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Leadership, Ethical Decision-Making, and Performance MGMT 8740 Walden University Abstract 1
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This paper reviews past research on transformational and transactional leadership in relation to ethical decision-making, cognitive moral development, and organizational performance. It further proposes a new approach to analyze and assess which leadership style influences ethical decision-making. In addition, this paper provides additional research that may benefit future research proposals. Key words: Defining Issues Test, Cognitive Moral Development, Transformation and Transactional Leadership, Ethical Decision-Making Introduction 2
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Organizational performance can be influenced by many factors, such as culture, leadership, or an ethically moral environment. These factors can affect performance positively or negatively depending on what type of environment an organization has procured. Past research on leadership and ethics have shown no correlations, however, additional research has yielded contrasting evidence. Companies such as Google, Microsoft, Patagonia, SAS Institute, etcetera have established ethical environments which is exhibited through their performance standards. As these companies have undergone negative press, their ethical standards and performance remain high ranking due to their leadership. Developing a moral and ethical environment is dependent on the type of leadership adopted by the organization. Transformational leadership has been conveyed as the type of leadership with the most moral and ethical background on many occasions. This type of leadership is characterized as placing subordinate needs before their own, encouraging their subordinates to achieve the best possible outcomes, creating awareness, enabling their followers to create new points of views, and lastly, developing their colleagues (Scholl, 2018). On the other hand, transactional leadership is characterized as bargaining by creating a give and take environment. In this case, leaders listen to employee needs, however, do not succumb into their demands (Felix, et. al., 2015). This paper analyzes the correlational relationship between transformational and transactional leadership styles with ethical decision-making. Ethical leadership is defined as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcements, and decision-making” (Scholl, 2018). Ethical leadership traits include honesty, trustworthiness, and integrity with general concerns for other individuals and personal morality. 3
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In addition, Kohlberg’s theory of Cognitive Moral Development (CMD) will be utilized to assess which stage of cognition the leaders reside in. CMD is a process of moral reason where “people develop or move from the lowest to the highest stage.” (Felix, et. al., 2015). CMD contains three levels of cognition, pre-convention (self-aware, fear of punishment, give and take phase), conventional (follow expectations), and lastly, post-conventional (the person is fully developed).
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  • Fall '14
  • Dr.Dimatteo-Gibson
  • Ethics

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