Ethical values of transactional and transformational leaders

Canadian Journal of Administrative Sciences, Dec 2001 by Rabindra N Kanungo

Given the nature of ethical leadership as described above, how does one justify the transactional and transformational influence strategies to be ethical? The answer to this question will be sought by first examining the two ethical perspectives and then analyzing the motives, values, and assumptions underlying the two forms of leadership influence.

Two Ethical Perspectives to Evaluate Leadership

In the business ethics literature (e.g., White, 1993), one finds two dominant approaches to evaluate the ethical nature of one's conduct: teleological ethics and deontological ethics. According to teleological ethics, a leader's actions per se have no intrinsic moral status. The moral status of these actions stems from their consequences. In any given situation, actions that produce larger benefits to a larger number of people are considered morally right. In this approach, hedonism (that which gives pleasure is good) and utilitarianism (greatest good for the greatest number) form the basis for ethical judgments (Melden, 1967; Mill, 1967 version). Teleological ethics is ends or outcomes oriented. As Keeley (1995) has pointed out, a transactional leader behaves in a moral way because such behaviour (i.e. seeking consent to means to achieve individual ends rather than seeking consensus on a single collective purpose) brings greatest satisfaction to the greatest number of people.

In contrast to the teleological perspective, deontological ethics considers a leader's actions to have intrinsic moral status. An act is considered moral when it is performed with a sense of obligation or when it stems from a sense of duty guided by pure reason. Kant (trans. 1994), while advocating this approach, recommended that moral acts always treat human beings as an end and never simply as a means.

Treating people as ends requires seeing them as autonomous beings who are entitled to control their own fate and not to be deceived or manipulated. Actions that are consistent with the dignity and autonomy of moral agents are intrinsically good. Treating people simply as a means, however, is to regard them as something that we use for our own purposes without their full and free consent. Such actions are inherently wrong. (White, 1993)

The argument presented by Kanungo and Mendonca (1996) that transformational leadership that uses empowering strategies is ethical is consistent with the deontological perspective. Thus, teleological and deontological ethics provide two different criteria for judging the ethical character of the two types of leadership behaviour. This is explored further by relating the two ethical approaches to the motives, values, and assumptions of the two types of leaders.

Leader's Motive for Transactional and Transformational Influence Strategies

The overarching motive for ethical leadership is the leader's altruistic intent as opposed to egotistic intent (Kanungo & Mendonca, 1996). Leaders are truly effective in achieving organizational objectives only when they are motivated by a concern for others (organizational members and other stakeholders), when their actions are invariably guided primarily by the criterion of benefit to others even if it results in some cost to self. In deciding whether a leader is ethical, the fundamental expectation is that the leader will direct and guide organization members towards goals and objectives which will benefit the organization, its members, other stakeholders, and the society at large. It is only in the context of such benefits that leadership acts in the areas of planning, controlling, and coordinating are justified and assume moral meaning and significance.