these. We can either confront the individual and possibly lose their friendship or talk with a

superior and ask for them to handle this situation with discretion. Either solution could end with

many repercussions. Each situation should be carefully thought out before a decision is made.

How your audience will react is one scenario to keep in mind. In this case, the colleague was

considered ill tempered and often refused to listen to younger employees. After considering her

attitude in past situations, the solution was quite simple.

C4. I would have confided in a superior who I believe would handle the situation with

discretion. Reporting an incident that could potentially cause harm to our office is the best

option. When a colleague whom you know refuses to see reason, it is best to inform someone

who can motivate the perpetrator to do the right thing and follow company protocol.

C5. This decision is supported by my own ethical beliefs. I believe each individual should be

treated fairly, that rules should be followed and that consequences must be carried out. Rules

and policies in an office setting are made to avoid situations like the one described above.

Ramifications of leaked personal information could include breaking attorney/client privilege or

possible identity theft. Although the latter is considered an unlikely outcome, it is still a

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possibility. Many people may disagree about the importance of following rules, but in order to

acquire success in the business world, rules must be followed.

Leaders in today's society possess an array of ethical traits. No two people believe in

the exact same values, which I believe makes the business field an interesting area of study.

Companies are made and run by a variety of ethical leaders; some more ethical than others. It

is best to understand your own ethical beliefs and how to strengthen them throughout your

career. If Starbucks’ CEO Howard Schultz has taught us anything, it is that following one’s

ethical beliefs can open endless possibilities.

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References

Nocera, J. (2011). We Can All Become Job Creators. New York Times, Serwer, A. & Bonamici, K. (2004). HOT STARBUCKS TO GO. Fortune, 149(2), 60­74. Starbucks Corporation. (2014). Starbucks Corporation ­ Accelerated Growth Plan, 1­21. Trevino, L.K., & Nelson, K.A. (2014). Managing business ethics: Straight talk about how to do it right (6th ed.). Hoboken, NJ: Wiley.

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