Leadership: Trustworthiness and Ethical Stewardship
The problem to be investigated is the leadership challenge to ensure organizations are efficient, effective and financially solvent, but more importantly, leaders earn the trust and respect of their employees and other stakeholders.
Leaders must possess and demonstrate trustworthy and ethical behaviors in order to perform effectively in a more socially responsible and global business environment (Jennings, 2012). The ability for leaders to earn trust is in part based upon if they are perceived as having a primary motivation is their commitment to the organization (Collins, 2001). The dynamics between leadership, perceptions of trustworthiness, and ethical stewardship are key in building successful present-day organizations (Donaldson & Dunfree, 1999).
Corporate social responsibility is a valid source of intangible competitive advantage indicators (Melo & Galan, 2011). It is not used to its full potential because it has a less impact on financial indicators (Melo & Galan, 2011, p. 423). This statement is presently true according to this writer’s opinion, but it is changing. The change is occurring because old economic models do not contain all the variables needed to truly measure the economic impact of corporate social responsibility know as CSR (Paine, 2002) and because successful models of leadership are also changing (Kanter, 2009). However, this is not a universally agreed upon concept.
There are noted economists, business leaders and those in academia who do not agree.
Discussion among some economists that posits the only responsibility business has is to make a profit. Milton Friedman who lived through the 20th century is firmly in this school of though. Friedman, a highly regarded Nobel Prize winner and noted scholar from the University of Chicago was influential in shaping United States economic policy in the periods of great growth in the 20th century. This school of thought rejects corporate social responsibility (CSR). Economic models focused on stockholder value believe generating wealth for stockholders is there primary role in society. There are changing opinions not only is CSR, business ethics also is now thought of as more than individual ethics, but there are different schools of thought concerning business ethics.
When analyzing the conflicting objectives of business leaders who influence business decisions there are those who oppose the development of business ethics. The opposition is for different reasons, one known scholar is Peter Drucker (1981). He certainly professes high ethical standards and strong moral principles in business, but he does not feel a separate field of study for business ethics is needed. One’s personal moral code, ethical principles are character is sufficient for organizations and businesses.
Leadership was not always part of the economic models of the past. Leadership theory was not...