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  • Tamar Balkin

Can Ethical Behaviour Enhance Leadership Capability And Wellbeing?

Updated: Sep 7, 2022

“But when his drinking and lusting And his hunger for power Became known to more and more people The demands to do something About this outrageous man Became louder and louder”

Rasputin by Boney M (click here for the song)


Photo by Kyle Glenn on Unsplash


“The intense media coverage of a serious allegation of financial misconduct in my organisation has detrimentally impacted everyone. I was at a BBQ on the weekend and was verbally abused.. I didn’t even have the opportunity to point out that my work is way connected. But most importantly, trial by media is not the rule of law in a democracy, surely we still believe in the presumption of innocence until proven otherwise in a court” .

Coaching client


Whilst defining ethics is in the realm of the philosophers there is a common consensus cross culturally that the following is unethical:

  • Violation of care. i.e to harm people intentionally

  • Violation of justice

Psychologists who study of behavioural ethics do not debate what people ought to do, but rather why do they do what they do.

The recognition of moral issues requires: moral awareness, moral sensitivity and moral attentiveness. Given that actions may be legal but not ethical, ethical behaviour requires an awareness of implications of choices.

High profile ethical misconduct


“What if we thought of opioids in the US not as a passive crisis, but the logical result of a series of legal and ethical crimes.”

Alex Gibney


It would be an understatement to say that there have been examples of unethical behaviour in the media lately by professionals who have strict codes of practice or work in organisations with ethical principles. What is reported is perhaps the tip of the iceberg when it comes to unethical behaviour.

How do large scale unethical practices occur?


“ulterior financial motives have led certain companies to prioritize transactional values above the health of the consumers, which reflects the companies’ disregard for bioethics.”

Jason Sanchez Alonso


Researchers found that on a corporate level the opioid pandemic was in large part due to the following:

  • Poor enforcement of marketing regulations,

  • Lack of independent scientific evidence of long-term safety and effectiveness

  • Inadequate management of conflicts of interest.

It can also be hypothesised that Doctors were too busy to properly research the new medication and thus relied on the evidence from the sales people.

Why do so many unethical practices go unreported?

  • Fear of consequences

  • Lack of trust in privacy of reporting system

  • Minimisation by others

  • Marketing and persuasion

  • Lack of time

  • Arrogance

  • Power

  • Lies and deceit

  • Lack of clarity around moral codes

  • Biased perspectives

  • Finaical strain

  • Job insecurity

  • Market competition

  • Incivility

  • Peer Pressure

What about ethical blind spots?

Ethical decisions or lack thereof occur in everyday life, yet they often go unnoticed until there are repercussions.

Researchers have recognised that individuals are facing ethical choices all the time even if they don’t see the ethical concern. The concept of moral awareness, implies that the individual who is making a decision needs recognise that an ethical issue is at stake in a given situation. This moral awareness precedes the process of seeking the most morally justifiable course of action from the alternatives.

Unfortunately there are policies and practices in organisations that are a minefield for ethical dilemmas.


“The inherent complexity of business situations is not the only cognitive factor that perpetuates unethical business practices. Individuals bring with them varying capacities to recognize the moral component of a business situation. It is the degree of ability to recognize the moral content of a situation—known as moral awareness”

Craig V. Vansandt


When designing and implementing recognition and reward systems researchers have found that rarely do leaders stop and think about what they are actually incentivising. Often an organisation described the desired behaviour but are unaware that they are rewarding the complete opposite action through their systems. For example numerous moral hazards are created from rewarding the number of sales orders received not the number of satisfied repeat customers.

Promotions are ethical decisions, if they are based on revenue or sales rather than leadership capability and emotional intelligence, the message is conveyed that there is a higher value placed on profits than people.

Rationalisation: It’s easy for people to lose sight of what they should do in a situation, and will justify their unethical behaviour. However researchers have found that the process of rationalising the implications of poor decisions implies that people do have a sense of how they ought to behave. If they didn’t care about morality they wouldn't need to rationalise.

What is the impact of unethical behaviour?

  • Decrease in morale

  • Erosion of internal and external trust

  • Reputation of firm

  • Legal proceedings

  • Financial loss

  • Direct or indirect damage to customers

  • Loss of productivity

  • Stress and anxiety

  • Staff turnover

  • Decline in wellbeing

What can leaders do?


“a healthy organizational culture is one in which speaking up and listening go hand in hand and thereby reinforce ethical standards. If concerns are expressed, changes can be made in a timely way.”

Ferrère, Rider, Renerte, and Edmondson.


Clearly articulate behavioural expectations: Whilst all organisations have both spoken and unspoken rules and guidelines about how to act, many of the cultural norms and expectations aren’t clearly expressed in writing and conveyed to all staff. To avoid confusion, provide clarity around behaviour towards colleagues, customers, and the public.

Practice what you preach: If the highest standards of ethics are desired within an organisation then high-profile leaders in that organisation need to demonstrate these standards beyond reproach.

Reinforce ethical behaviour: It is essential to be mindful and intentional about what behaviours an organisation wants to reinforce and what behaviours they don't. Appropriately and clearly reinforcing ethical behaviour will ensure that it will continue to occur.

Make it easy for staff: Provide regular and relevant training, consultation, modelling, resources and supervision around ethical dilemmas for all staff.

Encourage timely feedback: The tone of corrective feedback needs to be one of collaboration and education as it will allow for openness. Immediate feedback is critical to maximise a fuller understating of the unethical decisions and behaviours.

How do you make good ethical decisions?

Whilst most people are inherently ethical, it is extremely difficult to make sound choices, ethical or otherwise in a hurry with limited information that’s coming to you in a rush. The leadership practice of acting fast and decisively is not conducive to thinking deeply about complicated ethical dilemmas.

Researchers have found that good ethical decision making requires complex thinking before action.

The following process will improve ethical decision making:

  • Define your ethics and values

  • Pre-empt situations that may be troubling

  • Slow down

  • Think through a problem

  • Understand from different lenses

  • Consult with colleagues and experts inside and outside the organisation

  • Gain Support

  • Identify the consequences of your options

When there is the pressure to act fast and make a decision, take a moment to pause and think. Reflective practice involves recognising the choices that are available in front of you, considering others and making a conscious effort to make the best choice.

How do you behave ethically when you have made an error of judgment?

  • Admit to your mistakes,

  • Apologise without justification,

  • Identify and take remedial action

  • Review the circumstances, habits and biases that led to the behaviour

  • Establish systems and processes to ensure that mistakes are not repeated

The nature of the human condition is such that mistakes are made, in the context of ethical dilemmas it is critical to resist the temptation to sweep the mess under the carpet.

Final thoughts

Being a moral individual means being honest and kind in your behaviour, an ethical organisation creates a climate of kindness, psychological safety and enhanced wellbeing for all employees.


References: (n.d.). Offences against justice/in public office. [online] Available at: [Accessed 29 Jun. 2022]. Australian Government (n.d.). Presumption of innocence. [online] Attorney-General’s Department. Available at: An Examination Of The Relationship Between Ethical Work Climate And Moral Awareness (2001) Craig V. Vansandt Ferrère, A., Rider, C., Renerte, B. and Edmondson, A. (2022). Fostering Ethical Conduct Through Psychological Safety. MIT Sloan Management Review, [online] 63(4). Available at: [Accessed 29 Jun. 2022]. ‌Psychology Today. (n.d.). Six Ways to Create a Culture of Ethics in Any Organization. [online] Available at: Brown, Michael & Stilwell, Jason. (2005). The ethical foundation of performance measurement and management. the Guardian. (2021). ‘The crisis was manufactured’: inside a damning film on the origins of the opioid epidemic. [online] Available at: Liu, X., Greenbaum, R.L., Allen, D. and Zhang, Z. (2021). A Newcomer Socialization Perspective on the Proliferation of Unethical Conduct in Organizations: The Influences of Peer Coaching Practices and Newcomers’ Goal Orientations. Journal of Business Ethics. doi:10.1007/s10551-020-04730-y. Erik Helzer on Moral Psychology and Behavioral Ethics THE INDIGO PODCAST 27 APR ⋅ 1:06:38 Alonso, J.S. (2021). Purdue Pharma Deceptive Research Misconduct: The Importance of the Use of Independent, Transparent, Current Research. Voices in Bioethics, [online] 7. doi:10.7916/vib.v7i.7786. ‌Helzer, E. G., Cohen, T. R., & Kim, Y. (forthcoming ). The character lens: A person-centered view of moral recognition and ethical decision-making. Journal of Business Ethics. Accepted November 24, 2021 Kolodny, A. (2020). How FDA Failures Contributed to the Opioid Crisis. AMA Journal of Ethics, 22(8), pp.E743-750. doi:10.1001/amajethics.2020.743. ‌Teresi, M., Pietroni, D.D., Barattucci, M., Giannella, V.A. and Pagliaro, S. (2019). Ethical Climate(s), Organizational Identification, and Employees’ Behavior. Frontiers in Psychology, [online] 10. doi:10.3389/fpsyg.2019.01356.

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