The Challenge of Leading an Ethical and Successful Organization

174 Pages·2022·5.364 MB·English

by  John Zinkin, Chris Bennett

JohnZinkin,ChrisBennett
TheChallengeofLeadinganEthicalandSuccessfulOrganization

John Zinkin, Chris Bennett
The Challenge of
Leading an Ethical
and Successful
Organization
ISBN978-3-11-078081-9
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e-ISBN(EPUB)978-3-11-078095-6
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Acknowledgments
We were helped by many people in developing our thoughts, refining our argu-
ments,andmakingthecase.
Wewouldliketothankthefollowingforthetimetheyinvestedinreadingour
drafts to ensure that the case we make is correct, clear, and, relevant; based on
their respective experiences as academics, company director of long standing; se-
niormanagementconsultingpartner;entrepreneur;centralbankerandcapitalmar-
kets regulator; and lawyer: Professor Sander van der Leeuw, Professor John Rudd,
John Colvin, Dato Dr R. Thillainathan, Edward Clayton, Tony Heneberry, Tan Sri
Andrew Sheng, and Sujata Shekar Naik. If we have misunderstood or misrepre-
sentedtheirviews,thefaultisentirelyours.WewouldliketothankStefanGiesen,
our excellent editor, for challenging our assumptions robustly and constructively,
including simplifying thestructure of the book. Wewould like to thank Jaya Dalal
for her excellent coordination of production, as usual; and Mervin Ebenezer for
finalproduction.
JohnZinkin
ChrisBennett
KualaLumpur
https://doi.org/10.1515/9783110780871-202

Advance Praise for The Challenge of Leading
an Ethical and Successful Organization
“TheChallengeofLeadinganEthicalandSuccessfulOrganizationdemonstratesthat
there are serious external obstacles to being both ethical and successful. Obeying
the law provides minimum guidelines, and the law does not treat corporations as
moralagents.Theresultingfocusbyjudges,investors,andanalystsonshareholder
value maximization often leads to breaking the law and behaving unethically, as
longastheso-called‘costofdoingbusiness’islessexpensivethantheextraprofits
achievedthroughmalpractice.
Theenddoesnotalwaysjustifythemeans.Theoutcomedoesnotalwaysjustify
the process. The process must be morally upright and ethically sound. It must
stand the scrutiny of good decency. Ethical decisions are more complicated when
theworldasitis,differsfromtheworldasitoughttobe;andreconcilingduty-based
and consequential ethics may prove impossible because of different cultural as-
sumptions and individuals’ ‘multiple ethical personas.’ Choices are often between
complicated‘shadesofgray’ratherthanbetweensimple‘blackandwhite’answers.
John Zinkin and Chris Bennett show in detail how leaders can overcome the
barrierstoethicalandeffectivedecision-makingbybuildinganethicalandsuccess-
ful organization – where ethics defines its mission, vision, and values, combining
the ‘Five P’ performance checklist (covering ‘Purpose,’ ‘Principles,’ ‘Power,’ ‘Peo-
ple,’ and ‘Processes’) with a simple six-step ethical process that allows leaders to
confronttheirethicaldilemmassuccessfully.
I highly recommend this book to anyone in a leadership position who has to
makedifficultethicalchoicesintheworldasitisasopposedtotheidealworldasit
oughttobethatdoesnotexist.”
–DevanesonEvanson,CEO,MinorityShareholdersWatchGroup(MSWG)
“What ought I do? This is increasingly becoming a challenge – society today de-
mands that we take into account a vast number of factors when deciding whether
ornotacourseofactionisethicallyacceptableornot.Thiscanleadtomanyunfor-
tunateoutcomes– virtuesignalling,where we actina way,webelieve otherswill
findacceptable,kneejerkreactions,wherewedowhatfeelsrightatthetime,often
basedonasimplesetof‘rules’wehaveconstructed.Orelsetocompleteandutter
confusion as we seek to navigate our way intelligently and ethically through the
challengeswefaceatworkandinwidersociety.
TheChallengeofLeadinganEthicalandSuccessfulOrganizationisanenormous
help to the confused – as well as to kneejerkers and virtue signallers – because it
takesthereaderbacktofirstprinciplesofethics,andshows,withnumerouscontem-
poraryandhistoricalexamples,theunderlyingissuesandhowtheycanbehandled.
https://doi.org/10.1515/9783110780871-203
VIII AdvancePraiseforTheChallengeofLeadinganEthicalandSuccessfulOrganization
Itequipsreaderswithatoolkitwhichcutsthroughtheconfusionofmoderncontinu-
ouslychangingethicalpriorities.
Reading this book provided many ‘aha’ moments and clear insights which I
foundextremelyhelpfulasIadviseclientsandmentorstaff.”
–EdwardClayton,Partner,Advisory,PwCMalaysia/Vietnam
“TheChallengeofLeadinganEthicalandSuccessfulOrganizationisfilledwithexam-
ples of our ultimately self-destructive nature. Given the current state of the world,
perhapsitisnotdarkenough,norimbuedwithasufficientsenseofurgency.
John Zinkin and Chris Bennett have again written a book which is profoundly
informativeandchallenging,leavingmehopingitprovidesconclusivesolutionsto
theproblemsbusinessleadersface.Itdescribesaworldwherethetramlines(rules
andregulations)aredesignedtocontrolthemajority,forthebenefitofthepolitical
andfinancialminorities(readelites),forwhomthetramlinesappearnottoapply.
The final chapter brings light to the darkness with practical suggestions for
change.Iwonder,however,whetheraglobalsystemoftaxation,variableaccording
toanorganization’spositiveimpactonsocietyandontheenvironment,shouldbe
addedtothisrecipeforredemption.”
–TonyHeneberry,FounderandCEOofCEOSolutions
“WithTheChallengeofLeadinganEthicalandSuccessfulOrganization,JohnZinkin
and Chris Bennett have come out with a three-volume masterpiece. After dealing
ably and comprehensively with The Principles and Practice of Effective Leadership
in their first volume, in their second volume, Criminality and Business Strategies:
SimilaritiesandDifferences,theymakeitoverwhelminglyclearthatthesimilarities
between organized crime and legitimatebusinesses are a lot greater than their ap-
parentdifferences.Insteadofleavingtheirreaderswiththisdepressingconclusion,
in this, their third volume, they demonstrate masterfully, using their trans-disci-
plinarytoolkit,howbusinessleaderscanconfronttheethicalissuesandchallenges
they face in decision making as well as building and guiding enterprises that are
bothethicalandsuccessful.
Theirtrilogyoneffectiveleadershipisamustreadforallexecutives.”
–DatoDrR.Thillainathan,DirectorofGentingBerhad,
PublicInvestmentBankBerhad,IDEASPolicyResearchBerhad
Contents
Acknowledgments V
Introduction XIII
Chapter1
EthicsandtheLaw 1
Ethics 1
ProfessionalEthics 2
BusinessEthics 3
PersonalEthics 4
TheLaw 5
RealityisDifferent 5
RuleofLaw 7
TheWorkingsoftheLaw 10
Summary 15
Appendix1.1:IntroductiontoBusiness-relatedProfessional
CodesofConduct 17
Accountancy 17
Engineering 17
Finance 18
Journalism 18
Law 19
Medical 20
Chapter2
TheEthicsContinuum 23
“Ought”Versus“Is” 23
Duty-basedVersusConsequentialEthics 26
DifferentAxioms,DifferentChoices 28
Virtue 28
Effectiveness 33
Mutuality 34
Predictability 35
Utility 36
Self-image 36
MultipleEthicalPersonas 37
RewardandPunishment 39
FordPintoCase 41
Boeing737MAXCase 42
Summary 43
X Contents
Chapter3
BarrierstoEthicalBehavior 48
Evolution 48
System1andSystem2 48
Rhetoric 50
Volatility,Uncertainty,Complexity,andAmbiguity(VUCA) 51
Maslow’sFiveNeeds 51
Survival 51
Safety 51
Belonging 52
Esteem 53
Self-actualization 53
InappropriateRoleModels 53
IncreasingImpunity,DecliningAccountability 54
MediaandRealityTV 56
VestedInterests 58
InappropriateRegulation? 60
Deception 62
“BadApples” 63
Rules-basedandPrinciples-basedRegulation 66
CulturalComplications 67
WeakEnforcement 68
InappropriateKPIs 69
Summary 71
Chapter4
HandlingEthicalDilemmas 76
EstablishinganEthicalBaseline 76
EstablishingPersonal“MoralCapital” 77
EthicsareSituational 78
Determining“KaleidoscopicEthicalPersonas” 82
DealingwiththeState 82
DealingwithEmployees 83
DealingwithPeers 84
KaleidoscopicEthicalPersonas 84
ConfrontingEthicalDilemmas 85
DeterminingAreasofConflict 86
MakingDecisions 88
ApplyingtheSix-StepEthicalFramework 89
Purpose 89
Principles 90
Power 92