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People—and, in context, leaders—have to make decisions. Leaders make decisions that significantly affect the integrity and autonomy of other people. However, as Joanne Ciulla notes at the start of her treatment of leadership ethics, “We live in a world where leaders are often morally disappointing. Even the greats of the past … are diminished by probing biographers who document their ethical shortcomings” (Ciulla 1995, 5). This might be even truer for leaders in everyday life, such as organizational leaders. Pressure for profits, increasing in companies as a consequence of globalization worldwide, requires acknowledgment. Pressure on managers often leads them to focus only on things that bring in money and ignore the needs, goals, and rights of those being led. Ethical questions and reflections about morality are—as a consequence—not on the agenda. Although for-profit organizations are of higher interest in this situation, nonprofit organizations are similarly affected by ethical questions because leadership relations occur in every type of organization.

Leadership relations are interactions and as such subject to moral rules and ethical reflections. Nevertheless, rarely has leadership research asked whether the form and extension of influencing subordinates have any limitations. Limitations here does not refer to boundaries given by law; these are obvious and can easily be handled in principle. Rather, limitations here refers to those boundaries grounded in morality. This invisible boundary of action is likewise important. Every community and every group relies on it and cannot fulfill its task efficiently if standards of moral behavior are disregarded. Moreover, because people—and, in context, subordinates—have value in their own right, questions of moral behavior are always present. However, because most leadership approaches have been articulated from the leader's perspective and are concerned mainly with efficient organizational goal attainment, moral behavior remains in the shadow. Only a few approaches consider the follower position and, as such, allow thinking confined to effects of behavior besides efficiency. These include attribution theory (which explains both the process by which persons are distinguished from others as leaders and how individuals systematically search for different causes of their behavior and the behavior of others) and implicit leadership theory (which deals with cognitive processes of the people being led—perceptions, evaluations—when confronted with leaders and leadership attempts). Ethics is concerned with moral behavior, which refers to an act that is to be valued as good, hence justified. Ethics is concerned with perspectives and criteria of moral behavior without giving valued answers for a concrete situation itself or at all. Three main streams of research are distinguishable: normative ethics, descriptive ethics, and meta-ethics. Normative (or prescriptive) ethics is concerned about the correctness of statements with regard to moral values and action norms. Two parts are worth mentioning: On one side exists a material ethics that presents values and norms that should be fulfilled. On the other side exists a formal ethics that deals with procedures about finding solutions in conflict situations. Descriptive ethics examines the psychological, biological, social, and historical bases of judgments. It especially examines practiced norms and interprets them. Finally, meta-ethics—often called “analytical ethics”—deals with the problem of separating moral from non-moral questions and asks about the epistemological (relating to the study of knowledge), ontological (relating to existence), and philosophical foundations of statements of values and norms. Meta-ethics helps us to understand why and when differences between different ethics exist and—importantly—whether and how it is possible if at all to justify a (universal) truth of moral judgments.

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